JBS 3Q14 Results Presentation November 13 th, 2014

Transcription

1 JBS 3Q4 Results Presentation November 3 th, 04

2 Disclaimer This release contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of JBS. These are merely projections and, as such, are based exclusively on the expectations of JBS management concerning the future of the business and its continued access to capital to fund the Company s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in JBS filed disclosure documents and are, therefore, subject to change without prior notice.

3 JBS Global Estimated Net Revenue of around US$50.0 billion in 04 Prepared products and others 7% Revenue 04E US$50.0 bi Pork 7% Poultry 7% Bovines 49% Capacity to process 00,000 bovines per day in 73 units in seven countries Capacity to process 7,000 hogs per day in units in Brazil and the United States Capacity to process more than 3 million birds per day in 57 units in the Americas Capacity to produce more than 00 thousand hides per day in 3 units worldwide More than 80 thousand tons of convenient and value added products per month in the world More than 00 thousand employees around the world 3

4 JBS Global Presence in 0+ countries, Exports to 50+ countries and more than 300,000 clients 84% of JBS Revenue is Moscow denominated in US$ North America ~5% of JBS revenue¹, ² Chicago Toronto London Ghent Hamburg Shanghai Seoul Tokyo Dubai Taipei Hong Kong 6% of JBS Revenue is denominated in R$ Caracas Santiago São Paulo (headquarter) South America Exports ~3% of JBS revenue ~7% of JBS revenue¹,3 96% from Brasil Note. It considers only domestic sales Note. Includes beef and lamb operations in the USA and Australia Note 3. Includes leather and hides operations in Brazil, Uruguay, Mexico, Germany, Vietnam and China and also Rigamonti operations in Italy. Sales office Sales office presence Production Platform 4

5 JBS Evolution Net Revenue (R$ billion) +74% LTM¹ EBITDA (R$ million) EBITDA margin (%) 8.5% 6.4 % 5.0% 5.8% 6.6% 9, % 3.7% 6,30.3 3, ,07.0 4,40.3,56., LTM¹ 5

6 Consolidated Results 6

7 3Q4 Highlights - Consolidated 3Q4 Highlights (R$ Million) Net Revenue Gross Profit EBITDA Adjusted EBITDA Net Income Gross Margin (%) Adjusted EBITDA Margin (%) EPS (R$) 7.% 4,.0 7,. 6,49. 8, % 30, , , , , , ,709.7,873.5, , , ,09.9 3Q3 4Q3 Q4 Q4 3Q4 3Q3 4Q3 Q4 Q4 3Q4 3Q3 4Q3 Q4 Q4 3Q4 3Q3 4Q3 Q4 Q4 3Q4 Net Revenue of R$30.8 billion, Gross Profit of R$5.6 billion, an EBITDA of R$3.6 billion,.6% Net Income of R$. billion, expansion of R$6.6 billion, or 7.% increase of R$.4 billion, or 77.7% superior than 3Q3. EBITDA equivalent to an EPS of R$0,38. superior than 3Q3 higher than 3Q3. margin was.8%. Operational Cash Generation of R$3.0 billion and Free Cash Generation (after Investments) of R$. billion. JBS ended the quarter with leverage of.54x compared to 3.5x in Q4. 7

8 3Q4 Highlights - Businesses Units JBS Foods recorded net revenue of R$3,376.8 million, 9.5% superior over Q4, and EBITDA of R$576.0 million, with an EBITDA margin of 7.%. JBS Mercosul posted net revenue of R$6,470.5 million, 4.8% higher than 3Q3 and EBITDA of R$554.6 million, with EBITDA margin of 8.6%. JBS USA Beef posted net revenue of US$5,849.3 million, 4.7% higher than 3Q3. EBITDA was US$504.9 million, with an EBITDA margin of 8.6% Net Revenue of JBS USA Pork totaled US$937.8 million, 3.8% higher than 3Q3, and EBITDA of US$3. million, with an EBITDA margin of.%. JBS USA Chicken (PPC) reported net revenue of US$,68.0 million, an increase of 5.8% compared to 3Q3. EBITDA was US$435.4 million, with a margin of 9.%. 8

9 JBS Consolidated Exports Breakdown in 3Q4 and 3Q3 Canada.4% Others 8.% Greater China¹ 6.8% Others 4.% Growth of 48% in exports in the quarter compared to 3Q3 Greater China¹ 0.4% South Korea 4.7% E.U. 6.5% Russia 9.% USA 9.5% 3Q4 US$4,36. million MENA 0.5% Mexico.0% South America 0.5% Japan 0.9% Canada 4.% South Korea 5.5% E.U. 5.6% 3Q3 US$,954.0 million Mexico 5.6% Russia 5.6% South America 8.% MENA 9.0% Japan.9% Note. China and Hong Kong 9

10 Capex, Cash Generation and Debt Profile 0

11 Capex and Cash Generation CAPEX In 3Q4, total capital expenditure (CAPEX) was R$878.6 million, of which approximately 0% in acquisitions, 5% in expansions and facilities modernization and 55% in maintenance. Cash Generation In 3Q4 the Company generated net cash flow from operations of R$3.0 billion and free cash flow (after capex) of R$. billion, due to the strong performance of JBS businesses units.

12 Debt Profile Leverage (Net Debt/EBITDA LTM) 6,000 5,000 4,000 3,000,000, Q3 4Q3 Q4 Q4 4Q4 Leverage EBITDA (R$ million) JBS ended the quarter with leverage of.54x compared to 3.5x in Q4. The reduction in leverage is due to the improvement in operational performance of JBS, combined with a strong cash generation in the quarter. This reduction in the leverage reflects the Management commitment in improve continuously its capital structure in order to generate value to all its stakeholders. Breakdown by Currency and Costs Breakdown by Source Breakdown by Company.50% per annum BNDES 0.% R$ 0% US$ 80% Commercial Banks 59.9% Capital Markets 40.0% Subsidiaries 3% JBS Foods 3% JBS S.A. 56% 5.7% per annum

13 Debt Profile and Maturity Debt Profile The Company ended the quarter with R$,578.5 million in cash, equivalent to 0% of its short-term debt. Q3 35% 65% JBS USA has US$.33 billion fully available under revolving credit facilities which, if added to the current cash position, represents % of short term debt. 4Q3 Q4 9% 9% 7% 7% The percentage of short term debt (ST) in relation to total debt was 30% in 3Q4. Q4 3Q4 8% 30% 7% 70% Maturity (R$ million) Short Term Long Term 4,543 5,45 5,90 5,636,798 -,095,050, Short Term* after 0 * Net of Cash 3

14 Business Units 4

15 JBS Foods 5

16 JBS Foods Leading producer of prepared foods (PFPs) and fresh poultry and pork products Operational Platform 5. million birds per day Brazil +55,000 employees Production units located in the south, southeast and mid-west regions,00 hogs per day Production units located in the south and mid-west regions ~80,000 tons per month AM MT MS 5 PR DF MG 3 RJ SP 4 3 BA CE 3 PE 9 slaughterhouses and deboning units 08 slaughterhouses and deboning units 3 PFP units 5 distribution centers Production units located in the south, southeast, northeast and mid-west regions RS 5 7 SC distribution centers In states nd largest producer and exporter of poultry and pork in Brazil³ Large production platform, with 60 production units, and nearly 55,000 employees National distribution platform serving ~79,000 points of sale Strong international presence, exporting to over 00 countries Complete product portfolio with leading and well-known brands Uniquely positioned as the natural consolidator of the sector in Brazil, allowing accelerated growth Net Revenue 9M4 R$9. billion EBITDA 9M4 R$,396 million 5.% Margin Notes: Industrial Complex: location with one or more units of production; Includes Tyson acquired units, approved in October/4; 3 Total produced volume of PFP, poultry and pork of 8 mm tons, 359 mm tons and 54 mm tons in 3Q4, respectively. Total export volume of 33 mm tons in 3Q4 6

17 % 0.0% 8.0% 6.0% 4.0%.0% 0.0% 8.0% 6.0% 4.0%.0% 0.0% -.0% -4.0% -6.0% -8.0% -0.0% -.0% -4.0% -6.0% -8.0% -0.0% JBS Foods % JBS Net Revenue 8% 8% 40% % Net Revenue (R$ billion) 4% 9.5% Net Revenue of R$3,376.8 million in the quarter, 9.5% higher than Q4: Increase of 6.8% in domestic volumes; Increase of.9% in average prices of prepared products in domestic market; Higher volume of fresh pork exports (+7.7%); Increase of 6.4% in average export prices. 4Q3 Q4 Q4 3Q4 EBITDA (R$ million) 7.9% % 4.3% % EBITDA totaled R$576.0 million, with an EBITDA margin of 7.%, compared to 4.3% in Q4: Higher productivity with lower production costs, as well as a decrease in the cost of raw materials resulted in a COGS representing 7.5% of net revenue, compared to 74.4% in Q4; 4Q3 Q4 Q4 3Q4 Reduction in SG&A (4.4% over net revenue compared to 5.% in the Q4), mainly due to lower logistics costs, reflecting the reorganization and optimization of the company s logistics network. EBITDA Margin (%) 7

18 JBS Mercosul 8

19 JBS Mercosul Beef production in Brazil, Argentina, Paraguay and Uruguay, in addition to leather and other Related Business Operational Platform ~ 55,000 bovines per day 9% in Brazil, 3% in Argentina, 3% in Paraguay and % in Uruguay 90,000 hides per day Facilities in Brazil, Argentina, Uruguay, China, Vietnam and Mexico 43 distribution centers central and 3 regional Brazil AM AC RO MT PA MS 4 4 PR RS 6 4 GO MA SC BA MG RJ CE ES SP PE +70,000 employees 48 beef processing facilities 06 feedlots 9 tanneries 43 distribution centers 09 related businesses Biodiesel Can making Collagen JBS Carriers Trading Hygiene and Clean Casings TRP Complementary to JBS Carriers Recycling Argentina Leadership in beef production Paraguay JBS is the leader in beef processing and has around 5% of market share in exports of Paraguay Uruguay Great access to export markets; the only country to export fresh beef to the US Net Revenue LTM4 R$7.8 billion EBITDA LTM4 05 beef processing facilities 0 can making 0 tannery 0 beef processing facility 0 beef processing 0 tanneries R$,477.4 million 0.0% Margin 9

20 % 6.0% 4.0%.0% 0.0% 8.0% 6.0% 4.0%.0% 0.0% 8.0% 6.0% 4.0%.0% 0.0% -.0% -4.0% -6.0% -8.0% -0.0% -.0% -4.0% -6.0% -8.0% -0.0% JBS Mercosul % JBS Net Revenue 7% 44% 7% % Net Revenue (R$ billion) % 4.8% Net revenue of R$6.470,5 million in the quarter, 4.8% higher than 3Q3: Increase in sales prices in the export market; % Compared to Q4, net revenue increased.8%; The launching of convenience beef products reflected in an increase in the sales volumes in this category (processed products) coupled with an increase in prices during the period. 3Q3 4Q3 Q4 Q4 3Q4 EBITDA (R$ million) EBITDA totaled R$554.6 million, with EBITDA margin of 8.6%:.6%.0% 0.4% 0.% 8.6% Strong demand in the international market More products towards exports in order to maximize profitability per animal processed Strategy of investing in brands and product innovation in the domestic market 3Q3 4Q3 Q4 Q4 3Q4 EBITDA margin (%) 0

21 Beef JBS USA

22 JBS USA Beef Beef production in the United States, Canada and Australia Operational Platform United States +30,000 employees ~40,000 bovines per day 8,000 in the US 4,000 in Canada 8,000 in Australia ID UT CO 4 NE KS WI MI PA 09 beef processing facilities,000 hides per day 5,000 in the US 6,000 in Australia AZ TX OK 3 feedlots 0 tannery 06 carriers units 6 feedlots (bovine) in the US/ Capacity of.0 million bovines 0 in Canada / Capacity of 70,000 bovines 05 in Australia / Capacity of 5,000 bovines 4 4 Australia Leadership in beef exports Leadership in the processing of lamb (,000 lamb per day) #st in the Food Industry Ranking¹ Growth of % in revenues from 007 to LTM04 3 processing facilities 08 bovine and 05 lamb 07 feedlots 05 bovine and 0 lamb 0 tannery 07 distribution centers 03 case ready facilities 07 distribution centers 07 DCs in Australia and 06 carriers units in the US Net Revenue LTM4 Canada Growth of 7% in revenues from 03 to LTM04 US$0.5 billion EBITDA LTM4 0 beef processing facility 0 feedlot (bovine) 0 trading US$704.9 million 3.4% Margin Note. Source: Food&Drink Business Magazine

23 % 6.0% 4.0%.0% 0.0% 8.0% 6.0% 4.0%.0% 0.0% 8.0% 6.0% 4.0%.0% 0.0% -.0% -4.0% -6.0% -8.0% -0.0% -.0% -4.0% -6.0% -8.0% -0.0% JBS USA Beef % JBS Net Revenue 7% 44% 7% % Net Revenue (US$ billion) 4.7% % 3Q3 4Q3 Q4 Q4 3Q4 Net revenue of US$5,849.3 million in the quarter, 4.7% higher than 3Q3: Increase in sales volume in both domestic and export markets; Increase in prices; Compared with Q4, net revenue posted an increase of 9.7%; Main destinations of this business unit were Japan, Greater China and South Korea; % EBITDA (US$ million).7%.4% -0.5%.0% 8.6% EBITDA totaled US$504.9 million, with EBITDA margin of 8.6%: Company strategy regarding the purchase of cattle permitted the improvement in COGS; Q3 4Q3 Q4 Q4 3Q4 Seasonal stronger beef demand in a scenario which beef supply remains constraint, contributing to an increase in sales prices; Australia operations performed well and contributed to the strong results of this quarter. EBITDA margin (%) 3

24 Pork JBS USA 4

25 JBS USA Pork Pork production in the United States Operational Platform United States +6,000 employees ~ 5,300 hogs per day 00% in the US 0 case ready facilities Convenience products CA CO IA KY NC 03 hogs processing facilities 0 case ready facilities ~3,000 lamb per day 0 lamb processing facility Products Main Brands Swift Premium Dry Rubbed Ribs Swift Premium Boneless Backrib Swift Premium Rubbed Loin Filet Swift Premium Boneless Pork Chops Net Revenue LTM4 US$3.8 billion EBITDA LTM4 US$396. million 0.5% Margin 5

26 % 6.0% 4.0%.0% 0.0% 8.0% 6.0% 4.0%.0% 0.0% 8.0% 6.0% 4.0%.0% 0.0% -.0% -4.0% -6.0% -8.0% -0.0% -.0% -4.0% -6.0% -8.0% -0.0% JBS USA Pork % JBS Net Revenue 7% 44% 7% % Net Revenue (US$ million) % 3.8% Net revenue of US$937.8 million in the quarter, 3.8% higher than 3Q3: , Increase of 8.7% in sales prices in the domestic market and an increase of 4.7% in export prices; Compared with Q4, net revenue decrease 8.8%, due to lower volumes. -8.8% 3Q3 4Q3 Q4 Q4 3Q4 EBITDA (US$ million) 4.8% 9.5% 9.%.%.% EBITDA of US$3. million, with EBITDA margin of.%: In comparison with Q4, EBITDA remained stable; The maintenance of pork prices in higher levels due to constraint supply, coupled with a decrease in raw material costs contributed to this quarter results. 3Q3 4Q3 Q4 Q4 3Q4 EBITDA margin (%) 6

27 Pilgrim s Pride 7

28 JBS USA Chicken (Pilgrim s Pride Corporation - PPC ) Poultry production in the United States, Porto Rico and Mexico Operational Platform United States +39,000 employees ~ 7.5 million birds per day 6.5 million in the US 50,000 in Porto Rico 800,000 in Mexico KY WV VA 4 poultry processing facilities 0 distribution centers TX 4 AR LA TN AL 3 GA 7 NC SC Located in Mexico FL + de 3,500 contract growers 36 hatcheries 8 feed mills Mexico With Tyson acquisition, PPC will have an additional of three facilities, adding 600,000 birds per day of capacity and 9,000 employees 03 poultry processing facilities 0 distribution centers Porto Rico 0 processing facility Net Revenue LTM4 US$8.5 billion EBITDA LTM4 US$,76.3 million 3.8% Margin 8

29 % 6.0% 4.0%.0% 0.0% 8.0% 6.0% 4.0%.0% 0.0% 8.0% 6.0% 4.0%.0% 0.0% -.0% -4.0% -6.0% -8.0% -0.0% -.0% -4.0% -6.0% -8.0% -0.0% JBS USA Chicken (Pilgrim s Pride Corporation - PPC ) % JBS Net Revenue 7% 44% 7% % Net Revenue (US$ billion) % 5.8% Net revenue of US$,68.0 million in the quarter, increase of 5.8% compared to 3Q3: % In the US, sales increased 4.8%, of which.4% is due to an increase in volume and.4% is due to an increase in prices, as a reflect of a change in product mix, with an improvement in the participation of small and deboned small birds, in addition to convenience products; 3Q3 4Q3 Q4 Q4 3Q4 EBITDA (US$ million) 9.% 5.5% 0.6% 9.6% 0.% In Mexico, revenue increased 5.0%, as a result of an increase in price per kilo, due to the restriction in the supply of eggs sets for incubation, as well as in the number of chicks placed. This increase in revenue was partially offset by a decrease in volume sold and by the devaluation of Mexican Peso. EBITDA in 3Q4 was US$435.4 million, with EBITDA margin of 9.%: Reduction of US$0.8 million in feed costs in the US and of US$.5 million in Mexico; 3Q3 4Q3 Q4 Q4 3Q4 Reduction in costs with labor, freights and storage, packaging and in contract growers, totaling US$3.8 million. EBITDA margin (%) 9

30 Consumer Ready USA Production capacity in 04: 9.8 thousand tons per month Production capacity in 05: 30. thousand tons per month Increase in production: +5.8% 30

31 Mission To be the best in what we set out to do, completely focused on our business, ensuring the best products and services for our customers, consistency for our suppliers, profitability for our shareholders and the opportunity of a better future for all our team members.