Frequently Asked Questions

Shares in Dexco are traded on the exchange B3 – Brasil, Bolsa, Balcão, under the ticker DXCO3.

Before starting to invest we recommend that you check out the Start Investing link on the Education Hub of the B3 website.

Afterwards, you should create an account with a brokerage house (broker) in order to start trading. If the broker operates a Home Broker system, trades can be carried out over the internet.

Currently there are many ways to carry out this type of tracking, such as the home page of our IR site (with a 15 minute delay) or the Historical Stock Prices page.

In addition, this information can be found on the B3 site or using other information platforms such as Google, Yahoo and Infomoney, or other tools and sites provided by the stock exchanges.

This is the area responsible for liaising with investors, providing a bridge between the Company’s leadership and shareholders (and their representatives). Among other activities, the IR area produces quarterly reports and updates, maintains the IR site, and organizes and participates in individual meetings and national and international conferences.

Through the link on the webpage Contact IR or by sending an email to investidores@dex.co.

Register for the e-mail alert by clicking here.

Dexco’s shares are categorized as ordinary (ON), identified by the ticker DXCO3. This category of shares guarantees shareholders two main rights:

• The right to vote and participate in Assemblies, in proportion to the quantity of shares that the shareholder holds.
• tag along: ensures the protection of minority shareholders, should control of the company change, that is, at the time that control changes the shares may be sold to the new controlling party for at least 80% of the market value at the corresponding price. It should be noted that, as it is listed on the Nov Mercado segment of the bourse, the Company grants 100% tag along rights to its minority shareholders.

Dividends and Interest on Net Equity (JCP) are means of distributing the Company’s profits to its shareholders, the accounting treatment being the main difference between them. With Dividend payments, there is no income tax deducted at source (known as IRRF in Brazil), and thus shareholders receive the full amount. For payment of JCP, on the other hand, the amount distributed to shareholders is net of tax, which is retained by the Company.

The Company’s Corporate Bylaws provide that a minimum of 30% of the adjusted net earnings will be distributed as dividends, as described in the said document.

Payment is made directly into the account of the shareholder’s broker. For more information on Dividends and JCP, access our webpage.

The dividend yield is an indicator of the relative profitability of earnings paid to shareholders in a given period, that is, the ratio between the dividend paid per share in relation to the share price ((total cash earnings [previous 12 months] ÷ current share price) x 100). For example, if total dividend distributed is R$0.50 per share (UDM) and the share price is R$10.00, the dividend yield is 5%.

The payout, on the other hand, represents how much of the net income was distributed in the form of dividends or JCP.

It is the date that at which the shareholder no longer has the right to receive the dividends and JCP announced. For example, if the ex-dividend date is announced as 10/02/2020, for the right to receive earnings, the investor should acquire or be in possession of the shares on 10/01/2020.

The Company’s Share reports are available exclusively on the Digital Correspondence Portal of Itaú Custódia, a registered bank. For more information contact: Itáu Custódia -Av. Engineer Armando de Arruda Pereira, 707 – 9° andar Eudoro Villela Tower 04344-902 – São Paulo (SP) Tel +55 11 3003-9285 (Capitals and Metropolitan Regions) Tel +55 0800 7209285 (other locations) or www.itaucustodia. com.br.

Requests for information about the shareholding should be addressed directly to Itaú Custódia at: Av. Engenheiro Armando de Arruda Pereira, 707 – 9° andar Torre Eudoro Villela 04344-902 – São Paulo (SP) Tel +55 11 3003-9285 (Capitals and Metropolitan Regions) Tel +55 0800 7209285 (other locations) or www.itaucustodia.com.br.

Itaú also has the Íon Itaú application for Android users, a new platform that seeks to bring agility to the Bookkeeping processes that used to be done in person. To access it, initially the investor must access the Itaú application and update the registration data that are in the bookkeeping environment, according to the current account data. Then, the investor must access Íon with the same current account and update the book-entry registration with his own preferences.

In case of doubts, it is possible to contact the Call Center at 4004 4828 (capital cities and metropolitan regions) and 0800 970 4828 (other locations).

Requests for information about the shareholding should be addressed directly to Itaú Custódia at: Av. Engenheiro Armando de Arruda Pereira, 707 – 9° andar Torre Eudoro Villela 04344-902 – São Paulo (SP) Tel +55 11 3003-9285 (Capitals and Metropolitan Regions) Tel +55 0800 7209285 (other locations) or www.itaucustodia.com.br.

A share buy-back is when the Company acquires its own publicly traded shares to either be held in custody in the treasury department or canceled. The buy-back programs may be instigated in order to meet obligations relating to share-based remuneration packages or, in the case of canceling the shares, to increase the percentage shareholding of each individual shareholder in the Company’s capital.

Dexco has 17 industrial units located in Brazil, distributed in 8 states in the Northeast, Southeast and South regions, in addition to 5 forestry units. While in Colombia, it has 2 industrial units and one forestry unit. Furthermore, the Company is part of 2 joint ventures: LD Celulose and Caetex. The geographical distribution can be seen on the map below:

Yes, in addition to the 3 industrial units and one forestry unit in Colombia, the Company also has commercial property and warehouses in the USA (Dexco North America) and in Peru (Dexco Andina). Dexco also exports its products to a range of geographic locations.

This change is part of a transformational journey begun a few years ago, intended to leverage competitive advantage and enable expansion into new businesses. In addition, with Dexco the Company is also taking an important step by getting closer to its clients and consumers. For more details, check out the announcement made regarding the change during Dexco Day 2021 by clicking here and the video talking about the new brand on the corporate website.

To find out more about the fabrication of wood panels, click here for a video showing the MDP and MDF production processes.

The MDP wood panel is produced from wood particulates that form 3 layers and offer effective resistance to warping. Thus, they are applied to straight pieces that bear a heavy load, such as shelving. The MDF panels, on the other hand, are made from a single layer of fibers, which allows for a machine finish and makes the panels suited for pieces with rounded corners.

The main costs related to the production of panels are: resin and wood. Together, these materials make up approximately 40% of the total cost.

Resin has two functions in the manufacture of wood panels:

1. Raw / Base Panels: fixing and bonding of fibers (MDF) / wood particulates (MDP) in forming the the panels in the presses, aided by the appropriate temperatures and pressures and;
2. Coated Products: infiltration of the papers to be laminated, in which the resin provides the finish, strength and adhesion to the base panel.

One of the main raw materials used in the resin is formalin (or formaldehyde). However the technology deployed by Dexco ensures a level of emissions that comply with national and international normative standards and specifications. It should also be noted that, as a differential, the Company’s portfolio of panels includes those that contain formalin-free resins.

The Division operates under the brands Deca e Hydra, mainly in the metal and sanitary ware and electric showers sectors.

Base products are metal products used in sanitary or plumbing installations, usually found inside a structure, such as valves and manifolds. This type of product accounts for approximately 30% of the volume currently sold by the Division. Finished products, on the other hand, include other items in the Division’s portfolio, such as faucets, showers, sinks, sanitary ware and bathroom accessories.

The main costs associated with the manufacture of the products are: i) labor, stemming from the production model used in making sanitary ware, and ii) metals, which together make up approximately 40% of the total.

The Tiles Division is the Company’s youngest division, created through the acquisition of Ceusa, in 2017. In 2019, the Company increased its market share in the sector through the acquisition of Cecrisa. In2022, Dexco made its most recent acquisition: Castelatto, leader in the segment of architectural concrete floors and coatings, another important step in the expansion of its portfolio.

The process begins with grinding, in which the ingredients (raw materials) that make up the ‘slurry’ are mixed together. In wet production, the ingredients receive a precise dose of water during the mixing process, thus achieving a better quality and homogenization of the slurry. The dry method, on the other hand, does not add water during the mixing of ingredients, which results in a lower quality mixture. All Dexco products are produced using the wet method.

The main costs related to the production of ceramic tiles are: i) fuel and ii) labor. Together these costs make up approximately 40% of the total.

The joint venture is owned by Dexco and Lenzing, each with shareholdings of 49% and 51%, respectively. It should also be noted that the results for LD Celulose will be reported using equity equivalence in Dexco’s financial results.

Through this project, the Company intends to diversify its risks, broadening the scope of its operations in the pulp market, which has less exposure to the domestic market. In addition, in keeping with the offtake agreement, 100% of production will be sold in dollars to Lenzing, destined for factories in Europe, Asia and North America.

Wood-based fibers that can serve different applications, from LCD screens to medicine capsules. In the case of LD Celulose, dissolving wood pulp is supplied to the textile industry, principally for use in the production of viscose, modal and lyocell fibers. For more information, check out LD’s website by clicking here.

Due to the proximity between the forest and the factory, the joint venture will have one of the lowest cash costs in the world (~300 USD – China freight). In addition, the industrial unit features integrated logistics and forests certified to international standards.

The industrial unit began its operations in April 2022 and reached full capacity in the first quarter of 2023.

The production capacity is 500k tons of dissolving wood pulp per year, with the possibility of an additional 10% to be achieved through a process of debottlenecking, to be undertaken once the plant reaches its full capacity.

Dexco publishes its 1st, 2nd and 3rd quarter results within 45 days following the end of the quarter, and the 4th quarter and annual results within 3 months following the end of the year.

The results are presented in the following materials: Quarterly Information Form (ITR), Standardized Financial Statements (DFP), Quarterly Results Report and Results Presentation. These materials are available from the Brazilian Securities Commission (CVM), and can also be found on the Results page of the IR website. In addition, Dexco also offers a spreadsheet illustrating its spreadsheet showing its historical performance.

Videoconferences and live events can be accessed via the Videos page of the IR website.

SGD is a management initiative whose start point is the identification of opportunities in processes, costs and revenues that can translate into financial gains. The setting of annual goals and action plans ensures success in the search for better results, which are monitored using the PDCA methodology (Plan, Do, Check and Act).

Net Revenue is the Company’s total gross sales from operations net of discounts, rebates, returns and sales tax. Pro Forma Net Revenue, on the other hand, excludes non-recurring events in the period, that is, revenue that did not arise from the natural course of doing business, such as receipts related to the sale of assets, forests and land.

In the case of Dexco, Biological Assets refers to its forests or, more precisely, the trees in the plantations undergoing their growth phase. When the tree is felled and turned into wood, the Biological Asset is either stored as a product or sold to third parties. It should also be noted that the Biological Asset is assessed at Fair Value, comprising its cost added to the difference between its cost and fair value (the wood’s expected sales price).

The Fair Value of Biological Assets is calculated on an accounting basis and comprises the expected trade value of the Biological Asset in the open market. At Dexco, the Fair Value calculation takes into consideration aspects such as the average price of sales to third parties, market research, the age of the asset and its productivity.

Depreciation, the Amortization of Intangibles, and Depletion refer to the estimated depreciation of Fixed, Intangible and Biological Assets, respectively, as resources are consumed and exploited.

As the Biological Asset comprises the cost portion plus the difference between cost and Fair Value, depletion is presented separately for reporting purposes. Thus, the Depletion that is reported under Depreciation and Amortization refers to the “cost” portion of the Biological Asset, while the Depletion Portion in the Fair Value of a Biological Asset, on the other hand, refers to the difference between the cost and the Fair Value of the Biological Asset.

EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization – indicates the Company’s operating results and the potential for cash generation. Adjusted and Recurring EBITDA, on the other hand, discounts events that are not related to the natural course of doing business. Examples of non-recurring events are:

• The sale of assets, forests or land;
• Donations;
• The project to build the new dissolving wood pulp plant;
• The exclusion of ICMS (goods and services tax) from the PIS and COFINS (social security contributions) base calculation.

Adjusted and Recurring EBITDA is one of the main indicators used to monitor the Company’s performance, as in addition to only including recurring events, this indicator does not include accounting and non-cash effects, such as a change in the Fair Value of Biological Assets.

Net Income is income net of taxes, expenses and production costs. In the same way that EBITDA is adjusted to capture and report only items that originate solely from the natural course of doing business, Recurring Net Income also excludes non-recurring events. Examples of non-recurring events are:

• The sale of assets, forests or land;
• Donations;
• The project to build the new dissolving wood pulp plant;
• The exclusion of ICMS (goods and services tax) from the PIS and COFINS (social security contributions) base calculation.

It should be noted that Net Income is not a recommended indicator for analyzing or tracking Dexco’s performance as it is impacted by effects solely of an accounting nature, such as the Change in the Fair Value of Biological Assets.

ROE – Return on Equity – expresses the operating income in relation to the value of the Company’s equity. In general terms, the higher the Company’s ROE, the more profitable it is.

EVA – Economic Value Added – indicates the profit generated over a given period, that is, the Company’s residual wealth after deducting the cost of invested capital from the operating income. The structural initiatives that Dexco has carried out in recent years, such as operational improvements that have reduced costs, added to asset optimization, led the Company to a positive EVA in 2020.

Working Capital is the funds needed to maintain day-to-day operations, that is, the receivables and expenses that keep the operation turning over. It is essential to control and monitor this indicator in order to maintain a healthy cash flow and thus ensure that the Company has the liquidity needed to meet its obligations.

Free Cash Flow indicates the Company’s generation or consumption of cash over a given period. Sustaining Free Cash Flow, on the other hand, indicates the cash generated or consumed from operations, excluding non-recurring effects in the period, such as:

• Investment in the dissolving wood pulp project;
• Factory expansion;
• Donations.

In other words, Sustaining Free Cash Flow indicates the cash balance after deducting obligations, such as the payment of salaries, taxes, interest on loans and factory maintenance.

The Cash Conversion Cycle indicates the period of time elapsing between cash being paid out (in paying suppliers, salaries and taxes) and the equivalent value being paid in as a result of sales. During this period the Company still needs capital in order to operate, so the longer the cash cycle, the greater the level of working capital needed to keep the operation turning over.

Three mechanisms are used to manage the Cash Conversion Cycle: the average payment lead time to suppliers, the average storage period, and the average lead time for client receivables.

At Dexco, leverage is calculated using the formula Net Debt / Adjusted and Recurring EBITDA for the previous 12 months. This metric is used to analyze the financial health of the business and represents how many multiples of annual net earnings would be needed to pay off the total corporate debt. Thus, if a company has a leverage of 1.5, it would take one year and a half to pay off its debt commitment, if the financial performance of the previous twelve months were maintained. It should be noted that for a more robust analysis of indebtedness, it is important also to analyze the debt payment schedule and cash generation.

Yes, the Company holds an AAA(bra) rating, the highest rating given by Fitch Ratings, and also an AAA.br rating by Moody’s, two of the three major credit rating agencies in the national and international credit risk assessment sector. The credit rating analysis takes into consideration various factors including the macroeconomic environment, financial solidity, projected future results, investment and growth cycles, ESG aspects, among others. The highest rating indicates Dexco’s strong business position and its ability to generate a robust operational cash flow even in challenging scenarios. For more information, you can refer to our website by clicking here.

ESG – Environmental, Social and Governance – is a set of standards and good practices that indicate whether a business is socially aware, sustainable and properly managed. In other words, it refers to the ways in which the business seeks to minimize its impact on the environment; contributes to a fairer and more responsible world; and follows the best management practices.

Commitment to conscientious business management is a fundamental part of Dexco’s history, which has adopted sustainability-oriented practices since the beginning of its activities. In light of the new circumstances arising from the company re-brand, the ESG strategy is currently being revised, with a focus on aligning the business challenges to innovation, purpose and culture. This entails focusing on bringing together the ESG aspects of the sector in which we operate; acting as agents of change in relation to construction and renovation processes; and thus supporting sustainable growth with a commitment to maintaining a positive carbon balance. At the same time, we aim to further promote health and well-being not just for clients and customers but for everyone who works with Dexco and is a part of it. We thus aim to deliver on the concept of providing Solutions for Better Living to all stakeholders.

Dexco has 820,566,246 shares, distributed as follows:

• Itaúsa and family: 40.8%
• Seibel Block: 20.4%
• Free float: 37.3%
• Treasury: 1.5%

General Meetings are called by management to discuss matters that affect the Company’s activities. The AGM (Annual General Meeting) is held annually, in the first four months after the end of the fiscal year, with the purpose of reviewing the accounts presented by the board; examining, discussing and voting on the financial statements; discussing the allocation of that year’s net earnings and the distribution of dividends; and electing or re-electing board members. An EGM, on the other hand, is called in order to discuss other matters.

The instructions for participation in the General Shareholders’ Meeting are disclosed prior to the AGM/EGM, following the schedule stipulated by legal regulations, in the Call Notice, which is made available on the Shareholders’ Meetings and Board of Directors page on the IR website, as well as in widely circulated newspapers.

Dexco is listed on the Novo Mercado, which has the most stringent levels of governance requirements on the B3. Thus, the Company must comply with an additional set of legislative rules, such as:

• Share capital composed solely of common shares;
• 100% tag along rights for the shares;
• Installation of the Internal Audit, Compliance and Audit Committee area;
• Should the company leave the Novo Mercado, a public offering to acquire the shares (OPA) at fair value is to be held;
• A Board of Directors with at least 2, or 20%, of its members being independent, whichever figure is the greater, with a unified term of 2 years;
• Minimum 25% of outstanding shares (free float);
• Structure and dissemination of the process for evaluating the Board of Directors, its committees and the Executive Board;
• Development and dissemination of (i) remuneration policies; (ii) appointment of members to the board of directors, its advisory committees and the statutory executive board; (iii) risk management; (iv) transactions with related parties; and (v) trading of securities, with a minimum content (except for the remuneration policy);
• Simultaneous disclosure, in English and Portuguese, of material facts and events, information on earnings, and earnings press releases;
• Monthly disclosure of securities issued by the company traded by the controlling shareholders.

B3 indices create theoretical asset portfolios that aim to capture the behavior of assets and segments of the Brazilian economy. Companies that achieve eligibility for these portfolios gain visibility and liquidity. As an example, Dexco is included in all of B3’s Governance indices, as well as the Ibov, ISE, and ICO2. You can check here for the indices that Dexco is part of.

Dexco has a Code of Conduct that establishes the rights and responsibilities of managers, employees and third parties which are part of the Dexco group, which demonstrates the Company’s commitment to ethics and integrity in its relations. The Code of Conduct is repeatedly reinforced in compliance training and given to new employees upon admission. For more information, see our Code of Conduct by clicking here.

Dexco has a channel for receiving complaints, which may be anonymous and confidential, for situations that run contra to the Code of Conduct or other internal policies and rules; are regarding non-compliance with current legislation; or suggest illegal practices. As provided for in  Whistleblower Channel Policy, all reports are investigated with the highest level of impartiality and confidentiality and, where applicable, disciplinary measures are applied. Click here to access the Channel.

Dexco repudiates any act of corruption and adopts, through its Integrity Program, all means necessary to prevent and combat them, in compliance with current legislation. Combating Corruption Policy offers guidelines for preventing, detecting and combating corruption in relations between administrators, employees or third parties representing the Company and government agencies, in compliance with current legislation. For more information, see our Anti-Corruption Policy by clicking here.

Currently, Dexco has innovation initiatives in place, which include:

• Open Innovation, represented by the DX Ventures and Open Dexco initiatives.
• Intrapreneurship, represented by the IMAGINE program.

DX Ventures is a Corporate Venture Capital fund focused on investing in scale ups that have high growth potential. The purpose in creating the fund is to track macro-trends in transformation and innovation in the construction, renovation and home-improvement sector, as well as to map potential disruptions to Dexco’s businesses and products.

Visit open.dex.co and submit your solution/startup for one of the challenges that best fits your solution, or you can also send us an email at inovacao@dex.co.