Camil Alimentos S.A. (CAML3) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the call of Camil foods. We have present with us Mr. Luciano Quartiero, CEO; Flavio Vargas, Financial Director and relations with investors and the team of relations with investors of the company. [Operator Instructions] The audio is being presented simultaneously the site of relations with investors of the company. Comments of the administration and this session of Q&A may contain forecast around future events that are subject to risks and uncertainties, and they may not come true or may turn out to be different from expected. Please, Mr. Luciano and Flavio, please go on with the opening.

Good morning. Welcome all. As you have seen, we conclude the purchasing of Silcom. It's a company from Uruguay. This acquisition is very small, and we see the consolidated numbers. It's a very important step within Uruguay. It double folds our domestic sales in Uruguay. It's mainly exports, and 10% is domestic sales. With this acquisition, we are double-folding our domestic sales. In Uruguay, it serves 800 clients, covering 5,500 clients, so our coverage and our distribution in Brazil will be much ahead. 850 SKUs, 300 are the main ones; sales, $23 million per year; $4.2 million in EBITDA. A growth in our results in Uruguay, very significant. We are very much excited with this step, and the conclusion of the transaction must happen in 60 days. If you have seen the portfolio, we have 6 brands with La Abundancia, the brand's -- the house brand, products for breakfast, grains, beans, chicken, beef. And once again, that's a very much synergic with what we are doing in Uruguay. Having said that, I would like to open the floor for questions. We'll start now the Q&A session for investors and analysts. [Operator Instructions]

[Operator Instructions] Our primera question comes from Guilherme Palhares, Bank of America.

Congratulations, first of all. I would like to learn a little more about the structure and the numbers of the acquisition. Defending for this operation and understanding from a cooperation standing point, is it an operation that requires increasing capacity? And in terms of this category, looking at Brazil, there is a potential of Brazil going into this category of dried products, if I've made myself clear.

Number-wise, the number -- the total number of this transaction, we cannot disclose. We have a confidentiality agreement with the seller, $23 million forecast for revenue, $4.2 million in EBITDA. As Luciano mentioned, there is an expectation to have that company within our portfolio in a way that we can expand our operations, replicating the model that we have to make an effort to implement in Brazil. With the benefit of working in multi-categories, reinforcing the whole commercial cycle, we have had a very positive experience in Brazil, and we expect to replicate that in the operations that we have overseas. Funding-wise, it shouldn't take our leverage much further up. We should have this funding using the structure of local funding. SAMAN should do the capture of that financing in dollars for the financing of that transaction. It wasn't a major impact in our distribution. We have a capacity for leveraging that is very adequate for going on with the alternatives that we have. Now the second part of the question, I think it will be very much learned -- a lesson to be learned. And how synergic it can be to take this model of operation to other parts -- to other countries, and that is the pathway of growth we are looking at. From my part, I think I answered the question.

Our next question comes from Gustavo, Itaú BBA.

The theme that I would like to mention here is the SKU, 850 here at Silcom comparable to Camil S.A. and Santa Amália. Silcom is greater in terms of SKU, and I would like to understand that difference. Is it related to the new category? Or we can use the portfolio -- the SKU or the main ones are 300? And the new categories that go in line with the scope of the current portfolio, expanding into dried foods, and we have a margin that ensures a safe purchasing. Is there a possibility of the expansion of margin with this acquisition? Or there isn't much elasticity thereof?

Gustavo, we are above 15%. You have a good idea of that. We have the companies. We have the, administrative-wise, logistics and coverage will have a very positive impact in terms of logistics freight. Portfolio-wise, good. Part of the sales have come from 300 SKUs, some of which are seasonal. But part of the job of the company is to always review the portfolio, but there isn't a perception at this point clear on how we are going to develop our portfolio further despite the EBITDA above -- 15% above the average of the company. With local operations, we hope for additional gains, and the margin will improve. That's our expectation.

[Operator Instructions] If there are no further questions, I would like to pass the floor back to Mr. Luciano. Please, floor is yours.

I would like to thank you all for taking the time to participate here and reinforce 2 or 3 points. Firstly, it's a small step for Camil in terms of consolidated numbers but very significant for Uruguay for our local teams and local operations. We are double-folding our size there. The team in Uruguay will not cause negative impacts with Santa Amália. And with that, we have the operations in Ecuador as well. Camil has been preparing for that for quite a while, and Flavio mentioned that our appetite for acquisitions is still ongoing. We have financial and operation capability and capacity. On that note, thank you all, and have a great day.

The audio conference of Camil is hereby adjourned. Thank you all, and have a great day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]