Overview of the Brazilian food sector. Industry report partial free sample. Sao Paulo, December Copyright Falke Information

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1 Overview of the Brazilian food sector Industry report partial free sample Sao Paulo, December 2016

In Brazil, food revenue has been growing steadily in recent years and the food sector will exceed 10% of the gross domestic product in 2016 Turnover of the food industry in Brazil and share on

2 In Brazil, food revenue has been growing steadily in recent years and the food sector will exceed 10% of the gross domestic product in 2016 Turnover of the food industry in Brazil and share on national GDP Market size turnover [BRL bn] Share on national GDP CAGR: 13.6% % 9.3% 9.5% 10.4% 7.1% 7.6% 7.2% E E Source: ABIA, Ipeadata, FALKE Information analysis 2

3 The industrial park is composed of about 28,000 companies gathered in the Southeast and Centre-West and especially in meat and cereals Sales breakdown per product category and geographic distrubition of food companies Revenues breakdown [BRL bn] Distribution of companies [ 000] Others 1) CAGR 11.3% 11.8% Norte 1.1 (4%) Nordeste 5.2 (19%) Fruit & vegetables 10.4% Wheat derivatives 9.3% Oils and fats Sugars 14.4% Dairy Coffee, tea & cereals 13.2% 11.2% Centro-Oeste 7.4 (27%) Sudeste 11.6 (42%) Meat 12.0% ,600 companies Sul 2.2 (8%) 1) others includes chocolate & confectionery, ready meals and sea food Source: ABIA, IBGE, FALKE Information analysis 3

4 The Brazilian food industrial park is composed mainly of international companies that seem to focus on specific product segments Main figures for the top food industry players in Brazil in 2015 [USD mn] Company Segment of focus Net revenue Net income Equity Assets EBITDA JBS Brasil Beef 48, , , , ,852.8 Ambev Beverages 14, , , , ,562.5 Bunge Alimentos 10, , , BRF (Sadia) Poultry and pork 9, , , ,696.1 Cargill 9, , Copersucar Sugar and alcohol 7, , Marfrig Beef 5, , Louis Dreyfus 4, , CRBS 4, , Amaggi Wholesale & foreign trade 3, , , Tereos Sugar and alcohol 3, , , Coamo Wholesale & foreign trade 3, , , NOTE: Some of the food and beverage companies are privately held and do not provide financial data for analysis Source: Revista IT, Exame Melhores & Maiores, FALKE Information analysis 4

5 In the global ranking of top food producers there are several groups that stand out among the largest food & beverage players in Brazil Main food & beverage producers by revenue in 2015 [USD bi] Net margin Revenue from food 1) Tyson Foods 3.0% Pepsico 8.6% Nestle 10.4% Coca-Cola 16.6% Kraft Heinz 3.1% JBS USA 2.7% Anheuser-Busch InBev 22.6% Smithfield Foods 3.1% General Mills 10.2% Conagra -5.8% Mars - Kellogg 4.5% Miller Coors 14.0% Hormel Foods Cargill 1.3% 97% 60% 30% 49% 79% 48% 36% 97% 72% 100% 33% 67% 100% 94% 7% 1) over total group revenues Source: Food Processing 2015, FALKE Information analysis 5

6 In the global scenario, McKinsey has identified a set of 24 business opportunities for food and agribusiness companies Opportunity matrix for food and agribusiness companies in the world Compound risk index Market size Low Moderate High Wheat & corn in Eastern Europe Cotton & soy in Latin America Meat in Brazil & Argentina Sugar in India Dendê oil in Asia and Africa Additives Functional foods Cotton in East Asia Protein in China Corn in Africa Consumer supply chain & packaged goods in Africa Aquacultura Information services Diagnostics products GMO seeds Inputs distribution Agricultural machines Precision agriculture Biopesticides Fruit & vegetables in Middle East and North of Africa Irrigation Stock infrastructure Non in emerging traditional markets agricultural products 0.5 Low 3.0 Medium 7.0 High Expected growth, average annual growth rate, > US$ 100 bn US$ 10bn-50bn < US$ 2 bn Microbiotic fertilisers Source: McKinsey 6

7 DISCLAIMER The analysis and recommendations of Falke Information are supported by assumptions considered right and consistent based on the available information. Therefore, Falke Information will not be held responsible for the correctness of the resulting recommendations and analysis in this document. NOTE: Copying and handling over of this document is not allowed without prior written permission by Falke Information 7

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