Institutional Presentation November, 2014

Institutional
Presentation
November, 2014
Marfrig Global Foods
Profile
3
History and Overview

1986: Startup of operations in Brazil with the distribution of premium beef cuts

1986-2005: Diversification into new regions across Brazil and start of exports

2005-2006: International expansion through acquisitions in South America

2007: IPO in Novo Mercado segment of BM&FBOVESPA

2008: Acquisition of Moy Park, one of the largest food companies in the UK

2009: Acquisition of Seara, one of the largest food companies in Brazil

2010: Acquisition of Keystone, one of the world's largest food suppliers to
restaurant chains and quick service restaurants

2012: Divestment of Keystone's logistics services business and focus directed
to the protein business

1H13: Divestment of the Seara and Zenda business units
4
History and Overview

2H13: Launch of strategic plan “FOCUS TO WIN”
Net Revenue
(1)
EBITDA
Margin (2)
Investment
(CAPEX)
Free Cash Flow
to
Shareholders
2014
Target Range
9M14
% achieved
2018
Target Range
R$21.0bn to
R$23.0bn
R$15.1bn
72% - 66%
7.5% - 8.5%
8.2%
109% - 96%
8.5% to 9.5%
R$600MM
R$447MM
75%
n/d
Breakeven to
R$100MM
R$71MM

R$650MM to
R$850MM
7.5% to 9.5%
(CAGR 2012-18)
Note:
(1) Revenue calculated in R$ billion based on FX rate of R$2.40/US$ in 2014 and stable going forward, with no projected inflation.
(2) Excludes non-recurring items.
5
Corporate Profile

Marfrig is one of the largest and most diversified global food
companies
World’s 3rd largest
beef producer and
one of South
America’s largest
lamb suppliers
More than
45,000
employees
One of the world’s
largest providers of
processed food to
major restaurant
chains
78
commercial
production and
distribution
units
One of the largest
poultry-based
processed products
suppliers in the UK
and Europe
16
Presence in
countries in the
Americas, Europe,
Asia and
Oceania
Diversified presence
in animal protein,
serving the Retail and
Food Service
Channels
Serving global retail
and food chains in
over
countries
110
6
Corporate Profile

Net Revenue
21.9
(R$ billion)
23.7
21.0 – 23.0
18.8
15.9
9.6

1.0
1.3
1.4
2.1
2003
2004
2005
2006
3.3
2007
6.2
2008
2009
2010
2011
2012
2013
2014*
Revenue Breakdown - 9M14
% by Business
46% 28%
Marfrig Beef
Keytone
Moy Park
* Guidance 2014
26%
% by Currency
42% 26% 21% 11%
USD
EUR/GBP
BRL
Other
% by Product
46%
Processed
Fresh
Other
44% 10%
7
Corporate Governance Structure
Marcos Molina
Chairman of the Board
Audit Board
Sergio Rial
CEO - Marfrig Global Foods
CEOs
Business Units
Corporate
Vice-Presidents
Heraldo Geres
VP - Legal
Jaime Singer
Andrew
Murchie
Martin
Secco
Marfrig Beef Marfrig Beef
Brasil
Southern
Cone
Frank
Ravndal
Janet
McCollum
Keystone
Foods
Moy Park
VP – Strategic Planning
Marcello Zappia
VP – Human Resources
Ricardo Florence
VP – Finance and IRO - CFO
8
Corporate Governance Structure

Variable compensation plan



Individual targets for each area
Financial targets connected with guidance
Net Revenue
EBITDA
Margin
CAPEX
Free Cash
Flow
Weight
20%
Weight
20%
Weight
10%
Weight
50%
Weights:
•
CEO, Vice Presidents, Officers: 70% Financial Targets and 30% Individual
Targets
•
Managers: 50%-40% Financial Targets and 60%-50% Individual Targets
9
Commitment to Sustainability

Greenpeace Pact: higher exports to European market
and sales of canned meat at Tesco

Rainforest Alliance Certified: sales of beef with social
and environmental responsibility seal to Carrefour and of
sustainable leather to Gucci

Carbon Disclosure Project and GHG Emission
Inventory: first company in industry to report Scope 3
emissions

The Nature Conservancy: participation
organization's board for Latin America

Business Benchmark on Farm Animal Welfare
(BBFAW): elected one of the world’s leading companies
in animal welfare in 2013
on
the
Marfrig Beef
11
Marfrig Beef | Overview
 One of the world's largest beef and lamb producers
 Strong expertise in supplying food service chains in Brazil
 Pioneer in the development of new export markets
 Geographic diversification in South America helps mitigate
sanitary risks
 Brands
portfolio
recognized for quality and diversified product
 World’s
3rd largest beef producer and Brazil's 2nd largest
beef operation
 Uruguay's
leading primary processor and Chile's largest
meat importer
12
Marfrig Beef | Overview

Production Structure
Brazil
Uruguay/Chile
Argentina
19 units
7 units
2 units
17,200 employees
3,300 employees
1,400 employees
3.7 million head of
cattle/year
930,000 head of
cattle/year
390,000 head of
cattle/year
2.0 million lamb/year

Revenue Breakdown – 3Q14
% by Channel/Market
44%
% by Protein
36% 15% 5%
Brazil Domestic
Brazil Export
Uruguay/Chile
Argentina
76% 7% 17%
Fresh Beef
Processed
Lamb, Leather and Other
13
Marfrig Beef | 3Q14 Highlights

Net Revenue
(R$ million)
2,482
2,365
2,240
9M14:
R$6.9bn
2,256
2,075
+ 11%
3T13
3Q13



4T13
4Q13
1T14
1Q14
2T14
2Q14
3T14
3Q14
Stronger exports from Brazil
Continued good performances at the Uruguay and Chile operations
Lower average price in Brazil's domestic market due to the shift in the product
mix
14
Marfrig Beef | 3Q14 Highlights

Adjusted EBITDA and Margin
(R$ million and %)
10.0%
9.0%
9.5%
10.2%
8.6%
253
226
202
197
203
9M14:
R$653MM
9.4%
+ 25%
3T13
3Q13
4T13
4Q13
1T14
1Q14
2T14
2Q14
3T14
3Q14

Higher raw material (cattle) costs passed through to export sales

The Productivity Agenda Project in Brazil yielded initial savings of over R$13
million from the implementation of a series of actions to improve expense
management
15
Marfrig Beef | Strategic Goals
 Productivity Agenda Project in Brazil






Rigorous monthly budget with diminishing cost targets

Use of cheaper energy sources (steam) and reduction of cold-storage
temperature losses

Raise performance and optimization levels at production units to meet the
company’s internal benchmarks
Better management of overtime, attendance and shifts
Restructuring of the sales/marketing team and redesign of route map
Greater control of travel/transportation expenses
Review and renegotiation of various contracts
Review of procurement/expense model for maintenance, laundry, uniforms,
etc
Estimated annual savings of R$30MM
16
Marfrig Beef | Strategic Goals

Segmentation of service to Food Service channel
Large
Chains
Service
Providers
Street
Business
Independent
Establishments

Specialized
relationship

Negotiations

Pricing dynamics

Product
customization

Delivery times

Logistics
management
17
Marfrig Beef | Strategic Goals

Retail


Higher sales to small retailers
Partnerships with large retailers for portioned cuts based on
specific consumer demands
Pilot Project
18
Marfrig Beef | Outlook & Scenario Brazil
Brazil enjoys a very competitive position in world beef exports
Beef Cattle by Country

(million head)
Cattle Price
(USD/KG – Carcass Weight)
CAGR
10-14
India
330
Brazil
209
China
104
BRAZIL
BRASIL
AUSTRÁLIA
USA
EUA
URUGUAI
URUGUAY
1.0%
3.0%
$5.44
-0.3%
EU
88
-0.6%
$3.72
$3.68
USA
88
-1.5%
$3.27
Aug-14
Mar-14
0.4%
Oct-13
28
May-13
Australia
Dec-12
-0.6%
Jul-12
30
Feb-12
Colombia
Sep-11
1.6%
Jun-10
52
Jan-10
Argentina
Apr-11

Nov-10

19
Marfrig Beef | Outlook & Scenario Brazil


The opening up of new markets to Brazilian beef should drive
export growth

Share in Exports
Marfrig Beef Brazil
Marfrig Beef Brasil
(R$ million and % of Revenue)
42%
33%
Exports by Destination 3Q14
(% of Revenue)
45%
1,971
1,734
Europe
Asia
South/Central America
1,473
Middle East
Russia
Other
3T12
3Q12
3T13
3Q13
3T14
3Q14
20
Marfrig Beef | Outlook & Scenario Brazil

Despite its competitive advantages, Brazil still lacks access to
the world's largest beef importers
Main import markets
Import volume
(‘000 tons/year)
Share of world imports
Restrictions on Brazil
USA
1,055
13.6%
Negotiation
Russia
1,020
13.1%
Open
Japan
760
9.8%
Closed
Hong Kong
575
7.4%
Open
China
550
7.1%
Negotiation
European Union
380
4.9%
Open / Hilton
South Korea
360
4.6%
Closed
Venezuela
300
3.9%
Open
Canada
290
3.7%
Closed
Chile
255
3.3%
Open
Mexico
235
3.0%
Closed
21
Marfrig Beef | Outlook & Scenario Uruguay

Uruguay enjoys access to main
beef import markets

Exports by destination 3Q14
Marfrig Beef Uruguay (% of Revenue)
Europe
Main import
markets
Restrictions on
Uruguay
USA
Open
Russia
Open
Japan
Negotiation
Hong Kong
Open
China
Open
European Union
Open
South Korea
Open
Venezuela
Open
Canada
Open
Chile
Open
Mexico
Open
Asia
South/Central America
Middle East
Russia
Other

Share of Exports
Marfrig Beef Uruguay (R$ million and % of Revenue)
55%
49%
347
56%
379
268
3Q12
3T12
3Q13
3T13
3Q14
3T14
22
Marfrig Beef | Outlook & Scenario Argentina
 15% tax levied on all exports from the country
 Each export transaction must be informed to and approved by
the Trade Department
 Some
items in the domestic market have price caps set by
the government
 Marfrig
Beef temporarily cut back its operations to two
production units
Keystone Foods
24
Keystone Foods | Overview
 Tradition stretching back over 50 years
 A leading global supplier of products to the food
service industry and QSR chains
 Over 30,000 clients in North America and APMEA
(Asia, Pacific, Middle East and Africa)
 Important protein supplier to McDonald's (61% of
unit’s sales in 3Q14)
 Committed to the highest food safety and quality
standards
 Long-standing history of innovation
25
Keystone Foods | Overview

Production Structure
United States

APMEA
7 units
7 units
6,200 employees
5,400 employees
190 million birds/year
40 million birds/year
400,000 tons of processed food/year
150,000 tons of processed food/year
Revenue Breakdown - 3Q14
% by Channel/Market
76%
% by Protein
24%
74% 22% 4%
USA
Further processed poultry
APMEA
Further processed beef
Other
26
Keystone Foods | 3Q14 Highlights

Net Revenue
(R$ million)
1,483
1,390
1,391
1,414
1,412
9M14:
R$4.2bn
- 5%
In the USA:
3T13
3Q13
4T13
4Q13
1T14
1Q14
2T14
2Q14
3T14
3Q14

Pricing model adopted with our main client whereby product prices reflect drops in
raw material costs

Change in sales mix to QSRs
In APMEA:

Sales mix was impacted by an incident involving a competitor food supplier to our
main client in China
27
Keystone Foods | 3Q14 Highlights

Adjusted EBITDA and Margin
(R$ million and %)
6.4%
6.9%
8.0%
111
95
96
7.1%
6.1%
100
87
9M14:
R$298MM
7.1%
- 9%
3Q13
3T13



4Q13
4T13
1Q14
1T14
2Q14
2T14
3Q14
3T14
Impact of mark-to-market adjustments of unrealized hedge losses
Higher outside meat costs
Lower feed costs
28
Keystone Foods | Strategic Goals

Comprehensive product portfolio for food service industry and QSR
chains
Poultry-based products
Nuggets
Chicken
patties
Beef-based products
Grilled
strips
Beef patties
Other
Coated seasoned cuts
Fish patties
Bacon and
“Halal” Bacon
Desserts
29
Keystone Foods | Strategic Goals

Integrated production chain allows greater control and ensures
product availability, consistency and quality
Vertical integration
corresponding to
70% poultry supply
Bird Selection
Pullet Farms
Selection of breeds
based on performance
Hens raised until they
reach sexual maturity
in Keystone’s
operation in the U.S.
Further Processing
Creation of chickenbased fully-cooked, parfried and marinated
products.
Breeder Farms
Hens lay eggs that
are taken to the
hatchery
Feed Plant
High quality feed is produced to
optimize the performance of chickens.
Primary Processing
Poultry slaughter with
the carcass forwarded
to the further
processing units
Broiler Farms
Broilers are raised until
they reach the targeted
weight.
Fertile Hatchery
Fertile hatching eggs
are incubated and
hatched.
30
Keystone Foods | Strategic Goals

Established a Broad Footprint in APMEA Supplying 19 Countries
Across the Region

APMEA Sales Well Diversified
(% of revenue by country of destination - 2013)

Volume growth in all markets where
we have production presence
(‘000 pounds)
United Arab
Emirates
5%
Australia
6%
Other
3%
12.4% CAGR
313
Australia
China
30%
South Korea
Singapore
8%
Thailand
Middle East
11%
South Korea
12%
109
Malaysia
Japan
13%
Malaysia
12%
China
2004
2013
31
Keystone Foods | Outlook & Scenario


Potential QSR segment growth in USA

Sales of major QSR chains
(US$ billion)
Expected market growth
(US$ billion)
5.5% CAGR
35.9
265
Keystone
Customer
12.7
11.7
8.8
250
3.7% CAGR
8.5
185 188
09
Source: Euromonitor / U.S. Fast Food, QSR 50 Report 2012
10
195
11
204
12
214
13
225
236
14E 15E 16E 17E
32
Keystone Foods | Outlook & Scenario

Potential QSR segment growth in APMEA

Per-capita poultry consumption by country
(2013)
India
Pakistan
Indonesia
Philippines
Thailand
China
Vietnam
Korea
Turkey
Saudi Arabia
Malaysia
Growth drivers
0
10
20
30
40
Kg / inhabitant / year
Source: OECD-FAO Agricultural Outlook 2014-2023
50

Higher per-capita GDP

Population growth

Growing middle class

Rural flight
33
Keystone Foods | Outlook & Scenario

Potential QSR segment growth in APMEA

Yum Brands expects to open 700 new stores in China in
2014

KFC chain has over 4,500 restaurants in over 1,000 cities in
China

Pizza Hut chain has over 1,200 restaurants in over 300 cities
in China

McDonalds’ has opened an average of 190 stores per year
since 2008 in China, and currently has 2,000 stores

McDonalds’ has opened an average over 300 stores per
year since 2008 in APMEA, and currently has some 10,000
stores
Source: websites of Yum Brands and McDonald’s
Moy Park
35
Moy Park | Overview
 Over 70 years of tradition and growth
 One of the 15 largest food companies in the UK and
largest company in Northern Ireland
 Relationships with leading retailers and food service
operators in UK and continental Europe
 Unique and comprehensive poultry production platform
with high quality standards
 Clear opportunities for growth and operational excellence
to drive margin expansion
 Pioneer in the production of free range and organic
poultry
36
Moy Park | Overview

Production Structure
UK and Continental Europe
14 units
12,000 employees
240 million birds/year
270,000 tons of processed food/year

Revenue Breakdown - 3Q14
% by Market
% by Channel
61% 29% 10%
74% 25% 1%
UK
Continental Europe
Other
Retail
Food Service
Other
% by Protein
53%
Processed
Fresh
Other
40% 7%
37
Moy Park | 3Q14 Highlights

Net Revenue
(R$ million)
1,332
1,321
1,338
1,345
9M14:
R$4.0bn
1,222
+10%
3T13
3Q13



4T13
4Q13
1T14
1Q14
2T14
2Q14
3T14
3Q14
Sales growth in the retail channel in UK and Ireland, led by fresh meats
Positive contribution from currency variation in the period (7%)
Consolidation of Marfrig's convenience beef business in Europe
38
Moy Park | 3Q14 Highlights

Adjusted EBITDA and Margin
(R$ million and %)
7.6%
6.4%
101
7.2%
7.0%
7.1%
95
94
96
78
9M14:
R$284MM
7.1%
+24%
3Q13
3T13



4Q13
4T13
1Q14
1T14
2Q14
2T14
3Q14
3T14
Grantham Project for optimizing the further processing unit in England: lower
production and labor costs
Lower grain costs
Higher freight expenses resulting from the consolidation at Moy Park of Marfrig Beef
Brazil's beef business in Europe
39
Moy Park | Strategic Goals


Moy Park has leading positions in the highest value, growing
retail segments in poultry

Fresh poultry
Chilled ready-to-eat

Chilled fresh coated
46%
25%
52%
48%
75%
Second largest
producer in the UK
Source: Kantar Worldpanel, Euromonitor
54%
Leading market positions in higher growth
convenience food categories
(growth of over 6% p.y.)
40
Moy Park | Strategic Goals
 Unique Comprehensive Poultry Farming Production
Platform
Completely vertical integration
•
Grandparent stock
•
Parent hatchery
•
Parent rearing
•
Parent laying
•
Broiler hatchery
•
Broiler housing
•
Feed mill
•
Slaughterhouse/Portioning
•
Further processing
•
Commercial/Marketing
High animal
welfare
Free range and
organic
45% of Moy Park’s broiler housing
is less than 10 years old, vs. 8% for
the industry
41
Moy Park | Strategic Goals



Longstanding relationships with customer base
Working to enhance product offerings
Developing partnership for future growth opportunities
Competitive advantages
Key Clients
Retail
Food Service
Long-term relationships

Focus on win-win profitability with
customers

Enhanced risk management
Developing deep customer access
and insights
 Drive growth in new channels and with
v
new, innovative products
Sustainability
42
Moy Park | Strategic Goals

Innovation and food development

Delivered an average of 1 to 2 new innovations per year during the
last 10 years with growing NPD pipeline
2011
Jamie Oliver
Menu launched in
supermarkets
2012
Meals
High-quality meals
made with Irish
ingredients
2013
Snacks
Convenient
snacking
products
2014
Kitchen
Ready meals in
convenient pouches
43
Moy Park | Outlook & Scenario
 UK poultry dynamics

Retailer and consumer focus on UK provenance

Growth in demographics: UK population forecasted to grow
from 63 to 70 million by 2030

Consumer preference for fresh, convenience and locally farmed
products

Most versatile and healthy protein, also consumed by most
religions
44
Moy Park | Outlook & Scenario


UK protein production
Kill per week (million head)
20
Birds
19.1
Hogs¹
19
Cattle¹
18
Origin of UK poultry
Imported
UK produced
38%
17.2
62%
17
16
14.7
15
14
13
Jan-08
Jan-14
Dec-16
Source: DEFRA UK broiler slaughter (rolling weekly average)
¹ Pork and Beef in ‘000 tons, indexed to 2008
UK production
expected to
increase
4% p.a.
45
Moy Park | Outlook & Scenario

Poultry is the most affordable protein
Cost per ton
(£)1

UK sales volume
(‘000 tons)
4,420
CAGR 1.6%
800
1,300
778
746
1,590
700
CAGR 1.6%
600
Chicken
Pork
Beef
500

CAGR 0.1%
Evolution of UK consumption
2007-2012 (‘000 tons)
Chicken
400
Pork
Beef
175
CAGR 0.1%
300
38
Source: Euromonitor, USDA
1 Production price
442
314
200
2012A 2013A 2014E 2015E 2016E 2017E
-125
Chicken
Fish
Beef
Pork
46
Moy Park | Outlook & Scenario
 Peer comparison – EV/EBITDA14E
(Circle size = Enterprise Value)
EBITDA 2014E (USD MM)
400
HILTON
GREENCORE
300
CRANSWICK
SCANDI STANDARD
200
175
EBITDA LTM
MOY PARK
USD 170 MM
121
100
67
62
0
6,5
Source: Factset
7,0
7,5
8,0
8,5
9,0
EV/EBITDA
9,5
10,0
10,5
11,0
11,5
47
Moy Park | Outlook & Scenario
 Pricing Dynamics of UK IPOs
2013
1Q14
Under
Source: Dealogic
Bottom
2Q14
Middle
Top
3Q14
Upper
Consolidated Financial
Performance
49
Financial Performance | Consolidated


Net Revenue
(R$ million)
Breakdown by Business
(%)
Receita por Negócio - 3T13
Receita
por Negócio
3Q14
3Q13
45%
25%
47%
26%
+ 6%
30%
Compared to 3Q13:



Moy Park  +10% to R$1,345MM
Keystone  -5% to R$1,412MM
Marfrig Beef  +11% to R$2,482MM
27%
50
Financial Performance | Consolidated

Gross Income and Gross Margin
(R$ million and %)

Breakdown by Business
(%)
Lucro por Negócio - 3T13
Lucro por Negócio - 3
3Q13
63%
+ 11%
Gross margin growth vs. 3Q13:



Moy Park  + 80 bps to 10.7%
Keystone  - 60 bps to 6.0%
Marfrig Beef  + 50 bps to 16.9%
3Q14
21%
16%
65%
22%
13%
51
Financial Performance | Consolidated


SG&A and SG&A/NOR
(R$ million and %)
Breakdown by Business
(%)
3Q13
58%
3Q14
29%
58%
30%
+ 5%
13%
SG&A/NOR vs. 3Q13:



Moy Park  + 20 bps to 8.2%
Keystone  stable at 3.0%
Marfrig Beef  - 50 bps to 8.4%
12%
52
Financial Performance | Consolidated

Adjusted EBITDA and Margin
(R$ million and %)
por Negócio
- EBITDA
3T13 por Negócio  EBITDA
Breakdown
by Business
(%)
3Q13
54%
+16%
EBITDA Margin vs. 3Q13:



Moy Park  + 70 bps to 7.1%
Keystone  - 30 bps to 6.1%
Marfrig Beef  + 120 bps to 10.2%
3Q14
21%
25%
22%
58%
20%
Consolidated adjusted EBITDA
margin of 8.2% in 9M14, reaching
the upper level of the target range in
the FOCUS TO WIN strategy
53
Liquidity and Debt | Consolidated




Debt
(R$ million)
Strong BRL depreciation at end-3Q14 increased net debt, with no cash effect
BRL depreciation of 11% (R$2.20/US$ at end-2Q14 vs. R$2.45/US$ at end-3Q14)
Operating income has yet to capture the BRL depreciation that occurred late in 3Q14, since
the average FX rate in the quarter was R$2.28/US$, virtually flat from R$2.23/US$ in
2Q14
54
Liquidity and Debt | Consolidated


Net Debt in USD
(US$ million)
Marfrig’s debt in USD remained stable
55
Liquidity and Debt | Consolidated
Indicators
3Q14
2Q14
Net Debt / EBITDA LTM
4.84x
3.71x
Net Debt / Annualized
Adjusted EBITDA
4.33x
4.23x
0.37x
0.37x
2.47x
2.52x
2.18
2.18
50
7.6%
11.7%
88.3%
5.8%
94.2%
54
7.0%
11.2%
88.8%
4.1%
95.9%
Net Debt / Total Assets
Cash and Equivalents / ShortTerm Debt
Current Liquidity (*)
Duration (months)
Average Cost ** (p.y.)
Short Term (%)
Long Term (%)
In BRL (%)
Other Currencies (%)
* Current Liquidity = Current Assets / Current Liabilities
** Excludes the interest paid on the mandatorily convertible debentures

Leverage ratio for bank and market
financing
excludes
FX
effects,
resulting in a ratio of 3.64x at end3Q14

EBITDA LTM does not yet fully reflect
BRL depreciation

Average exchange rate in LTM of
R$2.29/US$, vs. R$2.45/US$ at end3Q14
56
Liquidity and Debt | Consolidated

Maturity Schedule in 3Q14
(R$ million)
Short Term: R$1.2bn

Longer debt maturity profile, with first large maturity due only in 2018
57
Liquidity and Debt | Consolidated

Liability Management Operations - 2014
Transaction



Period
Amount (million)
Coupon
Maturity
2020 Bond Re-tap
1Q14
US$ 275
9.500%
2020
Moy Park Bond Issue
2Q14
GBP 200
6.250%
2021
2019 Bond Issue
2Q14
US$ 850
6.875%
2019
Repurchase 2016
2Q14
US$ 191
9.625%
2016
Repurchase 2017
2Q14
US$ 349
11.250%
2021
Repurchase 2021
3Q14
US$ 448
9.875%
2017
Bond issue of US$850MM: company's
largest ever and Brazil's largest until May
2014

Demand breakdown
% by region
Order book (US$4.9bn) exceeded the issue
by 5.6x, which allowed for lowering the cost
to 6.875% p.y.
Repurchase of 2017 and 2021 Senior Notes,
significantly reducing the cost and realigning
the maturity profile
44%
Europe
LatAm
% investor
type
39% 5% 4% 8%
US
Other
Asia
45% 17%14%12% 13%
Asset Mgmt
Private Bank
Other
Hedge Fund
Bank
58
Cash Flow | Consolidated

Cash Flow Bridge – 3Q14



Better working capital management, especially at Marfrig Beef Brazil

The line “Other” increased, mainly due to non-cash items related to market transactions, such
as swap and commodity contracts
(R$ million)
Improvement in trade accounts receivable term from 28 days in 2Q14 to 27 days in 3Q14
Incident involving a supplier to our main client in China contributed to the temporary increase
in inventories
59
Cash Flow | Consolidated

Free Cash Flow (after CAPEX and Interest)
(R$ million)
1Q13
1T13
2Q13 3T13
3Q13
2T13
4Q13 1T14
1Q14
4T13
2Q14
2T14
16
(135)
3Q14
3T14
84
(30)
(295)
(628)
(932)

Free cash flow was positive R$84 million in the quarter, despite the higher export
volumes and payments related to the renegotiation of tax liabilities under REFIS

In 9M14, free cash flow was positive R$71 million, reaffirming our commitment to deliver
positive free cash flow in 2014
60
Cash Flow | Consolidated

Net Income
(R$ million)
3Q13
4Q13
(83,4)
(194,1)
1Q14
2Q14
3Q14
Currency variation
(R$226MM)
(55,1)
(96,4)
REFIS expenses
(R$93MM)
- 56%
(303,3)
61
Cash Flow| Consolidated

Investments
(R$ million)
3Q14
2Q14
1Q14
4Q13
3Q13
119.3
172.7
139.0
236.1
204.7
Fixed Assets
75.0
130.8
95.5
192.8
165.7
Breeding stock
44.3
41.9
43.5
43.3
39.0
8.0
4.1
3.6
3.3
3.2
127.3
176.8
142.6
239.4
207.9
Investments in fixed assets
Investments in intangible assets
Total investment in the period
Ownership Structure
and Capital Markets
63
Ownership Structure | October 2014
Share Capital
520,747,405 shares1
Officers/
Management
0.1%
Free-float
255,183,732 shares
Treasury
0.1%
11.0%
15.2%
MMS
Part.
31.2%
Other
42.7%
8.2%
Other
11.1%
30.7%
23.7%
BNDES
19.6%
6.3%
1 In
January 2007, up to 100 million shares will be issued following maturity of the mandatory convertible bond
64
Sell-Side Assessment
 Covered by 14 institutions
46%
Manter
15%
39% 38%
Recommendation
Buy
Hold
Sell
Average TP: R$7.71
65
Share Performance | 2014
100%
80%
60%
52%
52%
40%
27%
27%
20%
3%
3%
0%
-20%
dez-13
jan-14
fev-14
mar-14
MRFG3
Source: Bloomberg
To November 12, 2014
*Peers: average of JBS, BRF and Minerva
abr-14
mai-14
jun-14
Peers*
jul-14
ago-14
set-14
Ibovespa
out-14
nov-14
66
Bond Performance | 2014
2018
2020
2021
24%
24%
24%
20%
20%
20%
16%
16%
16%
12%
8%
8%
4%
4%
12%
8%
4%
2%
1%
MRFG3
nov-14
set-14
out-14
ago-14
jun-14
jul-14
abr-14
mai-14
fev-14
mar-14
jan-14
nov-14
-4%
set-14
out-14
-4%
ago-14
-4%
jun-14
jul-14
0%
abr-14
mai-14
0%
fev-14
mar-14
0%
jan-14
15%
Peers*
Source: Bloomberg
To November 12, 2014
* Peers: average of bonds issued by JBS, BRF and Minerva with same maturities
1%
jan-14
fev-14
mar-14
abr-14
mai-14
jun-14
jul-14
ago-14
set-14
out-14
nov-14
13%
12%
13%
Final Remarks
68
Final Remarks | Consolidated Results

We are on track to delivering our 2014 guidance, which is an
important milestone for Marfrig and for our shareholders

We delivered another quarter of steady performance that included:
(i) an undivided commitment to Free Cash Flow (FCF); (ii) a totally
re-designed debt maturity profile (with the first material payment
only in 2018); and (iii) improved operating performance

All businesses posted EBITDA margins above 7% in the year to date,
which has allowed the group to stay on the high end of its 2014
EBITDA target margin

The business portfolio is well positioned to capture this unique high
margin/price environment in the animal protein industry, which is
further supported by a potentially stronger dollar in the near future
69
Final Remarks | Marfrig Beef

The world needs beef and we are well positioned (world's thirdlargest beef producer) to capture this opportunity

Our shift to a much higher share of exports in our Beef business in
Brazil (45% in 3Q14, vs. 41% in 3Q13 and 33% in 3Q12) is
underpinned by our belief in the current supply and demand
situation in the international market

We believe there are plenty of opportunities to improve results
further, especially in terms of FCF and margin. We assumed a
commitment to a serious productivity agenda at Marfrig Beef Brazil,
which is starting to pay off, as seen in this quarter with the
improvement in cost management. Note that the same productivity
agenda is being rolled out in Uruguay, Argentina and Chile
70
Final Remarks | Marfrig Beef

The gains captured in the third quarter signal a good probability of
delivering annual cost savings (in Brazil alone) greater than the initial
target of R$30 million

Uruguay continues to post strong results, but we believe the best is
yet to come in the fourth quarter of the year

We do not see any short term concerns, with cattle prices most likely
remaining under pressure, but with relatively strong international
demand helping to keep domestic margins at reasonable levels
71
Final Remarks | Keystone Foods

Our further processing operations in the US will benefit as meat costs
are moving toward seasonal lows

Lower grain costs are flowing through our integrated operations in the
US leading to improved cost

We have secured new volumes in APMEA and expect to see an impact
in Q4 2014 as consumer confidence begins to return

We are focused on managing costs and expect to drive SG&A savings
in the 4th quarter

We expect growth in EBITDA in the 4th quarter due to improving
market dynamics in both the US and Asia
72
Final Remarks | Moy Park

The fourth quarter should be strong, with turkey sales adding to the
bottom line and a better grain environment

We will also focus more intensely on SG&A expenses, but while
keeping an eye on making good inroads in terms of innovation and
service quality

Moy Park is an unquestionable growth story. Annual sales increased
from £800 million in 2008 (at the time of its acquisition by Marfrig) to
approximately £1.45 billion estimated for 2014, which confirms the
enormous potential of the European market, which remains promising
73
Final Remarks | Capital Structure

Our operating performance has not yet benefitted from the
stronger dollar, but the fourth quarter will hopefully provide
some signs of this

In 2015, if market conditions permit, we will carry out Moy
Park’s IPO
74
Final Remarks

We will remain very focused on our full-year results. We want
to finish 2014 with strong operating performance and
meeting all targets in our 2014 guidance

We see ourselves as a multi-year deleveraging story marked
by (i) improved operating performance; (ii) lower interest
expenses (and consequently expanding FCF); and (iii)
attracting equity through the subsidiaries to accelerate debt
reduction in absolute terms
75
Next Steps
1. Continue expanding margins by fully capitalizing on the current positive trends
in the animal protein industry
2. Share our two-year plan (part of our current Focus to Win strategy), which will
set more comprehensive targets that will enable a better assessment of the
Group’s operating performance and capital structure
3. We are planning a Marfrig Day event in the first half of 2015 to share
management's views for the next two years, culminating in January 2017. On
that occasion, the BNDES will convert its R$ 2.1 billion mandatory convertible
bond into equity, which should provide annual cash flow relief of around US$100
million (based on the exchange rate of R$2.50/US$), representing another
concrete step towards strengthening our capital structure
4. Management, across all businesses, remains highly committed and aligned to
improving current performance. Worth sharing that management 2014 current
variable compensation program, is tied up to meeting our 2014 guidance. We are
on track
Questions and
Answers
Disclaimer
This 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 Company nor any
of its affiliated companies, consultants or representatives undertake any
responsibility for any 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 September 30, 2014, 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 management. The words “anticipates,” “hopes,” “expects,”
“estimates,” “intends,” “projects,” “plans,” “predicts,” “projects,” “aims” and
other similar expressions are used to identify such statements.
Although the Corporation believes that the expectations and assumptions
reflected by these forward-looking statements are reasonable and based on
the information currently available to its management, it cannot guarantee
results or future events. Such forward-looking statements should be
considered with caution, since actual results may differ materially from those
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offered or sold in the United States unless they are registered or exempt from
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(“Securities Act”). Any future offering of securities must be made exclusively
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part of this presentation nor any information or statement contained herein
should be used as the basis for or considered in connection with any contract
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opportunely in connection with any security offering conducted by the
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IR Contacts
Address
Avenida
Chedid Jafet, 222
Bloco A 5º andar São Paulo - SP
Telephone
SP: +55 (11) 3792-8650
NY: +001 484 362 8645 -
E-mail
@
ri@marfrig.com.br
Website
www.marfrig.com.br/ri