Hypera (HYPE3) Status Update summary

Working capital optimization strategy and financial outlook

• Working capital optimization aims to increase cash generation by BRL 2.5 billion by 2028 and BRL 7.5 billion over ten years through reduced accounts receivable and inventory levels, aligning with industry standards.

• The process will be gradual over six quarters, targeting a reduction in accounts receivable from 116 to 60 days by end-2025, with no expected impact on sell-out growth.

• Operational improvements include AI-driven demand planning, reduced delivery lead times, and enhanced distribution center efficiency.

• Maintains focus on sell-out growth, with Q3 and October 2024 increases of approximately 11% and 13%, alongside continued portfolio diversification and R&D investments.

• Preliminary Q3 2024 results: net revenue around R$1.9 billion, EBITDA of R$561 million, and net income of R$370 million.

Short- and medium-term impacts

• Net revenue, EBITDA, and net profit will be temporarily reduced during the adjustment period (2024-2025), but main investments and sell-out growth will be preserved.

• Margin reductions are expected to be temporary, with operational efficiency gains anticipated from 2026 onward.

• The strategy is aligned with client needs, releasing distribution center space and improving logistics, with no major impact expected on client working capital.

• Sell-out growth remains strong, reaching 9% year-to-date, and a new share buyback program for up to 30 million shares was announced.

• Discontinued 2024 financial guidance, which previously projected net revenue of R$8.6 billion, adjusted EBITDA of R$3.0 billion, and net income of R$1.85 billion.

Share repurchase program details

• Approved a new share repurchase program for up to 30 million common shares (7.487% of free float), replacing the previous program, with a maximum term of 18 months from October 18, 2024, to April 18, 2026.

• Repurchased 1.75 million shares under the previous program, with 3.25 million remaining unconsumed; the new program supersedes the old one.

• Repurchased shares may be held in treasury, cancelled, sold, or used for stock-based compensation, with no impact on capital stock.

• May use derivatives for hedging obligations related to stock-based compensation; all transactions will occur on B3 at market prices.

• No impact expected on control or administrative structure; intermediaries include Bradesco, Credit Suisse, Ágora, Itaú, and XP Investimentos.