Investor Relations Company Presentation June, 2020
Marfrig A T A G L A N C E Company Highlights Financial Highlights 2 nd largest beef producer worldwide Revenue¹ by business unit Revenue¹ by Currency Cattle slaughtering capacity of 31,200 head/day and lamb slaughtering capacity 72% of 6,500 head/day 89% 8% North America 3% Largest beef patties producer worldwide In US$ Production capacity of 232 thousand tons of beef patties/year North America South America US$ BRL Others R$ 13.5 bn Production in the best geographies in the world with access to premium markets Net Revenue 1Q20² National Beef is one of the most profitable R$ 1.2 bn and efficient beef companies in the US South America operation has the highest Adjusted EBITDA 1Q20² number of plants certified to export to China 2.8 x Expertise in industrialized and plant-based products coupled with strategic partnerships Net Debt/Adj. EBITDA 1,3 Note: (1) As of 4Q20 LTM; (2) As of 4Q20; (3) Presented on a pro forma basis to give effect to the acquisition of national beef, Iowa Premium, LLC, and Quickfoods 2 S.A. as if they had occurred on January 1, 2018 and certain related indebtedness incurred in connection with each acquisition Source: Company
A c q u i s i t i o n s p h a s e A global path 2007 2008 2009 2010 2011 IPO(B3: Brazil) Moy Park Seara Keystone Greenpeace First food Acquisition of beef Acquisition of Acquisitions of Acquisition of company in the processing units the first Seara; Grupo Keystone Foods world to sign a in Brazil, in Mato international Zenda; public Grosso, Mato asset of global Brazilian turkey commitment Grosso do Sul and scale operation owned São Paulo by Doux Frangosul; Leasing of 12 slaughter facilities 3
A global path R e a d j u s t m e n t Portfolio 2013 2014 2018 2019 Added value Asset Sales Moy Park National Beef and Divestment of Seara Keystone Acquisition of BRF Sale of Moy Park. and Zenda assets, Quickfood Company's Shift in Marfrig’s strategic businesses units. and Várzea Grande strategy to focus direction towards beef protein Launch new Plant Based Burger on food service and higher value products, organizational Attainment of a low-leverage culture “Focus to capital structure. Win” 4
Market 4 % Profile Europe 64 % 5 % 78 % 10 % USA Japan Revenue 1% China Solid market (US, by Region Europe and Japan) Middle East 9 % 19 % DIVERSIFIED Brazil REVENUE 4 % Growing Market GENERATION (Brazil and China) 3% WITH ACCESS Argentina, Chile & Uruguay TO MAIN MARKETS: Others Base: 3rd quarter 5
Marfrig’s superior production and sales presence W I D E P RO D U C T I O N C A PA C I T Y I N T H E A M E R I C A S W I T H S U P E R I O R S A L E S P L AT F O R M A N D A C C E S S TO P R E M I U M M A R K E T S Cattle G L O B A L S A L E S F O R C E 58% 42% slaughtering capacity South America North America Breakdown 19% 78% by source of revenue 3% Solid markets Growing markets Others 6 Sales offices Source: Company
OWNERSHIP STRUCTURE as of 06/10/2020 MMS + Management Other Controlling Holders +Treasury 46,01 % 2,29% 51,70% Marfrig 6 GLOBAL FOODS 7
Management Marcos Molina Board of Directors Marfrig GlobalFoods Controlling Shareholder and Chairman of the Board Operations 20+ years in the food industry, where he began at SouthAmerica North America age 16 in the food distribution business. Mr. Molina is also the CEO of MMS Participações ltda Operations Operations Miguel Gularte Tim Klein CEO CEO Tang David Simon McGee CFO CFO 35+ years of experience in the beef industry. Began career at Cooperativa Industrial de Cames e Derivados. Miguel Gularte Former president of Uruguayan Meatpacker PUL, international VP of Minerva, and president of JBS Mercosul CEO, South America Prior to joining Marfrig in 2007, worked for 11 years in the Treasury department of Asea Brown Boveri — Tang David ABB Brasil, where his last position was Executive Officer of their financial arm. Also worked for 4 years in the CFO, South America Treasury department of JBS Friboi 30+ years of experience in the beef industry. Joined National Beef in 1992 and has served as CEO since 2009. Prior Tim Klein VP as Cargill, VP of Operations at Armour Food Company (of ConAgra Foods), and VP of Sales and Pricing at EA CEO National Beef Miller Simon McGee Joined National Beef in 2006. Former investment banker with Christenberry Collet & Company and founder and majority owner of McGee Ranch Company, Inc. CFO, National Beef
High Corporate Governance Standards B E N C H M A R K AT C O R P O R AT E G OV E R N A N C E P R A C T I C E S Board of Directors Years on Supporting Committees the Board Experience Marcos Chairman Audit 12+ Molina Santos Antonio Maciel Neto* José Mauro Depes Lorga Lúcio Abrahão Monteiro Bastos Antonio 12+ Maciel Neto Financial and Risk Management Independent members Herculano 1+ Herculano Aníbal Alves* Anibal Alves Marcia Aparecida Pascoal Marçal dos Santos Tang David 3+ Roberto Faldini Sustainability Roberto Silva Roberto Silva Waack 12+ Waack Daniela Martins Mariuzzo (IDH) Alain Emilie Martinet Paulo Pianez Junior Marcia A. M. 12+ Santos Compensation, Corporate Board members Governance and Human Resources Rodrigo 12+ Antonio Maciel Neto Marçal Filho Roberto Faldini Alain Emilie Heraldo Geres 10+ Martinet Source: Company Note: (1) Transparência Internacional (TI); (2) Considered as protein industry Marfrig, BRF, JBS and Minerva
Our Operations North America South America Plant Plus Foods 4 th Largest beef processing Leading beef processing Recent created JV with ADM companies in South America company in the U.S.² to explore the meat alternative market in North and South Cattle slaughtering capacity: Cattle slaughtering capacity: America. 18,100 head per day 13,100 head per day PlantPlus Foods merges Marfrig’s global leadership in % of Consolidated Revenue % of Consolidated Revenue hamburger production and protein processing with ADM’s unique technical ingenuity and complete portfolio of natural 72% 28% ingredients and flavor. PlantPlus Foods is conceived as an organization with unmatched end to end capabilities and scale to % of Consolidated Ebitda % of Consolidated Ebitda further meet consumer needs 36% 64%
N o r t h A m e r i c a O p e r a t i o n
North America Operation U N I Q U E C O M B I N A T I O N O F P R O F I T A B I L I T Y A N D S C A L E One of the most profitable and efficient beef companies in the U.S. Cattle slaughtering capacity: 13,100 head per day, 14% of slaughtering capacity share in the U.S. 4 th Largest beef processing 87% of sales to the U.S. internal market targeting company in the U.S.² premium customers Unique sourcing capability: ~25% coming from USPB (association), ensuring quality and consistency One of the largest and most technologically IO PA advanced Wet Blue tannery in the world OH KS MO State-of-the-art e-commerce for high-end and customized products GA Transportation services in 48 states through National Carriers 3 5 Exports to premium markets such as slaughtering further processing Japan and South Korea plants plants 12 Note: (1) As of 1Q20 LTM; (2) In terms of production capacity Source: Company
North America Operation V A L U E A D D E D S T R A T E G Y VALUE-ADDED MINDSET HAS ENABLED THE 2019 YTD US Chilled Beef Exports COMPANY TO ROUTINELY ACHIEVE HIGHER MARGINS VS. THE COMPETITION 25% 30% 22% 21% 19% 20% - National Beef sells a higher % of its products in value- 13% added format vs. the competition while still 10% maintaining a low cost structure 0% National Peer1 Peer2 Peer3 Others - Value-added product mix provides a more attractive Beef and insulated margin profile - Leading global market share for US Chilled Beef; Fiscal Year EBITDA Margin % Comparison especially notable in Japan (35+%) – the premium export market for US Beef 11,1% 10,7% 9,6% 8,7% 8,3% 7,7% 7,4% - Leading producer of Certified Angus Beef 6,2% - Tightly synchronized cattle procurement and sales team enable more effective margin capture 2017 2018 2019 TTM March 2020 National Beef Peer2 13 Note: In US GAAP Source: Companies financial statements
North America Operation S T R A T E G I C P A R T N E R S H I P I N C A T T L E P R O C U R E M E N T Cattle Procurement - National Beef strives to procure the best, most profitable, cattle from the best feedyards. More than 70% were Black Angus. - ~85% of National Beef’s cattle come from the primary procurement area of KS, TX and OK and within a 250 mile radius of the plants. The remainder of the company’s cattle come primarily from the key cattle feeding states of Nebraska, Iowa, Colorado and South Dakota - US Premium Beef owns 15.1% of National Beef and its members provide us with approximately 25% of the cattle that we process. - In addition to USPB, the company has several other significant supplier appliances that provide another ~35-45% of our cattle each year.
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