1) What is the M. Dias Branco’s ticker and which rights do holders have?
The M. Dias Branco’s shares are registered at B3 under the ticker “MDIA3”. They are listed on the New Market (“Novo Mercado”) segment, the highest level of corporate governance differentiated practices. The M. Dias Branco’s Shares assures to its holders the following rights:
- The right to vote on the Company’s General Meetings
- The compulsory minimum dividend right, in each fiscal year, not less than 25.0% of net profit of that year, adjusted pursuant to article 202 of Law 6,404, of December 15, 1976 and later changes (“Lei das Sociedades por Ações”);
- In case of directly or indirectly control sale of the Company, even by successive operations, it must be contracted under suspensive or resolutive condition that the acquirer will realize a tender offer to the other shareholders regarding the conditions and terms of the current legislation and New Market (“Novo Mercado”) rules, ensuring equal treatment among the Selling Controlling Shareholder and the others shareholders;
- In case of M. Dias Branco deregistering as a publicly-held company or delisting from the New Market (“Novo Mercado”) of B3, the right to sell its shares on tender offer launched by the Selling Controlling Shareholder or by M. Dias Branco, for at least the economic value calculated by an appraisal report made by an specialized and independent firm (that has no connection with the Company, its management, controlling shareholders and that is not under its decision power). The firm must have proven experience and will be chosen during the Shareholders Meeting from a list of three firms presented by the M. Dias Branco’s Board of Directors;
- All the other rights assured to the shares, pursuant to B3 New Market Regulation (“Regulamento do Novo Mercado da B3”), M. Dias Branco Bylaws and the Corporate Law (“Lei das Sociedades por Ações”).
2) What means the M. Dias Branco be a listed company on the B3’s New Market (“Novo Mercado”)?
In 2000, the B3 introduced three special listing segments, known as Level 1 and Level 2 and New Market (“Novo Mercado”), of Differentiated Corporate Governance Practices, aiming to create a secondary market for securities issued by Brazilian companies which follow the best corporate governance practices. The listing segments were designed for the trading of shares issued by companies which voluntarily agree to follow corporate governance practices and disclosure requirements in addition to those already imposed by Brazilian law. These rules generally increase shareholders’ rights and enhance the quality of information provided to shareholders.
To be listed at New Market (“Novo Mercado”), in addition to the obligations imposed by current Brazilian law, an issuer must meet all of the following requirements:
- Issue only common shares;
- Grant tag-along rights to all shareholders in case of a control selling of the company, the acquirer being required to hold a public offer for acquisition of the shares to the other shareholders, at the same price per share paid for the controlling block;
- Ensure that shares of the issuer representing at least 25% of its total capital are effectively available for trading;
- Adopt offering procedures that favor widespread ownership of shares whenever making a public offering;
- Comply with minimum quarterly disclosure standards;
- Follow stricter disclosure policies with respect to transactions made by controlling shareholders, directors and officers involving securities issued by the issuer;
- Submit any existing shareholders´ agreements and stock option plans to the B3;
- Disclose a schedule of corporate events to the shareholders;
- Limiting the mandate of all the members of M. Dias Branco´s Board of Directors to a maximum of 2 years, the Board to consist of at least 5 members, 20% of whom independent board members;
- Within two years after listing shares on the Novo Mercado, prepare annual financial statements in English, including cash flow statements, in accordance with international accounting standards, such as U.S. GAAP or International Financing Report Accounting Standards (IFRS);
- Adhere exclusively to the arbitration rules of the B3, pursuant to which the B3, the company, the controlling shareholder, the management and the members of fiscal council, if any, agree to resolve by arbitration any dispute or controversy related to the Novo Mercado listing rules;
- Hold public meetings with financial analysts and any other interested third parties at least once a year to present information regarding its financial and economic position, projects and prospects; and
- If a decision to delist from the New Market (“Novo Mercado”) is made, the issuer´s controlling shareholder must launch a tender offer for the acquisition of all outstanding shares at a minimum price to be established based on an independent appraisal.
3) M. Dias Branco is present in which B3 indices?
A M Dias Branco atualmente faz parte dos seguintes índices da B3:
- Brazil Index (IBrX)
- Brazil Broad-Based Index (IBrA)
- Industrial Sector Index (INDX)
- Consumption Index (ICON)
- Special Corporate Governance Stock Index (IGC)
- Corporate Governance Trade Index (IGCT)
- Corporate Governance Index – Novo Mercado (IGC-NM)
- Special Tag Along Stock Index (ITAG)
- Mid-Large Cap Index (MLCX)
4) What is B3?
The B3 was created in the year of 2008 from the merger or the São Paulo Stock Exchange (“Bolsa de Valores de São Paulo”) and the Brazilian Mercantile and Futures Exchange (“Bolsa de Mercadorias & Futuros”). It is the main Brazilian intermediary institution for capital market operations, such as: stock trading, equity derivatives, fixed income securities, government securities, financial derivatives, currencies at sight and agricultural commodities.
5) How can I contact the M. Dias Branco’s Investor Relations Department?
It is possible to contact the Investor Relations Department through the section “Contact IR”, the email address firstname.lastname@example.org or calling Fabio Cefaly (New Business and Investor Relations Director) at (+55 11) 3883-9273 and (+55 85) 4005-5952.
6) What is Tag Along? What does it guarantee to the shareholders?
Tag Along is a mechanism created to protect the minority shareholders in case of an eventual sale of control and works as the following: In case of power of control sale, the acquirer must realize a tender offer to the other shareholders offering to each share the same paid price for the controlling block.
7) How can I access the historical prices of the M. Dias Branco’s shares?
The historical prices of the M. Dias Branco’s shares are available at the section “Quotes and Charts” of the IR website.O histórico das ações da M Dias Branco está disponível na seção “Histórico de Cotações” do site de RI.
8) What is Free-Float? Which is the Free-Float percentage of M. Dias Branco?
The Free-Float term is used to designate the quantity of shares available for trading in an over-the-counter market. In the case of M. Dias Branco, its shares are registered for trading at B3 and represents 25.5% of the total shares issued by the Company.
9) What does IPO mean?
The acronym IPO means Initial Public Offering and represents the first stock offering that a company realizes on a stock market.
10) What are Stakeholders?
The term “Stakeholder” refers to all parties who have any interest in the company, for example: the employees, shareholders, investors, suppliers, clients, trade unions, competitors, government, regulating bodies and community where it operates.
11) How can I register the M. Dias Branco’s mailing to receive periodic information about the Company?
It is possible to register the M. Dias Branco’s mailing through the section “Register / Mailing” of the IR website.
1) What is the current Ownership Structure of M. Dias Branco?
The M. Dias Branco is constituted by the total of 339,000,000 ordinary shares distributed as follows:
- 63% DIBRA – Fundo de Investimentos e Participações
- 12% Others
- 25% Free-float
2) With what frequency are reported the M. Dias Branco’s results?
The Company reports its results quarterly, within 45 days of each trimester end, except the fourth quarter of the fiscal year, or when the Company discloses information to shareholders or third parties, if it happens at an earlier date.
3) What are Interest on Equity and Dividends? What is the difference between them?
Interest on equity and dividends are two different kinds of proceeds, which means benefits distributed from a company to its shareholders. The dividends represent the shareholder right over the company profit for being its partner. By law, the dividend to be distributed by the company at the end of each fiscal year must represent, at least, 25% of its net profit. The interest on equity is based on the profit retained by the company in the previous years, with the incidence of 15% income tax (which do not occurs in the dividend case because it is calculated after the income, social contribution and other taxes).
4) What is the share buyback program?
The share buyback programs occurs when a company believes that the share price is far below the fair value or when it has excess of cash and the amount spent on the buyback would not be so efficient if spent on the company’s growth. When a company announces a share buyback, it generates a positive effect on its quotation (it tends to rise, regarding the supply and demand law), there is an increase on the payment of dividends per share and the company avoids a hostile takeover attempt (in order to its devalued stocks that are cheap and attractive to competitors).
5) How much M. Dias Branco paid in Interest on Equity and Dividends in the last years?
From 2006 to 2018, the Company paid more than R$ 1.37 billion to its shareholders in form of Interest on Equity and Dividends. The historical of dividend payments can be accessed on the section “Dividend Policy and History” of the IR website.
1) Gross Operating Revenue
It is all the operating revenue generated by a company during a certain period before taxes and deductions on sales.
2) Cost of Goods Sold (COGS)
The Cost of Goods Sold (COGS) represents the total amount employed on the production of goods sold by a company. In the case of M. Dias Branco, the COGS includes the operational costs of raw materials (wheat, vegetable oil, sugar, third party flour, third party vegetable shortening and other supplies), packages, labor, indirect costs, depreciation, amortization and others.
3) Gross Profit
The Gross Profit is given deducting the Cost of Goods Sold (COGS) from the Net Revenue.
4) Selling, General and Administrative Expenses
Represents the amount spent by the company to cover expenditures with salaries and other commercial and administrative employees expenses, as well as advertising, propaganda and other expenses with media institutions.
EBITDA means “Earnings Before Interests, Taxes, Depreciation and Amortization” and represents the period net profit plus taxes over the profit, net financial expenses from financial income, depreciation, amortization and depletion.
6) Financial Expenses/Financial Income
The financial expenses come from remuneration to third party capital (banks and other financial institutions) as paid interests, monetary restatement, bank fees, etc. The financial income aims to compensate the expenses through applications, received interests, among others.
7) Income and Social Contribution Taxes
Income and Social Contribution Taxes are paid concerning the Income Tax (“Imposto de Renda de Pessoa Jurídica – IRPJ”) and Social Contribution Tax (“Contribuição Social sobre o Lucro Líquido – CSLL”).
8) Net Income / Loss
After all costs and expenses deduction (including taxes) of the period’s generated revenue, is obtained the net income (if is a positive result) or loss (if is a negative result).
9) Assets and Liabilities
The assets represent all the company’s properties and rights, it may be current (cash, inventories, Trade accounts receivable, etc) or noncurrent (property, plant and equipment, intangible, investments, etc). The liabilities represent all the company’s obligations and debts, it also may be current (represents all the commitments that the company must pay in a period equal or less than one year) and noncurrent (commitments that the company must pay in a period exceeding one year).
10) Shareholders’ Equity
The shareholders’ equity represents the total book value that the partners or stockholders own in the form of quotas or shares.
11) Price / Earnings (P/E)
Ratio obtained from the division of the stock market price by the projected earnings per share. It aims to show how many years would be necessary to recover the invested capital in a stock purchase by receiving the company’s generated profits in form of dividends.
12) Net Debt / EBITDA
This debt ratio aims to measure the company’s leverage by indicating the number of years that it would need to pay all its obligations with third parties.
13) EBITDA Margin
The EBITDA margin is obtained from the division of the EBITDA by the Net Revenue, demonstrating the representativeness of the EBITDA in the company’s Net Revenue.
EVA means Economic Value Added and can be defined as the result obtained by the company that exceeds the minimum compensation by the capital owners, is an indicator that is directly related to the creation of shareholder’s wealth.