4q09 conference call presentation
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4th Quarter 2009 Results
In God We Trust, Nature We RespectJBS S.A.
March 8th, 2010
32 51 73150 185
345 432548 602
1.156
3.058
4,92% 5,73%6,0%
11,0%9,7% 10,5%
11,2%
13,6%
4,3% 3,8%5,5%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*
EBITDA R$ mm EBITDA Mar in
JBS remains a Growth Company
*Pro forma including Bertin and Pilgrims Pride.
Source: JBS
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Presenters
Jeremiah OCallaghan
Investor Relations Director
Joesley Mendona Batista
Chief Executive Officer
Guilherme Arruda
Investor Relations
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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.
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Our Values
Excellence
Planning
Determination
Discipline
Availability
Openness
Simplicity
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Agenda
Company Overview
Market Overview
4Q09 Highlights
Short Term Outlook
Final Considerations
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Company Overview
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JBS S.A. at a Glance
Founded 1953 in central Brazil
IPO in 2007
Ibovespa ticker: JBSS3
ADR ticker: JBSAY
Leading animal protein producer in the World
Production platform in South America, North America, Europe and
Oceania
125,000 employees worldwide
Revenues of about US$ 30 Billion per annum
Market cap of R$ 22 billion
*Source: Bloomberg 25/02/2010
*
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JBS S.A. Growth Through Acquisitions
JBS History has been built throughmore than 30 acquisitions in 15 yearswith adequate capital structure andmanagement
Cceres
(Frigosol)
Iturama
(Frigosol)
Araputanga
(Frigoara)
Barretos (Anglo)
Pres. Epitcio (Bordon)
Campo Grande (Bordon)
Pedra Preta
(Frigo Marca)
Rosrio
(Swift ARG)
San Jose
(Swift ARG)
Inalca
Swift Foods Co.
Maring (Amambay)
Berazategui
(Rio Platense)
Colonia Caroya
SB Holdings
JV Beef Jerky
Venado
Tuerto
Pontevedra
(CEPA)
Rio Branco
Cacoal 1
Cacoal 2
Porto Velho
Vilhena (Frigovira)
Andradina
(Sadia)
Barra do
Garas
(Sadia)
Tasman
Smithfield
Beef
Five Rivers
R$/US$ end of the year quotation
Bertin Association
Pilgrims Pride
JBS Hides
5 new units
(1) (2) (3)
Net Sales (in US$ billion)
Companies and assets acquired
Source: JBS(1) Pro Forma JBS S.A. LTM Dec07(2) Pro Forma JBS S.A. LTM Dec08(3) Pro Forma JBS S.A. LTM Jun09 (including 5 new units and hides operation); Pilgrims Pride Sep09 (Estimated); Bertin LTM J un09
0.3 0.4 0.4 0.5 0.5 0.4 0.7 1.21.5 1.9
12.7
19.8
30.3
1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Goinia
(Anglo)
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EBITDA Growth
JBS remains a Growth Company.
*Pro forma includingBertin and Pilgrims Pride.Source: JBS
8
32 51 73150 185
345432
548 602
1.156
3.058
4,92%5,73% 6,0%
11,0%9,7%
10,5%
11,2%
13,6%
4,3% 3,8%
5,5%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*
EBITDA (R$ mm) EBITDA Margin
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Our Strategy
2005/2006AdequateFinancialStructure
2007/2008
Global ProductionPlatform
2009/2010Global Sales &
DistributionPlatform
2011/2012Value AddedProducts &Branding
- Access to raw materialsupply globally.
- Leader in countries withsurplus 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 anddistribution platform toserve efficiently, local andexternal markets, smallretailers, food processors,restaurants, and othercustomers globally.
- Sales force distributed overthe globe.
- Efficiency on selling the bestproduct, to the best market,
with the best price.- Cost reduction on sales and
transport.- Margin improvements.
- High liquidity level.- Debt equalized to cash
generation.- Strong cash position.- Access to international
capital markets to financegrowth.
- Development of long termfinancing plan.
- Use of export platform togrow.
- Hands-on working capitalmanagement.
South America
North America
Australia
European Union
Asia
Russia
Africa
Middle East
SouthAmerica
North
America
Australia
EuropeanUnion
Debt forWorking
CapitalEquity
toFinance
Growth
Cooked Products
Case ReadyProducts
Global Brands
Marketing
Investments
Minced Products
Fresh Products
Cured Products
Ready to EatProducts
- High technologyinvestments to producevalue added products.
- Increase value addedproducts portfolio.
- Customized products toeach market.
- Convenience to consumersday to day.
- Brand and Qualityrecognition and leadership.
- Marketing investments tobe present in consumerminds.
- Margin improvements.
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Our Strategy
Branding
ValueAdded
Products
Sales &Distribution
Platform
Production Platform
Foundation
Financial
Structure
Experienced
Management
Cost Reduction,Productivity,
ProcessOptimization
Risk
Management
EBITDA
Margin
4%
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Batista Family Bertin Family
ControllingHolding Market(Free Float)
JBS S.A.
(including Bertin)
JBS U.S.A.Includes AUS
Pilgrims Pride
BNDES
Othersubsidiaries
59% 41%
100% 80% - 75%
20% - 25%
64%Other
shareholders
36%
US$ 2 Bn
Corporate Structure
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Shareholders
12
Controlling
Holding
59%
BNDESPAR
19%
Individual
1%
Foreign
Investors
10%
Others
10%
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Production Units Employees
28,600 B
48,500 P
4,500 S
8,690 B
20,000 S
92,090 B
48,500 P
24,500 S
7,200,000 C
CPilgrims Pride 37 39,000 7,200,000
8,4006,217
125,000
Daily Slaughter Capacity
3,500
6,995
24,295
B
B
B
JBS MERCOSUR
JBS USA
JBS Austrlia
Inalca JBS
8
16
10
8
Total
JBS Brasil 61 44,993 43,400
140
3,000
(B) Beef; (P) Pork; (S) Smalls; (C) Chicken
Global Production Platform
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Market Overview
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Market Highlights
Robust domestic consumption in Brazil.
Growing middle classes in the Emerging Market sourcing moreproduct through imports.
Recovery of exports from US allied with improved domestic Americanconsumption.
European protein production declining.
Gradual Improvement in exports generally with the reduction and/orremoval of trade barriers.
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Per capita food consumption curve
(Kg / Year)
0
20
40
60
80
10 0
12 0
14 0
16 0
18 0
Cereals Roots and
Tubers
Beans, Peas
and Lentils
Sugar Oils Crops
and its
products
Meat Milk and its
products
1969/ 71
1979/ 81
1989/ 91
1999/ 01
2030
2050
Source: FAO
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Source: Secex
Brazilian Beef exports
(Thousand Tons)
1,086
1,218
1,4911,425
1,263
1,095
78 0
0
20 0
40 0
60 0
80 0
1,000
1,200
1,400
1,600
2003 2004 2005 2006 2007 2008 2009
E.U. Russia Egypt Venezuela Algeria USA Hong Kong Others
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Source: USDA ERS
1.8671.888
1.433
1.146
697
461
2.5202.449
2.269
2.4672.412
0
500
1.000
1.500
2.000
2.500
3.000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Mexico Canada South Korea Japan Vietnam China Hong Kong Netherlands Others
US Beef and Veal Exports (Million Pounds)
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Source: USDA ERS
4.128
4.667
3.1422.995
2.667
2.181
1.7171.6121.560
1.2871.278
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Japan China Hong Kong Mexico Russia Canada South Korea Australia Others
US Pork Exports (Million Pounds)
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Source: USDA ERS
6.9067.109
6.070
5.3675.333
4.9975.0134.942
5.738
5.1384.980
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Russia China (Mainland) Iraq Mexico Canada Cuba Other Chicken Others
US Poultry Exports (Million Pounds)
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Strong Long-term Industry Fundamentals
Meats Consumption Per Capita
Percapitacons
umption
(kg/capita)
Source: FAO
Recommendedconsumption80kg/capita
Population growth coupled with rising worldwide standards of living will drivean increase in protein demand on emerging global middle class
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4Q09 Highlights
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Highlights for the 4th Quarter 2009
Net Profit of R$127.9 million in 4Q09.
Net Revenue for 2009 was R$34,311.8 million, representing a 13.1% increase y-o-y.
In 4Q09 the consolidated EBITDA increased 49.6% compared to 4Q08, from
R$265.9 million to R$397.8 million. The consolidated EBITDA margin was 5.4% forthe period, compared with 2.8% for 4Q08
Completion of the Bertin S.A. Merger and the acquisition of a controlling interest inPilgrims Pride Corporation.
A pro forma Net Revenue in 2009 of R$55,223.6 million, 82.0% higher than 2008.
EBITDA pro forma of R$3,058.0 million in 2009, increase of 164.5% over theprevious year.
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JBS Consolidated Results
Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)
Source: JBS
EBITDA Margin (%)
-11.6%
36.3%
-3.8%
-20.4%
-0.1%
81.6%
-9.5%
-24.0%
13.1% 11.2%
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Performance by Business Units
Net Sales(US$ billion)
EBITDA (US$ mi)EBITDA margin
JBS USA (Beef)
Including Australia
Net Sales
(US$ million)
EBITDA (US$ mi)EBITDA margin
JBS USA (Pork)Net Sales( million)
EBITDA ( mi)
EBITDA margin
INALCA JBSNet Sales(R$ billion)
EBITDA (R$ mi)EBITDA margin
JBS MERCOSUL
Source JBS
EBITDA Margin (%)
2.82.7
2.9 2.8 2.8
4Q08 1Q09 2Q09 3Q09 4Q09
108.4126.0
104.6
59.760.4
2.2% 2.2%3.6% 3.8%
4.5%
4Q08 1Q09 2Q09 3Q09 4Q09
600 526 554 559606
4Q08 1Q09 2Q09 3Q09 4Q09
25.6
7.5
24.7
15.3
28.6
4.3%
1.4%
4.5%
2.7%
4.7%
4Q08 1Q09 2Q09 3Q09 4Q09
162144 144 146 141
4Q08 1Q09 2Q09 3Q09 4Q09
8.3
5.66.6
9.7
7.0
5.1%3.9% 4.6%
6.6%
5.0%
4Q08 1Q09 2Q09 3Q09 4Q09
1.61.4
1.7 1.71.7
4Q08 1Q09 2Q09 3Q09 4Q09
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Debt
The Net Debt/EBITDA reduced from 3.3x in 3Q09 to 3.1x in 4Q09.
JBS raised US$2.0 billion by issuing two million Debentures.
The companys cash position is sufficient to cover, almost entirely, the short term debt of JBS
Current assets exceed current liabilities by almost 50%, demonstrating the liquidity of theCompanys balance sheet.
Net Debt / EBITDA Pro Forma per Quarter
Source: JBSNet Debt/ EBITDA EBITDA pro-forma
* LTM including Bertin and Pilgrims Pride pro-forma.
Gross debt Profile (R$ million)
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*
37% 38%
63% 62%
2009 2008
Short Term Long Term
5,479.614,429.8
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Revenue Distribution by Market
2009 2008
Source: JBS Source: JBS
Exports
23%
Domestic
Market
77%
Exports
33% Domestic
Market
67%
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JBS Consolidated Exports Distribution
JBS Exports 2009
Source: JBS
JBS Exports 2008
28
Mexico18%
Russia13%
E.U,11%Japan
9%Canada
8%
Middle East7%
Hong Kong5%
South Korea4%
Taiwan4%
USA3%
China3%
Others15%
US$ 5.6 billion
Japan
13%E.U.
11%
Russia
10%Canada
8%Mexico
8%
Africa and Middle East
7%
South Korea
6%
Hong Kong
6%
USA
5%
China
4%
Taiwan
2%
Others
19%
US$ 5.0 billion
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Short Term Outlook
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A Closer look at synergies Pilgrims Pride
USD 95 Million already captured, through initiatives in the personnel, transportation, andpackaging supply areas.
USD 65 Million further by mid year, principally through G&A, exports, and logistic efficiencies.
USD 200 / 300 Million total annual synergies.
30
0
2
4
6
8
10
12
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10
Announcement of the
PPC acquisition by JBS
Closing of the
acquisition
Pilgrims Pride Stock Price
Source: Bloomberg
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A Closer look at synergies Bertin S.A.
R$145 million implemented by end of 1Q10 in packaging,
industrial processes, formulation and corporate.
R$100 million further synergies to be realized particularly at
corporate and exports in the coming six months.
Total annual synergies expected to reach R$500 million by
2011.
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Final Considerations
JBS remains a Growth Company.
Focus on synergy gains through the integration of Bertin in Brazil and Pilgrims
Pride in the USA.
JBS continues to build its distribution platform to add value to its products and
expand its margins.
Commitment to the Companys financial health and the reduction of the financial
leverage, maintaining a strong cash generation.
Having taken the Company public and having elevated its corporate governance,
JBS is now focused upon the financial fundamentals to take the Company to
Investment Grade.
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Questions & Answers
In God We Trust, Nature We Respect
IR Contacts:
ir@jbs.com.br
+55 11 3144 4055
www.jbs.com.br/ir34
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