Mbrf Global Foods Company S.a. · BMFBOVESPA:MBRF3
Mbrf Global Foods — Marfrig Alimentos — Investor Presentation (December 2010)
44 slides from Mbrf Global Foods's investor presentation, December 2010
Slide 1: Institutional Presentation – Dec/2010
Marfrig Alimentos S.A. Institutional Presentation – Dec/2010 1
Slide 2: Marfrig Alimentos
) MARFRIG MARFRIG ALIMENTOS
Slide 3: Marfrig is one of the largest and most diversified global food companies
Marfrig Alimentos S.A. Marfrig is one of the largest and most diversified global food companies, long term oriented on increasing further processed products participation in sales and strongly client focused 3rd largest player in the meat products sector globally Diversified platform, with 151 produ
Slide 4: Strong Brands and Products
Marfrig Alimentos S.A. Complete portfolio with strong brands in more than 200 countries Leading positioning in its local markets, with vast growth opportunities Focus on industrialized products with high value added Expertise in food supply to the food service segment Focused on clients and sales wi
Slide 5: Experienced management team
Experienced management team Marcos Molina More than 25 years of experience in the sector. CEO and Chairman of the Board He initiated his entrepreneur career with a food distribution business at the age of 16 Alexandre Mazzuco Ricardo Florence Eduardo Miron Finance Brazil Strategic Planning Finance I
Slide 6: Global platform for food production and distribution
Global platform for food production and distribution 14 01 11 11 02 04 04 02 01 04 52 14 01 03 05 04 08 01 01 07 02 01 97 Protein Industrial Units 14 Leather Industrial Units / Sales Offices 40 Distribution Centers 6
Slide 7: Capacity
Capacity Complete protein portfolio Scale production Risks mitigation Geographic diversification Protein diversification Cattle Lamb Chicken Pork Turkey Industrialized Leather Distribution heads/day heads/day heads/day heads/day heads/day tons/month unities/month thousand cases/year Beef 23,450 2,00
Slide 8: Marfrig Group's Strategy
Drivers of the Marfrig Group’s strategy Seasoned Main Comfortable Risk Management production mitigation Presence cash position Long-term base in South in local and America international Independent Low cost sustainability Committee and (cattle and Diversified markets Board Structur
Slide 9: Social and environmental sustainability initiatives
Social and environmental sustainability initiatives Projects to reduce greenhouse gas emissions Program to quantify and offset GHG emissions Social-environmental monitoring system in Amazon Biome Improved effluent treatment systems Renewable energy programs Organic production programs Animal well-be
Slide 10: Consolidation as one of the leading companies in the global food market
Consolidation as one of the leading companies in the global food market… 28.9 E* *Market Consensus 16.5 E* 9.6 6.2 2.1 3.3 Net Revenues 1.4 2005 2006 2007 2008 2009 2010 2011 Bonds Bonds IPO Capital Capital Issuance Funding Issuance BOVESPA Increase Increase Debentures Issuance Acquisition Global pl
Slide 11: Achieving important results since the IPO in 2007
... achieving important results since the IPO in 2007 Net Revenue (R$ million) Volume Sold (thousand tonnes/year) CAGR: 9,616 CAGR: 69.7% 51.6% 2,186 Strong Growth 3,340 951 2007 2009 2007 2009 Revenues Breakdown Industrialized (% in Revenue) 2007 2009 Protein 9.5% 8.7% Diversification 12.3% 37.1% 2
Slide 12: The New Seara
THE NEW SEARA J
Slide 13: The new Seara
The new Seara Goals/Strategies Results achieved... Seara brand had an “awareness” of 86% in recent survey Seara became one of the “50 most valuable brands in Brazil”, according to Brand Analytics Strengthening the brand in institute and Millward Brown the domestic market Seara was among the 10th mos
Slide 14: The new Seara
The new Seara Goals/Strategies Results achieved... % of sales (in volume) Before (2009) After (9M10) Balance of sales 34.0% 46.6% between domestic and export markets 66.0% 53.4% Domestic Export Seara Division - Domestic Sales - Seara Division - Domestic Salesc - Industrialized meat Frozen Meat Pro F
Slide 15: The new Seara
The new Seara Goals/Strategies Results achieved... Synergies are estimated in R$ 200 million by 2011 Seara - Sinergies obtained in 2010 (R$ million) ~140M (e) ~34M (e) ~60M (e) 4.0 26.4 11.7 0.8 5.1 4.6 0.1 Purchase 2010 2011 Industrial G&A Grains 4Q10 9M10 Supply chain Farming and ranching 15
Slide 16: Seara has a distribution network with national reach
Seara has a distribution network with national reach The company is committed to timely delivery, working 24 hours a day to ensure the integrity of each order Besides its own distribution, Seara Distribution Center has several Support Centers distribution partners Seara Plants throughout Brazil. 16
Slide 17: Seara products are gaining share in the Brazilian market
Seara products are gaining share in the brazilian market... New industrialized products launched in 2010 Seara products have been growing its presence in the supermarkets shelves 17
Slide 18: Seara + Marfrig
Seara + Marfrig Estimated synergies of R$ 200 million by December 2011 2nd largest poultry and pork producer in the domestic and export markets Target: making the 2nd choice among industrialized and frozen branded meat products in Brazil, meaning flavor and high quality products among consumers 18
Slide 19: Keystone Foods
Keystone Foods KEYSTONE FOODS
Slide 20: Keystone Foods: rationale behind the acquisition
Keystone Foods Rational behind the acquisition: Stable business with constant margins and consistent cash generation Higher earnings visibility Focus on prepared products for the Food Service industry Global platform with access to new markets (Asia, USA, Middle East and Oceania) Greater internation
Slide 21: Overview
Overview Global company focused on prepared products and distribution directly to Food Service chains: Global supplier of animal protein (poultry, pork, beef and fish) and distribution services to the largest fast food chains Market leader in USA (East Coast) and main markets in Europe (France) and
Slide 22: Global distribution platform
Global distribution platform Keystone is a global provider of protein products and distribution services for food service chains Protein: 13 processing units of poultry, beef, hog and fish, in 7 countries Distribution: 28 Distribution Centers in 11 countries About 5,700 restaurants attended Purchase
Slide 23: Synergies
Synergies Preliminary analysis show capture of synergies estimated at Return for US$100 million by 2013: Shareholders Boost production •Growth in Marfrig’s protein sales to Keystone using Keystone’s •Increased use of Keystone’s processing plants, with cost global platform reductions • Stable Optimiz
Slide 24: Marfrig + Keystone Foods
Marfrig + Keystone Foods Global food company Global distribution platform Focus on value-added products Estimated 2011 net revenue: R$ 28.9 billion* 151 slaughter and production plants, distribution centers and offices in 22 countries on 5 continents 90,000 employees More stable cash generation and
Slide 25: Scenarios and Growth Drivers
SCENARIOS AND GROWTH DRIVERS
Slide 26: Opportunities x Challenges
Opportunities x Challenges Opportunities Challenges Obtain every potential synergy from Seara integration the recent acquisitions Keystone integration Global economy recovery Efficiency gains Exchange rates volatility Commodities prices increase Market share gains (cattle and grains) Brazilian GDP g
Slide 27: Commodities prices have increased, but average sales prices reached 2008 levels
Commodities prices have increased, but average sales prices reached 2008 levels... Average Cattle Prices (USD/@ ) USD 65.00 USD 55.00 USD 45.00 USD 35.00 USD 25.00 USD 15.00 Brasil Argentina Australia USA Uruguay Average Grain Prices – Brazil Average Grain Prices – CBOT (R$/60Kg ) (USD/60Kg ) R$ 55.
Slide 28: Brazilian beef sector
Brazilian beef sector Brazilian Beef Exports Source: Marfrig/SECEX (USD million and %) 18.9% 15.5% 15.7% 13.3% 251.0 Gross Exports Marfrig 11.6% 202.1 (USD million) 164.3 Market Share (%) 148.5 122.0 3Q09 4Q09 1Q10 2Q10 3Q10 Brazilian Cattle Slaughtering (SIF)¹ Source: Marfrig / MAPA (thousand heads
Slide 29: United Kingdom poultry sector
United kingdom poultry sector UK Retail Prices - fresh chicken (GBP/Kg) 3.2 3.0 2.8 2.6 2.4 2.2 2.0 UK Poultry Consumption – LTM (million and tonnes) 1.8 1.7 1.7 1.6 1.6 1.5 Source: DEFRA (Department for Environment, Food and Rural Affairs) 29
Slide 30: Growth drivers
Growth drivers • Low production costs •Lack of religious restrictions • Most consumed protein in the world • Cattle Quality (Nelore and British breeds) •Flexibility, simplicity and short • High potential of exports increase: the production cycle less exported protein in Brazil • Export quota to Euro
Slide 31: Financial & Operational Highlights
FINANCIAL & OPERATIONAL HIGHLIGHTS
Slide 32: 3Q10 Highlights
3Q10 Highlights Results Achieved Gross Revenue of R$ 4.2 billion Up 10.3% from 2Q10 R$ 3.8 billion Supported by the improvement of sales Up 63.9% from 3Q09 R$ 2.5 billion in the domestic market (including Food Net Revenue of R$ 3.9 billion Service) and exports of Beef - Brazil and New Seara - Brazil
Slide 33: Net revenue by market, volume and exports
Net revenue by market, volume and exports By Market By Volume (R$ million) 60.5% (thousand tonnes) 66.7% 3,855.1 3,558.7 8.3% 9.3% 1,603.1 2,402.6 1,607.7 918.5 829.6 906.6 2,252.0 543.8 1,951.0 1,484.1 3Q09 2Q10 3Q10 3Q09 2Q10 3Q10 Exports Domestic Markets Exports Destination (% of revenues) Europe
Slide 34: Sales by division and by currency
Sales by division and by currency Sales by business division (% of revenues) 19.0% 17.7% BEEF BRAZIL & FOOD SERVICE 26.2% 32.2% 30.4% 34.4% ARGENTINA 3Q09 2Q10 3Q10 URUGUAY 11.3% NEW SEARA 33.5% 7.8% 34.3% 7.0% 20.6% 9.6% 9.3% 6.7% EUROPE Sales by currency (% of revenues) 27.1% 31.9% 36.7% 17.5% 11.
Slide 35: EBITDA and EBITDA margin
EBITDA and EBITDA margin ( R$ million and %) Adjusted EBITDA on 3Q10 of R$ 282.6 million, compared to R$ 249.4 million on 2Q10 Adjusted EBITDA Margin on 3Q10 of 7.3% compared to 7.0% on 2Q10 11.3% 8.0% 7.0% 8.5% 7.0% 7.3% 272.5 286.3 271.5 282.6 249.4 204.2 3Q09 2Q10 3Q10 3Q09 2Q10 3Q10 EBITDA (R$ m
Slide 36: Net revenue progress
Net revenue progress Beef: Growth driven by the division Beef Brazil (R$ million) 16.3 19.3 0.6 200.2 28.5 (1.4) (29.5) (6.5) (65.5) (0.8) 1,851.5 + 9.5% 1,690.5 Beef Brazil & Food Service Argentina Uruguay + R$243.6 (R$9.7) (R$72.9) 22.5% (3.5%) (22.1%) 2Q10 Domestic Food Export Leather Domestic Ex
Slide 37: Consolidated debt / Cash flow
Consolidated debt/ Cash flow – R$ million Net Debt and Net Debt / EBITDA Short Term Debt (R$ million) (%) 2.4x 2.5x 3.98 3.96 3.30 1.9 x (*) 2.59 3.21 (*) 1.3x 1.4x 1.0x 2.40 36.6% 31.3% 4,613.9 28.6% 26.2% 4,231.2 25.8% 3,317.8 2,794.1 2,120.7 3Q09 4Q09 1Q10 2Q10 3Q10 3Q09 4Q09 1Q10 2Q10 3Q10 Net D
Slide 38: Investments
Investments CAPEX (R$ million) Investment Activities 1Q10 2Q10 3Q10 9M10 CAPEX – Invested in fixed assets (110.0) (96.5) (143.2) (349.7) CAPEX – Invested in breed stocks (39.0) (40.9) (83.2) (163.1) Payment of prior acquisitions (612.1) - - (612.1) Payment of acquisitions in the period - - (67.4) (6
Slide 39: Results 2010 YTD vs. guidance
Results 2010 YTD Results Guidance 2010² 2010 YTD vs. lower limit R$ 16.5 billion Net Revenue R$ 10.6 billion 64.2% R$ 18.0 billion R$ 1.4 billion EBITDA1 R$ 964.7 million 68.9% R$ 1.8 billion 8.5% EBITDA Margin 9.1% 60 b.p. 10.5% CAPEX³ R$ 400 million R$ 349.7 million 87.4% 1. Earnings before, inter
Slide 40: Bonds and ratings
Bonds Bonds Ratings Issued in Nov/06 Apr/10 Agency Scale Rating Outlook Last Report Maturity Nov/16 Apr/20 Domestic BBB+ Fitch Ratings Stable Sep/10 Global B+ Amount (US$ M) 375 500 Standard & Coupon (% per year) 9.625% 9.50% Global B+ Stable Sep/10 Poos’s Current yield (% per year) 8.48% 7.82% Mood
Slide 41: Market capital performance
Market capital performance Share Price x Shareholders Equity / Share R$ 21.00 R$ 17.50 R$ 14.00 R$ 10.50 R$ 7.00 R$ 3.50 R$ 0.00 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10¹ 4Q10¹ Shareholders' Equity / Share MRFG3 Quote (Closing) ¹ Adjusted by the highest amount of shares to be issued in
Slide 42: Marfrig: A unique investment opportunity
Marfrig: A unique investment opportunity Global Platform with Geographic Diversification and Scale Experienced Diversification with Management Team and Focus on Further Corporate Governance Processed Products Multiple Growth and Well-Positioned Brands Value Creation with Leadership in Opportunities
Slide 43: Forward-looking statements
Forward-looking statements This presentation may contain statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are only projections and are not guarantees of future p
Slide 44: Contacts – Investor Relation Office
Contacts – Investor Relation Office Ricardo Florence Chief Planning and Investor Relations Officer Remi Kaiber Junior www.marfrig.com.br/ir Investor Relations Manager ri@marfrig.com.br Marfrig Alimentos S/A Av. Chedid Jafet, 222 Bl. A 1º andar CEP: 04551-065 – Vl. Olímpia Phone: (55 11) 3728-8600/86
Marfrig Alimentos — Investor Presentation (December 2010) on 6ix