Earnings Release

3Q23 | 9M23

November 10th, 2023

Eusébio (CE), November 10, 2023 - M. Dias Branco S.A. Indústria e Comércio de Alimentos (B3: MDIA3), leader in Brazil's cookies & crackers, pasta and healthy cookies markets, announces today its results for the third quarter of 2023 (3Q23) and first nine months of 2023 (9M23). The consolidated interim financial information has been developed pursuant to CPC 21 - Interim Financial Reporting and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB).

MDIA3

3Q23 WEBINAR RESULTS November 13, 2023

Time:

  • Portuguese | English 11h00 (Brasília Time) 09h00 (New York Time

Zoom Meetings registration:

Click Here

Live on Youtube:

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Share price:

Closing on 11/08/2023 MDIA3: R$ 34.44 per share Market Cap: R$ 11.7 billion

youtube.com/rimdias

IR CONTACT

Gustavo Lopes Theodozio

Vice-President of Investments and Controllership Phone: (85) 4005-5667

Email: gustavo.theodozio@mdiasbranco.com.br

Fabio Cefaly

New Business and Investor Relations Officer

Phone: (11) 3883-9273

Email: fabio.cefaly@mdiasbranco.com.br

Rodrigo Ishiwa

Investor Relations Manager

Phone: (11) 3883-9225

Email: ri@mdiasbranco.com.br

Everlene Pessoa

Investor Relations Analyst

Phone: (85) 4005-5730

Email: ri@mdiasbranco.com.br

Fernanda Castilho and Lucas Laport

Investor Relations Interns

Phone: (85) 4005-5730

Email: ri@mdiasbranco.com.br

ri.mdiasbranco.com.br ri@mdiasbranco.com.br

EARNINGS RELEASE 3Q23 | 9M23

A quarter with recurring and consistent recovery in margins and a record cash generation

  • Net income +33% vs. 3Q22;
  • EBITDA of R$441 million;
  • EBITDA Margin of 16.1%;
  • R$973 million in operating cash generation.

In 9M23, we recorded growth in Revenue, Volumes, Average Price, EBITDA, Net Income, Margins, and Operating Cash Generation

Payout ratio increased, from 60% to 80% and fixed quarterly payment from R$0.05 to R$0.06 per share

Net Revenue of R$2.7 billion in 3Q23 and R$8.1 billion in 9M23. In the first nine months of the year, we recorded double digit growth, with higher prices (+7%) and volumes (+2%). The retraction in 3Q23 versus 3Q22 was due to price reductions, with average prices increasing for cookies and pasta but falling for lower added value products, such as wheat flour and margarines & vegetable shortening, in line with the drop in the commodities market, and was also affected by the decline in volumes, in a scenario which retailers operated with lower inventory levels.

Net Revenue (R$ million)

Sales Volume (Thousand tonnes)

Average Price (R$/Kg)

-8%

-7%

-2%

-4%

+10%

-1%

+2%

-3%

+7%

2,977

2,765

2,849

2,735

8,070

482

454

1,276

1,307

6.2

6.3

6.2

6.3

6.1

5.8

6.2

2,486

451

7,364

441

403

3Q22 4Q22 1Q23 2Q23 3Q23

9M22

9M23

3Q22 4Q22 1Q23 2Q23 3Q23

9M22

9M23

3Q22 4Q22 1Q23 2Q23 3Q23

9M22

9M23

3

EARNINGS RELEASE 3Q23 | 9M23

The news articles on the side indicate that retailers operated with lower inventory levels, which included lower inventory levels for M. Dias Branco's products at Retail, as shown in the charts below, causing a negative impact on sell- in (sales from the manufacturer to retailers).

Days* in inventory at Retail (Cookies & Crackers - M. Dias Branco)

42

45

34

3Q22

2Q23

3Q23

Days* in inventory at Retail

(Pasta - M. Dias Branco)

44

51

39

3Q22

2Q23

3Q23

*Source: Neogrid Direct/Indirect + Estimate C&C

*

**

*

  • Increase in costs force retailers to reduce inventories, while industries deal with excess products
  • Cash and Carry/Retail reduce inventories in view of deflation

MARKET

COOKIES & CRACKERS

PASTA

(Increase %)

YEAR

QUARTER

YEAR

QUARTER

Value

9%

4%

9%

2%

Volume

-1%

4%

1%

2%

Units

0%

4%

4%

4%

Average Price

10%

0%

8%

0%

Volume per Units

-1%

0%

-3%

-1%

The cookies & crackers and pasta market in Brazil (sell-out | retail sales to consumers) increased in value vs. 3Q22 and grew in value and volume vs. 2Q23, as shown in the table on the side.

Source: Nielsen - Retail Index. Total Brazil. INA+C&C. Cookies and Crackers / Pasta.

The variation in YEAR refers to the period of Jul/Aug 2023 vs. Jul/Aug 2022, and QUARTER refers to the period Jul/Aug 2023 vs. May/Jun 2023.

Increase in Gross margin, reaching out 35.6% in 3Q23 (+2.6 p.p. vs. 2Q23 and +7 p.p. vs. 3Q23), mainly due to the drop in variable costs (wheat and palm oil) and the good performance of higher added value products, such as the Piraquê brand, which accounted for 13% of total net revenue in the quarter (10% in 3Q22).

Gross Mg. (%)

+7.0 p.p.

+2.6 p.p.

33.0%

35.6%

28.6%

24.8%

27.1%

3Q22

4Q22

1Q23

2Q23

3Q23

4

EARNINGS RELEASE 3Q23 | 9M23

Administrative and Sales Expenses (SG&A as a percentage of Net Revenue) remain under control, at 20.5% of net revenue in 3Q23 (20.4% in 9M23), in line with previous quarters and maintaining the gains captured in the structuring initiatives carried out in recent years, such as the Multiplique Project and the Organizational Redesign.

SG&A (% NR)

+2.1 p.p.

+0.3 p.p.

21.1%

20.7%

20.5%

20.2%

18.4%

3Q22

4Q22

1Q23

2Q23

3Q23

We reached a record EBITDA of

EBITDA (R$ million) and EBITDA Mg. (% NR)

Net Profit (R$ million) and Net Mg. (% NR)

R$440.7 million in 3Q23, up by

16.1%

7.6%

9.5%

32.3%

over

3Q22

and

17.0%

11.2%

13.2%

6.6%

higher than

in

2Q23.

EBITDA

4.4%

7.0%

2.8%

0.6%

margin

was

16.1%,

with

376.8

440.7

217.9

259.0

consistent

growth since

4Q22,

333.1

195.0

due

to:

a)

the

increase

in

173.7

average

price

in the

last

121.3

69.9

15.5

quarters, mainly for cookies; b)

cost

reduction;

c)

control

of

3Q22

4Q22

1Q23

2Q23

3Q23

3Q22

4Q22

1Q23

2Q23

3Q23

expenses.

Net

Income

grew

32.8% YoY and 18.9% QoQ, resulting from the expansion in EBITDA and the improvement in the financial result.

Net cash generated by operating activities reached R$973.3 million, an historic record and 90.2% higher than in 2Q23, also reflecting the EBITDA growth and the releasing of working capital

arising from inventory management, the drop in input prices, and higher supplier payment days.

Net Cash Generated from Operating

Leverage

Activities (R$ million)

Net Debt / EBITDA last 12 months

973.3

1.7x

1.8x

1.6x

1.2x

511.8

302.5

0.3x

56.8

-90.8

3Q22

4Q22

1Q23

2Q23

3Q23

3Q22

4Q22

1Q23

2Q23

3Q23

We recorded, for the third consecutive quarter, a reduction in leverage (net debt/LTM EBITDA), to 0.3x in the quarter (1.2x in 2Q23), due to recurring improvement in the results and a strong cash generation.

5

EARNINGS RELEASE 3Q23 | 9M23

OTHER HIGHLIGHTS:

Piraquê é a terceira marca de alimentos mais escolhida para consumo fora do lar

Piraquê is the third most chosen food brand to be consumed outside the home, according to Kantar Brand Footprint 2023

In the 11th edition of Brand Footprint Brasil, produced by Kantar, which lists the brands most chosen by Brazilians in 2022, Piraquê was third place in the "Sweet Snacks" category for the ranking of the most consumed brands outside of homes1.

AAA

Rating Perspectiva

Estável

Reafirmado

PELO 6º ANO

CONSECUTIVO

Fitch Ratings reaffirmed our AAA National Long-term Rating with a stable outlook

The Fitch Ratings classification agency reaffirmed our 'AAA(bra)' National Long- term Rating with a stable outlook for the sixth consecutive year.

Transparency Trophy Award, by the sixth year, for the Quality of Financial Statements

The award promotes transparency and good business practices and is carried out by the National Association of Finance, Administration and Accounting Executives (ANEFAC).

We are part of IDIVERSA B3 portfolio

We are part of IDIVERSA B3, the first diversity index in Latin America, developed by B3, the Brazilian stock exchange.

Jasmine participates in the International Congress of Functional Nutrition

The Congress, one of the biggest events in this field, took place in São Paulo and had an exclusive stand for the Jasmine brand, offering the audience tastings and healthy novelties from its product portfolio.

See below the key consolidated results indicators for 3Q23 and 9M23, which include the results of Jasmine and Las Acacias as of Sep/22 and Nov/22, respectively.

1 Source: Kantar, Brand Footprint 2023, Brazil

6

EARNINGS RELEASE 3Q23 | 9M23

cial and Operating Results

3Q23

3Q22

Variation

2Q23

Variation

9M23

9M22

Variation

Net Revenue (R$ million)

2,734.9

2,976.6

-8.1%

2,849.4

-4.0%

8,069.8

7,364.2

9.6%

Total Sales Volume (thousand tonnes)

450.5

482.2

-6.6%

454.1

-0.8%

1,307.4

1,276.2

2.4%

Cookies and Crackers Sales Volume (thousand tonnes)

129.7

153.2

-15.3%

133.1

-2.6%

379.6

392.9

-3.4%

Pasta Sales Volume (thousand tonnes)

87.6

99.4

-11.9%

90.1

-2.8%

257.0

265.4

-3.2%

Market Share of Cookies and Crackers (volume)*

31.3%

29.9%

1.4 p.p

32.0%

-0.7 p.p

32.1%

31.3%

0.8 p.p

Market Share of Pasta (volume)*

27.9%

30.1%

-2.2 p.p

28.1%

-0.2 p.p

29.4%

30.7%

-1.3 p.p

Net Income (R$ million)

259.0

195.0

32.8%

217.9

18.9%

546.8

466.3

17.3%

EBITDA (R$ million)

440.7

333.1

32.3%

376.8

17.0%

991.2

779.1

27.2%

EBITDA Margin

16.1%

11.2%

4.9 p.p

13.2%

2.9 p.p

12.3%

10.6%

1.7 p.p

Net Cash (Debt) (R$ million)

-318.2

-1,659.9

-80.8%

-1,253.1

-74.6%

-318.2

-1,659.9

-80.8%

Net Cash (Debt) / EBITDA (last 12 months)

-0.3

-1.7

-82.4%

-1.2

-75.0%

-0.3

-1.7

-82.4%

Capex (R$ million)

106.3

71.3

49.1%

71.9

47.8%

223.4

186.3

19.9%

Net Cash generated from operating activities

973.3

-90.8

n/a

511.8

90.2%

1,541.9

-219.1

n/a

  • The values presented in 3Q23 and 3Q22 are from the period of Jul/Aug 2023 and 2022. The values presented in 2Q23 are from the period of May/Jun 2023.
    The values presented in 9M23 and 9M22 are from the period of Jan to Aug 2023 and 2022.

MARKET AND OPERATIONAL HIGHLIGHTS

MARKET SHARE

The charts below show the Brazilian market share (in % of sales volume) of M. Dias Branco, the national leader in the cookies & crackers and pasta markets, and its main competitors (from January to August 2023).

Market Share Cookies and Crakers* - Brazil

Market Share Pasta* - Brazil

(% of volume sold)

(% of volume sold)

M. Dias

M. Dias

Others

Branco

Others

32.1%

Branco

36.6%

31.1%

29.4%

Company A

Company J

Company F

3.3%

Company E

8.6%

Company I

13.7%

4.9%

Company B

3.5%

Company D

Company C

6.5%

Company H

Company G

5.4%

5.9%

6.1%

12.9%

*Source: Nielsen - Retail Index. Total Brazil. INA+C&C. Cookies and Crackers / Pasta.

In the wheat flour category, we expanded our market share value and volume in relation to 3Q22 and 2Q23. In the cookies category, we ended 3Q23 with a growth in market share value and volume vs. 3Q22. In the pasta category, stability vs. 2Q23.

Wheat Flour

Cookies & Crackers

Pasta

Market Share

11.1

12.3

12.7

11.6

12.1

27.5

29.3

29.3

28.8

28.3

29.0

30.1

30.3

27.3

27.8

Value*

Market Share

9.9

10.8

11.2

10.1

11.0

32.8

32.6

32.0

31.3

30.1

31.1

31.7

28.1

27.9

29.9

Volume*

3Q22

4Q22

1Q23

2Q23

3Q23

3Q22

4Q22

1Q23

2Q23

3Q23

3Q22

4Q22

1Q23

2Q23

3Q23

* Source: Nielsen - Retail Index. Total Brazil. INA+C&C.

7

EARNINGS RELEASE 3Q23 | 9M23

SALES CHANNELS

Highlight for the representativeness increase in Cash & Carry.

Client Mix

3Q23

3Q22

Variation

2Q23

Variation

9M23

9M22

Variation

Key Accounts / Regional Chains

21.2%

22.5%

-1.3 p.p

22.2%

-1 p.p

21.9%

22.3%

-0.4 p.p

Cash and Carry

25.8%

24.3%

1.5 p.p

24.5%

1.3 p.p

24.0%

23.1%

0.9 p.p

Wholesale

16.2%

18.2%

-2 p.p

16.6%

-0.4 p.p

17.1%

18.2%

-1.1 p.p

Small Retail

18.0%

17.9%

0.1 p.p

17.4%

0.6 p.p

18.1%

19.3%

-1.2 p.p

Distributors

12.6%

11.4%

1.2 p.p

13.3%

-0.7 p.p

12.6%

11.1%

1.5 p.p

Industry

3.1%

2.8%

0.3 p.p

2.8%

0.3 p.p

3.0%

3.0%

0 p.p

Other

3.1%

2.9%

0.2 p.p

3.2%

-0.1 p.p

3.3%

3.0%

0.3 p.p

TOTAL

100.0%

100.0%

100.0%

100.0%

100.0%

Note: Client mix, considering gross revenue excluding discounts and returns.

Major Clients

Sales 3Q23

Gross revenue excluding

Sales 9M23

Gross revenue excluding

discounts and returns (%)

discounts and returns (%)

(R$ million)*

(R$ million)*

Sequence

Accumulated

Individual

Accumulated

Individual

Accumulated

Major Client

1

295.5

9.2%

9.2%

810.1

8.5%

8.5%

49 Subsequent

50

1,022.7

31.8%

41.0%

2,971.8

31.3%

39.8%

50 Subsequent

100

261.4

8.1%

49.1%

788.0

8.3%

48.1%

900 Subsequent

1,000

983.7

30.6%

79.7%

2,968.6

31.3%

79.4%

Other Clients

All clients

650.4

20.2%

99.9%

1,948.7

20.5%

99.9%

TOTAL

3,213.7

9,487.2

*Gross revenue excluding discounts and returns.

PRODUCTION CAPACITY UTILIZATION RATE

The capacity utilization level decreased in 6.8 p.p. vs. 3Q22 and 4.0 p.p. vs. 2Q23 due to the drop of production volumes of 11.9% e 5.4%, respectively.

Cookies and

Wheat Flour and

Margarine and

Other

Effective Production /

Pasta

Vegetable

Total

Crackers

Bran

products**

Shortening

Production Capacity*

3Q23

3Q22

3Q23

3Q22

3Q23

3Q22

3Q23

3Q22

3Q23

3Q22

3Q23

3Q22

Total Production

131.3

158.4

88.1

107.4

392.3

425.9

42.2

50.8

3.9

4.5

657.8

747.0

Total Production Capacity

220.4

237.9

131.4

141.1

631.4

631.1

90.0

90.0

14.1

10.3

1,087.3

1,110.4

Capacity Utilization

59.6%

66.6%

67.0%

76.1%

62.1%

67.5%

46.9%

56.4%

27.7%

43.7%

60.5%

67.3%

Cookies and

Wheat Flour and

Margarine and

Other

Effective Production /

Pasta

Vegetable

Total

Crackers

Bran

products**

Shortening

Production Capacity*

3Q23

2Q23

3Q23

2Q23

3Q23

2Q23

3Q23

2Q23

3Q23

2Q23

3Q23

2Q23

Total Production

131.3

144.7

88.1

96.7

392.3

402.6

42.2

45.5

3.9

6.2

657.8

695.7

Total Production Capacity

220.4

219.5

131.4

129.8

631.4

624.5

90.0

90.0

14.1

14.4

1,087.3

1,078.2

Capacity Utilization

59.6%

65.9%

67.0%

74.5%

62.1%

64.5%

46.9%

50.6%

27.7%

43.1%

60.5%

64.5%

Cookies and

Wheat Flour and

Margarine and

Other

Effective Production /

Pasta

Vegetable

Total

Crackers

Bran

products**

Shortening

Production Capacity*

9M23

9M22

9M23

9M22

9M23

9M22

9M23

9M22

9M23

9M22

9M23

9M22

Total Production

388.2

417.7

270.0

284.5

1,149.7

1,146.0

126.1

132.7

15.7

13.5

1,949.7

1,994.4

Total Production Capacity

661.5

720.8

393.4

421.3

1,873.6

1,872.6

270.0

270.0

42.1

31.0

3,240.6

3,315.7

Capacity Utilization

58.7%

57.9%

68.6%

67.5%

61.4%

61.2%

46.7%

49.1%

37.3%

43.5%

60.2%

60.2%

*Thousand tonnes.

**Cakes, snacks, cake mix, packaged toast, healthy products, sauces and seasonings.

8

EARNINGS RELEASE 3Q23 | 9M23

Production Capacity (thousand tonnes) and Utilization Rate -

Production Capacity (thousand tonnes) and Utilization Rate -

Cookies and Crackers (%)

Pasta (%)

237.9

222.6

221.6

219.5

220.4

141.1

133.5

132.2

131.4

129.8

66.6%

65.9%

76.1%

74.5%

67.0%

59.6%

60.1%

64.4%

56.7%

50.6%

3Q22

4Q22

1Q23

2Q23

3Q23

3Q22

4Q22

1Q23

2Q23

3Q23

Capacity

Utilization Rate

Capacity

Utilization Rate

Production Capacity (thousand tonnes) and Utilization Rate -

Production Capacity (thousand tonnes) and Utilization Rate

-

Wheat Flour and Bran (%)

Margarine and Vegetable Shortening (%)

631.1

631.1

617.7

624.5

631.4

90.0

90.0

90.0

90.0

90.0

67.5%

56.4%

47.9%

50.6%

46.9%

64.5%

62.1%

42.7%

57.5%

57.4%

3Q22

4Q22

1Q23

2Q23

3Q23

3Q22

4Q22

1Q23

2Q23

3Q23

Capacity

Utilization Rate

Capacity

Utilization Rate

Note: Total production capacity refers to the maximum yield that can be extracted from the equipment considering the losses caused by maintenance stoppages, setup time, line clean-up, restrictions on the maximum number of shifts in the plants, etc.

VERTICALIZATION

We maintained the high vertical integration level of the two main inputs. In 3Q23, 99.9% of wheat flour and 100.0% of vegetable shortening consumed were internally produced.

Wheat flour

Vegetable shortening

3Q23

99.9%

0.1%

41.1%

58.9%

3Q23

100.0%

48.5%

51.5%

2Q23

99.6%

0.4%

37.6%

62.4%

2Q23

100.0%

46.3%

53.7%

3Q22

99.6%

0.4%

31.7%

68.3%

3Q22

100.0%

44.4%

55.6%

Own Production External Source

Sale Internal Consumption

Own Production External Source

Sale Internal Consumption

9

EARNINGS RELEASE 3Q23 | 9M23

ECONOMIC AND FINANCIAL HIGHLIGHTS

NET REVENUE

Net revenue declined by 8.1% in 3Q23 vs. 3Q22, reflecting the drop in volumes sold and a lower average price, by 6.6% and 1.6%, respectively. The reduction in average price reflects the drop in the wheat flour & bran and the margarine & vegetable shortening categories, which followed the trend for commodity prices.

3Q23

3Q22

Variation

Segment

Net

Weight

Average

Net

Weight

Average

Net

Weight

Average

Revenue

Price

Revenue

Price

Revenue

Price

Cookies and Crackers

1,432.4

129.7

11.04

1,560.7

153.2

10.19

-8.2%

-15.3%

8.3%

Pasta

564.6

87.6

6.45

606.5

99.4

6.1

-6.9%

-11.9%

5.7%

Wheat Flour and Bran

477.8

207.7

2.3

518.4

200.7

2.58

-7.8%

3.5%

-10.9%

Margarine and Vegetable Shortening

158.5

19.9

7.96

200.2

23.3

8.59

-20.8%

-14.6%

-7.3%

Other products**

101.6

5.6

18.14

90.8

5.6

16.21

11.9%

0.0%

11.9%

TOTAL

2,734.9

450.5

6.07

2,976.6

482.2

6.17

-8.1%

-6.6%

-1.6%

*Net revenue in R$ million, weight excluding sales returns in thousand tonnes and net average price in R$/Kg.

**Cakes, snacks, cake mix, packaged toast, healthy products, sauces and seasonings.

By region, the decrease in net revenue was due to the drop in volumes, in a context that retailers operated with lower inventory levels, as well as the decline in averages prices in wheat flour

  • bran and the margarine & vegetable shortening categories, mainly in the Defense region (North and Northeast).

Variation in Net Revenue by Regions 3Q23 vs. 3Q22 (R$ million)

Var. -8.1%

2,977

2,735

Var. -5%

Var. -10%

Var. +12%

Launches: 17 products, with highlights to healthy options, such as the corn biscuit and gluten-free tapioca bites from the Jasmine brand, the Richester ramen, and cookies and pasta for export.

Investments in marketing and sales: Highlight for the campaigns "Neologio", from Adria, with Claude Troisgros; "Família Maltado", from Piraquê, with Ludmilla; and "Vitarella no São João tem diferença".

10

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M. Dias Branco SA published this content on 10 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 15:26:28 UTC.