Public Meeting Presentation

Transcription

Public Meeting Presentation
Minerva S.A.
2007 Public Meeting
Agenda
History and Corporate Profile
Novo Mercado and IPO
Investments Highlights
3Q07 Results
Why Minerva?
2
Perfil eand
History
Histórico
Perfil
e Histórico
Corporate
Profile
Minerva at a Glance
f
One of the leading beef processors in Brazil
f
3rd largest Brazilian exporter of beef and beef byproducts
in 2006 with a higher growth rate than that of Brazilian
beef exports
f
f
Location
New Plants
Redenção – Pará
(2H08)
57% expansion of
organic capacity in
2008
Brazil’s 4th largest and world’s 8th largest beef producer,
with daily slaughtering capacity of 5,000 heads of cattle
and daily processing capacity of 1,200 tonnes, or
approximately 7,500 heads of cattle
Rolim de Moura – Rondônia
(2H08)
Strong and experienced management team with proven
track record
Araguaína - Tocantins
(2Q 2007)
Palmeiras de Goiás
2007 Gross Revenue Breakdown (1)
International
Market - 74%
Goiás
Batayporã
Mato
Grosso do
Sul
Olimpia
Barretos
José Bonifácio
São Bernardo do Campo
São Paulo
Domestic
Market - 26%
f Year-to-date gross revenue of R$ 1.5 billion
(1) For the 12 months ended in September
4
Plants
Distribution
Centers
Company History
Origins
Creating
a Beef Processing
Company
Production Growth, Geographic Expansion and
Product Diversification
2004: Beginning of
operations of Palmeiras de
Goiás production facility,
one of Latin America’s most
modern facilities
1957: Vilela de
Queiroz family
starts cattle
ranching and
transportation
activities
1992: Acquisition
of first
slaughterhouse
and Minerva
establishment
1999:
Acquisition of
José Bonifácio
production
facility
1,192
2002
820
627
159
2003
27
2001: Leasing of
Cajamar
production facility
5
1,538 (1)
940
464
(1) For the 12 months ended in September
2006: Leasing of
Batayporã
production facility
Investments and
Consolidation
Net Revenue (R$ M)
2005
2007: USD 200m Bond
Emission. Construction of Rolim
de Moura production facility,
acquisition of production
facilities in Tocantins and Pará,
cooked frozen JV and leasing of
a tanning plant located in
Fernandópolis, State of São
Paulo.
Novo Novo
Mercado and
Mercado
IPO
IPO – Conclusion of the Offering
On July 20, 2007 Minerva joined the Novo Mercado and raises R$ 333 million for projects to
increase its operating capacity,
Offering Structure
Shares Offered
International sales efforts under Rules 144A/Reg S
IPO in Brazil
24,000,000 common shares (primary offering 20,000,000 and secondary offering
4,000,000) with voting and 100% tag along rights (Novo Mercado)
R$ 18.50/share
Price
Offering Size
Approximately R$ 444.0 million, R$370.0 million from the primary offering and R$
74.0 million from the secondary offering
83% primary and 17% secondary
Offerings
Selling Shareholders
VDQ Holding S.A.
July 18th
Pricing
Lock-up Period
Use of Proceeds
180 days for selling shareholders, management and Minerva
Increase operating capacity, potential acquisitions and working capital
... working capital and finance potential acquisitions
7
Shareholder Structure
Free float of 32%, and 55% of the outstanding shares held by foreign investors
Pre-IPO
Pre-IPO
Current
Current
Vilela de Queiroz
Family – 7.3%
Foreign investors – 17.7%
Institutional Investors
Brazil – 13.8%
Individual Investors
Brazil – 0.5%
VDQ Holdings – 92.7%
Market Cap: R$ 1 billion (75 million shares)
Market Maker: Credit Suisse
(1) 12/05/07
8
VDQ Holdings – 68.0%
Destaques
de
Destaques
Investments
de
Perfil
e
Investimento
Investimento
Highlights
Histórico
Investments Highlights
Brazil’s
Competitive
Advantages in
the Beef
Industry
Experienced
Management
Natural
Consolidator
10
Modern,
Strategically
Located
Facilities
Production
Flexibility and
Efficient
Logistics
Presence in
Most Profitable
Markets
Brazil: Unique Competitive Position …
History of Competitive Cattle Raising Costs
US$ / Kg
3.14
2.85
2.41
1.45
1.50
Argentina
Brazil
Vast area and abundant water available
for cattle ranching
1.70
Uruguay
Unique Country Advantages
Australia
Canada
USA
Lowest costs: cattle acquisition, land and
labor
Source: USDA
Land Availability
% of Total (in million hectares)
44%
41%
Extensive cattle ranching, higher quality
and lower dependence on grain prices
40%
32%
30%
30%
62%
83%
100%
56%
59%
60%
Canada
Russia
68%
70%
70%
China
USA
Favorable climate to speed up maturity
for slaughtering
38%
17%
Brazil*
Argentina Australia
Current Used Farmland
Source: FAO
*excluding Legal Amazon
11
EU
Unused Farmland
India
… With Strong Potential for Growth...
Largest Beef Producers
Largest Commercial Herd in the World – 2007E
180
Tons of Carcass Equivalent
Million Heads
139
97
12,000
89
28
USA
Argentina
EU
11,981
11,318
11,969
11,911
- 1.1%
10,000
9,000
China
11,261
11,000
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Brazil
12,039
Australia
8,304
8,000
Source: USDA
7,000
6,000
Slaughter Rate – 2007E
8,245
9,020
8,592
8,060
8,090
9,850
9,470
8,065
8,000
7,975
7,385
6,305
6,759
7,115
7,850
7,492
33.4%
27.9%
7,900 - 4.9%
5,000
46%
21%
22%
24%
27%
27%
30%
33%
37%
38%
4,000
3,000
2,800
3,130
3,200
2,000
1,000
1,670
2003
1,590
2004
1,525
3,175
3,100
1,430
2005
1,380
2006
3,125
1,370
2007E
11.6%
- 18.0%
2008E
8%
Brazil
India South
Africa
Source: USDA
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Brazil Mexico Argentina Canada Australia Europe USA
China Russia
Source: USDA
USA
European Union
China
Argentina
Russia
… Supporting the Brazilian Leadership in the Beef
Market
Fastest Growing Exporter
Exports - Brazil x Minerva (USD FOB Million)
2,500
7.6%
2,400
6.0%
2,000
4.6%
4.5%
7.9%
6.8%
5,757
5.7%
Tons of Carcass Equivalent
4,859
4,448
1,500
1,450
3,760
2,580
1,000
650
1,895
2,060
525
500
400
88
92
148
227
304
438
383
0
2002
2003
Brazil
Source: USDA
13
Australia
2004
2005
Argentina
2006
USA
2007E
Uruguay
2001
2002
2003
Minerva USD FOB Million
2004
2005
2006
9M07
Brazil USD FOB Million
Source: SECEX (Fresh Beef / Processed Beef / Leather).
Growth of Consumption and New Markets
Still Limited Access to World Markets
Domestic Market: Low per Capita Consumption
Meat Kg / capita (annual)
% of Total World Imports (2007E – Tons of Carcass Equivalent)
37.3
37.6
26%
36.9
36.4
19%
13%
34.5
34.8
6%
4%
2003
13%
2004
2005
2006
2007E
Egypt South Korea
2008E
Source: USDA
7%
Mexico
Japan
EU
Source: USDA
Per Capita Beef Consumption (kg/year) – 2007E
65.9
56.0
42.6
37.3
37.0
23.3
Argentina
Source: USDA
14
USA
Uruguay
Brazil
Australia
Mexico
17.5
EU
16.8
Russia
9.5
Japan
5.9
China
Russia
USA
Strategically Located Modern Facilities
f All production facilities certified for exports
Barretos – SP
Araguaína – TO(1)
Minerva - 2008
Slaughtering: 7,850 heads/day
Deboning: 11,600 heads/day
Redenção – PA(2)
Rolim de Moura – RO(2)
fSlaughtering: 1,000 heads/day
fSlaughtering: 850 heads/day
fDeboning: 1,677 heads/day
fDeboning: 886 heads/day
fDawn Farms Joint Venture
Production facilities
Distribution Centers
fSlaughtering: 1,000 heads/day
fDeboning: 1,582 heads/day
fSlaughtering: 1,700 heads/day
Live cattle exports
operations
fDeboning: 1,582 heads/day
Cajamar – SP
José Bonifácio – SP
Palmeiras de Goiás – GO
Batayporã – MS
fSlaughtering: 900 heads/day
fDeboning: 1,392 heads/day
(1) End of 2007
(2) 2H08
15
fSlaughtering: 1,500 heads/day
fSlaughtering: 900 heads/day
fDeboning: 2,532 heads/day
fDeboning: 1,266 heads/day
fDeboning: 633 heads/day
Production Flexibility and Efficient Logistics
Production
Production Flexibility
Flexibility
Product
Product Customization
Customization
16
ƒ Segmented
commercial
strategy
ƒ More valueadded
products
ƒ Diversified
product
portfolio
ƒ Long-term
client
relationship
ƒ Sanitary
licenses
ƒ Cost control
ƒ Deboning and
slaughtering
capacities
ƒ Better time to
market
Logistics
Logistics Control
Control
ƒ CIF Exports
ƒ Domestic
distribution for
regional
retailers
ƒ Access to
hard-to-reach
markets
ƒ Proximity to
end clients
Ability to Access the Most Profitable Markets…
International Market
f 3rd largest Brazilian exporter of beef products in 2006
f Exporting to approximately 80 countries and 600 active
clients
f Direct relationship with customers instead of big traders
f Pioneer in significant importing markets
f Developed Countries: Client Segmentation
ƒ Food Services: portion controlled
ƒ Industry: ingredients for further food processors with high
degree of customization
ƒ Retail: shelf products, under Minerva brand or third-parties for
private label
f Developing Countries: Geographic and Ethnic Segmentation
Domestic Market
Top 5 Exporters
2006
9M07
JBS
16%
Bertin
15%
1.1%
1.6% 1.4% 0.7%
3.2%
3.3%
4.3%
25.0%
6.7%
Minerva
8%
9.2%
23.2%
Marfrig
7%
9.9%
10.2%
ƒ Kosher, Halal
Independência
4%
Source: SECEX
17
Minerva’s Export
Destinations
European Union
Venezuela
Iran
Other Africa
Russia
Asia
Saudi Arabia
Oceania
Egypt
Algeria
Other Europe
Lebanon
Israel
Other America
Ability to Access the Most Profitable Markets (cont’d)
International Market
f Established distribution channels
ƒ National Accounts Division: wholesalers, supermarkets, industry,
nationwide food service
ƒ Distribution Division with two distribution centers:
Domestic Market
Share of Small Retail (up to 9 check-outs) domestic
sales (%)
36
27
30
22
9 Estimated 12,500 customers in 600 cities (São Paulo,
Minas Gerais, Paraná)
9 Estimated 1,500 customers in 50 cities (Goiás, Brasilia)
f “One Stop Shop”
2004
2005
2006
9M07
f Customer diversification and focus on smaller customers
f Diversified product portfolio of approximately 4,000 items
Domestic Sales as percentage of Gross Revenue (%)
35
29
23
2006
18
24
3T06
3T07
Oct/Nov
Natural Consolidator
Growth of Slaughtering and Deboning Capacity
Thousand heads of cattle
11.6
Slaughtering
Deboning
6.2
1.0
1.7
1992
1.9
3.1
1999
3.7
8.4
7.5
5.2
4.3
3.4
7.8
Fernandópolis, SP
Leasing of tanning plant in August 2007
2004
2006
2007
Market Share - Slaughtered Heads of Cattle - 2006
Other – 78.4%
Redenção, PA
Acquisition in April 2007
Barretos, SP
Joint-venture with Dawn Farms
1.9
2001
Araguaína, TO
Acquisition in April 2007
2008
Exports Market Share - 2006
JBS – 16.0%
Other – 50.3%
JBS – 8.6%
Bertin – 5.1%
Bertin – 14.6%
Marfrig – 3.8%
Independência
2.1%
Minerva
2.0%
Minerva
7.6%
Independência
4.2%
Source: Brazilian Agriculture Department
19
Source: SECEX
Marfrig – 7.2%
CAPEX
Investments to increase production capacity and focus on acquiring
companies with higher value-added products
155.0
95.0
40.5
40.8
13.0
2004
2005
2006
2007E
2008E
Total 2007 / 2008 Expenditures Breakdown
2007E – R$95 MM
X Rolim de Moura Construction
X Araguaína acquisition / expansion
X Biodiesel plant construction
X Cooked frozen plant construction
20
2008E – R$155 MM
X Rolim de Moura and Araguaína final stages
X Redenção plant construction
X New Plant acquisition
X Biodiesel and Cooked frozen final stages
Resultados
Resultados
3Q07
3T07
Resultados
3T07 3T07
Results
Gross Revenue
Strong organic growth of 31.4% in gross revenue with a higher share of the
domestic market in the quarter
37%
1,538
25%
1,132
1,126
907
74%
73%
75%
31%
437
77%
333
71%
76%
24%
29%
3Q06
3Q07
23%
9M06
27%
9M07
Domestic market
*For the 12 months ended in September
22
25%
Sep/06*
Export market
26%
Sep/07*
Gross Revenue Breakdown
Larger share of the leather division in the domestic market and the live cattle
division in the export market
Domestic Market
9M06
R$ 211.3 million
Resale of
Third-Party
Products
11%
9M07
R$ 300.6 million
+42%
Resale of
Third-Party
Products
Other
8%
1%
Leather
Leather
12%
5%
Beef
80%
Beef
83%
Export Market
9M06
R$ 695.3 million
9M07
R$ 831.7 million
+20%
Live Cattle
Live Cattle
5%
16%
Leather
Leather
9%
5%
Beef
86%
23
Beef
79%
Export Distribution
Greater export diversification, with Russia and emerging markets playing a
larger role, and lower exposure to the European Union
Japan – 2.2%
Hong Kong – 3.0%
Other in Europe – 1.9%
Saudi Arabia – 1.6%
Israel – 3.1%
Oceania – 0.0%
European Union – 40.2% Algeria – 4.3%
America – 3.2%
European Union – 25.0%
Asia – 6.7%
Other in Asia – 3.2%
Algeria – 8.4%
Venezuela – 9.2%
Lebanon – 5.8%
Egypt – 10.9%
Lebanon – 9.9%
Russia – 13.3%
Exports - 9M06
24
Other in America – 1.1%
Other in Africa – 0.7%
Iran – 3.2%
Israel; 3.3%
Oceania – 0.1%
Libyan – 3.2%
Other in Europe – 1.4%
Saudi Arabia – 1.6%
Russia – 23.2%
Egypt – 10.2%
Exports - 9M07
Gross Profit and Gross Margin
Increase of 25% in gross profit in 3Q07 despite the unfavorable exchange rate
and high raw material prices.
31%
297
12%
217
226
194
23.4%
21.4%
21.7%
21.5%
9M06
9M07
Sep/06*
Sep/07*
25%
63
78
20.8%
19.3%
3Q06
3Q07
Gross Profit
*For the 12 months ended in September
25
Gross Margin
EBITDA and EBITDA Margin
In the 12 months ended September 30, 2006 and 2007, EBITDA margin remained
stable at 8.5%
33%
117.2
-5%
88.4
83.7
10.7%
21%
23.6
10.6%
88.4
10.2%
8.7%
8.5%
8.5%
8.2%
6.4%
65
59
28.5
7.8%
7.0%
3Q06
3Q07
9M06
9M07
Sep/06* Sep/07*
EBITDA
*For the 12 months ended in September
26
7.7%
6.9%
65
6.1%
58
5.7%
88
8.4%
122
135
8.8%
112
8.5%
117
88
55
1Q05 2Q05 3Q05 1Q06 4Q05 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
EBITDA Margin
Adjusted Net Income and Net Margin
Adjusted net income** grows by 77% in 9M07, accompanied by a net margin of
5%, up by 1.5 p.p.
383%
75.8
77%
50.9
28.7
936%
14.5
1.4
3.5%
5.0%
15.7
5.5%
1.5%
3.6%
0.5%
3Q06
3Q07
9M06
Adjusted net income
* For the 12 months ended in September
** Excluding IPO and bond issue expenses
27
9M07
Sep/06*
Net Margin
Sep/07*
Debt
In September, the Company had R$ 463 million cash and cash equivalents, and
total debt of R$ 562 million, 11% of which is short-term and 89% long-term.
392
5.1x
3.3x
2.9x
353
0.8x
295
219
99
12
2004
2005
Net Debt (R$m)
28
2006
3Q07
Net Debt / EBITDA
2008
37
32
27
2009
2010
2011
2012-2015
Debt Amortization (R$m)
PorWhy
que
Minerva?
Por que
Minerva?
Minerva?
Minerva’s Differentials
Renowned for
quality, broad
and tailor-made
product portfolio
Client
Oriented
Return
Maximization from
“Disassembly
Process”
Greater possibilities for
acquisitions.
Economies of scale and
focus on products with
higher value-add
Acquisitions and
Consolidation
4
Better value
proposition
Production
Flexibility
Integrated Logistics
1
30
3
2
Multiple Growth Opportunities
for Minerva
30
IR Contact
Speakers
Fernando Galleti de Queiroz – CEO
Carlos Watanabe – CFO and IRO
Ronald Aitken – IR Superintendent
Investors Relations
Site: www.minerva.ind.br/ir
e-mail: [email protected]
Phone: +55 17 3321-3412
31
Disclaimer
This presentation contains forward-looking statements relating to the prospects of
the business, estimates for operating and financial results, and those related to
growth prospects of Minerva. These are merely projections and, as such, are based
exclusively on the expectations of Minerva’s management concerning the future of
the business and its continued access to capital to fund the Company’s business
plan. Such forward-looking statements depend, substantially, on changes in market
conditions, government regulations, competitive pressures, the performance of the
Brazilian economy and the industry, among other factors and risks disclosed in
Minerva’s filed disclosure documents and are, therefore, subject to change without
prior notice.
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