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 and sugar product lines; and (ii) International Food Products Segment: includes the operations carried out by the units established in Uruguay, Chile, Peru and Argentina, 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 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, 2017 and February 28, 2016, 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, 2017 and February 28, 2016, discards and rebates accounted for approximately 7% of gross revenue.

Net Revenues

The net price history of our products 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, 2017, revenues from sales in the Brazilian Food Segment accounted for 75% of net sales and service revenues, while revenue from sales in the International Food Segment accounted for 25% of net sales revenue and services.

Productive Capacity

The Company’s total effective production capacity is 1,760 thousand tons of grain per year, while sugar and fish total 727 thousand tons and approximately 60 thousand tons per year, respectively.

We highlight below the detail of the capacity, dynamics and timing of the main agricultural commodities used by the Company:

Brazilian Food Products Segment:

Grains

  • Rice

The rice crop occurs once a year, between the months of February and May. 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. The Company’s main rice brands, in terms of volume, include Camil, Pop, Príncipe, Carreteiro and Tche. The rice has one crop per year, as below:

  • Beans

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. According to CONAB, bean production is notably concentrated in the Center-South region of Brazil, responsible for approximately 78% of the total crop for 2016/17.

  • Other grains

Among the other grains sold, the Company has special grains, rice crackers, ready to use food and soy protein. 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

The Company has a volume of approximately 46,000 metric tons of sugar per month and 4 distribution plants at Brazil. Sugar supply comes from a long-term supply contract with volumes and market prices pre-agreed with one strategic supplier. In addition to the “União” brand, the Company also owns “Da Barra”, “Duçula”, “Neve” and “Dolce” brands. União brand is also present in the segments of organic sugar, sucralose sweetener, special sugar for cooking, among others.

  • Canned fish

The Company has the canned fish distribution factories and centers located strategically at the two main fishing locations in Brazil (São Gonçalo, Rio de Janeiro, and Navegantes, in Santa Catarina), which have a processing capacity of 4,800 tons of sardines and , approximately 400 tonnes of tuna per month. 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 occasional imports. The Company’s main canned fish brand is Coqueiro.

International Food Products Segment

  • Uruguay

In Uruguay, Saman has 8 industrial plants for rice production. In addition to rice, Saman 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 Chile, Tucapel has its production totally focused on serving the Chilean market, with the Tucapel and Banquete brands, having 5 distribution centers strategically located in the country and counting on 3 industrial plants in the cities of Santiago, Retiro and San Carlos. 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 Peru, the Company is present as Costeño, which has 3 industrial plants, one in Lima, one in Arequipa and one in Piura. Costeño 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.

  • Argentina

In Argentina, the Company has a rice processing plant located in the city of Los Charrúas, Entre Rios province. It commercializes rice, and sub-products such as rice bran and broken rice.

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, 2017 and February 28, 2016, 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. In the last years, our selling expenses accounted for around 10% of our net revenues.
  • Our general and administrative expenses are basically related to personnel, travel, fees and other general and administrative expenses. In the last years, our general and administrative expenses represented around 5% of net revenue.

EBITDA

The EBITDA and EBITDA Margin are financial indicators used to evaluate the results of companies without the influence of their capital structure, tax effects, and 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 financial condition and performance of the Company.

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.

Income Tax and Social Contribution

The provision for income tax and social contribution is related to taxable income, with income taxes rates of 25% and social contribution of 9%.


Updated at 06/21/2018 at 04:36 pm

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