Earnings Conference Call 2Q18. August 15, 2018

Transcription

1 Earnings Conference Call August 15, 2018

2 Disclaimer This material is a presentation of general information about Marfrig Global Foods S.A. and its consolidated subsidiaries (jointly the Corporation ) on the date hereof. The information is presented in summary form and does not purport to be complete. No representation or warranty, either expressed or implied, is made regarding the accuracy or scope of the information herein. Neither the Corporation nor any of its affiliated companies, consultants or representatives undertake any liability for losses or damages arising from any of the information presented or contained in this presentation. The information contained in this presentation is up to date as of June 30, 2018, and, unless stated otherwise, is subject to change without prior notice. Neither the Corporation nor any of its affiliated companies, consultants or representatives have signed any commitment to update such information after the date hereof. This presentation should not be construed as a legal, tax or investment recommendation or any other type of advice. The data contained herein were obtained from various external sources and the Corporation has not verified said data through any independent source. Therefore, the Corporation makes no warranties as to the accuracy or completeness of such data, which involve risks and uncertainties and are subject to change based on various factors. This presentation includes forward-looking statements. Such statements do not constitute historical fact and reflect the beliefs and expectations of the Corporation s management. The words anticipate, hope, expect, estimate, intend, project, plan, predict, aim and other similar expressions are used to identify such statements. Although the Corporation believes that the expectations and assumptions reflected by these forward-looking statements are reasonable and based on the information currently available to its management, it cannot guarantee results or future events. Such forward-looking statements should be considered with caution, since actual results may differ materially from those expressed or implied by such statements. Securities are prohibited from being offered or sold in the United States unless they are registered or exempt from registration in accordance with the U.S. Securities Act of 1933, as amended ( Securities Act ).Any future offering of securities must be made exclusively through an offering memorandum. This presentation does not constitute an offer, invitation or solicitation to subscribe or acquire any securities, and no part of this presentation nor any information or statement contained herein should be used as the basis for or considered in connection with any contract or commitment of any nature. Any decision to buy securities in any offering conducted by the Corporation should be based solely on the information contained in the offering documents, which may be published or distributed opportunely in connection with any security offering conducted by the Corporation, depending on the case. 1

3 Marfrig Global Foods STRATEGY Highlights Conclusion of the acquisition of the control of National Beef in June 2018 Marfrig continued to advance in another step in the sale process of Keystone Foods OPERATIONAL Solid result corroborates the decision to redirect strategy to focus on beef In, an increase of 87% in Adjusted EBITDA (i) to R$ 918 million and a margin of 9.2% (i) Considers National Beef Pro forma Data 3

4 Marfrig today Overview 5% 2% 7% 5% Net Revenue by Destination (%) 62% 62% 12% 3% Production platform in the Americas 3% 12% Slaughter capacity of more than 32,000 head of cattle per day 2 nd largest beef company in the world (in capacity) Middle East Other 7% 5% 5% 2% 4% 4

5 Consolidated Results

6 Considerations disclosure of results For purposes of the main operational indicators, we will present the pro forma result with National Beef Continued operation: the data of the financial statements contemplate the result of National Beef as of June 2018 (completion of acquisition) Except where otherwise indicated, the data presented herein do not include the results of Keystone Foods (assets available for sale since 1Q18) As determined by the accounting rule, Argentina's assets (previously classified as assets available for sale) have been reclassified to "Continued Operation" 5

7 Marfrig Revenue Profile Due to the recent strategic movements, Marfrig is still in the integration phase. For this quarter, the Company will present its revenue in two regions: North America % Revenue Marfrig Consolidated Pro forma South America 6 Note: Not consider the revenue for the beef patties facility in North Baltimore, Ohio

8 Net Revenue Proforma R$ million Revenue by destination(%) EUA 62% +21% América do Sul 15% 8,200 2,180 1,292 (478) 929 9,944 2,900 Japão 7% 5% 6,020 7,044 Europe Middle East 5% 2% 2Q17 Volume Price FX Other 5% South America North America Increased demand for beef protein globally has led to the expansion of sales volume Average sales price followed the market dynamics, with a higher decrease in South America due to the Brazilian operation Average depreciation of 12% of the Real contributed positively to the increase in net revenue 7

9 Indicators Proforma SLAUGHTER (000 heads) GrossProfit and Margin (R$ million and %) EBITDA AdJ. and MARGIN (R$ million and %) 13.5% +21% 1, % +75% 1, % +87% 9.2% 918 1, Q17 2Q17 2Q17 Solid result reflects assertive strategy of geographical diversification focusing on beef protein 8 Worth mentioning the results of North America and Southern Cone assets, Brazilian real depreciation and the good performance of industrialized products

10 Debt and Leverage (Basis ) Gross Debt (US$ million) Cash & Equiv. (US$ million) Net Debt (US$ million) +2% - 16% +12% 5,717 5,841 + = 1,941 1,621 3,776 4,220 1Q18 1Q18 1Q18 70% 30% Avg Cost (% p.a.) 6,57% vs 7,20% in IQ18 Avg. Term 3.93 years in R$ Million 1Q18 Net Debt 12,552 16,271 Adjusted EBITDA LTM* 3,466 3,871 Net Debt/ Aj. EBITDA LTM* 3.62x 4.20x Short Term Long Term * Beef div.+ Keystone + National Beef 9

11 Cash flow Continued Op.* * National Beef June only R$ million (156) (156) (255) (568) OCF Capex Interest FCL continued Increase in inventories impacted working capital Continuity of investments in improvement and maintenance Interest affected by the bridge loan and FX 10 Note: not consider investment with acquisition

12 Next Steps Continuity in the integration process with National Beef Creation of two global Committees on Food Security and Animal Welfare & Sustainability Marfrig s Leadership in Sustainable Production Strategic Alliance with Embrapa - Carbon Neutral Meat and Low Carbon Meat Advancement (organic growth) in the positioning of brands and the creation of higher value-added products: certification programs, beef patty facility and portioned products Definition of "Liability Management" next steps with the conclusion of the sale of Keystone Strategic plan preparation and presentation of a new long-term plan (Marfrig Day) 11

13 Final Comments Consolidated production footprint in the Americas, with access to key consumer markets worldwide The outlook for the global animal protein industry remains positive Non-negotiable commitment to Financial Discipline 12

14 Earnings Conference Call August 15, 2018