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Presentation Jbs S.A.   December 2009
 

Presentation Jbs S.A. December 2009

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    Presentation Jbs S.A.   December 2009 Presentation Jbs S.A. December 2009 Presentation Transcript

    • JBS S.A. “In God we trust, nature we respect” December, 2009 JBS S.A.. JBS S.A
    • Our Values The Foundation Of Our Culture Planning Determination Discipline Availability Openness Simplicity 1
    • The Global Beef Industry 8 8
    • Global Market Largest beef producers Largest beef consumers Others Others United States United States 31% 31% 21% 22% Brazil EU-27 15% 15% India 4% Mexico 4% Argentina Argentina 5% EU-27 Brazil China 5% China 14% 13% 10% 10% Largest beef exporters Largest beef importers Others 25% Brazil United States 23% Others 19% 38% Russia 16% New Zealand Australia 7% 19% Canada 7% India South Korea Japan United States 4% EU-27 8% Mexico 10% 11% 8% 5% Source: USDA 2009 3
    • World Population Growth and Beef Consumption (1960 – 2050) 140 10000 Population growth, a beef consumption driver. 120 8000 Consumption (million tons) 100 Population (million) 6000 80 60 4000 40 2000 20 0 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010* 2015* 2020* 2025* 2030* 2035* 2040* 2045* 2050* Population - Developed countries Population - Developing countries Beef Consumption** Source: UN (United Nations) and USDA *UN Estimates **Beef consumption trend considering CAGR of 2.0% (from 1960 to 2008) 4
    • Per capita food consumption (Kg / Year) 180 1969/ 71 160 1979/ 81 1989/ 91 140 1999/ 01 120 2030 2050 100 80 60 40 20 0 Cereals Roots and Beans, Peas Sugar Oils Crops Meat Milk and its Tubers and Lentils and its products products Source: FAO 5
    • US Beef and Veal Exports (Million Pounds) 3,000 2,467 2,520 2,412 2,449 2,500 2,269 2,000 1,888 1,433 1,500 1,349 1,146 1442 1349 1,000 697 461 500 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Mexico Canada South Korea Japan Vietnam China Hong Kong N etherlands Others Until September Source: USDA ERS 6
    • US Pork Exports (Million Pounds) 5,000 4,667 4,500 4,000 3,500 3,142 3,619 2,995 3,003 3,000 2,667 3,003 2,500 2,181 2,000 1,717 1,560 1,612 1,500 1,278 1,287 1,000 500 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Japan China Hong Kong Mexico Russia Canada South Korea Australia Others Until September Source: USDA ERS 7
    • US Poultry Exports (Million Pounds) 8,000 7,109 7,000 6,070 6,000 5,738 5,333 5,367 5,138 5,208 4,980 4,942 5,013 4,997 5,000 5,324 5,208 4,000 3,000 2,000 1,000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Russia China (Mainland) Iraq Mexico Canada Cuba Other Chicken Others Until September Source: USDA ERS 8
    • Brazilian beef exports (USD billion) Source Secex 9
    • Our Strategy 8 8
    • Our Strategy 2005/2006 2009/2010 2011/2012 2007/2008 Adequate Global Sales & Value Added Global Production Financial Distribution Products & Platform Structure Platform Branding South America Fresh Products South Debt for America North America Cooked Products Working Minced Products North Australia Cured Products Capital America European Union Ready to Eat Products Equity Australia Asia Case Ready Products to Russia Global Brands Finance European Africa Marketing Union Growth Middle East Investments - Access to raw material - Integrate the sales and - High technology - High liquidity level. distribution platform to investments to produce supply globally. - Debt equalized to cash serve efficiently, local and value added products. - Leader in countries with generation. external markets, small - Increase value added surplus production. - Strong cash position. retailers, food processors, products portfolio. - Scale. - Access to international restaurants, and other - Customized products to - Leader in exports globally. capital markets to finance customers globally. each market. - Access to all meat growth. - Sales force distributed over - Convenience to consumers markets. the globe. - Development of long term day to day. - Exchange of best - Efficiency on selling the best financing plan. - Brand and Quality practices. product, to the best market, - Use of export platform to recognition and leadership. - Efficiency cost gains. with the best price. - Marketing investments to grow. - Cost reduction - Cost reduction on sales and be present in consumer - Hands-on working capital opportunities. transport. minds. management. - Margin improvements. - Margin improvements. - Margin improvements. 11
    • Our Strategy 50% Branding Value Added Products 12% Sales & Distribution 8% Platform Production Platform 4% Consolidated Cost Reduction, Average Financial Experienced Productivity, Risk EBITDA Structure Management Process Management Margin Optimization Foundation 12
    • JBS’ History Bertin Association* Pilgrim’s Pride* • JBS’ History has been built through Inalca JBS Hides more than 30 acquisitions in 15 years Swift Foods Co. 5 new units with appropriated capital structure and Maringá (Amambay) management Berazategui Tasman (Rio Platense) Smithfield Colonia Caroya Beef Net Sales (in US$ billion) SB Holdings Five Rivers Companies and assets acquired JV Beef Jerky Rio Branco Venado Barretos (Anglo) Cacoal 1 Tuerto 30.3 Pres. Epitácio (Bordon) Cacoal 2 Pontevedra Campo Grande (Bordon) Porto Velho (CEPA) Vilhena (Frigovira) Barra do Cáceres Pedra Preta Garças Araputanga (Frigo Marca) 19.8 (Frigosol) (Sadia) (Frigoara) Rosário Iturama (Swift ARG) (Frigosol) San Jose Andradina (Swift ARG) 12.7 (Sadia) 1.2 1.5 1.9 0.3 0.4 0.4 0.5 0.5 0.4 0.7 (1) (2) (3) 1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 R$/US$ end of the year quotation Source: JBS (1) Pro Forma JBS S.A. LTM Dec07 (2) Pro Forma JBS S.A. LTM Dec08 (3) Pro Forma JBS S.A. LTM Jun09 (including 5 new units and hides operation); Pilgrim’s Pride Sep09 (Estimated); Bertin LTM Jun09 13 * Transactions subject to customary conditions for this type of business
    • Global Production and Distribution Platform JBS’ main units and markets x = Legend Slaughterhouse (Beef) Slaughterhouse and Industry Distribution Center Vegetable Canning Plant Beef Canning Plant Beef Jerky Plant (Beef Snack’s) Slaughterhouse (Pork) Slaughterhouse (Lamb) x Beef and Pork Processing Plant = Wet Blue Processing Plant Headquarters Office Feed Lot Package Industry Inland Container Terminal Commercial Office 14
    • Brief Description Global Production Platform Production Units Employees Daily Slaugther Capacity JBS Brasil 25 16,993 26,950 B JBS Argentina 6 5,059 6,700 B 28,600 B JBS USA 16 24,295 48,500 P 4,500 S 8,690 B JBS Australia 10 6,995 15,000 S Inalca JBS 8 2,019 3,000 B 7 3 ,9 4 0 B Tota l JBS 65 5 5 ,3 6 1 4 8 ,5 0 0 P 1 9 ,5 0 0 S Additional Distribution Platform United Kingdom Russia Angola Congo Algeria Dem. Rep. of the Congo Poland (B) Beef; (P) Pork; (S) Smalls; 15
    • JBS Consolidated Net Revenue Distribution Revenue Distribution by Market 3Q09 Italy Australia 5% Argentina 14% 2% Brazil Pork USA 17% 12% Beef USA 50% Source: JBS 16
    • Sustainability Actions Sustainability Policies Reduction of Greenhouse  JBS is aware of its responsibilities as the largest beef Company in the world and all the impacts its operations Emissions, Effluents Gases emission (GHG) generates in every region. The Company has a appropriate sustainability program in each of its units including: and W aste  Environmental Policy  Natural Resources Usage  Procedures Adopted  Social-environmental Actions 50% Effluent reutilization 50% Solid waste recycling  Informative Policy  Waste Treatment Energetic Matrix development  Community Relationship and Environmental Investments Energy Use of certified wood 25% Consume reduction  JBS is the first and only beef Company to register a CDM project at the 35% Consume reduction UNFCCC (United Nations Framework Convention on Climate Change). W ater (2m3 per head) The project is in validation phase at the designated national authority. Flora conservation Biodiversity Animal origination control Sustainability Principles Priorities • Ecological feasability • Sustainable use of materials Focus on environmentally Materials friendly materials • Ecological correctness • Partnership with organizations equally concerned • Social concern Laws Legislative compliance • Health and Quality of Life • Cultural acceptance Environmental awareness • Climate Physical activities • Waste Society Health Care  The environmental and social responsibility have always been part of JBS´s development and business growth. Formal education The Company’s extensive experience proves the importance of the reduction of environmental impacts and the improvement of its relations with the community, throughout constant investments that focus these issues. 17
    • Corporate Governance JBS has embraced a Corporate Governance model with a view to implant the best practices in the Company. The view is that the model demonstrates transparency and confidence to the public, guaranteeing the best products and services for customers, solidity for suppliers, satisfactory return for shareholders and the certainty of a better future for all JBS collaborators. Novo Mercado  JBS is part of the of BM&FBOVESPA´s Novo Mercado, is in accordance with all requirements of this market and with the obligations imposed by the current Brazilian legislation. Management and Board of Directors  Board of Directors - JBS’ Board of Directors is formed by 7 members – a president, a vice-president, 2 effective councils without specific denomination and 3 independent effective councils.  Audit Board - The Audit Board shall consist of at least 3 and at most five 5 sitting members and alternates in the same number, shareholders or not, liable to be elected or dismissed at any time of the General Meeting.  Board of Executive Officers - The members of the Company’s board of executive officers are elected by the board of directors, for three-year terms, and are eligible for reelection. Board of Directors’ Committees  The Board of Directors has approved the establishment of the following Committees: Audit, Financial, Personnel Management and Corporate Strategy, that incorporates the Sustainability matters. Publishing and Use of Information  JBS is completely in accordance with the CVM 358 instruction that revised and consolidated the requirements regarding the disclosure and use of information related to material facts and acts of publicly held companies, including the disclosure of information in the trading and acquisition of securities issued by publicly held companies. Conduct and Ethic Manual  JBS Executive Officers have developed a Conduct and Ethic Manual according to the corporate governance best practices concept. The conduct code embraces the relationship between the members of the board, shareholders, employees, suppliers and all the other stakeholders. 18
    • JBS American Depositary Receipt (JBSAY) The Bank of New York Mellon, has been selected by JBS S.A. as the depositary bank for its American depositary receipt (ADR) program. Each JBS ADR represents two common shares and they are traded on the over-the-counter market under the symbol “JBSAY“. On May 2009, JBS became the first Brazilian Company to have its ADRs traded under the OTCQX, a kind of “Novo Mercado” of the North American over-the-counter market. Since then, the JBS’ ADRs (JBSAY) appreciated in value by 172.1%. ADRs’ traded volume (JBSAY) 140,000 11.51 $12.00 10.51 120,000 $10.00 99,075 100,000 7.95 7.92 $8.00 7.26 80,000 6.00 6.08 $6.00 60,827 60,000 4.60 4.23 4.13 3.96 41,970 $4.00 40,000 23,730 $2.00 20,000 14,600 11,000 10,000 4,500 1,300 500 1,500 0 $0.00 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Volume Closing Price (U$) 19
    • JBS American Depositary Receipt (JBSAY) 20
    • 3rd Quarter 2009 Results 8 8
    • JBS Consolidated Results Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million) 24.0% -3.8% -0.1% -9.5% -44.0% -20.4% 81.6% -24.0% Source: JBS EBITDA Margin (%) 22
    • Currency effects in the net revenue Net Revenue (Million) • Excluding the exchange rate effect in R$ US$ the period, net revenue increased Exchange rate 0.6% over 2Q09. average of the period: 2Q09 – 2.0748 3Q09 – 1.8677 9,255.0 8,379.9 4.460.7 4.486.8 -9.5% 0.6% 2Q09 3Q09 2Q09 3Q09 Source: JBS Source: Banco Central 23
    • Performance by Business Units JBS USA (Beef) Including Australia JBS USA (Pork) INALCA JBS JBS MERCOSUL Net Sales Net Sales Net Sales Net Sales (US$ billion) (US$ million) (€ million) (R$ billion) 2.9 2.8 162 1.8 1.7 2.8 144 144 146 1.6 1.7 2.7 2.7 143 1.4 3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09 EBITDA (US$ mi) EBITDA (US$ mi) EBITDA (€ mi) EBITDA (R$ mi) EBITDA margin EBITDA margin EBITDA margin EBITDA margin 5.2% 6.6% 3.6% 3.8% 5.3% 5.1% 4.6% 5.6% 4.3% 4.9% 2.2% 2.2% 3.7% 3.9% 2.9% 9.7 8.3 104.6 108.4 7.6 6.6 5.6 104.1 60.4 59.7 199,1 69.4 82.6 58,2 47.3 3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09 Source JBS 24 EBITDA Margin (%)
    • Debt • The net debt / EBITDA ratio increased from 2.6x in 2Q09 to 3.3x in 3Q09, reflecting the EBITDA decline when compared with 3Q08. • The company projects a reduction in leverage levels by the end of the year. • The gross and net debt reduced 5.6% and 2.2%, respectively, over 2Q09. Net Debt / EBITDA Pro Forma per Quarter Gross debt Profile (R$ million) 5,971.8 6,226.4 5,877.1 3.3 * 2.5 2.6 2.3 2.0 3Q08 4Q08 1Q09 2Q09 3Q09 1T09 2T09 3T09 Short term Long term Source: JBS Net Debt/ EBITDA EBITDA pro-forma * LTM including Smithfield Beef pro-forma. 25
    • Working Capital JBS continues to reduce its working capital needs, which decreased from 37 days in 2Q09 to 33 days in 3Q09. 2º Quarter 2009 Client’s order Product Client’s payment to JBS Delivery to JBS Production & Stock CLIENT = 37 days 21 dias SUPPLYER = 21 days 37 days Supplyer WORKING CAPITAL & payment INTERESTS 3º Quarter 2009 Client’s order Product Client’s payment to JBS Delivery to JBS Production & Stock CLIENT = 33 days 21 dias SUPPLYER = 21 days 33 days Supplyer WORKING CAPITAL & payment INTERESTS 26
    • JBS Consolidated Exports Distribution Revenue Distribution by Market 3Q09 Revenue Distribution by Market 2Q09 Exports Exports 24% 26% Domestic Domestic Market Market 76% 74% Exports Distribution 3Q09 Exports Distribution 2Q09 JBS Exports 3Q09 US$ 1,127.4 Million JBS Exports2Q 09 US$ 1,169.1 Million Others Japan Taiwan O thers Japan Indonesia 18% China 2% 14% 18% 19% 3% 4% China E.U. Hong Kong E.U. 4% 12% 5% 15% Russia South Korea South Korea USA Canada 6% Russia Africa and USA Mexico 9% Mexico Middle East 9% 4% 8% 5% 7% 7% 8% 7% Hong Kong 5% Africa and Middle East Canada 6% 6% Source: JBS 27
    • Investor Relations www.jbs.com.br/ir ir@jbs.com.br +55 11 3144 4055 Thank you!
    • 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. 29