3Q17 and 9M17 Results NOVEMBER 2017

Transcription

1 3Q17 and 9M17 Results NOVEMBER 2017

2 Brazilian Fertilizer Market The Company & Financial Highlights Outlook

3 In thousands of metric tons BRAZILIAN FERTILIZER MARKET - DELIVERIES +9.8% +1.3% +6.7% +3.3% 22,294 24,474 24,795 10,582 11,292 11,663 3Q15 3Q16 3Q17 9M15 9M16 9M17 Delivery volumes in 3Q17 and 9M17 were higher than those in the same periods of 2015 and 2016 Source: ANDA 3

4 In thousands of metric tons BRAZILIAN FERTILIZER MARKET DOMESTIC PRODUCTION -0.8% -6.7% +1.9% -8.2% 6,726 6,675 6,226 2,356 2,400 2,204 3Q15 3Q16 3Q17 9M15 9M16 9M17 Smaller domestic production compared to previous years Source: Anda 4

5 In thousands of metric tons BRAZILIAN FERTILIZER MARKET - IMPORTS +8.2% +10.3% +17.3% -4.8% 6,353 7,455 7,097 16,075 17,388 19,182 3Q15 3Q16 3Q17 9M15 9M16 9M17 Imports dropped by 4.8% in 3Q17 over 3Q16 (growth of 21.7% in 1H17 over 1H16) In 9M17, imports grew by 10.3% compared to 9M16 Source: ANDA 5

6 Brazilian Fertilizer Market The Company & Financial Highlights Outlook

7 DELIVERIES BY CROP HERINGER * +2.9% Soy 1, , % Corn Coffee Sugar Cane % +2.1% +23.9% In thousands of metric tons Other Cultures % 3Q16 Market +3.3% 3Q17 The Company increased its delivery volume by 2.9% in 3Q17 compared to 3Q16 Delivery of crops increased in 3Q17 except for corn crop Source: Heringer/ANDA - * includes exports 7

8 DELIVERIES BY CROP HERINGER * Soy 3, % 2, % Corn Coffee Sugar Cane % 0.0% +18.9% In thousands of metric tons Other Cultures % 9M16 Market +1.3% 9M17 Delivery volume fell 5.1% in 9M17 compared to 9M16 (down 11.0% in 1H17 over 1H16) Increase in the delivery of sugarcane in the period was a highlight Source: Heringer/ANDA - * includes exports 8

9 In thousand of metric tons In thousand of metric tons SPECIALTY PRODUCTS DELIVERIES VOLUME 3,136 2, % SPECIALTY PRODUCTS SHARE 1,320 1, % 1,544 3Q16 1, % 3Q17 9M16 9M % 48% 46% 49% 46% % 1,592 1, % 52% 54% 51% 54% 3Q16 3Q17 9M16 9M17 Specialty Conventional DELIVERED VOLUME AND SPECIAL PRODUCT SHARE TRENDS CAGR 12.6% 22% 22% % 1,044 29% 1,321 49% 35% 36% 37% 35% 38% 1,725 1,824 1,841 1,950 1,900 2, Reduction in the delivery volume of specialty products in periods 9

10 INCOME STATEMENT (R$ THOUSAND) 3Q17 % NR 3Q16 % NR % 17/16 9M17 % RL 9M16 % NR % 17/16 Volume 1,358,445 1,319, % 2,975,578 3,135, % Net Revenue 1,481, % 1,512, % -2.0% 3,302, % 3,821, % -13.6% Cost of Goods Sold (1,357,254) -91.6% (1,323,233) -87.5% 2.6% (3,009,569) -91.1% (3,431,938) -89.8% -12.3% Gross Profit 124, % 189, % -34.1% 292, % 389, % -25.0% Freigth and Commission (75,261) -5.1% (72,006) -4.8% 4.5% (162,346) -4.9% (176,139) -4.6% -7.8% SG&A (56,923) -3.8% (49,665) -3.3% 14.6% (159,147) -4.8% (141,359) -3.7% 12.6% EBITDA 14, % 84, % -82.6% 20, % 111, % -81.5% Net Financial Income (Expense) (16,883) -1.1% (38,859) -2.6% -56.6% (137,461) -4.2% (89,460) -2.3% 53.7% Net Income (9,876) -0.7% 22, % % (102,428) -3.1% (9,254) -0.2% % Growth of 2.9% and reduction of 5.1% in 3Q17 and 9M17 volumes compared to the same periods of 2016 Lower gross and EBITDA margins in 3Q17 compared to 3Q16 but higher if compared to 2Q17 Net results lower than the same periods of

11 INCOME STATEMENT - DISTRIBUTION AND PRODUCTION (R$ THOUSAND) 9M17 % RL 9M16 % RL 9M17 % RL 9M16 % RL 9M17 9M16 Net Revenue 3,302, % 3,821, % - 0.0% - 0.0% 3,302,045 3,821,786 Cost of Goods Sold (2,989,583) -90.5% (3,415,323) -89.4% (19,986) % (16,615) % (3,009,569) (3,431,938) Gross Profit 312, % 406, % (19,986) % (16,615) % 292, ,848 Freigth and Commission Fertilizer Sales SSP and Sulfuric Acid Production Heringer Total (162,346) -4.9% (176,139) -4.6% - 0.0% - 0.0% (162,346) (176,139) SG&A (159,147) -4.8% (141,359) -3.7% - 0.0% - 0.0% (159,147) (141,359) EBITDA 32, % 120, % (12,038) % (8,601) % 20, ,568 Adequate maintenance levels in the SSP and sulfuric acid units despite the temporary shut-down 11

12 WORKING CAPITAL DAYS Accounts Receivable Days Inventory Days Acconunts Payable Days Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 WORKING CAPITAL DAYS 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q

13 CASH FLOW (R$ THOUSDAND) 3Q17 9M17 Income before tax and social contribution (15,426) (156,995) Expenses (revenues) with no cash effect (2,423) 96,800 Reduction / (Increase) in asset accounts (39,479) (54,328) (Reduction) / Increase in liability accounts 18,976 73,232 Cash flow from operating activities (38,352) (41,291) Cash flow from investment activities (10,529) (12,839) Free cash flow (48,881) (54,130) Cash flow form financing activities 55,503 83,061 6,622 28,931 Statement of Cash Position Opening Cash Balance 86,859 64,550 Closing Cash Balance 93,481 93,481 Cash Variation in the period 6,622 28,931 13

14 FINANCIAL INDICATORS 9M16 9M17 INDEBTEDNESS - R$ 1,217,318 1,186,863 CASH AVAILABILITIES- R$ 94,412 93,481 EBITDA* - R$ 207, ,659 NET DEBT / EBITDA 5,4 x 6,9 x CURRENT LIQUIDITY * Last Twelve Months 14

15 FINANCIAL INDICATORS PROVISION FOR BAD DEBTS AND CAPEX * PCLD Provision for Doubtful Accounts Provision for doubtful accounts in 9M17 was higher than in 9M16, but in line with the Company's history 9M17 CAPEX was in line with the business plan for the year 15

16 OWNERSHIP BREAKDOWN OWNERSHIP BREAKDOWN 10% 9.5% 51.5% 29% Controlling Group Free Float OCP PCS FHER3 (53,857,284 Shares) ,3 2,8 2,8 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Free Float: 91% Brazilian (2,243 investors) and 9% foreign (16 investors) 16

17 Brazilian Fertilizer Market The Company & Financial Highlights Outlook

18 BARTER RATIO OF AGRICULTURAL PRODUCTS VS. FERTILIZERS Lower prices of agricultural commodities in general and higher prices of fertilizer raw materials in September 2017 compared to September 2016 Worse barter ratios compared to the same period of the previous year Source: Agroconsult 18

19 RAW MATERIAL PRICES INTERNATIONAL MARKET USD Ureia Potassium Chloride MAP Sep-15 dez/15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Significant increase in Urea prices and small oscillations in MAP and Potassium Chloride in 3Q17 Source: Siacesp/FOB Brasil 19

20 In millions of metric tons BRAZILIAN FERTILIZER MARKET AND SAZONALITY % 40% 38% 39% 39% 39% 60% 60% 62% 61% 61% 61% E 1º Semester 2º Semester Expectation of market stability in 2017 compared to 2016 At the end of 2016, delivery of the second corn crop was anticipated Source: ANDA / Heringer E Estimate 20

21 BRAZIL: GRAIN PRODUCTION, PLANTED AREA AND FERTILIZER CONSUMPTION , , , , , , , , , , ,971 37,847 47,868 49,873 50,885 53,563 57,060 57,915 58,336 60,891 95/96 00/01 05/06 10/11 11/12 12/13 13/14 14/15 15/16 16/17E Productivity (1000 per kg/ha) Planted Area (1000 ha) Productivity (1000 t) Fertilizers (million tons) Record grain production in Brazil in the 16/17 harvest Continued increase in agricultural productivity over the years, reaching a record level in the 16/17 harvest Grains: Corn, Soybean, Rice, Beans, Sorghum, Castor Bean, Cotton, Sunflower, Barley, Rye, Canola, Oat, Peanut, Wheat and Triticale Brazil s Total (all crops) Source: CONAB 12nd Estimate September

22 IR CONTACTS THANK YOU INVESTOR RELATIONS Phone:

23 3Q17 INCOME STATEMENT (in thousands of reais) 3Q17 %NR 3Q16 %NR 17 x 16 Net Revenue from Sales 1,481, % 1,512, % -2.0% Cost of Goods Sold (1,357,254) -91.6% (1,323,233) -87.5% 2.6% Gross Profit 124, % 189, % -34.1% Operating (expenses) revenues (123,236) -8.3% (116,836) -7.7% 5.5% Selling expenses (106,518) -7.2% (98,309) -6.5% 8.4% General and Administrative expenses (25,666) -1.7% (23,362) -1.5% 9.9% Other Operating Revenues (expenses), net 8, % 4, % 85.1% Operating Profit 1, % 72, % -98.0% Financial (expenses) Income (16,883) -1.1% (38,859) -2.6% -56.6% Financial Revenues 16, % 58, % -71.1% Financial Expenses (96,843) -6.5% (89,486) -5.9% 8.2% Net Exchange Rate Variation 63, % (7,533) -0.5% 938.4% Income before Income Tax and Social Contribution (15,426) -1.0% 33, % % Income Tax and Social Contribution 5, % (11,093) -0.7% 150.0% Current Year - 0.0% 16, % % Deferred 5, % (27,495) -1.8% 120.2% Net Income (9,876) -0.7% 22, % % EBITDA 14, % 84, % -82.6% Income before financial results and taxes 1, % 72, % -98.0% Depreciation and Amortization 13, % 12, % 5.9%

24 9M17 INCOME STATEMENT (in thousands of reais) 9M17 %nr 9M16 %NR 17 x 16 Net Revenue from Sales 3,302, % 3,821, % -13.6% Cost of Goods Sold (3,009,569) -91.1% (3,431,938) -89.8% -12.3% Gross Profit 292, % 389, % -25.0% Operating (expenses) revenues (312,010) -9.4% (316,719) -8.3% -1.5% Selling expenses (246,793) -7.5% (248,221) -6.5% -0.6% General and Administrative expenses (74,700) -2.3% (69,278) -1.8% 7.8% Other Operating Revenues (expenses), net 9, % % % Operating Profit (19,534) -0.6% 73, % % Financial (expenses) Income (137,461) -4.2% (89,460) -2.3% 53.7% Financial Revenues 87, % 134, % -35.1% Financial Expenses (270,375) -8.2% (499,539) -13.1% -45.9% Net Exchange Rate Variation 45, % 275, % -83.5% Income before Income Tax and Social Contribution (156,995) -4.8% (16,331) -0.4% 861.3% Income Tax and Social Contribution 54, % 7, % 671.1% Current Year - 0.0% (1,670) 0.0% % Deferred 54, % 8, % 523.9% Net Income (102,428) -3.1% (9,254) -0.2% % EBITDA 20, % 111, % -81.5% Income before financial results and taxes (19,534) -0.6% 73, % % Depreciation and Amortization 40, % 38, % 4.5%

25 BALANCE SHEET (in thousands of reais) ASSETS Sep-17 Dec-16 LIABILITIES and SHAREHOLDERS EQUITY Sep-17 Dec-16 Current Assets Current Liabilities Cash and Cash Equivalents 93,481 64,550 Local Suppliers 239, ,680 Accounts Receivable 496, ,987 Foreign Suppliers 658, ,865 Inventories 696, ,380 Forfait 187, ,706 Taxes Recoverable 163, ,253 Loans and Financing 1,080, ,662 Other accounts receivable 194,317 50,623 Taxes payable 4,531 8,709 1,644,241 1,575,793 Customer s Advances 367, ,122 Others accounts payable 98,479 94,457 Non-Current Assets 2,635,782 2,344,201 Taxes Recoverable 504, ,708 Non-Current Assets Other Credits 270, ,452 Loans and Financing 106, ,606 Long-Term Assets 775, ,160 Other accounts payable 25,617 22, , ,607 Property, Plant and Equipment 528, ,158 Shareholders Equity Intangible 6,695 6,904 Capital Stock 585, , , ,062 Net income/loss for the period -439, ,803 1,310,785 1,274,222 Adjustment to equity valuation 40,767 41, , ,207 Total ASSETS 2,955,026 2,850,015 Total LIABILITIES and SHAREHOLDERS EQUITY 2,955,026 2,850,015

26 DISCLAIMER AND IFRS This presentation may include forward-looking statements about future events or results in accordance with Brazilian and international regulations governing securities. Such statements are based on assumptions and analyses made by Heringer based on its experience, the economic environment, market conditions and expected future events, many of which are beyond the Company s control. Important factors that can lead to significant differences between actual results and these forward-looking statements include Heringer s business strategy, economic conditions in Brazil and abroad, technology, financial strategy, developments in the fertilizer industry, financial market conditions, uncertainty regarding the results of the Company s future operations, plans, objectives, expectations, intentions, and other factors described in the item "Risk Factors of the IPO Prospectus filed with the Securities and Exchange Commission of Brazil (CVM). As a result of these factors, Heringer s actual results may differ substantially from those expressed or implied by the forwardlooking statements. The Financial Statements of Heringer were prepared and are being presented in accordance with the accounting practices adopted in Brazil (BR GAAP), which include the rules of the Brazilian Securities Commission (CVM) and the rules issued by the Accounting Pronouncements Committee (CPC), and the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). In addition, pursuant to CVM Rule 656, the Company chose to present again its 2010 Quarterly Information (ITR) in accordance with the new accounting standards mentioned above, including comparisons with that of 2009, which also was adjusted for the rules in effect in 2010, until the date of presentation of the 1st ITR of 2011, i.e., May 15, Therefore, as required by said rule, the Financial Statements for the fiscal year ended December 31, 2010 include an explanatory note that shows, for each quarter, the impacts of the full adoption of the rules in 2010 on the results and shareholders equity.