Earnings

Conference Call 3rd Quarter, 2018

2

62 52

Recurring Net Profit

3Q17 3Q18

210

Recurring EBITDA

205

3Q17 3Q18

Net Revenues*

3Q17

1,020

1,513

3Q18

EBITDA Margin

16.4% 20.1%

Gross Margin

28.3% 29.1%

Higher volumes: Increase in volumes shipped in both three business divisions

Good performance in foreign markets: Higher exported volumes and improving performance in Colombia

Sale of assets: Second tranche of the deal with Suzano Papel e Celulose recorded in the quarter

Consolidated Results and Highlights BRL million

Pressure in Margins: Higher commodity prices and BRL depreciation

*Net revenues in 3Q18 includes BRL 235,1mn related to the sale of biological assets to Suzano

1,511

EBITDA Working Capital

CAPEX Tax Others Financial Flow

Free Cash Flow

(143) (305) (318)

(416)

(63)

266

YTD18 YTD17

Cash Net Debt

Cash and applications

3,037

2,070

967 2,991

1,949

1,042

Net Debt/EBITDA 2.3x Net Debt/EBITDA 2.8x

3Q18 3Q17

581

(283) (79) (16)

(107) (71)

25

Total Debt

Net Debt

Total Debt

Financial deleveraging: Continuing trend of deleveraging

Sale of assets: 2nd tranche of the transaction was partially collected, disbursement of the taxes

More favorable financial flow: Reduction on financial expenses

Diligent investment management: CAPEX lower than expected for the year

BRL million

Cash Flow and Indebtedness

3

DPO (days) Suppliers

62 49

Cash Conversion Cycle (days)

100

122

DIO (days) Inventory

91 105 YTD18

YTD17

Forestry OPEX (BRL million)

50 42

Maintenance and Projects (BRL million)

59 45 3Q18

3Q17 CAPEX

(BRL million)

109

87

Focus on sustaining CAPEX

Cash conversion cycle improved 22 days

The efficient inventory management has driven the working capital reduction

BRL million

Working Capital and Investments

4

The majority of Ceramic Tiles Expansion project will be invested in 2019

DSO (days) Trade Receivables

71 66

Low end furniture chain has driven demand increase: worse product mix

Pressure in margins: Higher commodity prices, BRL depreciation and maintenance stoppages

Capacity Utilization

MDF 73%

MDP 72%

Wood 72%

Gross Margin

27,5% 28,5%

EBITDA Margin

16,7% 23,4%

Increasing demand for wood panels: increase in sales as a consequence of better demand

Net Revenues*

3Q18 3Q17

1,050

651 136

Rec. EBITDA

152

3Q17 3Q18

Wood Division BRL million

5

Wood Panels Brazilian Industry Source: IBÁ – in m³ million

MDF 2015 2016 2017 YTD 2018

Domestic Market 3.6 3.5 3.7 2.8

Exports 0.4 0.6 0.7 0.6

Idle Capacity 19% 22% 18% 16%

MDP 2015 2016 2017 YTD 2018

Domestic Market 2.5 2.5 2.6 2.0

Exports 0.1 0.3 0.4 0.4

Idle Capacity 30% 27% 27% 23%

3Q18 3Q17

768 615

Volume (‘000 m³)

*Net revenues in 3Q18 includes BRL 235,1mn related to the sale of biological assets to Suzano

Differentiation is key in Wood’s Strategy

Being benchmark in production costs, supported by SGD and exploring initiatives such as factory vocation, S&OP, assets adjustments and lean manufacturing.

Accelerate the product life cycle, ensuring the position at the spotlight of innovation and design, generating value from differentiation.

Intensify digital initiatives in the Wood business, such as Marcenaria D. app

Strengthen the relationship with customers, exploring the customer committee which incorporates the main distribution channels.

Encourage higher stability in the furniture productivity chain, constantly increasing the service level.

Improve market intelligence, optimizing the commercial policy and execution and exploiting even more the market segmentation.

Consolidate the cultural transformation.

Continue export program, with a greater focus on long-term agreements and products with higher value added.

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7

Gross Margin

28.5% 30.3%

3Q18 3Q17

368 407

Net Revenue

3Q18

59 52

EBITDA Rec.

3Q17

EBITDA Margin

14.6% 14.2%

ABRAMAT Index Source: ABRAMAT

Growth in an adverse scenario: increase in volumes and revenues

-5,9% -12,5% -11,5%

-4,0%

1,2% 1,5%

2016 2017 YTD18 2018e

Deflated net revenues of building materials industry vs previous year in the domestic market

Deca Division BRL million

2014 2015

Capacity Utilization

Metals 78%

Ceramic 66%

Deca 72%

6,924

Volume (‘000 itens)

6,771

3Q18 3Q17

Ongoing recovery: successfully implemented the second round of price hike and captured gains in initiatives among the Division

Costs are still pressured: increase on costs of non-ferrous commodities and productivity below the potential

8

Growth strategical agenda

Soluções Para Melhor Viver

Improve the industrial and logistic efficiency promoting productivity and logistic gains

Use innovation in a more assertive, efficient and effective way, getting relevant insights from our customers and partners to anticipate trends.

Develop new sources of revenues in different categories of products and services.

Optimize the market intelligence, capturing and analyzing the market dynamics and converting it into improvement actions.

Consolidate the excellence in commercial execution by capturing business synergies and optimizing the sales routine.

Attract and develop people and consolidate the cultural transformation.

Ceramic Tiles Division

Capacity Utilization

Ceusa 99%

Gross Margin

39.6% N/A

EBITDA Margin

25.6% N/A 9

3Q18 3Q17

55

Net Revenue

N/A

3Q18

14

EBITDA Rec.

3Q17

N/A

Record performance: best operational quarter since the acquisition

BRL million

1,502

Volume (m²)

N/A

3Q18 3Q17

Increase in sales: recovery in retained volumes

Ceramic Tiles Brazilian Industry Source: ANFACER – in m² million

2015 2016 2017 YTD 2018

Domestic Market 816 706 685 514

Exports 77 94 90 71

Idle Capacity 18% 28% 28% 26%

Growth horizon

Increase the productivity and consolidate the capacity expansion.

Lean manufacturing as a culture.

Strengthen the relationship with stakeholders and the improve in the digital marketing strategy.

Accelerate the digital transformation and implement a system of statistical process management.

Expand and complement the mix of products with different sizes and shapes and consolidate the differentials.

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11

Cultural Transformation - Jeito de Ser e de Fazer

2015 Culture mapping and diagnosis o 582 participants representing the

entire organization.

2017 Leadership Development o Actions to align and strengthen the practices

of the new culture (Jeito de Ser e de Fazer). o Participation in GPTW research, obtaining

the certificate.

2018 Leadership Development and Culture Consolidation o Sustained the GPTW certificate . o Internal actions to strengthen the

culture. o Dissemination at Ceusa. o Culture adherence research.

2016 Dissemination of the new culture o The Board of Directors and the leadership built together the new culture ( Jeito

de Ser e de Fazer) and prepared themselves to deploy it in the Organization. o Communication campaigns and caravan of executives in all business units. o Creation of the Innovation Center

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Innovation

+ 350 companies

applied

15 scale-ups selected by a working group composed of different areas

of the company

7 scale-ups selected by the executive board

7 months of acceleration

Focus on: Construction and Remodeling, Operational Efficiency and Digital Platforms

Support an innovation culture in the Company

Increase the connection with the entrepreneurial ecosystem

Challenge the Organization’s business model

7

Priorities in the agenda

13

Improve the results in the business divisions

Consolidate the projects related to assets improvement of the Company

Consolidate the capacity expansion in Ceramic Tiles

Implement the project of the DWP joint-venture, which is currently on schedule

The information herein has been prepared by Duratex S.A. and does not represent any form of prospectus regarding the purchase or subscription to the company’s shares or securities. This material contains general information relating to Duratex and the markets the company operates in. No representation or guarantee, expressed or implied, is made herein, and no reliance should be placed on the accuracy, justification or completeness of the information provided. Duratex does not offer any assurances or guarantees regarding the fulfilment of expectations described.

November 2018

1) Recurring EBITDA: EBITDA adjusted for events not arising from the fluctuation in the fair value of biological assets, a combination of extraordinary business and events

2) Recurring EBITDA LTM: Sum of Recurring EBITDA from the previous 12 months

Disclaimer e Glossary

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