1Q17 Conference Call

Transcription

1 1Q17 Conference Call May 09, 2017

2 MINERVA 1Q17 Highlights OPERATING AND FINANCIAL HIGHLIGHTS Operational Cash Flow: 1Q17: R$53.6 million LTM1Q17: R$432.3 million 1Q17 ROIC: 22.2% Gross revenue: 1Q17: R$2,302.9 million LTM1Q17: R$10,091 million EBITDA 1Q17: R$197.6 million EBITDA Margin: 9.2% Exports: 60.5% of revenue DM sales volume: +4.4% yoy Net income 1Q17: R$2.5 million LTM1Q17 : R$151.2 million Leverage measured by the net debt/ltm EBITDA ratio: 3.8x Cash Position: R$2.9 billion CAPITAL STRUCTURE Debt denominated in US$: 76% Duration: around 6 years Exercise of call option to redeem 2022 Bonds (12.25% annual coupon) Maturity of the 2017 Bond (9.25% p.a.) OTHER HIGHLIGHTS Favorable outlook for the cattle supply Positive Cycle Cancellation of shares and new Repurchase of Shares Program Payment of R$ 60.1 million in dividends (2.7% div. yield) in April, 17 2

3 INDUSTRY OVERVIEW BRAZIL HIGHLIGHTS 1Q17 slaughter volume: +2% yoy and +3 qoq 1Q17 Average arroba price: R$ (-3.1% qoq and - 5.0% yoy) Outlook for 2017 decrease in grain price: more cattle from feedlots in second semester Inversion of cattle cycle: more availability of cattle ready for slaughter BEEF EXPORTS (% OF REVENUE) EXTERNAL MARKET AND DOMESTIC MARKET Operation Carne Fraca impacted sales volume in EM and DM in the end of 1Q17 EM: Exported Volume: +7.4% qoq and -8.2% yoy Average price in US$: +6.3% yoy DM: Affected by the seasonality effect of the first quarter: historically the year's weakest quarter Lower demand for beef implied in a reduction of the industry capacity SLAUGHTERING AND AVERAGE CATTLE PRICE Outros 28% Chile 6% Irã 7% 1Q16 Hong Kong 21% Rússia 8% China 14% Egito 16% Others 30% Chile Saudi 5% Arabia 6% 1Q17 Russia 11% China 20% Hong Kong 16% Iran 12% ,976 6,402 6,003 5,925 6,086 Slaughter ('000 head) R$/@ 150,00 100,00 50,00 0,00 Source: Ministry of Agriculture, Livestock and Supply and Secex 3

4 02/01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /02/ /05/ /08/ /11/ /02/ /05/ /08/ /12/ /03/ /06/ /09/ /12/ /03/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /05/ /08/ /11/ /02/ /05/ /08/ /11/ /03/ /06/ /09/ /12/ /03/2017 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec INDUSTRY OVERVIEW BRAZIL CATTLE CYCLE BREEDING MARGIN X FEMALE SLAUGHTER CALF PRODUCTION AND FEMALE SLAUGHTER 50% 45% 40% 35% Female Slaughter (p,m) LTM Moving Average (Female Slaughter) Breeding Margin (p,m) LTM Moving Average (Breeding Margin) 4% 3% 2% 1% Female Slaughter Calf Production Million heads ,0 50,0 45,0 40,0 35,0 30,0 25,0 30% -1% 5 20,0 15,0 0 10,0 AVERAGE CATTLE PRICE (R$/@ - SP ESTATE) AVERAGE STEER PRICE (R$/HEAD SP STATE) Fontes: Agroconsult, Informa FNP, IBGE e CEPEA 4

5 INDUSTRY OVERVIEW PARAGUAY HIGHLIGHTS SLAUGHTERING AND AVERAGE CATTLE PRICE 1Q17 slaughter volume: +14% yoy and +22% qoq Average cattle price: +22% yoy and stable qoq 1Q17 export volume: +4% yoy ,0 160,0 120,0 Main destinations: Chile and Russia 1Q17 export highlights: ,0 40,0 Chile: 35% of the total +5 p.p. yoy - 0,0 Russia: 25% of the total +5 p.p. yoy Slaughter ('000 head) Average Price (US$/100kg) BEEF EXPORTS (% OF REVENUE) FRESH BEEF EXPORTS (US$ MILLION) Iraq 3% Other 15% 1Q16 Chile 30% Taiwan 3% Vietna m 5% Other 13% 1Q17 Chile 35% Vietnam 10% Israel 8% Israel 10% Brazil 12% Russia 20% Brazil 11% Russia 25% Source: Minerva and SENACSA 5

6 INDUSTRY OVERVIEW URUGUAY HIGHLIGHTS SLAUGHTERING AND AVERAGE CATTLE PRICE 1Q17 slaughter volume: +14% yoy and -4% qoq 1Q17 average cattle price: -4% yoy and -1% qoq 800,0 700,0 600, Q17 export volume: +18% yoy and -8% qoq 500,0 400, Q17 export highlights: 300,0 200, China: 36% USA: 15% 100,0-0 Slaughter ('000 head) Average Price (US$/100kg) BEEF EXPORTS (% OF REVENUE) FRESH BEEF EXPORTS (US$ MILLION) 1Q16 1Q17 Other 20% Germany 6% Canada 6% The Netherlands 9% Israel 12% China 31% United States 16% Other 17% Germany 4% Brazil 4% The Netherlands 11% Israel 13% China 36% United States 15% Source: Minerva and INAC 6

7 MINERVA SHARE OF EXPORTS 1Q17 MARKET SHARE (% OF REVENUE PER COUNTRY) BRAZIL PARAGUAY URUGUAY Minerva 17% Minerva 20% Minerva 16% BREAKDOWN OF EXPORTS BEEF DIVISION % OF REVENUE NAFTA 4% EU 13% LTM1Q16 Africa 16% NAFTA 5% EU 14% LTM1Q17 Africa 12% Americas 12% Americas 16% Middle East 21% CIS 8% Asia 26% Middle East 22% CIS 5% Asia 26% Sources: Minerva, Secex, INAC and SENACSA 7

8 OPERATING AND FINANCIAL RESULTS NET INCOME (R$ MILLION) 1Q17 EBITDA (R$ MILLION) AND EBITDA MARGIN (%) 1Q % 10.7% 9.8% 9.8% 9.2% 2,338 2,221 2,534 2,556 2, ROIC (%) 1 NET DEBT / EBITDA RATIO (x) 27.7% 28.9% 24.8% 23.9% 22.2% ROIC: LTM EBITDA/(total assets cash (short-term liabilities short-term debt)) 8

9 NET RESULT R$ Million 1Q17 LTM1Q17 Net (loss) income before taxes (+) Income and Social Contribution Taxes Net (loss) income % Net margin 0.1% 1.6% 9

10 OPERATING CASH FLOW R$ Million 1Q17 LTM1Q17 Net (loss) income (+) Net income adjustments (+) Changes in working capital requirements Operating cash flow

11 FREE CASH FLOW 1Q17 (R$ MILLION) (58.5) (163.0) (36.5) (60.4) (57.3) (144.3) (87.0) 3.1 EBITDA Capex (cash) Financial Result (cash) Working Capital Var Free Cash Flow Fx Hedge Recurring Free Cash Flow Cancellation of Shares FCF After Cancellation of Shares LTM1Q17 (R$ MILLION) (214.2) (853.8) (245.5) (378.3) (164.0) (87.0) (251.0) EBITDA Capex (cash) Financial Result (cash) Working Capital Var Free Cash Flow Fx Hedge Recurring Free Cash Flow Cancellation of Shares FCF After Cancellation of Shares 1 Working capital excludes equity valuation adjustments and accumulated conversion amounts 11

12 CAPITAL STRUCTURE HIGHLIGHTS Net Debt/LTM EBITDA ratio: 3.8x Cash Position: R$2.9 billion At the end of 1Q17, approximately 76% of total debt was exposed to the dollar variation Debt Duration: 5.8 years Liability management: Bonds 2017 Maturity (cupom 9.25% p.a.) in January/2017 Early Redemption of Bonds 2022 (coupon of 12.25% p.a.) in February 2017 DEBT AMORTIZATION SCHEDULE (R$ MILLION) MAR/17 2,944.8 Debt Duration = 5.8 years 2, Cash 2Q17 3Q17 4Q17 1Q

13 DISCLAIMER This presentation provides general information about Minerva S.A. and its subsidiaries ("Minerva" or "Company") and was prepared on the date of its presentation by Minerva. Information herein is provided in summary form and is not intended to be complete or to be interpreted as advice to potential investors. We do not make any declaration or guarantee, express or implied, about the veracity, suitability, impartiality, completeness or scope of the information contained here. Information obtained from public sources contained in this presentation was not independently verified. This material does not contain projections and/or estimates of future events. Any forward-looking statements made herein were carefully prepared and intend to indicate possible trends concerning Minerva, based on management s reasonable expectations. The use of terms such as projects, estimates, anticipates, foresees, plans, expects, among others, should not be interpreted as a projection or guidance under the terms of the current legislation, and should be seen merely as trends that, obviously, involve risks and uncertainties. These statements are based on several assumptions and factors, including changes in market conditions, government regulations, pressures from competitors, and the performance of the industry and the Brazilian and global economy, among other factors, as well as the risks mentioned in the disclosure documents filed by the Company at the Securities and Exchange Commission of Brazil (CVM). Any changes in these assumptions and factors may lead to practical results that differ from the current trends. Investors should not place undue reliance on these statements. The Company s past performance is not an indicator of future results. Although Minerva believes that the forward-looking statements in this presentation are reasonable and based on data currently available to management, it cannot guarantee future results or events. The statements and information in this presentation apply only to the date on which they were prepared, and Minerva is not obliged to update them in light of new information or future developments. Neither should this presentation nor its contents be considered an offer or invitation to an offer to subscribe to or acquire any securities. The information contained in this presentation should not serve as the basis of any agreement or commitment. Minerva assumes no responsibility for operations that are performed or investment decisions that are made based on information in this presentation. Nobody is authorized to provide any information or make any representation that is inconsistent and incoherent with this presentation. If any such information has been provided or representation made, it should not be construed as having been authorized by or on behalf of the Company. This presentation is strictly confidential and is presented to a select audience. It may not be reproduced, fully or partially, distributed or transmitted to any other person without prior written consent from Minerva. This presentation is not meant for distribution or use by any person or entity in any jurisdiction or country where such distribution or use is against law or regulations. 13

14 Investor Relations Eduardo Puzziello Kelly Barna Matheus Oliveira Phone: