Financial and Operational Historical Data
 
Modeling Guide

Gross Revenue

The main activity of Camil is the processing, distribution and sales of rice, beans, sugar and canned fish. In addition, the Company also process, distribute and sell other grains, including peas, chickpeas, lentils, soybeans, yellow and white hominy, popcorn and soy protein. In a non-representative matter, the Company also generates electricity from rice husk, as well as sells rice oil, olive oils and provides irrigation, storage and drying services for grains.

The historical data of the Company’s gross volumes and prices of rice, beans, sugar and canned fish can be found in the spreadsheets at the beginning of this section. The Company conducts its operations and reports its results in two segments: (i) Brazilian Food Products Segment: includes the operations carried out by the units established in Brazil, in grain, fish, sugar and other revenues; and (ii) International Food Products Segment: includes the operations carried out by the units established in Uruguay, Chile and Peru in the grain segment. In the Brazilian Food Segment, a substantial part of the sales is from the Brazilian domestic market, while in the International Food Segment, a large part of the sales comes from exports through our Uruguayan subsidiary Saman.

Taxes on sales and returns and rebates

The ICMS is a state sale tax and is levied on our gross sales revenue at rates ranging from 0.0% to 20% according to the type of product and the State in which the product is sold. In the last two fiscal years ended February 28, 2018 and February 28, 2017, sales taxes accounted for 7% of gross revenues.

Returns consist of the products that we sell to our customers and returns in case of low quality or after the validity expiration. The rebates consist of the discounts we grant, on a case-by-case basis, only to our customers, according to negotiations that are normally based on the volume of products sold, and quality and longevity of the relationship with each client. In the last two fiscal years ended February 28, 2018 and February 28, 2017, discards and rebates accounted for approximately 7% of gross revenue.

Net Revenues

The net price history by segment can also be found in the spreadsheets for modeling net revenue. The Company mainly depends on the activities carried out in Brazil, being the Company’s dependence on the activities carried out abroad lower.

In the fiscal year ended February 28, 2018, revenues from sales in the Brazilian Food Segment accounted for 71% of net sales and service revenues, while revenue from sales in the International Food Segment accounted for 29% of net sales revenue and services.

Productive Capacity

We highlight below the detail of the dynamics by category and timing of the main agricultural supplies used by the Company:

Brazilian Food Products Segment:

Grains

In the latest two fiscal years ended on February 28th, 2018 and February 28th, 2017, the volume of grains in Brazil represented approximately 34% of the total produced. The Company’s main grain brands, in terms of volume, include Camil and other regional minor brands such as Namorado (as of December 2018, with the conclusion of the acquisition of SLC Alimentos), Pop, Príncipe, Carreteiro, and Tche.

  • Rice

In the latest two fiscal years ended on February 28th, 2018 and February 28th, 2017, the volume of rice in Brazil represented approximately 30% of the total produced. The rice crop occurs once a year, between the months of February and May, as shown below in the agricultural calendar. The Company benefits from a variety of different types of rice to attract more consumers and has a long-term relationship with suppliers of rice with daily purchases at market prices, allocating to producers the risks of commodity prices throughout the year.

  • Beans

In the latest two fiscal years ended on February 28th, 2018 and February 28th, 2017, the volume of beans in Brazil represented approximately 4% of the total produced. Beans have three harvests a year, in March, August and November. The first crop is known as ‘rain harvest’, due to the high rainfall index on its period. The planting of this crop is in the Center-South regions from August to December and in the Northeast from October to February. The second is called the drought crop, with planting carried out from December to March. The third crop is the irrigated crop, because it refers to the irrigated bean harvest, with the concentration of planting in the Center-West and Southeast regions, from April to June.

  • Other grains

Among the other grains sold, the Company has special grains, rice crackers, ready to use products and other high added value products. The special grains are composed of peas, chickpeas, lentils, corn, soy and hominy. These products, despite having a very positive margin, are not representative in revenues, due to its volatility of supply. The rice cookie is the product with the highest growth in revenue in the Company, being produced in two plants.

The ready to use products consist on processed foods and divided into convenience products and preserves. Among the foods of the convenience line, the Company produces 5 types of beans (Carioca, Black, White, Frosty). The soy protein line is only sold and distributed by the Camil brand. The Company has a strategic partner and does not operate in the production stage.

  • Sugar

In the latest two fiscal years ended on February 28th, 2018 and February 28th, 2017, the volume of sugar in Brazil represented approximately 27% e 28% of the total produced, respectively. Sugar supply comes from a long-term supply contract with volumes and market prices pre-agreed with one strategic supplier. The company´s main sugar brands are “União” and “Da Barra”, besides other value priced brands. União brand is also present in the segments of organic sugar, sucralose sweetener, special sugar for cooking, cake dough, among others.

  • Canned fish

In the latest two fiscal years ended on February 28th, 2018 and February 28th, 2017, the volume of canned fish in Brazil represented approximately 2% of the total produced. The Company has the canned fish processing facilities located strategically in Navegantes, Santa Catarina. In addition, the Company produces sauces and pates derived from tuna and sardines for sale. The fish supply in the local market is made by a fragmented basis of suppliers and supplemented by imports. The Company’s main canned fish brands are “Coqueiro” and “Pescador” (value pricing brand).

International Food Products Segment

  • Uruguay

In the latest two fiscal years ended on February 28th, 2018 and February 28th, 2017, the volume in Uruguay represented approximately 28% and 27% of the total produced, respectively. Saman, Uruguayan leader of rice exports also sells sweet and savory rice crackers, with vegetable oil and by-products such as rice bran and broken rice in its portfolio.

  • Chile

In the latest two fiscal years ended on February 28th, 2018 and February 28th, 2017, the volume in Chile represented approximately 4% of the total produced. With Tucapel and Banquete, the Chilean operation is totally focused on serving the local market. Tucapel works with different types of products besides the flagship, the rice. Among them, vegetables (beans, peas, chickpeas and lentils), half-cooked risottos, rice flour, pre-made rice recipes, olive oil, quinoa and rice crackers.

  • Peru

In the latest two fiscal years ended on February 28th, 2018 and February 28th, 2017, the volume in Peru represented approximately 5% and 4% of the total produced, respectively. In Peru, the Company is present as Costeño, which commercializes several products, the main ones being white rice and special, having in its portfolio of vegetable oil, sugar and various cereals such as lentils, quinoa, wheat, beans and corn.

Cost of Sales and Services

The main raw material used in the production process by the Company and its subsidiaries are commodities, whose prices fluctuate due to the public policies of agricultural development, seasonality of harvests and climatic effects. Our costs of sales and services therefore includes, mainly, the cost of raw materials, consisting of rice in shell, beans, sugar, fish and packaging materials, as well as other related costs. Our cost of raw materials is the most representative cost of our cost of sales and services, accounting for about 80% of the costs.

In the fiscal years ended February 28, 2018 and February 28, 2017, cost of sales and services represented approximately 75% of net revenue for the period.

Operating Expenses

Our operating expenses include selling, general and administrative expenses, equity in subsidiaries and other operating expenses.

Our selling expenses consist of freight, marketing, and other expenses directly related to the product sales, concentrating mostly our variable expenses. In the fiscal years ended on February 28th, 2018 and February 27th, 2017, expenses with sales represented 12% and 10%, respectively, of the total net revenue.

Our general and administrative expenses are basically related to personnel, travel, fees and other general and administrative expenses, concentrating mostly our fixed expenses. In the fiscal years ended on February 28th, 2018 and February 27th, 2017, expenses with sales represented 5% of the total net revenue.

EBITDA

EBITDA and EBITDA Margin are financial indicators used to evaluate the results of companies without the influence of their capital structure, tax effects, other accounting impacts without a direct reflection on the company’s cash flow, and other items that are unusual or not arising from its main operations. We understand that it is the appropriate measure for the correct understanding of the Company’s financial condition and performance. In recent years, between February 2011 and February 2018, Camil’s EBITDA margin as a percentage of net sales and services revenue ranged between at least 9.8% and at most 11.7%, the period of economic downturn and high inflation of said period. grafico

Financial Results

The main financial expenses are interest on the indebtedness and exchange variation on commercial transactions in other currencies. The main financial income is income from financial investments. The company has concluded since 2017, important initiatives for the improvement of its capital structure, including the management of its indebtedness. We issued CRAs in an amount higher than R$ 1 billion at rates lower than CDI, replacing the use of working capital with higher costs, allowing a reduction of the debt and an improvement on the amortization. In the fiscal year ended on February 28th, 2018, the net financial result had a R$ 74 million expense.

Income Tax and Social Contribution

In Brazil, taxation on revenue encompasses income tax and social contribution. The provision on income tax (IRPJ) and social contribution (CSLL) is related to the taxable income of the fiscal years, with tax rates for IRPJ at 25% and CSLL at 9% on the taxable income. In Uruguay, the tax rate is at 25%. In Chile, 27%. In Argentina, 35%. In Peru, 29.5%. In Brazil, these results are taxed according to the MP 2.159-70/2001 and Law
no. 12.973/14.
Company’s tax rate is impacted in some years by virtue of exclusions regarding the acknowledgment of grant-in-aid of ICMS and payment of Interest on Own Capital, a measure commenced in December 2017 The fiscal year ended on February 28th, 2018, had an effective tax rate at 23%.


Updated at 10/10/2019 at 09:43 pm

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