Marcos Molina - Chairman Martin Secco Arias - Chief Executive Officer Frank Ravndal - Chief Executive Officer, Keystone Foods Eduardo de Oliveira Miron - Chief Financial and Adm. Officer and IRO Marcelo Di Lorenzo - Vice President, Strategic Planning and Investor Relations Andrew Murchie - Chief Executive Officer, Marfrig Beef Brazil Ricardo Florence - Chief Financial Officer, Marfrig Global Foods

Isabella Simonato - Bank of America Merrill Lynch

Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to Marfrig Global Foods SA Conference Call to present and discuss its results for First Quarter of 2016. It’s worth mentioning that in compliance with Law 11,638/07, the financial statements reflect the adoption of the International Accounting Standards, IFRS and have been reviewed by independent external auditors. The audio for this conference is being broadcast simultaneously through the Internet in the website, www.marfrig.com.br/ir. In that address, you can also find a slideshow presentation available for download. We inform that all participants will only be able to listen to the conference call during the Company’s presentation. After the Company’s remarks are over, there will be a Q&A session. At that time, further instructions will be given. [Operator Instructions] Before proceedings, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Marfrig’s management, and on information currently available to the Company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions, because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Marfrig, and could cause results to differ materially from those expressed in such forward-looking statements. Now, I’ll turn the conference over to Mr. Marcos Molina, Marfrig’s Global Foods Chairman.

Once again I would like to thank everyone for their participation in the call. Before I pass this call over to Martin I want to highlight some points. Marfrig recently announced its new organizational structure. As the Chairman of the Board of Directors I believe that this change is in line with the Company’s goal to have a linear structure and we will allow our executives to manage the business with greater efficiency and agility. It is important to emphasize that Marfrig has changed in terms of the company’s strategic direction. Our commitment to the leveraging, lowering debt cost and generating positive free cash flow remains our top priority. As for the first quarter results I highlight the continued solid performance in system and the ongoing strategy in Marfrig Beef which despite the challenging scenario in the Brazilian economy as proven success in effectively serving the Food Service segment and growing exports. I will now hand the call over to our CEO, Martin Secco.

Good morning, good afternoon, ladies and gentlemen. I would like to start by thanking everyone for participating in another earnings conference call of Marfrig Global Foods. Today, we will be commenting on the results of the first quarter of 2016. The CEO’s of the Business Unit Frank, Andrew, and Marcelo are with me and will present the result of their respective units over the course of the call. Eduardo Miron, our new IRO and Global CFO is here with us. And [Roberto Varela], our IRD Director is here as well. Please go to the Slide number 3 just to begin the presentation. On this slide, I will comment on the main metrics of our guidance for the first quarter of 2016. Consolidated net revenue was R$4.9 billion. The lower sales volume affected by the quarter seasonality mostly in Marfrig Beef was offset by the higher average sales price in Brazil and the Brazilian real depreciation against the dollar. Adjusted EBITDA was R$443 million with a margin of 9% in line with our expectation for the year. The solid performance in Keystone and a good operational result in Brazil combined with our continued discipline in fixed cost contribute to the result compared to the first quarter of 2015. In term of CapEx, the amount invested in the quarter’s came to R$108 million. Free cash flow was negative in R$122 million, which is in line with our expectation for the first quarter reflecting this period seasonality as I already mentioned before. It is important to highlight, however, the 28% increase in operating cash flow, which amounted R$298 million in the first quarter of the year. I want to emphasize that we remain commitment with the guidance for 2016 focus on delivering on positive cash flow generation. Before moving to the next slide I will pass the call over to Eduardo Miron, Marfrig Global Foods CFO.

Thanks, Martin. Moving now to the Slide 4, I will give more details on the composition of our net revenue. As you can see Marfrig’s net revenue was R$4.9 billion increasing 16% from first quarter of 2015. The highlights were the depreciation of the real against U.S. dollar, the better average sales price in Marfrig Beef Brazil and the ongoing and successful strategy in Keystone to grow its key accounts. Keystone which is one of the largest global suppliers of high value protein products with a production platform located in United States, Asia and Oceania accounted for 50% of the consolidated revenue which is 11 percentage points higher than in the first quarter of 2015. Marfrig Beef responsible for the remaining 50% of the total revenue posted revenue growth of 6.4% with lower sales volume offset by the higher average sales price. Regarding currency, note that only 19% of revenue was linked to the Brazilian real, which is 5.3 percentage points lower than in the first quarter of last year. This trend reflects Keystone’s continued good performance and Marfrig Beef’s ability to take advantage of the good opportunity in the export channels and to prioritize the most profitable channel despite the adverse economic scenario in Brazil. The international operations, Keystone and Marfrig Beef international combined accounted for 62% of total revenue up from 58% in the first quarter of 2015 just confirming the high level of internationalization of Marfrig. Let’s now go to Slide 5, please. On the Slide 5, I will comment on Marfrig’s consolidated gross income and adjusted EBITDA in the first quarter of this year. Gross income was R$576 million advancing 21% over the prior year period with margin of 11.7%. The main factors contributing to this performance toward the depreciation of the real against the dollar, the lower cost of the raw material in international operations partially offset by higher cattle costs in Brazil. SG&A expenses as a ratio of net revenue stood at 5.2%, in line with same quarter last year. In this context adjusted EBITDA was R$443 million or 25% higher than in the first quarter of last year. The solid performance in Keystone combined with the good performance of the Beef operations in Brazil were partially offset by the lower contribution from the operations in Uruguay. In addition, I would like to highlight the increasing Keystone’s contribution to consolidate EBITDA that increased to 50% compared to 39% in the first quarter of last year. Going to the Slide 6. In this slide I would comment on the Company’s net result. In the first quarter of 2016 Marfrig posted a net loss of R$106 million which represents an improvement of R$465 million from the prior period. The main drivers of this improvement award the operational performance and the financial results. Now, I will pass the call over to Frank Ravndal, Keystone’s CEO.

Thanks, Eduardo. Good morning, everyone. Keystone had another very strong quarter. Adjusted EBITDA increased 17% compared to the first quarter of 2015 and the EBITDA margin reached 9.1%. This was a record first quarter performance for the Company. Keystone’s business model executed with financial and operational discipline continues to pay off, generating consistent and sustainable returns. Let’s review the overall quarter performance in more detail on Slide 7. As a reminder, all financial data presented for Keystone is in U.S. dollars. Starting with the graph on the upper left, net revenue decreased by 6% compared to the first quarter of 2015. As you know Keystone’s business model includes pass through arrangements for commodity inputs and some commercial contracts with several customers. Therefore, revenue was linked to meat and feed prices and in the first quarter we continued experiencing a market environment of lower price levels for these commodities. In the U.S. for example, feed cost dropped by approximately 16% and outside meat cost fell by approximately 15%. In addition, revenue an APMEA was lower than the same period in 2015 when we saw a significantly higher level of promotional activity across the quick service restaurant channel especially in China when compared to this current quarter. In terms of volume, the quarter was very similar to a year ago levels, showing 1% increase. Continued key account growth in the United States helped to offset slightly lower volume in APMEA particularly in China as explained by the lower level of promotions mentioned previously. Moving to the graph on the right side of the page, you can see the EBITDA and EBITDA margin results. We generated adjusted EBITDA of $57 million in the quarter up from $48 million in the first quarter of 2015, an increase of 17% year-over-year. This is a record high first quarter. To give you a quick historical perspective, in the first quarter of 2012 Keystone’s EBITDA was $34 million with a 5.5% margin. This highlights the very steady year-to-year increase in margins from 2012 through 2015. This quarter’s strong performance is mainly explained by three main drivers. First, better sales mix in the U.S. key accounts in Thailand and Malaysia. Second, a positive commodity market environment which led to a 16% drop in feed cost and also lower outside meat cost. And third an unrealized mark-to-market gain on grain hedge contracts representing a positive year-on-year variance of $1.8 million. In summary, this is a great way to start 2016 and I would like to take the opportunity to thank the entire Keystone team for strong result. Andrew Murchie, CEO of Marfrig Beef Brazil.

Thank you, Frank and good morning everyone. On Slide 8, I’ll comment on the result of Marfrig Beef, which is flown by the operations in Brazil and Southern Cone. Net revenue in the first quarter of 2016 was R$2.5 billion, increasing 6% on the same period last year. The lower sales volume influenced by the lower cattle supply in Brazil was basically offset by the better average price in Brazil, which reflects the better sales mix focus on serving a more profitable channel such as exports, food service and small retailers, and also by the depreciation of the real against the dollar. Between the periods highlights the growth in export share in both divisions which accounted for 54% in the unit’s revenue in the third quarter versus 48% in the previous year. In the specific case of Marfrig Beef Brazil division export accounted for 50% of the unit’s revenue reflecting the Company’s flexibility to serve the best markets during these adverse movement in the Brazilian economy. Also in the Marfrig Beef operation Brazil I want to highlight the ongoing and successful strategy to expand sales in the food service channel, which accounted for 40% of Brazil domestic market revenue during the quarter. In the quarter, adjusted EBITDA amounted to R$222 million, up 3% on the first quarter 2015. The lower sales in volume in Brazil and the weak performance of the Uruguayan operation affected by the price increase in international market were offset by the better sales mix and the real depreciation. Before moving on to the next slide, I will pass the call back over to Eduardo Miron.

Thank you, Andrew. The Slide 9 shows market liquidity and debt maturity schedule. We ended the first quarter of the year with cash and equivalents in an amount began off to cover our debt in 2018. Although, we acknowledge that this is a conservative position. We saw it as necessary given the overall condition of the Brazilian markets. In that regards, we continue accessing the market and the best alternatives to move forward with our liability management process. On March 31, gross debt is stood at R$11.7 billion decreasing 3% and 13% versus fourth quarter 2015 and first quarter 2016 respectively. Measured in U.S. dollars gross debt stood at US$3.3 billion. Marfrig net debt closed at R$6.5 billion decreasing 8% and 39% when compared to fourth quarter 2015 and first quarter 2016 respectively. In U.S. dollar net debt stood at US$1.8 billion. In the first quarter 2016 the company’s leverage measured by the ratio net debt to adjusted EBITDA excluding the positive effect from the capital gain on sales, on asset sold in 2015 was 3.47 times or 0.5 times lower than the previous quarter. The average cost of the debt was 7.64% 24 basis points lower and 7.88% posted in the fourth quarter 2015. Regarding, debt maturity the average term was 50 months in line with the previous quarter. Let’s go to the next slide please. On this slide, I will comment on the cash flow in the first quarter of the year. The cash flow from operations before interest and CapEx was R$298 million impacted by seasonality of the big industry during the quarter. Working capital had a small but negative impact of around R$9 million. Regarding CapEx we invested R$108 million in the first quarter to keep the high operational efficiency of our facilities. Financial expenses amounted R$312 million affected by the average exchange rate of R$3.91 per dollar versus R$3.84 in the fourth quarter of 2015 and R$2.86 in the first quarter of 2015. The concentration of the low season in the big industry together with the continuity of the investment plan and interest expense explained above led to a negative free cash flow of R$122 million during the period. I would like to finish saying that our financial and operating discipline which led us to deliver our guidance in 2013, 2014, and 2015, remains one of the main strategic drivers for the Company. I reaffirm our full commitment to achieve this year’s guidance. Before moving on to the next slide I will pass the call back to Martin.

Thank you, Eduardo. On the last slide we will comment on Marfrig’s priorities for 2016. The market economic scenario remains challenging. However, the expectation for developed countries to maintain a moderate expansion with GDP growth rate of 2.4 in the United States and 1.5 in the Eurozone according to the latest IMF report. In the case of China, despite growth being below historical average partly influenced by the lowest commodity price. If development policy remained focus on domestic consumption, which should continue to drive growth for their fresh beef and processed products. In Brazil, the economic scenario remains negative which will continue to affect domestic demand. In this context, we remain commitment to strengthen Marfrig by focusing on profitability, by capturing operational efficiency and productivity gains, prioritizing growth in value added challenge at Marfrig Beef and growing on its capacity to continue growing in international markets as well the improvement in Uruguayan operation. Continuing to expand Keystone food service business in both United States and Asia by maintaining our strong focus and financial discipline, controlling costs, and delivery. And in this scenario, our expectation is that Marfrig will continue delivering good results and we remain commitment to delivering this year – the guidance of this year announced in last February. Our presentation, we would like to begin the question-and-answer session where me and my team will be available to take your question. And thank you again for joining us in this call.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Fernando Ferreira with Bank of America Merrill Lynch.

Good afternoon, everyone. This is actually Isabella Simonato. I have two questions. First on the beef side, if you could give us more color on how you are seeing the outlook for Brazil and Uruguay in the short-term in the next few quarters and how do we expect profitability; we assume FX stays close to 350, how that changes your view for the year? And second on liability management, what are the next steps that we can expect on that I mean you did important asset sales last year and also the buyback of some bonds, what can we expect from now on? Thank you.

Hi, Isabella. It’s Andrew. Isabella in terms of capital in Brazil, we see normally – the first [indiscernible] of course is – this is the most challenging one. The type of negotiation that we have with farmers is open pasture animals, so it’s normally to have a little bit more of difficulty in terms of volumes, but there was lot of rain by the end of last year and in the first trimester so we expect to have a lot of regular I’d say offers in terms of availability of animals for the second trimester. That will be the break between the open [indiscernible] to feed lots where we also expect to have stability, the capacity installed in Brazil is quite in line with the availability. The cycle of cattle is still very on the positive side let’s say there is still being retention in terms of cows and we expect that this massive volume should becoming – this end of this cycle should be in 2017. So we expect normal offers during 2016 and a higher volume coming by the year of 2017. Yes Isabella.

Yes. Thank you. So and what about Uruguay?

With regarding Uruguay is not that the lowest season in Uruguay normally, normally lowest season in Uruguay is over September and October, but we really have a very robust time in Uruguay regarding the weather was very, very surprise. In the last two months we have a lot of raining that was unexpected on the Uruguay and they offer of the animal are very low. But today the situation was absolutely normal, we are going to the biggest slaughter time in the year that is mean May, June, July is our strong season in Uruguay, their business in Uruguay is absolutely normal now.

Thank you. And my second question was on the liability management?

Isabella

Sorry, no I thought you let me first, the liability management I’d like to understand what are the next steps from now after you did the asset sales and the beginning of the liability management just started last year, what are the next steps from now on?

Isabella, so the liability management is a process and it continues our changes following the market, our bonds they have reacted positively so they are performing very well. I think the overall conditions seems become a little bit better and we will be ready to take the opportunity as it pops up.

Okay. Thank you very much.

You’re welcome.

Our next question comes from [indiscernible].

Hi, I just wanted to understand if it’s possible and when you look at the cash flow statement of the company and you that there is gap in between what you guys reported EBITDA and what’s the cash flow generated so if just look at the last piece of the presentation can you see what was net income and what were the adjustments for non-cash items and if you just add those two up for none of the period it actually been close to EBITDA and I was just wondering what are the cash items are there that are below EBITDA line?

As you know I mean EBITDA is not necessarily a cash flow so we have a full reconciliation of these in our report so you can see exactly what is – what are the non-cash that is shown in the cash flow is like. What are trying to do in this is like is to show – is to have as much as link with the financial report so that I can fully follow. At same time that we have the interest expense that is we use the accrual for interest expense, so it’s more in a managerial way. So that’s the way we present the –go for the market and that’s been depressed just for a while.

Right, I was just wondering do you have any other big financial expense that is not reported as interest or I mean the interest it’s a big number, if I were to think about cash flow might be EBITDA and then working capital interest, CapEx and this items I never get to the same number that you guys reported as being you free cash flow and so I am just wondering what are kind of deal that would be cash expense that don’t fall under any of these lines I just mentioned now?

Yes, I mean the interest that you have – that is our total interest, the expense and we have been providing the sales to the market so if you are interested that we can give you a more of sales and breakout.

Understood. And could you also just start on slightly different topic, could you just – into a bit more detail around what drove that the fall in volumes in Keystone during this Q1?

It’s Frank Ravndal. We didn’t have a drop in volume overall was about 1% increase where we did by the drop of volume was in Asia and of about 4% and really just I think a question what we mentioned of just slightly lower promotional activity across the few markets. I think the biggest of those deltas was probably in China over that period.

I understood. Okay, thank you.

[Operator Instructions] This concludes today’s question-and-answer session. I would like to invite Mr. Martin Secco proceed with his closing statements. Please go ahead sir.

Thank you. In our historically seasonally challenging quarter for these type of industry especially in our Beef segment, Marfrig team was able to deliver a good operational result when compared to first quarter of 2015. The continued solid performance at Keystone, the cost discipline on the pursuit of the better result remain our core drivers. The continued improvement of the Uruguay operation, the positive outlook of the global beef industry and the recovering of the late quarter prices in the international market are positive factors - positively influencing our business through 2016. I want to take this opportunity to wish the team much success in their new challenge. As you know we recently announced a change in our organizational structure, which we believe we will streamline our company by making it more efficient. Before closing I would like once again to emphasize our commitment with liability management process, delivering and positive free cash flow generation. I would like to thank you again our teams all over the world for this - for the result of this quarter. Thank you everyone for participating today in this call and I wish you all a good weekend. Thank you. Operator Thank you. That does conclude our Marfrig conference call for today. Thank you very much for your participation and have a great day.