Good morning, ladies and gentlemen, and thank you for waiting. Welcome to Cosan's Third Quarter 2021 Results Conference Call. Today with us, Mr. Luis Henrique Guimaraes, Cosan's CEO; Mr. Marcelo Martins, Cosan's CFO; Ms. Paula Kovarsky, Head of IR and ESG; Mr. Joao Arthur Souza, Head of Finance; and Ms. Ana Perina, IR manager. We inform that this event is being recorded and simultaneous translation into English is available. [Operator Instructions]. After that, we will start the Q&A session when further instructions will be given. Today, we have a simultaneous webcast that can be accessed at the website, www.cosan.com, and the slide presentation is also available at the website to be downloaded. The audio with this conference replay will be available on the website. Before proceeding, we would like to say that forward-looking statements that might be made during this presentation regarding the company's business prospects, operating and financial projections and goals are based on beliefs and assumptions of Cosan's management as well as information currently available to the company. Forward-looking statements are not guarantee of performance. They involve risks, uncertainties and assumptions as they relate to future events and therefore, depend on circumstances that may or may not occur. General economic conditions, industry conditions and other operating factors may affect the company's future results and may lead results to differ materially from those expressed in such forward-looking statements. Now I would like to turn the floor to Ms. Ana Luisa. Please, Ms. Ana Luisa, the floor is yours.

Good morning, everyone, and thank you for joining Cosan's Third Quarter of 2021 Earnings Conference Call. For the Q&A session, are also present, Luis Henrique, our CEO; Marcelo Martins, our CFO and IRO; Paula Kovarsky, Head of IR and ESG; and Joao Arthur, Finance Director. Since this is the last public conference of the year, we have a full house here. Going over the financial and operating highlights for business, beginning with Raizen. Last Friday, the company already hosted its own conference call with the market, does all briefly go over the main topics of the quarter. Raizen posted record results in a pro forma basis, i.e. considering Biosev's figures from April 1, 2021, and also adjusting previous quarters for a fair comparison. First, renewables in -- on Slide 4. Once again, we posted significant EBITDA growth, driven by an improved pricing environment, especially for ethanol. We offer a unique ethanol portfolio of diverse applications, therefore, addressing different markets and sustaining competitive advantages. Lower sales volumes of all products, however, reflect our sales strategy for the crop the drop in production, following the relevant crop setback at the center-south region in Brazil, impacted by the intense drought besides fires and frosts. Nonetheless, Raizen's efficiency journey continues steadily on track, represented by a higher agro-industrial performance compared to the market, partially offsetting the climate issues. In addition, the typical volatility of PLD spot prices has contributed to improved results in bioelectricity. Now let's move to sugar on Slide 5. The segment faced similar effects in the quarter compared to the renewables, posting lower volumes sold, yet with improved prices. Most of sugar production this year will be shipped along the second half of the crop year according to our sales strategy, leveraging on our infrastructure and efficient pricing, to maximize profitability…

Good morning, everyone. Thank you very much for being with -- It's great to be with you to look at our third quarter results. Ana covered many topics. I just would like to point out some of the topics. First, we have gone forward in the group restructuring that we have been talking to you for a while now, with Raizen upheal the private placing of Compass, and several activities that were carried out, that are part of our long-term view. We started at sugar with extended North Grid, and Rumo established Cosan investments, and several other investments and initiatives in our group. So it's very important to have a structured portfolio with the management focused -- ensuring funding and analyzing and having -- and focus our long-term activity. That was an important step. Also important to highlight that we announced three major actions for Cosan investments. As planned, we are bringing in [indiscernible] to be the head of that area to structure these projects. That's very important to focus on the dedicated execution of these 3 projects that were announced. That's an important topic in our agenda. We had a record EBITDA as you have seen. And we still have some important topics, a positive perspective for crops next year, that has a positive effect on Rumo and Raizen. Businesses -- we are back in mobility with a vaccination, which is very important for our business, both for Compass, Moove and Raizen. Our carbon agenda that is even stronger, and that's important for the Energia's transition that is even stronger in the companies and the government's agenda. We see that very -- that's a very important topic. And also, we have changed some people at Raizen that consolidates our internal pipeline, and we have opportunity for people to grow, focusing on the importance in the commercial area and also supply chain areas. So it's important to hear your questions, and we are here, me, Marcelo and Paula with Ana, and we are available to take your questions now. Thank you very much.

[Operator Instructions]. Our first question is from Isabella Simonato from Bank of America.

My question is about capital allocation. And Luis, it's important to mention about the pace of Cosan investments. And now probably we'll see a pause there. And out of the investments that you were announcing, maybe they have different CapEx times. And at the same time, with a growing business and improving cash generation and EBITDA, I understand that the leverage of Cosan as a hill -- probably is not going to be too far from what we have seen now, or maybe even going down with the EBITDA increase. Considering that, and once again, base that, in Cosan investments, we will not see such an accelerated pace. How are you looking at shares? We see Cosan as a holding? How -- what are you thinking in terms of capital allocation within the group?

Well, Luis quickly talked about our investment strategy by Cosan investments. I just would like to have a quick recap. Cosan investments, this investment arm that we call non perennial assets, that is something that we had discussed with the market. It was very much in the beginning, but a while ago, we were ready for a while -- discussing investments opportunities that have been carried out. And what happened is that, when we believe that this progress would happen, we would be ready to announce Cosan investments. Remember, this is another step. And the improvement of the group which started with the corporate restructuring -- So we are, in fact, at a moment where we have announced the most relevant transactions that were ongoing.

So the market should expect a deceleration?

Yes. Right now, we do not expect to continue that level of announcements that -- just to make it very clear. Second, we always want to focus on capital structure. This is a group's priority. Our main priority here is risk and exposure management, that is for holding the main objective, and the creation of Cosan investments involves that. We have an objective which is not having this company to leverage. We are at a comfort level at 2x, 2.5x -- reaching 2.5x. That's not a comfortable level for us, close to 2x. It's good for us because we are then at a more efficient capital allocation level. That is not going to change. We will be buying back. We see now the price of the shares that's much lower than what we believe is reasonable. And the consequence of that is -- will be an acceleration of shares buyback for a few reasons. We had to stop. We were at a stage where we are preparing ourselves for our results. But now we want to focus in the risk structure of the group exposure, structure, capital structure, leverage and buyback. As the financial management of the holding, these are our main objectives as of now.

Mr. Thiago Duarte from BTG Pactual has a question.

I have two questions. First, focused in one of the recent announcements, which was the increase of stake at Radar. I would like to know what changes in Radar -- the Radar that you are reacquiring, or acquiring again a significant position, from the Radar that you divested in the past. In terms of capital needs, Radar is -- or was a real estate company tapping into the real estate gains from rural areas or agricultural areas. I would like to understand what it should be from now on? And how that is driving your needs or dividends payment? Or how that is going to behave from now on compared to what it was in the past for Cosan? And a second question, that's a broader discussion. In your presentation, you talked about tapping into value in the ecosystem. When we look at it, we can think about different combinations or communications among the different businesses. And we can think about [indiscernible] or a Mobitech or a number of consumers companies such as Compass and Raizen's access on a daily basis. We can think about a lot of possibilities. And most of these assets are not only held by Cosan. They -- you have a number of partners in the different businesses. So when you think about that in an ecosystem, it's not as trivial as we could imagine. So we have each one of these areas as independent and separated. So if you can comment on that, please? How can we think about that in terms of ecosystem, and the benefits of having an integrated ecosystem in terms of synergy, sharing best practices and from -- for that for now on?

Let me talk about the ecosystem, and then Marcelo will talk about Radar, and he'll explain funds and so on. So first, I think the idea of our group, Thiago -- and you well know it -- we have business independence with focus and management and governance. We started building in the last period, a process of interdependence where it makes sense to work together. We work together. So I'll give you a few examples that not necessarily involve modernization, but they have to do with best practices. For instance, information security. And this is a very dear topic for all companies in Brazil and in the world, where we have made a huge revolution in the structure and the process since we had that attack last year. We had a robust structure in our opinion, but we did learn that we needed to improve. And we put a lot of efforts into that. And that was a joint effort. And all the companies in the group benefited in the process. We had to scale to have the best professionals. So I will use some technical language here. We have a [indiscernible] and basis the chief information officers and the business information officers with the security officers, with the common back office areas. The defense team is also common, and also monitoring -- operation monitoring team that was in common. So, obviously, everyone shared from that know-how benefit and also accessibility cost. If I turn to the other side, and when we are looking at how to work with client base, we, of course, have to follow the data protection law, and also, we always have to have a shared benefit with all the companies. So we have transactions, internal contracts, and part of the results are allocated to the…

When we announced Cosan investments, our idea was to make it clear to the market that, first, that portfolio would be separated from the perennial portfolio in the group, which are the business verticals that are relevant, already established, that have become incumbent players, and each one in its respective sector. And what we wanted also was to reach the ability of raising capital to have flexibility in the financing of these opportunities without diluting Cosan's shareholders value. So we did not want Cosan to become just a source of funding to invest in new businesses. The way that we established Cosan investments, we can have 2 things: first, the ability of raising funds and financing businesses independently; and second, the possibility of having a spin-off of these businesses separately or collectively, as we believe that we are in a certain maturity level, and it makes sense for the businesses to be out of our permanent portfolio, if that's the case. We always said this is an opportunistic view. Whenever we believe there is a leverage opportunity, some synergies with the group without generating conflict -- and that we have the capacity of investing, where, we believe, that we can make a contribution, and we'll do that by using that arm. And that separates the portfolio because it allows us to be more flexible in terms of governance. We can be more flexible in terms of funding and also of working capital. And you know that in the permanent portfolio, we have a long-term approach, and therefore, long-term interest in maintaining those businesses. Radar was a great opportunity. You remember that when we sold the stake in the company, if I'm not mistaken, 5 years ago, the price that we had compared to the price that we paid now is…

Yes.

Next question from Mr. Luiz Carvalho, UBS.

I have three different lines of businesses here that I would like to tackle. Part of capital allocation. I think you have already talked about that, but I would like to go deeper. First, mining business that you went into recently. And to understand in these last weeks -- I would like to understand a little bit better what have you done in terms of developments of progress? If you can talk anything about the deal in the port. I think that was very interesting to see, obviously, assigning. We're able to solve the logistics of it. I think that is already a great step. But if you can give us a little bit more color there, it would be great. Second, still on -- in Compass business. If you can share a little bit more about the rationale, regarding the bid at Sulgas. It seems to be one of the important states, but I would like to understand what you are thinking about, in terms of privatizations in the states that are following that direction, and how that could or not, in your opinion, have any impact or any reaction from the antitrust agency. And finally -- and I'm sorry if I'm being very specific. Although this is Cosan's call, but we see now a strong reaction at Raizen, at least today. And talking to some distributors, at least what we have heard, and I would like to hear from you, of course, is that, in this last Petrobras review for orders for December, apparently, Raízen had 19% cut -- and Petrobras system. And maybe going back to Thiago's question, a more integrated business, maybe to diversify that supply, considering that changing behavior in the company. I'm sorry to be very specific here to a business, but I think this is important.

That's okay, no problem. You can ask us. So let me start by the third question Raizen. Well, this cuts by Petrobras are in line with the market. They are not privileging or discriminating any players. It has to do with the history and with the size of the supply capacity, and the size of the order placed by each company. So I would like to say that this process is not going to bring any disadvantages or advantages for any players, except for those that did not purchase from Petrobras. And they -- those will not have their order placed, and they will have more restrictions. And I'm not confirming that the number is 19, but, whichever is the rumor in the market, I cannot state that this is fully consistent with what the market is going to take in terms of restrictions compared to other players. What is important to say is that, this might be a new paradigm, a new reality of the Brazilian market, where Petrobras is not going to ensure supply at any price, at any moment, at any location. And I think that's the good news of the maturity of the Brazilian market that for many years was anchored in this assumption that at a moment, Petrobras is below the parity price, and that is no maintenance because it is regulating the price. It will bring the product because no one is going to import it. I think it is clear for the last few months since that -- those that are not prepared with infrastructure and capacity and bring product, will allow their own clients to be dry, because they won't have products. So -- and also, we have this concern, first, with the infrastructure; second, with SNOP, the ability to predict the…

Very clear. Thank you very much, and I'm sorry for being so specific in this call.

Next question is from Mr. Regis Cardoso from Credit Suisse.

Two questions here. First one, short-term, thinking about this year. The guidance was more controversial in this earnings season. Starting with Raizen, the guidance was lower than our expectation in most of the market, especially in renewables, and that seems to -- still conservative. But I would like to know if you can comment more -- comment a little more, because most you already commented last week. But now in Cosan's guidance, Moove also has a sequential reduction of EBITDA now in the fourth quarter. So Luis, can you tell us about the seasonal demand, what we can expect for the fourth quarter? It seems that the guidance is more conservative, and maybe you're aiming that guidance. I would like to hear from you on that topic. And my second question -- and Marcelo already started talking about it. And it's about funding and capital allocation for Cosan investments. Because you went into some factors that are capital intensive, real estate, mining, also car leasing or car rental, all of those are capital intensive. So I want to know where funding is coming from, especially in the context where the main opcos of Cosan -- did they have a capital increase recently? And they have their own expansion projects which are bold. And I feel that maybe capital will be coming from that and the holding, but maybe from shareholders and marginal fundings in this funded structure in the company. But I would like to hear from you, and to know what is the decision variable involved? And where are you going to have funding coming from?

Let me tell you quickly about the three guidances that you mentioned. We expect that all of them are going to be very close to the top of the guidance. The guidance is a range, of course. And we have not updated the Compass and Moove's guidances, but we are very optimistic, and we know that the company is going to perform at the top of guidance. And there is nothing in the fourth quarter that is the reason of concern for us. I think we'll have good results, of course, December, specifically for Compass and Moove. These tend to be a deceleration in volume because we have stoppages in the industry. Let's see if that's going to happen. Some of the industries are working at a very intense level to replenish inventory levels then -- but that's not normal. In the case of Moove also, there is a trend that the retail distributors do not -- might not want to have less inventories. But that's nothing that is not natural. And we are very confident about all the companies, Raizen, Compass and Moove, will be delivering at the top of the guidance, concluding with a strong fourth quarter, but with the seasonal characteristics that each one of the segments have. Marcelo, you want to talk about funding?

Yes. The structure, as it was said, is that, we can create equity for each one of these businesses. So the idea is not to fund all these investments with Cosan's debt. Obviously, some capital contribution -- because then we'll have to do -- and it has done in the 3 of them. And with time, that's going to be diluted as we bring in equity. I would like to stress an important topic here. We do not have that funding diluted. We have a good size, an ideal size, but the idea is that it is done like that. So we can have our funding structure without diluting Cosan's shareholder. We knew that the growth of this business would depend on equity. If we did not develop this structure, the dilution would happen at Cosan level, and that's not what we wanted. Yes, real estate can be capital intensive, but it is not. Remember the model, we are actually managers of real estate portfolio, the maintenance of the property, and the operation of the property will be made by the sector's operators that are leasing that piece of land. So that is a yield business, obviously, depending on the quality of the properties, and that's why it's very sensitive for us, the price that we pay for this business. And we are aiming a very relevant yield, and I believe we will be meeting it, considering that we paid a good price for that real estate. All of these 3 businesses -- I would say that this one will be the one that will have least need of capital. I think that we quickly will be able to have funding so -- that we can even increase that portfolio and invest in more real estate. So the funds would…

And a quick follow-up, please, in that discussion of the capital increase of these companies, because then you could have the option to increase capital in the fund or in the investee. And also on that control structure of 50-50. For instance, if I use the example of Mobitech, if you have capital increase, bringing equity to the fund, you would need that -- your partner to maintain 50-50. They also would have to invest the same amount of money. And then maybe the alternative would be to directly increase the company -- in the company at Mobitech, for instance. And then maintain the same control group with the same stakes. So in practice, I just would like to understand, when do you choose to raise the capital for the -- in the structure of the investees?

Well, the FIP is Cosan's, and our partners will invest there. And we'll be using this capital for the company, but always participating in Cosan's block. Cosan will use that capital depending on its strategy, and it's going to be directed to investments and FIP's partners. Investors would be Cosan's partners bringing in capital, and with Cosan's capital, that will be directed to the investees. And that is the model for all the companies. So if the investee company decides to have an IPO and the company will be listed, so this investor will be an investor of a listed company, another private company. But the idea is that the FIP is the channel to get the funding. And as a transparency to all our shareholders, we ensure them that the management will be done by Cosan, the management of this fund, the control and the management of this fund. And as Marcelo said, we might have partners of this fund, of the FIP, that are not partners of the company. But that is one of our characteristics -- characteristics of our portfolio.

Next question from Mr. Gabriel.

I have a few follow-ups. One about Compass. I think it's interesting to understand, and thinking about the company's strategy about the gas market, I think, the blue ocean of opportunities you see ahead in this new segment, in this new environment, with the market opening, is interesting. And one of my questions is about the synergies that you have, even about the new gas law. And there are some separations among the businesses that you have to maintain in terms of the regulations. But it looks like there are synergies, and I would like to better understand from you, which are them? You have all the portfolio already designed. You have the gas trader, you have Comgas. And now with the acquisition of Sulgas and potentially Gaspetro, what you see in terms of synergy? And if -- does it make sense to think in terms of synergy for that kind of business? Or when you think about the regulated gas business, Gaspetro or Comgas, you will be replicating the Comgas model in these 2 potential -- two new companies. This is my first topic on Compass. Now I know that you talked a lot about Cosan investments, and I would like to understand Leo's role in this new -- not new, but in this arm of the company, as you said, you were at a very aggressive base or quick base in terms of new businesses, new opportunities, and now is the moment of working on them. Now looking ahead, what can we think in terms of that business? The idea is really to maintain the portfolio as it is, and to have a possibility of new businesses and focusing on new opportunities, but to have synergies with the perennial businesses of the company? Or could you have other types of businesses that -- only thinking about the opportunity and not synergy? Just to make it clearer, but these were the 2 questions I had.

About Compass -- and going back to what Nelson is talking about in the market, we have 4 verticals. All of them are related to gas and power business, but we see efficiencies as the main synergy driver. But each business has its own dynamic. Our distribution will be focused on bringing in clients, developing grids and infrastructure. We'll create possibilities of having new molecules, opportunities, bringing in more competition to the market. And gas price is very important to increase the greater challenge that we'll have in the market, which is demand generating. We know that there is abundant supply, not only in Brazil, but also in the world. But we have to make sure that we will meet the demand that -- Comgas and Sulgas are developing, and we have the generation business that is going to look for opportunities, projects that have the right profitability, bringing in generation and monetization of gas. And also, we have trading, which makes an important link, so that the molecule gets where it needs to get, at competitive prices and costs, with different contract portfolios, with different indexes, different flexibilities. Because sometimes people think the gas molecules are all the same, but they have very important characteristics that need to be taken into consideration. So these are opportunities to be developed by Compass. This is the portfolio we designed. It starts gaining density in each one of its arms. Comgas and now Gaspetro and Sulgas -- in the infrastructure of the terminal being developed. We have -- analyzing several projects, active commercialization, and we are already discussing with the public hearing for distributing companies all over Brazil, and also contracts with potential free clients here in Sao Paulo. So we are populating the density of each one of these arms so that they can reach the size and the power that they can have, with advancement with the gas -- in the energy matrix in Brazil. Second, [indiscernible] is going to be the CEO of these initiatives responsible for this portfolio that is already built, and to put into practice Cosan's concepts, the capital discipline, allocation, people development, and everything that needs to be done so that these new undertakings are successful. And he will be screening our ecosystem -- and this was Thiago's question -- for monetization opportunities, always looking at digitization. This is a great opportunity that we have a value generation. And payroll, that might be hidden in the portfolio. We have been seeing that in several areas, financial transactions, insurance, information security, and several other topics that the company's CEOs are raising and moving forward. And so this is his role. The first 3 areas are successful and continuously analyze our portfolio, our ecosystem, and generate a value generation with dedicated focus so that every area has an owner and has a responsibility to deliver results, capital allocation and discipline, and how we control our business.

Next question is from Christian Audi, Santander.

I have two questions. Two questions, please. First, please. Investors keep asking me how companies will deal with the Brazilian economy in 2022, a more challenging economy. And my question is, can you comment on that? How do you see Cosan's companies prepared for a more difficult scenario in terms of economic growth in 2022? And my second question, Marcelo, going back to capital allocation. How do you make the decision of shares buyback and dividends payment? How do you work on that? It's just a matter of tax payment? And can you comment also on how companies in Cosan face the dividends payment topic? How they deal with that?

Yes. We actually do both. We pay dividends and we buyback shares. I think that, in practice, the effects are similar, and that should benefit shareholders, especially at the moment where shares are at a lower price for reasons that, I believe, are very immediate and have more to do with the market -- of a situation that is not perennial. But we will do both. We will be paying dividends -- a record dividend payment year, if you analyze our results, and we'll be buying back shares. I mentioned that in the beginning of the call, our objective is to restart the shares buyback. We'll do that starting to date. This was always part of our objective and our strategy, and it's not going to be different now. About our decisions for dividends payment, all companies have a very clear position their self [indiscernible]. They have to use their cash generation to finance their own business, in a strategic line, 100% defined with us, with shareholders, and all of them have to generate cash. The ones that pay less dividends are at a moment of growth, and dedication in its own business, that is higher. That's why they demand more cash than others. The companies that are more mature, will pay more dividends. That's how it goes. And Cosan, obviously, will continue to pay dividends to its shareholders. And I even mentioned, Cosan investments will not get in the way of that dynamic, because our objective is to bring in third-party capital, even if that means some type of dilution.

About your first question, about the GDP for 2022, obviously, we are always analyzing and checking the scenarios, managing risk in the downside. But when we look at the scenario for the improvement of the water supply and the next crop, the next season, and for soybean, corn and sugarcane, you see that as positive. So regardless the GDP, these businesses will have a positive effect. I believe that we'll have mobility back next year. That's very important for our businesses that depend upon mobility. And so we see, the way that Brazilians reacted to vaccination, it's not a surprise, and it's extremely positive. And obviously, we gain a lot of time, and we are working on costs, expenses and efficiencies. Therefore, we are even more resilient in that period. So of course, that -- a greater GDP always helps us to drive businesses, but specifically in -- our businesses are exposed to agricultural commodities and movement of products that Brazil will keep on exporting relevantly. We see that positive, and with a positive approach better than this year. In mobility also, we were very much affected at the beginning of the year in April, May, both in Brazil as well as other countries where we have a footprint. And now that is resuming at a stronger pace, and more perennial. And once again, we remain very disciplined in terms of funding and costs. And that's why it's so important to have that interdependence of the companies and all the homework that we have been doing in the last 8 months of joint purchases, joint renewals, and all the projects that we can run together, that allow us to provide a strong base for costs and funding to face what we will have in the future.

Next question from Mr. Bruno Montanari from Morgan Stanley.

I have just one more question on Compass. Looking at what happened to general price in the international market. I would like to understand if your conversations with potential new clients, if they are afraid of higher volatility in the molecule price, what is their mindset about this new niche, which is the gas market?

Yes, I think it's important to understand in all these analysis -- is the short-term, the spot pricing, and the long-term. The gas market had a great shock, considering the supply chain disruptions. And the recovery pace that the world had, surprised the most producers and transporters. And we thought that there was going to be slowing down. Let's see how winter will be in the northern Hemisphere. But that doesn't change. That even stresses the need of our industrial customers or clients who have a portfolio of contract supply with different times, with different flexibilities, different paces. I think that only stresses the need of risk mitigation and management of the alternatives. And this was not possible in Brazil when we only had 1 supplier, which was Petrobras. And obviously, on the other side, there is responsibility and professionalism even greater, both for our clients and traders. And that is good for us, because we have been in the market for a long time. We have a great structure, great team, and we are exposed, not only to Brazilian market, but the international market as well, with all the work that Compass has carried out in the past few years. So in my understanding, and what we have seen with our clients is this, there is more and more interest of looking for portfolio diversification and better understanding of the options, and basically to organize ourselves so that the short-term doesn't change. And that was seen in the electric energy market in the transition between captive market and free market, where each client based on each price cycle, had to adjust their electric energy portfolio to the type of risk and contracting that they want to have. That's part of the game. Market is market. And in Brazil, this…

Cosan's webinar has ended. Thank you very much for your participation. Have a nice day.