Institutional presentation 080413 eng final impressão
11Vigor Alimentos S.A.April, 2013
22This presentation contains forward-looking statements relating to the prospects of thebusiness, estimates for operating and financial results, and those related to growthprospects of Vigor Alimentos. These are merely projections and, as such, are basedexclusively on the expectations of Vigor’s management concerning the future of thebusiness and its continued access to capital to fund the Company’s business plan. Suchforward-looking statements depend, substantially, on changes in market conditions,government regulations, competitive pressures, the performance of the Brazilianeconomy and the industry, among other factors and risks disclosed in Vigor’s fileddisclosure documents and are, therefore, subject to change without prior notice.Disclaimer
33IntroductionMarket and Strategy OverviewFinancial PerformanceAppendix
44Future94 years of growth in the Brazilian food market1917operations start1982Vigor reaches installedcapacity of 1.0 millionliters/day and acquires Leco 1990a199520091984a19861917a198220121995acquisition of Refino deÓleos Brasil20072012Delisting of VigorCombination of the activities ofJBS and Bertin, andconsequently of Vigor1984Vigor and Leco IPOBertin S/A acquirescontrol of VigorAcquisition of SerrabellaCorporate restructuring in whichFábrica de Produtos AlimentíciosVigor becomes a full subsidiary ofVigor Alimentos S.A.Relisting of Vigor1917a1982
55Traditional brands operating in diverse market segmentsConsumer sectorVigor Today Main BrandsFoodservice sectorEmployees 3,423Net revenues – 2012 R$ 1.330,2 MM / +8%1Gross Profit – 2012 R$ 394,7 MM / +27%1Note: 1. Growth compared to same period last year.EBITDA – 2012 R$ 68,0 MM / +54%1EBITDA Margin – 2012 5,1% / +1,5 p.p.
66Resilient market with strong growth potentialApproximately 50% of total distribution through independent retailersStrengths and competitive advantagesBrands with excellent reputation and high expansion potentialExperienced and independent management team, with solid corporate governancestandardsDiversified portfolio with high value-added products
77IntroductionMarket and Strategy OverviewFinancial PerformanceAppendix
88High value-added and diversified products mixNote: 1. Dairy (yogurt, fermented milk, desserts and petit suisse, “requeijão” cheese spread,parmesan, special cheese, “minas” cheese, cream cheese, fondue and creams) / 2. Spreads(margarines, blend, butter, fats and mayonnaise) / 3. Milk: UHT milk and pasteurized / 4. Others(pastas, sauces, juices, chocolate milk and others).Dairy1Higher margins(%)Leading brandsin categoriesFocus ininnovation andproductlaunchingSpreads2High householdpenetration levelHelps diversifythe cost matrixPossible to add“brand” equityUHT Milk3Low volumeSpecific channelsMargin understrict disciplineOthers4Juices, sauces,chocolate milkand othersTotal: R$ 1.330,2 millionNet Revenue – 2012Dairy56%Spreads30%UHT Milk8%Others6%
99KA; 10%Wholesale/Distributor17%FoodService;24%Others; 3%Independent retailers and food service…increasing distribution through independent channelsNet revenues by distribution channel – 2012• Independent retailers are the fastest growing distributionchannel in Brazil• Vigor currently has c. 20,000 retail clients• Significant opportunities in the food service segment, whichcurrently shows low market penetration and high growth ratesTotal: R$ 1.330,2 billion49% of sales toindependentretailers......................................................
1010Operational excellence by adding value to the production chainDistribution centersSeven distribution centersDistribution centers positioned close to largeconsumer markets14 TSPsStrategic positioningProduction unitsApproximately 3,300 employeesSeven plants with and installed capacity of over47,000 tons per monthSolid expansion capacityFour milk collection centers1,280 producersApproximately 18 million liters collected every monthMilk collection centersDiversified supplier baseMilk collection centersDistribution centesDairy production unitOils production unitMixed production unitPoint-of-sale presenceOver 20,000 active clientsSales channel and consumer profile diversificationSpread distribution in retail.................................................................. . . . . . . . . . . . . . . . . . . . . . . .. . . . . ...................47720k
1212BrazilReference brand inparmesan cheese(unaudited category)1Consolidated position in key categoriesSource Nielsen - 20121.Based on total revenues:2. Regular family liquid yogurt,not including functional yogurts3. Natural yogurt, not including functional yogurts4. “Requeijão” cheese spreadsParmesan cheese“Requeijão” cheese spreads – market share1,4Brazil Metropolitan area of São Paulo15% 25%Total market R$ 967 mm11Natural yogurts – market share1,3Brazil Metropolitan area of São Paulo15% 25%Total market R$ 315 mm131 liter yogurts – market share1,2Brazil Metropolitan area of São Paulo7% 29%Total market R$ 734 mm21
1313Strong presence in Brazil’s most important regions leveragesVigor for further expansion…Importance of the macro regions to the market and to Vigor – in valueSource: Nielsen – 2012 | BrazilConsidered categories: yogurt, fermented milk, dessert, petit suisse, “requeijão” cheese spread, cream cheeses and “minas” cheese16% 15%10%16%18%17%7%4% 4%10%36%30%9%6%Northeast ES+ MG + RJ Countryside RJ Metropolitan area SPMetropolitan area SPCountryside +Coast South MidwestMarket Vigor
1414Our vision and strategic orientationBig food Company, one of the biggest dairy companies in BrazilCategories and Segments• Development of innovation according to seasonal waves• Further development of Food Service segmentGeographic expansion• Improve our presence in markets close to core market (SP)• Lower the company’s dependence of São Paulo marketInvestment Plan • Increase in productive capacity, with continuous investments in keyproduct linesEBITDA Margin • Continuously increase in margins to surpass historic levelsCapital Structure• Increase stock liquidity• Reduction of cost of capital• Return on Invested Capital to shareholders Policy
1515IntroductionMarket and Strategy OverviewFinancial PerformanceAppendix
1919Investment on Itambé Alimentos S.A.Shareholder StructureHighlights of the Transaction•CCPR (sellers) created Itambé S.A. (Equity ofR$410 MM)•Enterprise Value: R$960 MM•Net Debt: R$550 MM•Equity Value: R$410 MM•Vigor invests R$410 MM on Itambé S.A. inexchange for 50%•Capital will be used to reduce debt to R$140 MM•Operation is subject to the approval of the anti-trust entity (CADE)Itambé S.A.Vigor S.A.50%CCPR50%Itambé S.A.100%CCPRItambé S.A.R$410 MMVigor S.A.Shares1 21233
2020IntroductionMarket and Strategy OverviewFinancial PerformanceAppendix
2121Experienced ManagersGilberto Xandó – CEOGilberto Xandó holds a Bachelor degree in BusinessAdministration from Fundação Getúlio Vargas, a MastersDegree in Retail from USP/FEA and is specialized in BusinessManagement PGA from Fundação Dom Cabral/INSEAD, inFrance. He has large multidisciplinary experience and hasworked in the areas of Finance, Controlling, TradeMarketing, Marketing, Commercial (Brazil and othercountries) and Business Unit Management at Natura, SadiaS.A. and Coopers & Lybrand. In July 2011 he became CEO ofVigor.Maurício HassonCFO and IROMaurício holds a bachelor degree in mechanic andproduction engineering by PUC-RJ and holds a MBA degreeby The University of Chicago Booth School of Business. Hehas over 13 years of experience in Investment Banking andCorporate Finance, having worked for the past seven yearsat Rothschild and Bear Sterns in the advisory of importantM&A transactions. He became the CFO of Vigor in April2012.Anne NapoliMarketing DirectorAnne has graduated from the European Business Programand Insead and has 18 years of experience in theconsumer sector. Involved in marketing strategy,innovation projects, communication planning andregional coordination, Anne has worked for seven yearsat Unilever and six at Danone, becoming MarketingDirector of Vigor in December 2011.Darlan CarvalhoDiretor de Supply chainDarlan holds a bachelor degree in Accountancy and agraduate degree in Administration. He also holds a MBAdegree in Business Management and has worked for 29years at Sadia, in the supply chain and logistics areas,being responsible for the whole logistics structuring of BRFoods. He became Supply Chain Director of Vigor inSeptember 2011.Gustavo TheodozioAdministrative DirectorGustavo holds a Bachelor degree in BusinessAdministration by PUC-PE and a MBA in BusinessManagement by FGV-PE and Accountancy and Controllingby UF/PE. Gustavo has worked in companies such asBompreço S/A Supermercado do NE, Grupo JCPM andSistema do Jornal do Comércio de Comunicação. In 2010and 2011 he worked as the CFO for JBS’ leather divisionand he is currently the Comptroller and AdministrativeDirector of Vigor.Paulo BotelhoIndustrial DirectorPaulo has been working at Vigor for over 29 years. Hestarted as an intern and has acted as maintenance superior,maintenance manager and industrial manager, becomingindustrial director in June 2011.Luiz GennariSales DirectorLuiz Henrique holds a Statistics degree from UFSCar, and amasters degree in Marketing from ESPM, and has over 19years of experience in the consumer sector, involved inmarket research, trade marketing and sales. Luiz has workedfor 15 years at Sadia, and for 4 years at Cia J.Macedo.Last year, Luiz was appointed, at BRF’s Dairy productsdivision “Batavo”, Sales Director (Brazil), becoming SalesDirector of Vigor in June 2012.
2222Wesley BatistaChairmanJoesley BatistaMember elected by FBVicente Falconi CampoIndependent memberCristiana ArcangeliIndependent memberMr. Wesley Batista became CEO of JBS’ global operations inFeb/2011. Prior to that, he was the president and CEO of JBS USAafter Swift & Company’s acquisition in 2007. Under hismanagement, JBS USA more than doubled its revenues in 4 years,acquiring Smithfield Beef, JBS Five Rivers Feedlot, a majority stakein Pilgrim’s Pride, as well as expanding its Australian operationsacquired along with Swift. During the previous fifteen years, Mr.Batista acted as Chief Operating Officer (COO) of JBS’ beefoperations in Brazil and Argentina.Mr. Joesley Batista is the current Chairman of JBS, elected onJanuary 2nd, 2007. He was also the CEO of JBS SA between 2006and 2011, a period in which revenues have grown by 1,200%, andthe Company has made different transformational acquisitions inNorth America and Australia, in addition to going public in 2007. Mr.Joesley Batista has been working at the JBS Group since 1988.Betânia Tanure de BarroIndependent memberMr. Vicente Falconi Campos is a Board member of Ambev andmember of tbe Institutional Board of Managerial Development atINDG, as well as an Emeritus professor at the Federal Universityof Minas Gerais. Mr. Campos has been a Board member of Sadiaand Unibanco and has received awards from different publicorganizations, both from the Executive and Legislative branches,and business associations, as well as having published six bookson Business Administration. Bachelor in Mining and MetallurgyEngineering from the Federal University of Minas Gerais, as wellas a M.Sc. and Ph.D. from the Colorado School of Mines (EUA).Professor at PUC MG, PhD from the Brunel University (England),Post-graduate in Management Consulting by HenleyManagement College (England), specialized in management byINSEAD, psychologist by PUC – MG. Works as a BTA-certifiedtechnical consultant, and professor at national and internationalcompanies such as: ArcelorMittal, Banco Santander, BancoCentral do Brasil, Banco Itaú, Brasilprev, Embraer, Gerdau,Kimberly-Clark, IBM, Natura, RBS, Sadia, Samarco, TAP, Usiminas,Vale, Via Retail and Weg. Board Member at RBS and GOL LinhasAéreasMrs. Cristiana Arcangeli has graduated in Dentistry withspecialization in Endodontics and has been working in thecosmetics segment for over 25 years, in which she has createdbrands such as Phytoervas, Éh Cosméticos and Beauty’in. Mrs.Arcangeli has received different awards for her influence in thecosmetics and fragrances segment and for her entrepreneurialactions, as well as being the first female member of theBrazilian Marketing Academy, a volunteer at Endeavor,Board of Directors with well-known membersMarício Tiomno TolmasquimIndependent memberLuiz Antonio Rodrigues EliasIndependent memberMr. Mauricio Tiomno Tolmasquim was Executive-Secretary ofthe Ministry of Mining and Energy, Board Member at ItaipuBinacional and Furnas Centrais Elétricas (Hydro Powerhouses),coordinator of the technical group responsible for formulationand implementation of a wide reform of the electric energysector regulation. Mr. Tolmasquim was honored from Itamaratywith the Great Officer from Rio Branco Order. He is also author,co-author, and organizer of over 20 books and more than 100technical articles.Mr. Luiz Antonio Rodrigues Elias is an Economist and HeadResearcher at INPI (National Institute for Intellectual Property).Since 2007 is Executive Secretary of the Ministry of Science,Technology and Innovation. Before that, was Secretary ofTechnological Development and Innovation from the sameMinitry (2006), Director of Federal Railroad and Co-Secretary ofthe Social Development Division of Rio de Janeiro Municipality.