2Q10 Conference Call Presentation

Published on May 2016 | Categories: Documents | Downloads: 32 | Comments: 0 | Views: 391
of 27
Download PDF   Embed   Report

Comments

Content

2nd Quarter 2010 Results
August 16th, 2010
The Company posted a landmark EBITDA of R$1.0 billion in 2Q10.

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

Presenters
Joesley Mendonça Batista
CEO of JBS S.A.

Wesley Mendonça Batista
CEO of JBS USA

Jeremiah O’Callaghan
Investors Relations Officer

Guilherme Arruda
Investors Relations
3

Agenda
Company Overview

Market Overview

2Q10 Highlights

Short Term Outlook

4

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

5

Leading, Sizeable and Diversified Business Platform
Beef
Ranking

Chicken

Pork

Hides / Leather

Dairy

Lamb

1st
Global 75
‘000 heads/day:

2nd
Global 33
mm heads/day:

3rd
U.S.A. 3
‘000 heads/day:

1st
Global 26
‘000 hides/day:

3rd
Brazil 7
‘000 tons/day:

1st
Global 6
‘000 heads/day:

Production Units

41.2 1.1

55.6

1.4

Geographic Presence and Installed Capacity

6.7 28.6 6.9 48.5 28.6 6.0 0.7 Total: 7.6 Total: 48.5 1.2 Total: 91.4 Total: 1.4 Total: 27.5 4.5

8.7
3.0 1.0 Total: 90.3

23.0

WellRecognized Brands

6

Our Strategy

Rationale
Branding
• Associating quality and branding to

increase client loyalty
• Customized and further processed

Value added products

products for the end users
• Expanding a global distribution

Sales and distribution platform

platform to reach end clients
• Developed an efficient

Production platform

and diversified global production platform

EBITDA Margin

Financial structure

Experienced management

Cost reduction, process optimization

Risk management

JBS’ Value & Strategy
7

Distribution Platform with Access to Key Markets

Growth 1 -2 % 3% 4% Growth 1 9% 13 % 8% Growth 1 7% 25 %

Growth 2% 8%

1

16 %
5% Distribution Center Sales Offices

1 Real growth of total consumption in tons – 2010E to 2015E Source – OECD-FAO

8

Agenda
Company Overview

Market Overview

2Q10 Highlights

Short Term Outlook

9

World Meat Consumption
(million tons cwe)

2000 Pork 89 70 60 219

2009 102 98 65 265

2018 120 120 75 315

Growth 2009-2018 18% 23% 15% 19% Growth 2009-2018 8% 25%

Poultry Beef
TOTAL

2000
OECD NON OECD 92 127

2009
100.4 164

2018
108.5 205

Source: OECD/FAO Agricultural Outlook 2009-2018

10

Animal protein consumption growth in the last decade
Former USSR

47.7%

EU - 27

North America

7.5%

41.4%

23.7%

East Asia

Central America

29% 70.2%

Middle East Southeast Asia
48.7%

South America

32.2%

Sub Saharan Africa

23.3%

Oceania

3

Source: FAPRI February 2010

11

Beef Exports
 Rising demand in emerging economies drove export volumes up in the semester both in Brazil and in the US but more importantly, pricing was very strong. As beef production is long cycle, some of this export demand will tend to boost chicken exports, particularly out of the US, in the coming years.

US Beef and Veal Exports (Tons)
700.000 600.000 500.000 400.000 300.000 4.600 1.400.000 1.200.000

Brazilian Beef Exports (Tons)
4.500 4.000 26,6% 4.400 1.000.000 3.000 800.000 4.200 600.000 7,0% 3.500

5,3%

4.500

24,3%

4.300 2.500 2.000 1.500 400.000 1.000 200.000 0 2005 2006 2007 2008 2009 JAN-JUN 09 JAN-JUN 10 500 0

4.100
200.000 4.000 3.900 3.800 2005 2006 2007 Beef Exports Source: USDA and Secex 2008 2009 JAN-JUN 09 JAN-JUN 10

100.000
0

Avg Price in US$ per Ton

Beef Exports

Avg Price in US$ per Ton

12

Chicken Exports
 Strong domestic demand in both Brazil and the US limited exports in the first semester although it is clear that prices will tend to push up export volumes from now on particularly taking into account the reopening of the Russian market for US product.

Brazilian Chicken Exports (Tons)
3.500 3.000 17,3% 2.500 2.000 1.500 1.000 500 200 0 2005 2006 2007 2008 2009 JAN-JUN 09 JAN-JUN 10 0 1.600 1.400 1.200 1,1% 1.000 2.500.000 2.000 1.800 3.000.000 3.500.000

US Poultry Exports (Tons)
1.200 -2,9% 1.000

800

2.000.000
-6,5% 1.500.000 400 1.000.000 500.000 2005 2006 2007 2008 2009 JAN-JUN 09JAN-JUN 10 200 600

800
600 400

-

Chicken Exports
Source: USDA and Secex

Avg Price in US$ per Ton

Chicken Exports

Avg Price in US$ per Ton

13

Agenda
Company Overview

Market Overview

2Q10 Highlights

Short Term Outlook

14

Highlights for the 2nd Quarter 2010
 Revenues increased 52.5% y-o-y and 12.5% to R$14,116.3 million • • •

JBS USA increased 67.6% y-o-y and 12.9% q-o-q JBS MERCOSUL increased 123.1% y-o-y and 19.1% q-o-q JBS Exports increased 37.0% q-o-q reaching 29% of sales

 EBITDA increased 163.3% y-o-y and 16.0% q-o-q.  Leverage remained fairly stable at 3.0x  Consolidated customer base grew by 22.2% q-o-q, reaching more than 300

thousands customers in 2Q10.

15

JBS Consolidated Results
Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)

6,9% 5,4% 4,1% 3,5%

7,1%

1.000,0 862,0

14.116,3 12.550,3

9.255,0

8.379,9

7.408,9

384,0
291,9

397,8

-9,5%

-11,6%

69,4%

12,5%

-24,0%

36,3%

116,7%

16,0%

2Q09

3Q09
Source: JBS

4Q09

1Q10

2Q10

2Q09

3Q09

4Q09

1Q10

2Q10

EBITDA Margin (%)

16

Performance by Business Units
JBS MERCOSUL JBS USA Beef
Including Australia

JBS USA Pork

JBS USA Chicken (PPC)

Net Sales (R$ billion)
3,5

Net Sales (US$ billion)

Net Sales (US$ million)

Net Sales (US$ million)

3,0

3,3
1,7 1,7

1,7

2,9

2,8

2,8

2,8

554

559

606

646

739

1,7

1,8

1,6

1,7

2T09

3T09

4T09

1T10

2T10

2Q09

3Q09

4Q09

1Q10

2Q10

2Q09

3Q09

4Q09

1Q10

2Q10

1Q09

2Q09

1Q10

2Q10

EBITDA (R$ mi) EBITDA margin
11,9% 9,5% 6,6% 4,9% 2,9%

EBITDA (US$ mi) EBITDA margin

EBITDA (US$ mi) EBITDA margin
6,6%

EBITDA (US$ mi) EBITDA margin
9,3% 7,5% 4,8%

6,0% 3,6% 3,8% 4,5%

5,9%

4,5%

4,7% 2,7%

5,4%

352,6

334,5

164,6
194,9 170,5 104,6

3,6%

127,6
48,7 28,6 15,3

108,4

126,0

82,6 47,3

112,2

34,9

80,8

24,7

59,5

2T09

3T09

4T09

1T10

2T10

2Q09

3Q09

4Q09

1Q10

2Q10

2Q09

3Q09

4Q09

1Q10

2Q10

1Q09

2Q09

1Q10

2Q10

Source: JBS EBITDA Margin (%)

17

Revenue Distribution by Market
Revenue Distribution by Market 2Q10
Pork Exports 2% Chicken Exports 2%

Revenue Distribution by Market 1Q10
Chicken Pork Exports 1% Exports 2% Beef Exports 20%

Beef Exports 25%

Beef Domestic 44%

Beef Domestic 47%

Chicken Domestic 20% Pork Domestic 7%

Chicken Domestic 22% Pork Domestic 8%

Exports = 29%

Domestic Market = 71%

Exports = 23%

Domestic Market = 77%

Revenue Distribution by Market 2Q10

Revenue Distribution by Market 1Q10

USA Chicken 22% USA Pork 9%

Mercosul 27%

USA Chicken 25%

Mercosul 23%

USA Pork 10%

USA Beef 42%

USA Beef 42%

Source: JBS

18

EBITDA Distribution by Business Units

2Q10

1Q10

Mercosul 33,5%

USA BEEF 34,7%

Mercosul 43,9%

USA BEEF 36,1%

USA Chicken 22,7%

USA PORK 8,7%

USA Chicken 12,6%

USA PORK 7,4%

Source: JBS

19

JBS Consolidated Exports Distribution
JBS Exports 2Q10 JBS Exports 1Q10

China 4% South Korea 5%

Taiwan Canada 2% 4%

Others 12%

Africa and Middle East 19% Mexico 12%

USA 7%

E.U. 7%

Russia 10%

Hong Kong 8%

Japan 10%

Taiwan Canada 2% 4% China 4% South Korea 4% USA 7%

Others 12%

Africa and Middle East 16% Mexico 14%

E.U. 8%

Russia 8%

Hong Kong 9%

Japan 12%

US$2,3331.0 Million

US$1,765.4 Million

Source: JBS

20

Debt
While JBS leverage remained fairly constant in the quarter (at 3.0x LTM EBITDA), the liquidity of the balance sheet improved significantly. The company’s cash position increased 17,5% when compared with 1Q10 (which represents 70% of the company’s ST debt, from 55% in the previous quarter), while ST debt decreased 7,7% in the same period. Considering the US$700mm bond issuance in July, ST debt on a pro-forma basis would represent roughly 33% of total debt, closer to the company’s target of having less than 30% of its total debt maturing in the ST.
Leverage
3,3
2,6 3,1 3,1

ST / LT Profile
3,0x *

61%

60%

64%

67%

39%
2Q09

40%
1Q10

36%
2Q10

33%
(Pro-Forma)*

2Q09

3Q09

4Q09

1Q10

2Q10

**

Short term

Long term

Source: JBS *LTM including Bertin and Pilgrim’s Pride pro-forma. ** Pro-Forma takes into account senior unsecured notes issued July, 2010

21

Shareholders

Market 19,1%

PROT - FIP 8% Controlling Holding 55,5%

BNDESPAR 17,3%

Average daily trade volume of USD 50,4 million in 2Q10

Source: JBS

22

Agenda
Company Overview

Market Overview

2Q10 Highlights

Short Term Outlook

23

A Closer look at synergies – Pilgrim’s Pride
 JBS already captured US$ 150 million in synergies with Pilgrim’s Pride acquisition of a total estimated amount of US$ 220 million.  The next graphic shows the origin of the captured synergies.
Captured Synergies On going Synergies
Size Time
2 years

Descrição

US$ 150 Million
Logistics Optimization

Efficiency gains in the average load factor for trucks

US$50mm

General administrative expenses 34%

Logistics 23%

Exports

Reaching final customers through the JBS current sales structure.

US$20mm

2010

Suppliers 20%

Corporative 23%

Total

US$70mm

Source: JBS

24

A Closer look at synergies – Bertin S.A.
 JBS already captured R$ 154 million in synergies due to the merger with Bertin of a total estimated amount R$ 485 million.  The next graphic shows the origin of the captured synergies.
Captured Synergies On going Synergies
Size Time
2010 Maximization of sales channels and reviewing contracts for freight

Descrição

R$154 Million
Exports
Suppliers 16% Logistics 13%

R$31mm

Administrative expenses 26%

Hides

Capturing value with the greatest volume of processed
Review of terms of contract noncore suppliers (eg packaging) Optimization of fixed costs and streamlining of existing contracts

R$45mm

2010

Suppliers

R$10mm

2010

Exports 45%

Industrial Processes

R$245mm

2 Years

Total

R$331mm

Source: JBS

25

Final Considerations
 Having seen double digit revenue growth and EBITDA of R$1 billion in the last quarter, we are on track to deliver the top line growth and EBITDA budgeted for 2010.

 An increase in our exports q-o-q of 37% demonstrates the recovery of international trade which we believe will continue to grow and serve as a driver for better margins.

 Rating agencies upgrades demonstrate recognition for the effort we continue to make to maintain financial improvements with a view towards reaching Investment grade category.

 We surpassed 300 thousand active customers globally in 2Q10, proving that our distribution strategy (another margin driver) continues to gain traction.

26

Q&A

IR Contacts: [email protected] +55 11 3144 4447 www.jbs.com.br/ir
“In God We Trust, Nature We Respect”

27

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close