35
0 0 4 th Quarter 2009 Results In God We Trust, Nature We Respect” JBS S.A. March 8 th , 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

Jbs Presentation 4 Q09

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Page 1: Jbs Presentation 4 Q09

00

4th Quarter 2009 Results

“In God We Trust, Nature We Respect”JBS S.A.

March 8th, 2010

32 51 73 150 185345 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

Page 2: Jbs Presentation 4 Q09

Presenters

Jeremiah O’Callaghan

Investor Relations Director

Joesley Mendonça Batista

Chief Executive Officer

Guilherme Arruda

Investor Relations

1

Page 3: Jbs Presentation 4 Q09

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

Page 4: Jbs Presentation 4 Q09

Our Values

Excellence

Planning

Determination

Discipline

Availability

Openness

Simplicity

3

Page 5: Jbs Presentation 4 Q09

Agenda

Company Overview

Market Overview

4Q09 Highlights

Short Term Outlook

Final Considerations

4

Page 6: Jbs Presentation 4 Q09

Company Overview

5

Page 7: Jbs Presentation 4 Q09

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

Page 8: Jbs Presentation 4 Q09

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

Page 9: Jbs Presentation 4 Q09

EBITDA Growth

• JBS remains a Growth Company.

*Pro forma including Bertin and Pilgrim’s Pride.

Source: JBS

8

32 51 73150 185

345432

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

Page 10: Jbs Presentation 4 Q09

Our Strategy

2005/2006Adequate Financial Structure

2007/2008Global Production

Platform

2009/2010Global Sales &

Distribution Platform

2011/2012Value 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 forWorkingCapital

Equity to

FinanceGrowth

Cooked Products

Case ReadyProducts

Global Brands

MarketingInvestments

Minced Products

Fresh Products

Cured Products

Ready to EatProducts

- 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

Page 11: Jbs Presentation 4 Q09

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

Page 12: Jbs Presentation 4 Q09

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

Page 13: Jbs Presentation 4 Q09

Shareholders

12

Controlling Holding

59%

BNDESPAR19%

Individual1%

Foreign Investors

10%

Others10%

Page 14: Jbs Presentation 4 Q09

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

CPilgrims 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

Page 15: Jbs Presentation 4 Q09

Market Overview

14

Page 16: Jbs Presentation 4 Q09

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

Page 17: Jbs Presentation 4 Q09

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

Page 18: Jbs Presentation 4 Q09

Source: Secex

Brazilian Beef exports

(Thousand Tons)

1,086

1,218

1,4911,425

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

Page 19: Jbs Presentation 4 Q09

Source: USDA ERS

1.8671.888

1.433

1.146

697

461

2.5202.449

2.269

2.4672.412

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

Page 20: Jbs Presentation 4 Q09

Source: USDA ERS

4.128

4.667

3.1422.995

2.667

2.181

1.7171.6121.560

1.2871.278

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

Page 21: Jbs Presentation 4 Q09

Source: USDA ERS

6.9067.109

6.070

5.3675.333

4.9975.0134.942

5.738

5.1384.980

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

Page 22: Jbs Presentation 4 Q09

Strong Long-term Industry Fundamentals

Meats Consumption Per Capita

Per c

ap

ita c

on

su

mp

tion

(kg

/cap

ita)

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

Page 23: Jbs Presentation 4 Q09

4Q09 Highlights

22

Page 24: Jbs Presentation 4 Q09

Highlights for the 4th Quarter 2009

• Net Profit of R$127.9 million in 4Q09.

• Net Revenue for 2009 was R$34,311.8 million, representing a 13.1% increase y-o-y.

• In 4Q09 the consolidated EBITDA increased 49.6% compared to 4Q08, from

R$265.9 million to R$397.8 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 R$55,223.6 million, 82.0% higher than 2008.

• EBITDA pro forma of R$3,058.0 million in 2009, increase of 164.5% over the

previous year.

23

Page 25: Jbs Presentation 4 Q09

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

Page 26: Jbs Presentation 4 Q09

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 (%)

2.82.7

2.9 2.8 2.8

4Q08 1Q09 2Q09 3Q09 4Q09

108.4126.0

104.6

59.760.4

2.2% 2.2%

3.6% 3.8%4.5%

4Q08 1Q09 2Q09 3Q09 4Q09

600 526 554 559606

4Q08 1Q09 2Q09 3Q09 4Q09

25.6

7.5

24.7

15.3

28.6

4.3%

1.4%

4.5%

2.7%

4.7%

4Q08 1Q09 2Q09 3Q09 4Q09

162144 144 146 141

4Q08 1Q09 2Q09 3Q09 4Q09

8.3

5.66.6

9.7

7.0

5.1%3.9% 4.6%

6.6%

5.0%

4Q08 1Q09 2Q09 3Q09 4Q09

1.61.4

1.7 1.71.7

4Q08 1Q09 2Q09 3Q09 4Q09

25

Page 27: Jbs Presentation 4 Q09

Debt

• The Net Debt/EBITDA reduced from 3.3x in 3Q09 to 3.1x in 4Q09.

• JBS raised US$2.0 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

5,479.614,429.8

Page 28: Jbs Presentation 4 Q09

Revenue Distribution by Market

2009 2008

Source: JBS Source: JBS

E x ports

23%

Domes tic

Market

77%

E x ports

33% Domestic

Ma rket

67%

27

Page 29: Jbs Presentation 4 Q09

JBS Consolidated Exports Distribution

JBS Exports 2009

Source: JBS

JBS Exports 2008

28

Mexico18%

Russia13%

E.U,11%Japan

9%Canada

8%

Middle East7%

Hong Kong5%

South Korea4%

Taiwan4%

USA3%

China3%

Others15%

US$ 5.6 billion

Japan13%

E.U.11%

Russia10%

Canada8%

Mexico8%

Africa and Middle East7%

South Korea6%

Hong Kong6%

USA5%

China4%

Taiwan2%

Others19%

US$ 5.0 billion

Page 30: Jbs Presentation 4 Q09

Short Term Outlook

29

Page 31: Jbs Presentation 4 Q09

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

Announcement ofthe PPC acquisition by JBS

Closing of the acquisition

Pilgrim’s Pride Stock Price

Source: Bloomberg

Page 32: Jbs Presentation 4 Q09

A Closer look at synergies – Bertin S.A.

• R$145 million implemented by end of 1Q10 in packaging,

industrial processes, formulation and corporate.

• R$100 million further synergies to be realized particularly at

corporate and exports in the coming six months.

• Total annual synergies expected to reach R$500 million by

2011.

31

Page 33: Jbs Presentation 4 Q09

Final Considerations

32

Page 34: Jbs Presentation 4 Q09

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

Page 35: Jbs Presentation 4 Q09

3434

Questions & Answers

“In God We Trust, Nature We Respect”

IR Contacts:

[email protected]

+55 11 3144 4055

www.jbs.com.br/ir34