Largest Multi-Protein Company in the World

Transcription

1 October, 2009 JBS S.A. In God we trust, Nature we respect Largest Multi-Protein Company in the World

2 Our Values The Foundation Of Our Culture Planning etermination iscipline Availability Openness Simplicity 1

3 The Global Beef Industry 8

4 Global Market Largest beef producers Largest beef consumers Others 31% United States 21% Others 31% United States 22% India 4% Argentina 5% China 10% EU-27 14% Brazil 15% Mexico 4% Argentina 5% China 10% Brazil 13% EU-27 15% Largest beef exporters Largest beef importers Others 25% New Zealand 7% Canada 7% India 8% United States 11% Brazil 23% Australia 19% Others 38% South Korea 4% EU-27 Mexico 8% 5% Japan 10% United States 19% Russia 16% Source: USA

5 Meats Consumption Per capita (including beef, pork and poultry) Recommended consumption 80Kg/capita Per capita consumption (kg/capita) Source: FAO China Russi a Mexico EU-27 Brazil US W orld eveloped 4

6 World Population Growth and Beef Consumption ( ) Population growth, a beef consumption driver Population (million) CAGR 2,0% Consumption (million tons) * 2015* 2020* 2025* 2030* 2035* 2040* 2045* 2050* 0 Population - eveloped countries Population - eveloping countries Beef Consumption** Source: UN (United Nations) and USA *UN Estimates **Beef consumption trend considering CAGR of 2.0% (from 1960 to 2008) 5

7 Per capita food consumption (Kg / Year) / / / / Cereals Roots and Tubers Beans, Peas and Lentils Sugar Oils Crops and its products Meat Milk and its products Source: FAO 6

8 Our Strategy 8

9 OUR STRATEGY ebt for Working Capital Equity to Finance Growth South America North America Australia European Union South America North America Australia European Union Asia Russia Africa Middle East Fresh Products Cooked Products Minced Products Cured Products Ready to Eat Products Case Ready Products Global Brands Marketing Investments - High liquidity level. - ebt equalized to cash generation. - Strong cash position. - Access to international capital markets to finance growth. - evelopment 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. - 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. - 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. 8

10 OUR STRATEGY 50% 12% 8% 4% Financial Structure Experienced Management Cost Reduction, Productivity, Process Optimization Risk Management Consolidated Average EBITA Margin Foundation 9

11 JBS History 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 Inalca Swift Foods Co. Maringá (Amambay) Berazategui (Rio Platense) Colonia Caroya SB Holdings JV Beef Jerky Bertin Association* Pilgrim s Pride* JBS Hides 5 new units Tasman Smithfield Beef Five Rivers Barretos (Anglo) Pres. Epitácio (Bordon) Campo Grande (Bordon) Rio Branco Cacoal 1 Cacoal 2 Porto Velho Venado Tuerto Pontevedra (CEPA) 30.3 Vilhena (Frigovira) Barra do Garças (Sadia) Andradina (Sadia) Araputanga (Frigoara) Cáceres (Frigosol) Iturama (Frigosol) Pedra Preta (Frigo Marca) Rosário (Swift ARG) San Jose (Swift ARG) R$/US$ end of the year quotation Source: JBS (1) Pro Forma JBS S.A. LTM ec07 (2) Pro Forma JBS S.A. LTM ec08 (3) Pro Forma JBS S.A. LTM Jun09 (including 5 new units and hides operation); Pilgrim s Pride Sep09 (Estimated); Bertin LTM Jun09 * Transactions subject to customary conditions for this type of business (1) (2) (3)

12 Global Production and istribution Platform JBS main units and markets x = Legend Slaughterhouse (Beef) Slaughterhouse and Industry istribution Center Vegetable Canning Plant Beef Canning Plant Beef Jerky Plant (Beef Snack s) Slaughterhouse (Pork) Slaughterhouse (Lamb) x Beef and Pork Processing Plant = Wet Blue Processing Plant Headquarters Office Feed Lot Package Industry Inland Container Terminal Commercial Office 11

13 Brief escription Global Production Platform Production Units Employees aily Slaugther Capacity JBS Brasil B JBS Argentina B B JBS USA P S JBS Australia B S Inalca JBS B Total JBS 65 Additional istribution Platform B P S United Kingdom Russia Angola Congo Algeria em. Rep. of the Congo Poland (B) Beef; (P) Pork; (S) Smalls; 12

14 JBS Consolidated Net Revenue istribution Revenue istribution by Market 2Q09 Pork USA 13% Australia 11% Italy 4% Argentina 2% Brazil 16% Beef USA 54% Source: JBS 13

15 Sustainability Emissions, Effluents and Waste Energy Water Society Materials Biodiversity Laws Actions Reduction of Greenhouse Gases emission (GHG) 50% Effluent reutilization 50% Solid waste recycling Energetic Matrix development Use of certified wood 25% Consume reduction 35% Consume reduction (2m 3 per head) Flora conservation Animal origination control Focus on environmentally friendly materials Legislative compliance Environmental awareness Physical activities Health Care Formal education 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 JBS is the first and only beef Company to register a CM 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 Cultural acceptance Priorities Sustainable use of materials Partnership with organizations equally concerned Health and Quality of Life Climate Waste Natural Resources Usage Social-environmental Actions Waste Treatment The environmental and social responsibility have always been part of JBS s development and business growth. The Company s 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. 14

16 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&FBOVESPA s Novo Mercado, is in accordance with all requirements of this market and with the obligations imposed by the current Brazilian legislation. Management and Board of irectors Board of irectors - JBS Board of irectors 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 Company s board of executive officers are elected by the board of directors, for three-year terms, and are eligible for reelection. Board of irectors Committees The Board of irectors has approved the establishment of the following Committees: Audit, Financial, Personnel Management and Corporate Strategy, that incorporates the Sustainability matters. Publishing and Use of Information 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. Conduct and Ethic Manual 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. 15

17 JBS American epositary Receipt (JBSAY) The Bank of New York Mellon, has been selected by JBS S.A. as the depositary bank for its American depositary receipt (AR) program. Each JBS AR represents two common shares and they are traded on the over-the-counter market under the symbol JBSAY. The new program did not represent an increase in the share capital or issuance of new shares. This step represents an opportunity to increase the liquidity, visibility and value of JBS shares. The Company believes that the program will help readjusting the share price to its reasonable currency level, considering that more than 80% of the Company s revenue is in American ollars. In May 2009, JBS became the first Brazilian Company to have its ARs traded under de OTCQX, a kind of Novo Mercado of the North American over-the-counter market. This pioneer step reflected as an increase of 331% in the average daily traded volume of JBS (JBSAY) stocks in New York ARs traded volume (JBSAY) ec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 16

18 JBS American epositary Receipt (JBSAY) 17

19 Acquisition of Pilgrim s Pride Corp. and Association with Bertin S.A. 8

20 Combined Financials JBS S.A Pilgrim's Pride Bertin S.A. Combined logo logo logo R$ million Jun 2009 FY09E (2) Jun 2009 TOTAL Results Net Sales LTM 38,680 (1) 14,778 (3) 7,224 60,683 Ebitda LTM 1,482 (1) 469 (3) 776 2,727 Ebitda Margin 3.8% 3.2% 10.7% 4.5% Gross Indebtedness 6,226 4,914 4,628 15,768 Cash and cash equivalents 2, ,496 Net ebt 3,928 4,418 3,926 12,272 Net ebt / Ebitda (4) Net ebt Pro Forma / Ebitda (5) Source: Companies (1) Pro forma figures (2) Fiscal year from October to September (3) oes not include Mexican operation (4) oes not include capital increase (5) Considering US$2.5 billion capital increase in JBS USA 19

21 Creation of the largest protein company in the world Combined Combined company company will will have have a leading leading position position in in the the global global market market Global ranking of protein companies (US$ million) 1 1 a largest global protein company 28,725 28,130 12,717 12,488 12,088 10,494 9,457 6,755 Source: Companies, Exame, Valor Econômico and CNN (Global 500) 1 Based in net revenues of 2008 and including Pilgrim s Pride in Bertin + JBS 20

22 Leader company in the protein industry Ranking Ranking Presence Presence Installed Installed capacity capacity Industrial Industrial units units Beef 1 Brazil / Argentina / Italy / Australia / U.S.A. / Uruguay / Paraguay Brazil: 43,400 heads/day Latin America: 6,700 heads /day U.S.A.: 28,600 heads/day Italy: 3,000 heads/day Brazil: 39 Latin America: 8 U.S.A.: 13 Italy: 8 Australia: 8,690 heads/day Australia: 10 Total: 89,790 heads/day Total: 82 U.S.A. / Mexico U.S.A. / Mexico: U.S.A.: 34 Poultry 2 7.2mm birds/day Total: 7.2mm birds/day Mexico: 3 Total: 37 Pork 3 U.S.A. U.S.A.: 48,500 heads/day U.S.A.: 3 Leather 1 Brazil / U.S.A. / China Brazil: 148,500 m 2 /day Brazil: 12 airy 3 Brazil Brazil: 1,266 ton/day Brazil: 7 21

23 Expansion of global leadership and geographic diversification Presence Presence in in over over countries countries across across five five continents continents X Slaughterhouses and Industry istribution Centers / Commercial Offices Processed products Pork Ovine Leather Poultry Beef istribution centers Leather airy Vegetable fat Pet products Source: Companies 22

24 Strategic Rationale Pilgrim s Pride Acquisition Opportunity to enter in the poultry industry as one of the largest companies in the world (Net revenues of US$8.5bn in FY 2008) Integrated distribution of Pilgrim s Pride is aligned with JBS direct distribution strategy Potentially higher margins Traditional brands US$200m/year of potential synergies Bertin S.A. Association iversification into new segments with significant presence in the dairy industry Creation of the largest leather processing company Potential gains of scale, with estimated synergies of R$ 500 million / year Expansion of distribution channels (Retail and Food Service) Optimization of the industrial assets due to its geographic complementarity Capacity of adding value through turnaround process by the implementation of better operating and managerial practices JBS USA exports growth 23

25 Creation of the largest protein company in the world Leader in beef processing in Brazil, Australia, Argentina and Italy and one of the leaders in the US Third largest pork processor in the US Leading company in the poultry industry in the US and in the world Global leader in leather tanning Total revenues of approx. US$30 billion Global processing capacity: - Beef: 90.4 thousand heads/day - Pork: 48.5 thousand heads/day - Poultry: 7.2 million birds/day - Smalls: 19.5 thousand heads/day - Leather: 148,500 m 2 /day - airy: 1,266 tons/day Complementary companies Source: Companies estimates 24

26 Transaction summary Pilgrim s Pilgrim s Pride Pride acquisition acquisition Firm value of US$2.8 billion Initial acquisition by JBS S.A., through its JBS USA subsidiary, of new issued shares representing 64% of Pilgrim s Pride total capital Estimated synergies of US$200 million/year Customary precedent conditions, including: - Approval by the competent antitrust authority - Final approval of the Reorganization Plan in the Bankruptcy Court (Chapter 11 of the United States Bankruptcy Code) Association Association with with Bertin Bertin S.A. S.A. Bertin and JBS controlling shareholders will contribute to a new Holding company their stakes of 73% and 51%, respectively It is estimated that the respective equity value of Bertin and JBS should be in a proportion of approximately 40%-60% Estimated synergies of R$ 500 million/year Customary precedent conditions, including: - Approval by the competent antitrust authority - ue iligence JBS is in an advanced negotiation for a capital increase of US$2.5 billion in JBS USA, resulting in a maximum stake of 26.3% after the capitalization 25

27 Ownership structure post transactions Ownership structures before transactions Ownership structure post transactions Batista Family 51.4% Market including BNES 48.6% Batista Family Bertin Family JBS S.A. Bertin Family BNESPAR Controlling Holding Market including BNES ~60% * ~40% * 73.1% 26.9% JBS S.A. Investor Bertin 100% 73.7% Bertin Other subsidiaries JBS U.S.A. Includes AUS 26.3% Pilgrim s shareholders Float 35% 65% 64% Old shareholders 36% Pilgrim s Pride * Controlling shareholders estimates Pilgrim s Pride 26

28 Pilgrim s Pride overview Profile Profile One of the largest producers of chicken with extremely well-known brands in this industry Plants in the US, Mexico and Porto Rico Vertically integrated company Chicken production in 2008: 3.8 million tons Slaughterhouses: 33 in the US, 3 in Mexico and 1 in Puerto Rico Employees: ~ 41 thousand istribution centers: 6 in the US, 18 in Mexico and 1 in Puerto Rico Recent Recent Events Events ec. 2006: Acquisition of Gold Kist for US$ 1.1 bn May 2008: Public Primary Offering of 7.5 million shares at US$24/share (total of US$180m), aiming to reduce leverage Nov. 2008: Rating downgraded by S&P ec. 2008: Company files for Chapter 11 (Bankruptcy protection) - Company was delisted from NYSE and started to be traded over-the-counter Feb. 2009: Shares reach their lowest historical price of US$0.15/share Net Net revenues revenues (US$ (US$ million) million) EBITA EBITA (US$ (US$ million) million) and and margin margin (%) (%) 5,153 7,499 8,525 7,095* 5.5% 2.8% 3.2% * -9.6% FY06 FY07 FY08 FY09E -821 FY06 FY07 FY08 FY09E Source: 10K, 10Q and Pilgrim s Pride Plan of Reorganization Pilgrim s Pride fiscal year is from October to September * oes not include Mexico operations 27

29 Footprint expansion in North America Pilgrim s Pilgrim s Pride Pride Acquisition Acquisition will will strengthen strengthen JBS JBS presence presence in in North North America America WA OR CA NV I UT MT WY CO N S NE KS MN IA MO WI IL MI IN KY OH WV VA PA M NY NJ VT NH MA CTRI E ME AZ NM TX OK AR LA MS TN AL GA FL SC NC Subtitle JBS USA production units JBS USA distribution center Pilgrim s Pride production units Pilgrim s Pride distribution center MEXICO 28

30 Bertin Overview escription escription Established in 1977, Bertin has 38 production units and 28 thousand employees - Present in the beef, dairy, leather and pet product segments with several nationwide well-known brands, e.g. Bertin, Vigor, Leco and anúbio - Units in Brazil, Uruguay, Paraguay and China - Exports to more than 110 countries Production Capacity: - 16,450 head/day (2009E) - 21,400 hides/day (2009E) Net Net Sales Sales Breakdown Breakdown (R$ (R$ million) million) 13% 12% % 68% Beef Leather airy Others Net Net Sales Sales (R$ (R$ million) million) EBITA EBITA (R$ (R$ million) million) and and margin margin (%) (%) 13.2% 5,188 6,626 7, % 10.7% Source: Bertin LTM Jun LTM Jun09 29

31 South America production base The The combined combined production production units units places places JBS JBS at at the the forefront forefront in in South South America America PA AC RO MT BA Paraguay MS GO MG Brazil RJ PR SP SF SC CO ER BA Uruguay Argentina Combined companies 30

32 Final remarks of the Transactions Complementary activities and consolidation of the global leadership in the protein industry will be strengthened through the association between JBS S.A. and Bertin S.A. Entry in the poultry industry through one of the leading companies in the US industry Acceleration of direct distribution strategy through the IPO of JBS USA Appropriate capital structure Significant opportunity of adding value through synergy gains Proven track record in acquisitions, integration and restructuring of companies Resuming growth through acquisitions and partnerships 31

33 2st Quarter 2009 Results 8

34 JBS Consolidated Results Net Revenue (R$ million) EBITA and EBITA Margin (R$ million) 6.1% 4.1% 4.1% 2.8% 2.3% 9, , , , , % 24.0% -3.8% -0.1% 59.5% -43.5% -20.4% 81.5% 2Q08 3Q08 4Q08 1Q09 2Q09 2Q08 3Q08 4Q08 1Q09 2Q09 Source: JBS EBITA Margin (%) 33

35 Performance by Business Units JBS USA (Beef) Including Australia Net Net Sales Sales (US$ (US$ million) million) JBS USA (Pork) Net Net Sales Sales (US$ (US$ million) million) INALCA JBS Net Net Sales Sales ( ( million) million) JBS MERCOSUL Net Net Sales Sales (R$ (R$ million) million) Q08 3Q08 4Q08 1Q09 2Q09 2Q08 3Q08 4Q08 1Q09 2T09 2Q08 3Q08 4Q08 1Q09 2T09 2Q08 3Q08 4Q08 1Q09 2T09 EBITA EBITA (US$ (US$ mi) mi) EBITA EBITA margin margin EBITA EBITA (US$ (US$ mi) mi) EBITA EBITA margin margin EBITA EBITA ( ( mi) mi) EBITA EBITA margin margin EBITA EBITA (R$ (R$ mi) mi) EBITA EBITA margin margin 5.1% 5.6% 2.2% 2.2% 3.6% 3.2% 7.6% 4.3% 1.4% 4.5% 4.7% 5.3% 5.1% 3.9% 4.6% 4.1% 5.6% 4.3% 3.7% 4.9% , , Q08 3Q08 4Q08 1Q09 2T09 2Q08 3Q08 4Q08 1Q09 2T09 2Q08 3Q08 4Q08 1Q09 2T09 2Q08 3Q08 4Q08 1Q09 2T09 Source JBS EBITA Margin (%) 34

36 ebt Considering the seasonality with the production increase in a high moment of high demand for beef, the Company maintained its leverage on the same levels of the preview quarter. The Company has improved its net debt in comparison to the 1Q09. The short term debt decreased 47% in 1Q09 to 39% in 2Q09 against the total debt. Net ebt / EBITA Pro Forma per Quarter ebt Profile Net ebt = R$ 3,928MM EBITA pro forma = R$ 1,482 MM = % * 80% 60% 50% 53% 61% 40% 20% 50% 47% 39% 2Q08 3Q08 4Q08 1Q09 2Q09 0% 2Q08 1Q09 2Q09 Source: JBS Net ebt/ EBITA EBITA pro-forma * LTM including Smithfield Beef pro-forma. Short term Long term 35

37 Cash and Availabilities R$ Million 06/30/09 03/31/09 Var.% Net indebtedness 3, , % Cash and cash equivalents 2, , % Current 2, , % Long term 3, , % Gross indebtedness 6, , % Besides the cash and cash equivalents noted above, the US and Australia subsidiaries of the Company has availabilities of approximately US$ 560 million under their existing credit facilities that provide additional liquidity. Therefore the Company s total liquidity including the availabilities under its credit facilities: R$ Million 06/30/09 Additional availability 1,092.9 Cash and cash equivalents 2,298.7 Total Liquidity 3,

38 JBS Consolidated Exports istribution Revenue istribution by Market 1Q09 Revenue istribution by Market 2Q09 Exports 22% Exports 26% omestic Market 78% omestic Market 74% Exports istribution 1Q09 Exports istribution 2Q09 JBS Exports 2 Q 09 US$ 1,169.1 Million Taiwan 2% Middle East 4% Canada 4% Hong Kong 5% China 5% South Korea 6% Others 14% Russia 8% Mexico 9% Japan 16% USA 11% E. U. 16% Hong Kong 5% Canada 5% China 4% Taiwan 2% South Korea 6% Russia 7% Others 14% Mexico 7% Africa and Middle East 8% Japan 18% USA 9% E. U. 15% JBS Exports 1Q09: US$ Million JBS Exports 2Q09: US$ 1,169.1 Million Source: JBS 37

39 Investor Relations Thank you!

40 isclaimer 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. 39