M Dias Branco (MDIA3.SA): Takeaways from 18th Citi Brazil Equity Conference. Execution Improving, Demand The Missing Piece.

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M Dias Branco (MDIA3.SA): Takeaways from 18th Citi Brazil Equity Conference. Execution Improving, Demand The Missing Piece.

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17 Jun 2026 23:54:00 ET │ 11 pages

M Dias Branco (MDIA3.SA)

Takeaways from 18th Citi Brazil Equity Conference. Execution Improving,

Demand The Missing Piece.

CITI’S TAKE Neutral

We hosted M. Dias Branco at the Citi Brazil Equity Conference and came Price (17 Jun 26 18:00) R$17.58

away reaffirming our view that the earnings story remains largely Target price R$26.00

dependent on volume recovery. While we expect sequential improvement

Expected share price return 47.9% in trends through 2Q26, supported by seasonality, better sell-out

dynamics and market share gains, we continue to see limited evidence of a Expected dividend yield 2.6%

broader recovery in underlying category demand. We see that pricing Expected total return 50.5%

remains stable but constrained by elevated elasticity, limiting the scope Market Cap R$5,960M

for margin expansion through revenue management alone. As a result, US$1,178M

utilization remains the key earnings variable, particularly in milling, where

operations continue to run below optimal levels. In our view, a more

meaningful recovery in profitability would likely require stronger volume

trends and better asset utilization, while ongoing productivity initiatives Renata CabralAC

and modernization investments should continue to support gradual +55-11-4009-7561

operational improvement. renata.cabral@citi.com

Better Trends, But No Clear Inflection Yet. We expect trends to improve sequentially

through 2Q26; however, we see limited evidence of a broader recovery in underlying

category demand, which remains relatively soft across several categories. Consumer