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JBS Institutional Presentation June/July 2015
2JBS Global
2
LTM to 1Q15 Net Revenue of R$127.9 billion
Bovines40%
Poultry20%
Pork10%
Prepared products and
others30%
0%
Revenue LTM to 1Q15R$127.9 bi
Second largest global food company according to Bloomberg ranking
Capacity to process 100,000 bovines per day in 73 units in seven countries
Capacity to process 72,000 hogs per day in 11 units in Brazil and the United States
Capacity to process more than 13 million birds per day in 58 units in the Americas
Capacity to producemore than 100 thousand hides per day in 31 units worldwide
More than 215 thousand employees around the world
Note 1. Based on 2013 Net Sales
3Presence in 20+ countries, Exports to 150+ countries and more than300,000 clients
Note 1. It considers only domestic salesNote 2. Includes beef and lamb operations in the USA and AustraliaNote 3. Includes leather and hides operations in Brazil, Uruguay, Mexico, Germany, Vietnam and China and also Rigamonti operations in Italy.
JBS Global
Tokyo
Hong Kong
Shanghai
Taipei
Santiago
Dubai
Moscow
London HamburgGhent
ChicagoToronto
So Paulo(headquarter)
Sales officeSales office presenceProduction Platform
North America
~49% of JBS revenue,
South America
~17,6% of JBS revenue,3
Seoul
Caracas Exports
~30,7% of JBS revenue17% of JBS
Revenue is denominated in
R$
83% of JBS Revenue is
denominated in US$
4JBS Historical Performance
LTM to 1Q15, JBS reached R$127.9 billion in net revenue, EBITDA of R$12.1 billion,equivalent to an EBITDAmargin of 9.5%, and net income of R$3.36 billion.
EBITDA Margin(%)EBITDA (R$ billion)Net Revenue (R$ billion)
4,3%3,8% 3,7%
5,5%5,0%
5,8%6,6%
9,2% 9,5%
0,6 1,2 1,3 3,5 3,1 4,4
6,1
11,1 12.1
14,1
30,3 34,3
54,7 61,8
75,7
92,9
120,5 127,9
2007 2008 2009 2010 2011 2012 2013 2014 LTM1T15
Updating the results using FX at the end of 1Q15, net revenue reached R$153.9 billionand EBITDA LTM was R$14.5 billion.
5JBS Performance Since IPO in 2007*
Market CapitalizationMultiplied by
since 2007
7.7x
30xSales Growth
to R$128 billion
Net Income CAGR
36%
EBITDAImprovement
520bpsfrom 4.3% to 9.5% margin
*LTM to 1Q15
6Value Creation
EBITDA and EBITDA margin
Proven M&A and turnaround track recordMore than 50 acquisitions in the last 10 years
2007Pre JBS
LTMQ1/2015
2009Pre JBS
LTMQ1/2015
LTMQ1/2015
2013Pre JBS
2,288.5M
1,506M
1,486M
7Step 3: Develop leading consumer brands
Step 2:Expand global distribution platform to reach clients; sell direct to customers in foreign markets
Step 1:Develop efficient and diversified global processing platform; optimize mix
Processing platform
Branding
Value added products
Sales and distribution platform
4+%
8+%
10+%
JBS has created an integrated platform that increasingly capturesmaximum value across the value chain
JBS Strategy
80,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
2000 2005 2010 2015E
Strong Global Industry Fundamentals
The Global Middle Class is Growing(1)
1.8 Billion 3.2 Billion
4.9 Billion
2009 2020 2030
Supporting Global Consumption Growth(2)
228,1 278,2
338,3
2001 2008-2010 2020
Meat Consumption Forecast (tons in mm)
22%
____________________
(1) Source: OECD.(2) Source: FAO OECD.(3) Source: Foreign Agricultural Service, Official USDA Estimates. Expressed in millions of MT.
Global Protein Trade(3) MT in 1000s
LambBeefPorkPoultry
14,296
28,714
21.6%
19,86823,358
9Australia24%
India21%
Brazil19%
USA12%
Mercosul9%
Canada4%
Other11%
USA32%
EU32%
Canada18%
Brazil8%
Other11%
Global Protein Trade Largest Exporters & Importers
(1) May contain meat of other bovines.Source: USDA FAS; Company defined regional grouping.Note: Bolded countries indicate JBS presence.
Brazil33,9%
USA31,6%
EU10,8%
Asia9,9%
Middle East4,6%
Mercosul3,5%
Other5,6%
Asia36%
Middle East14%Russia
8%
USA8%
Africa8%
Mexico7%
Other19%
Top Beef Exporters in 2014 (68% JBS Presence) Top Chicken Exporters in 2014 (65% JBS Presence)
Top Pork Exporters in 2014 (40% JBS Presence) Total Imports in 2014
10
Why JBS?
GLOBAL LEADERCONSISTENT GROWTH AND MARGIN EXPANSION
OPERATIONAL EXCELLENCE
DIVERSIFICATION
BEST-IN-CLASS MANAGEMENT
GEOGRAPHY
PROTEIN
PRODUCT PORTFOLIO
CONSISTENT AND MORE
STABLE EARNINGS
BEST-IN-CLASS COST STRUCTURE
11
Consolidated Results1Q15
12
1,750
2,758
6.6%
8.2%
1Q14 1Q15
26,419
33,819
1Q14 1Q15
1Q15 Consolidated Highlights
EBITDA Margin (%)
Consolidated Net Sales (R$ Million) Consolidated EBITDA (R$ Million)
28.0%57.6%
Highest Revenue and EBITDA in a first Quarter.EBITDA grew more than Revenues.160 bps expansion in EBITDA margin over 1Q14.
13
70
1,394
0.024
0.482
1Q14 1Q15
505
4,538
1Q14 1Q15
1Q15 Consolidated Highlights
Earnings per share (R$)
Cash Generation (R$ Million) Consolidated Net Income (R$ Million)
Cash generation reached historical high for a first quarter.Free Cash Flow generation of R$3.8 billion prior to acquisitions.Effective hedging strategy to protect results.
1891.6%799.2%
14
Africa and Middle East14,7%
Mexico 12,4%
South America 12,1%
Greater China 11,5%
Japan 9,5%USA 7,1%
E.U. 7,1%
Russia 6,4%
South Korea 5,4%
Canada 2,5%
Others 11,3%
1Q14US$3,145.5
million
JBS Consolidated Exports Breakdown in 1Q15 and 1Q14
Note 1. Including China and Hong Kong
South America14,2%
Africa and Middle East13,4%
Greater China11,9%
Mexico11,9%USA
11,0%
Japan9,9%
E.U.6,7%
South Korea6,2%
Russia3,7%
Canada2,3%
Others8,7%
1Q15US$ 3,547.3
million
Growth of 13% in 1Q15 exports compared to 1Q14
15
23,679
27,721
5,500
3.3x
2.3x
1Q14 1Q15
10,464
8,641
1,714
1Q14 1Q15
1Q15 Consolidated Highlights
Net Debt (US$ Million) Net Debt (R$ Million) / Leverage
10,356
1.9x
33,221
Leverage (x)Net Debt
Acquisitions and dividends
Acquisitions and dividends
US$1.8 billion debt reduction compared to 1Q14 when analyzed beforeacquisitions.Leverage would have been 1.9x, prior to acquisitions.Primos Revenue and EBITDA are not considered in a pro-forma analysis.
16
29%
28%
30%
34%
29%
71%
72%
70%
66%
71%
1Q14
2Q14
3Q14
4Q14
1Q15
Short Term Long Term
-573
4.069
2.067
5.311
680
9.027
3.672
8.969
Short term* 2016 2017 2018 2019 2020 2021 after 2021
The Company ended the quarter with R$14,120.8 million in cash,
equivalent to 104% of short term debt, approximately.
JBS USA has US$1.5 billion fully available under credit
facilities which, if added to the current cash position,
represents 140% of short term debt.
The percentage of short term debt (ST) in relation to total
debt was 29% in 1Q15.
* Net of Cash
Debt Profile and Maturity
Debt Profile
Maturity (R$ million)
17
JBS Credit Ratings
Source: Moodys, Fitch and Standard & Poors.
Jan-06 Jul-10 Mar-13 Apr-15 May-15
Ba1 / BB+
Ba2 / BB
Ba3 / BB-
S&PMoodys
B1 / B+
JBS Credit Ratings have been upgraded consistently
Current Ratings: Moodys Ba2 and S&P BB+
Fitch
May-15 Outlook STABLE STABLE POSITIVE
18
JBS SA Shares Performance
JBSS3 vs IBOV
Period JBSS3 IBOV
2014 30.2% -0.7%
Jan-May 2015 46.8% 14.4%
19
Business Units
20
EBITDA LTM to 1Q15Net Revenue LTM to 1Q15 R$14.0 billion
JBS Foods
Leading producer of prepared foods (PFPs) and fresh poultry and pork products
+66,000 employees
R$2,288.5 million16.4% Margin
Brazil
30 slaughterhouses and deboning units
08 slaughterhouses and deboning units
23 PFP units
18 distribution centers
1
MTBA
MG
RJ
PR
RS
MS
DF
57
2
SC 8 3 7
SP 4 3
12
611
3
11
212
21
1
1
CE1
PE 1
1
23
2
3
Notes. Industrial Complex: location with one or more units of production;
1
1
AM
1
2nd largest producer and exporter of poultry and pork in Brazil
Large production platform, with 61 production units1 and nearly 66,700employees
National distribution platform serving ~79,000 points of sale
Strong international presence, exporting to over 100 countries
Complete product portfolio with leading and well-known brands
Uniquely positioned as the natural consolidator of the sector in Brazil, allowing accelerated growth
5.6 million birds per day
21,200 hogs per day
80 thousand tons per month
Operational Platform
18 distribution centers
Production units located in the south, southeast and mid-west regions
Production units located in the south and mid-west regions
Production units located in the south, southeast, northeast and mid-west regions .
In 13 states
21
379.8
616.013.7%
15.9%
1Q14 1Q15
JBS Foods 1Q1512%
20%
44%
7%
18%
% NR JBS S.A.
Strong revenue growth, organic and inorganic.Integration success and synergy capture.Continuous improvement in quality indicators, level of serviceand execution.Market share gains in several product categories.
EBITDA (R$ Million)Net Revenue (R$ Million)
39.4% 62,2%
Strong appreciation and recognition of Seara brand.
2,780.0
3,874.5
1Q14 1Q15
22
EBITDA LTM to 1Q15Net Revenue LTM to 1Q15 R$27.1 billion
~ 55,000 bovines per day
90,000 hides per day
44 distribution centers
09 related businesses
92% in Brazil, 3% in Argentina, 3% in Paraguay and 2% in Uruguay
Facilities in Brazil, Argentina, Uruguay, China, Vietnam and Mexico
11 central and 32 regional in Brazil and 01 in Argentina
Biodiesel
Can making
Collagen
JBS Carriers
Trading
Hygiene and Clean
Casings
TRP Complementary to JBS Carriers
Recycling
JBS Mercosul
Beef production in Brazil, Argentina, Paraguay and Uruguay, in addition to leather and other Related Business
Operational Platform +70,000 employees
R$2,099.4 million7.7% Margin
Argentina
Leadership in beef production
05 beef processing facilities01 distribution center01 tannery
ParaguayJBS is the leader in beef processing and has around 25% of market share in exports of Paraguay
02 beef processing facility01 tannery
Uruguay
Great access to export markets; the only country to export fresh beef to the US01 beef processing02 tanneries
Brazil
47 beef processing facilities
06 feedlots
29 tanneries
43 distribution centers
1
15
9
3
1
11
6
43
4
42 1
1
32
1
2
6
2
4
1
8
5
3
2
21
1
1
21
1
1 23 63
PAAM
AC RO MT
MA
PEBA
MG
ESRJ
SP
SC
PR
RS
MS
1
GO
1 CE
23
596.1
376.4
10.4%
5.6%
1Q14 1Q15
5,725.3
6,782.3
1Q14 1Q15
JBS Mercosul 1Q15 % NR JBS S.A.
Profitability impacted by reduced cattle availability forprocessing due to cow retention and a decrease in Brazilianexports in 1Q15.
Continued investment in Friboi brand for differentiation anddevelopment of its products in the Brazilian market.
EBITDA (R$ Million)Net Revenue (R$ Million)20%
18.5%-36.8%
Focus on sales expansion of higher value-added products.
24
Australia and New Zealand
Leadership in beef exports
Leadership in the processing of lamb (22,000 lamb per day)
#1st in the Food Industry Ranking
Growth of 17% in revenues from 2013 to 2014
01 beef processing facility01 feedlot (bovine)01 trading
15 processing facilities 09 bovine, 05 lamb and 01 hogs
07 feedlots 05 bovine and 02 lamb
01 tannery14 distribution centers03 case ready and 03 small goods facilities
~41,000 bovines per day
11,000 hides per day
14 distribution centers
09 beef processing facilities
11 feedlots
01 tannery
06 carriers units
28,000 in the US
4,000 in Canada
9,000 in Australia
5,000 in the US
6,000 in Australia
14 DCs in Australia and 06 carriers units in the US
JBS USA Beef
Beef production in the United States, Canada and Australia
Operational Platform United States
Canada
Growth of 49% in revenues from 2013 to 2014
16 feedlots (bovine)
11 in the US/ Capacity of 1.0 million bovines
01 in Canada / Capacity of 70,000 bovines
05 in Australia / Capacity of 152,000 bovines
Note 1. Source: Food&Drink Business Magazine; Note 2. Includes Primo Smallgoods
+30,000 employees
EBITDA LTM to 1Q15Net Revenue LTM to 1Q15 US$22.3 billion US$1,125.2 million5.0% Margin
1
NE 21
CO 141
UT11
TX1312
WI11 MI
1
PA1
AZ
1
ID 1
KS1
OK1
4
2
1
2
2
2
1
1
1
4
1
1
1
1
25
-22.5
186.6-0.5%
3.6%
1Q14 1Q15
4,520.7
5,190.5
1Q14 1Q15
JBS USA Beef (including Australia and Canada) 1Q15% NR JBS S.A.
Strong recovery in US cattle herd.Production diversification (Australia, Canada, fed cattle andregional units) provides greater flexibility and agility to adaptto market conditions.Acquisition of Primo Group, leader in the production ofprocessed products in Australia and NZ, expands theCompany's presence in value-added products with brands.
EBITDA (US$ Million)Net Revenue (US$ Million)
14.8%
44%
26
~ 51,300 hogs per day
03 hogs processing facilities
02 case ready facilities
01 lamb processing facility
100% in the US
JBS USA Pork
Pork production in the United States
United States
CO
1
IA1
KY 1CA1
1
02 case ready facilities
~3,000 lamb per day
Main Brands
Swift PremiumDry Rubbed Ribs
Swift PremiumRubbed Loin Filet
Products
Swift PremiumBoneless Backrib
Swift PremiumBoneless Pork Chops
Operational Platform+6,000 employees
EBITDA LTM to 1Q15Net Revenue LTM to 1Q15 US$3.7 billion US$415.9 million11.3% Margin
Convenience products NC1
MN
27
896.9
762.3
1Q14 1Q15
JBS USA Pork 1Q15% NR JBS S.A.
Growth in number of animals available for processing andconsequent increase in sales volume.Organic growth in ready to cook and convenience productssegment.
7%
-15.0%12,4%
EBITDA (US$ Million)Net Revenue (US$ Million)
82.9
93.29.2%
12.2%
1Q14 1Q15
12.4%
28
United StatesOperational Platform
~ 8.1 million birds per day
6.5 million in the US
250,000 in Porto Rico
1,4 million in Mexico
JBS USA Chicken (Pilgrims Pride Corporation - PPC)Poultry production in the United States, Porto Rico and Mexico
TX17 distribution centers
Located in Mexico
Mexico
With Tyson acquisition, PPC now have an additional of three facilities, adding 600,000 birds per day of capacity and 5,400 employees
06 poultry processing facilities17 distribution centers
4
1
3
AL
AR1
NC 2
FL1
GA7
KY 1
LA
Porto Rico
SC1
TN 1
VA1
WV1
01 processing facility
+ de 3,500 contract growers
36 hatcheries
28 feed mills
+44,000 employees
EBITDA LTM to 1Q15Net Revenue LTM to 1Q15 US$8.6 billion US$1,505.3 million17.5% Margin
24 processing facilities
05 case ready facilities
1
1
11
1
6
1
29
205.2
363.5
10.2%
17.7%
1Q14 1Q15
2,018.12,052.9
1Q14 1Q15
JBS USA Chicken (Pilgrims Pride Corporation - PPC) 1Q15% NR JBS S.A.
Relentless focus on operational excellence.Effective strategy in product portfolio and management of saleschannels.Sales growth in value-added products.
1.7%
77.2%
18%
EBITDA (US$ Million)Net Revenue (US$ Million)
30
JBS Mission
To be the best in all that we do, completely focused
on our business, ensuring the best products and services
to our customers, a relationship of trust for our suppliers, profitability for
our shareholders and the opportunity
of a better futurefor all of our teammembers.
31
JBS Values
DETERMINATIONBe relentless. Deliver superior results. Adopt a sense of urgency. Make things happen.
SIMPLICITYBe practical. Focus on what is important. Adopt a hands-on approach. Avoid bureaucracy.
AVAILABILITYBe receptive and open. Always be prepared and motivated to take on new challenges.
HUMILITYListen. Be helpful and thoughtful. Act with respect. Prioritize the team over yourself. Value the opinion of others.
SINCERITYBe direct, truthful and transparent. Respectfully express opinion. Know how to say no, but be positive and offer solutions.
DISCIPLINEBe punctual. Fulfill commitments. Deliver results. Do not make excuses.
OWNERSHIPBe committed to results. Focus on details. Take responsibility.