According to the UN’s report entitled World Economic Situation and Prospects 2016 , the global economy grew 2.4% in 2015. Developed countries led this growth, unlike in previous years, when developing countries - and China in particular, with its large demand for commodities - dictated the pace of growth.
The trends in the United States were similar to the global average, according to the Bureau of Economic Analysis. The 2.4% growth in GDP in 2015 was the same as the previous year, reflecting the maintenance of consumer spending in the domestic economy.
In relation to proteins, there has been a gradual recovery in the cattle herd in the US, which will contribute to a reduction in live cattle prices. With regard to poultry, 2015 was a more challenging year due to the bird flu cases registered in the country, which resulted in the imposition of embargoes (total and partial) against exports. Given the increased product supply in the domestic market, there was pressure on prices, impacting margins. With regard to pork, slaughter levels remained slightly above the historical average throughout the year, and in the second half there was an increase in exports, mainly to China, which contributed positively to the industry.
The Brazilian economy, in turn, suffered a 3.8% decline in the period, according to the Brazilian Institute of Geography and Statistics (IBGE), the largest fall since 1996. Meanwhile, inflation NET REVENUE PROFIT is expected to reach 10.8%, according to the Central Bank. Food and beverages are expected to exceed this average, reaching 12.9%.
In the proteins sector, there was a 3% increase in the price of cattle in Brazil. In terms of exports, beef experienced a weaker performance, down 12.1% from 2014. In terms of revenue, exports grew 13.9% in reais, mainly due to the devaluation of the currency against the US dollar. In relation to poultry, production reached 13.1 million tons in 2015, according to the Brazilian Association of Animal Protein (ABPA), establishing Brazil as the second largest producer worldwide. Per capita consumption increased 1.1%, and exports grew in volume and revenue, at rates of 6.6% and 28.0%, respectively. Meanwhile, frozen and prepared products are gaining more market share among the foods consumed by Brazilians. According to a report by the O Globo news agency, consumers have opted for cheaper items and prioritized meals at home, rather than outside the home. These new habits are triggering an increased demand for prepared and frozen foods.
In 2015, JBS’s consolidated net revenue totaled R$162,914.5 million, an increase of R$42,444.8 million, up 35.2% over 2014.
Approximately 70% of JBS’s global sales occurred in the domestic markets in which the Company operates and 30% came through exports.
|Net Revenue by business unit||(% share)|
|JBS USA Beef||45.5%|
|JBS USA Pork||7.2%|
|JBS USA Poultry||16.8%|
In 2015, the Company recorded net income of R$4,640.1 million, equivalent to earnings per share (EPS) of R$1.60.
Consolidated Gross Profit
Gross profit for the period totaled R$22.6 billion, up 21.0% over 2014. The gross margin, in turn, fell by 1.6 percentage points.
Adjusted EBITDA totaled R$13.3 billion, up 19.9% over 2014. The EBITDA margin was 8.2%.
|R$ million||2015||2014||Chg. %|
|Net income for the fiscal year (including minority interest)||5,128.60||2,406.40||113.10%|
|Net financial result||1,300.60||3,637.60||- 64.2%|
|Income tax and social contribution - current and deferred||2,750.00||1,785.40||54.00%|
|Depreciation and amortization||3,692.80||2,546.80||45.00%|
|Restructuring, reorganization, donations and indemnity||487.2||745.5||-34.60%|
|Early settlement by premium paid by JBS USA||0||-5.6||-|
|(=) Adjusted EBITDA||13,300.40||11,090.00||19.90%|
The Company generated R$21,206.4 million in cash from operating activities in 2015. Free cash flow before the acquisitions of Tyson Mexico, Primo Group, Moy Park and Cargill Pork was R$17.0 billion in 2015, up 169.3% over 2014.
JBS ended the year with net debt of R$47,038.7 million and leverage of 3.18x. Including the pro forma results of the recent acquisitions, leverage was 2.91x. In dollar terms, the debt ranged from US$9,475.5 million to US$12,046.4 million.
|R$ million||2015||2014||% Chg.|
At the end of the year, 68% of JBS’s debt had a long-term profile. The other 32% was short-term, essentially unchanged from 2014.
ST/LT debt profile
With regard to the composition of the debt, 91% is denominated in US dollars, with an average cost of 5.24% per annum. The 9% of the debt in reais, in turn, has an average cost of 13.99% a year. Commercial banks are the main source of funding for the Company (56.3%).
|Value Added Statement (VAS)||(R$ ‘000)|
|Taxes and contributions|
|Third-party capital remuneration|
|Interest and exchange rate variations||21,001,386|
|Net income attributable to controlling shareholders||4,640,114|
|Non-controlling share in retained earnings||488,533|
Shares of JBS S/A, traded on the BM&FBovespa under the code JBSS3, ended 2015 quoted at R$12.34, up 10.3% from the close of 2014.
The Company’s shares also outperformed the Bovespa Index (Ibovespa), which fell 13.3% last year.
The Company’s market value totaled R$35.3 billion, placing it among the 15 companies with the highest market value on the Ibovespa, an index that includes its shares.
Shareholders and Investor Services
JBS has a specific area dedicated to serving its shareholders and investors. The area can be reached by e-mail firstname.lastname@example.org The information disclosed to the market, in turn, is available on the website www.jbs.com.br/ir.