TECN3

Technos S.A. is a Brazilian publicly traded company, with common shares listed on B3 under the ticker TECN3, headquartered in the city of Rio de Janeiro. Although the current holding company was incorporated in 2007 and began operations in 2008 with the corporate purpose of holding interests in other companies, the origin of the business dates back to 1956, with the founding of the importer Centauro to act as the exclusive distributor of the then Swiss brand Technos in Brazil. The brand’s trajectory began even earlier abroad, with the Gunzinger family opening its first watchmaking workshop in 1900 and registering the Technos brand in 1924. Over the 1950s, 1960s and 1970s, the Brazilian operation grew significantly, culminating in leadership of the Brazilian watch market in terms of revenue by the late 1980s. The company went public in 2011 and has consolidated its position as one of the main watchmaking groups in Latin America, operating in an integrated way in the development, assembly, distribution and retail of wristwatches.

Technos’ main activity is the development, assembly and sale of watches, directly or through its subsidiaries, with a predominant focus on the Brazilian market. Since 1956, the company has expanded its portfolio beyond the original Technos brand, going on to manage a set of own and licensed brands that cover different price ranges, styles and target audiences. As of December 31, 2024, the company was developing and distributing products for ten nationally recognized brands: seven proprietary brands (Technos, Touch, Euro, Allora, Condor, Mariner and Dumont) and three third-party brands licensed or exclusively distributed (Mormaii, Fossil and Michael Kors). The business model is essentially geared toward discretionary consumer goods, with revenue concentrated in the sale of analog, digital, multifunction and chronograph watches, complemented by technical assistance services and sales of spare parts after the end of the warranty period.

Technos’ brand portfolio is structured to cover various segments of the watch market, combining fashion, sport and classic niches and economic, mid-range and more aspirational price bands. The Technos brand, of Swiss origin and the group’s most established label, is positioned in the classic segment, focusing on analog, multifunction and steel chronograph watches for adults and associated with perceptions of quality and tradition. Condor operates as a democratic fashion brand, with strong appeal in terms of affordable pricing and giftable kits for both female and male consumers. Euro, Allora and Touch reinforce the company’s presence in the fashion segment, with an emphasis on young and adult women interested in style trends at competitive prices. The Mormaii brand, licensed until 2026, targets the sports segment linked to the surf and wellness world, with analog and digital watches. The Fossil Group brands, including Fossil and Michael Kors, are operated under distribution and brand-use agreements running until 2025, adding products aligned with international fashion trends to the portfolio.

On the operational front, Technos combines in-house design and product development with a global supply chain for components and final assembly in Brazil. The company maintains its own industrial plant in the Manaus Free Trade Zone, with approximately 8,570 m² and hundreds of employees, dedicated to assembling and distributing watches. Key components — such as straps, cases, crystals and movements — are purchased from a diversified base of suppliers in China and Japan, with which the group maintains long-term relationships, but no long-term supply contracts, operating instead through individual purchase orders. The company maintains an office in Shenzhen to strengthen relationships with manufacturers and reinforce quality control at source. The product development process generally takes 6 to 12 months and involves internal teams dedicated to planning, trends and design, as well as sourcing, with frequent trips to Europe, Asia and North America to attend trade fairs and identify global watch trends.

Technos products are distributed through a broad and highly fragmented network of retailers and proprietary channels. As of December 31, 2024, the company served more than 9,000 active points of sale across Brazil, including watch and jewelry stores, optical shops and department stores, with no material concentration in any single client or chain. The company also invests in digital channels, operating five e-commerce websites, four of which are dedicated to its main brands (Technos, Fossil, Euro and Condor) and one proprietary marketplace, Timecenter, focused on the online offering of all brands in the portfolio. In addition, it maintains a network of 16 own stores in major capitals, combining full-price units, aimed at reinforcing brand equity and testing products, and outlet units, used as an inventory management tool and a way to move slower-moving items with less impact on traditional channels.

Technos’ market is predominantly domestic. Virtually all relevant net revenue comes from Brazilian customers, with exports considered immaterial and foreign operations not generating significant revenue. Within Brazil, the company has a presence in all states, with a notable revenue contribution from the North and Northeast regions, which have historically shown GDP growth above the national average. In 2024, the group reported gross revenue of R$ 464.3 million, adjusted EBITDA of R$ 93.2 million and net income of R$ 64.8 million, in a context of gradual recovery in the watch segment after the pandemic, but still marked by high interest rates and a strong US dollar. The company is not dependent on individual customers; in 2024, there was no buyer accounting for more than 10% of total net revenue.

Technos’ industrial operation is subject to specific environmental regulation, since watch assembly is classified as a potentially polluting activity and depends on licensing. The Manaus facility operates under a license issued by the state environmental agency, IPAAM, valid until March 2027, subject to periodic renewals and compliance with technical conditions. The company highlights the need to adhere to rules related to effluents, waste handling and disposal, atmospheric emissions and noise, noting that violations may lead to administrative, civil and criminal penalties. To mitigate risks, the company implements practices such as wastewater treatment, cardboard recycling and the sale of metal waste for reuse, but it does not formally adopt international environmental certification standards. In addition, the Manaus assembly operation benefits from tax incentives, such as the ICMS tax benefit granted by the State of Amazonas to the sector, renewed until December 2026, which contributes to the competitiveness of production.

In terms of brands and contracts, Technos is highly dependent on its intangible assets, especially its own brands Technos and Condor and the licensed or exclusively distributed brands such as Mormaii, Fossil and Michael Kors. The Mormaii licensing agreement, registered with the INPI in the name of Mormaii Indústria, Comércio, Importação e Exportação de Artigos Esportivos Ltda., is valid until September 2026 and provides for the payment of royalties on gross revenue and minimum commitments for marketing investment. The Fossil Group brands, in turn, are exploited through a distribution and brand-use agreement with Fossil Partners, L.P., renewed until December 2025, which guarantees the exclusive right to assemble, distribute and sell Fossil and Michael Kors watches in Brazil, with no initial royalty payments. The company states that it does not make financial contributions to political parties, candidates or public policy influence initiatives.

Regarding environmental, social and governance (ESG) practices, Technos does not currently publish a formal sustainability report audited by third parties, but it maintains a section dedicated to the topic on its corporate website, where it presents its commitments and progress. The company states that it complies with applicable environmental legislation and declares a commitment to sustainable development, supported by an internal materiality matrix that guides priorities such as business model resilience, ethics and reputation, health and well-being, product quality and safety, socio-environmental management of the supply chain, waste management, greenhouse gas emissions, water use and effluents, gender equity, people training and development, energy management, data security, diversity and inclusion and prevention of critical incidents. Even without a specific report, the company considers some UN Sustainable Development Goals as guidelines, including good health and well-being, quality education, gender equality, affordable and clean energy, decent work and economic growth, responsible consumption and production, climate action and institutional integrity, incorporating these themes into its corporate strategy and the evolution of its internal indicators.

As an issuer listed on B3 under the ticker TECN3, Technos follows corporate governance practices typical of Brazilian public companies, with professional management and a board of directors that underwent significant changes in 2019, when an operational turnaround process was initiated. This effort focused on restoring efficiency and profitability, digitizing channels, strengthening the connected watches category and restructuring after-sales, with technical assistance outsourced to an accredited network. The management structure combines executives with long experience in the watchmaking and consumer markets with new talent, seeking to align product development, the manufacturing operation in Manaus and the multichannel presence in physical and digital retail in Brazil.