2020 Annual Report 2020 Annual Report A Message From the Board of Directors A Message From the A Message From the Executive Board Board of Directors 102-10 | 102-14 2020 Highlights Portfolio Overview The Investment Holding Company Strategy and Management People A crisis like never before, Eduardo Vassimon José Roberto Ermírio Cláudio Ermírio de Moraes Governance, Compliance and Risks impacting global health and Chairman de Moraes Board Member Deputy Chairman Economic and Financial Performance with significant economic Social Investment repercussions, made 2020 an Initiatives to Combat COVID-19 absolutely atypical year, which In Brazil, the impact of the imposed a series of challenges pandemic on economic activity Center of Excellence (CoE) on companies and society around was significant. The reduction Reservas Votorantim the world. Faced with this difficult of interest rates to a historic Altre situation, we demonstrated our low, the economic stimulus Portfolio Companies strength and resilience, emerged through emergency aid granted Votorantim Cimentos from it strengthened, and by the Federal Government Banco BV reaffirmed our values. and the devaluation of the real Votorantim Energia transformed the macroeconomic Luís Ermírio de Moraes Marcelo Medeiros Nexa Resources Worldwide, governments adopted context of our businesses. Board Member Independent Board Member Citrosuco different strategies to contain CBA the pandemic. Some of the more At Votorantim, we were quick Acerbrag and Acerías Paz del Río restrictive ones included border to react, focusing first on About this Report closures, strict lockdowns and people, then on our financial curfews. In addition, the turbulent GRI Disclosures health and the continuity of presidential election in the our operations, and finally on Consolidated Financial Statements United States and the country’s supporting society. Assurance Report continued trade dispute with Credits and Corporate Information China contributed to an estimated Our sense of community 3.5% global economic contraction prevailed, attesting to an aspect in 2020, according to the that is very important to us: Marcos Lutz Oscar Bernardes Independent Board Member Independent Board Member International Monetary Fund (IMF). our concern for the social Page 1 of 187 2020 Annual Report A Message From dimension, expressed both operational stability despite and responded promptly to a the Board of Directors internally, through our support to new conditions resulting from new demand for faster decisions, A Message From our employees and their families, the pandemic, and we achieved through streamlined processes the Executive Board and externally, through our work better consolidated results than and increased employees 2020 Highlights in communities to mitigate the originally estimated before the autonomy. Portfolio Overview effects of the pandemic from crisis. Compared to 2019, our net The Investment Holding Company the very beginning. Considering revenues increased 19%, totaling We continued to evolve our Strategy and Management the budget reallocation from the R$ 36.7 billion, and our adjusted governance, based on providing People Votorantim Institute, donations EBITDA grew 35%, reaching autonomy to our portfolio Governance, Compliance and Risks made directly by the companies R$ 6.9 billion. Our leverage (net companies while also seeking, as Economic and Financial Performance and the shareholder family, debt/adjusted EBITDA) was 1.63x, a holding company, to influence Social Investment and an additional donation a very comfortable level in the cross-cutting themes, such Initiatives to Combat COVID-19 of R$ 50 million made by consolidated calculation. as Environmental, Social and Votorantim, the total amount Governance (ESG) issues. Center of Excellence (CoE) allocated to initiatives to Another strength was our Internally, we advanced our Reservas Votorantim address the pandemic totaled portfolio diversification, which succession planning by continuing Altre approximately R$ 150 million, provides balance and enables us to follow our management Portfolio Companies which enabled more than 400 to face new situations. Despite approach and outlined strategy, Votorantim Cimentos initiatives in different areas. Also a scenario of new risks and with the transition of our Banco BV through the resource allocation uncertainties, we continued to executive leadership and the Votorantim Energia announced by the Votorantim advance our long-term strategies, appointment of João H. Schmidt Nexa Resources Institute, we and our companies supporting the growth plans as CEO of Votorantim S.A. At the Citrosuco contributed to the expansion of of our companies. In addition, Board level, Marcos Lutz joined us CBA vaccine plants in Rio de Janeiro we continued to prospect for as an independent board member. Acerbrag and Acerías Paz del Río and São Paulo, which will give new investments in other About this Report Brazil greater autonomy in terms segments and regions, seeking Our entrepreneurial spirit, of vaccine supply. diversification according to our GRI Disclosures which has always characterized strategy and in line with the Votorantim, will be relevant in a Consolidated Financial Statements The importance of our prudent Board’s investment mandate. still challenging future scenario Assurance Report management, from a financial marked by geopolitical tension Credits and Corporate Information perspective—which prepares And it was not just about financial and questions about commercial us for times of uncertainty— results: we learned more, had relations between countries. also became evident. Our confidence and demonstrated In Brazil, the scenario also companies managed to maintain adaptability to face adversity, includes some uncertainties, Page 2 of 187 2020 Annual Report A Message From mainly related to fiscal issues. the present with prudence and Collaboration and Courage are the Board of Directors The absence of signs that responsibility. our drivers not only in our day- A Message From reinforce fiscal responsibility to-day activities, but also for the Executive Board could have negative effects on In our century-old history, we our long-term vision, which 2020 Highlights other macroeconomic variables, have gone through many crises, motivates us to continue going Portfolio Overview such as foreign exchange and and have always succeeded in further. The Investment Holding Company interest rates, and jeopardize a overcoming them. This trajectory Strategy and Management sustainable growth resumption. is guided by values that reflect Eduardo Vassimon People However, we look to the future our essence and which have been Chairman of the Board of Governance, Compliance and Risks with optimism, while working in updated this year: Integrity, Directors, Votorantim S.A. Economic and Financial Performance Social Investment Initiatives to Combat COVID-19 Center of Excellence (CoE) Reservas Votorantim Altre Portfolio Companies Votorantim Cimentos Banco BV Votorantim Energia Nexa Resources Citrosuco CBA Acerbrag and Acerías Paz del Río About this Report GRI Disclosures Consolidated Financial Statements Assurance Report Credits and Corporate Information Page 3 of 187 2020 Annual Report A Message From the Board of Directors A Message From the A Message From 102-10 | 102-14 the Executive Board Executive Board 2020 Highlights Portfolio Overview The Investment Holding Company Strategy and Management In 2020, in the midst of a People pandemic, an event that none João H. Schmidt Glaisy Domingues Luiz Caruso Governance, Compliance and Risks of us had faced before, our CEO Chief Legal Officer Center of Excellence and Compliance Officer Economic and Financial Performance commitment to the right way of Social Investment doing business was reaffirmed. Initiatives to Combat COVID-19 We worked collaboratively and fight the effects of the pandemic with courage. In all portfolio in the different regions where Center of Excellence (CoE) companies, people’s health we operate, demonstrating that Reservas Votorantim and safety was prioritized, collaboration remains strong in Altre and business continuity was our DNA. Portfolio Companies ensured. With extreme agility, Votorantim Cimentos all companies developed and This period represented a true Banco BV implemented contingency plans test of the evolution of the Votorantim Energia to deal with the new challenges. governance and management Marcio Yamachira Mateus Gomes Ferreira Nexa Resources Votorantim also ensured that model of Votorantim and its Corporate Development Officer Chief Investment Officer Citrosuco its entire portfolio had liquidity companies, which was established CBA to face a period of uncertainty, in 2014. The leadership of the Acerbrag and Acerías Paz del Río while also maintaining financial companies and their Boards of About this Report flexibility to continue investing Directors were agile and diligent in efficiency, modernization, in the management of each of our GRI Disclosures innovation and growth. And businesses, which were impacted Consolidated Financial Statements in facing the health crisis, we in very different ways. They Assurance Report and the portfolio companies, in established Crisis Committees, got Credits and Corporate Information partnership with the Votorantim closer to the everyday operations Institute, reinforced our social and took impactful decisions commitment through immediate throughout the year. And the Sergio Malacrida CFO and Investor Relations and structuring initiatives to results