Presentation JBS
Presentation JBS
Presentation JBS
February, 2010
Our Values
The Foundation Of Our Culture
Planning Determination Discipline Availability
Openness
Simplicity
1
Who we are
8 8
Batista Family
Bertin Family
~40% *
JBS S.A.
100% 80% - 75%
Investor
Bertin
Other subsidiaries
20% - 25%
Old shareholders
36%
Pilgrims Pride
* Controlling shareholders estimates
Shareholders Base
Free Float
Individual 2%
3
Corporate Governance
JBS has embraced a Corporate Governance model with a view to implant the best practices in the Company. The view is that the model demonstrates transparency and confidence to the public, guaranteeing the best products and services for customers, solidity for suppliers, satisfactory return for shareholders and the certainty of a better future for all JBS collaborators. Novo Mercado
JBS is part of the of BM&FBOVESPAs Novo Mercado, is in accordance with all requirements of this market and with the obligations imposed by the current Brazilian legislation.
Board of Directors - JBS Board of Directors is formed by 7 members a president, a vice-president, 2 effective councils without specific denomination and 3 independent effective councils. Audit Board - The Audit Board shall consist of at least 3 and at most five 5 sitting members and alternates in the same number, shareholders or not, liable to be elected or dismissed at any time of the General Meeting. Board of Executive Officers - The members of the Companys board of executive officers are elected by the board of directors, for three -year terms, and are eligible for reelection.
The Board of Directors has approved the establishment of the following Committees: Audit, Financial, Personnel Management and Corporate Strategy, that incorporates the Sustainability matters.
JBS is completely in accordance with the CVM 358 instruction that revised and consolidated the requirements regarding the disclosure and use of information related to material facts and acts of publicly held companies, including the disclosure of information in the trading and acquisition of securities issued by publicly held companies.
JBS Executive Officers have developed a Conduct and Ethic Manual according to the corporate governance best practices concept. The conduct code embraces the relationship between the members of the board, shareholders, employees, suppliers and all the other stakeholders.
JBS History
Bertin Association*
JBS History has been built through more than 30 acquisitions in 15 years with appropriated capital structure and management
Net Sales (in US$ billion) Companies and assets acquired
Pilgrims Pride
Inalca Swift Foods Co. Maring (Amambay) Berazategui (Rio Platense) Colonia Caroya SB Holdings JV Beef Jerky Rio Branco Venado Tuerto Pontevedra (CEPA) Tasman Smithfield Beef Five Rivers
30.3
Araputanga (Frigoara)
Pedra Preta (Frigo Marca) Rosrio (Swift ARG) San Jose (Swift ARG)
19.8
12.7
0.3 1996
0.4 1997
0.4 1999
0.5 2000
0.5 2001
0.4 2002
0.7 2003
1.2 2004
1.5 2005
2008
(2)
2009
(3)
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); Pilgrims Pride Sep09 (Estimated); Bertin LTM J un09 * Transaction subject to customary conditions for this type of business
Source: Companies
Brief Description
JBS Argentina
5,059
JBS USA
16
24,295
Pilgrims Pride
37
41,000
JBS Austrlia
10
6,995
Inalca JBS
2,019
3,000 B 9 0 ,3 9 0 B 4 8 ,5 0 0 P 1 9 ,5 0 0 O
Tota l
140
1 2 4 ,3 6 1
Global ranking of protein companies (US$ million)1 largest global protein company
1a
28,725 28,130
12,717
12,488
12,088
10,494
9,457 6,755
Source: Companies, Exame, Valor Econmico and CNN (Global 500) 1 Based in net revenues of 2008 and including Pilgrims Pride in Bertin + JBS
Ranking
Presence
Installed capacity
Industrial units
Brazil: 39 Latin America: 8 U.S.A.: 13 Italy: 8 Australia: 10 Total: 82 U.S.A.: 34 Mexico: 3 Total: 37
Beef
Brazil / Argentina Brazil: 43,400 heads/day / Italy / Australia / Latin America: 6,700 heads /day U.S.A. / Uruguay / U.S.A.: 28,600 heads/day Paraguay Italy: 3,000 heads/day Australia: 8,690 heads/day Total: 89,790 heads/day U.S.A. / Mexico U.S.A. / Mexico: 7.2mm birds/day Total: 7.2mm birds/day
Poultry
Pork
U.S.A.
U.S.A.: 3
Leather
Brazil: 12
Dairy
Brazil
Brazil: 7
3
10
Source: JBS .
11
Beef
Beef
Beef
Beef
Beef
Dairy
Leather
Poultry
12
Our Strategy
8 8
Our Strategy
2005/2006 Adequate Financial Structure 2007/2008 Global Production Platform 2009/2010 Global Sales & Distribution Platform 2011/2012 Value Added Products & Branding
South America
Fresh Products
Cooked Products
Minced Products
North America
Australia
European Union
Cured Products
Australia
European Union
Middle East
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.
Marketing Investments
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.
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.
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.
14
Our Strategy
50%
Branding Value Added Products Sales & Distribution Platform Production Platform
Cost Reduction, Productivity, Process Optimization
12%
8%
4%
Consolidated
Financial Structure
Experienced Management
Risk Management
Average
EBITDA Margin
Foundation
15
8 8
Global Market
Others 31%
Others 31%
India 4% Argentina 5%
Brazil 15% Mexico 4% China 10% EU-27 14% Argentina 5% China 10% Brazil 13%
EU-27 15%
Others 25%
Brazil 23%
Others 38%
Australia 19% United States 11% South Korea 4% Mexico 5% Japan 10%
EU-27 8%
17
10000
140
6000
80
60 4000
40 2000 20
0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010* 2015* 2020* 2025* 2030* 2035* 2040* 2045* 2050*
Population - Developed countries Population - Developing countries Beef Consumption**
Source: UN (United Nations) and USDA *UN Estimates **Beef consumption trend considering CAGR of 2.0% (from 1960 to 2008)
18
Population (million)
180
1969/ 71
Cereals
Sugar
Meat
Source: FAO
19
3,000 2,520
2,500
2,412
2,467 2,269
2,449
2,000
1,888 1,698
1,433
1752
1698
0 1999 Mexico 2000 Canada 2001 South Korea 2002 Japan 2003 Vietnam 2004 China 2005 Hong Kong 2006 2007 Others 2008 2009
N etherlands
Until N ovember
20
5,000 4,500
4,667
4,355
4,000 3,500 2,995 3,000 2,500 2,000 1,560 1,500 1,000 500 0 1999 Japan 2000 China 2001 Hong Kong 2002 Mexico 2003 Russia 2004 Canada 2005 South Korea 2006 Australia 2007 Others 2008 1,278 1,287 1,612 1,717 2,181 2,667 3,142
3,764
3,764
2009
Until N ovember
21
8,000 7,109 7,000 6,070 6,000 4,980 5,000 4,000 3,000 2,000 1,000 0 1999 Russia 2000 2001 2002 Iraq 2003 2004 Canada 2005 Cuba 2006 Other Chicken 2007 Others 2008 2009 5,138 5,738 5,333 4,942 5,013 4,997 5,367
6,579
6,377
6,377
China (Mainland)
Mexico
Until N ovember
22
Source Secex
23
8 8
24.0%
-3.8%
-0.1%
-9.5% -44.0%
-20.4%
81.6%
-24.0%
25
-9.5%
0.6%
2Q09
Source: JBS Source: Banco Central
3Q09
2Q09
3Q09
26
INALCA JBS
Net Sales
( million)
JBS MERCOSUL
Net Sales
(R$ billion)
Net Sales
(US$ billion)
2.7
2.8
2.9 2.7
2.8
143
162
144
144
146
1.8
1.6
1.4
1.7
1.7
3Q08
4Q08
1Q09
2Q09
3Q09
3Q08
4Q08
1 Q09
2Q09
3Q09
3Q08
4Q08
1 Q09
2Q09
3Q09
5.3%
5.1 % 3.9%
4.6%
6.6%
5.6%
4.3% 3.7%
4.9% 2.9%
9.7
104.6 108.4 104.1 60.4 59.7
7.6
3Q08
4Q08
1 Q09
2Q09
3Q09
3Q08
4Q08
1 Q09
2Q09
3Q09
3Q08
4Q08
1 Q09
2Q09
3Q09
27
Debt
The net debt / EBITDA ratio increased from 2.6x in 2Q09 to 3.3x in 3Q09, reflecting the EBITDA decline when compared with 3Q08.
The company projects a reduction in leverage levels by the end of the year. The gross and net debt reduced 5.6% and 2.2%, respectively, over 2Q09.
6,226.4
5,877.1
3Q08
4Q08
1Q09
2Q09
3Q09
3T09
Source: JBS Net Debt/ EBITDA * LTM including Smithfield Beef pro-forma.
EBITDA pro-forma
28
Working Capital
JBS Brazil continues to reduce its working capital needs, which decreased from 37 days in 2Q09 to 33 days in 3Q09.
2 Quarter 2009
Clients order to JBS Production & Stock 21 dias Product Delivery CLIENT = 37 days Clients payment to JBS
SUPPLYER = 21 days
37 days
Supplyer payment
3 Quarter 2009
Clients order to JBS Product Delivery CLIENT = 33 days Clients payment to JBS
SUPPLYER = 21 days
33 days
Supplyer payment
29
Exports 24%
Exports 26%
Indonesia 3% China 4% South Korea 4% Hong Kong 5% Africa and Middle East 6%
Others 18%
Taiwan 2%
O thers 14%
USA 8%
Russia 9%
South Korea 6%
Russia 7%
Mexico 7%
USA 9%
Canada 6%
Source: JBS
30
Sustainability
Actions
Emissions, Effluents and W aste
Sustainability Policies
JBS is aware of its responsibilities as the largest beef Company in the world and all the impacts its operations generates in every region. The Company has a appropriate sustainability program in each of its units including:
Environmental Policy Procedures Adopted Informative Policy Community Relationship and Environmental Investments
50% Effluent reutilization 50% Solid waste recycling Energetic Matrix development Use of certified wood 25% Consume reduction 35% Consume reduction (2m3 per head) Flora conservation Animal origination control
Energy
Biodiversity
W ater
JBS is the first and only beef Company to register a CDM project at the UNFCCC (United Nations Framework Convention on Climate Change). The project is in validation phase at the designated national authority.
Sustainability Principles
Ecological feasability Ecological correctness Social concern
Priorities
Sustainable use of materials Partnership with organizations equally
Materials
concerned
Health and Quality of Life Climate Waste
Laws
Cultural acceptance
Society
Health Care
Formal education
The environmental and social responsibility have always been part of JBSs development and business growth. The Companys extensive experience proves the importance of the reduction of environmental impacts and the improvement of its relations with the community, throughout constant investments that focus these issues.
31
Thank You!
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.
33