Presentation jbs sep oct english 2 q12
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Transcript of Presentation jbs sep oct english 2 q12
JBS S.A.
October / November, 2012
JBS S.A.
3 PAGE
JBS S.A. at a glance
Founded in the 1950’s in Midwest of Brazil
IPO in 2007
Leading protein producer in the World
Net Revenue of R$34.5 billion in 1st semester of 2012
EBITDA of R$1.7 billion in 1st semester of 2012
Net revenue organic growth of 18% in 1st semester of 2012
135,000 employees worldwide
301 production units in 5 continents
4 PAGE
JBS Ranking
Largest global beef and
lamb producer 1 st
Largest global leather
processor 1 st
Largest global chicken
producer 1 st
Largest pork producer
in the US 3 rd
Source: JBS
1 Market Leader
4 Well-recognized
brands
3 Geographic and
market segment
diversification
2 Track Record of
successful
acquisitions
5 PAGE
0.4 0.4 0.5 0.5 0.4 0.7 1.2 1.5 2.0
7.2
16.5 17.2
31.1
36.9
1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Merger and Acquisition track record More than 30 acquisitions in 15 years
Barra do Garças (Sadia)
Andradina (Sadia)
Barretos (Anglo) Pres. Epitácio e Campo grande (Bordon)
Araputanga(Frigoara)
Cáceres (Frigosol) Iturama (Frigosol)
Rio Branco Cacoal 1 Cacoal 2 Porto Velho Vilhena (Frigovira)
Pedra Preta (Frigo Marca)
Venado
Tuerto
Pontevedra
(CEPA)
JV Beef Jerky
Merger with Bertin
JBS Couros
5 new units
Tatiara Meat
(Swift Austrália)
Net revenue (USD billion)
Inalca
SB Holdings
Berazategui (Rio Platense)
Colonia Caroya
Maringá (Amambay)
Swift Foods Co.
JBS went international with the acquisition of Swift Argentina.
Construction of a sustainable global meat production and sales platform.
2005
JBS became the largest beef company in the world and the biggest Brazilian company in the food industry and entered the US pork market.
2007
2008
Diversification of market segments through the acquisition of Pilgrim’s Pride and merger with Bertin.
2009
JBS Swift became the leader in lamb production in Australia.
2010
Rosário San Jose (Swift Argentina)
Pilgrim´s Pride Rockdale Beef
Source: JBS
Smithfield
Beef
Five Rivers
Tasman
1 Market Leader
4 Well-recognized
brands
3 Geographic and
market segment
diversification
2 Track Record of
successful
acquisitions
6 PAGE
1 Market Leader
4 Well-recognized
brands
3 Geographic and
market segment
diversification
2 Track Record of
successful
acquisitions
Diversified market segments
Beef
Pork
Chicken
Transportation
Biodiesel
Collagen
Leather
Lamb
7 PAGE Source: JBS
Presence in more than 100 countries, in 5 continents
Slaughterhouses and Production Units
Sales Office
Pork
Leather Beef
Distribution Center Biodiesel
Strategic Geographical Distribution
Chicken
Geographic
Presence and
Production
Capacity
81,400 heads/day
Beef
8.3 mm birds/day
Chicken
50,100 heads/day
Pork
18,265 heads/day
Lamb
86,300 hides/day
Leather
3
61
39
29
2 64
17
301
6 Lamb
1 Market Leader
4 Well-recognized
brands
3 Geographic and
market segment
diversification
2 Track Record of
successful
acquisitions
8 PAGE
EBITDA
Margin
Our Strategy
RATIONALE
Associating quality and branding to
increase client loyalty
Customized and further processed
products for the end users
Expanding a global distribution
platform to reach end clients
Developed an efficient and
diversified global production
platform
Production platform
Sales and distribution platform
Value added products
Branding
Financial
Structure
Experienced
Management
Cost reduction,
process
optimization
Risk
Management
JBS’s Value & Strategy
9 PAGE
Well-recognized Brands, symbols of quality
USA
Australia
Brazil
Argentina
1 Market Leader
4 Well-recognized
brands
3 Geographic and
market segment
diversification
2 Track Record of
successful
acquisitions
Perspectives for the animal protein market
11 PAGE
Global consumption of animal protein has been increasing
Consumption growth by region over the past ten years
North America
Central America
South America
E.U. - 27
Middle East
North Asia
East Asia
Oceania
Southeast Asia
Africa
+3.0%
+41.4%
+47.7% +7.5%
+29%
+32.2%
+23.7%
+48.7%
+23.3%
Source: Rabobank, 2010.
+70.2%
12 PAGE * Cereals, rice, oilseeds, meals, oils and feed equivalent of meat.
Source: The Economist
World’s Food* Surpluses and Deficits
North
America
South
America Australia
Eastern Europe
and former
Soviet Union
Western
Europe Asia Middle East
& Africa
Central
America
1965
1990
1970
1995
1975
2000
1980
2005
1985
2010
Net intra-regional trade, million tonnes
13 PAGE
Global Protein Consumption Growth by Species
Source: USDA FAS
(MT in mm)
Strong Global Industry Fundamentals
0
50
100
150
200
250
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
14 PAGE
Global Beef Trade
Largest Beef Exporters
Source: USDA 2011 (Estimated)
Argentina 3%
Canada 5%
Uruguay 4%
New Zealand 6%
E.U 6%
Others 12%
India 14%
Brazil 17%
Australia 17%
USA 16%
15 PAGE
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2006 2007 2008 2009 2010 2011 1S11 1S12
Beef and Veal exports Average Price (US$/Ton)
Australian Beef Exports (tons)
Brazilian Beef Exports (tons)
US Beef and Veal Exports (tons)
Source: USDA, MLA & Secex
Brazil, Australia and the US continue to lead global beef exports
1.6%
-2.7%
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2006 2007 2008 2009 2010 2011 1S11 1S12
1.2%
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
6.000
6.500
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2006 2007 2008 2009 2010 2011 1S11 1S12
-11.4%
17.0%
-0.2%
16 PAGE Source: USDA & Secex
Brazilian Chicken Exports (tons) USA Chicken Exports (tons)
Chicken Exports Average Price (US$/Ton)
Chicken Exports Brazil vs US
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
2.200
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
2006 2007 2008 2009 2010 2011 1S11 1S12
-6.5%
3.4%
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
2006 2007 2008 2009 2010 2011 1S11 1S12
13.3%
13.1%
17 PAGE Source: USDA & Secex
Brazilian Pork Exports (tons) USA Pork Exports (tons)
Pork Exports Average Price (US$/Ton)
Pork Exports US vs Brazil
0
500
1.000
1.500
2.000
2.500
3.000
3.500
0
300.000
600.000
900.000
1.200.000
1.500.000
1.800.000
2006 2007 2008 2009 2010 2011 1S11 1S12
-7.2%
0
500
1.000
1.500
2.000
2.500
3.000
3.500
0
300.000
600.000
900.000
1.200.000
1.500.000
1.800.000
2006 2007 2008 2009 2010 2011 1S11 1S12
0.5%
21.2%
1.8%
18 PAGE
Global Surplus (deficit)
Source: Goldman Sachs
Goldman Sachs forecast for animal protein in 2020
Beef & Veal
Surplus Deficit
Pork
Chicken
2Q12 Highlights
20 PAGE
JBS posted consolidated net revenue of R$18.5 billion, 26.3% higher than 2Q11.
Consolidated EBITDA was R$1,012.8 million which represents an increase of 72.3% compared to 2Q11. EBITDA
margin was 5.5%.
JBS Mercosul was highlight during the quarter reporting net revenue of R$4,317.7 million, an increase of 19.4%
over 2Q11. EBITDA increased 47.3% over the same period and was R$630.3 million, EBITDA margin was 14.6%.
JBS USA Chicken (Pilgrim’s Pride Corporation) posted net revenue of US$2.0 billion and EBITDA of US$125.7
million in the period, reversing the negative result presented in 2Q11.
The Company ended the quarter with R$5.475 billion in cash or cash equivalent, corresponding to more than 110%
of short-term debt.
Adjusted net Income in the period was R$212.9 million excluding deferred income tax liabilities generated by
goodwill (this only generates effective income tax payment if the company sells the investment that generated
goodwill). Consolidated reported net income was R$169.5 million.
2Q12 Highlights
21 PAGE Source: JBS
JBS Consolidated Results – 2Q12
EBITDA Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)
587.7
786.8
940.6
696.5
1,012.8
4.0 5.1 5.6
4.3 5.5
-12,0
8,0
0,0
200,0
400,0
600,0
800,0
1000,0
1200,0
1400,0
1600,0
1800,0
2Q11 3Q11 4Q11 1Q12 2Q12
14,116.3 15,567.8
16,934.5 16,011.1
18,468.3
2Q11 3Q11 4Q11 1Q12 2Q12
+15.3% +10.3% +8.8% -5.5%
+45.4% +33.9% +19.5% -26.0%
EBITDA Margin (%)
22 PAGE
Performance by Business Unit
Source: JBS
Quarterly Analysis
EBITDA Margin (%)
Net sales (R$ billion) Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion)
EBITDA (R$ million) EBITDA (US$ million) EBITDA (US$ million) EBITDA (US$ million)
JBS Mercosul JBS USA
(Including Australia)
JBS USA JBS USA (PPC)
2.0 1.9 1.8 1.9 2.0
2Q11 3Q11 4Q11 1Q12 2Q12
4.0
4.2
4.5
4.1
4.3
2Q11 3Q11 4Q11 1Q12 2Q12
3.6
3.9 3.8 3.8
4.3
2Q11 3Q11 4Q11 1Q12 2Q12
846.0 867.1 923.1 855.4 844.0
100,0
180,0
260,0
340,0
420,0
500,0
580,0
660,0
740,0
820,0
900,0
980,0
1060,0
1140,0
1220,0
1300,0
2Q11 3Q11 4Q11 1Q12 2Q12
-47.6 -31.4 22.6
104.0 125.7
-2.4% -1.7% 1.2%
5.5% 6.4%
-25,0%
-23,0%
-21,0%
-19,0%
-17,0%
-15,0%
-13,0%
-11,0%
-9,0%
-7,0%
-5,0%
-3,0%
-1,0%
1,0%
3,0%
5,0%
7,0%
9,0%
-200
-100
0
100
200
300
400
500
2Q11 3Q11 4Q11 1Q12 2Q12
427.9 453.8 407.7
508.6
630.3
11.8% 11.6% 10.7%
13.3% 14.6%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
0
100
200
300
400
500
600
700
800
2Q11 3Q11 4Q11 1Q12 2Q12
44.7
184.1 223.6
-45.4 -9.1
1.1% 4.4%
5.0%
-1.1% -0.2%
-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%
-100
0
100
200
300
400
500
2Q11 3Q11 4Q11 1Q12 2Q12
83.6 75.9 77.0 55.8 49.2
9.9% 8.8% 8.3% 6.5% 5.8%
-23,0%
-19,0%
-15,0%
-11,0%
-7,0%
-3,0%
1,0%
5,0%
9,0%
13,0%
-0,023
99,977
199,977
2Q11 3Q11 4Q11 1Q12 2Q12
23 PAGE Source: JBS
JBS Consolidated Exports Distribution in 1S12
Approximately US$4.4 billion
US$4,387
million
Mexico 15.5%
Japan 11.7%
Russia 9.3%
E.U 6.1%
Canada 4.8%
Chile 3.6%
Taiwan 2.1%
Others 15.1%
China, Hong Kong and
Vietnam 14.6%
Africa and Middle East 9.1%
South Korea 6.2%
Venezuela 1.9%
24 PAGE Source: JBS
Debt Profile
2Q12 Net debt to EBITDA was 4.27x.
The Company ended the quarter with R$5.475 billion in cash or cash equivalent, which represents more than 110% of short-term debt.
3.60
4.04 4.00
4.30 4.27
0
1
2
3
4
-100
100
300
500
700
900
1100
1300
1500
2Q11 3Q11 4Q11 1Q12 2Q12
. Leverage EBITDA
Leverage
.
23%
27%
28%
28%
77%
73%
72%
72%
2Q12
1Q12
4Q11
3Q11
Short Term Long Term
ST / LT Debt Profile
The percentage of short term debt decreased from 27% in 1Q12 to 23% in 2Q12
25 PAGE
Bonds 37%
Other 63%
2Q12
Debt Maturity Schedule and Profile
JBS S.A. 57%
Subsidiaries43%
2Q12
Bonds / Other
Source: JBS Financial Statements 2Q12
Net Debt: 15,276.9 (R$ million)
656
883
4,469
1,381
2,567
169
3,726
2,738
Short Term Net of Cash 2013 2014 2015 2016 2017 2018 2019 and after
Breakdown by Currency and Company
R$ 25% USD 75% 2Q12
26 PAGE
Classroom
Social
Germinare School is a social initiative of the JBS Institute which
looks at Education as the principal instrument to transform society.
Laboratory
Social
GERMINARE SCHOOL
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.
Number of students (2011): 270
Capacity of 630 students.
Area: 6,000 m2
Sport complex, swimming pool, computer lab and chemistry lab.
Amount invested: R$15 million
Selection process: tests and group dynamics.
Top Brazilian professors.
JBS Institute funds Germinare School Social Responsibility
Source: JBS
Started in 2010
27 PAGE
Amazon
Environmental
Satellite image
Social & Environmental
Purpose: reduce deforestation in the Amazon Biome; avoid
purchasing cattle from Environmentally Protected Areas – EPAs,
Indigenous reserves and protected areas; eradication of slave
labor in Brazil.
JBS Brazil monitors a 100% of its cattle suppliers properties via
satellite geo-referencing (GPS monitoring).
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
Institute for Space Research – INPE.
JBS contains a database of almost 12,000 cattle ranches registered
in the Amazon Biome.
Satellite image monitoring of the Amazon Biome
JBS actions related to cattle traceability and the Amazon Biome Sustainability
Source: JBS Sustainability Policy (1)Real Time Deforestation Detection (2)Legal Amazon Deforestation Monitoring Project
JBS SA participates in CDP - Carbon Disclosure Project.
Also, JBS integrates the Carbon Efficient Index of BOVESPA - ICO2.
Mission
“
”
To be best in what we set out to do, totally focused on
our 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.