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Jbs presentation october v0

Jbs presentation october v0






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    Jbs presentation october v0 Jbs presentation october v0 Presentation Transcript

    • October, 2010
    • DisclaimerThe forward-looking statements presented herein are subject to risks and uncertainties. Thesestatements are based on the beliefs and assumptions of our management, and on informationcurrently 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 oncircumstances 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 suggestedby these forward-looking statements. Many of the factors that will determine these results andvalues are beyond our ability to control or predict.Forward-looking statements also include information concerning our possible or assumed futureoperating results, as well as statements preceded by, followed by, or including the wordsbelieves, may, will, continues, expects,‘ anticipates, intends, plans, estimates orsimilar expressions. 2
    • Agenda Company OverviewMarket Overview 2Q10 Highlights Short Term Outlook 3
    • Who We Are Our Mission To be the best at what we set out to do, totally focused on our business, ensuring the bestproducts 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 4
    • Corporate Structure CEO President Joesley Batista Corporate Investors Corporate Commercial and Finance CEO JBS Law Relations And Adm. New business Distribution Dairy Director Brazil MERCOSUL Hides Department Jeremiah Controller José Luis International Gilson Marcos Cunha Marco Roberto Francisco O’Callaghan / Eliseo Medeiros Offices Teixeira Bastos Bortolon Motta de Assis e Silva Guilherme Arruda Fernandes Marco Bichieri Marcos graduate from Francisco is the director of Jerry has a Engineering Eliseo has a Business Marco has more than 10 José Luiz has a degree Marco has more than 24 Roberto has more than 20 Gilson has more than Mackenzie University in the Law Department. Has Degree from the University Administration and years experience in JBS. in Accounting and has years of experience in the years in the Leather 25 years experience inBusiness Administration a post graduated from the of Cork College in Ireland. Accounting Degree from Initially started as a been working in the Beef Protein Sector. Worked Industry. Was responsible Finance and Controller and has a MBA in University of Mackenzie. Immigrated to Brazil in the University Católica de Production Manager and Sector since 1975. 14 for more than 20 years in for incorporating BMZ of business units of Finance from San 1979. Started working in Pernambuco and a post in 2009 was promoted to year in Bertin and Bertin. Hides with the JBS Group. Bertin, where he later Started working at JBS in Francisco State the Beef Sector in 1983 and graduate degree in Chief Operating Officer of started at JBS in 1997. served as a member of December of 2001 and University. Worked in in JBS in 1996 in order to Business Administration the Brazil Beef Division. January 2010 became the Board for 5 years. later became a member ofmany financial institutions develop the Trade Area and from FGV. He started with the Director of New the Executive Board in in Brazil, primarily in eventually became the JBS in August 2005 and Business. Investment banking, January of 2007. Investors Relations Officer. eventually became Financial Projects, and Guilherme graduated in Director of Administration Portfolio management. Business and Economics and CorporateStarted in 2008 with JBS. from the University of Governance. He has 8 California. Start in the years Experience in Company in 2009 after Auditing and Consulting working for 7 years for BTG and 10 years in the Retail Pactual. industry. 5
    • Corporate Structure CEO USA/AUS Wesley Batista JBS Five Human Pork JBS Carriers Trading CFO Pilgrims Pride Beef USA Australia Rivers Resources Martin Mr. Moe Robert André Don Jackson Bill Rupp Iain Mars Mike Bob Dooley Schroder Wadland Nogueira Thoren Daubenspeck Don is the President, Bill has learned the Beef Martin has a degree in Iain was born in England Mike is the President and Moe has more than 30 Robert has 27 years of Robert assumed this André has a degree in CEO and Director of Industry from the ground Biology from the University and worked in the Beef CEO of Five Rivers since years experience in meat trading experience position in February Economics from the Pilgrim’s Pride since up. Right out of college, of Eastern Illinois. Worked Industry for his whole life. the Start of the Company. Transportation Sector. with 17 years of that at 2009 and before that Federal University January 2009. For 9 he began learning the in Swift for his whole life, He became the President Has a Masters of Science Graduated from the JBS enhancing exports was in JBS Fluminense, a masters inyears was the president business at Cargill where having started the and CEO of JBS Australia in Agricultural Economics University of Ryerson, out of Australia and New Packerland from 2002 Capital Markets fromof the chicken division of he worked for 25 years. company as a manager in 2007, after the and has a degree in Toronto, Canada. Zealand. Recently to 2008. FGV – Fundação Getúlio Foster Farms and vice He was a plant general trainee in 1983. In 2007 acquisition of Swift. He Agribusiness from the Occupied the position of transferred to the US to Vargas, and masters in president of Food manager and eventual was given the position of has worked in JBS since University of Washington Vice President of Sales, run the group’s trading Economics from Services in ConAgra went to build a meat president of the Pork 2005. State. Dedicated Operations at business unit University of Brasilia in Poultry Company. processing facility in Division of JBS USA. KLLM and before that was 2003. Worked more than Before this he worked Canada. He later in various executive 20 years at Bank of at Seaboard farms of became the VP of positions at CR England . Brazil and started at JBS Athens for 22 years, Operations, then was the Moe Joined JBS to run the USA in 2007 after theincluding 4 years as the President of the Beef carrier business Swift acquisition. CEO of the Chicken Business, and eventual Division became the president of Cargill Meat Solutions. Bill joined JBS in 2010 as the President of the US Beef Business. 6
    • Shareholders PROT - FIP 8.1% Market 19.1% Controlling Holding 55.5% BNDESPAR 17.3% Average daily trade volume of USD 50.4 million in 2Q10Source: JBS 7
    • Leading, Sizeable and Diversified Business Platform Beef Chicken Pork Hides / Leather Dairy Lamb Ranking 1st 2nd 3rd 1st 3rd 1st Global Global U.S.A. Global Brazil GlobalProduction 76 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 4.5and Installed Capacity 9.5 6.0 23.0 3.0 1.0 0.7 1.2 Total: 91.1 Total: 7.6 Total: 48.5 Total: 91.4 Total: 1.4 Total: 27.5 Well-Recognized Brands 8
    • 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 managementEBITDA Margin optimization JBS’ Value & Strategy 9
    • 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% Distribution Center Sales Offices 1 Real growth of total consumption in tons – 2010E to 2015E Source – OECD-FAO 10
    • Agenda Company OverviewMarket Overview 2Q10 Highlights Short Term Outlook 11
    • World Meat Consumption (million tons cwe) Growth 2000 2009 2018 2009-2018 Pork 89 102 120 18% Poultry 70 98 120 23% Beef 60 65 75 15% TOTAL 219 265 315 19% Growth 2000 2009 2018 2009-2018 OECD 92 100.4 108.5 8% NON OECD 127 164 205 25%Source: OECD/FAO Agricultural Outlook 2009-2018 12
    • Animal protein consumption growth in the last decade Former USSR 47.7% EU - 27North 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 13
    • Beef Exports  Rising demand in emerging economies drove export volumes up in the semester both in Brazil and in the US but more importantly, pricing was very strong. As beef production is long cycle, some of this export demand will tend to boost chicken exports, particularly out of the US, in the coming years. US Beef and Veal Exports (Tons) Brazilian Beef Exports (Tons)700,000 4,600 1,400,000 4,500 4,500 4,000600,000 5.3% 1,200,000 26.6% 4,400 3,500500,000 1,000,000 3,000 4,300400,000 800,000 2,500 24.3% 4,200300,000 600,000 7.0% 2,000 4,100 1,500200,000 400,000 4,000 1,000100,000 3,900 200,000 500 0 3,800 0 0 2005 2006 2007 2008 2009 JAN-JUN JAN-JUN 2005 2006 2007 2008 2009 JAN-JUN JAN-JUN 09 10 09 10 Beef Exports Avg Price in US$ per Ton Beef Exports Avg Price in US$ per Ton Source: USDA and Secex 14
    • Chicken Exports  Strong domestic demand in both Brazil and the US limited exports in the first semester although it is clear that prices will tend to push up export volumes from now on particularly taking into account the reopening of the Russian market for US product. Brazilian Chicken Exports (Tons) US Poultry Exports (Tons)3,500 2,000 3,500,000 1,200 - 1,800 2.9%3,000 17.3% 3,000,000 1,000 1,6002,500 1,400 2,500,000 8002,000 1,200 1.1% 2,000,000 1,000 -6.5% 6001,500 800 1,500,000 4001,000 600 1,000,000 400 500 500,000 200 200 0 0 - - 2005 2006 2007 2008 2009 JAN-JUN JAN-JUN 2005 2006 2007 2008 2009 JAN-JUN JAN-JUN 09 10 09 10 Chicken Exports Avg Price in US$ per Ton Chicken Exports Avg Price in US$ per Ton Source: USDA and Secex 15
    • Agenda Company OverviewMarket Overview 2Q10 Highlights Short Term Outlook 16
    • Highlights for the 2nd Quarter 2010 Revenues increased 52.5% y-o-y and 12.5% to R$14,116.3 million • JBS USA increased 67.6% y-o-y and 12.9% q-o-q • JBS MERCOSUL increased 123.1% y-o-y and 19.1% q-o-q • JBS Exports increased 37.0% q-o-q reaching 29% of sales EBITDA increased 163.3% y-o-y and 16.0% q-o-q. Leverage remained fairly stable at 3.0x Consolidated customer base grew by 22.2% q-o-q, reaching more than 300 thousands customers in 2Q10. 17
    • JBS Consolidated Results Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million) 6,9% 7,1% 5,4% 4,1% 3,5% 1.000,0 862,0 14.116,3 12.550,39.255,0 397,8 8.379,9 384,0 7.408,9 291,9 -9,5% -11,6% 69,4% 12,5% -24,0% 36,3% 116,7% 16,0%2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 Source: JBS EBITDA Margin (%) 18
    • Performance by Business Units JBS MERCOSUL JBS USA Beef JBS USA Pork JBS USA Chicken (PPC) Including AustraliaNet Sales (R$ billion) Net Sales (US$ billion) Net Sales (US$ million) Net Sales (US$ million) 3,5 3,0 3,3 1,8 1,7 1,7 1,6 739 1,7 1,7 2,9 2,8 646 1,7 2,8 2,8 606 554 5592T09 3T09 4T09 1T10 2T10 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 1Q09 2Q09 1Q10 2Q10 EBITDA (R$ mi) EBITDA EBITDA (US$ mi) EBITDA EBITDA (US$ mi) EBITDA margin EBITDA (US$ mi) EBITDA margin margin margin 11,9% 6,6% 9,3% 5,4% 9,5% 6,0% 5,9% 4,5% 4,7% 7,5% 4,5% 2,7% 6,6% 3,6% 3,8% 4,8% 352,6 3,6% 334,5 164,6 4,9% 2,9% 194,9 127,6 170,5 48,7 126,0 104,6 108,4 34,9 80,8 112,2 28,6 59,5 24,782,6 15,3 47,32T09 3T09 4T09 1T10 2T10 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 1Q09 2Q09 1Q10 2Q10 Source: JBS EBITDA Margin (%) 19
    • Revenue Distribution by MarketRevenue Distribution by Market 2Q10 Revenue Distribution by Market 1Q10 Pork Chicken Pork Chicken Exports 2% Exports 1% Exports 2% Exports 2% Beef Beef Exports Exports 20% Beef Beef 25% Domestic 44% Domestic 47% Chicken Domestic 22% Chicken Domestic 20% Pork Pork Domestic 8% Domestic 7% Exports = 29% Domestic Market = 71% Exports = 23% Domestic Market = 77%Revenue Distribution by Market 2Q10 Revenue Distribution by Market 1Q10 USA Chicken Mercosul USA Chicken Mercosul 22% 27% 25% 23% USA Pork 9% USA Pork 10% USA Beef USA Beef 42% 42% Source: JBS 20
    • EBITDA Distribution by Business Units 2Q10 1Q10Mercosul USA BEEF USA BEEF 33.5% 34.7% Mercosul 36.1% 43.9% USA PORK USA PORK USA Chicken 8.7% USA Chicken 7.4% 22.7% 12.6% Source: JBS 21
    • JBS Consolidated Exports Distribution JBS Exports 2Q10 JBS Exports 1Q10 Taiwan Taiwan Canada 2% Others Canada 2% Others 12% Africa and Middle East Africa and Middle East 4% 4% 12% China 19% China 16% 4% 4% MexicoSouth Korea Mexico South Korea 14% 5% USA 12% 4% USA 7% E.U. Japan 7% Japan E.U. 7% Russia Hong Kong 10% 8% Russia Hong Kong 12% 10% 8% 8% 9% US$2,3331.0 Million US$1,765.4 Million Source: JBS 22
    • DebtWhile JBS leverage remained fairly constant in the quarter (at 3.0x LTM EBITDA), the liquidity of thebalance sheet improved significantly.The company’s cash position increased 17,5% when compared with 1Q10 (which represents 70% ofthe company’s ST debt, from 55% in the previous quarter), while ST debt decreased 7,7% in the sameperiod.Considering the US$700mm bond issuance in July, ST debt on a pro-forma basis would representroughly 33% of total debt, closer to the company’s target of having less than 30% of its total debtmaturing in the ST. Leverage ST / LT Profile 3,3 3,1 3,1 3,0x * 2,6 61% 60% 64% 67% 39% 40% 36% 33% 2Q09 1Q10 2Q10 ** (Pro-Forma)* 2Q09 3Q09 4Q09 1Q10 2Q10 Short term Long term Source: JBS *LTM including Bertin and Pilgrim’s Pride pro-forma. ** Pro-Forma takes into account senior unsecured notes issued July, 2010 23
    • Agenda Company OverviewMarket Overview 2Q10 Highlights Short Term Outlook 24
    • A Closer look at synergies – Pilgrim’s Pride JBS already captured US$ 150 million in synergies with Pilgrim’s Pride acquisition of atotal estimated amount of US$ 220 million. Descrição The illustration bellow the origins of the captured synergies. Captured Synergies On going Synergies Size Time US$ 150 Million Efficiency gains in the average Logistics Optimization US$50mm 2 years load factor for trucks Logistics Adminstrative 23% Reaching final customers expenses Exports through the JBS current sales US$20mm 2010 34% structure. Suppliers 20% Corporate Total US$70mm 23% Source: JBS 25
    • A Closer look at synergies – Bertin S.A. JBS already captured R$ 154 million in synergies due to the merger with Bertin of a totalestimated amount R$ 485 million. Descrição The next graphic shows the origin of the captured synergies. Captured Synergies On going Synergies Size Time R$154 Million Maximization of sales channels Exports and reviewing contracts for R$31mm 2010 freight Suppliers Capturing value with the Administrative Hides R$45mm 2010 16% greatest volume of processed expenses Logistics 26% 13% Review of terms of contract non- Suppliers R$10mm 2010 core suppliers (ex packaging) Exports Optimization of fixed costs and 45% Industrial Processes streamlining of existing R$245mm 2 Years contracts Total R$331mm Source: JBS 26
    • IR Contacts: ir@jbs.com.br +55 11 3144 4447 www.jbs.com.br/ir“In God We Trust, Nature We Respect” 27