T4F Entretenimento S A : Transcrição - 3T23 - EN

Conference Call Transcript

3Q23 Results

T4F (SHOW3 BZ)

November 9, 2023

INTRODUCTION - SERAFIM ABREU

Good morning, everyone, and welcome to the presentation of results for the third quarter of 2023 at T4F.

In this quarter, we premiered the musical "The Lion King" in partnership with Disney, the longest- running Broadway musical that has reigned supreme for over 25 years, garnering critical acclaim and a loyal audience during its new run in Brazil after a decade.

We are wrapping up the final preparations for the delivery of the Brazilian edition of Primavera Sound, the largest festival in Europe, reinforcing our strategy to expand our festival portfolio with relevant brands, emphasizing sustainability and inclusion, and delivering an excellent experience. This year's edition features The Cure, The Killers, Pet Shop Boys, Beck, and other top-notch acts such as The Hives, Carly Rae Jepsen, and Marisa Monte. With this impressive lineup, the outcome couldn't be any different-we have had excellent support from the audience and partner brands. We expect to welcome over 80,000 people on December 2nd and 3rd at Interlagos Racetrack.

Additionally, we have announced the expansion of our beloved Turá festival, which will be held for the first time in Porto Alegre on November 18th and 19th, featuring Caetano Veloso, Emicida, and other attractions.

Lastly, we have successfully concluded the sales, with an absolute sell-out, of the six shows from Taylor Swift's 'The Eras Tour.' A worldwide success, the singer will perform three shows in São Paulo and three in Rio de Janeiro in November.

With that, we conclude the third quarter of 2023 with an adjusted EBITDA of R$ 16.5 million, with a 27.6% margin, marking a 14-point increase compared to the third quarter of 2022. Regarding the company's cash position, we closed the quarter with an effective cash balance of R$ 16.3 million, after fully prepaying the R$ 63 million of our debentures.

After Diego's explanations, our Director of Investor Relations, regarding the financial and operational results of the period, I will return to discuss the upcoming events.

FINANCIAL AND OPERATING RESULTS - DIEGO PARENTE

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Conference Call Transcript

3Q23 Results

T4F (SHOW3 BZ)

November 9, 2023

Thank you very much, Serafim.

In this quarter, we promoted 91 events, for which we sold 154 thousand tickets, compared to 103 thousand tickets sold for 105 events in the third quarter of 2022, as can be seen in slide 5. This means a 49% increase in the number of tickets sold, with 13% less events being promoted.

These 91 events consisted of 38 days of the Marvel Avengers S.T.A.T.I.O.N and 53 sessions of the musical The Lion King, which premiered in July. In the same period of 2022, the 105 promoted events included 45 days of the Warner Bros. Parque do Terror exhibition and 53 sessions of The Addams Family musical, in addition to 5 Indoor shows and 2 days of the Turá festival.

In the accumulated nine months of this year, we promoted 24% more events than in the same period of 2022, 268 against 216. This increase also meant a 21% increase in the total number of Tickets Sold between the two years.

The Net Revenue for the third quarter of 2023 was 12% higher than that recorded in the third quarter of 2022. This increase is concentrated in the Event Promotion line, with a 78% year-over- year increase, highlighting revenue in Family and Theater Events, with the premiere of The Lion King musical in July.

This increase was offset by a slight 6% decrease in Ticketing, Food and Beverage, and Venues Operations, as well as a 27% decrease in Sponsorships. This drop in Sponsorships is due to the calendar difference in the promotion of the Turá festival in São Paulo, which in 2022 occurred in July, being recognized in the third quarter, and this year was promoted in June, still in the last quarter.

In the nine-month cumulative view, we see a 28% growth in Net Revenue, distributed across all segments. Event Promotion grew 9%, while Ticketing, Food and Beverage, and Venues operations grew 32%, and Sponsorships 78%.

Moving on to slide 6, we see a Gross Profit of R$ 30 million this quarter, with a Gross Margin of 50%, which means a 37% increase compared to the same period of 2022, with R$ 21.9 million and a gross margin of 41%. This expansion of 9 percentage points in Gross Margin is due to the revenue mix,

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Conference Call Transcript

3Q23 Results

T4F (SHOW3 BZ)

November 9, 2023

with greater volume of Family and Theater events, which historically present better margins than Live Music events.

Also, in this slide, we see a 24% increase in SG&A in the third quarter of 2023. The total SG&A was R$ 11.9 million, versus R$ 9.6 million in the same period of 2022. In the year-to-date, however, we see a 3% reduction, in nominal terms, after absorbing the inflation.

In Other Revenues and Expenses, we recorded about R$ 6.2 million negative in the second quarter of 2023, against about R$ 4.9 million negative in the second quarter of 2022. The increase this year is due to the recognition, in the line of Other Results with Investments, of R$ 4.2 million related to the variable portion in the acquisition of the ticketing company INTI, which reflects the results of this business unit above the projected at the time of its acquisition in 2020.

Now going to slide 7, we see that the EBITDA for the third quarter of 2023 was R$ 14.5 million, a growth of 62% compared to the EBITDA of R$ 9.0 million in the same period last year. The recurring EBITDA of R$ 15.8 million in the third quarter of 2023 represents a growth of 22% compared to the same period of 2022, which totaled R$ 13.1 million.

In both periods, we have adjustments related to agreements, legal decisions, and provisions for contingencies, recognized in "Other operational expenses". In addition, in this quarter, we adjusted the R$ 4.2 million, already mentioned earlier, related to the variable portion in the acquisition of the ticketing company INTI, reflecting its result above projected at its acquisition.

This growth reflected in the accumulated EBITDA of the first nine months of the year. The result for the first nine months of 2023 topped that of the same period of 2022 by 59%, being R$ 59.6 million against R$ 37.6 million. In the view of Recurring EBITDA, the exclusions are essentially the same as the quarterly view. Thus, the increase from the Second Quarter of this year against the same period last year is 35%, going from R$ 51.6 million to R$ 69.5 million.

On slide 8, we demonstrate the Financial Result, negative at R$ 9.2 million in the third quarter of this year, which is 23% better than the R$ 12 million, also negative, recorded in the same period of 2022. Of this result, approximately R$ 600 thousand negative refers to the difference between financial revenues and expenses, mainly composed of the difference between Interest on Financial

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Conference Call Transcript

3Q23 Results

T4F (SHOW3 BZ)

November 9, 2023

Investments and the payment of Interest on loans. In the same period of 2022, this relationship was slightly positive, at half a million Reais. Its variation is due to the fact that, in the third quarter of 2023, we had 3 lines of loans contracted: the debentures and two short-term debt lines, all settled within the period.

Additionally, we have effects that do not directly affect cash, in the lines of exchange, monetary, and hyperinflationary variation. The exchange variation recorded in the period was positive at R$

1.7 million, due to the appreciation of the dollar in the period, by 4%, reflected in the value of the foreign currency holdings maintained for payments to international artists, as well as the financing of operations abroad.

Furthermore, the monetary and hyperinflationary variations, added together, were negative at R$

10.3 million against R$ 13 million, also negative, in the same period of 2022, a result of the constant inflationary process in Argentina.

Moving on to slide 9, we have the Net Result. In the third quarter of 2023, we recorded a Net Profit of about R$ 3.7 million, compared to a Net Loss of R$ 8.8 million in the same period last year. This improvement is due to the accumulation of the factors described earlier, mainly the higher margin generated by the contents promoted in the period, combined with the Company's focus on containing costs and expenses. In the year-to-date, we recorded a Net Profit of R$ 33.9 million, an improvement of more than 400% compared to the R$ 6.5 million recorded last year.

As for the Cash Balance, shown on slide 10 of the presentation, we ended the quarter with Gross Cash Balance of R$172.5 million and Net Cash of R$156 million. The difference between these two indicators is made up solely of Lease Liabilities, since we closed this quarter without debts, as we settled our debentures in August, as well as the other loan lines during the month of September. In the same period of 2022, we had Gross Cash Balance of R$232.6 million, while Net Cash Balance recorded was R$115.5 million.

On slide 11, we detail the Cash Flow. This quarter we generated R$42.5 million, while in the third quarter of 2022 the generation was R$15.5 million. The effects were:

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Conference Call Transcript

3Q23 Results

T4F (SHOW3 BZ)

November 9, 2023

• In Operating Cash Flow, generation of R$170.7 million this quarter, with the receipt of amounts relating to tickets sold for Taylor Swift concerts and the musical The Lion King.
• Cash Flow from Investments is mainly of investments in management software and evolution of the INTI ticket platform, plus investments in modernizing the Renault Theater and improving its surroundings for the musical The Lion King. The total, however, was positive due to an adjustment of around R$ 4 million between Operation and Investment Cashflows.
• As a result of paying off the short- and long-term financing lines we held, we increased consumption in Financing Cash Flow, from R$1 million in the third quarter of last year, to R$133.2 million.
• Finally, there was a positive exchange rate variation of R$0.3 million.

Thank you all for your attention. Now Serafim will conclude with the presentation of our pipeline.

CONCLUSION - SERAFIM ABREU

Thank you, Diego. As I mentioned earlier, we will continue to expand our festival platform, both with licensed brands like Primavera Sound and our proprietary brands. In this regard, we are thrilled to kick off the first edition of the Turá Festival in Porto Alegre. The festival, already well-established in São Paulo, is now beginning its geographical expansion in the capital of Rio Grande do Sul.

Bringing Taylor Swift's "The Eras Tour" to Brazil, where more than 300,000 people will be able to experience it in November, fills us with pride and demonstrates how committed we are to our purpose of bringing people together through exciting experiences to celebrate life.

Due to its immense success in terms of both audience and critical acclaim, "The Lion King" musical will continue its run at the Teatro Renault for an extended period throughout December 2024, reaching an even larger audience than during its initial run in Brazil.

Reaffirming our commitment to inclusion and sustainability, in this quarter alone, we donated over 1700 tickets for "The Lion King" musical to NGOs and ensured that all showings include sign language interpretation and audio description. Our festivals achieved 100% carbon neutrality, with

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Conference Call Transcript

3Q23 Results

T4F (SHOW3 BZ)

November 9, 2023

a humanity approach and free from prejudice, which is strongly reinforced with our partners and suppliers. This year, we recycled over 53 tons of waste and obtained a Zero Waste certification at the last Turá festival held in July in São Paulo.

Lastly, we continue to invest in the company's digital transformation by innovating ticket acquisition and event execution. We are also implementing efficient management tools to further enhance the experience of our audience and business partners.

Thank you very much for your attention, and I wish you all a great Tuesday.

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