Presentation 3 q11 conference call final
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Transcript of Presentation 3 q11 conference call final
JBS S.A.
Results Presentation3Q11
JBS S.A.JBS S.A.
JBS S.A. at a glance
Founded in the 1950’s in West Central Brazil
IPO in 2007
Leading protein producer in the World
Revenues of over US$27 billion in the first nine months of 2011
EBITDA of US$1.3 billion in the first nine months of 2011
3PAGE
EBITDA of US$1.3 billion in the first nine months of 2011
Net revenue organic growth of 10.6% in local currency in 3Q11 y.o.y.
125,000 employees worldwide
134 production units in 6 continents
Market cap of approximately US$9.3 billion(1)
(1) 11/11/2011
JBS Ranking
3 Geographic and market segment diversification
1 Market Leader
4 Well-recognized brands
2 Track Record of successful acquisitions
Largest global beef and lamb producer1
st
Largest global leather processor1
st
4PAGE
brands
Largest global chicken producer2
nd
Largest dairy producer in Brazil3rd
Largest pork producer in the US3rd
Source: JBS
3 Geographic and market segment diversification
1 Market Leader
4 Well-recognized brands
2 Track Record of successful acquisitions
Presence in more than 100 countries, in 6 continents
Strategic Geographical Distribution
5PAGESource: JBS
brands
Slaughterhouse and Industry
Sales Office
Pork
LeatherBeef
Distribution CenterDairy
Biodiesel
Chicken
Geographic Presence andProductionCapacity
85,825 heads/day
Beef
7.9 mm birds/day
Chicken
50,000 heads/day
Pork
5,400 tons/day
Dairy
24,000 heads/day
Lamb
76,100 hides/day
Leather
3
60
37
20
7
1
58
17
134
u Units
Well-recognized Brands, symbols of quality
3 Geographic and market segment diversification
1 Market Leader
4 Well-recognized brands
2 Track Record of successful acquisitions
Brazil
Argentina
6PAGE
brands
USA
Australia
3Q11 Highlights3Q11 Highlights
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.
3Q11 Highlights
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
EBITDA margin increased 101 bps to 5.1% in the quarter.
Gross Margin expanded 102bps, compared to 2Q11 and reached 10.9%.
8PAGE
The main operating highlights were:
Net debt reduced approximately R$530 million, excluding the FX variation effect in the net debt in US
dollar denominated.
JBS Mercosul presented EBITDA of R$453.8 million, with an EBITDA margin of 11.6%.
JBS USA Beef presented EBITDA in 3Q11 of R$184.1 million , an increase of 77.9% over the last quarter.
JBS USA Pork business unit presented cumulative 2011 EBITDA of US$264.8 million, 51.8% higher than in the same period of 2010.
JBS Consolidated Results – 3Q11
EBITDANet Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)
7.36.0 5.7 5.1
8,0
1600,0
1800,0
14,069.6 14,319.6 14,672.7 14,621.8 15,567.8
9PAGESource: JBS
1,026
866 836
588
787
5.7
4.05.1
-12,00,0
200,0
400,0
600,0
800,0
1000,0
1200,0
1400,0
3Q10 4Q10 1Q11 2Q11 3Q11
14,069.6 14,319.6 14,672.7 14,621.8
3Q10 4Q10 1Q11 2Q11 3Q11
+2.5% -3.8% +6.5%+1.8%
-3.4%
-29.7%+33.9%
-15.7%
EBITDA Margin (%)
Nine Months Analysis
Net sales (R$ billion) Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion)
JBS Mercosul JBS USA(Including Australia)
JBS USA JBS USA (PPC)
Performance by Business Unit
5.15.7
9.5
12.0
9.811.1 2.2
2.5
0
10PAGESource: JBS
EBITDA (R$ bi) EBITDA (US$ mi) EBITDA (US$ mi) EBITDA (US$ mi)
9M10 9M119M10 9M119M10 9M11
0
9M10 9M11
174.4
261.5
-0,2
-0,15
-0,1
-0,05
0
0,05
0,1
0,15
0
100
200
300
9M10 9M11
357.1
-172.4
-0,9
-0,88
-0,86
-0,84
-0,82
-0,8
-0,78
-0,76
-0,74
-0,72
-0,7
-0,68
-0,66
-0,64
-0,62
-0,6
-0,58
-0,56
-0,54
-0,52
-0,5
-0,48
-0,46
-0,44
-0,42
-0,4
-0,38
-0,36
-0,34
-0,32
-0,3
-0,28
-0,26
-0,24
-0,22
-0,2
-0,18
-0,16
-0,14
-0,12
-0,1
-0,08
-0,06
-0,04
-0,02
0
0,02
0,04
0,06
0,08
0,1
0,12
0,14
0,16
0,18
0,2
-200
-100
0
100
200
300
400
500
600
700
800
900
1000
9M10 9M11
1.1
1.2
-0,15
-0,13
-0,11
-0,09
-0,07
-0,05
-0,03
-0,01
0,01
1000
1100
1200
9M10 9M11
468.9 515.5
-0,3
-0,28
-0,26
-0,24
-0,22
0
100
200
300
400
500
600
700
800
900
1000
1100
9M10 9M11
Performance by Business Unit
Net sales (R$ billion) Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion)
JBS Mercosul JBS USA(Including Australia)
JBS USA JBS USA (PPC)
Quarterly Analysis
1.7 1.8 1.9 2.0 1.9
3.4
3.6
3.8
4.0
4.2
3.53.4
3.6 3.6
3.9772 799 837 846 867
100
180
260
340
420
500
580
660
740
820
900
980
1060
1140
1220
1300
11PAGE
Source: JBS
EBITDA (R$ mi) EBITDA (US$ mi) EBITDA (US$ mi) EBITDA (US$ mi)
EBITDA Margin (%)
3Q10 4Q10 1Q11 2Q11 3Q113Q10 4Q10 1Q11 2Q11 3Q113Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11
170124.8
-55.2 -47.6-31.4
9.9%6.9%
-2.9%
-2.4%
-1.7%
-30,0%
-28,0%
-26,0%
-24,0%
-22,0%
-20,0%
-18,0%
-16,0%
-14,0%
-12,0%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
18,0%
20,0%
-200
-100
0
100
200
300
400
500
3Q10 4Q10 1Q11 2Q11 3Q11
373.7
238.8308.6
427.9 453.8
10.7%
7.1%8.6%
11.8% 11.6%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
0
100
200
300
400
500
600
3Q10 4Q10 1Q11 2Q11 3Q11
103.5
194.8
269.7
44.7
184.1
3.1% 5.4%7.1%
1.1%4.4%
-30,0%
-28,0%
-26,0%
-24,0%
-22,0%
-20,0%
-18,0%
-16,0%
-14,0%
-12,0%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
0
100
200
300
400
500
3Q10 4Q10 1Q11 2Q11 3Q11
90.8102.4 105.3
83.6 75.9
11.8% 12.8% 12.6% 9.9% 8.8%
-23,0%
-19,0%
-15,0%
-11,0%
-7,0%
-3,0%
1,0%
5,0%
9,0%
13,0%
0
100
200
3Q10 4Q10 1Q11 2Q11 3Q11
45.3%
25.1%20.3%
9.3%
Revenue and EBITDA Distribution by Business Unit
Net Revenue - 3Q11
12PAGE
Source: JBS
59.6%
39.6%
16.3%
-15.6%
EBITDA – 3Q11
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)
3.000
3.200
3.400
3.600
3.800
4.000
4.200
1.700
1.800
1.900
2.000
2.100
13PAGE
Source: JBS
JBS USA Pork – Net Revenue (US$ million) JBS Mercosul – Net Revenue (R$ million)
2.600
2.800
3.000
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
1.600
1.700
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
500
550
600
650
700
750
800
850
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
2.800
3.000
3.200
3.400
3.600
3.800
4.000
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
JBS Consolidated Exports DistributionApproximately US$2.4 billion in the 3Q11 and US$7.2 billion in 9M11
Taiwan 2.4%
Others 17.9%
Mexico 14.5%
Africa and Middle East 14.0%
Vietnam 1.6%
US$ 2,374.2
14PAGE
Source: JBS
Taiwan 2.4%
China 4.4%
Canada 5.5%
Sulth Korea 6.0%
Russia 7.0% Hong Kong 7.2%
Japan 11.7%
E.U. 7.8%
US$ 2,374.2 million
4
Leverage
Debt Profile
ST / LT Profile
Net 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.
28% 72%3Q11
The Company generated R$897 million of operating cash flow and R$620 million of net cash flow.
4.0x 41500
15PAGE
2.9 3.0 3.1 3.23.0x
0
1
2
3
4
. EBITDA. Leverage
Source: JBS* subsidiary controlled by JBS with non-recourse debt.
Short Term Long Term
33%
33%
30%
27%
67%
67%
70%
73%
3Q10
4Q10
1Q11
2Q11
2.9 3.0 3.1
3.6
4.0x
0
1
2
3
4
-100
100
300
500
700
900
1100
1300
1500
3Q10 4Q10 1Q11 2Q11 3Q11
. Leverage Ex-PPC EBITDA Ex-PPC
Sell-side analyst recommendation
Institution Analyst Recommendation Target Price (R$)
Henrique Koch
Ricardo Boiati / Alan Cardoso
Thiago Duarte / Fábio Monteiro
Pedro Herrera / Diego Maia
Hold
Market Perform
Buy
Neutral
In revision– 10.20 (last)
5.20
6.20
5.00
Banco do Brasil
Bradesco
BTG Pactual
HSBC
$
Carlos Albano Hold 7.40Citi
Gabriel Vaz Lima Overweight 5.50Barclays Capital
16PAGESource: Bloomberg and JBS
Fernando Ferreira / Isabella Simonato
Erick Guedes / Fernando Labes
Gustavo Oliveira / Flavio Barcala
Underperform
Outperform
Neutral
5.00
7.29
5.10
Luis Miranda Hold 7.00
Merrill Lynch BofA
Safra
UBS
Santander
Luiz Cesta /Marco Richieri Buy 5.70Votorantim
Marketing Campaign
JBS started in October, in the state of Sao Paulo, an unprecedented marketing campaign in the media
17PAGE
The construction of a brand aims at selling a product with higher added value
Environmental
Purpose: reduce deforestation in the Amazon Biome; avoidpurchasing cattle from Environmentally Protected Areas – EPAs,Indigenous reserves and protected areas; eradication of slavelabor in Brazil.
Satellite image monitoring of the Amazon Biome
JBS actions related to cattle traceability and the Amazon BiomeSustainability
JBS SA participates in CDP - Carbon Disclosure Project.Also, JBS integrates the Carbon Efficient Index of BOVESPA - ICO2.
18PAGE
Amazon
Satellite image
Social & Environmental
labor in Brazil.
JBS Brazil monitors a 100% of its cattle suppliers properties viasatellite geo-referencing (GPS monitoring).
After the property coordinates are collected, the data is keyed intoJBS’s registry of cattle suppliers and is sent to an outsource companyto be analyzed by superimposing on a map constructed from satelliteimages and the DETER(1) and PRODES(2) produced by Brazil’s NationalInstitute for Space Research – INPE.
JBS contains a database of almost 12,000 cattle ranches registeredin the Amazon Biome.
Source: JBS Sustainability Policy(1)Real Time Deforestation Detection(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,
”
for our customers, solidity for our suppliers,
satisfactory profitability for our shareholders and the
certainty of a better future to all our employees.