value from both farm land - slc agrícola – investor...

VALUE FROM BOTH

FARMANDLAND September 2016

SLC AGRÍCOLA OVERVIEW

FOUNDATION OF THE SLC GROUP FOUNDATION OF SLC AGRÍCOLA SLC MAKES THE FIRST BRAZILIAN

SELF-PROPELLED GRAIN

HARVESTER

JOHN DEERE BUYS 20%

STAKE IN THE SLC GROUP SLC AGRÍCOLA IPO

(THE FIRST IN IT’S SECTOR, GLOBALLY)

SLC GROUP SELLS 100% OF

THE AG-MACHINERY BUSINESS

TO JOHN DEERE

1945 1965 1977

1979 1999 2007

70 YEARS IN THE SECTOR

3

323K HECTARES OF OWN LAND

INCLUDING LEGAL RESERVES

377K HECTARES OF PLANTED AREA

24,8% COTTON 56,4% SOYBEAN 17,7% CORN 1,1% OTHERS

ON BOTH OWNED AND LEASED LAND

ONE OF THE LARGEST

PRODUCERS OF

GRAINS AND FIBERS

OPERATIONAL EFFICIENCY

TARGETING THE LOWEST POSSIBLE UNITARY COST

OUR BUSINESS MODEL

FARMING OPERATION ON MATURE OWNED LAND

1st CROP 2nd CROP LAND BANK

Returns come from Farming + Land Appreciation

155K há 54K ha 44K ha

56% OF PLANTED AREA(1)

8 (1) Crop 2015/16

OUR BUSINESS MODEL

FARMING OPERATION ON LEASED LAND + JOINT VENTURES

1st AND 2nd CROP

Returns come from Farming (with low investment)

27K ha 22K ha

45% OF PLANTED AREA(1)

1st AND 2nd CROP 1st CROP

119K ha

50% 50.1%

+ MANAGEMENT FEE

Leasing Contracts

9 (1) Crop 2015/16

OUR BUSINESS MODEL

ACQUISITION OF UNDEVELOPED LAND FOR

TRANSFORMATION AND SALE

Returns come from Land Conversion + Land Appreciation

59K ha 28K ha

Contributed Acquired

10

82% 18%

FREE-FLOAT

(BM&FBOVESPA)

Sells branded rice and

beans to wholesalers

and supermarkets.

John Deere dealer

for northwestern Rio

Grande do Sul State.

Sells MRO’S (Maintenance,

repair and operation) items

for the industry.

(1) Total shares issued: 98,897,500 / Level 1 ADR Program: Launched August 8th. 2011 (Sponsor: JP Morgan) - Ticker SLCJY

(1)

STRAIGHTFORWARD

OWNERSHIP STRUCTURE

SLC GROUP

FAMILY HOLDINGS

51% 49% 100% 100% 100%

100%

11

(NO RELATED-PARTY TRANSACTIONS)

CORPORATE STRUCTURE

(NO RELATED-PARTY TRANSACTIONS)

BOARD OF DIRECTORS FISCAL COUNCIL

EDUARDO

LOGEMANN

Chairman

JORGE

LOGEMANN

Vice-Chairman

ANDRÉ

PESSOA

Board Member

L. F. CIRNE

LIMA

Board Member

OSVALDO

SCHIRMER

Board Member

Risk Management Committee

SHAREHOLDERS

AURÉLIO PAVINATO CEO

IVO

BRUM

CFO & IRO

GERSON

TRENHAGO

COO

ALDO

TISOTT

CSO

ALVARO

DILLI

CHR&SO

GUSTAVO

LUNARDI

CSCO

12

STRATEGIC AND DIVERSIFIED

LOCATION OF FARMS

Fully owned by SLC Agrícola

SLC LandCo’s farms

Joint Venture with Grupo Dois Vales

Joint Venture with Mitsui Co.

HEAD OFICCE

PORTO ALEGRE - RIO GRANDE DO SUL

CERRADO REGION

13

STRATEGIC AND DIVERSIFIED

LOCATION OF FARMS

3 2

5

4

15

11 12

13

10

1

9

8

7

6

14

PERDIZES Farm (1)

Planted Area: 16,463 ha

PAIAGUÁS Farm (1)


PLANORTE Farm


PAMPLONA Farm (1)


PLANALTO Farm (1)


PLANESTE Farm (1) (2)


PARNAÍBA Farm (1) (2)


PARNAGUÁ Farm


PAINEIRA Farm

Leased Farm

PARCEIRO Farm (2)


PALADINO Farm


PALMARES Farm (1)


PANORAMA Farm (2)


PIONEIRA Farm (1)


PIRATINI Farm (2)

Planted Area:13,347 ha

Planted Area: Crop 15/16. (1) Units with second crop (2) Includes areas from SLC LandCo.

CERRADO REGION

14

PLANALTO FARM MATO GROSSO DO SUL

LODGE 1

2

3

4

5

FARM VILLAGE

CLUB

REFECTORY

MACHINERY REPAIR

MACHINERY WAREHOUSES 6

7

8

9

10

HEAD OFFICE

SEED STORAGE

CHEMICALS STORAGE

COTTON GIN

COTTON WAREHOUSE 11

12

13

GRAIN STORAGE

FERTILIZERS STORAGE & MIXER

15

5

6 9

10

13

1

3 4

2 7 8

12

11

PRODUCTION CYCLE

MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR

YEAR 1 - Y1 YEAR 2 - Y2 YEAR 3 - Y3

SOIL PREPARATION

FERTILIZERS CHEMICALS SEEDS

HANDLING Soyben

SEP-NOV

PLANTING Corn

OCT-FEB

Cotton

NOV-JAN

Soil Preparation,

Planting & Handling

Sep Y1 - Aug Y2

Input

Purchases

Feb - Sep Y1

Agricultural

Strategy Jan

- Apr Y1

JAN FEB

• Feed

• Vegetable oils

• Textile industry

TRADING INDUSTRY

AND

Harvesting

Jan - Aug Y2

Processing

and Storage

Jun - Dec Y2

Processing and

Storage Jan Y2 -

Mar Y3

Market, costs,

area, CAPEX,

technology

and people.

16

MANAGING WEATHER RISKS

Geographic Positioning

SLC Farms are distributed within 6

different states, with distances that reach

1,500km between units.

Crops

Exposure to three different crops, with

specific planting/harvesting schedules.

Varieties within crops

Several different varieties are used, from

short to long cycles, and with specific

traits/benefits for each region.

super short cycle

short cycle

normal cycle

17

HEDGE POSITION

HEDGE POSITION – AUGUST 2016*

YEAR 1 - Y1 YEAR 2 - Y2

SOIL PREPARATION

FERTILIZERS CHEMICALS SEEDS

HANDLING

Soyben

SEP-NOV

PLANTING Corn

OCT-FEB

Cotton

NOV-JAN

Input Purchases

Feb - Sep Y1

Soil Preparation, Planting

& Handling Sep Y1 - Aug Y2

FISCAL YEAR

FX RATE

2016

% US$/R$

2017

% US$/R$

FX HEDGE 83.9 3.5772 33.9 4.0109

DEBT 7.6 1.8425 5.5 1.8790

TOTAL HEDGE 91.5 3.4337 39.3 3.7143

COTTON % US$¢/lb % US$¢/lb

TOTAL HEDGE 100.0 69.5 75.8 70.9

SOYBEAN % US$¢/bu % US$¢/bu

TOTAL HEDGE 84.6 10.2 42.2 10.3 18

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP

* Update on August,10

1%

SOYBEAN COTTON CORN OTHERS*

212k ha 94k ha 67k ha 4k ha

NET REVENUE BREAKDOWN 2016(1)

38%

45%

9% 7%

COTTON SOYBEAN CORN OTHERS*

DIVERSIFIED AND FLEXIBLE

CROP PORTFOLIO

PLANTED AREA 2015/16 (377 K ha)

56%

25%

18%

19 * Others: Wheat, corn seed, sunflower, castor beans, beans and sorghum (1) Estimated

DIVERSIFIED AND FLEXIBLE

CROP PORTFOLIO

COTTON 1st CROP 6,274 7,241 15.4

COTTON 2nd CROP 4,936 6,082 23.2

SOYBEAN 2,008 2,233 11.2

CORN 1st CROP 2,513 2,897 15.3

CORN 2nd CROP 1,545 1,652 6.9

Production Cost (R$/ha) 2014/15 2015/16 %

COTTON SOYBEAN CORN

LABOR SEEDS FERTILIZERS CHEMICALS

20

34.1% 17.3%

7.9%

1.1%

24.6%

17.5%

13.3%

0.6%

15.8%

35.1%

16.7%

0.5%

FERTILIZERS PRICES AND PURCHASE

21

100120140160180200220240260280300320340360380400420440460480500520540560580600

Ja

n-1

5

Fe

b-1

5

Ma

r-1

5

Ap

r-1

5

Ma

y-1

5

Ju

n-1

5

Ju

l-1

5

Au

g-1

5

Se

p-1

5

Oct-

15

No

v-1

5

De

c-1

5

Ja

n-1

6

Fe

b-1

6

Ma

r-1

6

Ap

r-1

6

Ma

y-1

6

Ju

n-1

6

Ju

l-1

6

U$/t

on

Purchase 2016-17

DAP TAMPA USD/Ton=360

KCL VANCOUVER USD/Ton=236

UREA BLACK SEA USD/Ton=212

Purchase 2015-16

OPERATING PERFORMANCE

YIELD COMPARISON

FIVE YEAR AVERAGE YIELDS: 2010/11 TO 2014/15 - Kg/ha

SLC 1st CROP BEST FARM

SLC 1st CROP

SLC 2nd CROP

BRAZIL

CHINA

USA

INDIA

1,720

1,613

1,484

1,451

1,404

931

530

COTTON (lint)

SLC Average: 1,598 9% above brazilian

average

Source: USDA and SLC Agrícola. 23

YIELD COMPARISON


SLC 1st CROP BEST FARM

SLC

BRAZIL

USA

ARGENTINA

CHINA

3,777

3,006

2,922

2,919

2,673

1,805 SOYBEAN

3% above

brazilian average


YIELD COMPARISON


SLC BEST FARM 2nd CROP

SLC 2nd CROP

USA 1ª CROP

UE-27 1ª CROP

BRAZIL 2nd CROP

CHINA 1ª CROP

7,569

6,854

9,435

7,034

4,980

5,781 CORN

SLC

above

Brazilian

average

52%

38%



2012 2013 2014 2015

133 119

107 128

2011/12 2012/13 2013/14 2014/15

144 156

163

GENERAL AND ADMINISTRATIVE EXPENSES (1)

(R$ per hectare planted)

HECTARES PER EMPLOYEE

(production, processing, and

administrative)

(1) Adjusted by inflation

172

-38%

+28%

26

DOING MORE WITH LESS


AREA WITH PRECISION AGRICULTURE

(‘000 ha)

TRACTORS

(HP/ha)

2012 2013 2014 2015 2016

97 76

178

224 235

2011/12 2012/13 2013/14 2014/15 2015/16

0.33

0.28 0.27 0.27

0.24

PROCESS CONTROL: CERTIFICATIONS

* Others: Wheat, corn seed, sunflower, castor beans, beans and sorghum (1) Forecast

SOYBEAN COTTON INTEGRATED

CERTIFICATION

Integrated

Certification

ISO 14.001

OHSAS 18.001

NBR 16.001

28

KEY FACTORS FOR OPERATIONAL EFFICIENCY

SOIL AND CLIMATE CONDITIONS

PROFESSIONAL MANAGEMENT

HIGH TECH MACHINERY

NO-TILL TECHNIQUE

CROP ROTATION SYSTEM

RESEARCH FIELDS

CUTTING EDGE MANAGEMENT

& TECHNOLOGY

29

FUNDAMENTALS

MARKET

MACRO TRENDS

7.1 bilion

9.3 bilion

POPULATION GROWTH

2050

2013

PE

RC

EN

TAG

E

100

80

60

40

20

1950 1970 1990 2010 2030 2050

0

RURAL URBAN

World population is expected to reach more than 9 billion people by

2050. In addition, people continue to migrate from the countryside

to the cities, where they adopt urban consumption patterns (higher

calorie intake).

Source: USDA and FAO

31

MACRO TRENDS

42.5

45

49

2050

2030

2012

USA 120.2

BRAZIL 85.3

THAILAND 25.8

INDONESIA 11.6

CHINA 58.2

MEAT CONSUMPTION PER CAPITA - (KG PER PERSON) - WORLD

Expected higher incomes in developing countries brings higher protein

consumption. Meat protein requires soy and corn. The gap in protein

consumption between developed and developing countries is expected to

reduce.

Source: USDA and FAO 32

0.52

0.40.38

0.320.29

0.250.22 0.21

0.19 0.18 0.17

0

0,1

0,2

0,3

0,4

0,5

0,6

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Source: The World Bank and Fraser Mackenzie

MACRO TRENDS

GRAINS STOCK-TO-USE RATIO AGRICULTURAL AREA PER CAPITA (HA PER CAPITA)

Population growth has outpaced planted area growth. Global

arable area per capita ratio has decreased by 50% in the past

50 years. Global inventories of grains have been on lower

levels in the past decade.

Source: USDA and FAO

33

10%

15%

20%

25%

30%

35%

40%

1964/6

5

1968/6

9

1972/7

3

1976/7

7

1980/8

1

1984/8

5

1988/8

9

1992/9

3

1996/9

7

2000/0

1

2004/0

5

2008/0

9

2012/1

3

2016/1

7*

Green Revolution

"Demand Schock"

17%

28%

22%

GRAINS & SUGARCANE 70.0 27.0(1) 43.0 PASTURE 60.0 58.5(2) 1.8

FRUITS 6.1 2.8 (2) 3.2

PRESERVATION AREAS 71.0 71.0 -

TOTAL 207.0 159.3 48.0

AGRICULTURAL SUPERPOWER

LAND USE IN CERRADO REGION – BRAZIL (mm/HA)

ACTIVITY TOTAL

POTENTIAL(1)

UTILIZED

POTENTIAL

EXPANSION

POTENTIAL

STABLE

TEMPERATURE

REGULAR

RAINFALLS

ABUNDANT

SOLAR ENERGY

PRODUCTION

SEASON

LASTS ENTIRE

YEAR

FLAT

TOPOGRAPHY

MAIN

GEOGRAPHIC

FACTORS

Sources: (1) Jamil Macedo (The Potential of Cerrado); (2)CONAB; (3) IBGE/

BRAZIL IN THE AGRICULTURAL CONTEXT

34

AGRICULTURAL SUPERPOWER

BRAZIL IN THE AGRICULTURAL CONTEXT - WORLD RANK

SUGAR SUGAR

POULTRY

POULTRY

PORK

COTTON CORN

CORN

BEEF

ETHANOL

COFFEE

SOYBEAN

COFFEE

ORANGE

JUICE

BEEF

ORANGE

JUICE

COTTON

ETHANOL

SOYBEAN

PORK

OUTPUT EXPORTS

1º 2º 3º 4º 1º 2º 3º 4º 5º

35

FOOD EXPORTS BY COUNTRY (% OF TOTAL)

32%

1% 16%

38%

BRAZIL

6% 6%

7% 9%

ARGENTINA

• Brazil accounted for only 1% of global food exports in

1980.

• In 2010, Brazil accounted for 16% of global food exports.

• In 2020 Brazil will be the largest food exporter.

2010: 434 MILLION TONS 1980: 266 MILLION TONS

Source: USDA, MBAgro. Products: Soybean, Corn, Oil Seeds, Rice, Sorgum, Oak, Wheat, Sugar, Barley, Rye

1980 2010 2020

1980 2010

1980 2010 2020

1980 2010

EU 27

EUA

AUSTRALIA

51%

42%

COTTON

Source: USDA August 2016. *Expected **Projected

PRICES WORLD IMPORTS

37

30

90

150

210

270

330

390

450

0

60

120

180

240

300

360

2008 2009 2010 2011 2012 2013 2014 2015 2016

US

¢/l

b

ICE-NYBOT

Brazilian Internal Price USD

Brazilian Internal Price R$ (Right Axis)

R$¢/lb

0

10

20

30

40

50

60

2007/0

8

2008/0

9

2009/1

0

2010/1

1

2011/1

2

2012/1

3

2013/1

4

2014/1

5

2015/1

6*

2016/1

7**

China Rest of the World

mil

lio

nb

ale

s

60

80

100

120

140

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

20

13

/14

20

14

/15

20

15

/16

*

20

16

/17

**

mil

lio

n b

ale

s

Production Consumption

COTTON


WORLD SUPPLY & DEMAND GLOBAL STOCK-TO-USE-RATIO

38

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

20

40

60

80

100

120

2007/0

8

2008/0

9

2009/1

0

2010/1

1

2011/1

2

2012

/13

2013/1

4

2014/1

5*

2015/1

6**

2016/1

7**

mil

lio

n b

ale

s

Ending Stocks

World Ending Stocks (Excl. China)

Stock to Use (Right Axis)

'

'

'

COTTON

Source: SLC Agrícola

EVOLUTION OF SLC

AGRICOLA’S COTTON MARKET

PRICE DIFFERENTIAL AGAINST

ICE/NYBOT

(U$cent/Pound)

39

81%

67%59%

47%

63%

47%52%

34% 31% 34% 34%

13% 9%18%

5%10%

19%

33%41%

53%

37%

53%48%

66% 69% 66% 66%

82%

67% 48%

59%57% 73%

5%

24%34%

36% 33%27%

* Update: Dec/2015

% Direct Export % Export with Tradings % Internal Market

-6,5

-4,8

-6,5

-4,3

-1,4-2,5

-0,3

8,3

1,3 2,2 3,1 3,6 2,7

6,0 5,05,0

5,0

4,1

-8,0

-6,0

-4,0

-2,0

0,0

2,0

4,0

6,0

8,0

10,0 Brazilian Basis

Basis SLC ( Additional due to Direct Sale)

0,00

0,20

0,40

0,60

0,80

1,00

1,20

2002/2

003

2003/2

004

2004/2

005

2005/2

006

2006/2

007

2007/2

008

2008/2

009

2009/2

010

2010/2

011

2011

/2012

2012/2

013

2013/2

014

2014/2

015

SOYBEAN

Source: USDA August,2016. *Expected **Projected

PRICES CHINESE IMPORTS

40

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

50,0

5

9

13

17

21

25

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

US

$/b

ush

el

Brazilian Internal Price

CBOT

Brazilian Internal price (R$)

R$

/bu

she

lR

$/

bu

sh

el

0

20

40

60

80

100

2007

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

2012

/13

20

13

/14

20

14

/15

20

15

/16

*

20

16

/17

**

mil

lio

ns

of to

ns

SOYBEAN



41

150

170

190

210

230

250

270

290

310

330

350

20

07

/08

2008/0

9

2009/1

0

2010/1

1

20

11

/12

2012/1

3

2013/1

4

2014/1

5

20

15

/16

*

2016/1

7**

mil

lio

n t

on

s


0%

5%

10%

15%

20%

25%

30%

35%

0

10

20

30

40

50

60

70

80

90

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

20

13

/14

20

14

/15

20

15

/16

*

20

16

/17

**

mil

lio

n to

ns

Ending Stocks (left axis) Stock to use

CORN


PRICES CHINESE IMPORTS

42

2

4

6

8

10

12

14

16

18

20

22

2

3

4

5

6

7

8

9

10

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

US

$/b

ush

el

CBOT

Brazilian Internal Price

Brazil Internal Price R$ (Right Axis)

R$/b

ush

el

C

0

1

2

3

4

5

6

7

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

20

13

/14

20

14

/15

20

15

/16

*

20

16

/17

**

mil

lio

n to

ns

Import Export

600

800

1000

2007/0

8

2008/0

9

2009/1

0

2010/1

1

2011/1

2

2012/1

3

2013/1

4

2014/1

5

2015/1

6*

2016/1

7**

mil

lio

n to

ns


CORN

Source: USDA August, 2016. *Expected **Projected


43

0%

5%

10%

15%

20%

25%

100

120

140

160

180

200

220

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

20

13

/14

20

14

/15

20

15

/16

*

20

16

/17

**

mil

lio

n to

ns

Ending Stocks (left axis) Stock to use

DEMAND AND PLANTED AREA

SOYBEAN AND CORN HISTORICAL

4% 3.4%

1% 1.4%

DEMAND

GROWTH

YIELD

GROWTH

SOYBEAN

CORN

HISTORICAL DEMAND AND YIELD HISTORICAL GLOBAL PLANTED AREA

44

145

177

93

120

80

85

90

95

100

105

110

115

120

125

140

145

150

155

160

165

170

175

180

185

Mil

lio

n o

f h

ecta

res

Corn Soybean

mIl

lio

no

f h

ecta

res

LAST 10 YEARS LAST 10 YEARS

SOYBEAN AND CORN DEMAND

ASSUMPTION EXERCISE

BY 2025 SOYBEAN

AND CORN DEMAND

ASSUMPTION

(POSSIBILITIES)

ADDITIONAL DEMAND

(MILLIONS OF TONS)

ADDITIONAL AREA

(MILLIONS OF HA)

REQUIRED GROWTH OF

THE PLANTED AREA (AS A

RATIO OF CURRENT

BRAZILIAN PLANTED AREA)

CAGR SOYBEAN CORN SOYBEAN CORN SOYBEAN CORN

4% 131 340 46 55 1.4X 3.4X

3% 87 207 31 33 0.9X 2.1X

2% 48 85 17 14 0.5X 0.9X

Source: USDA and SLC Agrícola for 2014/15 crop; Note: Additional area needed was calculated considering increase of yield of 0.8% in soybean and 1.3% in corn.

45

THROUGH LAND

VALUE CREATION

DOLLAR 45.70% 58.70%

CDI 39.91% 183%

BOVESPA 0.20% 35.90%

GOLD 37.64% 219%

FARMLAND 27.11% 248.67%

FARMLAND APPRECIATION IN BRAZIL

KEY DRIVERS FOR LAND

PRICES

Indicator

Appreciation

% in the period

(36 Months)¹

Appreciation

% in the period

(120 Months)¹

¹ Last 36 months (July/2012 a June/2015) - Inflation 36 months: 19.13% ² Last 120 months (July/2010 a June/2015) - Inflation

60 months: 36.74% Sources: BM&FBovespa, Cetip and Informa Economics FNP, June 2015

Primary

Drivers

Land as an

Asset Class

Commodity

Prices

Land

Profitability

Agricultural

Productivity

Scarcity

Location Underlying

Drivers

Source: Informa Economics

THE LAND MARKET IN BRAZIL

47

ASSET APPRECIANTION & TURNOVER

PORTFOLIO VALUE EVOLUTION

(R$/MM)(1)

2007

2008

2009

2010

2011

2012

2013

2014

2015

693

693 1,880

1,919

3,342

1,417

5,848

6,670

4,330

7,069

13,0

15,0

17,668

18,533

20,263

1,076

876

1,470 989

1,474 963

1,756 1,083

2,316 1,268

2,679 1,351

3,189 1,624

3,402 1,695

Piauí (BRA)

Maranhão (BRA)

Bahia (BRA)

Mato Grosso (BRA)

Córdoba (ARG)

Santa Fé (ARG)

Indiana (USA)

Illinois (USA)

Iowa (USA)

*IPO portfolio – CAGR 12% Total portfolio at date- CAGR 22% Cerrado Arable Land Pasture

POTENCIAL FOR FARMLAND

APPRECIATION(2)

(THD/USD PER HA)

(1)Source: Appraisal Delloite/ (2)Source: Informa Economics / FNP July - August - 2016, USDA. Companhia Argentina de Tierras. In Brazil adjusted by legal reserve.

48

THE LAND TRANSFORMATION PROCESS

ACQUISITION OF

PASTURE OR

RAW LAND

CLEARING

ROOT

PICKING

PLOUGHING &

SOIL

CORRECTION

HIGH

YIELDING

FARMLAND

USD 1,500/ha to

USD 2,000/ha

USD 1,100/ha to

USD 1,400/ha over

three years

1 YEAR FOR 5,000 HA

USD 5,000/ha to

USD 6,000/ha

ARABLE LAND PORTFOLIO MATURITY

(excl. 2nd crop)

44K ha to be developed

155K ha in use

SLC AGRÍCOLA

49

LICENSE

REQUEST

AVERAGE OF 1 YEAR

SOYBEAN AND CORN

VOLUME - 2015X2014:

SANTARÉM 1 million tons +47% YoY

ITACOTIARA 1.7 million tons +32% YoY

VILA DO CONDE 1.6 million tons +133% YoY

SÃO LUÍS 3.4 million tons +92% YoY

Source: Aprosoja, SECEX

LOGISTICS: FUTURE PERSPECTIVES

Itacotiara

Porto Velho

Santos

Paranaguá

São Francisco do Sul

Rio Grande

Miritituba

Marabá

Vila do Conde Santarém

São Luís

1

2

4

3

5

5

6

Santana

6

Expansion of Norte-Sul railway

Paving of BR-163

Building and paving of BR-080

Paving of BR-158

Port of Marabá (PA) and Port of Villa do Conde (PA) Port

of Miritituba (PA) and Port of Santana (AP)

1

2

3

4

5

6

Highway

Railway

Waterway

City

Port

PROJECTS FOR 5 YEARS

50

*Bunge, ADM,

Amaggi

*Cargill

*Amaggi,

Bunge

* Grupo CGG (Glencore, Amaggi,

Novagri, Louis Dreyfus

* ADM, Bunge

LOGISTICS: PRICES COMPARATIVE

Santos (SP)

Itacoatiara (AM)

Paranaguá (PR)

Santarém (PA)

Porto Velho (RO)

Rondonópolis (MT)

Mirituba (PA)

Nova Canaã do Norte (PA)

1.519km

2.165km

589km 1.555km

2.278km

1.113km

322km

280km

1.425km

1.260km

R$ 248,69 per ton

R$ 258,72 per ton

R$ 216,63 per ton

R$ 227,80 per ton

R$ 133,36 per ton

R$ 167,49 per ton

Route currently not used

Lucas do Rio

Verde (MT)

Highway Waterway Railway

Source: CNT (Transportation National Confederation) 51

FARMLAND ACQUISITION/

LEASE BY FOREIGNERS IN BRAZIL

CURRENT STATUS OF THE LEGISLATION

THE FACTS

August 2010 – an old Law (nº 5.709. from 1971) was “re-enacted” by the government,

through a Legal Opinion from the Union’s General Advocacy (AGU) .

The law limits (not prohibits) foreign acquisition and leases on farmland to:

25% of the area per municipality;

40% (out of the 25%) per foreign country;

The municipality’s Registry Office is responsible for this control;

The concept of “foreign” for the purposes of this law is either a foreign

company/individual or a Brazilian registered company whose voting control belongs

to foreigners;

•INCRA (National Institute for Colonization and Land Reform), a federal entity, has to

approve all transactions involving foreigners .

52

FARMLAND ACQUISITION/

LEASE BY FOREIGNERS IN BRAZIL

CURRENT STATUS OF THE LEGISLATION

THE FACTS

June 2011 – Congress created a special committee to discuss the matter, due to

pressure from the private sector .

May 2012 – the committee approved a project (by Congressman Marcos Montes)

that restricts land acquisitions only to NGO’s and SWF . There are several other

steps for this project to be fully implemented (approval in other committees,

Congress plenary, Senate and Presidency).

April 2015 – Agricultural Minister and Finance Minister start to comment about

changing the legislation.

September 2015 - The National Congress submitted to urgent voting bill PL-4012-

2012, which brings changes to the restriction of land acquisition by foreigners.

53

FINANCIAL PERFORMANCE

796

984 1,035

1,336

1,482

2011 2012 2013 2014 2015

SUMMARY OF FINANCIAL RESULTS

Dividend Policy:

2007-2010:25% 2011 2013:40% 2015: 50%

NET REVENUE (R$/MM)

Excluding (non-cash) effects from

biological assets.

NET PROFIT (R$/MM) and

NET PROFIT MARGIN

Net profit is impacted by non-cash

effects,such as biological asset

recognition

16.2% CAGR

GROWTH

160

38

9670

121

16%

3%

8%

5%

8%

-5%

0%

5%

10%

15%

-10

40

90

140

190

240

290

340

2011 2012 2013 2014 2015

SUMMARY OF FINANCIAL RESULTS

EBITDA (R$/MM) and EBITDA MARGIN

Excluding (non-cash) effects from

biological assets.

NET LAND APPRECIATION (R$/MM)

Adjusted for SLC Agricola’s

share at SLC LandCo.

56

292 290 234 320 340

37%

30%

23% 24% 22%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

-50

50

150

250

350

450

550

2011 2012 2013 2014 2015

179

269

375

428

140

11%

+17%

+18%

+17%+5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

200

400

600

800

1000

1200

1400

1600

2011 2012 2013 2014 2015Net Land Appreciation Variation in price per hectare

DEBT BREAKDOWN

DEBT PROFILE – 2Q16(%):

NOMINAL AVERAGE

INTEREST RATE:

US$ R$

IN R$:

12.86% p.a.

IN US$:

5.13% p.a.

48.9% 51.1%

90.1%

9.9%

(R$ thd) INDEX INTEREST RATE

2Q16

CONSOLIDATED

2Q16

APPLIED IN FIXED ASSETS

FINAME Pre-Fixed and TJLP 6.99% 178,711

Constitutional Funds Pre-Fixed 7.32% 7,099

Financing Investments US$+Libor 5.97% 7,517

SUBTOTAL 193,327

APPLIED IN WORKING CAPITAL

Rural Credit Pre-Fixed 10.89% 334,666

Constitutional Funds Pre-Fixed 10.50% 119,596

Working Capital Pre-Fixed 15.46% 19,168

Working Capital Swap US$/CDI 15.20% 375,961

External Loans CDI 15.32% 447,966

External Loans US$, Libor+Pre-Fixed 5.09% 155.620

SUBTOTAL 1,452,977

TOTAL DEBT 12.09% 1,646,304

(-) Cash 489,428

Gains/Losses with derivatives linked to bank deposits/debts (14,188)

(=) Net Debt Adjusted 1,171,064

Net Debt Adjusted/Adjusted EBITDA 4,47X

Net Debt Adjusted/NAV 32.0%

57

LONG TERM SHORT TERM

FINANCIAL INDICATORS

& LAND APPRAISAL

RETURN ON INVESTED CAPITAL – ROIC - R$MM

2012 2013 2014 2015

Adjusted Operating Income 73 116 150 207

Net Land Appreciation 270 374 428 140

Final Adjusted Operating Income 343 490 578 347

Invested Capital 2,987 3,753 4,329 4,788

Return on Invested Capital 11.5% 13.0% 13.3% 7.2%

NET ASSET VALUE

R$ Million

SLC Agrícola Farms 2,535

SLC LandCo Farms 518

Infrastructure (except Land) 773

Accounts Receivable (except derivatives) 183

Inventories and Biological Assets 922

Cash 460

SUBTOTAL 5,392

Suppliers 96

Adjusted Gross Debt with gain and losses with derivatives 1,575

Outstanding debt related to land acquisitions 62

SUBTOTAL 1,733

NET ASSET VALUE 3,658

NET ASSET VALUE per/SHARE 37,0

DELOITTE APPRAISAL 2015

PORTFOLIO OF LAND ARABLE LAND R$/TH R$/HA

SLC AGRÍCOLA FARMS

Pamplona, GO 13,908 290,900 20,916

Planalto, MS 15,600 473,550 30,356

Parnaíba, MA 22,736 371,040 16,319

Planorte, MT 17,286 315,870 18,273

Paiaguás, MT 24,169 450,910 18,664

Palmares, BA 12,590 187,600 14,901

Parnaguá, PI 16,185 143,710 8,879

Paineira, PI 8,729 93,350 10,694

Parceiro, PI 22,738 215,970 9,651

Perdizes, MT 11,575 175,030 15,121

SLC LANDCO FARMS

Planeste, MA 13,305 234,550 17,629

Parnaíba, MA 5,390 371,040 7,616

Panorama, BA 7,677 166,430 21,679

Parceiro, PI 2,649 215,970 7,180

Piratini, BA 20,284 222,860 10,987

TOTAL 214,461 3,401,840 15,862

+7% YOY

58

GROWTH STRATEGY

- 20,0 40,0 60,0 80,0

100,0 120,0 140,0 160,0 180,0 200,0 220,0 240,0 260,0 280,0 300,0 320,0 340,0 360,0 380,0 400,0 420,0 440,0 460,0 480,0 500,0 520,0 540,0 560,0 580,0 600,0

95

/96

96

/97

97

/98

98

/99

99

/00

00

/01

01

/02

02

/03

03

/04

04

/05

05

/06

06

/07

07

/08

08/0

9

09

/10

10

/11

11

/12

12

/13

13

/14

14

/15

15

/16

*

First Crop Area Second Crop Area

- 20,0 40,0 60,0 80,0

100,0 120,0 140,0 160,0 180,0 200,0 220,0 240,0 260,0 280,0 300,0 320,0 340,0 360,0 380,0 400,0 420,0 440,0 460,0 480,0 500,0 520,0 540,0 560,0 580,0 600,0

95

/96

96

/97

97

/98

98

/99

99

/00

00

/01

01

/02

02

/03

03

/04

04

/05

05

/06

06

/07

07

/08

08

/09

09

/10

10

/11

11

/12

12

/13

13

/14

14

/15

15

/16

*

Owned Planted Area Leased Area Planted Joint Ventures Area Planted

HISTORICAL PLANTED AREA (thd ha)

32

69

171

377

32 69

171

377

* Estimated

GROWTH STRATEGY

Land Bank:

SLC Agrícola

44 K hectares

Growth through

the currents

Joint Ventures

EXPANSION

Cost reduction

through early

adoption

of advanced

technology

Increase production

through

2nd Crop and

Leased areas

EFFICIENCY

61

DIGITAL AGRICULTURE

IMPROVING PROFITABILITY

~2008

1980s

GMO

The Plough

19th century

INCREMENTAL BENEFIT OVER

PREVIOUS GENERATION NEW GROWTH POTENCIAL FOR FARMER

Machinery &

GPS Tracking

PAST PRESENT FUTURE Confused Farmer

Overwhelmed by data

DATA INSIGHT

Source: Accenture Digital - “Digital Agriculture: Improving Profitability”.

OUR

BIG DREAM

To positively impact future generations,

through global leadership in

agribusiness and respect to the planet.

OUR

VALUES CLIENTS:

QUALITY:

MANAGEMENT:

TECHNOLOGY:

RELATIONS:

Client satisfaction is to ensure a long

life for our business.

Developing long-lasting relationships with our

employees, clients, shareholders and suppliers,

grounded on ethics and transparency.

Quality must be perceived in all our actions. HUMAN CAPITAL

SUSTAINABILITY:

Provide facilities for training and retaining the

best professionals, through policies of competitive

compensation, benefits and development, seeking

superior performance and human realization.

Fomenting the balance among economic, social

and environmental issues.

Entrepreneurial, innovative and participative

management, aimed at profits and growth.

Technology is our competitive advantage.

DISCLAIMER

We make forward-looking statements that are

subject to risks and uncertainties. These statements

are based on the beliefs and assumptions of our

management, and on information currently available

to us.

Forward-looking statements include statements

regarding our intent, belief or current expectations or

that of our directors or executive officer.

Forward-looking statements also include information

concerning our possible or assumed future results of

operations, as well as statements preceded by,

followed by, or that include the words ''believes'',

''may'', ''will'', ''continues'', ''expects'', ''anticipates'',

''intends'' , ''plans'' , ''estimates'' or similar

expressions. Forward-looking statements are not

guarantees of performance. They involve risks,

uncertainties and assumptions because they relate

to future events and therefore depend on

circumstances that may or may not occur. Our

future results and shareholder values may differ

materially from those expressed in or suggested by

these forward-looking statements. Many of the

factors that will determine these results and values

are beyond our ability to control or predict.

INVESTOR RELATIONS

DEPARTAMENT CONTACTS

+55 51 3230.7799 | +55 51 3230.7864 | +55 51 3230.7797

IVO MARCON BRUM

Chief Financial and Investor Relations Officer

FREDERICO LOGEMANN

Investor Relations Manager

ALISANDRA MATOS

Investor Relations Analyst

e-mail: [email protected]

www.slcagricola.com.br

mailto:[email protected]

http://www.slcagricola.com.br/

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