jbs s.a.jbss.infoinvest.com.br/enu/3537/institutional presentation 3q15.pdf · 4 ipo jbs sa net...

JBS S.A.

A GLOBAL

FOOD

COMPANY

Institutional Presentation 3Q15

Global and diversified platform

Value added product portfolio with brands

Focus on operational excellence

High performance team with more than

230 thousand employees

Net Revenue of R$150 billion (LTM)

Second largest global food company¹

JBS AT A GLANCE

Beef32%

Poultry22%

Pork16%

Prepared & Others

30%LTM Revenue

3Q15

R$150 bi

2Source 1: Bloomberg

3

A GLOBAL COMPANYAn Exclusive Global Production and Sales Platform

As % of Total Revenue¹

Production footprint

Note 1. Revenues by region includes domestic sales and imports.

CANADA3%

USA

47%

MEXICO6%

BRAZIL12%South Am/

OTHERS

EUROPERUSSIA

ASIA

AFRICA &

MIDDLE EAST

OCEANIA

6%

6%

4%

4%

1%

11%

4

IPO JBS SA

Net Revenue: R$14.1 bi

2007

2008


2009

BERTIN

2010

EXPANSION IN USA AND AUSTRALIA


2013

ACQUISITIONS: TYSON IN BRAZIL

AND MEXICO

2014

CARGILL PORK

Net Revenue LTM3Q15¹:

R$150.1 bi

2015

230,000

EMPLOYEES

From a Brazilian beef company in 2007 to a Global food company

EVOLUTION

2006

19,000

EMPLOYEES


Note 1. Not considering revenues from Moy Park and Cargill Pork

5

STRATEGYGlobal and Diversified Production and Distribution Platform progressing towards value added

products with brands

Production platform

Branding

Value added products

Sales and distribution platform

\\\\\\\\\\\\

+300 production units in +15 countries

+350,000 costumers and sales to +150 countries

6

| Net Revenue Growth: 77%

HISTORICAL PERFORMANCEConstant Revenues and EBITDA Margin Growth

EBITDA Margin (%)EBITDA (R$ million)Net Revenue (R$ million)

| EBITDA Growth: 124%

7.1% 6.9% 6.6%

8.4%

11,8%9.6%

8.2%

9.2% 8.9%

24,22227,222 26,419

28,96930,779

34,303 33,819

38,90543,029

1,710 1,874 1,7502,433

3,618 3,2902,758

3,577 3,834

3T13 3T13 4T13 4T13 1T14 1T14 2T14 2T14 3T14 3T14 4T14 4T14 1T15 1T15 2T15 2T15 3T15 3T153Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

CONSOLIDATED RESULTS

3Q15

7

3,618 3,834

11.8%

8.9%

3Q14 3Q15

30,779

43,029

3Q14 3Q15

8

3Q15 CONSOLIDATED HIGHLIGHTS

EBITDA Margin (%)

CONSOLIDATED NET SALES (R$ MILLION) CONSOLIDATED EBITDA (R$ MILLION)

| Robust sales growth

| Solid operational results

39.8%

6.0%

1,092.9

3,441.4

0.38

1.19

3Q14 3Q15

2,130

5,066

3Q14 3Q15

9

NET INCOME (R$ MILLION) FREE CASH FLOW GENERATION (R$ MILLION)

| Net income reached a historical high

| Increased Earnings Per Share (EPS) (Cancelation of shares held in treasury)

| Robust Free Cash Flow Generation

137.8%


288.6%

Earnings Per Share (R$)Reported Net Income

Adjusted

Net Income

4,246.7

JBS S.A.41%

JBS Foods11%

JBS USA Holdings

48%Capital Market45.0%

Commercial Banks54.9%

BNDES0.1%

11

BREAKDOWN BY CURRENCY

AND COST BREAKDOWN BY COMPANY

MATURITY (R$ MILLION)

-5,058

1,752 3,231 3,790 1,646

10,643 6,281

19,422

Short Term* 2016 2017 2018 2019 2020 2021 After 2021

US$91%

R$9%

13.61% p.a.

4.76% p.a.

Note *. Net of Cash

DEBT PROFILE AND MATURITY

BREAKDOWN BY SOURCE

52.0

8.9

43.1

Financial Liability Operational Asset Net ExposURE

12

FX HEDGING POLICY

JBS EXPOSURE TO US DOLLAR (R$ BILLION) HEDGE POSITION (R$ BILLION)

41.4

1.7

Hedge Unhedged Position

FX Variation on Net Exposure: R$10.1 billion

Effect on Financial Results: R$6.1 billion

Effect on Equity: R$4.0 billion

Hedge Result: R$9.5 billion

Financial

Liability

Operational

Asset

Net

Exposure

FX Exposure and Hedge Position at the end of 3Q15

CONSOLIDATED EXPORTSJBS Exports breakdown in 2Q15 and 3Q15

Greater China¹16.8%

Mexico11.0%

Japan10.9%

South America10.5%

Africa & Middle East10.5%

USA9.5%

Russia9.1%

E.U.6.5%

South Korea4.7%

Canada2.4%

Others8.2%

3Q14

US$4,361.1

million

South America16.8%

Greater China¹15.1%

Africa & Middle East

12.6%

Mexico12.2%

USA9.5%

Japan9.4%

E.U.5.2%

South Korea4.9%

Russia3.8%

Canada2.1%

Others8.3%

3Q15

US$ 3,941.3

million

Note 1. Considers China and Hong Kong 13

14

JBS FOODS

3,376.8

5,012.2

3Q14 3Q15

15

JBS FOODS

| Expressive organic growth and via acquisitions.

| Continuous EBITDA margin expansion.

| Commitment to improved performance.

| Focus in quality, innovation and brands.

48.4% 80.5%

NET REVENUE (R$ MILLION) EBITDA (R$ MILLION)

576.0

1,040.017.1%

20.7%

3Q14 3Q15

13.7%

15.9%

20.7%

1Q

14

2Q

14

3Q

14

4Q

14

20

14

1Q

15

2Q

15

3Q

15

10.6

12.9

17.0

20.0

2013 (Acquisition)¹ 2014 LTM3Q15 3Q15 Annualized

NET REVENUE (R$ BILLION)

Note 1: proforma net revenue considers combined 2013 results from Seara + JBS Aves

CONSISTENCY OF RESULTS (EBITDA Margin %)

21.7%

31.8%

EVOLUTION OF JBS FOODS

18.0%

16

17

OPERATIONAL EXCELLENCE

Source: Company

Costumer Service (OTIF – on time in full)

23% improvement

Point of Purchase Out of Stock

24% improvement

Active Costumers

An increase of 29 thousand

Perceived Quality

26% improvement in quality drivers

Productivity Drivers

An increase of 400 bps in operational efficiency index

18

JBS MERCOSUL

554.6640.8

8.6% 9.0%

3Q14 3Q15

6,470.5

7,146.9

3Q14 3Q15

19

JBS MERCOSUL

10.5% 15.5%

| Recovery of exports and opening of Chinese and Saudi markets.

| Operational profitability improvement.

| Better supply and demand dynamics.

| Continuous investments in Friboi brand.

| Outlook of trade with the US.

NET REVENUE (R$ MILLION) EBITDA (R$ MILLION)

20

JBS EUROPE

4,0064,723

5,5086,383

2012 2013 2014 LTM 3Q15

21Source: Company

In Natura

Convenience and Value Added UK

Convenience and Value Added Europe

Poultry Breeding Grounds

Rigamonti

NET REVENUE (R$ MILLION)

+59%

JBS EUROPE OVERVIEW

| 15 production units with 12 thousand employees

| 450 thousand tons of products processed annually

42% 51% 7%

In Natura Prepared & Breaded Convenience & Others

62% 27% 10%

Retail Foodservice Others²

MOY PARK: VALUE ADDED PRODUCTS

In Natura Prepared & Breaded Convenience & Others

Pro

du

cts

Ch

an

ne

l

Mix

¹C

ostu

me

rs

Note 1: 2014 Revenues Percentage.

Note 2: Others includes agricultural costumers, poultry international costumers and poultry sub products. 22

26

76

2011 2014

+50

MOY PARK: INNOVATION BENCHMARKING

DEVELOPMENT OF PRIVATE LABEL PRODUCTS

NEW PRODUCT SAMPLES DEVELOPED BY MOY PARK

EMBEDDED CHEFS

FOOD DEVELOPMENT INNOVATION & INSIGHT HEADCOUNT

R&D Headcount

BENCHMARK IN POULTRY BREEDING PRACTICES

Antibiotic Free

Free Range

Organics

23

24

JBS USA BEEF

504.9

196.8

8.6%

3.4%

3Q14 3Q15

5,849.3 5,750.9

3Q14 3Q15

25

JBS USA BEEF

-1.7%-61.0%

Swift

(bolinha) e

Primo

NET REVENUE (US$ MILLION) EBITDA (US$ MILLION)

| Lower cattle availability in US as a consequence of stronger Heiferand Cow retention.

| Impact of Australian dollar devaluation vs. US Dollar.

| New management in Primo leading the process of reorganization,integration and synergy capturing.

| 30% expansion of value added products (consumer ready) in 2015and 60% in 2016, reaching 340 million lbs.

PRIMO: VALUE ADDED PRODUCT DIVERSIFICATION

Processed

Pro

du

cts

Ch

an

ne

l

Mix

¹

Le

ad

ing

Bra

nd

s

74% 5% 18% 2%

Retail Foodservice Distributors Exports & Others

Note 1: Others: retail stores 26

PRIMO: LEADING BRANDS IN OCEANIA

Primo40%

George Weston23%

Dorsogna11%

Ingham3%

Bertocchi10%

Other5%

Private Label8%

Leading Brand in Australia

Premier Beehive

37%

Hellers28%

Private Label10%

A.Verkerk9%

Hobsons Choice4%

Tegel Foods4%

Other8%

Leading Brand in New Zealand

Source: Australia and New Zealand Market Share data based in Woolworths & Coles (September 2015) 27

28

JBS USA PORK

113.2

48.4

12.1%

6.2%

3Q14 3Q15

937.8

785.4

3Q14 3Q15

29

JBS USA PORK

-57.2%

-16.3%

| Increase in pork supply and decrease in prices.

| Increase of products and clients portfolio through the acquisition ofCargill Pork, concluded in October 30th.

| Increased sales of value added products.

| Defined management team at the New JBS USA Pork with theinitiation of integration and synergy capturing.


30

NEW JBS USA PORK

| Proforma Net Revenue of US$6.3 billion.

| Proforma EBITDA of US$565 million (Pre-Synergies).

| 20% market share.

| 90,000 hog processing capacity per day.

| 5.0 million lbs of prepared and valueadded products per week.

| 2.0 million lbs of bacon produced per

week.

FINANCIAL HIGHLIGHTS

OPERATIONAL HIGHLIGHTS

05 hog processing units

01 lamb processing unit

03 consumer ready facilities

05 feed mills

04 genetic units

CA

2

1

TX

1

AR

2

1

OK

CO1 MO

2

IA2

1

1

MN

IL1

KY1

NC1

31

JBS USA CHICKENPILGRIM’S PRIDE (PPC)

435.4

274.3

19.2%

13.0%

3Q14 3Q15

2,268.02,112.5

3Q14 3Q15

32

JBS USA CHICKEN (PPC)

-6.9%

-37.0%

| Robust Cash generation.

| Decrease in prices in domestic and export markets.

| US$30 million impact of non recurring costs in the quarter.

| US$200 million in operational improvements through 2015.

| Challenging environment for exports, but with the expectation ofmarkets reopening.


NEW PILGRIM’S IN MEXICO

| US$1.6 billion in revenue annually.

| 28% Market Share.

| US$50.0 million synergies in progress.

| Conclusion of Tyson de México acquisition in

July 2015.

| Integration 100% concluded.

| +10,000 Team members.

| 1.3 million poultry processed per day.

| Strong nationally recognized brands.

| New Vera Cruz complex initiating in December

2015.

FINANCIAL HIGHLIGHTS

OPERATIONAL HIGHLIGHTS

06 poultry processing units

17 Distribution Centers

FACILITIES FOOTPRINT

33

34

MARKETING AND INNOVATION

Ma

rke

tin

g a

nd

In

no

vati

on

Adding

Value

Bottled Water Market Value¹

US$ ~160 billion

Source 1: globe newswire35

THE POWER OF MARKETING AND INNVOATION IN FOOD

FOOTBALL oriented Marketing, through the

sponsorship of teams and events.

SINGLE-TIER, with no price category diversification.

SEARA BRAND UNTILL 2013... ...REPOSITIONING TROUGHOUT 2014

Seara is the brand of the contemporary

woman, with FOCUS ON QUALITY, taste and

convenience.

Seara becomes a MULTI-TIER brand.

Experimente Seara

A QUALIDADE VAI TE SURPREENDER

36

REPOSITIONING OF THE SEARA BRAND

BRAND PREFERENCE TRIPLED

90% COSTUMERS CONSIDERS SEARA IN THE BUYING

PROCESS

CONSIDERED THE BRAND OF THE MODERN WOMAN!

SECOND PLACEON TOP OF MIND!

ONE OF THE MOST REMEMBERED TV COMERCIALS IN TEN(SOURCE: DATAFOLHA)

SEARA WAS THE MOST APPRECIATED BRAND IN 2014

Pre

miu

mM

ain

stre

amR

egio

nal

/ A

cces

s

BRAND REPOSITIONING

Source: Datafolha e Millward Brown 37

BUYING RATE¹

(Per semester)

VOLUME PER OCCASION

(Volume growth)

PENETRATION

(Presence in Brazilian homes)

+3,579,950 homes(1H15 vs. 1H14)

46%

+ 7.1%

+12.7%2.5 visits

(1H15 vs. 1H14)

REPEATED PURCHASE

Besides the conquest of new buyers throughout Brazil, the

repetition conversion is already happening at Seara.

Testers Repeaters Monthly Penetration

Repeat Rate: 67%

Source: Kantar WorldPanel – Consuming evolution in Brazilian homes (Categories: Pizzas, Pasta, Hamburger, Breaded, Snacks, Sausages and Ham (1H15 vs. 1H14 variation) 38

BUYING BEHAVIOUR EVOLUTION

19.5 20.3

24.626.4 26.4

27.6

30.2

7.2 7.0 7.68.7 8.8 9.0 9.1

Aug/Sep 14 Oct/Nov 14 Dec/Jan 15 Feb/Mar Apr/Mar 15 Jun/Jul 15 Aug/Sep 15

Frozen Margerines

13.2 13.2 13.6 13.9 13.715.0 15.3

22.5

24.5

28.829.6

31.131.8

32.5

Jul/Aug 14 Sep/Oct 14 Nov/Dec 14 Jan/Feb 15 Mar/Apr 15 May/Jun 15 Jul/Aug 15

Industrialized Pizzas

Source: AC Nielsen - Market Share by Volume Category - Includes Excelsior. In Frozen, includes Massa Leve from Aug/Sep 14, Agrovêneto and Macedo from Dez/Jan 15 and Big Frango from Fev/Mar/15

FROZEN AND MARGERINES INDUSTRIALIZED AND PIZZAS

39

MARKET SHARE EVOLUTION

40

FRIBOI

“De

co

mm

od

itiz

ati

on

”

FRIBOI WAS... FRIBOI FROM 2013 ONWARDS

| Sparse Marketing

Investments.

| Beef still treated as

commodity.

| Increase in Marketing investments through a well

known national TV celebrity.

| Slogan “Ask for Friboi. Reliable Beef has a Name”.

| Focus on communicating the reliability benefit

through guarantee of origin.

| Commercials aired on TV, radio, banners, magazines

and stand ups.

41

“DECOMMODITIZING” BEEF

42

100%

115%

120%

125%

135%

150%98%

101%

104%103%

2013 PreCampaign

2013 PostCampaign

2014 YTD 2015

Friboi average price vs Market average price

After the Slogan “Ask for Friboi. Reliable Beef has a

Name”, Friboi prices increased 5% compared to the

market average

Source: JBS and Shoppingbrasil IFR

Note 1: Basket is composed by: shoulder, rump, strip loin, round cuts, tenderloin, flank steak, and top sirloin cap.

PRICING INDEX OF JBS BRANDS IN BRAZIL FRIBOI BRAND POSITIONING IN THE MARKET (Basket of Cuts¹)

POSITIONING OF FRIBOI IN THE BRAZILIAN MARKET

43

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.

jbs s.a.jbss.infoinvest.com.br/enu/3537/institutional presentation 3q15.pdf · 4 ipo jbs sa net...

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