Risk Factors - Vix RI

RISK FACTORS

Before the decision to invest in the company, the potential investors must consider all the information available about the company, both on the website and in the documents supplied. The operations and companies composing the economic group of VIX Logística are businesses that demand intensive, long-term capital, therefore the financial and operational condition of VIX can be adverse and impact the negotiable instruments issued by the company.

To analyze and verify the risks related to the operation of VIX, how it can affect the company, and the management of the company considering these risks, we invite investors to access our reference form, available in section “CVM Filings”, and to very with greater detail the 4.Risk factors and 5. Risk management and internal controls

Potential Impact of Pandemics or Other Epidemiological Outbreaks

A potential pandemic or the occurrence of other epidemiological outbreaks, the perception of their effects, or the way such events may impact the Company’s business could be influenced by future, uncertain, and unpredictable developments, and may result in a material adverse effect on the Company and its ability to continue operating its business.

Historically, epidemics and regional or global outbreaks — such as those caused by the Zika virus, Ebola, H5N5 (avian flu), foot-and-mouth disease, H1N1 (swine flu), MERS, measles, and SARS — have impacted economic sectors in the countries where they occurred. Therefore, outbreaks that alter population behavior or require public containment measures may negatively impact the Company’s business and the Brazilian economy as a whole.

Possible effects include: reduced demand for vehicle rentals and transportation services; decline in vehicle negotiations and distribution; collective vacation programs implemented by clients; restrictions on interstate or international travel; unavailability of drivers and employees; challenges in hiring new service providers; halted vehicle production; and delays in obtaining documents and government authorizations essential to operations.

The extent of such impacts will depend on unpredictable future factors such as the duration and severity of the outbreak, containment measures taken, and the pace of economic recovery. The Company also acknowledges that the effectiveness of vaccination campaigns and public health policies will directly influence the recovery of affected sectors.

Should restrictive measures, such as lockdowns, be reinstated by public authorities, the risks described above could worsen, adversely affecting the Company’s financial condition and operational performance. These effects may lead to increased operational costs, restricted access to supplies or services, and other significant operational challenges.

The Company’s business segment requires specialized labor, and its ability to attract, train, and retain skilled professionals at all levels may adversely and materially affect the Company’s results.

The Company’s market is competitive and relies on specialized and qualified professionals to efficiently manage operations, implement and operate new technologies, and develop suitable solutions for its clients. There is competition for professionals with such experience and qualifications, as well as a general shortage of skilled labor.

There is no guarantee that the Company will be able to attract or retain qualified professionals, according to the pace and demands of each of its business areas, to manage, implement, and operate new technologies and develop solutions. Nor is it guaranteed that the Company will avoid incurring substantial costs in doing so, which may negatively impact its results.

As the Company expands its business, it may be unable to identify, hire, and retain a sufficient number of qualified professionals who are aligned with its corporate culture. Such failure could result in a decline in customer service and, consequently, in the weakening of the brand. Failure to maintain this culture, service quality, and brand strength may adversely affect the Company’s business and operating results.

We are subject to restrictive financial covenants.

The Company is subject to restrictive financial covenants under the terms and conditions of its debt instruments.

The Company’s financial agreements and debt instruments contain clauses that require the maintenance of certain financial ratios. The Company may not be able to comply with such financial covenants and other obligations established with its creditors due to adverse business conditions, such as lack of liquidity or a downturn in the market in which it operates. As a result, an early maturity of debt may be triggered, including cross default or cross acceleration of other Company obligations, in accordance with the provisions of its existing loan and financing agreements. The early maturity of any of its financial contracts may affect its ability to meet its obligations and have a material adverse impact on the Company’s business and financial condition.

Moreover, the early maturity of debts may limit the Company’s ability to make investments and enter into new financing arrangements. Additionally, such an event may negatively affect the Company’s business, financial condition, and results of operations.

As the Company operates in a capital-intensive industry that requires significant investment for the acquisition and renewal of its fleet, restrictions on obtaining new loans may impair its ability to mobilize new operating contracts. For more information, see item 2.1 of this Reference Form.

We are subject to the risk of rating downgrades

The Company’s local corporate credit rating assigned by Standard & Poor’s and Fitch Ratings, which currently stands at “AA-” with a stable outlook by both agencies, may be affected by changes to Brazil’s sovereign rating, negative sector outlooks, or other factors such as a reduction in cash generation. If the Company’s rating is downgraded, the indentures of its debentures and other debt instruments may require the calling of a Debenture Holders’ Meeting or the involvement of other creditors, who will decide on the early maturity of the debentures or other debt instruments. Any downgrade in the Company’s rating may result in higher funding costs, payment of fees related to waivers, renegotiation of existing indebtedness, and a more selective access to credit in the capital markets, which could materially and adversely impact the Company’s business operations.

We may not succeed in our acquisition strategy

We consider the acquisition of other logistics companies as one of our growth strategies. Acquisitions involve several risks, including difficulties in integrating the acquired company’s operations, entering markets in which we have limited or no experience, potential loss of customers, key executives and employees of the acquired company, and exposure to contingencies or liabilities incurred by the acquired entity. These risks may have an adverse effect on our business and operating results. Additionally, we may be held liable for any previously unidentified contingencies in future acquisitions, as legal successors of the acquired companies. If we are required to incur costs or expenses associated with such contingencies, our financial condition and operating results may be adversely affected.

Furthermore, any large-scale acquisitions we may pursue could be subject to approval by the Brazilian antitrust authorities and other regulatory bodies. We may not succeed in obtaining such approvals or in securing them in a timely manner.

In addition, future acquisitions may require increased indebtedness, which could adversely affect our financial results. We may also need to raise additional capital through public or private offerings of shares or convertible securities, which could result in dilution of our shareholders’ ownership interest.

If future acquisitions are completed, we cannot guarantee that we will be able to successfully integrate the acquired companies or assets into our business. Failure to execute our acquisition strategy may adversely affect our results.

Our business requires long-term capital-intensive investments to finance fleet renewal and may fall short of supporting the successful implementation of our growth strategy

The Company relies on its ability to raise funds, whether through indebtedness or capital increases, to maintain its competitiveness and execute its growth strategy. However, there is no assurance that such resources will be available under the necessary terms and conditions, due either to macroeconomic adversities, such as credit restrictions or significant increases in interest rates, external factors, or the Company’s own performance. Such challenges may materially and adversely affect the Company’s financial condition.

Any inability to obtain new financing, refinance existing debt, or renew insurance guarantees within appropriate timeframes may compromise the Company’s ability to meet its financial obligations and limit the pursuit of new business opportunities. This risk may be exacerbated by pandemics or epidemiological outbreaks, which tend to restrict access to credit and impose cash flow constraints, potentially affecting the Company’s relationships with third parties, including suppliers.

If such resources are not obtained in a timely manner, the Company may be forced to seek additional capital earlier than expected, delay its strategic plans, or even forgo market opportunities. Additionally, future financing transactions may contain more restrictive covenants, require guarantees, or impose operational limitations—particularly in an economic crisis scenario marked by credit scarcity. The inability to raise additional funds on satisfactory terms may negatively affect the Company’s business and growth prospects.

The Company is subject to the risk of not renewing contracts with key clients or not entering into new fleet outsourcing agreements

Fleet management and outsourcing (FMO) with clients represents a significant activity for the Company, accounting for 22.5%, 26.1%, and 16.6% of its consolidated net revenue from sales and services in the fiscal years ended December 31, 2024, 2023, and 2022, respectively. This segment typically involves long-term contracts with clients, and expanding and diversifying this portfolio is an important element of the Company’s business strategy. As such, failure to successfully implement its strategy in this segment may have adverse effects.

The non-renewal of fleet outsourcing contracts with key clients may have a negative financial impact on the Company, directly affecting its operating revenue.

If the Company fails to successfully implement its expansion strategy to attract new clients, or if current clients do not renew their contracts, or if the Company is unable to close new service agreements, it may experience a significant reduction in revenue, which could adversely affect its business, financial condition, and operating results.

The resale value of assets used in our operations is important to the expected return of our contracts

In the Fleet Management and Outsourcing (FMO), Dedicated Logistics, and Mobility Platform segments, the Company operates under a cycle that begins with the acquisition of assets used in providing services to its clients and ends with their resale upon contract termination. The pricing of these contracts takes into account the value of the asset at the end of this cycle, with both the volume and resale price being key elements for the Company to achieve the expected return on each operation. Credit restrictions and increases in interest rates, for example, may directly or indirectly affect the secondary market for these assets and significantly reduce their liquidity. Market price volatility may also reduce the resale value of the Company’s assets, creating a higher discount relative to their purchase price. The Company cannot predict market behavior with regard to asset resale, and any pricing fluctuation may adversely affect its business.

Significant increases in our cost structure may negatively affect the Company’s results
The Company is subject to risks related to the difficulty of passing on cost increases to its clients, including increases in fuel prices, automotive parts, tires, labor costs, and rental expenses, through corresponding price adjustments for its services. Such increases may have a material adverse effect on the Company’s financial condition or operating results. The price and availability of inputs depend on political and economic factors and market conditions beyond the Company’s control, and it cannot predict when the prices of these inputs will change. The Company’s business may also be adversely affected by labor stoppages, strikes, or reduced working hours of its service providers, including third-party contractors. Any disruption or reduction in work hours or issues involving truck drivers or other operators may adversely affect the Company’s business and operating results.

Additionally, the Company is subject to risks related to adverse market conditions, such as increases in base interest rates and outlook.

We have a defined controlling shareholder, whose interests may differ from those of other shareholders

Grupo Águia Branca, through Águia Branca Participações S.A., has the power to control the Company, including the authority to: (i) elect and remove the majority of the members of the Board of Directors; (ii) establish management policies; (iii) exercise general control over the Company’s management and subsidiaries; (iv) sell or otherwise transfer shares representing the Company’s controlling interest held by it; (v) determine the outcome of any shareholder resolution, including related-party transactions, corporate reorganizations, acquisitions and disposals of assets submitted for shareholder approval, including the sale of all or a substantial portion of the assets; and (vi) determine the timing and payment of any future dividends. The controlling shareholder’s interests may not align with those of the other shareholders, which could adversely affect the Company’s business operations.

The Company may face potential conflicts of interest in transactions with related parties, which could adversely impact its business, operating results, financial condition, and securities

The Company currently engages and may in the future engage in revenue-generating activities, incur costs, and have expenses arising from transactions with related parties.

The Company’s mechanisms, processes, and procedures for evaluating related-party transactions may prove to be ineffective or insufficient to ensure that potential conflicts of interest are handled in strict compliance with all rules and best governance practices. These include, but are not limited to, ensuring that the agreed-upon terms are fully commutative and that adequate compensation is provided when applicable.

The Company’s current Related-Party Transactions Policy was approved by the Board of Directors on July 26, 2021. However, the Company may have approved related-party transactions prior to the policy’s adoption. Therefore, there is no assurance that, had such transactions occurred after the policy came into effect, they would have been executed, or would have been executed under the same terms and conditions.

Conflicts of interest involving related parties may negatively impact the Company’s business, which could adversely affect its operations, reputation, financial condition, operating results, and its shareholders.

For additional information regarding the Company’s practices in relation to related-party transactions, please refer to items 11.1 to 11.3 of this Reference Form.

The relative volatility of the Brazilian capital markets may significantly restrict investors’ ability to sell our shares at the desired price and time

Investments in securities in Brazil, including our shares (when listed), involve a higher degree of risk compared to investments in securities issued by companies in countries with more stable political and economic environments. Moreover, such investments are generally considered speculative in nature. These investments are subject to economic and political risks, including, but not limited to: changes in the regulatory, tax, economic, and political environment that may affect investors’ ability to receive full or partial returns on their investments; and restrictions on foreign investment and the repatriation of invested capital.

We may raise additional capital in the future through the issuance of shares, which could result in the dilution of our shareholders’ equity interest

We may need to raise additional capital in the future through public or private offerings of shares or securities convertible into shares in order to finance our growth initiatives. In accordance with Brazilian Corporate Law, provided certain requirements are met, fundraising through public offerings of shares or convertible securities may be carried out with the exclusion of preemptive rights for existing shareholders, which may consequently result in the dilution of these investors’ equity interests in our capital stock.

The risks to which the Company’s subsidiaries are subject, among others, are substantially the same operational, corporate, and regulatory risks to which the Company is exposed, as described in item 4.1.(a) of the Reference Form.

The Company’s results may be adversely affected by increases in the cost of acquiring new vehicles

The Company’s vehicle fleet is renewed after a period of use of each vehicle. Considering the Company’s various business segments and the contractual assumptions of each type of activity, it is not possible to establish a standard operation period for the fleet before it is made available for sale, since factors such as operational environment, vehicle type, and the specific needs of each client are taken into account. However, considering the average age of the Company’s contracts, it can be said that vehicles operate for at least 18 months.

Therefore, the Company’s results may be adversely affected if increases occur in the cost of acquiring new vehicles, including those caused by higher demand for new vehicles or changes in sales policies practiced by manufacturers, as well as external factors such as inflation, increases in tax rates, or higher prices of certain commodities in the international market.

If there is an increase in demand for new vehicles, which consequently reduces manufacturers’ capacity to meet such demand and/or causes price increases, or an unfavorable change in the vehicle sales policy to rental companies and Fleet Management (GTF), or even production shortages due to supply issues of components and other essential inputs for manufacturing, the Company may face increased costs and a consequent reduction in its margins. Since the prices charged to clients in vehicle rental and GTF activities consider the cost of acquiring new vehicles, the Company’s business, financial condition, and results may be adversely impacted in such scenarios.

Thus, the Company may be negatively affected if it is unable to maintain the current purchase price levels negotiated with manufacturers due to increased demand, changes in manufacturers’ commercial policies, or other factors.

The Company’s activities depend on good relationships and the reputation of its suppliers, which if compromised, may have adverse impacts on the Company

The maintenance of the Company’s activities largely depends on the financial condition, reputation, marketing, managerial strategy, and commercial relationship of the Company with its suppliers. If suppliers terminate or do not renew contracts due to defaults, failure to meet satisfaction standards, changes in internal management and corporate control structures of the Company without their approval, or other criteria, the Company’s activities, operational results, and financial condition may be harmed.

Furthermore, if the Company’s suppliers fail to adopt ethical commercial practices or comply with applicable laws and regulations, such as laws against child labor, slave-like conditions, or environmental protection, the Company’s reputation or assets may be damaged due to negative publicity or imposition of joint or subsidiary liabilities.

If the Company has commercial disagreements with its suppliers, especially those supplying more restricted products/services such as fuel, tires, and lubricants, the Company’s operational and financial results may be adversely affected.

The Company is a service provider and its results depend on the customer base and the volume of business generated by them; if there is a reduction in this business volume, the Company may be adversely affected

As a service provider, the Company’s results depend on contracts entered into with its clients, among other factors related to its customer base, including the maintenance of relationship policies, credit policies, demand levels, client satisfaction with its services, and the absence of material adverse effects on clients’ businesses. A reduction in business volume with key clients may result in lower operating margins for the Company due to decreased scale and the consequent reduction in fixed cost dilution. Furthermore, if the Company’s clients experience material adverse economic effects causing lower demand for services or a significant increase in client default rates, the Company’s financial results may be adversely impacted, especially considering the Company’s cost related to the large amount of fixed assets used to serve its clients.

A substantial portion of the Company’s business comes from providing services to a limited number of clients. The Company’s operations may be adversely affected if business with these clients decreases significantly (either in volume or price) or if these clients’ ability to make payments, or to do so on time, is impaired.

13.5% of the Company’s service revenue came from services provided to its largest client. If, for any reason, the Company’s business with its main clients significantly declines, including the conduct by such clients of their own logistics and transportation operations, or if these clients’ ability to make payments or make timely payments for the Company’s services is negatively affected, the Company’s business and operating results may be adversely impacted.

Additionally, most of the Company’s contracts with its clients contain clauses allowing the client to terminate early, upon at least 30 (thirty) days’ prior notice, for any reason and generally without penalty. Upon termination of each such contract, the Company will face competition from its competitors and cannot guarantee that it will renew these contracts or renew them under the same terms. Losing one or more of these major clients to competitors could materially and adversely affect the Company’s business, financial condition, and operating results.

Fluctuations in certain seasonal sectors in which our clients operate may have adverse effects on our business

Some of the Company’s clients operate in seasonal markets, and fluctuations in some of these sectors may adversely affect the Company. Additionally, some of the products the Company transports have exhibited seasonal price patterns typically influenced by the general economic environment and sector capacity and demand. The Company cannot guarantee that the prices and demand for these products will not decline in the future, which could adversely affect these sectors and, consequently, its business and financial results.

The lack of conservation of the Brazilian roads or of improvements to the Brazilian road infrastructure may adversely affect our activities

Out Automotive Logistics activities depend fundamentally on road transport. We do not control the maintenance and preservation of the Brazilian roads on which we operate or the periodicity and nature of the improvements made to the Brazilian road infrastructure. The lack of conservation of a substantial part of the Brazilian highways increases the likelihood of the occurrence of accidents, damages, or loss of cargo, also increasing the time of transit and costs with the maintenance of our fleet.

In addition, during the rainy season, some Brazilian roads, especially those located in the southeastern region, may be blocked due to landsliding, causing accidents and delays. In the case of interruption of services on streets and roads or if the government or private utilities do not repair such damages with the due celerity, our activities and operating results may be materially and adversely affected.

If such occurrences are recurrent and the investments necessary in infrastructure are not realized by the Federal Government or by the road utilities, as the case may be, we may be subject to an increase of our operating costs, which may not be transferred and accepted by our customers, which may adversely impact our results.

We face substantial competition in the types of services we offer.

The logistics sector in which we act is highly competitive and pulverized. Our key competitors are companies that act in the road transport sector, historically the main cargo transport mode in Brazil. We have also suffered competition from companies engaged in railroad and water transport and other providers of integrated logistics services. The competition is based fundamentally on freight fees, available capacity, quality of service, reliability, transit time, and scope of the operations.

In addition, some of our competitors periodically reduce their prices to attract new customers, especially in these times of low economic growth, which may restrict our capacity of maintaining our operating profit margin. Some customers may also contract services from different logistics providers, which may cause a reduction to our prices so that we don’t lose customers to our competitors. We may also face competition of our own customers, who may no longer outsource their logistics needs.

In addition, we may face competition in the services of Fleet Service, Dedicated Logistics, Automotive Logistics, and Freight, in relation to the prices set forth by us and the scope of the services we provide. We may not be successful in meeting the demand of services or the collection of acceptable prices, similar to those of our competitors, and the results of our operations may be adversely affected.

The environmental laws and regulations and those applicable to occupational health and safety may require expenses greater than those currently incurred for their observance and the inobservance of these laws and regulations may result in civil, criminal, and administrative penalties.

Our activities are subject to the comprehensive federal, state, and municipal legislation, as well as regulations, permits, and licenses related to sanitary surveillance, protection of the occupational health and safety and of the environment. Any inobservance of these laws, regulations, permits, and authorizations, or failure in their obtainment or renewal may result the application of criminal and administrative penalties, such as fines, in addition to the negative publicity and liability for the sanitation or environmental damages, as well as civil sanctions to repair the environmental damage. We already incurred and will continue incurring expenses of capital and operating expenses to comply with these laws and regulations. Due to the possibility of regulations or other unforeseen events, especially considering that these laws become more restrictive in Brazil, the amount and terms necessary for future expenses for the maintenance of the compliance of the regulations may increase and adversely affect the availability of resources to capital expenditures and for other purposes. The observance of the new laws or with the laws and regulations in force may cause an increase to our costs and expenses, consequently resulting smaller profits.

Our sites are located in several regions of Brazil with activities of administrative, operating, and maintenance characteristics. In spite of the different locations, the factors regarding the exposure to the social-environmental risks are common once the intensification of the urbanization in the last stage of the modernity generated several issues related to the quality and conditions of human life in the cities, generating considerable challenges to the social-environmental management.

The lack of public planning and the absence of a greater social-environmental awareness constitute the urban environmental issues, such as pollution of the waters of rivers and lakes, the elevation of temperatures, the occurrence of acid rain (result of the emission of toxic gases in the atmosphere) generating climate changes.

The growth of the cities causes the impermeability of the soil and generates several problems with serious consequences, many of them causing changes to the urban drainage and consequently with negative impact to the health of the population. The problem related to the quality of the water and the management of water resources is a factor of relevant

impact to the organizations. Especially urban rivers, in their majority, are highly degraded, generating scarcity of water and a risk of negative impact to the operations, since the use of water is fundamental to assure the quality in the fleet wash, as well as primary use for the work force.

Climate forecasts performed by the Brazilian Panel on Climate Change (“PBMC”) and by the Intergovernmental Panel on Climate Change (IPCC) indicate that in the future Brazil may be impacted by the climate changes even more adversely and frequently. In this scenario, it is fundamental to take measures to avoid the emissions of Greenhouse Gases (GEE), which cause changes to the climate, and also initiatives to adopt to the climate events that are occurring and that will occur.

Evidences of climate changes may already be perceived, especially with the occurrence of extreme climate events. The increase of temperature, droughts, and floods may directly affect the yield and generation of results of the company. The risk of indirect impact of the climate changes may increase the pressure related to regulations, requirements of investors, customers, and suppliers.

The decisions involving the management of solid waste are fundamentally decisions on public health and therefore require the integration among economic, social, and environmental policies. There is a complex challenge to large cities in the management of solid waste with the objective of eliminating the risks to health and the environment, collaborating with the mitigation of climate changes related to human health.

Initiatives for the reduction of the quantity of material discarded in landfills, such as selective waste collection for posterior recycling, are still at slow pace.

The proper handling of waste is an important strategy of environmental preservation, as well as of promotion and protection of health. Once disposed in landfills, solid waste may compromise the quality of the soil, water, and air, and since these are sources of volatile organic compounds, pesticides, solvents, and heavy metals, among others. The decomposition of the organic matter present in the garbage results in the formation of a darkish liquid, leachate, which may contaminate the soil and surface waters or the underground waters with the contamination of the waterbed. Toxic, asphyxiating, and explosive gases may also be formed, which accumulate in the subsoil or are launched into the atmosphere, generating risk of contamination of the soil and water for consumption, proliferation of vectors and of other disease transmitting agents.