Marfrig Global Foods S A : AGOE - Management Proposal

March 09, 2021 at 01:59 pm EST

MESSAGE FROM MANAGEMENT

Dear Shareholders,

Marfrig Global Foods S.A., in keeping with its corporate governance policies and its commitment to transparency in its relations with investors, cordially invites you to attend the the Combined Annual and Extraordinary General Shareholders Meeting set to convene on April 08, 2021, at 10 a.m., at our registered office at Avenida Queiroz Filho, no 1560, Block 5 (Tower Sabiá), 3rd floor, Suite 301, Vila Hamburguesa, City and State of São Paulo, Postal Code (CEP) 05319-000, in accordance with the Call Notice published in the newspaper Valor Econômico and in the São Paulo state register Diário Oficial do Estado de São Paulo.

The effective participation of all shareholders in the Annual Shareholders' Meeting is extremely important and will give you an opportunity to discuss and vote on the matters on the agenda so that you can make an informed decision based on the information available.

Pursuant to CVM Instruction n° 481/09 and with the purpose of facilitating and encouraging the participation of its shareholders, the Company offers a remote voting system, allowing its Shareholders to send remote voting ballots through their respective voting custody agents or directly through the Company, according to the detailed guidelines contained in this Proposal and the Meeting Manual.

The matters to be decided in the Meeting are described in this Guide as well as in the Call Notice and Management Proposal. The pertinent documents are available at the registered office of the Company, on our Investor Relations website(www.marfrig.com.br/ri) and on the websites of the Brazilian Stock Exchange (B3 S.A. - Brasil, Bolsa, Balcão) (www.b3.com.br) and of the Securities and Exchange Commission of Brazil (www.cvm.gov.br). We hope this Guide contributes to the effective participation of all shareholders.

Cordially,

Marcos Antonio Molina dos Santos

Chairman of the Board

TABLE OF CONTENTS

Date, Time, Place and Preliminary Clarifications ........................................................................ 04

Management Proposal ......................................................................................................... 05

How to Participate in the Annual Shareholders Meeting ..................................................... 27

Documents Made Available ………………………………………………… ... ………………… ..32

Appendix I - Proxy Appointment Form without Voting Instructions ..................................... 33

Appendix II - Proxy Appointment Form with Voting Instructions ......................................... 34

Appendix III - Remote Voting Intructions Form ................................................................... 37

Appendix IV - Allocation of Net Income ………………………………………………………… .42

Appendix V - Section 10 of the Reference Form ................................................................ 55

Appendix VI - Section 12.5 to 12.10 of the Reference Form ............................................. 117

Appendix VII - Information of the Candidates for the Fiscal Council proposed by minority

shareholders ...................................................................................................................... 135

Appendix VIII - Section 13 of the Reference Form ............................................................ 143

Appendix IX - Copy of the Bylaws, highlighting the proposed amendments and a detailed

report on the origin and justification of the amendments .................................................. 177

Appendix X - Restated Bylaws - Proposal ........................................................................ 183

ANNUAL AND EXTRAORDINARY SHAREHOLDERS MEETING

• Date, Time and Place:

The Annual and Extraordinary Shareholders' Meeting was called to convene as follows:

Date: April 08, 2021

Time: 10:00 a.m.

Place: Avenida Queiroz Filho, no 1560, Block 5 (Tower Sabiá), 3rd floor, Suite 301, Vila Hamburguesa, City and State of São Paulo, Postal Code (CEP) 05319-000.

• Call Notice:

The Call Notice for the Annual and Extraordinary Shareholders Meeting will be published as follows: Three times, in the issues of March 09,10 and 11, 2021 of the newspaper Valor Econômico, and of the São Paulo state register Diário Oficial do Estado de São Paulo.

• Preliminary Clarifications:

Consistent with Article 125 of Brazilian Corporation Law (Federal Law 6,404/76), attendance by shareholders of record representing at least one quarter (1/4) of the capital stock outstanding constitutes valid quorum for convening the Annual Shareholders Meeting, while consistent with Arcticle 135 of the Federal Law 6,404/76, attendance by shareholders of record representing at least two thirds (2/3) of the capital stock outstanding constitutes valid quorum for convening the Extraordinary Shareholders Meeting. If quorum is not achieved, the Company will announce a new date for convening the Meeting on second call with the attendance of any number of shareholders.

Shareholders may attend the Meeting in person or through a duly appointed proxy. To facilitate participation, the Company is attaching two proxy appointment forms to this Management Proposal. To facilitate and encourage shareholder participation, the Company has also provided an absentee ballot system so that shareholders can submit absentee ballots through their custody agents or directly to the Company, as per the detailed guidelines in this Management Proposal.

PROPOSAL OF THE MANAGEMENT OF MARFRIG GLOBAL FOODS S.A.

TO THE ANNUAL AND EXTRAORDINARY SHAREHOLDERS' MEETING TO BE HELD

ON APRIL 08, 2021.

In accordance with Brazilian Corporation Law, the Corporation is required to hold an Annual

Shareholders' Meeting within four months of the end of the fiscal year to consider and vote

on the financial statements, the allocation of net income for the fiscal year, the aggregate compensation of the managers and, this year, to elect the Members of the Fiscal Council.

As per Brazilian Corporation Law (Federal Law 6,404/76, as amended), the Company must hold an Extraordinary General Shareholders' Meeting to resolve on any matters that are not subject to the Annual General Meeting.

We, the Management of Marfrig Global Foods S.A., submit for your consideration at the

Annual and Extraordinary Shareholders' Meeting called to convene at 10:00 a.m. on April 08, 2021, the following Management Proposal ("Proposal"), as follows.

AT THE ANNUAL MEETING:

1. Receiving the management accounts and reviewing, discussing and voting on the Financial Statements for the fiscal year ended December 31, 2020.

The Company's Management Report, Financial Statements and respective Notes, which

were prepared by the Board of Executive Officers and approved by the Board of Directors in a meeting held on March 08, 2021, accompanied by the independent auditors' report, and

the report of the Fiscal Council and Audit Committee for the fiscal year ended December 31, 2020, the pertinent documents are available at the registered office of the Company, on our Investor Relations website(www.marfrig.com.br/ri)and on the websites of the Brazilian Stock Exchange (B3 S.A. - Brasil, Bolsa, Balcão) (www.b3.com.br) and of the Securities and Exchange Commission of Brazil(www.cvm.gov.br). The Fiscal Council issued a report to the effect that said financial states and respective notes present adequate conditions for being examined by the shareholders of the Company convened in the Annual Shareholders Meeting.

The Financial Statements are prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), where were implemented in Brazil through the Accounting Pronouncements Committee (CPC) and its technical interpretations and guidelines and approved by the Securities andExchange Commission of Brazil (CVM). Such Statements comprise the Balance Sheet, Statement of Income, Statement of Comprehensive Income, Statement of Changes in

Shareholders' Equity, Statement of Cash Flow and Statement of Value Added. The Financial

Statements are complemented by the respective notes, whose purpose is to support shareholders in their analysis and understanding of such Statements.

The Financial Statements are also accompanied by the Management Report, which provides financial information, such as the main lines of the Income Statement for the fiscal year and non-financial, statistical and operational information, such as information related to the employees of the Company, the activities of its subsidiaries, its social responsibility practices, its corporate governance and the capital markets on a comprehensive basis.

The audit firm Grant Thornton Auditores Independentes has audited our financial statements and issued a report indicating that, in their opinion, the financial statements fairly present, in all material respects, the financial position and results of operations of the Company and its subsidiaries.

The following documents related to this item of the agenda are available at the Corporation's registered office, on its Investor Relations website(www.marfrig.com.br/ri)and on the websites of the Brazilian Stock Exchange (B3 S.A. - Brasil, Bolsa, Balcão) (www.b3.com.br) and of the Securities and Exchange Commission of Brazil (CVM)(www.cvm.gov.br): a) Management Report; b) Financial Statements for the fiscal year ended December 31, 2019; c) Independent Auditors' Report; d) Fiscal Council Report; e) Audit Committee Report; f)

Statutory Audit Committee's Summarized Annual Report; g) Management's Comments on the Company's financial situation in accordance with Item 10 of the Reference Form, as required by Instruction 480 issued by the CVM on December 7, 2009, ("CVM Instruction 480"); e) Standardized Financial Statements (DFP).

Appendix V to this Proposal presents Management's Discussion and Analysis of Financial

Condition and Results of Operations required by Section 10 of the Reference Form in accordance with Instruction 480 issued by the Securities and Exchange Commission of Brazil

(CVM) on December 7, 2009, as amended ("CVM Instruction 480").

Election of the members of the Board of Directors.

The current members of the Board of Directors of Marfrig Global Foods S.A. were elected at the Annual Shareholders' Meeting held on April 26, 2019, for a unified term expiring on the date of the Annual Shareholders Meeting held in 2021. Management proposes to the shareholders of the Company the election of the following nominees to the Board of Directors: 6

Independent Nominees to the Board of Directors

Antonio dos Santos Maciel Neto

Mr. Antonio dos Santos Maciel Neto, 63, has been an independent director of the Corporation since May 2007 and is currently an entrepreneur in the livestock, biotechnology and executive education sectors. He was the Chief Executive Officer of the CAOA Group from 2013 until 2017, of Suzano Papel e Celulose from 2006 to 2012, of Ford do Brasil of South America and Ford Corporate Vice President from 1999 until May 2006. He also served as the chief executive officer of the Itamarati Group (1997 to 1999) and of CECRISA - Revestimentos Cerâmicos (1993 to 1997). From 1990 to 1993, he held various positions in the federal government in Brasília, serving in the Ministry of the Economy as Deputy Director of the Industry and Commerce Department and as Adjunct National Economic Secretary. When the Ministry of Industry, Commerce and Tourism was created, he served for eight months as Executive Secretary (Vice-Minister). During these three years, he served as the technical coordinator of the Brazilian Quality and Productivity Program (PBQP). He began his career at Petrobrás in 1980, where he worked for 10 years. He served as chief executive officer of Suzano Pulp and Paper. He is currently a member of the global Board of Directors of Archer Daniels Midland Company. Mr. Maciel Neto received a B.S. in Mechanical Engineering from the Federal University of Rio de Janeiro (UFRJ) in 1979.

Herculano Aníbal Alves

Mr. Herculano Aníbal Alves, 68, holds master's in finance and Investments and Post-graduation in Financial Administration from Fundação Getúlio Vargas and Economist from PUC. He also completed an executive education program in Risk, Compliance and Governance at the Risk University of KPMG and participated in the Audit Committee course by Brazilian Corporate Governance Institute (IBGC). He is certified as a Portfolio Manager by the Securities and Exchange Commission of Brazil (CVM) and a Certified Professional by the Brazilian Financial and Capital Markets Association (Anbima-CGA). He worked in the financial industry as Investment Director, Stock Manager and Credit Analyst at BRAM - Bradesco Asset Management, ABN AMRO, Unibanco and Banco Bozzano Simonsen, and in the administrative and financial areas of Empresa de Onibus Vila Carrão. At the former three companies, he was a member of the Credit and Investment committees and on the BRAM monthly committee at Banco Bradesco. Director at Tim Brasil (2015 to present) and at Marfrig Brasil Foods (2015 to 2016) and (2018 to present). Fiscal Council at Cielo (2015 to present), Grendene (2015 to present), Grupo Fleury and Ecorodovias (2018 to 2019), Gerdau (2017-2018), Metalúrgica Gerdau (2020 - presente), Fundo de Private Equity de Tecnologia da GP (2001-2005), Fundo de Valor e Liquidez da Bradesco Templeton (1998-2001). Alternate Fiscal Council at Fundo de Private Equity da 2Bcapital (2013 to 2019) and Gerdau (2020 to present). Partner at Araxá Investimentos (2015-2016) and Barigui Gestão de Recursos (2016 to present). Member os the Statutory Audit Committee of Tim Brasil, President of the Risk Committee and Financial Specialist and Coordinator of the Financial Committee of Marfrig.

Roberto Silva Waack

Mr. Roberto Silva Waack, 60, is President of Fundação Renovan, an organization created to manage repairs following the collapse of the Fundão Dam in Mariana, Minas Gerais. His is founder, shareholder and former CEO and subsequently Chairman of the Board of Amata S.A. (www.amatabrasil.com.br), a forestry company engaged in the stewardship and cultivation of native and exotic species. He has long experience as an executive of Brazilian and multinational companies in the pharmaceutical and forestry industries, as general director and in the technology, marketing and planning areas. As an entrepreneur, he is engaged directly in the private placement and creation of management and governance structures. He participates actively on the board of directors of organizations such as Wisewood (recycled plastics), CHS Agroindustrial (grain trading), Global Reporting Initiative (GRI), Forest Stewardship Council (FSC), Brazilian Corporate Governance Institute (IBGC), Instituto Ethos, Fundo Brasileiro de Biodiversidade (Funbio), ISE-Bovespa and WWF. He has been engaged directly in environmental and social movements since the 1980s, always acting at the interface between the private sector and NGOs. He holds a B.Sc. in Biology from IB-USP and an MBA from FEA-USP. Previously he served at the following organizations: Amata S.A. (Chairman of the Board, 2013-2015); CHS Agronegócio Ltda. (Advisory Board, 2014-2016); Brazilian Corporate Governance Institute - IBGC (Director, 2014-2016); Global Reporting Initiative - GRI (Director, 2010-2016); Instituto Ethos (Director, 2013-2016); WWF Brasil (Director and Chairman of the Board, 2014-2016); Instituto Ipê (Director, 2012-2016); BOVESPA Corporate Sustainability Index - ISE (Advisory Board, 2014-2106); Enterprises for Climate Initiative - EPC/FGV (Advisory Board, 2011-2016); Rede Amigos da Amazônia - RAM (Advisory Board, 2008-2014); Fundo Brasileiro para a Biodiversidade - FUNBIO (Director, 2009-2014); Forest Stewardship Council - FSC (Director, 2006-2012; Chairman of the Board, 2008-10); Steering Committee of the Amazon Alternative - IDH The Sustainable Trade Initiative - Holland (2011-2014); Instituto para a Agricultura Sustentável - ARES (Chairman of the Board, 2007-2011); Global Campaign for Climate Action - Brazilian Section (Advisory Board, 2009-2010); Grupo Orsa Holding (Advisory Board, 2005-2006); Centro de Referencia para Informação Ambiental - CRIA (Director, 2005-2011); Forest Stewardship Council Brazilian Initiative (Director, 2005-2007); Ybios, a joint venture of Orsa, Natura and Centroflora for R&D in products from biodiversity (Founder and Director, 2004-2006); Plantations Review Group at Forest StewardshipCouncil (2004-2005); Foundation Institute of the Business and Economics School of the University of São Paulo (FIA/USP) ; PENSA Agribusiness Program at FEA-USP (Advisory Board, 2001-2006).

Nominees to the Board of Directors:

Alain Emilie Henry Martinet

Mr. Alain Emile Henri Martinet, 78, has been an independent director of the Corporation since December 2009. He is a French Argentine who has worked in the animal protein industry for over 30 years, having managed the international team of the meats department at Louis Dreyfus Corporation USA (1978 to 1984). He was general manager (1985 to 1991) and commercial director (1991 to 1992) at the meatpacker Frigorífico Rio - Platense. He served as executive officer at SWIFT Argentina for five years, starting in 2001. Mr. Martinet joined the Corporation in October 2006 and has served as the executive officer responsible for the Argentina operations, for the trading houses and for the U.S. operations of the Marfrig Group.

Marcia Aparecida Pascoal Marçal dos Santos

Ms. Marcia Aparecida Pascoal Marçal dos Santos, 47, has been a director of the Corporation since March 2007. She has amassed long experience at Marfrig, having served as head of the financial department from 2000 to 2006 and as head of the internal audit team from 2000 to 2006. She also actively participates in the Marfrig Social Responsibility Institute Fazer e Ser Feliz as its president. Ms. Marçal dos Santos also is a partner and executive vicepresident at MMS Participações Ltda., which is the parent company of the Corporation.

Marcos Antonio Molina dos Santos

Mr. Marcos Antonio Molina dos Santos, 51, is the chairman of the board of the Corporation since March 2007. He has over 20 years of experience in the food industry, where he began at age 16, by opening his first enterprise, a food distributor. Since Marfrig's incorporation, he has worked actively with key clients to strengthen commercial relations in the national and international markets and to support the development and improvement of industrial and quality processes, with a view to surpassing the expectations for the global market. Mr. Molina dos Santos also is a partner and the chief executive officer of MMS Participações Ltda., which is the controlling shareholder of the Corporation.

Rodrigo Marçal Filho

Mr. Rodrigo Marçal Filho, 46, has been a director at the Corporation since March 2007 and is a statutory office of the Corporation, elected on January 7, 2014, and invested into office on January 23, 2014. He has spent his entire career in the agriculture sector, having worked 9

as a farm administrator until he joined the Corporation in May 2000, as director of cattle sourcing.

The Corporation's Management further declares, in accordance with Article 3 of CVM

Instruction 367, of May 29, 2002 ("CVM Instruction 367"), that it received from the nominees the information that they are apt to sign the declaration of no legal impediments to the discharging of duties required by Article 147 of Brazilian Corporation Law and by said CVM Instruction 367.

The Regulations of the "Novo Mercado", the listing segment on which the shares issued by the Corporation are traded, requires at least 20% or 2 members of the Board of Directors to be formed by independent directors. The nominees to serve as independent directors are

Antonio dos Santos Maciel Neto, Herculano Aníbal Alves and Roberto Waack.

In accordance with Article 3 of CVM Instruction 165/91, as amended by CVM Instruction 282/98, the minimum percentage of voting capital needed to request the adoption of a multiple voting procedure is 5%. In the election of the directors by a multiple voting procedure, each share is attributed votes in the same number as the number of directors to be elected, with shareholders allowed to attribute all of their votes to a single nominee or to distribute them among various nominees.

In accordance with Article 10 of CVM Instruction 481, the information about the nominees to serve as members of the Board of Directors proposed by Management in which is required by items 12.6 to 12.10 of the Reference Form, in accordance with CVM Instruction 480, is included in Appendix VI to this Management Proposal.

Election of the members of the Fiscal Council.

The current members of the Fiscal Council of Marfrig Global Foods S.A. were elected at the

Annual Shareholders Meeting held on April 30, 2020, for a unified term expiring on the date of this Annual Shareholders Meeting to be held in 2021. In accordance with Article 27 of the

Corporation's Bylaws, the Fiscal Council functions on a permanent basis.

According to the Brazilian Corporate Governance Institute (IBGC), a Fiscal Council is an independent body that oversees the board of executive officers and board of directors and that seeks, through the principles of transparency, equitable treatment and accountability, to contribute to the organization's performance. It can serve as a legal instrument forimplementing an active policy of good corporate governance practices aimed in particular at improving the transparency and control of a company's internal acts.

Management proposes to the Corporation's shareholders the following ticket of nominees to serve as members of the Fiscal Council.

Nominees to effective members of the Fiscal Council:

Eduardo Augusto Rocha Pocetti

Mr. Pocetti, 65, holds a bachelor's degree in Accounting from FECAP - Fundação Escola de Comércio Álvares Penteado and a MBA degree in Business Administration from Fundação Getúlio Vargas. He worked for 39 years in the accounting audit position, coordinating audit work on the financial statements of companies and business conglomerates in several segments. He was president of BDO Trevisan from 2004 to 2011. Partner of KPMG from 2011 to 2014. He was CEO of Ibracon - Institute of Independent Auditors of Brazil (Instituto de Auditores Indepententes do Brasil) for the period between 2012 and 2014 and Chairman of the Board of Directors of the same entity for the 2018- 2020 period. He is a member of the Board of Directors of Mahle Metal Leve, a member of the Advisory Board of CIEE - Centro de Integração Empresa Escola, a member of the Fiscal Council of Camil Alimentos, a member of the Fiscal Council of Marisa Lojas and a member of the Fiscal Council of Marfrig Global Foods S.A. since April 2014.

Ricardo Florence dos Santos

Mr. Ricardo Florence dos Santos, 66, act as an independent member of the Board of Directors of Movida Aluguel de Carros S.A. since 2016, as a member of the Fiscal Council of Marfrig Global Foods and of the Advisory Board of Granol Industria, Comércio e Exportação since 2020 and as a member of the Fiscal Council of CPFL Energia since 2017. At MOVIDA also act in the Audit and Finance committees. He served as Chief Financial Officer (CFO - Vice Presidente de Finanças) of Marfrig Global Foods S.A. between 2013 and 2016 and as Statutory Officer of Investor Relations between 2007 and 2014. Chemical engineer graduated from the Polytechnic School of USP and in Business Administration from Universidade Mackenzie, he has MBA degree in Strategy and Finance from IBMEC-SP. He previously worked at Grupo Pão de Açúcar for 16 years (1984-2000) in several positions as Strategic Planning and Financial Officer and Statutory Officer of Investor Relations. He was also responsible for the IR areas of UOL Inc. (Grupo Folha de São Paulo - 2000/2001) and Brasil Telecom (2005-2007). He has been involved in several IPO processes, mergers, acquisitions and sales of assets in the companies where he worked. He served on the Boards of Directors of Grupo Pão de Açúcar (1995-1999), UOL - Grupo Folha (2001) and IBRI - Brazilian Instituteof Investor Relations (Instituto Brasileiro de Relação com Investidores) (1998-2001 and 2014-2019), where he was also CEO from 2010 to 2013 and the Advisory Board of Dentalcorp S.A. (2002 to 2006). Mr. Ricardo Florence dos Santos does not hold positions in other companies or organizations in the third sector.

Tiago Medeiros Garcia

Mr. Tiago Medeiros Garcia, 38, has been a tax manager at Benício Advogados Associados since 2013, whose main focus is the recovery of taxes. Leads a team of 22 people who develop the projects for several national and multinational clients, providing all technical support and tax legislation, as well as the coordination of the area. Graduated in Administration from the Federal University of Ouro Preto and with a Postgraduate Degree in Tax Management from FECAP, he also participated in Basic Accounting courses; Fiscal SPED and EFD Contributions; ICMS - Tax Replacement; Calculation of Income Tax (Real Profit); PIS / COFINS - Not cumulative and cumulative. He also served as Tax Supervisor between 2009 and 2013 at Benício Advogados Associados, previously in the period between 2008 and 2009 as a senior tax analyst at Fernando, Nagao, Cardone & Alvarez Jr. Advogados Associados and from 2003 to 2008 as a tax analyst at Marcondes Advogados Associados.

Nominees to alternate members of the Fiscal Council:

Ely Carlos Perez

Mr. Ely Carlos Perez, 50, received a B.S. in Accounting from Universidade São Marcos and an MBA from the Getúlio Vargas Foundation (FGV). His career has focused on the Financial, Accounting and Process Management areas, with the last 17 years spent as a business and process consultant for implementing Enterprise Resource Planning (ERP) systems. During this period, he has specialized in mapping processes, adapting processes to the system, implementing ERP and training/accompanying post-implementation processes. He worked for more than 10 years at Datasul S.A.

José Osvaldo Bozzo

Mr. José Osvaldo Bozzo, 55, has a law degree from the University of Ribeirão Preto, has worked for more than 30 years as a tax consultant, with a strong specialization in Agribusiness and participation in projects tax consultancy and audit support for several Ethanol and Sugar Producing companies in Brazil, becoming one of the responsible Consultants in major acquisitions. He started his career in 1989 at PriceWaterhouseCoopers, in Ribeirão Preto, acting as a tax consultant until 1997, becoming in 1998 Manager at former Trevisan Auditores (current BDO), in the area of TAX, acting as Director and later as Partnerin 2007. He remained as Partner of KPMG, after the purchase of BDO Brasil until December 2012. He served as Partner and tax consultant at MJC Consultores e Auditores de Ribeirão Preto until December 2018, and currently works at Jbozzo Consultores providing specialized consulting in the Accounting areas, Tax, Corporate, Labor and Social Security for companies of various activities. In addition to being a consultant, he was a professor of tax planning at USP - MBA. He participated in Portugal, in works related to the Tax Services Quality Assurance Review and in Chile at the XIV Annual Meeting of BDO partners from Latin American countries. He also has several articles published in magazines, newspapers and websites addressing tax and legal issues of interest to agribusiness.

Marcílio José da Silva

Mr. Marcílio José da Silva, 57, holds a B.S. in Accounting from the Candido Rondon School of Economic and Accounting Sciences (FACEC). Previously, he served in various positions in the accounting departments of meatpackers, including Quatro Marcos Ltda. (1996-2000) and Frigorífico Tangará Ltda. (2000-2003). He is an accounting consultant and served as effective member of the Corporation's Fiscal Council from April 2010 to April 2014.

Indication of Candidate to the Fiscal Council by minority shareholders - Separate Election

Article 161, paragraph 4 of the SA law states that minority shareholders who jointly represent 10% or more of the voting shares, shall have the right to elect a separate member of the Fiscal Council. The Company received the following nominations from the shareholder Jaburá Ações (CNPJ nº 07.670.184/0001-46) to participate in the election of a member of the Fiscal Council.

Nominated to serve as Effective Fiscal Council Member: Axel Erhard Brod: Mr. Brod, 63, holds graduate degrees in Business Administration from the Universität des Saarlandes, in Saarbrücken, Germany, and from the Pontifical Catholic University of Rio de Janeiro (Pontifícia Universidade Católica do Rio de Janeiro - PUC-RJ), and a master's degree in Finance from PUC-RJ. He is currently a partner and director of ABZ Assessoria e Consultoria Empresarial, a business consulting firm. He server in the Board of Director of Mahle Metal Leve S.A. (since 2011) and Faber Castell S.A. (since 2011). He serves as fiscal council member of the following companies: Mahle Metal Leve S.A. (since 2011), Metalúrgica Gerdau S.A. (from 2011 until 2013), Santos Brasil S.A. (from 2012 until 2016) and Queiroz Galvão Exploração e Produção S.A. (from 2014 until 2017). Between 1999 and 2010, he worked with the MAHLE Group, having served in a number of positions, including as management team member for the global group, and as director and chairman of the boardof a number of Mahle joint venture companies and group companies. At MAHLE Metal Leve S.A. he served as Chief Financial and Administrative Officer and as Investor Relations Officer from 1999 through 2010 and served also as Vice President between 2004 and 2010. Additionally, from 1990 to 1998, Mr. Brod worked for the Thyssen Group, in the trade and services division, as Group Chief Financial and Administrative Officer for Latin America. Between 1984 and 1989, he worked as audit manager of the German Desk in Rio de Janeiro office of KPMG Auditores Independentes.

Nominated to serve as Alternate Fiscal Council Member: Christiano Ernesto Burmeister: Mr. Burmeister, 73, holds graduate degrees in Business Administration (1975) and Electronic Engineering (1971) from Universidade Mackenzie (São Paulo). Previously, from 1975 to 2003, he worked for BASF S.A. in a number of positions, last having served as Executive Vice President of BASF South America. He has been a member of the Fiscal Council of Associação Beneficente Mahle since April 2009 to 2016; and a member of the Higher Committee for Agriculture (COSAG) of the São Paulo Federation of Industries. In addition, Mr. Burmeister was a member of the Directive Board of the National Association for Vegetal Protection (Associação Nacional de Defesa Vegetal - ANDEF) having served for the 1987-1989, 1993-1997 and 2006-2010 terms; former member (2006-2010) of the Advisory Board of the National Pesticide Trade Union (Sindicato Nacional de Defensivos Agrícolas - SINDAG) and as a representative of TASA, former Board member with the Brazil-Germany Chamber of Commerce and Industry (January 2005 - March 2006).

Detailed information on the nominees proposed by the Management, as required by items 12.5 to 12.10 of the Reference Form in accordance with CVM Instruction 480, are presented in the Appendix VI to the Management Proposal made available to shareholders.

4. Proposal for the Aggregate Compensation of the Directors, Officers and Fiscal Council Members for fiscal year 2021.

The compensation proposal put forward to the Annual Shareholders Meeting is for the Corporation to pay the directors, officers and members of the Fiscal Council an aggregate annual amount of up seventy-eight million, eleven thousand and seven hundred and eight reais and eighty one cents (R$ 78,011,708.81), which includes all benefits and related payroll charges. Said amounts are for the period from January to December 2021.

Of the proposed aggregate compensation of R$ 78,011,708.81, R$ 71,489,822.26 is attributable to the Board of Executive Officers, R$ 5,499,871.86 is attributable to the Board of Directors and the remaining R$ 1,002,014.69 is attributable to the Fiscal Council. See thefollowing table:

Number membersof	Fixed compensation	Variable compensation	Share-based payments	Charges	Benefits	Total compensation
Board of Directors	8.00	4,509,800.00	-	-	901,960.00	88,111.86	5,499,871.86
Board of Executive Officers	4.00	8,391,641.72	39,595,465.00	20,469,671.47	2,248,184.68	784,859.39	71,489,822.26
Fiscal Council	6.00	845,012.27	-	-	169,002.46	7,999.96	1,002,014.69
Total	18.00	13,746,453.99	39,595,465.00	20,469,671.47	3,319,147.14	880,971.21	78,011,708.81

Fixed compensation

The fixed compensation of the Statutory Board of Executive Officers is composed of 13 monthly salaries per year and the corresponding vacation pay and payroll charges. The members of the Board of Directors are entitled to fixed monthly compensation and an additional fixed monthly compensation for members participating on the advisory committees of the Board of Directors. The compensation of the members of the Fiscal Council is composed only of a fixed monthly portion.

Benefits

The package of benefits offered to the Statutory Board of Executive Officers includes a health plan, life insurance, meal vouchers, fuel vouchers, the use of a corporate mobile phone and other legal benefits. Members of the Board of Directors and Fiscal Council are entitled to life insurance.

Short-Term Variable Compensation

Short-term variable compensation is determined based on the following performance indicators: (i) individual performance reviews; and (ii) the performance indicators of the Corporation, such as EBITDA, obtained by the net revenue of the Corporation.

Long-Term Incentives

The Corporation has a Stock Option Plan approved by the Extraordinary Shareholders' Meeting held on May 29, 2009, whose beneficiaries are executives and employees in management positions.

Options are granted based on the Corporation's global result indicators and individual performance, and aim to align the interests of managers with the interests of the Corporation and its shareholders in the long term, as well as to retain key personnel.

The options granted under the terms of the Stock Option Plan will vest over four consecutive years, at the rate of 25% each year as of the execution of the corresponding Stock Option Agreement and also observing the terms and conditions stipulated by the Board of Directors and the respective Grant Agreements.

The Corporation's stock option plan includes the possibility of granting long-term incentives to the Board of Directors. However, no variable compensation and/or long-term incentives were granted to the Board in fiscal year 2020 or will be granted in fiscal year 2021. All compensation packages offered by the Corporation are aligned with the market standards for similar functions.

Direct Granting of Shares as Part of the Payment to Managers:

As part of the payment of the remuneration provided for in this Proposal, the Company proposes to its shareholders that up to 70% of the variable remuneration of its Managers is paid through the direct granting of shares held in treasury, and the calculation of the share price, pursuant to the sole paragraph of article 4 of CVM Instruction 567, it will be the average of the last 20 trading sessions prior to the date of granting the variable remuneration scheduled for April 30, 2021. All other conditions for the direct granting of shares such as part of the compensation will be defined by the Company's Board of Directors.

Consistent with the reporting requirements of Section 13 of the Reference Form provided for in CVM Instruction 480, the executive compensation information related to this proposal can be found in the Appendix VIII to the Management Proposal made available to shareholders

5. Resolution on the allocation of the net income and distribution of dividends.

Pursuant to the Brazilian Corporation Law and Articles 29 and 30 of the Company's Bylaws, the net income for the year shall have the following allocation: (i) five percent (5%) for the formation of the legal reserve, up to twenty percent (20%) of the subscribed share capital; (ii) payment of mandatory dividend in a minimum mandatory percentage of twenty-five percent (25%) on the net income of the year and; (iii) formation of a profit reserve and distribution of dividends in addition to the mandatory dividends under the terms of Law No. 6,404/76.

The Company's Management proposes to its shareholders for this Annual Shareholders'

Meeting the payment of a dividend in a percentage of fifty percent (50%) on the net income of the year.

The payment declaration must be made at the time of the Ordinary General Meeting, to be held on April 8, 2021. The date considered for identification of the shareholders who will be entitled to receive it will be April 9, 2021, considering the "ex dividends" to be paid as of April 12, 2021.

As long as approved by the Ordinary General Meeting to be held on April 8, 2021, the payment of declared dividends shall occur in a sole installment on April 30, 2021.

The Management also proposes that the balance of net income of the year, after the formation of a legal reserve and payment of dividends, should be allocated to the profit reserve account, pursuant to Article 29 of the Company's Bylaws. The table below shows in numbers the allocation of net income and distribution of dividends proposed:

Detailed information on the allocation of the net income and the distribution of dividends, required by Article 9 of CVM Instruction 481, are set out in Appendix IV to this Proposal.

EXTRAORDINARY GENERAL MEETING:

Resolve on the following amendments to the Company's Bylaws, as detailed in the draft, with revision marks in this Management Proposal (Appendix IX):

1. Promote the update of the monetary expression of the share capital and the number of shares issued by the Company in the article 5 of the Bylaws, in accordance with capital increase resolutions, within the authorized capital limit, carried out by the Board of Directors at meetings held on June 27, July 25, August 25 and September 23, 2016, January 26, 2017 and December 17, 2019 will read as follows:

"Article 5 - The Company's share capital, fully subscribed and paid-in, is eight billion, three hundred and twenty-eight million, five hundred and seventy-seven thousand, nine hundred and sixty-one reais (BRL 8,328,577,961.00), divided into seven hundred and eleven million, three hundred and sixty-nine thousand, nine hundred and thirteen (711,369,913) common shares, all registered and without par value."

2. Amend the head provision of article 6 of the Bylaws to increase the authorized capital limit from six hundred and thirty million (630,000,000) common shares, to one billion, two hundred and sixty million (1,260,000,000) common shares, and this is the amount that the Company is authorized, by resolution of the Board of Directors, to increase its share capital, regardless of the amendment to the bylaws:

"Article 6 - The Company is authorized, by resolution of the Board of Directors, to increase its share capital, regardless of the amendment to the bylaws, with the issue of up to one billion, two hundred and sixty million (1,260,000,000) common shares, all registered and without par value, including the Company's current share capital."

3. Resolve on the change of the number of members to comprise the Board of Directors, in accordance with the statutory minimum provided in the Brazilian Corporate Law, which will be increased from five (5) to three (3), with the amendment to the head provision of article 16 of the Bylaws.

"Article 16. The Board of Directors will be comprised of a minimum of three (3) and a maximum of eleven (11) members, all elected and removable by the General Meeting, with a unified term of two (02) years, and the reelection is permitted."

4. Resolve on the inclusion of an additional form to represent the Company, which may also be represented by two officers, jointly, one of them being the Chief Executive Officer or the General Counsel, necessarily in conjunction with the Managing Officer or another Officer without a specific designation, with inclusion of item ii and amendments of the items iii and iv of article 26 of the Bylaws.

"Article 26 [...]

(ii) by two (2) officers jointly, one of them being the Chief Executive Officer or the General Counsel, necessarily in conjunction with the Chief Financial Officer or another Officer without a specific designation;"

(iii) by any officer together with an attorney-in-fact appointed in the form of item (i) and (ii) above;

(iv)by 2 (two) attorneys-in-fact together, appointed in the form of item (i) and (ii) above;

Adjust the Company's Bylaws to B3's Novo Mercado Regulation, through:

a) Adjust the Company's Bylaws to B3's Novo Mercado Regulation, through:

Amending the articles: Article 3º, Paragraph 2º, Article 12 with the exclusion of item x; Article 13, paragraph 1, paragraph 2, paragraph 4º inclusion of new paragraphs 5 and 6; article 16 paragraph 2, paragraph 3 and paragraph 4; article 19, items iii, xxiii and xxiv; article 27 paragraph 2 and inclusion of the new paragraph 3; article 28, head provision, inclusion of paragraph 2, paragraph 3 and inclusion of the new item vii of paragraph 4; head provision of article 31; head provision of article 32; and Article 43 (new article 33).

"Art. 3º [...]

Paragraph 2 - With the admission of the Company to the special listing segment called Novo

Mercado, of B3 S.A. - Brasil, Bolsa, Balcão ("B3" e "Novo Mercado", respectively), the

Company, its shareholders, including controlling shareholders, members of the Board of Directors, the Executive Board and the Fiscal Council, if and when installed, are subject to the provisions of Novo Mercado Regulation ("Novo Mercado Regulation").

"Art. 13 [...]

Paragraph 1. The investiture of the members of the Board of Directors and of the Board of Officers takes place through as instrument drawn up in the appropriate book, signed by the 19

manager or director in office and including their subordination to the arbitration clause referred to in Article 33 of these Bylaws, waiving any management guarantee, and will be subject to compliance with the applicable legal requirements.

Paragraph 2. The management shall communicate to the Company, and, if applicable, to CVM and B3, the ownership and trading carried out with securities issued by the Company, under the law and regulations in force.

Paragraph 5. The rule in Paragraph 4 does not apply in the event of a vacancy, in which case, the company shall: (i) disclose the accumulation of positions as a result of vacancy, until the business day following the vacancy; (ii) disclose within sixty (60) days from the vacancy, the measures taken to cease the accumulation of positions; and (iii) cease the accumulation within one (1) year.

Paragraph 6. The Company shall disclose, subject to the provisions of the regulations issued by CVM, which provide for the disclosure and use of information on the relevant act or fact regarding publicly-held companies, the resignation or removal of members of the board of directors and statutory officers, until the following business day in which the company is notified of the resignation or the removal is approved."

"Article 16. [...]

Paragraph 2. The members of the Board of Directors, at least two (2) directors or twenty percent (20%), whichever is greater, shall be independent directors, based on the criteria and requirements established by the Novo Mercado Regulation, and the characterization as an independent director shall be expressly indicated in the minutes of the General Meeting that elects them, being also considered as independent the director(s) elected through the powers provided in article 141, paragraphs 4 and 5, of Law No. 6,404, of December 15, 1976, as amended ("Brazilian Corporate Law").

Paragraph 3. When, as a result of the calculation of the percentage referred to in Paragraph 1 above, a fractional number of independent directors results, the Company shall round to the nearest whole number.

Paragraph 4. The member of the Board of Directors must have an unblemished reputation,

and one cannot be elected, unless upon waiver of the Shareholders' Meeting, if he/she (i)

occupies positions in companies that may be considered competitors of the Company; or (ii) has or represents a conflicting interest with the Company; voting rights cannot be exercised

by the member of the Board of Directors if the same impediment factors are configured superveniently."

"Art. 19 [...]

(iii) establish or change the Board of Officers' authority to issue and/or carry out a public or private offering of credit instruments to raise funds, whether they are ordinary debentures, not convertible into shares and without security interest, bonds, promissory notes, commercial papers or others commonly used in the market, as well as to establish their issue and redemption conditions, and may, in the cases to be defined, require the prior authorization of the Board of Directors as a condition to validate the act;

(xxiii) make a favorable or contrary statement regarding any public offering for acquisition of shares ("OPA") that has as its purpose the shares issued by the Company, by means of a founded prior opinion, disclosed within fifteen (15) days of the publication of the OPA notice, which shall address, at least, (i) the convenience of the OPA regarding the interest of the group of shareholders and the price and potential impacts on the liquidity of the securities owned by them; (ii) the strategic plans disclosed by the offeror regarding the Company; and

(iii) alternatives to the acceptance of the OPA available on the market. The Board of Directors'

opinion shall include the opinion favorable or contrary to the acceptance of the public offering for the acquisition of shares, warning that each shareholder is responsible for the final decision on said decision; and

(xxiv) choose the specialized company responsible for preparing the appraisal report for the Company's shares, in the event of cancellation of registration as a publicly-held company or delisting from Novo Mercado."

"Art. 27 [...]

Paragraph 2. The members of the Audit Committee shall, immediately after taking office in their respective positions, communicate to B3 the amount and characteristics of the securities issued by the Company that they hold directly or indirectly, including their derivatives.

Paragraph 3. The members of the Audit Committee shall have a term of office of one (1) year and may be reelected. The members of the Audit Committee will take office through an instrument drawn up in the appropriate book, signed by said member in office and including their subordination to the arbitration clause referred to in Article 33 of these Bylaws and will be subject to compliance with the applicable legal requirements."

"Article 28. The Statutory Audit Committee, advisory body linked to the Board of Directors is composed of at least three (3) members, of which at least one (1) is independent director, and at least 1 (one) must have recognized experience in corporate accounting matters.

Paragraph 2. The activities of the audit committee coordinator are defined in its internal regulations, approved by the Board of Directors.

Paragraph 3. The members of the Statutory Audit Committee will have a term of office of two (2) years, they may be reelected and exercise their positions for a maximum of ten (10) years, being the investiture subject to the signature of the instrument of investiture, which shall include their submission to the arbitration clause referred to in Article 33 of these Bylaws."

Paragraph 4. [...]

(vii) ensure that the Company has the means to receive and process information about non-compliance with legal and normative provisions applicable to the Company, in addition to internal regulations and codes, including provision for specific procedures to protect the whistle-blower and the confidentiality of information."

"Article 31. The direct and indirect disposal of the Company's control, either through a single transaction or through successive transactions, shall be contracted on condition that the control acquiror is required to carry out the OPA aiming for the shares issued by the Company, held by the other shareholders, subject to the conditions and terms set forth in the laws and regulations in force and in Novo Mercado Regulations, in order to ensure a treatment equal to that given to the transferor."

"Article 32. In the event of direct or indirect disposal of the Company's control, cancellation of registration as a publicly-held company, voluntary delisting from Novo Mercado or corporate reorganization involving the transfer of the Company's shareholding widely held, the provisions of the applicable law and regulations, including, without limitation, the rules issued by CVM and the Novo Mercado Regulation shall be complied with."

"Article 43 (new article 33). The Company, its shareholders, managers and permanent and alternate members of the audit committee, if any, undertake to resolve, through arbitration, before the Market Arbitration Chamber, pursuant to its regulation, any dispute or controversy that may arise between them, related to or arising from their condition as issuer, shareholders, managers and members of the audit committee, in particular, resulting from the provisions inLaw No. 6,385/76, of December 7, 1976, as amended, in the Brazilian Corporate Law, in the rules issued by the National Monetary Council, the Central Bank of Brazil and CVM, as well as the other rules applicable to the functioning of the stock market in general, in addition to those contained in the Novo Mercado Regulation, the other regulations of B3 and of the Novo Mercado Listing Agreement."

b)Exclusion of current articles 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 46.

"Article 33 - Whoever acquires the controlling power of the Company, due to a share purchase agreement entered into with the Controlling Shareholder, involving any number of shares, will be obliged to:

I. carry out the public offering referred to in Article 31 of these Bylaws and;
II. pay, under the terms indicated below, an amount equivalent to the difference between the price of the public offering and the amount paid per share eventually acquired on the stock exchange in the six (6) months prior to the date of acquisition of the Controlling Power, duly updated until the payment date. Said amount shall be distributed among all the people who sold Company's shares in the trading in which the Acquiror made the acquisitions, in proportion to the daily seller net balance of each one, and BM&FBOVESPA is responsible for operating the distribution, in accordance with its regulations."

"Article 34 - In the public offering for the acquisition of shares to be carried out by the controlling shareholder or by the Company for the cancellation of the Company's registration as a publicly-held company, the minimum price to be offered shall correspond to the economic value determined in the appraisal report referred to in Article 37 of these Bylaws, pursuant to the applicable legal and regulatory rules."

"Article 35 - If it is decided to delist the Company from Novo Mercado so that the securities issued by it are registered for trading outside Novo Mercado, or due to a corporate reorganization transaction, in which the company resulting from this reorganization has its securities admitted for trading on the Novo Mercado within one hundred and twenty (120) days from the date of the general meeting that approved the referred transaction, the Controlling Shareholder shall carry out a public offering for the acquisition of shares held by the other Company's shareholders, at least, for the respective Economic Value to be determined in an appraisal report prepared pursuant to Article 37 of these Bylaws, in compliance with the applicable legal and regulatory rules."

"Article 36 - In the event that there is no Controlling Shareholder, if it is decided to delist the Company from Novo Mercado so that the securities issued by it will be registered for trading outside Novo Mercado, or due to a corporate reorganization transaction, in which the company resulting from this reorganization does not have its securities admitted for trading on the Novo Mercado within one hundred and twenty (120) days from the date of the general meeting that approved the referred transaction, the delisting will be conditioned to the holding of a public offering of shares under the same conditions provided in the article above.

Paragraph 1 - The aforementioned general meeting shall define the person(s) responsible for the public offering for the acquisition of shares, which in attendance at the meeting, shall expressly assume the obligation to carry out the offer.

Paragraph 2 - In the absence of a definition of those responsible for carrying out the public offering for the acquisition of shares, in the case of a corporate reorganization transaction, in which the company resulting from this reorganization does not have its securities admitted to trading on the Novo Mercado, the shareholders who voted in favor of the corporate reorganization will be responsible for said offer."

"Article 37 - The delisting of the Company from Novo Mercado due to non-compliance with obligations provided in the Novo Mercado Regulations is subject to the completion of a public offering for the acquisition of shares, at least, for the Economic Value of the shares to be determined in the appraisal report under Article 37 of these Bylaws, in compliance with the applicable legal and regulatory rules.

Paragraph 1 - The Controlling Shareholder shall carry out the public offering for the acquisition of shares provided in the head provision of this article.

Paragraph 2 - If there is no Controlling Shareholder and the delisting from Novo Mercado referred to in the head provision is the result of a resolution of the general meeting, the shareholders who voted in favor of the resolution that caused the respective non-compliance shall carry out the public offering for acquisition of shares provided in the head provision.

Paragraph 3 - If there is no Controlling Shareholder and the delisting from Novo Mercado referred to in the caput occurs as a result of an act or fact of the management, the Company's Management shall call a shareholders' meeting whose agenda will be the resolution on how to remedy the breach of obligations in the Novo Mercado Regulations or, if applicable, decide to delist the Company from Novo Mercado.

Paragraph 4 - If the general meeting mentioned in Paragraph 3 above resolves to delist the Company from Novo Mercado, the aforementioned general meeting shall define the person(s) responsible for the public offering for the acquisition of shares provided in the headprovision, which in attendance at the meeting, shall expressly assume the obligation to carry out the offer."

"Article 38 - The appraisal report referred to in articles 33, 34 and 36 of these Bylaws shall be prepared by a specialized institution or company, with proven and independent experience regarding the decision-making power of the Company, its management and controlling shareholders, and the report shall also comply with the requirements of paragraph 1 of article 8 of Law No. 6,404/76 and contain the responsibility provided in paragraph 6 of the same article of said Law.

Paragraph 1 - The choice of the institution or specialized company responsible for determining the economic value of the Company is the General Meeting's sole discretion, as from the submission by the Board of Directors of a triple list, with the respective resolution, and not counting the blank votes, be taken by majority vote of the shareholders representing the outstanding shares in attendance at the General Meeting that decide on the matter, which if held on first call, shall have the presence of shareholders representing at least twenty percent (20%) of the total outstanding shares or, if held on second call, with the presence of any number of shareholders representing the outstanding shares.

Paragraph 2 - The costs of preparing the appraisal report shall be fully borne by the offeror."

"Article 39 - The Company will not register any transfer of shares to the Acquiror, or to those who come to hold the controlling power, until they subscribe to the Controllers' Instrument of

Consent referred to in Novo Mercado Regulation. The Company will also not register a shareholder agreement that provides for the exercise of controlling power until its signatories subscribe the aforementioned Controllers' Instrument of Consent."

"Article 40 - The formulation of a single public offering for the acquisition of shares is possible for more than one of the purposes provided in this Chapter VI, in the Novo Mercado Regulation or in the regulations issued by CVM, provided that it is possible to make the procedures for all types of public offering for the acquisition of shares compatible and there is no loss for the recipient of the offer, and CVM authorization is obtained, when required by the applicable law.

"Article 41 - The shareholders responsible for carrying out the public offering for the acquisition of shares provided in this Chapter V, in the Novo Mercado Regulation or in the regulation issued by CVM may ensure their effectiveness through any shareholder or third party. The liable shareholders, however, are not exempt from the obligation to carry out the public offering for the acquisition of shares until it is concluded in compliance with the applicable rules.

"Article 42- The cases not mentioned in these Bylaws will be resolved by the General Meeting and regulated in accordance with Law No. 6,404/76, pursuant to Novo Mercado Regulation."

6. Make wording adjustments with the amendment of head provision of article 1 to clarify that the Company is a corporation with authorized capital and governed by the applicable legal and regulatory provisions. Adjustments to sections, chapters, renumbering articles, paragraphs, items, and cross-references will be made when applicable.

"Article 1. Marfrig Global Foods S.A. ("Company") is a corporation with authorized capital, governed by these bylaws ("Bylaws") and by the applicable legal and regulatory provisions."

In addition to the inclusion, amendment and exclusion of the articles set out above, the statutory provisions will undergo adjustments to renumbering and cross-references, as well as the adequacy of sessions and chapters, when applicable.

The proposed amendment to the Bylaws is detailed in Appendix X to this Management Proposal, which includes: a) table with the proposed amendments to the bylaws highlighted and their comparison with the terms of the current Bylaws; and b) the detailed report on the origin and justification of the proposed amendments, with the legal and economic analysis, documents presented in accordance with Article 11, of CVM Instruction No. 481, of December 17, 2009.

7. Resolve on the Reinstatement of the Bylaws to include the changes mentioned above.

The Company's Management proposes to its shareholders to reinstate the Company's

Bylaws as a result of the amendments proposed above. The reinstatement version of the

Company's Bylaws proposed by the Management, already considering all the proposed

amendments, is attached in Appendix X of this Management Proposal. Copies of all documents related to the resolutions on the agenda are available to the Shareholders, including those required by CVM Instruction 481/2009, at the Company's head office, on the

Company's Investor Relations website (ri.marfrig.com.br), as well as on the BM&FBOVESPA (www.b3.com.br) and the Securities and Exchange Commission (www.cvm.gov.br) website.

HOW TO PARTICIPATE IN THE ANNUAL AND EXTRAORDINARY SHAREHOLDERS'

MEETING

To participate in the Combined Annual and Extraordinary Shareholders' Meeting, shareholders must deliver the following documents preferably at least two (2) business days prior to the Meeting (i.e. no later than 6:00 p.m. on April 6, 2021) to the address Avenida Queiroz Filho, no 1560, Block 5, (Tower Sabiá), 3rd floor, Ofice 301, Vila Hamburguesa, São Paulo / SP - CEP 05319-000, care of the Investor Relations Department. Shareholders may attend the Meeting in person, through a duly appointed proxy or by submitting a remote voting ballot, in accordance with CVM Instruction 481.

For Shareholders that are Natural Persons

• Identity document with photograph;
• Updated statement issued by the transfer agent or custody agent attesting to the ownership of shares of record.

For Shareholders that are Legal Persons

• Certified copy of the current bylaws or consolidated articles of association and the corporate documents attesting to the capacity as legal representative (i.e. minutes of meeting appointing the representative, as applicable);
• Identity document with photograph of the legal representative(s);
• Updated statement issued by the depositary institution or custodian attesting to the ownership of shares of record.

Note: For investment funds: a copy of the latest consolidated fund regulations, the bylaws or articles of association of the fund administrator, the corporate documents attesting to the capacity to act as legal representative and an identity document with a photograph of the legal representative(s).

For Shareholders Represented by Proxy

• In addition to the aforementioned documents, a valid and authenticated proxy appointment, which must be granted to a representative who is either a shareholder, a manager of the Corporation or a lawyer;
• Identity document with a photograph of the proxy.

In accordance with Paragraph 1, Article 126 of the Brazilian Corporate Law, a shareholder must be represented by a proxy duly appointed within a maximum of one year, who must be a shareholder, lawyer, financial institution or manager of the Corporation.

In the case of shareholders who are legal persons, in accordance with the decision of the Board of Commissioners of the CVM in a meeting held on November 4, 2014 (CVM Process RJ2014/3578), the Corporation does not require the agent to be a: (i) shareholder, (ii) attorney, (iii) financial institution or (iv) manager of the Company, and such shareholders may be represented in accordance with their corporate documents. However, the corporate documents must attest to the capacity as legal representative of the person appointing the proxy.

For Foreign Shareholders

Foreign shareholders must present the same documents as Brazilian shareholders, except that the corporate documents and proxy appointments must be notarized and consularized.

Registration

In the case of the granting of physical proxies, said documents must be delivered to the

Corporation's headquarters before the start of the Shareholders' Meeting.

However, to facilitate shareholders' access to the Shareholders' Meeting, we request that these documents be submitted as early as possible at any time after March 24, 2021.

The documents must be delivered to the Investor Relations Department at the address Avenida Queiroz Filho, no 1560, Block 5, Tower Sabiá, 3rd floor, Office 301, Vila Hamburguesa, São Paulo/SP, CEP 05319-000.

Public Proxy Solicitation

Shareholders holding at least zero-point five percent (0.5%) of the capital stock may include a proxy solicitation, pursuant to Brazilian Corporation Law and CVM Instruction 481.

Public proxy solicitations must be accompanied by a draft of the proxy and the information and other documents required under CVM 481, in particular its Appendix 23, and be delivered to the Investor Relations Department at the address Avenida Queiroz Filho, no 1560, Block 5 (Tower Sabiá), 3rd floor, Office 301, Vila Hamburguesa, São Paulo / SP - CEP 05319-000.

Pursuant to the applicable regulations, the Company shall comply with the public proxy solicitations made by shareholders within two (2) business days as from the receipt of said solicitation, giving it the same attention as the other documents made available by the

Corporation pertaining to this Shareholders' Meeting. The Corporation and its management undertake no liability for the information contained in public proxy solicitations made by shareholders.

Participation by Submitting a Remote Voting Ballot

The Corporation voluntarily adopted the remote voting system established in Article 21-A of CVM Instruction 481, as amended by CVM Instruction 561/2015. In 2017, in addition to CVM Instruction 481, the Corporation also shall comply with the special procedures established by CVM Resolution 741/2015 regarding remote voting.

As such, shareholders may submit their voting instructions on the matters of the Meeting: (i) by completing the instructions submitted to their custody agents who provide this service, in the case of shareholders whose shares are held at a depositary institution; or (ii) by sending the remote voting instructions form directly to the Company, in accordance with Appendix III hereto, in the case of any shareholder. Excluding the exception established in CVM Instruction 481, if there is any divergence between a remote voting instructions form received directly by the Corporation and a voting instruction contained in the consolidated voting map submitted by the depositary institution related to the same CPF or CNPJ number, the voting instructions contained in the voting map shall prevail, and the voting form received directly by the Corporation shall be disregarded. During the voting period, shareholders may change their voting instructions as many times as they deem necessary, and the last voting instruction submitted shall be the one considered in the Corporation's voting map. Once the voting period ends, shareholders will no longer be able to change their previously submitted voting instructions. If a shareholder deems it necessary to make a change, they must attend the Shareholders' Meeting bearing the documents required above and request that the voting instructions submitted via their voting form be disregarded.

Voting via Service Providers - Remote Voting System

Shareholders who opt to exercise their right to vote remotely via a service provider must submit their voting instructions to the respective custodian agents, in accordance with the rules established by the latter, which, in turn, must forward the instructions to the Depositary Institution of the Corporation. To adopt this process, shareholders must contact their custodyagents and verify the procedures established for issuing voting instructions via a voting form, as well as the documents and information required for such purpose. In accordance with CVM

Instruction 481, as amended, shareholders must submit the completed voting instruction form to their custody agents at least 7 days prior to the date of the Meeting, i.e., April 1st, 2021

(inclusive), unless a different deadline is established by the custody agents. Note that, in accordance with CVM Instruction 481, the Corporation's Depositary Institution, upon

receiving the voting instructions from shareholders through their respective custody agents, shall disregard any instructions different from those issued by persons with the same CPF or

CNPJ number.

Voting Forms Submitted Directly by Shareholders to the Corporation

Shareholders who opt to exercise their right to vote remotely may alternatively do so directly at the Company by submitting the following documents to the Investor Relations Department, at the address Avenida Queiroz Filho, no 1560, Block 5 (Tower Sabiá), 3rd floor, Office 301, Vila Hamburguesa, São Paulo / SP - CEP 05319-000.

(i) physical copy of Appendix III to this Guide, duly completed, initialed and signed; and
(ii) authenticated copy of the aforementioned documents, as applicable.

If they prefer, shareholders also may submit digital copies of the documents cited in items (i) and (ii) above to the e-mailri@marfrig.com.br, in which case they also must submit, by April 5, 2021, a copy of the voting form and an authenticated copy of the other documents required to Avenida Queiroz Filho, no 1560, Block 5 (Tower Sabiá), 3rd floor, Office 301, Vila

Hamburguesa, São Paulo / SP - CEP 05319-000.

Once the documents cited in items (i) and (ii) above are received, the Corporation shall notify the shareholder of their receipt and if they were accepted, in accordance with CVM Instruction 481, as amended.

If the voting form is submitted directly to the Company and is not completely filled out or not accompanied by the supporting documents described in item (ii) above, it will be disregarded and such information will be submitted to the shareholder via the e-mail informed in item 3 of the voting form.

The documents referred to in items (i) and (ii) above must be lodged at the Company at least 7 days prior to the Shareholders' Meeting, i.e., by April 1st, 2021 (inclusive). Any voting forms

received by the Company after said date shall also be disregarded.

DOCUMENTS MADE AVAILABLE

The following documents related to the matters to be discussed at the Meeting are available at the Company's registered office at Avenida Queiroz Filho, no 1560, Block 5 (Tower Sabiá),

3rd floor, Office 301, Vila Hamburguesa, São Paulo / SP - CEP 05319-000, on the Investor Relations website of Marfrig Global Foods S.A.(www.marfrig.com.br/ri), and on the websites of the Brazilian Stock Exchange (B3 S.A. - Brasil, Bolsa, Balcão) (www.b3.com.br) and the Securities and Exchange Commission of Brazil (CVM) (www.cvm.gov.br):

(I) Call Notice;
(II) Management Report;
(III) Financial Statements and accompanying notes for the fiscal year ended at December 31, 2020, accompanied by the independent auditors' report, the reports of the Fiscal Council and

Audit Committee of the Corporation and the Statutory Audit Committee Summary Report;

(IV) Management Proposal, which comprises: a) Proxy Form without voting instructions -

Appendix I; b) Proxy Form with voting instructions - Appendix II and Remote Voting Instruction Form - Appendix III; c) Practical Guide to participate in the Annual and

Extraordinary Shareholders' Meeting; d) Comments from Officers on the Corporation's

financial situation; e) Information on the nominees to serve on the Fiscal Council; f) Proposal for the aggregate compensation of Management for fiscal year 2021; g) Copy of the Bylaws highlighting the proposed amendments; and h) Report detailing the origin and justification of the proposed changes and analyzing their legal and financial effects.

APPENDIX I

PROXY FORM WITHOUT VOTING INSTRUCTIONS

Please find below the Proxy Form without voting instructions that you may use to appoint a delegate to attend the meeting on your behalf.

PROXY APPOINTMENT

[SHAREHOLDER], [IDENTIFICATION INFORMATION] ("Appointor") hereby grants full

power of substitution to [NAME], [NATIONALITY], [MARITAL STATUS], [OCCUPATION],

bearer of Identity Document (RG) number [●], Taxpayer ID (CPF/MF) number [●], resident and domiciled in the City of [●], State of [●], at [street address], to represent the Appointor in the capacity of shareholder of Marfrig Global Foods S.A. ("Company") at the Company's

Annual and Extraordinary Shareholders' Meeting called to convene on April 8, 2021, at 10:00 a.m., at Avenida Queiroz Filho, no 1560, Block 5 (Tower Sabiá), 3rd floor, Office 301, Vila Hamburguesa, São Paulo / SP - CEP 05319-000, with powers to examine, discuss and vote on behalf of the Appointor on the matters on the agenda, in short, with powers to practice any acts required to faithfully execute this proxy appointment.

This proxy appointment is valid for sixty (60) days as from the date hereof.

[City], [Month] [Date], [2021]

_____________________________

Appointor (authenticated signature)

APPENDIX II

PROXY FORM WITH VOTING INSTRUCTIONS

Please find below the Proxy Form with voting instructions that you may use to appoint a delegate to attend the meeting on your behalf.

PROXY APPOINTMENT

[SHAREHOLDER], [IDENTIFICATION INFORMATION] ("Appointor") hereby grants full power of

substitution to [NAME], [NATIONALITY], [MARITAL STATUS], [OCCUPATION], bearer of Identity

Document (RG) number [●], Taxpayer ID (CPF/MF) number [●], resident and domiciled in the City of [●], State of [●], at [street address], to represent the Appointor in the capacity of shareholder of Marfrig Global Foods S.A. ("Company") at the Company's Annual and Extraordinary Shareholders' Meeting

called to convene on April 8, 2021, at 10:00 a.m., at Avenida Queiroz Filho, no 1560, Block 5 (Tower Sabiá), 3rd floor, Office 301, Vila Hamburguesa, São Paulo / SP - CEP 05319-000, with powers to examine, discuss and vote on behalf of the Appointor on the matters on the Agenda in strict conformity with the following voting instructions.

Annual Shareholders Meeting:

1. Approval of the management accounts and examination, discussion and voting on the Financial Statements for the fiscal year ended December 31, 2020.

For [ ] Against [ ] Abstain [ ]

2. Election of the members of the Board of Officers.

For [ ] Against [ ] Abstain [ ]

3. Election of the members of the Fiscal Council.

For [ ] Against [ ] Abstain [ ]

4. Approval of the Proposal for the Aggregate Compensation of the Directors, Officers and Fiscal Council Members for fiscal year 2021.

For [ ] Against [ ] Abstain [ ]

Aproval of the dividend distribution.

For [ ] Against [ ] Abstain [ ]

Extraordinary Shareholders Meeting:

For [ ] Against [ ] Abstain [ ]

Adjust the Company's Bylaws to B3's Novo Mercado Regulation, through:a) Adjust the Company's Bylaws to B3's Novo Mercado Regulation, through: Amending the articles: Article 3º, Paragraph 2º, Article 12 with the exclusion of item x; Article 13,

paragraph 1, paragraph 2, paragraph 4º inclusion of new paragraphs 5 and 6; article 16

paragraph 2, paragraph 3 and paragraph 4; article 19, items iii, xxiii and xxiv; article 27

paragraph 2 and inclusion of the new paragraph 3; article 28, head provision, inclusion of paragraph 2, paragraph 3 and inclusion of the new item vii of paragraph 4; head provision of article 31; head provision of article 32; and Article 43 (new article 33).

For [ ] Against [ ] Abstain [ ]

b)Exclusion of the current articles: 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 46.

For [ ] Against [ ] Abstain [ ]

6. Make wording adjustments with the amendment of head provision of article 1 to clarify that the Company is a corporation with authorized capital and governed by the applicable legal and regulatory provisions. Adjustments to sections, chapters, renumbering articles, paragraphs, items and cross-references will be made when applicable.

For [ ] Against [ ] Abstain [ ]

Resolve on the Reinstatement of the Bylaws to include the changes mentioned above.

For [ ] Against [ ] Abstain [ ]

For the purposes of this proxy appointment, the powers granted herein are meant only for the appointed proxies to attend the Annual and Extraordinary Shareholders' Meeting of the Company and to vote in accordance with the voting instructions herein. This instrument neither includes nor assumes any right or obligation for any proxy to take any action other than as strictly required for the faithful performance hereof. The delegates are hereby authorized to abstain from considering or voting on any matter for which, at their discretion, they have not received sufficiently specific voting instructions.

This proxy appointment is valid for sixty (60) days as from the date hereof.

[City], [Month] [Date], [2021]

_____________________________

Appointor

(authenticated signature)

APPENDIX III

REMOTE VOTING INSTRUCTIONS FORM - ANNUAL AND EXTRAORDINARY

SHAREHOLDERS' MEETING OF MARFRIG GLOBAL FOODS S.A. ON APRIL 08, 2021

1. Shareholder's name
2. Shareholder's CNPJ or CPF
3. E-mail for the Corporation to send to the shareholder confirmation of receipt of the voting form

4. Instructions for completion

This voting form must be completed if the shareholder opts to exercise their right to vote remotely, in accordance with CVM Instruction 481, as amended.

In this case, the above fields must be completed with the shareholder's full name (or corporate name)

and corporate taxpayer ID (CNPJ) or individual taxpayer ID (CPF), as well as an e-mail address for contact.

For this voting form to be considered valid and for the voting instructions to be tallied towards the quorum of the Shareholders' Meeting:

- all of the following fields must be duly completed;
- all pages must be initialed;
- at the end, the shareholder or their representative(s), as applicable and in accordance with the law, must sign the voting form; and

- authentication or consularization of the voting form is not required.

5. Instructions for submitting the voting form

Shareholders that opt to exercise their right to vote remotely may: (i) complete and submit this voting form directly to the Corporation, or (ii) transmit the instructions for its completion to the authorized service providers, as per the following instructions:

5.1 Voting via a service provider - Remote voting system

Shareholders who opt to exercise their right to vote remotely via a service provider must submit their voting instructions to the respective custodian agents, in accordance with the rules established by the latter, which, in turn, must forward the instructions to the Depositary Institution of the Corporation To adopt this process, shareholders must contact their custody agents and verify the procedures established for issuing voting instructions via a voting form, as well as the documents and information required for such purpose.

In accordance with CVM Instruction 481, as amended, shareholders must submit the completed voting instruction form to their custody agents at least 7 days prior to the date of the Meeting, i.e., April 1st, 2021 (inclusive), unless a different deadline is established by the custody agents.

Note that, in accordance with CVM Instruction 481, the Corporation's Depositary Institution, upon receiving the voting instructions from shareholders through their respective custody agents, shall disregard any instructions different from those issued by persons with the same CPF or CNPJ number.

5.2. Voting form submitted directly by the shareholder to the Corporation

(iii) physical copy of this ballot, duly completed, initialed and signed; and
(iv) authenticated copy of the following documents:
(a) for natural persons:
- • identity document with a photograph of the shareholder;
(b) for legal persons:
- • the latest consolidated bylaws or articles of organization, which must attest to the representation powers of the shareholder; and
- • an identity document with a photograph of the legal representative.
(c) for investment funds:
- • the latest consolidated regulations of the fund;
- • the bylaws or articles of organization of the fund administrator or manager, as applicable, in compliance with the fund's voting policy and corporate documents attesting to the powers of representation; and
- • an identity document with a photograph of the legal representative.

If they prefer, shareholders also may submit digital copies of the voting form and of the documents cited to the e-mailri@marfrig.com.br, in which case they also must submit the original copy of the voting form and an authenticated copy of the other documents required by March 25, 2021, to Avenida Queiroz Filho, no 1560, Block 5 (Tower Sabiá), 3rd floor, Office 301, Vila Hamburguesa, São Paulo / SP - CEP 05319-000.

The Company does not require a legal translation of documents originally drawn up in Portuguese, English or Spanish, or that are accompanied by a translation into such languages. The following identity documents shall be accepted, provided they include a photo: RG, RNE, CNH, Passport or officially recognized professional cards.

Once the voting form and required documents are received, the Corporation shall notify the shareholder of their receipt and if they were accepted, in accordance with CVM Instruction 481, as amended.

If this voting form is submitted directly to the Company and is not completely filled out or not accompanied by the supporting documents described in item (ii) above, it will be disregarded and the shareholder will be notified of such via the e-mail informed in item 3 above.

The voting form and supporting documents must be lodged at the Company at least 7 days prior to the Shareholders' Meeting, i.e., by April 1st, 2021 (inclusive). Any voting forms received by the Company after said date shall also be disregarded.

Decisions / Matters related to the Annual and Extraordinary Shareholders' Meeting

Annual Shareholders Meeting:

1. Approval of the management accounts and examination, discussion and voting on the Financial Statements for the fiscal year ended December 31, 2020.

For [ ] Against [ ] Abstain [ ]

Election of the members of the Board of Officers.

For [ ] Against [ ] Abstain [ ]

Election of the members of the Fiscal Council.

For [ ] Against [ ] Abstain [ ]

4. Approval of the Proposal for the Aggregate Compensation of the Directors, Officers and Fiscal Council Members for fiscal year 2021.

For [ ] Against [ ] Abstain [ ]

Aproval of the dividend distribution.

For [ ] Against [ ] Abstain [ ]

Extraordinary Shareholders Meeting:

For [ ] Against [ ] Abstain [ ]

Adjust the Company's Bylaws to B3's Novo Mercado Regulation, through:c) Adjust the Company's Bylaws to B3's Novo Mercado Regulation, through: Amending

the articles: Article 3º, Paragraph 2º, Article 12 with the exclusion of item x; Article 13, paragraph 1, paragraph 2, paragraph 4º inclusion of new paragraphs 5 and 6; article 16 paragraph 2, paragraph 3 and paragraph 4; article 19, items iii, xxiii and xxiv; article 27 paragraph 2 and inclusion of the new paragraph 3; article 28, head provision, inclusion of paragraph 2, paragraph 3 and inclusion of the new item vii of paragraph 4; head provision of article 31; head provision of article 32; and Article 43 (new article 33).

For [ ] Against [ ] Abstain [ ]

d)Exclusion of the current articles: 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 46.

For [ ] Against [ ] Abstain [ ]

6. Make wording adjustments with the amendment of head provision of article 1 to clarify that the Company is a corporation with authorized capital and governed by the applicable legal and regulatory provisions. Adjustments to sections, chapters, renumbering articles, paragraphs, items and cross-references will be made when applicable.

For [ ] Against [ ] Abstain [ ]

Resolve on the Reinstatement of the Bylaws to include the changes mentioned above.

For [ ] Against [ ] Abstain [ ]

[City], [date]

________________________________________

Shareholders' Name

APPENDIX IV

CVM INSTRUCTION 481, OF DECEMBER 17, 2009 35

APPENDIX 9-1-II

ALLOCATION OF NET INCOME

1. Inform the amount of net income in the fiscal year

Net income in fiscal year 2020 was R$3,301,754,532.06.

2. Inform the total amount and amount per share of the dividends, including any dividends prepaid and interest on equity already declared

The total amount to be distributed as dividends, in accordance with the proposal for the allocation of dividends approved by the Company's Board of Directors, in a meeting held on

March 8, 2021, is R$ 141,083,274.72, of which R$70,541,637.36 corresponds to the minimum mandatory dividend and R$70,541,637.36 to the proposed additional dividend. All of the proposals cited must be ratified by shareholders in the Annual Shareholders Meeting to be held on April 8, 2021.

3. Inform the percentage of net income distributed in the fiscal year

The percentage of net income to be distributed, relating to the fiscal year ended December 31, 2020, is 25% for the mandatory dividend and another 25% for the proposed additional dividend.

4. Inform the total amount and amount per share of the dividends distributed based on net income in prior fiscal years

Federal years ended December 31,
(R$)
2018	2019	2020
Net Income	1,395,259,522	218,087,937	3,301,754,532

Gross interest on equity	N/A	N/A	N/A
Gross earnings per share	N/A	N/A	N/A

Balance of gross dividends	N/A	N/A	141,083,275
Gross earnings per share	N/A	N/A	0.2038902

Shares considered for the calculation	619,141,347	700,997,584	691,956,807

5. Inform, deducting any dividends prepaid and interest on equity already declared:

the gross amount per share of dividends and interest on equity, separately for each type and class of share

The Company's Board of Directors, in a meeting held on March 8, 2021, decided on payment of the balance of dividends in the amount of R$ 141.083.274,72, of which R$70,541,637.36 corresponds to the minimum mandatory dividend and R$70,541,637.36 to the proposed additional dividend, equivalent to R$0.2038902 per share.

All of the proposals cited must be ratified by shareholders in the Annual Shareholders Meeting to be held on April 8, 2021.

b. The form and date for the payment of dividends and interest on equity

Provided it is approved by the Annual Shareholders Meeting, to be held on April 8, 2021, payment of the dividends declared will be made on April 30, 2021.

c. Any restatement and interest applicable on the dividends and interest on equity

There is no restatement or interest applicable on the dividends and interest on equity.

d. Declaration date of the payment of dividends and interest on equity considered for identifying those shareholders entitled to receive said payments

Declaration of the payment should be made on the occasion of the Annual Shareholders Meeting, to be held on April 8, 2021. The record date for identifying those shareholders entitled to receive the payment is April 09, 2021, being considered ex-dividends as of April 12, 2021.

6. If there were any declarations of dividends or interest on equity based on the net income ascertained by semiannual balance sheets or statements for shorter periods

a. Inform the amount of dividends or interest on equity already declared

There were no dividends or interest on equity declared for other periods.

b. Inform the respective payment dates

N/A

7. Provide a comparative table indicating the following amounts per share for each type and class of share:

a. Net income in the fiscal year and in the three (3) prior fiscal years
b. Dividends and interest on equity distributed in the three (3) prior fiscal years

Federal years ended December 31,
(R$)
2018	2019	2020
Net Income	1,395,259,522	218,087,937	3,301,754,532

Gross interest on equity	N/A	N/A	N/A
Gross earnings per share	N/A	N/A	N/A

Balance of gross dividends	N/A	N/A	141,083,275
Gross earnings per share	N/A	N/A	0.2038902

Shares considered for the calculation	619,141,347	700,997,584	691,956,807

Note that the Company issues only common shares.

8. If net income was allocated to the legal reserve

a. Identify the amount allocated to the legal reserve

The Legal Reserve was established based on Art. 193 of Federal Law 6.404/76 in an amount corresponding to five percent (5%) of Net Income for the fiscal year ended December 31, 2020, after offsetting accumulated losses based on Art. 189 of Federal Law

6.404/76, in the aggregate amount of fourteen million, eight hundred and fifty-one reais (R$14,851,000), prior to any other allocation, limited to 20% of the Share Capital.

b. Detail the method for calculating the legal reserve

In thousands of Brazilian reais

2020
Net Income for fiscal year 2020	R$ 3,301,755
Offsetting of Accumulated Losses	R$ (3,004,737)
Net Income after offsetting of Accumulated Losses	R$ 297,017
Legal Reserve - 5%	R$ 14,851

9. If the company has preferred shares with the right to fixed or minimum dividends
a. Describe the method for calculating the fixed or minimum dividends
b. Inform if the net income in the fiscal year is sufficient for the full payment of the fixed or minimum dividends
c. Identify if any portion not paid is cumulative
d. Identify the total amount of fixed or minimum dividends to be paid for each class of preferred shares
e. Identify the amount of fixed or minimum dividends to be paid for each class of preferred shares

The Company issues only common shares.

10.Regarding the mandatory dividend

a. Describe the calculation method provided for in the bylaws

Article 29 of our bylaws establishes that shareholders are entitled to receive, each fiscal year, as dividends, a minimum mandatory dividend corresponding to twenty-five percent (25%) of net income for the fiscal year, with the following adjustments:

I. deduction of the amounts allocated in the fiscal year to the legal reserve and to the contingency reserves; and
II. addition of the amounts arising from reversals, in the fiscal year, of previously constituted contingency reserves.

Paragraph 1 - Whenever the amount of the minimum mandatory dividend exceeds the portion of net income realized in the year, the management may propose, and the

Shareholders' Meeting approve, the allocation of the excess amount to an unearned profit reserve (Article 197 of Federal Law 6,404/76).

Paragraph 2 - The Shareholders Meeting may attribute to the managers of the Company or of its subsidiaries a share in the profits, observing the pertinent legal limits. A condition for the payment of this profit sharing is the attribution to shareholders of the minimum mandatory dividend cited in this article. Paragraph 3 - The Company may prepare semiannual balance sheets or for shorter periods. Observing the conditions imposed by law, the Board of Directors may:

(a) decide to distribute dividends against the profit account determined by the semiannual balance sheet or for shorter periods ad referendum the Shareholders Meeting; and

(b) declare intermediary dividends against the profit reserves account existing on the last annual or semiannual balance sheet.

Paragraph 4 - Any dividends not claimed with three years shall become time-barred and revert to the Company.

Paragraph 5 - The Board of Directors will deliberate on the proposal by the Board of Executive Officers for payment or credit of interest on equity, subject to approval at the Annual Shareholder Meeting that will approve the financial statements for the fiscal year in which such interest on equity was paid or credited, and the corresponding amounts recorded towards the mandatory dividend.

b. Inform if it is being fully paid

The minimum mandatory dividend is being paid in full. For this Annual Shareholders Meeting, the Company's Management proposes to its shareholders the payment of a 50% (fifty percent) dividend on the net profit for the year, in the amount of R$ 141,083,274.72.

The additional payment of 25% of the net income for the proposed year will also be paid in full.

c. Inform any amount withheld

There is no proposal for the withholding of dividends.

11.If the mandatory dividend was withheld due to the company's financial situation

Not applicable.

a. Inform the amount withheld
b. Describe in detail the company's financial situation, including the aspects related to the analyses of liquidity, working capital and positive cash flows
c. Justify the withholding of dividends

12.If net income was allocated to the contingency reserve

There is no proposal for the allocation of net income to establish the contingency reserve.

a. Identify the amount allocated to the reserve
b. Identify the loss considered probable and the associated cause
c. Explain why the loss was considered probable
d. Justify the recording of the reserve

13.If net income was allocated to the unearned profit reserve

There is no proposal for the allocation of net income to establish the unearned profit reserve.

a. Inform the amount allocated to the unearned profit reserve
b. Inform the nature of the unearned profit that led to the creation of the reserve

14.If net income was allocated to the statutory reserves

It is proposed that the balance after the constitution of the legal reserve and distribution of dividends in the amount of R$ 141,083,274.72, be allocated to the profit reserve in accordance with the statutory provision.

a. Describe the clauses in the bylaws that establish the reserve

Pursuant to Art. 29, §3, c of the Company's Bylaws, the net profit for the year must be allocated as follows: a) 5% (five percent) for the formation of the legal reserve; b) payment of mandatory dividend; and c) constitution of a profit reserve. Management proposes, under the terms of its Bylaws, that the balance after the constitution of the legal reserve and payment of dividends be allocated as a profit reserve. The corresponding clause of the Statute is transcribed below:

Paragraph 3 - The net profit for the year must have the following destination: a. 5% (five percent) for the formation of the legal reserve, until it reaches 20% (twenty percent) of the subscribed share capital; b. payment of mandatory dividend, in compliance with the provisions of article 29 of these Bylaws and the applicable legislation and; c. constitution of a profit reserve and distribution of dividends in addition to the mandatory dividends under the terms of Law No. 6,404 / 76.

b. Identify the amount allocated to the reserve

The amount of the R$ 141,083,274.72

c. Describe how the amount was calculated

In thousands of Brazilian reais

2020
Net income for fiscal year 2020	3.301.755
Offset of accumulated losses	(3.004.737)
Net income after offset of accumulated losses	297.018
(-) Legal reserve - 5%	(14.851)
Net inocme adjusted for the purposes of dividends	282.167
Mandatory dividends payable - 25%	70.542
Additional proposed dividends	70.542
Total of dividends	141.083
Profit reserve	141.083

15.If the withholding of net income was provided for in the capital budget

There is no proposal for the withholding of net income provided for in the capital budget.

a. Identify the amount withheld
b. Provide a copy of the capital budget

16.If net income was allocated to the fiscal incentive reserve

There is no proposal for the allocation of net income to establish the fiscal incentive reserve.

a. Inform the amount allocated to the reserve
b. Explain the nature of the allocation

APPENDIX V

OFFICER'S COMMENTS ON MARFRIG'S GLOBAL FOODS S.A.

FINANCIAL PERFORMANCE

Section 10 of the Reference Form

10.1 - General financial and equity conditions

The accounting information included and analyzed below is derived from the Company's consolidated financial statements. For a presentation of the Company's financial and additional information on the topic, see item 3.9 of this Reference Form.

(a)

Officers' comments on general financial and equity conditions

In the Company's officers' assessment, the progress of the Company's main financial indicators reflects commitment to improvement of its capital structure, and the quest for better performance of its activities.

In the period to December 31, 2020, the Company continued its strategic redirection toward animal and vegetable protein, with products of higher added value, and a capital structure with low leverage. We highlight some examples:

(i)Formation of a company in Paraguay - Las Ánimas S.A.

(ii) Acquisition of the processed foods plant Campo del Tesoro in Argentina - a leader in production of beef hamburgers for food service in Argentina.

(iii) Creation of the joint venture PlantPlus, to produce and sell plant-based products.

In 2019, the Company executed a strategic redirection toward animal and vegetable protein, with products of higher added value, and a capital structure with low leverage, with, among others, the following events:

(i) Acquisition of Quickfood, a market leader in production and sale of hamburgers in Argentina.
(ii) Acquisition of the Várzea Grande processing plant in the Brazilian State of Mato Grosso, with production capacity for 69,000 tons of hamburgers and more than 27,000 tons of other products.
(iii) Acquisition, together with other stockholders of National Beef, of Iowa Premium, in Tama, Iowa, USA.
(iv) Start of production and sale of plant-based products in Brazil, in August 2019, in partnership with Archer-Daniels-Midland (ADM) of the USA, one of the world's largest processors of agricultural products and suppliers of food ingredients. This came with the launch of a new product - the Rebel Whopper hamburger, by the fast food chain Burger King, made with the vegetable-based burger supplied by Marfrig.
(v) In November 2019, through its subsidiary NBM US Holdings, Inc, Marfrig increased its interest in the capital of the subsidiary National Beef, with the transfer to NBM and other minority stockholders of 5,395.17

shares, or 31.17% of the voting and total stock of National Beef, formerly owned by Jefferies Financial

Group Inc., which withdrew from the company.

(vi) In December 2019 the Company concluded a capital increase of BRL 900,901, with the issue of 90,090,091 new shares, through an initial public offering. After the primary offering, BNDES Participações S.A.

('BNDESPar') sold all of its common shares in the Company and, as a consequence, the Stockholders'

Agreement of the Company between MMS Participações Ltda. and BNDESPar was terminated and extinguished on August 5, 2010.

2018 was the year of the Company's adoption of a strategic redirection toward beef protein and products of higher added value, and a low leverage capital structure.

In June, it acquired control of National Beef of the USA, the fourth largest, and most efficient, beef company in the USA, becoming the world's second largest beef company in the world in capacity.

In line with its commitment to financial discipline, in November 2018 the Company sold its former subsidiary Keystone Foods, which is primarily a processor of chicken meat.

This table below shows the changes in the Company's main financial indicators:

2020	2019	2018
Net debt(1) / LTM Ebitda	1.57x	2.77x	1.16x
Net debt(1) / LTM Ebitda / ('carve-out') (2)	0.98x	2.36x	0.78x
Current liquidity ratio (3)	1.33x	1.36x	1.36x
Average maturity of debt (months)	42	54	49
Loans, financing and debentures - non-current portion (%)	75.5%	78.8%	75.9%
Loans, financing and debentures - denominated in BRL (%)	11.2%	4.0%	1.4%
Loans, financing and debentures - denominated in other currencies (%)	88.8%	96.0%	98.6%
___________

(In BRL '000, except %)

On December 31,

(1) Net debt = [Loans, financings and debentures (current and non-current)], less [the sum of cash, cash equivalents and financial investments].
(2) This reflects the ('carve-out') contractual provisions that allow exclusion of the effects of exchange rate variations in calculating the leverage ratio (Net debt / LTM Ebitda).
(3) Current liquidity ratio = total current assets divided by total current liabilities, not considering mandatorily convertible debentures.

At December 31, 2020, the consolidated balance of the Company's loans, financing and debentures was BRL 26.8 billion. This balance was BRL 21.7 billion on December 31, 2019 and BRL 15.2 billion on December 31, 2018.

At December 31, 2020, 11.2% of total loans, financing and debentures was denominated in Reais and 88.8% in other currencies. The weighted average cost of consolidated debt was 5.7% p.a. The leverage ratio Net debt / Last 12 months' Ebitda was 1.57x. Current liquidity, based on the cash position at December 31, 2020 of BRL 11,757.4 million, was 1.33x. For the purposes of bank and market financing transactions, the leverage ratio - calculated under clauses that exclude the effects of exchange rate variations - was 0.98x on December 31,2020. Of total gross debt, comprising loans and interest on debentures, 24.5% had short-term maturities and 75.5% had long-term maturities.

In the year to December 31, 2019 only 21.2% of the total of loans, financing and debentures had short-term maturities, and 78.8% had long-term maturities. A highlight for our objective of lengthening the profile of our debt and reducing its cost was the thirteenth transaction, concluded in July 2019, through the subsidiary NBM US Holdings: an offering, in the category of Sustainable Transition Bonds, of USD 500 million in 10-year Senior Notes. The proceeds of the issue were invested in purchase of cattle from the Amazon Biome in the states of Mato Grosso, Pará and Rondônia, meeting specific criteria, with the purpose of controlling deforestation, preventing use of indigenous lands, and eradication of slave and child labor, through greater control of cattle traceability, with innovations developed by the Company. The equivalent of BRL 730 million (USD 181 million) of the funds was used by December 31, 2019. The rest is invested in liquid investments, awaiting use based on the criteria described above.

At December 31, 2018 only 24.1% of the total of loans, financing and debentures had short-term maturities, and 75.9% had long-term maturities. In line with our objective of lengthening the profile of our debt and reducing its cost, the Officers note our tenth issue, concluded in January 2018, through the subsidiary Cledinor S.A.: an offering of USD 60 million in 10-year Senior Notes, maturing in January 2028, placed for an interest rate of 5.82% p.a., in Uruguay, designated for local investors in the country. This issue received a risk rating of BBB+ from Fix SCR, the Uruguay local affiliate of Fitch Ratings. The Senior Notes are guaranteed by the Company's subsidiaries in Uruguay: Frigorífico Tacuarembó S.A., Inaler S.A. and Establecimientos Colonia S.A. The objective of the issue was to optimize the Company's capital structure and finance future investments in operations in Uruguay.

The eleventh issue, also concluded in January 2018, was by MARB BondCo PLC: USD 1 billion in Senior Notes, with coupon of 6.875% p.a., semiannual interest and principal maturity at 7 years (January 2025). It received foreign currency risk ratings of B+ from Standard & Poors (S&P) and BB- from Fitch Ratings. These Senior Notes are guaranteed by Marfrig Global Foods S.A., Marfrig Overseas Limited and Marfrig Holdings (Europe) B.V. The proceeds were used to extend the debt and reduce its cost.

In January 2018 the Company repurchased the principal amount of approximately USD 277.1 million or 58.01% of the outstanding remaining notes of the Third Issue, and the principal of approximately USD 151.9 million, or 23.00%, of the outstanding Notes from the Seventh Issue remaining in circulation.

In May 2018 the Company repaid the full principal of the outstanding Senior Notes from the Third Issue, USD 88.6 million, plus the related interest of USD 3.7 million, totaling USD 92.3 million.

At December 31, 2018, 1.4% of the total of loans, financing and debentures was denominated in Reais and 98.6% in other currencies. In the year, 16.1% of the Company's consolidated revenues were generated in Reais and 83.9% in other currencies. The weighted average cost of consolidated debt was 7.00% p.a. The leverage ratio Net debt / Ebitda at the end of 2018, based on net cash and cash equivalents, of BRL 7.2 billion, was 1.16x, with current liquidity ratio of 1.36x. For the purposes of bank and market financing transactions, the leverage ratio - calculated under clauses that exclude the effects of exchange rate variations - was 0.78x on December 31, 2018.

(b)

Officers' comments on the capital structure

Below, the Company's Officers present the composition of the Company's capital structure for the periods indicated. In their opinion the Company's capital structure currently represents an adequate relationship between stockholders' equity and external capital (current + non-current liabilities):

• At December 31, 2020, the capital structure comprised 8.9% stockholders' equity and 91.1% external capital.

• At December 31, 2019, the capital structure comprised 5.6% stockholders' equity and 94.4% external capital.
• At December 31, 2018, the capital structure comprised 15.1% stockholders' equity and 84.9% external capital.

The Officers also report that the Company has no redeemable shares issued.

Business combinations resulted in a change in the Company's ratio of own capital to external capital in 2020, due to the formation of Las Ánimas under the laws of the Republic of Paraguay on September 24, 2020, and PlantPlus, under the laws of the State of Delaware, on October 26; and acquisition of Campo del Tesoro, on October 5, as described in Explanatory Note 11 to the financial statements at December 31, 2020.

In 2019 the ratio of own to external capital was also changed by business combinations: acquisition, through its subsidiaries, of Quickfood SA, on January 3, and Iowa Premium, LLC on June 10, and acquisition of a 30.73% additional interest in the subsidiary National Beef Packing Company, LLC on November 29. Costs related to business combinations in the amounts of BRL 1.0 million and BRL 12.7 million, respectively, were recognized in the Profit and loss account as administrative expenses.

The capital structure was changed by business combinations in 2018: acquisition of National Beef Packing Company, LLC, and sale of the business of Keystone Foods, as described in Notes 12.2 and 31 (respectively) to the financial statements at December 31, 2018.

The Company manages its capital based on capital structure optimization parameters with a focus on liquidity and leverage metrics that enable a financial return to its stockholders over the medium term that is consistent with the risks assumed in the operation.

The main indicator for monitoring is Modified immediate liquidity, defined as the ratio of cash and cash equivalents and financial investments to the current portion of loans, financing and debentures:

2020	2019	2018
Cash and cash equivalents plus cash investments	11,757,449	8,410,113	7,191,706
Loans, financing and debentures - current	6,566,089	4,594,444	3,665,455
Modified liquidity indicator	1.79	1.83	1.96

(In BRL '000, except %)

On December 31,

(c)

Officers' comments on capacity to repay financial commitments assumed

In the Officers' assessment, the Company's ability to pay its financial commitments is considered comfortable, taking into account the position in cash and cash equivalents, the debt profile and expected cash generation.

At December 31, 2020, only 24.5% of the Company's total gross debt had short-term maturities, and 75.5% had long-term maturities. Cash investments, totaling BRL 11,757.4 billion, resulted in a short-term liquidity ratio (Cash and equivalents / Short term debt) of 1.79x.

At December 31, 2019, only 21.2% of Company's total gross debt had short-term maturities, and 78.8% had long-term maturities. Cash investments, totaling BRL 8,410.1 billion, resulted in a short-term liquidity ratio (Cash and equivalents / Short term debt) of 1.83x.

At December 31, 2018, only 24.1% of Company's total gross debt had short-term maturities, and 75.9% had long term maturities. The cash position, of BRL 7,191.7 billion, resulted in a short-term liquidity ratio (Cash and equivalents / Short-term debt) of 1.96x.

The Officers report that the Company is constantly seeking a debt profile with optimum balance between maturities, avoiding concentrations of payments in any single period.

(d)Funding sources used for working capital and for investments in non-current assets

The Officers report that in the last three business years the Company's main funding sources were: (i) cash flow from operations; (ii) short and long term bank debt; (iii) divestment of assets; (iv) issuance of debt (bonds and debentures); and (v) follow-ons in primary issues.

These financings are used by the Company mainly to cover costs, expenses and investments related to: (i) business operations; (ii) capital disbursements, including investments in new plants, and expansion and/or modernization of existing plants; and (iii) reduction of debt and the related interest rates.

The Officers believe that these funding sources are adequate for the Company's debt profile, meeting the needs for working capital and investments, always preserving the long-term debt profile and, consequently, the Company's capacity to pay.

(e) Funding sources used for working capital and for investments in non-current assets used to cover liquidity deficiencies

At December 31, 2020, the Company had BRL 11.757.4 billion in cash and cash equivalents and financial investments, compared to BRL 6,566.1 billion in short-term debt. Considering the Company's debt profile and its historic ability to raise funds and generate cash in US dollars and Reais, it expects to be able to pay its debts, using a combination of various capital resources, such as revenues from operations, issues of debt and equity, and payment terms with suppliers.

The Company believes that the focus on its core business, together with the investments it plans to make in the coming years, will enable cash generation to be increased. This, in turn, may gradually increase the Company's capacity to pay its financial obligations.

Item 10.1(f) of this Reference Form describes the main financing lines contracted by the Company and the characteristics of each one.

(f)Levels and characteristics of debt

(I)Significant loan and financing agreements

This table shows the Company's consolidated debt at December 31, 2020, 2019 and 2018, by type, with weighted average rates and weighted average maturities:

BRAZILIAN CURRENCY:

On December 31,

(BRL '000)(BRL '000)

Finame/Finep

Export credit notes (NCEs) /

Working capital

Credit notes

CDI rate

TJLP + Flat Rate

Non-convertible debentures - CRAs

104% of CDI

Total in Brazilian currency

5.50%

0.04

1,001

6,942

4.40% 3.08%

0.85 2.11

1,180,979 497,449

247,751

_ _

4.04%

3,009,384

867,228

210,438

Floating rate

Bank Loan (USD)

+ ERVRevolving Credit FacilityFloating rate

+ ERV

Total, foreign currency

3.81%

1.36

2.37%

1.44

5.91%

( * ERV = Exchange rate variation )

Total loans, financing and debentures

2,739,359

1,681,991

23,800,763

20,849,052

2,267,132

291,757

1,633,277

515,824

15,022,912

5.70%

26,810,147

21,716,28015,233,350

Current liabilities

Non-current liabilities

6,566,089 20,244,058

4,594,444

17,121,836

3,665,455 11,567,895

Of the loans and financings above, the table below shows the individual contracts for loans and financings by Senior Notes recorded as having balances payable in the Statement of financial position at December 31, 2020, and debts that individually exceed BRL 100.0 million:

Type of contract

Non-convertible debentures - CRAs

NCEs / Working capital loans

Principal (million)

Issue date

Annual cost

Balance at December 31, 2020

(million)

BRL 250.0

September 13, 2019

1.98%

BRL 246.67

BRL 250.0

July 14, 2020

4.18%

BRL 250.78

BRL 409.6

November 1, 2019

2.44%

BRL 308.86

BRL 121.5

September 03, 2020

4.81%

BRL 123.35

BRL 195.0

October 1, 2020

4.81%

BRL 197.27

NCEs / Working capital loans

BRL 105.0

October 21, 2020

4.30%

BRL 105.86

BRL 217.6

December 14, 2020

4.35%

BRL 218.09

Credit notes

BRL 350.0

September 14, 2020

4.70%

BRL 349.25

Credit notes

BRL 100.0

October 19, 2020

3.34%

BRL 100.67

Credit notes

BRL 200.0

November 9, 2020

4.00%

BRL 201.16

Credit notes

BRL 196.0

November 27, 2020

4.29%

BRL 196.75

Credit notes

Pre-payment / NCEs / ACCs (USD)

Pre-payment / NCEs / ACCs (USD)BRL 100.0

BRL 120.0

October 7, 2020

October 9, 2020

4.80%

BRL 101.09

4.80%

BRL 121.26

3.52%

BRL 183.84

4.38%

BRL 103.93

USD 20.0

April 7, 2020

4.38%

BRL 103.93

USD 20.0

June 9, 2020

4.38%

BRL 103.93

Pre-payment / NCEs / ACCs (USD)

Pre-payment / NCEs / ACCs (USD)USD 20.0

June 24, 2020

4.38%

BRL 103.93

USD 20.0

May 21, 2020

4.38%

BRL 103.93

Pre-payment / NCEs / ACCs (USD)

Pre-payment / NCEs / ACCs (USD)USD 20.0

March 9, 2020

4.38%

BRL 103.93

USD 20.0

May 8, 2020

4.38%

BRL 103.93

Pre-payment / NCEs / ACCs (USD)

Pre-payment / NCEs / ACCs (USD)USD 20.0

November 18, 2020

4.38%

BRL 103.93

USD 20.0

December 8, 2020

4.38%

BRL 103.93

Pre-payment / NCEs / ACCs (USD)

Senior Notes due 2028

USD 20.0

August 6, 2020

4.38%

BRL 103.93

USD 60.0

January 3, 2018

6.00%

BRL 253.46

Senior Notes due 2024

Senior Notes due 2025

USD 750.0

March 15, 2017

7.00%

BRL 3,564.97

USD 1,000.0

January 19, 2018

6.88%

BRL 5,104.58

Senior Notes due 2026

Senior Notes due 2029

USD 1,000.0

May 14, 2019

7.00%

BRL 5,042.61

USD 500.0

August 6, 2019

6.63%

BRL 2,580.90

Bank loan (USD)	USD 500.0	June 26, 2020	4.00%	BRL 2,251.28
Revolving credit facility	USD 375.0	May 30, 2018	2.37%	BRL 1,681.99
Bank loan (USD)	USD 64.0	May 30, 2018	4.00%	BRL 137.37

The Company's Officers believe that the modes below describe the most significant loans and financings, as follows:

These are long-term debt borrowings, in international currencies, through issue of bonds outside Brazil intended exclusively for qualified institutional investors and in accordance with exemptions from registry under the US Securities Act of 1933 (Rule 144A, Regulation S).

Through its subsidiaries, the Company has made thirteen funding transactions of this nature since 2006, eight of which (the first through the eighth issue) have been paid in full.

The following is a brief description of the agreements with our principal creditors in effect on December 31, 2020.

Export credit notes (NCEs) / Working capital loans

The Company issued export credit notes with total principal value of BRL 1,593.7 million, all with maturity in 2021, except for one note with maturity in 2023. This type of note is issued to strengthen the Company's working capital, to support production for export. The notes attract an average annual interest rate of 4.25%. On December 31, 2020, the outstanding balance on these contracts was BRL 1,331.2 million.

Pre-payment Financing Contracts / NCEs / ACCs (USD)

In March 2019 the company entered a Pre-exportation Financing Contract with HSBC México S.A., for principal of USD 50 million, at an annual rate of Libor + 3.5%. In September 2009 an amendment was signed to this contract reducing the principal to USD 35 million. In 2020, the company signed more of these contracts for a principal amount of USD 547.9 million, at a fixed annual rate of 4.38%. All the contracts have maturities in 2021.

This type of contract is signed to strengthen the Company's working capital, to support production destined for export. On December 31, 2020, the outstanding balances on these contracts totaled BRL 2,832.8 million.

Credit notes - CPRs and CCBs

In 2020 the Company signed contracts for Credit Notes: Farm Production Credits (Créditos de Produtor Rural - CPRs) and Bank Credit Notes (Cédulas de Crédito Bancários - CCBs), for a total principal value of BRL 1,176.0 million, with maturity in 2021. This type of contract is signed to strengthen the Company's working capital. The contract accrues interest at an annual rate of 4.46%. On December 31, 2020, the outstanding balances on these contracts totaled BRL 1,180.9 million.

Non-Convertible Debentures - CRAs

On September 13, 2019, we issued 250,000 unsecured non-convertible debentures, in a single series, with nominal unit value of BRL 1,000, in the total amount of BRL 250 million, with interest at 1.98% p.a., with final maturity in September 2023. On July 14, 2020, we issued 250,000 unsecured non-convertible debentures, in a single series, with nominal unit value of BRL 1,000, in the total amount of BRL 250 million, with interest at 4.18% p.a., with final maturity in September 2022. The Debentures were subscribed and paid up by RB Capital Companhia de Securitização with the funds of a public offering of agribusiness receivables certificates (CRAs). The CRAs are guaranteed by the Company's agribusiness receivables.

2024 Notes

The ninth transaction was concluded in March 2017: an issue by MARB BondCo PLC of USD 750 million in Senior Notes, with coupon of 7.0% p.a. and semiannual interest payments, starting in September 2017 and with principal maturity in 7 years (March 2024). This issue was given foreign currency risk ratings of B+ by Standard & Poors (S&P) and BB- by Fitch Ratings. This transaction was guaranteed by Marfrig Global Foods S.A., Marfrig Overseas Limited and Marfrig Holdings (Europe) B.V. The proceeds were used to lengthen the profile of the debt and reduce its cost.

2028 Notes

The tenth transaction was concluded in January 2018: issue by Cledinor S.A of USD 60 million in Senior Notes, with a coupon of 5.82% p.a., semiannual interest payments, and principal maturity at 10 years (January 2028). This issue was assigned foreign currency risk ratings of B+ by Standard & Poors (S&P), and BB- by Fitch Ratings. The transaction is guaranteed by the Company's subsidiaries in Uruguay: Frigorífico Tacuarembó S.A.,

Inaler S.A. and Establecimientos Colonia S.A. The objective of the issue was to optimize the Company's capital structure and finance future investments in operations in Uruguay.

2025 Notes

The eleventh transaction was concluded in January 2018: an issue by MARB BondCo PLC of USD 1 billion in Senior Notes, with a coupon of 6.875% p.a., semiannual interest, and principal maturity at 7 years (January 2025). This issue was assigned foreign currency risk ratings of B+ by Standard & Poors (S&P) and BB- by Fitch Ratings. This transaction was guaranteed by Marfrig Global Foods S.A., Marfrig Overseas Limited and Marfrig Holdings (Europe) B.V. The proceeds were used to lengthen the profile of the debt and reduce its cost.

2026 Notes

The twelfth transaction was concluded on May 14, 2019: issue by NBM US Holdings, Inc. for aggregate principal of USD 1.0 billion in Senior Notes expiring May 14, 2026 ('the 2026 Notes'). The notes were issued to fund auction offers for the Senior Notes of 2021 and 2023 and to pay fees and expenses associated with those transactions, with the remaining net proceeds to pay other outstanding debts (including, among others, open market repurchases of some of the Company's outstanding debts). The notes were offered to QIBs in the United States, based on the exemption from registry provided by Rule 144-A, and to certain non-US persons in offshore transactions, based on Regulation S. The notes bear interest at 7% per year with semiannual fees due on May 14 and November 14 of each year, beginning on November 14, 2019. The notes are unconditionally and irrevocably guaranteed by Marfrig, MARB, Marfrig Holdings and Marfrig Overseas.

2029 Notes

The thirteenth transaction, placed as Sustainable Transition Bonds, was concluded in July 2019: issue by NBM US Holdings, Inc., of USD 500 million in Senior Notes, with 6.625% p.a. coupon, semiannual interest, and principal maturity at 10 years (August 2029). This was assigned foreign currency risk ratings of BB- by Standard & Poors (S&P) and BB- by Fitch Ratings. The transaction has the benefit of guarantees from Marfrig Global Foods S.A., Marb Bondco PLC, Marfrig Overseas Limited and Marfrig Holdings (Europe) B.V. The proceeds were invested in purchase of cattle from the Amazon Biome, in the states of Mato Grosso, Pará and Rondônia, meeting certain criteria with a view to control of deforestation, non-use of indigenous lands, and eradication of slave and child labor, through greater control of cattle traceability, with innovations developed by the Company.

Revolving credit facility

In May 2018, National Beef signed a credit agreement with Cobank ACB, for a reduced rate revolving credit facility for an aggregate principal amount of USD 375.0 million, at interest of 2.37% p.a., with majority on June 4, 2022. On December 31, 2020, the outstanding balances on these contracts totaled USD 1,681.9 million.

Bank loans (USD)

In December 2020 the Company had outstanding bank loans in US dollars of USD 2,739.3 million, at an average rate of 3.81% p.a., the majority of these contracts maturing in 2021 and the rest in 2023. This type of lending is used to generate working capital in companies of the group located outside Brazil.

Financing contracts signed with buyers or their affiliates

On the date of this Reference Form, and except for the working capital facilities contracted in the normal course of business and as disclosed above, the Company has no other financing agreements with the initial buyers or their affiliates.

Consolidated debt maturity timetable - total of all currencies:

On December 31,

2020	2018
2019	-	3,665,463
2020	4,594,444	201,361
2021	6,566,089	259,549	178,344
2022	2,859,065	1,851,941	650,475
2023	1,214,054	1,917,393	3,815,450
2024	3,884,751	3,002,949	2,838,455
2025-2029	12,286,188	10,090,004	3,883,802
Total	26,810,147	21,716,280	15,233,350

2019

(in BRL '000)

(ii)Other long-term relationships with financial institutions

The Officers confirm that the Company has no long-term relationships with financial institutions other than as a result of the financing, loans and guarantees described above.

(iii)

Degree of subordination between the Company's debts

The Officers report that the Company's debts have no degree of subordination between them, and thus all have equal payment rights. It should be noted, however, that the Finame credit facilities contracted by the Company with the Brazilian Development Bank (BNDES) rely on the provision of guarantees providing rights over assets acquired with funds loaned, and on some credit lines such as export prepayments, with the assignment of receivables.

The Company also reports that in the last three business years there has been no degree of subordination between the Company's unsecured debts. Debts guaranteed by assets have certain preferences and prerogatives as a result of legislation.

(iv) Restrictions imposed on the Company, especially in relation to debt limits and contracting of new debts, distribution of dividends, sale of assets, issue of new securities, and disposal of a controlling interest; and whether the issuer has been complying with these restrictions 65

In the Officers' assessment, the main restrictions imposed on the Company in relation to debt limits, contracting of new debt, sale of assets, issue of new securities and disposal of a controlling interest are as follows:

The Company is subject to restrictive clauses in debt agreements that mention or govern its outstanding debt, such as limitations on assumption of new debt, encumbrances, and restrictions on payments and/or investments, among other restrictive clauses that are standard in this type of debt instrument, including the following obligations:

• Not to incur any new indebtedness (as defined in such agreements) which, on the date of such occurrence, considering its pro forma effect, would lead Net debt / Ebitda (as defined in such agreements) to be greater than 4.75 up to 1.00; or, in the case of bank financing, an obligation to keep Net financial debt / Ebitda (as defined in such agreements), at or below 4.75.
• Not to restrict the ability of the Company and its subsidiaries to: (i) pay dividends and/or other distributions between groups; (ii) incur or pay debts/advances between companies, or (iii) transfer properties or assets between them.
• Not to sell any assets, unless: (i) the sale of the asset is at fair market value; (ii) at least 75% of the consideration consists of cash or assets/properties related to the Company's business; and (iii) within 360 days after receiving such funds, they are used to pay debts or acquire additional assets in businesses related to the Company's business.
• Not to issue, sell or transfer common shares in subsidiaries, unless to the Company or its subsidiaries or in accordance with the clauses that provided for limitations on sale of assets or limitation of restricted payments.

In addition, certain agreements contain cross-default clauses in the event of default by the Company or its subsidiaries. The Company continues to pay its debts regularly, making programmed payments of principal and interest.

Limits to indebtedness

In their most restrictive form, agreements for loans and financing are related to a level of consolidated debt by a covenant for the ratio [Net Debt / Last 12 months' Ebitda] not to exceed 4.75x.

The penalty for non-compliance with this covenant is the same applied in the financial market in general, i.e. if a limit is exceeded, the debt becomes due immediately, and must be reclassified to Current liabilities.

The leverage indicator is calculated as follows:

On December 31,
(in BRL '000)
2020
Consolidated gross debt	26,810,147
(-) Consolidated cash and equivalents	11,757,449
Consolidated net debt	15,052,698
Ebitda in full year 2020	9,595,859
Ebitda ratio	1.57
Consolidated net debt	15,052,698
(-) Effect of exchange rate variation ('carve-out')	5,694,293
Adjusted consolidated net debt	9,358,405
Leverage indicator for financial covenants	0.98

Due to the contractual provisions relating to the 'carve-out' that allow exclusion of the effects of exchange rate variation in the calculation of the leverage ratio (Net debt / LTM Ebitda), the Company reports that by this method the current leverage ratio (Net debt / LTM Ebitda) was 0.98x on December 31, 2020.

Restriction on sale of assets

In certain Advances on foreign exchange contracts (ACCs) there are restrictions on sales of assets that could lead to breach of the obligations specified.

In the case of the Finame lending facility of the BNDES, there is a restriction on encumbrance, after the transaction, of the borrower's fixed assets without prior express authorization from the BNDES (under Sub-item XII of Article 34 of the Provisions Applicable to the Agreements with the BNDES).

Restriction on issue of securities

In agreements under the Finame lending facility of the BNDES, there is a restriction on issue of debentures, after contracting of the transaction, by the borrower without prior express authorization from BNDES (Under Sub-item IX of Article 34 of the Provisions Applicable to the Agreements with BNDES).

Restriction on sale of control

In agreements under the BNDES Finame lending system, there is a restriction on direct or indirect change of effective control of the borrower, after contracting of the transaction, without prior and express authorization from BNDES, under Sub-item III of Article 39 of the Provisions Applicable to the Agreements with BNDES.

There are also restrictions on transfer of control of the borrower in financings under NCEs, Finame, NPRs, CCBs and some ACCs.

(g) Officers' comments on limits of use of financings previously contracted

The Officers report that all amounts envisaged in the financing agreements were released in full after the respective approval and formalization with the creditor counterparty.

(h) Officers' comments on significant changes in each item of the financial statements

In the tables below, the column 'HA' ('Horizontal Analysis') indicates percentage of the total of a line, and 'VA' ('Vertical Analysis') indicates percentage of the total of the column.

The tables give a summary of the Company's financial and operating information for the periods indicated. The information below should be read and analyzed jointly with Company's consolidated financial statements, and with the respective explanatory notes, available on the websites of the Company(www.marfrig.com.br/ri)and the CVM(www.cvm.gov.br).

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

The consolidated Statements of financial position (balance sheets) relating to the business years ended December 31, 2020, 2019 and 2018 are presented below.

COMPARISON OF THE STATEMENTS OF FINANCIAL POSITION AT DECEMBER 31, 2020 AND 2019

The table below compares changes in the main account lines between December 31, 2019 and December 31, 2020.

ASSETS	Dec. 31, 2020	VA	Dec. 31, 2019	VA	Change (%)
(In BRL '000, except percentages)
CURRENT ASSETS
Cash and cash equivalents	2,041,924	5.17%	1,774,902	5.62%	15.04%
Cash investments	9,715,525	24.59%	6,635,211	21.02%	46.42%
Receivables - Brazilian clients	2,026,341	5.13%	1,442,725	4.57%	40.45%
Receivables - International clients	486,691	1.23%	577,791	1.83%	-15.77%
Inventory of products and goods	2,851,160	7.22%	2,383,486	7.55%	19.62%
Biological assets	36,922	0.09%	29,139	0.09%	26.71%
Recoverable taxes	704,783	1.78%	1,176,530	3.73%	-40.10%
Expenses of subsequent year	93,107	0.24%	61,823	0.20%	50.60%
Trade bills receivable	27,400	0.07%	82,318	0.26%	-66.71%
Advances to suppliers	154,978	0.39%	110,044	0.35%	40.83%
Other amounts receivable	281,071	0.71%	146,135	0.46%	92.34%
Total, current assets	18,419,902	46.62%	14,420,104	45.67%	27.74%
NON-CURRENT ASSETS
Escrow deposits made	48,943	0.12%	62,055	0.20%	-21.13%
Trade bills receivable	2,150	0.01%	-	0.00%	0.00%
Deferred income tax and Social Contribution tax	1,542,293	3.90%	1,413,253	4.48%	9.13%

Recoverable taxes

Other amounts receivable

Investments

Real estate for investment

Property, plant and equipment

3,000,291 234,790 60,023 150,657 8,062,919 7,985,473

7.59% 0.59% 0.15% 0.38% 20.41% 20.21%

2,321,233 134,537 45,694

7.35% 29.25%

0.43% 74.52%

0.14% 31.36%

- 6,441,055 6,734,090

0.00% 0.00%

20.40% 25.18%

Intangible assets

21.33% 18.58%

Total non-current assets

21,087,539

53.38%

17,151,917

54.33%

22.95%TOTAL ASSETS

39,507,441

LIABILITIES AND STOCKHOLDERS' EQUITY

100.00%

31,572,021

100.00%

25.13%

Dec. 31, 2020

% of net revenueDec. 31, 2019

% of net revenueChange (%)

CURRENT LIABILITIES

Suppliers

Supplier debtor risk

Personnel and employment-law obligations

Taxes

Loans, financing and debentures

Accounts payable

Leases payable

Dividends payable

Advances from clients

2,764,643

3,426 1,545,664 509,299 6,566,089 125,899 161,432 70,542 1,710,034 407,360

7.68% 0.01% 4.29% 1.41% 18.24% 0.35% 0.45% 0.20% 4.75% 1.13%

2,670,322 176,881 757,699 407,817 4,594,444 108,483 131,093

8.96% 0.59%

3.53% -98.06%

2.54% 103.99%

1.37% 24.88%

15.42% 42.91%

0.36% 16.05%

0.44% 23.14%

- 1,322,910 445,399

0.00% 0.00%

4.44% 29.26%

Other obligations

1.49% -8.56%

Total, current liabilities

13,864,388

NON-CURRENT LIABILITIES

Loans, financing and debentures

Taxes

Deferred income tax and Social Contribution tax

Provision for contingencies

Leases payable

Accounts payable

38.52%

10,615,048

35.63%

30.61%

20,244,058 372,302 98,831 428,939 527,998 246,356 210,506

56.24% 1.03% 0.27% 1.19% 1.47% 0.68% 0.58%

17,121,836 768,129 136,275 361,884 392,740 233,094 166,674

57.46%

18.24%

2.58% -51.53%

0.46% -27.48%

1.21% 18.53%

1.32% 34.44%

0.78% 5.69%

Other obligations

0.56% 26.30%

Total, non-current liabilities

22,128,990

61.48%

19,180,632

64.37%

15.37%

TOTAL LIABILITIES	35,993,378	91.11%	29,795,680	94.37%	20.80%
STOCKHOLDERS' EQUITY
Share capital	8,204,391	20.77%	8,204,391	25.99%	0.00%
Capital reserves, options and treasury shares	(1,684,338)	-4.26%	(1,271,370)	-4.03%	32.48%
Legal reserve	59,327	0.15%	44,476	0.14%	33.39%
Profit reserves	148,431	0.38%	7,348	0.02%	1,920.02%
Additional dividend proposed	70,542	0.18%	-	0.00%	0.00%
Other comprehensive income	(4,703,644)	-11.91%	(3,271,650)	-10.36%	43.77%
Retained losses	-	0.00%	(3,094,630)	-9.80%	-100.00%
Equity of controlling stockholders	2,094,709	5.30%	618,565	1.96%	238.64%
Non-controlling interests	1,419,354	3.59%	1,157,776	3.67%	22.59%
Total stockholders' equity	3,514,063	8.89%	1,776,341	5.63%	97.83%
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	39,507,441	100.00%	31,572,021	100,00%	25.13%
Current assets

Current assets at December 31, 2020 were BRL 18,419.90 million, compared to BRL 14,420.1 million on December 31, 2019, an increase of 27.7%. Current assets as a percentage of total assets were 46.6% on December 31, 2020 and 45.7% on December 31, 2019.

Cash position: At December 31, 2020 the Company held BRL 11,757.40 million in cash, 39.8% more than at December 31, 2019 (BRL 8,410.1 million). The cash position was 29.8% of total assets at December 31, 2020, and 26.6% on December 31, 2019. The Company's Officers highlight this increase as due to improvement in operational efficiency.

Receivables from customers: The Company's receivables from clients at December 31, 2020 totaled BRL 2,513.0 million, 24.4% more than at December 31, 2019 (BRL 2,020.5 million). Receivables from customers were 6.4% of total assets at December 31, 2020, and also 6.4% on December 31, 2019. In the assessment of the Company's Officers, this increase of 24.4% in receivables from customers was significantly the result of better performance in trading operations, and also due to the effects of foreign exchange variation on receivables from customers denominated in currencies other than the Real.

Inventories and Biological assets: The value of the Company's inventories and biological assets at December 31, 2020 totaled BRL 2,888.1 million, compared to BRL 2,412.6 million at December 31, 2019 - an increase of 19.7%. Inventories and biological assets were 7.3% of total assets on December 31, 2020 and 7.6% on 2019. The increase reflects the effect of foreign exchange variation in currencies other than the Real.

Non-current assets

Non-current assets at December 31, 2020 were BRL 21,087.5 million, 22.9% higher than at December 31, 2019 (BRL 17,151.9 million). Non-current assets were 53.4% of total assets on December 31, 2020, compared to 54.3% on December 31, 2019.

Property, plant and equipment (PP&E) on December 31, 2020 totaled BRL 8,062.9 million, compared to BRL 6,441.1 million on December 31, 2019 - an increase of 25.2%. Fixed assets were 20.4% of total assets on December 31, 2020, and also 20.4% on December 31, 2019. The Company's Officers believe that the increase in PP&E is mainly due to the increase of BRL 1,144.0 million in maintenance, and growth of BRL 232 million of the Company's plants.

Intangible assets at December 31, 2020 were BRL 7,985.5 million, compared to BRL 6,734.1 million on December 31, 2019, an increase of 18.6%. They were 20.2% of total assets on December 31, 2020, and 21.3% on December 31, 2019. The Officers report that a large proportion of the increase in intangible assets is due to the effects of exchange rate variation on the companies outside Brazil that have functional currencies other than the Real.

As from the fourth quarter of 2020, the Company's Officers decided, as strategy, to lease the tanneries of Promissão and Bataguassú, together with the industrial plants at Capão do Leão, Mato Leitão e Pirenópolis, to earn rental income. The fair value of Investment Property was calculated on December 31, 2020 as BRL 150,657 million, of which BRL 11,491 million was the value of land holdings, and BRL 139,166 million was the value of buildings and facilities.

Current liabilities

Current liabilities were 30.6% higher on December 31, 2020, at BRL 13,864.4 million, than on December 31, 2019 (BRL 10,615.0 million). Current liabilities were 35.1% of total liabilities on December 31, 2020, and 33.6% on December 31, 2019.

Suppliers: Accounts payable to suppliers on December 31, 2020 were BRL 2,768.1 million, or 2.8% less than on December 31, 2019 (BRL 2,847.2 million). Accounts payable to suppliers were 7.7% of total liabilities on December 31, 2020, compared to 9.6% on December 31, 2019. The Company's Officers attribute this reduction of 2.8% in the Suppliers account line to the Company's operational management of flow of payments.

Loans, financing and debentures: On December 31, 2020, loans, financing and debentures totaled BRL 6,566.1 million, or 42.9% higher than at December 31, 2019 (BRL 4,594.4 million). Loans, financings and debentures were 18.2% of total liabilities at December 31, 2020, and 15.4% at December 31, 2019. The Officers attribute this increase to translation of the balance sheet - i.e. principally due to the depreciation of the Real against the US dollar.

Non-current liabilities

Non-current liabilities were BRL 22,129.0 million on December 31, 2020, 15.4% more than on December 31, 2019 (BRL 19,180.6 million). Non-current liabilities were 61.5% of total liabilities on December 31, 2020, and 64.4% on December 31, 2019.

Loans, financing and debentures: These totaled BRL 20,244.1 million on December 31, 2020, 18.2% more than on December 31, 2019 (BRL 17,121.8 million); and 56.2% of total liabilities on December 31, 2020, compared to 57.5% on December 31, 2019. The Officers attribute this increase to translation of the financial statements: the change was principally due to the depreciation of the Real against the US dollar.

Stockholder's equity

Stockholders' equity at December 31, 2020, at BRL 3,514.1 million, was 97.8% higher than at December 31, 2019 (BRL 1,776.3 million). The Officers attribute this to the record net profit in 2020.

COMPARISON OF STATEMENTS OF FINANCIAL POSITION AT DECEMBER 31, 2019 AND 2018

The table below shows the main changes in the account lines of the consolidated Statement of financial position from December 31, 2018 to December 31, 2019:

ASSETS	Dec. 31, 2019	VA	Dec. 31, 2018	VA	Change (%)
(In BRL '000, except percentages)
CURRENT ASSETS
Cash and cash equivalents	1,774,902	5.62%	2,459,202	9.28%	-27.83%
Cash investments	6,635,211	21.02%	4,732,504	17.86%	40.21%
Receivables - Brazilian clients	1,442,725	4.57%	1,068,553	4.03%	35.02%
Receivables - International clients	577,791	1.83%	175,287	0.66%	229.63%
Inventory of products and goods	2,383,486	7.55%	1,822,280	6.88%	30.80%
Biological assets	29,139	0.09%	16,570	0.06%	75.85%
Recoverable taxes	1,176,530	3.73%	1,144,888	4.32%	2.76%
Expenses of subsequent year	61,823	0.20%	53,833	0.20%	14.84%
Trade bills receivable	82,318	0.26%	118,307	0.45%	-30.42%
Advances to suppliers	110,044	0.35%	58,628	0.22%	87.70%
Other amounts receivable	146,135	0.46%	112,905	0.43%	29.43%
Total, current assets	14,420,104	45.67%	11,762,957	44.38%	22.59%
NON-CURRENT ASSETS
Escrow deposits made	62,055	0.20%	47,526	0.18%	30.57%
Trade bills receivable	-	0.00%	220	0.00%	-100.00%
Deferred income tax and Social Contribution tax	1,413,253	4.48%	999,844	3.77%	41.35%
Recoverable taxes	2,321,233	7.35%	1,780,342	6.72%	30.38%
Other amounts receivable	134,537	0.43%	82,567	0.31%	62.94%
Investments	45,694	0.14%	42,545	0.16%	7.40%
Property, plant and equipment	6,441,055	20.40%	5,231,216	19.74%	23.13%
Intangible assets	6,734,090	21.33%	6,557,055	24.74%	2.70%
Total non-current assets	17,151,917	54.33%	14,741,315	55.62%	16.35%

TOTAL ASSETS

31,572,021

100%

26,504,272

100%

19.12%

LIABILITIES AND SHAREHOLDERS' EQUITY	Dec-31-19	%RL	Dec-31-18	%RL	Var(%)
CURRENT LIABILITIES
Suppliers	2,670,322	8.46%	2,148,983	8.11%	24.81%
Suppliers debtor risk	176,881	0.56%	182,635	0.69%	-9.60%
Personnel, social charges and benefits	757,699	2.40%	564,391	2.13%	34.25%
Taxes, Fees and Contributions	407,817	1.29%	345,438	1.30%	18.06%
Loans, financing and debentures	4,594,444	14.55%	3,665,455	13.83%	25.34%
Accounts payable	108,483	0.34%	185,522	0.70%	(41.53)%
Leases payable	131,093	0.42%	3,209	0.01%	3,985.17%
Advance payments of clients	1,322,910	4.19%	1,093,168	4.12%	21.02%
Other obligations	445,399	1.41%	457,589	1.73%	(2.66)%
Total Current Liability	10,615,048	33.62%	8,646,390	32.62%	22.77%
NON-CURRENT LIABILITIES
Loans, financing and debentures	17,121,836	54.23%	11,567,895	43.65%	48.01%
Taxes, Fees and Contributions	768,129	2.43%	833,591	3.15%	(7.85)%
Deferred income tax and social contribution	136,275	0.43%	118,911	0.45%	14.60%
Provision for contingencies	361,884	1.15%	301,667	1.14%	19.96%
Leases payable	392,740	1.24%	2,102	0.01%	18,584.11%
Accounts payable	233,094	0.74%	301,945	1.14%	(22.80)%
Advance payments of clients	-	0.00%	387,480	1.46%	(100.00)%
Other obligations	166,674	0.53%	332,734	1.26%	(49.91)%
Total Non-Current Liability	19,180,632	60.75%	13,846,325	52.24%	38.53%
TOTAL LIABILITIES	29,795,680	94.37%	22,492,715	84.86%	32.47%
SHAREHOLDERS' EQUITY
Share Capital	8,204,391	25.99%	7,319,467	27.62%	12.09%
Capital reserves, granted options and treasury shares	(1,271,370)	-4.03%	155,824	0.59%	-915.90%
Retained earnings	51,824	0.16%	51,824	0.20%	0.00%
Other comprehensive income	(3,271,650)	-10.36%	(3,535,777)	(13.34)%	(4.46)%
Retained Losses	(3,094,630)	-9.80%	(3,317,874)	(12.52)%	(6.73)%
Controlling companies' shareholders' equity	618,565	1.96%	673,464	2.54%	321.66%
Non-controlling interests	1,157,776	3.67%	3,338,093	12.59%	(65.32)%
Total Shareholders' Equity	1,776,341	5.63%	4,011,557	15.14%	(0.35)%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	31,572,021	100.00%	26,504,272	100.00%	27.50%

Current assets

Current assets on December 31, 2019 were BRL 14,420.1 million, 22.6% higher than on December 31, 2018 (BRL 11,763.0 million). Current assets were 45.7% of total assets on December 31, 2019, and 44.4% on December 31, 2018.

Cash position: The Company's cash position at December 31, 2019 was BRL 8,410.1 million, 16.9% higher than on December 31, 2018 (BRL 7,191.7 million). The cash position was 26.6% of total assets at December 31, 2019, and 27.1% on December 31, 2018. The Officers note that a significant portion of this increase in cash was the investment in short-term cash investments of the proceeds from the Sustainable Transition Bond issue: only the equivalent of BRL 730 million (USD 181 million) of these proceeds were used by December 31, 2019, and the remaining amount was to be used based on the specific criteria for their use, that is to say for purchase of cattle coming from the Amazon Biome, in the states of Mato Grosso, Pará and Rondônia, that meet specific criteria, with a view to control of deforestation, non-use of indigenous lands, and extinction of child and slave labor, through greater control of cattle traceability.

Receivables from clients: Receivables from clients totaled BRL 2,020.5 million on December 31, 2019, 62.4% more than on December 31, 2018 (BRL 1,243.8 million). Receivables from clients were 6.4% of total assets on December 31, 2019, compared to 4.7% on December 31, 2018. In the assessment of the Company's Officers, this increase of 62.4% in receivables from clients was significantly the result of better performance in trading operations, and also due to effects of foreign exchange variation on receivables from clients denominated in currencies other than the Real.

Inventories and Biological assets: Inventories and biological assets on December 31, 2019 were BRL 2,412.6 million, or 31.2% higher than on December 31, 2018 (BRL 1,838.9 million). Inventories and biological assets were 7.6% of total assets on December 31, 2019, and 6.9% on December 31, 2018. The increase reflected the acquisitions of Quickfood S.A. and Iowa Premium, and also the effects of foreign exchange variation in currencies other than the Real.

Non-current assets

Non-current assets on December 31, 2019 were BRL 17,151.9 million, 16.4% higher than at December 31, 2018 (BRL 14,741.3 million). Non-current assets were 54.3% of total assets on December 31, 2019, compared to 55.6% on December 31, 2018.

PP&E on December 31, 2019 totaled BRL 6,441.1 million, 23.1% higher than at December 31, 2018 (BRL 5,231.2 million). Fixed assets were 20.4% of total assets on December 31, 2019, vs. 19.7% on December 31, 2018. The Company's Officers attribute this increase to the acquisitions of control of Quickfood S.A. and Iowa Premium LLC, and the acquisition of the Várzea Grande processed foods plant in Mato Grosso.

Intangible assets on December 31, 2019 were BRL 6,734.1 million, 2.7% higher than on December 31, 2018 (BRL 6,557.1 million). Intangible assets were 21.3% of total assets on December 31, 2019, and 24.7% on December 31, 2018. The Officers attribute this increase of 2.7% in intangible assets to the added value generated in the acquisition of an interest in Iowa Premium LLC, and acquisition of assets of Quickfood S.A., which are expressed in the functional currency of each of those business units, and converted at the exchange rate for the end of the period, in accordance with NBC TG 02/R3 (CVM Resolution 540/10) - Effects of changes in foreign exchange and conversion rates of accounting statements.

Current liabilities

Current liabilities on December 31, 2019 were 22.8% higher year-on-year (YoY), at BRL 10,615.1 million, compared to BRL 8,646.4 million on December 31, 2018. They were 35.6% of total liabilities on December 31, 2019, and 38.4% on December 31, 2018.

Suppliers: On December 31, 2019, accounts payable to suppliers totaled BRL 2,847.2 million, or 22.1% more than at December 31, 2018 (BRL 2,331.6 million). They were 9.6% of total liabilities on December 31, 2019, compared to 10.4% on December 31, 2018. The Officers see the increase of 22.1% in the Suppliers line as linked to the acquisition of Quickfood S.A. and Iowa Premium, and also foreign exchange variation on currencies other than the Real.

Loans, financing and debentures: On December 31, 2019, loans, financing and debentures totaled BRL 4,594.4 million, or 25.3% more than on December 31, 2018 (BRL 3,665.5 million). They were 15.4% of total liabilities on December 31, 2019, and 16.3% on December 31, 2018. The Officers attribute this increase to financing raised outside Brazil, of USD 500 million, for acquisition of the further 30.73% interest in the indirect subsidiary National Beef Packing Company, LLC.

Non-current liabilities

Non-current liabilities were BRL 19,180.6 million on December 31, 2019, or 38.5% more than on December 31, 2018 (BRL 13,846.3 million). They were 60.8% of total liabilities on December 31, 2019, compared to 52.2% on December 31, 2018.

Loans, financing and debentures: On December 31, 2019, non-current borrowings totaled BRL 17,121.80 million, or 48.0% more than on December 31, 2018 (BRL 11,567.9 million). They were 57.4% of total liabilities on December 31, 2019, compared to 51.4% on December 31, 2018. The Officers attribute this raise to the twelfth issue of senior notes transaction (bonds) maturing 2026, the funds of which were used mostly to settle bonds with short-term maturities and higher cost than the new issue.

Stockholder's equity

Stockholders' equity on December 31, 2018 was 55.7% lower YoY, at BRL 1,776.3 million, than on December 31, 2019 (BRL 4,011.6 million). The Officers attribute the decrease to the effects of the acquisition of the 30.73% interest in the indirect subsidiary National Beef Packing Company, LLC, partially offset by the capital increase of BRL 900.9 million (issue of 90,090,091 new shares) through the initial public offering.

CASH FLOW STATEMENTS

The Company's cash flows for the business years ended December 31, 2020, 2019 and 2018 are presented below.

COMPARISON OF CASH FLOWS IN 2020 AND 2019

(In BRL '000, except %)	HA (%)
2020	2019
Net cash from operations	7,691.2	2,600.1	195.8%
Net cash applied in investment activities	(1,401.4)	(1,391.1)	0.7%
Net cash consumed in financing activities	(4,307.4)	(5.6)	76,504.7%
Operations

Year ended December 31,

Net cash from operations was 195.81% higher, at BRL 7,691.2 million, in 2020, than in 2019 (BRL 2,600.1 million).

This mainly reflected operational optimization in 2000 - a year in which the Company reported its highest-ever net profit.

Investment

Net cash used for investments was 0.75% higher in 2020 than 2019 - at BRL 1,401.4 million in 2020, vs. BRL 1,391.1 million in 2019.

This mainly reflected the acquisition of Campo del Tesoro, with a small part being due to exchange rate variation.

Financing

Net cash from financing activities was 76,504.7% higher in 2020, at BRL 4,307.4 million, than in 2019 (BRL 5.6 million).

This was mainly due to settlement of principal and interest of debentures and bonds.

COMPARISON OF CASH FLOWS IN 2019 AND 2018

(In BRL '000, except %)	HA (%)
2019	2018
Net cash from operations	2,600.1	1,518.8	71.2%
Net cash used in investments	(1,391.1)	(4,344.1)	-68.0%
Net cash from / used in financing activities	(5.6)	204.1	-102.8%
Operations

Net cash from operations was 71.2% higher in 2019, at BRL 2,600.1 million, than in 2018 (BRL 1,518.8 million).

This mainly reflects the addition of the operations of National Beef, included for the full 12 months in 2019, compared to only 7 months in 2018.

Investment

Net cash used for investments was 68.0% lower in 2019, at BRL 1,391.1 million, in 2019, than in 2018 (BRL 4,344.1 million).

This mainly reflects the lower volume of M&A in 2019, compared to 2018, when the Company acquired control of National Beef.

Financing

Financing activities in 2019 resulted in an outflow of BRL 5.6 million, compared to inflow in 2018 of BRL 204.1 million - which could be expressed as a reduction of 102.8%.

This reflects payment of dividends, and reduction of debt, with the settlement of the bridge loan used to acquire National Beef, and also the effects of the acquisition of the 30.73% interest in National Beef.

10.2 - Net operational profit and net financial revenue (expenses)

As described in item 3.9 of this Reference Form, the audited consolidated Profit and loss account and Statements of cash flows for 2019 and 2018: (i) include the profit of National Beef only as from the date of acquisition, June 5, 2018; and (ii) exclude the net profit from Keystone, which are included in Discontinued operations.

Thus the audited consolidated financial statements for 2020, 2019 and 2018 are not directly comparable, since consolidation of National Beef began only on the date of its acquisition, June 5, 2018.

Comparison of Profit and loss accounts for 2020 and 2019

The table below gives the components of the Profit and loss accounts for 2020 and 2019:

CONSOLIDATED PROFIT AND LOSS ACCOUNT (BRL million)

12M20

% of Net revenue

12M19

% of Net revenueChange

(%)Change (BRL)

Net sales revenue

67,481.5

100.0% 48,761.1
100.0%
- 38.4% 18,720.5
  Cost of products and goods sold
  (55,760.0)
-82.6% (42,377.1)
-86.9%
- 31.6% (13,382.8)
  Gross profit
  11,721.6
  17.4%
  6,383.9
  13.1%
- 83.6% 5,337.6
  Operational revenues (expenses)
  (3,867.7)
  -5.7%
  (2,971.6)
  -6.1%
- 30.2% (896.1)Commercial
  (2,559.3)
  General and administrative expenses
  (960.0)
  Share in profit of non-consolidated investees
  (0.7)
  Other operational revenues (expenses)
  (347.7)
  -3.8% -1.4% 0.0% -0.5%
  (2,054.2)
  (756.6)
  -
  (160.8)
  -4.2% -1.6% 0.0% -0.3%
- 24.6% (505.1)
- 26.9% (203.4)
-
-
- 116.3% (187.0)Net profit before financial revenues (expenses)
  7,853.9
  11.6%
  3,412.4
  7.0%
- 130.2% 4,441.5
  Net financial revenue (expenses)
  (2,725.6)
-4.0% (2,059.7)
Financial revenues
3,092.0
4.6%
2,113.2
Financial expenses
(5,817.5)
-8.6% (4,172.9)

-4.2% 4.3% -8.6%

32.3% (665.8)
46.3% 978.8
39.4% (1,644.7)
Pre-tax profit (loss)
5,128.3
7.6%
1,352.6
2.8%
279.1% 3,775.7
Income tax and Social Contribution tax
(597.4)
-0.9%
229.6
0.5%
-360.2% (827.1)
Current income tax and Social Contribution tax
(683.6)
Deferred income tax and Social Contribution tax
86.2
-1.0% 0.1%
193.8
35.8
0.4% 0.1%
- -452.7% (877.4)
- 140.7% 50.4

Net profit from going concern operations

4,530.9

6.7%

1,582.2

3.2%

186.4% 2,948.6

Net profit before minority interests

4,530.9

6.7%

1,582.2

3.2% 186.4% 2,948.6

Net income attributed to:

Interest of controlling stockholder

3,301.8

4.9%

218.1

0.4% 1,414.0% 3,083.7

Net profit attributed to:

Interest of non-controlling stockholder

1,229.1

1.8%

1,364.2

2.8% -9.9%

(135.1)Basic audited net profit (loss) per share - common shares

4.7

0.4

1,245.2%

4.4

Net sales revenue

Net sales revenue in 2020 was 38.4% higher YoY, at BRL 67,481.5 million, compared to BRL 48,761.1 million in 2019. The main factors in 2020 were: (i) the continued excellent performance of the North America operation, especially in the US domestic market; (ii) higher export prices and volumes in the South America operation; (iii) depreciation of 31% in the Real against the US dollar; and (iv) continued implementation of the program for operational improvement and efficiency which had begun in 2019 in the South America operation.

This table shows net sales for the business units:

Year ended

(BRL million)	December 31,
2020
North America
Domestic market	43,435.2	29,565.3
Exports	5,473.3	4,385.6
Total, North America	48,908.5	33,951.0
South America
Domestic market	6,985.2	6,922.2
Exports	11,587.8	7,887.8
Total, South America	18,573.0	14,810.1
Marfrig consolidated
Domestic market	50,420.4	36,487.6
Exports	17,061.1	12,273.4
Marfrig consolidated - total	67,481.5	48,761.1

2019

Below are comments comparing net sales revenue by business unit, as shown in the table above.

North America

North America sales revenue increased from BRL 33,951.0 million in 2019 to BRL 48,908.5 million in 2000. This mainly reflects domestic market prices 3.6% higher, and the higher volume of total sales - in turn reflecting the high demand for beef protein all over the globe.

• Domestic market: Net sales revenue in the North America domestic market increased to BRL 43,435.2 million in the year ended December 31, 2020. Main factors in this increase were: (i) inclusion of results from Iowa Premium during the whole of the year (vs. 6 months in 2019); (ii) higher average prices in the domestic market, caused by higher demand for products sold in portions and more expensive cuts, sold to supermarkets and distributors, which were previously allocated to food service networks; and (iii) effects of depreciation of the Real on translation of the profit and loss account from US dollars.
• Export market: Net sales revenue of exports from North America operations increased to BRL 5,473.3 million in 2020. This reflects (i) a higher volume of sales, mainly to Asia, reflecting the high demand for protein, and (ii) effects of depreciation of the Real on translation of the profit and loss account from US dollars.

South America

Net sales revenue in South America was up 25.4% YoY in 2020, at BRL 18,573.0 million, compared to BRL 14,810.0 million in 2019. Factors in this increase were: (i) export volume 0.4% higher YoY, with average export price 24.8% higher; (ii) depreciation of the Real against the dollar of 30.7% over the year; and (iii) average sale price in the domestic market 11% higher YoY in 2019, compensating the effect of volume 9.1% lower.

• Domestic market: South America domestic net sales revenue was 0.9% higher in 2020, at BRL 6,985.2 million, compared to BRL 6,922.2 million in 2019. The increase in revenue in the domestic market is justified by an average selling price of 11% higher than the average price in 2019, which offset the 9.1% drop in volume.
• Exports from South America: Net export sales revenue in the South America operation increased 46.9%, from BRL 7,887.8 million in 2019 to BRL 11,587.8 million in 2020. The increase reflects a higher number of qualifications for shipments to China, and a trading strategy that resulted in a better mix of destination countries.

Cost of goods sold

Cost of goods sold increased 31.6%, from BRL 42,377.1 million in 2019 to BRL 55,760.0 million in 2020. This mainly reflects the higher cost of cattle in South America, and the effect of depreciation of the Real against the dollar on translation costs in foreign currency.

This table shows the breakdown of COGS:

(in BRL million, except %)

Year ended

December 31,

2020
Direct and indirect labor	5,828.5	10.5%	3,700.9	8.7%
Raw materials	44,623.5	80.0%	34,193.0	80.7%
Production costs	5,308.0	9.5%	4,483.2	10.6%
Total	55,760.0	100.0%	42,377.1	100.0%

Raw materials, including livestock, continued to be the main component of COGS, comprising 80.0% of the total in 2020 - this compares to 80.7% in 2019. The cost of cattle, the largest component in raw materials, was 98.4% of the total cost of input materials in 2020, compared to 97.6% in 2019.

Gross profit

Gross profit in 2020, at BRL 11,721.6 million, was 83.6% higher than in 2019, and gross margin was 17.4%.

In the North America operation, we highlight that the 'cutout ratio' (average price of beef divided by the average cost of capital), was 2.15 in 2020, compared to 1.90 in 2019. This reflects the higher average sale price - the USDA Comprehensive - which was USD 233.30/cwt in 2020, compared to USD 219.13 in 2019; and a lower USDA KS Steer price - the average price used as reference in purchase of cattle - which was USD 108.65/cwt in 2020, compared to USD 115.94/cwt in 2019.

The record profit in the South America operation reflects: (i) the excellent performance of exports, arising from the higher number of qualifications for shipments to China, and a trading strategy that resulted in a better mix of destination countries; (ii) better mix and pricing in the Brazilian domestic market; (iii) higher volume of processed and branded products; and (iv) improvement in the structure of the operation, with reduction of costs 82

and expenses, and dilution of fixed costs, resulting from the program for operational improvement and efficiency begun in 2019.

Sales, general and administrative expenses

SG&A expenses were BRL 3,519.30 million in 2020, 25.2% more than in 2019 (BRL 2,810.8 million). They were 5.2% of total net sales revenue, compared to 5.8% in 2019.

Selling expenses were 24.6% higher, at BRL 2,559.3 million in 2020, compared to BRL 2,054.2 million in 2019. This reflects higher total sales volume, especially in the US domestic market, the substantial increase in exports from the South America operation, and the effect of the depreciation of the Real on translation of expenses in non-Brazilian currencies.

General and administrative expenses were 26.9% higher in 2020, at BRL 960.0 million, compared to BRL 756.6 million in 2019. This increase mainly reflects the effect of the depreciation of the Real on translation expenses in foreign currency - partially offset by the simplification of the corporate structure carried out at the beginning of 2020.

Adjusted Ebitda

Consolidated adjusted Ebitda in 2020 was BRL 9,595.9 million, 99.4% higher than in 2019. Adjusted Ebitda margin was 14.2%, 4.4 basis points (bp) more than in 2019 (9.9%). Some key factors in this performance were: (i) record results in the two operations, as described above; (ii) improvements in efficiency and productivity, and cost reductions; and finally (iii) the depreciation of the Real in the period.

Other operational revenues (expenses)

The Company recorded Other operational expenses of BRL 347.7 million, BRL 187.0 million more negative than in 2019 (expenses of BRL 160.8 million). This reflected additional expenses related to the measures to combat Covid-19, and expenses on plants that were hibernated and/or closed down - both in South America.

Net financial revenue (expenses)

The Company reported financial expenses of BRL 2,725.6 million in 2020, 32.3% higher than in 2019 (BRL 2,059.7 million). Financial expenses totaled BRL 5,817.5 million, and financial revenues BRL 3,092.0 million.

This table shows the breakdown of Net financial revenue (expenses):

Financial revenues

3,092.0

2,113.2

46.3%

(in BRL million, except %)	Change, %
2020	2019
Interest and yields on financial investments	30.5	186.7	-83.7%
Interest provisioned on debentures and leasings with financial institutions	(1,815.9)	(1,686.3)	7.7%
Monetary updating, banking expenses, debt amortization costs, etc.	30.6	(162.1)	-118.9%
Effect of exchange rate variations	(970.7)	(398.0)	143.9%
Total	(2,725.6)	(2,059.7)	32.3%
Financial expenses	(5,817.5)	(4,172.9)	39.4%

On December 31,

Total

(2,725.6)

(2,059.7)

32.3%

The Company does not make leveraged transactions involving derivatives or similar instruments. Transactions with derivatives are designed to provide a minimum protection against exposure to other currencies, and the Company maintains a conservative policy of not taking positions that might compromise its financial position.

Income tax and Social Contribution tax

The Company posted liabilities for income tax and the Social Contribution tax totaling BRL 597.4 million in 2020. The figure includes recognition of deferred tax assets.

In 2019 the Company posted BRL 229.6 million for income tax and Social Contribution tax, also reflecting recognition of deferred tax assets.

Net operational profit (loss)

The net profit on going-concern operations in 2020 was BRL 4,530.9 million, compared to BRL 1,582.2 million in 2019.

Net margin in 2020 was 6.7%, compared to 3.2% in 2019. The significant increase reflects the record performance, and lower financial expenses and expenses on interest.

Comparison of 2019 and 2018

This table itemizes the Profit and loss accounts for 2019 and 2018:

CONSOLIDATED PROFIT AND LOSS ACCOUNT (BRL million)

2019

% of Net revenue

2018

% of Net revenueChange

(%)Change (BRL)

Net sales revenue

Cost of goods sold

48,761.1

100.0%

29,715.2

100.0%

64.1% 19,045.9
(42,377.1)
(86.9)%
(25,872.9)
-87.1%
63.8% (16,504.2)
Gross profit
6,383.9
13.1%
3,842.3
12.9%
66.1% 2,541.7
Operational revenues (expenses)
(2,971.6)
(6.1)%
(3,420.2)
-11.5%
-13.1% 448.6
Selling expenses
General and administrative expenses
Other operational revenues (expenses)
(2,054.2)
(4.2)%
(1,475.0)
-5.0% -1.4% -5.1%
39.3% (579.3)
(756.6)
(1.6)%
(419.9)
80.2% (336.7)
(160.8)
(0.3)%
(1,525.3)
-89.5% 1,364.6
Profit before financial revenues and expenses
3,412.4
7.0%
422.1
1.4%
708.5% 2,990.3
Net financial revenue (expenses)
Financial revenues
Exchange rate variation (positive)
Financial expenses
Exchange rate variations (negative)
(2,059.7)
(4.2)%
(2,309.0)
-7.8% 1.5% 5.2% -8.0% -6.5%
-10.8% 249.2
403.7
0.8% 3.5%
447.3
-9.7% (43.6)
1,709.5
1,544.5
10.7% 165.0
(2,065.4)
(4.2)%
(2,373.7)
-13.0% 308.3
(2,107.5)
(4.3)%
(1,927.0)
9.4% (180.5)
Pre-tax profit (loss)
1,352.6
2.8%
(1,886.9)
-6.3%
-171.7% 3,239.5
Income tax and Social Contribution tax
Current income tax and Social Contribution tax
Deferred income tax and Social Contribution tax
229.6
0.5%
397.5
1.3%
-42.2% (167.9)
178.8
0.4% 0.1%
243.8
0.8% 0.5%
-26.6% (65.0)
50.8
153.7
-67.0% (103.0)
Net profit from going concern operations
1,582.2
3.2%
(1,489.3)
-5.0%
-206.2% 3,071.6
Net profit from discontinued operations
-
-
3,643.3
12.3%
-100.0% (3,643.3)Net profit before minority interestsNet income attributed to:
Interest of controlling stockholder - going concern operation
1,582.2
3.2%
2,154.0
218.1
- 0.4% (2,212.9)
7.2%
-26.5% (571.7)
-7.4%
-109.9% 2,431.0

Interest of controlling stockholder - discontinued operation	-	-	3,608.2	12.1%	-100.0%	(3,608.2)
Interest of controlling stockholder - Total	218.1	0.4%	1,395.3	4.7%	-84.4%	(1,177.2)
Net profit attributed to:
Interest of non-controlling stockholder - going concern operation	1,364.2	2.8%	723.6	2.4%	88.5%	640.6
Non-controlling stockholder - discontinued operation	-	-	35.2	0.1%	-100.0%	(35.2)
Interest of non-controlling stockholder - Total	1,364.2	2.8%	758.7	2.6%	79.8%	605.4
Basic and diluted net profit (loss) per share - common shares	0.4	(3.6)	-109.8%	3.9

Net sales revenue

Net sales revenue was 64.1% higher in 2019, at BRL 48,761.1 million, than in 2019 (BRL 29,715.2 million). Average selling prices in 2019 were 19.5% higher year-on-year (YoY), mainly on three factors: (i) the acquisition of stockholding control of National Beef, acquisition of Ohio and Iowa Premium in the North America operation, which together generated revenue of BRL 34.0 billion; (ii) the acquisition of Quickfood in Argentina; and (iii) devaluation of 8.0% in the Real against the dollar.

This table shows net sales for the business units:

Year ended

(BRL million)	December 31,
2019
North America
Domestic market	29,565.3	14,472.2
Exports	4,385.6	2,491.6
Total, North America	33,951.0	16,963.8
South America
Domestic market	6,922.2	6,019.5
Exports	7,887.8	6,731.9
Total, South America	14,810.1	12,751.4
Marfrig consolidated
Domestic market	36,487.6	20,491.7
Exports	12,273.4	9,223.5
Marfrig consolidated - total	48,761.1	29,715.2

2018

Below are comments comparing net sales revenue by business unit, as shown in the table above. North America

Net sales revenue in North America increased to BRL 33,950.9 million in the year ended December 31, 2019, from BRL 16,963.8 million in 2018. The increase reflects: (i) acquisition of stockholding control of National Beef in June 2018; (ii) acquisition of Ohio Beef, in December 2018; (iii) acquisition of Iowa Premium in June 2019; and (iv) depreciation of the Real against the dollar.

• Domestic market: The increase in domestic market net sales revenue in North America to BRL 29,565.3 million in 2019 mainly reflects: (i) acquisition of stockholding control of National Beef, completed in June 2018; (ii) acquisition of Ohio Beef, completed in December 2018; (iii) acquisition of Iowa Premium, completed in June 2019; and (iv) greater demand in the domestic market due to improvement in the economy, and greater availability of livestock.
• Export market: The increase in net sales revenue from exports in North America to BRL 4,385.6 million in 2019 mainly reflects: (i) acquisition of stockholding control of National Beef, completed in June 2018;

(ii) acquisition of Ohio Beef, completed in December 2018; and (iii) acquisition of Iowa Premium, completed in June 2019.

South America

Net sales revenue in South America increased by 16.1% in 2019, from BRL 12,751.4 million in 2018, to BRL 14,810.0 million in 2019. This increase reflects: (i) acquisition of Quickfood, completed in January 2019; and (ii) increased exports, the effect of which was augmented by the depreciation of the Real against the dollar.

• Domestic market: Net sales revenue in the domestic market in South America increased 15.0%, from BRL 6,019.5 million in 2018 to BRL 6,922.0 million in 2019. This increase was mainly due to the acquisition of assets over the course of the first half of the year.
• Exports from South America: Export sales net revenue in the South America operation increased 17.2% in 2019, from BRL 6,731.9 million in 2018 to BRL 7,887.8 million in 2019. This increase was mainly due to: (i) acquisition of assets over the course of the first half of the year; (ii) a higher volume of exports due to the new global scenario in proteins; and (iii) depreciation of the Real against the dollar.

Cost of goods sold

Cost of goods sold was 63.8% higher, at BRL 42,377.1 million, in 2019, than in 2018 (BRL 25,872.9 million). Key factors in this increase were: (i) acquisition of stockholding control of National Beef, and acquisition of Ohio and Iowa Premium in the North America operation; (ii) increase of the cost of cattle in the South America operation, due to greater demand for exports, mainly to China, and lower availability of cattle in Uruguay; (iii) acquisition of Quickfood in Argentina; and (iv) depreciation of the Real against the dollar.

This table shows the breakdown of COGS:

(in BRL million, except %)

Year ended

December 31,

2019
Direct and indirect labor	3,700.9	8.7%	2,291.9	8.9%
Raw materials	34,197.8	80.7%	21,556.4	83.3%
Production costs	4,478.5	10.6%	2,024.6	7.8%
Total	42,377.1	100.0%	25,872.9	100.0%

2018

Raw materials, including livestock, continued to be the main component of COGS, comprising 80.7% of the total in 2020 - this compares to 83.3% in 2018. The cost of cattle, the largest component in raw materials, was 97.6% of the total cost of input materials in 2019, compared to 98.7% in 2018.

Gross profit

Gross profit was BRL 6,383.9 million in 2019, an increase of 66.1% from 2018, reflecting the acquisition of stockholding control of National Beef. Gross margin was 13.1% in 2019, in line with (0.2 bp higher than) the previous year.

Sales, general and administrative expenses

SG&A expenses were BRL 2,810.8 million in 2019, an increase of 48.3% in relation to BRL 1,894.9 million in 2018. They were 5.8% of total net sales revenue, compared to 6.4% in 2018.

Selling expenses were 39.3% higher, at BRL 2,054.2 million, in 2019, compared to BRL 1,475.0 million in 2018. The increase was mainly due to: (i) acquisition of stockholding control of National Beef, and acquisition of Ohio and Iowa Premium in the North America operation; (ii) acquisition of Quickfood in Argentina; and (iii) depreciation of the Real against the dollar.

General and administrative expenses were 80.2% higher, at BRL 756.6 million in 2019, vs. BRL 419.9 million in 2018. The increase was mainly due to: (i) acquisition of stockholding control of National Beef, and acquisition of Ohio and Iowa Premium, in the North America operation; (ii) acquisition of Quickfood in Argentina; and (iii) depreciation of the Real against the dollar. SG&A expenses in 2019 were 1.6% of net revenue, compared to 1.4% in 2018.

Adjusted Ebitda

Consolidated adjusted Ebitda In 2019 was BRL 4,811.2 million, an increase of 85.0% from 2018. Adjusted Ebitda margin was 9.9%, 1.1 bp more than in 2018 (8.8%). The main factors in this performance were: (i) acquisition of stockholding control of National Beef, and acquisition of Ohio and Iowa Premium in the North America operation; (ii) better domestic market prices in the South America operation; (iii) a better mix in exports, with more products going to China; and (iv) the acquisition of Quickfood, together with the turnaround in the operation in Argentina, recovering profitability and operational efficiency.

Other operational revenues (expenses), net

This line posted expenses BRL 1,364.6 million lower in 2019, at BRL 160.8 million in 2019, compared to BRL 1,525.3 million in 2018. This reduction mainly reflects the Company's recognition of a single net expense of BRL 616 million in 2018 as a result of its adhesion to the Special Rural Tax Regularization Program (Programa Especial de Regularização Tributária Rural - PRR) in relation to withholding obligations in the Brazilian rural Social Security system.

Net financial revenue (expenses)

The company posted net financial expenses in 2019 of BRL 2,059.7 million, compared to a net expense of BRL 2,308.9 million in 2018. The reduction is mainly due to the effect of hyperinflation in the Argentina unit.

This table breaks down financial revenue (expenses):

(in BRL million, except %)	Change, %
2019	2018
Interest and yields on financial investments	186.7	123.4	51.3%
Interest provisioned on debentures and leasings with financial institutions	(1,686.3)	(1,115.3)	51.2%
Monetary updating, bank expenses, debt amortization costs, etc.	(162.1)	(934.5)	-82.7%
Effect of exchange rate variations	(398.0)	(382.5)	4.1%
Total	(2,059.7)	(2,308.9)	-10.8%
Financial revenues	2,113.2	1,991.7	6.1%
Financial expenses	(4,172.9)	(4,300.6)	-3.0%
Total	(2,059.7)	(2,308.9)	-10.8%

On December 31,

Income and Social Contribution taxes

In 2019 the Company posted BRL 229.6 million for income tax and Social Contribution tax, reflecting acknowledgment of deferred tax assets.

For 2018 the Company posted liabilities for income tax and the Social Contribution tax of BRL 397.5 million, due to recognition of deferred tax assets.

Net profit (loss) on going concern operations

Net profit ongoing concern operations in 2019 was BRL 1,582.2 million, compared to a net loss of BRL 1,489.3 million in 2018.

Net margin in 2019 was 3.2% positive, compared to 5.0% negative in 2018. The main factor was the record results of the Company's business in North America.

(a)Results of operations

(i)Description of any important components of revenue

Marfrig has 32 production units, and distribution centers and offices, in South America, North America, Europe and Asia. Its revenues thus come from both domestic markets in the companies where it operates, and also from exports to the various countries accessed through its distribution network.

The main factors affecting revenue have been:

(a) Acquisition of stockholding control of National Beef, as of June 2018; sale of the subsidiary Keystone Foods in November 2018; acquisition of Quickfood in January 2019; acquisition of the assets of Várzea Grande in April 2019, and Iowa Premium in June 2019; acquisition of an additional 30.73% interest in National Beef in November 2019; and acquisition of 100% of Campo del Tesoro in October 2020.
(b) Exchange rate variation, inflation and fluctuation of interest rates.
(c) Variations in average sale prices in the domestic and international markets, arising mainly from changes in the balance of supply and demand, with the Company taking advantage of opportunities in each market where it operates.
(d) Variation in the prices of the main inputs.
(e) Efficiency of the production process, and manufacturing capacity utilization rates.
(f) Performance of the world economy, and those of the countries where the Company operates.

Below, we provide some additional comment on these topics.

Supply and demand for our products

In relation to supply, we mention the availability and prices of cattle. The low or high availability of raw material may increase or reduce acquisition costs, directly affecting margins depending on the response of demand and the pass-through of prices to final products.

In relation to demand, we cite factors which can significantly affect the Company's operations: the global economic crisis caused a retraction of employment levels, with effects on families' available income and consumption; while on the other hand, opening of new markets to the Company's products can have a significant positive influence on revenue.

The Officers note that outbreaks of diseases in livestock can result in countries raising trading and health barriers, affecting the Company's access to international markets, and thus sales.

Growth of Global GDP and of countries where we operate and have demand for our products

The Officers believe that growth in the consumption of animal foods and protein is directly linked to population growth and the population's income. Performance of GDP in countries where the Company sells its products may affect operational profit.

Effects of fluctuations in raw material prices

The Officers note that the main component of the Company's production costs is the purchase of raw material, including cattle. Fluctuations in cattle prices in the domestic and foreign markets significantly affect net operating revenue and costs of goods sold. The Company has no control over these prices, which vary according to the dynamics of supply and demand.

Sales prices in domestic and foreign markets

The Officers note that prices of the Company's products in the domestic and foreign markets are generally established by market conditions, over which the Company has no control. Prices in domestic markets are also affected by the prices that the Company is able to charge the various wholesale and retail customers that resell its products.

Effects of exchange rate volatility and monetary policy

In the Officers' opinion, the Company's operating profit and financial situation have been and will continue to be affected by the volatility of the currencies with which it operates. A considerable part of the Company's revenues originates in currencies other than the Real. Additionally, part of its debt is denominated in US dollars, which requires the Company to make payments of principal and interest in that currency.

The Officers note that Brazilian exports and significant international transactions, which enable the Company to generate accounts receivable in foreign currency, tend to be approximately the same proportion of total sales as the proportion of the company's debt in foreign currency to its total debt. This provides what we call a 'cash flow hedge' or 'natural hedge' for the significant portion of total debt that is denominated in US dollars.

In the Officers' opinion, inflation and the measures adopted to fight it by the governments of the countries where we operate may have considerable effects on the economy of those countries and, consequently, on the Company's business. Inflationary pressures may lead to government intervention in the economy, including implementation of government policies that may have an adverse effect on the Company and its customers. Moreover, in the event that the Company experiences high rates of inflation in the countries where it operates, it may not be able to increase its prices sufficiently to offset the effects of inflation on the cost structure, which may have an adverse effect on its profit.

ii. Factors that materially affected operational results

Effects of acquisitions and disposals

Year ended December 31, 2020

On May 26, 2020, the company signed an agreement with the Archer-Daniels-Midland Company (ADM) to create PlantPlus Foods, a joint venture which will combine the capacity for innovation, operational excellence and global scale of the two companies, to produce and sell vegetable-based products through the retail and food service channels, in the markets of South and North America.

On September 24, 2020 the company Las Ánimas was formed in the Republic of Paraguay, with an office in the city of Asunción, Paraguay, with Marfrig holding a 100% equity interest. The Company announced a non-binding memorandum of intent with APPEC - the Paraguayan Association of Meat Producers and Exporters - to create,jointly, a new company in the Republic of Paraguay with the objective of exploring potential investments in the country.

On October 5, 2020, the Company acquired 100% of the voting stock of Campo del Tesoro, for USD 4.6 million (BRL 25,966). Campo del Tesoro is leader in the production of beef hamburgers for food service in Argentina. It operates a plant at Pilar, in the province of Buenos Aires, with processing capacity for more than 15,000 tons/year of hamburgers, mainly serving the world's largest players in food service.

The 2019 business year

On January 3, 2019, the Company acquired 91.89% of the total voting capital of Quickfood S.A. for USD 54.9 million. Quickfood owns the best-known hamburger brand in Argentina, and also has a slaughter plant with a processing capacity of 620 heads/day.

On January 24, 2019, the Company completed acquisition of Várzea Grande in the State of Mato Grosso, for BRL 100 million. The assets were purchased from BRF, and at the same time a partnership was entered into for supply to BRF of processed products, such as hamburgers, meat balls and kibbeh. The partnership will enable the Company to further expand its supplier relationships to global food service companies in Brazil.

On February 28, 2019, Marfrig sold its entire equity interest in Ohio Beef USA LLC to National Beef for USD 60 million. After completion of this transaction, Ohio Beef USA LLC changed its name to National Beef Ohio, LLC.

On March 11, 2019, taking advantage of a positive moment in the North American industry, the Company decided, through its indirect subsidiary NBM US Holdings, Inc ('NBM'), and jointly with Jefferies Financial Group, Inc. (through its subsidiary JIAC LLC) ('Jefferies'), U.S. Premium Beef, LLC ('USPB'), TMK Holdings, LLC ('TMK') and NBPCo Holdings, LLC ('NBPCo') to increase its operations and exposure in the United States, by the joint acquisition of Iowa Premium, LLC ('Iowa Premium') and subsequent subscription of capital in National Beef Packing Company, LLC ('National Beef'). The transaction was completed in June 2019.

On November 29, 2019, through its wholly-owned subsidiary, NBM US Holdings, Inc ('NBM'), completed acquisition of 30.73% of the share capital of National Beef Packing Company, LLC ('National Beef'), previously held by Jefferies. As a result, its total interest held in the North American subsidiary is now 81.73%.

GPD growth and product demand

Sales in the domestic markets of the countries where the Company operates were 74.7% of its total net sales in 2020. In 2019 sales in these domestic markets were 74.8% of the total net sales. Thus the Company is significantly affected by the economic conditions in its main domestic markets. The Company's sales and financial situations have been and will continue to be affected by GDP growth and demand for the Company's products in its main domestic markets.

Effects of fluctuation in prices of raw materials (beef cattle)

Fluctuations in cattle prices in the domestic and foreign markets in which the Company operates significantly affect its net sales revenue and cost of products sold.

Effects on net sales

The domestic and foreign prices of the Company's products are generally determined by market conditions beyond its control. These prices are also affected by the additional mark-up that retailers charge to final consumers, some of which the Company negotiates on a case-by-case basis. Among the main factors that influence the prices of its products are cattle prices, outbreaks of diseases, and health, trading and customs restrictions imposed in Brazil, the United States and the rest of the world.

Effects on cost of goods sold

Cattle is the Company's principal raw material. Purchases of raw materials were 80.0% of COGS in 2020, and 80.7% in 2019. Among other costs of materials are direct and indirect labor, direct and indirect industrial costs, packing materials and electric power.

The Company does not control cattle prices. The cost of cattle varies according to the domestic and export market prices, which vary depending on supply and demand. Generally, the Company purchases cattle to be delivered every 30 days, on average, and the price paid is based on market prices at the time of purchase. As a consequence, fluctuations in the market price directly affect the cost of products sold.

Effect of export levels on financial performance

In its South America operations, the Company usually obtains higher prices and margins for its products in export markets than in domestic markets. The difference in prices and margins between domestic and export markets results, in part, from (i) a generally higher demand for products with higher added value in export markets - mostly premium cuts and processed products; and (ii) greater purchasing power in the more developed countries.

South America export sales were 62.4% of total net sales in 2020, and 53.3% in 2019. Net export sales were 46.9% higher, at BRL 11,587.8 million, in 2020 than in 2019 (BRL 7,887.8 million).

Effects of exchange rate variations

The Company's operational profit and financial situation have been and will continue to be affected by the depreciation or appreciation in the exchange rate of the Real against the dollar.

A substantial part of the Company's net revenue is linked to the dollar. All profit obtained by subsidiaries outside Brazil, and export revenue, is initially expressed in US dollars. Any depreciation or appreciation of the Real against foreign currencies may affect the Company's revenues, causing increase or decrease, if other variables remain unchanged.

Additionally, a substantial part of the Company's loans and financings is made in foreign currencies, mainly in dollars. For this reason, any depreciation of the Real in relation to other currencies may significantly increase current and non-current financial expenses and loans and financings when expressed in Reais. At the same time, any appreciation of the Real in relation to other currencies may significantly decrease current and non-current financial expenses, and loans and financings, when expressed in Reais.

With 93% and 90% of net sales being made in currencies other than real in 2020 and 2019, respectively, the Company believes that it has a natural hedge against the maturity of its future obligations in foreign currencies. Also, the Company maintains a solid financial policy, maintaining high cash balances and short-term negotiable instruments with first-tier institutions.

Except as described in relation to the structure of this offering, the Company does not make leveraged transactions with derivatives or similar instruments. It uses derivatives or similar instruments only to protect its exposure to debt in foreign currencies, and has a conservative policy of not entering into derivative instruments or transactions or similar instruments that may compromise its financial status.

Effect of the level of debt

On December 31, 2020, the Company's total debt was BRL 26,810.1 million. Of this, 11.2% (BRL 3,009.4 million) was in Reais and 88.8% (BRL 23,800.7 million) was in other currencies. Short-term debt totaled BRL 6,566.1 million (this includes the current portion of loans and financings, interest on debentures and debentures payable); long-term debt (including the non-current portion of loans and financings and debentures payable) was BRL 20,244.1 million. The level of the Company's debt results in substantial financial expenses, which comprise interest, effects of exchange rate variations on debts in non-Brazilian currencies, and other items.

In 2020 the Company reported total financial expenses of BRL 2,725.6 million - comprising BRL 5,817.5 million in financial expenses, and financial revenues of BRL 3,092.0 million.

Effects of Covid-19

On March 11, 2020 the World Health Organization declared Covid-19 to be a pandemic, leading government authorities in various jurisdictions to impose confinements on movement and other restrictions, to contain the virus. As a result numerous companies suspended or reduced activities. However the food sector, along with hospitals, and personal hygiene and cleaning products, is part of the chain of supply of items of primary necessity, and continued to operate.

The Company continues to constantly assess the impact of Covid-19 on its business and operations. We are actively working, since we know that this is an extremely challenging moment, and the effects of pandemic affect the regions where we operate. Below is a summary of the main impacts on the Company's business at December 31, 2020.

a)Operations

In 2020 the Company did not suffer negative impacts as a result of the pandemic, and this is reflected in its record results in the year.

The geographical areas where Marfrig has an operational presence were most highly affected at the end of the first quarter. However, the dynamics of the markets in both regions did not result in the Company suffering operational losses, since although sales volume was lower to the food service channel in domestic markets, demand was directed to the retail channel, which increased significantly as people began to stock foods so as to remain at home for longer.

In exports, an important aspect of the South America operation, the Company's strategy set out in December 2019, expecting the Chinese market to contract for the Chinese New Year celebrations, proved more advantageous than expected with the advent of the pandemic, which affected exports to China in the first quarter, returning to normal over the rest of the year.

b)FX variation

Depreciation of the Brazilian currency against the US dollar caused a positive impact on revenue in 2020, since approximately 92.9% of the Company's revenues originate in other currencies than the Real. The effects of exchange rate variations on Financial revenue (expenses) do not affect the Company's cash position, since this is substantially linked to the long-term loans in foreign currency to be realized in future periods.

c)Social aspects

Marfrig's operations are indispensable to the security of the communities where they are present, and of consumers' homes in approximately 100 countries. The Company thus stated its commitment to keeping its units functioning during the crisis caused by pandemic, to guarantee supply of an essential product to the majority of consumers, with maximum responsibility, and putting its employees' health and safety in first place, while uninterruptedly monitoring conditions in our units.

Below we describe the principal social actions carried out by the Company in this period, representing expenditure of approximately BRL 68.1 million:

South America:

✓ Donation of BRL 7.5 million to the Brazilian Health Ministry for purchase of coronavirus tests.
✓ Donation of BRL 1 million for medical care in vulnerable communities of the Amazon Region.
✓ Distribution of alcohol gel free of charge to employees, assistance institutions and hospitals in the municipalities in which the Company has operations, for a total of the BRL 0.6 million.
✓ Donation of 48,000 cans of meat to complement emergency food baskets distributed by the Social Development Ministry Uruguay, with total value of BRL 0.3 million.
✓ Donation, in Brazil, of 2.5kg of meat to each employee every week, strengthening the food supply of our employees' families in the first half of 2020, representing a total of BRL 12.5 million.
✓ Marfrig supplied its employees with examinations and other materials for prevention during the seven months of the pandemic, for a total of BRL 23.4 million.
✓ To maintain supply to the population without exposing the health of its employees, Marfrig made other investments in prevention, for a total of BRL 9 million.
✓ In addition Marfrig implemented its #TMJMarfrig Program, focused on supporting more than 5,000 micro and small entrepreneurs in the food service segment - bars, restaurants, snack bars, bakeries and barbecue restaurants all over Brazil. This was an investment of BRL 50 million, in extending periods for maturity of invoices and increasing credit limits for purchases from partner clients by up to 3 times.

North America:

✓ In Ohio, we contributed to the local Food Bank, donating USD 123,000 (BRL 0.7 million) in chilled beef.
✓ We donated a kit with meat to all employees and outsourced workers in all units of the operation, for a total of USD 172,000 (BRL 1 million).
✓ Donation of USD 2.3 million (BRL 12 million) to institutions helping to combat spread of the virus and local companies affected by the Covid-19 pandemic.
✓ Donation of USD 25,000 (BRL 0.1 million) in chilled beef to companies helping in distribution of food to families affected by the Covid-19 pandemic.

✓

In addition, all employees who are paid by hourly production are receiving an increase of USD 2 per hour in their base salary.

Outlook

The Covid-19 pandemic continues to affect countries where the Company has operations, but with the advance of vaccination campaigns, restrictive measures imposed by governments are likely to become less severe, and other activities most affected will likely return to normality. Based on its studies and projections, the Company is not expecting to experience negative impacts in its operations arising from Covid-19. On the other hand, it will continue to monitor the effects of the pandemic in the coming months, to capture any potential significant impacts on the accounting information when they are substantially known and measurable.

b. Variations in revenues attributed to changes in prices, changes in the exchange rate, inflation, alteration of volumes and/or introduction of new products and/or services

As mentioned above, the Officers believe that several factors have influenced Marfrig's revenue.

In 2020, the Officers assess that consolidated revenue was principally influenced by: (i) the effect of the acquisition of Iowa Premium during the whole of 2020; (ii) higher volume sales in other operations; and (iii) depreciation of the Real in the period.

(c) Impact of inflation, variation in prices of the main inputs and products, foreign exchange rates and interest rates on the Company's operational profit and financial revenue, where applicable

The Officers report that the profit from our operations is influenced by several factors, such as variations in prices of raw materials, and labor costs.

Considerations on the impact of exchange rates on financial revenue (expenses)

On December 31, 2020, 88.8% of the Company's debt was linked to currencies other than Real (mainly the U.S. Dollar). On the other hand, revenues from international operations, including Brazilian exports, totaled 93.0% of the Company's sales.

On December 31, 2019, 96.0% of the Company's debt was linked to currencies other than Real (mainly the U.S. Dollar) - while revenues from international operations, including Brazilian exports, totaled 90.0% of the Company's sales.

On December 31, 2018, 98.6% of the Company's debt was linked to currencies other than Real (mainly the U.S. Dollar) - while revenues from international operations, including Brazilian exports, totaled 84% of the Company's sales.

Considerations on the impact of inflation and interest rates on financial revenue (expenses)

On December 31, 2020, the weighted average interest rate on our debt was 5.7%, a reduction of 0.6% bp compared to the same indicator in 2019, reflecting our processes of liability management, which aim to lengthen the debt profile and reduce the cost of our capital structure.

Comparative analysis of 2020 and 2019

Net sales revenue in North America increased to BRL 48,908.5 million in 2020, from BRL 33,950.9 million in 2019. This mainly reflects domestic market prices 3.6% higher, and the higher volume of total sales - in turn reflecting the high demand for beef protein all over the globe.

Raw material continued to be the main component of COGS, representing 80.0% in 2020, compared to 80.7% in 2019. Expenditure on labor was 10.5% of total costs in 2020, compared to 8.7% in 2019.

Gross profit in 2020 was BRL 11,721.6 million, 83.6% more than in 2019; and gross margin in 2020 was 17.4%.

Sales, general and administrative expenses (SG&A) in 2020 totaled BRL 3,519.3 million, 25.2% more than in 2019 (BRL 2,810.8 million). Principal factors include: (i) the effect of variations in the exchange rate on translation of the results of the international units to Reais; (ii) actions taken to reduce expenses, such as optimizations of logistics and reduction in travel; and (iii) simplification of the corporate structure, implemented at the beginning of 2020.

Consolidated adjusted Ebitda in 2020 was BRL 9,595.9 million, 99.4% more than in 2019. Adjusted Ebitda margin was 14.2%, 4 bp more than in 2019 (9.9%). Main factors in his increase were: (i) record results in the two operations, as described above; (ii) improvements in efficiency and productivity, and cost reductions; and finally (iii) depreciation of the Real in the period.

Comparison of 2019 and 2018

In 2019 cost of goods sold totaled BRL 42,377.1 million, an increase of 63.8% from the previous year, mainly reflecting: (i) acquisition of stockholding control of National Beef, and acquisition of Ohio and Iowa Premium in the North America operation; (ii) increased cost of cattle in the South America operation, due to greater demand for exports, mainly to China, and lower availability of cattle in Uruguay; (iii) acquisition of Quickfood in Argentina; and (iv) depreciation of the Real against the dollar.

Raw material continued to be the main component of COGS representing 80.7% in 2019, compared to 83.3% in 2018. Expenditure on labor was 8.7% of total costs in 2019, compared to 8.9% in 2018.

Gross profit in 2019 was BRL 6,383.9 million, 66.1% higher than in 2018, reflecting the acquisition of stockholding control of National Beef. Gross margin in 2019 was 13.1%, an increase of 0.2 bp from 2018, mainly reflecting: (i) the increase in the prices, and lower cost of purchase, of cattle, in the North America operation, due to greater availability of livestock; and (ii) higher average prices, and volumes, in exports by the South America operation.

Sales, general and administrative expenses (SG&A) totaled BRL 2,810.8 million in 2019, 48.3% more than in 2018 (BRL 1,894.9 million). This reflects: (i) acquisition of stockholding control of National Beef, and acquisition of Ohio and Iowa Premium, in the North America operation; (ii) acquisition of Quickfood in Argentina; and (iii) depreciation of the Real against the dollar.

Consolidated adjusted Ebitda in 2019 was BRL 4,811.9 million, an increase of 85.0% from 2018. Adjusted Ebitda margin was 9.9%, an expansion of 1.1bp from 8.8% in 2018. The main factors in this increase were: (i) acquisition of stockholding control of National Beef, and acquisition of Ohio and Iowa Premium, in the North America operation; (ii) better domestic market prices in the North and South America operations; (iii) a better mix in exports, with more products going to China; and (iv) the acquisition of Quickfood, together with the turnaround in the operation in Argentina, recovering profitability and operational efficiency.

10.3 Events with significant unexpected or expected effects on the financial statements

(a)Introduction or disposal of an operating segment

On June 5, 2018, the Company, through its subsidiary NBM US Holdings, Inc., entered into an agreement with Jefferies Financial Group Inc and other stockholders, in which terms and conditions were agreed for acquisition by the Company of 51% of the voting shares of National Beef Packing Company, LLC ('National Beef'), as described in note 12.2 to the Financial Statements of December 31, 2018.

The acquisition of National Beef represented a strategic redirection for the Company, focusing on the beef protein industry. National Beef is considered to be the world's second largest company in its sector by installed capacity. This strategic movement is in line with Marfrig's guidelines: Simple, focused and with sustainable value creation.

Constitution, acquisition, or disposal of any equity interests

On June 5, 2018, the Company acquired a controlling interest of 51% in National Beef from Jefferies and other stockholders, for BRL 3.7 billion. This acquisition represented a new strategic direction for the Company, focusing on the beef sector and a more simplified structure that creates value in a sustainable manner. National Beef is the 4th largest and most efficient beef company in the USA, making the Company the world's second largest beef company by capacity.

On November 30, 2018, the Company sold to Tyson its entire interest in certain Marfrig subsidiaries that own and operate the Keystone business unit. Total consideration for the sale was USD 2.4 billion, and the amount received by Marfrig after contractual adjustments, such as exclusion of Keystone's net debt, was USD 1.4 billion, which remains subject to adjustments to the purchase price. With the sale of the business of Keystone, mainly focused on poultry, the Company continues to concentrate its operations in the beef sector, and significantly reduced its leverage.

On January 3, 2019, the Company acquired 91.89% of the total voting stock of Quickfood S.A. for USD 54.9 million. Quickfood is the main beef producer in Argentina, leader in the local hamburger market, and has processing capacity for 620 head/day.

On January 24, 2019, the Company completed acquisition of Várzea Grande in the Brazilian state of Mato Grosso, and entered into a supplier partnership with BRF S.A. for BRL 100 million. The partnership will enable the Company to further expand its supplier relationships to global food service companies in Brazil.

On February 28, 2019, the Company sold all equity interests in Ohio Beef USA LLC to National Beef, for USD 60 million. After completion of this transaction, Ohio Beef USA LLC changed its corporate name to National Beef Ohio, LLC.

On June 10, 2019, the Company, through its subsidiary NBM US Holdings, LLC, together with Jefferies Financial Group, Inc (through its subsidiary JIAC LLC), U.S. Premium Beef, LLC, TMK Holdings, LLC and NBPCo Holdings, LLC, entered into an agreement with Sysco Holdings, LLC ('Sysco'), to acquire 100% of the voting and total capital of Iowa Premium, LLC ('Iowa'), which was subsequently subscribed as capital in National Beef Packing Company, LLC ('National Beef').

Iowa Premium is headquartered in the United States, has slaughter capacity for 1,100 head/day, and reported sales of USD 644 million in 2018. It works only with high quality livestock (Black Angus), and specializes in meats of USDA Choice and USDA Prime grades.

The transaction is fully in line with National Beef's strategy, increasing its ability to serve markets that demand high quality meat, and also representing an opportunity to generate synergies and improvements of scale in itsoperation. It also demonstrates the long-term partnership between Marfrig, Jefferies, USPB, TMK and NBPCo, as well as the commitment of all stockholders to National Beef.

On November 29, 2019, again, through its subsidiary NBM US Holdings, Inc., the Company increased its interest in the equity of the subsidiary National Beef, through acquisition of an additional 30.73% of the voting and total stock of National Beef, for BRL 3,255 million. With the transaction, NBM now holds an 81.73% interest in the North American subsidiary.

On September 24, 2020 the company Las Ánimas, in which Marfrig has a 100% equity interest, was formed in the Republic of Paraguay, with an office in the city of Asunción, Paraguay. The Company has authorized capital of Gs (PYG) 5,000 million, held in nominal, common, endorsable shares each with nominal par value of Gs 50,000 and the right to one vote.

The Company reported a non-binding memorandum of intent with APPEC - the Paraguayan Association of Meat Producers and Exporters - to create, jointly, a new company in the Republic of Paraguay with the objective of exploring potential investments in the country.

Marfrig will contribute its know-how in technology, production, sales, marketing and logistics, while APPEC will seek to ensure a significant quantity of raw material, and also contribute its vast knowledge of the local market, to enable sustainable development of the business with high quality and competitive prices.

On October 5, 2020, the Company entered into an agreement with the stockholders of Campo del Tesoro to acquire 100% of the shares of this company in Argentina. The value of the transaction was USD 4.6 million (BRL 25.966 million). Campo del Tesoro is the leader in production of beef hamburgers for food service in Argentina. It operates a plant at Pilar, in the province of Buenos Aires, with processing capacity for more than 15,000 tons of hamburgers per year, mainly serving the world's largest players in food service.

On October 26, 2020, after obtaining approval from the competent regulatory authorities, the Company reported completion of creation of PlantPlus Foods LLC under the laws of Delaware, with an office in Chicago, USA. The agreement with Archer-Daniels-Midland Company (ADM) for this joint venture will combine the capacity for innovation, operational excellence and global scale of the two companies, to produce and sell vegetable-based products through the retail and food service channels, in the markets of South and North America.

Marfrig, one of the largest producers of beef meat and the world's largest producer of hamburgers, and ADM, a global nutrition leader, have a track record of success in operating together in development and manufacture of sustainable vegetable-based products, including the Rebel Whopper of Burger King, and the Aussie Plant Burger, of Outback Steakhouse, in Brazil, and also products sold under Marfrig's Revolution brand. PlantPlus Foods will now enable expansion of this successful relationship and unique specialization to offer its clients very high quality hamburgers, nuggets, sausages and other products made from vegetable ingredients.

Marfrig owns 70% of this company, and ADM owns 30%. Marfrig will be responsible for production, sale and distribution of PlantPlus Foods, using its facilities at Várzea Grande, in the Brazilian state of Mato Grosso, and in Ohio, USA. ADM will supply technical knowledge, application development and a range of vegetable-based ingredients from its special proteins complex in Campo Grande, Mato Grosso do Sul, and from its network of protein units in the USA, including its new pea protein plant at Enderlin, in the US State of North Dakota.

100

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Marfrig Global Foods SA published this content on 09 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 March 2021 18:58:05 UTC.

Market Closed - Sao Paulo Other stock markets 04:07:42 2024-04-23 pm EDT			5-day change	1st Jan Change
9.59 ^BRL	-1.44%		-7.70%	-1.13%

Mar. 28	Transcript : Marfrig Global Foods S.A., Q4 2023 Earnings Call, Mar 28, 2024
Mar. 27	Marfrig Global Foods S.A. Reports Earnings Results for the Fourth Quarter Ended December 31, 2023	CI

Transcript : Marfrig Global Foods S.A., Q4 2023 Earnings Call, Mar 28, 2024	Mar. 28
Marfrig Global Foods S.A. Reports Earnings Results for the Fourth Quarter Ended December 31, 2023	Mar. 27	CI
Marfrig Global Foods S.A. Reports Earnings Results for the Full Year Ended December 31, 2023	Mar. 26	CI
Brazil slaughtering records make it global meat king, IBGE data shows	Mar. 14	RE
Marfrig Global Foods S.A.(BOVESPA:MRFG3) dropped from Brazil IBRX 50 Index	Dec. 28	CI
Brazilian meatpacker JBS mulls more investments in Saudi Arabia	Nov. 29	RE
Brazil's Minerva to command 50% of South American beef exports in 5 years - CEO	Nov. 28	RE
Marfrig Global Foods S.A. announces an Equity Buyback for 31,563,105 shares, representing 9.47% of its issued share capital.	Nov. 21	CI
Marfrig Global Foods S.A. authorizes a Buyback Plan.	Nov. 20	CI
Transcript : Marfrig Global Foods S.A., Q3 2023 Earnings Call, Nov 14, 2023	Nov. 14
Marfrig Global Foods S.A. Reports Earnings Results for the Third Quarter and Nine Months Ended September 30, 2023	Nov. 12	CI
Marfrig Global Foods S.A.(BOVESPA:MRFG3) dropped from FTSE All-World Index	23-09-18	CI
Brazil meatpacker Marfrig to sell abattoirs to Minerva in $1.5 bln deal	23-08-28	RE
Brazil's Marfrig to sell some beef, sheep assets to Minerva in $1.5-billion deal	23-08-28	RE
Minerva S.A. agreed to acquire Certain cattle and sheep slaughter units from Marfrig Global Foods S.A. for BRL 7.5 billion.	23-08-27	CI
Brazil's JBS remains optimistic on China despite short-term woes	23-08-17	RE
Transcript : Marfrig Global Foods S.A., Q2 2023 Earnings Call, Aug 15, 2023	23-08-15
Brazilian meatpacker Marfrig looking to raise up to $443 mln	23-08-14	RE
Marfrig Global Foods S.A. Reports Earnings Results for the Second Quarter and Six Months Ended June 30, 2023	23-08-13	CI
BRF S.A. announced that it expects to receive $900 million in funding from Saudi Agricultural and Livestock Investment Co., Marfrig Global Foods S.A.	23-05-30	CI
Brazilian banks urged to crack down on meatpackers tied to deforestation	23-05-30	RE
BRF Shares Fall 6.7%, JBS Down 4.1% After Avian Flu Confirmed	23-05-24	DJ
Transcript : Marfrig Global Foods S.A., Q1 2023 Earnings Call, May 16, 2023	23-05-16
Marfrig Global Foods S.A. Reports Earnings Results for the First Quarter Ended March 31, 2023	23-05-14	CI
BRF and Other Brazil Exporters' Shares Fall as Stronger Real Erodes Revenue	23-04-13	DJ

	1st Jan change	Capi.
MARFRIG GLOBAL FOODS S.A.	-1.13%	1.73B
HORMEL FOODS CORPORATION	+9.44%	19.25B
HENAN SHUANGHUI INVESTMENT & DEVELOPMENT CO.,LTD.	+1.80%	13B
WH GROUP LIMITED	+15.67%	10.47B
JBS S.A.	-11.56%	9.48B
PILGRIM'S PRIDE CORPORATION	+29.03%	8.46B
BRF S.A.	+25.78%	5.66B
INDUSTRIAS BACHOCO, S.A.B. DE C.V.	-100.00%	59.94K
LDC	+2.86%	2.68B
MAPLE LEAF FOODS INC.	-3.84%	2.18B

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