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Investor Relations
Company Presentation
June, 2020
Marfrig A T A G L A N C E
Company Highlights
2nd largest beef producer worldwide
Cattle slaughtering capacity of 31,200 head/day and lamb slaughtering capacity of 6,500 head/day
Largest beef patties producer worldwide
Production capacity of 232 thousand tons of beef patties/year
Production in the best geographies in the world with access to premium markets
National Beef is one of the most profitable and efficient beef companies in the US
South America operation has the highest number of plants certified to export to China
Expertise in industrialized and plant-based products coupled with strategic partnerships
Net Revenue 1Q20²
R$ 13.5bn
Adjusted EBITDA 1Q20²
R$ 1.2bn
Net Debt/Adj. EBITDA1,3
2.8x
Note: (1) As of 4Q20 LTM; (2) As of 4Q20; (3) Presented on a pro forma basis to give effect to the acquisition of national beef, Iowa Premium, LLC, and QuickfoodsS.A. as if they had occurred on January 1, 2018 and certain related indebtedness incurred in connection with each acquisition
Source: Company
Financial Highlights
72%North America
Revenue¹ by business unit
North America South America
8%
3%
Revenue¹ by Currency
US$ BRL Others
89% In US$
2
A c q u i s i t i o n s p h a s e
2007 2008 2009 2010 2011
IPO(B3: Brazil)Acquisition of beef processing units in Brazil, in Mato Grosso, Mato Grosso do Sul and São Paulo
Moy ParkAcquisition of the first international asset of global scale
SearaAcquisitions of Seara; Grupo Zenda;Brazilian turkey operation owned by Doux Frangosul; Leasing of 12 slaughter facilities
KeystoneAcquisition of Keystone Foods
GreenpeaceFirst food company in the world to sign a public commitment
A global path
3
A global path
Asset SalesDivestment of Seara and Zenda businesses units.Launch new organizational culture “Focus to Win”
Moy ParkSale of Moy Park. Company's strategy to focus on food service
National Beef and Keystone Shift in Marfrig’s strategic direction towards beef protein and higher value products, Attainment of a low-leverage capital structure.
Added valueAcquisition of BRF assets, Quickfood and Várzea GrandePlant Based Burger
2013 2014 2018 2019
R e a d j u s t m e n t
Portfolio
4
Revenue by RegionDIVERSIF IED REVENUE GENERATION WITH ACCESSTO MAIN MARKETS :
78%Solid market (US, Europe and Japan)
Market Profile
19%Growing Market (Brazil and China)
5%10%
Brazil
9%
4%Argentina, Chile & Uruguay
64%USA Japan
China
Middle East
1%
4%Europe
Others
3%
Base: 3rd quarter
5
Marfrig’s superior production and sales presenceW I D E P RO D U C T I O N C A PA C I T Y I N T H E A M E R I C A S W I T H S U P E R I O R
S A L E S P L AT F O R M A N D A C C E S S TO P R E M I U M M A R K E T S
G L O B A L S A L E S F O R C E
Source: Company
Sales offices
78%19%
3%
Solid markets
Growing markets
Others
Breakdown by source of revenue
58% 42%
South America
North America
Cattle slaughtering
capacity
6
6
MMS +Controlling Holders
46,01%
Management +Treasury
2,29%
Other
51,70%
MarfrigGLOBAL FOODS
OWNERSHIP STRUCTURE
7
as of 06/10/2020
ManagementBoard of Directors
Marfrig GlobalFoods
Operations
South America Operations
Miguel GularteCEO
North America Operations
Tim KleinCEO
Marcos Molina
Controlling Shareholder
and Chairman of the Board
Tang DavidCFO
Simon McGeeCFO
35+ years of experience in the beef industry. Began career at Cooperativa Industrial de Cames e Derivados.
Former president of Uruguayan Meatpacker PUL, international VP of Minerva, and president of JBS Mercosul
Prior to joining Marfrig in 2007, worked for 11 years in the Treasury department of Asea Brown Boveri—
ABB Brasil, where his last position was Executive Officer of their financial arm. Also worked for 4 years in the
Treasury department of JBS Friboi
30+ years of experience in the beef industry. Joined National Beef in 1992 and has served as CEO since 2009. Prior
VP as Cargill, VP of Operations at Armour Food Company (of ConAgra Foods), and VP of Sales and Pricing at EA
Miller
Joined National Beef in 2006. Former investment banker with Christenberry Collet &
Company and founder and majority owner of McGee Ranch Company, Inc.
Miguel Gularte
CEO, South America
Tang David
CFO, South America
Tim Klein
CEO National Beef
Simon McGeeCFO, National Beef
20+ years in the food industry, where he began at
age 16 in the food distribution business. Mr.
Molina is also the CEO of MMS Participações ltda
High Corporate Governance StandardsB E N C H M A R K AT C O R P O R AT E G O V E R N A N C E P R A C T I C E S
Years on
the Board Experience
Marcos
Molina Santos12+
Antonio
Maciel Neto12+
Herculano
Anibal Alves1+
Roberto Faldini 3+
Roberto Silva
Waack12+
Marcia A. M.
Santos12+
Rodrigo
Marçal Filho12+
Alain Emilie
Martinet10+
Ch
air
man
Ind
ep
en
den
t m
em
bers
Bo
ard
mem
bers
Board of Directors Supporting Committees
Audit
Antonio Maciel Neto*
José Mauro Depes Lorga
Lúcio Abrahão Monteiro Bastos
Financial and
Risk Management
Herculano Aníbal Alves*
Marcia Aparecida Pascoal Marçal dos Santos
Tang David
Sustainability
Roberto Silva Waack
Daniela Martins Mariuzzo (IDH)
Alain Emilie Martinet
Paulo Pianez Junior
Compensation, Corporate
Governance and Human Resources
Antonio Maciel Neto
Roberto Faldini
Heraldo Geres
Note: (1) Transparência Internacional (TI); (2) Considered as protein industry Marfrig, BRF, JBS and Minerva Source: Company
Our OperationsNorth America
% of Consolidated Revenue
4th Largest beef processing company in the U.S.²
Cattle slaughtering capacity: 13,100 head per day
72%
% of Consolidated Ebitda
64%
South America
Leading beef processing companies in South America
Cattle slaughtering capacity: 18,100 head per day
28%
36%
Plant Plus Foods
Recent created JV with ADMto explore the meat alternative market in North and South America.
PlantPlus Foods merges Marfrig’s global leadership in hamburger production and protein processing with ADM’s unique technical ingenuity and complete portfolio of natural ingredients and flavor.
PlantPlus Foods is conceived as an organization with unmatched end to end capabilities and scale to further meet consumer needs
% of Consolidated Revenue
% of Consolidated Ebitda
N o r t h A m e r i c a O p e r a t i o n
North America OperationU N I Q U E C O M B I N A T I O N O F P R O F I T A B I L I T Y A N D S C A L E
Cattle slaughtering capacity: 13,100 head per day, 14% of slaughtering capacity share in the U.S.
87% of sales to the U.S. internal market targeting premium customers
Unique sourcing capability: ~25% coming from USPB (association), ensuring quality and consistency
One of the largest and most technologically advanced Wet Blue tannery in the world
State-of-the-art e-commerce for high-end and customized products
Transportation services in 48 states through National Carriers
Exports to premium markets such as Japan and South Korea
One of the most profitable and efficient beef companies in the U.S.
4th Largest beef processing company in the U.S.²
IO
KS MO
OHPA
GA
3slaughteringplants
5further processing plants
Note: (1) As of 1Q20 LTM; (2) In terms of production capacity Source: Company
12
North America OperationV A L U E A D D E D S T R A T E G Y
7,4%9,6%
11,1% 10,7%
6,2%7,7% 8,7% 8,3%
2017 2018 2019 TTM March 2020
Fiscal Year EBITDA Margin % Comparison
National Beef Peer2
- National Beef sells a higher % of its products in value-
added format vs. the competition while still
maintaining a low cost structure
- Value-added product mix provides a more attractive
and insulated margin profile
- Leading global market share for US Chilled Beef;
especially notable in Japan (35+%) – the premium
export market for US Beef
- Leading producer of Certified Angus Beef
- Tightly synchronized cattle procurement and sales
team enable more effective margin capture
25% 22% 21% 19%13%
0%
10%
20%
30%
NationalBeef
Peer1 Peer2 Peer3 Others
2019 YTD US Chilled Beef Exports
13 Note: In US GAAPSource: Companies financial statements
VALUE-ADDED MINDSET HAS ENABLED THE COMPANY TO ROUTINELY ACHIEVE HIGHER MARGINS VS. THE COMPETITION
North America OperationS T R A T E G I C P A R T N E R S H I P I N C A T T L E P R O C U R E M E N T
Cattle Procurement
- National Beef strives to procure the best, most profitable, cattle from the best feedyards. More than 70% were Black Angus.
- ~85% of National Beef’s cattle come from the primary procurement area of KS, TX and OK and within a 250 mile radius of the plants. The remainder of the company’s cattle come primarily from the key cattle feeding states of Nebraska, Iowa, Colorado and South Dakota
- US Premium Beef owns 15.1% of National Beef and its members provide us with approximately 25% of the cattle that we process.
- In addition to USPB, the company has several other significant supplier appliances that provide another ~35-45% of our cattle each year.
O p e r a t i n g H i g h l i g h s t
N O R T H A M E R I C A
- Increased availability of fed cattle led to additional throughput in the beef plants which allowed for a 19.5% growth in sales volume.
- The revenue growth is mainly explained by the strong and continuous demand for beef products mainly in the domestic market and by the increase
in the sales volume of case ready and direct-to-consumer businesses.
355 419
6583502
420
1Q19 1Q20
19.5%
Exports Domestic Market
275287
1Q19
1,759 1,898
1Q20
2,0342,185
7.4%
Exports Domestic Market
18%
27%
Volume(thousand tons)
Net Revenue(US$ million)
8%
5%
6,149
1Q19 1Q20
6,465
5.1%
Market Data
Kills(USDA F.I. Steer/Heifer Kill)
218.4 215.6
1Q19 1Q20
-1.3%
Domestic Price(USDA Comprehensive Cutout $/cwt)
15
178 229
8.7%
1Q19
10.5%
1Q20
+29.1%
Gross Margin Gross Profit
131 175
8.0%
6.5%
1Q19 1Q20
+33.5%
EBITDAaj Margin EBITDAaj
Gross Profit(US$ million)
EBITDAAJ & Margin(US$ million)
Market Data
Cattle Prices(USDA KS Steer $/cwt)
1.82
1Q19 1Q20
1.74
+4.6%
Spread(Cutout Ratio)
1Q19 1Q20
125.4 118.8
-5.2%
* cutout ratio: average USDA reported prices for beef price divided by average USDA reported live prices for fed cattle “USDA KS Steer”: cattle price reference in the U.S. state of KansasA “hundredweight,” or Cwt, is a weight-measuring unit used in certain commodity contracts. In North America, a hundredweight equals 100 pounds.
- Margins expansions are explained by the improvement in 1Q20 cutout ratio* of 1.74x, up 4.6% over 1Q19 as fed cattle prices declined
more than beef values.
- The combination of increased throughput and higher per unit margins resulted in increased gross profit versus Q1-2019.
16
O p e r a t i n g H i g h l i g h s t
N O R T H A M E R I C A
S o u t h A m e r i c a O p e r a t i o n
South America OperationL E A D I N G P O S I T I O N A C RO S S A L L
S O U T H A M E R I C A O P E R AT I O N S
Slaughtering capacity in Brazil
Cattle slaughtering capacity: 18,100 head/day
Geographic footprint diversity, plants in 4 countries and 7 states in Brazil
Footprint improvement keeping the same slaughter capacity with less plants
17,500+ cattle farmers
Exports to ~100 countries
Food-service provider for the premier restaurants and steakhouses
Reference in Brazil for plant-based burger
Diversified industrialized portfolio focused on premium brands and markets
Access to all premium export markets
South America leader in certified organic beef production
Superior capacity to serve growth markets
2nd
Largest beef producer in Uruguay
1st
Largest beef importer in Chile
1st
Largest hamburger producer in Argentina
1st
18
South America OperationA N I N T E G R AT E D E X P O RT S P L AT F O R M W I T H T H E B E S T F O OT P R I N T
TO A C C E S S T H E M O S T I M P O RTA N T M A R K E T S
19
M a r f r i g ’ s C u r r e n t E x p o r t P r o f i l e a s % o f R e v e n u e s ( a s o f 1 Q 2 0 )
E x p o r t t o : S o u t h A m e r i c a
T o t a l
M a r f r i g
B r a z i l
M a r f r i g
U r u g u a y
M a r f r i g
A r g e n t i n a
C h i n a & H o n g
K o n g
5 9 , 5 % 3 3 , 9 % 4 2 , 5 % 3 1 , 4 %
E u r o p e 2 5 , 2 % 1 0 , 8 % 3 4 , 6 % 1 9 , 8 %
M i d d l e E a s t 8 , 7 % 7 , 2 % 0 , 7 % 0 , 0 %
U S A 6 , 5 % 5 , 2 % 0 , 9 % 0 , 3 %
O t h e r s 0 , 1 % 4 2 , 9 % 2 1 , 3 % 4 8 , 5 %
T o t a l 1 0 0 % 1 0 0 % 1 0 0 % 1 0 0 %
Source: Company
South America OperationM A R F R I G H A S T H E L A G E S T P R O D U C T I O N
A V A I L A B I L T Y C E R T I F I E D T O E X P O R T T O C H I N A
20
70%
S l a u g h t e r i n g c a p a c i t y
a v a i l a b l e c e r t i f i e d t o e x p o r t
t o C h i n a
1Q201Q19
17%
34%
+97
E x p o r t f r o m S o u t h
A m e r i c a t o C h i n a a % o f
r e v e n u e s
245 229
88 111
1Q19 1Q20
333 340
+2.1%
Domestic MarketExports
1,637
3,766
1,3502,222
1Q19
1,544
1Q20
2,987
+26.1%
Exports Domestic Market
-6%
+26%
Volume(thousand tons)
Net Revenue(R$ million)
+65%
-6%
1Q20
60%
45%
1Q19
Exports(% of revenue)
Exports by destination
(% of exports revenue)
19%
8%
31%
2%
China & Hong Kong
Europe
Middle East
USA
Other
8%
25%
7%
- Growth of 26.1% in net revenue is mainly explained by the increase in the volume and average price of exports, a consequence (i) of the
higher number of permissions for China, which, added to Hong Kong, now represents 60% of the exports sales destination, (ii) 87% increase in
processed food revenue, (iii) better commercial and pricing strategy adopted at the end of 2019 improving the mix of destination countries,
and (iv) the effect of the 18.2% devaluation of the real against the dollar (1Q20 R$ 4.46 vs R$ 3.77 in 1Q19).
40% 60%
1Q19 1Q20
21
S O U T H A M E R I C AO p e r a t i n g H i g h l i g h s t
S O U T H A M E R I C A
21
280
621
9.4%
1Q19
16.5%
1Q20
+122%
Gross Margin Gross Profit
104464
3.5%
1Q19
12.3%
1Q20
+346%
EBITDAaj Margin EBITDAaj
Gross Profit(R$ million)
EBITDAAJ & Margin(R$ million)
▪ Footprint optimization: closing inefficient plants and potentializing the efficient ones▪ Better yield of de-boned products▪ Increased productivity and reduced fixed costs
- The record performance is explained by: (i) better export results, (ii) increase in processed food results, and (iii) reduction in costs, expenses and fixed
cost dilution given the operational improvement & efficiency program started in 2019 and continued in 2020, which offset the increase in COGS (+
16.2%) due to the increase in production and cattle prices in Brazil (+ 30%) and Uruguay (+ 13%).
Operational Improvement & Cost Management
▪ Strategic purchase of meat for patties production▪ Best mix of cattle purchase and production carried out▪ Increased productivity and reduced industrialization costs▪ Better yield of de-boned and trimmings products
▪ Higher production of value-added products and organic meat▪ Better yield of de-boned and trimmings products▪ Reduction of industrialization costs
▪ Start of operation of the new Distribution Center▪ Increased sales capillarity through new channels
22
South America Operation:▪ Integrated platform with consolidated directories: Exports; Financial; IT;
Sustainability
S O U T H A M E R I C AS O U T H A M E R I C AO p e r a t i n g H i g h l i g h s t
S O U T H A M E R I C A
22
P a t t i e s
the world
T H E B I G G E S T
P R O D U C E R O F
B E E F P A T T I E S
Várzea Grande - BRAZIL: Beef patties, meatballs and kibbeh
QuickFood - Argentina:Leaders in the production of beef products
in Argentina and controllers of the Paty and Vienissima brands
8%
17%
30%
45%
Uruguay
Argentina
Brazil
USA
Patties Production by Countries
Ohio Facility: Beef patties 106,000 tons/year
24
P l a n t b a s e d
Meat Alternative
Marfrig, one of the largest beef and hamburger
producer in the world, and ADM, a global leader in
nutrition, have a success history in working together to
develop and manufacture sustainable and plant-basedproducts, including
The Rebel Whopper hamburgers, from Burger King, and
the Aussie Plant Burger, from Outback Steakhouse, in
Brazil, as well as products marketed under the Revolution
brand, from Marfrig
Now, PlantPlus Foods will enable the expansion of this
successful relationship and unique specialization to offer
hamburgers, nuggets, cold meats, sausages and other
highest quality plant-based products to their clients26
Technical ingenuity and
complete portfolio of natural
ingredients and flavors
One of the
world’s leading meat producers
and the global leader in
hamburger production
Contributions
ManufacturingNatural
Ingredients
Technical
Expertise
Contributions
Application
Development
Sales &
Distribution
Customer
Access
27
S u s t a i n a b i l i t y I n i t i a t i v e s
CustomersFood safety, innovation and growth, engagement and communication
with stakeholders, nutritional value and value generation
EconomicValue creation, free cash flow, reduction
of leverage and increasing profitability
Work EnvironmentCompliance, diversity and inclusion, employee
development, ethics and integrity, health and well being
SuppliersSustainable supply chain, free deforestation,
animal welfare, slave labor prevention
CommunitiesCommunity engagement, volunteering among employees,
social economic development and social entrepreneurship
EnvironmentEmission reduction, energy, water, environmental
management system – waste and effluent
SustainabilityS T R A T E G I C
PillarsR e f e r e n c e i n t h e e f f i c i e n t u s e o f n a t u r a l r e s o u r c e s ande n v i r o n m e n t a l preservat i o n
Best ranked Brazilian Company in the
FAIRR Protein Producer Index 201911°100% compliant for the 7th consecutive
year on cattle sourcing in the Amazon
Biome2
2°
29
Source: Company; Coller FAIRR Protein Producer Index 2019
RESPONSIBLE
Deforestation and Biodiversity Loss
Global movements tracking forest loss target factory farming companies
and can lead to shareholder divestment and/or weaken customer loyalty
14LIFE
BELOOW
WATER
LIFE15 ON LAND
2Water Use and Water Scarcity
Beef, pork, dairy, and poultry companies consume large quantities of
water both directly and indirectly via their purchase of animal feed
6CLEAN WATER
AND SANITATION 15 LIFE
ON LAND
3Waste and Water Pollution
Companies are facing greater scrutiny about the impact of waste on surrounding
communities and the environment, meaning potential fines and regulation
GOODHEALTH3AND WELL-BEING
CLEAN WATER
6 AND SANITATION
4Antibiotics
Drug-resistant infections are a serious public health threat which will
likely impact productivity on a national scale
GOODHEALTH3AND WELL-BEING
5Working Conditions
Operational risks, which can involve worker injuries and reputational
risk, as well as food product contaminated by sick workers
DECENT WORK8 AND ECONOMIC
GROWTH6Animal Welfare
Poor animal welfare presents operational and
reputational risks for the companies
12
CONSU
MPTION
AND PRODUCTION
7
60Global companies
09Risk and opportunity factors
30KPIs
FAIRRProteinP R O D U C E R
I N D E X 2 0 1 9
Greenhouse Gas Emissions
Disproportionate amount of GHGs generated by livestock makes companies
engaged in factory farming vulnerable to transition and physical risks
13 CLIMATE
ACTION1
Sustainable Proteins
Reduced reliance on animal protein sources is key to sustainable
development
GOOD
HEALTH3 AND WELL-BEING 12RESPONSIBL
E
CONSUMPTIO
N
AND
PRODUCTION
LIF
E15 ON
LAND
1
3
CLIMAT
E1
4
LIFE
BELOW
ACTION
WA
TER9
Food Safety
A series of high profile food safety incidents in meat and dairy have focused
consumers concerns on threat of food contamination and foodborne illnesses
GOODHEALTH3AND WELL-BEING2 ZERO
HUNGER8
FAIRRProteinP R O D U C E R
I N D E X
2 0 1 9
Mowi
Leroy Seafood
Bakkafrost
Fonterra
Grieg Seafood
Tassal Group
SalMar
Tyson Foods
Hormel Foods
Charoen Pokphand
FoodsThai Union Group
Empresas AquaChile
WH Group
GFPT
Grupo Nutresa
Maple Leaf Foods
BRF
JBS
Cranswick
Minerva
Marfrig Global Foods
Salmones Camanchaca
0% 70%60%50%40%30%20%10%
AvaregeRisk Score
MED
IUM
RIS
KLO
WR
ISK
HIG
HR
ISK
31
Ta k e a w a y s
TakeawaysK E Y
C l e a r v a l u e c r e a t i o n s t r a t e g y
S o l i d f i n a n c i a l p e r f o r m a n c e c o m b i n i n g c o n s i s t e n t m a r g i n s a n d d e l e v e r a g i n g
T o p -n o t c h m a n a g e m e n t t e a m i n c o n n e c t i o n w i t h h i g h l e v e l o f c o r p o r a t e g o v e r n a n c e
D i v e r s i f i e d p r o d u c t i o n a n d d i s t r i b u t i o n p l a t f o r m e v o l v i n g t o w a r d s v a l u e -a d d e d p r o d u c t s
R o b u s t a n d e f f i c i e n t n o r t h a m e r i c a n o p e r a t i o n c o m p r i s i n g a u n i q u e s o u r c i n g c a p a b i l i t y
A c c e s s t o h i g h g r o w t h m a r k e t s t h r o u g h t h e s o u t h a m e r i c a o p e r a t i o n
W o r l d l e a d i n g s t r o n g s e c t o r
B e e f p l a t f o r m , w e l l -p o s i t i o n e d t o b e n e f i t f r o m m o m e n t u m
34
Appendix
1Q20 Consolidated
Financial Results
Net Revenue & EBITDA
72%
1Q19
72%
1Q20
10,668
13,502
+26.6%
Net Revenue(R$ million)
8%
3%
5.5%
83%1Q201Q19
9.1%
64%584
1,223
112%
South AmericaEBITDAaj Margin North America
EBITDAAJ & Margin(R$ million)
Norht AmericaSouth America
- Consolidated net revenue 26.6% higher than 1Q19 due to the continued excellent performance of the North America Operation, the 46.5% increase in
export revenues in South America and the 18.2% devaluation of the real against the dollar, which had an average rate of R$ 4.46 16% at closing R$ 5.20.
In Q1 only 8% of revenues was in reais.
- The excellent performance is explained by (i) the higher sales volume in the North America Operation given the solid and continuous growth in
demand for beef protein in the USA and (ii) the increase in the average price and higher volume of exports in South America, (iii) the improvements in
productivity efficiency and cost reduction promoted by Operation South America; and (iv) the greater devaluation of the real against the dollar.
89%In US$
Net Revenue profile(% by currency)
In US$ In R$ Outher
35
Cash Flow(R$ million)
- In continuity with the debt and financial expenses reduction plan, we settled R$ 938 million in
1Q20 in working capital operations that burdened financial expenses, a significant milestone in the
execution of our liability management strategy.
- Recurring free cash flow was positive by R$ 243 million after the reversal of one-off items, such as
the elimination of working capital operations and the payment of the bonus related to the North
American operation.
-971
726
243
Operational C.F. Recurrent Capex
759
938
One-off effects Adjusted OCF
-190
-293
Interest FCF
North
America
Bonus
Settlement of
Working
Capital
Operations
18Source: Company, ¹ Forbes 2018, ² Rabobank
Amort.of Issuance Cost and 23’ Bond Buyback Premium
4Q19 Net Debt
4,251
FX Variation Share BuybackFCF
1,45478188
19,38544 64
Settlement of Leases Other Net Debt 1Q20
13,306
Evolution of Net Debt & Leverage(R$ million)
In US$
3,3013,729
2.84x
2.74x
In US$
3,56x
2,77x
- The net debt of US$ 3,729 million was 13% higher than 4Q19 mainly (i) due to the impacts on free cash flow such as the elimination of
working capital operations, payment of taxes and bonuses related to the North American operation; and (ii) the non-cash effect of the
write-off of the amortization cost of the issue of Senior Notes due 2023, settled in advance in January 2020.
37
37
Debt Profile
1Q19 1Q20
5.81%
6.94%
-113 bps(-16%)
Average Cost of Debt(% a.a.)
In US$
Short Term
Long Term
- In this quarter we reached another important milestone in the execution of the liability management strategy with the average
cost of debt reaching 5.81% a.a., a reduction of 16% or 113 bps compared to 1Q19.
- The downward movement in the cost of the Company's debt is one of the main indicators of the success of the work in
progress to reduce financial expenses and increase profitability.
97%In US$
75%Long Term
- Financial expenses were reduced by 31% or R$ 135 million compared to 4Q19 (i) by the
elimination of working capital operations with greater emphasis in 1Q20, (ii) by the settlement
of R $ 616 million in Refills and (iii ) for the interest savings of under US$ 466 million of Senior
Notes due 2023 repurchased in January.
- The one-off expense of R $ 244 million is a consequence of the early settlement of the Senior
Notes mentioned above. Of this amount, R $ 169 million have no effect since they are the
write-off of the amortized issue costs.
Net Financial Result
4Q19 1Q20 Δ
Provisioned Net Interest (283) (248) 35
Other Income and Expenses (160) (60) 100
Recurrent Financial Result (443) (308) 135
Non Recurrent Expenses (244) (244)
FX Variation (167) (632) (465)
Net Financial Result (610) (1,183) (572)
(R$ million)
224 242 254 283 248
182 147170
160
60
1Q19 2Q19 3Q19 4Q19 1Q20
406389
423443
308
-31%
Provisioned Net Interest
Other Financial Income and Expenses
39
- In the quarter, the negative FX variation of R$ 632 million was the main impact of the net result, which,
adjusted for the non-cash effect of the early repurchase of the Senior Notes due in 2023, was positive by
R$ 32 million.
Net Result(R$ million)
32
169
Adj Net ResultNet Result before FX Variation
Bond 2023 Adj of Amortization Cost
-632
FX Variation Aj Net Result
495
664
22