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    Presentation jbs jan english Presentation jbs jan english Presentation Transcript

    • JBS S.A.January / February, 2012
    • JBS S.A.
    • 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$1.3 billion in the first nine months of 2011Net revenue organic growth of 11.1% in local currency in 9M11 y.o.y.125,000 employees worldwide134 production units in 6 continentsMarket cap of approximately US$ 10 billion(1) (1) 12/30/2011 PAGE 3
    • 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
    • Merger and Acquisition track record1 Market Leader More than 30 acquisitions in 15 years 2005 JBS went international with the acquisition of Swift Argentina.2 Track Record 2007 JBS became the largest beef company in the world and the of successful biggest Brazilian company in the food industry and entered the acquisitions US pork market. Rockdale Beef 2008 Construction of a sustainable global meat Pilgrim´s Pride Inalca Tatiara Meat production and sales platform.3 Geographic and Swift Foods Co. Merger with Bertin (Swift Austrália) market segment 2009 Diversification of market segments through the Maringá (Amambay) JBS Couros diversification acquisition of Pilgrim’s Pride and merger with Bertin. Berazategui (Rio Platense) 5 new units Colonia Caroya 31.1 2010 JBS Swift became the leader in lamb production in Tasman Australia. SB Holdings JV Beef Jerky Smithfield4 Well-recognized Rio Branco Cacoal 1 Venado Beef Five Rivers brands Cacoal 2 Tuerto Porto Velho Pontevedra Barretos (Anglo) Vilhena (CEPA) (Frigovira) 16.5 17.2 Pres. Epitácio e Pedra Preta Campo grande (Frigo Marca) (Bordon) Cáceres (Frigosol) Barra do Rosário Garças Andradina Araputanga Iturama San Jose (Sadia) (Sadia) (Frigoara) (Frigosol) (Swift Argentina) 7.2 1.2 1.5 2.0 0.3 0.4 0.4 0.5 0.5 0.4 0.7 1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Net revenue (USD billion) Source: JBS PAGE 5
    • Diversified market segments1 Market Leader2 Track Record of successful Beef acquisitions3 Geographic Transportation Pork and market segment diversification4 Well-recognized Leather Chicken brands Dairy Biodiesel products Collagen Lamb PAGE 6
    • 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 6 Lamb 20 Leather 17 Sales Office 1 Biodiesel 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 7
    • Our Strategy RATIONALE Branding Associating quality and branding to increase client loyalty Customized and further processed Value added products products for the end users Expanding a global distribution Sales and distribution platform platform to reach end clients Developed an efficient and Production platform diversified global production platform Financial Experienced Cost reduction, Risk Structure Management process Management optimization EBITDA JBS’s Value & Strategy Margin PAGE 8
    • 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 9
    • Marketing Campaign1 Market Leader In October of 2011, JBS launched an innovative beef marketing campaign, initially in the State of São Paulo, Brazil2 Track Record of successful acquisitions3 Geographic and market segment diversification4 Well-recognized brands Brand building to enhance value PAGE 10
    • Perspectives for the animal protein market JBS is well positioned to serve global demand for animal protein A promising sector to invest in
    • Global consumption of animal protein has been increasingConsumption by region over the past ten years North AsiaNorth America E.U. - 27 +3.0% +47.7% +7.5% Middle East +41.4% +23.7% East AsiaCentral America +29% +70.2% Southeast Asia +48.7% +32.2% South America Oceania +23.3% AfricaSource: Rabobank PAGE 12
    • Global Protein Consumption Growth by Species Strong Global Industry Fundamentals (MT in mm)25020015010050 0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Source: USDA FAS PAGE 13
    • US Cattle Herd Projection (million)125115105 95 85 75 65 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012e 2014e 2016e 2018e 2020e Source: USDA PAGE 14
    • Global Beef TradeLargest Beef Exporters Others 9.2% Brazil 20.7% E.U. 3.8% Paraguay 4.0%Uruguay 4.5% New Zealand 6.2% Australia 17.4% Canada 6.8% India 12.9% USA 14.5%Source: USDA 2011 (Estimated) PAGE 15
    • Brazil, Australia and the US continue to lead global beef exportsBrazil, Australia and US represent, respectively, 20.7%, 17.4% and 14.5% of global beef trade Brazilian Beef Exports (tons) 1.400.000 5.500 5.000 1.200.000 +30% 4.500 1.000.000 4.000 3.500 800.000 3.000 -20% 600.000 2.500 2.000 400.000 1.500 1.000 200.000 500 0 0 2005 2006 2007 2008 2009 2010 9M10 9M11 Australian Beef Exports (tons) US Beef and Veal Exports (tons) 1.400.000 5.500 1.400.000 5.500 5.000 5.000 1.200.000 +11% 1.200.000 +4% 4.500 4.500 4.000 1.000.000 4.000 1.000.000 3.500 3.500 800.000 3.000 800.000 3.000 600.000 +28% 2.500 600.000 2.500 +1% 2.000 2.000 400.000 1.500 400.000 1.500 1.000 1.000 200.000 200.000 500 500 0 0 0 0 2005 2006 2007 2008 2009 2010 9M10 9M11 2005 2006 2007 2008 2009 2010 8M10 8M11 Beef and Veal exports Average Price (US$/Ton)Source: USDA, MLA & Secex PAGE 16
    • Chicken Exports Brazil vs USBrazil and US represent, respectively, 39% and 34% of global chicken tradeBrazilian Chicken Exports (tons) USA Chicken Exports (tons)4.500.000 2.000 4.500.000 1.8004.000.000 1.800 4.000.000 1.600 +20%3.500.000 1.600 3.500.000 1.400 1.4003.000.000 3.000.000 1.200 1.200 +12%2.500.000 2.500.000 1.000 1.0002.000.000 +1% 2.000.000 800 800 +6%1.500.000 1.500.000 600 6001.000.000 400 1.000.000 400 500.000 200 500.000 200 0 0 0 0 2005 2006 2007 2008 2009 2010 9M10 9M11 2005 2006 2007 2008 2009 2010 9M10 9M11 Chicken Exports Average Price (US$/Ton)Source: USDA & Secex PAGE 17
    • Pork Exports US vs BrazilUS and Brazil represent, respectively, 32% and 11% of global pork tradeBrazilian Pork Exports (tons) USA Pork Exports (tons) 3.000 3.0001.400.000 +11% 1.400.000 +7% 2.500 2.5001.200.000 1.200.0001.000.000 2.000 1.000.000 +20% 2.000 800.000 800.000 1.500 1.500 600.000 600.000 -7% 1.000 1.000 400.000 400.000 500 500 200.000 200.000 0 0 0 0 2005 2006 2007 2008 2009 2010 9M10 9M11 2005 2006 2007 2008 2009 2010 9M10 9M11 Pork Exports Average Price (US$/Ton)Source: USDA & Secex PAGE 18
    • Global Surplus (deficit)Goldman Sachs forecast for animal protein in 2020 Surplus Deficit Beef & Veal Pork ChickenSource: Goldman Sachs PAGE 19
    • 3Q11 Highlights
    • 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$264.8 million, 51.8% higher than in the same period of 2010. PAGE 21
    • JBS Consolidated Results – 3Q11 EBITDANet Revenue (R$ million) EBITDA and EBITDA Margin (R$ million) 1800,0 8,0 7.3 15,567.8 6.0 14,319.6 14,672.7 14,621.8 1600,0 5.7 14,069.6 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 +33.9% -29.7% 588 600,0 400,0 200,0 0,0 -12,0 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 EBITDA Margin (%)Source: JBS PAGE 22
    • Nine Month Analysis (January to September 2011) 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) 1100 0,16 1.2 0,14 0,15 1000 0,12 1000 0,21200 0,15 0,18 0,1 0,16 0,14 261.5 0,13 0,08 0,12 900 300 900 0,1 0,1 0,06 0,08 0,11 0,06 0,04 0,04 800 0,09 800 0,02 0,02 0 -0,02 0 0,05 0,07 -0,04 700 -0,06 -0,02 700 -0,08 515.5 174.4 0,05 -0,1 -0,04 -0,12 468.9 600 200 -0,14 0,03 -0,06 0 -0,16 600 -0,18 1.1 -0,08 -0,2 0,01 500 -0,221100 -0,1 -0,24 -0,01 500 -0,26 357.1 -0,12 -0,05 -0,28 400 -0,3 -0,03 -0,14 -0,32 -0,34 400 -0,16 -0,36 -0,05 -0,38 300 100 -0,18 -0,1 -0,4 -0,07 -0,42 -0,2 300 -0,44 -0,46 -0,09 200 -0,22 -0,48 -0,5 -0,24 -0,15 -0,52 -0,11 200 -0,54 100 -0,26 -0,561000 -0,13 -0,15 0 -0,28 -0,3 0 -0,2 100 -134.2 -0,58 -0,6 -0,62 -0,64 -0,66 -0,68 -0,7 9M10 9M11 9M10 9M11 9M10 9M11 0 -0,72 -0,74 -0,76 -0,78 -0,8 -100 -0,82 -0,84 -0,86 9M10 9M11 -0,88 -200 -0,9 Source: JBS PAGE 23
    • 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% 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 -100 3Q10 4Q10 1Q11 2Q11 3Q11 -20,0% -22,0% -24,0% -26,0% -28,0% -200 -30,0% EBITDA Margin (%) PAGE 24 Source: JBS
    • 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 25Source: JBS
    • 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) 2.1004.2004.000 2.0003.8003.600 1.9003.400 1.8003.2003.000 1.7002.8002.600 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) 4.000850 3.800800750 3.600700 3.400650 3.200600 3.000550500 2.800 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11Source: JBS PAGE 26
    • JBS Consolidated Exports Distribution in 3Q11Approximately 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% South Korea 6.0% E.U. 7.8% Russia 7.0% Hong Kong 7.2% PAGE 27Source: JBS
    • Debt Profile: 3Q11Net 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$620 million of net cash flow.Leverage ST / LT Profile 3Q11 28% 72% 1500 4.0x 4 1300 3.6 3.2 2Q11 27% 73% 3.1 1100 2.9 3.0 3.0x 3 900 1Q11 30% 70% 700 2 500 4Q10 33% 67% 300 1 100 3Q10 33% 67% -100 3Q10 4Q10 1Q11 2Q11 3Q11 0 . Leverage EBITDA Short Term Long Term . Leverage Ex-PPC EBITDA Ex-PPCSource: JBS PAGE 28* subsidiary controlled by JBS with non-recourse debt.
    • Stock MarketIn 2007, JBS was the first Company in the beef industry to trade its shares on the stock market
    • ShareholdersAverage dailytraded volumeof R$ 22.5million in 3.1%4Q11 Source: JBS PAGE 30
    • $ 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 Equal Weight 6.50 Bradesco Ricardo Boiati / Alan Cardoso Market Perform 5.20 BTG Pactual Thiago Duarte / Fábio Monteiro Buy 7.70 Citi Carlos Albano Sell 5.20 HSBC Pedro Herrera / Diego Maia Neutral 7.50 Merrill Lynch BofA Fernando Ferreira / Isabella Simonato Underperform 5.70 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 XP Equity Research Gustavo Lomonaco / Kent Lucas Unattractive 6.60 Morgan Stanley Wesley Brooks Overweight 7.50 Source: Bloomberg and JBS PAGE 31
    • Corporate GovernanceJBS is listed on the Novo Mercado, a segment in which companies are committed tofollowing a series of rules that provide better transparency and security to investors Transparency Management and Board of Directors Good Governance Practices Board of Directors Audit Committe Confidence 11 members 5 members Best services and products 1 president Consist of shareholders or not, liable to 5 permanent directors be elected or dismissed at any time of Solidity 5 permanent independent directors the General Meeting. Profitability Future * Board of Executive Officers Committes of Directors Elected by the board of directors, for three-year terms, and are eligible for reelection. 4 committes Audit Finance Human Resources Corporate Strategy / Sustainability PAGE 32
    • SustainabilityJBS is listed on the Novo Mercado which guarantees transparency, confidence and continuous improvements in best practices
    • Social, economic and environmental responsibility has always been a part of thedevelopment and business growth of JBS Foundation Economic Social Environmental Risk and Crises Citizenship and Environmental Management Education Management Corporate Direction Good Practices of Human Eco-efficiency Resource Knowledge Management Sustainable Cattle Human Capital Breeding Stakeholders Development Engagement Climate Changes Premises Priorities Ecologically viable Sustainable use of the materials * Clean Development Ecologically correct Partnership with reputable organizations Mechanism **United Nations Socially responsible Health and Quality of life Framework Convention on Climate Change Culturally acceptable Climate Residue TreatmentSource: JBS Sustainability Policy PAGE 34
    • JBS Institute funds Germinare School Social Responsibility Social GERMINARE SCHOOL Started in 2010 Germinare School is a social initiative of the JBS Institute which looks at Education as the principal instrument to transform society. Purpose: to prepare well-educated and well-rounded citizens with a broad cultural repertoire, sound ethical values and a positive attitude toward life and society. Classroom SocialNumber of students (2011): 270Capacity of 630 students.Top Brazilian professors.Area: 6,000 m2Sport complex, swimming pool, computer lab and chemistry lab.Selection process: tests and group dynamics.Amount invested: R$15 million Laboratory Source: JBS PAGE 35
    • 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 36 (2)Legal Amazon Deforestation Monitoring Project
    • 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. ”