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JBS S.A.

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

Presenters

Wesley Mendona Batista


CEO

James Cleary
CEO JBS Brazil Poultry

Jeremiah OCallaghan
Investor Relations Director

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JBS S.A. at a glance


Founded in the 1950s 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

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1 Market Leader 2 Track Record


of successful acquisitions

Merger and Acquisition track record


More than 30 acquisitions in 15 years
2005 2007
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.

2008

Inalca Swift Foods Co. Pilgrims Pride

3 Geographic and

Rockdale Beef Tatiara Meat (Swift Austrlia)

market segment diversification

2009 2010

Diversification of market segments through the acquisition of Pilgrims Pride and merger with Bertin. JBS Swift became the leader in lamb production in Australia.

Maring (Amambay) Berazategui (Rio Platense) Colonia Caroya SB Holdings JV Beef Jerky Rio Branco Venado Cacoal 1 Tuerto Cacoal 2 Porto Velho Pontevedra Vilhena (CEPA) (Frigovira) Pedra Preta (Frigo Marca) Cceres (Frigosol) Iturama (Frigosol) Rosrio San Jose (Swift Argentina)

Merger with Bertin JBS Couros 5 new units Tasman Smithfield Beef Five Rivers

36.9 31.1

4 Well-recognized
brands
Barretos (Anglo) Pres. Epitcio e Campo grande (Bordon) Barra do Garas (Sadia)

16.5

17.2

Andradina (Sadia)

Araputanga (Frigoara)

7.2

0.4
1997

0.4
1999

0.5
2000

0.5
2001

0.4
2002

0.7
2003

1.2
2004

1.5
2005

2.0
2006 2007 2008 2009 2010 2011

Net revenue (USD billion)

Source: JBS

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1 Market Leader 2 Track Record of


successful acquisitions

Presence in more than 100 countries, in 5 continents


Strategic Geographical Distribution

3 Geographic
and market segment diversification

4 Well-recognized
brands

3 60

Pork Beef

37 6

Chicken Lamb

7 20

Dairy Leather

58 17

Distribution Center Sales Office

134 1

Slaughterhouse and Industry Biodiesel

Geographic Presence and Production Capacity


Source: JBS

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

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Poultry Industry Overview of the Global Market

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
Global Consumption (2010) : 94 M ton
CAGR: 9.6%

Poultry Consumption (US$ Bn)


CAGR: 3.6%

234 203 162

104 65

2000
Consumption kg/person/year Over 40 30-40 20-30 10-20 0-10

2005

2010

2015E

2019E

Poultry Consumption (M ton)


CAGR: 2.3% CAGR: 3.1%

83 69

94

106

116

Relevant poultry consumption in the world, with growth prospects for the next years, boosting Brazilian exports

2000

2005

2010

2015E

2019E

1 - Includes poultry, turkey, duck, goose and guinea fowl Source: FAO, USDA

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Positive Prospects for the Industry


The poultry industry is increasing its importance and replacing other meats in the global consumption market
Poultry Industry Second largest meat category
Expected to surpass pork by 2030 Increasing demand from emerging markets Substitution effect from other meats
Sheep 5% Beef 26% Poultry 30%

Global Meat Market Breakdown


2000

Main Growth Drivers

Pork 39%

2010

Beef 23%

Increase in the world population GDP growth Cheapest source of protein Quick to produce vis--vis other proteins No religion barriers
Sheep 4%

Sheep 4%

Poultry 34%

2030E

Pork 39%

Beef 20%

Poultry 39%

Pork 37%

Fonte: USDA, FAO

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Attractive Industry Dynamics The poultry has several advantages when compared with other meats

Intrinsic Advantages of Poultry

Chicken Products Key Highlights


1 Whole Chicken
Consumed worldwide Exported frozen to Middle East Broiler: regular" chicken

Fast Production Low Cost Production

Griller: small chicken consumed individually in Middle East

2 Poultry
No Religious Barriers High Nutritional Qualities

Chicken Cuts
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

3 Processed Products
Mainly consumed in western countries Increased exports to developing countries
Source: Market Information PG.

Top Countries from the Global Chicken Market Brazil plays a relevant role in the industry

Top 7 Consumers 2011


M Tons 13.7 13.0 9.6 9.1

Top 7 Producers 2011


M Tons 16.7 13.2 13.1 9.4 3.5 3.0 2.9 2.9 2.9

2.6

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 0.9

3.9 3.2

0.8

0.7 0.6 0.5 0.4 0.4

1.0 0.5 Brazil USA EU-27 Thailand 0.4 China 0.2 Argentina 0.2 Turkey Japan Saudi Arabia EU -27 Mexico Russia Iraq Hong Kong

Source USDA, Ubabef

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Global Surplus (deficit)


Goldman Sachs forecast for animal protein in 2020

Surplus

Deficit

Beef & Veal Pork Chicken


Source: Goldman Sachs
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Brazilian Poultry Industry


Largest export market with promising domestic market
Overview 3rd largest poultry consumer in a expanding domestic market:
Increase in purchase power boosting demand for processed products

Poultry Exports Main States (2010)


State Santa Catarina Paran R. Grande do Sul So Paulo Gois Market Share 26.7% 26.2% 21.0% 7.0% 5.2% 4.5% 4.3% 3.4% 1.5%

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

MT MS

GO PR SC SP

Mato Grosso

MG

Minas Gerais M. Grosso do Sul Dist. Federal

RS

Total: 3.9 M tons

Production (M ton)
Export market represents ~30%

Exports Destination 2010 Others 17% Middle East 36%

Poultry Consumption per Capita kg / person / year

12,2 9,3 10,3 10,9 11,0

13,1

38.5 35.5 35.7 37.0 38.5

44.1

Asia 26% America 7% 2006 2007 2008 2009 2010 2011

2006

2007

2008

2009

2010

2011

Af rica 13%

Source: USDA, Ubabef, Secex, MDIC

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JBS Poultry Brazil Frangosul

Frangosul at a Glance
The Company is the 3rd largest poultry exporter in Brazil
Frangosul was founded in 1970 in the city of Montenegro (RS). The company was acquired by Group Doux in 1998

Brief Overview

o o o o

Poultrys production capacity of 1,100,000 chickens / day Porks production capacity of 3,000 hogs / day Sales of R$ 1.4 billion in 2011 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

Brands
Highly recognized and established brands with strong reputation for quality and innovation
Premium brand dedicated to the Brazilian domestic market (South Region)

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)

Value brand dedicated to the Brazilian export market

Multi Concept Operations

Main Export Markets


Saudi Arabia Chile Gulf Iraq Yemen Venezuela Argentina Cuba

Sourcing

Product

Market

Distrib.

Middle East

LatAm

Whole Cuts Processed

100 countries 5 continents

Retailers Food Service Industry


China

Markets Japan
Korea

Asia

Eastern Europe

Greece

CIS

(1)

Includes Brazilian domestic market

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Source: Company

Sales Breakdown of Frangosul


The Company is the 3rd largest poultry exporter
Exports
3% 6% 8%

Domestic Markets
15% 8% 7%

Sales 2011
( By Market )

83%
Poultry Pork Processed Others Poultry Pork

70%
Processed Others

295,178 tons 3% 4% 6%

69,645 tons 1% 7% 5%

Volume 2011
(364,823 Tons)

87% 87%
Poultry Pork Processed Others Poultry Pork Processed Others

Source: Company

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Slaughter Plants
The Company has plants strategic located in the State of Rio Grande do Sul and Mato Grosso do Sul.

1A

Montenegro I Poultry Area (m): 30,498 Capacity (heads / day): 550,000 Production 2010 (tons): 148,863 Montenegro II Processed Products Area (m): 11,885 Capacity (tons / day): 180 Production 2010 (tons): 78,273 Ana Rech Pork Area (m): 23,419 Capacity (heads / day): 3,000 Production 2010 (tons): 55,227 Passo Fundo Poultry Area (m): 25,511 Capacity (heads / day): 430,000 Production 2010 (tons): 162,050 Caarap Poultry Area (m): 8,710 Capacity (heads / day): 127,000 Production 2010 (tons): 37,507

RR

AP PA TO MT GO MS MG SP PR SC RS RJ ES

AM AC RO

MA PI BA

CE

1B

RN PB PE AL SE

3 2 1
Poultry Site Pork Site

Total Production Capacity


Poultry: 1,100,000 heads / day Pork: 3,000 heads / day Processed Products: 180 tons / day

Processed Products Export Site

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Investment Highlights
JBS Frangosul

Increase in the poultry consumption Expanding poultry market 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

One of the worlds leading producers Leading Company Sizable asset with a production capacity of ~365,000 tons (2011) Brazils 3rd largest poultry exporter

JBS Frangosul
Multi concept operations

Guarantees a stable perf ormance through:


Multi-product: whole, cuts, processed products Multi-market: operating in 100 countries and on 5 continents Multi-distribution: retailers, food service, industry

Strong brands with global impact: Recognised brands


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

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

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