JBS will operate Frangosul plants in Brazil May 07th, 2012 JBS S.A.

Transcription

1 JBS will operate Frangosul plants in Brazil May 07th, 2012 JBS S.A.

2 Presenters Wesley Mendonça Batista CEO James Cleary CEO JBS Brazil Poultry Jeremiah O Callaghan Investor Relations Director 2

3 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 US$36.9 billion in 2011 EBITDA of US$1.9 billion in 2011 Annual net revenue organic growth of 13% in local currency y.o.y. 135,000 employees worldwide 145 production units in 5 continents Market cap of approximately US$13 billion (1) (1) 03/19/2012 3

4 1 Market Leader Merger and Acquisition track record More than 30 acquisitions in 15 years 2 Track Record of successful acquisitions 3 Geographic and market segment diversification 4 Well-recognized brands Barra do Garças (Sadia) JBS went international with the acquisition of Swift Argentina. JBS became the largest beef company in the world and the biggest Brazilian company in the food industry and entered the US pork market. Construction of a sustainable global meat production and sales platform. Diversification of market segments through the acquisition of Pilgrim s Pride and merger with Bertin. JBS Swift became the leader in lamb production in Australia. Andradina (Sadia) Barretos (Anglo) Pres. Epitácio e Campo grande (Bordon) Araputanga (Frigoara) Cáceres (Frigosol) Iturama (Frigosol) Inalca Swift Foods Co. Maringá (Amambay) Berazategui (Rio Platense) Colonia Caroya SB Holdings JV Beef Jerky Rio Branco Cacoal 1 Venado Cacoal 2 Tuerto Porto Velho Pontevedra Vilhena (CEPA) (Frigovira) Pedra Preta (Frigo Marca) Rosário San Jose (Swift Argentina) 7.2 Tasman Smithfield Beef Five Rivers Pilgrim s Pride Merger with Bertin JBS Couros 5 new units Rockdale Beef Tatiara Meat (Swift Austrália) Net revenue (USD billion) Source: JBS 4

5 1 Market Leader Presence in more than 100 countries, in 5 continents Strategic Geographical Distribution 2 Track Record of successful acquisitions 3 Geographic and market segment diversification 4 Well-recognized brands 3 Pork 37 Chicken 7 Dairy 58 Distribution Center 134 Slaughterhouse and Industry 60 Beef 6 Lamb 20 Leather 17 Sales Office 1 Biodiesel Geographic Presence and Production Capacity Beef 85,825 heads/day Chicken 7.9 mm birds/day Pork 50,000 heads/day Leather 76,100 hides/day Dairy 5,400 tons/day Lamb 24,000 heads/day Source: JBS 5

6 Poultry Industry Overview of the Global Market

7 World Poultry Consumption The poultry industry has a large and global demand base. Emergent populous markets such as China, India and Russia still have a low consumption per capita World Poultry Consumption Poultry Consumption¹ (US$ Bn) Global Consumption (2010) : 94 M ton CAGR: 9.6% CAGR: 3.6% E 2019E Consumption kg/person/year Over Poultry Consumption¹ (M ton) 69 CAGR: 3.1% CAGR: 2.3% 116 Relevant poultry consumption in the world, with growth prospects for the next years, boosting Brazilian exports E 2019E 1 - Includes poultry, turkey, duck, goose and guinea fowl Source: FAO, USDA 7

8 Positive Prospects for the Industry The poultry industry is increasing its importance and replacing other meats in the global consumption market Poultry Industry Global Meat Market Breakdown Second largest meat category Expected to surpass pork by 2030 Increasing demand from emerging markets Substitution effect from other meats Beef 26% 2000 Poultry 30% Main Growth Drivers Sheep 5% Pork 39% 2010 Increase in the world population GDP growth Cheapest source of protein Quick to produce vis-à-vis other proteins No religion barriers Sheep 4% 2030E Beef 20% Pork 37% Poultry 39% Sheep 4% Beef 23% Pork 39% Poultry 34% Fonte: USDA, FAO 8

9 Attractive Industry Dynamics The poultry has several advantages when compared with other meats Intrinsic Advantages of Poultry Fast Production Low Cost Production Chicken Products Key Highlights 1 Whole Chicken Consumed worldwide Exported frozen to Middle East Broiler: regular" chicken Griller: small chicken consumed individually in Middle East No Religious Barriers Source: Market Information Poultry High Nutritional Qualities 2 Chicken Cuts 3 Chicken Fillet Preferred part of the chicken in the developed countries Dark Meat Parts of chicken excluding the filet Mainly exported to Asia where it is highly consumed Processed Products Mainly consumed in western countries Increased exports to developing countries 9

10 Top Countries from the Global Chicken Market Brazil plays a relevant role in the industry Top 7 Consumers 2011 M Tons Top 7 Producers 2011 M Tons USA China Brazil EU-27 Mexico Russia India USA China Brazil EU-27 India Mexico Russia Top 7 Exporters 2011 M Tons Top 7 Importers 2011 M Tons Brazil USA EU-27 Thailand China Argentina Turkey Japan Saudi Arabia EU -27 Mexico Russia Iraq Hong Kong Source USDA, Ubabef 10

11 Global Surplus (deficit) Goldman Sachs forecast for animal protein in 2020 Beef & Veal Pork Chicken Surplus Deficit Source: Goldman Sachs 11

12 Brazilian Poultry Industry Largest export market with promising domestic market Overview Poultry Exports Main States (2010) 3 rd largest poultry consumer in a expanding domestic market: Increase in purchase power boosting demand for processed products Change in Brazilian Western consumption habits Largest poultry exporter: Brazil is a top 3 poultry producer with13.1 M tons in 2011 In 2011, it exported approximately 30% of its production Middle East and Asia are the main Brazilian exports destination M T GO M S SP PR M G State Market Share Santa Catarina 26.7% Paraná 26.2% R. Grande do Sul 21.0% São Paulo 7.0% Goiás 5.2% Mato Grosso 4.5% Minas Gerais 4.3% M. Grosso do Sul 3.4% Dist. Federal 1.5% RS SC Total: 3.9 M tons Production (M ton) Exports Destination 2010 Poultry Consumption per Capita kg / person / year 9,3 10,3 Export market represents ~30% 13,1 12,2 10,9 11,0 Others 17% Middle East 36% Asia 26% Africa 13% America 7% Source: USDA, Ubabef, Secex, MDIC 12

13 JBS Poultry Brazil Frangosul

14 Frangosul at a Glance The Company is the 3rd largest poultry exporter in Brazil Brief Overview Frangosul was founded in 1970 in the city of Montenegro (RS). The company was acquired by Group Doux in 1998 o Poultry s production capacity of 1,100,000 chickens / day o Pork s production capacity of 3,000 hogs / day o Sales of R$ 1.4 billion in 2011 o Well recognized brands with presence in both domestic and export market Main Operational Assets 4 slaughtering plants 3 dedicated plants for poultry 1 dedicated plant for pork 1 dedicated plant for processed products and 2 breaded plants 4 feed factories 6 hatcheries Grand parents (2.8 M females/year) Growing breeders (2.2 M females/year) Hatching eggs production (6.3 M eggs/week) Brands Highly recognized and established brands with strong reputation for quality and innovation Premium brand dedicated to the Brazilian domestic market (South Region) Value brand dedicated to the Brazilian export market Multi Concept Operations Main Export Markets Saudi Arabia Chile Sourcing Product Market Distrib. Gulf Iraq Middle East LatAm Venezuela Argentina Yemen Cuba Whole 100 countries¹ Retailers Markets Cuts Processed 5 continents Food Service Industry China Japan Korea Asia Eastern Europe Greece CIS (1) Includes Brazilian domestic market Source: Company 14

15 Sales Breakdown of Frangosul The Company is the 3rd largest poultry exporter Exports Domestic Markets 8% 3% 6% 15% 8% 7% Sales 2011 ( By Market ) 83% Poultry Pork Processed Others 70% Poultry Pork Processed Others 295,178 tons 69,645 tons 3% 4% 6% 1% 7% 5% Volume 2011 (364,823 Tons) 87% 87% Poultry Pork Processed Others Poultry Pork Processed Others Source: Company 15

16 Slaughter Plants The Company has plants strategic located in the State of Rio Grande do Sul and Mato Grosso do Sul. 1A 1B Montenegro I Poultry Area (m²): 30,498 Capacity (heads / day): 550,000 Production 2010 (tons): 148,863 Montenegro II Processed Products Area (m²): 11,885 Capacity (tons / day): 180 Production 2010 (tons): 78,273 AC RR AM RO AP PA TO M T GO M S M A M G PI BA ES CE RN PB PE AL SE 2 3 Ana Rech Pork Area (m²): 23,419 Capacity (heads / day): 3,000 Production 2010 (tons): 55,227 Passo Fundo Poultry Area (m²): 25,511 Capacity (heads / day): 430,000 Production 2010 (tons): 162, SP PR SC R S R J Poultry Site 4 Caarapó Poultry Area (m²): 8,710 Capacity (heads / day): 127,000 Production 2010 (tons): 37,507 Total Production Capacity Poultry: 1,100,000 heads / day Pork: 3,000 heads / day Processed Products: 180 tons / day Pork Site Processed Products Export Site 16

17 Investment Highlights JBS Frangosul Expanding poultry market Increase in the poultry consumption Limited production capacity in the biggest consuming countries New markets opening up to importations Intrinsic advantages No religion barriers Low production costs compared to other protein sources Fast production cycle JBS Frangosul Leading Company Multi concept operations One of the world s leading producers Sizable asset with a production capacity of ~365,000 tons (2011) Brazil s 3 rd largest poultry exporter Guarantees a stable performance through: Multi-product: whole, cuts, processed products Multi-market: operating in 100 countries and on 5 continents Multi-distribution: retailers, food service, industry Recognised brands Strong brands with global impact: Frangosul is a respect poultry brand on the export market: LeBon has a 10% growth rate in Brazil [Doux Brand?] Proven relation with customers Longstanding relations with customers: averaging 20 years with the Top 20 17

18 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, satisfactory profitability for our shareholders and the certainty of a better future to all our employees.