4q08 earnings release - ri.mdiasbranco.com.br · 4q08 earnings release eusébio – ceará state,...

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4Q08 EARNINGS RELEASE

Eusébio – Ceará state, March 16, 2009 – M. Dias Branco S.A. (Bovespa: MDIA3), leader in the Brazilian pasta, cookies and crackers markets, announces today its results for the fourth quarter of 2008 (4Q08) and the whole year of 2008 (2008). The company’s consolidated financial statements are prepared in accordance with the accounting practices adopted in Brazil, based on Brazilian Corporate Law and in accordance with the regulations of the Brazilian SEC, known locally as the CVM. On December 28, 2007, Law 11.638, which amended several provisions of Law 6.404 (Brazilian Corporate Law), was published in the Official Gazette (Diário Oficial da União). The accounting information for the years 2007 and 2008 herein reflects the cha nges in accounting practices introduced by this Law by the Accounting Announcements Committee – known as CPC – approved by the Brazilian SEC (CVM). The period information on this document showcase the Company’s historical figures and, therefore, include the figures of Indústria Bomgosto Ltda. (Vitarella) only as of April 2008, when this company was acquired by our subsidiary Adria Alimentos do Brasil Ltda. In order to allow further market comparative analysis, a pro forma Income Statement is available in the end of this document with Vitarella numbers added to the company’s since January 2007.

IR Contact

Geraldo Luciano Mattos Júnior CFO and Investor Relations Officer Tel: (55 85) 4005-5667 e-mail:[email protected]

Álvaro Luiz B. de Paula Investments and Investor Relations Director Phone: (55 85) 4005-5952 e-mail:[email protected] IR website: www.mdiasbranco.com.br/ir 4Q08 Results Conference Call

Date: March 18, 2009.

Time: > English (BR GAAP) 12.00 pm (Brasília Time) 11.00 am (US EST) Phone: 1 973 582 2868 Replay: 1 800 642-1687 / 1 706 645-9291 Code: 88844949 > Portuguese (BR GAAP) 10.00 am (Brasília Time) 09.00 am (US EST) Phone: (55-11) 2188-0188 Replay: (55-11) 2188-0188 Code: MDias Share Price: Closing Price on March 13, 2009 MDIA3: R$ 18.99 per share Market cap: R$ 2,154.4 million

HIGHLIGHTS

Net revenue totaled R$ 2,192.5 million in 2008, 45.5% up on the R$ 1,507.2 million recorded in 2007. Quarterly net revenue climbed by 48.2% (from R$399.6 million in the 4Q07 to R$592.2 million in the 4Q08);

Sales volume reached 1,085,600 thousand tonnes in 2008, 18.0% up year-on-year. Sales volume stood at 286,400 tonnes in the 4Q08, 27.6% up versus 224,400 tonnes in the 4Q07;

Net income climbed 33.2% in 2008, reaching R$214.2 million, up on R$160.8 million in 2007;

EBITDA totaled R$376.2 million in 2008, versus R$268.4 million in 2007 (+40.2%). EBITDA stood at R$88.8 million in the 4Q08, 32.7% up on the R$66.9 million recorded in the 4Q07;

Capacity utilization came to 75.9% in 2008, versus 71.6% in 2007 (+4.3 p.p.), and 76.4% in the 4Q08, versus 68.4% in the 4Q07 (+8.0 p.p. ).

Financial and Operating Results (R$ Million) 4Q08 4Q07 Variation 2008 2007 Variation

Net Revenue 592.2 399.6 48.2% 2,192.5 1,507.2 45.5%

Sales Volume (thousand of tons) 286.4 224.4 27.6% 1,085.6 920.0 18.0%

Net Profit 41.8 42.5 -1.6% 214.2 160.8 33.2%

EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%

EBITDA Margin 15.0% 16.7% -1.7 p.p. 17.2% 17.8% -0.6 p.p.

Net Debt 707.8 111.6 534.2% 707.8 111.6 534.2%

Net Debt / EBITDA (last 12 months) 1.9 0.4 375.0% 1.9 0.4 375.0%

Production Capacity Usage 76.4% 68.4% 8.0 p.p. 75.9% 71.6% 4.3 p.p.


Net Revenue 592.2 399.6 48.2% 2,192.5 1,507.2 45.5%


Net Profit 41.8 42.5 -1.6% 214.2 160.8 33.2%

EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%


Net Debt 707.8 111.6 534.2% 707.8 111.6 534.2%




Net Revenue 592.2 399.6 48.2% 2,192.5 1,507.2 45.5%


Net Profit 41.8 42.5 -1.6% 214.2 160.8 33.2%

EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%


Net Debt 707.8 111.6 534.2% 707.8 111.6 534.2%




Net Revenue 592.2 399.6 48.2% 2,192.5 1,507.2 45.5%


Net Profit 41.8 42.5 -1.6% 214.2 160.8 33.2%

EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%


Net Debt 707.8 111.6 534.2% 707.8 111.6 534.2%




Net Revenue 592.2 399.6 48.2% 2,192.5 1,507.2 45.5%


Net Profit 41.8 42.5 -1.6% 214.2 160.8 33.2%

EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%


Net Debt 707.8 111.6 534.2% 707.8 111.6 534.2%



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M. DIAS BRANCO S/A presents to the market its results for 2008, constantly pursuing to improve its transparency practices and allowing shareholders and society to have a correct interpretation of its business. Firstly, it’s important to explain the modifications on the numbers’ presentation in this document, introduced by the law 11.638 and by the Accounting Announcements Committee – known as CPC – approved by the Brazilian SEC (CVM) in order to standardize Brazilian accounting practices to International Financial Reporting Standards (IFRS). Although it has been several changes in accounting practices, detailed in our notes of financial statement, the main adjustment is the inclusion of tax benefits of ICMS and income tax incentives in the Income Statement, reducing, respectively, the costs of goods sold and the income and social contribution taxes. On the operating costs and net income comments that we will make on this document, these changes can be seen clearly. Despite the complex sector scenario, with our main raw materials (wheat and vegetable oil) reaching their highest historical prices during the year, and the macroeconomic scenario completely deteriorated over the past four months, with the devaluation of Real and instantaneous economic retraction, the company is presenting good numbers with a positive evolution, showing its solidity, management efficiency and the consistency of its results. In 2008, on the other hand, with our strategy of sector consolidation, we acquired Industria de Alimentos Bomgosto Ltda (Vitarella). It permitted M. DIAS BRANCO S.A not only add at the time 5.5% of cookies and crackers market share and 2.9% in pasta market share , but also to extend the benefits of its verticalization process (productions of its main inputs) and consolidate the absolute leadership in all states of Northeast of Brazil. During the 4Q08 the maintenance of wheat and vegetable oils inventories with prices over market quotations, thanks to the supply risk on the beginning of the semester caused by, among other reasons, the political instability in Argentina, still reflected on the company. The effects of raw material storage totally ended until the end of the year. In 2009 the company has already returned to favorable position compared to the market, with lower costs of wheat and vegetable oil. Despite this factor, the company keeps reducing its operating expenses, which influenced significantly on the reduction of general and administrative expenses and will probably have more effective results on selling expenses during 2009. The company had non-recurring expenses of around R$10.0 million in the 4Q08, due to the labor compensation related to the distribution model restructuring in some states. In spite of all challenges we have commented, M. Dias Branco S.A ended 2008 with 33.2% growth on its net income, coming from R$160.8 million in 2007 to R$214.2 million in 2008. EBITDA followed its upward trend growing more than 40.0% in the annual comparison, reaching R$376.2 million at the end of 2008.

MANAGEMENT COMMENTS

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Sales volume keeps growing consistently in all segments, enlarging our leadership and market share (volume) in national market both in pasta (coming from 18.6% in 2007 to 21.9% in 2008) and cookies and crackers (13.7% in 2007 and 19.8% in 2008). The strong growth in sales volume influenced our 45.5% increase in Net Revenue, from R$1,507.2 million in 2007 to R$2,192.5 million in 2008. It is worth noting that the devaluation of Real against Dollar did not impact significantly the company’s figures thanks to the constitution of a hedge contract of 100% of our currency exposure during the second semester of 2008. Moreover, in order to readapt some of our factories, the results still do not include all synergies of Vitarella acquisition, which will contribute significantly to our performance in 2009. In addition, the Company is well positioned in its wheat inventories to the first half of 2009, which results in real expectation of historical margins recovery for this year, even in a period of lower economic growth, which, so far, did not decrease our products demand. FINANCIAL AND OPERATING RESULTS - PRO FORMA In order to allow a comparison of the numbers without Vitarella’s acquisition effect, the Company shows a charter below with operational and financial data consolidating the results of the acquired company to the Company’s figures for 2007 and the first quarter of 2008, which we refer to as pro-forma figures.

Financial and Operating Results - pro forma(R$ Million)

4Q08 4Q07 Variation 2008 2007 Variation

Net Revenue 592.2 486.5 21.7% 2,280.1 1,830.4 24.6%

Sales Volume (thousand of tons) 286.4 255.9 11.9% 1,119.5 1,046.4 7.0%

Net Profit 41.8 48.5 -13.8% 227.1 206.4 10.0%

EBITDA 88.8 79.9 11.1% 381.8 326.1 17.1%


Net Debt 707.8 111.6 534.2% 707.8 111.6 534.2%





Net Revenue 592.2 486.5 21.7% 2,280.1 1,830.4 24.6%


Net Profit 41.8 48.5 -13.8% 227.1 206.4 10.0%

EBITDA 88.8 79.9 11.1% 381.8 326.1 17.1%


Net Debt 707.8 111.6 534.2% 707.8 111.6 534.2%





Net Revenue 592.2 486.5 21.7% 2,280.1 1,830.4 24.6%


Net Profit 41.8 48.5 -13.8% 227.1 206.4 10.0%

EBITDA 88.8 79.9 11.1% 381.8 326.1 17.1%


Net Debt 707.8 111.6 534.2% 707.8 111.6 534.2%





Net Revenue 592.2 486.5 21.7% 2,280.1 1,830.4 24.6%


Net Profit 41.8 48.5 -13.8% 227.1 206.4 10.0%

EBITDA 88.8 79.9 11.1% 381.8 326.1 17.1%


Net Debt 707.8 111.6 534.2% 707.8 111.6 534.2%



Segment Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice

Cookies and Crackers 403.1 84.5 4.77 316.8 70.7 4.48 27.2% 19.5% 6.5%

Pasta 190.1 63.6 2.99 151.3 59.2 2.56 25.6% 7.4% 16.8%

Wheat Flour anda Bran 140.9 128.1 1.10 128.9 114.0 1.13 9.3% 12.4% -2.7%

Margarine and Vegetable Shortening35.9 10.2 3.52 29.1 10.4 2.80 23.4% -1.9% 25.7%

Other - - - 0.1 1.7 0.06 - - - TOTAL 770.0 286.4 2.69 626.2 256.0 2.45 23.0% 11.9% 9.8%

*Gross Revenue in R$ million, Weight in thousand tonnes and Average Price in R$/Kg (Pro forma data)

4Q08 4Q07 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 190.1 63.6 2.99 151.3 59.2 2.56 25.6% 7.4% 16.8%



Other - - - 0.1 1.7 0.06 - - - TOTAL 770.0 286.4 2.69 626.2 256.0 2.45 23.0% 11.9% 9.8%


4Q08 4Q07 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 190.1 63.6 2.99 151.3 59.2 2.56 25.6% 7.4% 16.8%



Other - - - 0.1 1.7 0.06 - - - TOTAL 770.0 286.4 2.69 626.2 256.0 2.45 23.0% 11.9% 9.8%


4Q08 4Q07 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 190.1 63.6 2.99 151.3 59.2 2.56 25.6% 7.4% 16.8%



Other - - - 0.1 1.7 0.06 - - - TOTAL 770.0 286.4 2.69 626.2 256.0 2.45 23.0% 11.9% 9.8%


4Q08 4Q07 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 190.1 63.6 2.99 151.3 59.2 2.56 25.6% 7.4% 16.8%



Other - - - 0.1 1.7 0.06 - - - TOTAL 770.0 286.4 2.69 626.2 256.0 2.45 23.0% 11.9% 9.8%


4Q08 4Q07 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 190.1 63.6 2.99 151.3 59.2 2.56 25.6% 7.4% 16.8%



Other - - - 0.1 1.7 0.06 - - - TOTAL 770.0 286.4 2.69 626.2 256.0 2.45 23.0% 11.9% 9.8%


4Q08 4Q07 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 190.1 63.6 2.99 151.3 59.2 2.56 25.6% 7.4% 16.8%



Other - - - 0.1 1.7 0.06 - - - TOTAL 770.0 286.4 2.69 626.2 256.0 2.45 23.0% 11.9% 9.8%


4Q08 4Q07 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice

Cookies and Crackers 1,500.8 325.4 4.61 1,254.3 293.1 4.28 19.7% 11.0% 7.7%

Pasta 683.5 242.2 2.82 546.1 230.5 2.37 25.2% 5.1% 19.0%

Wheat Flour anda Bran 598.5 505.5 1.18 467.6 479.2 0.98 28.0% 5.5% 20.4%

Margarine and Vegetable Shortening142.5 41.8 3.41 98.6 36.6 2.69 44.5% 14.2% 26.8%

Other 16.1 4.6 3.50 1.0 7.0 0.14 - - - TOTAL 2,941.4 1,119.5 2.63 2,367.6 1,046.4 2.26 24.2% 7.0% 16.4%


2008 2007 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 683.5 242.2 2.82 546.1 230.5 2.37 25.2% 5.1% 19.0%



Other 16.1 4.6 3.50 1.0 7.0 0.14 - - - TOTAL 2,941.4 1,119.5 2.63 2,367.6 1,046.4 2.26 24.2% 7.0% 16.4%


2008 2007 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 683.5 242.2 2.82 546.1 230.5 2.37 25.2% 5.1% 19.0%



Other 16.1 4.6 3.50 1.0 7.0 0.14 - - - TOTAL 2,941.4 1,119.5 2.63 2,367.6 1,046.4 2.26 24.2% 7.0% 16.4%


2008 2007 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 683.5 242.2 2.82 546.1 230.5 2.37 25.2% 5.1% 19.0%



Other 16.1 4.6 3.50 1.0 7.0 0.14 - - - TOTAL 2,941.4 1,119.5 2.63 2,367.6 1,046.4 2.26 24.2% 7.0% 16.4%


2008 2007 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 683.5 242.2 2.82 546.1 230.5 2.37 25.2% 5.1% 19.0%



Other 16.1 4.6 3.50 1.0 7.0 0.14 - - - TOTAL 2,941.4 1,119.5 2.63 2,367.6 1,046.4 2.26 24.2% 7.0% 16.4%


2008 2007 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 683.5 242.2 2.82 546.1 230.5 2.37 25.2% 5.1% 19.0%



Other 16.1 4.6 3.50 1.0 7.0 0.14 - - - TOTAL 2,941.4 1,119.5 2.63 2,367.6 1,046.4 2.26 24.2% 7.0% 16.4%


2008 2007 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 683.5 242.2 2.82 546.1 230.5 2.37 25.2% 5.1% 19.0%



Other 16.1 4.6 3.50 1.0 7.0 0.14 - - - TOTAL 2,941.4 1,119.5 2.63 2,367.6 1,046.4 2.26 24.2% 7.0% 16.4%


2008 2007 Variation

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This comparison intends to show that the company’s growth is not only from the sum of acquired company’s numbers. Also, it is worth noting that the pro-forma figures herein are presented for illustrative purposes only and are not intended to represent the Company’s operating results if the acquisition of Vitarella had occurred on January 1, 2007 and also are not necessarily an indication of our future operating results as synergy gains are not being taken into account. At the end of this report two income statements are available, one of which is historical and the other pro forma, in order to allow the market and the public in general to evaluate the effects of the acquisition on the Company’s historical figures and its performance in the relevant periods jointly with its new subsidiary, Vitarella. Brazilian economy had been growing consistently until the third quarter of 2008. In mid-September, there was a radical change with the worsening of international financial crisis. Brazilian GDP grew 5.1% in 2008, less than the 6.3% growth on the last twelve months ended on September 30, 2008. Despite the scenario for 2009 is less favorable in terms of GDP growth, we believe the potential economic slowdown will probably not be transferred in the same sense or to the same extent to the Company’s results, since we operate in the food segment, with essential products and low credits need to their acquisition, low purchase prices and our sales are concentrated in the domestic market. It is also important to highlight that the recovery of our raw materials inventories with lower costs, thanks to the decrease in commodities prices, will benefit us, in terms of margins, of volume and revenue increase over the last quarters.

COMMODITIES MARKET The Company’s activities are strongly concentrated in the production and sale of cookies, crackers and pasta whose production depends on two main inputs, which play a major role in our variable costs: (i) wheat (which represented 43.5% of COGS and 27.2% of net revenue in 2008); and (ii) vegetable oils (which represented 8.0% of COGS and 5.0% of net revenue in 2008). In addition, it is important to mention that wheat flour and shortening purchased from other suppliers in order to provide cookies, crakers and pasta production in Vitarella and Isabela factories represented 9.3% and 5.2% of COGS, respectively, in 2008. Management watches wheat and vegetable oils markets closely as they substantially affect results and we include below some pertinent information and comments. Regarding vegetable oils, we will highlight soybean and palm oil, which are the most relevant ones, although we also use cotton oil and palm kernel oil. WHEAT The year 2008 was unusual for the wheat market. Until the beginning of the second semester, there was a period characterized by high prices, explained by increasing demand and the role of speculative investor in grains future market. However, with the worsening of international financial crisis, wheat prices had a strong retraction.

MACROECONOMIC SCENARIO

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Global financial crisis, which got worse on the second semester of the year, encouraged Institutional investors to draw money from the future market and there was a worldwide U.S Dollar appreciation, reducing the wheat price. The average price on December, 2008 was US$ 174 / tonne, around 60% lower than the average price in March of the same year. However, wheat prices have not registered such devaluation in our currency, due to the appreciation of Dollar against Real. Brazilian mills built up inventories in the first half of the year, due to the risk of shortage in the second semester, especially caused by economic policy decisions of Argentine Government (blocking of exports). At the time, Brazilian government released the Common Foreign Tariff, which allowed the acquisition of wheat from countries outside Mercosur in more favorable conditions. However, blocking exports did not take place and, with the wheat price reduction, these mills presented higher average prices than the market in the second semester. The company already consumed the grains acquired in the first half of 2008. We expect wheat prices in 2009 to be lower than in 2008 due to the recovery of global inventories and the decline in oil and biofuel prices. In January, 2009, the company replaced its grain inventories for the first half of the year with lower prices than wheat market quotations.

* Source: www.safras.com.br

VEGETABLE OILS

At the beginning of 2008, vegetable oils market had a strong demand thanks to increase on its global consumption for food and biofuel production. In the first semester of this year, the upward trend of crude oil prices and the political crisis in Argentina, the third largest producer of soybean oil in the world, worsened the situation and led prices to historic high levels.

In the second semester, vegetable oils prices had similar behavior to other commodities, reducing its prices significantly after the worsening of international financial crisis, U.S Dollar appreciation and rising inventories of palm oil in Asia, indicating that vegetable oil demand began to decline.

191 189 193

214 225

244 257

294

338 351

288

302

332

390

429

406 399 397

356

314 310

280

196

174 183 178 177 178 193

214 225

236 226 237

252 267

293 304

333 346

407

366

353

350 336

301

271

222

150

175

200

225

250

275

300

325

350

375

400

425

450

Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08

US$

Month

WHEATAcquisition Average Price M. Dias Branco X Market P rice

US$ / TON2007 and 2008

Market* MDias

Dec/08

191 189 193

214 225

244 257

294

338 351

288

302

332

390

429

406 399 397

356

314 310

280

196

174 183 178 177 178 193

214 225

236 226 237

252 267

293 304

333 346

407

366

353

350 336

301

271

222

150

175

200

225

250

275

300

325

350

375

400

425

450


US$

Month


US$ / TON2007 and 2008

Market* MDias

Dec/08

191 189 193

214 225

244 257

294

338 351

288

302

332

390

429

406 399 397

356

314 310

280

196

174 183 178 177 178 193

214 225

236 226 237

252 267

293 304

333 346

407

366

353

350 336

301

271

222

150

175

200

225

250

275

300

325

350

375

400

425

450


US$

Month


US$ / TON2007 and 2008

Market* MDias

Dec/08

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On this scenario, at the time with no prospect of change, vegetable oil consumers built up their inventories in the first semester to protect themselves from prices even higher than registered. As a result, the Company, similarly to other players, maintained inventories with average prices higher than the average prices for the period.

In recent years, vegetable oils prices were correlated to crude oil quotation. However, in the last two months of 2008, crude oil prices decreased, while vegetable oil remained relatively stable, supported by the drop in U.S. soybean crop and uncertainty about the production in South America.

We expect vegetable oil prices in 2009 to be lower than last year, despite the dollar appreciation has limited the impact of price reduction. In the following months, the market will pay close attention to biofuel demand, oil prices and the situation of production and consumption of vegetable oils.

Source: www.safras.com.br *Source: Braincorp

Our operating structure is formed by M. Dias Branco S/A, with headquarters in Ceará, and our subsidiary, Adria, based in São Caetano do Sul, São Paulo State, which acquired Indústria de Alimentos Bomgosto Ltda. (Vitarella), headquartered in Jaboatão dos Guararapes, Pernambuco state, which, together, have 16 commercial units and 11 industrial units, whose production, commercialization and logistics distribution actions are coordinated in a centralized and integrated fashion. The industrial units are located in the States of Ceará (3 units), Rio Grande do Norte (1 unit), Bahia (1 unit), Paraíba (1 unit), Pernambuco (1 unit), São Paulo (3 units) and Rio Grande do Sul (1 unit). The Company’s production process is verticalized; it manufactures its two main inputs (flour and vegetable shortening) for the production of pasta, cookies and crackers. In the fourth quarter of 2008, 67.1% of all wheat flour and 48.2% of all vegetable shortening used were produced internally. It is important to mention that this percentage dropped significantly due to the purchase of flour and vegetable shortening from suppliers in order to use them in Vitarella’s production process. The use of our own flour and vegetable shortening has been growing consistently as synergies with the acquired company have been implemented. Regarding product distribution, 47.6% of total gross sales were made via direct channels. Direct distribution is concentrated in large consumer centers; in other localities, distribution is outsourced.

OPERATING HIGHLIGHTS

1,720 1,683

1,630 1,640 1,693 1,720

1,790 1,883

1,822

2,200

2,370 2,435

2,550

2,850 2,950 2,933

2,794 2,784 2,720

2,348 2,370 2,311

2,170 2,095

1,423 1,501 1,567

1,609 1,612 1,621 1,704 1,704

1,818

1,897

1,897 1,883 1,883 1,883 1,883

2,508

2,739 2,734

2,659 2,560 2,560

2,406

2,149 2,050

1,240

1,640

2,040

2,440

2,840


R$

MONTH

SOYBEAN OILAcquisition Average Price M. Dias Branco X Market P rice

R$ / TON2007 and 2008

Market* MDias

Dec-08

1,720 1,683

1,630 1,640 1,693 1,720

1,790 1,883

1,822

2,200

2,370 2,435

2,550

2,850 2,950 2,933

2,794 2,784 2,720

2,348 2,370 2,311

2,170 2,095

1,423 1,501 1,567

1,609 1,612 1,621 1,704 1,704

1,818

1,897

1,897 1,883 1,883 1,883 1,883

2,508

2,739 2,734

2,659 2,560 2,560

2,406

2,149 2,050

1,240

1,640

2,040

2,440

2,840


R$

MONTH


R$ / TON2007 and 2008

Market* MDias

Dec-08

1,720 1,683

1,630 1,640 1,693 1,720

1,790 1,883

1,822

2,200

2,370 2,435

2,550

2,850 2,950 2,933

2,794 2,784 2,720

2,348 2,370 2,311

2,170 2,095

1,423 1,501 1,567

1,609 1,612 1,621 1,704 1,704

1,818

1,897

1,897 1,883 1,883 1,883 1,883

2,508

2,739 2,734

2,659 2,560 2,560

2,406

2,149 2,050

1,240

1,640

2,040

2,440

2,840


R$

MONTH


R$ / TON2007 and 2008

Market* MDias

Dec-08

1,720 1,683

1,630 1,640 1,693 1,720

1,790 1,883

1,822

2,200

2,370 2,435

2,550

2,850 2,950 2,933

2,794 2,784 2,720

2,348 2,370 2,311

2,170 2,095

1,423 1,501 1,567

1,609 1,612 1,621 1,704 1,704

1,818

1,897

1,897 1,883 1,883 1,883 1,883

2,508

2,739 2,734

2,659 2,560 2,560

2,406

2,149 2,050

1,240

1,640

2,040

2,440

2,840


R$

MONTH


R$ / TON2007 and 2008

Market* MDias

Dec-08

1,720 1,683

1,630 1,640 1,693 1,720

1,790 1,883

1,822

2,200

2,370 2,435

2,550

2,850 2,950 2,933

2,794 2,784 2,720

2,348 2,370 2,311

2,170 2,095

1,423 1,501 1,567

1,609 1,612 1,621 1,704 1,704

1,818

1,897

1,897 1,883 1,883 1,883 1,883

2,508

2,739 2,734

2,659 2,560 2,560

2,406

2,149 2,050

1,240

1,640

2,040

2,440

2,840


R$

MONTH


R$ / TON2007 and 2008

Market* MDias

Dec-08

640 640 628 663

780 838

880 871 865

955 1,010

1,010

1,148

1,285

1,355 1,340 1,350

1,260

975

855 810

583 605 633 616 623

689 763 763 763 763 763

894 945

1,136

1,422

1,593

1,258

1,113

1,332 1,347

1,351 1,351 1,350

1,238

1,125

1,039

550

850

1.150

1.450


US$

MONTH

PALMA OILAcquisition Average Price M. Dias Branco X Market P rice

R$ / TON2007 and 2008

Market* MDias

,

Dec-08

640 640 628 663

780 838

880 871 865

955 1,010

1,010

1,148

1,285

1,355 1,340 1,350

1,260

975

855 810

583 605 633 616 623

689 763 763 763 763 763

894 945

1,136

1,422

1,593

1,258

1,113

1,332 1,347

1,351 1,351 1,350

1,238

1,125

1,039

550

850

1.150

1.450


US$

MONTH


R$ / TON2007 and 2008

Market* MDias

,

Dec-08

640 640 628 663

780 838

880 871 865

955 1,010

1,010

1,148

1,285

1,355 1,340 1,350

1,260

975

855 810

583 605 633 616 623

689 763 763 763 763 763

894 945

1,136

1,422

1,593

1,258

1,113

1,332 1,347

1,351 1,351 1,350

1,238

1,125

1,039

550

850

1.150

1.450


US$

MONTH


R$ / TON2007 and 2008

Market* MDias

,

Dec-08

640 640 628 663

780 838

880 871 865

955 1,010

1,010

1,148

1,285

1,355 1,340 1,350

1,260

975

855 810

583 605 633 616 623

689 763 763 763 763 763

894 945

1,136

1,422

1,593

1,258

1,113

1,332 1,347

1,351 1,351 1,350

1,238

1,125

1,039

550

850

1.150

1.450


US$

MONTH


R$ / TON2007 and 2008

Market* MDias

,

Dec-08

640 640 628 663

780 838

880 871 865

955 1,010

1,010

1,148

1,285

1,355 1,340 1,350

1,260

975

855 810

583 605 633 616 623

689 763 763 763 763 763

894 945

1,136

1,422

1,593

1,258

1,113

1,332 1,347

1,351 1,351 1,350

1,238

1,125

1,039

550

850

1.150

1.450


US$

MONTH


R$ / TON2007 and 2008

Market* MDias

,

Dec-08

of 25

As shown in the following chart, wholesale/distributors have bigger participation on Company’s sales and the sales to our major client represent only 2.9% of gross revenue in 2008, which shows our fragmented client base and low dependence of main chains. According to Nielsen, the Company’s volume market share rose from 13.7% in 2007 to 19.8% in 2008 in the cookies and crackers market and from 18.6% in 2007 to 21.9% in 2008 in the pasta market.

COOKIES AND CRACKERS – Market Share – 2007 and 2008 *

* Note: Accumulated period – AC Nielsen. Others represented 58.5% and 51.9% (in volume) and 50.6% and 46.2% (in revenue) in 2007 and 2008, respectively.

13.7%

7.6% 7.4%6.6% 6.2%

19.8%

7.9%6.9% 7.0% 6.5%

COOKIES AND CRACKERS - MARKET SHARE BY VOLUME 2007 x 2008

20072007200720072007 20082008200820082008

13.7%

7.6% 7.4%6.6% 6.2%

19.8%

7.9%6.9% 7.0% 6.5%


20072007200720072007 20082008200820082008

13.7%

7.6% 7.4%6.6% 6.2%

19.8%

7.9%6.9% 7.0% 6.5%


20072007200720072007 20082008200820082008

13.7%

7.6% 7.4%6.6% 6.2%

19.8%

7.9%6.9% 7.0% 6.5%


20072007200720072007 20082008200820082008

13.7%

7.6% 7.4%6.6% 6.2%

19.8%

7.9%6.9% 7.0% 6.5%


20072007200720072007 20082008200820082008

13.7%

7.6% 7.4%6.6% 6.2%

19.8%

7.9%6.9% 7.0% 6.5%


20072007200720072007 20082008200820082008

13.7%

7.6% 7.4%6.6% 6.2%

19.8%

7.9%6.9% 7.0% 6.5%


20072007200720072007 20082008200820082008

12.2% 11.2%

7.7%

10.3%

8.0%

16.6%

11.7%

7.1%

10.7%

7.7%

COOKIES AND CRACKERS - MARKET SHARE BY SALES 2007 x 2008

20072007200720072007 20082008200820082008

12.2% 11.2%

7.7%

10.3%

8.0%

16.6%

11.7%

7.1%

10.7%

7.7%

COOKIES AND CRACKERS - MARKET SHARE BY SALES 2007 x 2008

20072007200720072007 20082008200820082008

Sales Mix 4Q08 4Q07 Variation 2008 2007 VariationRetail 44.4% 43.4% 1.0 p.p 42.7% 43.5% -0.8 p.p

Wholesale/ Distributers 37.2% 39.1% -1.9 p.p 37.7% 38.4% -0.7 p.p

Main Chains 14.1% 8.2% 5.9 p.p 12.2% 8.8% 3.4 p.p

Industry 3.6% 4.3% -0.7 p.p 4.1% 4.0% 0.1 p.p

Other 0.7% 5.0% -4.3 p.p 3.3% 5.3% -2.0 p.p

TOTAL 100.0% 100.0% - 100.0% 100.0% -

Sales Mix 4Q08 4Q07 Variation 2008 2007 VariationRetail 44.4% 43.4% 1.0 p.p 42.7% 43.5% -0.8 p.p

Wholesale/ Distributers 37.2% 39.1% -1.9 p.p 37.7% 38.4% -0.7 p.p

Main Chains 14.1% 8.2% 5.9 p.p 12.2% 8.8% 3.4 p.p

Industry 3.6% 4.3% -0.7 p.p 4.1% 4.0% 0.1 p.p

Other 0.7% 5.0% -4.3 p.p 3.3% 5.3% -2.0 p.p

TOTAL 100.0% 100.0% - 100.0% 100.0% -

Sequence Accumulated Individual Accumulated Individual A ccumulated

Major Client 1 27.1 3.5% 3.5% 82.4 2.9% 2.9%

49 Subsequent 50 211.2 27.4% 30.9% 779.2 27.5% 30.4%

50 Subsequent 100 65.8 8.5% 39.4% 242.7 8.6% 38.9%

900 Subsequent 1,000 197.3 25.6% 65.0% 699.9 24.7% 63.6%

Other Clients All clients 268.6 35.0% 100.0% 1,031.4 36.4% 100.0%

TOTAL 770.0 2,835.6

Major Clients Sales - 4Q08(R$ million)

Sales Relative Participation Sales - 2008(R$ million)

Sales Relative Participation


Major Client 1 27.1 3.5% 3.5% 82.4 2.9% 2.9%

49 Subsequent 50 211.2 27.4% 30.9% 779.2 27.5% 30.4%

50 Subsequent 100 65.8 8.5% 39.4% 242.7 8.6% 38.9%

900 Subsequent 1,000 197.3 25.6% 65.0% 699.9 24.7% 63.6%


TOTAL 770.0 2,835.6





Major Client 1 27.1 3.5% 3.5% 82.4 2.9% 2.9%

49 Subsequent 50 211.2 27.4% 30.9% 779.2 27.5% 30.4%

50 Subsequent 100 65.8 8.5% 39.4% 242.7 8.6% 38.9%

900 Subsequent 1,000 197.3 25.6% 65.0% 699.9 24.7% 63.6%


TOTAL 770.0 2,835.6





Major Client 1 27.1 3.5% 3.5% 82.4 2.9% 2.9%

49 Subsequent 50 211.2 27.4% 30.9% 779.2 27.5% 30.4%

50 Subsequent 100 65.8 8.5% 39.4% 242.7 8.6% 38.9%

900 Subsequent 1,000 197.3 25.6% 65.0% 699.9 24.7% 63.6%


TOTAL 770.0 2,835.6





Major Client 1 27.1 3.5% 3.5% 82.4 2.9% 2.9%

49 Subsequent 50 211.2 27.4% 30.9% 779.2 27.5% 30.4%

50 Subsequent 100 65.8 8.5% 39.4% 242.7 8.6% 38.9%

900 Subsequent 1,000 197.3 25.6% 65.0% 699.9 24.7% 63.6%


TOTAL 770.0 2,835.6





Major Client 1 27.1 3.5% 3.5% 82.4 2.9% 2.9%

49 Subsequent 50 211.2 27.4% 30.9% 779.2 27.5% 30.4%

50 Subsequent 100 65.8 8.5% 39.4% 242.7 8.6% 38.9%

900 Subsequent 1,000 197.3 25.6% 65.0% 699.9 24.7% 63.6%


TOTAL 770.0 2,835.6





Major Client 1 27.1 3.5% 3.5% 82.4 2.9% 2.9%

49 Subsequent 50 211.2 27.4% 30.9% 779.2 27.5% 30.4%

50 Subsequent 100 65.8 8.5% 39.4% 242.7 8.6% 38.9%

900 Subsequent 1,000 197.3 25.6% 65.0% 699.9 24.7% 63.6%


TOTAL 770.0 2,835.6





Major Client 1 27.1 3.5% 3.5% 82.4 2.9% 2.9%

49 Subsequent 50 211.2 27.4% 30.9% 779.2 27.5% 30.4%

50 Subsequent 100 65.8 8.5% 39.4% 242.7 8.6% 38.9%

900 Subsequent 1,000 197.3 25.6% 65.0% 699.9 24.7% 63.6%


TOTAL 770.0 2,835.6





Major Client 1 27.1 3.5% 3.5% 82.4 2.9% 2.9%

49 Subsequent 50 211.2 27.4% 30.9% 779.2 27.5% 30.4%

50 Subsequent 100 65.8 8.5% 39.4% 242.7 8.6% 38.9%

900 Subsequent 1,000 197.3 25.6% 65.0% 699.9 24.7% 63.6%


TOTAL 770.0 2,835.6




of 25

PASTA – Market Share – 2007 and 2008*

* Note: Accumulated period. – AC Nielsen. Others represented 46.8% and 43.2% (in volume) and 46.3% and 42.8% (in revenue) in 2007 and 2008, respectively.

Note that the methodology used by AC Nielsen did not involve information related to certain states, such as the countryside of Maranhão and Piauí (Northeast region), Mato Grosso State (Midwest region) and all the states from the North region, even though the Company sells its products in all of these locations. Thus whenever we use the term “Brazil” or the “Brazilian market” in this report, we are referring only to the group of states covered by the study, due to the lack of reliable data covering the whole country. In 2008, the Company’s installed capacity utilization came to 75.9%, 4.3 p.p. up on 2007 (71.6%), chiefly due to increase in production caused by the growth in sales volume and the acquisition of Vitarella. Consolidated gross revenue totaled R$770.0 million in the 4Q08, an increase of 48.0% over the R$520.2 million recorded in the same period of the previous year due to the increase of 27.6% in sales volume, especially in the pasta, cookies and crackers segments, and also the upturn of 15.9% in products average prices.

RESULTS

18.6%

11.7%10.5%

6.3% 6.1%

21.9%

12.7%

10.0%

6.1% 6.1%

PASTA - MARKET SHARE BY VOLUME 2007 x 2008

20072007200720072007 20082008200820082008

18.6%

11.7%10.5%

6.3% 6.1%

21.9%

12.7%

10.0%

6.1% 6.1%


20072007200720072007 20082008200820082008

18.6%

11.7%10.5%

6.3% 6.1%

21.9%

12.7%

10.0%

6.1% 6.1%


20072007200720072007 20082008200820082008

18.9%

11.0%12.1%

6.8%4.9%

21.8%

12.1%11.5%

6.7%5.1%

PASTA - MARKET SHARE BY SALES 2007 x 2008

20072007200720072007 20082008200820082008

18.9%

11.0%12.1%

6.8%4.9%

21.8%

12.1%11.5%

6.7%5.1%


20072007200720072007 20082008200820082008

18.9%

11.0%12.1%

6.8%4.9%

21.8%

12.1%11.5%

6.7%5.1%


20072007200720072007 20082008200820082008

18.9%

11.0%12.1%

6.8%4.9%

21.8%

12.1%11.5%

6.7%5.1%


20072007200720072007 20082008200820082008

4Q08 4Q07 4Q08 4Q07 4Q08 4Q07 4Q08 4Q07 4Q08 4Q07

Total Production 86.2 48.1 62.1 47.3 205.4 187.7 16.8 15.5 370.5 298.6

Total Production Capacity 112.6 74.2 90.3 79.9 262.7 262.7 19.5 19.5 485.1 436.3

Capacity Usage 76.6% 64.8% 68.8% 59.2% 78.2% 71.5% 86.2% 79.5% 76.4% 68.4%

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Total Production 302.6 205.4 237.2 195.3 830.2 789.6 65.2 58.7 1,435.2 1,249.0

Total Production Capacity 412.4 296.8 350.8 319.6 1,050.8 1,050.3 78,0 78,0 1,892.0 1,744.7

Capacity Usage 73.4% 69.2% 67.6% 61.1% 79.0% 75.2% 83.6% 75.3% 75.9% 71.6%

* Thousand tonnes

Effective Production / Production Capacity *

Cookies and Crackers

PastaWheat Flour and

BranMargarine and

Shortening




BranMargarine and

ShorteningTotal

Total

4Q08 4Q07 4Q08 4Q07 4Q08 4Q07 4Q08 4Q07 4Q08 4Q07

Total Production 86.2 48.1 62.1 47.3 205.4 187.7 16.8 15.5 370.5 298.6

Total Production Capacity 112.6 74.2 90.3 79.9 262.7 262.7 19.5 19.5 485.1 436.3

Capacity Usage 76.6% 64.8% 68.8% 59.2% 78.2% 71.5% 86.2% 79.5% 76.4% 68.4%

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Total Production 302.6 205.4 237.2 195.3 830.2 789.6 65.2 58.7 1,435.2 1,249.0

Total Production Capacity 412.4 296.8 350.8 319.6 1,050.8 1,050.3 78,0 78,0 1,892.0 1,744.7

Capacity Usage 73.4% 69.2% 67.6% 61.1% 79.0% 75.2% 83.6% 75.3% 75.9% 71.6%

* Thousand tonnes




BranMargarine and

Shortening




BranMargarine and

ShorteningTotal

Total

of 25

In 2008, consolidated gross revenue totaled R$2,835.6 million , 43.2% up on the R$1,979.5 million recorded in 2007 due to the increase of 21.4% in average product prices and 18.0% in sales volume.

Note: Other represented 0.1% and 0.4% of Gross revenue in 2007 and 2008, respectively. COOKIES AND CRACKERS Revenue from the Cookies and Crackers segment totaled R$403.1 million in the 4Q08, 74.1% up year-on-year, thanks to the growth in sales volume (+76.4%), from 47,900 tonnes in the 4Q07 to 84,500 tonnes in the 4Q08, chiefly due to the acquisition of Vitarella and sales volume growth of the brands Richester and Fortaleza. It is worth noting the increase in the sales of Cream Cracker by 17,200 tonnes and Filled Cookies by 8,100 tonnes. Average prices in the segment came from R$4.84/kg to R$4.77/kg in 4Q08, a reduction of 1.4%. This variation was influenced, essentially, due to the acquisition of Vitarella, which has a low price product mix, that contributed to the average price decline in the 4Q08, although the company has done its price revision process (+6.5% in 4Q08 compared to 4Q07).

SegmentGross

RevenueWeight

AveragePrice

Gross Revenue

WeightAverage

PriceGross

RevenueWeight

AveragePrice

Cookies and Crackers 403.1 84.5 4.77 231.6 47.9 4.84 74.1% 76.4% -1.4%

Pasta 190.1 63.6 2.99 130.6 50.4 2.59 45.6% 26.2% 15.4%


Margarine and Vegetable Shortening 35.9 10.2 3.52 29.1 10.4 2.80 23.4% -1.9% 25.7%Other - - - - 1.7 - - - - TOTAL 770.0 286.4 2.69 520.2 224.4 2.32 48.0% 27.6% 15.9%

*Gross Revenue in R$ million, Weight in thousand tonnes and Average Price in R$/Kg.

4Q08 4Q07 Variation

SegmentGross

RevenueWeight

AveragePrice

Gross Revenue

WeightAverage

PriceGross

RevenueWeight

AveragePrice


Pasta 190.1 63.6 2.99 130.6 50.4 2.59 45.6% 26.2% 15.4%




4Q08 4Q07 Variation

SegmentGross

RevenueWeight

AveragePrice

Gross Revenue

WeightAverage

PriceGross

RevenueWeight

AveragePrice


Pasta 190.1 63.6 2.99 130.6 50.4 2.59 45.6% 26.2% 15.4%




4Q08 4Q07 Variation

SegmentGross

RevenueWeight

AveragePrice

Gross Revenue

WeightAverage

PriceGross

RevenueWeight

AveragePrice


Pasta 190.1 63.6 2.99 130.6 50.4 2.59 45.6% 26.2% 15.4%




4Q08 4Q07 Variation

SegmentGross

RevenueWeight

AveragePrice

Gross Revenue

WeightAverage

PriceGross

RevenueWeight

AveragePrice


Pasta 190.1 63.6 2.99 130.6 50.4 2.59 45.6% 26.2% 15.4%




4Q08 4Q07 Variation

70.0%

18.7%

7.0%4.3%

Sales by Region (% Gross Revenue) - 2008

Northeast Southeast South Other

70.0%

18.7%

7.0%4.3%



70.0%

18.7%

7.0%4.3%



70.0%

18.7%

7.0%4.3%



70.0%

18.7%

7.0%4.3%



52.3%44.5%

49.9% 47.4%

24.7%

25.1%23.4%

23.9%

18.3%24.8% 21.1% 23.6%

4.7% 5.6% 5.0% 5.0%

4Q08 4Q07 2008 2007

Gross Revenue Breakdown

Margarine and Vegetable Shortening Wheat Flour and Bran

Pasta Cookies and Crackers

52.3%44.5%

49.9% 47.4%

24.7%

25.1%23.4%

23.9%

18.3%24.8% 21.1% 23.6%

4.7% 5.6% 5.0% 5.0%

4Q08 4Q07 2008 2007




52.3%44.5%

49.9% 47.4%

24.7%

25.1%23.4%

23.9%

18.3%24.8% 21.1% 23.6%

4.7% 5.6% 5.0% 5.0%

4Q08 4Q07 2008 2007




52.3%44.5%

49.9% 47.4%

24.7%

25.1%23.4%

23.9%

18.3%24.8% 21.1% 23.6%

4.7% 5.6% 5.0% 5.0%

4Q08 4Q07 2008 2007





Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice

Cookies and Crackers 1,416.2 301.1 4.70 939.0 203.2 4.62 50.8% 48.2% 1.7%

Pasta 662.3 232.6 2.85 473.2 194.0 2.44 40.0% 19.9% 16.8%



Other 16.1 4.6 - 1.0 7.0 - - - - TOTAL 2,835.6 1,085.6 2.61 1,979.5 920.0 2.15 43.2% 18.0% 21.4%


2008 2007 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 662.3 232.6 2.85 473.2 194.0 2.44 40.0% 19.9% 16.8%



Other 16.1 4.6 - 1.0 7.0 - - - - TOTAL 2,835.6 1,085.6 2.61 1,979.5 920.0 2.15 43.2% 18.0% 21.4%


2008 2007 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 662.3 232.6 2.85 473.2 194.0 2.44 40.0% 19.9% 16.8%



Other 16.1 4.6 - 1.0 7.0 - - - - TOTAL 2,835.6 1,085.6 2.61 1,979.5 920.0 2.15 43.2% 18.0% 21.4%


2008 2007 Variation


Weight AveragePrice

Gross Revenue

Weight AveragePrice

Gross Revenue

Weight AveragePrice


Pasta 662.3 232.6 2.85 473.2 194.0 2.44 40.0% 19.9% 16.8%



Other 16.1 4.6 - 1.0 7.0 - - - - TOTAL 2,835.6 1,085.6 2.61 1,979.5 920.0 2.15 43.2% 18.0% 21.4%


2008 2007 Variation

of 25

Revenue from the cookies and crackers segment totaled R$1,416.2 million in 2008, 50.8% up on 2007 due to the increase in sales volume which totaled 301,100 tonnes in 2008, 48.2% up year-on-year thanks to the same quarterly variation reasons. In addition to the products with brand Vitarella, recently added to the company’s portfolio, in the 4Q08 the brands Fortaleza and Richester increased their gross revenue by 29.2% and 23.4%, respectively, compared to 4Q07, and by 14.7% and 11.5%, in 2008 compared to 2007.

PASTA Pasta revenue totaled R$190.1 million in 4Q08, up by 45.6% on the R$130.6 million recorded in the 4Q07, thanks to the increase in sales volume and average price, which came from R$2.59/kg to R$2.99/kg (+15.4% in the 4Q08), due to the price revision process. In the quarterly comparison, the company sold 63,600 tonnes of pasta in 4Q08, 26.2% up on the 50,400 tonnes in the 4Q07. In addition to the acquisition of Vitarella, the growth in sales volume was due to the repositioning of our brands to make them even more competitive, especially the brand “Imperador”, which is mostly sold in the state of Bahia, the launch of pasta for exportation and new flavors of instant pasta. In 2008, revenue from the pasta segment stood at R$662.3 million , 40.0% up on 2007, due to the increase in pasta sales volume and average price (from R$2.44/kg in 2007 to R$2.85/kg in 2008 ). Pasta sales volume increased by 19.9%, from 194,000 tonnes in 2007 to 232,600 tonnes in 2008, especially due to the same reasons as for the quarterly variation. In 2008 we also registered an increase of exports (+2,900 tonnes).

25.3%33.2%

25.2%34.0%

22.4%

30.3%

21.1%

29.7%

24.7% 27.9%

9.0%11.3%

8.2%

11.3%

8.2%11.0%

7.6%11.4%

10.4% 14.2% 10.0% 13.6%

2008 2007 4T08 4T07

Other Own Brands

ADRIA

ISABELA

VITARELLA

FORTALEZA

RICHESTER

Gross Revenue Evolution by Brands - Cookies and Crackers

25.3%33.2%

25.2%34.0%

22.4%

30.3%

21.1%

29.7%

24.7% 27.9%

9.0%11.3%

8.2%

11.3%

8.2%11.0%

7.6%11.4%

10.4% 14.2% 10.0% 13.6%

2008 2007 4T08 4T07

Other Own Brands

ADRIA

ISABELA

VITARELLA

FORTALEZA

RICHESTER


25.3%33.2%

25.2%34.0%

22.4%

30.3%

21.1%

29.7%

24.7% 27.9%

9.0%11.3%

8.2%

11.3%

8.2%11.0%

7.6%11.4%

10.4% 14.2% 10.0% 13.6%

2008 2007 4T08 4T07

Other Own Brands

ADRIA

ISABELA

VITARELLA

FORTALEZA

RICHESTER


25.3%33.2%

25.2%34.0%

22.4%

30.3%

21.1%

29.7%

24.7% 27.9%

9.0%11.3%

8.2%

11.3%

8.2%11.0%

7.6%11.4%

10.4% 14.2% 10.0% 13.6%

2008 2007 4T08 4T07

Other Own Brands

ADRIA

ISABELA

VITARELLA

FORTALEZA

RICHESTER


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In 2008 it is worth noting the increase in gross revenue of the brands Adria (+28.2%), Basilar (+17.7%) and Fortaleza (+18.1%). WHEAT FLOUR AND BRAN Wheat flour and bran revenue totaled R$140.9 million in the 4Q08, up by 9.3% on the R$128.9 million recorded in the 4Q07. This upturn is explained by the increase in sales volume in the quarter. In the 4Q08, wheat flour and bran sales volume increased by 12.4% year-on-year, to 128,100 tonnes , chiefly due to the increase in sales volume of industrial wheat flour. It is important to mention that in 4Q07 the sales volume declined due to price revision process and the company opted not to follow the competitors in the market price competition. The average price of this segment declined from R$1.13/kg in the 4Q07 to R$1.10/kg in the 4Q08 (-2.7%), explained by the reduction of 16.1% in bran average price. In 2008, wheat flour and bran revenue stood at R$598.5 million , up by 28.0% year-on-year due to the 20.4% increase in average price, which came from R$0.98/kg in 2007 to R$1.18/kg in 2008 , and the growth of 5.5% on sales volume, which totaled 505,500 tonnes in 2008 . Gross revenue from Medalha de Ouro grew by R$7.2 million (14.0%) in the 4Q08 and 26.1% in 2008 while gross revenue from Finna rose by R$2.7 million (9.3%) in the 4Q08 and 26.6% in 2008. The graph below shows the participation of our main brands in total revenue. Others brands grew its participation due to the growth in sales of wheat flour for industries in 2008.

24.2% 27.0% 23.0% 25.1%

14.1%15.6%

12.5%16.7%

13.9%17.5%

14.1%

19.0%11.3% 16.0%

10.8% 11.8%11.2%

11.4%

9.3% 11.6%8.5%

9.8%

11.9% 8.9%12.5%

10.3%

4.5% 7.6% 2.2% 7.7%

2008 2007 4T08 4T07

3rd Party Brands

Other Own Brands

ISABELA

RICHESTER

VITARELLA

FORTALEZA

BASILAR

ADRIA

Gross Revenue Evolution by Brands - Pasta

24.2% 27.0% 23.0% 25.1%

14.1%15.6%

12.5%16.7%

13.9%17.5%

14.1%

19.0%11.3% 16.0%

10.8% 11.8%11.2%

11.4%

9.3% 11.6%8.5%

9.8%

11.9% 8.9%12.5%

10.3%

4.5% 7.6% 2.2% 7.7%

2008 2007 4T08 4T07

3rd Party Brands

Other Own Brands

ISABELA

RICHESTER

VITARELLA

FORTALEZA

BASILAR

ADRIA

Gross Revenue Evolution by Brands - Pasta

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MARGARINE AND VEGETABLE SHORTENING Margarine and vegetable shortening quarterly revenue increased by 23.4% from R$29.1 million to R$35.9 million . Average price rose by 25.7%, from R$2.80/kg in the 4Q07 to R$3.52/kg in the 4Q08, due to the pass-through of the increase in vegetable oil prices in 2008, as previously mentioned. Margarine and vegetable shortening sales volume came to 10,200 tonnes , 1.9% lower than in the 4Q07 thanks to the price revision process in the 4Q08 and the company opted not to follow the competitors in the market price competition. Margarine and vegetable shortening revenue reached R$142.5 million in 2008 , 44.5% up on 2007, due to the increase of 26.8% in average price and 14.2% in sales volume, explained by the synergies on our selling structure, the repositioning of our brands and the growth of Food Service segment. Also, we had the fact that in the 2Q08 one of the margarine and vegetable shortening players with a strong market share in the food service segment underwent changes in its ownership control, causing a shortage. As a result, the Company managed to capture new clients in this segment, where the brand Medalha de Ouro is well-accepted. The margarine brands that grew most as a percentage of gross revenue in the 4Q08 compared to the 4Q07 were: Puro Sabor, up by R$ 3.4 million (+31.2%), Medalha de Ouro, up by R$2.6 million (+36.1%), and Adorita, up by R$ 1.1 million (+23.4%). In 2008 their growth was, respectively, 33.7%, 59.6% and 65.3%.

45.5% 47.1% 47.5% 45.6%

24.5% 25.2% 25.8% 25.8%

4.9% 6.1% 3.6% 6.0%5.9%

6.2% 7.1% 6.2%

19.2% 15.4% 16.0% 16.4%

2008 2007 4Q08 4Q07

OTHER BRANDS

ADORITA

MONARCA

FINNA

MEDALHA DE OURO

Gross Revenue Evolution by Brands - Flour

45.5% 47.1% 47.5% 45.6%

24.5% 25.2% 25.8% 25.8%

4.9% 6.1% 3.6% 6.0%5.9%

6.2% 7.1% 6.2%

19.2% 15.4% 16.0% 16.4%

2008 2007 4Q08 4Q07

OTHER BRANDS

ADORITA

MONARCA

FINNA

MEDALHA DE OURO


45.5% 47.1% 47.5% 45.6%

24.5% 25.2% 25.8% 25.8%

4.9% 6.1% 3.6% 6.0%5.9%

6.2% 7.1% 6.2%

19.2% 15.4% 16.0% 16.4%

2008 2007 4Q08 4Q07

OTHER BRANDS

ADORITA

MONARCA

FINNA

MEDALHA DE OURO


45.5% 47.1% 47.5% 45.6%

24.5% 25.2% 25.8% 25.8%

4.9% 6.1% 3.6% 6.0%5.9%

6.2% 7.1% 6.2%

19.2% 15.4% 16.0% 16.4%

2008 2007 4Q08 4Q07

OTHER BRANDS

ADORITA

MONARCA

FINNA

MEDALHA DE OURO


45.5% 47.1% 47.5% 45.6%

24.5% 25.2% 25.8% 25.8%

4.9% 6.1% 3.6% 6.0%5.9%

6.2% 7.1% 6.2%

19.2% 15.4% 16.0% 16.4%

2008 2007 4Q08 4Q07

OTHER BRANDS

ADORITA

MONARCA

FINNA

MEDALHA DE OURO


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NET REVENUE

Due to the increase in prices and sales volume, as mentioned before on results by segment comments, net revenue totaled R$592.2 million in the 4Q08 , 48.2% up on the R$399.6 recorded in the 4Q07. Net revenue rose by 45.5%, from R$1,507.2 million in 2007 to R$2,192.5 million in 2008 . Gross revenue deductions fell by 1.2 p.p ., from 23.9% of gross revenue in 2007 to 22.7% in 2008, resulting mainly from the reduction in the PIS/COFINS tax on the sale of wheat flour granted by the Federal Government as of May 28 until December 31, 2008, via Executive Decree 433. This exemption was extended until 06/30/2009 by the law 11.787/08.

OPERATING COSTS AND EXPENSES Operating costs and expenses totaled R$527.9 million in the 4Q08, 46.8% up on the R$359.5 million recorded in the 4Q07. The main items that led to this result are detailed below. In 2008, operating costs and expenses stood at R$1,915.4 million , versus R$1,333.3 million in 2007. Costs of Goods Sold Note : Sundry operating costs refer especially to sale of vegetable oil in the 3Q08.

41.6% 44.8% 43,5% 42.1%

31.3% 28.4% 29.8% 27.8%

18.3% 15.9% 17.6%18.1%

8.8% 10.9% 9.1% 12.0%

2008 2007 4Q08 4Q07

OTHER BRANDS

ADORITA

MEDALHA DE OURO

PURO SABOR

Gross Revenue Evolution by Brands - Margarine

41.6% 44.8% 43,5% 42.1%

31.3% 28.4% 29.8% 27.8%

18.3% 15.9% 17.6%18.1%

8.8% 10.9% 9.1% 12.0%

2008 2007 4Q08 4Q07

OTHER BRANDS

ADORITA

MEDALHA DE OURO

PURO SABOR

Gross Revenue Evolution by Brands - Margarine

Operating Costs(R$ million) 4Q08

% Net Rev.

4Q07% Net Rev.

2008% Net Rev.

2007% Net Rev.

Raw material 271.5 45.8% 169.9 42.5% 59.8% 3.3 p.p 1,014.8 46.3% 594.3 39.4% 70.8% 6.9 p.p

Wheat 148.0 25.0% 117.5 29.4% 26.0% -4.4 p.p 596.8 27.2% 404.8 26.9% 47.4% 0.3 p.p

Vegetable Oil 28.8 4.9% 20.6 5.2% 39.8% -0.3 p.p 109.2 5.0% 67.7 4.5% 61.3% 0.5 p.p

Sugar 8.5 1.4% 3.8 1.0% 123.7% 0.4 p.p 27.4 1.2% 18.7 1.2% 46.5% 0.0 p.p

Third Party Flour 41.7 7.0% 11.0 2.8% 279.1% 4.2 p.p 127.8 5.8% 33.6 2.2% 280.4% 3.6 p.pThird Party Vegetable Shortening 22.5 3.8% 5.8 1.5% 287.9% 2.3 p.p 71.2 3.2% 21.5 1.4% 231.2% 1.8 p.p

Other 22.0 3.7% 11.2 2.8% 96.4% 0.9 p.p 82.4 3.8% 48.0 3.2% 71.7% 0.6 p.p

Packages 38.8 6.6% 26.6 6.7% 45.9% -0.1 p.p 141.5 6.5% 111.5 7.4% 26.9% -0.9 p.p

Labor 43.1 7.3% 27.1 6.8% 59.0% 0.5 p.p 142.1 6.5% 103.7 6.9% 37.0% -0.4 p.p

Indirect costs 29.0 4.9% 21.9 5.5% 32.4% -0.6 p.p 109.4 5.0% 84.3 5.6% 29.8% -0.6 p.p

Depreciation and amortization 13.5 2.3% 12.3 3.1% 9.8% -0.8 p.p 52.7 2.4% 52.1 3.5% 1.2% -1.1 p.pOther 0.7 0.1% - 0.0% 0.0% 0.1 p.p 11.1 0.5% - 0.0% 0.0% 0.5 p.p

Tax benefits (ICMS) -27.7 -4.7% -17.2 -4.3% 61.0% -0.4 p.p -99.3 -4.5% -61.6 -4.1% 61.2% -0.4 p.p

TOTAL 368.9 62.3% 240.6 60.2% 53.3% 2.1 p.p 1,372.3 62.6% 88 4.3 58.7% 55.2% 3.9 p.p

Variation VariationOperating Costs(R$ million) 4Q08

% Net Rev.

4Q07% Net Rev.

2008% Net Rev.

2007% Net Rev.

Raw material 271.5 45.8% 169.9 42.5% 59.8% 3.3 p.p 1,014.8 46.3% 594.3 39.4% 70.8% 6.9 p.p

Wheat 148.0 25.0% 117.5 29.4% 26.0% -4.4 p.p 596.8 27.2% 404.8 26.9% 47.4% 0.3 p.p

Vegetable Oil 28.8 4.9% 20.6 5.2% 39.8% -0.3 p.p 109.2 5.0% 67.7 4.5% 61.3% 0.5 p.p

Sugar 8.5 1.4% 3.8 1.0% 123.7% 0.4 p.p 27.4 1.2% 18.7 1.2% 46.5% 0.0 p.p

Third Party Flour 41.7 7.0% 11.0 2.8% 279.1% 4.2 p.p 127.8 5.8% 33.6 2.2% 280.4% 3.6 p.pThird Party Vegetable Shortening 22.5 3.8% 5.8 1.5% 287.9% 2.3 p.p 71.2 3.2% 21.5 1.4% 231.2% 1.8 p.p

Other 22.0 3.7% 11.2 2.8% 96.4% 0.9 p.p 82.4 3.8% 48.0 3.2% 71.7% 0.6 p.p

Packages 38.8 6.6% 26.6 6.7% 45.9% -0.1 p.p 141.5 6.5% 111.5 7.4% 26.9% -0.9 p.p

Labor 43.1 7.3% 27.1 6.8% 59.0% 0.5 p.p 142.1 6.5% 103.7 6.9% 37.0% -0.4 p.p

Indirect costs 29.0 4.9% 21.9 5.5% 32.4% -0.6 p.p 109.4 5.0% 84.3 5.6% 29.8% -0.6 p.p

Depreciation and amortization 13.5 2.3% 12.3 3.1% 9.8% -0.8 p.p 52.7 2.4% 52.1 3.5% 1.2% -1.1 p.pOther 0.7 0.1% - 0.0% 0.0% 0.1 p.p 11.1 0.5% - 0.0% 0.0% 0.5 p.p

Tax benefits (ICMS) -27.7 -4.7% -17.2 -4.3% 61.0% -0.4 p.p -99.3 -4.5% -61.6 -4.1% 61.2% -0.4 p.p

TOTAL 368.9 62.3% 240.6 60.2% 53.3% 2.1 p.p 1,372.3 62.6% 88 4.3 58.7% 55.2% 3.9 p.p

Variation Variation

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The variation of 53.3% in operating costs (62.3% of net revenue in the 4Q08 and 60.2% of net revenue in the 4Q07) resulted, especially, from the increase of 27.6% in sales volume in addition to other reasons as following:

The acquisition of Vitarella, which increased in absolute value all cost of goods sold items and also influenced to increase their representativeness thanks to the low price products mix of the acquired company, besides the fact that the synergies were not totally implemented;

The growth in cost of vegetable oils and shortening from other suppliers, as mentioned in Commodities comments;

The increase in cost of sugar, due to a downward trend in world production in 2008/09, thanks to climatic events impact in Brazilian sugar cane harvest and the decrease in India production;

The increase in labor costs as a result of a collective bargaining;

The growth in tax benefits (ICMS) due to the increase in volume and costs of wheat purchase, since the state tax benefits are calculated in accordance to the cost of this raw material;

The items of COGS reduced relatively to net revenue, except for raw materials, which are not under control of the company, and also labor costs.

In 2008, operating costs increased by 55.2% year-on-year (from R$884.3 million to R$1,372.3 million ), chiefly due to the same reasons mentioned for the fourth quarter.

It is worth noting that the presentation of operating costs changed according to the law 11,638 and accounting pronouncement from the Accounting Announcements Committee, approved by the Brazilian SEC (CVM) in order to standardize Brazilian accounting practices to International Financial Reporting Standards (IFRS). In order to facilitate quarterly comparison of the costs of goods sold in 2008, we present the following chart where it can be seen the ICMS tax incentive reducing operating costs, as determined by the new accounting standard:


% Net Rev.

2Q08% Net Rev.

3Q08% Net Rev.

4Q08% Net Rev.

Raw material 198.1 47.3% 252.6 44.5% 292.6 47.7% 271.5 45.8%

Wheat 144.0 34.4% 139.4 24.5% 165.4 27.0% 148.0 25.0%

Vegetable Oil 22.6 5.4% 26.2 4.6% 31.6 5.2% 28.8 4.9%

Sugar 3.8 0.9% 6.9 1.2% 8.2 1.3% 8.5 1.4%

Third Party Flour 8.5 2.0% 37.4 6.6% 40.2 6.6% 41.7 7.0%

Third Party Vegetable Shortening 6.1 1.5% 19.0 3.3% 23.6 3.8% 22.5 3.8%

Other 13.1 3.1% 23.7 4.2% 23.6 3.8% 22.0 3.7%

Packages 26.9 6.4% 35.1 6.2% 40.7 6.6% 38.8 6.6%

Labor 25.0 6.0% 35.5 6.2% 38.5 6.3% 43.1 7.3%

Indirect costs 23.4 5.6% 26.7 4.7% 30.3 4.9% 29.0 4.9%

Depreciation and amortization 12.0 2.9% 13.1 2.3% 14.1 2.3% 13.5 2.3%

Other 0.3 0.1% 8.9 1.6% 1.2 0.2% 0.7 0.1%

Tax incentives (ICMS) -20.7 -4.9% -22.9 -4.0% -28.0 -4.6% -27.7 -4.7%

TOTAL 265.0 63.2% 349.0 61.4% 389.4 63.5% 368.9 62.3%


% Net Rev.

2Q08% Net Rev.

3Q08% Net Rev.

4Q08% Net Rev.

Raw material 198.1 47.3% 252.6 44.5% 292.6 47.7% 271.5 45.8%

Wheat 144.0 34.4% 139.4 24.5% 165.4 27.0% 148.0 25.0%

Vegetable Oil 22.6 5.4% 26.2 4.6% 31.6 5.2% 28.8 4.9%

Sugar 3.8 0.9% 6.9 1.2% 8.2 1.3% 8.5 1.4%

Third Party Flour 8.5 2.0% 37.4 6.6% 40.2 6.6% 41.7 7.0%

Third Party Vegetable Shortening 6.1 1.5% 19.0 3.3% 23.6 3.8% 22.5 3.8%

Other 13.1 3.1% 23.7 4.2% 23.6 3.8% 22.0 3.7%

Packages 26.9 6.4% 35.1 6.2% 40.7 6.6% 38.8 6.6%

Labor 25.0 6.0% 35.5 6.2% 38.5 6.3% 43.1 7.3%

Indirect costs 23.4 5.6% 26.7 4.7% 30.3 4.9% 29.0 4.9%

Depreciation and amortization 12.0 2.9% 13.1 2.3% 14.1 2.3% 13.5 2.3%

Other 0.3 0.1% 8.9 1.6% 1.2 0.2% 0.7 0.1%

Tax incentives (ICMS) -20.7 -4.9% -22.9 -4.0% -28.0 -4.6% -27.7 -4.7%

TOTAL 265.0 63.2% 349.0 61.4% 389.4 63.5% 368.9 62.3%

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Operating Expenses

Operating expenses rose from R$118.9 million in the 4Q07 to R$159.0 million in the 4Q08 (+33.7%). However, its representativeness fell 3.0 p.p in 4Q08 compared to 4Q07 and 5.0 p.p in the annual comparison due to the following reasons.

Selling expenses totaled R$124.2 million in the 4Q08 versus R$83.8 million recorded in the 4Q07.

In terms of absolute values, selling expenses rose by 48.2%, as a result of the increase of R$19.1 million in freight expenses, thanks to the growth of sales volume and the price revision process of transportation companies; marketing expenses in the 4Q08, which were superior in R$6.0 million compared to both 3Q08 and 4Q07 due to our advertising campaigns; and the pay rise for employees, due to the collective bargaining and the payment of R$ 9.1 million of compensation to distributors, as a result of our distribution model restructuring. In 2008, selling expenses rose by 28.4%, from R$308.4 million in 2007 to R$396.0 million , due to the same reasons presented for the fourth quarter, and representing a lower variation in the quarterly comparison, since Vitarella’s selling expenses were added only in the 2Q08.

However, more important than analyzing selling expenses in absolute numbers is to observe its 2.4 p.p reduction relatively to net revenue (from 20.5% in 2007 to 18.1% in 2008), even considering the R$9.1 million of non-recurrent expenses, related to our distribution model restructuring.

The reduction of expenses’ representativeness is due to the company effort to reduce expenses during the year and compensate margins decrease caused by the increase costs of our main raw materials. In 2009 we expect that this representativeness will continue to decrease.

General and administrative expenses rose by 1.4%, from R$21.1 million in the 4Q07 to R$21.4 million in the 4Q08 chiefly due to the addition of Vitarella’s general and administrative expenses and the collective bargaining. In 2008, general and administrative expenses totaled R$89.8 million , up by 12.4% year-on-year due to the same quarterly variation reasons.

Once again it is important to highlight the reduction of expenses relatively to net revenue, from 5.3% to 3.6% in the last quarter, thanks to the reduction of expenses during the last months, which is a constant concern for the company and its employees.

Tax expenses fell by 29.6% in the quarter, from R$5.4 million to R$3.8 million , and by 35.0% in 2008 chiefly due to the discontinuation of the CPMF (provisory tax on financial transactions) tax on December 31, 2007. Depreciation and amortization totaled R$10.7 million in the 4Q08, up by 2.9% compared to the 4Q07. In 2008, these expenses were R$41.0 million , 7.3% up on 2007, due to the acquisition of Vitarella and the depreciation of the construction works carried out in the administrative area of some of our units. In 2008, other operating revenues totaled R$4.1 million chiefly due to the reversal of provisions for discounts on sales and sale of waste of our production process.

Operating Expenses(R$ million)

4Q08% Net Rev.

4Q07% Net Rev.

2008% Net Rev.

2007% Net Rev.

Selling 124.2 21.0% 83.8 21.0% 48.2% 0.0 p.p 396.0 18.1% 308.4 20.5% 28.4% -2.4 p.p

Administrative 21.4 3.6% 21.1 5.3% 1.4% -1.7 p.p 89.8 4.1% 79.9 5.3% 12.4% -1.2 p.p

Management fees 1.9 0.3% 0.6 0.2% 216.7% 0.1 p.p 6.5 0.3% 6.3 0.4% 3.2% -0.1 p.p

Taxes 3.8 0.6% 5.4 1.4% -29.6% -0.8 p.p 13.2 0.6% 20.3 1.3% -35.0% -0.7 p.p

Depreciation and amortization 10.7 1.8% 10.4 2.6% 2.9% -0.8 p.p 41.0 1.9% 38.2 2.5% 7.3% -0.6 p.p

Other operating expenses/(revenues) -3.0 -0.5% -2.4 -0.6% - 0.1 p.p -3.4 -0.2% -4.1 -0.3% -17.1% 0.1 p.p

TOTAL 159.0 26.8% 118.9 29.8% 33.7% -3.0 p.p 543.1 24.8% 449 .0 29.8% 21.0% -5.0 p.p

Variation VariationOperating Expenses(R$ million)

4Q08% Net Rev.

4Q07% Net Rev.

2008% Net Rev.

2007% Net Rev.

Selling 124.2 21.0% 83.8 21.0% 48.2% 0.0 p.p 396.0 18.1% 308.4 20.5% 28.4% -2.4 p.p



Taxes 3.8 0.6% 5.4 1.4% -29.6% -0.8 p.p 13.2 0.6% 20.3 1.3% -35.0% -0.7 p.p



TOTAL 159.0 26.8% 118.9 29.8% 33.7% -3.0 p.p 543.1 24.8% 449 .0 29.8% 21.0% -5.0 p.p

Variation VariationOperating Expenses(R$ million)

4Q08% Net Rev.

4Q07% Net Rev.

2008% Net Rev.

2007% Net Rev.

Selling 124.2 21.0% 83.8 21.0% 48.2% 0.0 p.p 396.0 18.1% 308.4 20.5% 28.4% -2.4 p.p



Taxes 3.8 0.6% 5.4 1.4% -29.6% -0.8 p.p 13.2 0.6% 20.3 1.3% -35.0% -0.7 p.p



TOTAL 159.0 26.8% 118.9 29.8% 33.7% -3.0 p.p 543.1 24.8% 449 .0 29.8% 21.0% -5.0 p.p

Variation Variation

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FINANCIAL RESULT

In order to facilitate the understanding of the variations in our financial result, we decided to show and analyze our financial revenue and expenses excluding the effect of exchange rate variations in the period, as shown in the chart below:

Financial revenue fell by 13.3% in the quarter, from R$13.5 million to R$11.7 million , and by 10.8% in 2008, from R$45.4 million to R$40.5 million , chiefly due to the redemption of investments totaling R$501.9 million in the 2Q08, mainly allocated to the payment for the acquisition of Vitarella. Financial expenses increased by 102.5%, from R$12.2 million in the 4Q07 to R$24.7 million in the 4Q08. In 2008, financial expenses rose by 89.3%, from R$50.4 million to R$95.4 million chiefly due to interest on the amount payable for the acquisition of Vitarella. Exchange rate gains changed from a revenue of R$3.8 million to an expense of R$66.6 million in the 4Q08, due to the 32.2% devaluation of Real against U.S dollar in this period, which influenced the company’s foreign currency liabilities. In 2007, the exchange rate gains was R$16.2 million changing to an expense of R$93.8 million in 2008, due to the negative exchange variation in 2008. Among July and December, 2008, the company made a hedge contract to protect itself from the currency exposure, which ended at December 31, 2008, with a partial maturity each three months. This contract intended to exchange indexes about the difference between the Company’s U.S dollar assets and liabilities (US$ 95.4 million at 12/31/2008), where the company gains the income with exchange variation and pays the interests of 100% of CDI. Therefore, with this contract, the company totally eliminated the risk of currency exposure on its foreign assets and liabilities, changing them to the CDI rate, recording, for this operation, R$56.3 million net result in the 4Q08 and R$102.2 million in 2008 , totally eliminating its currency exposure.

Financial Income (R$ million) 4Q08 4Q07 Variation 2008 2007 Variation

Financial Revenue 97.5 33.9 187.6% 261.9 136.0 92.6%

Financial Expenses -120.8 -28.8 319.4% -308.4 -124.8 147.1%

TOTAL -23.3 5.1 - -46.5 11.2 -




TOTAL -23.3 5.1 - -46.5 11.2 -




TOTAL -23.3 5.1 - -46.5 11.2 -




TOTAL -23.3 5.1 - -46.5 11.2 -




TOTAL -23.3 5.1 - -46.5 11.2 -




TOTAL -23.3 5.1 - -46.5 11.2 -




TOTAL -23.3 5.1 - -46.5 11.2 -


Financial Revenue 11.7 13.5 -13.3% 40.5 45.4 -10.8%


Operating Hedge Revenue 56.3 - 100.0% 102.2 - 100.0%

Exchange Variation -66.6 3.8 - -93.8 16.2 -

TOTAL -23.3 5.1 - -46.5 11.2 -






TOTAL -23.3 5.1 - -46.5 11.2 -






TOTAL -23.3 5.1 - -46.5 11.2 -






TOTAL -23.3 5.1 - -46.5 11.2 -






TOTAL -23.3 5.1 - -46.5 11.2 -






TOTAL -23.3 5.1 - -46.5 11.2 -






TOTAL -23.3 5.1 - -46.5 11.2 -

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OTHER REVENUES We recorded other revenues of R$5.4 million in 2008 thanks to the sale of non-operating properties and an exclusive agreement with financial institutions for the management of our payroll. It is worth noting that the name of this section was amended by the Provisory Measure number 449 of 12/03/2008, which changed the description of “non-operating revenue and expenses” to “other revenues and expenses”.

INCOME TAX AND SOCIAL CONTRIBUTION Income tax benefits rose by 30.9% in 2008 compared to 2007, chiefly due to the acquisition of Vitarella, which also has income tax benefits.

NET INCOME It is important to mention that in our last results we did not add the tax benefits to our net income, due the fact that it was not considered accounting revenue, and could not be distributed as dividend, as shown in Law 6,404/76, and had to be reinvested in the company. However, since the tax benefits are important source of cash to new investments and company’s growth, in our last results, we presented it as Net Income after Tax Incentives. On December 28, 2007, Law 11,638, which amended several provisions of Law 6,404 (Brazilian Corporate Law), was published in the Official Gazette (Diário Oficial da União). Among the major changes, we can mention the tax benefits, which were registered as Capital Reserves and were not shown on income statement, and now are registered directly on it. Note that by law the tax incentives continue to be excluded from the calculation of the mandatory dividend. Considering the influence of tax benefits and other changes in the law, the Company’s net income decreased 1.6% in the quarter, from R$42.5 million to R$41.8 million, and grew 33.2% in the 2008, from R$160.8 million to R$214.2 million .

EBITDA EBITDA – NET INCOME:

EBITDA CONCILIATION (R$ million) 4Q08 4Q07 Variation 2008 2007 VariationNet Profit 41.8 42.5 -1.6% 214.2 160.8 33.2%Income Tax and Social Contribution 3.3 10.7 -69.2% 46.8 47.6 -1.7%

Income tax benefits -3.8 -3.9 -2.6% -25.0 -19.1 30.9%Financial Revenues -97.5 -33.9 187.6% -261.9 -136.0 92.6%

Financial Expenses 120.8 28.8 319.4% 308.4 124.8 147.1%

Depreciation and Amortization over cost of goods 13.5 12.3 9.8% 52.7 52.1 1.2%

Depreciation and Amortization Adm/Com Expenses 10.7 10.4 2.9% 41.0 38.2 7.3%

EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%

EBITDA Margin 15.0% 16.7% -1.7 p.p 17.2% 17.8% -0.6 p.p.






EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%







EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%







EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%







EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%


Income and Social Contribution Taxes (R$ million)


Income and Social Contribution Taxes 3.3 10.7 -69.2% 46.8 47.6 -1.7%

Income Tax Incentive -3.8 -3.9 -2.6% -25.0 -19.1 30.9%

TOTAL -0.5 6.8 - 21.8 28.5 -23.5%

Income and Social Contribution Taxes (R$ million)


Income and Social Contribution Taxes 3.3 10.7 -69.2% 46.8 47.6 -1.7%

Income Tax Incentive -3.8 -3.9 -2.6% -25.0 -19.1 30.9%

TOTAL -0.5 6.8 - 21.8 28.5 -23.5%

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EBITDA – GROSS REVENUE:

At the end of 2008, the company’s gross debt totaled R$933.5 million (58.2% in short term and 41.8% in long term), 76.3% higher than at the end of 2007, while net debt amounted to R$707.8 million , higher than in 2007, chiefly due to the acquisition of Vitarella. The upturn in our indebtedness level is also related to the increase in our wheat and vegetable oil inventories. Our financial leverage, represented by the net debt / net equity ratio , came to 58.6% at the end of 2008, versus 11.7% at the end of the 2007. M Dias Branco ended 2008 with a net cash position (cash balances plus investments in marketable securities) of R$225.7 million , versus R$417.9 million in 2007, a decline of 46.0% in the period, due to the redemption of investments to pay for the acquisition of Vitarella and the payment anticipation of input imports to reduce our foreign currency exposure.

DEBT, CAPITALIZATION AND CASH

Capitalization (R$ million) 12/31/2008 12/31/2007 Variation

Short Term 543.5 368.9 47.3%

Long Term 390.0 160.6 142.8%Total Indebtedness 933.5 529.5 76.3%

(-) Cash * -225.7 -417.9 -46.0%(=) Net Debt 707.8 111.6 534.2%(+) Shareholders Equity 1,207.3 956.6 26.2%Capitalization 2,140.8 1,486.1 44.1%

* Includes Cash and Cash equivalents.


Short Term 543.5 368.9 47.3%





Short Term 543.5 368.9 47.3%





Short Term 543.5 368.9 47.3%




Financial Indicator 12/31/2008 12/31/2007 Variation

Net Debt / Adjusted EBITDA (last 12 months) 1.9 0.4 375.0%Net Debt / Shareholders Equity 58.6% 11.7% 46.9 p.pIndebtedness / Total Assets 39.5% 31.7% 7.8 p.p

EBITDA CONCILIATION (R$ million) 4Q08 4Q07 Variation 2008 2007 VariationGross Revenue 770.0 520.2 48.0% 2,835.6 1,979.5 43.2%Sales taxes and deductions on sales -177.8 -120.6 47.4% -643.1 -472.3 36.2%

Cost of goods sold -368.9 -240.6 53.3% -1,372.3 -884.3 55.2%

Depreciation and Amortization over cost of goods 13.5 12.3 9.8% 52.7 52.1 1.2%Operating Expenses -159.0 -118.9 33.7% -543.1 -449.0 21.0%

Depreciation and Amortization Adm/Com Expenses 10.7 10.4 2.9% 41.0 38.2 7.3%Other revenues 0.3 4.1 -92.7% 5.4 4.2 28.6%

EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%






EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%






EBITDA 88.8 66.9 32.7% 376.2 268.4 40.2%


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* Interest rate of December 31, 2008, except where otherwise stated. The company opts not to hedge the price of its main inputs (wheat and soybean oil) because we monitor the market, plan our purchases and rely on large storage capacity, but we do carry out FX hedging. We have liabilities linked to foreign currency (mainly the U.S. dollar), especially resulting from importing wheat, which are protected through financial investments linked to the US dollar, as shown below. The increase in dollar-denominated liabilities was due to an upturn in the purchased volume of our main raw materials (wheat and vegetable oil) to be stored, which contributes to reduce the impacts of the variation in the price of these commodities in the Company’s results. In the 3Q08 and 4Q08, due to the economic instability, the company made a hedge contract to protect itself of currency exposure, as showed in the section “Financial Result” on the page 16 of this document. Investments totaled R$70.0 million in 2008, versus R$33.3 million in 2007. The main items of capital expenditures were (i) machinery and equipment (expenses related to the remodeling and construction of vegetable shortening storage tanks at our shortening and margarine unit (GME), the acquisition of new packaging equipment and the acquisition of a new line of cookies and crackers to Vitarella); (ii) construction and remodeling works (construction of a distribution center for Adria – São Caetano do Sul branch, remodeling works at a few units and the construction of silos in Vitarella to wheat storage), and (iii) others (modernization of the warehousing system at the Bento Gonçalves unit).

CAPEX

Description 12/31/2008 09/30/2008 12/31/2007

Assets (USD million) 54.6 57.8 98.6

Liabilities (USD million) 150.0 222.9 152.7BALANCE -95.4 -165.1 -54.1

Description 12/31/2008 09/30/2008 12/31/2007



Description 12/31/2008 09/30/2008 12/31/2007



Description 12/31/2008 09/30/2008 12/31/2007



Description 12/31/2008 09/30/2008 12/31/2007



Description 12/31/2008 09/30/2008 12/31/2007



Consolidated Debt (R$ million) Index Interest (year) 12/31/2008 Variation 12/31/2007

Domestic Currency: 583.0 62.5% 259.0 48.9% 125.1%FINAME TJLP 3.31% (3.56% on 12/31/07) 25.2 2.7% 33.3 6.3% -24.3%

BNDES - Financings TJLP 2.49% 9.1 1.0% 29.3 5.5% -68.9%(PROADI-GMP) Financing of state taxes TR - - 0.0% 0.7 0.1% -100.0%

(PROVIN-MOINHO) Financing of state taxes TR - - - 0.2 0.0% -100.0%(PROVIN-MOINHO) Financing of state taxes TJLP - 22.6 2.4% 77.5 14.6% -70.8%

(DESENVOLVE) Financing of state taxes TJLP - 3.6 0.4% 26.6 5.0% -86.5%

BNB-FNE - Financings 10.0% (11.5% on 12/31/07) 111.9 12.0% 75.5 14.3% 48.2%BNDES - MODERMAQ 12.09% (12.1% on 12/31/07) 0.8 0.1% 1.4 0.3% -42.9%

BNDES - MODERMAQ TJLP 1.04% (1.5% on 12/31/2007 4.9 0.5% 0.6 0.1% 716.7%

BNB - FNE - Working Capital Financings 10.0% (11.5% on 12/31/07) 4.7 0.5% 6.5 1.2% -27.7%Bank loans - Working Capital 6.75% 3.6 0.4% 7.4 1.4% -51.4%

Investment of assigment of Vitarella's shares CDI - 100% - 396.6 42.5% - - 100.0%

Foreign Currency: 350.5 37.5% 270.5 51.1% 29.6%

Imports financing USD 4.59% (6.6% on 12/31/07) 349.5 37.4% 266.1 50.3% 31.3%Machinery USD Libor + 1.13% (Libor + 1.07% on 12/31/07) 1.0 0.1% 4.0 0.8% -75,0%

Machinery EURO Eurolibor + 1.75% - - 0.4 0.1% -100.0%

TOTAL 933.5 100.0% 529.5 100.0% 76.3%

VariationConsolidated Debt (R$ million) Index Interest (year) 12/31/2008 Variation 12/31/2007












TOTAL 933.5 100.0% 529.5 100.0% 76.3%

VariationConsolidated Debt (R$ million) Index Interest (year) 12/31/2008 Variation 12/31/2007












TOTAL 933.5 100.0% 529.5 100.0% 76.3%

Variation

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Besides the investments shown on the chart above, it is important to highlight the R$665.1 million for the acquisition of Vitarella held on April 07, 2008, with payment schedule for five years from the date of the acquisition announcement. The graph below shows the performance of the Company’s shares in 2008. On December 31, 2008, MDIA3 shares were priced at R$19.79, representing a market cap of R$2.24 billion . Average daily trading volume in the period stood at R$1,740 million . The Ibovespa index came to 37,550 while the Special Governance Stock Index (IGC) stood at 3,697 at the end of the year.

The graph below shows the performance of the MDIA3 share compared to the Ibovespa and the IGC in the period between the worsening of international financial crisis, on September 15, 2008 and the end of the fourth quarter. Note that MDIA3 outperformed the IBOVESPA by 38.7% and the IGC by 40.0% at the end of the analyzed period.

CAPITAL MARKET

Investiments (R$ Million) 4Q08 4Q07 Variation 2008 2007 V ariation

Buildings 0.5 0.3 66.7% 1.8 0.7 157.1%

Machinery and equipment 7.3 3.0 143.3% 32.2 10.4 209.6%Construction in progress 5.8 3.9 48.7% 17.0 7.3 132.9%

Vehicles 0.3 0.0 100.0% 1.5 0.9 66.7%

Computers and terminals 0.5 0.1 400.0% 1.8 0.9 100.0%

Chattel and tools 0.6 1.4 -57.1% 3.6 2.3 56.5%

Others 3.8 1.5 153.3% 12.1 10.8 12.0%Total 18.8 10.2 84.3% 70.0 33.3 110.2%


Buildings 0.5 0.3 66.7% 1.8 0.7 157.1%


Vehicles 0.3 0.0 100.0% 1.5 0.9 66.7%



Others 3.8 1.5 153.3% 12.1 10.8 12.0%Total 18.8 10.2 84.3% 70.0 33.3 110.2%


Buildings 0.5 0.3 66.7% 1.8 0.7 157.1%


Vehicles 0.3 0.0 100.0% 1.5 0.9 66.7%



Others 3.8 1.5 153.3% 12.1 10.8 12.0%Total 18.8 10.2 84.3% 70.0 33.3 110.2%

-50%

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Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08

12/31/2007 a 12/31/2008

MDIA3 X IBOV X IGC

Average Daily Volume: MDIA3

MDIA3 X IBOV X IGC

Profiability (%)

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12/31/2007 a 12/31/2008

MDIA3 X IBOV X IGC


MDIA3 X IBOV X IGC

Profiability (%)

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12/31/2007 a 12/31/2008

MDIA3 X IBOV X IGC


MDIA3 X IBOV X IGC

Profiability (%)

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In the Board of Diretors Meeting on March 16, 2009, it was approved, among other proposals, the cancellation of 1.350.000 (one million, three hundred and fifty thousand) treasury shares. Therefore, the Company’s social capital will be constituted of 113.450.000 (one hundred and thirteen million, four hundred and fifty thousand) ordinary shares. This proposal will be voted in the Ordinary Shareholders Meeting on April 24, 2009. 1. Conference Call – 4Q08 Results

Date: March 18, 2009 Portuguese: 09:00 am (US EST) Phone: +55 (11) 2188-0188 Code: MDias

Replay: +55 (11) 2188-0188 Code: MDias

Live webcast: http://www.mdiasbranco.com.br/ri English: 11:00 am (US EST) Phone: +1 973 582 2868

Code: 88844949 Replay: 1 800 642 1687 (U.S) 1 706 645 9291 (Other countries)

Code: 88844949 Live webcast: http://www.mdiasbranco.com.br/ir

UPCOMING EVENTS

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MDIA3 / IBOV MDIA3 / IGC

MDIA3 SHARE PERFORMANCE TO IBOVESPA AND IGC INDEXES09/15/2008 a 12/31/2008

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SUBSEQUENT EVENTS

of 25

About M Dias Branco

M. Dias Branco S.A., operating since the 1940s, is leader in the production of cookies and crackers and pasta, and also has activities in the wheat grinding, oil refining, vegetable shortenings, margarines and vegetable cream segments. Its brands are a hallmark of tradition and quality, forming a bond of confidence and respect with the consumer. Legal Notice The statements contained in this document related to business prospects, projected operating and financial results and the growth outlook of M Dias Branco are merely forecasts and, as such, are based exclusively on the expectations of management on the future of the businesses. These expectations depend, substantially, on changes in market conditions, on the performance of the Brazilian economy, of the sector and of the international markets and, therefore, are subject to changes without prior notice. Glossary of ANNEXES

1) Pro-forma Income Statements: in this statement, we added Vitarella’s 2007 and 1Q08 figures to the Company’s results.

2) Historical Income Statements: prepared according to the Company’s accounting figures, including

the modifications in accounting practices introduced by the Law 11.638/07 and by the Accounting Announcements Committee – known as CPC – approved by the Brazilian SEC (CVM). Vitarella’s results were considered only after it was effectively acquired by the subsidiary Adria on April 7, 2008.

3) Historical Balance Sheet: prepared according to the Company’s accounting figures, consolidating Vitarella’s balance sheet into the balance sheet of M.Dias (Company) only on December 31, 2008 when Vitarella was already our indirect subsidiary. In order to allow the market to have a clearer idea of the acquired company, we hereby present, in addition to the consolidated balance sheet, Vitarella’s balance sheet.

4) Historical cash flow statements: prepared according to accounting figures, showing the effects of

the acquisition of Vitarella in 2008.

ANNEXES

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ANNEX 1 ANNEX 2

INCOME STATEMENT - PROFORMA

(R$ million) REVENUES 770.0 626.4 22.9% 2,941.4 2,367.7 24.2%

Sales of goods 770.0 626.4 22.9% 2,941.4 2,367.7 24.2%

DEDUCTIONS -177.8 -139.9 27.1% -661.3 -537.3 23.1%

Sales taxes and deductions on sales -177.8 -139.9 27.1% -661.3 -537.3 23.1%

NET REVENUES 592.2 486.5 21.7% 2,280.1 1,830.4 24.6%

COST OF GOODS SOLD -368.9 -299.8 23.1% -1,431.2 -1,099.6 30.2%

GROSS PROFIT 223.3 186.8 19.6% 848.9 730.8 16.2%

OPERATING EXPENSES -159.0 -134.5 18.2% -558.5 -503.5 10.9%

Selling expenses -124.2 -93.9 32.3% -407.1 -345.1 18.0%

Administrative and general expenses -21.4 -25.0 -14.4% -93.7 -94.0 -0.3%

Management fees -1.9 -0.6 216.7% -6.4 -6.3 1.6%

Taxes -3.8 -6.0 -36.7% -13.5 -22.4 -39.7%

Depreciation and Amortization -10.7 -10.6 0.9% -41.3 -39.2 5.4%

Other operating expenses 3.0 1.6 - 3.5 3.5 0.0%

OPERATING INCOME - before Financial Results 64.3 52.3 23.0% 290.4 227.3 27.8%Financial income 97.5 38.5 153.2% 265.9 152.3 74.6%

Financial expenses -120.8 -38.8 211.3% -310.6 -142.3 118.3%

OPERATING INCOME - after Financial Results 41.0 52.0 - 21.1% 245.7 237.3 3.5%

Other revenues (expenses) 0.3 4.4 -93.2% 5.5 4.5 22.2%

INCOME - before income and social contribution taxe s 41.3 56.4 -26.7% 251.2 241.8 3.9%

Income and social contribution taxes 0.5 -7.9 -106.3% -24.1 -35.4 -31.9%

NET INCOME (LOSS) 41.8 48.5 -13.8% 227.1 206.4 10.0%

4Q08 4Q07(unaudited)

Variation 2007-2008

Variation 4Q07-4Q08

2008(unaudited)

2007(unaudited)



Sales of goods 770.0 626.4 22.9% 2,941.4 2,367.7 24.2%

DEDUCTIONS -177.8 -139.9 27.1% -661.3 -537.3 23.1%


NET REVENUES 592.2 486.5 21.7% 2,280.1 1,830.4 24.6%


GROSS PROFIT 223.3 186.8 19.6% 848.9 730.8 16.2%




Management fees -1.9 -0.6 216.7% -6.4 -6.3 1.6%

Taxes -3.8 -6.0 -36.7% -13.5 -22.4 -39.7%









NET INCOME (LOSS) 41.8 48.5 -13.8% 227.1 206.4 10.0%


Variation 2007-2008

Variation 4Q07-4Q08

2008(unaudited)

2007(unaudited)



Sales of goods 770.0 626.4 22.9% 2,941.4 2,367.7 24.2%

DEDUCTIONS -177.8 -139.9 27.1% -661.3 -537.3 23.1%


NET REVENUES 592.2 486.5 21.7% 2,280.1 1,830.4 24.6%


GROSS PROFIT 223.3 186.8 19.6% 848.9 730.8 16.2%




Management fees -1.9 -0.6 216.7% -6.4 -6.3 1.6%

Taxes -3.8 -6.0 -36.7% -13.5 -22.4 -39.7%









NET INCOME (LOSS) 41.8 48.5 -13.8% 227.1 206.4 10.0%


Variation 2007-2008

Variation 4Q07-4Q08

2008(unaudited)

2007(unaudited)

INCOME STATEMENT - HISTORICAL DATA(R$ million) REVENUES 770.0 520.2 48.0% 2,835.6 1,979.5 43.2%Sales of goods 770.0 520.2 48.0% 2,835.6 1,979.5 43.2%

DEDUCTIONS -177.8 -120.6 47.4% -643.1 -472.3 36.2%Sales taxes and deductions on sales -177.8 -120.6 47.4% -643.1 -472.3 36.2%

NET REVENUES 592.2 399.6 48.2% 2,192.5 1,507.2 45.5%

COST OF GOODS SOLD -368.9 -240.6 53.3% -1,372.3 -884.3 55.2%

GROSS PROFIT 223.3 159.0 40.4% 820.2 622.9 31.7%

OPERATING EXPENSES -159.0 -118.9 33.7% -543.1 -449.0 21.0%Selling expenses -124.2 -83.8 48.2% -396.0 -308.4 28.4%

Administrative and general expenses -21.4 -21.1 1.4% -89.8 -79.9 12.4%Management fees -1.9 -0.6 216.7% -6.5 -6.3 3.2%

Taxes -3.8 -5.4 -29.6% -13.2 -20.3 -35.0%Depreciation and Amortization -10.7 -10.4 2.9% -41.0 -38.2 7.3%

Other operating expenses 3.0 2.4 - 3.4 4.1 -17.1%



OPERATING INCOME - after Financial Results 41.0 45.2 - 9.3% 230.6 185.1 24.6%Other revenues (expenses) 0.3 4.1 -92.7% 5.4 4.2 28.6%


Income and social contribution taxes 0.5 -6.8 - -21.8 -28.5 -23.5%

NET INCOME (LOSS) 41.8 42.5 -1.6% 214.2 160.8 33.2%

4Q08 2007 Variation 2007-2008

4Q07 Variation 4Q07-4Q08

2008INCOME STATEMENT - HISTORICAL DATA(R$ million) REVENUES 770.0 520.2 48.0% 2,835.6 1,979.5 43.2%Sales of goods 770.0 520.2 48.0% 2,835.6 1,979.5 43.2%


NET REVENUES 592.2 399.6 48.2% 2,192.5 1,507.2 45.5%


GROSS PROFIT 223.3 159.0 40.4% 820.2 622.9 31.7%










NET INCOME (LOSS) 41.8 42.5 -1.6% 214.2 160.8 33.2%

4Q08 2007 Variation 2007-2008




NET REVENUES 592.2 399.6 48.2% 2,192.5 1,507.2 45.5%


GROSS PROFIT 223.3 159.0 40.4% 820.2 622.9 31.7%










NET INCOME (LOSS) 41.8 42.5 -1.6% 214.2 160.8 33.2%

4Q08 2007 Variation 2007-2008




NET REVENUES 592.2 399.6 48.2% 2,192.5 1,507.2 45.5%


GROSS PROFIT 223.3 159.0 40.4% 820.2 622.9 31.7%










NET INCOME (LOSS) 41.8 42.5 -1.6% 214.2 160.8 33.2%

4Q08 2007 Variation 2007-2008


2008

of 25

ANNEX 3

BALANCE SHEET - HISTORICAL DATA

(R$ million) 12/31/2008 12/31/2007 Variation 12/31/2008 12/31/2007 Va riationASSETSCURRENT 751.6 741.2 1.4% 163.0 242.2 -32.7%Cash and cash equivalents 26.9 44.5 -39.6% 3.8 7.4 -48.6%

Short-term investments 65.8 213.1 -69.1% 31.3 139.8 -77.6%

Marketable Securities - 30.3 -100.0% - - - Trade accounts receivable 224.4 162.1 38.4% 51.5 37.8 36.2%

Inventories 271.1 226.7 19.6% 69.1 49.9 38.5%

Taxes recoverable 95.7 53.0 80.6% 4.2 4.6 -8.7%

Deferred income and social contribution taxes 3.6 - 100.0% - - -

Advances to suppliers 7.4 6.1 21.3% 0.7 0.8 -12.5%

Related Parties 48.1 0.2 23,950.0%

Other accounts receivable 7.8 4.7 66.0% 2.3 1.8 27.8%

Prepaid expenses 0.8 0.5 33.3% 0.1 0.1 0.0%

NONCURRENT 186.8 175.7 6.3% 12.2 3.1 293.5%

Marketable Securities 127.4 130.0 -2.0% - - - Short-term investments 5.6 - 100.0% 5.6 - 100.0%

Judicial deposits 21.3 17.1 24.6% 2.0 0.6 233.3%Taxes recoverable 15.2 12.7 19.7% 4.6 2.5 84.0%

Deferred income and social contribution taxes 11.7 9.9 18.2% - - - Credit wih related parties - - - - - -

Tax incentives / other accounts receivable 5.6 6.0 -6.7% - - -

PERMANENT 1,425.7 753.9 89.1% 160.0 133.0 20.3%Investments 0.1 0.1 - 58.6 92.9 -36.9%

Property, plant and equipments 843.2 666.6 26.6% 98.2 36.6 168.3%

Deferred charges and intangibles 24.8 31.6 -69.9% 3.2 3.5 -8.6%Intangible 557.6 55.6 100.0% - - -

TOTAL ASSETS 2,364.1 1,670.8 41.5% 335.2 378.3 -11.4%

LIABILITIES AND SHAREHOLDERS EQUITYCURRENT 723.5 514.4 40.7% 40.4 32.5 24.3%

Financing 414.9 368.9 12.5% 13.0 3.1 319.4%Direct financing - Company acquisition 128.6 - 100.0% - - -

Suppliers 52.0 39.4 32.0% 8.4 7.7 9.1%Labor and social charges payable 43.4 27.2 59.6% 5.5 4.6 19.6%

Taxes and contribution payable 32.9 42.0 -21.7% 6.7 10.1 -33.7%Advances 0.4 0.2 100.0% - - -

Other accounts payable 9.8 6.2 58.1% 6.8 7.0 -2.9%Dividends 31.7 30.5 4.3% - - -

Government Grant 9.8 - 100.0% - - -

NONCURRENT LIABILITIES 433.3 199.8 116.9% 36.7 33.9 8.3%

Loans and financing 122.0 160.6 -24.0% 34.5 33.8 2.1%Direct financing - Company acquisition 268.0 - 100.0% - - -

Taxes and contribution payable 7.3 8.9 -18.0% 0.1 - 100.0%Accounts payable 1.1 - 100.0% - - -

Provision for contingencies 34.9 30.3 15.2% 2.1 0.1 2,000.0%

SHAREHOLDERS EQUITY 1,207.3 956.6 26.2% 258.1 311.9 -17.2%Capital 725.6 704.8 3.0% 180.0 51.0 252.9%Capital reserves 126.4 142.7 129.3% 31.1 52.1 -40.3%

Equity valuation adjustments 0.3 - 100.0% - - - Profit reserves 355.0 19.6 842.3% 47.0 30.0 56.7%

Treasury shares 0.0 -22.6 35.8% - - -

Accrued profit - 112.1 -100.0% - 178.8 -100.0%

TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 2,364.1 1,6 70.8 41.5% 335.2 378.3 -11.4%

M. DIAS VITARELLA (unaudited)BALANCE SHEET - HISTORICAL DATA




Inventories 271.1 226.7 19.6% 69.1 49.9 38.5%







NONCURRENT 186.8 175.7 6.3% 12.2 3.1 293.5%








TOTAL ASSETS 2,364.1 1,670.8 41.5% 335.2 378.3 -11.4%













Treasury shares 0.0 -22.6 35.8% - - -

Accrued profit - 112.1 -100.0% - 178.8 -100.0%


M. DIAS VITARELLA (unaudited)BALANCE SHEET - HISTORICAL DATA




Inventories 271.1 226.7 19.6% 69.1 49.9 38.5%







NONCURRENT 186.8 175.7 6.3% 12.2 3.1 293.5%








TOTAL ASSETS 2,364.1 1,670.8 41.5% 335.2 378.3 -11.4%













Treasury shares 0.0 -22.6 35.8% - - -

Accrued profit - 112.1 -100.0% - 178.8 -100.0%


M. DIAS VITARELLA (unaudited)

of 25

ANNEX 4 CASH FLOW - HISTORICAL DATA(R$ million)CASH FLOW IN OPERATING ACTIVITIES

Net Income for the Period 236.0 189.3 24.7%Adjustments to Reconcile net incomeand cash from operating activities:Depreciation and amortization 95.1 91.3 4.2%

Sale cost of permanet assets 2.3 3.0 -23.3%

Loans update 197.0 -15.7 0.0%

Hedge contract income -102.2 0.0 100.0%

Interests and exchange variation -52.9 -59.9 -11.7%Net income and social contribution taxes -30.3 -29.6 2.4%Liberation of reivestments incentives 1.7 0.0 100.0%

Assets and Liabilities Variations(Increase) decrease in clients -20.9 -37.8 -44.7%

(Increase) decrease in inventories 29.9 -73.0 0.0%

(Increase) decrease in marketable securities 32.9 36.5 -9.9%

(Increase) decrease in recoverable -34.4 -24.0 43.3%

(Increase) decrease in accounts receivable -1.9 -4.9 -61.2%

(Increase) decrease in suppliers 6.7 -4.4 -

(Increase) decrease in taxes and contributions payable -9.3 -3.6 158.3%

Increase (decrease) in Government grants 4.7 0.0 100.0%

(Increase) decrease in other accounts payable / provisions -135.5 13.9 0.0%

Net Cash generated in operating activities 218.9 81.1 169.9%

CASH FLOW IN INVESTMENTS

Acquisition of property, plant and equipment -63.4 -39.7 59.7%

Cash flow from subsidiary acquisition -266.4 0.0 100.0%

Purchase of own shares -8.2 -22.6 -63.7%

Net Cash used in Investment Activities -338.0 -62.3 442.5%

NET CASH IN FINANCING ACTIVITIES

Dividends Payments -30.5 -44.0 -30.7%

New Loans 383.9 335.3 14.5%

Loan Principal payments -445.1 -239.9 85.5%

Income earned on hedge contract 45.8 0.0 100.0%

Capital reserve constitution - ICMS Tax Incentive 0,0 -54.7 -100.0%

Net Cash used in Financing Activities -45.9 -3.3 1,290.9%-165.0 15.5 -

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTSAt begin of period 257.6 242.1 6.4%

At end of period 92.6 257.6 -64.1%

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS -16 5.0 15.5 -

2007 Variation2008CASH FLOW - HISTORICAL DATA(R$ million)CASH FLOW IN OPERATING ACTIVITIES



Loans update 197.0 -15.7 0.0%




















New Loans 383.9 335.3 14.5%






At end of period 92.6 257.6 -64.1%


2007 Variation2008CASH FLOW - HISTORICAL DATA(R$ million)CASH FLOW IN OPERATING ACTIVITIES



Loans update 197.0 -15.7 0.0%




















New Loans 383.9 335.3 14.5%






At end of period 92.6 257.6 -64.1%


2007 Variation2008

4q08 earnings release - ri.mdiasbranco.com.br · 4q08 earnings release eusébio – ceará state,...

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