2007 Results Presentation
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    2007 Results Presentation 2007 Results Presentation Presentation Transcript

    • JBS S.A. RESULTS 2007 MARCH 31, 2008
    • Presenters Joesley Mendonça Batista CEO Sérgio Longo Finance and IR Director Rodrigo Gagliardi Investor Relations Manager 1
    • Period Highlights  The conclusion of the investment plan in the USA and Australia, initiated in July 2007 through the Swift & Co acquisition.  As announced it was realized the renewal of credit lines in the total amount of US$750 million.  JBS’ net revenue increased 256.4%, from R$3,967.6 million in 2006 to R$14,141.6 million in 2007.  The Company’s EBITDA margin in 2007 was 4.18%, comprised by the 14.2% margin of JBS MERCOSUL and -1.1% margin of JBS USA;  In the 4Q07, JBS MERCOSUL’s EBITDA margin was 15.1%.  The pork division in JBS USA in the 4Q07 returned its highest EBITDA margin in the past 4 years: 6.8%.  In the 4Q07, EBITDA margin of JBS Australia was 3.4%, the second highest EBITDA in the past 4 years.  The company’s results were negatively impacted by the exchange variation on investments made in the foreign subsidiaries.  The acquisitions described in the recent events, allied with the positive atmosphere in the global beef trade and the improved margins in the USA in 2008, create a positive environment for JBS to achieve positive results this year. 2
    • AGENDA CONSOLIDATED RESULTS RESULTS OF MERCOSUL RESULTS OF JBS USA QUESTIONS AND ANSWERS 3
    • JBS CONSOLIDATED RESULTS – Net Revenue, EBITDA and EBITDA Margin Net Revenue (R$ million) EBITDA and EBITDA Margin EBITDA Margin (%) 25,500.0 14.2% 9.1% 9.6% 4.2% 5.0% 1,275.0 14,141.6 80.3% 564.9 591.1 3,967.6 345.1 3,158.0 3,577.1 286.8 115.7% 13.3% 10.9% 256.4% 20.3% 63.7% 4.6% 12M04 12M05 12M06 12M07 2008* 12M04 12M05 12M06 12M07 2008* Source: JBS *According to guidance published in 01/27/2008 without considering the acquisitions of National Beef, Smithfield Beef and Tasman. 4
    • JBS CONSOLIDATED RESULTS – Net Income Net Results (R$ million) The net loss in 2007 were affected by the exchange rate variation on foreign currency investments in approximately R$160.0 million. 180.3 Exchange variations do not have a cash effect on the Company, and as such, did 107.3 not impact the EBITDA. 55.5 The dollar declined 7.9% against the real, and the Argentine peso fell 19.6% against the real. -5.0 * Excluding this effect, the Company would have registered a net loss of R$5.0 million for the 12M07. The net loss was also a consequence of the negative impacts of the beginning of the -165.0 USA operations. 12M04 12M05 12M06 12M07 12M07* Source: JBS * Net loss excluding the amounts relating to the exchange variation on permanent investments made in foreign subsidiaries. 5
    • Net Debt over Ebitda Net Debt/Ebitda* 3.7x 3.3x 2.5x 2.3x 1Q07 2Q07 3Q07 2007 Source: JBS * Pro-forma Consolidated 6
    • JBS CONSOLIDATED – Sales Distribution Sales Distribution by Division 2007 Sales Distribution by Market 2007 Beef Argentina Beef 2% Australia 15% Exports 32% Beef USA 46% Pork USA 18% Domestic Market 68% Beef Brazil Impacted by the 19% USA domestic market Source: JBS Pro-forma 2007 Source: JBS Pro-forma 2007 7
    • JBS CONSOLIDATED – Exports Distribution Exports Distribution 2007 Others 14% Japan 19% Taiwan 3% Hong Kong 3% China 5% European Union Canada 14% 5% Russia 7% Mexico South Korea 12% 8% USA 10% JBS Pro Forma Exports: ~US$ 3.8 billion Source: JBS Pro-forma 2007 8
    • JBS – Mercosul EBITDA and margin EBITDA 14.2% 14.2% 9.1% 9.6% 692.5 564.9 345.1 286.8 20.3% 63.7% 22.6% 12M04 12M05 12M06 12M07 Source: JBS 9
    • JBS – EUA e Australia Beef USA Pork USA Beef Australia Net Revenue Net Revenue Net Revenue (US$ million) (US$ million) (US$ million) 5,999 5,604 5,579 5,461 2,243 2,070 2,175 1,981 1,871 1,914 1,577 1,751 1,491 1,745 570 598 516 595 FY04 FY05 FY06 FY07 3Q07 4Q07 FY04 FY05 FY06 FY07 3Q07 4Q07 FY04 FY05 FY06 FY07 3Q07 4Q07 (1) (2) (1) (2) (1) (2) EBITDA (US$ million) EBITDA (US$ million) EBITDA (US$ million) and margin EBITDA and margin EBITDA and margin EBITDA Margin (%) Margin (%) Margin (%) 5.7% 0.7% 6.7% 6.8% -0.4% -0.7% -1.2% -1.7% 5.4% 3.4% 2.9% 106.0 2.4% 44.7 -5.8% 3.5% 1.7% 3.2% 132.6 2.7% 122.1 -0.3% 42.9 45.6 -19.8 -10.3 73.3 70.3 40.5 29.5 20.0 -65.1 15.5 -97.1 -101.6 -1.3 FY04 FY05 FY06 FY07 3Q07 4Q07 FY04 FY05 FY06 FY07 3Q07 4Q07 FY04 FY05 FY06 FY07 3Q07 4Q07 (1) (2) (1) (2) (1) (2) Sources: JBS, Swift’s fiscal year used to be from june to may (1) 13 weeks ended 09/23/2007 (2) 14 weeks ended 12/30/2007 10
    • USA – Beef Price vs. Cattle Price Spread Live Cattle / Beef Blended Cutout 155,00 50,00 30,00 Cattle / Cutout - US$/100 pounds 145,00 Spread (US$)/Head 10,00 135,00 (10,00) 125,00 (30,00) (50,00) 115,00 (70,00) 105,00 (90,00) 95,00 (110,00) jan/07 fev/07 mar/07 abr/07 mai/07 jun/07 jul/07 ago/07 set/07 out/07 nov/07 dez/07 jan/08 fev/08 Spread/Head Cattle Texas Blended Cutout Source: Bloomberg, USDA 11
    • JBS USA – Adjusted Ebitda Adjusted EBITDA1 Dec. 30 EBITDA2 Swift - Beef -101.6 Swift - Pork 40.5 Swift - Australia 20.0 Corporate and Others - TOTAL -41.1 Adjustments: Non-recurring Expenses – Retention Plan3 1.5 Expenses Reductions - JBS USA4 1.8 14 weeks compared to 13 weeks5 2.3 Costs – Increase in Production6 31.8 Beef US meat margin normalization7 95.4 Yield improvements subsequent to acquisition8 3.2 Subtotal 136.0 Adjusted EBITDA 94.9 margin EBITDA 3.3% (1) Last 14 weeks ended 12/30/2007 in US GAAP and in US$; (2) In millions of US$; (3) Non-recurring expenses associated with the employee retention plan; (4) Permanent reduction in selling, general and administrative expenses obtained so far by JBS USA; (5) The quarter ended in December contained 14 weeks and the quarter ended in September contained 13 weeks; (6) Costs associated with the higher production, the benefits of which will only be captured in the coming quarters; (7) US beef margins were lower than historical levels during the quarter ended December 30, 2007; (8) Improvements in product yields occurring after the acquisition date. 12
    • QUESTIONS & ANSWERS 13
    • Disclaimer The forward-looking statements presented herein are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management, and on information currently available to us. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Our future operating results, financial condition, strategies, market share and values may differ materially from those expressed in or suggested by these forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. Forward-looking statements also include information concerning our possible or assumed future operating results, as well as statements preceded by, followed by, or including the words ''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,'‘ ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions. 14