BAUH4

Excelsior Alimentos S.A., traded on B3 under the tickers BAUH3 and BAUH4, is a company with a long track record in Brazil’s food sector. The Excelsior brand dates back to 1893, when the company was founded by Abraão Tatsch and later succeeded by A. Evers & Cia. The first formal articles of association were executed on October 24, 1930, marking the institutionalization of the business. In August 1940, Baumhardt Irmãos & Cia. Ltda. merged A. Evers & Cia., including the industrial facility then known as Frigorífico Excelsior. In April 1968, the company obtained publicly held corporation status and carried out its first public share offering, placed with tax incentive funds, which consolidated its presence in the Brazilian capital markets.

Over its more recent history, Excelsior Alimentos’ ownership structure has undergone significant changes. On September 30, 2013, the company’s controlling interest was acquired by JBS S.A., one of the country’s largest food groups. Subsequently, in August 2015, JBS S.A. transferred control of Excelsior Alimentos S.A. to one of its subsidiaries, Seara Alimentos Ltda., with the stated objective of better aligning the business within the group. The company’s headquarters are currently located in Santa Cruz do Sul, in the state of Rio Grande do Sul, at Rua Barão do Arroio Grande, 192, in the Arroio Grande neighborhood, a region that concentrates a large part of its operations and customer base.

Excelsior Alimentos’ business model is focused on the manufacturing and sale of processed meat products (cold cuts) and other processed foods for everyday consumption. The company produces a wide range of items, with its main products being mortadella, sausage, ham, cured sausage, pâtés, and sliced product lines in different weights (1 kg, 300 g and 180 g), in addition to other chilled and frozen processed products. Complementing its own production, the company purchases certain items from third parties that are complementary to its product line, which are incorporated into the portfolio sold to client establishments. According to its Reference Form, the company emphasizes the adoption of good manufacturing practices and the continuous pursuit of process improvements, focusing on quality and sustainable results over time.

From a management and reporting standpoint, Excelsior Alimentos organizes its operations into two reportable segments, considered strategic business units: chilled products and frozen products. The chilled segment includes products such as cooked ham alternatives, ham, cooked sliced products, smoked cured sausage, light line, mortadella, garlic bread, pâtés and sausages. The frozen segment is composed of hamburgers, fresh sausage, party line, snacks, pizzas, ready meals, sandwiches, and vegetables. In 2024, chilled products accounted for 81% of the company’s net operating revenue, reaching R$ 199.4 million, while frozen products represented 19%, with R$ 47.8 million. On the same basis, operating profit from the chilled segment represented 79% of net income, and the frozen segment 21%, reinforcing the economic predominance of chilled products in the company’s performance.

In terms of production and supply chain, the company is not vertically integrated in the slaughter stage and purchases all of its meat raw materials in the market from suppliers that are federally inspected and meet pre-established quality standards. These suppliers are basically located in the South of Brazil and, like the company itself, follow strict sanitary regulations to ensure food safety. The raw material is processed at Excelsior Alimentos’ facilities to produce its cold cuts and other chilled and frozen products. The company notes that it is routinely subject to sanitary inspections and audits by the relevant authorities, underscoring the importance of the regulatory environment in its sector.

Excelsior Alimentos’ commercial strategy is primarily focused on Brazil’s Southern region, with a strong concentration in Rio Grande do Sul, a state that accounts for more than 81% of the company’s sales. Commercial activities are conducted through its own sales force and independent sales representatives, with segmentation of the customer base into three major channels: self-service, wholesale (distributors and resellers) and retail. Each channel is served using a differentiated service model, tailored to the size, characteristics, and needs of the customers. Product distribution is carried out from the plant in Santa Cruz do Sul and from two branches located in Esteio (RS) and Palhoça (SC), using contracted carriers to reach the various regions served. The company reports that it does not have individual customers responsible for more than 10% of its net revenue, indicating a diversified buyer base.

As a food sector company, Excelsior Alimentos is subject to a broad regulatory environment involving sanitary and food safety rules at multiple levels of government. The company must obtain health permits to operate, as well as licenses that must be obtained, maintained, and renewed with the competent authorities. Its processing, packaging, storage, distribution, advertising, and labeling activities are subject to regulations issued by the Ministry of Health, the Brazilian Health Regulatory Agency (ANVISA), the Ministry of Agriculture, Livestock and Supply (MAPA), and state and municipal agencies. Each facility must be previously licensed, have a technical officer in charge, and implement self-control programs in line with current legislation. Non-compliance with regulations may result in civil, criminal and administrative penalties, such as warnings, fines, shutdowns, and license cancellations, under Law No. 6,437/1977.

From an intellectual property and institutional standpoint, the company holds several trademarks registered with the National Institute of Industrial Property (INPI), including the “Excelsior” brand. It also owns internet domain names such as “excelsior.com.br”, which support its institutional and commercial presence in the digital environment. With respect to environmental, social and governance (ESG) practices, Excelsior Alimentos states that it complies with applicable legal and regulatory environmental obligations and notes that it has been gradually adopting policies aimed at saving natural resources and respecting the environment. However, it reports that it does not yet publish an annual report or specific ESG document, does not conduct a greenhouse gas emissions inventory, and does not currently have a materiality matrix or ESG key performance indicators formally disclosed. The company states that it is analyzing the future implementation of these practices, taking into account current regulations and the Sustainable Development Goals, but provides no further detail in the reference document.

Finally, it is worth mentioning that Excelsior Alimentos has no revenue abroad and is not affected by specific foreign regulation, as it does not operate as an exporter according to its Reference Form. Its revenue is entirely attributable to the Brazilian market, with a regional focus strongly concentrated in the country’s South. For individual investors interested in BAUH3 and BAUH4 shares, the company presents itself as a B3-listed issuer focused on the industrial processing of processed and frozen meat products, with a strong regional profile and exposure to a strict sanitary regulatory environment, characteristics that shape the business’s risk and operating profile.