Havaianas Reseting a Scalable Growth Model | Limited oil price impact

Research evidence excerpt

Havaianas Reseting a Scalable Growth Model | Limited oil price impact

Alpargatas (ALPA4 BZ / ALPA3 BZ)

Equity Research

June 29, 2026

Key Points

ALPA focuses on profitable growth in Brazil, continued international turnaround (especially Europe

and the US under the new model), disciplined cost management, and sustained brand investment. We

believe a structural margin expansion will be driven by three main levers: (1) ongoing productivity and

manufacturing efficiency initiatives, (2) premiumisation of product and channel mix, and (3) gradual

recovery of scale. ALPA' stock price has been closely correlated with the oil price, which we believe

is unjustified - Havaianas raw materials (30% COGS) volatility has a limited impact on margins, given

relatively lower oil price conversion to butadiene and styrene and small cost weight, and fully hedged

in 1H26.

Transition complete: from restructuring to disciplined growth. ALPA has simplified its business,

driving efficiency gains and service improvement, and refocused on priority markets. This has already

translated into a meaningful recovery in profitability (c25% EBITDA vs. 5% pre-turnaround) alongside

a return top-line growth, setting a stronger base for the next phase. With capacity utilization at ~75%

and continued efficiency gains, the company looks well positioned to scale volumes with limited

incremental cost. The broader turnaround—driven by simplification, productivity improvements, and a

leaner cost structure—supports sustained margin resilience and strong cash generation.

From margin restoration to volume growth. Despite the sharp restoration in profitability, international

volumes remain below historical levels, and rebuilding scale is now the central driver of incremental

value.