los grobo g.grobocopatel

8/10/2019 Los Grobo G.grobocopatel

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The information is strictly linked to the oral comments which were made at its presentation, and may only be used

by attendees of that presentation. Unauthorized copying, disclosure or distribution of the material in this document

is strictly forbidden and may be unlawful.

CONFIDENTIAL

Welcome toGrupo Los Grobo


2/31

1

Food Inflation: The Growth Heptagon

ClimateOil

Environmental

Restrictions

Biofuels

Urbanization/

Mega cities

Free

Market

Consumption

Habits Changes

Welfare

Programs

IncomeGrowth

Population

Growth

Consumption

consumo per cpita

Fuente: USDA

Nvitas S.A.

Consumo de Carnes per Cpita en China

0

5

10

15

20

25

30

35

40

45

50

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Kg./

Hab.

AVICOLA

PORCINA

BOVINA

Poblacin(milesdemillones)

Poblacin(milesdemillones)

Fuente: USDA

Nvitas S.A.

USO DE MAIZ PARA ETANOL EN EE.UU.

0

20

40

60

80

100

120

81 83 85 87 89 91 93 95 97 99 01 03 05 07 09

Enmillonesdetoneladas

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

%

USO DE MAIZ PARA ETANOL

% SOBRE EL USO TOTAL DE MAIZ

Tm(

milesdem

illones)


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2

Food Inflation: The Solutions

Area

Yield

Infra Structure

Institutional

Framework

Demand

Innovation through Biotech and Operational Technology Improvements

New generation of Fertilizers / The water challenge

New Areas through environmental sustainable processes

Improvement of Actual Areas

In Land Logistics (Railways, Roadways, Warehouses)

Ports and Ships

Improvement of Local and Trading Institutional Framework

High Quality Organizations

Change in Consumption Habits

Biofuels Efficiency


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3

It is expected that 50% of agricultural growth takes place in MERCOSUR

2

4

5

2 4

2

6

13

35

50%

of totalgrowth

Forecasted production growth

Source: Based on OECD-FAO projections.

Only 3% of the world landis suitable for agricul turewithout irrigation

Growing urbanizationprocess in EmergingCountries

Water shortage in differentplaces in the world

Desertification and landdegradation

MERCOSUR is the regionwith the highest growthpotential to meet demand


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4

100 years of agricultureCereals and oilseeds produccion in tons

0

10.000.000

20.000.000

30.000.000

40.000.000

50.000.000

60.000.000

70.000.000

80.000.000

90.000.000

100.000.000

1900/01

1903/04

1906/07

1909/10

1912/13

1915/16

1918/19

1921/22

1924/25

1927/28

1930/31

1933/34

1936/37

1939/40

1942/43

1945/46

1948/49

1951/52

1954/55

1957/58

1960/61

1963/64

1966/67

1969/70

1972/73

1975/76

1978/79

1981/82

1984/85

1987/88

1990/91

1993/94

1996/97

1999/00

2002/03

2005/06


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5

0

2.000

4.000

6.000

8.000

10.000

1914

1917

1920

1923

1926

1929

1932

1935

1938

1941

1944

1947

1950

1953

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

Carne (miles de tn) Leche (millones de lt)

Milk and meat production. 1914-2008in millions o f tons, and millons of litres


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6

0

50

100

150

200

250

300

1990 2000 2010 2019

MERCOSUR is today the largest soybean producerMillions of tn.

Worlds soybean production

Brazil and Argentina arethe main producers in theMERCOSUR

US and Canada rate ofgrowth decreases , asfarmland is scarcing

The rest of the world is notsuitable for high yieldagriculture

CAGR*Share of totalproduction by 2019

50%

36%

14%

Source: Oilworld.

* CAGR: Compound Average Growth Rate.

+6.2%

+4.2%

+2.4%

+8.1%

+3.0%

+2.8%

+3.6%

+0.6%

+2.1%

US + Canada

MERCOSUR

Rest of theworld


8/31


9/31

8

Technology: Growth in Adoption Speed

New Technology Adoption in Pampean Agriculture 1980/2000

GMO

Pesticides

Direct seeding

Fertilizers

PrecisionAgricu lture

Silo bags

Inoculants

Technologyadoptionbyfarmer

s(%)


10/31

9

A highly scalable model allowed GLG to become one of the largestLatAm agribusiness players in less than a decade, establishing a solid

track record of organic and M&A growthRevenuesPlanted area

Regional Leader Internationalization New Growth Era

Thousands of ha., Millions of USD

Development of a strongorigination network dividedinto three separate businessunits:

- Origination

- Input Retailing- Agricultural Production

Firstagribusinesscompany toobtain the ISO9001 certification

Knowledge exchange program with the TexasA&M University and Universidad de Buenos,first Los Grobo Case published

Expansion to

Uruguay withcreation ofAgronegociosdel Plata

Launching ofLos Grobo SGR*leverages thenetworksfinancingpotential

Expands to

Paraguayby foundingTierra Roja

Los Grobo Groupbecomes a HarvardBusiness SchoolCase Study

Transaction

with VinciPartnersopens thedoor toBrazil

Rapid growth in Brazil

- Partnership with Ceagro

- Acquisition of Selecta (Brazil)

- Sponsorship of Sollus Capital

Acquisi ti on of UPJ (Argent ina)

240

691

246

116

172

154

267

173

557

104

138

Los Grobo

AgropecuariaS.A. is foundedby AdolfoGrobocopatel

773

1,058

263

280

1,305

Mutual guarantee society.*

2004200320001990s1984 2009 20102006 2007 20082005 2011 2012E

Today GLG is one ofthe largest grainproducers and

service providers inLatin America


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10

Grupo Los Grobo is present throughout the agribusiness value chain

Production Services Processing

Development of geographicallydiversified portfolio of farms

Applying modern techn iquesto crops production

focusing on:- Maximizing yields in the

selected fields while

- reducing yield volatility

- generating better riskadjusted returns

Adding value to our grain originationnetwork by integrating downstreamactivities:

- Wheat milling on a regional scale

- combined with a state-of-the-artdried pasta plant

- Soybean deactivation facilities inBrazil

Supply of agricultural inputs to localfarmers

as well as financial services such as:

- Grain commercialization

- Hedging

Supply of warehousing and logisticservices

Leveraging its potential through GLGnetwork


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11

Grupo Los Grobo property framework2010

Shareholders Structure

Vinci PartnersGrobocopatel family

A brief descript ion

Grobocopatel family

More than 90 years of agribusiness experience

In 1984 Adolfo founded Los Grobo Agropecuaria composed by 4employees and 3k ha and became a Professional company at the first half ofthe 90s decade, managing today more than 1K employees

Under Gustavos management, Los Grobo was the first agro company in theworld to obtain the ISO 9001, becoming also a Harvard Business Case,farming in more than 260K ha

Vinci Partners

One of the most successful h istory in private equity in Brazil

Started as an investment vehicle of Banco Pactuals former partners

- Pactual was the largest investment bank in Brazil and one of the largestAsset Managers

- sold to UBS for US$ 3.1Bn in 2006

Vinci is Partners is one of the main shareholder of:

- PDG Realty, the largest real estate company in Brazil by market cap

- Equatorial Energia, a leading Brazilian energy company- Ethanol business in Brazil through CMAA

- The retail /fashion business through InBrands

Local partners

Paulo Fachim, partner in Brazil, founded Ceagro in 1994, and has morethan 20 years of experience in the Brazilian agricultural market

Marcos Guigou, partner in Uruguay, founded ADP in 2004, and has over 16

years of experience in agribusiness

22%78%

100% 100% 100% 65% 100% 100%

59,5%


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12

Grupo Los Grobo: One of the largest agribusiness producers

and services provider in South America

Regional Presence

2011/12, Thousands of ha., Millions of tn.

Own Planted Area

CAGR*

Brazil:

Production Area: 56k haInput Sales: US$ 122 mm

Grain Origination: 680K tnCrushing: 540 tn/day

Argentina:

Production Area: 115k haInput Sales: US$ 72 mmGrain Origination: 1,810k tnCrushing: 735 tn/day

Uruguay:

Production Area: 92k haInput Sales: US$ 35 mmGrain Origination: 400k tn

Paraguay:

Production Area: 16k haGrain Origination: 50k ton

Total:

Production Area: 280k haInput Sales: US$ 229 mmGrain Origination: 2,9 mm tnCrushing: 1,275 tn/day

Grain origination


73%

27%

2006/07

1,5

2009/10

72%

2,0

28%

2,7

76%

24%

67%

33%

2004/05

0,7

65%

35%

22%

2007/08 2008/09

78%

1,9

2005/06

26%

74%

1,10,9

27% Own

73%

2011/12E

2,9

2010/11

Clients

19%

121

28%

2007/08

18%

25%

48%

14%

51%

7%

2005/06

9%

2006/07

178

141

50%

Wheat

Corn

Others

Soybean

5%12%

22%

263

52%

7%

2010/11

67%

16%

66%

21%6%7%

2009/10

247

15%

2011/12E

2807%

2008/09

245

59%

18%

12%

49%

28%29%10%

2004/05

15%7%

105

Areas where GLG hasan active presence

UruguayArgentina

Brazil

Paraguay

MA

PITO

GO

MG

BA

Brazil

MT


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13

GLG in numbers: fast growth leveraged on acquisitionsAcquisitions

Revenues

Millions of USD

Note: Revenues and EBITDA 08/09 in accordance to IRFS as of 30/04/09; Revenues and EBITDA 09/10 in accordance to IRFS as of 30/04/10.

CAGR*


26%

19%1%

7%

2007/08

557.3

48%

21%

19%2%

11%

2006/07

267.1

67% 15%

2%16%

171.5

69%17% 2%

12%

2004/05

138.1

79%

2005/06

1%9%

2009/10

664.6

17% 4%

2003/04

96.7

75% 21%4%

2011/12E

TR

Industrial

LGA

UPJ

2010/11

1,058.5

31%

Ceagro

ADP

27%

35%

16%+38%

6%

39%

17%2%

9%

2008/09

8%

772.8

41%

6%

10%

1%

14%

31%

8%

35%

1,305.3


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14

Grain production is on the rise, expanding to new geographies

19%

33%

6%

2009/10

246.9

36%

1%

20%

37%

6%

2008/09

244.6

49%

1%13%

30%

7%

2007/08

178.0

68%

22%

9%

2006/07

141.3

80%

20%

2005/06

120.7

81%

19%

+15%

LGA

UPJCeagro

ADP

TR

2010/11

262.8

40%

2%

6%

33%

2011/12E

1% 20%3%

38%

279.7

Thousands of ha., % CAGR*


GLG has focused it expansion in new geographies

and improvement of the revenues mix in each country

leveraging on experience exchange between managers and companies

GLG managed production (ha.)


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15

GLG focus on service provision, leveraged on its own production, will

grow as local commercial links matureMillions of tn., Millions of USD

15%

2008/09

142.3

37%

7%

35%

21%

2007/08

119.9

39%

36%

17%+42%

206.9

UPJ

LGA

ADP

Ceagro

22%

2010/11

54%

7%

28%

2005/06

28.3

75%

25%

2006/07

25%

36.7

72%

2009/10

158.1

18%

6%

61%

2011/12E

16%

53%

7%

25%

228.7

Note: Revenues and EBITDA 08/09 in accordance to IRFS as of 30/04/09; Revenues and EBITDA 09/10 in accordance to IRFS as of 30/04/10.

CAGR*


WhileArgentina is intensive on grain trading

Brazil is focused on agricutltural inputs distribution

Grain traded Agricultural inputs distribution

50%

ADP

TR

2010/11

+18%

LGA

UPJ

Ceagro

0%

0%

0%0%

0% 12%

22%

14%

1%

2009/10

2.4

49%

9%

20%

21%

1%

2008/09

1.9

52%

8%

19%

20%

1%

2007/08

1.9

74%

11%

13%2%

2006/07

1.5

87%

13%

2005/06

1.1

89%

11%

2.7

0%0%

2%

14%

23%

11%

51%

2.9

2011/12E


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16

Leveraging the companys through a vast regional network of

storage capacity2011, Thousand of tn.

156.0

38%

62%

339.673%

9.5

27%

481.011%

986.175% 25%

89%

Own

Rented

Total storage capacity per country

Total

storagecapacity

GLG relies on asset lightstrategies when possible

renting 39% of storagecapacity

Brazil has rapidly become thecompanys main storagecapacity country (54%)

More than 50storing facilities

spread over 4countries


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17

where export logistics are key

Uruguay

Argent ina

Chile

Brazil

Venezuela

Peru

Bolivia

Paraguay

MA

PI

TOMT

GO

MS

PR

MG

Colombia

BA

Ponta da Madeira/MA, BR

Ponta da Madeira port:Loading Rate: 2 k mt/h.Draft: 15 mExpectable Line up: no line up (only by rain).Acc ess: On ly rai lway.

Paranagu/PR, BR Paranagu port:Loading Rate: 3 k mt/h.Draft: 12 mExpectable Line up: 15 days (plus rain).Storage Capacity: 65 k mtAcc ess : m ainly truck. 1 r ailway

Santos/SP, BRSantos port:

Loading Rate: 2 k mt/h.Draft: 13 mExpectable Line up: 15 days (plus rain).Access: truck and 3 railways

Lima (up river)Loading Rate: 1,5 k mt/h.Draft: 9 mExpectable Line up: 2 daysAcc ess : t ruck .

Nueva Palmira, UYNueva Palmira port (up river)Loading Rate: 1,5 k mt/h.Draft: 9 mExpectable Line up: 7 daysAccess: truck. 1 r ailway

Necochea, AR

NecocheaLoading Rate: 1,5 k mt/h.Draft: 12 mExpectable Line up: 15 days (plus rain)Acc ess : t ruck . 1 rai lway

Bahia BlancaLoading Rate: 1,5 k mt/h.Draft: 13 mExpectable Line up: 15 days (plus rain)Storage Capacity: 100 k mtAcc ess : t ruck . 1 rai lway

Bahia Blanca, AR


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18

GLG collects awards, attesting our track record by external evaluationsInstitutionAwardedYearAwards

Top 34 agribusiness company in Brazil 2010 Ceagro Exame Magazine

Best "Corporate Citizenship" in large company category for sustainable management 2009 Los Grobo Agropecuaria The American Chamber of Commerce in Argentina (AMCHAM)

Top 50 Companies to work for in Argentina and Top 20 in Uruguay 2009 Los Grobo Agropecuaria andAgronegocios del Plata

Great Place To Work (ARG)

Top 150 place to work and made into 500 best companies charts2009 Ceagro Revista Exame

Readers Choice Award: "Best Sustainability Report" 2008Fundacin EmprendimientosRurales Los Grobo

Global Reporting Initiative (GRI)

Award to Excelence 2008 Los Grobo Agropecuaria Amrica Economa Magazine

Enviromentally responsible company of the year 2008 Los Grobo Agropecuaria Institute for Enviromental Research at UCES (ARG)

Creative award Diente 20072007 Los Grobo Agropecuaria Crculo de Creativos Argentinos (Publicist Organization)

1st Place in CSR survey organized by the magazine Valor Sostenible" 2007 Los Grobo Agropecuaria Valor Sostenible Magazine (ARG)


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19

Committed and experienced management team, fully aligned

through a long term SOP programYears

AgribusinessCompany Executive Position Experience

GustavoGrobocopatel

Chairman

Founder and leader of GLG More than 25 years of experience in the industry, has been awarded a Honor

Mention at the Argentine Senate and a recognized as the agribusiness entrepeneurof the decade with the Konex Platinum Award

Graduated as an Agronomy Engineer at Universidad de Buenos Aires

HoracioBusanello

ChiefExecutive

Officer

Joined GLG in 2011 as Regional COO and LGA CEO Have worked all his life in top agribusiness companies such as Monsanto, Seneca

and Syngenta at top management positions CPA with postgraduate courses at INSEAD and Harvard

Antonio

Neto

ChiefFinancialOfficer

In 2008 Mr. Oliva Neto Joined Vinci Partners team and been appointed to be CFO atLos Grobo Brazil, becoming CFO at the group recently

Mr. Oliva has 13 years career with corporate finance, working in financial institutions Major in economics by Pontificia Universidade Catlica de Rio de Janeiro (PUC-RJ)

and holds an MBA in Corporate Finance by IBMEC

GerardoBurriel

CEO LGAArgentine

Division

Mr. Burriel has been a key commercial manager for the company since itsprofessionalization process began in the early 90s, becoming CEO in 2011

He holds several postgraduate courses in agribusiness and management by both theUniversidad de Buenos Aires and Universidad de San Andrs

PauloFachin

CEO

CeagroBrazilianDivision

Founded Ceagro in 1994

Strong entrepreneurship capacity, named Entrepeneur of the Year by the City ofBalsas Chamber of Commerce and Industry Over 20 years in agricultural production

MarcosGuigou

CEO ADPUruguayan Division

Founded ADP in 2004 Second largest soybean producer in Uruguay Several years of experience in agricultural production, being awarded one of top 100

most influential people in Uruguay

ElenaMorena

Director

IndustrialDivision

Joined GLG in 2005, having worked for 8 year at Pioneer, the international seed

company Graduated as a Business Administrator at Universidad de Buenos Aires

25 25

3 3

17 17

2 20

5 16

8 16

1 25


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20

GLG capital is fully invested in farming and services development

leading to superior returns

Quality management model

Intensive technology use

State-of-the-art plantingtechniques

Continuous innovation

Partnerships with localagribusiness leaders

Local management

Decentralized micro decision taking

Deep insights on clients

Asset light (100% leased landand machinery)

Focus on services and production

Active interaction with local producers

Creation of ecosystem in the region

Networkmodel

Localknowledge

Riskmanagement

Quality /Innovation

GeographicdiversificationIntegration

Strict policies designedat board level

Price and foreignexchange hedging

Climate risk control

Credit limits

State of the Art land operator

Relevant additional revenuesthrough services

Leverage the companysmarket knowledge

Second largest player in LatAm,with planted area of 273k ha

Operations in 4 countriesdiversifying crops risks


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21

Season

Productionphilosophy

Type of crops

2009/2010

27% 31% 28%31% 21%

12% 13% 13% 17% 20%

7%

9%7%8%10%

51%

2005/06

48%

2006/07

52%

2007/08

44%

2008/09

52%

2009/10E

Others

Corn

Wheat

Soybean

GLG geographical diversification and

positioning in different weather areas

are key to take advantage of year round

seasons allowing two harvests per year

59%Summer

41%Winter

0%

5%

10%

15%

20%

25%

30%

35%

0% 5% 10% 15% 20% 25% 30%

RS

GO

MS

MA

PR

GOMT

MA

PR

10YYieldVolatility

Gross Margin

Integration

GLG specializes in non perennialcrops, meaning

...crops with a 100 to 180 days thatafter harvesting requires re-seeding

increasing flexibility of crops with a large portion being soybean,

wheat and corn

GLG follows a strict ri sk-rewardphilosophy

analyzing locations not only on a profitbasis, but adjusting it for actual risks

which combined with our scale anddiversification allows GLG to choose thebest risk-reward sites for production

GLG specializes in non-perennial crops, active year round

following a strict risk-reward philosophy


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22

GLG has a one-stop-shop service concept that generates cash

inflows all year round

Integration

Wide portfo lio of services offered

available all year round

J F M A M J J A S O N D J F M A M J J A S O N D J

Summer I Growing Harvest Commercialization

Winter I Inputs buying Planting Growing Harvest Commercialization

Summer II Inputs buying Planting Growing Harvest Commercialization

Crop seasonplanning

Technicaldecisions

Inputs combo Planting Harvest Grain sale

Los Grobo providestechnical expertiseand otherconsulting servicesto other agriculturalproducers

Over 120 Specialists

on Field

Research and seedtests

Over 10 fieldsdedicated to research

Los Grobos tradingdesk and hedgingservices leverage thecompanys marketknowledge

Comprehensive logisticnetwork, providingtransportation andstorage solutions

Sale of own and thirdparty productionsecuring improved

scale

Input acquisition forLos Grobo and allpartners resulting ineconomies of scaleand appropriate soiltreatment

providing also

financing to farmers

Constant cropmonitoring andadvising to farmers


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23

GLG is present in three different climate regions, which combined

with crop diversification, reduces yield risks

Based on company research of soybean yields

Brazil

MA

PITO

MT

GO

MG

BA

Argent ina

Paraguay

Uruguay

Brazil

Tropical dry or savanna climate

Humid subtropical climate

Maritime Temperate climate

Regional presence allows reduces riskslower climate correlation which

Argentina Uruguay Paraguay Brazil

Argentina

Uruguay0.44

Paraguay

-0.10 0.26

Brazil-0.04 0.12 0.19

Low yield correlation betweenthe countries Los Grobo

has presence brings a portfolioeffect both to Own Productionand also to Services Business

Diversification through differentproduction cycles, as shown inthe previous chart, generates acash flow stream for thecompany less risky andseasonal

Geographical

diversification

Areas where GLG has an active presence


25/31

24

Different cost structures between countries improves GLG

exposure to different assets

Geographical

diversification

7% 10% 11% 9%

15% 9% 10% 12%

22%

5%

17% 16%

19%

45%

32%28%

6%

11%5%

9%

22%

10%

14% 15%

9% 10% 11% 11%

Grain

Grain

Grain

US$

US$

Local currency

Local currency

Brazil Argentina Uruguay Paraguay

Land Lease

Harvest

Seeds

Chemicals

Fertilizer

G&A

Labor/machinery

Inputs

1,237 794 895 705Cost US$/ha=

There are signif icant cost/ha differences throughout count ries

Land lease cost, ranging from 19% in Brazil to 45% in Argentina for soybean production, while

Inputs range from 24% in Argentina, being larger in Uruguay and...

particularly higher in Brazil where inputs stand for 44% of total cost production

Soybeans Main exposureCost item

USD/ha.


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25

GLG applies state-of-the-art technology to produce grains in both,

the field and the office

Quality /

Innovation

Crop rotation ensures higher productivity in the long run

Appropriate fertilizer utilization

Environmentally conscious crop disease control

No-tillage seeding approach- Optimization of water use efficiency

- Improved fertility of soil chemistry and physics

- Increased soil biological activity

- Protection from exogenous factors (erosion by windand water)

Precision Agriculture

- Measures soil characteristics within a 5Ha grid...- combined with high technology machinery, allows

for optimal fertilizer application

Superior f ield technology

1stAgribuisness company ISO-certified in the world

In-house developed GroboSoft System, allowsmanagement of production network with superb quality

standards Process and Technology Support

- Ceres modeling allows optimization of fertilization

- RISK modeling for budgeting, simulating over 5,000different scenarios through Monte Carlo

- Agroecoindex generate KPIs that measure ourrelationship with the environment

Process management and IT Support

Corn 1st CropSoybean

Wheat2nd Crop Soybean

Crop rotation diagram Precision agriculture render

Volveral inicio Ayuda

Establecimiento LosGroboAgrop Telfono Localidad CONSOLIDADOPropietario LG Prod. Predominante Provincia BuenosAires

Aodeevaluacin 2006 Perodo Evaluado Ecorregin PampaOndulada-BuenosAires

Indicador 0 71.986 % PorcentajedecultivosanualesIndicador 1 9483.636 Mj/ha/ao ConsumodeenergafsilIndicador 2 0.181 Mj EF/Mj prod. Eficienciadeusode laenergafsilIndicador 3 -1.184 kg/ha/ao Balancede NitrgenoIndicador 4 -2.084 kg/ha/ao BalancedeFsforoIndicador 5 0.000 mg/l RiesgodecontaminacinporNIndicador 6 0.000 mg/l RiesgodecontaminacinporPIndicador 7 1772.625 Indicerelativo RiesgodecontaminacinporplaguicidasIndicador 8 5.197 ton/ha/ao RiesgodeerosinhdricayelicaIndicador 9 0.016 Indicerelativo Riesgodeintervencindehbitat

Indicador 10 0.007 ton/ha/ao Cambiodel stockdecarbonoIndicador 11 105.675 ton/ha/ao Balancede gasesinvernadero

Hoja1de2 PaneldeResultados

RESULTADOS02395-459022AGRICOLA2005-2006

DesagregacinporActividades/Potreros

GroboSoft order input screen Ceres model ing wheat fer ti l izat ion curve

Agroecoindex KPI sheetRisk forecasting result sli p


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26

and a 21st

Century corporate governance model

Quality /

Innovation

General framework

addressing the MilleniumGoals of United Nations

United Nations

GlobalCommitment

Ethics codeArea policies

Coexistence manualEthics committee

Risk map

Resguarda

system

GlobalReporting

Initiative (GRI)

Board of Directorsand External

Audi ting

Corporate governanceframework

guaranteeing transparencyof the decisions of the Board ofDirectors and

preventing frauds

Managements internal framework

prevents risks within theorganization, under the guidelines ofan international standard by Global

Compact

Preemptive and controlframework

in line with the Ro de JaneiroDeclaration (1992) Precautionary

Principle

Communication channel

which is a transparent,confidential and outsourcedclaim management entity opento all stakeholders

Management and reportingtool

based on a triple bottom lineapproach to complimentfinancial reports

Corporategovernance


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27

Local knowledge is a key asset to GLG business strategy and is

carefully cherished and developed at all levels

Local

Knowledge

Localmanagement

Deep clientknowledge

Local partners

Operations are usually managed by local people that have deep ins ights of the area

Approximately 70% of employees are on the country side, having direct contact with the local businessecosystem, were everyday decision taking is made locally

with the coordination of a corporate division

overviewed by a board of directors quarterly

Business practices and culturesare different at micro local level

and GLG thoughtfully studiesclient characteristics in more than50 micro regions

GLG observes variables such as:

- Market size (farmers, ha.,productivity, etc)

- Farmers financial preferencesand input purchasing habits

- Local competition

19%44%

19%

30%19% 20%

27% 24%3%

3%6%

3%

94%

Pamplona

45%

Sete Placas

81%

CampoLindo

80%

Jatoba

26%

BR050

9%

49%

SoBartolomeu

Banks

Barter

Tradings

Own

Farmers financial preferences in Cristalina, Gois

GLG acquisition strategy relies in a thoughtful search for local agribusiness leaders

that stay afteracquisition

fully aligned with GLG:

- Paulo Fachim owns 40,5% of Ceagro (Brazil)

- Marcos Guigou owns 35% of ADP (Uruguay)


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28

The network model generates operational and financial leverage

WharehouseLos Grobo

Own Production: 5 6 k ha

Clients: 10 12 k ha

Railw

ay

and centralizes crop operations

For each hectare Los Grobo utilizes forown production

it intends to provide services forother 2 hectares in the region

Los Grobo operates several mid-sizeproperties

positioning each property as thecenter of a large network of producers

Los Grobo leases 100% of its land andmachinery

immobilizing less capital than thetraditional producer

Typical Los Grobo Influence Area

Own Area: 1 / 3

Clients: 2 / 3

Capex NeedsLos Grobo vs. Traditional Producers

Example of Los Grobo Network

Provides services for local producers .... shares resources

Clients

Leverages on Scale Asset Light Develops theEcosystem

Network

model

Contractor

Land Owner

TraditionalProducers

Land

Machinery

InfrastructureInfrastructure


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29

Risk management strategy is comprehensive, managing all

types of risks at different levels

Risk

management

Weekly reporting to CFO at corporate level

to ensure enforcement of Board policies

Strict policies for all risks are designed at Board level in order to take advantage of the unique broader viewgained as a regional company

Daily ALM hedging for both FXand Grains positions

Cost Hedging policy on OwnProduction

Clear exposures for grain and

fertilizerpositions on servicesbusiness

Physical Forward and NaturalHedging preference

Margin Call risk limits

In-house developed ratingsystems of clients

Interest rate charged according toclient rating

Different approval instances fordifferent credit amounts

Concentration limit by clients andMicro-Regions

Geographic d iversification atMERCOSUR and country level

Crop diversification amongseasons (summer and wintercrops)

RISK modeling at micro regionlevel

Insurance coverage for negativetail risk scenarios

Crops and FX Credit Climate


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30

Grupo Los Grobo is the preeminent vehicle in the Latin American

Agribusiness Community

+

+

+

+

+

Integration

Geographic Diversification

Quality / Innovation

Local knowledge

Network Model

Risk management

Organized and scalable growth

platform with secure access to

key grain production / origination

los grobo g.grobocopatel

Documents