Upload
jbs-ri
View
312
Download
4
Embed Size (px)
DESCRIPTION
Citation preview
August, 2010
2
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.
Agenda
3
2Q10 HighlightsMarket Overview
Company Overview
Short Term Outlook
4
Our MissionTo be the best at 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 for all our employees.
Our ValuesExcellence
Planning
Determination
Discipline
Availability
Openness
Simplicity
Who We Are
Corporate Structure
Invetsidors
Relations
Jeremiah
O’Callaghan /
Guilherme Arruda
Finance
Director Brazil
Marcos Cunha
Bastos
Corporate
Law
Department
Francisco
de Assis e Silva
Mr. Marcos
Bastos, Graduate
from the
Mackenzie
University in
Business
Administration and
has a MBA in
Finance from San
Francisco State
University. Worked
in many financial
institutions in
Brazil, primarily in
the Investment
banking, Financial
Projects, and
Portfolio
management.
Started in 2008
with JBS.
Mr. Francisco de Assis
e Silva, Director of the
Law Department. Has A
post graduated from the
University of Mackenzie.
Started working at JBS
in December of 2001
and later became a
member of the Executive
Board in January of
2007.
Mr. Jeremiah
O’Callaghan, Has a
Engineering Degree from
the University of Cork
College in Ireland.
Immigrated to Brazil in
1979. Started working in
the Beef Sector in 1983
and in JBS in 1996 in
order to develop the
Trade Area and
eventually became the
Investors Relations
Officer.
Mr. Guilherme Arruda
graduated in Business
and Economics from the
University of California.
Start in the Company in
2009 after working for 7
years for the Bank
Pactual
Corporate
And Adm.
Controler
Eliseo
Fernandes
Mr. Eliseo Fernandez
Has a Business
Administration and
Accounting Degree from
the University Católica de
Pernambuco and a post
graduate degree in
Business Administration
from FGV. Started with
JBS in August 2005 and
eventually became
Director of Administration
and Corporate
Governance. 8 years
Experience in Auditing,
Consulting and 10 years
in the Retail industry.
Dayry
Gilson
Teixeira
CEO
MERCOSUL
Marco
Bortolon
JBS
Hides
Roberto
Motta
New business
José Luis
Medeiros
Comercial and
Distribution
International
Offices
Marco Bichieri
CEO
President
Joesley
Batista
Mr. Marco Bortolon, has
more than 10 years
experience in JBS.
Initially started as the
manager of production
and afterwards was
promoted to be Chief
Operating Officer of the
Brazil Beef Division.
Mr. Marco Bichieri, has
more than 24 years of
experience in the Protein
Sector. Worked for more
than 20 years in Bertin.
Mr. Roberto Motta, has
more than 20 years in
the Leather Industry.
Was responsible for
incorporating BMZ Hides
with the JBS Group.
Mr. Gilson Teixeira,
has more than 25 years
experience in Finance
and Controler of
business units of Bertin,
where he later served as
a member of the Board
for 5 years.
Mr. José Luiz
Medeiros, has a degree
in Accounting and has
worked in the Beef
Sector since1975. 14
year in Bertin and
started in JBS in 1997.
January 2010 became
the Director of New
Business.
5
Corporate Structure
Australia
Iain Mars
Pilgrim's Pride
Don Jackson
Beef USA
Richard Vesta
JBS Five
Rivers
Mike
Thoren
JBS Carriers
Mr. Moe
Schroder
CEO
USA/AUS
Wesley
Batista
Pork
Martin
Dooley
Mr. Iain Mars, born
in England and
worked in the Beef
Industry for his whole
life. He became the
President and CEO
of JBS Australia in
2007, after the
acquisition of Swift.
He has worked in
JBS since 2005.
Mr. Martin Dooley
Has a degree in Biology
from the University of
Eastern Illinois. Worked
in Swift for his whole live,
having started the
company as a manager
trainee in 1983. In 2007
was given the position of
president of the Pork
Division of JBS USA.
Mr. Moe Schroder has
more than 30 years
experience in
Transportation Sector.
Majored at the
University of Ryerson,
Toronto, Canada.
Occupied the position
of Vice President of
Sales and Dedicated
Operations at KLLM
and before that has
occupied executive
positions for 15 years
at CR England
Mr. Thoren,
is the President and
CEO of Five Rivers
since the Start of the
Company. Has a
Masters of Science in
Agricultural Economics
and has a degree in
Agribusiness from the
University of
Washington State.
Mr. Richard Vesta,
joined Smithfield Foods
with the Acquisition of
Parkerland in 2001 and
serves as the president
and CEO of JBS
Packerland
Mr. Don Jackson is the
President, CEO and
Director since January
2009. Originally was the
president of the chicken
division of Foster Farms
for 9 years and vice
president of Food
Service in ConAgra
Poultry Company.
Before this worked for
the Seaboard farm of
Athens or 22 years,
including 4 years as the
CEO of the Chicken
Division
Trading
Robert
Wadland
Mr. Robert Wadland
27 years of meat
trading experience with
17 years at JBS
enhancing exports out
of Australia and New
Zealand. Recently
transferred to the US to
run the groups trading
business unit
CFO
André
Nogueira
Human
Resources
Bob
Daubenspeck
Mr. André Nogueira has
a degree in Economics
from the Federal
University Fluminense, a
masters in Capital
Markets from FGV –
Fundação Getúlio
Vargas, masters in
Economics from
University of Brasilia in
2003. Worked more than
20 years at Bank of Brazil
and started at JBS USA
in 2007 after the Swift
acquisition.
Mr. Robert
Daubenspeck
assumed the position
in February 2009 and
before that in JBS
Packerland from 2002
to 2008.
6
Shareholders
7
Average daily trade volume of USD 50.4 million in 2Q10
Source: JBS
Controlling Holding55.5%
BNDESPAR17.3%
Market19.1%
PROT - FIP8.1%
Leading, Sizeable and Diversified Business Platform
8
1stRanking
Well-
Recognized
Brands
Production
Units
Geographic
Presence
and Installed
Capacity
2nd 3rd 1st 3rd 1st
Global Global U.S.A. Global Brazil Global
Beef
41.2
1.1
6.7
28.6
8.7
3.0
1.0
‘000 heads/day:
6.9
0.7
mm heads/day:
48.5
‘000 heads/day: ‘000 hides/day:
1.4
‘000 tons/day:
4.5
23.0
‘000 heads/day:
Total: 90.3 Total: 7.6 Total: 48.5 Total: 91.4 Total: 1.4 Total: 27.5
Chicken Pork Hides / Leather Dairy Lamb
75 33 3 26 7 6
55.6
28.6
6.0
1.2
Our Strategy
9
Production platform
Sales and distribution platform
Value added products
Branding
JBS’ Value & Strategy
EBITDA Margin
Financial structure
Experienced management
Cost reduction, process
optimization
Risk management
• Developed an efficient and diversified global production platform
• Expanding a global distribution platform to reach end clients
• Customized and further processed products for the end users
• Associating quality and branding to increase client loyalty
Rationale
Distribution Platform with Access to Key Markets
101 Real growth of total consumption in tons – 2010E to 2015ESource – OECD-FAO
Distribution Center
Growth 1
2 %
5 %
8 %
Growth 1
7 %
16 %
25 %
Growth 1
9%
8%
13 %
Growth 1
4 %
3 %
-2 %
Sales Offices
Agenda
11
2Q10 HighlightsMarket Overview
Company Overview
Short Term Outlook
World Meat Consumption (million tons cwe)
2000 2009 2018Growth
2009-2018
Pork 89 102 120 18%
Poultry 70 98 120 23%
Beef 60 65 75 15%
TOTAL 219 265 315 19%
2000 2009 2018Growth
2009-2018
OECD 92 100.4 108.5 8%
NON OECD 127 164 205 25%
Source: OECD/FAO Agricultural Outlook 2009-2018
12
Animal protein consumption growth in the last decade
13
3
Source: FAPRI February 2010
7.5%
29%
32.2%
70.2%
41.4%
47.7%
23.7%
23.3%
48.7%
North America
Central
America
South America
Sub Saharan
Africa
Middle EastSoutheast
Asia
East Asia
Former USSR
Oceania
EU - 27
Beef Exports
14Source: USDA and Secex
US Beef and Veal Exports (Tons) Brazilian Beef Exports (Tons)
Rising demand in emerging economies drove export volumes up in the semester both
in Brazil and in the US but more importantly, pricing was very strong. As beef production
is long cycle, some of this export demand will tend to boost chicken exports, particularly
out of the US, in the coming years.
0
100.000
200.000
300.000
400.000
500.000
600.000
700.000
2005 2006 2007 2008 2009 JAN-JUN 09
JAN-JUN 10
3.800
3.900
4.000
4.100
4.200
4.300
4.400
4.500
4.600
Beef Exports Avg Price in US$ per Ton
24.3%
5.3%
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2005 2006 2007 2008 2009 JAN-JUN 09
JAN-JUN 10
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
Beef Exports Avg Price in US$ per Ton
7.0%
26.6%
Chicken Exports
15Source: USDA and Secex
Brazilian Chicken Exports (Tons) US Poultry Exports (Tons)
Strong domestic demand in both Brazil and the US limited exports in the first
semester although it is clear that prices will tend to push up export volumes from now on
particularly taking into account the reopening of the Russian market for US product.
0
500
1.000
1.500
2.000
2.500
3.000
3.500
2005 2006 2007 2008 2009 JAN-JUN 09
JAN-JUN 10
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
Chicken Exports Avg Price in US$ per Ton
1.1%
17.3%
-
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
2005 2006 2007 2008 2009 JAN-JUN 09
JAN-JUN 10
-
200
400
600
800
1.000
1.200
Chicken Exports Avg Price in US$ per Ton
-6.5%
-2.9%
Agenda
16
2Q10 HighlightsMarket Overview
Company Overview
Short Term Outlook
Highlights for the 2nd Quarter 2010
17
Revenues increased 52.5% y-o-y and 12.5% to R$14,116.3 million
• JBS USA increased 67.6% y-o-y and 12.9% q-o-q
• JBS MERCOSUL increased 123.1% y-o-y and 19.1% q-o-q
• JBS Exports increased 37.0% q-o-q reaching 29% of sales
EBITDA increased 163.3% y-o-y and 16.0% q-o-q.
Leverage remained fairly stable at 3.0x
Consolidated customer base grew by 22.2% q-o-q, reaching more than 300
thousands customers in 2Q10.
JBS Consolidated Results
18
Source: JBS
EBITDA Margin (%)
Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)
9,255.08,379.9
7,408.9
12,550.3
14,116.3
2Q09 3Q09 4Q09 1Q10 2Q10
69.4%-11.6% 12.5%-9.5%
384.0
291.9
397.8
862.0
1,000.0
4.1%3.5%
5.4%
6.9% 7.1%
2Q09 3Q09 4Q09 1Q10 2Q10
-24.0% 36.3% 116.7% 16.0%
Performance by Business Units
19
Net Sales (US$ billion) Net Sales (US$ million) Net Sales (US$ million)
EBITDA (US$ mi) EBITDA
marginEBITDA (US$ mi) EBITDA margin EBITDA (US$ mi) EBITDA margin
JBS USA BeefIncluding Australia
JBS USA Pork JBS USA Chicken (PPC)
Source: JBS
EBITDA Margin (%)
2.9 2.8 2.8 2.8
3.3
2Q09 3Q09 4Q09 1Q10 2Q10
104.6 108.4126.0
170.5
194.9
3.6% 3.8%4.5%
6.0% 5.9%
2Q09 3Q09 4Q09 1Q10 2Q10
554 559 606 646739
2Q09 3Q09 4Q09 1Q10 2Q10
24.7
15.3
28.634.9
48.7
4.5%2.7%
4.7%5.4%
6.6%
2Q09 3Q09 4Q09 1Q10 2Q10
1.71.8
1.6 1.7
1Q09 2Q09 1Q10 2Q10
80.8
164.6
59.5
127.6
4.8%
9.3%
3.6%
7.5%
1Q09 2Q09 1Q10 2Q10
1.7 1.7 1.7
3.0
3.5
2T09 3T09 4T09 1T10 2T10
Net Sales (R$ billion)
EBITDA (R$ mi) EBITDA
margin
82.6
47.3
112.2
352.6334.5
4.9% 2.9%
6.6%
11.9%
9.5%
2T09 3T09 4T09 1T10 2T10
JBS MERCOSUL
Revenue Distribution by Market
20
Revenue Distribution by Market 2Q10 Revenue Distribution by Market 1Q10
Revenue Distribution by Market 2Q10 Revenue Distribution by Market 1Q10
Beef Domestic 44%
Pork Domestic 7%
Chicken Domestic 20%
Beef Exports 25%
Pork Exports 2%
Chicken Exports 2%
Exports = 29% Domestic Market = 71%
Beef Domestic 47%
Pork Domestic 8%
Chicken Domestic 22%
Beef Exports 20%
Pork Exports 1%
Chicken Exports 2%
Exports = 23% Domestic Market = 77%
Source: JBS
Mercosul27%
USA Beef42%
USA Pork9%
USA Chicken22%
Mercosul23%
USA Beef42%
USA Pork10%
USA Chicken25%
EBITDA Distribution by Business Units
21
2Q10 1Q10
USA BEEF34,7%
USA PORK8,7%USA Chicken
22,7%
Mercosul33,5%
USA BEEF36,1%
USA PORK7,4%USA Chicken
12,6%
Mercosul43,9%
Source: JBS
JBS Consolidated Exports Distribution
22
JBS Exports 2Q10 JBS Exports 1Q10
US$2,3331.0 Million US$1,765.4 Million
Source: JBS
Africa and Middle East 16%
Mexico 14%
Japan 12%Hong Kong
9%
Russia 8%
E.U. 8%
USA 7%
South Korea 4%
China 4%
Canada 4%
Taiwan 2% Others
12%Africa and Middle East19%
Mexico12%
Japan10%Hong Kong
8%Russia
10%
E.U.7%
USA7%
South Korea5%
China4%
Canada4%
Taiwan2% Others
12%
Debt
23
While JBS leverage remained fairly constant in the quarter (at 3.0x LTM EBITDA), the liquidity of the
balance sheet improved significantly.
The company’s cash position increased 17,5% when compared with 1Q10 (which represents 70% of
the company’s ST debt, from 55% in the previous quarter), while ST debt decreased 7,7% in the same
period.
Considering the US$700mm bond issuance in July, ST debt on a pro-forma basis would represent
roughly 33% of total debt, closer to the company’s target of having less than 30% of its total debt
maturing in the ST.
Source: JBS
*LTM including Bertin and Pilgrim’s Pride pro-forma.
** Pro-Forma takes into account senior unsecured notes issued July, 2010
2.6
3.3 3.1 3.1 3.0x
2Q09 3Q09 4Q09 1Q10 2Q10
39% 40% 36% 33%
61% 60% 64% 67%
2Q09 1Q10 2Q10 (Pro-Forma)*
Short term Long term
*
**
Leverage ST / LT Profile
Agenda
24
2Q10 HighlightsMarket Overview
Company Overview
Short Term Outlook
A Closer look at synergies – Pilgrim’s Pride
25
JBS already captured US$ 150 million in synergies with Pilgrim’s Pride acquisition of a
total estimated amount of US$ 220 million.
The illustration bellow the origins of the captured synergies.
Captured Synergies
US$ 150 MillionLogistics Optimization
Efficiency gains in the average load factor for trucks
US$50mm
Total US$70mm
Descrição
2 years
On going Synergies
ExportsReaching final customers through the JBS current salesstructure.
US$20mm 2010
Size Time
Source: JBS
Logistics23%
Suppliers20%
Corporate23%
Adminstrative expenses
34%
A Closer look at synergies – Bertin S.A.
26
Captured Synergies
R$154 MillionExports
Maximization of sales channels and reviewing contracts for freight
R$31mm
Total R$331mm
Descrição
2010
On going Synergies
HidesCapturing value with the greatest volume of processed
R$45mm 2010
Size Time
SuppliersReview of terms of contract non-core suppliers (ex packaging)
R$10mm 2010
Industrial ProcessesOptimization of fixed costs and
streamlining of existing
contracts
R$245mm 2 Years
Source: JBS
JBS already captured R$ 154 million in synergies due to the merger with Bertin of a total
estimated amount R$ 485 million.
The next graphic shows the origin of the captured synergies.
Administrative expenses
26%
Exports45%
Logistics13%
Suppliers16%
27“In God We Trust, Nature We Respect”
IR Contacts:
+55 11 3144 4447
www.jbs.com.br/ir