ABILIO DINIZ C H A I R M A N PEDRO FARIA C E O FEEDING THE WORLD - - PowerPoint PPT Presentation

ABILIO DINIZ

C H A I R M A N

PEDRO FARIA

C E O

FEEDING THE WORLD

S U P P L Y F O O T P R I N T & M O D E L S Expand production platforms & new models

FOOD VISION

G L O B A L B R A N D I N G T H R O U G H G L O C A L H O U S E O F B R A N D S

Sustainable Chain Innovation People Quality Brand Sales & Logistics

TOGETHER

Partners with nature Nurturing life Preparing with love

FEEDING THE WORLD

KEY CAPABILITIES

GEOGRAPHIC EXPANSION FOCUS

Europe Central Europe Africa South Gate Latam Paraguay, Peru MENA Egypt, Turkey Asia Southeast Asia

KEY CATEGORIES TO BUILD

Food Service portfolio Value added pork & chicken cuts Prepared meals On the go Cooked & Coated Cold Cuts

BIG BETS

New Businesses

1.

Sadia Halal

3.

China

2.

MARKET STRATEGY

STRATEGIC VISION

BRAZIL

BRF Day

Rafael Ivanisk & Leonardo Byrro

General Managers Brazil

Today, less than

GROWTH INNOVATION

Source: McKinsey

…and to accelerate engine to reach a new level in Brazil we embraced the challenge and started our

• f the global

innovation in the food industry comes from the category leaders…

35%

Oversupply in production Overshoot in costs New competitive landscape Change in consumption habits Downtrade in products / categories

First let’s recap what happened in Brazil in the last 2 years...

Political crisis Contraction in disposable income Decrease in consumer confidence Increase in unemployment Higher Inflation

AND BRF HAS ALSO CHANGED

OUR SECTOR HAS CHANGED A LOT... MACRO IN BRAZIL HAS CHANGED A LOT...

Advance in distribution (+40k POS) From Channel to Region Portfolio

• ptimization

Project From Supply Push strategy to Market Pull Brand/Consumer at the center of

• ur strategy

People development & Talents Return of Perdigão One sales team New Segmentation Model (GTM)

LET’S LOOK AT WHAT WE HAVE DONE DURING THIS PERIOD...

2014 2016

Portfolio Optimization

Reduced significant number of SKUs 10 lines back in Q4 Opportunity for innovation and new products Pull strategy makes sense for modern trade

• Volumes flat in 1H16 (yoy)

Traditional trade is a different game... share of stock

• Volumes down 15% in 1H16 (yoy)

Supply & demand unbalanced + trade down in consumption profile

• FIFO1 loss of R$207M in 1H16 vs

R$121M in 1H15

Adjusting supply/demand and sales execution

From Push to Pull

SOME INITIATIVES WERE ALREADY ADJUSTED

1 FIFO (first in first out) –discounts associated with shelf life

One Sales Team

• New and larger

portfolio

• With the same time at

POS (point of sales)

• Brand equity larger

than expected

• Change to One

sales team

Perdigão Return

SOME OF THEM ARE VERY PROMISSING

• Proper segmentation
• Improved technology/

tools and training

• Higher productivity

and efficiency Salami Perdigão (2016) was completely different

• Different packaging
• Specific channels
• BRF total volumes grew

13.7% 3Q vs 2Q

1 3 2 5 4

AND HERE ARE THE BIG WINS

GO TO MARKET LOYALTY PROGRAM SERVICE LEVEL INNOVATION PEOPLE

WE ARE IMPROVING THE

SERVICE LEVEL to our clients...

Top 3 Key Accounts

Fill rate improving

Variable Expenses

• 3% (1H16 vs 1H15)

Fleet Optimization Improvement of delivery phasing 5% increase in direct sales vs 2015 System monitoring routes

Variable cost reducing

APP Deliveries

Stock out reduction Improve relationship with clients

73%

80% 86% 89%

73% 75%

A B C

Jan16 Jul16 Jan16 Jul16 Jan16 Jul16

PROGRAMS

Small/Medium Regional Supermarket GETTING CLOSER

Launched in Apr/16 Loyalty program with adherence to price policy Results: 1,265 clients above target:

Modern Trade

(Top 100 Regionals Key Account)

Launched in Feb/16 Relationship program for top 100 regional retailers Main Events:

LOYALTY

Olympic Program 2H16 Planning Meeting Jamie Oliver´s launch exclusive dinner 31% of clients achieved goal These clients performed 11.6 p.p. better than the others

WE ENGAGED AND PROMOTED

PAB (Talent Program) “Programa de aceleração Brasil” 91 “PABs” (Sales, Logistics and Finance areas) 21 promoted this year, two

• f them to sales managers

Engagement 173 Promoted to leadership position this year 89% engagement in 2015 climate research with employees

PEOPLE

Over 25 new products launched in 2016... Another 75 in the pipeline for 2017... New products’ average gross margin 17% higher than average portfolio Entering new categories... On the Go, Ready to Cook

AND MOST IMPORTANTLY, WE REIGNITED INNOVATION IN BRAZIL

GROWTH AND INNOVATION AGENDA DRIVING THE STRATEGY

BRANDS CATEGORIES CHANNEL

More time at POS Large increase of merchandisers Focus in perfect store execution Better understanding of customer profile

WHAT IT MEANS...

Increase Service Level “segmentation” of profitable Stores (Traditional Trade)

Customized Cost to Serve

Visit frequency equalization Delivery grid rationalization Internal sales force implementation

SEGMENTATION WAS KEY TO GO TO MARKET (GTM)

Implementation ended Sep.16 and the results so far...

SEGMENTATION WAS KEY TO GO TO MARKET (GTM)

From 30% to 65% segmented net revenue 30% more merchandisers in large stores Extra 48 minutes per visit to attend profitable customers 26% reduction in sales rep daily displacement 18% increase in next day deliveries

• Segmented clients: +10.9%
• Non segmented clients: +3.8%

Rio State had a 7.7% volume growth since implementation

TECHNOLOGICAL TOOLS

Knowledge Execution Productivity

Sales Process Technology in our hands

VISIT REVIEW GOLDEN FAMILY OUT OF STOCK FOCUS MIX

INTELLIGENCE IN A BOX Intelligence in a Box

Focus Mix: usual mix history and

• ffering others products for sale by

the client cluster: innovation, out of stock and profitability (Golden Family)

GROWTH AND INNOVATION AGENDA DRIVING THE STRATEGY

BRANDS CATEGORIES CHANNEL

BRANDS

The Power of BRF Brands: Sadia, Perdigão and Qualy amongst the 5 most preferred masterbrands in food

1st MOST VALUABLE FOOD BRAND

Source: Kaantar Vermeer – Isto é Dinheiro

Brand Awareness Consideration Top3 Preference Preference

in Brazil

31 62 92 98 32 95 95 60 12 96 96 34 5 95 95 17 4 94 94 28 4 93 93 23

Sources IPSOS

TWO LARGE EQUITY BRANDS

SADIA AND PERDIGÃO

Occupying different spaces in consumers minds

And how to do that?

With specific portfolios of products Positioning them in a different way Focusing on distinct occasions

SADIA BRAND

Communication on animal welfare, real food, natural and better ingredients Offer products with a better nutritional profile – balance (healthier) Intellectual leadership

• f the category

Transparency Healthier products Leadership

PERDIGÃO BRAND

DELICIOUS PRODUCTS: affordable quality Democratic: for everyone, accessible (100 Price Index) Prepared with love: for family gathering moments, friends reunion and having food at the center of special moments

QUALY BRAND

Healthy benefit: Energy Transfer Super ingredients: ingredients

• rigin, characteristics and

functional benefits

“AN EXTRA ‘Q’ OF TASTE AND HEALTHINESS THAT WILL SURPRISE YOU”

THE HOUSE OF BRANDS STRATEGY IS AN IMPORTANT LEVER OF IGNITING GROWTH...

2 3 4 5 6 7

PPC/unit 500G R$ 6.95 R$ 4.61 R$ 3.24

Brazil

R$ 4.09 R$ 4.61 R$ 5.16 R$ 3.63 R$ 2.92 R$ 3.81 R$ 3.44

Northeast

Source: Nielsen Retail JJ 2016 | 500g pack Market Share Value | Total Brand

BRF BRF

GROWTH AND INNOVATION AGENDA DRIVING THE STRATEGY

BRANDS CATEGORIES CHANNEL

In-natura “100% natural” Chicken Cuts “Na Brasa” Barbecue Line to bring Perdigão Assa Fácil range Easy Bake Chicken with vegetables Sadia Easy Bake Oven, cooked and with vegetables

P R O T E C T T H E C O R E

O F O U R B U S I N E S S I N N O V A T I O N C A N

Innovation securing LONG TERM market share and margins… and promoting TRADE UP

Objective

Develop the category through an increase of portfolio with different price points Sadia: focus in convenience and healthiness Perdigão: focus in family size packs and traditional dishes Reduce dependency

• f a single product

Fact

In 2015, the ready meals market was R$1bi in Brazil BRF is the market leader in the category leader

M A R K E T S H A R E (Ready Meals*)

IN CURRENT CATEGORIES

INJECT

GROWTH

INNOV AT ION CAN NEW READY MEALS LINE 68% 73%

2B16 4B16

Source: Niesen Retail *Ex - lasanha

INJECT

GROWTH

INNOV AT ION CAN

THE SALAMITOS CASE

Objective

Build a snack platform, bringing Sadia closer to Youngsters Salamitos, since launch, selling full

• capacity. Investments

to increase capacity and launch new flavors

Fact

In 2015, the snacks market was R$6.4bi in Brazil Expected CAGR (value)

• f 8% until 2019

Highly concentrated market: Pepsico is 63% of it

M A R K E T S H A R E (Salami)

IN NEW AVENUES

Source: Niesen Retail

0% 4%

1B16 4B16

R$ 4.7bi

Quality Trust Healthiness Nutrition (milk) Naturality Lightness Protagonism Healthy energy Anytime Healthy energy Anytime anywhere

R$ 3.4bi R$ 7.3bi R$ 2.6bi

SIZE OF THE PRIZE BRAND IMAGE OCCASIONS

Breakfast In home Beyond breakfast On the go OOH* On the go OOH*

HEALTHY ENERGY & ANYTIME ANYWHERE

MARGARINE SPREADS BASE FOR SPREADS PORTABLES

3 2 1

* Out of home

BIG BETS

QUALY A brand that is bigger than its portfolio, brings a lot of new

• pportunities

AND FINALLY, THE FOR THE FUTURE…

SERVICE LEVEL INNOVATION to GROW

B R A Z I L

&

I S A L L A B O U T . . .

LATAM

BRF Day

Jorge Lima

General Manager LATAM

Argentina

represents 70% of Latam sales

Local sales

75%

Direct Export from Brazil

25%

In-natura

32%

Processed

68%

BRANDED, PROCESSED PORTFOLIO AND LOCAL DISTRIBUTION

WITH ARGENTINA AS OUR KEY MARKET REGION DOMINATED BY

70%

13% 5% 3%9%

Revenues Breakdown Local Sales vs. Sales from Brazil Processed vs. In-natura

Chile Caribbean Uruguay Others Argentina

Local sales and distribution

ARGENTINA

2013 2014 2015 2016

GROWTH AND INNOVATION

L E A D I N G T H E P A T H

B RAN DS KEY CATEGO RI ES

Burger Franks Margarines In-natura Poutry & Beef Commemoratives Vegetables Ham Pork Shoulder Chicken IQF Bologna Nuggets Cold Cuts Breaded Frozen French Fries In-natura Pork (Re-launch)

…AND DRIVING STRONG MARKET POSITIONING IN KEY CATEGORIES …

MARKET SHARE 2014

(%)

2016

(%)

Position

Burger

48,9 57,4 #1

Franks

17,2 35,4 #1

Chicken IQF

81,2 #1

Cold Cuts

1,1 12,5 #2

Nuggets

0,6 24,5 #2 B R A N D P R E F E R E N C E S 2014 2 0 1 6 Variation Paty 60% 72% +12 p.p. Sadia, Calchaqui, Bocatti & Campo Austral 22% 28% + 6 p.p. BRAND AWARENESS 2014 2016 Sadia 84% 85% Paty Viena & Viensíssima 75% 95%

Argentina

Advertising

(communication in media)

2014 Only 3 weeks 2016 26 weeks

M A R G I N

* Excluding Venezuela

IMPROVING

FINANCIAL PERFORMANCE

L ATAM EBITD A*

(R$mn)

47 90 205 243

2013 2014 2015 1H16 LTM CAGR +93%

3,0% 6,6% 9,7% 10,9%

ASIA

BRF Day

Simon Cheng

General Manager

Singapore, HK Japan, South Korea China, Thailand Malaysia, Philippines India, Vietnam Indonesia, Myanmar

Mixed stages of market development require different strategies

Food Security Food Safety Product Values Life Values

50 100 150 200 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80

50% 40% 20% 30% 10%

• S. Korea

Japan China Malaysia Hong Kong Singapore Food Kg/Cap* India

GDP PPP/ capita

Vietnam Philippines Thailand Indonesia % FPP FPP adoption curve Food/capita curve

23%

Growth of direct sales

Downstream

Closer to end-clients 49% Awareness in Singapore, 95% Weigthed distribution, 62% Market share of Sadia

Brand

Platforms

40%

Growth volume

Expand

Access & Presence

Add-value

Value-Chain & Mix

BRF ASIA STRATEGY

25%

Growth in new, richer portfolio

Key levers and 2016 performance

FOCUS

Our

Initiatives

Grow Local Presence Feed to FPP Presence in a Relevant Market

Develop New Big Market

ASEAN

Increase access Structured presence Mix, Mix, Mix Semi-Value-added Evolve Local Sales model

Structure Presence in China

CN

Premium Cuts Semi-Value-added Cooked & Coated Grow & Diversify Capacity Continued Supply Develop Food Services Leading Consumer Brand

Implement Malaysia Entry

MY

Expand Add-value Brand Downstream

Grow Capacity & Markets Feed & Ingredients

Develop Local Sales & Food Services

USA BRA RUS VNM MEX IDN IND CHN 2025 CHN 2015 10 20 30 40 50 60 70 80 90 100 10.000 20.000 30.000 40.000 50.000 60.000

Kg of meat / capita 2015 GDP per capita PPP 2015

China will continue growing its consumption per capita and will

account for 30% of the global growth until 2025

Meat consumption vs. GDP per capita

Sources: OECD, FAO and IMF

World 2025 World 2015

Growth in global protein consumption (Mtons)

USA BRA CHN RUS IND IDN MEX VNM Others 302,8 38% 264,0 3%

1,1

3% 3%

1,0 1,2

30%

2,9 1,3 1,2

3% 3%

11,6

10%

3,7

7%

14,7 38,8

CHINA WILL NOT BE SELF-SUFFICIENT

China has only 0.081ha per capita of arable land vs. 0.371ha in Brazil Not cost competitive (~14% higher than Brazil) Food scandals lead to higher demand for control & traceability Scarcity of fresh water and high level of pollution China’s urban population is expected to jump from 54%2 in 2014 to 76%2 in 2050 (+292M2 people living in cities)

Availability Cost Safety Environment Social

Sources: (1) World Bank Open Data; (2) UN World Urbanization Prospects 2014 revision.

Already diversifying its supply strategy

Short term: Increase access to exports Medium term: Structured Presence Long term: Local operations

Complement with local operations to tackle all segments of the market

(1) From January to September

BRF is well positioned not only in terms of cost and safety, but also in terms of market access and prices

New plants approval, growing product mix and moving down in the value chain Study potential partnerships with Chinese companies on dedicated plants

SUCCESSFUL OPERATIONAL & FINANCIAL INTEGRATION WITH RESULTS AHEAD OF EXPECTATIONS

BRF THAILAND

Synergies from BRF to Thailand Synergies already captured

Farming Expertise Industrial Productivity Management System

Synergies to be captured

New markets / clients Portfolio Local sales

Synergies from Thailand to BRF

Quality and Service focus Global export platform Each step of the value chain as a business Know-how in Cooked & Coated Make to order

TPP RCEP

MALAYSIA

Strategic Market with high chicken consumption

RELEVANT MARKET STRATEGIC REGION

47 44 36 9 7

High Chicken Consumption

Halal + ASEAN HUB Total Market: USD 1.7 billion

30 million people

Affluent Established Emerging Aspirant Poor

3.2

4.8 14.4 4 4.8 Canada Chile Mexico Peru USA Australia NZ Japan China India

• S. Korea

Brunei

Malaysia

SG Vietnam

ASEAN

Cambodia Laos Myanmar Indonesia Philippines Thailand

per capita (kg)

MENA

BRF Day

Patricio Rohner

General Manager

Sadia Halal reach¹

SADIA HALAL HISTORY IN THE MIDDLE EAST BEGAN IN THE 70S

10 million people $250 billion GDP

Business model: Access markets through exports

International trade

• f basic products

Focus on cost and volume

Mid 70's First product sold in the Middle East (KSA)

• 1. GCC as of 1970-1980

Source: Gulf Research Center

1989 First Sadia TV commercial in the region

Sadia Halal reach¹

SADIA HALAL CURRENT STATUS

200 milion people $6 trillion GDP

Business model – Earn the right to win

Local presence and distribution – 50% market share Focus on brand and value-added products

Over

$500M

invested in the region:

1 mi tons USD 2B sales USD 450M EBITDA (22% margin) 3k employees

• 1. As of 2015; Muslim population and Nominal GDP in USD at PPP of reached countries. Source: EIU

2015 - distribution 2016 - distribution 2009 - distribution 2014 - distribution 2014 - Abu Dhabi factory

SIGNIFICANT ADDRESSABLE MARKETS UNDER SADIA HALAL

• 1. As of 2015; Muslim population and Nominal GDP in USD at PPP of reached countries

Source: EIU

Sadia Halal reach¹

1.5 bilion people $25 trilion GDP

Business model – Global Dominant Food player

Leverage presence, brand and distribution Move across geographies, consolidating markets Develop local further presence

BUILDING THE

#1

GLOBAL HALAL F O O D P L A Y E R

1 2 3

Sadia Halal already a winner

…with strongest food brand and dominant share in ME

Dedicated, integrated supply chain

…ensuring food security & safety at unrivaled cost

Sadia Halal is positioned for substantial growth

…with tangible opportunities in current and new geographies

BUILDING THE

#1

GLOBAL HALAL F O O D P L A Y E R

1 2 3

Sadia Halal already a winner

…with strongest food brand and dominant share in ME

Dedicated, integrated supply chain

…ensuring food security & safety at unrivaled cost

Sadia Halal is positioned for substantial growth

…with tangible opportunities in current and new geographies

Sadia Halal has the strongest food brand in the

Middle East, top of mind across diversified companies

Brand awareness of top food brands in the Middle East

Share of respondents that named brand 'top-of-mind', or knew the company1 (%)

• 1. Simple average of brand awareness surveys in Saudi Arabia, UAE and Kuwait

Note: Base: KSA 524 / UAE 525 / Kuwait 514. Source: Ipsos

37 17 10 10 4 Americana 99 Sadia 99 2 3 2 91 Perdix 30 3 Seara 48 Kraft Maggi 95 3 97 95 Al Islami Al Watania 78 Nestle 78 Almarai 72 Doux 50 Goody

Top of mind Awareness

Answer to: Which of these food brands do you know, even if just heard of? Answer to: Thinking of food brands, which is the first brand that comes to mind?

Sadia Halal Others

Mainstream brand Core brand

Sadia Halal is #1 player in all relevant markets it operates

Sadia Halal has a leading market share across product categories in key markets

Total across countries1 Saudi Arabia UAE Oman Qatar Kuwait Bahrain

Key Sadia Halal markets - ordered by size 38

49 11 59 33 7 40 52 24

76

67 19 85 43 29

72

42 6 48

Branded whole chicken

53

61

36 5 41 39 3 42 60 4 64 83 3 86 37 7 72 54 5 60 7

Chicken Parts

28

29

47 2

49

45 5 50 48 1 49

72

48 1 49 40 2 42 1

Chicken Franks 28 20 30 25 27 23 26 Chicken Nuggets

Sadia Other Sadia Halal brands

1. Average weighted by volumes from Nielsen 2. As of Mar’ 16

#1 in each market #2 in each market

Source: Nielsen

Saudi Arabia

Leadership makes Sadia Halal a price leader, holding a premium in key markets

Example: Price of Sadia Frozen Branded Whole Chicken vs top competitors in key markets1 Mar '16, Sadia=100 100 104 81 86

#2 #3 #4 Sadia

UAE

100 85 96 90 Sadia #2 #4 Perdix 38% 36% 5% 3% 49% 14% 10% 7%

Kuwait

100 75 81 93

Perdix Sadia Hilal #4

Qatar

100 81 87 86

#3 #4 Perdix Sadia 67% 11% 7% 3% 52% 22% 12% 2%

Bahrain

43% 23% 7% 5%

100 74 74 79

Perdix Sadia #3 Hilal

Oman

100 122 100 100

Perdix Sadia #2 #3 33% 29% 4% 4%

~1Mt ~250kt ~100kt ~100kt ~80kt ~40kt

40% BRF total market share 59% BRF total market share 85% BRF total market share 72% BRF total market share 38% BRF total market share 76% BRF total market share

• 1. Excludes producers focused in fresh Poultry - Source: Nielsen

x% Brand market share

Market size, 2015 (kT, Poultry imports)

BUILDING THE

#1

GLOBAL HALAL F O O D P L A Y E R

1 2 3

Sadia Halal already a winner

…with strongest food brand and dominant share in ME

Dedicated, integrated supply chain

…ensuring food security & safety at unrivaled cost

Sadia Halal is positioned for substantial growth

…with tangible opportunities in current and new geographies

INTEGRATED SUPPLY CHAIN TRANSLATES INTO 3 KEY COMPETITIVE ADVANTAGES

Source: BRF data

B R A Z I L Cost & Efficiency

1

Food safety & security

2

Local presence

3

M I D D L E - E A S T

Farms Feed mill Grain storage Incubators Slaughtering & Processing Sales, Marketing and Distribution

SADIA HALAL'S UNRIVALED FARM-TO-FORK

BUILDING THE

#1

GLOBAL HALAL F O O D P L A Y E R

1 2 3

Sadia Halal already a winner

…with strongest food brand and dominant share in ME

Dedicated, integrated supply chain

…ensuring food security & safety at unrivaled cost

Sadia Halal is positioned for substantial growth

…with tangible opportunities in current and new geographies

Value drivers with proven capabilities

2

Distribution control

Increase reach and enhance POS execution

5

Brand building

Transform commodity

• rientation into

branded

4

Local processing

Eventually including upstream capacity

3

Mix improvement

Increase share of value-added products, including cuts and FPP

Macro

1

Tailwinds

Sadia Halal's markets are large and fast growing

Phased growth strategy

6

Market expansion

• i. Expand in existing

core markets (GCC)

• ii. Entry/Expand in

immediate priority markets (e.g., Egypt, Turkey, Malaysia)

• iii. Long term global

expansion (e.g., Indonesia, Pakistan)

SUBSTANTIAL GROWTH

SADIA HALAL IS READY TO CAPTURE OPPORTUNITIES,

BUILDING ON PREVIOUS SUCCESS STORIES

1

SADIA HALAL WILL CONTINUE TO CAPTURE ITS TARGET POPULATION'S SUPERIOR GROWTH POTENTIAL + =

High population growth

Muslim population and % of total

Bn People

~2x

C A G R

+10%

Non-Muslims

+19%

Muslims

4.2 4.8 5.3 5.8 6.1 1.1 1.3 1.6 1.9 2.2

‘90 ‘00 ‘10 ‘20 ‘30

20 22 23 25 26

Increasing income per capita

GDP per Capita, real values

US$ k / year

C A G R

3.3%

3.8%

Non-Muslims Muslims

13.5 14.4 15.4 16.4 17.5 18.6 10.4 11.3 12.1 12.9 13.9 15.1

2010 2012 2014 2016 2018 2020

Surging Food & Beverage consumption

Muslim spending in F&B¹

US$ T

Non -Muslims Muslims

7.2 12.1 5.9 9.5 1.3 2.5

2013 2019E

9.1% 8.4% 11.9%

C A G R

• 1. Food & Beverage. Includes meat, Dairy, packaged food, ready meals, etc.

• Note. Sadia Halal doesn`t own distribution in Bahrain.

2014 2016

20+

DCs & TSPs

2

SADIA HALAL HAS A HISTORY OF SUCCESS IN EXPANDING MARKET SHARE THROUGH DISTRIBUTION

Established extensive footprint, benchmark in cold chain distribution Control over distribution with direct impact

• n market share improvement

Deals Country

Recent investments in distribution ME

~US$400M

Alyasra QNIE Al Khan Foods Federal foods Al Wafi Kuwait Qatar Oman UAE Saudi Arabia

DCs Plant

35K+

POS

500+

trucks

Market share2 Countries Nominal distribution1

2014 2016

62

9

82

5 20

56

2

25 45 64 76 49 30 30

21

85 76 59 38 40

53 77 36 23 24

Kuwait Qatar UAE Arábia Saúdita Oman

%

4

FOCUSED LOCAL PROCESSING IN THE MIDDLE EAST IS A KEY COMPETITIVE ADVANTAGE

State of the art factory Located inside the Khalifa Port Zone ADFCA Award

US$160M

70 ktons per year

• f capacity

investment

06

lines of value- added products

07 months ahead

• f schedule

accidents since opening

40% of expansion

4 years ahead of plan, bringing capacity to 100 ktons One of the Most Outstanding Facilities in Abu Dhabi for the Year 2015

ADFCA award

" "

Abu-Dhabi Factory

Opened November 2014

Source: BRF

500 1,000 1,500 100 80 60 40 20

6

CURRENT FOCUS ON IMPORT MARKETS, NEXT EXPANSION PHASE TARGETS LARGE MARKETS THAT REQUIRE LOCAL PRESENCE

Qatar Yemen Tunisia Nigeria Bangladesh Lebanon Sudan Bahrain Kuwait Philippines Turkey Libya1 UAE Algeria Jordan India Syria Iraq Iran Morocco Malaysia Pakistan Egypt2 Indonesia Saudi Arabia Addressable poultry market size (2015 MT) Poultry imports (%)

• 1. Imports estimated based
• n Sadia Halal exports to Libya
• 2. Sadia Halal present in Egypt,

with opportunity to expand Source: USDA, FAO, EIU, BRF, BCG Analysis

Sadia Halal dominant Sadia Halal present Expansion targets Other addressable markets Poultry consumption per capita (Kg/person)

BRF prioritized import markets at first Matured leading presence Access to ~31% of addressable market Sadia Halal will now move into new growth frontiers Strengthening presence in current markets Entering large markets that require local presence Access expanded to ~70%

• f addressable market

BUILDING THE

#1

GLOBAL HALAL F O O D P L A Y E R

1 2 3

Sadia Halal already a winner

…with strongest food brand and dominant share in ME

Dedicated, integrated supply chain

…ensuring food security & safety at unrivaled cost

Sadia Halal is positioned for substantial growth

…with tangible opportunities in current and new geographies