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DisclaimerThis material is a presentation of general information about Marfrig Global Foods S.A. and its consolidated subsidiaries (jointly the “Corporation”) on the date hereof. The
information is presented in summary form and does not purport to be complete.
No representation or warranty, either expressed or implied, is made regarding the accuracy or scope of the information herein. Neither the Corporation nor any of its
affiliated companies, consultants or representatives undertake any liability for losses or damages arising from any of the information presented or contained in this
presentation. The information contained in this presentation is up to date as of June 30, 2018, and, unless stated otherwise, is subject to change without prior notice. Neither
the Corporation nor any of its affiliated companies, consultants or representatives have signed any commitment to update such information after the date hereof. This
presentation should not be construed as a legal, tax or investment recommendation or any other type of advice.
The data contained herein were obtained from various external sources and the Corporation has not verified said data through any independent source. Therefore, the
Corporation makes no warranties as to the accuracy or completeness of such data, which involve risks and uncertainties and are subject to change based on various factors.
This presentation includes forward-looking statements. Such statements do not constitute historical fact and reflect the beliefs and expectations of the Corporation’s
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Although the Corporation believes that the expectations and assumptions reflected by these forward-looking statements are
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depending on the case.
2
3
The Transaction
Sale of Keystone Foods to Tyson Foods ("Transaction"), except the beef patty
facility in North Baltimore, Ohio, USA
The Enterprise value considered for this Transaction, excluding the beef patty
facility, was US$2.4 billion
EV/EBITDA(i) transaction multiple of 10x
The retention of operations of the North Baltimore facility facility is in line with
Marfrig’s strategy
▪ One of the largest U.S. plants with an annual capacity of 91,000 tons of beef
patties (fresh and frozen)
▪ State of the art facility dedicated to the foodservice channel
▪ Annual revenue of around US$300 million (11% of Keystone’s total revenue)
▪ Improvement of National Beef portfolio in the U.S.
(i) Adj EBITDA of the LTM not including the beef patty of North Baltimore
4
RationaleThe Transaction
▪ Strengthens Marfrig's capital structure by reducing debt and improving
cash generation
▪ The retention of the North Baltimore, Ohio facility is in line with Marfrig’s
renewed strategy focus on beef protein
▪ It is one of the largest beef patties facility in the country and expands
Marfrig’s portfolio in the U.S.
A simpler, more focused company with a capital
structure appropriate to the sector
Track record of successKeystone
5
▪ Value of the company
increased by ~ 2.3x
during Marfrig’s
management
▪ Improving profitability with
value generation
▪ Retention of the U.S. beef
patty plant which
represents around 11% of
Keystone’s total revenue
Keystone - Acquisition Value by Marfrig
Keystone Value After Transactions
Tyson Transaction
Sale of logistics assets
US$
mill
ion
Sale of the European assets to Moy Park
+127 % Beef pattyplant
3.9
3.0
4.2x
2.6x
-2.0x
-1.0x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2Q18 2Q18 AfterTransaction
16.3
7.9
(8.4)
Net Debt 2Q18 Keystone Sale Nebt Debt After Transaction
- 51%
6
Debt and Leverage(Basis 2Q18) after Transaction
LTM
EB
ITD
A a
nd
Lev
era
ge(R
$ b
illio
n a
nd
“x”
)
NET
DEB
T(R
$ b
illio
n)
(MRFG consolidatedwith National Beef +
Keystone)
(MRFG consolidatedwith National Beef
after the transaction)
*
* Enterprise Value of US$2,4 billion excluding minority interest
The Brazilian company in the sector
with the lowest leverage ratio** It does not include the beef patty facility of North Baltimore
**
4.2US$ billion (2.2) 2.1
Marfrigafter strategic projects
7
Net Revenue*
R$
40 billion
* Annualized 2Q18 data
EBITDA Adj*
3.7 billionR$
EV/EBITDA(a): 5.5x
EV : 20.2
Debt after transaction: 7.9 (-)
Minorities(b): 3.2 (-)
MARKET CAP theoretical
9.0 billionR$
(b) Based on the historical average transaction multiple of the sector(a) Despite the different methodologies that can be used (Equity Method, Discounted Cash Flow,
others), for this presentation purposes we use as a reference the acquisition value of the
National Beef control in June 2018, without disregarding the premium for the control.
R$
bill
ion
(=)
Perspectives2nd half 2018
8
Note: Assumes completion of Keystone's transaction by the end of 2018
The Brazilian company in the
sector with the lowest
leverage ratio
2H18
Revenue (R$ billion) 20 to 21
Adj EBITDA Margin (%) 9 to 10%
Expectation of Marfrig's results is in line with its annual guidance:
Leverage 2018: 2.2 to 2.5x
The Transaction represents another milestone in the execution of Marfrig's strategy,
which is expected to increase shareholder value
Consolidated production footprint in the Americas, with access to key consumer markets
worldwide
The outlook for the global animal protein industry remains positive
Non-negotiable commitment to Financial Discipline
6
Final Comments