JBS S.A. Institutional Presentation Including 3Q18 Results

Transcription

1 JBS S.A. Institutional Presentation Including 3Q18 Results 1

2 About JBS Over 230 thousand direct and 700 thousand indirect employees. Around 350 thousand Customers in 150 countries. JBS has been a public company since 2007 and its shares are traded on the New Market of the São Paulo Stock Exchange (B3). Number One in global beef production; in global chicken production; in global leather processing. US$ 50.4 Billion (R$177Bn) in net revenue (LTM 3Q18). Number Two in global pork production; in global lamb production. 2

3 3 A Unique Global Platform 4% 51% CANADA USA MEXICO 4% 6% EUROPE AFRICA AND THE MIDDLE EAST 4% 15% ASIA BRAZIL 11% SOUTH AMERICA 1% 4% GLOBAL PLATFORM Present in over 15 countries with over 400 facilities and offices. % of Total Revenues Beef Lamb Pork Leather Poultry Commercial Offices AUSTRALIA AND NEW ZEALAND

4 4 Global Management Structure Food Quality and Safety Center of Excellence and Innovation Gilberto Tomazoni Global Chief Executive Officer Global Sourcing André Nogueira CEO of JBS USA Wesley Batista Filho President of Operations South America Joanita Karoleski President of Seara Renato Costa President of JBS Meats Nelson Dalcanale President of JBS New Business Roberto Motta President of JBS Leather Bill Lovette Global CEO of PPC Al Byers President of JBS USA Beef Regional Marty Dooley President of JBS USA Pork Tim Schellpeper President of JBS USA Fed Beef Brent Eastwood President of JBS Australia David Colwel President of JBS Canada Tom Lopez President of Plumrose USA

5 Evolution From a Brazilian beef company in 2006 to a Global food company 19,000 EMPLOYEES IPO JBS SA Net Revenue: R$14.1 bn 2007 BERTIN CARGILL PORK 2015 ~235,000 EMPLOYEES Net Revenue: R$3.9 bn 2008 Net Revenue: R$30.3 bn 2010 EXPANSION IN USA AND AUSTRALIA Net Revenue: R$54.7 bn 2014 ACQUISITIONS: TYSON IN BRAZIL AND MEXICO 2016 Net Revenue: R$163.2 bn 5

6 6 Strategy Global and Diversified Production and Distribution Platform evolving towards value added products with brands Branding Value added products Sales and distribution platform +350,000 customers and sales to +150 countries Production platform +400 units in +15 countries

7 Consolidated Exports Greater China¹ 22.4% Africa & Middle East 13.5% Japan 13.1% USA 9.7% South Korea 9.3% E.U. 7.2% 5.5% 9.7% 3.2% 7.2% 22.4% 9.3% 13.1% Mexico 5.5% South America 3.4% Canada 3.2% Others 12.7% 3.4% 13.5% Asia, Africa & Middle East corresponded to 58.3% of the total of exports 3Q17 US$3,625.6mn 3Q18 US$3,469.0mn Note 1: Considers China and Hong Kong 7

8 3Q18 Business Units 8

9 Seara Production of prepared foods and fresh poultry and pork products in Brazil Brazil Main Brands CE Operational Platform 4.9 million birds per day PE Production units located in the south, southeast and mid-west regions 23,970 hogs per day ~70,500 team members MT MS DF BA MG Production units located in the south and mid-west regions 115,000 tons per month 29 poultry processing facilities 08 hogs processing facilities 21 PFP units RS SP PR SC RJ Production units located in the south, southeast, northeast and mid-west regions 14 distribution centers Net Revenue (billion) EBITDA (million) and % % 10.9% 8.3% 5.5% 10.3% Net Revenue LTM 3Q18 R$17.5Bn EBITDA LTM 3Q18 R$1.6Bn 8.9% Margin 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18¹ 3Q18 Note 1: Adjusted EBITDA excluding the R$112.9 million impact from the truckers strike in Brazil at Seara. 9

10 JBS Brazil Beef production in Brazil, in addition to leather and other Related Business Brazil Main Brands Operational Platform PA CE 34,240 bovines per day 100% in Brazil 74,707 hides per day 16 facilities in Brazil 01 facility in Mexico, Vietnam, Italy, Uruguay, Argentina, Portugal and Hungary 21 distribution centers 10 central and 11 regional AC ~50,000 team members 35 beef processing facilities 03 feedlots 16 tanneries¹ RO MT MS PR RS TO GO SP MG RJ BA PE 11 related business 21 distribution centers Biodiesel 07 PFP units Can making Collagen and Ingredients JBS Carriers / TRP Trading Hygiene and Clean Casings Recycling Fetal Serum Feed Solutions Fertilizers Net Revenue (billion) EBITDA (million) and % % 6.2% 1.4% -5.2% -1.6% Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18² Net Revenue LTM 3Q18 R$24.7Bn EBITDA LTM 3Q18 R$669.7Mn 2.7% Margin Note 1: Does not consider facilities outside Brazil; Note 2: Adjusted EBITDA excluding impact from adherence to RRP Funrural. 10

11 JBS USA Beef Beef production in the United States, Canada and Australia UT CO NE WI MI United States PA Main Brands Operational Platform ~35,000 team members AZ GA 42,533 bovines per day 19 beef processing facilities TX 28,130 in the US 4,200 in Canada 10,203 in Australia 06 feedlots 02 tanneries Australia and NZ Canada 12,900 hides per day 08 carrier units 5,000 in the US 08 case ready facilities 7,900 in Australia 08 distribution centers 06 feedlots 03 lamb processing facilities 06 in Australia / Capacity of 162,000 bovines 01 hogs processing facility (Primo) 08 distribution centers Net Revenue (billion) EBITDA (million) and % 07 DCs in Australia 01 DC in New Zealand % 7.0% 6.1% 10.2% 8.2% Net Revenue LTM 3Q18 US$21.8Bn 08 carriers units in the US EBITDA LTM3Q18 US$1.7Bn 7.9% Margin 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 11

12 12 JBS USA Pork Main Brands Pork and value added production in the United States United States MN VT Operational Platform IA IL IN 92,000 hogs per day 100% in the US CA OK AR MS KY NC 07 PFP facilities Examples of products ~11,000 team members 05 hogs processing facilities 07 PFP facilities 02 genetic units 02 distribution centers Net Revenue (billion) EBITDA (million) and % 15.1% 11.7% 12.1% 7.2% 9.9% Net Revenue LTM 3Q18 US$5.9Bn EBITDA LTM 3Q18 US$606.4Mn 10.3% Margin 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18

13 Pilgrim s Pride Poultry production in the United States, Mexico, Puerto Rico and Europe MN United States & Puerto Rico WI Main Brands Operational Platform 8.7 million birds per day Mexico TX AR LA WA VA KY TN NC AL GA SC FL 25 facilities / 6.6 million birds in the US 01 facility / 66,000 birds in Porto Rico 06 facilities / 1,2 million birds in Mexico 04 facilities / 871,000 birds in UK 40,000 tons of products per month 04 facilities in the US 02 facilities in Mexico 06 facilities in the UK 03 facilities in France 01 facility in Netherlands ~60,000 team members 36 poultry processing facilities 16 PFP facilities 22 distribution centers Net Revenue (billion) EBITDA² (million) and % Europe 22 distribution centers % 8.8% 9.9% 10.0% 5.8% Net Revenue LTM 3Q18¹ US$11.0Bn 21 located in Mexico 01 located in Porto Rico EBITDA LTM 3Q18¹ US$951.3Mn 8.6% Margin 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 Note 1: includes Moy Park results in all quarters; Note 2: Adjusted EBITDA in accordance with PPC earnings release 13

14 Other Relevant Topics

15 Rating Evolution Fitch Ratings Moody s Standard & Poor s Ba3 B1 B1 BB- BB- BB- B+ B+ B3 B3 B B 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 December 2017 November 2018 Agency Rating Outlook Moody s B3 Negative Standard & Poor s B Negative Fitch Ratings BB- Negative Rating Ba3 BB- BB- Outlook Stable Positive Stable Source: Moody s, S&P, Fitch and JBS 15

16 16 Compliance JBS has implemented a number of initiatives to strengthen its compliance culture, such as the Always Do It Right program, where each employee serves as a multiplier of best practices. JBS received an 8.1 grade on the Transparency International ranking the average grade in Brazil is 5.7. The company is a signatory of the Business Integrity and Anticorruption Compact from the Ethos Institute, and has implemented a Global Code of Ethics & Integrity.

17 17 Sustainability JBS maintains several sustainability initiatives that positively influence the entire value chain, from sourcing raw materials to product packaging disposal. A satellite monitoring system maintained by JBS covers around 59 million hectares of the Amazon region, including 437 municipalities, aiming environmental preservation (deforestation) and indigenous land criteria and taking steps to combat labor analogous to slavery. JBS operates in the circular economy (take, make and dispose) and uses its raw material to produce leather and collagen. It also employs structured programs to transform waste into biodiesel and fertilizer, reducing water use and greenhouse gas emissions.

18 18 Animal Well-Being In 2017, JBS invested R$ 14.7 million in Animal Well-Being improvements. JBS Supply Chain Seal assesses all animal quality and well-being criteria, certifying guaranteed beef sourcing. The protocol is certified by the SBC, the Brazilian Certification Service. In 2017, JBS was ranked one of the best companies in the world in Animal Well-Being practices by the BBFAW.

19 19 Quality and Food Safety JBS is ISO 9001 certified and the Brazilian operation with the largest number of facilities certified by the BRC (British Retail Consortium). 100% of U.S., European & Canadian facilities passed Global Food Safety initiative (GFSI) food safety and global audits. Al Almanza, Global Food Safety and Quality Assurance Director, is internationally recognized for his work and is focused on establishing JBS as a global reference in this area. Worldwide, over 70 thousand employees have undergone mandatory food safety training.

20 20 Seara Awards Seara was awarded in two categories of the FI Innovation Awards, recognized as Latin America s main innovation award for the food industry. The Seara Rotisserie line received 1 st prize in the Most Innovative Product of 2018 category, while the Seara DaGranja meals ranked 3 rd place in the same category. The new Seara 100% Natural product line was chosen as one of most innovative products at SIAL Paris and was recently launched in the Middle East. 3

21 21 Recent Events In November, JBS signed in excess of US$3.4Bn in MoUs during the China International Import Expo to supply animal protein to the world s largest consumption market Breakdown per Agreement CP 8.69% Others 14.34% Grand Farm 10.32% Alibaba 43.47% Unifood 23.18% JBS stand at China International Import Expo.

22 Annex 3Q18 Consolidated Results

23 3Q18 HIGHLIGHTS N et rev enue was R$49.4bn, up 20.1% Consolidated adjusted EBI TDA¹ i ncreased by 2.6% to R$4.4bn, t h e l a r g e s t p o s t e d b y JBS i n a si ngle quarter. A d j usted net i ncome² was R$2.1bn and reported accounti ng l oss was R$133.5mn C ash flow from operati ng acti v i ti es was R$4.3bn and F ree cash f l ow was R$2.3bn Lev erage i n US $ reduced to 2.99x, compared to 3.45x i n 3Q17, wi th a US$710 mn reduction i n net d ebt i n the quarter S hort-term debt reduced to 5% of total debt compared to 27% in 3Q17 ¹ Adjusted EBITDA excluding impact from adherence to RRP - Funrural. ² Adjusted net income excluding non-cash effect of FX variation and adherence to RRP Funrural. 23

24 3Q18 CONSOLIDATED RESULTS 24 Net Revenue (R$ million) Gross Profit (R$ million) Gross margin (%) 41, , % 15.4% 20.1% 6, % 7, Q17 3Q18 3Q17 3Q18 Net revenue was Gross profit was R$49.4Bn Increase of 20.1% compared with 3Q17 R$7.6Bn Increase of 11.3% compared with 3Q17

25 3Q18 CONSOLIDATED RESULTS Adjusted EBITDA¹ (R$ million) Adjusted Net Income (R$ million) EBITDA margin (%) 10.5% 9.0% 3Q17 3Q18 3Q18² 4, , % , Q17 3Q Adjusted EBITDA was R$4.4Bn EBITDA margin was 9.0% in 3Q18 Adjusted net income² was R$2.1Bn Reported accounting loss was R$133.5Mn ¹ Adjusted EBITDA excluding impact from adherence to RRP - Funrural. ² Adjusted net income excluding non-cash effect of FX variation and adherence to RRP Funrural. 25

26 3Q18 CONSOLIDATED RESULTS 26 Operating Cash Flow (R$ million) Free Cash Flow (R$ million) 4, , , % -28.8% 2, Q17 3Q18 3Q17 3Q18 Cash flow from operational activities was R$4.3Bn Free cash flow was R$2.3Bn

27 3Q18 CONSOLIDATED RESULTS Net Debt (million)/leverage Net debt decreased by US$2.8 billion In comparison to 2Q Leverage in US$ reduced to 2.99x in 3Q18, from 4.05x in 2Q17 Leverage in R$ reduced to 3.38x in 3Q18, from 4.16x in 2Q Q17¹ 2T17¹ 3Q17 3T17 2Q18 2T18 3T18 3Q18 Net debt (R$) Leverage (R$) Net debt (US$) Leverage (US$) 27

28 3Q18 CONSOLIDATED RESULTS Gross Debt Reduction (US$ Bn) Cash and Availability (US$ Bn) US$3,3 BILLION / (R$13,4 BILLION²) Cash Revolving credit facilities Q17¹ 2T17 ¹ 3T17 3Q17 4Q17 4T17 1Q18 1T18 2Q18 2T18 3T18 3Q18 2Q17¹ 2T17¹ 3Q18 3T18 Debt Events after 3Q18 Tender offer and redemption of US$1.0 billion of Senior Notes due 2020 from JBS S.A and approximately US$488 million of Senior Notes due 2021 from JBS USA (principal amount US$1.15 billion). US$500 million issue (JBS S.A Notes), which proceeds, together with cash in hand, were used to repurchase the totality of its 2020 Notes. This offering was more than 5 times oversubscribed. Gross debt reduction by ~ US$1.0 billion (~ R$4.0 billion)² JBS USA renewed its revolving credit facility, in the amount of US$900 million, guaranteed for the next 5 years, in conditions and price similar to the previous agreement. Additionally, JBS Australia contracted a new revolving credit line, in the amount of AUD$200 million, guaranteed for the next 2 years. ¹ Quarter of stabilization agreement ² Converted using the prevailing FX rate at the end of the period 28

29 3Q18 CONSOLIDATED RESULTS Cash at the end of 3Q18 was R$12.1Bn In addition, JBS USA has US$1,977.9 mn (R$7,919.3 mn)¹ fully available unencumbered line under revolving credit facilities Debt profile ST/LT ST 5.0% Source breakdown Commercial Banks 23% Total liquidity at the end of 3Q18 was R$20.0Bn Seven times higher than short-term debt Entity breakdown Seara 6.0% JBS USA 61.8% LT 95.0% Currency and cost breakdown 8.93% p.a. R$ 4.2% Capital Markets 77% JBS S.A. 32.2% US$ 95.8% 5.89% p.a. ¹ Converted using the prevailing FX rate at the end of the period 29

30 OUR 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 with our suppliers, profitability for our shareholders and the opportunity of a better future for all of our team members. 30