Eternit S A : Release 4Q21

Earnings Release

4Q21

Earnings Release

Summary
Highlights ........................................................................................................................................................	3
Message from Management...............................................................................................................................	4
Main Indicators.................................................................................................................................................	5
Economy and Market ........................................................................................................................................	5
Operating Performance .....................................................................................................................................	6
Consolidated Financial Performance .................................................................................................................	10
Capital Markets...............................................................................................................................................	17
Events Subsequent to the Reporting Period ......................................................................................................	18
Appendices.....................................................................................................................................................	19

4Q21

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Earnings Release

São Paulo, February 22, 2022 - Eternit S.A. - Under Court-Supervised Reorganization (B3: ETER3, "Eternit" or "Company") announces today its results for the 4th quarter of 2021. 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 period ended on December 31, 2021.All comparisons in this earnings release are with the 4th quarter of 2020, except where stated otherwise.

Highlights

4Q21

Eternit ends 2021 with the best result in the decade: Adjusted EBITDA of R$ 337 million and Net Income of R$ 269 million.

MARKET CAP (12/31/2021)

R$ 1.3 billion

SHARE PRICE: (12/31/2021)

R$ 20.96

NUMBER OF SHARES: (12/31/2021) 61,776,575

FREE FLOAT 99%

INVESTOR RELATIONS [e-mail]

Vítor Mallmann - Investor Relations Officer Anderson Rebeque - Investor Relations Manager

Videoconference:

February 23, 2022 at 3 p.m.

Webcast:

https://choruscall.com.br/eternit/4t21.htm

4Q21/4Q20 PERFORMANCE

Net Revenue of R$ 290 million, up 26%.

Gross Profit of R$ 119 million, up 16%, and Gross Margin of 41%.

Adjusted EBITDA of R$ 76 million, up 13%.

Net income of R$ 53 million.

Positive Net Cash of R$ 181 million, up R$ 166 million.

4Q21

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Earnings Release

Message from Management

Despite the healthy performance in 4Q21, the quarter proved more challenging, especially with the continuous hike in prices of raw materials and other production inputs, restrictions on international logistics and falling demand in the construction materials sector during the year.

Against this backdrop, in 4Q21, the Company recorded net income of R$53 million. In 2021, net income came to R$269 million, a significant growth of 70% from 2020.

Net revenue in 4Q21 totaled R$290 million, 5% higher than in 3Q21 and 26% higher than in 4Q20. Gross margin in 4Q21 was 41%, remaining practically at the same level as in 3Q21.

Adjusted EBITDA reached R$76 million in 4Q21, 10% lower than in 3Q21, but 13% higher than in 4Q20. In the year, adjusted EBITDA totaled R$337 million, the best result in the decade and one of the be st in the Company's history.

The Company continued expansion work at its units in Rio de Janeiro and Goiânia, among other projects in the program to modernize fiber-cement units, which will jointly represent additional production capacity of 7,000 tons per month, about 10% of current capacity. Expansion work at the Rio de Janeiro plant is scheduled for completion in 1Q22 and the Goiânia plant in 2Q22.

In 4Q21, the Company continued to sell BIG-F10 concrete photovoltaic tiles, still restricted to selected projects, completing yet another important stage of business development. In December, the F-140fiber-cement photovoltaic tile received approval for registration from Inmetro, thus completing the final stage of the new product registration process.

As part of the Court-Supervised Reorganization Plan, Eternit paid R$ 655,000 to Class I bankruptcy creditors this quarter. As such, Eternit's bankruptcy debt at the end of 2021 was approximately R$45 million, of which R$37 million refer to the loan borrowed in 2014 from Banco da Amazônia (BASA) to build the polypropylene fiber unit of Eternit Amazônia.

In November, the company announced a new fiber-cement roofing panels factory in Northeastern Brazil, in the city of city of Caucaia, Ceará, at an investment of approximately R$ 165 million, with operational startup scheduled for 2023. The new unit will initially have production capacity of 7,000 tons per month, which can be doubled at a later stage using the infrastructure currently under construction.

In line with its strategy of growth and industry consolidation, the Company raised R$ 110 million in March through capital increase, which involved the issue of shares for private subscription, in order to fund the acquisition of Confibra. In January 2022, the Company informed the market through a Material Fact notice of the signing of a purchase agreement for the acquisition of the entire capital stock of Confibra. The acquisition will add 20% to the Eternit Group's production capacity for fiber-cement roofing panels.

Production of synthetic polypropylene (PP) at the Manaus unit, an input for fiber-cement production, totaled 12,000 tons in 2021, a new production record and 25% above project capacity. In view of heated demand in the fiber- cement segment, the acquisition of Confibra and the greenfield project in Ceará, in January 2022, the Company announced to the market the expansion of production capacity at the Manaus unit to 18,000 thousand tons p.a., representing an addition of 40% to the current capacity. The expansion of the Manaus plant is scheduled for completion in 2023 at an estimated investment of R$ 24 million.

After a period of six years, the Company once against started paying interest on equity to its shareholders this quarter, distributing R$ 14.9 million in December.

4Q21

4

Earnings Release

Main Indicators

Consolidated - R$ thousand	4Q21	4Q20	Chg. %	3Q21	Chg. %	2021	2020	Chg. %
Gross Sales Revenue	359,741	285,995	25.8	344,131	4.5	1.393,132	860,368	61.9
Net revenue	289,545	229,453	26.2	275,978	4.9	1.123,125	683,423	64.3
Gross profit	119,216	102,707	16.1	118,709	0.4	491,050	227,344	116.0
Gross margin	41%	45%	- 4 p.p.	43%	- 2 p.p.	44%	33%	11 p.p.
Net income (loss) for the period	53,343	121,077	(55.9)	98,014	(45.6)	269,446	158,733	69.7
Net margin	18%	53%	- 35 p.p.	36%	- 18 p.p.	24%	23%	1 p.p.
Adjusted Net Income/Loss	54,866	63,548	(13.7)	76,698	(28.5)	251,059	85,775	192.7
Adjusted Net Margin	19%	28%	- 9 p.p.	28%	- 9 p.p.	22%	13%	9 p.p.
EBITDA CVM 527/12	73,906	135,446	(45.4)	116,939	(36.8)	362,070	209,052	73.2
EBITDA Margin CVM 527/12	26%	59%	- 33 p.p.	42%	- 16 p.p.	32%	31%	1 p.p.
Adjusted EBITDA	76,214	67,350	(13.2)	84,642	(10.0)	336,995	122,224	175.7
Adjusted EBITDA Margin	26%	29%	- 3 p.p.	31%	- 5 p.p.	30%	18%	12 p.p.

Economy and Market

Confidence indicators ended 2021 with an overall downward revision. Market expectations, reflected in the Focus Report1 and Copom2 of the Brazilian Central Bank, have been pointing to worsening macroeconomic parameters, marked by a reduction in the GDP growth forecast (2022: +0.30%) and an increase in the basic interest rate (SELIC 2022: 11.75% p.a.).

In the industrial segment, according to data from the Brazilian Confederation of Industry ("CNI"), the construction sector should grow above expectations in 2021, which is forecast at 8.2%.

According to the Brazilian Construction Materials Industry Association ("ABRAMAT"), deflated total revenue of the sector continues to show signs of cooling in 4Q21. According to the report, sales in October 20213 declined 4.2% year on year, repeating the poor performance of September 2021, and declined 0.3% from September 20213, the fourth successive decline.

Despite the decline in recent months, sales from January through October 2021[3] were 12.8% higher than in the same period in 2020. As such, ABRAMAT maintained its growth projection of 8% for 20213.

1. Focus Report - 07/01/22 e 28/02/22
2. 244º Reunião do Copom - 02/02/22
3. ABRAMAT:www.abramat.org.br- Index Out/21

4Q21

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