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JBS S.A.
A GLOBAL
FOOD
COMPANY
Institutional Presentation 3Q15
Global and diversified platform
Value added product portfolio with brands
Focus on operational excellence
High performance team with more than
230 thousand employees
Net Revenue of R$150 billion (LTM)
Second largest global food company¹
JBS AT A GLANCE
Beef32%
Poultry22%
Pork16%
Prepared & Others
30%LTM Revenue
3Q15
R$150 bi
2Source 1: Bloomberg
3
A GLOBAL COMPANYAn Exclusive Global Production and Sales Platform
As % of Total Revenue¹
Production footprint
Note 1. Revenues by region includes domestic sales and imports.
CANADA3%
USA
47%
MEXICO6%
BRAZIL12%South Am/
OTHERS
EUROPERUSSIA
ASIA
AFRICA &
MIDDLE EAST
OCEANIA
6%
6%
4%
4%
1%
11%
4
IPO JBS SA
Net Revenue: R$14.1 bi
2007
2008
Net Revenue: R$30.3 bi
2009
BERTIN
2010
EXPANSION IN USA AND AUSTRALIA
Net Revenue: R$54.7 bi
2013
ACQUISITIONS: TYSON IN BRAZIL
AND MEXICO
2014
CARGILL PORK
Net Revenue LTM3Q15¹:
R$150.1 bi
2015
230,000
EMPLOYEES
From a Brazilian beef company in 2007 to a Global food company
EVOLUTION
2006
19,000
EMPLOYEES
Net Revenue: R$3.9 bi
Note 1. Not considering revenues from Moy Park and Cargill Pork
5
STRATEGYGlobal and Diversified Production and Distribution Platform progressing towards value added
products with brands
Production platform
Branding
Value added products
Sales and distribution platform
\\\\\\\\\\\\
+300 production units in +15 countries
+350,000 costumers and sales to +150 countries
6
| Net Revenue Growth: 77%
HISTORICAL PERFORMANCEConstant Revenues and EBITDA Margin Growth
EBITDA Margin (%)EBITDA (R$ million)Net Revenue (R$ million)
| EBITDA Growth: 124%
7.1% 6.9% 6.6%
8.4%
11,8%9.6%
8.2%
9.2% 8.9%
24,22227,222 26,419
28,96930,779
34,303 33,819
38,90543,029
1,710 1,874 1,7502,433
3,618 3,2902,758
3,577 3,834
3T13 3T13 4T13 4T13 1T14 1T14 2T14 2T14 3T14 3T14 4T14 4T14 1T15 1T15 2T15 2T15 3T15 3T153Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
CONSOLIDATED RESULTS
3Q15
7
3,618 3,834
11.8%
8.9%
3Q14 3Q15
30,779
43,029
3Q14 3Q15
8
3Q15 CONSOLIDATED HIGHLIGHTS
EBITDA Margin (%)
CONSOLIDATED NET SALES (R$ MILLION) CONSOLIDATED EBITDA (R$ MILLION)
| Robust sales growth
| Solid operational results
39.8%
6.0%
1,092.9
3,441.4
0.38
1.19
3Q14 3Q15
2,130
5,066
3Q14 3Q15
9
NET INCOME (R$ MILLION) FREE CASH FLOW GENERATION (R$ MILLION)
| Net income reached a historical high
| Increased Earnings Per Share (EPS) (Cancelation of shares held in treasury)
| Robust Free Cash Flow Generation
137.8%
3Q15 CONSOLIDATED HIGHLIGHTS
288.6%
Earnings Per Share (R$)Reported Net Income
Adjusted
Net Income
4,246.7
25,848
41,707
2.54x 2.55x
3Q14 3Q15
10
NET DEBT - US$ MILLION NET DEBT (R$ MILLION) / LEVERAGE
RECENT ACQUISITIONS
| Tyson de Mexico
| Primo Group
| Moy Park
| Big Frango
| Céu Azul
| Anhambi
| Tyson do Brasil
| Total Value: ~US$ 3.5 billion
| Revenues: ~US$ 5.0 billion
2,32x¹
Note 1. leverage considering proforma results from recent acquisitions (does not include Cargill Pork).
3Q15 CONSOLIDATED HIGHLIGHTS
10,546 10,498
3Q14 3Q15
JBS S.A.41%
JBS Foods11%
JBS USA Holdings
48%Capital Market45.0%
Commercial Banks54.9%
BNDES0.1%
11
BREAKDOWN BY CURRENCY
AND COST BREAKDOWN BY COMPANY
MATURITY (R$ MILLION)
-5,058
1,752 3,231 3,790 1,646
10,643 6,281
19,422
Short Term* 2016 2017 2018 2019 2020 2021 After 2021
US$91%
R$9%
13.61% p.a.
4.76% p.a.
Note *. Net of Cash
DEBT PROFILE AND MATURITY
BREAKDOWN BY SOURCE
52.0
8.9
43.1
Financial Liability Operational Asset Net ExposURE
12
FX HEDGING POLICY
JBS EXPOSURE TO US DOLLAR (R$ BILLION) HEDGE POSITION (R$ BILLION)
41.4
1.7
Hedge Unhedged Position
FX Variation on Net Exposure: R$10.1 billion
Effect on Financial Results: R$6.1 billion
Effect on Equity: R$4.0 billion
Hedge Result: R$9.5 billion
Financial
Liability
Operational
Asset
Net
Exposure
FX Exposure and Hedge Position at the end of 3Q15
CONSOLIDATED EXPORTSJBS Exports breakdown in 2Q15 and 3Q15
Greater China¹16.8%
Mexico11.0%
Japan10.9%
South America10.5%
Africa & Middle East10.5%
USA9.5%
Russia9.1%
E.U.6.5%
South Korea4.7%
Canada2.4%
Others8.2%
3Q14
US$4,361.1
million
South America16.8%
Greater China¹15.1%
Africa & Middle East
12.6%
Mexico12.2%
USA9.5%
Japan9.4%
E.U.5.2%
South Korea4.9%
Russia3.8%
Canada2.1%
Others8.3%
3Q15
US$ 3,941.3
million
Note 1. Considers China and Hong Kong 13
14
JBS FOODS
3,376.8
5,012.2
3Q14 3Q15
15
JBS FOODS
| Expressive organic growth and via acquisitions.
| Continuous EBITDA margin expansion.
| Commitment to improved performance.
| Focus in quality, innovation and brands.
48.4% 80.5%
NET REVENUE (R$ MILLION) EBITDA (R$ MILLION)
576.0
1,040.017.1%
20.7%
3Q14 3Q15
13.7%
15.9%
20.7%
1Q
14
2Q
14
3Q
14
4Q
14
20
14
1Q
15
2Q
15
3Q
15
10.6
12.9
17.0
20.0
2013 (Acquisition)¹ 2014 LTM3Q15 3Q15 Annualized
NET REVENUE (R$ BILLION)
Note 1: proforma net revenue considers combined 2013 results from Seara + JBS Aves
CONSISTENCY OF RESULTS (EBITDA Margin %)
21.7%
31.8%
EVOLUTION OF JBS FOODS
18.0%
16
17
OPERATIONAL EXCELLENCE
Source: Company
Costumer Service (OTIF – on time in full)
23% improvement
Point of Purchase Out of Stock
24% improvement
Active Costumers
An increase of 29 thousand
Perceived Quality
26% improvement in quality drivers
Productivity Drivers
An increase of 400 bps in operational efficiency index
18
JBS MERCOSUL
554.6640.8
8.6% 9.0%
3Q14 3Q15
6,470.5
7,146.9
3Q14 3Q15
19
JBS MERCOSUL
10.5% 15.5%
| Recovery of exports and opening of Chinese and Saudi markets.
| Operational profitability improvement.
| Better supply and demand dynamics.
| Continuous investments in Friboi brand.
| Outlook of trade with the US.
NET REVENUE (R$ MILLION) EBITDA (R$ MILLION)
20
JBS EUROPE
4,0064,723
5,5086,383
2012 2013 2014 LTM 3Q15
21Source: Company
In Natura
Convenience and Value Added UK
Convenience and Value Added Europe
Poultry Breeding Grounds
Rigamonti
NET REVENUE (R$ MILLION)
+59%
JBS EUROPE OVERVIEW
| 15 production units with 12 thousand employees
| 450 thousand tons of products processed annually
42% 51% 7%
In Natura Prepared & Breaded Convenience & Others
62% 27% 10%
Retail Foodservice Others²
MOY PARK: VALUE ADDED PRODUCTS
In Natura Prepared & Breaded Convenience & Others
Pro
du
cts
Ch
an
ne
l
Mix
¹C
ostu
me
rs
Note 1: 2014 Revenues Percentage.
Note 2: Others includes agricultural costumers, poultry international costumers and poultry sub products. 22
26
76
2011 2014
+50
MOY PARK: INNOVATION BENCHMARKING
DEVELOPMENT OF PRIVATE LABEL PRODUCTS
NEW PRODUCT SAMPLES DEVELOPED BY MOY PARK
EMBEDDED CHEFS
FOOD DEVELOPMENT INNOVATION & INSIGHT HEADCOUNT
R&D Headcount
BENCHMARK IN POULTRY BREEDING PRACTICES
Antibiotic Free
Free Range
Organics
23
24
JBS USA BEEF
504.9
196.8
8.6%
3.4%
3Q14 3Q15
5,849.3 5,750.9
3Q14 3Q15
25
JBS USA BEEF
-1.7%-61.0%
Swift
(bolinha) e
Primo
NET REVENUE (US$ MILLION) EBITDA (US$ MILLION)
| Lower cattle availability in US as a consequence of stronger Heiferand Cow retention.
| Impact of Australian dollar devaluation vs. US Dollar.
| New management in Primo leading the process of reorganization,integration and synergy capturing.
| 30% expansion of value added products (consumer ready) in 2015and 60% in 2016, reaching 340 million lbs.
PRIMO: VALUE ADDED PRODUCT DIVERSIFICATION
Processed
Pro
du
cts
Ch
an
ne
l
Mix
¹
Le
ad
ing
Bra
nd
s
74% 5% 18% 2%
Retail Foodservice Distributors Exports & Others
Note 1: Others: retail stores 26
PRIMO: LEADING BRANDS IN OCEANIA
Primo40%
George Weston23%
Dorsogna11%
Ingham3%
Bertocchi10%
Other5%
Private Label8%
Leading Brand in Australia
Premier Beehive
37%
Hellers28%
Private Label10%
A.Verkerk9%
Hobsons Choice4%
Tegel Foods4%
Other8%
Leading Brand in New Zealand
Source: Australia and New Zealand Market Share data based in Woolworths & Coles (September 2015) 27
28
JBS USA PORK
113.2
48.4
12.1%
6.2%
3Q14 3Q15
937.8
785.4
3Q14 3Q15
29
JBS USA PORK
-57.2%
-16.3%
| Increase in pork supply and decrease in prices.
| Increase of products and clients portfolio through the acquisition ofCargill Pork, concluded in October 30th.
| Increased sales of value added products.
| Defined management team at the New JBS USA Pork with theinitiation of integration and synergy capturing.
NET REVENUE (US$ MILLION) EBITDA (US$ MILLION)
30
NEW JBS USA PORK
| Proforma Net Revenue of US$6.3 billion.
| Proforma EBITDA of US$565 million (Pre-Synergies).
| 20% market share.
| 90,000 hog processing capacity per day.
| 5.0 million lbs of prepared and valueadded products per week.
| 2.0 million lbs of bacon produced per
week.
FINANCIAL HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
05 hog processing units
01 lamb processing unit
03 consumer ready facilities
05 feed mills
04 genetic units
CA
2
1
TX
1
AR
2
1
OK
CO1 MO
2
IA2
1
1
MN
IL1
KY1
NC1
31
JBS USA CHICKENPILGRIM’S PRIDE (PPC)
435.4
274.3
19.2%
13.0%
3Q14 3Q15
2,268.02,112.5
3Q14 3Q15
32
JBS USA CHICKEN (PPC)
-6.9%
-37.0%
| Robust Cash generation.
| Decrease in prices in domestic and export markets.
| US$30 million impact of non recurring costs in the quarter.
| US$200 million in operational improvements through 2015.
| Challenging environment for exports, but with the expectation ofmarkets reopening.
NET REVENUE (US$ MILLION) EBITDA (US$ MILLION)
NEW PILGRIM’S IN MEXICO
| US$1.6 billion in revenue annually.
| 28% Market Share.
| US$50.0 million synergies in progress.
| Conclusion of Tyson de México acquisition in
July 2015.
| Integration 100% concluded.
| +10,000 Team members.
| 1.3 million poultry processed per day.
| Strong nationally recognized brands.
| New Vera Cruz complex initiating in December
2015.
FINANCIAL HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
06 poultry processing units
17 Distribution Centers
FACILITIES FOOTPRINT
33
34
MARKETING AND INNOVATION
Ma
rke
tin
g a
nd
In
no
vati
on
Adding
Value
Bottled Water Market Value¹
US$ ~160 billion
Source 1: globe newswire35
THE POWER OF MARKETING AND INNVOATION IN FOOD
FOOTBALL oriented Marketing, through the
sponsorship of teams and events.
SINGLE-TIER, with no price category diversification.
SEARA BRAND UNTILL 2013... ...REPOSITIONING TROUGHOUT 2014
Seara is the brand of the contemporary
woman, with FOCUS ON QUALITY, taste and
convenience.
Seara becomes a MULTI-TIER brand.
Experimente Seara
A QUALIDADE VAI TE SURPREENDER
36
REPOSITIONING OF THE SEARA BRAND
BRAND PREFERENCE TRIPLED
90% COSTUMERS CONSIDERS SEARA IN THE BUYING
PROCESS
CONSIDERED THE BRAND OF THE MODERN WOMAN!
SECOND PLACEON TOP OF MIND!
ONE OF THE MOST REMEMBERED TV COMERCIALS IN TEN(SOURCE: DATAFOLHA)
SEARA WAS THE MOST APPRECIATED BRAND IN 2014
Pre
miu
mM
ain
stre
amR
egio
nal
/ A
cces
s
BRAND REPOSITIONING
Source: Datafolha e Millward Brown 37
BUYING RATE¹
(Per semester)
VOLUME PER OCCASION
(Volume growth)
PENETRATION
(Presence in Brazilian homes)
+3,579,950 homes(1H15 vs. 1H14)
46%
+ 7.1%
+12.7%2.5 visits
(1H15 vs. 1H14)
REPEATED PURCHASE
Besides the conquest of new buyers throughout Brazil, the
repetition conversion is already happening at Seara.
Testers Repeaters Monthly Penetration
Repeat Rate: 67%
Source: Kantar WorldPanel – Consuming evolution in Brazilian homes (Categories: Pizzas, Pasta, Hamburger, Breaded, Snacks, Sausages and Ham (1H15 vs. 1H14 variation) 38
BUYING BEHAVIOUR EVOLUTION
19.5 20.3
24.626.4 26.4
27.6
30.2
7.2 7.0 7.68.7 8.8 9.0 9.1
Aug/Sep 14 Oct/Nov 14 Dec/Jan 15 Feb/Mar Apr/Mar 15 Jun/Jul 15 Aug/Sep 15
Frozen Margerines
13.2 13.2 13.6 13.9 13.715.0 15.3
22.5
24.5
28.829.6
31.131.8
32.5
Jul/Aug 14 Sep/Oct 14 Nov/Dec 14 Jan/Feb 15 Mar/Apr 15 May/Jun 15 Jul/Aug 15
Industrialized Pizzas
Source: AC Nielsen - Market Share by Volume Category - Includes Excelsior. In Frozen, includes Massa Leve from Aug/Sep 14, Agrovêneto and Macedo from Dez/Jan 15 and Big Frango from Fev/Mar/15
FROZEN AND MARGERINES INDUSTRIALIZED AND PIZZAS
39
MARKET SHARE EVOLUTION
40
FRIBOI
“De
co
mm
od
itiz
ati
on
”
FRIBOI WAS... FRIBOI FROM 2013 ONWARDS
| Sparse Marketing
Investments.
| Beef still treated as
commodity.
| Increase in Marketing investments through a well
known national TV celebrity.
| Slogan “Ask for Friboi. Reliable Beef has a Name”.
| Focus on communicating the reliability benefit
through guarantee of origin.
| Commercials aired on TV, radio, banners, magazines
and stand ups.
41
“DECOMMODITIZING” BEEF
42
100%
115%
120%
125%
135%
150%98%
101%
104%103%
2013 PreCampaign
2013 PostCampaign
2014 YTD 2015
Friboi average price vs Market average price
After the Slogan “Ask for Friboi. Reliable Beef has a
Name”, Friboi prices increased 5% compared to the
market average
Source: JBS and Shoppingbrasil IFR
Note 1: Basket is composed by: shoulder, rump, strip loin, round cuts, tenderloin, flank steak, and top sirloin cap.
PRICING INDEX OF JBS BRANDS IN BRAZIL FRIBOI BRAND POSITIONING IN THE MARKET (Basket of Cuts¹)
POSITIONING OF FRIBOI IN THE BRAZILIAN MARKET
43
Mission
“To be the best in what we set out to do,
completely focused on our business, ensuring the
best products and services for our
customers, consistency for our suppliers,
profitability for our shareholders and the
opportunity of a better future for all our team
members.