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Results Presentation 2018 and 4Q18 1 The statements contained - - PowerPoint PPT Presentation

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Results Presentation 2018 and 4Q18 1 The statements contained in this document related to the management's views on the business of M. Dias Branco are merely trends and, as such, are based exclusively on management's perspective on the

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Results Presentation 2018 and 4Q18

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The statements contained in this document related to the management's views on the business of M. Dias Branco are merely trends and, as such, are based exclusively on management's perspective on the continuity of past and present actions, based on facts that have already occurred. These trends do not constitute projections or estimates, and may be substantially altered by changes in market conditions, the performance of the Brazilian economy, the sector and international markets.

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On May 16, 2018, the Company concluded the acquisition of 100% of Indústria de Alimentos Piraquê S.A. (“Piraquê”). Piraquê’s results for the period between May 17 and September 30, 2018, can be found in the consolidated information of this document. This presentation includes some information excluding Piraquê’s results (“without Piraquê”).

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Highlights of 2018

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Innovation in Cracker Synergy with Piraquê brand Product for export Innovation in Cookies

2018 Releases

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Acquisition of Piraquê in May / 2018

  • R$ 1.5 billion | 16.2x EV / EBITDA
  • Items of high added value
  • Seventh brand of the group with annual sales

in excess of R$ 500 million

  • Leader in the state of Rio de Janeiro
  • + 7.3% of net revenue for M. Dias Branco
  • Integration in progress
  • Synergies

Margin Adjusted EBITDA 2017: 14.0% Margin Adjusted EBITDA 2018: 15.3%

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Marketing investments consistent with strategy and short- term results

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Buy one and get items for free Digital Influencer | Digital marketing Points of sale

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Accelerated growth in exports

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2016 2017 2018

R$ 28 millions R$ 46 millions R$ 35 millions

19 countries 37 countries 25 countries

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Sustainability

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1st inventory of greenhouse gas emissions (GHG) Lower water consumption (m³ / ton produced): -14.3% in 4Q18 vs. 4Q17 and -8.5% 2018 vs. 2017. SDG

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Evolution of Organizational Climate ICO * of 71.3 points in 2018

+5.6% vs. 2013

Culture, people and management

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* Organizational Climate Index

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Results 4Q18 and 2018

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Net Revenue (with Piraquê) +11.3% 2018 vs. 2017

Variation of Net Revenue - 2018 vs. 2017 (R$ Million) | M.Dias + Piraquê

5,415 6,025

154 103 75 14 2 292 10 123 7 8

  • 1.
000 2. 000 3. 000 4. 000 5. 000 6. 000 7. 000 8. 000

Net revenue 2017 Cookies and Crackers Pasta Wheat Flour and Bran Margarine and Vegetables Shortening Others Products Cookies and Crackers Pasta Wheat Flour and Bran Margarine and Vegetables Shortening Others Products Net revenue 2018

  • 8.2%

Volume Effect Price Effect +5.3% +9.0%

  • 4.3%

+1.9% +10.1% +0.9% +13.0% +2.0% +6.0%

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Variation of Net Revenue - 2018 vs. 2017 (R$ Million) | M. Dias

Net Revenue (without Piraquê) +3.4% 2018 vs. 2017

  • 0.3%

+2.5%

  • 8.1%
  • 4.4%

+1.2% +4.4% 0.0% +13.0% +1.8% +5.7% Volume Effect Price Effect

5,415 5,597

8 28 74 14 2 128 1 107 6 8

1. 000 1. 500 2. 000 2. 500 3. 000 3. 500 4. 000 4. 500 5. 000 5. 500

Net revenue 2017 Cookies and Crackers Pasta Wheat Flour and Bran Margarine and Vegetables Shortening Others Products Cookies and Crackers Pasta Wheat Flour and Bran Margarine and Vegetables Shortening Others Products Net revenue 2018

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Net Revenue (with Piraquê) +15.8% 4Q18 vs. 4Q17

Variation of Net Revenue - 4Q18 vs. 4Q17 (R$ Million) | M.Dias + Piraquê

1,364 1,580

12 28 44 2 1 117 31 67 2 1

1. 000 1. 100 1. 200 1. 300 1. 400 1. 500 1. 600 1. 700 1. 800

Net revenue 4Q17 Cookies and Crackers Pasta Wheat Flour and Bran Margarine and Vegetables Shortening Others Products Cookies and Crackers Pasta Wheat Flour and Bran Margarine and Vegetables Shortening Others Products Net revenue 4Q18

+1.7% +10.0%

  • 19.2%

+1.9%

  • 2.3%

+16.2% +11.0% +32.4% +2.9% +3.4% Volume Effect Price Effect

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Variation of Net Revenue – 4Q18 vs. 4Q17 (R$ Million) | M.Dias

Net Revenue (without Piraquê) +3.5% 4Q18 vs. 4Q17

1,364 1,412

49 44 1 1 51 28 59 2 1

1. 000 1. 100 1. 200 1. 300 1. 400 1. 500 1. 600 1. 700 1. 800

Net revenue 4Q17 Cookies and Crackers Pasta Wheat Flour and Bran Margarine and Vegetables Shortening Others Products Cookies and Crackers Pasta Wheat Flour and Bran Margarine and Vegetables Shortening Others Products Net revenue 4Q18

  • 6.7%

+0.2%

  • 19.0%

+1.4%

  • 4.5%

+7.1% +9.7% +32.4% +2.6% +4.2% Volume Effect Price Effect

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Product Line 2018 vs. 2017 4Q18 vs. 4Q17

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s 1

Share volume: 34.0% (+1.5 p.p vs. 2017) Share Value: 28.2% (+3.8 p.p vs. 2017) Share volume: 36.0% (+3.6 p.p vs. 2017) Share Value: 31.7% (+3.1 p.p vs. 2017) Share volume: 35.6% (+3.7 p.p vs. 4Q17) Share Valor: 30.5% (+6.5 p.p vs. 4Q17) Share volume: 37.9% (+4.4 p.p vs. 4Q17) Share Valor: 33.4% (-0.1p.p vs 4Q17)

Expansion of market share in cookies and crackers and pastas M. Dias Branco + Piraquê

Note: NIELSEN data for the period from January to December 2018, covering Piraquê de mai-dez / 18 The variations presented refer to the periods Jan-Dec/2018 vs. 2017 and Nov-Dec/2018 vs. 2017.

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875 933

75% 67%

60 % 80 % 10 0% 12 0% 14 0% 16 0% 18 0% 20 0%

4Q17 4Q18

  • 500
1. 000 1. 500 2. 000 2. 500 3. 000

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Production Capacity (Thousand Ton) and Usage Level (%)

3,372 3,663

79% 72%

50 % 55 % 60 % 65 % 70 % 75 % 80 % 85 % 90 % 95 % 10 0% 1. 000 1. 500 2. 000 2. 500 3. 000 3. 500 4. 000

2017 2018

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Verticalization of Wheat Flour and Vegetable Shortening

2017 2018

Wheat Flour Vegetable Shortening

2017 2018

92.1% 85.0% 82.6% 98.7%

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23.0% 25.6% 23.5% 23.4% 8.6% 9.0% 7.3% 8.5%

2017 2018

24.6% 27.5% 23.1% 24.0% 9.3% 9.1% 7.8% 9.0%

4Q17 4Q18

64.8% 69.6%

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COGS (% Net Revenue) impacted by the increase in the cost

  • f wheat and the devaluation of the Real

62.4% 66.5%

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26.0% 25.6%

1.6% 0.1% 0.8% 0.5% 0.2%

Operating Expenses 2017 Other expenses with marketing, sales and logistics. Freights Salaries and benefits Non-recurring expenses Other operating expenses Operacional Expenses 2018

Evolution Operating expenses (% Net Revenue) | M.Dias + Piraquê | 2018 vs. 2017

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Reduction of operating expenses (M. Dias Branco + Piraquê), even with negative impact of non-recurring items 2018 vs. 2017

¹Note: Non-recurring expenses associated with Piraquê (R$ 6.4 million), Independent Committee (R$ 19.5 million) and expenses incurred by Piraquê, with consultancy and restructuring (R$ 4.9 million). ²Note: Regarding administrative expenses, administration fees, tax expenses and other operating expenses, without non-recurring expenses. 1 2

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¹Note: Non-recurring expenses associated with Piraquê (R$ 2.0 million), Independent Committee (R$ 11.4

million) and expenses incurred by Piraquê with consultancy and restructuring (R$ 0.1 million). ²Note: Regarding administrative expenses, administration fees, tax expenses and other operating expenses, without non-recurring expenses.

Evolution Operating expenses (% Net Revenue) | M.Dias + Piraquê | 4Q18 vs. 4Q17

Reduction of operating expenses (M. Dias Branco + Piraquê), even with negative impact of non-recurring items 4Q18 vs. 4Q17 27.5% 26.6%

2.1% 1.0% 0.9% 0.7%

Operating Expenses 4Q17 Other expenses with marketing, sales and logistics. Salaries and benefits Non-recurring expenses Other operating expenses Operacional Expenses 4Q18

1 2

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193.3 183.5 275.8 283.8 189.9

14.2% 15.1% 18.6% 16.3% 12.0%

0, 0% 5, 0% 10 , 0 % 15 , 0 % 20 , 0 % 25 , 0 % 30 , 0 % 35 , 0 % 40 , 0 % 45 , 0 % 50 , 0 %

4Q17 1Q18 2Q18 3Q18 4Q18

50 10 15 20 25 30 35 40 45 50

EBITDA EBITDA Margin

  • 2.3%

4Q18 vs. 4Q17

  • 3.5%

2018 vs. 2017

Reduction of expenses, contributing to the positive result

EBITDA (R$ Million) and EBITDA Margin (% Net Revenue)

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966.4 933.0

17.8% 15.5%

0, 10 0, 20 0, 30 0, 40 0, 50 0, 60 0, 70, 80 0, 90 0, 10 00, 0% 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 %

2017 2018

EBITDA EBITDA Margin

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  • 14.3%

2018 vs. 2017

  • 30.8%

4Q18 vs. 4Q17

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Net Income (R$ Million) and Net Margin (% Net Revenue)

844,3 723,5

15.6% 12.0%

2017 2018

10 20 30 40 50 60 70 80 90 0% 10 % 20 % 30 % 40 % 50 % 60 %

Net Profit Net Margin

201.9 139.7 209.7 234.3 139.8

14.8% 11.5% 14.1% 13.4% 8.9%

4Q17 1Q18 2Q18 3Q18 4Q18

50 10 15 20 25 30 35 40 45 50 0% 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 %

Net Profit Net Margin

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Ongoing construction of the new milling unit in Bento Gonçalves (RS); Reuse of effluents in the Fats and Margarines unit in Fortaleza (CE); Implantation of the flour line at the Eusébio plant (CE);

2018 vs. 2017

  • 8.6%

329.5 301.1 6,1% 5,0%

2017 2018

50 10 15 20 25 30 35 0% 5% 10 % 15 % 20 % 25 % 30 % 35 % 40 % 45 % 50 %

Capex (Million) Capex/Net Revenue

Investments of R$ 301.1 million in 2018

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925.9 451.0

779.9 300.0 401.8 132.4 23.8 1,306.4 7.7 113.7

Cash and Cash Equivalents in Dec-17 Net Cash from

  • perating

activities Payment of property and software licenses Financing activities Dividends (interest on

  • wn capital)

Payment for the acquisition

  • f subsidiaries

Acquisition of Equity Interest Investment applications Cash and cash equivalents acquired Cash and Cash Equivalents in Dec-18

12.9% of Net Revenue in 2018

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Cash Flow and (%) Net Revenue

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Cash (Debt) Net: R$ Million and EBITDA

596.6

  • 763.5

0.6

  • 0.6

2017 2018

  • 150
, 0 %
  • 100
, 0 %
  • 50,
0% 0, 0% 50 , 0 % 10 0, 0% 15 0, 0%
  • 900
, 0
  • 800
, 0
  • 700
, 0
  • 600
, 0
  • 500
, 0
  • 400
, 0
  • 300
, 0
  • 200
, 0
  • 100
, 0 0, 10 0, 20 0, 30 0, 40 0, 50 0, 60 0,
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Average Daily Volume: MDIA3 (R$ million)

Profitability%

MDIA3 x IBOV x IGC 01/02/2018 a 03/08/2019

  • 40%
  • 30%
  • 20%
  • 10%

0% 10% 20% 30% 40% 5 10 15 20 25 30 35 40

jan-18 feb-18 mar-18 apr-18 may-18 jun-18 jul-18 aug-18 sep-18

  • ct-18

nov-18 dec-18 jan-19 feb-19 mar-19

Volume (Millions) MDIA3 IBOV IGC

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www.mdiasbranco.com.br/ri ri@mdiasbranco.com.br

Fabio Cefaly

New Business and Investor Relations Director Phone.: (85) 4005-5730 E-mail: fabio.cefaly@mdiasbranco.com.br

Geraldo Luciano Mattos Júnior

Vice-President of Investments and Controllership Phone.: (85) 4005-5874 E-mail: geraldo@mdiasbranco.com.br

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