1. society
2. welfare
3. healthcare

MARFRIG GENERATES POSITIVE FREE CASH FLOW
OF R$84 MILLION IN 3Q14
São Paulo, November 13, 2014 – Marfrig Global Foods S.A. – Marfrig (BM&FBOVESPA NOVO MERCADO: MRFG3
and Level 1 ADR: MRTTY) announces today its results for the third quarter of 2014 (3Q14). Except where stated
otherwise, the following operating and financial information is presented in nominal Brazilian real, in accordance
with International Financial Reporting Standards (IFRS), and should be read together with the financial reports for
the fiscal year ended September 30, 2014 filed at the Securities and Exchange Commission of Brazil (CVM).
3Q14 HIGHLIGHTS
Total capital
520,747,405 shares
Share price
(Nov. 12, 2014)
R$6,06/share
Market cap
(Nov. 12, 2014)
R$3.156.000.000
Conference call with
Webcast on Nov. 13, 2014
Portuguese: 9:00 a.m. (Brasilia)
English: 11:00 a.m. (Brasilia)
Dial-in from Brazil:
+55 (11) 3193-1001
+55 (11) 2820-4001
English: 11:00 a.m.
Dial-in for other countries:
+1 (786) 924-6977
Investor Relations
+55 (11) 3792-8600
ri@marfrig.com.br
www.marfrig.com.br/ir
 All targets in our 2014 Guidance have
been met, reinforcing the commitment
we assumed in our Focus to Win strategy.
 Positive free cash flow of R$71 million in
the year to date (R$84 million in 3Q14).
 We
have
delivered
performance
consistency
straight quarters.
operating
for
four
 The productivity agenda in Brazil has
yielded savings in costs and expenses of
over R$13 million (R$52 million on an
annualized basis).

Record-high exports at Marfrig Beef
Brazil, corresponding to 45% of revenue,
with strong position in markets with high
beef demand.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
1
GUIDANCE 2014
YTD through
3Q14
2014
Target Range (1)
%
Achieved
Net
Revenue
15.1
21.0 – 23.0
72% - 66%
Adjusted
EBITDA
Margin
8.2
7.5 – 8.5
109% - 96%
%
CAPEX
447
600
75%
R$ million

R$ million
Free Cash
Flow to
Shareholders (2)
71
Breakeven
to 100
R$ billion
(1) Net Revenue in 2014 calculated in BRL based on the exchange rates of R$2.40/US$1.00 and R$3.80/£1.00.
(2) Operating cash flow after investments, variations in working capital, interest expenses and income tax.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
2
OPERATING HIGHLIGHTS
NET REVENUE

Consolidated net revenue grows 6% from 3Q13 to R$5.2 billion:
+ 10%

- 5%
+ 11%
The strong export performance at Marfrig Beef Brazil and sales growth at Moy Park
offset the slowdown in Brazil's domestic market and the impact of lower average
prices at Keystone in the United States and APMEA (product mix).
Adjusted EBITDA

Consolidated adjusted EBITDA grew 16% vs. 3Q13 to R$435 million, with adjusted
EBITDA margin of 8.3%.
+ 24%
- 9%
+ 25%

Export growth and operational efficiency gains at Marfrig Beef, combined with the
better sales mix and lower production costs at Moy Park, offset the more challenging
scenario faced by Keystone in the quarter.

All divisions are maintaining adjusted EBITDA margins of over 7% in the year to date,
reaffirming the Company's commitment of targeting higher profitability across all
operations, accompanied by lower earnings volatility.
7.1%
7.1%
9.4%
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
3
OPERATING HIGHLIGHTS
Net Revenue
Gross Income and Gross Margin
(R$ million)
(R$ million and %)
+ 6%
SG&A and SG&A/NOR (R$ million and %)
+ 11%
Adjusted EBITDA and Margin
(R$ million and %)
+ 16%
+ 5%
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
4
BALANCE SHEET HIGHLIGHTS

Standard & Poor’s upgraded the corporate credit rating on the global scale of
Marfrig and Moy Park to “B+” and reaffirmed Moy Park's standalone rating of “BB-”.

Fitch Ratings upgraded Marfrig’s corporate credit rating on the global scale to “B+”
with a stable outlook and also upgraded its national scale rating to BBB+(bra).

The noncash impact on the Company's debt caused by local-currency
depreciation does not affect the calculation of the financial leverage for bank
financing and capital market transactions.

Net debt of R$7.5 billion (US$3.1 billion), compared to R$6.7 billion (US$3.1 billion) in
2Q14.

Shorter-dated debt remains at comfortable levels: 11.7% of total debt.

Tax liabilities were renegotiated under the REFIS program, helping to reduce risks at
the federal tax level and allowing the company to monetize approximately R$ 600
million over time.

Positive free cash flow of R$84 million in the quarter and R$71 million in the year to
date, in line with 2014 guidance.
ANALYST ESTIMATES
Broker
BES
BRADESCO
BTG PACTUAL
DEUTSCHE
FATOR
GBM
HSBC
ITAÚ
JP MORGAN
MORGAN STANLEY
VOTORANTIM
BOFA MERRILL LYNCH
SHORE CAPITAL
CONSENSUS
Marfrig 3Q14
Net Revenue
(R$ million)
Adjusted EBITDA
(R$ million)
Adjusted EBITDA
Margin (%)
5,171
5,118
5,248
5,263
5,378
5,376
5,293
5,011
5,293
5,244
5,369
5,300
5,508
5,275
5,239
409
421
436
411
425
432
410
394
424
387
448
427
404
418
435
7.9%
8.2%
8.3%
7.8%
7.9%
8.0%
7.7%
7.9%
8.0%
7.4%
8.3%
8.1%
7.3%
7.9%
8.3%
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
5
 Over 70 years of tradition and growth
 A leading food company in the United Kingdom
 Relationships with leading retailers and food
service operators in the United Kingdom and
continental Europe
 Unique and comprehensive poultry production
platform with high quality standards
 Clear opportunities for growth and operational
excellence to drive margin expansion
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
6
OPERATING HIGHLIGHTS
Net Revenue
Gross Income and Gross Margin
(R$ million)
(R$ million and %)
+ 10%
+ 19%
Adjusted EBITDA and Margin
SG&A and SG&A/NOR
(R$ million and %)
(R$ million and %)
+ 12%
+ 24%
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
7
Net Revenue: Net Revenue amounted to R$1,345 million in the quarter, advancing 10%
from 3Q13 and 0.5% from 2Q14.
Revenue growth in relation to 3Q13 was driven by: (i) the positive impact from
exchange variation (7%); (ii) the consolidation of Marfrig’s European beef business into
Moy Park, increasing sales by GBP8.5 million; and (iii) the stronger sales in the retail
channel in the United Kingdom and Ireland, led by fresh products and the slight
increase in convenience ready-to-eat and frozen coated poultry products. Results
were partly offset by commodity input cost deflation, the strengthening of the GBP
relative to the Euro reducing the GBP value of European revenues, and a modest
decline in volumes sold in the European business.
Compared to 2Q14, August tends to be atypical in terms of sales due to the summer
holiday period in Europe.
Gross Income and Gross Margin: Gross Income was R$144 million (gross margin of
10.7%), increasing 19% from R$121 million (gross margin of 9.9%) in 3Q13.
The main factors contributing to margin expansion in relation to 3Q13 were: (i) the
reduction in production and labor costs captured by the investments made in the
Grantham Project; (ii) lower grain costs; and (iii) higher net revenue.
Compared to 2Q14, gross Income declined 6% to R$153 million (margin of 11.4%), due
to the follow factors: (i) higher outside meat costs; and (ii) lower Retail channel revenue
driven by seasonal demand during the traditional UK holiday period of August coupled
with the lower level of promotions at Key Accounts.
Selling, General and Administrative Expenses: SG&A Expenses as a ratio of NOR in 3Q14
stood at 8.2%, compared to 8.0% in 3Q13 and 8.9% in 2Q14.
The 20 bps increase compared to 3Q13 was driven by the higher freight expenses
resulting from the consolidation at Moy Park of Marfrig's convenience beef business in
Europe.
Adjusted EBITDA and Adjusted EBITDA Margin: Adjusted EBITDA was R$96 million (margin
of 7.1%), increasing 24% from R$78 million (margin of 6.4%) in 3Q13. Compared to 2Q14,
adjusted EBITDA was virtually in line with the R$94 million (margin of 7.0%) posted in that
quarter.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
8
Statement of Income
Net Revenue
COGS
Gross Income
SG&A
Selling
Administrative
Adjusted EBITDA*
Other Income/Expenses
EBITDA
GBP / BRL
3Q2014
R$
%NOR
1,344.6
100.0%
(1,200.6)
-89.3%
144.0
10.7%
(109.8)
-8.2%
(68.6)
-5.1%
(41.2)
-3.1%
95.9
7.1%
(2.5)
-0.2%
93.3
6.9%
3.80
2Q2014
R$
%NOR
1,338.2
100.0%
(1,185.2)
-88.6%
153.1
11.4%
(118.6)
-8.9%
(78.5)
-5.9%
(40.1)
-3.0%
93.7
7.0%
(1.2)
-0.1%
92.6
6.9%
3.75
Change ∆
Chg. $
Chg.%
6.4
0.5%
(15.5)
-1.3%
(9.0)
-5.9%
8.7
7.4%
9.8
12.5%
(1.1)
-2.8%
2.1
2.3%
(1.3)
-113.4%
0.8
0.8%
0.04
1.2%
3Q2013
R$
%NOR
1,221.7
100.0%
(1,100.3) -90.1%
121.4
9.9%
(98.0)
-8.0%
(61.3)
-5.0%
(36.7)
-3.0%
77.6
6.4%
(2.4)
-0.2%
75.2
6.2%
3.55
Change ∆
Chg. $ Chg.%
122.9
10.1%
(100.3)
-9.1%
22.6
18.6%
(11.8)
-12.1%
(7.3)
-12.0%
(4.5)
-12.3%
18.2
23.5%
(0.2)
-6.8%
18.1
24.0%
0.25
6.9%
(*) Excludes the effects from other operating income/expenses.
Revenue, Volume and Average Price
REVENUE
(R$ MILLION)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
909.3
400.2
362.1
147.0
128.2
35.2
93.0
1,037.5
435.4
455.1
147.0
982.9
427.4
468.4
87.1
148.9
36.6
112.2
1,131.8
464.1
580.6
87.1
1,049.4
428.2
534.8
86.3
172.3
36.0
136.3
1,221.7
464.2
671.2
86.3
1,147.9
482.0
583.0
82.9
184.5
37.2
147.3
1,332.4
519.3
730.3
82.9
1,151.4
485.0
571.2
95.2
169.9
43.6
126.2
1,321.3
528.6
697.4
95.2
1,174.0
489.3
595.8
88.8
164.3
47.6
116.7
1,338.2
536.9
712.5
88.8
1,186.2
488.3
608.2
89.6
158.5
46.0
112.4
1,344.6
534.3
720.7
89.6
VOLUME
(‘000 TONS)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
Domestic Market
Fresh Meat
Processed Products
Other
Exports
Fresh Meat
Processed Products
TOTAL MOY PARK
Fresh Meat
Processed Products
Other
127.6
38.6
30.3
58.8
27.7
5.1
22.6
155.4
43.7
52.9
58.8
131.0
40.2
38.6
52.2
29.1
5.6
23.5
160.1
45.8
62.2
52.2
120.9
35.7
39.0
46.2
32.2
3.6
28.6
153.2
39.3
67.7
46.2
124.7
36.3
42.7
45.8
35.0
3.6
31.4
159.7
39.9
74.1
45.8
126.3
37.7
39.4
49.1
31.1
3.6
27.5
157.4
41.3
66.9
49.1
125.8
38.5
42.6
44.7
32.2
3.8
28.4
157.9
42.3
70.9
44.7
123.7
38.2
42.8
42.7
33.9
3.6
30.4
157.7
41.8
73.2
42.7
AVERAGE PRICE
(R$/KG)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
Domestic Market
Fresh Meat
Processed Products
Other
Exports
Fresh Meat
Processed Products
TOTAL MOY PARK
Fresh Meat
Processed Products
Other
7.12
10.37
11.96
2.50
4.62
6.90
4.11
6.68
9.96
8.60
2.50
7.50
10.64
12.13
1.67
5.11
6.58
4.77
7.07
10.14
9.34
1.67
8.68
11.99
13.71
1.87
5.34
10.00
4.76
7.98
11.81
9.92
1.87
9.20
13.29
13.66
1.81
5.27
10.38
4.69
8.34
13.03
9.86
1.81
9.12
12.86
14.49
1.94
5.46
12.10
4.59
8.39
12.79
10.42
1.94
9.33
12.71
14.00
1.99
5.10
12.45
4.11
8.47
12.69
10.05
1.99
9.59
12.77
14.20
2.10
4.67
12.92
3.70
8.53
12.79
9.84
2.10
Domestic Market
Fresh Meat
Processed Products
Other
Exports
Fresh Meat
Processed Products
TOTAL MOY PARK
Fresh Meat
Processed Products
Other
Chg.%
3Q14 /
2Q14
1.0%
-0.2%
2.1%
0.9%
-3.5%
-3.3%
-3.6%
0.5%
-0.5%
1.2%
0.9%
Chg.%
3Q14 /
3Q13
13.0%
14.0%
13.7%
3.8%
-8.0%
27.9%
-17.5%
10.1%
15.1%
7.4%
3.8%
Chg.%
3Q14 /
2Q14
-1.6%
-0.7%
0.6%
-4.6%
5.5%
-6.8%
7.1%
-0.2%
-1.3%
3.2%
-4.6%
Chg.%
3Q14 /
3Q13
2.3%
7.1%
9.8%
-7.7%
5.3%
-1.0%
6.1%
2.9%
6.3%
8.2%
-7.7%
Chg.%
3Q14 /
2Q14
2.7%
0.5%
1.5%
5.7%
-8.5%
3.8%
-10.1%
0.7%
0.8%
-2.0%
5.7%
Chg.%
3Q14 /
3Q13
10.5%
6.5%
3.6%
12.4%
-12.7%
29.2%
-22.3%
6.9%
8.2%
-0.8%
12.4%
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
9
 Over 50 years of history
 Leading global supplier of products to the food
service industry
 Over 30,000 clients in North America and APMEA
 Committed to the highest food safety and quality
standards
 Long-standing history of innovation
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
10
OPERATING HIGHLIGHTS
Net Revenue
Gross Income and Gross Margin
(R$ million)
(R$ million and %)
- 5%
- 13%
4,8%
SG&A and SG&A/NOR
Adjusted EBITDA and Margin
(R$ million and %)
(R$ million and %)
- 6%
- 9%
4,8%
4,8%
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
11
Net Revenue:
Keystone posted net revenue of R$1,412 million, down 5% on 3Q13. The lower revenue
primarily reflects the commodity-based pricing model with several QSR clients in the
United States, in which product prices reflect variations in input costs, and a shift in the
product mix in the QSR channel in the United States.
In APMEA, the sales mix was impacted by an incident involving a competitor food
supplier to our main client in China, which forced us to immediately prepare to meet
the shortfall created by the closure of said supplier's plants. As a result, 3Q14 presented
atypical inventory levels of basic items for the higher production that became
necessary, with this effort not yet reflected in sales. Note that this offsetting effect
should be felt as of the fourth quarter.
Sales volume in APMEA grew 6% vs. 3Q13, driven by the QSR channel in China and the
Middle East, which was partially offset by the lower volumes in the United States due to
fewer promotions for poultry and beef items in the QSR channel. Sales to Key Accounts
in APMEA grew 25% over 3Q13, with particular strength in the domestic markets of
China and South Korea as well as in the QSR and export market in Malaysia.
Compared to 2Q14, net revenue was flat. In the United States, revenues from Key
Accounts increased substantially due to higher seasonal volumes of proteins used as
ingredients in soups / frozen entrées produced by clients, which offset the lower sales to
our main client.
Gross Margin:
Gross Margin decreased 60 bps to 6.0%, compared to 6.6% in 3Q13. Gross margin in
3Q14 benefited from 10% lower feed costs in the United States, which mitigated the
impact from the 13% increase in outside meat costs in the United States.
Lower grain market prices also resulted in an unrealized mark-to-market loss of
approximately US$2.3 million in the third quarter related to grain hedges through the
end of the 4th quarter of 2014. Excluding this loss, gross margin would have been 6.3% in
3Q14, compared to 6.6% in 3Q13, a 30 bps decline.
In APMEA, gross margin benefitted from the improved sales mix, with an increased
share of higher-margin Key Accounts, as well as from lower raw material costs in China.
Compared to 2Q14, gross margin increased 30 bps, from 5.7% to 6.0%. The Gross Margin
improvement in 3Q14 was driven by lower outside meat and feed costs in the USA.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
12
Selling, General and Administrative Expenses: Reported SG&A expenses in the quarter
were R$42 million or 3.0% of net revenue, a reduction of 6% from 3Q13 and an increase
of R$21 million or 96% from 2Q14. SG&A expenses corresponded to 3.0% and 1.5% of net
revenue in 3Q14 and 2Q14, respectively. The result of 1.5% of net revenue in 2Q14 was
impacted by a “true-up” of accruals made during fiscal year 2013 and therefore is not
directly comparable to the 3Q14 result. On an annualized basis, SG&A expenses in
3Q14 corresponded to between 2.5% and 3.0% of net revenue and therefore were in
line with our expectations and represented one of the best ratios in the industry.
ADJUSTED EBITDA and Adjusted EBITDA Margin: Adjusted EBITDA amounted to
R$87million in 3Q14 (margin of 6.1%), compared to R$95 million in 3Q13 (margin of 6.4%).
Excluding the mark-to-market effect mentioned previously, EBITDA margin would have
been 6.5% this quarter.
Compared to 2Q14, Adjusted EBITDA declined R$14 million (-14%) and Adjusted EBITDA
Margin contracted 100 bps.
Statement of Income
3Q2014
2Q2014
Change ∆
3Q2013
Change ∆
R$
%NOR
R$
%NOR
Chg. $
Chg.%
R$
%NOR
Chg. $
Chg.%
1,412.3
100.0%
1,414.1
100.0%
(1.8)
-0.1%
1,482.7
100.0%
(70.4)
-4.7%
(1,327.0)
-94.0%
(1,333.0)
-94.3%
6.0
0.4%
(1,385.2)
-93.4%
58.2
4.2%
85.3
6.0%
81.0
5.7%
4.2
5.2%
97.4
6.6%
(12.2)
-12.5%
(42.0)
-3.0%
(21.5)
-1.5%
(20.5)
-95.5%
(44.5)
-3.0%
2.5
5.6%
Selling
(5.1)
-0.4%
(4.8)
-0.3%
(0.3)
-7.0%
(7.0)
-0.5%
1.9
27.1%
Administrative
(36.9)
-2.6%
(16.7)
-1.2%
(20.2)
-120.6%
(37.5)
-2.5%
0.6
1.6%
Adjusted EBITDA*
86.6
6.1%
100.3
7.1%
(13.8)
-13.7%
95.4
6.4%
(8.8)
-9.2%
Other Income/Expenses
(3.3)
-0.2%
7.5
0.5%
(10.8)
-143.6%
0.3
0.0%
(3.6)
-1299.4%
EBITDA
83.3
5.9%
107.9
7.6%
(24.6)
-22.8%
95.6
6.5%
(12.4)
-12.9%
USD / BRL
2.28
0.05
2.0%
2.29
(0.01)
-0.6%
Net Revenue
COGS
Gross Income
SG&A
2.23
(*) Excludes the effects from other operating income/expenses.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
13
Revenue, Volume and Average Price
REVENUE
(R$ MILLION)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
890.5
890.5
322.7
322.7
1,213.2
1,213.2
1,011.5
1,011.5
274.1
274.1
1,285.6
1,285.6
1,131.3
1,131.3
351.4
351.4
1,482.7
1,482.7
1,027.0
1,027.0
363.3
363.3
1,390.3
1,390.3
1,026.0
1,026.0
365.0
365.0
1,391.0
1,391.0
1,051.4
1,051.4
362.7
362.7
1,414.1
1,414.1
1,066.9
1,066.9
345.4
345.4
1,412.3
1,412.3
VOLUME
(‘000 TONS)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
KEYSTONE - USA
Processed Products
KEYSTONE - ASIA
Processed Products
TOTAL KEYSTONE FOODS
Processed Products
202.9
202.9
36.2
36.2
239.1
239.1
211.2
211.2
33.7
33.7
244.9
244.9
214.0
214.0
35.7
35.7
249.7
249.7
210.1
210.1
36.2
36.2
246.3
246.3
206.1
206.1
35.8
35.8
241.9
241.9
210.7
210.7
37.4
37.4
248.1
248.1
213.3
213.3
37.9
37.9
251.2
251.2
AVERAGE PRICE
(R$/KG)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
KEYSTONE - USA
Processed Products
KEYSTONE - ASIA
Processed Products
TOTAL KEYSTONE FOODS
Processed Products
4.39
4.39
8.92
8.92
5.07
5.07
4.79
4.79
8.14
8.14
5.25
5.25
5.29
5.29
9.84
9.84
5.94
5.94
4.89
4.89
10.04
10.04
5.64
5.64
4.98
4.98
10.20
10.20
5.75
5.75
4.99
4.99
9.70
9.70
5.70
5.70
5.00
5.00
9.11
9.11
5.62
5.62
KEYSTONE - USA
Processed Products
KEYSTONE - ASIA
Processed Products
TOTAL KEYSTONE FOODS
Processed Products
Chg.%
3Q14 /
2Q14
1.5%
1.5%
-4.8%
-4.8%
-0.1%
-0.1%
Chg.%
3Q14 /
3Q13
-5.7%
-5.7%
-1.7%
-1.7%
-4.7%
-4.7%
Chg.%
3Q14 /
2Q14
1.2%
1.2%
1.5%
1.5%
1.3%
1.3%
Chg.%
3Q14 /
3Q13
-0.3%
-0.3%
6.2%
6.2%
0.6%
0.6%
Chg.%
3Q14 /
2Q14
0.2%
0.2%
-6.2%
-6.2%
-1.4%
-1.4%
Chg.%
3Q14 /
3Q13
-5.4%
-5.4%
-7.5%
-7.5%
-5.3%
-5.3%
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
14
 One of the world's largest beef and lamb
producers
 Strong expertise in supplying food service chains
in Brazil
 Pioneer in new export markets
 Geographic diversification in South America helps
mitigate sanitary risks
 Recognized for its quality meat
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
15
OPERATING HIGHLIGHTS
Net Revenue (R$ million)
Gross Income and Gross Margin
(R$ million and %)
+ 11%
SG&A and SG&A/NOR (R$ million and %)
+ 14%
Adjusted EBITDA and Margin
(R$ million and %)
+ 5%
+ 25%
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
16
Net Revenue: Net Revenue in 3Q14 was R$2,482 million, increasing 11% on 3Q13
(R$2,240 million) and 5% on 2Q14 (R$2,365 million).
This good performance is explained by higher exports from Brazil, with 33% growth in
fresh meat export revenue on 3Q13, and by the improvement in the operations in
Uruguay and Chile(+9% vs. 3Q13), which combined more than offset the slower sales in
Argentina (-17% vs. 3Q13) resulting from our reduced exposure to the country, where
we currently operate only 2 production units (vs. 3 units in 3Q13).
BRAZIL OPERATION – DOMESTIC MARKET: Net revenue from Brazil's domestic operations
was R$1.088 billion, increasing 7% from 3Q13 (R$1.014 billion), mainly due to the 22%
increase in sales volume, which was partially offset by 12% drop in prices in relation to
3Q13 due to the shift in the product mix, with more higher-value products directed to
export markets.
Brazil's domestic market poses a more challenging economic backdrop combined with
higher raw material (cattle) costs. The gradual decline in household purchasing power
driven by higher inflation and more restricted credit, coupled with the political and
economic outlooks marked by uncertainty, had a negative impact on sales, especially
sales to large retail clients.
On the other hand, sales to the food service segment continued growing to already
account for 33% of domestic revenue in Brazil, compared to 30% in 3Q13. In line with
the strategy to increase our share of sales to this segment, we have been focusing on
expanding our relationships with restaurant chains, hamburger shops and steakhouses,
as shown by the partnerships signed recently with the chains Outback Steakhouse and
Johnny Rockets to supply meat cuts and exclusive products.
BRAZIL OPERATION – EXPORT MARKET: Net revenue from exports in Brazil was R$883
million, advancing 23% from 3Q13 (R$720 million), reflecting the 16% growth in fresh
meat sales volume and 15% increase in average price compared to 3Q13.
This performance is the result of the Company’s strategy to better balance its sales
across markets by gradually increasing the share of exports to take advantage of the
strong international demand for Brazilian beef; the BRL depreciation against the USD;
the adverse scenario for important global exporters, such as the United States and
Australia; Russia’s recent decision to authorize meat exports from a higher number of
Brazilian plants; and the gradual increase in beef demand from Asia, particularly in
China, which has increased its imports from Brazil.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
17
Our shift to a much larger share of exports in our Beef business in Brazil (45% in 3Q14, vs.
41% in 3Q13 and 33% in 3Q12) is underpinned by our positive view of the current supply
and demand situation in the international market.
The following chart presents the main destinations of exports by Marfrig Beef Brasil:
Exports by destination
(% of revenue)
1Q14
2Q14
3Q14
Europe
Asia
South/Central America
Middle East
Russia
Other
INTERNATIONAL OPERATIONS: The international operations posted net revenue of R$511
million, virtually flat (+1%) from 3Q13 (R$506 million). This performance is explained by
our lower exposure to Argentina, which was offset by the good performance of our
businesses in Uruguay and Chile.
The growing difficulties imposed on Argentina's beef industry have led us to temporarily
pare back our operations in the country, where we currently operate 2 units.
Argentina's revenue contribution, which in 3Q13 accounted for 31% of revenue in the
international operations, has fallen to 26%.
On the other hand, our operations in Uruguay and Chile grew 9% vs. 3Q13, with
advances in both sales volume and average price.
Gross Income and Gross Margin: Gross income was R$420 million in 3Q14, increasing
14% from R$367 million in 3Q13 and 7% from R$391 million in 2Q14.
Gross margin reached 16.9%, compared to 16.4% in 3Q13 and 16.5% in 2Q14.
Profitability advanced despite the higher cattle acquisition costs in the quarter. The
higher average prices practiced, especially in export markets, combined with the
various initiatives implemented to increase profitability, especially at the units in Brazil.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
18
Selling, General and Administrative Expenses: SG&A Expenses as a ratio of NOR in the
quarter stood at 8.4%, compared to 8.9% in 3Q13 and 9.7% in 2Q14.
The decreases of 50 bps vs. 3Q13 and 130 bps vs. 2Q14 reflect the initial gains from the
process to improve expense management launched in mid-2Q14 (Productivity Agenda
Project), which this quarter already yielded initial savings of over R$13 million from the
implementation of a series of initiatives at the units in Brazil.
The Productivity Agenda Project in Brazil seeks to obtain annual cost and expense
savings of at least R$30 million through initiatives such as:

rigorous monthly budget with diminishing cost targets;

better management of overtime, attendance and production shifts;

restructuring of the sales/marketing team and redesign of current route grid;

greater control of travel/transportation expenses;

review and renegotiation of various contracts (outsourced services, leases,
telecommunications and IT);

review of the procurement/expense model with maintenance, laundry and
uniforms;

use of cheaper energy sources (steam) and reduction loss of temperature in cold
storage.
In this initial phase of the project, one of the main objectives is to increase the level of
performance and optimize each production unit to meet the company’s internal
benchmarks. In a subsequent phase, we will seek to meet even higher market
benchmarks.
Adjusted EBITDA and Adjusted EBITDA Margin: Adjusted EBITDA was R$253 million
(margin of 10.2%), increasing 25% from R$202 million (margin of 9.0%) in 3Q13 and 24%
from R$204 million (margin of 8.6%) in 2Q14.
The higher sales volume coupled with the significant advances in the cost and expense
management initiatives implemented, especially at Marfrig Beef Brazil, supported a 120
bps increase in adjusted EBITDA margin.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
19
Statement of Income
3Q2014
Net Revenue
COGS
Gross Income
2Q2014
Change ∆
3Q2013
Change ∆
R$
%NOR
R$
%NOR
Chg. $
Chg.%
R$
%NOR
Chg. $
Chg.%
2,482.1
100.0%
2,365.3
100.0%
116.8
4.9%
2,239.7
100.0%
242.4
10.8%
(2,062.4)
-83.1%
(1,974.5)
-83.5%
(87.9)
-4.5%
(1,872.3)
-83.6%
(190.1)
-10.2%
419.7
16.9%
390.8
16.5%
28.9
7.4%
367.4
16.4%
52.3
14.2%
(209.0)
-8.4%
(228.5)
-9.7%
19.6
8.6%
(199.9)
-8.9%
(9.0)
-4.5%
Selling
(152.0)
-6.1%
(158.7)
-6.7%
6.7
4.2%
(147.0)
-6.6%
(5.0)
-3.4%
Administrative
SG&A
(57.0)
-2.3%
(69.8)
-3.0%
12.8
18.4%
(52.9)
-2.4%
(4.0)
-7.6%
Adjusted EBITDA*
252.9
10.2%
203.5
8.6%
49.4
24.3%
202.2
9.0%
50.7
25.1%
Other Income/Expenses
(35.1)
-1.4%
(24.2)
-1.0%
(11.0)
-45.3%
(7.2)
-0.3%
(27.9)
-387.9%
EBITDA
217.8
8.8%
179.3
7.6%
38.5
21.5%
195.0
8.7%
USD / BRL
2.28
0.05
2.0%
2.29
2.23
22.8
11.7%
(0.01)
-0.6%
(*) Excludes the effects from other operating income/expenses.
Revenue, Volume and Average Price
REVENUE
(R$ MILLION)
1,970.9
1,088.4
748.2
108.8
231.4
882.5
730.8
60.7
90.9
511.2
260.6
191.2
8.5
Chg.%
3Q14 /
2Q14
6.3%
-0.1%
1.0%
-1.4%
-2.6%
15.3%
22.1%
-4.6%
-12.1%
0.1%
24.3%
37.7%
-8.2%
Chg.%
3Q14 /
3Q13
13.7%
7.3%
38.4%
-60.0%
14.9%
22.6%
33.3%
-27.1%
3.6%
1.0%
-11.7%
-11.4%
-56.1%
60.9
250.6
219.6
5.3
25.7
2,482.1
1,889.8
183.3
409.0
-1.0%
-16.7%
-16.7%
12.4%
-21.4%
4.9%
8.5%
-2.5%
-6.1%
1.3%
18.8%
20.8%
11.0%
5.3%
10.8%
27.1%
-51.7%
9.4%
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
MARFRIG BEEF - BRAZIL
Domestic Market
Fresh Meat
Processed Products
Lamb, Leather and Other
Exports
Fresh Meat
Processed Products
Lamb, Leather and Other
MARFRIG BEEF - INTERNATIONAL OP.
Domestic Market
Fresh Meat
Processed Products
1,579.2
1,029.0
559.6
281.4
188.1
550.2
334.1
98.3
117.8
544.7
294.5
220.3
19.3
1,488.5
953.4
494.8
276.3
182.3
535.1
342.7
105.3
87.1
549.4
302.8
221.6
19.5
1,733.6
1,014.0
540.7
272.0
201.4
719.6
548.5
83.3
87.8
506.2
295.1
215.7
19.3
1,825.1
1,033.1
603.4
209.8
220.0
792.0
612.9
70.5
108.6
430.6
234.0
182.0
11.8
1,645.1
936.6
629.3
121.3
186.0
708.4
561.0
54.2
93.2
430.2
196.0
137.3
11.4
1,854.7
1,089.1
741.1
110.3
237.7
765.6
598.5
63.7
103.5
510.6
209.6
138.9
9.2
Lamb, Leather and Other
Exports
Fresh Meat
Processed Products
Lamb, Leather and Other
TOTAL MARFRIG BEEF
Fresh Meat
Processed Products
Other
54.8
250.2
218.9
4.0
27.3
2,123.9
1,332.9
403.0
388.0
61.7
246.6
215.8
3.4
27.5
2,037.9
1,274.8
404.5
358.6
60.1
211.0
181.8
4.8
24.4
2,239.7
1,486.7
379.3
373.7
40.2
196.6
172.0
4.2
20.4
2,255.7
1,570.3
296.3
389.1
47.3
234.1
205.7
4.7
23.8
2,075.2
1,533.4
191.5
350.3
61.5
301.0
263.5
4.7
32.7
2,365.3
1,741.9
187.9
435.5
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
20
277.2
Chg.%
3Q14 /
2Q14
13.2%
Chg.%
3Q14 /
3Q13
17.0%
200.5
79.6
9.8
16.0%
12.7%
21.5%
21.6%
18.5%
-54.4%
94.2
72.0
55.1
111.1
76.8
63.1
17.9%
6.6%
14.6%
45.8%
6.4%
15.9%
3.9
11.9
54.1
4.6
12.3
75.7
2.8
10.8
72.4
-39.4%
-12.1%
-4.4%
-57.3%
-2.6%
7.4%
39.9
17.1
1.1
21.7
16.7
12.7
35.1
12.7
1.1
21.3
19.0
14.1
48.8
15.1
1.0
32.7
27.0
19.9
51.7
20.0
0.9
30.9
20.7
15.0
6.0%
32.0%
-7.7%
-5.6%
-23.2%
-24.3%
5.4%
-12.7%
-52.4%
26.7%
12.8%
10.4%
0.2
4.6
304.4
0.1
3.8
287.0
0.2
4.8
288.0
0.1
7.0
320.7
0.2
5.5
349.7
15.4%
-20.8%
9.0%
-16.1%
21.1%
14.9%
139.1
158.2
154.9
139.9
160.7
177.7
10.6%
12.4%
31.7
145.7
30.0
116.2
21.0
111.1
13.8
134.3
13.7
146.2
13.6
158.3
-1.0%
8.3%
-54.7%
36.2%
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
MARFRIG BEEF - BRAZIL
Domestic Market
Fresh Meat
Processed Products
Lamb, Leather and Other
Exports
Fresh Meat
Processed Products
Lamb, Leather and Other
6.38
5.44
7.89
13.79
1.92
9.41
9.65
12.49
7.38
6.50
5.45
8.31
13.09
1.94
9.84
9.80
12.95
7.70
7.32
6.15
8.05
12.67
2.64
9.97
10.06
12.77
7.89
7.92
6.70
8.90
14.57
3.05
10.40
10.69
13.17
8.09
7.03
5.62
10.20
14.03
1.93
10.51
10.89
13.85
7.80
7.57
6.30
10.50
13.69
2.52
10.63
10.86
13.86
8.39
7.11
5.43
9.40
11.11
2.08
11.50
11.57
21.82
8.39
Chg.%
3Q14 /
2Q14
-6.1%
-13.8%
-10.4%
-18.8%
-17.4%
8.2%
6.6%
57.4%
0.0%
Chg.%
3Q14 /
3Q13
-2.8%
-11.7%
16.8%
-12.3%
-21.2%
15.3%
15.0%
70.8%
6.3%
MARFRIG BEEF - INTERNATIONAL OP.
Domestic Market
Fresh Meat
Processed Products
Lamb, Leather and Other
Exports
Fresh Meat
Processed Products
Lamb, Leather and Other
TOTAL MARFRIG BEEF
Fresh Meat
Processed Products
Other
5.78
4.42
8.28
9.26
1.44
9.07
11.43
19.33
3.33
6.21
8.81
13.18
2.42
6.30
4.85
8.63
8.34
1.79
9.94
11.41
24.11
4.76
6.44
9.17
12.75
2.46
7.50
6.01
9.43
10.47
2.47
11.49
13.35
26.11
5.35
7.36
9.40
12.64
3.22
7.61
5.87
10.67
10.66
1.85
11.77
13.50
31.62
5.32
7.86
10.13
14.11
3.50
7.96
5.59
10.84
10.06
2.23
12.32
14.61
30.28
4.99
7.20
10.96
13.83
2.61
6.74
4.30
9.18
9.70
1.88
11.16
13.27
35.49
4.69
7.38
10.84
13.68
2.98
7.06
5.04
9.57
9.65
1.97
12.10
14.60
34.56
4.65
7.10
10.63
13.47
2.58
4.7%
17.3%
4.3%
-0.5%
4.9%
8.4%
10.0%
-2.6%
-0.8%
-3.8%
-1.9%
-1.5%
-13.3%
-6.0%
-16.2%
1.5%
-7.8%
-20.1%
5.3%
9.4%
32.3%
-13.0%
-3.5%
13.1%
6.6%
-19.7%
VOLUME
(‘000 TONS)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
MARFRIG BEEF - BRAZIL
247.7
229.2
237.0
230.4
234.0
244.9
Domestic Market
Fresh Meat
Processed Products
189.2
70.9
20.4
174.8
59.5
21.1
164.8
67.2
21.5
154.3
67.8
14.4
166.6
61.7
8.6
172.9
70.6
8.1
Lamb, Leather and Other
Exports
Fresh Meat
97.9
58.5
34.6
94.2
54.4
35.0
76.2
72.1
54.5
72.1
76.1
57.4
96.3
67.4
51.5
Processed Products
Lamb, Leather and Other
MARFRIG BEEF - INTERNATIONAL OP.
7.9
16.0
94.2
8.1
11.3
87.3
6.5
11.1
67.4
5.4
13.4
56.6
Domestic Market
Fresh Meat
Processed Products
Lamb, Leather and Other
Exports
Fresh Meat
66.7
26.6
2.1
38.0
27.6
19.1
62.4
25.7
2.3
34.4
24.8
18.9
49.1
22.9
1.8
24.4
18.4
13.6
Processed Products
Lamb, Leather and Other
TOTAL MARFRIG BEEF
0.2
8.2
341.9
0.1
5.8
316.4
Fresh Meat
151.3
Processed Products
Other
30.6
160.1
AVERAGE PRICE
(R$ / KG)
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
21
CONSOLIDATED RESULTS
3Q2014
Net Revenue
COGS
Gross Income
SG&A
R$
%NOR
2Q2014
R$
%NOR
Change ∆
Chg. $
Chg.%
3Q2013
Change ∆
R$
%NOR
Chg. $
Chg.%
5,239.1
100.0%
5,117.6
100.0%
121.5
2.4%
4,944.1
100.0%
294.9
6.0%
(4,590.1)
-87.6%
(4,492.7)
-87.8%
(97.4)
-2.2%
(4,357.9)
-88.1%
(232.2)
-5.3%
649.0
12.4%
624.9
12.2%
24.1
3.8%
586.3
11.9%
62.7
10.7%
(360.8)
-6.9%
(368.6)
-7.2%
7.8
2.1%
(342.4)
-6.9%
(18.4)
-5.4%
Selling
(225.7)
-4.3%
(241.9)
-4.7%
16.2
6.7%
(215.2)
-4.4%
(10.5)
-4.9%
Administrative
(135.1)
-2.6%
(126.6)
-2.5%
(8.5)
-6.7%
(127.2)
-2.6%
(7.9)
-6.2%
Adjusted EBITDA*
435.3
8.3%
397.5
7.8%
37.7
9.5%
375.2
7.6%
60.1
16.0%
Other Income/Expenses
(40.9)
-0.8%
(17.8)
-0.3%
(23.1)
-129.9%
(9.3)
-0.2%
(31.6)
-340.4%
EBITDA
394.4
7.5%
379.7
7.4%
14.6
3.9%
365.9
7.4%
28.5
7.8%
Equity income (loss)
(3.3)
-0.1%
(3.0)
-0.1%
(0.3)
-9.8%
(2.8)
-0.1%
(0.5)
-16.1%
Depreciation/Amortization
(147.1)
-2.8%
(141.2)
-2.8%
(5.9)
-4.2%
(131.4)
-2.7%
(15.7)
-12.0%
Financial Result
(718.1)
-13.7%
(306.3)
-6.0%
(411.8)
-134.5%
(481.1)
-9.7%
(237.0)
-49.3%
Financial Income and Expenses
(491.9)
-9.4%
(316.5)
-6.2%
(175.4)
-55.4%
(352.3)
-7.1%
(139.5)
-39.6%
Exchange Variation
(226.3)
-4.3%
10.2
0.2%
(236.5)
-2323.3%
(128.8)
-2.6%
(97.5)
-75.7%
(4.3)
-0.1%
(4.6)
-0.1%
0.3
6.3%
(3.3)
-0.1%
(1.1)
-32.3%
(478.5)
-9.1%
(75.4)
-1.5%
(403.1)
-534.9%
(252.7)
-5.1%
(225.8)
-89.4%
Non-controlling interest
Net income before income and
soc. contr. taxes
Income and soc. contr. taxes
Net Income
175.2
3.3%
20.3
0.4%
154.9
764.2%
58.6
1.2%
116.6
198.8%
(303.3)
-5.8%
(55.1)
-1.1%
(248.2)
-450.6%
(194.1)
-3.9%
(109.2)
-56.3%
USD / BRL – Average
2.28
2.23
0.05
2.0%
2.29
(0.01)
-0.6%
USD / BRL – Final
2.45
2.20
0.25
11.3%
2.23
0.22
9.9%
GBP / BRL – Average
3.80
3.75
0.04
1.2%
3.55
0.25
6.9%
GBP / BRL – Final
3.98
3.77
0.21
5.5%
3.61
0.37
10.2%
(*) Excludes the effects from other operating income/expenses.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
22
Financial Result: Excluding currency translation effects, the financial result was an
expense of R$492 million, compared to the expense of R$316 million in 2Q14. The
increase is explained by:

the expense of R$93 million related to surcharges and interest arising from the
renegotiation of federal tax liabilities under the REFIS program;

the R$44 million gain from the mark-to-market adjustment of swap transactions (for
more details see Note 32 to the 3Q14 Financial Statements) explained by the
depreciation in the BRL against the USD in the period; and

the full consolidation of the interest on the Moy Park bonds of approximately R$12
million in the period.
Exchange variation generated a loss of R$226.3 million in the period, influenced by the
non-cash effect from the higher gross debt due to the depreciation in the BRL against
the USD (end of period).
FINANCIAL INCOME AND EXPENSES
(R$ million)
FINANCIAL INCOME
3Q14
2Q14
3Q13
129.1
58.9
72.7
- Interest income, income from marketable securities
27.0
20.7
34.5
- Market transactions
89.0
33.6
34.6
- Other Income
13.1
4.6
3.6
FINANCIAL EXPENSES
(621.0)
(375.3)
(425.0)
- Interests Provisioned, debentures and lease
(286.3)
(279.6)
(322.4)
- Market transactions
(132.8)
(15.0)
(53.3)
- Bank fees, commissions, financ. disc. and other
(201.9)
(80.7)
(49.3)
EXCHANGE VARIATION
(226.3)
10.2
(128.8)
(718.1)
(306.2)
(481.1)
NET FINANCIAL RESULT
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
23
Net Income (Loss): The non-cash exchange variation loss in the period contributed to
higher financial expenses and consequently increased the net loss in 3Q14, which
amounted to R$303 million.
3Q13
4Q13
(83.4)
1Q14
2Q14
3Q14
Currency variation
(R$226 MM)
(55.1)
(96.4)
REFIS Expenses
(194.1)
(R$93 MM)
- 56%
(303.3)
Gross Debt and Debt Profile: The leverage ratio (net debt/EBITDA LTM) ended the period
at 4.84x, reflecting exclusively the non-cash impact from exchange variation, with the
USD/BRL exchange rate ending 3Q14 at R$2.45/US$ compared to R$2.20/US$ at the
end of 2Q14, which represents local-currency depreciation of 11% that impacts only
the net debt in the ratio.
The operating result has yet to capture a weaker R$ that occurred mainly at the end of
the quarter, since the average exchange rate in 3Q14 was R$2.28/US$, virtually flat from
R$2.23/US$ in 2Q14.
It is important to note that the contracts of bank and market financing transactions
include provisions that allow for excluding the effects of exchange variation from the
calculation of the leverage ratio. The ratio excluding exchange variation ended 3Q14
at 3.64x (see note 32.6 to the financial statements).
In our opinion, the leverage ratio calculated based on EBITDA in the last 12 months
reflects a situation in which EBITDA growth has not yet fully capitalized on a weaker R$.
In the last 12 months, the average exchange rate was R$2.29/US$, compared to the
exchange rate at end of the 3rd quarter of R$2.45/US$ used to calculate debt.
Therefore, in addition to the leverage ratio based on EBITDA LTM, we believe it is
important to evaluate projected annualized EBITDA based on the 3Q14 result,
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
24
indicating a significantly lower leverage ratio of 4.33x and closer to where business
actually was.
Another no less important aspect in this analysis is the Company’s debt profile, which
today is structurally longer, with the first large maturity due only in 2018.
Debt
(R$ million)
Marfrig’s debt in USD remained stable.
Net Debt in USD
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
25
Indicator
LTM EBITDA
3Q14
2Q14
1,558.9
1,813.6
Net Debt / LTM EBITDA
4.84
3.71
Net Debt / Annualized Adj. EBITDA
4.33
4.23
Cash and Equiv./Short-Term Debt
2.47
2.52
Net Debt/Total Assets
0.37 x
0.37 x
Current Liquidity *
2.18
2.18
Duration (months)
50
54
Avg. Cost (p.a.)
7.6%
7.0%
Short-Term Debt (%)
11.7%
11.2%
Long-Term Debt (%)
88.3%
88.8%
Debt in R$ (%)
5.8%
4.1%
Debt in other currencies (%)
94.2%
95.9%
(*) Current Liquidity = Current Assets / Current Liabilities
Maturity Schedule in 3Q14 (R$ million)
3.061
2.468
1.789
Short Term: R$1.2 billion
880
755
344
Cash
4Q14
2.352
1Q15
36
107
2Q15
3Q15
658
637
574
4Q15
2016
2017
2018
2019
2020
2021
Cash Flow: In 9M14, free cash flow was positive R$71 million, reaffirming our
commitment to deliver positive cash flow for the year.
In 3Q14, free cash flow was positive R$84 million, despite higher export volumes which
demand higher working capital and payments/compensation related to the
renegotiation of tax liabilities under REFIS.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
26
The improvement in working capital management, especially at Marfrig Beef Brazil,
made a positive contribution to cash flow in the period. We focused on the line
suppliers and shortened the receivable term from 28 days in 2Q14 to 27 in 3Q14.
On the other hand, the line inventories increased by R$150 million, which was partially
and temporarily impacted by the incident involving a competitor in China (higher
inventory at Kesytone).
The line “Other” increased R$192 million, mostly due to non-cash items related to
market transactions, such as swap and commodity contracts.
Cash Flow Bridge (R$ million)
232
501
192
33
463
336
(127)
(150)
(42)
(252)
(303)
Net Income/
Loss
Not
Trade
Inventories
affecting
account
cash items receivables
Trade
account
payables
Other
Taxes
Op. Cash
Flow before
Investiments
Capex
Op. Cash
Flow
Financial
expense
84
Free cash
flow
Free Cash Flow
(R$ million)
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
27
Capital Expenditure:
Investment
(R$ million)
Investments in fixed assets
3Q14
2Q14
1Q14
4Q13
3Q13
119.3
172.7
139.0
236.1
204.7
Fixed Assets
75.0
130.8
95.5
192.8
165.7
Breeding stock
44.3
41.9
43.5
43.3
39.0
8.0
4.1
3.6
3.3
3.2
127.3
176.8
142.6
239.4
207.9
Investments in intangible assets
Total investment in the period
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
28
FINAL REMARKS
CONSOLIDATED RESULTS
 We are on track to delivering our 2014 guidance, which is an important milestone for
Marfrig and for our shareholders.
 We delivered another quarter of steady performance that included: (i) an undivided
commitment to Free Cash Flow (FCF); (ii) a totally re-designed debt maturity profile
(with the first material maturity only in 2018); and (iii) improved operating
performance.
 All businesses posted EBITDA margins above 7% in the year to date, which has
allowed the group to stay on the high end of its 2014 EBITDA target margin.
 The business portfolio is well positioned to capture this unique high margin/price
environment in the animal protein industry, which is further supported by a potentially
stronger dollar in the near future.
MARFRIG BEEF
 The world needs beef and we are well positioned (world's third-largest beef
producer) to capture this opportunity.
 Our shift to a much higher share of exports in our Beef business in Brazil (45% in 3Q14,
vs. 41% in 3Q13 and 33% in 3Q12) is underpinned by our belief in the current supply
and demand situation in the international market.
 We believe there are plenty of opportunities to improve results further, especially in
terms of FCF and margin. We assumed a commitment to a serious productivity
agenda at Marfrig Beef Brazil, which is starting to pay off, as seen in this quarter with
the improvement in cost management. Note that the same productivity agenda is
being rolled out in Uruguay, Argentina and Chile.
 The gains captured in the third quarter signal a good probability of delivering annual
cost savings (in Brazil alone) greater than the initial target of R$30 million.
 Uruguay continues to post strong results, but we believe the best is yet to come in the
fourth quarter of the year.
 We do not see any short term concerns, with cattle prices most likely remaining under
pressure, but with relatively strong international demand helping to keep domestic
margins at reasonable levels.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
29
KEYSTONE FOODS





Our further processing operations in the US will benefit as meat costs are moving
toward seasonal lows.
Lower grain costs are flowing through our integrated operations in the US leading to
improved cost.
We have secured new volumes in APMEA and expect to see an impact in Q4 2014
as consumer confidence begins to return.
We are focused on managing costs and expect to drive SG&A savings in the 4th
quarter.
We expect growth in EBITDA in the 4th quarter due to improving market dynamics in
both the US and Asia.
MOY PARK



The fourth quarter should be strong, with turkey sales adding to the bottom line and
a better grain environment.
We will also focus more intensely on SG&A expenses, but while keeping an eye on
making good inroads in terms of innovation and service quality.
Moy Park is an unquestionable growth story. Annual sales increased from GBP 800
million in 2008 (at the time of its acquisition by Marfrig) to approximately GBP 1.45
billion estimated for 2014, which confirms the enormous potential of the European
market, which remains promising.
CAPITAL STRUCTURE


Our operating performance has not yet benefitted from the stronger dollar, but the
fourth quarter will hopefully provide some signs of this.
In 2015, if market conditions permit, we will carry out Moy Park’s IPO.
FINAL REMARKS
We will remain very focused on our full-year results. We want to finish 2014 with strong
operating performance and meeting all targets in our 2014 guidance.
We see ourselves as a multi-year deleveraging story marked by (i) improved operating
performance; (ii) lower interest expenses (and consequently expanding FCF); and (iii)
attracting equity through the subsidiaries to accelerate debt reduction in absolute
terms. It is important to say that #(ii) is helped by #(iii).
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
30
NEXT STEPS:
1. Continue expanding margins by fully capitalizing on the current positive trends in
the animal protein industry.
2. Share our two-year plan (part of our current Focus to Win strategy), which will set
more comprehensive targets that will enable a better assessment of the Group’s
operating performance and capital structure.
3. We are planning a Marfrig Day event in the first half of 2015 to share
management's views for the next two years, culminating in January 2017. On that
occasion, the BNDES will convert its R$ 2.1 billion mandatory convertible bond
into equity, which should provide annual cash flow relief of around US$100 million
(based on the exchange rate of R$2.50/US$), representing another concrete step
towards strengthening our capital structure.
4. Management, across all businesses, remains highly committed and aligned to
improving current performance. Worth sharing that management 2014 current
variable compensation program, is tied up to meeting our 2014 guidance. We
are on track.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
31
EARNINGS CONFERENCE CALL
Date: November 13, 2014
Portuguese: 9:00 a.m. (Brasília) / 6:00 a.m. (US EDT) / 11:00 a.m. (GMT)
English: 11:00 a.m. (Brasília) / 10:00 a.m. (US EDT) / 2:00 p.m. (GMT)
Dial-in from Brazil: +55 (11) 3193-1001 / 2820-4001
Dial-in from other countries: +1 (786) 924-6977
Code: Marfrig
Live audio webcast with slide presentation.
Replay available for download on our website: www.marfrig.com.br/ri
ABOUT MARFRIG
Marfrig Global Foods is a global food company operating in the food service, retail
and export segments that offers innovative, safe and healthy food solutions to its
clients. With a diversified and comprehensive product portfolio, the Company is
committed to excellence and quality and to ensuring the presence of its products in
the largest restaurant chains and supermarkets, as well as consumers' homes, in over
110 countries.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
32
DISCLAIMER
This material is a presentation of general information about Marfrig Global Foods S.A. and its
consolidated subsidiaries (jointly the “Corporation”) on the date hereof. The information is presented in
summary form and does not purport to be complete.
No representation or warranty, either expressed or implied, is made regarding the accuracy or scope of
the information herein. Neither the Company nor any of its affiliated companies, consultants or
representatives undertake any responsibility for any losses or damages arising from any of the information
presented or contained in this presentation. The information contained in this presentation is up to date
as of September 30, 2014, and, unless stated otherwise, is subject to change without prior notice. Neither
the Corporation nor any of its affiliated companies, consultants or representatives have signed any
commitment to update such information after the date hereof. This presentation should not be construed
as a legal, tax or investment recommendation or any other type of advice.
The data contained herein were obtained from various external sources and the Corporation has not
verified said data through any independent source. Therefore, the Corporation makes no warranties as
to the accuracy or completeness of such data, which involve risks and uncertainties and are subject to
change based on various factors.
This presentation includes forward-looking statements. Such statements do not constitute historical fact
and reflect the beliefs and expectations of the Corporation’s management. The words “anticipates,”
“hopes,” “expects,” “estimates,” “intends,” “projects,” “plans,” “predicts,” “projects,” “aims” and other
similar expressions are used to identify such statements.
Although the Corporation believes that the expectations and assumptions reflected by these forwardlooking statements are reasonable and based on the information currently available to its management,
it cannot guarantee results or future events. Such forward-looking statements should be considered with
caution, since actual results may differ materially from those expressed or implied by such statements.
Securities are prohibited from being offered or sold in the United States unless they are registered or
exempt from registration in accordance with the U.S. Securities Act of 1933, as amended (“Securities
Act”). Any future offering of securities must be made exclusively through an offering memorandum. This
presentation does not constitute an offer, invitation or solicitation to subscribe or acquire any securities,
and no part of this presentation nor any information or statement contained herein should be used as the
basis for or considered in connection with any contract or commitment of any nature. Any decision to
buy securities in any offering conducted by the Corporation should be based solely on the information
contained in the offering documents, which may be published or distributed opportunely in connection
with any security offering conducted by the Company, depending on the case.
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
33
BALANCE SHEET
(R$ million)
ASSETS
Sep/14
Jun/14
CURRENT ASSETS
LIABILITIES
Sep/14
Jun/14
CURRENT LIABILITIES
Cash and cash equivalents
848,775
644,636
Marketable securities
2,212,689
2,012,407
Accounts receivable from domestic clients
1,008,653
Trade accounts receivable – intern. clients
1,856,627
1,765,099
Accrued payroll and related charges
357,158
339,833
955,544
Taxes payable
200,120
147,763
633,888
690,674
Loans and financing
1,106,807
972,848
2,050,257
1,866,702
59,696
47,883
441,020
386,168
1,817,574
1,185,618
Prepaid expenses
150,033
140,380
Notes receivable
70,278
92,185
Advances to suppliers
58,291
68,367
Other receivables
78,219
63,936
9,369,677
8,106,615
Inventories
Biological assets
Recoverable taxes
Suppliers
Leasing payable
Notes payable
189,162
85,909
Prepaid accounts from clients
233,307
144,730
Interest on Debentures - Convertible
135,010
81,115
Other payables
152,162
125,851
4,290,048
3,711,031
9,358,579
8,336,305
LONG-TERM LIABILITIES
Loans and financing
Leasing payable
LONG TERM RECEIVABLES
Marketable securities
Demand deposits
Notes receivable
Deferred taxes
Recoverable taxes
Other receivables
985
1,000
65,111
72,902
293,738
219,795
1,594,912
1,535,072
973,550
972,362
38,548
29,804
2,966,844
2,830,934
81,803
89,557
Taxes payable
695,315
189,788
Deferred taxes
633,236
619,599
Provisions
Notes payable
Mandatory convertible instruments
Other
35,779
31,397
285,507
216,721
2,118,100
2,114,730
120,955
107,463
13,329,274
11,705,561
105,658
92,294
Share Capital
5,276,678
5,276,678
Share issue expenses
(108,210)
(108,210)
184,642
184,642
NON-CONTROLLING INTEREST
CONTROLLING SHAREHOLDERS' EQUITY
PERMANENT ASSETS
Investment
Property, plant and equipment
Biological assets
Intangible Assets
TOTAL ASSETS
43,762
41,875
4,798,308
4,658,184
123,304
112,140
Capital reserve
Profit reserves
Other comprehensive income
2,871,540
2,691,461
Accumulated losses
7,836,914
7,503,661
Net Income for the period
20,173,436
18,441,210
TOTAL LIABILITIES
36,152
35,774
(225,296)
(42,198)
(2,260,696)
(2,262,856)
(454,814)
(151,504)
2,448,455
2,932,325
20,173,436
18,441,210
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
34
CASH FLOW
(R$ million)
1Q14
2Q14
3Q14
Net income
(96,4)
(55,1)
(303,3)
Non Cash Items
424,4
427,0
501,0
Depreciation & Amortization
141,7
141,2
147,1
Foreign Exchange Variation
31,0
(10,2)
226,3
Accrued Interest Expenses
250,1
231,7
253,6
6,0
3,0
3,3
(4,4)
61,3
(129,2)
128,3
185,1
40,8
Clients Account Receivables
261,3
(17,2)
232,5
Stocks & Biologic Assets
(99,0)
(26,4)
(149,8)
Suppliers & Advancements
(34,0)
228,8
(41,8)
(48,8)
(179,6)
224,9
Other
(10,8)
(127,6)
192,0
Current and deferred taxes
(38,0)
(52,0)
32,9
407,5
377,4
463,4
(142,6)
(176,9)
(127,3)
264,9
200,6
336,1
(248,6)
(230,3)
(252,1)
16,3
(29,7)
84,0
Equity Earning/Loses
Other
Working Capital Variation
Other Working Capital Variation
Operational Cash Flow Before CAPEX
CAPEX
Operational Cash Flow
Financial Revenues/Expenses
Free Cash Flow
IR Contacts:
Av. Chedid Jafet, 222 Bloco A - 5º andar - Vila Olímpia - São Paulo - SP – CEP: 04551-065
Tel: +55 (11) 3792-8600/8650
www.marfrig.com.br/ri
e-mail: ri@marfrig.com.br
Focus to Win
35