Camil Alimentos SA · BMFBOVESPA:CAML3

Camil Alimentos SA — Investor Presentation (March 2019)

63 slides from Camil Alimentos SA's investor presentation, March 2019

  1. Slide 1: Institutional Presentation

    Institutional Presentation

  2. Slide 2: Disclaimer

    Disclaimer Financial data is presented in accordance to the International Financial Reporting Standards and represents the Company’s consolidated results in million reais (R$), unless otherwise indicated. Company fiscal year begins in March and ends in February of the following year (inclusive). The

  3. Slide 3: Table of Contents

    Table of Contents I. Camil Alimentos Overview II. Key Investment Thesis III. SLC Alimentos Acquisition IV. Key Takeaways Appendix A. Financial Highlights (Latest Results: 3Q18) B. Industry Highlights C. Selected Comparable Companies

  4. Slide 4: Section I: Camil Alimentos Overview

    Section I Camil Alimentos Overview

  5. Slide 5: Purpose and Values

    Purpose and Values Our Purpose We believe that each person can make a difference in others lives and we exist to nurture relationships that bring more flavor to the everyday life Our Values Trust We honor our commitments with seriousness and discipline. We value transparency in our relationships, an

  6. Slide 6: Camil's IPO

    Camil’s IPO Camil successfully completed its Initial Public Offering on September 2017 IPO Highlights Ownership Structure As of February, 2019 R$9.00 / share Priced on September 26, 2017 Free float 41.0 million ONs Treasury stocks 29% Camil Investimentos Primary Offering 1% 56% Management and contro

  7. Slide 7: Camil at a Glance

    Camil at a Glance Founded in 1963, Camil is a leading food company in Latin America with a diversified portfolio of several brands in rice, beans, sugar and canned fish Leadership positioning in all segments and countries in which it operates, Camil is one of the largest food companies in LatAm High

  8. Slide 8: Timeline

    Timeline Present for more than 50 years in the Brazilian everyday life, Camil grew in South America grains segment and expanded its portfolio into new categories Camil’s Acquisition of canned fish IPO and Costeño Acquisition of Acquisition of the brand Acquisition of SLC Alimentos; Acquisition of su

  9. Slide 9: Product Portfolio

    Product Portfolio Complementary product portfolio composed of high value added items Main products across the segments that Camil operates Grains - Brazil Grains - International Core Biscuits Value added Value added Sugar Fish 9

  10. Slide 10: Diversification across product categories

    Diversification across 3 products categories Business Divisions Overview Brazil1 Uruguay Chile Peru Grains Sugar Fish Grains Main Brands Rice Beans 1st 2nd 1st 2nd 2nd Market Share 43%6 23%6 1st 1st 1st 9%2,3 7%2,4 32%5 48%7 33%8 33%9 Sardine Sardine Tuna Top of 47% Sardine n.a. 50% 72% Mind10 60% 8

  11. Slide 11: Recognized Brands, Leadership and Innovation

    Recognized Brands, Leadership and Innovation Broad consumer recognition and innovation leads to several awards and market leading positions Awards Leadership¹ Brands Grains Sugar Canned Fish & win the Brazil 1º 2º 1º 2º 2º award for best brands of Rice and Beans, and Rice Beans Sugar Sardines Tuna 9

  12. Slide 12: Solid Business Model with Stable and Resilient Margins

    Solid Business Model with Stable and Resilient Margins Despite the slowdown in the Brazilian economy, Camil posted solid results maintaining EBITDA margin over +10% Camil: Net Revenue (R$mm) Net Revenue by Segment (R$mm) Even in a challenging environment, 26% Camil was able to post double-digit 25%

  13. Slide 13: Section II: Key Investment Thesis

    Section II Key Investment Thesis

  14. Slide 14: Key Investment Thesis

    Key Investment Thesis 3 4 Seasoned Compelling Management Team Business Model with and the Highest Stable and Resilient Standards of Margins Corporate Governance in Place 5 2 Wide Distribution Investment Grade Network Reaching Indebtedness Profile more than 300k POS 1 6 Market Leader with Solid Cash

  15. Slide 15: Market Leader with Iconic Brand Recognition

    Market Leader with Iconic Brand Recognition Iconic Brand Recognition… …Leading to a Leadership Position in all Sectors & Regions1 Brazil – RICE2,3 Brazil – REFINED SUGAR5  Market leader in São Paulo City: #1 9.1% #1 31.6% Rice 44% market share10 #2 Player 2 4.8% #2 Player 2 18.7%  Rice: 60% Top of

  16. Slide 16: Wide Distribution Network Reaching more than 400k POS

    Wide Distribution Network Reaching more than 400k POS Strong distribution network with more than 400,000 points of sale, favoring the business expansion to new segments % Sales Fev/2018 Selected Accounts / Retailers Key Accounts 33% Own Sales Force 28%  95% of sales made by the company’s own sales

  17. Slide 17: Solid Business Model with Stable and Resilient Margins

    Solid Business Model with Stable and Resilient Margins Despite the recent slowdown in the Brazilian economy, Camil presented a strong performance in terms of growth and margin stability Brasil: GDP and Retail Sales (% growth, real terms) Camil: Net Revenues (R$ millions) During 2015-16, the GDP decr

  18. Slide 18: Solid Business Model with Stable and Resilient Margins (Cont'd)

    Solid Business Model with Stable and Resilient Margins (Cont´d) The segments in which Camil operates present active price dynamics, with weekly price pass-through, ensuring stability of margins Rice - Market vs. Camil’s prices Beans - Market vs. Camil’s prices 300 7.00 6.00 250 5.00 Agrolink (RS/60k

  19. Slide 19: Proven Cost Transfer Capability (rice case)

    Solid Business Model with Stable and Resilient Margins (Cont´d) Since 2006, Camil maintained gross margin of 22.5% - 28.0%, mainly due to its weekly pricing capacity Business Model: Proven Cost Transfer Capability (rice case) Subtitle Average purchase price (CIF - R$/30kg) Adjusted selling price (1)

  20. Slide 20: Pricing and Purchasing

    Solid Business Model with Stable and Resilient Margins (Cont´d) Pricing and Purchasing Agriculture Origination Processing Packaging Distribution Marketing Brand Strategy  Weekly purchases at spot price        Provision of storage to producers throughout the year: benefits from logistics cost

  21. Slide 21: Premium Price | Sugar Case Study and Rice Strategy

    Premium Price | Sugar Case Study and Rice Strategy União: Brand of strong emotional bond, preferred by consumers and with greater perception of value! Pricing Power  Rice Strategy  Replicating the sugar model    "Brand of sugar": higher from commodity to brand Market Leadership prices compared

  22. Slide 22: Rice | Broad Product Portfolio

    Rice | Broad Product Portfolio Tailored product offering for targeted consumer segments across Brazil Product Portfolio - Breakdown Portfolio Camil¹ Product Shelving Avg market selling price Premium 129 129 Upper Avg market mainstream selling price 111 112 Avg market Mainstream selling price 101 111

  23. Slide 23: Brazil Food Segment | Rice

    Brazil Food Segment | Rice Fragmented Industry with high opportunity for expansion and consolidation Market Share¹ Product Portfolio Market Share (in volume) Mainstream 1º Rice Market Share 21% 10% Brazil – RICE2,3 I #1 9.1% 3% 11% VII #2 Player 2 4.8% 10% 16% II #3 Player 3 3.1% 23% 2% Value pricin

  24. Slide 24: Brazil Food Segment | Beans

    Brazil Food Segment | Beans Fragmented Industry with high opportunity for expansion and consolidation Market Share¹ Product Portfolio Market Share (in volume) Mainstream 2º Beans Market Share 12% 2% Brazil – BEANS2,4 I #1 Player 1 7.4% 1% 4% VII #2 6.0% 9% 17% II #3 Player 3 5.8% V 20% 1% Value pric

  25. Slide 25: Brazil Food Segment | Sugar

    Brazil Food Segment | Sugar Sugar: wide, resilient and consolidated industry Market Share and Pricing Power Product Portfolio 1º Pricing Power Sugar Market Share Mainstream Brazil – REFINED SUGAR5  "Brand of sugar": higher #1 31.6% prices compared to the #2 Player 2 18.7% main competitors Sugar pri

  26. Slide 26: Brazil Food Segment | Canned Fish

    Brazil Food Segment | Canned Fish Canned Fish: consolidated industry, with growth in consumption and seasonality on Lent period Market Share Product Portfolio 2º 2º Tuna Market Share Sardine Market Share Mainstream Brazil – SARDINE6 Brazil – TUNA6 #1 Player 1 46.5% #1 Player 1 60.2% #2 42.9% #2 23.2

  27. Slide 27: Clear and Tangible Avenues for Expansion

    Clear and Tangible Avenues for Expansion …Coupled with consolidation of the Brazilian grains 1 Expansion to white areas… market Unique opportunity to consolidate the fragmented Brazilian rice market.... Minas 21% 10% 1º Rice Market Share Gerais I Brazil – RICE2,3 3% 11% VII #1 9.1% #2 Player 2 4.8%

  28. Slide 28: Clear and Tangible Avenues for Expansion (cont'd)

    Clear and Tangible Avenues for Expansion (cont´d) Clear recovery opportunities in the sugar and fish markets and expansion to new categories in South America 2 Fine Sugar Market Share Evolution1 (%) 42% 42% 43% 42% 42% 42% 40% 40% 40% Recovery in the 37% 36% 38% 37% 36% 37% 36% Sugar Market in 34% 3

  29. Slide 29: Leadership with Wide Experience in the Sector

    Leadership with Wide Experience in the Sector All Camil's directors have experience in their respective areas of expertise Legend Years of experience in Camil Luciano Quartiero Flavio Vargas, CFA Years of experience in the market CEO CFO and IR Director  Ex-CFO of Smiles S.A.  Ex-CFO of Camil Alim

  30. Slide 30: Solid Corporate Governance

    Solid Corporate Governance Camil has high levels of controls and corporate governance, being supported by independent board members for +10 years and being audited for +15 years (big 4) Board of Directors Corporate Governance Jairo Quartiero (Chairman)  Since 2008, the Board of Directors  Listing

  31. Slide 31: Solid Corporate Governance (Cont'd)

    Solid Corporate Governance (Cont’d) Well-defined committees structure aiming to enhance the company’s organizational policies and comply with the best corporate practices Committees Main Responsibilities/Guidelines  Elaborate and recommend the approval of the Company’s financial policies, as well a

  32. Slide 32: Environmental, Social and Governance (ESG)

    Environmental, Social and Governance (ESG) Solid corporate governance focused on value creation for shareholders and commitment to environmental and social practices Environmental Governance • HACCP Since 2008, the Board of Directors is responsible for general strategic policies • Biomassa - Thermoe

  33. Slide 33: Section III: SLC Alimentos Acquisition

    Section III SLC Alimentos Acquisition

  34. Slide 34: M&A: SLC Acquisition - Transaction Summary

    M&A: SLC Acquisition - Transaction Summary Acquisition aligned to the Company’s expansion strategy and an important step towards the consolidation of the grain market in Brazil Acquisition 100% of SLC Alimentos Ltda. from Grupo SLC Participações • Consolidation of the grain market in Brazil • Portfo

  35. Slide 35: SLC Acquisition: Overview

    SLC Acquisition: Overview Overview¹ Market share  Ex-subsidiary of SLC Participações Group Brands Camil and Namorado combined hold approx. 9% of the rice market and 7% of the beans Market in Brazil  Founded in December 2000 Company  and three other brands in the portfolio. Main Brand  Brand was

  36. Slide 36: SLC Acquisition: Financial and Operational Highlights

    SLC Acquisition: Financial and Operational Highlights 12M17 + Period ended on Feb. 28, 2018 Dec. 31, 2017 12M17 12M17 12M17 Audited Audited Pro-forma Volume Grains Brazil (k ton) Grains 668,5 221,0 889,5 Rice 596,1 205,0 801,1 Beans 72,4 16,0 88,4 Financial Statements (R$mn) Net Revenues 4,663 512 5

  37. Slide 37: SLC Acquisition: Pro-forma

    SLC Acquisition: Pro-forma Combined Historical Financial Highlights1 (R$mn) Market Share Brazilian Rice per Region Camil Combo Combo SLC Alimentos C S Total Brazil 7% 2% 9% Combo Combo Greater São 32% 5% 37% Value Firm Value 3.157 308 3,465 91% 9% Paulo South 1% 3% 4% NE 8% 2% 10% 2015A 4.229 457 4,

  38. Slide 38: Section IV: Key Takeaways

    Section IV Key Takeaways (© camil

  39. Slide 39: Key Takeaways

    Key Takeaways Market Resilient demand 1 The Company’s main market proves resilient to economic downturns as the consumption of rice and beans has a strong cultural appeal, being a pillar of the Brazilians’ typical diet Low exposure to fluctuations in commodities prices 2 The market dynamics differ m

  40. Slide 40: Key Financial Highlights

    Key Financial Highlights Camil Consolidated Profitability Evolution1 Camil: Net Revenue (R$mm) Net Revenue by Segment (R$mm) Even in a challenging environment, 26% Camil was able to post double-digit 25% 24% 25% 25% 4.948 23% growth, maintaining profitability 4.663 4.229 4.393 4.948 3.582 3.676 4.66

  41. Slide 41: Key Financial Highlights (Cont.)

    Key Financial Highlights (Cont.) Breakdown of Cash Flow Generation Consistent cash flow generation mainly backed by strong operating cash flow (relevant EBITDA growth with stable margins) and also impacted by working capital seasonality and historical capex spent in M&A Breakdown of Cash Flow Genera

  42. Slide 42: Appendix A. Financial Highlights

    Appendix A. Financial Highlights Latest Results: 3Q18

  43. Slide 43: 3Q18 Operating Performance

    600.000 600.000 3Q18 Operating Performance 300.000 400.000 500.000 500.000 200.000 300.000 400.000 600.000 Sequential 100.000 growth in sales400.000 volume in all categories, except for rice in Brazil 200.000 Historical Operating Performance (‘000 ton) 300.000 500.000 0 300.000 1T14 2T14 3T14 4T14 1

  44. Slide 44: Brazil Food Segment | Rice

    Brazil Food Segment | Rice Challenging environment for rice sales in Brazil this quarter. The Company continues focused on volume recovery. Rice – Camil’s Volume and Net Prices Rice – Market Prices vs. Camil’s Gross Prices Source: Company Source: Esalq Senar, Company Rice – Quarterly Highlights Rice

  45. Slide 45: Brazil Food Segment | Beans

    Brazil Food Segment | Beans Sequential and annual volume growth Beans - Camil’s Volume and Net Prices Beans - Market Prices vs. Camil’s Gross Prices 300 7.00 6.00 250 5.00 Agrolink (RS/60kg) 200 Camil (R$/kg) 4.00 150 3.00 100 2.00 50 1.00 nov-16 fev-17 mai-17 ago-17 nov-17 fev-18 mai-18 ago-18 nov-

  46. Slide 46: Brazil Food Segment | Sugar

    Brazil Food Segment | Sugar Sequential and annual volume growth Sugar - Camil’s Volume and Net Prices Sugar - Market Prices vs. Camil’s Gross Prices Source: Company Source: Esalq-Senar; Company Sugar – Quarterly Highlights Sugar – Product Portfolio Sales volume : 134.7 thousand tons • +1.8% QoQ • +1

  47. Slide 47: Brazil Food Segment | Canned Fish

    Brazil Food Segment | Canned Fish Sequential volume growth Canned Fish - Camil’s Volume and Net Prices Canned Fish - Camil’s Gross Prices Source: Company Source: Company Canned Fish – Quarterly Highlights Canned Fish – Product Portfolio Sales volume: 10.1 thousand tons Mainstream • +24.7% QoQ • -7.3

  48. Slide 48: International Food Segment

    International Food Segment Sequential and annual volume growth International - Main Considerations International Operational Performance – Quarterly Evolution (‘000 ton) Export Market Uruguay Sales volume: 136.5 thousand tons Sales recovery • +31.2% QoQ • +3.3% YoY Gross price in R$: 2.12 Gross pric

  49. Slide 49: 3Q18 Financial Highlights

    3Q18 Financial Highlights Food Products Brasil Food Products International Consolidated Result Statements 3Q17 3Q18 3Q18 vs 3Q17 3Q18 3Q18 vs 3Q17 3Q18 3Q18 vs Closing Date 30-Nov-18 31-nov-18 3Q17 30-Nov-18 31-nov-18 3Q17 30-Nov-18 31-nov-18 3Q17 Net Revenues 818.9 857.5 4.7% 340.2 409.3 20.3% 1,15

  50. Slide 50: Profitability Evolution: Net Income, EBITDA and Margins

    Profitability Evolution: Net Income, EBITDA and Margins 3Q18 remarked by margins expansions YoY: Gross margin (25.3%, +0.6pp YoY), EBITDA margin (12.0%, +0.8pp YoY); and net margin (11.9%, +5.7pp YoY) Quarterly Profitability Evolution (in R$mn) Source: Company Quarterly Margin Evolution (%) Source:

  51. Slide 51: 3Q18 Financial Result and Debt

    3Q18 Financial Result and Debt Liability Management: Debt cost reduction Debt (R$mn) Debt (in R$mn) 3Q17 2Q18 3Q18 3Q18 vs 3Q18 vs Net Financial Result Closing Date 30-nov-17 31-ago-18 31-nov-18 3Q17 2Q18 Total Debt 1,170.0 1,491.2 1,386.0 18.5% -7.1% Loans and financing 360.1 512.8 404.3 12.3% -21.

  52. Slide 52: Investment Grade Indebtedness Profile

    Investment Grade Indebtedness Profile Stable outlook by S&P mainly backed by better expectations on enhanced credit metrics, leverage reduction and stable margins, all supported by solid financial policies Main Financial Policies and Indebtedness Evolution (R$ mm, except otherwise indicated) Constan

  53. Slide 53: Solid Cash Flow Generation Supported by Strong Operating Results

    Solid Cash Flow Generation Supported by Strong Operating Results Solid EBITDA conversion into Free Cash Flow Breakdown of FCF Generation – In R$ mm Period 2013 2014 2015 2016 2017 LTM 3T18 Funds from Operat ions1 381.0 388.8 488.5 579.6 529.9 603.2 (+/-) Change in Working Capital (291.4) 59.8 (150.2

  54. Slide 54: Solid Cash Flow Generation Supported by Strong Operating Results (Cont.)

    Solid Cash Flow Generation Supported by Strong Operating Results (Cont.) The company’s seasonal cash flow is mainly explained by (i) its working capital seasonality and (ii) the historical capex spent in assets acquisitions (M&A) Breakdown of FCF1 (R$ mm) and EBITDA-to-FCF conversion (%) 315% 322% 2

  55. Slide 55: Appendix B. Industry Highlights

    Appendix B. Industry Highlights

  56. Slide 56: Resilient Demand and Favorable Market Dynamics: Rice Brazil

    Resilient Demand and Favorable Market Dynamics Rice Industry | Brazil The rice industry in Brazil is characterized by a combination of (i) resilient demand based on cultural identity and (ii) high and stable production levels Largest Producers in the World1 National Production Ton mm Ton mm 210.3 16

  57. Slide 57: Resilient Demand: Rice Peru, Chile and Uruguay

    Resilient Demand and Favorable Market Dynamics (Cont’d) Rice Industry | Peru, Chile and Uruguay Peru, Chile e Uruguay present: (i) resilient market e (ii) potential to consolidate Domestic Peru – Total Consumption1 (‘000 tons) Market Growth Potential: CAGR13-17 : 1.6% P Broad market P migration to p

  58. Slide 58: Resilient Demand: Beans Industry Brazil

    Resilient Demand and Favorable Market Dynamics (Cont’d) Beans Industry | Brazil With stable production levels, the beans market in Brazil is also characterized by a combination of: (i) resilient demand based on cultural identity and (ii) supply stability National Production Average Productivity Ton

  59. Slide 59: Resilient Demand: Sugar Industry Brazil

    Resilient Demand and Favorable Market Dynamics (Cont’d) Sugar Industry | Brazil Brazil has a leading position in sugar production and consumption, presenting: (i) resilient demand and (ii) supply stability Largest Producers in the World1 National Production Ton mm Ton mm CAGR15/16-17/18E: 6.8% 1º Pr

  60. Slide 60: Resilient Demand: Fish Industry Brazil

    Resilient Demand and Favorable Market Dynamics (Cont’d) Fish Industry | Brazil The fish industry in Brazil is consistently growing, driven by the trend of the diversification of protein sources and increase in the consumption of food with higher nutritional value National Production Per Capita Prote

  61. Slide 61: Appendix C. Selected Comparable Companies

    Appendix C. Selected Comparable Companies

  62. Slide 62: Selected Comparable Companies

    Selected Comparable Companies (figures in R$ mm1) Brazil LatAm (ex-Brazil) Ratings (Fitch/Moody's/S&P) NA / NA / BB- BB- / B1 / BB- BBB- / Ba2 / BBB- BB- / WR / BB- A / NA / NA BBB / Baa2 / BBB AAA / WR / BBB AA- / NA / AA- NA / NA / NA NA / NA / NA Ticker BOVESPA:CAML3 BOVESPA:BEEF3 BOVESPA:BRFS3 B

  63. Slide 63: Investor Relations

    Investor Relations Phone: +55 11 3039-9238 +55 11 3039-9237 E-mail: ri@camil.com.br

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