4Q17 Earnings Presentation May 24th 2018 1
Recent Developments Latest News Conclusion of R$168 million Agribusiness Receivables Certificate issuance the Company concluded its R$168 million Agribusiness Receivables Certificate Issuance at a cost of 98% of the local Interbank Deposit Rate (DI) with a 4-year maturity tenor This transaction if part of the liability management program totaling R$973 million of CRA transactions in the past months at a cost lower than CDI Share Buyback Program Approval The Board of Directors approved the Company’s share buyback program to repurchase up to 5,8 million shares with the objective to minimize the dilution from the Stock Options Plan. The buyback program will end by June 12 th , 2018 Approval of Interest on Equity Payment Distribution Distribution on December 2017 of R$65 million IOE equivalent to R$0.1585 / share 2
Financial Highlights 4Q17 Financial Highlights 2017 Financial Highlights Comparisons refers to 4Q16¹ Comparisons refers to 2016¹ R$1.1 billion Net Revenue ( -11.6%) R$4.7 billion Net Revenue ( -5.8%) R$767 million Brazil Food Segment ( -18.6%) R$3.3 billion Brazil Food Segment ( -9.6%) R$349 million International Food Segment ( +9.1%) R$1.3 billion International Food Segment ( +5.3%) R$285 million Gross Profit ( +1.6%) R$1.2 billion Gross Profit ( -5.8%) 25.% Gross Margin ( +3.3pp) 24.7% Gross Margin (stable vs. 2016) R$119 million EBITDA ( +21.9%) R$490 million EBITDA ( -10.5%) 10.7% EBITDA Margin ( +2.9pp) 10.5% EBITDA Margin ( -0.6pp) R$77 million Net Income ( +286.6%) R$251 million Net Income ( +24.4%) 6,9% Net Margin ( +5.3pp) 5.4% Net Margin ( +1.3pp) 3 ¹Comparisons refer to results ended on Feb. 28, 2017 (4Q16 and 2016)
Brazil Food Segment | Rice The reduction in gross prices was lower than the decrease of market prices, as a result of Camil’s strategy to preserve profitability and brand positioning in the market Rice prices – Brazilian Market (in R$/50kg) Rice Brazil – Market vs. Camil’s prices Source: Esalq Senar Source: Esalq Senar, Company Rice – Main Highlights Rice – Camil’s Portfolio Volume : Mainstream • 128.4 thousand tons on 4Q17 (-13.0%) • 596.1 thousand tons on 2017 (-0.6%) Raw material acquisition - average market prices: • R$36.61/bag on 4Q17 (-25.7%) • R$38.40/bag on 2017 (-18.6%) Brands Value Lower decrease in Camil’s gross prices vs. market prices: • R$2.33 on 4Q17 (-11.3%) • R$2.37 on 2017 (-8.3%) Decrease in value priced brands volume We reviewed our pricing strategy and our product’s composition to adjust the Company to a new market reality Increase in Camil’s brand volume 4
Brazil Food Segment | Beans The reduction in gross prices was lower than the decrease of market prices, as a result of Camil’s strategy to preserve profitability and brand positioning in the market Beans prices – Brazilian Market (in R$/60kg) Beans Brazil – Market vs. Camil’s prices Source: Agrolink Source: Agrolink, Company Beans – Main Highlights Beans – Camil’s Portfolio Volume : Mainstream • 16.4 thousand tons on 4Q17 (-14.9%) • 72,4 thousand tons on 2017 (-4.7%) Raw material acquisition - average market prices: • R$98.90/bag on 4Q17 (-40.9%) • R$132.13/bag on 2017 (-50.3%) Brands Value Lower decrease in Camil’s gross prices vs. market prices: • R$3.23 on 4Q17 (-22.9%); and • R$3.86 on 2017 (-31.9%). Decrease in value priced brands volume Beans value priced category: distribution similar to rice Increase in Camil’s brand volume 5
Brazil Food Segment | Sugar The reduction in gross prices was lower than the decrease of market prices, as a result of Camil’s strategy to preserve profitability and brand positioning in the market Sugar prices – Brazilian Market (in R$/50kg) Sugar Brazil – Market vs. Camil’s prices Source: Esalq Senar Source: Esalq Senar, Company Sugar – Main Highlights Sugar – Camil’s Portfolio Volume : Mainstream • 118.0 thousand tons on 4Q17 (-5.9%) • 541.3 thousand tons on 2017 (-2.2%) Raw material acquisition - average market prices: • R$60.92/bag on 4T17 (-30.6%) • R$64.24/bag on 2017 (-25.4%) Brands Value Lower decrease in Camil’s gross prices vs. market prices: • R$2.11 on 4Q17 (-18.9%) • R$2.22 on 2017 (-12.5%) Decrease in value priced brands volume União: absolute leadership with greater perception of value translated Increase in Camil’s brand volume in premium prices 6
Brazil Food Segment | Canned Fish Continued challenge of sardine and tuna fishing in the Brazilian coast resulted in record levels of imports by the industry Canned Fish – Camil’s Volume (‘000 ton) Canned Fish – Camil’s Gross Prices (R$/kg) Pescados Brasil - Volume de Vendas Camil 45 39,62 40 36,05 35 30 25 20 14,02 15 11,39 10,92 9,21 10 8,08 8,30 7,55 6,18 5 0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 2016/17 2017/18 Source: Company Source: Company Canned Fish – Main Highlights Canned Fish – Camil’s Portfolio Volume : • 11.4 thousand tons on 4Q17 (-18.7%) Mainstream • 36.1 thousand tons on 2017 (-9.0%) 2017: Raw material reached record levels of imports Camil’s gross prices: • R$20.92 on 4Q17 (+22.9%) Brands • Value R$19.42 on 2017 (+13.5%) Improved industrial performance + efficiency gains from the canned fish operations concentration at Navegantes (SC) 7
International Food Segment We continue to present a better operational performance: the combined effect of volume growth and price increase in local currency offset the exchange devaluation in each country we operate. Operational Highlights - International International Operational Performance – Quarterly Evolution (‘000 ton) Production Uruguay mainly for export Volume reached 143.2 thousand tons on 4Q17 (-7.6%) and 547.8 thousand tons (+3.4%) on 2017. Price in US$ per ton increased by 1.5% on 4Q17 and decreased by 2.8% on 2017. 4.3% dollar exchange devaluation Production mainly for Chile domestic market Volume reached 18.3 thousand tons on 4Q17 (+3.7%) Source: Company and 75.8 thousand tons (+4.8%) on 2017. International Operational Performance – Annual Evolution (‘000 ton) Price in CLP per ton increased 3.7% on 4Q17 and 4.8% on 2017. 0,2% Chilean peso exchange devaluation . Production Peru mainly for domestic market Volume reached 22.8 thousand tons on 4Q17 (+19.1%) and 94.1 thousand tons (+9.5%) on 2017. Price in PEN per ton decreased 8,2% on 4Q17 and 4,7% on 2017. 1,4% Peruvian soles exchange devaluation Source: Company 8
Consolidated Costs and Expenses Statements (in R$ millions) 4Q17 3Q17 4Q16 4Q17 vs 4Q17 vs 2017 2016 2017 vs. Closing Date 28-feb-18 30-nov-17 28-feb-17 3Q17 4Q16 28-feb-18 28-feb-17 2016 Net Revenues 1,116.4 1,159.2 1,262.4 -3.7% -11.6% 4,663.0 4,947.8 -5.8% (-) Cost of Sales and Services (831.5) (873.2) (981.9) -4.8% -15.3% (3,512.5) (3,726.6) -5.7% Gross Profit 284.9 286.0 280.5 -0.4% 1.6% 1,150.5 1,221.2 -5.8% (-) Selling Expenses (138.5) (129.6) (136.0) 6.9% 1.9% (543.6) (508.7) 6.9% (-) G&A Expenses (59.5) (58.5) (77.4) 1.7% -23.1% (238.6) (256.0) -6.8% (+/-) Equity (Earnings)/Losses in Uncons. Subs. (0.6) (0.9) 1.6 -37.3% -135.0% (1.9) 0.7 -371.4% Other Operating Income 9.8 8.7 8.2 12.5% 19.3% 33.2 3.2 937.5% EBIT 96.1 105.7 77.0 -9.0% 24.9% 399.6 460.4 -13.2% Cost of Sales and Services SG&A SG&A Evolution (% net revenues) decrease in cost of raw materials International expenses reduction R$36.61/bag on 4Q17 (-25.7%) Higher freight expenses Rice R$38.40/bag on 2017 (-18.6%) Reduction on sales commissions R$98.90/bag on 4Q17 (-40.9%) Beans R$132.13/bag on 2017 (-50.3%) R$60.92/bag on 4T17 (-18.9%) Sugar R$64.24/bag on 2017 (-12.5%) Volume decrease International volume growth Source: Company 9
Financial Result The Company concluded its important initiatives to improve its capital structure, including the reduction of the cost of debt and better amortization profile. Net Financial Expense (in R$mn) 2017 Liability Management Net Financial Expenses decrease Decrease of average market tax rate (SELIC) Net Debt reduction (-43.7%) o from R$1,014 million (feb/17) to R$571 milhões (feb/18) Reduction of debt cost o R$973 million issuance of Agribusiness Receivables Certificate over the past months at a remuneration interest lower than the Interbank Deposit Rate (DI). Source: Company Statements (in R$ millions) 4Q17 3Q17 4Q16 4Q17 vs 4Q17 vs 2017 2016 2017 vs. Closing Date 28-feb-18 30-nov-17 28-feb-17 3Q17 4Q16 28-feb-18 28-feb-17 2016 EBIT 96.1 105.7 77.0 -9.0% 24.9% 399.6 460.4 -13.2% (+/-) Finacial Result (13.0) (12.6) (39.3) 3.7% -66.9% (74.4) (158.0) -52.9% (-) Debt Interest Expense (33.6) (40.4) (62.3) -16.9% -46.0% (181.1) (224.2) -19.2% (+) Interest Income 20.6 27.9 23.0 -26.1% -10.3% 106.7 66.2 61.2% Pre-Tax Income 83.1 93.1 37.6 -10.7% 120.8% 325.2 302.4 7.5% (-) Total Income Taxes (5.8) (21.2) (17.7) -72.4% -66.9% (74.5) (100.8) -26.1% Net Income 77.3 71.9 20.0 7.5% 286.6% 250.7 201.6 24.4% 10
Profitability Evolution: Net Income, EBITDA and Margins Even in a challenging scenario Camil continues to reinforce its business model resiliency Quarterly Profitability Evolution (in R$mn) Annual Profitability Evolution (in R$mn) Source: Company Source: Company Quarterly Margin Evolution (%) Annual Margin Evolution (%) 11 Source: Company Source: Company
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