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Agenda
Company Overview
Market Overview
3Q10 Highlights
Who We Are
Our Mission
To be the best at what we set out to do, totally focused on our business, ensuring the best products and services for our customers, solidity for our suppliers, satisfactory profitability for our shareholders and the certainty of a better future for all our employees.
Our Values
Excellence Planning Determination Discipline Availability Openness Simplicity
Corporate Structure
CHAIRMAN JBS S.A. Joesley Batista
Investors Relations
Jeremiah OCallaghan / Guilherme Arruda
Jerry has a Engineering Degree from the University of Cork College in Ireland. Immigrated to Brazil in 1979. Started working in the Beef Sector in 1983 and in JBS in 1996 in order to develop the Trade Area and eventually became the Investors Relations Officer. Guilherme graduated in Business and Economics from the University of California. Start in the Company in 2009 after working for 7 years for BTG Pactual.
Started working at JBS in December of 2001 and later became a member of the Executive Board in January of 2007.
Marco has more than 24 Roberto has more than 20 Jos Luiz has a degree years in the Leather in Accounting and has years of experience in the Industry. Was been working in the Beef Protein Sector. Worked responsible for Sector since 1975. 14 for more than 20 years in incorporating BMZ Hides year in Bertin and Bertin. with the JBS Group. started at JBS in 1997. January 2010 became the Director of New Business.
Corporate Structure
CEO President JBS S.A. Wesley Batista
Bill has learned the Beef Industry from the ground up. Right out of college, he began learning the business at Cargill where he worked for 25 years. He was a general plant manager and eventually went to build a meat processing facility in Canada. He later became the VP of Operations, then was the President of the Beef Business, and eventually became the president of Cargill Meat Solutions. Bill joined JBS in 2010 as the President of the US Beef Business.
Martin has a degree in Andr has a degree in Biology from the Economics from the University of Eastern Universidade Federal Illinois. Worked in Swift Fluminense, a for his whole life, having specialization in started the company as a Marketing from PUC-SP, manager trainee in 1983. a MBA from Fundao In 2007 was given the Don Cabral and a position of president of the masters in Economics Pork Division of JBS USA. from Universidade de Brasilia. Worked more than 20 years in the banking sector and started at JBS USA in 2007 after the Swift acquisition.
Shareholders
Source: JBS
Chicken
Pork
Hides / Leather
Dairy
Lamb
1st
Global 65
000 heads/day:
2nd
Global 39
mm heads/day:
3rd
U.S.A. 3
000 heads/day:
1st
Global 23
000 hides/day:
3rd
Brazil 7
000 tons/day:
1st
Global 6
000 heads/day:
Production Units
41.7 1.0
Geographic Presence and Installed Capacity
68.3
5.4
5.0
28.8
9.0 3.0 0.9
7.3
49.0
6.0 6.0
4.0
20.0
0.6
2.0
Total:
89.4
Total: 7.9
Total: 49.0
Total: 82.3
Total: 5.4
Total: 24.0
Well-Recognized Brands
Our Strategy
Growth 2% 8%
16 %
5% Distribution Center Sales Offices
Agenda
Company Overview
Market Overview
3Q10 Highlights
10
47.7%
EU - 27
North America
7.5%
41.4%
23.7%
East Asia
Central America
29% 70.2%
South America
32.2%
23.3%
Oceania
11
Source: USDA
12
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Pork (US$/MT)
Beef (US$/MT)
Chicken (US$/MT)
Source: USDA
13
8000
7000
6000
5000
4000
3000
2000
1000
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: USDA
14
European Union
1.1
0.9
Million tons
3.2
0.6
8.9
3.7
Prod.
Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
China 0.2
19.1
21.6
15.1
22.5
Prod.
Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
Brazil
0.1
India -
Thailand
7.6
17.0
0.8
3.7 9.4
3.8
1.9
1.1
Prod.
Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
15
Canada
0.3
Million tons
22.7
2.2 1.2
Prod. Imports Exports Cons.
21.6
Prod.
Imports
Exports
Cons.
United States
Russia -
0.5
2.5
1.1
9.9
11.9
3.1
4.1
Prod.
Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
Mexico
-
China
0.8
1.6
0.2
56.4 (0.3)
3.0
Prod. Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
16
Million tons
8.0
0.2
12.8
8.6
Prod.
Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
Brazil
China
0.2
1.2
6.0 15.4
9.5
Prod. Imports Exports Cons. Prod. Imports Exports Cons.
7.3
8.5
India
Australia
0.4
1.6
3.6
3.2
4.1
3.7
2.4
0.8
Prod.
Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
Prod.
Imports
Exports
Cons.
17
Beef
Exports Brazil vs USA
5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
2,7%
500,000
400,000 300,000 200,000 100,000 0
2005 2006 2007 2008 2009 Jan-Nov Jan-Nov 2009 2010
600,000
400,000 200,000
500
0
2005 2006 2007 2008 2009 2010
18
Chicken
Exports Brazil vs USA
The reopening of the Russian market in late August should boost US chicken exports in the latter half of 2010.
1,200 1,000
-1,5%
1,800
1,600
4,000,000
6,0%
1,400 1,200
3,000,000
2,000,000
1,500,000
1,000,000 500,000 -
2,000,000
1,000,000
400 200
2005
2006
2007
2008
2009
JAN-NOV JAN-NOV 09 10
19
Agenda
Company Overview
Market Overview
3Q10 Highlights
20
Highlights - 3Q10
Net revenue for the 3Q10 was R$14,069.6 million, practically stable in comparison to the 2Q10, which was R$14,116.3 million. Consolidated EBITDA increased by 2.6% q-o-q, reaching R$1,026.4 million for the 3Q10. EBITDA margin was 7.3% in the quarter. The main operating highlights were: JBS Mercosul operations presented EBITDA of R$363.7 million and EBITDA margin of 10.4% for the quarter, versus 9.5% in 2Q10, despite challenges such as cost of raw materials and FX-rate. JBS USA Pork presented EBITDA of US$90.8 million and a historical EBITDA margin of 11.8% in 3Q10. JBS USA Chicken (PPC) had an EBITDA of US$170.0 million, 33.2% higher q-o-q, with EBITDA margin of 9.9%. Consolidated customer base grew 15.3% q-o-q, primarily in Mercosul, and now exceeds 350 thousand clients globally.
21
Export Growth
4,500.0 4,000.0 3,500.0 400.0 350.0
3,000.0
2,500.0 2,000.0 1,500.0 1,000.0 500.0 4Q09 1Q10 2Q10 Exports (mil tons) 3Q10
300.0
250.0 200.0 150.0
100.0
50.0 4Q09 1Q10 2Q10 3Q10
Customers (thousand)
22
1,000.0 862.0
1,026.4
14,116.3
14,069.6
12,550.3
8,379.9
397.8
7,408.9
291.9
-11.6%
69.4%
12.5%
-0.3%
36.3%
116.7%
16.0%
2.6%
3Q09
4Q09
Source: JBS
1Q10
2Q10
3Q10
3Q09
4Q09
1Q10
2Q10
3Q10
23
3.5 3.0
3.5
3.3
3.4
1.8
606
1.7
2.8
1.7 1.7
2.8
2.8
559
646
739
772
1.7
1.7
3Q09
4Q09
1Q10
2Q10
3Q10
3Q09
4Q09
1Q10
2Q10
3Q10
3Q09
4Q09
1Q10
2Q10
3Q10
2Q09
3Q09
2Q10
3Q10
352.6
2.9%
334.5
363.7
194.9 170.5 108.4 126.0
90.8
170.0
103.5
112.2 47.3
3Q09
4Q09
1Q10
2Q10
3Q10
3Q09
4Q09
1Q10
2Q10
3Q10
3Q09
4Q09
1Q10
2Q10
3Q10
2Q09
3Q09
2Q10
3Q10
24
Exports = 28%
Exports = 29%
Mercosul 27%
25
3Q10
2Q10
Mercosul 36.4%
26
Taiwan Canada 2% 4%
Others 12%
USA 7%
E.U. 7%
Russia 10%
Hong Kong 8%
Japan 10%
US$2,326.9 Millions
US$2,3331.0 Millions
Source: JBS
27
Debt Profile
The ratio of net debt to EBITDA was 2.9x in the quarter, slightly less than 3.0x in 2Q10.
It is important to note that the liquidity of the balance sheet continues to improve, as the cash position amounted to R$4,402.5 million (25.2% higher than 2Q10), almost 90% of short-term debt, compared to 70.0% in the previous quarter and 55.0% in 1Q10. Additionally, the debt profile also improved. ST debt reached 33.0% of total debt in the 3Q10, compared to 36.0% in the 2Q10 and 40.0% in the 1Q10.
Leverage
3.3 3.1 3.1 3.0 2.9x*
ST / LT Profile
60%
64%
67%
40%
1Q10
36%
2Q10
33%
3Q10
3Q09
4Q09
1Q10
2Q10
3Q10
Short term
Long term
Source: JBS *LTM including Bertin and Pilgrims Pride pro-forma. EBITDA Margin EBITDA
28
Agenda
Company Overview
Market Overview
3Q10 Highlights
29
Stock Performance
JBS shares fell 7.5% when compared with the 2nd Quarter closing price. The Ibovespa and the
S&P 500 Indexes increased 13.4% and 11.1% respectively, in 3rd Quarter 2010.
The sector, in general, was impacted by factors such as FX-Rate and rising input cost.
Aug-10
JBSS3 IBOV
Sep-10
30
Ongoing Actions
Pending issues
Actions
INALCA JBS
JBS bought 50% of Inalca JBS in 2008 paying a total of 218.5 million.
Argentina
more efficient industrial complex. Laid off 1,500 employees from 4 plants. Negotiated commercial agreements that will increase plants utilization and deficiencies as well as maximizing the Pilar Distribution Center. Transferred headquarters from Buenos Aires to Rosario, reducing administrative expenses. 3Q10 income already reflects an improvement over the previous quarter due to these actions.
31
Ongoing Actions
Pending issues
Actions
JBS paid a premium of R$ 521,940,000.00 to its Debenture holders
on December 23rd, 2010. JBS communicated that it is in advanced stages of negotiation with
Convertible Debentures
The management is in advanced studies supported by specialized consultants, aiming to rebalance the Company's debt, according to the cash flow of each region.
32
Institution
Banco do Brasil Bradesco BTG Pactual Goldman Sachs HSBC Merrill Lynch BofA Santander Safra UBS Votorantim
Analyst
Mariana Peringer Ricardo Boiati Fbio Monteiro Gustavo Wigman Pedro Herrera Fernando Ferreira Luis Miranda Erick Guedes Gustavo Oliveira Luiz Carlos Cesta
Recommendation
Buy Market Perform Buy Neutral Overweight Neutral Buy Outperform Neutral Neutral
Target Price
13.18 8,80 9.30 7,30 9.50 8.00 9.60 10.35 8.80 8.80
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34