Mbrf Global Foods Company S.a. · BMFBOVESPA:MBRF3
Mbrf Global Foods — Marfrig — Investor Presentation (June 2012)
36 slides from Mbrf Global Foods's investor presentation, June 2012
Slide 1: Marfrig Company Presentation June 2012
MARFRIG Company Presentation June/2012
Slide 2: Disclaimer
Disclaimer This presentation may include statements representing expectations about future events or results according to the Brazilian and international securities regulation. These statements are based on certain assumptions and analyses made by the Company according to its experience and the econ
Slide 3: Marfrig: Growth, Diversification and Optimization
Marfrig: Growth, Diversification and Optimization Sustainable track record: growth, diversification and optimization … Growth Diversification Optimization 2006 2007 2008 2009 2010 2011 2012 Increase capacity Protein diversification Brand and Consolidation of global Strategy Regional Focus on process
Slide 4: A Truly Global Footprint
A Truly Global Footprint BNDESPar Controlling shareholder Others 85,000 EMPLOYEES WITH PRODUCTION 14% 47% 39% 146 COMMERCIAL AND DISTRIBUTION UNITS PRESENCE IN Marfrig Alimentos S.A. 17 5 COUNTRIES CONTINENTS PRODUCTS IN COUNTRIES 160 MORE THAN WITH STRONG, WELL RECOGNIZED BRANDS SEARA MARFRIG FOODS
Slide 5: Marfrig at a glance: Global Structure
Marfrig at a glance: Global Structure Controlling BNDESPar Other Shareholder 14% 47% 39% Marfrig Alimentos S.A. Seara Seara Foods Foods Marfrig Beef* Poultry, Pork and Processed Poultry, Pork, Processed and Elaborated Beef, Lamb and Leather Products Brazil Argentina Uruguay Objective: generate syn
Slide 6: Marfrig's Strategy: Focus on Diversification and Value Added Products
Marfrig’s Strategy: Focus on Diversification and Value Added Products Transform and diversify the product mix to match protein consumption trends globally and in Brazil Revenue Breakdown by Segment (R$ million) 66.8% 33.2% 21.885 Marfrig Beef (Bovinos, Ovinos e Couro) Seara Foods (Seara, Moy Park e
Slide 7: Marfrig Beef
MARFRIG BEEF Y Sean ea WQ Fo Tacuarembé K GROUP na c——
Slide 8: Marfrig Beef Focus on Profitability
Marfrig Beef Focus on Profitability Operations at three Brazilian plants will restart during the 2Q12 Distribution Center Industrialized Distribution Center Leather Distribution Center Industrialized Industrialized Market share in beef exports – Brazil (1) Market share in cattle slaughtering – Brazi
Slide 9: Marfrig Beef: Main Synergies From the Integration
Marfrig Beef: Main Synergies From the Integration Creation of a “new company”, able to leverage strengths of the integrated companies, operating under the principle of being “simple, lean and agile” Synergies across the chain Incentive/ Sales/ Genetics Slaugthering Value-added Logistics Marketing Di
Slide 10: Marfrig Beef Overview
Marfrig Beef Overview 1 Management Logistics (maritime shipping) Single IT platform (ERP) Unified production plan 4 Critical Factors 2 Commercial Central bank actions Unified model for positioning concerning FX rate and SELIC Tax refunds for exporters Marfrig brands Expansion and unifi
Slide 11: Marfrig Beef: Beginning a Positive Cattle Cycle
Marfrig Beef: Beginning a Positive Cattle Cycle Brazilian Scenario Production of Cattle Meat Brazil’s Cattle Herd 12,000 220 11,353 211 11,000 210 Thousand tons Millions of cattle head 10,000 200 9,158 9,000 190 8,000 180 176 7,000 170 6,000 160 5,000 150 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 12: Seara Foods
SEARA FOODS Y Sean ea WQ Fo Tacuarembé K GROUP na c——
Slide 13: Overview of Seara Foods
Overview of Seara Foods Comprised of Seara (Brazil), Moy Park (Europe) and Keystone (Global – US/China) Main strategy: company integration and focus on customers. Up to R$330 million in cost and revenue synergies over the next five years SEARA FOODS Renowned global Leading European Global food
Slide 14: Reorganization: Seara Foods Business Unit
Reorganization: Seara Foods Business Unit New organization in 2 Business Units will focus our efforts and generate synergies • The creation of Seara Foods encourages accountability and focus within three SEARA FOODS distinct Business Units - Keystone: Global food services platform - Moy Park: Leadin
Slide 15: Seara Foods: Marfrig global footprint platform
Seara Foods : Marfrig global footprint platform Focus: Continue expansion of food service client base and global geographic expansion Key drivers of Marfrig Food Service strategy Focused protein strategy Value orientation Food service expertise + cost Sale of distribution business of key customers s
Slide 16: Seara Alimentos
Seara Alimentos Seara has become the second largest player in the Brazilian poultry, pork, processed and industrialized markets Turn-around track-record based on 6 levers: 1. Accelerated product mix shift towards higher value-added processed products in Brazil 2. Focused brand and product archit
Slide 17: Asset Swap with Brasil Foods
Asset Swap with Brasil Foods On March 20th, 2012 Marfrig announced a binding agreement with BR Foods for an asset swap transaction. Commercial and operating synergies and faster growth in Brazil are expected Brands and Assets Acquired Key Benefits • Improves Marfrig’s cost position thru greater scal
Slide 18: Seara Alimentos' Industrial Facilities (Post Asset Swap)
Seara Alimentos’ Industrial Facilities (Post Asset Swap) . 22 distribution centers and 23 production facilities SEARA: Highlights – Post Asset Swap • Operations: Brazil • # of Plants: 23 • # of Employees : 46,000 • Exports – Main Markets: Asia, Middle New Pork Plant East, Europe New Assets Existing
Slide 19: Seara Alimentos: Brand and Customer Base
Seara Alimentos: Brand and Customer Base Seara is focusing on a new positioning of its product, with an enhanced brand architecture and innovation as a result of its new customer base Significant customer base expansion Review of brand & product structure (in thousand clients) EXAMPLES OF CURRENT BR
Slide 20: Marfrig will achieve a step-change in scale as a result of the BRF deal
Marfrig will achieve a step-change in scale as a result of the BRF deal Installed production capacity for processed and elaborated food (thousand tons/month) Sausage 15% Novas Unidades New Units 88.1 Seara Others Ham + 150% 45% 14% 52.9 35.2 Bologna 12% Pré Incorporation Before Aquisição Pós Incorpo
Slide 21: Focus on Protein Assets
Focus on Protein Assets Disposal of two non-protein assets will enhance Marfrig’s cash position • Sale of current logistic and distribution structure currently belonging to Keystone • This logistic structure covers USA, Europe, Asia and Oceania Keystone Logistics • Direct selling process to Martin B
Slide 22: Moy Park - Overview
Moy Park - Overview Moy Park focuses on large retail chains and food service clients in the European domestic market Moy Park: geographic footprint and capacity Moy Park: highlights • Operations: Europe • # of Plants: 15 • # of Employees (Dec/ 2011): 9,316 • Exports – Main Markets: Ballymena ̶ Mainl
Slide 23: Plan to Lead (2012-16)
Moy Park will focus on 5 strategic objectives to achieve its full potential PLAN TO LEAD (2012-16) Profits, performance & people Profitability • Drive profitability and cash flows to fund continued investment and future expansion to and Cash Flows deliver total shareholder return Grow Profitable Sal
Slide 24: Keystone: Marfrig global food services platform
Keystone: Marfrig global food services platform Focus: Continue expansion of food service client base and global geographic expansion Key drivers of Marfrig Food Service strategy Focused protein Food service expertise + Value orientation strategy cost structure driven by of key customers McDonald’s
Slide 25: Keystone – Overview
Keystone – Overview Keystone Foods: Strong presence in the U.S. (East Coast), France and in the APMEA A global company focused on prepared products to Food Service Chains Capacity Main Brand Chicken (1) 730,000 600,000 Processed Products (2) 50,337 (1) Capacity in Heads/day (2) Capacity in Tons/mont
Slide 26: Keystone Foods: Opportunity in China
Keystone Foods: Opportunity in China Asia is the main growth driver in the global meat market Per Capita Income (USD/year) 20,000(f) 8,500(f) 3,000 350 1,000 1990 2000 2008 2020 2030 Source: FAO, FAPRI, OECD, USDA • Population growth, changes in nutritional habits and Production Plants increases in
Slide 27: Financial and Operating Highlights 1Q12
Financial and Operating Highlights 1Q12
Slide 28: 1Q12 Highlights
1Q12 Highlights Key Financial Highlights Net Revenue of R$5.23 billion, in line with the R$5.25 billion in 1Q11 Gross Income of R$803.3 million, increasing 10.2% from R$728.8 million in 1Q11 EBITDA of R$410.7 million, up 21.8% on R$337.3 million in 1Q11 Net Income of R$34.5 million, up 46.7% from R$
Slide 29: Net Revenue Breakdown by Market
Net Revenue Breakdown by Market Net Revenue by Market (R$ million) 5,786.6 5,252.1 - 15.5% 5,232.5 Lower exports compared to 4Q11 are 1,987.8 1,895.7 1,680.2 explained by seasonality (historically the first quarter is the weakest of the year) and by impacts of high chicken 3,356.4 3,798.8 3,552.3 in
Slide 30: Consolidated Financial Highlights
Consolidated Financial Highlights COGS and COGS / Net Revenue SG&A and SG&A / Net Revenue (R$ million and %) (R$ million and %) 86.1% 11.0% 84.6% 10.4% 4,523.4 4,429.3 547.0 573.7 1Q11 1Q12 1Q11 1Q12 COGS COGS / Net Revenue SG&A SG&A / Net Revenue EBITDA and EBITDA Margin Net Income (R$ million and
Slide 31: Financial Highlights by Segment
Financial Highlights by Segment Marfrig Beef: Net Revenue Seara Foods: Net Revenue (R$ million) (R$ million) 1,923.8 3,495.2 1,737.3 3,328.4 1Q11 1Q12 1Q11 1Q12 Marfrig Beef: EBITDA and EBITDA Margin Seara Foods: EBITDA and EBITDA Margin (R$ million and %) (R$ million and %) 11.6% 6.0% 5.4% 8.2% 208
Slide 32: Liability Management
Liability Management Focus on managing long-term capital structure and debt profile Debt Maturity Breakdown (R$ Million) 25.9% Short Term 2,340 74,1% Long Term 1,490 1,412 1,349 1,048 1,009 803 868 882 302 152 1 0 2Q12 3Q12 4Q12 1Q13 2013 2014 2015 2016 2017 2018 2019 2020 2021 Debt Profile Debt and
Slide 33: Cash Flow and Operational Cash Generation
Cash Flow and Operational Cash Generation Net Income of R$34.5 million and pro-forma Net Debt/EBITDA reduction to 3.52 Simplified Cash Flow 1Q12 (R$ million) Operational Activities Net income in period 34.5 Items not affecting cash 389.4 Working capital changes - operating accounts (408.7) Other ass
Slide 34: CAPEX: Focus on Optimizing Operational Structure and Generating Results
CAPEX: Focus on Optimizing Operational Structure and Generating Results Focus on reducing and controlling investments Investments 1Q12 (In R$ million) Investments in Fixed Assets 189.5 Fixed 103.5 Breeding stocks 86.0 Investment in Intangible Assets 2.0 Total CAPEX 191.5 • For 2012, we continue to f
Slide 35: Final Message and 2012 Priorities
Final Message and 2012 Priorities Further increase share of value-added products in the sales mix Integration of new assets Seara FOODS: Potential synergies: R$ 230 – R$ 330 million, materializing in up to 5 years Increase presence in the food service market through Keystone Foods and Keystone Foods
Slide 36: Contacts – Investor Relations Department
Contacts – Investor Relations Department Ricardo Florence CFO and Investor Relations Officer Remi Kaiber Junior www.marfrig.com.br/ir Investor Relations Director ri@marfrig.com.br Marfrig Alimentos S/A Av. Chedid Jafet, 222 Bloco A 1º andar CEP: 04551-065 – Vila Olímpia Fone: (55 11) 3792-8600/8650