JBS Presentation July
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JBS Presentation July

JBS Presentation July

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JBS Presentation July JBS Presentation July Presentation Transcript

  • July 2010
  • Who We Are Our Mission To be the best at what we set out to do, totally focused on our business, ensuring the best products and services for our customers, solidity for our suppliers, satisfactory profitability for our shareholders and the certainty of a better future for all our employees. Our Values Excellence Planning Determination Discipline Availability Openness Simplicity 2
  • Agenda Company Overview Short Term Outlook Market Overview 1Q10 Highlights 3
  • JBS at a Glance  Founded in the 1950’s in Central West Brazil  IPO in 2007  Leading protein producer and third largest food company in the World  Revenues of about USD 30 billion per annum  125,000 employees worldwide  Market cap of approximately USD 10,7 billion* 4
  • Shareholders PROT - FIP 8% Market 19,1% Controlling Holding 55,5% BNDESPAR 17,3% Average daily trade volume of USD 34,1 million* *April and May/2010 5
  • JBS – A Leading Global Food Company Growth Company (Net Revenues – R$ mm)1 Company at a Glance 55.224 • World’s largest protein producer (chicken, beef, pork and lamb) with a global and CAGR diversified low cost production platform 30.340 56% • We’ve been focusing our sales growth mainly 14.142 in exports and Emerging Markets, the sum of 4.302 650 890 1.212 1.289 1.912 3.501 3.709 which represent approx. 40% of JBS 2009 sales 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 • We’ve been expanding our margins through a wide range of value-added products, expanding worldwide distribution capabilities World’s Largest Food Companies and developing our brands, such as: Swift, 2009 Net Revenues (US$ bn)1 Maturatta, Friboi, Montana, Cabaña Las Lilas, 95 Bertin, King Island, 1855, Pilgrim’s Pride, Gold Kist, Vigor and Leco Protein Companies • World’s largest hides/leather processor 40 30 27 15 • Significant producer of dairy products in Brazil 14 13 12 10 8 7 Tyson General Nestle JBS BRF Campbell Soups Hormel Heinz Smithfield ConAgra Mills Kraft Foods Source: Bloomberg Note: 1 Pro forma figures 6
  • JBS – A Growth Company EBITDA (R$mm) Bertin Merger CAGR (1999-2009): 58% Pilgrim’s Pride 3,058 JBS Hides 5 new units Tasman Inalca Smithfield Beef Swift Foods Co. Five Rivers Venado SB Holdings Tuerto 1,156 Pontevedra (CEPA) . 548 602 327 399 66 147 165 2001 2002 2003 2004 2005 2006 2007 2008 2009 1999 2006 – pre IPO 2009 % of total revenues of R$650mm % of total revenues of R$4.3bn % of total revenues of R$55.2bn Industrialized/ Poultry Further 13% Pork Processed 23% 6% 100% 52% Industrialized/ 77% Beef 29% Further Beef Beef Processed 7
  • Global Low Cost Production Platform 3 8 33 3 1 Total Number of Plants 65 33 10 5 3 44 6 World Beef Producers World Pork Producers World Chicken Producers Brazil Brazil Others Brazil Others 3% 16% Others 15% 17% 34% 34% China US China 10% 10% China 17% 48% 14% 22% EU 22% 12% 21% 5% EU EU US India US 8
  • Global Low Cost Production Platform (cont’d) Chicken (€ /kg slaughtered chicken) Pork (€/Kg live weight) 1,56 0,85 1,46 0,75 0,77 0,79 1,28 1,35 1,35 0,74 0,65 1,07 0,51 0,52 0,90 Source: LEI – Wageningen University and Research Center (2007) Source: Rabobank (2006) Cattle Cost (US$/kg cwe) 4,04 3,19 2,54 2,69 2,71 2,71 Source: World Beef Report (March 2010) 9
  • Leading, Sizeable and Diversified Business Platform Beef Chicken Pork Hides / Leather Dairy Lamb 2nd Ranking 1st 3rd 1st 3rd 1st Global Global U.S.A. Global Brazil Global Production 65 33 3 26 7 6 Units ‘000 heads/day: mm heads/day: ‘000 heads/day: ‘000 hides/day: ‘000 tons/day: ‘000 heads/day: 41.2 55.6 1.4 1.1 Geographic 6.7 Presence 28.6 6.9 48.5 28.6 4.5 and Installed Capacity 8.7 6.0 23.0 3.0 1.0 0.7 1.2 Total: 90.3 Total: 7.6 Total: 48.5 Total: 91.4 Total: 1.4 Total: 27.5 Well- Recognized Brands 10
  • Strong Track Record of Acquisition Integration and Turnaround JBS USA Margin Improvement Pre-acquisitions Post JBS’ Ownership 3,2% 3,4% 2,5% 2,0% 398 451 236 193 0,2% (0.3%) 21 (31) 1 2004 2005 2006 2007 2008 2009 At Acquisition JBS Management Acquisition of Swift Took EBITDA from 15.1x 3.9x 2007 • EV of US$ 1.5 billion US$96.3mm to nearly US$375mm2 EV/EBITDA EV/2008EBITDA Acquisition of Smithfield Achieved consolidated 2008 Beef2 EBITDA of US$163mm2, 8.1x 3.5x even during the crisis EV/EBITDA EV/2008EBITDA • EV of US$ 565 million Acquisition of Pilgrim’s Stock price Sept/09: Pride ~US$5.8 Market Cap : Market Cap3: 2009 Stock price April 6, 2010: US$1.3 bi US$2.4 bi • US$ 800 million (64% stake) US$10.9 Notes: 1 Assumes 2-month operation of Smithfield Beef in 2008 3 Pilgrim’s Pride Market Cap as of April 6, 2010 2 Assumes 12-month operation of Smithfield Beef in 2008 11
  • Our Strategy Rationale Branding • Associating quality and branding to increase client loyalty • Customized and further processed Value added products products for the end users Sales and distribution platform • Expanding a global distribution platform to reach end clients • Developed an efficient Production platform and diversified global production platform Cost reduction, Financial Experienced Risk process structure management management EBITDA Margin optimization JBS’ Value & Strategy 12
  • Distribution Platform with Access to Key Markets Growth 1 -2 % 3% 4% Growth 1 9% 13 % 8% Growth 1 Growth 1 7% 2% 25 % 8% 16 % 5% DC’s and Sales Offices Protein Consumption in Key Markets (millions of Ton, 2009E) Europe Asia & Middle Europe Asia & Middle Asia Europe East East 12 51 17% 8 16% 21 13 28% 30 24% Latin America Latin America 41% 15% 59% 3% 22% 11 3 Latin America 13% 33% North America North America 10 28% North America 15 11 21 Total: 46 mm ton Total: 74 mm ton Total: 86 mm ton 1 Real growth of total consumption in tons – 2010E to 2015E Source – OECD-FAO 13
  • Agenda Company Overview Short Term Outlook Market Overview 1Q10 Highlights 14
  • Market Highlights • Domestic growth in Brazil remains strong • Input cost consistently attractive, including grain prices • Signs of growing importance of international trade with increased demand in all major importing markets • Consistent increase in US Exports to more diverse destinations • Declining production in Europe 15
  • Animal protein consumption growth in the last decade Former USSR 47.7% EU - 27 North America 41.4% 7.5% 23.7% East Asia Central 29% Middle East America Southeast 70.2% Asia 48.7% Sub Saharan Africa South America 32.2% 23.3% Oceania 3 Source: FAPRI February 2010 16
  • Agenda Company Overview Short Term Outlook Market Overview 1Q10 Highlights 17
  • Highlights for the 1st Quarter 2010 • Net Revenue increased by 35.4%, from R$9,267.9 million in 1Q09 to R$12,550.3 million in 1Q10, mainly due to the incorporation of Bertin and acquisition of Pilgrim’s Pride. • The 1Q10 consolidated EBITDA increased 307.5% compared to the same period in 2009, from R$211.5 million to R$862.0 million. The EBITDA margin was 6.9% for the period, compared with 2.3% for 1Q09. • Net Profit of R$99.4 million in 1Q10, compared to a net loss of R$322.7 million in 1Q09. • Beef US posted EBITDA of US$170.5 million, on margin of 6.0%, a record for 1Q. • In Mercosul, JBS posted EBITDA of R$352.6 million, with 11.9% margin. 18
  • JBS Consolidated Results Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million) 6,9% 5,4% 4,1% 3,5% 2,3% 862,0 12.550,3 9.267,9 9.255,0 397,8 8.379,9 384,0 7.408,9 291,9 211,5 1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 Source: JBS EBITDA Margin (%) 19
  • Performance by Business Units JBS MERCOSUL INALCA JBS Net Sales (R$ billion) Net Sales (€ million) 3,0 1,7 1,7 1,7 144 146 141 138 144 1,4 1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 EBITDA (R$ mi) EBITDA margin EBITDA (€ mi) EBITDA margin 7,3% 11,9% 6,6% 5,0% 4,6% 3,9% 6,6% 4,9% 352,6 3,7% 2,9% 10,1 9,7 6,6 7,0 112,2 5,6 82,6 53,5 47,3 1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 Source: JBS EBITDA Margin (%) 20
  • Performance by Business Units JBS USA (Beef) JBS USA (Pork) Pilgrim’s Pride Corporation Including Australia Net Sales (US$ billion) Net Sales (US$ million) Net Sales (US$ million) 1,7 1,6 2,9 2,8 2,8 2,8 646 2,7 554 559 606 526 1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 1T09 1T10 EBITDA (US$ mi) EBITDA margin EBITDA (US$ mi) EBITDA margin EBITDA (US$ mi) EBITDA margin 4,8% 6,0% 3,6% 4,5% 3,6% 3,8% 5,4% 4,5% 4,7% 2,2% 2,7% 1,4% 170,5 126,0 80,8 104,6 108,4 34,9 59,5 28,6 59,7 24,7 15,3 7,5 1T09 1T10 1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 Source: JBS EBITDA Margin (%) 21
  • Debt • Net debt / EBITDA ratio remained at 3.1x q-o-q. Gross debt declined 5.7%, while Net Debt increased 12.2%, reflecting working capital requirements to ramp up recent acquisitions, as well as investments in fixed assets, further impacted by FX fluctuations. • The vast majority of the company’s short term debt is composed of revolving trade finance credit lines. • As demonstrated below, the percentage of short term debt was 40% in 1Q10, compared with 37% in 4Q09 and 47% in 1Q09. 3,3 3,1 3,1 2,5 2,6 53% 60% 63% 47% 40% 37% 1Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 Short term Long term Source: JBS Net Debt/ EBITDA EBITDA pro-forma * LTM including Bertin and Pilgrim’s Pride pro-forma. 22
  • Revenue Distribution by Market 1Q10 1Q09 Exports Exports 23% 22% Domestic Domestic Market Market 77% 78% 23
  • JBS Consolidated Exports Distribution JBS Exports 1Q10 JBS Exports 1Q09 Taiwan Others Japan 2% 14% Middle East 16% 4% E.U. Canada 16% 4% China 5% South Korea USA Hong Kong Russia 6% Mexico 11% 5% 8% 9% US$ 1,765.4 Million US$ 901.4 Million 24
  • Agenda Company Overview Short Term Outlook Market Overview 1Q10 Highlights 25
  • A Closer look at synergies – Pilgrim’s Pride Pilgrim’s Pride Acquisition: Synergies of over US$220mm/year Description Size Timing Transportation Review of contract terms with carriers US$35mn  Suppliers Review of contract terms with packaging and other suppliers US$30mn  Corporate Streamlining of corporate structure and headquarters closure US$35mn 1H10 G&A Review of service contracts (e.g. Legal, insurance and IT) US$50mn 1H10 Logistics optimization Increase efficiency in average weight per truck US$50mn 2 years Exports Reach-out to end clients through JBS existing sales network US$20mn 2010 Total US$220mn 26
  • A Closer look at synergies – Bertin S.A. Association with Bertin: Synergies to Achieve at Least R$485mm/year Description Size Timing Corporate/G&A Offices, personnel, services contracts and third parties R$40mn  Exports Maximization of the combined sales channels and review of freight contracts R$100mn  Hides / Leather Value enhancement through further processing R$45mn 1H10 Logistics Review of transportation contracts R$20mn 1H10 Suppliers Review contract terms of non core suppliers (e.g. packaging) R$35mn 2 years Industrial Processes Optimization of fixed costs and rationalization of existing contracts R$245mn 2010 Total R$485mn 27
  • IR Contacts: ir@jbs.com.br +55 11 3144 4447 www.jbs.com.br/ir “In God We Trust, Nature We Respect” 28