Mbrf Global Foods Company S.a. · BMFBOVESPA:MBRF3
Mbrf Global Foods — Marfrig — Investor Presentation (July 2013)
28 slides from Mbrf Global Foods's investor presentation, July 2013
Slide 1: Institutional Presentation July 2013
Institutional Presentation July X’2013
Slide 2: Marfrig: thought process behind the deal
Marfrig: thought process behind the deal • Levered balance sheet – exposure to a weaker Real and higher domestic interest rates; • High quality portfolio with 2 distinctive growth pillars: Seara Brasil & Keystone Asia; • High inflation in Brazil undermining consumer purchasing power – potential impa
Slide 3: Sale of SEARA and Zenda – Goals Accomplished
Sale of SEARA and Zenda – Goals Accomplished • Fast and significant debt reduction : well above the R$ 2 bn anticipated to the market during the 1st quarter release; • One of the two critical growth pillars maintained, with divestment of the one which would have required significant investments in m
Slide 4: Deal Highlights: SEARA and Zenda
Deal Highlights: SEARA and Zenda Brands Assets Seara Brasil: 32 production plants, 23 DCs, hatcheries, herds and feed mills in Brazil. Zenda: 7 leather operations located in Uruguay, Argentina, South Africa, Mexico, Germany and USA. Revenues 2012* Capacity Employees *R$ million Processed 75.2 7.136
Slide 5: Deal Highlights – Key Items
Deal Highlights – Key Items Price / Form of payment: • JBS assumes R$5.85 bn in debt held by Marfrig/Seara/Zenda; Debt Transferred: • Maturities between 2013 and 2017; • Most of Marfrig’s short and long term bank debt transferred; • Senior Notes held at Marfrig; Closing: • Expected between 30 and 60
Slide 6: MARFRIG Group after the deal - a R$ 20 billion revenue food company
MARFRIG Group after the deal - a R$ 20 billion revenue food company 6
Slide 7: How investors should now think about Marfrig
How investors should now think about Marfrig United States / Europe / Asia Brazil / South America Keystone Foods: One of the world’s largest Food Service Marfrig Beef is the world’s third-largest beef suppliers in the USA and Asia, particularly in producer and one of South America’s largest China la
Slide 8: How investors should now think about Marfrig
How investors should now think about Marfrig • 74 production units, distribution centers and commercial offices with global representation • Local operations in 15 countries on 5 continents • More than 46,000 employees • Trade relations with over 110 countries • 2.8 million tonnes of food products s
Slide 9: How investors should now think about Marfrig
How investors should now think about Marfrig What a healthier balance sheet/cash flow generation would mean? • CAPEX needs: reduced by approx. 50% • Working Capital needs: reduced by R$ 1.0 bn • Interest Expenses: reduced by approx. 50% • Cost of Debt: immediate 20 bps reduction once deal is closed
Slide 10: How investors should now think about Marfrig
How investors should now think about Marfrig STRATEGY AND GROWTH DRIVERS Keystone • USA: possible expansion in the west coast and diversification of client base • Growth in Asia: overall market growth with expansion in food service client base – Key countries: China, Indonesia, Vietnam and Thailand
Slide 11: United States and Asia: Business Segment Keystone Foods
United States and Asia: Business Segment KEYSTONE FOODS
Slide 12: Keystone Foods
Keystone Foods: One of the world’s largest providers of processed foods to major global restaurant chains • Operations in Asia, Oceania and North America: 13 processing plants 4 slaughter plants • Integration of the chicken production chain: 70% integrated in USA X 100% integrated in Seara Brasil to
Slide 13: Keystone Foods: USA
Keystone Foods: USA • Strong presence on the East Coast: • 3 integrated poultry complexes and another 7 processing plants (5 poultry, 1 beef, 1 fish) • 32,000 restaurants served in USA and Canada • 2012 Revenue: R$ 3.702 bn Revenue breakdown 2012 28% 72% Office / R&D Growouts Further Processing 13
Slide 14: Keystone Foods: Asia
Keystone Foods: Asia • Strategic Local Partnerships • Operations in China, Malaysia, Thailand, South Korea and Australia • 6 processing plants • 1 slaughter plant • 1 commercial and 1 logistics office • Favorable demographics • Growing income levels • Changing food habits • Intelligently integrated
Slide 15: Keystone Foods: Asia
Keystone Foods: Asia Recent growth of global food service chains in China (Number of stores) 3,701 3,244 CAGR 03-11 2,872 2,140 2,497 18% KFC 1,822 1,557 1,291 1,468 12% 1,243 1,010 1,135 McDonald's 979 876 639 735 783 575 2003 2004 2005 2006 2007 2008 2009 2010 2011 Joint Ventures Per-capita poultr
Slide 16: UK and Europe: Business Segment Moy Park
UK and Europe: Business Segment MOY PARK
Slide 17: Moy Park: local taste in UK
Moy Park: local taste in UK One of the United Kingdom’s largest food companies and one of Europe’s leading poultry companies, with focus on major retail chains and food service industry • Operations in the United Kingdom, Ireland, France and on Netherlands: 10 processing plants Slaughtering 4 slau
Slide 18: Moy Park: Focus on Higher Value Products
Moy Park: Focus on Higher Value Products Revenue Breakdown – 1Q13: 6% 6% UK 7% 16% Fresh 14% Retail France 48% Processed 22% Food Service Ireland 36% 64% Other Other 81% Other Main clients: Retail Food Service 18
Slide 19: Focus on Value Added Products
Focus on Value Added Products Brand Positioning: + Premium Mainstream + Daily use Poultry Slaughtering Market Share in UK: 9% 1º 5% Moy Park 11% 37% 3º 11% 4º 5º 27% Outros 19
Slide 20: Moy Park: Operating Divisions
Moy Park: Operating Divisions 2012 Revenue 2012 Revenue: R$ 1.896 bn Other 13% Agriculture 11% Retail • Fresh chicken, eggs, chicks and feed 69% Agrifresh Food service • 27% market share in UK’s fresh poultry 7% sector Food 2012 Revenue: R$ 1.050 bn service 7% Convenience • Retail: Tesco, Waitro
Slide 21: Brazil / South America: Business Segment Marfrig Beef
Brazil / South America: Business Segment MARFRIG BEEF
Slide 22: Marfrig Beef: simple, lean and agile operation
Marfrig Beef: simple, lean and agile operation • 26 plants in Brazil, 5 in Argentina and 6 in Uruguay/Chile • Strategic relevance with global reach in industry • Well-positioned brands with leadership in regional markets • Distribution network and portfolio of global clients • Third party distributi
Slide 23: Marfrig Beef
Marfrig Beef Revenue Breakdown - 1Q13: Other 21% Exports Domestic 42% 58% Processed Fresh 18% 61% Uruguay Brazil 22% 70% Argentina 8% 23
Slide 24: Next Steps
NEXT STEPS
Slide 25: Next Steps
Next Steps • Conclude Seara and Zenda transaction • Present Marfrig`s strategic plan and our financial policies in 3Q13; • Unabated commitment towards corporate governance and transparency • Drive culture & sustainable growth with free cash flow generation 25
Slide 26: Next Steps
Next Steps Some opportunities ahead on our roadmap: KEYSTONE • China - Distribution J.V. with COFCO • Indonesia / Vietnam / Thailand MOY PARK • Food service opportunities in the UK market • Bolt-on acquisitions in Europe MARFRIG BEEF • SAP already implemented in Uruguay and Argentina; Brazil to be b
Slide 27: IR Contacts
IR CONTACTS Avenida Chedid Jafet, 222 - Bloco A - 1º andar Vila Olímpia - São Paulo/SP - CEP: 04551-065 Tel: +55 (11) 3792-8650/8600 E-mail: ir@marfrig.com.br Website: www.marfrig.com.br/ir
Slide 28: Disclaimer
Disclaimer This material is a presentation of general information on Marfrig Alimentos S.A. and its subsidiaries (jointly the “Corporation”) prepared as of the date of the presentation. This presentation was summarized and does not purport to be complete and should not be construed as an investment