1 CAMIL ANNOUNCES ITS 3Q18 RESULTS Company reaches Gross Profit of R$320mm (+12% YoY) with 25.3% margin São Paulo, January 10, 2019 – Camil Alimentos S.A. (“Company” or “Camil”) (B3: CAML3) announces today its third quarter results of 2018 (3Q18: September, October and November 2018). In this release, financial data is presented in accordance to the International Financial Reporting Standards and represents the Company’s consolidated results in million reais (R$). Comparisons refer to the second quarter results of 2018 (2Q18: June, July and August 2018; QoQ comparisons) and to the third quarter results of 2017 (3Q17 September, October and November 2017; YoY comparisons), unless otherwise indicated. The results here presented do not consider the acquisition of SLC Alimentos S.A., concluded by Camil in December 2018, except when specified. Highlights The 3Q18 was marked by sequential growth in volume for all the categories, except for Rice in Brazil (-17.9% QoQ): beans presented growth of +3.2% QoQ, sugar +1.8% QoQ, canned fish +24.7% QoQ and in the international segment +23.7% QoQ; being Uruguay +31.2% QoQ, Chile +2.6% QoQ and Peru +6.4% QoQ; Camil also highlights its YoY margins growth: gross margin (25.3%, +0.6pp YoY), EBITDA margin (12.0%, +0.8pp YoY); and net margin (11.9%, +5.7pp YoY); Net Revenue of R$1.3 billion in 3Q18 (+9.3% YoY); Gross Profit of R$319.9mm (+11.9% YoY) with 25.3% margin in 3Q18 (+0.6pp YoY); EBITDA of R$151.4mm (+17.5% YoY) with 12.0% margin (+0.8pp YoY). Excluding non-recurring revenues², the EBITDA reached R$115.4mm (-10.4% YoY), and 9.1% margin (-2.0pp YoY); Net Income of R$150.3mm (+109.0% YoY) with 11.9% margin (+5,7pp YoY). Excluding non- recurring revenues², Net Income reached R$71.8mm (-0.2% YoY), with 5.7% margin (-0.5pp YoY); CAPEX of R$42.7mm (+66.8% YoY); Net Debt/EBITDA reached 1.9x (+0.3x YoY). 1 1 Excludes Argentina´s volume data of the comparable basis, due to the conclusion of the sale of La Loma on August 31 st , 2018. ²Excludes the recognition of non-recurring revenues and expenses, recognized in Other Operating Revenues and in Financial Revenues on 3Q18. Earnings Release The streaming audio with management's comments about the results is already available on the IR website. Q&A January 11, 2019 Time: 10:00 (BRT) 7:00 (US EST) In Portuguese with simultaneous translation into English. To Connect: In Portuguese: +55 11 3193-1001 or +55 11 2820-4001 In English: +1 646 828-8246 or +1 800 492-3904 Code: Camil Participants Luciano Quartiero CEO Flavio Vargas Chief Financial and IR Officer Investor Relations Guilherme Salem Jenifer Nicolini Phones: +55 11 3039-9237 +55 11 3039-9238 [email protected]Highlights 3Q17 2Q18 3Q18 3Q18 vs 3Q18 vs Closing Date 30-Nov-18 31-aug-18 31-nov-18 3Q17 2Q18 Net Revenues 1,159.2 1,145.6 1,266.8 9.3% 10.6% Food Products Brasil 818.9 800.9 857.5 4.7% 7.1% Food Products International 340.2 344.7 409.3 20.3% 18.7% Gross Profit 285.9 316.1 319.9 11.9% 1.2% Gross Margin (%) 24.7% 27.6% 25.3% 0.6pp -2.3pp EBITDA 128.9 134.6 151.4 17.5% 12.5% EBITDA Margin (%) 11.1% 11.7% 12.0% 0.8pp 0.2pp Net Income 71.9 79.1 150.3 109.0% 90.0% Net Margin (%) 6.2% 6.9% 11.9% 5.7pp 5.0pp Capex 25.6 35.7 42.7 66.8% 19.6% Operational Highlights - Volume (in thousand ton) Volume - Brazil Grains 160.4 182.2 153.7 -4.2% -15.6% Rice 144.3 162.7 133.6 -7.4% -17.9% Beans 16.1 19.5 20.1 25.0% 3.2% Sugar 132.3 132.3 134.7 1.8% 1.8% Canned Fish 10.9 8.1 10.1 -7.3% 24.7% Volume - International¹ 177.2 144.8 179.1 1.1% 23.7% Uruguay 132.0 104.0 136.5 3.3% 31.2% Chile 19.4 19.9 20.4 5.6% 2.6% Peru 25.8 20.9 22.2 -13.9% 6.4%
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CAMIL ANNOUNCES ITS 3Q18 RESULTS
Company reaches Gross Profit of R$320mm (+12% YoY) with 25.3% margin
São Paulo, January 10, 2019 – Camil Alimentos S.A. (“Company” or “Camil”) (B3: CAML3) announces today its third quarter results of 2018 (3Q18: September, October and November 2018). In this release, financial data is presented in accordance to the International Financial Reporting Standards and represents the Company’s consolidated results in million reais (R$). Comparisons refer to the second quarter results of 2018 (2Q18: June, July and August 2018; QoQ comparisons) and to the third quarter results of 2017 (3Q17 September, October and November 2017; YoY comparisons), unless otherwise indicated. The results here presented do not consider the acquisition of SLC Alimentos S.A., concluded by Camil in December 2018, except when specified.
Highlights
The 3Q18 was marked by sequential growth in volume for all the categories, except for Rice in
Brazil (-17.9% QoQ): beans presented growth of +3.2% QoQ, sugar +1.8% QoQ, canned fish
+24.7% QoQ and in the international segment +23.7% QoQ; being Uruguay +31.2% QoQ, Chile
+2.6% QoQ and Peru +6.4% QoQ;
Camil also highlights its YoY margins growth: gross margin (25.3%, +0.6pp YoY), EBITDA margin
(12.0%, +0.8pp YoY); and net margin (11.9%, +5.7pp YoY);
Net Revenue of R$1.3 billion in 3Q18 (+9.3% YoY);
Gross Profit of R$319.9mm (+11.9% YoY) with 25.3% margin in 3Q18 (+0.6pp YoY);
EBITDA of R$151.4mm (+17.5% YoY) with 12.0% margin (+0.8pp YoY). Excluding non-recurring
revenues², the EBITDA reached R$115.4mm (-10.4% YoY), and 9.1% margin (-2.0pp YoY);
Net Income of R$150.3mm (+109.0% YoY) with 11.9% margin (+5,7pp YoY). Excluding non-
recurring revenues², Net Income reached R$71.8mm (-0.2% YoY), with 5.7% margin (-0.5pp
YoY);
CAPEX of R$42.7mm (+66.8% YoY);
Net Debt/EBITDA reached 1.9x (+0.3x YoY).
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1Excludes Argentina´s volume data of the comparable basis, due to the conclusion of the sale of La Loma on August 31st, 2018. ²Excludes the recognition of non-recurring revenues and expenses, recognized in Other Operating Revenues and in Financial Revenues on 3Q18.
Earnings Release The streaming audio with management's comments about the results is already available on the IR website. Q&A January 11, 2019 Time: 10:00 (BRT) 7:00 (US EST) In Portuguese with simultaneous translation into English. To Connect: In Portuguese: +55 11 3193-1001 or +55 11 2820-4001 In English: +1 646 828-8246 or +1 800 492-3904 Code: Camil Participants Luciano Quartiero CEO Flavio Vargas Chief Financial and IR Officer Investor Relations Guilherme Salem Jenifer Nicolini Phones: +55 11 3039-9237 +55 11 3039-9238 [email protected]
Highlights 3Q17 2Q18 3Q18 3Q18 vs 3Q18 vs
Closing Date 30-Nov-18 31-aug-18 31-nov-18 3Q17 2Q18
Net Revenues 1,159.2 1,145.6 1,266.8 9.3% 10.6%
Food Products Brasil 818.9 800.9 857.5 4.7% 7.1%
Food Products International 340.2 344.7 409.3 20.3% 18.7%
The third quarter of 2018 reinforces the execution of the Company´s strategy to expand its forefront in the brazilian grain market: we announced the acquisition of SLC Alimentos, bringing complementarity to our portfolio and in regions which we operate, which allows our consolidation in the Brazilian grain market and adds relevant brands to our group. We now hold a market share of 9.5%2 in the Brazilian rice market, an important step towards our growth strategy of acquiring strong brands and geographical expansion in key markets. The transaction was concluded in December 2018 and we remain focused in the processes of integrating and optimizing our operations.
Despite the challenging environment in the quarter for the rice category in Brazil (-17.9% QoQ and -7.4% YoY), we obtained sequential sales growth in beans (+3.2% QoQ and +25.0% YoY), sugar (+1.8% QoQ and +1.8% YoY), canned fish (+24.7% QoQ and -7.3% YoY) and in the international segment (+23.7% QoQ and +1.1% YoY, being Uruguay +31.2% QoQ and +3.3% YoY, Chile +2.6% QoQ and +5.6% YoY and Peru +6.4% QoQ and -13.9% YoY).
Regarding rice market prices, we observed the impact of a quick fall in the average market prices in Brazil in November 2018 compared to the previous month (-6.7%3). Our understanding is that the price reduction lead the retail segment to wait for prices to stabilize before restocking, which affected rice sales in Brazil in the period. We remain focused on recovering rice sales in Brazil.
In our international operations, we highlight sequential and annual volume growth, due to volume recovery in Uruguay, as a resumption of the year´s postponed sales, and continuity of positive performance in our operations in Chile.
Always looking to innovate and offer a complete mix of solutions to consumers, we highlight the strengthening of our business model based on a broad portfolio of brands and products. Our main brands in Brazil, Camil, Coqueiro and União are constantly working on new products for the market. We announced on the past months the launch of a line of ready-to-eat rice in just 1 minute in the microwave, the Arroz Minuto, and the individual packaging of rice crackers. We also announced recently the strategic partnership with Amyris Inc., an American company leader in research, development and production of sustainable products, to meet the rising consumer´s demand for healthiness through the development of a zero calorie sweetener made from sugar cane. Coqueiro also innovated by launching sardines fillets with olive oil, or olives and tuna with olive oil, or capers.
We remain focused on strengthening our brands with the objective of expanding our market share in the categories in which we already perform, on increasing sales and results of our categories and in obtaining synergies with SLC Alimentos. Our diversified portfolio of traditional brands, consolidated and recognized by consumers, allow us to maintain our leading positions in the markets we operate and put us in a privileged position to capture growth potential as one of the food market leaders in Latin America.
Luciano Quartiero
Chief Executive Officer Flavio Vargas
Chief Financial and Investor Relations Officer
2Nielsen Retail Index for Brazil Rice of Oct18-Nov18 of Camil Alimentos and of SLC Alimentos ³CEPEA; average rice price indicator Esalq/Senar-RS 50kg of Nov18 vs. Oct18
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Recent Events
Notices to the Market and Material Facts
December-2018: Completion of SLC Alimentos Acquisition
Camil concluded, in December 2018, the acquisition of 100% of SLC Alimentos shares. The total amount of the transaction reached R$308mm: (i) R$140mm paid on the date of the conclusion; (ii) R$40mm retained for contingencies; and (iii) R$128mm4 of SLC´s Net Debt undertaken by Camil.
November-2018: Interest on Equity Payment
The Company announced the payment of R$45mm in IOE, payed on December 10th, 2018. Additionally, R$20mm were paid in Aug-18.
October-2018: Adhesion to Rural Tax Regularization Program
On October 2018, Camil announced adhesion to Rural Tax Regularization Program in the total amount of R$42.5mm, recognized as other operating revenues/expenses in 3Q18, being R$5.7mm as an initial installment and R$36.8mm payable in monthly installments corresponding to 0.3% of the monthly average of the gross profit.
October-2018: Recognition of Tax Credits
The company announced, in October 2018, exclusion of ICMS from assessment bases of PIS/COFINS, with reversal of the total historical amount of R$38.1mm (R$43mn of credit and R$5mn of expenses related to advocative hours). There was also the recognition of R$84.5mm positive referring to tax credits from IRPJ and CSLL of ICMS subsidy, considering the 5 year retroactive effect to the Company. Both are recognized in other operating revenues/expenses in 3Q18, as well as the recognition of R$41.5mm in the quarter´s financial revenues referring to monetary restatements from previous periods relative to IRPJ and CSLL credits of ICMS subsidy and PIS and COFINS credits brought by the exclusion of ICMS from assessment bases.
News and Awards
December-2018: Camil is the Company of the Year in As Melhores da Dinheiro Rural 2018 (Rural Money Magazine)
In December 2018, Camil was awarded by As Melhores da Dinheiro Rural 2018, of Editora Três, the best company of 2018 (among all categories), Best Direct Agribusiness Company and Best Agribusiness Company.
December-2018: Camil wins APAS Acontece Prize in the Commodities Category
The APAS Acontece prize acknowledges the best retail suppliers in 21 categories, including best customer service and business profitability.
November-2018: IR Magazine Acknowledgement to the IR Team
IR Magazine, one of the main publications in the sector with over 25 years of international operations, highlighted our executives Flavio Vargas with 1st place in the Best IR by CEO or CFO (small cap) category and Guilherme Salem with 1st place in the Best Investor Relations Executive (small cap) category.
Operational Results 3Q18 was highlighted by sequential sales volumes growth in all categories, except for rice in Brazil (-17.9% QoQ). Beans presented +3.2% QoQ growth, sugar +1.8% QoQ, canned fish +24.7% QoQ and in the international segment we registered +23.7% QoQ, being Uruguay +31.2% QoQ, Chile +2.6% QoQ and Peru +6.4% QoQ.
Rice Volume of 133.6 thousand tons (-17.9% QoQ and -7.4%
YoY); Decrease in Camil brand sales volume and growth in
value pricing brands sales volume; Decrease in purchases by retail stores and reduction in
rice prices in November vs. October 2018 (-6,7%5), which waits for prices to stabilize before restocking;
Gross price of R$2.60/kg (+4.5% QoQ and +11.8% YoY) and net price of R$2.27/kg (+2.9% QoQ and +11.0% YoY).
Beans Volume of 20.1 thousand tons (+3.2% QoQ and +25.0%
YoY); Increase in Camil brand and value pricing brands sales
volume;
Beans market prices reached R$99.64/bag6 in 3Q18 (-2.1%
QoQ and -13.6% YoY), reduction occurred after an unusual stability during the last months;
Gross price of R$3.28/kg (-2.2% QoQ and -6.1% YoY) and net price of R$2.99/kg (+7.6% QoQ and -7.6% YoY).
Sugar Volume of 134,7 thousand tons (+1.8% QoQ and +1.8%
YoY); Increase in cristal sugar and value pricing brands sales
volume;
Average market price of R$64.27/bag7 (+17.5% QoQ and
+12.8% YoY); Gross price of R$2.09/kg (-0.9% QoQ and +0.1% YoY) and
net price of R$1.80/kg (-1.9% QoQ and -2.1% YoY).
Canned Fish Volume of 10.1 thousand tons (+24.7% QoQ and -7.3%
YoY); Growth in Coqueiro brand sales volume Prices readjustments initiated on the second quarter were
maintained, regaining market competitiveness; We continue to face difficulties in fishing in the Brazilian
coast; Gross price of R$20.04/kg (-0.7% QoQ and +5.6% YoY) and
net price of R$15.36/kg (-1.5% QoQ and +6.4% YoY)
Net Revenue and Margins Evolution (R$mm)
Source: Company
International Sequential and annual volumes growth (+23.7% QoQ and 1.1% YoY) driven by:
Uruguay: Volume of 136.5 thousand tons (+31.2% QoQ and +3.3% YoY), recovering the sale´s delay which was observed
during the first half of 2018;
Chile: Volume of 20.4 thousand tons (+2.6% QoQ and +5.6% YoY), continuous growth in sales volume and profitability;
Peru: Volume of 22.2 thousand tons (+6.4% QoQ and -13.9% YoY), sequential volume recovery and annual decrease due to political instabilities, which pressured retail as a whole.
In the rice category, the sales volume decreased in -17.9% QoQ and -7.4% YoY, reaching 133.6 thousand tons. We observed average market prices7 reduction of 6, 7% in November 2018 compared to the previous month. Our understanding is that the price reduction lead the retail segment to wait for market prices to stabilize before rebuilding their inventories, affecting rice sales in Brazil in the period, especially in November.
Brazil Rice - Quarterly Volume Evolution (´000 ton) Brazil Rice - Volume and Net Price QoQ e YoY
Source: Company Source: Company
Regarding raw material acquisition cost8, in 3Q18 the period´s average price reached R$44, 01/bag (+5.5% QoQ and +18.9% YoY).
Camil´s gross price for rice reached R$2.60/kg in 3Q18, growth of 4.5% QoQ and 11.8% YoY. Net price reached R$2.27/kg in 3Q18, growth of 2.9% QoQ and 11.0% YoY. The growth presented is below the market prices growth above, as a result of the value pricing brands sales volume recovery, which impacts in reducing average price increases due to lower prices, an attribute of this segment.
Brazil Rice – Market Prices (R$/bag) Brazil Rice – Market vs. Camil´s Gross Prices
The Company registered 7.6% market share and 7.9% value share (both presenting a +0,2pp growth in a bimonthly comparison). Considering the same indicator for SLC Alimentos in the period, the Company registered 9.5% of market share and 9.8% of value share.9
8Source: CEPEA; average rice price indicator Esalq/Senar-RS 50kg 9Source: Nielsen Retail Index bimonthly, Oct-Nov/18 vs. Aug-Sep/18
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Rice - Brazil28%
Beans4%
Sugar28%
Fish2%
Internacional38%
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Beans
In the beans category, we highlight sequential and annual volume growth, reaching 20.1 thousand tons (+3.2% QoQ and +25.0% YoY). The result derived from Camil brand and value pricing brands sales volume growth.
Beans Brazil – Quarterly Volume Evolution (´000 ton) Beans Brazil - Volume and Net Price QoQ e YoY
Source: Company Source: Company
Regarding acquisition cost of raw material, the average price for beans presented reduction of -2.1% QoQ and -13.6% YoY,
reaching R$99.64/bag10. We remarked a reduction which occurred after an unusual stability during the last quarters,
despite its historical volatility in market prices.
Gross price of beans reached R$3.28/kg (-2.2% QoQ and -6.1% YoY) and net price of R$2.99/kg (+7.6% QoQ and -7.6% YoY).
Beans Brazil – Brazilian Market (in R$/bag) Beans Brazil - Market vs. Camil’s prices
The Company registered 6, 0% of market share (+0,5pp in a bimonthly comparison) and 7, 0% of value share (+0,6pp in a bimonthly comparison). Considering the same indicator for SLC Alimentos in the period, the Company registered 7.3% of market share and 8.6% of value share.11
10Source: Agrolink; beans indicator Sc 60kg.. 11Source: Nielsen Scantrack Index bimonthly, Oct-Nov/18 vs. Aug-Sep/18
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Sugar
In the sugar category, we can remark sequential and annual volume growth, reaching 134.7 thousand tons (+1.8% QoQ and +1.8% YoY). This result derived from sales volume growth in cristal sugar and value pricing brands.
Sugar Brazil – Quarterly Volume Evolution (´000 ton) Sugar Brazil - Volume and Net Price QoQ e YoY
Source: Company Source: Company
Regarding acquisition cost of raw material, the average price for sugar reached R$64.27/bag12 (+17.5% QoQ and
+12.8% YoY). Gross price of sugar reached R$2.09/kg (-0.9% QoQ and +0.1% YoY), net price reached R$1.80/kg (-1.9% QoQ e -2.1% YoY), these are below the growth observed in the market, as a result of the company´s strategy towards the market in a scenario of price aggressiveness by the competition, as well as the sales volumes recovery in the value pricing brands and cristal sugar, which pressure the average prices down.
Sugar Brazil – Brazilian Market (in R$/bag) Sugar Brazil - Market vs. Camil’s prices
Sugar Brazil – Products Portfolio Sugar Brazil – Volume Breakdown (%)
Source: Company Source: Company
The Company registered 31, 8% of market share (+0,2pp in a bimonthly comparison) and 36.4% value share (+0.4pp in a bimonthly comparison).13
12Source: CEPEA; Cristal Sugar indicator Esalq-SP 50kg 13Source: Nielsen Retail Index bimonthly, Oct-Nov/18 vs. Aug-Sep/18
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Canned Fish
In the Canned fish category, we can remark sequential volume growth, reaching 10.1 thousand tons (+24.7% QoQ and -7.3% YoY). This result was driven by the increase in seasonal sales volume during the period that precedes lent for Coqueiro brand sardines and tuna.
Canned Fish Brazil – Quarterly Volume Evolution (´000 ton) Canned Fish Brazil – Net Price and Volume QoQ and YoY
Source: Company Source: Company
Canned Fish Brazil – Gross Price Camil
Gross price reached R$20.04/kg (-0.7% QoQ and +5.6% YoY) and net price of R$15.36/kg (-1.5% QoQ and +6.4% YoY).
We continue to observe low fishing volume in the Brazilian coast. Given that, we register high raw material import levels, which leads to encumbering the product´s final price. Given sardine and tuna´s high prices in the Brazilian market, we believe the consumer started to replace this product for other proteins.
Given this scenario, we initiated price readjustments in the second quarter of 2018 and regained market competitiveness.
Source: Company
Canned Fish Brazil – Products Portfolio Canned Fish Brazil – Volume Breakdown (%)
Source: Company Source: Company
The Company registered 42.0% of market share in Sardines (-0.9pp in a bimonthly comparison) and 42.2% of value share (-0,9pp in a bimonthly comparison). In Tuna the same indicators reached 24.8% (+1.6pp in a bimonthly comparison) and 26.4% (+1.2pp in a bimonthly comparison), respectively.14
14Source: Nielsen Retail Index bimonthly, Oct-Nov/18 vs. Aug-Sep/18
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International Segment
In the International Segment, we can remark sequential and annual volume growth, reaching 179.1 thousand tons in the quarter (+23.7% QoQ and +1.1% YoY)15.
We highlight that the result in International Food Segment considers our operations in Uruguay (Saman brand), Chile (Tucapel brand), and Peru (Costeño brand). Our operations in Peru and Chile are mainly addressed to supply internal market, while Uruguay is predominantly addressed to export
markets.
International – Volume Breakdown per Country (%) Source: Company
Uruguay
Uruguay´s sales volume reached 136.5 thousand tons, growth of 31.2% QoQ and 3.3% YoY. We remarked a volume recovery in the country given the sequential and annual improvement, a result of the revival of sales postponed during the first half of 2018. Gross price per US$ per ton presented growth of +4.6% QoQ and 2.5% YoY. Gross Price in BRL reached R$2.12, increase of 5.7% QoQ and 24.2% YoY. Average exchange rate for the period (US$/R$) reached R$3.88 (+0.8% QoQ and +21.3% YoY).
Uruguay – Quarterly Operational Performance (000 ton) Source: Company
Chile Sales Volume in Chile reached 20.4 thousand tons, growth of 2.6% QoQ and 5.6% YoY. We continue presenting profitability growth due to a higher added value product mix in the country. Gross price in CLP per ton presented decrease of 1.5% QoQ and 1.5% YoY. Gross Price in BRL reached R$5.62, decrease of 5.1% QoQ and growth of 10.8% YoY. Average exchange rate for the period (CLP/R$) reached R$175.18 (3.6% QoQ e -11.2% YoY).
Chile - Quarterly Operational Performance (000 ton) Source: Company
Peru Sales Volume in Peru reached 22.2 thousand tons, growth of 6.4% QoQ and decrease of 13.9% YoY. Political unrest pressures retail as a whole, affecting sales in the period. In the medium and long term, growth perspective is supported by the trend of rice migrating from being sold in bulk to package. Gross price in SOL per ton presented growth of 4.0% QoQ and decrease of 3.8% YoY. Gross Price in BRL reached R$4.81, growth of 3.0% QoQ and 22.3% YoY. Average exchange rate for the period (SOL/R$) reached R$0.86 (+0.9% QoQ and -15.1% YoY).
Peru - Quarterly Operational Performance (000 ton) Source: Company
15Excludes Argentina´s volume from 2Q18 e 3Q17 comparisons, due to the sale of the totality of the corporate interest held by the Company in the Argentinian subsidiary La Loma in the 2Q18.
Rice
28%
Beans4%
Sugar28%
Fish
2%
International38%
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Consolidated Financial Performance
Statements (in R$ millions) 3Q17 2T18 3Q18 3Q18 vs 3Q18 vs 9M17 9M18 6M18 9M18 vs.
Net Margin 6.9% 10.6% 6.6% -0.3pp -4.0pp 6.3% 3.4% -2.9pp
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Revenues
Net consolidated revenue reached R$1.3 billion in the
quarter, growth of 9.3% YoY. This result was due to an increase in the International Food Segment net revenue of 20.3% YoY, reaching R$409.3mm, also due to the growth of net revenues for the Brazil Food Segment of 4.7% YoY, and reaching R $857.5 mm.
Consolidated gross margin reached 25.3%, increase of 0.6pp YoY, driven by a margin increase in the Brazilian Food Segment of +0.9pp (24.4%). International Food Segment reached a gross margin of 27.0% (-0.5pp).
Costs & Expenses
Net Revenue vs. Costs Evolution (R$mn)
Source: Company
Cost of Sales and Services
Cost of Sales and Services reached R$946.9mm in the quarter, growth of 8.4% YoY. This growth was mainly resulted by sales volume increase in beans, sugar, canned fish and the international segment.
Cost of sales and services reached 74.7% of the Net Revenue in 3Q18 compared to 75.3% in 3Q17.
SG&A
The SG&A reached R$231.1mm in the quarter, growth of 22.8% YoY. As a percentage of the net revenue of sales and services, the SG&A reached 18.2% in the quarter (+2.0pp YoY).
The increase was mainly due to the: (i) growth in SG&A in the Brazilian Food Segment (+22.0% YoY), due to higher expenses related to freight and increased export levels between periods; (ii) SG&A increase on the International Food Segment (+24.6% YoY), mainly due to exchange rate depreciation (average exchange rate for the period R$/US$ +21.3% YoY) and sales volume increase in Uruguay and Chile.
Operational Expenses/Net Revenue (%) Source: Company
Expenses 3T17 2T18 3T18 3T18 vs 3T18 vs 9M17 9M18 9M18 vs.
Closing Date 30-nov-17 31-ago-18 31-nov-18 3T17 2T18 30-nov-17 31-nov-18 9M17
(i) Growth of selling expenses in the Brazilian Food Segment, due to increase in expenses related to freight and those related to the higher level of exports between periods and increase in beans, sugar and canned fish sales volumes. Both elements were partially compensated by a reduction in advertising investments; e
(ii) Growth in International Food Segment sales expenses, due to the growth in Uruguay sales volume, depreciation of BRL vs. average USD in the period of +21.3% and continuous increase in sales volume in Chile.
G&A Expenses: General & Administrative expenses reached R$71.6mm in the quarter, increase in 22.4% YoY, driven by:
(i) Increase in G&A by the Brazilian Food Segment, due to: (i) growth in expenses with bonuses and gratuities; (ii) impact of tax expenses (ICMS and others); (iii) IT software and equipment maintenance; and (iv) provision for doubtful accounts.
(ii) Increase in G&A on the International Food Segment, due to the depreciation of the BRL vs. USD and the remaining impact of La Loma´s sale.
We highlight that in comparison to the last quarter, total SG&A as a percentage of Net Revenue presented a reduction of 1.6pp, supporting the company´s reduction actions focused in personnel, and marketing and driven by the decrease in leases and freights, as a result of the reduction in rice sales volume in Brazil.
Other operating revenues (expenses)
Other operational expenses reached R$39.2mm, composed by non-recurring expenses of de R$36.0 relative to:
(+) R$84.5mm relative to tax credits from IRPJ and CSLL of ICMS subsidy, considering a 5 year retroactive effect to the Company;
(+) R$38.1mm recognition of outdated PIS and COFINS tax credits with the exclusion of ICMS from assessment bases (R$43mn of credit and R$5mn of expenses related to advocative hours);
(-) R$42.5mm relative to the adhesion to Rural Tax Regularization Program (Funrural); and
(-) R$44.1mm in provision for losses of industrial unit with the closure and migration of canned fish activity from the São Gonçalo unit (RJ) to Navegantes (SC).
EBITDA
Taking into consideration the elements above, the consolidated EBITDA for the period reached R$151.4mm in the quarter (+17.5% YoY) with a 12.0% margin (+0.8pp).
In order to exclude the non-recurring effect brought by the expenses described in “other operating revenues” above, the EBITDA reached R$115.4mm (-10.4% YoY), with a 9.1% margin (-2.0pp YoY).
Net Financial Results
Net Financial Expenses reached R$18.8mm positive in the quarter (vs. R$12.6mm negative in 3Q17).
EBITDA Evolution (R$mn)
Source: Company
This was mainly due to the growth in financial revenues creating a +R$41.5mm non-recurring impact referring to the recognition of monetary restatements from tax credits from IRPJ and CSLL of ICMS subsidy recognition and PIS and COFINS credits generated by the exclusion of ICMS from assessment bases, compensated mainly by interest expenses over loans and financing of R$19.4mm. Among financial revenues and expenses, the main impacts were:
Financial revenues of R$82.3mm in the quarter (+195.2% YoY), relative to: (i) R$41.5mm non-recurring relative to the recognition of monetary restatements from tax credits from IRPJ and CSLL of ICMS subsidy recognition and PIS and COFINS credits generated by the exclusion of ICMS from assessment bases; (ii) gains from derivative financial instruments , due to the increase in imports, combined with the dollar variation; (iii) increase in interest over financial applications; and (iii) growth in International Food Segment financial revenues (+24.0% YoY), due to exchange rate variation in the period.
Financial expenses of R$63.5mm in the quarter (+57.1% YoY), relative to the 69.1% growth in Brazilian Food Segment financial expenses, due to interest expenses over loans and financing of R$19.4mm and losses relative to derivative financial instruments.
16
Income Taxes and Social Contribution Taxes
The Income and Social Contribution taxes in the period reached R$3.8mm positive (vs. expense of R$21.2mm in 3Q17).
The result was mainly impacted by the exclusion of: (i) R$43.4mm relative to the recognition of ICMS subsidy; (ii) R$15.3mm
relative to the IOE R$45mm payment in November 2018; (iii) R$7.7mm related to the charges of adhesion to Funrural.
Net Profit and Earnings per Share
Taking into consideration the factors described above, the period’s Net Profit reached R$150.3mm in the quarter (+109.0%
YoY) with an 11.9% margin (+5.7pp). In order to exclude the recognition of non-recurring revenues in other operating
revenues and in the financial result, the net profit reached R$71.8mn (-0.2% YoY), with a 5.7% margin (-0.5pp YoY)
Earnings per Share reached R$0.37, being R$0.18 the EPS excluding the non-recurring effects of the quarter.
Net Profit Evolution (R$mn) Profitability Evolution (R$mm)
Source: Company Source: Company
Debt and Cash
Total debt presented 18.5% YoY growth, due to the increase in Debentures with the CRA emissions between periods and exchange rate depreciation in the international segment’s debt. Total liquidity (cash and equivalents and financial applications of short and long terms) reached R$461.4mn (+8.2% YoY and -30.7% QoQ). Given that, the company registered Net Debt/EBITDA of 1.9x.
Amortization Schedule (R$mm)
Source: Company
Debt (in R$mn) 3T17 2T18 3T18 3T18 vs 3T18 vsClosing Date 30-nov-17 31-ago-18 31-nov-18 3T17 2T18Total Debt 1.170,0 1.491,2 1.386,0 18,5% -7,1%
Loans and financing 360,1 512,8 404,3 12,3% -21,2%Debentures 809,9 978,4 981,7 21,2% 0,3%Short Term 179,3 362,2 275,9 53,9% -23,8%Long Term 990,7 1.129,0 1.110,1 12,1% -1,7%
Working Capital presented 25.7% YoY growth, as shown below:
Inventories: 22.4% YoY increase, due to the increase in Brazil rice inventories. This is a result of sales volume decrease in the period and also because of Uruguayan operations, mainly due to the exchange rate depreciation.
Advance to Suppliers: growth of 15.8% YoY, due to the impact of the International Segment and exchange rate depreciation.
Accounts receivable: 12.7% YoY increase, as a result of sales with receivables after the quarter ended on Uruguay and FX impact.
Suppliers: increase of 24.1% YoY, due to the improvement in payment conditions in Brazil and Uruguay operations and exchange rate depreciation in International Operations.
Sazonalidade do Capital de Giro Trimestral (R$mm) Source: Company
Capex
Capex reached R$42.7mm in the quarter (+66.8% YoY) mainly due to:
investments in a grain plant in Recife; expansion Project for drying and increase in
Itapecuru´s grain warehouse; and sugar packaging internalization project (“Super
Barra”).
Capex Evolution (R$mm)
Source: Company
Working Capital 3Q17 2T18 3Q18 3Q18 vs 3Q18 vs
Closing date 30-Nov-18 31-aug-18 31-nov-18 3Q17 2Q18
Other Current Assets 119.2 151.8 311.5 161.3% 105.2%
Other Current Liabilities 163.1 206.0 238.5 46.2% 15.8%
Working Capital 1,323.5 1,468.2 1,663.8 25.7% 13.3%
Days 100.5 120.6 134.0 33.4% 11.1%
18
Free Cash Flow
Camil registered free cash flow to firm of R$64.3mm
negative in the quarter (vs. R$124.7mm negative in
3Q17).
The Company´s free cash flow generation has a relevant seasonality over quarters, this mainly results from the quarterly seasonality of working capital, more specifically in inventories and accounts receivable, as described earlier. Given that, the year´s first and second quarters normally present cash intake while third and fourth quarters present working capital liberation and improvements in the operating cash flow.
Free Cash Flow Seasonality (R$mm)
Source: Company
Free Cash Flow Evolution (R$mn)
Quarterly Free Cash Flow Evolution (R$mm)
Fonte: Companhia Fonte: Companhia
Free Cash Flow to Firm (in
R$mn) 3Q17 3Q18 3Q18 vs
Closing Date 30-Nov-18 31-nov-18 3Q17
Net Income 71.9 150.3 109.0%
(+) D&A 23.2 23.7 2.2%(-) ∆ Working Capital (194.2) (195.6) 0.7%
(-) Capex (25.6) (42.7) 66.8%
Free Cash Flow to Firm (124.7) (64.3) -48.4%
19
Shareholder Structure
In December 2018, the Company had a capital stock of
410.1mm shares and 120.1mm shares free float16,
representing 29% of total capital. By the end of December
2018, approximately 50% of our shares were held by local
investors and 50% by foreign investors vs. 58% local and
42% foreign at the time of the IPO.
In number of shareholders, we registered 87 institutional
investors and over 7,290 classified as personal investors,
investment clubs, among others.
Shareholder Structure (December-2018)
Source: Company
Performance Acionária
On December 28, 2018 Camil´s shares (B3: CAML3) closed at $7.05/share with a market cap of R$2.9 billion (US$ 747 mm).
The quarter´s average daily trading volume was 637 thousand shares, or R$4.6 mm per day.
Since the IPO in September 2017 CAML3 decreased by 21.6%. During the same period, IBOV index increased by 24.4%.
Share Performance since IPO vs. Ibovespa (base 100)
Source: Company
IR Schedule
We reinforce our commitment of transparency and strong relationship with the market. We present below the
Corporate and Investor Relations preliminary schedule for the next months.
Year Event Date
2019 Conference for 3Q18 Results Jan 11, 2019
2019 Santander Conference, Cancun Jan 16, 2019
2019 NDR Itaú, Rio de Janeiro Jan 23, 2019
2019 Credit Suisse Conference, SP Jan 29-30, 2019
2019 Breakfast with Camil’s CEO & CFO, Itaú - SP Feb 14, 2019
2019 BTG CEO Conference, SP Feb 26-, 2019
2019 Santander Conference, SP Mar 22, 2019
2019 Itaú Consumer Event, Londres Mar 25-26, 2019
2019 NDR Middle East & Ásia Mar 27-29, 2019
2019 Bradesco Conference, SP Apr 2-3, 2019
2019 Earnings Release 4Q18 May 16, 2019
2019 Q&A for the Earnings Release 4Q18 May 17, 2019
2019 NDR Boston & NYC May, 2019
2019 Breakfast with Camil’s CEO & CFO, SP May 23, 2019
2019 NDR, Rio de Janeiro May 24, 2019
2019 General Shreholders Meeting June 28, 2019
2019 Earnings Release 1Q19 July 11, 2019
2019 Q&A for the Earnings Release 1Q19 July 12, 2019
16 Excludes participation held by Camil Investimentos S.A., Luciano Maggi Quartiero, Jacques Maggi Quartiero, Thiago Maggi Quartiero, other managers/related parties and treasury shares.
Camil Investimentos;
60,6%
Warburg Pincus; 8,6%
Franklin Templeton
5,0%
Mgt and Other Related Parties;
0,1%
Treasury; 1,4%
Free float¹;
29,3%
20
Appendix I – Operational Highlights
Consolidated Balance Sheet
Balance Sheet
In million R$ 3Q17 2T18 3Q18 3Q18 vs 3Q18 vsClosing Date 30-Nov-18 31-aug-18 31-nov-18 3Q17 2Q18
Total Current Assets 2,206.3 2,797.4 2,769.4 25.5% -1.0%Cash & Equivalents 187.4 369.1 222.6 18.8% -39.7%
