Minerva S.a. · BMFBOVESPA:BEEF3
Minerva — Minerva Foods — Investor Presentation (October 2023)
49 slides from Minerva's investor presentation, Oct 26, 2023
Slide 1: Presentation of Results from the 1st Unified Audit Cycle in Legal Amazon Livestock Chain
Federal Public Prosecutor's Office Presentation of Results from the 1st Unified Audit Cycle in Legal Amazon Livestock Chain October 26th, 2023
Slide 2: Event instructions
Event instructions For those attending the event via Teams: • The event will be streamed live on YouTube. You may choose to switch off the camera. • During the presentations, we ask that you turn off the microphone. • Questions and comments can be submitted via the platform chat or during the time a
Slide 3: Agenda
AGENDA Release of the Results of the Audit of Livestock Agreements in the Legal Amazon MPF Auditorium - Belém - Pará 26th October 2023 14:00 Opening Dr. Daniel Azeredo, MPF Dr. Priscila Lucas Bermúdez, MPF PA 14:15 Release of Livestock TAC audits MPF Amazonas – Dr. Rafael Rocha MPF Rondonia – Dr. Ga
Slide 4: Boi na Linha Protocol
BOI NA LINHA PROTOCOL Monitoring protocol for Amazon cattle suppliers - Boi na Linha • Version 1.0 • Approved on 05/12/2020 • In effect from 07/01/2020 - 11/21/2021 • Version 1.1 • Approved on 11/22/2021 • In force from 11/22/2021 – to date • Version 2.0 • Currently in the approval phase • Draft pre
Slide 5: Auditing Protocol
AUDITING PROTOCOL • Audit Protocol for Livestock Commitments in the Amazon - Version 1.0 • Approved on 11/22/2021 • In force as of 11/22/2021 • Completion of 1st unified audit cycle • Participation: AM, AC, MT, PA, RO • Start of 2nd unified audit cycle • Revision of Audit Protocol: specific adjustme
Slide 6: General information on the 1st unified audit cycle
General information on the 1st unified audit cycle • Audits carried out in 2023 • Transactions from July 2020 to December 2021 • Auditing firms: Grant Thornton; GeoMaster; DNV and BDO; Aguiar, Albuquerque & Cassiano Informações Gerais
Slide 7: Audits - Acre
Audits - Acre
Slide 8: Acre Audits
ACRE AUDITS Audit status 1 declared an JBS (GT*) auditing company 3 meatpackers solicited 2 did not declare *Grant Thornton
Slide 9: Acre Audits: Results overview
ACRE AUDITS Results overview - Name of unit: JBS S/A II - Municipality: Rio Branco Number of GTAs Heads of cattle Nº % Nº % Total purchases and head of cattle (global) 9,153 100% 199,107 100% Total purchases and number of sampled cattle 956 10% 38,555 19% 1. Purchases in compliance 745 78% 29,492 76
Slide 10: Acre Audits: Automatic analysis
ACRE AUDITS Automatic analysis JUL20 to AUTOMATIC 1st CYCLE MEAT TAC DEC21 JUL20 to DEC21 Irregularities AUDIT - Volume slaughtered/exp (TOTAL) (Irregularities) (%) Notified companies that did NOT 39,013 2,165 5.5% submit an audit 1 FRICARNES 22,746 1,705 7% 2 MODELO 16,267 460 3%
Slide 11: Audits - Amazon
Audits - Amazon
Slide 12: Amazon Audits: Audit status
AMAZON AUDITS Audits status AGROPAM (DNV*) AMAZOMBOI (DNV) To date, the MPF has 4 declared an yet to receive an audit auditing report. company 10 meatpackers NR (DNV) solicited 6 did not declare DONA RAIMUNDA (AGUIAR**) *DNV - Business Assurance Brasil **Aguiar, Albuquerque e Cassiano Assessoria Con
Slide 13: Amazon Audits: Automatic analysis
AMAZON AUDITS Automatic analysis JUL20 to DEC21 JUL20 to DEC21 AUTOMATIC 1st CYCLE MEAT TAC AUDIT - (TOTAL) (Irregularities) Irregularities (%) Volume slaughtered/exp Companies WITHOUT audits and WITH 218,507 16,339 7.4% relevance 1 AGROPAM - FRIZAM 65,418 9,107 14% 2 FRIGORIFICO AMAZONAS 22,715 2,0
Slide 14: Audits - Mato Grosso
Audits - Mato Grosso
Slide 15: Mato Grosso Audits: Audit status
MATO GROSSO AUDITS Audit status AGRA PANTANAL In MT, audits are performed FRIGOLÍDER 1 based on the database provided by DNV 3 the audited companies REDENTOR FRIALTO 2 To date, the MPF has PANTANEIRA 13 declared only received reports BOI BRANCO an auditing from JBS, Marfrig and NATURAFRIG 17 company
Slide 16: Mato Grosso Audits: Results overview (JBS)
MATO GROSSO AUDITS Results overview (JBS) - Units/municipalities (15): Alta Floresta, Água Boa, Araputanga, Barra do Garças, Brasnorte, Confresa, Colíder, Diamantino, Juara, Juína, Pedra Preta, Pontes e Lacerda, Pimenta Bueno, São Miguel do Guaporé (RO*), Vilhena (RO*) Number of GTAs Heads of cattle
Slide 17: Mato Grosso Audits: Results overview (Marfrig)
MATO GROSSO AUDITS Results overview (Marfrig) - Units/municipalities (3): Tangará da Serra, Várzea Grande, Pontes e Lacerda Number of GTAs Heads of cattle Nº % Nº % Total purchases and head of cattle (global) 7,918 100% 894,257 100% Total purchases and number of sampled cattle 940 12% 105,839 12% 1.
Slide 18: Mato Grosso Audits: Results overview (Minerva)
MATO GROSSO AUDITS Results overview (Minerva) - Units/municipalities (4): Paranatinga, Mirassol D´Oeste, Palmeiras de Goiás, Rolim de Moura Number of GTAs Heads of cattle Nº % Nº % Total purchases and head of cattle (global) 2,837 100% 171,289 100 % Total purchases and number of sampled cattle 720 2
Slide 19: Audits - Rondônia
Audits - Rondônia
Slide 20: Rondônia Audits: Audit status
RONDÔNIA AUDITS Audit status In RO, audits are performed based on the database provided by the audited companies JBS (GT*) 2 meatpackers 2 declared an solicited auditing company MINERVA (GT) *Grant Thornton
Slide 21: Rondônia Audits: Results overview (JBS)
RONDÔNIA AUDITS Results overview (JBS) - Units/municipalities (4): Pimenta Bueno, Porto Velho, São Miguel do Guaporé, Vilhena Number of GTAs Heads of cattle Nº % Nº % Total purchases and head of cattle (global) 28,474 100% 1,295,41 100 5 % Total purchases and number of sampled cattle 1,029 4% 173,88
Slide 22: Rondônia Audits: Results overview (Minerva)
RONDÔNIA AUDITS Results overview (Minerva) - Name of unit (2): CSAP (RM)*, Minerva (RM) - Municipalities: Rolim de Moura Number of GTAs Heads of cattle Nº % Nº % Total purchases and head of cattle (global) 8,833 100% 377,368 100 % Total purchases and number of sampled cattle 952 11% 119,473 32% 1. P
Slide 23: Audits - Pará
Audits - Pará
Slide 24: Company groupings
Company groupings Signatory companies that Non-signatory companies Relevant signatory companies* that Relevant non-signatory companies* submitted audits: 12 that submitted an audit: 1 did not submit audits: 12 that did not submit an audit: 9 Agroexport Frigorifico Valêncio Fribev/Xinguara Frigorífic
Slide 25: Automatic Audit: Group 5
Automatic Audit AUTOMATIC 5th CYCLE MEAT TAC PARA AUDIT - JUL20 to DEC21 JUL20 to DEC21 Volume slaughtered/exp (TOTAL) (Irregularities) Irregularities (%) GROUP 5 - Companies WITH TAC, WITHOUT 620,858 101,643 16% audit and WITH relevance 1 CE Mendonça Frig Vitoria 12,052 5,495 46% 2 Mararu - Frigoma
Slide 26: Automatic Audit: Group 3
Automatic Audit AUTOMATIC 5th CYCLE MEAT TAC PARA JUL20 to DEC21 JUL20 to DEC21 AUDIT - Volume slaughtered/exp (TOTAL) (Irregularities) Irregularities (%) GROUP 3 - Companies WITHOUT TAC, 410,784 81,283 20% WITHOUT audits and WITH relevance 1 Araticum 17,592 5,701 32% 2 Frigonorte - J M Soares * 100
Slide 27: Sampling
Sampling Sampling by company (qty) Total sampling (%) 1.000.000 900.000 800.000 12% 700.000 600.000 500.000 400.000 300.000 200.000 100.000 0 Total slaughter/purchases Total cattle audited Total slaughter/purchases Total cattle audited
Slide 28: Representativeness of audits in the State of Pará
Representativeness of audits in the State of Pará and % of animals with nonconformities Total animals marketed for slaughter/export.................... 3,549,455 (100%) Total number of animals marketed by audited companies................... 2,760,224 (78%) Total of animals not audited..............
Slide 29: Benefits of Contracting Audits
Benefits of Contracting Audits Contracted audits (qty and %) Irregularities 300.000 Automatic 250.000 Contracted audits audits 4.81% 24% 200.000 150.000 252.657 Automatic audits 100.000 (qty and %) 300.000 50.000 250.000 62.286 0 15.931 200.000 SEM evidências WITHOUT de evidence COMevidence WITH evi
Slide 30: 5-year Audit Comparison
5-year Audit Comparison 12 months 12 months 18 months 12 months 18 months 1st Audit 2nd Audit 3rd Audit 4th Audit 5th Audit cycle cycle cycle cycle cycle Total Pará (slaughter+export) 3,256,635 3,373,663 5,857,602 3,502,567 3,549,455 % 100% 100% 100% 100% 100% Number of animals marketed by 2,368,089
Slide 31: Compliance rates of audited companies (%)
Compliance rates of audited companies (%) Company Conformity (%) Agroexport 100.0% Aliança 27.2% Altamira 84.5% Estância Boi na Grota 95.6% ForteFrigo 95.1% Frigol 100.0% JBS 93.8% Mafrinorte - Ativo 100.0% Masterboi 100.0% Mercurio 100.0% Minerva 100.0% Rio Maria 100.0% Valêncio 99.8%
Slide 32: Audit history - non-conformities
Audit history - non-conformities Non-conformities (%) st 2nd Audit 5th Audit Companies 1 Audit cycle 3rd Audit cycle 4th Audit cycle cycle cycle Agroexport 0.00 0.00 0.00 0.00 0.00 Aliança 69.90 36.20 24.80 47.30 72.80 Altamira 72 17.60 -- 17.63 15.45 Alvo Consutoria Agropecuária -- -- 0.68 0.00 --
Slide 33: Companies that have maintained over 99% compliance
Agroexport Companies that Mafrinorte have maintained over 99% Masterboi compliance for the Mercúrio last three audit Minerva cycles Rio Maria
Slide 34: Satisfactory levels
Satisfactory levels % Tolerance Audit 2018 Audit 2019 Audit 2020 Audit 2022 Audit 2023 1º Cycle 2º Cycle 3º Cycle 4º Cycle 5º Cycle Up to 30% Up to 20% Up to 9.95% Up to 7% Up to 5%
Slide 35: Next Steps
Federal Public Prosecutor's Office NEXT STEPS October 26th, 2023
Slide 36: Next steps: Companies without audits
Encaminhamentos Next steps Companies without audits • Enforcement of TACs against non-participating companies (ongoing); • Filing lawsuits against companies without TACs (ongoing); • Recommendations to traders and financial institutions; • Work with MMA and OEMAS to prioritize inspections of compani
Slide 37: New TAC
Encaminhamentos New TAC • Redrafting of the TAC • Dialogue in the Social Chamber • Key points: - Blocking requirements; - Support for monitoring protocol; - New penalty system based on audits; - Updating of outdated or obsolete regulations.
Slide 38: Next steps: Indirect suppliers
Encaminhamentos Next steps Indirect suppliers • Signatories notified to be aware of indirect data (automatic analysis) • GTFI and Technical Chamber studies to include indirects in screening criteria as of July 2024 - initially for diagnosis and notifications only
Slide 39: Meat TAC Support Committee
Encaminhamentos Meat TAC Support Committee Technical Cooperation Agreement signed between MPF-PA, Imaflora and AdT in October 2021
Slide 40: Pará Meat TAC Support Committee Objectives (CAT PA)
Pará Meat TAC Support Committee Objectives (CAT PA) a) Assist in the effective implementation of the Meat TAC in the State of Pará; b) Assist in the expansion of the Meat TAC in the State of Pará (expansion to new slaughterhouses); c) Serve as a technical, scientific, advisory and instructional reso
Slide 41: Operational Structure
Operational Structure Pará TAC Support Committee Secex Meat TAC Technical Social Chamber Chamber
Slide 42: Meeting history: Technical Chamber
Meeting history Encaminhamentos Meetings of the Committee's Technical Chamber Date Agenda Item 07.20.22 Presentation of the Committee and formation of the Technical Chamber Definition of the relevant issues to be addressed by the Technical Chamber 09.29.22 Defining the working premises of the Commit
Slide 43: Meeting history: Social Chamber
Meeting history Encaminhamentos Meetings of the Pará Social Chamber Date Agenda Item 11.03.22 Presentation of the Committee and formation of the Social Chamber Presentation and discussion of the points for revision of the Monitoring Protocol 04.10.23 Feedback on the proposals of the Social Chamber r
Slide 44: The Brazilian cattle supply chain
The Brazilian cattle supply chain Indirect Direct Slaughterhouse Distributors Suppliers Suppliers 44
Slide 45: Direct and Tier 1 indirect suppliers constitute 80% of deforestation
Direct and Tier 1 indirect suppliers (>100 ha) constitute 80% of deforestation and 94% of the remaining forest Chart 1 Chart 2 Deforestation 2019- Remaining forest 2021 Source of analysis: University of 2021 in the state of Pará Wisconsin-Madison Source: based on the diagram drawn up by the Working
Slide 46: 85% of non-compliant Tier 1 indirect cattle sold to TAC slaughterhouses
85% of non-compliant cattle of Tier 1 indirect were sold to TAC slaughterhouses Time frame* for tier 1 indirects (02/January/2019 - 31/December/2020) Sales from Indirect Suppliers tier 1 Million head of cattle % of total % of total non-compliance Total number of heads 8,18 100% Total number of heads
Slide 47: 33 municipalities accounted for 80% of transferred cattle
33 municipalities accounted for 80% of the cattle that were transferred from Non- Compliant Indirect Suppliers to Direct Suppliers of Compliant TAC Meatpackers (5th Cycle) Time frame for Tier 1 indirects 02/January/2019 - 31/December/2020 3 Top 3 (24%) 1. São Félix do Xingu 2 2. Marabá 1 3. Novo Rep
Slide 48: SGT Indirect Monitoring Technician: Key Deliverables
SGT Indirect Monitoring Technician: Key Deliverables 1) Impact analysis on the application of good practices - GTFI and supplier reintegration measures 2) Technical requirements for the implementation of CAR + GTA approaches 3) In-depth protocol for integrating indirect suppliers into TACs
Slide 49: Thank you
THANK YOU October 26th, 2023