Presentation 3 q11 conference call final

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Presentation 3 q11 conference call final

  1. 1. JBS S.A.Results Presentation 3Q11
  2. 2. JBS S.A.
  3. 3. JBS S.A. at a glanceFounded in the 1950’s in West Central BrazilIPO in 2007Leading protein producer in the WorldRevenues of over US$27 billion in the first nine months of 2011EBITDA of US$1.3 billion in the first nine months of 2011Net revenue organic growth of 10.6% in local currency in 3Q11 y.o.y.125,000 employees worldwide134 production units in 6 continentsMarket cap of approximately US$9.3 billion(1) (1) 11/11/2011 PAGE 3
  4. 4. JBS Ranking1 Market Leader2 Track Record of successful acquisitions3 Geographic and st Largest global beef and market segment diversification 1 lamb producer st Largest global leather4 Well-recognized 1 processor brands nd Largest global chicken 2 producer rd Largest dairy 3 producer in Brazil 3rd Largest pork producer in the US Source: JBS PAGE 4
  5. 5. Presence in more than 100 countries, in 6 continents1 Market Leader Strategic Geographical Distribution2 Track Record of successful acquisitions3 Geographic and market segment diversification4 Well-recognized brands 3 Pork 37 Chicken 7 Dairy 58 Distribution Center 134 Slaughterhouse and Industry 60 Beef 20 Leather 1 Biodiesel 17 Sales Office u Units Geographic Beef Chicken Pork Leather Dairy Lamb Presence and 85,825 heads/day 7.9 mm birds/day 50,000 heads/day 76,100 hides/day 5,400 tons/day 24,000 heads/day Production Capacity Source: JBS PAGE 5
  6. 6. Well-recognized Brands, symbols of quality1 Market Leader2 Track Record of successful acquisitions Brazil3 Geographic and market segment diversification Argentina4 Well-recognized brands USA Australia PAGE 6
  7. 7. 3Q11 Highlights
  8. 8. 3Q11 Highlights Gross Margin expanded 102bps, compared to 2Q11 and reached 10.9%. EBITDA margin increased 101 bps to 5.1% in the quarter. Net revenue in 3Q11 was R$15,567.8 million, 10.6% higher than 3Q10. The Company ended the quarter with R$5.6 billion in cash, more than a 100% of its short-term debt. JBS generated net cash provided by operating activities of R$897 million in the quarter. JBS USA Beef presented EBITDA in 3Q11 of R$184.1 million , an increase of 77.9% over the last quarter. Net debt reduced approximately R$530 million, excluding the FX variation effect in the net debt in US dollar denominated.The main operating highlights were: JBS Mercosul presented JBS USA Pork business unit EBITDA of R$453.8 million, with presented cumulative 2011 an EBITDA margin of 11.6%. EBITDA of US$264.8 million, 51.8% higher than in the same period of 2010. PAGE 8
  9. 9. JBS Consolidated Results – 3Q11 EBITDANet Revenue (R$ million) EBITDA and EBITDA Margin (R$ million) 1800,0 8,0 15,567.8 7.3 14,672.7 14,621.8 1600,0 6.0 5.7 14,069.6 14,319.6 5.1 1400,0 4.0 +1.8% +2.5% -3.8% +6.5% 1200,0 1,026 1000,0 -15.7% 866 836 -3.4% 787 800,0 588 +33.9% 600,0 -29.7% 400,0 200,0 0,0 -12,0 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 EBITDA Margin (%)Source: JBS PAGE 9
  10. 10. Nine Months Analysis Performance by Business Unit JBS Mercosul JBS USA JBS USA JBS USA (PPC) (Including Australia) Net sales (R$ billion) Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion) 2.5 12.0 5.7 11.1 2.2 5.1 9.8 9.5 0 9M10 9M11 9M10 9M11 9M10 9M11 9M10 9M11 EBITDA (R$ bi) EBITDA (US$ mi) EBITDA (US$ mi) EBITDA (US$ mi) 11001200 1.2 1000 0,15 1000 0,2 0,18 0,16 0,14 261.5 0,12 900 900 300 0,1 0,1 0,08 0,06 0,04 800 800 0,02 0 -0,02 -0,04 0,05 -0,06 700 700 -0,08 -0,1 515.5 174.4 -0,12 -0,14 468.9 -0,16 600 600 200 -0,18 0 -0,2 -0,22 1.1 0,01 -0,24 500 357.1 500 -0,261100 -0,28 -0,01 -0,3 -0,05 -0,32 -0,34 400 400 -0,03 -0,36 -0,38 -0,4 -0,05 -0,42 300 300 -0,44 100 -0,1 -0,46 -0,07 -0,48 -0,5 -0,52 200 200 -0,09 -0,54 -0,22 -0,56 -0,58 -0,24 -0,15 -0,11 -0,6 -0,13 100 -0,26 -0,28 100 -172.4 -0,62 -0,64 -0,66 -0,68 -0,71000 -0,15 0 -0,3 0 -0,2 0 -0,72 -0,74 -0,76 -0,78 -0,8 -100 -0,82 9M10 9M11 9M10 9M11 9M10 9M11 -0,84 -0,86 -0,88 -200 -0,9 9M10 9M11 Source: JBS PAGE 10
  11. 11. Quarterly Analysis Performance by Business Unit JBS Mercosul JBS USA JBS USA JBS USA (PPC) (Including Australia) Net sales (R$ billion) Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion) 1300 4.2 1220 1140 4.0 1060 846 867 3.9 980 837 2.0 3.8 900 772 799 1.9 1.9 820 1.7 1.8 3.6 3.6 3.6 740 3.5 660 3.4 3.4 580 500 420 340 260 180 100 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 EBITDA (R$ mi) EBITDA (US$ mi) EBITDA (US$ mi) EBITDA (US$ mi) 500 16,0% 11.8% 11.6% 11.8% 12.8% 12.6% 9.9% 8.8% 14,0%600 10.7% 7.1% 12,0% 200 500 20,0% 5.4% 4.4% 10,0% 3.1% 12,0% 8.6% 13,0% 8,0% 18,0% 1.1% 400 427.9 453.8 6,0% 16,0% 7.1% 10,0% 9.9% 9,0%500 4,0% 14,0% 400 8,0% 2,0% 12,0% 373.7 6,0% 300 269.7 0,0% -2,0% 5,0% 6.9% 10,0% 102.4 105.3400 308.6 8,0% -4,0% 1,0% 4,0% 6,0% 90.8 -6,0% 300 238.8 194.8 184.1 -8,0% 83.6 -3,0% -1.7% 4,0% 75.9 2,0%300 100 -10,0% 2,0% 0,0% 200 -12,0% -7,0% 200 170 -2.9% 0,0% 124.8 -14,0% -2,0%200 -2,0% 103.5 -16,0% -4,0% -2.4% -11,0% -18,0% -6,0% -4,0% -20,0% 100 44.7 -22,0% -15,0% 100 -8,0%100 -6,0% -24,0% -31.4 -10,0% -8,0% -26,0% -28,0% -19,0% -55.2 -47.6 -12,0% -14,0% 0 -10,0% 0 -30,0% 0 -23,0% 0 -16,0% -18,0% -20,0% 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 -100 3Q10 4Q10 1Q11 2Q11 3Q11 -22,0% -24,0% -26,0% -28,0% -200 -30,0% EBITDA Margin (%) PAGE 11 Source: JBS
  12. 12. Revenue and EBITDA Distribution by Business Unit Net Revenue - 3Q11 20.3% 25.1% 9.3% 45.3% EBITDA – 3Q11 -15.6% 59.6% 16.3% 39.6% PAGE 12Source: JBS
  13. 13. Organic Growth Each business unit presented double digit organic growth in their local currency, for the analyzed period. JBS USA Beef – Net Revenue (US$ million) JBS USA Chicken – Net Revenue (US$ million) 2.100 4.200 4.000 2.000 3.800 3.600 1.900 3.400 1.800 3.200 3.000 1.700 2.800 2.600 1.600 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 JBS USA Pork – Net Revenue (US$ million) JBS Mercosul – Net Revenue (R$ million) 4.000 850 3.800 800 750 3.600 700 3.400 650 3.200 600 3.000 550 500 2.800 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 PAGE 13Source: JBS
  14. 14. JBS Consolidated Exports DistributionApproximately US$2.4 billion in the 3Q11 and US$7.2 billion in 9M11 Mexico 14.5% Others 17.9% Vietnam 1.6% Africa and Middle East 14.0% Taiwan 2.4% US$ 2,374.2 million China 4.4% Japan 11.7% Canada 5.5% Sulth Korea 6.0% E.U. 7.8% Russia 7.0% Hong Kong 7.2% PAGE 14Source: JBS
  15. 15. Debt ProfileNet debt to EBITDA, excluding Pilgrim’s Pride Corp. (PPC)*, reduced from 3.2x in 2Q11 to 3.0x in 3Q11.Net debt to EBITDA, including Pilgrim’s Pride Corp. (PPC)*, went from 3.6x in 2Q11 to 4.0x in 3Q11.The Company ended the quarter with R$5.6 billion in cash or cash equivalents, more than a 100% of the Company’s short-term debt.The Company generated R$897 million of operating cash flow and R$620 million of net cash flow.Leverage ST / LT Profile 3Q11 28% 72% 1500 4.0x 4 1300 3.6 3.2 2Q11 27% 73% 3.1 1100 2.9 3.0 3.0x 3 900 1Q11 30% 70% 700 2 500 4Q10 33% 67% 300 1 100 3Q10 33% 67% -100 3Q10 4Q10 1Q11 2Q11 3Q11 0 . Leverage EBITDA Short Term Long Term . Leverage Ex-PPC EBITDA Ex-PPCSource: JBS PAGE 15* subsidiary controlled by JBS with non-recourse debt.
  16. 16. $ Sell-side analyst recommendation Institution Analyst Recommendation Target Price (R$) Banco do Brasil Henrique Koch Hold In revision– 10.20 (last) Barclays Capital Gabriel Vaz Lima Overweight 5.50 Bradesco Ricardo Boiati / Alan Cardoso Market Perform 5.20 BTG Pactual Thiago Duarte / Fábio Monteiro Buy 6.20 Citi Carlos Albano Hold 7.40 HSBC Pedro Herrera / Diego Maia Neutral 5.00 Merrill Lynch BofA Fernando Ferreira / Isabella Simonato Underperform 5.00 Santander Luis Miranda Hold 7.00 Safra Erick Guedes / Fernando Labes Outperform 7.29 UBS Gustavo Oliveira / Flavio Barcala Neutral 5.10 Votorantim Luiz Cesta /Marco Richieri Buy 5.70 Source: Bloomberg and JBS PAGE 16
  17. 17. Marketing CampaignJBS started in October, in the state of Sao Paulo, an unprecedented marketing campaign in the media The construction of a brand aims at selling a product with higher added value PAGE 17
  18. 18. JBS actions related to cattle traceability and the Amazon Biome Sustainability EnvironmentalJBS SA participates in CDP - Carbon Disclosure Project.Also, JBS integrates the Carbon Efficient Index of BOVESPA - ICO2.Satellite image monitoring of the Amazon BiomePurpose: reduce deforestation in the Amazon Biome; avoidpurchasing cattle from Environmentally Protected Areas – EPAs,Indigenous reserves and protected areas; eradication of slavelabor in Brazil. AmazonSocial & Environmental JBS Brazil monitors a 100% of its cattle suppliers properties via satellite geo-referencing (GPS monitoring). JBS contains a database of almost 12,000 cattle ranches registered in the Amazon Biome. After the property coordinates are collected, the data is keyed into JBS’s registry of cattle suppliers and is sent to an outsource company to be analyzed by superimposing on a map constructed from satellite images and the DETER(1) and PRODES(2) produced by Brazil’s National Satellite image Institute for Space Research – INPE. Source: JBS Sustainability Policy (1)Real Time Deforestation Detection PAGE 18 (2)Legal Amazon Deforestation Monitoring Project
  19. 19. Mission“To be best in what we set out to do, totally focused onour 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 to all our employees. ”

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