M. Dias Branco seeks to implement the following strategies:
• Expand its market leadership.
M. Dias Branco is committed to expanding and strengthening its leading position in the markets where it operates, while also increasing its profitability. In order to accomplish these goals, it plans to: (i) further strengthen its brands through investments in media marketing and institutional point-of-sale initiatives; (ii) expand and diversify its already substantial client base, through geographical expansion and organic growth, especially in areas where it does not have a relevant market share, as well as through acquisitions in Brazil and abroad; (iii) increase sales to the non-residential food service and processing markets, including restaurants, hotels, bars, hospitals, clubs, pastry shops and bakeries; and (iv) strengthen the small retailer sales framework in order to further expand the fragmentation of its client base and sell new products through their identification with the Company’s existing market leaders, including compensating the sales force through incentives to sell higher value-added and recently-launched products.
• Improve operational efficiency and cost controls.
The Company is committed to improving the efficiency of its processes and further developing its verticalization strategy to increase margins. To this end, it intends to increase its productivity by: (i) optimizing the use of its infrastructure; (ii) increasing the flexibility of the production chain; (iii) maintaining fully up-to-date production facilities, with high-end technology and state-of-the-art operations; (iv) increasing wheat flour and shortening supply to the industrial units, in order to meet 100% of its needs; and (v) increasing the efficiency of its domestic distribution network. M. Dias Branco will also continue to implement stricter and more modern cost controls in order to increase profitability, including strengthening programs to reduce energy consumption and raw material inventory periods through the more intensive use of purchasing and production tools.
• Develop and launch new products, as well as products complementing existing lines.
M. Dias Branco will continue to focus on the development, production and marketing of higher value-added products, such as new product lines or complementary product lines targeted at those market segments in which it already operates. The Company is always looking for opportunities to inter in new categories in the food industry that present synergies with the categories it already operates.
• Grow organically and through acquisitions.
Regarding organic growth, the Company intends to: (i) expand production capacity with the necessary investments to meet demand from its customers for its products; (ii) use its current structures to rapidly install new equipment, without incurring substantial costs; and (iii) use available land in most of its plants to rapidly expand its infrastructure. Given its cracker, cookie and pasta leadership throughout Brazil, the Company believes it can play an important role in consolidating these markets. It is therefore constantly alert to any opportunities for expansion through new acquisitions focused on its current and related product lines. It will therefore accelerate the implementation of its business strategies by acquiring companies that offer: (i) strong brands in the Company’s operational regions; (ii) a solid customer base; (iii) an extensive distribution network or the possibility of developing such a network; (iv) a presence in regions where the Company is not active or where it has a limited presence; and (v) the opportunity to benefit from operational and distribution synergies.
• Maintain the current dividend policy.
Whenever possible and without jeopardizing its operations and strategies, the Company will maintain the dividend policy of recent years, whereby payments have been considerably higher than the mandatory minimum required by the applicable rules.