Mbrf Global Foods Company S.a. · BMFBOVESPA:MBRF3
Mbrf Global Foods — Marfrig Global Foods — Investor Presentation (January 2019)
29 slides from Mbrf Global Foods's investor presentation, January 2019
Slide 1: Meeting with Investors
Meeting with Investors January 2019
Slide 2: Disclaimer
Disclaimer This material is a presentation of general information about Marfrig Global This presentation includes forward-looking statements. Such statements do Foods S.A. and its consolidated subsidiaries (jointly the “Corporation”) on not constitute historical fact and reflect the beliefs and expe
Slide 3: Agenda
1. MARFRIG at a GLANCE 2. OPERATIONS 3. BEEF INDUSTRY and OUTLOOK Agenda 4. FINAL REMARKS 3
Slide 4: Marfrig at a glance
Marfrig at a glance Established in 2000. IPO in 2007 R$ 42 billion Net revenue* US$ ~11 billion Diversified production platform in the Americas R$ 4.0 billion EBITDA Aj* US$ ~1 billion One of the largest global beef suppliers serving premium global consumer 34 Khead Primary processing capacity/day m
Slide 5: Revenue by destination
Revenue by destination* 58% 12% 6% 5% 2% 9% 3% 9% 58% 6% 5% Middle East 2% 12% Others 5% 3% 5 *3Q18 Result
Slide 6: Simple and focused
Strategy focused on Beef Experienced Team 2018 Simple Structure Knowledge & Performance Adequate capital structure Operational improvement Liability management Simple and Productivity agenda focused “Focus to Win” plan 2013 Long term guidance 2013-2018 6
Slide 7: Experience. Knowledge. Performance
EXPERIENCE. KNOWLEDGE. PERFORMANCE Maximum of 11 members; Board of Directors AUDIT Currently 10 members: Marfrig Global Foods Tang David 50% of members are Independent Eduardo Miron CORPORATE CEO - Marfrig Global Foods Heraldo Geres Chief Legal Officer & HR / Compliance OPERATIONS Fabio Vasconcellos
Slide 8: Marfrig Strategic Pillars
Marfrig S T R AT E G I C P I L L A R S Strategy Strategy Sustainability Animal welfare Partnership with producers and Entities Social and Environmental Responsibility Customers Higher value-added products Operational Excellence and products Commercial and portfolio leverage Valuing brands Customers
Slide 9: Operations
Operations
Slide 10: Marfrig Operation profile
Marfrig Operation profile South America North America 2nd th largest beef operations in Brazil 4 largest beef processing company in the U.S. GRASS FED PARTNERSHIP with ranchers LEADER + #1 Exporter of US chilled beef in beef production in worldwide Uruguay to premium markets LARGEST beef importer in
Slide 11: Primary processing footprint
Marfrig | Primary processing footprint 2nd largest beef company in the world (in capacity) UNITED STATES Effective cattle slaughtering capacity per day 12.000 2 plants BRAZIL Effective cattle slaughtering capacity per day 16,000 15 plants URUGUAY Effective cattle slaughtering capacity per day 3,700
Slide 12: South America | Processed Food
South America | Processed Food THE TRANSACTION OF QUICKFOOD AND ASSETS OF VARZEA GRANDE - MT REINFORCES THE STRATEGY OF HIGHER VALUE-ADDED PRODUCTS 8 units of processed food with the ability to serve important channels such as foodservice and export to key destinations with BRAZIL higher margins suc
Slide 13: Beef industry and Outlook
Beef indust and ~ === Outlook =~
Slide 14: Beef global offer scenario
beef GLOBAL OFFER SCENARIO Cattle herd (1000 MT CWE) COUNTRY 2017 2018 India 305,600 305,000 Cattle herd growth and the perspective for higher productivity have positioned Brazil as Brazil 226,045 232,350 a key player in the global beef industry China 99,173 96,850 USA 93,585 94,400 Europe 89,078 88
Slide 15: Brazilian livestock competitive advantages
B R A Z I L I A N L I V E S TO C K competitive advantages Production with strategic advantages, such as grass- fed cattle » low fat content Hormone free Excellent sanitary conditions Abundance of land, water and labor - natural platform for supporting global demand growth Management experience, high
Slide 16: U.S. livestock competitive advantages
U . S . L I V E S TO C K competitive advantages Production with grain-finishing cattle » high marbling beef Coordination between cattle producers and packers has resulted in na increase in beef quality Predominately Angus genetics enables the consistent production of high-quality beef | superior fla
Slide 17: Beef scenario | Brazil
Beef scenario | Brazil Cow slaughtering (% of total) 50% 45% 40% ▪ After a period of retention, increase 35% in cow slaughtering indicates cycle 30% improvement (higher availability of 25% animals for slaughtering) 20% 15% jun/12 jun/13 jun/14 jun/15 jun/16 jun/17 jun/18 set/12 set/14 set/15 set/16
Slide 18: Beef scenario | US
Beef scenario | US USDA Beef Cow Inventory ▪ US cattle cycle dynamic is favorable for 40,000 packers; the supply of slaughter-ready 35,000 cattle will continue to increase for the 30,000 next ~3 years and is expected to be 25,000 supportive of continued above-average 20,000 margins for US beef packe
Slide 19: Consolidated Results 3Q18
Consolidated Results 3Q18
Slide 20: Marfrig Global Foods | 3Q18 Operational Highlights
Marfrig Global Foods | 3Q18 Operational Highlights Net Revenue record of R$11 billion in the quarter Resume of positive cash generation of R$271 million Adj EBITDA record of R$1,080 million With the completion of Keystone’s sale, net debt will be reduced by around 50% Proforma leverage (i) of 2,57x
Slide 21: Net Revenue Consolidated
Net Revenue Consolidated 3Q18 R$ million +21.3% 2,045 11,089 857 576 9,140 (377) 3,620 South America 2,687 North America 6,453 7,469 3Q17 Volume Price FX Week Effect 3Q18 ▪ Expansion of sales volume as a result of higher slaughtering in South America, offsetting one less week of production in North
Slide 22: Operational Highlights – 3Q18
Operational Highlights – 3Q18 SLAUGHTER GROSS PROFIT Adj. EBITDA (000 heads) AND MARGIN AND MARGIN (R$ million and %) (R$ million and %) +4.3% 1,754 1,829 13.1% 13.7% 9.6% 9.7% +26.1% 1,516 +23.0% 1,202 1,080 878 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 ▪ Slaughtering increase following the footprint readjustm
Slide 23: Operational Highlights - Accumulated
Operational Highlights - Accumulated SLAUGHTER GROSS PROFIT Adj. EBITDA (000 heads) AND MARGIN AND MARGIN (R$ million and %) (R$ million and %) +14.9% 5,313 10.7% 12.4% 7.1% 8.3% 4,626 +41.7% 3,699 +42.9% 2,611 2,483 1,738 9M17 9M18 9M17 9M18 9M17 9M18 Solid result reflects assertive strategy of geo
Slide 24: Debt and Leverage
Debt and Leverage (3Q18) após Transação 4.19x 4.19x EBITDA LTM and Leverage (49%) 4.19x 2.57x 16.9 2.57x 4.0 (R$ billion e “x”) 3.2 8.6 NET DEBT (R$ billion) 2.30x 2.57x 8.3 R$ 4.0 R$ 3.2 3Q18 3Q18 In US$ billion 4.2 (2.2) 2.1 2,1 * 3Q18 3Q18 3Q18 Net Debt Keystone Sale 3Q18 Net Debt (Including Keys
Slide 25: Cash Flow
Cash Flow 3Q18 804 (198) (77) “bridge loan” R$ million (259) 271 (336) OCF Capex Interest FCL Continued ▪ Solid result reflects the strategy focused on beef protein and diversified operating platform in the Americas ▪ Capex: continuity of investments in improvement and maintenance ▪ Interest affecte
Slide 26: Outstanding Bonds & Ratings
Outstanding Bonds & & Ratings Bonds BondsOutstanding Outstanding Ratings Ratings Maturity Currency Out. Coupon Agency National Global Outlook Amount (US$ mm) Scale Scale Standard brAA+ BB- Stable 2019 USD 508.4 6.875% & Poor’s * 2021 USD 27.8 11.250% Fitch Abra BB- Stable 2023 USD 1,000 8.000% Ratin
Slide 27: Final remarks
Final remarks
Slide 28: Final Comments
Final Comments Focus on beef protein, with diversified production platform in the Americas and access to the world's main consumer markets Search for operational excellence and sustainable value generation The outlook for the global animal protein industry remains positive Non-negotiable commitment
Slide 29: Investor Relations
Investor Relations January 2019
Marfrig Global Foods — Investor Presentation (January 2019) on 6ix