BAUH4 Excelsior Alimentos

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 signed on October 24, 1930, marking the institutionalization of the business. In August 1940, Baumhardt Irmãos & Cia. Ltda. incorporated 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, control of the company was acquired by JBS S.A., one of the largest food groups in the country. 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 head office is 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 share of its operations and customer base.

Excelsior Alimentos’ business model is focused on the production and sale of processed meat products and other processed foods for everyday consumption. The company manufactures 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 output, the company purchases from third parties some products that round out its 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, with a focus 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 items such as chopped ham, ham, cooked sliced products, smoked sausage, light line, mortadella, garlic bread, pâtés, and sausages. The frozen segment is made up of hamburgers, fresh sausage, party line products, 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%, at R$ 47.8 million. On the same basis, operating profit associated with the chilled segment represented 79% of net income, and that of the frozen segment 21%, underscoring the economic predominance of the chilled product line in the company’s performance.

With respect to production and the supply chain, the company is not integrated in the slaughter stage, purchasing all of its meat raw materials on the market from suppliers that hold federal inspection and meet pre-established quality standards. These suppliers are basically located in Brazil’s Southern region and, like the company itself, follow strict sanitary rules to ensure food safety. The raw material is processed at Excelsior Alimentos’ plants to produce the processed meats and other chilled and frozen products. The company notes that it undergoes routine sanitary inspections and audits by the relevant authorities, which highlights the importance of the regulatory environment in its sector.

Excelsior Alimentos’ commercial strategy is primarily focused on Southern Brazil, 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 carried out through its own salesforce and independent sales representatives, with its customer base segmented into three major channels: self-service, wholesale (distributors and resellers), and retail. Each channel receives a differentiated service model, tailored to the size, specific characteristics, and needs of clients. 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 any individual customers accounting 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 food safety and sanitary standards at multiple levels of government. The company must obtain sanitary 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 rules 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 manager, and implement self-control programs in line with current legislation. Non-compliance with regulations may result in civil, criminal, and administrative sanctions, 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. In terms of 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 still does not publish an annual report or specific ESG document, does not prepare a greenhouse gas emissions inventory, and does not yet have a materiality matrix or ESG key performance indicators formally disclosed. The company says it is analyzing the future implementation of these practices, taking into account current regulations and the Sustainable Development Goals, but provides no further details in the reference document.

Finally, it is worth noting that Excelsior Alimentos does not generate revenue abroad and is not affected by specific foreign regulations, since it does not operate as an exporter according to the Reference Form. Its revenue is entirely derived from the Brazilian market, with a regional focus heavily concentrated in the South of the country. For individual investors interested in BAUH3 and BAUH4 shares, the company presents itself as a B3-listed issuer with operations concentrated on the industrial processing of chilled and frozen meat products, a strong regional profile, and exposure to a strict sanitary regulatory environment, characteristics that shape the business’s risk and operating profile.