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 51 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 12 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 Segmented commercial strategy More valueadded products Diversified product portfolio Long-term client relationship Sanitary licenses Cost control Deboning and slaughtering capacities Better time to market Logistics Logistics Control Control CIF Exports Domestic distribution for regional retailers Access to hard-to-reach markets 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 Food Services: portion controlled Industry: ingredients for further food processors with high degree of customization 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% 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 National Accounts Division: wholesalers, supermarkets, industry, nationwide food service 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. 32 33