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2Q14 Results PresentationAugust 15th, 2014
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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 JBSmanagement concerning the future of the businessand its continued access to capital to fund the Companys business plan. Such forward-looking statementsdepend, substantially, on changes in market conditions, government regulations, competitive pressures, theperformance of the Brazilian economy and the industry, among other factors and risks disclosed in JBS fileddisclosure documents and are, therefore, subject to change without prior notice.
Disclaimer
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Summary of 2Q14 Results
Net revenue of R$29.0 billion, an increase of R$7.0 billion, or 32.1% higher than 2Q13.
Gross profit of R$4.25 billion, expansion of R$1.3 billion, or 44.3% higher than 2Q13.
Consolidated EBITDA of R$2.4 billion, an increase of 45.9% over 2Q13. EBITDA margin was 8.4%.
Net income of R$254.3 million, which corresponds to an EPS of R$0.09.
The consolidated 2Q14 exports grew 45% compared 2Q13, reaching US$4.3 billion.
JBS ended 2Q14 with leverage (Net Debt/EBITDA LTM) of 3.15x, compared to 3.26x in 1Q14.
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Businesses Units Highlights 2Q14
JBS Foods recorded net revenue of R$3,084.5 million and EBITDA of R$440.4 million, with an EBITDA margin of 14.3%.
JBS Mercosul posted net revenue of R$6,291.4 million in 2Q14, 15.8% higher than 2Q13 and EBITDA of R$634.3 million, withEBITDA margin of 10.1%.
JBS USA Beef posted net revenue of US$5,331.4 million, 10.9% higher than 2Q13. EBITDA was US$108.6 million, with an
EBITDA margin of 2.0%
Net Revenue of JBS USA Pork totaled US$1,028.3 million, 18.4% higher than 2Q13, and EBITDA of US$113.8 million, with anEBITDA margin of 11.1%.
JBS USA Chicken (PPC) reported net revenue of US$2,186.8 million, stable compared to 2Q13. EBITDA was US$338.6 million,with a margin of 15.5%.
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Recent Events and Exports
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Recent Events
Footprint of Acquired Assets
Tyson de Mxico
Acquisition Price: US$400 mm
3 Vertically integrated processingfacilities
7 Distribution Centers
Tyson do Brasil
Acquisition Price: US$175 mm
3 Integrated Poultry Units
6 Distribution Centers
Cu Azul
Acquisition Price: R$246 mm
2 Integrated Poultry Units
3 Hatcheries
2 Feed mills
3 poultry units in Brazil and 3 in Mexico, in addition to 6distribution centers in Brazil and 7 in Mexico
Acquisition of Macedo (BR), and Del Dia (MEX) brandsTyson is the 3rdlargest poultry producer in Mexico, with ~10%of Market Share
Tyson is the 4thlargest poultry exports in Brazil, responsible for3.2% of exported volume in 2H14Cu Azul has 2 poultry units, including hatcheries, feed milland processing facilities
Distribution network for fresh poultry products in the State ofSo Paulo
Assets Description
Post 2Q14, JBS announced the acquisition of Tyson Foods, Inc. Poultry businesses in Brazil and Mexico
and the assets of Cu Azul in Brazil
These acquisitions are pending regulatory approval.
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JBS Consolidated Exports Breakdown in 2Q14 and 2Q13
Growth of 45% in 2Q14 exportscompared to 2Q13
Note 1. China and Hong Kong
Greater China18%
South America13%
Africa and Middle East12%
Mexico11%
Japan9%
E.U.7%
Russia6%
South Korea4%
Canada3%
Others17%
2Q14US$4,305.1
million
Greater China 27.5%
Mexico 18.0%
Africa and Middle East10.1%
South America 5.9%
Russia 5.5%
E.U. 5.1%
South Korea 4.9%
Canada 4.2%
Japan 3.9%
Taiwan 2.2%
Others 12.7%
2Q13US$2,975.7
million
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CAPEX, Cash Generation
and Debt Profile
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Cash
Generation
CAPEX
Capex and Cash Generation
In 2Q14, total capital expenditure (CAPEX) was R$760.0 million, of which 40% in acquisitions,
expansion and facilities modernization and 60% in maintenance.
In addition, JBS recorded the payment of Massa Leve, which was made through the transfer of
shares held in treasury (R$203.5 million) and part in cash (R$55.1 million), in the statement of cash
flow in neteffect of working capital from acquired companies,which totaled R$266.6 million.
In 2Q14 the Company generated net cash flow from operations of R$147.3 million, due to an
increase in sales prices and an expansion of sales in general, besides the robust expansion of JBS
exports during the quarter.
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JBS S.A.63%
Subsidiaries37%
Debt Profile
USD77%
R$23%
Leverage EBITDA (R$ million)
JBS ended 2Q14 with leverage of 3.15x, compared to 3.26x in 1Q14.
In June 2014, JBS announced the issuance of Bonds in the amount of
US$750.0 million through its wholly-owned subsidiaries JBS USA, LLC
and JBS USA Finance, Inc. with maturity in 2024 and coupon of 5.875%
per annum.
This operation allowed JBS to reduce its financial costs and to extend
its debt profile.
Breakdown by Currency and Costs
Breakdown by Company
Leverage (Net Debt/EBITDA LTM)
11.25% per annum
5.67% per annum
3.28
4.033.70
3.26 3.15
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2Q13 3Q13 4Q13 1Q14 2Q14
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-403
1,952
4,713
1,365
4,723
52
4,749
2,509
5,054
Short term netof cash
2015 2016 2017 2018 2019 2020 2021 After 2021
The Company ended the quarter with R$10,297.7 million
in cash, equivalent to approximately 104% of its short-term debt.
JBS USA has US$1.27 billion fully available under
revolving credit facilities which, if added to the current
cash position, represents 133% of short term debt.
The percentage of short term debt (ST) in relation to total
debt dropped to 28% in 2Q14.
Debt Profile
Short term Long termDebt maturity (R$ million)
28%
29%
29%
35%
35%
72%
71%
71%
65%
65%
2Q14
1Q14
4Q13
3Q13
2Q13
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Business Units
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1
JBS Foods
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1
Europe29%
Asia/Oceania24%
Africa and MiddleEast24%
Americas21%
Others2%
JBS Foods
Footprint 2Q14 Revenue Breakdown
Exports by Region
Main Brands
Products
Overview
Domestic46%
Exports54%
AC
AM
RR
RO
PA
AP
MT
MS
GO
TO
MA
PI
CE
RN
PBPEALSE
BA
MGES
RJSP
PR
RS
SC
Production facilities
% NR JBS S.A.
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1
2.9 2.8 3.1
4Q13 1Q14 2Q14
JBS Foods
Net Revenue (R$ billion)
EBITDA (R$ million)
6.7%
EBITDA Margin (%)
11%
24%
40%
8%
18%
Net revenue of R$3,084.5 million in the quarter.
Improvement in sales volumes in both domestic and export markets.
Increase in prices in the domestic market, thanks to brands andcategories repositioning efforts.
Increase of 11.0% in pork export prices.
EBITDA reached R$440.4 million, with an EBITDA margin of 14.3%:
Relevant improvement in yields and productivity gains, in addition tocost reduction in the processing facilities.
Redesign and rationalization of the logistics network, which permittedcost reductions and increase in volume delivered.
Renewed go-to-market strategy, which provided efficiency gains inthe sales channels.
Increase in margins from prepared and convenient products
Increased access to customers abroad through synergies capturedand know-how already existing at JBS Group.
227.3379.8 440.4
7.9%
13.7% 14.3%
-20.0%
-18.0%
-16.0%
-14.0%
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0 .0 %
2 .0 %
4 .0 %
6 .0 %
8 .0 %
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1400.0
1600.0
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JBS Mercosul
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Domestic53%
Exports47%
JBS Mercosul
Beef facilities
Feedlots
Distribution Centers
Hides facilities
Main Brands
New Products in Brazil
Africa and MiddleEast11%
Asia/Oceania
36%
Europe9%
South America34%
North and CentralAmericas
3%
Others7%
Footprint 2Q14 Revenue Breakdown
Overview
Exports by Region
JBS M l% NR JBS S.A.
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1
5.4
6.2 6.35.7
6.3
2Q13 3Q13 4Q13 1Q14 2Q14
JBS Mercosul
Net Revenue (R$ billion)
EBITDA (R$ million)
15.8%
EBITDA Margin (%)
10%
22%
40%
8%
18%
Note 1. Includes JBS Aves
Net revenue of R$6,291.4 million in 2Q14, 15.8% higher than 2Q13:
Compared to 1Q14, net revenue increased 9.9%.
Increase of 21.9% in beef exports.
EBITDA totaled R$634.3 million, with EBITDA margin of 10.1%:
Increase in raw material prices, partially offset by an increase in salesprices.
Operations in Paraguay and Uruguay presented an increase inexports average price, which contributed to the increase in sales in
addition to fixed costs dilution. In Brazil, the Company foresees an increase in sales volume to the
international market and an improvement in sales in the domesticmarket as a result of marketing investments to promote the Friboibrand.
543.5687.5 692.4
596.1 634.3
10.0% 11.1% 11.0% 10.4% 10.1%
-20.0%
-18.0%
-16.0%
-14.0%
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0 .0 %
2 .0 %
4 .0 %
6 .0 %
8 .0 %
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1400.0
1600.0
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JBS USA Beef
JBS USA Beef (incl ding A stralia and Canada)
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Domestic
72%
Exports28%
JBS USA Beef (including Australia and Canada)
Africa and Middle
East4%
Asia/Oceania68%
Europe2%
South America2%
North and CentralAmericas
14%
Others10%
Main Brands
Footprint 2Q14 Revenue Breakdown
Overview
Exports by Region
Production facilities and DCs
Notae1. Distribution Centers in Australia
JBS USA Beef (including Australia and Canada)% NR JBS S.A.
8%
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2
4.8 4.7 4.8 4.5
5.3
2Q13 3Q13 4Q13 1Q14 2Q14
JBS USA Beef (including Australia and Canada)
Net Revenue (US$ billion)
EBITDA (US$ million)
10.9%
EBITDA Margin (%)
Net revenue of US$5,331.4 million, an increase of 10.9% compared
to 2Q13:
Increase in sales volume in both domestic and export markets.
Increase in prices in domestic market.
Compared with 1Q14, net revenue posted an increase of 17.9%, dueto higher seasonal demand in the period and an increase in salesprices.
EBITDA was US$108.6 million, with an EBITDA margin of 2.0%:
The reduction in beef supply combined with an increased demandcontributed to the increase in beef prices and partially offset theincrease in cattle prices during the period.
Compared with 1Q14, the improved EBITDA margin is due to higherbeef prices and strong demand seasonally.
Export growth supported by strong sales to Asia.
161.7125.3 113.9
-22.5
108.6
3.4% 2.7% 2.4%-0.5%
2.0%
-20.0%
-18.0%
-16.0%
-14.0%
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0 .0 %
2 .0 %
4 .0 %
6 .0 %
8 .0 %
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
-30.0
70.0
170.0
270.0
370.0
470.0
570.0
670.0
2Q13 3Q13 4Q13 1Q14 2Q14
10%
24%
42%
8%
18%
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JBS USA Pork
JBS USA Pork
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Domestic
85%
Exports15%
JBS USA Pork
Products
Processing Facilities
Case Ready
Main Brands
Swift Premium
Dry Rubbed Ribs
Swift Premium Dry
Rubbed Loin Filet
Swift Premium
Dry Rubbed Boneless Backrib
Swift Premium
Saddle Pack Boneless
Pork Chops
Swift Premium
Ground Pork
Asia/Oceania59%
Europe1%
South America1%
North and CentralAmericas
39%
Footprint 2Q14 Revenue Breakdown
Overview
Exports by Region
JBS USA Pork% NR JBS S.A.
8%
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2
868.5 903.3 904.9 896.91,028.3
2Q13 3Q13 4Q13 1Q14 2Q14
JBS USA Pork
Net Revenue (US$ million)
EBITDA (US$ million)
18.4%
EBITDA Margin (%)
Net revenue of US$1,028.3 million, an increase of 18.4% compared
to 2Q13:
Increase of 24.3% in sales prices in the domestic market and anincrease of 16.7% in export prices.
Compared with 2Q14, net revenue growth was 14.7%.
EBITDA of US$113.8 million, with an EBITDA margin of 11.1%:
In comparison with 2Q13, EBITDA grew 124.3%.
Hog supply remained tight and, combined with a strong demanddomestically and in the main consumer markets such as Hong Kong,Japan and South Korea, contributed to a better pricing of pork in the
US.
50.7 43.886.3 82.9
113.8
5.8% 4.8%
9.5% 9.2%11.1%
-20.0%
-18.0%
-16.0%
-14.0%
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0 .0 %
2 .0 %
4 .0 %
6 .0 %
8 .0 %
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
-30.0
20.0
70.0
120.0
170.0
220.0
270.0
320.0
370.0
2Q13 3Q13 4Q13 1Q14 2Q14
10%
24%
40% 18%
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JBS USA Chicken
(Pilgrims Pride Corporation)
JBS USA Chicken (Pilgrims Pride Corporation - PPC)
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Africa and MiddleEast7%
Asia/Oceania11%
North and CentralAmericas
80%
Others2%
JBS USA Chicken (Pilgrim s Pride Corporation PPC )
Domestic
80%
Exports9%
Mexico11%
Main Brands Products
Other products: boneless/skinless, wings, breast, whole birds, breaded,marinated, strips, cooked, par-fried, others.
Footprint 2Q14 Revenue Breakdown
Overview
Exports by Region
Production Facilities
JBS USA Chicken (Pilgrims Pride Corporation - PPC)% NR JBS S.A.
8%
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2
2.2 2.1 2.0 2.0 2.2
2Q13 3Q13 4Q13 1Q14 2Q14
JBS USA Chicken (Pilgrim s Pride Corporation PPC )
Net Revenue (US$ billion)
EBITDA (US$ million)
0.1%
EBITDA Margin (%)
Net revenue of US$2,186.8 million in 2Q14, stable compared to
2Q13: Increase in sales volume, partially offset by a decrease in sales price
both in the US and Mexico, due to a slightly change in sales mix.
Compared with 1Q14, PPC revenue grew by 8.4%, thanks to anincrease in chicken prices in both domestic and export markets.
EBITDA was US$338.6 million, with EBITDA margin of 15.5%:
Reduction of US$89.0 million in feed costs.
Reduction of US$6.4 million in labor costs.
Reduction of US$4.6 million in freight and warehousing costs in the
US. Improvements in costs and sales mix, all rooted on operational
excellence.
265.0226.1 197.2 205.2
338.6
12.1%10.6% 9.6% 10.2%
15.5%
-20.0%
-18.0%
-16.0%
-14.0%
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0 .0 %
2 .0 %
4 .0 %
6 .0 %
8 .0 %
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
-30.0
70.0
170.0
270.0
370.0
470.0
570.0
670.0
2Q13 3Q13 4Q13 1Q14 2Q14
10%
24%
40% 17%
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Mission
To be the best in what we set out to do, totally focusedonour business, ensuring the best products and
services for our customers, solidity for our suppliers,satisfactory profitabilityfor our shareholders and the
certainty of a better future to all our employees.