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0 0 4th Quarter 2009 Results "In God We Trust, Nature We Respect" JBS S.A. March 8th, 2010 32 51 73 150 185 345 432 548 602 1.156 3.058 4,92% 5,73% 6,0% 11,0% 9,7% 10,5% 11,2% 13,6% 4,3% 3,8% 5,5% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* EBITDA (R$ mm) EBITDA Margin JBS remains a Growth Company *Pro forma including Bertin and Pilgrim’s Pride. Source: JBS
Presenters Jeremiah O’Callaghan Investor Relations Director Joesley Mendonça Batista Chief Executive Officer Guilherme Arruda Investor Relations 1
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. 2
Our Values Excellence Planning Determination Discipline Availability Openness Simplicity 3
Agenda Company Overview Market Overview 4Q09 Highlights Short Term Outlook Final Considerations 4
Company Overview 5
JBS S.A. at a Glance • Founded 1953 in central Brazil • IPO in 2007 • Ibovespa ticker: JBSS3 • ADR ticker: JBSAY • Leading animal protein producer in the World • Production platform in South America, North America, Europe and Oceania • 125,000 employees worldwide • Revenues of about US$ 30 Billion per annum • Market cap of R$ 22 billion *Source: Bloomberg 25/02/2010 * 6
JBS S.A. Growth Through Acquisitions • JBS’ History has been built through more than 30 acquisitions in 15 years with adequate capital structure and management Cáceres (Frigosol) Iturama (Frigosol) Araputanga (Frigoara) Barretos (Anglo) Pres. Epitácio (Bordon) Campo Grande (Bordon) Pedra Preta (Frigo Marca) Rosário (Swift ARG) San Jose (Swift ARG) Inalca Swift Foods Co. Maringá (Amambay) Berazategui (Rio Platense) Colonia Caroya SB Holdings JV Beef Jerky Venado Tuerto Pontevedra (CEPA) Rio Branco Cacoal 1 Cacoal 2 Porto Velho Vilhena (Frigovira) Andradina (Sadia) Barra do Garças (Sadia) Tasman Smithfield Beef Five Rivers R$/US$ end of the year quotation Bertin Association Pilgrim’s Pride JBS Hides 5 new units (1) (2) (3) Net Sales (in US$ billion) Companies and assets acquired 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 0.3 0.4 0.4 0.5 0.5 0.4 0.7 1.2 1.5 1.9 12.7 19.8 30.3 1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Goiânia (Anglo) 7
EBITDA Growth • JBS remains a Growth Company. *Pro forma including Bertin and Pilgrim’s Pride. Source: JBS 8 32 51 73 150 185 345 432 548 602 1.156 3.058 4,92% 5,73% 6,0% 11,0% 9,7% 10,5% 11,2% 13,6% 4,3% 3,8% 5,5% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* EBITDA (R$ mm) EBITDA Margin
Our Strategy 2005/2006 Adequate Financial Structure 2007/2008 Global Production Platform 2009/2010 Global Sales & Distribution Platform 2011/2012 Value Added Products & Branding - Access to raw material supply globally. - Leader in countries with surplus production. - Scale. - Leader in exports globally. - Access to all meat markets. - Exchange of best practices. - Efficiency cost gains. - Cost reduction opportunities. - Margin improvements. - Integrate the sales and distribution platform to serve efficiently, local and external markets, small retailers, food processors, restaurants, and other customers globally. - Sales force distributed over the globe. - Efficiency on selling the best product, to the best market, with the best price. - Cost reduction on sales and transport. - Margin improvements. - High liquidity level. - Debt equalized to cash generation. - Strong cash position. - Access to international capital markets to finance growth. - Development of long term financing plan. - Use of export platform to grow. - Hands-on working capital management. South America North America Australia European Union Asia Russia Africa Middle East South America North America Australia European Union Debt for Working Capital Equity to Finance Growth Cooked Products Case Ready Products Global Brands Marketing Investments Minced Products Fresh Products Cured Products Ready to Eat Products - High technology investments to produce value added products. - Increase value added products portfolio. - Customized products to each market. - Convenience to consumers day to day. - Brand and Quality recognition and leadership. - Marketing investments to be present in consumer minds. - Margin improvements. 9
Our Strategy Branding Value Added Products Sales & Distribution Platform Production Platform Foundation Financial Structure Experienced Management Cost Reduction, Productivity, Process Optimization Risk Management EBITDA Margin 4% 10
Batista Family Bertin Family Controlling Holding Market (Free Float) JBS S.A. (including Bertin) JBS U.S.A. Includes AUS Pilgrim’s Pride BNDES Other subsidiaries 59% 41% 100% 80% - 75% 20% - 25% 64% Other shareholders 36% US$ 2 Bn Corporate Structure 11
Shareholders 12 Controlling Holding 59% BNDESPAR 19% Individual 1% Foreign Investors 10% Others 10%
Production Units Employees 28,600 B 48,500 P 4,500 S 8,690 B 20,000 S 92,090 B 48,500 P 24,500 S 7,200,000 C C Pilgrims Pride 37 39,000 7,200,000 8,400 6,217 125,000 Daily Slaughter Capacity 3,500 6,995 24,295 B B B JBS MERCOSUR JBS USA JBS Austrália Inalca JBS 8 16 10 8 Total JBS Brasil 61 44,993 43,400 140 3,000 (B) Beef; (P) Pork; (S) Smalls; (C) Chicken Global Production Platform 13
Market Overview 14
Market Highlights • Robust domestic consumption in Brazil. • Growing middle classes in the Emerging Market sourcing more product through imports. • Recovery of exports from US allied with improved domestic American consumption. • European protein production declining. • Gradual Improvement in exports generally with the reduction and/or removal of trade barriers. 15
Per capita food consumption curve (Kg / Year) 0 20 40 60 80 100 120 140 160 180 Cereals Roots and Tubers Beans, Peas and Lentils Sugar Oils Crops and its products Meat Milk and its products 1969/ 71 1979/ 81 1989/ 91 1999/ 01 2030 2050 Source: FAO 16
Source: Secex Brazilian Beef exports (Thousand Tons) 1,086 1,218 1,491 1,425 1,263 1,095 780 0 200 400 600 800 1,000 1,200 1,400 1,600 2003 2004 2005 2006 2007 2008 2009 E.U. Russia Egypt Venezuela Algeria USA Hong Kong Others 17
Source: USDA ERS 1.867 1.888 1.433 1.146 697 461 2.520 2.449 2.269 2.467 2.412 0 500 1.000 1.500 2.000 2.500 3.000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Mexico Canada South Korea Japan Vietnam China Hong Kong Netherlands Others US Beef and Veal Exports (Million Pounds) 18
Source: USDA ERS 4.128 4.667 3.142 2.995 2.667 2.181 1.717 1.612 1.560 1.287 1.278 0 500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 5.000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Japan China Hong Kong Mexico Russia Canada South Korea Australia Others US Pork Exports (Million Pounds) 19
Source: USDA ERS 6.906 7.109 6.070 5.367 5.333 4.997 5.013 4.942 5.738 5.138 4.980 0 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Russia China (Mainland) Iraq Mexico Canada Cuba Other Chicken Others US Poultry Exports (Million Pounds) 20
Strong Long-term Industry Fundamentals Meats Consumption Per Capita Per capita consumption (kg/capita) Source: FAO Recommended consumption 80kg/capita Population growth coupled with rising worldwide standards of living will drive an increase in protein demand on emerging global middle class 21
4Q09 Highlights 22
Highlights for the 4th Quarter 2009 • Net Profit of R127ドル.9 million in 4Q09. • Net Revenue for 2009 was R34,311ドル.8 million, representing a 13.1% increase y-o-y. • In 4Q09 the consolidated EBITDA increased 49.6% compared to 4Q08, from R265ドル.9 million to R397ドル.8 million. The consolidated EBITDA margin was 5.4% for the period, compared with 2.8% for 4Q08 • Completion of the Bertin S.A. Merger and the acquisition of a controlling interest in Pilgrim’s Pride Corporation. • A pro forma Net Revenue in 2009 of R55,223ドル.6 million, 82.0% higher than 2008. • EBITDA pro forma of R3,058ドル.0 million in 2009, increase of 164.5% over the previous year. 23
JBS Consolidated Results Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million) Source: JBS EBITDA Margin (%) -11.6% 36.3% -3.8% -20.4% -0.1% 81.6% -9.5% -24.0% 13.1% 11.2% 24
Performance by Business Units Net Sales (US$ billion) EBITDA (US$ mi) EBITDA margin JBS USA (Beef) Including Australia Net Sales (US$ million) EBITDA (US$ mi) EBITDA margin JBS USA (Pork) Net Sales (€ million) EBITDA (€ mi) EBITDA margin INALCA JBS Net Sales (R$ billion) EBITDA (R$ mi) EBITDA margin JBS MERCOSUL Source JBS EBITDA Margin (%) 2.8 2.7 2.9 2.8 2.8 4Q08 1Q09 2Q09 3Q09 4Q09 1 08.4 1 26.0 1 04.6 59.7 60.4 2.2% 2.2% 3.6% 3.8% 4.5% 4Q08 1Q09 2Q09 3Q09 4Q09 600 526 554 559 606 4Q08 1Q09 2Q09 3Q09 4Q09 25.6 7.5 24.7 1 5.3 28.6 4.3% 1 .4% 4.5% 2.7% 4.7% 4Q08 1Q09 2Q09 3Q09 4Q09 1 62 1 44 1 44 1 46 1 41 4Q08 1Q09 2Q09 3Q09 4Q09 8.3 5.6 6.6 9.7 7.0 5.1% 3.9% 4.6% 6.6% 5.0% 4Q08 1Q09 2Q09 3Q09 4Q09 1 .6 1 .4 1 .7 1 .7 1 .7 4Q08 1Q09 2Q09 3Q09 4Q09 25
Debt • The Net Debt/EBITDA reduced from 3.3x in 3Q09 to 3.1x in 4Q09. • JBS raised US2ドル.0 billion by issuing two million Debentures. • The company’s cash position is sufficient to cover, almost entirely, the short term debt of JBS • Current assets exceed current liabilities by almost 50%, demonstrating the liquidity of the Company’s balance sheet. Net Debt / EBITDA Pro Forma per Quarter Source: JBS Net Debt/ EBITDA EBITDA pro-forma * LTM including Bertin and Pilgrim’s Pride pro-forma. Gross debt Profile (R$ million) 26 * 37% 38% 63% 62% 2009 2008 Short Term Long Term 5,479.6 14,429.8
Revenue Distribution by Market 2009 2008 Source: JBS Source: JBS E xports 23% Domes tic Market 77% Exports 33% Domestic Market 67% 27
JBS Consolidated Exports Distribution JBS Exports 2009 Source: JBS JBS Exports 2008 28 Mexico 18% Russia 13% E.U, 11% Japan 9% Canada 8% Middle East 7% Hong Kong 5% South Korea 4% Taiwan 4% USA 3% China 3% Others 15% US$ 5.6 billion Japan 13% E.U. 11% Russia 10% Canada 8% Mexico 8% Africaand Middle East 7% South Korea 6% Hong Kong 6% USA 5% China 4% Taiwan 2% Others 19% US$ 5.0 billion
Short Term Outlook 29
A Closer look at synergies – Pilgrim’s Pride • USD 95 Million already captured, through initiatives in the personnel, transportation, and packaging supply areas. • USD 65 Million further by mid year, principally through G&A, exports, and logistic efficiencies. • USD 200 / 300 Million total annual synergies. 30 0 2 4 6 8 10 12 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Announcementofthe PPCacquisitionby JBS Closing of the acquisition Pilgrim’s Pride Stock Price Source: Bloomberg
A Closer look at synergies – Bertin S.A. • R145ドル million implemented by end of 1Q10 in packaging, industrial processes, formulation and corporate. • R100ドル million further synergies to be realized particularly at corporate and exports in the coming six months. • Total annual synergies expected to reach R500ドル million by 2011. 31
Final Considerations 32
Final Considerations • JBS remains a Growth Company. • Focus on synergy gains through the integration of Bertin in Brazil and Pilgrim’s Pride in the USA. • JBS continues to build its distribution platform to add value to its products and expand its margins. • Commitment to the Company’s financial health and the reduction of the financial leverage, maintaining a strong cash generation. • Having taken the Company public and having elevated its corporate governance, JBS is now focused upon the financial fundamentals to take the Company to Investment Grade. 33
34 34 Questions & Answers "In God We Trust, Nature We Respect" IR Contacts: ir@jbs.com.br +55 11 3144 4055 www.jbs.com.br/ir 34