M. Dias Branco Sa Industria E Comercio De Alimentos · BMFBOVESPA:MDIA3
M. Dias Branco Sa Industria E Comercio De Alimentos — M. Dias Branco — Investor Presentation (June 2018)
61 slides from M. Dias Branco Sa Industria E Comercio De Alimentos's investor presentation, June 2018
Slide 1: Company Presentation June 2018
Company Presentation June 2018 Food for the well-being of Society and the people’s happiness. 1
Slide 2: Agenda
1. Corporate Profile 2. Results 3. Corporate Governance and Capital Market 2
Slide 3: Corporate Profile
Corporate Profile 3
Slide 4: Over 65 years operating in the food sector in Brazil
Over 65 years operating in the food sector in Brazil National Leader in the cookies and pasta markets Growth strategy and consistent results Strong acquisition track record 4
Slide 5: An Entrepreneurial History
AN ENTREPRENEURIAL HISTORY 2000 Find out more about the evolution of M. DiasBranco ~ over its history spanning more than 60 years: 1951 Small-scale production 1980 1978 2002 2003 2005 2006 2008 2017 2015 2014 Cu» 2011/12
Slide 6: Mission and Vision
MISSION We offer high-quality, innovative, healthy, tasty and competitively priced food products for people’s nourishment and enjoyment VISION We contribute to society's development through successful and sustainable partnerships, a global presence and diversified business, and are recognized for ou
Slide 7: A team with 16.7 thousand employees
A team with 16.7*Thousand employees focused on sustainable results 55% Production 34% Sales and logistics 11% Administrative 33% women on the Board of Directors 7 (*) Figures without Piraquê 7
Slide 8: Competitive Advantages
Competitive Advantages Recognized Brands Vertically Strategically Integrated Located Plants Financial solidity Qualified and strong cash employees flow generation Integrated Sustainability Distribution Network National 8 8
Slide 9: A broad and diversified portfolio
A broad and diversified portfolio % of Sales 2017 * Cookies & Crackers¹ 53% Pasta 21% Wheat Flour & Bran 17% Margarine & Vegetable 6% Shortening Others ² 3% ¹ Contain Cookies, Crakers and Chocolate covered cookies. ² Cakes, snacks, cake mix and packaged toast * Figures without Piraquê 9
Slide 10: 19 brands with regional or national approach
19 brands with regional or national approach Brand with National approach 10
Slide 11: Brands awarded and recognized regionally and nationally
...and our brands are awarded and recognized on a regionl and national basis VITARELLA was elected in 2017 as one of the “60 most valuable brands in Brazil", according to the ranking published by IstoÉ Dinheiro and prepared by Kantar ADRIA was elected in 2016 as one of the "50 most valuable brands i
Slide 12: Sales per product line and brand
Sales per product line and brand Cookies & Crackers * Cookies 31.9% % of Revenue by brands and Crackers* 53.0% of 16.5% 16.4% total sales 7.4% 6.8% 5.6% 5.0% 4.3% 2.5% 1.9% 1.7% VITARELLA FORTALEZARICHESTER ISABELA ESTRELA ADRIA PILAR ZABET NIKITO OTHERS PELAGGIO Pasta * % of Revenue by brands 24.2%
Slide 13: Sales per product line and brand
Sales per product line and brand Wheat Flour & Bran * % of Revenue by brands Wheat 47.5% Flour & 34.1% Bran* 17.0% of 4.1% 3.7% 3.3% 2.4% 1.8% 1.6% 1.6% total sales MEDALHA FINNA PADEIRO ADORITA MONARCA ARATU OTHERS IMPERIAL PURO DE OURO SABOR Margarine & Vegetable Shortening * % of Revenue by brand
Slide 14: Our sales are distributed in all regions in Brazil
Our sales are distributed* in all regions in Brazil North 2017 – 3.9% Northeast 2016 – 4.1% 2017 – 69.8% 2016 – 71.3% Midwest 2017 – 3.0% 2016 – 2.8% Southeast 2017 – 16.4% South 2016 – 15.3% 2017 – 6.4% 2016 – 6.1% Note: The values are Percentage of Total Revenue In 2017 0.5% (0.4% in 2016) of Net
Slide 15: National Market Leadership
National Market Leadership* Market Share Volume Market Share Volume Cookies & Crackers² Pastas² 32.5% 28.0% 28.1% 27.9% 28.6% 32.4% 28.0% 28.9% 28.4% 28.8% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 ¹Leadership in Cookies & Crackers in 2017 ¹Leadership in Pasta in 2017 8.1% 7.1% 12.5% 9.6% 5.
Slide 16: Creation of new products in line with consumer needs
Assertive creation of new products, packaging and categories in line with consumer needs, market trends and scenarios Healthy with Nutrition flavor Indulgence and experience Convenience Affordable 16
Slide 17: Marketing investments to drive sales and create strong brands
Marketing investments to drive sales and to create strong brands Richester Animados Zoo Vitarella Treloso FINNA Salsitos 17
Slide 18: Marketing investments to drive sales and create strong brands
Marketing investments to drive sales and to create strong brands 18
Slide 19: We are also investing on new packages
We are also investing on new packages Previous Packages New Packages 19
Slide 20: We are also investing on new packages
We are also investing on new packages Previous Packages New Packages 20
Slide 21: Diversified client mix
Our products are sold through a diversified cliente mix % Revenue* per Client Mix Other 0.7% 0.6% Industry 1.0% 1.4% 6.9% 7.9% Cash & Carry 17.9% 16.2% Key Accounts/ Regional Chains 20.5% 19.8% Wholesale 28.2% 28.7% Small Retail 24.8% 25.4% 2017 2016 (*) Figures without Piraquê 21
Slide 22: Exported to 25 Countries in 2017
Exported to 25*Countries in 2017 2017 2 país 2017 2016 2017 2016 1 país 1 país 2017 1 país 1 países 2 países 2016 2016 1 país 2017 2017 0 países 6 países 8 países 2016 2016 4 países 2017 7 países 5 países 2016 5 países * 2016 * 2017 América do África América do África Sul Sul América Europa América
Slide 23: 15 Industrial Plants and 38 Distribution Centers
15 Industrial Plants and 38 Distribution Centers Fábrica Fortaleza State of Ceará Grande Moinho Aratu State of Bahia Gorduras e Margarinas Especiais State of Ceará 23
Slide 24: Vertically integrated production increases competitiveness
The vertically integrated production increases our competitiveness VERTICAL INTEGRATION OF WHEAT FLOUR * VERTICAL INTEGRATION OF VEGETABLE OIL * 92% of the wheat flour we 83% of the vegetal shortening we consume is produced internally consume is produced internally (*) Figures without Piraquê 24
Slide 25: Sustainability
Sustainability Topics of Work Groups Nutrition and Health Packaging Waste Water - Effluents | Energy - Emissions Social Investments and Communities Transparency and Dialogue Inputs “Expand business and generate value with responsibility to current and future generations” 25
Slide 26: Strong Acquisitions Track Record
Strong Acquisitions Track Record Aquisition in 2003 Aquisition in 2008 Aquisition in 2011 Regions: South and Southeast Region: Northeast Region: Northeast Aquisition in 2011 Aquisition in 2012 Aquisition in 2018 Region: Northeast Region: South Region: Southeast 26
Slide 27: The closing of the Piraquê acquisition was in May 2018
The closing of the Piraquê acquisition was in May 2018 Volume and Value Brazil Share: 3.8% and 6.2% Volume and Value Southeast Share : 8.1% and 12.0% Volume and Value Northeast Share: 0.3% and 0.6% Cookies and Crackers* Powder Juice Volume and Value Brazil Share: 3.4% and 4.2% Volume and Value South
Slide 28: Strategy
Strategy Expanding Market Share Vertical integration leadership. expansion. Organic Growth Maintain the current dividend policy. Continuous search for more New acquisitions. operational efficiency and costs control. Operations in new food segments. 28
Slide 29: Results
Results 29 29
Slide 30: Net Revenue (R$ million)
Net Revenue* (R$ million) CAGR 2009-2017: 11.0% 5,328 5,415 4,579 4,622 4,311 3,545 2,911 2,347 2,444 2009 2010 2011 2012 2013 2014 2015 2016 2017 (*) Figures without Piraquê 30
Slide 31: Sales Volume by Product Line
Sales Volume * by Product Line Cookies and Crackers – Sales (‘000 tonnes) Pasta – Sales (‘000 tonnes) CAGR 2009-2017: 5.0% CAGR 2009-2017: 4.4% 527.4 525.4 503.8 521.8 528.8 357.7 359.8 340.2 358.1 356.8 489.3 418.3 309.9 273.4 359.1 380.0 251.9 241.1 2009 2010 2011 2012 2013 2014 2015 2016 2017 200
Slide 32: Net Average Price by Product Line
Net Average* Price by Product Line Cookies and Crackers – Sales (R$/Kg) Pasta – Sales (R$/Kg) 5.26 5.43 CAGR 2009-2017: 5.7% CAGR 2009-2017: 4.6% 4.57 4.75 4.38 3.79 3.97 3.48 3.54 3.36 3.25 2.94 3.07 2.77 2.52 2.27 2.15 2.28 2009 2010 2011 2012 2013 2014 2015 2016 2017 2009 2010 2011 2012 2013 2014
Slide 33: Gross Profit and Gross Margin
Gross Profit* (R$ million) and Gross Margin* (%) CAGR 2009-2017: 10.7% 2,249 2,085 1,629 1,724 1,665 1,422 995 1,020 1,098 42.4% 41.7% 40.1% 39.1% 41.5% 37.7% 37.8% 37.7% 35.8% 2009 2010 2011 2012 2013 2014 2015 2016 2017 (*) Figures without Piraquê 33
Slide 34: EBITDA and EBITDA Margin
EBITDA* (R$ million) and and EBITDA Margin* (%) CAGR 2009-2017: 9.5% 966.4 919.4 770.4 673.8 686.6 621.6 469.2 466.3 481.2 20.0% 19.1% 17.5% 16.8% 17.3% 17.8% 16.5% 15.6% 14.9% 2009 2010 2011 2012 2013 2014 2015 2016 2017 (*) Figures without Piraquê 34
Slide 35: Net Profit and Net Margin
Net Profit* (R$ million) and Net Margin* (%) CAGR 2009-2017: 11.6% 844.3 784.4 599.3 603.9 524.4 470.5 351.5 351.7 366.5 15.0% 14.4% 13.3% 13.1% 13.1% 14.7% 15.6% 12.6% 12.2% 2009 2010 2011 2012 2013 2014 2015 2016 2017 (*) Figures without Piraquê 35
Slide 36: Capex and Capex/Net Revenue
Capex* (R$ million) and Capex*/Net Revenue (%) CAGR 2009-2017: 12.4% 456.9 407.9 287.9 307.1 263.9 142.5 120.5 135.3 117.2 8.9% 9.9% 5.1% 5.5% 4.9% 6.7% 5.0% 5.7% 3.3% 2009 2010 2011 2012 2013 2014 2015 2016 2017 * Excluding acquisitions (*) Figures without Piraquê 36
Slide 37: Operational Cash Generated
Operational Cash Generated * (R$ million) and Operational Cash/Net Revenue* (%) CAGR 2009-2017: 12.7% 964.2 870.8 646.1 572.6 490.5 431.5 334.6 343.3 334.7 18.1% 14.3% 14.0% 14.8% 13.3% 14.1% 16.1% 9.4% 10.6% 2009 2010 2011 2012 2013 2014 2015 2016 2017 (*) Figures without Piraquê 37
Slide 38: Net Cash and Net Cash/EBITDA
Net Cash (R$ million)* and Net Cash/EBITDA (unit) * 596.6 60 00, 50 00, 40 0,0 30 00, 212.8 20 00, 10 00, 0.2 0.6 0,0 -100 ,0 -0.2 -0.5 -0.4 -0.8 -0.7 -200 ,0 -300 ,0 -1.0 -176.0 -0.6 -400 ,0 -211.2 -261.7 -500 ,0 -378.8 -396.2 -600 ,0 -700 ,0 -468.4 -427.1 -800 ,0 -900 ,0 2009 2010 2011 2012 2013 2
Slide 39: Corporate Governance and Capital Market
Corporate Governance and Capital Market Listed in the “Novo Mercado” Shareholder Position as of 12/29/2017. Free Float composed by: 25.8% local investors 74.2% foreign investors 25% 03 independent members on the Board of Directors. Controller Administrators Free Float Audit Committee compose
Slide 40: MDIA3 vs IBOVESPA since the IPO
0 5 10 15 20 25 30 35 40 oct/06 jan/07 apr/07 jul/07 oct/07 jan/08 (R$ Millions) Average Daly apr/08 Volume : MDIA3 ago/08 oct/08 jan/09 apr/09 set/09 oct/09 jan/10 apr/10 out/10 oct/10 jan/11 apr/11 nov/11 oct/11 jan/12 Volume (em milhões) apr/12 dez/12 oct/12 jan/13 apr/13 MDIA3 jul/13 oct/13 MDIA
Slide 41: Sustainability Results
Sustainability Results gM I ~ MATERIAL ISSUES AND SUSTAINABLE DEVELOPMENT OBJECTIVES c/ TV PURSUED BY THE COMPANY THE GLOBAL GOALS g a eT a or 210i. MORI 13 BS For Sustainable Development NAY Economic Ethics and Integrity Stakeholder engagement e Development of Human Capital @ Occupational Health an
Slide 42: IR Team
IR Team Geraldo Luciano Mattos Júnior - Vice-President of Investments and Controllership Fabio Cefaly - New Business and Investor Relations Director Fernanda Carvalho - New Business and Investor Relations Manager Julianny Maia – New Business and Investor Relations Analyst Renata Lessa– New Business
Slide 43: Thank you
——ooO St Thank you 43
Slide 44: Results Presentation 1Q18
Results Presentation 1Q18 Food for the well-being of Society and the people’s happiness 44
Slide 45: Volume growth in all product lines and decrease of average price
Volume growth in all product lines and decrease of average price Net Revenue * Volume * Average Price* + 0.9% vs. 1Q17 = + 4.5% vs. 1Q17 -3,3% vs. 1Q17 * Variation of Net Revenue - 1Q18 VS 1Q17 (R$ Millions and %) Volume Effect Price Effect 4.3% 6.0% 25.0% 2.0% -9.9% -12.4% 3.7% 12 1,206 4.5% 27 10
Slide 46: Average prices decreased in 1Q18 vs 1Q17
Average prices decreased in 1Q18 vs 1Q17 and increased compared to 4Q17 Net Average Price R$/KG * Cookies and 5.40 5.45 5.49 5.36 5.51 Crackers Margarine and Vegetable Shortening 4.01 3.92 3.89 3.87 3.82 Pasta 3.44 3.37 3.16 3.09 3.10 Total M Dias 3.00 3.00 2.93 2.90 2.87 Wheat 1.21 1.08 1.00 1.05 1
Slide 47: Volume growth leveraged by sales incentives and marketing
Volume Growth leveraged by incentives to the sales promoters and marketing investments Incentive to the sales promoters to gain new extra points of sales in our clients; Marketing campaigns with prize promotions to the end consumers Promote sell in and sell out National visibility 47
Slide 48: Launches consistent with growth strategy
Launches consistent with the strategy of growth and introduction of items with higher added value 48
Slide 49: We maintained national leadership in pasta, cookies and crackers
We maintained the national leadership in pasta, cookies and crackers Cookies and Crackers* National Leadership with 32.2%* ∆ Share Volume: +0.3 p.p. ∆ Share Value: +0.2 p.p. Pasta* National Leadership with 33.1%* ∆ Share Volume: -0.4 p.p. ∆ Share Value: -0.6 p.p. Wheat Flour and Bran * Northeast Lea
Slide 50: COGS negatively impacted by lower volumes and wheat prices
COGS negatively impacted by decrease in the volumes produced, increase in the price of wheat and BRL devaluation Cost of Goods Sold * (% Net Revenue) Volume Produced('000 tonnes)* 61.2% 64.8% 65.8% 639 657 606 7.8% 8.3% 4 4 4 6.8% 37 43 8.4% 9.3% 10.0% 39 23.1% 23.2% 380 389 23.8% 359 89 87 81 22.2%
Slide 51: Growth of Vertical Integration Index of Shortening
Growth of Vertical Integration Index of Shortening Wheat Flour | Company Consumption (%)* Vertical 7.9% 7.8% 7.3% 8.7% 9.4% Integration Index * 92.1% 92.2% 92.7% 91.3% 90.6% 1Q18 = 90.6% 1Q17 = 92.1% 1Q17 2Q17 3Q17 4Q17 1Q18 Own Production External Source Shortening | Company Consumption (%)* Vertic
Slide 52: Decrease in Operating Expenses versus 4Q17
Decrease in Operating Expenses (% Net Revenue) versus 4Q17 Operation Expenses* (% Net Revenue) 26.7% 27.5% 25.6% 25.9% 24.3% 2.9% 2.7% 2.6% 2.2% 3.1% 2.2% 3.7% 3.3% 3.7% 3.0% 19.7% 20.7% 19.1% 21.1% 20.0% 1Q17 2Q17 3Q17 4Q17 1Q18 Sales Administrative and general Other * Selling Expenses contain: Sal
Slide 53: EBITDA and EBITDA Margin 1Q18 vs 1Q17
EBITDA (R$ Million)* and EBITDA Margin* (% Net Revenue) 30,0% 291.3 30 0 25,0% 233.1 247.7 25 0 20,0% 194.3 183.5 20 0 15,0% 18.0% 19.8% 15 0 -21.3% 19.3% 15.1% 10,0% 14.2% 10 0 1Q18 vs. 1Q17 5,0% 50 0,0% 0 1Q17 2Q17 3Q17 4Q17 1Q18 EBITDA EBITDA Margin (*) Figures without Piraquê 53
Slide 54: EBITDA Margin impacted by fixed costs and wheat price
EBITDA Margin impacted by lower dilution of fixed costs and increase in the price of wheat Margin EBITDA Evolution(% Net Revenue)* 1Q18 vs. 1Q17 19.3% 4.0% 0.3% 0.1% 15.1% Ebitda Margin Gross Margin* Selling Expenses Other operating Ebitda Margin 1Q17 expenses 1Q18 *Note: % Gross Margin without cons
Slide 55: EBITDA Margin growth compared to 4Q17
EBITDA Margin growth compared to 4Q17 * Margin EBITDA Evolution(% Net Revenue) 1Q18 vs. 4Q17 0.7% 15.1% 14.2% 0.9% 1.1% Ebitda Margin Gross Margin* Selling Expenses Other operating Ebitda Margin 4Q17 expenses 1Q18 *Note: % Gross Margin without consider the depreciation of Cost of Good Sales in the N
Slide 56: Net Profit and Net Margin 1Q18 vs 1Q17
Net Profit(R$ Million)* e Net Margin(% Net Revenue)* 60 % 253.6 30 0 199.4 201.9 25 0 189.4 50 % 20 0 139.7 40 % 15 0 30 % -26.2% 15.7% 14.5% 17.3% 14.8% 20 % 11.5% 10 0 1Q18 vs. 1Q17 10 % 50 0% 0 1Q17 2Q17 3Q17 4Q17 1Q18 Net Profit Net Margin (*) Figures without Piraquê 56
Slide 57: We invested R$ 67.1 millions in infrastructure
We invested R$ 67.1*millions in infrastructure Construction in progress of the Wheat Mill in Bento Gonçalves (RS) Expansion of storage capacity of the distribution center in the Maracanaú unit (CE) Modernization of silos of the Wheat Mill in Cabedelo (PB) 50 % 25 0 45 % 40 % 20 0 Capex (R$ Mil
Slide 58: Evolution of HR management and social-environmental practices
Evolution of HR management and social- environmental pratices Launch of Oracle Human Capital Management * (HCM) software Inventory of Greenhouse Gas Emissions for 12 industrial units* Labor’s accident rate decreased by 21.1%* compared to 1Q17 The relative water consumption decreased by 4.3%*
Slide 59: Strong cash generation in 1Q18
Strong cash generation in 1Q18* 24.3% of Net Revenue in 1Q18 295.9 70.3 26.5 1,178.0 925.9 Cash and cash equivalent on Net Cash from operating Payment of property and Financing activities Cash and cash equivalent on Dec-17 activities software licenses Mar-18 1Q17 = R$ 203.3 million 4Q17 = R$ 9.0 mil
Slide 60: Net cash position of R$ 824.8 million at end of 1Q18
We ended 1Q18 with net cash position (cash greater than debt) of R$ 824.8 million* 824.8 661.9 596.6 407.5 0.9 347.2 0.7 0.6 0.4 0.4 1Q17 2Q17 3Q17 4Q17 1Q18 (*) Figures without Piraquê 60
Slide 61: Capital Market
Capital Market Average Daly Volume : MDIA3 MDIA x IBOV x IGC Profitability% (R$ Millions) 01/02/2017 a 05/10/2018 40 60% 35 50% 30 40% 25 20 30% 15 20% 10 10% 5 0 0% jan-17 feb-17 mar-17 apr-17 may-17 jun-17 jul-17 aug-17 sep-17 out-17 nov-17 dez-17 jan-18 feb-18 mar-18 apr-18 may-18 Volume (Million