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JBS S.A.
Results Presentation
3Q11
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JBS S.A.
JBS S.A.
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JBS S.A. at a glance
Founded in the 1950's in West Central Brazil
IPO in 2007
Leading protein producer in the World
Revenues of over US$27 billion in the first nine months of 2011
EBITDA of US$1.3 billion in the first nine months of 2011
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EBITDA of US$1.3 billion in the first nine months of 2011
Net revenue organic growth of 10.6% in local currency in 3Q11 y.o.y.
125,000 employees worldwide
134 production units in 6 continents
Market cap of approximately US$9.3 billion
(1)
(1) 11/11/2011
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JBS Ranking
3
Geographic and
market segment
diversification
1
Market Leader
4
Well-recognized
brands
2
Track Record
of successful
acquisitions
Largest global beef and
lamb producer
1
st
Largest global leather
processor
1
st
4
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brands
Largest global chicken
producer
2
nd
Largest dairy
producer in Brazil
3
rd
Largest pork producer
in the US
3
rd
Source: JBS
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3
Geographic
and market
segment
diversification
1
Market Leader
4
Well-recognized
brands
2
Track Record of
successful
acquisitions
Presence in more than 100 countries, in 6 continents
Strategic Geographical Distribution
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Source: JBS
brands
Slaughterhouse and Industry
Sales Office
Pork
Leather
Beef
Distribution Center
Dairy
Biodiesel
Chicken
Geographic
Presence and
Production
Capacity
85,825 heads/day
Beef
7.9 mm birds/day
Chicken
50,000 heads/day
Pork
5,400 tons/day
Dairy
24,000 heads/day
Lamb
76,100 hides/day
Leather
3
60
37
20
7
1
58
17
134
u
Units
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Well-recognized Brands, symbols of quality
3
Geographic and
market segment
diversification
1
Market Leader
4
Well-recognized
brands
2
Track Record of
successful
acquisitions
Brazil
Argentina
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brands
USA
Australia
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3Q11 Highlights
3Q11 Highlights
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Net revenue in 3Q11 was R$15,567.8 million, 10.6% higher than 3Q10.
The Company ended the quarter with R$5.6 billion in cash, more than a 100% of its short-term debt.
3Q11 Highlights
JBS generated net cash provided by operating activities of R$897 million in the quarter.
JBS USA Beef presented EBITDA in 3Q11 of R$184.1 million , an increase of 77.9% over the last
EBITDA margin increased 101 bps to 5.1% in the quarter.
Gross Margin expanded 102bps, compared to 2Q11 and reached 10.9%.
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The main operating highlights were:
Net debt reduced approximately R$530 million, excluding the FX variation effect in the net debt in US
dollar denominated.
JBS Mercosul presented
EBITDA of R$453.8 million, with
an EBITDA margin of 11.6%.
JBS USA Beef presented EBITDA in 3Q11 of R$184.1 million , an increase of 77.9% over the last
quarter.
JBS USA Pork business unit
presented cumulative 2011
EBITDA of US$264.8 million,
51.8% higher than in the same
period of 2010.
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JBS Consolidated Results ­ 3Q11
EBITDA
Net Revenue (R$ million)
EBITDA and EBITDA Margin (R$ million)
7.3
6.0
5.7
5.1
8,0
1600,0
1800,0
14,069.6
14,319.6
14,672.7
14,621.8
15,567.8
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Source: JBS
1,026
866
836
588
787
5.7
4.0
5.1
-12,0
0,0
200,0
400,0
600,0
800,0
1000,0
1200,0
1400,0
3Q10
4Q10
1Q11
2Q11
3Q11
14,069.6
14,319.6
14,672.7
14,621.8
3Q10
4Q10
1Q11
2Q11
3Q11
+2.5%
-3.8%
+6.5%
+1.8%
-3.4%
-29.7%
+33.9%
-15.7%
EBITDA Margin (%)
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Nine Months Analysis
Net sales (R$ billion)
Net sales (US$ billion)
Net sales (US$ million)
Net sales (US$ billion)
JBS Mercosul
JBS USA
(Including Australia)
JBS USA
JBS USA (PPC)
Performance by Business Unit
5.1
5.7
9.5
12.0
9.8
11.1
2.2
2.5
0
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Source: JBS
EBITDA (R$ bi)
EBITDA (US$ mi)
EBITDA (US$ mi)
EBITDA (US$ mi)
9M10
9M11
9M10
9M11
9M10
9M11
0
9M10
9M11
174.4
261.5
-
0,2
-
0,15
-
0,1
-
0,05
0
0,05
0,1
0,15
0
100
200
300
9M10
9M11
357.1
-172.4
-
0,9
-
0,88
-
0,86
-
0,84
-
0,82
-
0,8
-
0,78
-
0,76
-
0,74
-
0,72
-
0,7
-
0,68
-
0,66
-
0,64
-
0,62
-
0,6
-
0,58
-
0,56
-
0,54
-
0,52
-
0,5
-
0,48
-
0,46
-
0,44
-
0,42
-
0,4
-
0,38
-
0,36
-
0,34
-
0,32
-
0,3
-
0,28
-
0,26
-
0,24
-
0,22
-
0,2
-
0,18
-
0,16
-
0,14
-
0,12
-
0,1
-
0,08
-
0,06
-
0,04
-
0,02
0
0,02
0,04
0,06
0,08
0,1
0,12
0,14
0,16
0,18
0,2
-
200
-
100
0
100
200
300
400
500
600
700
800
900
1000
9M10
9M11
1.1
1.2
-
0,15
-
0,13
-
0,11
-
0,09
-
0,07
-
0,05
-
0,03
-
0,01
0,01
1000
1100
1200
9M10
9M11
468.9
515.5
-
0,3
-
0,28
-
0,26
-
0,24
-
0,22
0
100
200
300
400
500
600
700
800
900
1000
1100
9M10
9M11
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Performance by Business Unit
Net sales (R$ billion)
Net sales (US$ billion)
Net sales (US$ million)
Net sales (US$ billion)
JBS Mercosul
JBS USA
(Including Australia)
JBS USA
JBS USA (PPC)
Quarterly Analysis
1.7
1.8
1.9
2.0
1.9
3.4
3.6
3.8
4.0
4.2
3.5
3.4
3.6
3.6
3.9
772
799
837
846
867
100
180
260
340
420
500
580
660
740
820
900
980
1060
1140
1220
1300
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Source: JBS
EBITDA (R$ mi)
EBITDA (US$ mi)
EBITDA (US$ mi)
EBITDA (US$ mi)
EBITDA Margin (%)
3Q10
4Q10
1Q11
2Q11
3Q11
3Q10
4Q10
1Q11
2Q11
3Q11
3Q10
4Q10
1Q11
2Q11
3Q11
3Q10
4Q10
1Q11
2Q11
3Q11
170
124.8
-55.2
-47.6
-31.4
9.9%
6.9%
-2.9%
-2.4%
-1.7%
-
30,0%
-
28,0%
-
26,0%
-
24,0%
-
22,0%
-
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%
-
200
-
100
0
100
200
300
400
500
3Q10
4Q10
1Q11
2Q11
3Q11
373.7
238.8
308.6
427.9 453.8
10.7%
7.1%
8.6%
11.8% 11.6%
-
10,0%
-
8,0%
-
6,0%
-
4,0%
-
2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
0
100
200
300
400
500
600
3Q10
4Q10
1Q11
2Q11
3Q11
103.5
194.8
269.7
44.7
184.1
3.1%
5.4%
7.1%
1.1%
4.4%
-
30,0%
-
28,0%
-
26,0%
-
24,0%
-
22,0%
-
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%
0
100
200
300
400
500
3Q10
4Q10
1Q11
2Q11
3Q11
90.8
102.4 105.3
83.6
75.9
11.8%
12.8% 12.6% 9.9% 8.8%
-
23,0%
-
19,0%
-
15,0%
-
11,0%
-
7,0%
-
3,0%
1,0%
5,0%
9,0%
13,0%
0
100
200
3Q10
4Q10
1Q11
2Q11
3Q11
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45.3%
25.1%
20.3%
9.3%
Revenue and EBITDA Distribution by Business Unit
Net Revenue - 3Q11
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Source: JBS
59.6%
39.6%
16.3%
-15.6%
EBITDA ­ 3Q11
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Organic Growth
Each
business
unit presented double digit organic growth in their local currency, for the analyzed period.
JBS USA Beef ­ Net Revenue (US$ million)
JBS USA Chicken ­ Net Revenue (US$ million)
3.000
3.200
3.400
3.600
3.800
4.000
4.200
1.700
1.800
1.900
2.000
2.100
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Source: JBS
JBS USA Pork ­ Net Revenue (US$ million)
JBS Mercosul ­ Net Revenue (R$ million)
2.600
2.800
3.000
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
1.600
1.700
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
500
550
600
650
700
750
800
850
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
2.800
3.000
3.200
3.400
3.600
3.800
4.000
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
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JBS Consolidated Exports Distribution
Approximately US$2.4 billion in the 3Q11 and US$7.2 billion in 9M11
Taiwan 2.4%
Others 17.9%
Mexico 14.5%
Africa and
Middle East 14.0%
Vietnam 1.6%
US$ 2,374.2
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Source: JBS
Taiwan 2.4%
China 4.4%
Canada 5.5%
Sulth Korea 6.0%
Russia 7.0%
Hong Kong 7.2%
Japan 11.7%
E.U. 7.8%
US$ 2,374.2
million
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4
Leverage
Debt Profile
ST / LT Profile
Net debt to EBITDA, excluding Pilgrim's Pride Corp. (PPC)*, reduced from 3.2x in 2Q11 to 3.0x in 3Q11.
Net debt to EBITDA, including Pilgrim's Pride Corp. (PPC)*, went from 3.6x in 2Q11 to 4.0x in 3Q11.
The Company ended the quarter with R$5.6 billion in cash or cash equivalents, more than a 100% of the Company's short-term debt.
28%
72%
3Q11
The Company generated R$897 million of operating cash flow and R$620 million of net cash flow.
4.0x
4
1500
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2.9
3.0
3.1
3.2
3.0x
0
1
2
3
4
.
EBITDA
.
Leverage
Source: JBS
* subsidiary controlled by JBS with non-recourse debt.
Short Term
Long Term
33%
33%
30%
27%
67%
67%
70%
73%
3Q10
4Q10
1Q11
2Q11
2.9
3.0
3.1
3.6
4.0x
0
1
2
3
4
-100
100
300
500
700
900
1100
1300
1500
3Q10
4Q10
1Q11
2Q11
3Q11
.
Leverage Ex-PPC
EBITDA Ex-PPC
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Sell-side analyst recommendation
Institution
Analyst
Recommendation
Target Price (R$)
Henrique Koch
Ricardo Boiati / Alan Cardoso
Thiago Duarte / Fábio Monteiro
Pedro Herrera / Diego Maia
Hold
Market Perform
Buy
Neutral
In revision­ 10.20 (last)
5.20
6.20
5.00
Banco do Brasil
Bradesco
BTG Pactual
HSBC
$
Carlos Albano
Hold
7.40
Citi
Gabriel Vaz Lima
Overweight
5.50
Barclays Capital
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Source: Bloomberg and JBS
Fernando Ferreira / Isabella Simonato
Erick Guedes / Fernando Labes
Gustavo Oliveira / Flavio Barcala
Underperform
Outperform
Neutral
5.00
7.29
5.10
Luis Miranda
Hold
7.00
Merrill Lynch BofA
Safra
UBS
Santander
Luiz Cesta /Marco Richieri
Buy
5.70
Votorantim
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Marketing Campaign
JBS started in October, in the state of Sao Paulo, an unprecedented marketing campaign in the media
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The construction of a brand aims at selling a product with higher added value
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Environmental
Purpose: reduce deforestation in the Amazon Biome; avoid
purchasing cattle from Environmentally Protected Areas ­ EPAs,
Indigenous reserves and protected areas; eradication of slave
labor in Brazil.
Satellite image monitoring of the Amazon Biome
JBS actions related to cattle traceability and the Amazon Biome
Sustainability
JBS SA participates in CDP - Carbon Disclosure Project.
Also, JBS integrates the Carbon Efficient Index of BOVESPA - ICO2.
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Amazon
Satellite image
Social & Environmental
labor in Brazil.
JBS Brazil monitors a 100% of its cattle suppliers properties via
satellite geo-referencing (GPS monitoring).
After the property coordinates are collected, the data is keyed into
JBS's registry of cattle suppliers and is sent to an outsource company
to be analyzed by superimposing on a map constructed from satellite
images and the DETER
(1)
and PRODES
(2)
produced by Brazil's National
Institute for Space Research ­ INPE.
JBS contains a database of almost 12,000 cattle ranches registered
in the Amazon Biome.
Source: JBS Sustainability Policy
(1)
Real Time Deforestation Detection
(2)
Legal Amazon Deforestation Monitoring Project
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Mission
"
To be best
in what we set out to do,
totally focused
on
our business, ensuring the
best products and services
for our customers, solidity
for our suppliers,
"
for our customers, solidity
for our suppliers,
satisfactory profitability
for our shareholders and the
certainty of a better future
to all our employees.