2008 conference call presentation
DESCRIPTION
TRANSCRIPT
2008 Consolidated Results
JBS S.A.February 20th, 2009
“In God we Trust”
3.74
2.892.77
2.31
1.96
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09
JBS lives an intense process of deleverage reducing
the net debt / EBITDA ratio from 3.74x in 2007 to
1.95x in 2008.
Leverage
1.95
Rodrigo GagliardiInvestor Relations Manager
Jeremiah O’CallaghanInvestor Relations Director
Joesley Mendonça BatistaCEO
1
Presenters
Our Values
The Foundation Of Our Culture
Planning
Determination
Discipline
Availability
Openness
Simplicity
2
2008 Highlights2008 Highlights
Debt ProfileDebt Profile
Consolidated ResultsConsolidated Results
Questions and AnswersQuestions and Answers
3
Agenda
• JBS lives an intense process of deleverage reducing the net debt / EBITDA ratio from 3.74x in 2007 to 1.95x in 2008.
• Adjusted pro forma net income in 2008 of R$1.05 billion, if adjusted by the exchange variation of foreign investments and excluded the goodwill amortization.
• Net revenue increased 114.5% YoY from R$14.1 billion in 2007 to R$30.3 billion in 2008.
• EBITDA YOY increased 95.6% from R$591.1 million in 2007 to R$1,156.1 million in 2008.
• Proposed dividend distribution has increased threefold from R$17.5 million in 2007 to R$51.1 million in 2008.
• Integration of the Tasman Group, of Smithfield Beef and the Five Rivers Feedlot grew the global production platform of JBS as well as increasing penetration in the world market while introducing cost cutting synergies.
• Distribution network of INALCA JBS enhanced the contact with customers in Africa and Eastern Europe.
• Proven risk control and management policy preserved the financial health of JBS during a period of uncertainty and high volatility particularly during the second semester of 2008.
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4
2008 Highlights
* Including Finimp
** Percentual to be paid in the period.
*** Working Capital due short term and automatically renewable.
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JBS S.A. Consolidated (R$ million)
1Q09 2Q09 3Q09 4Q09 Total %** 1Q09 2Q09 3Q09 4Q09
Financing for purchase of fixed assets
FINAME / FINEM - Enterprise financing 11 11 11 59 91 100% 11 11 11 59
Notes Payable 1 1 1 2 5 100% 1 1 1 2
Subtotal 1 12 12 11 61 96 100% 12 12 11 61
Loans for working capital purposes
ACC - Exchange advance contracts 214 322 150 29 715 0% - - - -
EXIM - BNDES export credit facility 72 0 0 0 72 100% 72 - - -
Fixed Rate Notes with final maturity in February 2011 9 - - - 9 100% 9 - - -
Working Capital - American Dollars * 33 71 0 0 104 0% - - - -
Working Capital - Australian Dollars 86 74 0 - 160 0% - - - -
Working Capital - Euros *** 1 11 2 288 302 0% - - - -
Working Capital - Reais 51 - - - 51 0% - - - -
Export prepayment 160 16 16 16 208 0% - - - -
Fixed Rate Notes with final maturity February 2016 (144-A) - 30 - - 30 100% - 30 - -
NCE / COMPROR 330 - 100 37 467 0% - - - -
Subtotal 2 957 524 268 371 2.119 5% 81 30 0 0
Total 969 536 279 431 2.215 9% 93 42 11 61
Amortization of Short Term Debt 2.215
Cash, cash equivalents and Short-term investments 12/31/2008 2.292 2.199 2.157 2.145 2.085
Working Capital 2.704
Short Term Debt
Probable Scenario
Short Term Debt
207
• The Administration of the Company is secure that even if the present financial crisis has not abated, the Company will not have difficulties in refinancing its short term debt and believes that in the final analysis there will be a possible increase in the cost of the debt.
Debt Profile – 4Q08
Net Sales Revenue (R$ million)Net Sales Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)EBITDA and EBITDA Margin (R$ million)
6
345.1
564.9 591.1
1,156.1
4.2% 3.8%
14.2%
9.6%
12M05 12M06 12M07 12M08
3,577.1 3,967.6
14,141.6
30,340.3
12M05 12M06 12M07 12M08
114.5%95.6%
Source: JBS
EBITDA Margin (%)
4.6%63.7%10.9% 256.4%
2008 Consolidated Results
94.8
176.3
290.8
470.5
265.9
2.8%
4.1%
6.1%
3.0%
1.4%
4Q07 1Q08 2Q08 3Q08 4Q08
9,633.2
7,771.5
6,650.7
5,859.1
7,129.5
4Q07 1Q08 2Q08 3Q08 4Q08
Net Sales Revenue (R$ million)Net Sales Revenue (R$ million) EBITDA and Margin (R$ million)EBITDA and Margin (R$ million)
-11.9%
86.0%
21.7%
64.9%
9.0%
61.8%
24.0%
-43.5%
Source JBS
EBITDA Margin (%) 7
180.5%
2008 Consolidated Results by Quarter
8
2.82.8
2.31.9
2.6
4Q07 1Q08 2Q08 3Q08 4Q08
Net Sales(US$ million)
Net Sales(US$ million)
EBITDA (US$ mi) margin EBITDA
EBITDA (US$ mi) margin EBITDA
60.4
155.6
-84.5
-0.9
132.9
2.2%
5.6%5.1%
-0,1%
-3.7%
4Q07 1Q08 2Q08 3Q08 4Q08
JBS USA (Beef)
Including Australia
620536598
682600
4Q07 1Q08 2Q08 3Q08 4Q08
Net Sales(US$ million)
Net Sales(US$ million)
EBITDA (US$ mi) margin EBITDA
EBITDA (US$ mi) margin EBITDA
25.6
52.1
40.5
15.719.9
4.3%
7.6%
3.2%2.9%
6.8%
4Q07 1Q08 2Q08 3Q08 4Q08
JBS USA (Pork)
143140132
162
1Q08 2Q08 3Q08 4Q08
Net Sales(€ million)
Net Sales(€ million)
EBITDA (€ mi) margin EBITDA
EBITDA (€ mi) margin EBITDA
8.37.4
6.67.6
5.1%5.3%4.7%5.6%
1Q08 2Q08 3Q08 4Q08
INALCA JBS
1.61.8
1.3 1.31.4
4Q07 1Q08 2Q08 3Q08 4Q08
Net Sales(R$ million)
Net Sales(R$ million)
EBITDA (R$ mi) margin EBITDA
EBITDA (R$ mi) margin EBITDA
69.4102.2
199,1
132.7
58,2
10.4%
15.1%
4.3%4.1%5.6%
4Q07 1Q08 2Q08 3Q08 4Q08
JBS MERCOSUL
Source JBS
EBITDA Margin (%)
Performance by Business Unit
Source: JBS
Net Debt / EBITDA
• JBS’s Net debt in relation to its EBITDA (last twelve months pro forma) is affected by weak results in the 4th quarter 2007 and 1st quarter 2008.
• Good results expected for 1st quarter 2009 will reduce the relation between Net Debt over Ebtida.
9
2.77
3.74
2.31
1.95
2.89
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09
Net Debt / EBITDA Pro Forma per TRIMESTER
*
Net Debt = R$ 3,325 MM
EBITDA pro forma = R$ 1,706 MM= 1,95
Exchange Rate:
R$ / US$ = 2.34 – 12/31/2008
US$ / €$ = 1.39 – 12/31/2008
Debt Profile
1.95Net Debt = R$ 3,325 MM
EBITDA pro forma = R$ 1,706 MM= 1.95
10
-0.4%
1.3% 1.3%
3.6%
0.9% 0.9%
6.4%
1.1%
3.2%
-0.9%
2.3%
-5.3%
-0.7%
-0.4%
-1.7%
4.2%
2.0%
5.3%
-1.3%-1.2%
0.9%0.7%
FY03* FY04* FY05* FY06* FY07* 3Q07** 4Q07** 1Q08** 2Q08** 3Q08** 4Q08**
Peers Average Beef USA
JBS Beef USA
Source: JBS and estimates of JBS based upon public data from peersEBITDA margins of the Companies taking into consideration beef only in the US*Fiscal years for the Companies differ one from the other:FY Tyson: October to SeptemberFY Smithfield: May to AprilFY National Beef: September to AugustFY JBS USA: June to May (altered after the acquisition)**The relevant quarterly period and adjustments made to the calendar year
EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)
JBS S.A. ManagementJBS S.A. ManagementJBS S.A. ManagementJBS S.A. ManagementPrevious ManagementPrevious ManagementPrevious ManagementPrevious Management
7.3 p.p Gain
JBS USA Beef EBITDA Margin Evolution
Revenue Distribution by Business Units 12M08Revenue Distribution by Business Units 12M08 Revenue Distribution by Market 12M08Revenue Distribution by Market 12M08
Source: JBS Source: JBS
11
Consolidated Gross Revenue Distribution
Beef ItalyBeef ItalyBeef ItalyBeef Italy5%5%5%5% Beef ArgentinaBeef ArgentinaBeef ArgentinaBeef Argentina
3%3%3%3%
Beef BrazilBeef BrazilBeef BrazilBeef Brazil19%19%19%19%
Beef USABeef USABeef USABeef USA47%47%47%47%
Pork USAPork USAPork USAPork USA14%14%14%14%
Beef AustraliaBeef AustraliaBeef AustraliaBeef Australia12%12%12%12%
Domestic MarketDomestic MarketDomestic MarketDomestic Market68%68%68%68%
ExportsExportsExportsExports32%32%32%32%
Exports Distribution 12M08Exports Distribution 12M08
Source: JBS
12
Consolidated Exports Distribution
MexicoMexicoMexicoMexico
18%18%18%18%
RussiaRussiaRussiaRussia
13%13%13%13%
E.U,E.U,E.U,E.U,
11%11%11%11%JapanJapanJapanJapan
9%9%9%9%
CanadaCanadaCanadaCanada
8%8%8%8%
Middle EastMiddle EastMiddle EastMiddle East
7%7%7%7%
Hong KongHong KongHong KongHong Kong
5%5%5%5%
South KoreaSouth KoreaSouth KoreaSouth Korea
4%4%4%4%
TaiwanTaiwanTaiwanTaiwan
4%4%4%4%
USAUSAUSAUSA
3%3%3%3%
ChinaChinaChinaChina
3%3%3%3%
OthersOthersOthersOthers
15%15%15%15%
Exports JBS 12M08: US$ 5.6 billion
Source: JBS
SWIFT USA ACQUISITIONSWIFT USA ACQUISITION
EV / EBITDAUS$1,458.8 mm
SMITHFIELD BEEF ACQUISITIONSMITHFIELD BEEF ACQUISITION
EV / EBITDAUS$565.0 mm
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96.3
370.5
3.9x
15.1x
Jul-07 Dec-08
285%70.0
163.1
3.5x
8.1x
Oct-07 Dec-08
133%
Enterprise Value and EBITDA Multiple
•Commitment from the Management to reduce the leverage of the Company.
•Appropriate liquidity level.
•We will continue to grow. We see the present crisis as an immense opportunity.
•Regardless of the negative aspects of the present macroeconomic scenario, the Management of this Company forecasts substantiallyimproved consolidated operational results for 2009.
•Planning and discipline contributed to risk reduction.
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Final Considerations
JBS S.A.February 20th, 2009
“In God we Trust”
3.74
2.892.77
2.31
1.96
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09
JBS lives an intense process of deleverage reducing
the net debt / EBITDA ratio from 3.74x in 2007 to
1.95x in 2008.
Leverage
1.95
Questions & Answers
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.
Disclaimer