Camil Alimentos Sa · BMFBOVESPA:CAML3
Camil Alimentos Sa — Investor Presentation (April 2019)
65 slides from Camil Alimentos Sa's investor presentation, April 2019
Slide 1: Institutional Presentation
Institutional Presentation
Slide 2: Disclaimer
Disclaimer Financial data is presented in accordance to the International Financial Reporting Standards and represents the Company’s consolidated results in million reais (R$), unless otherwise indicated. Company fiscal year begins in March and ends in February of the following year (inclusive). The
Slide 3: Table of Contents
Table of Contents I. Camil Alimentos Overview II. Key Investment Thesis III. SLC Alimentos Acquisition Appendix A. Financial Highlights (Latest Results) B. Industry Highlights C. Selected Comparable Companies
Slide 4: Section I: Camil Alimentos Overview
Section I Camil Alimentos Overview
Slide 5: Purpose and Values
Purpose and Values Our Purpose We believe that each person can make a difference in others lives and we exist to nurture relationships that bring more flavor to the everyday life Our Values Trust We honor our commitments with seriousness and discipline. We value transparency in our relationships, an
Slide 6: Camil at a Glance
Camil at a Glance Founded in 1963, Camil is a leading food company in Latin America with a diversified portfolio of several brands in rice, beans, sugar and canned fish Leadership positioning in all segments and countries in which it operates, Camil is one of the largest food companies in LatAm High
Slide 7: Timeline
Timeline Present for more than 50 years in the Brazilian everyday life, Camil grew in South America grains segment and expanded its portfolio into new categories Camil’s Acquisition of canned fish IPO and Costeño Acquisition of Acquisition of the brand Acquisition of SLC Alimentos; Acquisition of su
Slide 8: Camil's IPO
Camil’s IPO Camil successfully completed its Initial Public Offering on September 2017 IPO Highlights Ownership Structure As of April, 2019 R$9.00 / share Priced on September 26, 2017 Camil Free Float Investimentos 41.0 million ONs 60.6% 8.6% 5.1% 29.3% Primary Offering 86.5 million ONs Secondary Of
Slide 9: Product Portfolio
Product Portfolio Complementary product portfolio composed of high value added items Main products across the segments that Camil operates Grains - Brazil Grains - International Core Biscuits Value added Value added Sugar Fish 9
Slide 10: Diversification Across Products Categories
Diversification Across 3 Products Categories Business Divisions Overview Brazil1 Uruguay Chile Peru Grains Sugar Fish Grains Main Brands Rice Beans 1st 2nd 1st 2nd 2nd Market Share 41%6 24%6 1st 1st 1st 9%2,3 9%2,4 32%5 48%7 33%8 33%9 Sardine Sardine Tuna Top of 47% Sardine n.a. 50% 72% Mind10 60% 8
Slide 11: Recognized Brands, Leadership and Innovation
Recognized Brands, Leadership and Innovation Broad consumer recognition and innovation leads to several awards and market leading positions Awards Leadership¹ Brands Grains Sugar Canned Fish & win the Brazil 1º 1º 1º 2º 2º award for best brands of Rice and Beans, and Rice Beans Sugar Sardines Tuna 9
Slide 12: Solid Business Model with Stable and Resilient Margins
Solid Business Model with Stable and Resilient Margins Camil historically posted solid and profitable results Camil: Net Revenue (R$mm) Net Revenue by Segment (R$mm) Even in a challenging environment, 26% Camil was able to post double-digit 25% 24% 25% 25% 4.948 23% growth, maintaining profitability
Slide 13: Section II: Key Investment Thesis
Section II Key Investment Thesis
Slide 14: Key Investment Thesis
Key Investment Thesis 3 4 Seasoned Compelling Management Team Business Model with and the Highest Stable and Resilient Standards of Margins Corporate Governance in Place 5 2 Wide Distribution Investment Grade Network Reaching Indebtedness Profile more than 300k POS 1 6 Market Leader with Solid Cash
Slide 15: Market Leader with Iconic Brand Recognition
Market Leader with Iconic Brand Recognition Iconic Brand Recognition… …Leading to a Leadership Position in all Sectors & Regions1 Brazil – RICE2,3 Brazil – REFINED SUGAR5 Market leader in São Paulo City: #1 9% #1 32% Rice 40% market share10 #2 Player 2 4% #2 Player 2 19% Rice: 60% Top of Mind¹¹
Slide 16: Wide Distribution Network Reaching more than 400k POS
Wide Distribution Network Reaching more than 400k POS Strong distribution network with more than 400,000 points of sale, favoring the business expansion to new segments % Sales Fev/2018 Accounts / Retailers Key Accounts 33% Own Sales Force 28% 95% of sales made by the company’s own sales force Ret
Slide 17: Solid Business Model with Stable and Resilient Margins
Solid Business Model with Stable and Resilient Margins Despite the slowdown in the Brazilian economy, Camil posted solid results maintaining EBITDA margin over +10% Brasil: GDP and Retail Sales (% growth, real terms) Net Revenue (R$mm) 10,9% During 2015-16, the GDP decreased 7.2% Even in a challengi
Slide 18: Solid Business Model with Stable and Resilient Margins (Cont'd)
Solid Business Model with Stable and Resilient Margins (Cont´d) The segments in which Camil operates present active price dynamics, with weekly price pass-through, ensuring stability of margins Rice – Market¹ vs. Camil’s prices Beans – Market² vs. Camil’s prices Sugar – Market³ vs. Camil’s prices Ca
Slide 19: Proven Cost Transfer Capability (Rice Case)
Solid Business Model with Stable and Resilient Margins (Cont´d) Since 2006, Camil maintained gross margin of 22.5% - 28.0%, mainly due to its weekly pricing capacity Business Model: Proven Cost Transfer Capability (rice case) Subtitle Average purchase price (CIF - R$/30kg) Adjusted selling price (1)
Slide 20: Pricing and Purchasing
Solid Business Model with Stable and Resilient Margins (Cont´d) Pricing and Purchasing Agriculture Origination Processing Packaging Distribution Marketing Brand Strategy Weekly purchases at spot price Provision of storage to producers throughout the year: benefits from logistics cost
Slide 21: Premium Price | Sugar Case Study and Rice Strategy
Premium Price | Sugar Case Study and Rice Strategy União: Brand of strong emotional bond, preferred by consumers and with greater perception of value! Pricing Power Rice Strategy Replicating the sugar model "Brand of sugar": higher from commodity to brand Market Leadership prices compared
Slide 22: Rice | Broad Product Portfolio
Rice | Broad Product Portfolio Tailored product offering for targeted consumer segments across Brazil Product Portfolio - Breakdown Portfolio Camil¹ Product Shelving Avg market selling price Premium 129 129 Upper Avg market mainstream selling price 111 112 Avg market Mainstream selling price 101 111
Slide 23: Brazil Food Segment | Rice
Brazil Food Segment | Rice Fragmented Industry with high opportunity for expansion and consolidation Market Share¹ Product Portfolio Market Share (in volume) Mainstream 1º Rice Market Share 21% 10% Brazil – RICE2,3 I #1 9% 5% 12% VII #2 Player 2 4% 22% 16% II #3 Player 3 3% 23% 7% Value pricing V IV
Slide 24: Brazil Food Segment | Beans
Brazil Food Segment | Beans Fragmented Industry with high opportunity for expansion and consolidation Market Share¹ Product Portfolio Market Share (in volume) Mainstream 1º Beans Market Share 12% 4% Brazil – BEANS2,4 I #1 9% 1% 3% VII #2 Player 2 7% 37% 17% II #3 Player 3 5% V 18% 2% Value pricing I
Slide 25: Brazil Food Segment | Sugar
Brazil Food Segment | Sugar Sugar: wide, resilient and consolidated industry Market Share and Pricing Power Product Portfolio 1º Pricing Power Sugar Market Share Mainstream Brazil – REFINED SUGAR¹ "Brand of sugar": higher #1 32% prices compared to the #2 Player 2 19% main competitors Sugar price²
Slide 26: Brazil Food Segment | Canned Fish
Brazil Food Segment | Canned Fish Canned Fish: consolidated industry, with growth in consumption and seasonality on Lent period Market Share Product Portfolio 2º 2º Tuna Market Share Sardine Market Share Mainstream Brazil – SARDINE1 Brazil – TUNA1 #1 Player 1 47% #1 Player 1 58% #2 41% #2 24% Value
Slide 27: Clear and Tangible Avenues for Expansion
Clear and Tangible Avenues for Expansion …Coupled with consolidation of the Brazilian grains 1 Expansion to white areas… market Unique opportunity to consolidate the fragmented Brazilian rice market.... Minas 1º Rice Market Share Gerais 21% 10% I Brazil – RICE2,3 5% 12% #1 9.1% VII #2 Player 2 4.8%
Slide 28: Clear and Tangible Avenues for Expansion (cont'd)
Clear and Tangible Avenues for Expansion (cont´d) Clear recovery opportunities in the sugar and fish markets and expansion to new categories in South America 2 Fine Sugar Market Share Evolution1 (%) 43% 42% 42% 42% 42% 42% 40% 40% 40% Recovery in the 37% 38% 37% 37% Sugar Market in 34% 36% 36% 35% 3
Slide 29: Leadership with Wide Experience in the Sector
Leadership with Wide Experience in the Sector All Camil's directors have experience in their respective areas of expertise Legend Years of experience in Camil Luciano Quartiero¹ Flavio Vargas, CFA¹ Years of experience in the market CEO CFO and IR Director Ex-CFO of Smiles S.A. Ex-CFO of Camil Al
Slide 30: Solid Corporate Governance
Solid Corporate Governance Camil has high levels of controls and corporate governance, being supported by independent board members for +10 years and being audited for +15 years (big 4) Board of Directors Corporate Governance Jairo Quartiero (Chairman) Since 2008, the Board of Directors Listing
Slide 31: Solid Corporate Governance (Cont'd)
Solid Corporate Governance (Cont’d) Well-defined committees structure aiming to enhance the company’s organizational policies and comply with the best corporate practices Committees Main Responsibilities/Guidelines Elaborate and recommend the approval of the Company’s financial policies, as well a
Slide 32: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) Solid corporate governance focused on value creation for shareholders and commitment to environmental and social practices Environmental Governance • HACCP Since 2008, the Board of Directors is responsible for general strategic policies • Biomassa - Thermoe
Slide 33: Section III: SLC Alimentos Acquisition
Section III SLC Alimentos Acquisition
Slide 34: M&A: SLC Acquisition - Transaction Summary
M&A: SLC Acquisition - Transaction Summary Acquisition aligned to the Company’s expansion strategy and an important step towards the consolidation of the grain market in Brazil Acquisition 100% of SLC Alimentos Ltda. from Grupo SLC Participações • Consolidation of the grain market in Brazil • Portfo
Slide 35: SLC Acquisition: Overview
SLC Acquisition: Overview Overview¹ Market share Ex-subsidiary of SLC Participações Group Brands Camil and Namorado combined hold approx. 9% of the rice and beans market in Brazil Founded in December 2000 Company and three other brands in the portfolio. Main Brand Brand was awarded prizes fo
Slide 36: SLC Acquisition: Financial and Operational Highlights
SLC Acquisition: Financial and Operational Highlights 12M17 + Period ended on Feb. 28, 2018 Dec. 31, 2017 12M17 12M17 12M17 Audited Audited Pro-forma Volume Grains Brazil (k ton) Grains 668,5 221,0 889,5 Rice 596,1 205,0 801,1 Beans 72,4 16,0 88,4 Financial Statements (R$mn) Net Revenues 4,663 512 5
Slide 37: SLC Acquisition: Pro-forma Financial Indicators
SLC Acquisition: Pro-forma Combined Historical Financial Highlights1 (R$mn) Market Share Brazilian Rice per Region Camil Combo Combo SLC Alimentos C S Total Brazil 7% 2% 9% Combo Combo Greater São 32% 5% 37% Value Firm Value 3.157 308 3,465 91% 9% Paulo South 1% 3% 4% NE 8% 2% 10% 2015A 4.229 457 4,
Slide 38: Key Takeaways
Key Takeaways Market Resilient demand 1 The Company’s main market proves resilient to economic downturns as the consumption of rice and beans has a strong cultural appeal, being a pillar of the Brazilians’ typical diet Low exposure to fluctuations in commodities prices 2 The market dynamics differ m
Slide 39: Appendix A: Financial Highlights
Appendix A. Financial Highlights Latest Results: 4Q18
Slide 40: Highlights
Highlights News and Announcements Highlights of 2018 Recent events Launches • Camil Alimentos CRA IV Debenture Issuance with total value • Camil: “Arroz Minuto Caseiro”; of R$600 mm in Apr/19 • União: Launch of cake mix; • 2nd Share Repurchase Program was approved, of up to • P&D: Partnership Amyris
Slide 41: Financial Highlights of the Quarter
Financial Highlights of the Quarter Net Revenue grows 19.3% in the period, with an increase of 13.2% in the Brazil Food Segment´s Net Revenue, driven by SLC Alimentos acquisition in the period Highlights (var. YoY) 4Q18: Profitability Evolution (R$mm) R$1.5 billion Gross Revenue ( +16.9%) R$1.3 bill
Slide 42: Financial Highlights of the Year
Financial Highlights of the Year Growth of 1.8% in Net Revenue in the period, with an increase of 5.3% in the International Food Segment Net Revenue, driven by Exchange rate effect in the period Highlights (var. YoY) Profitability Evolution (R$mm) R$5.5 billion Gross Revenue ( +1.2%) R$4.7 billion N
Slide 43: Operational Highlights
Operational Highlights Growth of 16.8% in the quarterly consolidated volume YoY, driven by the growth in grains in the period and reduction of 4.4% YoY in the year, with an international volume reduction in the period Quarterly Volume Evolution (k ton) Annual Volume Evolution (k ton) Volume Breakdow
Slide 44: Brazil Food Segment | Rice
Brazil Food Segment | Rice We highlight volume increase in the quarter and a challenging sales scenario in the year Rice – Volume and Camil Net Price Rice – Brazil Market Price vs. Camil Gross Price 60 2.7 55 2.6 Esalq Senar (RS/50kg) 2.5 Camil (R$/kg) 50 2.4 45 2.3 40 2.2 35 2.1 30 2.0 Feb-17 May-1
Slide 45: Brazil Food Segment | Beans
Brazil Food Segment | Beans We Highlight quarterly and annual growth in volumes Beans - Volume and Net Price Camil Beans – Brazil Market Price vs. Camil Gross Price 300 7.00 250 6.00 5.00 200 Agrolink (RS/60kg) Camil (R$/kg) 4.00 150 3.00 100 2.00 50 1.00 0 - Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-1
Slide 46: Brazil Food Segment | Sugar
Brazil Food Segment | Sugar We highlight volumes growth in the quarter YoY Sugar – Volume and Camil Net Price Sugar – Brasil Market Price vs. Camil Gross Price 100 3.0 2.8 90 2.6 Esalq CEPEA SP (RS/50kg) 2.4 80 2.2 Camil (R$/kg) 70 2.0 1.8 60 1.6 1.4 50 1.2 40 1.0 Feb-17 May-17 Aug-17 Nov-17 Feb-18
Slide 47: Brazil Food Segment | Fish
Brazil Food Segment | Fish We Highlight volumes growth in the quarter (QoQ and YoY) Fish - Volume and Net Price Camil Fish – Gross Price Camil (R$/kg) 23 22 21 20 19 18 17 16 fev-17 mai-17 ago-17 nov-17 fev-18 mai-18 ago-18 nov-18 fev-19 Camill - Gross Price Source: Company Source: Company Fish – Hi
Slide 48: International Food Segment
International Food Segment We Highlight volumes increase in Chile International – Main Remarks International – Quarterly Volume Evolution (k ton) 717,935 Export Market Uruguay 620,559 Sales Volume • 4Q18: 131.0 k tons (-4.0% QoQ and -8.5% YoY) • 2018: 457.6 k tons (-16.5% YoY) Gross Price in BRL • 4
Slide 49: Financial Highlights
Financial Highlights Camil reaches Gross Profit of R$322mm (+13% YoY) with Gross Margin of 24.2% in the quarter and R$1.2 billion (+6.2% YoY) with 25.7% in the year Statements (in R$ millions) 4Q17 3Q18 4Q18 4Q18 vs 4Q18 vs 12M17 12M18 12M18 vs. Closing Date 28-Feb-18 31-nov-18 28-Feb-19 4Q17 3Q18 2
Slide 50: Financial Highlights: Gross Revenue
Financial Highlights: Gross Revenue Gross Revenue reached R$1.5 billion in the quarter (+16.9% YoY) and R$5.5 billion in the year (+1.2% YoY) 4Q18: Brazil – Gross Revenue by Category (R$mm) 2018: Brazil - Gross Revenue by Category (R$mm) 4Q18: International – Gross Revenue by Country (R$mm) 2018: In
Slide 51: Financial Highlights: COGS and Gross Profit
Financial Highlights: COGS and Gross Profit Camil reached Gross Profit of R$322mm (+13% YoY) with Gross Margin of 24.2% in the quarter and R$1.2 billion (+6.2% YoY) with a 25.7% margin in the year Net Revenue Quarterly Evolution vs. Costs (R$mm) Net Revenue Annual Evolution vs. Costs (R$mm) R$1,300
Slide 52: Financial Highlights: Costs and Expenses
Financial Highlights: Costs and Expenses Growth in SG&A in the periods driven by SLC Alimentos acquisition and freight expenses SG&A/Net Revenue Quarterly Evolution (%) SG&A/Net Revenue Annual Evolution (%) 25% 21% 20% 18% 18% 17% 17% 16%16% 17% 17% 16% 16%16% 15% 16%16% 16% 15%15% 15% 15% 13% 13%13
Slide 53: Financial Result and Indebtedness
Financial Highlights: Financial Result and Indebtedness Liability Management: Debt cost reduction Indebtedness (R$mm) Debt (in R$mn) 4Q17 3Q18 4Q18 4Q18 vs 4Q18 vs Indebtedness R$1.4 billion (+11.1% YoY and +3.1% QoQ): Closing Date 28-Feb-18 31-nov-18 28-Feb-19 4Q17 3Q18 • SLC Alimentos Acquisition
Slide 54: Profitability Evolution: Net Profit, EBITDA and Margins
Profitability Evolution: Net Profit, EBITDA and Margins We are focused in efficiency and sales growth recovery to achieve profitability increase Gross Margins Quarterly Profitability Evolution (%) Gross Margin Annual Profitability Evolution Gross Margins Quarterly Profitability Evolution (%) Annual
Slide 55: Investment Grade Indebtedness Profile
Investment Grade Indebtedness Profile Stable outlook by S&P mainly backed by better expectations on enhanced credit metrics, leverage reduction and stable margins, all supported by solid financial policies Main Financial Policies and Indebtedness Evolution (R$ mm, except otherwise indicated) Constan
Slide 56: Solid Historical Cash Flow Generation
Solid Historical Cash Flow Generation The company’s seasonal cash flow is mainly explained by (i) its working capital seasonality and (ii) the historical capex spent in assets acquisitions (M&A) Breakdown of FCF1 (R$ mm) and EBITDA-to-FCF conversion (%) 315% 322% 58% 36% 143% 235% 67% 123% 223% 47%
Slide 57: Appendix B: Industry Highlights
Appendix B. Industry Highlights
Slide 58: Resilient Demand and Favorable Market Dynamics: Rice Brazil
Resilient Demand and Favorable Market Dynamics Rice Industry | Brazil The rice industry in Brazil is characterized by a combination of (i) resilient demand based on cultural identity and (ii) high and stable production levels Largest Producers in the World1 National Production Ton mm Ton mm 210.3 16
Slide 59: Rice Industry | Peru, Chile and Uruguay
Resilient Demand and Favorable Market Dynamics (Cont’d) Rice Industry | Peru, Chile and Uruguay Peru, Chile e Uruguay present: (i) resilient market e (ii) potential to consolidate Domestic Peru – Total Consumption1 (‘000 tons) Market Growth Potential: CAGR13-17 : 1.6% P Broad market P migration to p
Slide 60: Beans Industry | Brazil
Resilient Demand and Favorable Market Dynamics (Cont’d) Beans Industry | Brazil With stable production levels, the beans market in Brazil is also characterized by a combination of: (i) resilient demand based on cultural identity and (ii) supply stability National Production Average Productivity Ton
Slide 61: Sugar Industry | Brazil
Resilient Demand and Favorable Market Dynamics (Cont’d) Sugar Industry | Brazil Brazil has a leading position in sugar production and consumption, presenting: (i) resilient demand and (ii) supply stability Largest Producers in the World1 National Production Ton mm Ton mm CAGR15/16-17/18E: 6.8% 1º Pr
Slide 62: Fish Industry | Brazil
Resilient Demand and Favorable Market Dynamics (Cont’d) Fish Industry | Brazil The fish industry in Brazil is consistently growing, driven by the trend of the diversification of protein sources and increase in the consumption of food with higher nutritional value National Production Per Capita Prote
Slide 63: Appendix C: Selected Comparable Companies
Appendix C. Selected Comparable Companies
Slide 64: Selected Comparable Companies
Selected Comparable Companies (figures in R$ mm1) Brazil LatAm (ex-Brazil) Ratings (Fitch/Moody's/S&P) NA / NA / BB- BB- / B1 / BB- BBB- / Ba2 / BBB- BB- / WR / BB- A / NA / NA BBB / Baa2 / BBB AAA / WR / BBB AA- / NA / AA- NA / NA / NA NA / NA / NA Ticker BOVESPA:CAML3 BOVESPA:BEEF3 BOVESPA:BRFS3 B
Slide 65: Investor Relations
Investor Relations Phone: +55 11 3039-9238 +55 11 3039-9237 E-mail: [email protected]