CONFERENCE CALL - 1Q18 May 10, 2018

Transcription

1 CONFERENCE CALL - 1Q18 May 10, 2018

2 Minerva 1Q18 Highlights Gross Revenue 1Q18: R$ 3,752.4 million LTM1Q18: R$ 14,430.9 million Exports: 63% of gross revenue Division 1Q18: OPERATING AND FINANCIAL HIGHLIGHTS Industry Brazil: 46% of gross revenue Industry International: 40% of gross revenue Trading: 14% of gross revenue Net Revenue 1Q18: R$ 3,531.4 million LTM1Q18: R$ 14,549.2 million (pro forma) Adjusted EBITDA: 1Q18: R$ million Adjusted EBITDA Margin: 8.1% LTM1Q18: R$ 1,304.0 million Adjusted EBITDA Margin: 9.0% Net (Loss) Income 1Q18: R$ million LTM1Q18: R$ million Operational Cash Flow 1Q18: R$ million Free Cash Flow 1Q18: R$ 51.6 million CAPITAL STRUCTURE Leverage measured by the net debt/ltm EBITDA ratio : 4.5x (reduction of 0.1x qoq) Cash Position: R$ 3.9 billion Duration: ~5.7 years OTHER HIGHLIGHTS Minerva reached 22% of market share in South America largest beef exporter of the continent Integration process advancement: new business opportunities Opening of new markets for Mercosur: Japan, Indonesia and USA 2

3 BRAZIL Sector Overview Mercosur PARAGUAY 1Q18 Slaughter volume: +4% yoy -5% qoq Good availability of cattle ready to slaughter and strong exports performance, although weak consumption (seasonal) 1Q18 Exports volume: +21% yoy -7% qoq Strong demand from Asia and Middle East Higher volumes to Chilean market 1Q18 Domestic Market: Seasonal: low demand Higher supply of substitutes proteins and calendar effect impact URUGUAY 1Q18 Slaughter volume: +8% yoy +7% qoq Slaughtering anticipation due to dry season ( La niña ) 1Q18 Exports volume: +16% yoy +17% qoq 1Q18 Highlights: China (39% of total) +3 p.p. yoy Russia: +19% yoy its participation in Uruguayan exports 1Q18 Slaughter volume: -17% yoy -11% qoq Female retention for reproduction Weather conditions affected animals transportation 1Q18 Exports volume: -11% yoy -20% qoq 1Q18 Highlights: Russia (44% of the total) +12 p.p. yoy Higher volumes to Russian market after ban for Brazilian beef ARGENTINA 1Q18 Slaughter volume: +8% yoy -2% qoq Slaughtering anticipation due to dry season ( La niña ), as in Uruguay 1Q18 Exports volume: +56% yoy China (35% of the total) +10 p.p. yoy Higher volumes to China, Russia and Chile 1Q18 Domestic Market: Strong consumption blocked seasonality impact Sources: Minerva, Ministry of Agriculture, Secex, SENACSA and INAC. * Estimate done by Paraguay s Central Bank. 3

4 MARKET SHARE (% OF REVENUE PER COUNTRY) 1Q18 Share of Exports Minerv a 19% Brazil Others 81% Minerva 40% Paraguay Others 60% Minerv a 21% Uruguay Others 79% Minerva 16% Argentina Minerva 71% Colombia Others 29% Others 84% Sources: Minerva, Secex, INAC, SENACSA, Senasa and DANE 4

5 Breakdown Of Exports BRAZILIAN DIVISION BREAKDOWN OF EXPORTS (% OF REVENUE) LTM1Q17 CIS 4% Americas 8% EU 15% NAFTA 1% Middle East 28% EU 10% Americas 10% CIS 7% LTM1Q18 1 NAFTA 2% Middle East 31% Africa 18% Asia 27% Africa 16% Asia 25% INTERNATIONAL DIVISION BREAKDOWN OF EXPORTS (% OF REVENUE) LTM1Q17 Middle East 12% CIS 6% Africa 1% Americas 33% Middle East 10% NAFTA 8% LTM1Q18 1 Africa 2% Americas 29% EU 12% CIS 10% Sources: Minerva NAFTA 14% Asia 22% EU 13% Asia 28% 5

6 Operating and Financial Results GROSS REVENUE - BRAZILIAN INDUSTRY DIVISION (R$ MILLION) GROSS REVENUE - INTERNATIONAL INDUSTRY DIVISION (R$ MILLION) +21.6% % 1,425 1,620 1,855 1,994 1, ,112 1,471 1,490 1Q17 2Q17 3Q17 4Q17 1Q18 CAPACITY UTITLIZATION BRAZILIAN INDUSTRY DIVISION 1Q17 2Q17 3Q17 4Q17 1Q18 CAPACITY UTITLIZATION INTERNATIONAL INDUSTRY DIVISION 69.9% 78.3% 84.1% 81.0% 80.1% 70.4% 70.7% 68.6% 68.6% 71.5% 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 6

7 Operating and Financial Results (cont d) GROSS REVENUE - TRADING DIVISION (R$ MILLION) +68.3% DIVISIONS BREAKDOWN (% OF GROSS REVENUE) 1Q18 Trading Division 14% Q17 2Q17 3Q17 4Q17 1Q18 International Industry Division [VALOR] Brazilian Industry Division [VALOR] NET REVENUE (R$ MILLION) EBITDA (R$ MILLION) AND EBITDA MARGIN (%) +64.9% 9.2% 10.8% 9.1% 9.2% 8.1% 2,142 2,579 3,418 3,965 3, Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 7

8 Net Result R$ Million 1Q18 LTM1Q18 Net (loss) income before taxes (+) Income and Social Contribution Taxes 9,1-33,2 Net (loss) income % Net margin -3.2% -2.9% 8

9 Operating Cash Flow R$ Million 1Q18 LTM1Q18 Net (loss) income (+) Net income adjustments (+) Changes in working capital requirements Operating cash flow

10 Free Clash Flow LTM1Q18 (R$ MILLION) 1,237.5 (258.5) (795.5) (460.4) (276.9) 1 EBITDA Capex (cash) Financial Result (cash) Working Capital Var Free Cash Flow 1Q18 (R$ MILLION) (48.4) (217.9) EBITDA Capex (cash) Financial Result (cash) Working Capital Var Free Cash Flow 1 Working capital excludes equity valuation adjustments and accumulated conversion amounts. 10

11 Capital Structure HIGHLIGHTS Net Debt/LTM EBITDA ratio: 4.53x Cash Position: R$ 3.9 billion At the end of March, approximately 79,5% of total debt was exposed to the dollar variation Debt Duration: 5.7 years DEBT AMORTIZATION SCHEDULE (R$ MILLION) MAR/18 3,877.3 Short-term debt 3, , , , Cash 2Q18 3Q18 4Q18 1Q

12 Organizational Restructuring HIGHLIGHTS New management s model Reorganization of the operational department: Greater synergy between departments Reorganization of the financial department: Reinforce governance and optimization on the decision-making process Greater control of working capital Focus on deleverage of the Company NEW ORGANIZATIONAL CHART CEO Fernando Queiroz Investor Relations Eduardo Puzziello Risk and Controllership Francisco Assis Global COO Iain Mars TSY Nathan Freire Other Officers COO Brazil/Colombia Luis Luz COO Paraguay/Uruguay Patrício Silveira COO Argentina Gustavo Kahl COO Related Businesses Frederico Queiroz Other Departments (Executive/Strategical) 12

13 Organizational Restructuring PROFESSIONAL SUMMARY PROFESSIONAL SUMMARY Mr. Mars joined Minerva in He has an extensive experience in the refrigeration industry and has been working in the sector for over 30 years. He earned a degree in Economics from the London School of Economics and has directed major companies in various countries such as Japan, Korea, Taiwan, Australia, Argentina, Egypt, Russia and the United Kingdom. Mr. Mars joined the Ian Anderson Mars Company's Management in the days it was still known as Indústria e Comércio de Carnes Minerva - he served as General Manager from 2001 to 2004 and returned in 2012 to serve as CEO of Minerva Fine Foods. He also served as Chief Commercial Officer of Minerva SA from September 2013 to November 2014, as Chief Operating Officer (COO) of the Company's Beef Brasil division from December 2014 to November 2016 and was the Company s Chief Commercial Officer (CCO) from December 2016 to May Mr. Puzziello has been with the Company since He holds a degree in Business Administration from the Pontifical Catholic University (PUC-SP) and an MBA in Capital Markets from the University of São Paulo (USP/Fipecafi). Mr. Puzziello started his professional career in 1998 at the insurance brokerage firm AON Risk Services, and also worked for BankBoston, Banco Santander, Eduardo Pirani Puzziello Corretora Fator, Banco Raymond James and Votorantim Corretora, where he held the position of sell side market analyst of several sectors. Between June 2009 and May 2010 he served as Minerva s Investor Relations Controller. He returned to the Company in November 2011 and in August 2012, Mr. Puzziello was elected for the position of Statutory Investor Relations Officer. Mr. Freire joined Minerva in In early 2018, he was appointed Treasury Director. With more than 14 years experience in the financial sector, Mr. Freire worked at Bank Boston Asset Management as a Fixed Income Trader. After Bank Boston, he joined Black River Asset Management (Cargill Asset Management) as Senior Fixed Income Trader, where he later became Portfolio Manager. In Nathan de Mello Freire 2009, he became a partner of BRL Capital Asset Management, covering the equity markets. Mr. Freire holds a bachelor's degree in Accounting from the School of Economics, Business and Accountancy of the University of São Paulo (FEA/USP) and an MBA in Finance and Economics, also from USP. Mr. Francisco de Assis Ferreira Filho holds a degree in Accounting Sciences from the University of São Paulo (USP) with specialization in leadership and innovation by the Harvard Business School. He joined Minerva in 2011 in the Investor Relations Francisco de Assis team and from 2013 to 2015 he served as "chief of staff" for the Company's CEO. In 2015, he was appointed Director of Planning, Risk and Control. Prior to that, he worked in the consulting and auditing field at PwC. 13

14 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, regarding the veracity, suitability, impartiality, completeness or scope of the information contained herein. Information obtained from public sources, contained in this presentation, has not been independently verified. This presentation contains forward-looking statements which were carefully prepared by management and are intended to indicate possible future tendencies in relation to Minerva in accordance with management s reasonable expectations. The use of such terms as project", "estimate", "anticipate", "envisage", "plan" and "expect", among others, should not be interpreted as projections or guidance in accordance with the prevailing legislation, but should be regarded as mere tendencies which clearly involve risks and uncertainties. These statements are based on various factors and assumptions, including market conditions, government regulations, pressures from competitors, and the performance of the industry and the global and Brazilian economy, among others, as well as the risks mentioned in the disclosure documents filed by Minerva with the Brazilian Securities and Exchange Commission (CVM). Any alterations to these factors or assumptions may lead actual results to differ from current tendencies. We advise not placing undue trust in these forward-looking statements, the Company s past performance being no indicator of future results. Although Minerva believes that the forward-looking statements contained herein are reasonable and based on data currently available to management, it cannot guarantee future results or events. The information and statements contained in this presentation apply only to the date on which they were prepared and Minerva is in no way obliged to update them in the light of new information or future developments. Neither should this presentation or 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 takes no responsibility for transactions or investment decisions based on the information herein. No one is authorized to provide any information or make any representation that is inconsistent and not coherent 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. 14

15 Investor Relations Eduardo Puzziello Kelly Barna Matheus Oliveira Luiza Puoli Phone: