Eternit S A : Release 1Q23

Earnings Release

1Q23

Earnings Release

Contents
Highlights…………………………………………………………………………………………………………………………………………………….3
Message from Management	4
Main Indicators	4
Economy and Market	5
Operating Performance	6
Consolidated Financial Performance	10
Capital Markets	16
Events Subsequent to the Reporting Period	17
Annexes	18

1T23 2

Earnings Release

São Paulo, May 9, 2023 - Eternit S.A. - Under Court-Supervised Reorganization (B3: ETER3, "Eternit" or "Company") announces today its results for the 1st quarter of 2023 (1Q23). Except where stated otherwise, the operational and financial information of the Company is presented on a consolidated basis in thousands of Brazilian reais, in accordance with the Brazilian accounting standards, especially Federal Law 6,404/76 and guidelines issued by the Accounting Pronouncements Committee (CPC) and approved by the Securities and Exchange Commission of Brazil (CVM), which should be read together with the financial statements and notes for the quarter ended March 31, 2023. All comparisons in this earnings release are with the 1st quarter of 2022, except where stated otherwise.

Highlights

1Q23

Eternit reports Recurring EBITDA of R$42 million in 1Q23, up

86% from 4Q22.

MARKET CAP (03/31/2023)

R$ 578 million

CLOSING SHARE PRICE (03/31/2023) R$9.36

NUMBER OF SHARES (03/31/2023) 61,776,575

FREE FLOAT

98,16%

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1Q23 PERFORMANCE

Net Revenue of R$296 million, up 14% from 1Q22.

Gross Profit of R$84 million, up 6% from 4Q22.

Gross Margin of 28%, up 3 p.p. from 4Q22.

Recurring EBITDA of R$42 million, up 86% from 4Q22.

Recurring EBITDA Margin of 14%, up 7 p.p. from 4Q22.

Net Income of R$22 million, up 57% from 4Q22.

1Q23

3

Earnings Release

Message from Management

The Company started 2023 with a significant recovery in its operational and financial performance, recording Net Income of R$22 million in 1Q23, an increase of 57% from 4Q22.

In 1Q23, the Company recorded Net Revenue of R$296 million and Gross Profit of R$84 million, up 6% from 4Q22, and gross margin of 28%, 3 p.p. higher than in the previous quarter. Recurring EBITDA totaled R$42 million, representing significant growth of 86%, while Recurring EBITDA margin was 14%, gaining 7 p.p. in relation to 4Q22.

Eternit's healthy performance was chiefly driven by sales volume in the fiber-cement segment, which totaled 164,000 tons in 1Q23, up 4% from 1Q22, and by chrysotile exports, which increased 14% from the same period in 2022.

Construction work on the greenfield project at the new fiber-cement roofing panels unit in Caucaia, Ceará, is in progress and the unit is slated for startup in 2H23. The unit's initial capacity is 6,500 tons per month, with estimated investments totaling R$165 million, of which nearly R$81 million have already been spent.

Continuing the development of solar roofing tiles technology, in 1Q23 the Company sold 42 kWp of concrete solar tiles, and advanced in the implementation of pilot projects for fiber-cement solar roofing tiles, which included the start of installation of a 300 kWp photovoltaic generator at its new fiber-cement plant in Ceará.

As part of the Court-Supervised Reorganization Plan, the Company paid R$1.8 million to Class II and III bankruptcy creditors. As such, at the end of March 2023, Eternit's bankruptcy-related debt was approximately R$38 million, of which around R$32 million refer to the loan taken from Banco da Amazônia to build the polypropylene fiber unit in Manaus. To conclude the Court-Supervised Reorganization, the Company is awaiting the decision on its appeals against the divergent decision at the Superior Court of Justice (STJ) claiming the reestablishment of the conditions for payment to labor creditors established in the Plan approved at the general meeting of creditors.

This quarter, due to the resignation of certain members of the Board of Directors, the Extraordinary Shareholders Meeting held on March 21 elected, unanimously and without reservations, Fausto Ribeiro and Richard Doern as directors, with the former also occupying the position of Chairman of the Board.

Finally, the Eternit Board of Directors Meeting held on May 9, 2023 approved the payment of interest on equity of around R$4.8 million related to the 1Q23 results, which represents gross remuneration of R$0.78 per share, and should be paid on September 29, 2023, in accordance with the Company's Policy on Dividends and Interest on Equity.

1Q23

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Earnings Release

Main Indicators

C o nso lidated - R $ tho usand	1Q23	1Q22	C hg. %	4Q22	C hg. %
Gro ss Sales R evenue	360,276	324,291	11,1	379,701	(5,1)
N et revenue	296,376	259,693	14,1	312,556	(5,2)
Gross profit	83,524	85,938	(2,8)	78,555	6,3
Gross margin	28%	33%	- 5 p.p.	25%	3 p.p.
N et inco me (lo ss) fo r the perio d	22,006	42,297	(48,0)	14,032	56,8
Net margin	7%	16%	- 9 p.p.	4%	3 p.p.
A djusted N et Inco me/ Lo ss	23,137	31,838	(27,3)	13,006	77,9
Adjusted Net M argin	8%	12%	- 4 p.p.	4%	4 p.p.
EB IT D A C VM 527/ 12	40,681	64,271	(36,7)	24,332	67,2
EBITDA M argin CVM 527/12	14%	25%	- 11p.p.	8%	6 p.p.
A djusted EB IT D A	42,394	48,424	(12,5)	22,778	86,1
Adjusted EBITDA M argin	14%	19%	- 5 p.p.	7%	7 p.p.

Economy and Market

The market's macroeconomic expectations disclosed in the Focus Report[1] published by the Brazilian Central Bank predict GDP growth of not over 1.0% in 2023, with inflation measured by IPCA of 6.05% and SELIC rate of 12.50% p.a. by the year-end.

The food inflation of 7.3% in the last 12 months, measured by IPCA - Food and Beverage, high household debt, which reached 78% in February 2023[2], and high interest rate levels, with the basic interest rate (SELIC) at 13.75 p.a., affected credit supply and the disposable income of consumers, impacting the construction materials segment.

	In March, revenue from the construction materials
	sector not adjusted for inflation, disclosed by
	ABRAMAT[3], decreased 7.9% in relation to March
	2022, for a total decline of 6.5% in 1Q23, after
*Estimate ABRAMAT	already decreasing significantly by 6.9% in 2022.

Despite the year-on-year decline in revenues across the sector in 1Q23, ABRAMAT[1] predicts sales growth of 2% in 2023, mainly driven by the resumption of construction works in the recent real estate cycle and by the Federal Government's initiatives as part of the "My Home, My Life" program.

1. FOCUS Report - 04/28/2023
2. PEIC/CNC
3. ABRAMAT:www.abramat.org.br- ABRAMAT index - April 5, 2023

1Q23

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