Disclaimer. by these forward-looking statements. Many of the factors that will determine these results and

Transcription

1 October, 2010

2 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

3 Agenda Company Overview Market Overview 2Q10 Highlights Short Term Outlook 3

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 4

5 Corporate Structure CEO President Joesley Batista Finance Director Brazil Marcos Cunha Bastos Corporate Law Department Francisco de Assis e Silva Investors Relations Jeremiah O Callaghan / Guilherme Arruda Corporate And Adm. Controller Eliseo Fernandes CEO MERCOSUL Marco Bortolon New business José Luis Medeiros Commercial and Distribution International Offices Marco Bichieri JBS Hides Roberto Motta Dairy Gilson Teixeira Marcos graduate from Mackenzie University in Business Administration and has a MBA in Finance from San Francisco State University. Worked in many financial institutions in Brazil, primarily in Investment banking, Financial Projects, and Portfolio management. Started in 2008 with JBS. Francisco is the director of the Law Department. Has a post graduated from the University of Mackenzie. Started working at JBS in December of 2001 and later became a member of the Executive Board in January of Jerry has a Engineering Degree from the University of Cork College in Ireland. Immigrated to Brazil in 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. Eliseo has a Business Administration and Accounting Degree from the University Católica de Pernambuco and a post graduate degree in Business Administration from FGV. He started with JBS in August 2005 and eventually became Director of Administration and Corporate Governance. He has 8 years Experience in Auditing and Consulting and 10 years in the Retail industry. Marco has more than 10 years experience in JBS. Initially started as a Production Manager and in 2009 was promoted to Chief Operating Officer of the Brazil Beef Division. José Luiz has a degree in Accounting and has been working in the Beef Sector since year in Bertin and started at JBS in January 2010 became the Director of New Business. Marco has more than 24 years of experience in the Protein Sector. Worked for more than 20 years in Bertin. Roberto has more than 20 years in the Leather Industry. Was responsible for incorporating BMZ Hides with the JBS Group. Gilson has more than 25 years experience in Finance and Controller of business units of Bertin, where he later served as a member of the Board for 5 years. 5

6 Corporate Structure CEO USA/AUS Wesley Batista Pilgrim's Pride Don Jackson Beef USA Bill Rupp Pork Martin Dooley Australia Iain Mars JBS Five Rivers Mike Thoren JBS Carriers Mr. Moe Schroder Trading Robert Wadland Human Resources Bob Daubenspeck CFO André Nogueira Don is the President, CEO and Director of Pilgrim s Pride since January For 9 years was the president of the chicken division of Foster Farms and vice president of Food Services in ConAgra Poultry Company. Before this he worked at Seaboard farms of Athens for 22 years, including 4 years as the CEO of the Chicken Division 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 plant general manager and eventual 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 eventual 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 Biology from the University of Eastern Illinois. Worked in Swift for his whole life, having started the company as a manager trainee in In 2007 was given the position of president of the Pork Division of JBS USA. Iain was born in England and worked in the Beef Industry for his whole life. He became the President and CEO of JBS Australia in 2007, after the acquisition of Swift. He has worked in JBS since Mike is the President and CEO of Five Rivers since the Start of the Company. Has a Masters of Science in Agricultural Economics and has a degree in Agribusiness from the University of Washington State. Moe has more than 30 years experience in Transportation Sector. Graduated from the University of Ryerson, Toronto, Canada. Occupied the position of Vice President of Sales, Dedicated Operations at KLLM and before that was in various executive positions at CR England. Moe Joined JBS to run the carrier business Robert has 27 years of meat trading experience with 17 years of that at JBS enhancing exports out of Australia and New Zealand. Recently transferred to the US to run the group s trading business unit Robert assumed this position in February 2009 and before that was in JBS Packerland from 2002 to André has a degree in Economics from the Federal University Fluminense, a masters in Capital Markets from FGV Fundação Getúlio Vargas, and masters in Economics from University of Brasilia in Worked more than 20 years at Bank of Brazil and started at JBS USA in 2007 after the Swift acquisition. 6

7 Shareholders Market 19.1% PROT - FIP 8.1% BNDESPAR 17.3% Controlling Holding 55.5% Average daily trade volume of USD 50.4 million in 2Q10 Source: JBS 7

8 Leading, Sizeable and Diversified Business Platform Beef Chicken Pork Hides / Leather Dairy Lamb Ranking Production Units Geographic Presence and Installed Capacity 1 st 2 nd 3 rd 1 st 3 rd 1 st Global Global U.S.A. Global Brazil Global heads/day: mm heads/day: 000 heads/day: 000 hides/day: 000 tons/day: 000 heads/day: Total: 91.1 Total: 7.6 Total: 48.5 Total: 91.4 Total: 1.4 Total: 27.5 Well- Recognized Brands 8

9 Our Strategy Rationale Branding Value added products Associating quality and branding to increase client loyalty Customized and further processed products for the end users Sales and distribution platform Expanding a global distribution platform to reach end clients Production platform Developed an efficient and diversified global production platform EBITDA Margin Financial structure Experienced management Cost reduction, process optimization Risk management JBS Value & Strategy 9

10 Distribution Platform with Access to Key Markets Growth 1-2 % 3 % 4 % Growth 1 9% 13 % 8% Growth 1 2 % 8 % 5 % Growth 1 7 % 25 % 16 % Distribution Center Sales Offices 1 Real growth of total consumption in tons 2010E to 2015E Source OECD-FAO 10

11 Agenda Company Overview Market Overview 2Q10 Highlights Short Term Outlook 11

12 World Meat Consumption (million tons cwe) Growth Pork % Poultry % Beef % TOTAL % Growth OECD % NON OECD % Source: OECD/FAO Agricultural Outlook

13 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 48.7% Southeast Asia South America 32.2% Sub Saharan Africa 23.3% Oceania 3 Source: FAPRI February

14 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) Brazilian Beef Exports (Tons) 700,000 4,600 1,400,000 4, , , , , , , % 24.3% 4,500 4,400 4,300 4,200 4,100 4,000 3,900 1,200,000 1,000, , , , , % 7.0% 4,000 3,500 3,000 2,500 2,000 1,500 1, JAN-JUN 09 JAN-JUN 10 3, JAN-JUN 09 JAN-JUN 10 0 Beef Exports Avg Price in US$ per Ton Beef Exports Avg Price in US$ per Ton Source: USDA and Secex 14

15 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) US Poultry Exports (Tons) 3,500 3,000 2,500 2,000 1,500 1, % 1.1% 2,000 1,800 1,600 1,400 1,200 1, ,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , % -6.5% 1,200 1, JAN-JUN 09 JAN-JUN JAN-JUN JAN-JUN Chicken Exports Avg Price in US$ per Ton Chicken Exports Avg Price in US$ per Ton Source: USDA and Secex 15

16 Agenda Company Overview Market Overview 2Q10 Highlights Short Term Outlook 16

17 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. 17

18 JBS Consolidated Results Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million) 6,9% 7,1% 4,1% 3,5% 5,4% 1.000,0 862, , , , , ,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 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 Source: JBS EBITDA Margin (%) 18

19 JBS MERCOSUL Performance by Business Units JBS USA Beef Including Australia JBS USA Pork JBS USA Chicken (PPC) Net Sales (R$ billion) Net Sales (US$ billion) Net Sales (US$ million) Net Sales (US$ million) 3,5 3,0 1,7 1,7 1,7 2,9 2,8 2,8 2,8 3, ,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 EBITDA (US$ mi) EBITDA margin EBITDA (US$ mi) EBITDA margin EBITDA (US$ mi) EBITDA margin 4,9% 2,9% 6,6% 11,9% 352,6 334,5 9,5% 3,6% 3,8% 4,5% 6,0% 5,9% 4,5% 2,7% 4,7% 5,4% 6,6% 4,8% 9,3% 164,6 3,6% 7,5% 82,6 47,3 112,2 104,6 108,4 126,0 170,5 194,9 24,7 15,3 28,6 34,9 48,7 80,8 59,5 127,6 2T09 3T09 4T09 1T10 2T10 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 1Q09 2Q09 1Q10 2Q10 Source: JBS EBITDA Margin (%) 19

20 Revenue Distribution by Market Revenue Distribution by Market 2Q10 Revenue Distribution by Market 1Q10 Pork Exports 2% Chicken Exports 2% Pork Exports 1% Chicken Exports 2% Beef Exports 25% Beef Domestic 44% Beef Exports 20% Beef Domestic 47% Chicken Domestic 20% Pork Domestic 7% Chicken Domestic 22% Pork Domestic 8% Exports = 29% Domestic Market = 71% Revenue Distribution by Market 2Q10 Exports = 23% Domestic Market = 77% Revenue Distribution by Market 1Q10 USA Chicken 22% Mercosul 27% USA Chicken 25% Mercosul 23% USA Pork 9% USA Pork 10% USA Beef 42% USA Beef 42% Source: JBS 20

21 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 21

22 JBS Consolidated Exports Distribution JBS Exports 2Q10 JBS Exports 1Q10 China 4% South Korea 5% Taiwan Canada 2% Others 4% 12% USA 7% E.U. 7% Russia 10% Africa and Middle East 19% Hong Kong 8% Japan 10% Mexico 12% China 4% South Korea 4% Canada 4% USA 7% Taiwan 2% Others 12% E.U. 8% Russia 8% Africa and Middle East 16% Hong Kong 9% Japan 12% Mexico 14% US$2, Million US$1,765.4 Million Source: JBS 22

23 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 ST / LT Profile 2,6 3,3 3,1 3,1 3,0x * 61% 60% 64% 67% 39% 40% 36% 33% 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 1Q10 2Q10 (Pro-Forma)* 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,

24 Agenda Company Overview Market Overview 2Q10 Highlights Short Term Outlook 24

25 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. Descrição The illustration bellow the origins of the captured synergies. Captured Synergies On going Synergies US$ 150 Million Logistics Optimization Efficiency gains in the average load factor for trucks Size US$50mm Time 2 years Adminstrative expenses 34% Logistics 23% Exports Reaching final customers through the JBS current sales structure. US$20mm 2010 Corporate 23% Suppliers 20% Total US$70mm Source: JBS 25

26 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. Descrição The next graphic shows the origin of the captured synergies. Captured Synergies On going Synergies R$154 Million Exports Maximization of sales channels and reviewing contracts for freight Size R$31mm Time 2010 Logistics 13% Suppliers 16% Administrative expenses 26% Hides Suppliers Capturing value with the greatest volume of processed Review of terms of contract noncore suppliers (ex packaging) R$45mm 2010 R$10mm 2010 Exports 45% Industrial Processes Optimization of fixed costs and streamlining of existing contracts R$245mm 2 Years Total R$331mm Source: JBS 26

27 IR Contacts: In God We Trust, Nature We Respect 27