2017 LGBT BAR’S ANNUAL CONFERENCE & C A R E E R FA I R
BUSINESS DEVELOPMENT INTENSIVE AG E N DA
LGBT BAR’S BUSINESS DEVELOPMENT INTENSIVE
TAB A
B U S I N E SS D E V E LO P M E N T I N T E N S I V E AG E N DA
9:00 am – 9:30 am
Registration
9:30 am – 9:45 am
Welcome and Introductory Remarks
9:45 am - 11:00 am
Session 1: Business Development Basics, Networking, Expertise and Brand Building Presentation by: Aurelio Perez, Shareholder (Employment Law), Littler Mendelson Jackie Stanley, Senior Associate (Securities and Litigation), WilmerHale
11:00 am - 11:15 am
Break
11:15 am - 12:30 pm
Session 2: Effective Client Pitching Presentation by: David Tsai, Partner (IP), Vinson & Elkins Ariel Ruiz, Senior Litigation Counsel, Uber
12:30 pm - 1:30 pm
Lunch
1:30 pm - 3:30 pm
Working Session 1: Pitch Team
3:30 pm - 3:45 pm
Break
3:45 pm - 4:30 pm
Working Session 2: Consultation
4:30 pm - 5:00 pm
Working Session 3: Final Pitch
5:00 pm - 6:30 pm
Team Pitch Presentations to Corporate Counsel & Feedback
6:30 pm - 8:30 pm
Cocktail Reception and Concluding Remarks Hosted by Littler Mendelson, P.C. 333 Bush Street, 34th Floor San Francisco, CA 94104
LGBT BAR’S BUSINESS DEVELOPMENT INTENSIVE
BUSINESS DEVELOPMENT INTENSIVE F A C U LT Y & C O R P O R AT E COUNSEL
LGBT BAR’S BUSINESS DEVELOPMENT INTENSIVE
TAB B
B U S I N E S S D E V E L O P M E N T I N T E N S I V E F A C U LT Y
Aurelio J. Pérez, Shareholder, Littler Mendelson, P.C. Ariel Ruiz, Senior Litigation Counsel, Uber Jacquelyn Stanley, Senior Associate, WilmerHale David Tsai, Partner, Vinson & Elkins LLP
C O R P O R AT E C O U N S E L Maile Choy, Senior Counsel, Wells Fargo Darek DeFreece, Managing Director & Chief Administrative Officer, Wells Fargo Miho Kubota, Managing Counsel, Wells Fargo David Lauer, Senior Vice President & Senior Company Counsel, Wells Fargo Katherine Ragusa, Senior Counsel, Wells Fargo Mark (Rick) Richardson, Vice President & Associate General Counsel, GlaxoSmithKline Nik Takacs, Senior Counsel, Wells Fargo Kelly Wessels, Senior Counsel, VF Outdoor & Action Sports
LGBT BAR’S BUSINESS DEVELOPMENT INTENSIVE
BUSINESS DEVELOPMENT BASICS, NETWORKING, EXPERTISE & BRAND BUILDING
LGBT BAR’S BUSINESS DEVELOPMENT INTENSIVE
TAB C
BUSINESS DEVELOPMENT BASICS, NETWORKING, EXPERTISE & BRAND BUILDING
Aurelio Perez, Shareholder, Littler Mendelson Jackie Stanley, Senior Associate, WilmerHale
BD BASICS & NETWORKING
Business Development – What Comes to Mind? ■ What word or phrase comes to mind when you think of “business development?” ■ Text JASONBEEKMAN196 to 22333 to join the poll. ■ POLL RESULTS
Business Development Myths ■ “I’m already busy. They rest will take care of itself.” ■ “I didn’t go to law school to be a sales (wo)man.” ■ “I’m too junior to think about business development.” ■ “Business development is all about personality. And I’m an introvert.” ■ “Clients always hire the smartest lawyers.” ■ “Doesn’t my firm have a business development group that does this?”
Business Development Truths ■ It is never too early in your career to think about business development. ■ People hire lawyers they like and trust. ■ Exceptional service is a form of sales. ■ Business development is non-linear – every interaction is an opportunity. ■ Relationships are the driving force ■ Everyone is “smart” and sells themselves as an “expert.” Developing a unique personal brand differentiates yourself.
Business Development: An Evolution Mid to Senior Associate: • Continue to form and cultivate relationships. • Know your clients and their business • Establish yourself as a go-to resource on a topic(s). Junior Associate: • Author client alerts and other • Form and cultivate relationships • Connect with partners, peers, other marketing materials that associate you with substantive expertise. professionals, etc. • Join key professional associations • Impress your most important clients (don’t forget – these include supervising attorneys, partners, etc.) • Develop practice area expertise
Business Development: An Evolution Counsel: • Continue to form and cultivate relationships. • Anticipate your clients’ problems and offer solutions. • Establish yourself in the legal and business community as an expert.
Partner: • Continue to form and cultivate relationships. • ALL OF THE REST – and then some! • Business development only becomes more important.
Make Your Net Work ■ Your network should always be expanding. ■ Every relationship is valuable, and you never know who or what can eventually lead to business. – Peers at other firms. – College classmates. – Daughter’s soccer coach. – Law School classmates. – Your first boss. – Internal connections at your firm. – The guy next to you on the plane. – Bankers on your last deal. – Couple that lives down the hall from you. – Your brother-in-law. – Friends from high school. – Your dog walker.
Networking Basics ■ Networking is all about establishing and nurturing relationships. ■ Engage ■ Listen ■ Respect ■ Be interested ■ Be authentic ■ Find common interests ■ Adapt your approach ■ Maintain contact ■ Build trust over time ■ GOLDEN RULES OF NETWORKING: – Before you ask anything of anyone, make it a point to help that person first. Ask, more than tell. Give, more than take.
Networking –Tips & Rules ■ Research speakers and attendees but don’t be obsessive. ■ Set goals for networking events and conferences. ■ Rehearse “elevator speech” but be flexible. ■ If meeting people makes you nervous, arrive early -- easier to make connections with fewer people present. ■ Approach people alone or in groups of 3+. ■ Pay equal attention to everyone in group. Don’t look around for someone better. Give everyone equal respect, regardless of position. ■ When meeting someone new, use their name as often as natural (ideally 3X to commit to memory). ■ Spend more time listening than speaking.
Follow–Up – Tips and Rules ■ Note on back of business cards how you want to follow up. Include reminders of discussion to reference conversation. ■ Follow-up no later than 48 hours after an event. ■ Use your firm’s CRM tools (e.g., InterAction) to organize follow-up. ■ Some follow-up options to consider: ■ Introductions to individuals or resources that can help them. ■ Coffee or lunch invitation. ■ Link to a relevant article. ■ Share a completed project with relevant background on its development. ■ Invitation to connect via a networking site like LinkedIn. ■ Invitation to Firm program, panel, or reception.
How to Develop Business Without Even Trying ■ Proverbial “low-hanging fruit.” – Know who your clients are and understand their business – Raise your internal visibility – Know what’s going on in the business world – Update your bio – Answer your phone ■ Use resources available to you. – Ask partners who are good at business development how they do it – Network via LinkedIn and industry groups – Utilize formal and informal mentors, both internal and external ■ Marketing and business development groups at your firm.
Key Points to Remember ■ Business development isn’t linear. ■ Business development is most important when business is good and you’re busy. ■ Internal business development is just as important. ■ Today’s analysts are tomorrow’s managing directors. ■ Be a team player. ■ Don’t always be looking for the jackpot.
“Free Advice” Can Be a Powerful Business Development Tool ■ Valuable means of building equity with clients and/or prospects. ■ Can help establish expertise with a prospect and position you as “go to” resource – often leading to billable business. – A client or prospect who feels indebted is more likely to reciprocate with business than one who views the relationship as a clean slate. – Word will spread. – Making clients and contacts look smart always reflects positively on you. ■ Providing free advice also keeps you in the loop on market developments and helps you proactively spot trends.
BD Basics: Takeaways ■ Elements of successful business development: – Cultivate relationships. – Develop expertise. – Share expertise. – Impress clients (internal and external). – Network.
EXPERTISE & BRAND BUILDING
Personal Brand Matters ■ In today’s marketplace, it’s tough to stand out – to get that dream job, to land the big client, etc. ■ Developing a strong personal brand – knowing who you are and maximizing your strengths – can separate you from the crowd. – Those who define and live their personal brand more naturally demonstrate confidence and executive presence. ■ Your brand is your reputation. It’s what you’re known for and the experience left in the minds of those with whom you interact.
Brand Basics ■ Unique – There’s only one of you, everyone else is taken! ■ Focused – Strong brands are simple, easy to understand and remember (think Bounty “the Quicker Picker Upper,” Apple “Think Differently,” and BMW “The Ultimate Driving Machine.”). ■ Authentic and Genuine – What makes you “you.” Everyone can spot a fake. ■ Consistent and Clear – Mixed or multiple messages can cloud your brand and confuse people about what you are all about. ■ Demonstrable – Make sure your brand messaging is supported by your experience/ knowledge/capabilities and provide evidence to bolster credibility. ■ Current and Relevant – Stay up to date with relevant developments and industry trends (e.g., desired skill sets and expertise).
Developing Your Personal Brand ■ They key is bringing who you are to what you do and how you do it. ■ Think about politicians, successful business leaders, scholars, and other public personas with strong personal brands you connect to and want to emulate. ■ Ask friends and family what they think your brand is as a starting point.
Developing Your Personal Brand ■ Identify the foundations of your brand – Personality – how would people describe you? Are you the life of the party? Are you more quiet and contemplative? – Skills/experiences – when you face a challenge, what’s your “go to” skill to beat it? What task are you most comfortable performing? – Abilities and strengths – what do you see in yourself and what do others recognize in you? What role do you typically play on a team? – Values – what accomplishment are you most proud of and why? What are the factors you consider most when making a decision? – Potential – what next level does your unique set of skills, experience, etc. allow you to achieve? What are your aspirations and what are you doing to achieve them?
Developing Your Personal Brand ■ You “represent the best combination of skills, personality and potential, and a unique blend of values and abilities.” Carla Harris, Expect to Win. ■ Your stated brand should include all of these elements, though the “weightings” may vary. ■ Most people focus only on skills. Extroverts may focus on personality, others less likely to do so. ■ Right now, potential may well be the most critical component of what you bring – own it. – Include your goals and aspirations. ■ At this stage, you are being assessed for a combination of what you have done and what others see you as having the potential to do, and your brand should reflect this.
Brand Examples ■ “At Southwest . . . we talk about hiring not for skills but three attributes: a warrior spirit (that is, a desire to excel, act with courage, persevere and innovate); a servant’s heart (the ability to put others first, treat everyone with respect and proactively serve customers); and a fun-loving attitude (passion, joy and an aversion to taking oneself too seriously.)” Julie Weber, How Southwest Airlines Hires Such Dedicated People. ■ Bill Gates – mercurial, mission-driven, visionary, global game-changer.
Breakout Activity ■ Take five (5) minutes and list, in words or short phases, 3 characteristics or differentiators under each category (or pick 3) for your brand: – – – – –
Personality Skills/Experiences Abilities/Strengths Values Potential
■ Some words/characteristics may cross categories.
Avoid Branding Pitfalls ■ Under-Selling: Imposter Syndrome, discomfort in self-promotion ■ Overselling: “Big concepts” without the back-up; ■ You are not a cliché. – In defining “who you are” avoid clichés that don’t convey any real information about the authentic you. – I am smart and hard-working (as opposed to stupid and lazy?). – I am a go-getter (not even sure what this means). ■ Clichés are probably unavoidable – key is to break down and unpack what you mean when you invariably use one. – What qualities are you attempting to convey? – Would these qualities bring value to the enterprise and if so, how? – What behaviors demonstrate those qualities?
Avoid Branding Pitfalls ■ Unpacking “team player” – Qualities: Collaborative, inclusive, flexible – Abilities: The ability to put others (such as clients, etc.) first; ability to distill a variety of perspectives and viewpoints to reach the optimal outcome – Values: Collective excellence; being part of a broader mission; goal-oriented, seeing projects and processes through to conclusion – Potential: Willingness to learn a new role (seek out new assignments, opportunities, etc.) and adjust based on the needs of my team ■ Unpacking “go-getter” – Qualities: Enthusiasm, passion, perseverance, resilience, grit – Values: Innovation, creativity, flexibility, “vision” – Skills: Mission-driven, results-oriented, ability to “fail fast” – Potential: The ability to see new opportunities and/or new ways of accomplishing current objectives combined with the qualities needed to see the mission through to completion
Brand Narrative ■ You should have one brand and core narrative, but may have multiple versions. – “Elevator speech” – very short synopsis (2-3 sentences or 30-60 seconds in length) about who you are, what you do/what you offer, and what you want. – Summary narrative – a short (1-2 paragraphs or 2 minutes in length) summary of who you are and what you do, with more time emphasis on how you add value and differentiation. – Long-form narrative – a longer discussion (think interviews or a resume) that involves an in-depth discussion of your skills and interests, and how you would utilize them in a particular context.
Selling Your Personal Brand ■ Ultimately, your brand is why clients will hire you. ■ Further into your career – establish and market yourself as an expert. – Develop subject-matter expertise. – Author articles, client alerts, blog posts, and other thought leadership pieces in a particular area or on a particular issue. – Develop contacts with and raise profile through legal and business media. – Raise your internal visibility and external profile. ■ Conduct trainings and webinars. ■ Present at relevant industry or practice-area conferences.
Branding Takeaways ■ Networking is about selling your brand, not building it. ■ Your initial focus must be on defining who you are and your value proposition – you have to have something to sell before you can sell it. ■ “Personal branding … is about making a full-time commitment to the journey of defining yourself … and how this will shape the manner in which you will serve others.” Glenn Llopsis, Personal Branding is a Leadership Requirement, Not a Self-Promotion Campaign. ■ Personal branding isn’t static – it evolves as you evolve. – Going back to Bill Gates – although elements remained largely constant his brand has evolved over time. FOUNDER OF MICROSOFT
GLOBAL PHILANTHROPIST
Mercurial
Passionate
Aggressive and Ruthless
Determined and Persistent
Mission-Driven
Mission-Driven
Visionary
Visionary
Global Game-Changer
Global Game-Changer
EFFECTIVE CLIENT PITCHING
LGBT BAR’S BUSINESS DEVELOPMENT INTENSIVE
TAB D
EFFECTIVE CLIENT PITCHING David Tsai, Partner, Vinson & Elkins Ariel Ruiz, Senior Litigation Counsel, Uber
Pitch Basics ■ Start Strong ■ Know Your Audience • Find out who is attending your pitch session and do your homework. • Understand pitch attendee backgrounds, company competitors and likely competitors for legal work (e.g., firms on their preferred outside counsel list). • Check available resources (e.g., SEC filings, investor presentations, news reports). ■ Keep it Simple • Avoid over-engineering your value-proposition messaging to potential clients. • Keep the pitch straightforward, clear, and economical. • Repeat key takeaways or “anchor points” that you want to leave in the minds of in-house counsel
Start Strong
Know Your Audience
Keep it Simple
Pitch Basics ■ Differentiate, Differentiate, Differentiate • Legal services marketplace is more competitive than ever before. • Highlight the “special sauce(s)” that you and your firm can offer that others cannot. ■ The Technology Factor • Determine whether to leverage technology-related aids like PowerPoint, videos, etc. • If you use PowerPoint, it’s a guide not a substitute. • Be sure to mention any technology your firm can use to make delivery of legal services faster, more collaborative, efficient, and less costly. ■ Highlight Client References • Showcase various representative clients that provides your law firm credibility (with approval). • Do not wait until the end of the pitch to highlight such clients!
Differentiate
Focus on Technology
Client References
Pitch Basics ■ Discuss Cyber and Data Security • Law firms are increasingly targeted by data hackers. • Cybersecurity is a top of mind issue for most in-house counsel. Articulate your firm’s data security safeguards (e.g., using highly reliable cloud services that provide with state-of-the-art security procedures). ■ Billing Flexibility • Don’t be afraid to discuss cost. • Express willingness to enter into creative alternative fee arrangements that align your interests with clients’ objectives. • Identify specific steps you take to lower cost (e.g., staffing all engagements efficiently to provide optimal value).
Cyber Security
Costs & Billing
Pitch Follow-Up Basics ■ Post Pitch Activity • Take a long-term view in developing relationships with potential clients. • • •
Send a handwritten and personal thank you to each attendee. Embrace a “growth mindset” by actively seeking constructive feedback about your presentation. Connect with attendees via LinkedIn and devise a strategy to sustain and deepen that connection moving forward.
“IDEA” Pitch Structure ■ IDEA is a simple but effective model for structuring your pitch content. I
• Impact
D
• Delivery
E
• Evidence
A
• Advocate
■ From Lee Grunnell’s Think.Feel.Do.: Making law firm pitches more persuasive.
Pitch Mistakes to Avoid ■ Be confident, but not too confident (no one likes an over-the-top ego). ■ Don’t undersell yourself either – or the worst of all – the humblebrag. •
Avoid experience padding. Only include relevant prior representations.
■ Focus on anticipated client concerns and potential questions. ■ Don’t beg for business and don’t threaten clients or scare them into hiring you. ■ Take out clichés that do not convey any real meaning (e.g., you’re a “strategic thinker”).
Case Studies and War Stories
Takeaways for Pitch Success Do more of this: •
Custom-made pitches (i.e., specifically applicable to audience and their business).
•
Answer questions asked rather than questions you wish were asked.
•
Do less of this: •
Canned pitch presentations.
•
Boilerplate responses to questions.
•
Irrelevant marketing and puffery.
Propose solutions/course of action, not just identify problems.
•
Long CV style experience discussion or introductions.
•
Sell your brand. Be your authentic self and connect.
•
Previous successes for other clients.
•
Be direct and succinct.
•
Focus on value add and what impact you will have.
•
Make it about the client, not you or your firm.
•
If a group pitch, make it “one voice.” The presentation should read as if it were written by one person.
Mock Pitches ■ You will be divided into groups. Each group will act as a different law firm pitching for work with JBS SA, the Brazilian-based meat processing company described in the materials you received a few weeks ago. • Note: We intentionally designed this to be a “group” activity since pitching is a team sport in many Biglaw practice areas these days. ■ You will have three working sessions, including one with a Corporate Counsel Team Coach (think The Voice only law business development version), to develop your pitch. ■ The mock pitch is designed to give you and your team members an opportunity to practice selling your brand and expertise. ■ It is also an opportunity for you to engage and learn from real corporate counsel, who will listen to you mock pitches, ask questions, and provide feedback.
Final Advice for Mock Pitches ■
Discuss areas of expertise, knowledge, and experience among your group members and identify capabilities to highlight in pitch. • Make sure the pitch includes an introduction to each team member and his or her practice. • Utilize what you’ve learned in this morning’s session about developing and selling your personal brand.
■
Demonstrate knowledge of JBS’s mission, business model, and corporate structure.
■
Access JBS’s potential legal services needs and propose courses of action (at a strategic, high level of course).
■
Discuss specific, relevant representative experience to help gain credibility.
■
Emphasize long-term relationship strategy and investment in JBS, should you be selected as outside counsel.
■
Work as a team and build on one another’s strengths.
■
The focus of the pitch should be how you would add value for JBS and advance its goals. Identify and emphasize how you are uniquely qualified to serve as JBS’s outside counsel.
■
MOST IMPORTANT: This is a learning experience – there is no pressure! We are here to support and encourage you, and provide valuable tools for you to take back with you and implement as you advance in your career and further develop your legal practice.
TAB E
TEAM PITCH
LGBT BAR’S BUSINESS DEVELOPMENT INTENSIVE
Team Pitch: You have been invited by a member of the Board of Directors of JBS SA, the largest meat processor in the world headquartered in Brazil, to pitch your team’s capabilities to the Company’s Board. Potential considerations may include:
Antitrust: DOJ investigating alleged manipulation of chicken price index – aka “Chicken Libor.” JBS operates facilities in Georgia, and its subsidiary Pilgrim’s Pride, is named in antitrust lawsuits in federal court in Illinois.
Capital Markets: Innovative financing structures to raise capital and alleviate company’s credit shortfall.
Corporate: JBS has made several attempts at growing its market share through M&A – some successful and some less so. Recently, JBS shareholders have called for management changes amid growing allegations of corruption. Should JBS consider strategically selling some of its assets and/or regional operations?
Corporate Litigation: JBS has and will likely continue to encounter any number of litigations, including shareholder lawsuits and activism-related litigation.
Environmental: JBS has faced investigations by Brazil’s environmental protection agency and other entities for illegal deforestation and other land misuses.
Financial Services: JBS regularly enters into financial protection instruments aimed at hedging exposure to currency and commodity risks.
Labor and Employment: JBS has faced EEOC complaints and other labor issues.
Tax: In addition to potential ramifications of tax reform, JBS and its subsidiaries considering a corporate transaction must undertake appropriate structuring
White Collar Defense and Investigations: JBS is facing numerous probes into alleged corruption, insider training, and other violations of federal securities laws.
Resources: Below are links (with full copies attached) to background resources in preparation for your meeting, though you may supplement with your own research and additional publicly available information. Company Background Materials o http://jbs.com.br/en/sobre/ o http://jbss.infoinvest.com.br/enu/4116/JBS%20Institutional%20Presentation.pdf
First Quarter 2017 Earnings Release and Investor Presentation o http://jbss.infoinvest.com.br/enu/4096/Earnings%20Release%201Q17%20%28Fi nal%29.pdf o http://jbss.infoinvest.com.br/enu/4107/JBS%201Q17%20Presentation%20Final.p df
Independent Auditor’s Review on Financials o http://jbss.infoinvest.com.br/enu/3343/DF%20JBS%20310315_Ingls_Com%20Pa recer.pdf
Litigation Documents o http://www.rosenlegal.com/media/casestudy/927_JBS%20%20Initial%20Complaint%20-%20web%20-%20secured.pdf o https://www.eeoc.gov/eeoc/newsroom/release/7-24-15.cfm o https://www.dol.gov/newsroom/releases/ofccp/ofccp20161213 o https://www.justice.gov/atr/case-document/complaint-137
News Articles o http://www.reuters.com/article/brazil-corruption-jbs-congress-idUSE4N1F7027 o https://www.bloomberg.com/news/articles/2017-05-26/the-dirty-family-secretbehind-jbs-s-20-billion-buying-spree o https://www.complianceweek.com/blogs/enforcement-action-global-glimpses/themeat-of-brazil%E2%80%99s-latest-bribery-scandal#.WWaWJRXyvcs o https://seekingalpha.com/article/4059755-2-rotten-meat-deforestation-scandalsimpact-jbss-brfs-usd-2_5-billion-ipos-brazilian-economy o http://www.dandodiary.com/2017/03/articles/securities-litigation/braziliancorruption-scandal-spreads-meat-industry-u-s-securities-litigation-follows/ o http://www.reuters.com/article/us-brazil-corruption-lula-idUSKBN19X2FO o http://www.greatfallstribune.com/story/news/local/2016/02/17/cattle-groupalleges-corruption-meatpacking-industry/80540232/ o http://www.foodsafetynews.com/2017/06/cattlemen-see-opportunity-to-re-openjbs-anti-trust-issues-in-u-s/#.WWbQDRXyvcu
o http://www.meatpoultry.com/articles/news_home/Global/2016/08/JBS_restructur es_for_larger_gl.aspx?ID=%7B019616EA-58AC-4395-AD7F6423F914D27B%7D&cck=1 o https://www.bloomberg.com/news/articles/2017-05-23/batista-bonds-worst-inemerging-markets-amid-jbs-debt-concerns
JBS S.A.
A GLOBAL FOOD COMPANY Institutional Presentation Including 1Q17 Results
Our Values DETERMINATION Be relentless. Deliver superior results. Adopt a sense of urgency. Make things happen.
SIMPLICITY Be practical. Focus on what is important. Adopt a hands-on approach. Avoid bureaucracy.
AVAILABILITY Be receptive and open. Always be prepared and motivated to take on new challenges.
HUMILITY
SINCERITY Be direct, truthful and transparent. Respectfully express opinion. Know how to say no, but be positive and offer solutions.
DISCIPLINE Be punctual. Fulfill commitments. Deliver results. Do not make excuses.
OWNERSHIP Be committed to results. Focus on details. Take responsibility.
Listen. Be helpful and thoughtful. Act with respect. Prioritize the team over yourself. Value the opinion of others.
2
JBS AT A GLANCE Net Revenue of R$164.1
billion LTM1Q17
Second largest global food companyยน Global and diversified platform
Value added product portfolio with brands High performance team with more than 235 thousand employees
Focus on operational Source 1: Bloomberg
excellence 3
A GLOBAL COMPANY An Exclusive Global Production and Sales Platform
3%
CANADA
RUSSIA
EUROPE
1%
5%
50%
14%
USA MEXICO
ASIA
4%
AFRICA & MIDDLE EAST
3% BRAZIL
South Am/ OTHERS
15%
2% As % of Total Revenueยน
Production footprint
Note 1. Revenues by region include domestic sales and imports.
OCEANIA
3%
4
EVOLUTION From a Brazilian beef company in 2007 to a Global food company
IPO JBS SA
19,000
Net Revenue: R$14.1 bi
EMPLOYEES
2006 Net Revenue: R$3.9 bi
2007
BERTIN
CARGILL PORK
2009 2008
2013 2010
Net Revenue: R$30.3 bi EXPANSION IN USA AND AUSTRALIA Net Revenue: R$54.7 bi
2015
235,000 EMPLOYEES
2014
2016
ACQUISITIONS: TYSON IN BRAZIL AND MEXICO
Net Revenue: R$170.4 bi
5
STRATEGY Global and Diversified Production and Distribution Platform progressing towards value added products with brands
\\\\\\\\\\\\
Branding
Value added products
Sales and distribution platform
Production platform
+350,000 customers and sales to +150 countries +300 production units in +15 countries 6
CONSOLIDATED EXPORTS
Greater Chinaยน 20.6%
Others 12.1%
Exports Breakdown in 1Q17 and 1Q16 Singapore 2.6% Russia 5.1%
South America 5.2%
Canada 2.8%
Others 8.8%
Mexico 3.4% Russia 4.6%
South America 20.4%
1Q16 US$3,258.9 million
South Korea 6.6%
1Q17 US$ 3,252.0 million
Mexico 6.1% E.U. 7.4% South Korea 7.5%
Africa & Middle East 13.5%
Japan 11.5% USA 8.4%
Greater Chinaยน 14.7%
E.U. 7.8% Africa & Middle East 11.3% Japan 9.6%
Note 1: Considers China & Hong Kong
USA 10.0%
7
BUSINESS UNITS 8
SEARA Leading producer of prepared foods (PFPs) and fresh poultry and pork products Operational Platform
Brazil
+ 71,000 employees
5.7 million birds per day CE
Production units located in the south,
1
southeast and mid-west regions
PE
BA
MS
and mid-west regions
1
1
1
1
1
1
7
PR
RS
Production units located in the south,
1
1 1 1
MG
SP
4
southeast, northeast and mid-west regions
SC
5
3
7
2
20 PFP units
3 1
2
117,000 tons per month
08 slaughterhouses and deboning units
1
DF
1 1
Production units located in the south
32 slaughterhouses and deboning units
1
MT
21,200 hogs per day
1
8
3
RJ
1
3
3
1
13 distribution centers
5
13 distribution centers In 11 states
Main Brands
Net Revenue LTM 1Q17
R$18.0 billion
EBITDA LTM 1Q17
R$1.2 billion 6.9% Margin 9
JBS MERCOSUL Beef production in Brazil, Argentina, Paraguay and Uruguay, in addition to leather and other Related Business Operational Platform
Brazil
+ 54,000 employees PA AM
40,200 bovines per day
4 1
86% in Brazil, 5% in Argentina, 7% in Paraguay and 2% in Uruguay
84,000 hides per day
AC
RO 1
1
1 2
MT 4
11
2 3
3 1 7
01 facility in Argentina, Germany, Mexico, Uruguay and Vietnam
36 beef processing facilities
PE
2 1
3 GO 3
2 1 2
7 2 1 3
1
BA
1 1
1
16 facilities in Brazil
CE
1
03 feedlots
MG
16 tanneries
MS 1
PR
2
1
02 facilities in Italy
1 1 1
1
RJ 1
3
30 distribution centers
SP
SC
Main Brands
RS
31 distribution centers 10 central and 20 regional in Brazil and 01 in Argentina
01 beef processing facilities 02 case ready facilities 01 distribution center 01 tannery
Argentina Leadership in beef production
08 related businesses Biodiesel Can making
Paraguay JBS is the leader in beef processing and has around 25% of market share in exports of Paraguay
Collagen
Uruguay
JBS Carriers / TRP
Great access to export markets
Trading Hygiene and Clean
Casings Recycling
Net Revenue LTM 1Q17
R$27.4 billion
03 beef processing facility
01 beef processing 01 tannery
EBITDA LTM 1Q17
R$1.0 billion 3.6% Margin 10
JBS USA BEEF Beef production in the United States, Canada and Australia Operational Platform
United States
+ 33,000 employees WI
~43,400 bovines per day
1
ID
1
1
~29,000 in the US
UT
~4,200 in Canada
CO
1 1
~10,200 in Australia
1 4
2
PA
1
KS OK
AZ
TX
5,000 in the US
1 3
GA 1
1 2
7,900 in Australia
09 beef processing facilities
01 tannery
1
1 1
1
11 feedlots
1
1
12,900 hides per day
MI 1
NE
06 carriers units Main Brands
17 feedlots (bovine) 4
11 in the US/ Capacity of 900,000
1
1
bovines
3
01 in Canada / Capacity of 75,000
1
bovines
2 4
1
05 in Australia / Capacity of 150,000
2
bovines
08 distribution centers
Australia and New Zealand
2
1 1
2
1
1
2
1
1
Leadership in beef exports Leadership in the processing of lamb (23,800 lamb per day) #1st in the Food Industry Ranking¹
Canada Growth in revenues from 2014 to 2015
Note 1. Source: Food&Drink Business Magazine
Net Revenue LTM 1Q17
09 bovine, 05 lamb and 01 hogs
05 feedlots 01 tannery 08 distribution centers 08 case ready facilities 07 in Australia and 01 in New Zealand
07 DCs in Australia, 01 in New Zealand and 06 carriers units in the US
15 processing facilities
US$20.8 billion
01 beef processing facility 01 feedlot (bovine) 01 trading
EBITDA LTM 1Q17
US$868 million 4.2% Margin 11
JBS USA PORK Pork production in the United States Operational Platform
United States
+10,000 employees MN
~ 90,000 hogs per day
1
VT IA
100% in the US
1 2 2
IL 1
07 case ready facilities
IN 1 1
KY
CA 1
OK 1
5 feed mills
05 hog processing units
1
NC
AR
1
1
MS 1 1
07 consumer ready facilities 02 distribution centers
Products
02 genetic units
Swift Premium Dry Rubbed Ribs
Swift Premium Boneless Backrib
Swift Premium Rubbed Loin Filet
Swift Premium Boneless Pork Chops
Main Brands
Net Revenue LTM 1Q17
US$5.5 billion
EBITDA LTM 1Q17
US$657 million 12.0% Margin 12
JBS USA CHICKEN (PPC) Poultry production in the United States, Porto Rico and Mexico Operational Platform
United States
+42,000 employees
MN 1
~ 7.8 million birds per day
WI
1
1
6.6 million in the US
25 processing facilities
WV
66,000 in Porto Rico 1.1 million in Mexico
1
KY TN
AR 1
TX 4
3
LA
VA
05 case ready facilities
1
NC
1
AL
21 distribution centers
1 1
2
SC 1
GA 6 1
20 located in Mexico 1 located in Porto Rico
2
1
Main Brands
FL 1
+ 3,500 contract growers 39 hatcheries
Mexico
34 feed mills
With Tyson acquisition, PPC now have an additional of three facilities, adding 600,000 birds per day of capacity and 5,400 employees
6
Porto Rico
06 poultry processing facilities 20 distribution centers
01 processing facility 01 distribution center
1
Net Revenue LTM 1Q17
US$8.0 billion
EBITDA LTM 1Q17
US$870 million 10.9% Margin 13
JBS EUROPE Poultry and Convenience Products in Europe Operational Platform
Europe
+ 12,000 employees
760,000 birds per day In Natura
100% in UK
Convenience and Value Added UK
250,000 tons of products per year
Convenience and Value Added Europe Poultry Breeding Grounds Rigamonti
Presence in UK, France, Netherlands and Ireland and Italy (Rigamonti)
+ 750 contract growers
Main Brands
Net Revenue LTM 1Q17
£1.5 billion
EBITDA LTM 1Q17
£132 million 9.0% Margin 14
EVOLUTION BY BUSINESS UNIT 15
Seara (R$)
Net Revenue (billion)
4.3
4.6
4.6
JBS Mercosul (R$)
EBITDA (million) and % EBITDA
4.7
4.1
13.5%
579.5
1Q16 2Q16 3Q16 4Q16 1Q17
8.3% 7.3% 6.4% 5.3%
Net Revenue (billion)
7.0
7.2
6.8
4.6
1Q16 2Q16 3Q16 4Q16 1Q17
1Q16 2Q16 3Q16 4Q16 1Q17
5.0%
7.3%
0.5%
3.7%
269.9
1Q16 2Q16 3Q16 4Q16 1Q17 EBITDA (million) and % EBITDA
11.9% 13.9% 10.4% 9.0% 10.1% 1.9
1.3
1.4
1.4
1.4
2.0
1Q16 2Q16 3Q16 4Q16 1Q17
1Q16 2Q16 3Q16 4Q16 1Q17
8.1% 10.0%
102.1
1Q16 2Q16 3Q16 4Q16 1Q17
136.9
14.0% 12.5% 11.4% 188.9 171.5 159.4
1Q16 2Q16 3Q16 4Q16 1Q17
JBS Europe - Moy Park (£ - pounds sterling) Net Revenue (million)
347.5 364.7 352.8 372.3 370.4
EBITDA (million) and % EBITDA
8.8% 9.2% 8.9% 9.8% 8.2% 30.6 33.5 31.4 36.5 30.2
233.5 282.7 210.8 172.2 204.0
1Q16 2Q16 3Q16 4Q16 1Q17
143.7 59.4
EBITDA (million) and % EBITDA 1.4
183.4
JBS USA Chicken – PPC (US$)
2.0
Net Revenue (billion)
387.6
-214.8 27.0
2.0
339.0
JBS USA Pork (US$)
-4.6%
2.0
5.0% 2.0% 1.0%
457.2
382.0 334.8 298.9 215.8
4.9
Net Revenue (billion)
6.3%
6.2 761.4
EBITDA (million) and % EBITDA
1Q16 2Q16 3Q16 4Q16 1Q17
10.9%
7.2
JBS USA Beef (US$) Net Revenue (billion) 5.2 5.4 5.3
EBITDA (million) and % EBITDA
1Q16 2Q16 3Q16 4Q16 1Q17
1Q16 2Q16 3Q16 4Q16 1Q17
16
CONSOLIDATED RESULTS 1Q17 17
1Q17 CONSOLIDATED HIGHLIGHTS NET SALES (R$ MILLION) 43,912
GROSS PROFIT (R$ MILLION) Gross Margin (%)
-14.3%
37,616
4,764
1Q16
1Q17
EBITDA (R$ MILLION)
11.8%
10.8%
-7.2%
1Q16
4,421
1Q17
NET INCOME (R$ MILLION)
EBITDA Margin (%)
2,137
422
5.7%
4.9% 0.2%
2,141
1Q16
1Q17
-2,741 1Q16
1Q17 18
1Q17 CONSOLIDATED HIGHLIGHTS NET DEBT (R$ MILLION) / LEVERAGE Leverage
3.84x
4.10x
4.32x
48,745
49,178
48,855
1Q16
2Q16
3Q16
4.16x
4.20x
46,905
47,806
4Q16
| The Company ended the quarter with R$10.7 billion in cash. | JBS’ net debt was R$47.8 billion at the end of 1Q17.
1Q17
| Adjusted leverage including the LTM results of GNP was 4.20x.
19
DEBT PROFILE 1Q17 BREAKDOWN BY CURRENCY AND COST
BREAKDOWN BY SOURCE
BREAKDOWN BY COMPANY
12.45% p.a. R$ 7.8%
Commercial Banks 62.1% Capital
US$ 92.2%
JBS S.A. 41.5%
Markets 37.8%
5.11% p.a.
BNDES 0.1%
DEBT PROFILE ST/LT Short Term
JBS USA 47.0%
Seara 11.5%
SHORT TERM DEBT BREAKDOWN BY TYPE Long Term
1Q16
33%
67%
2Q16
32%
68%
3Q16
31%
69%
4Q16
32%
68%
1Q17
31%
69%
Working Capital 16%
Others 8%
Bonds 2%
Trade Finance 74%
20
Mission “To be the best in what we set out to do, completely focused on our business, ensuring the best products and services for our customers, consistency for our suppliers, profitability for our shareholders and the opportunity of a better future for all our team members.
JBS S.A. (BVM&FBOVESPA: JBSS3; OTCQX: JBSAY)
São Paulo, May 15th, 2017
1Q17 Results JBS Reports 1Q17 Net Revenue of R$37.6 billion and Net Income of R$422.3 million JBS ended 1Q17 with net revenue of R$37.6 billion. Net income was R$422.3 million, representing an EPS of R$0.15. Gross profit was R$4.4 billion, with gross margin increasing from 10.8% in 1Q16 to 11.8% in 1Q17. EBITDA was R$2.1 billion, stable in comparison with 1Q16, with EBITDA margin increasing from 4.9% to 5.7%. “We started 2017 performing well in our international business units, boosted by strong demand in the markets where we operate. Our operations in South America, on the other hand, continued to face a challenging scenario, mainly due to the strong appreciation of the real against the US dollar, which was R$3.91 in 1Q16 and R$3.14 in 1Q17, impacting the profitability of our exports from Brazil.”, stated Wesley Batista, Global CEO of JBS. “Our global production platform, product diversification, continuous investments in innovation and constant focus on cost control and efficiency, allowed us to mitigate the effects from a challenging scenario in South America with good results from our international operations.”, added Wesley Batista.
1
1Q17 Highlights
Net revenue in 1Q17 was R$37.6 billion, a decrease of 14.3% compared with 1Q16.
Gross profit in 1Q17 was R$4.4 billion. Gross margin increased from 10.8% in 1Q16 to 11.8% in 1Q17. EBITDA in 1Q17 was R$2.1 billion. EBITDA margin increased from 4.9% in 1Q16 to 5.7% in 1Q17. JBS posted net income of R$422.3 million in 1Q17, which represents an EPS of R$0.15.
Net Revenue (R$ Million)
Gross Profit (R$ Million)
Gross margin (%)
43,911.9 37,616.4
10.8%
11.8%
4,763.8
4,421.0
-14.3%
1Q16
-7.2%
1Q17
EBITDA (R$ Million)
1Q16
1Q17
Net Income (R$ Million)
EBITDA margin (%)
422.3 5.7%
4.9%
1Q16
1Q17
2,140.5
2,137.2 0.2%
-2.741,2 1Q16
1Q17 2
1Q17 Highlights
In 1Q17, net cash used in operating activities was
R$285.4 million. JBS ended 1Q17 with net debt of R$47.8 billion. Leverage at the end of the quarter including LTM results of GNP was 4.20x.
Net Operating Cash Flow (R$ Million)
Net Debt (R$ Million) and Leverage
Leverage
1Q16
4.16x
4.20x
46,904.8
47,806.0
1Q17
-285.4
1.9% -1,101.9
4Q16
1Q17
3
1Q17 Consolidated Results Consolidated analysis of the main operational indicators of JBS 1Q17 R$ m illion
R$ MM
Net Revenue Cost of Goods Sold Gross Income
∆%
4Q16 R$ MM
% NR
1Q17 vs 4Q16
37,616.4
100.0%
41,630.6
100.0%
-9.6%
43,911.9 100.0%
-14.3%
(33,195.4)
-88.2%
(35,694.2)
-85.7%
-7.0%
(39,148.1) -89.2%
-15.2%
4,421.0
11.8%
5,936.3
14.3%
-25.5%
Selling Expenses
(2,069.5)
-5.5%
(2,461.0)
-5.9%
General and Adm. Expenses
(1,289.2)
-3.4%
(1,529.8)
(410.8)
-1.1%
(939.8)
Net Financial Income (expense) Equity in earnings of subsidiaries
∆%
1Q16
% NR
R$ MM
4,763.8
% NR
10.8%
-7.2%
-15.9%
(2,678.5) -6.1%
-22.7%
-3.7%
-15.7%
(1,227.6) -2.8%
5.0%
-2.3%
-56.3%
(4,765.3) -10.9%
-91.4%
0.0%
-48.8%
1.8
0.0%
21.9
0.1%
(19.2)
0.0%
-
675.3
1.8%
990.1
2.4%
-31.8%
(189.1)
-0.5%
(250.9)
-0.6%
-24.6%
Participation of non-controlling shareholders
(63.9)
-0.2%
(45.3)
-0.1%
41.1%
(96.5) -0.2%
Net Income (Loss)
422.3
1.1%
693.9
1.7%
-39.1%
(2,741.2) -6.2%
2,140.5
5.7%
3,112.9
7.5%
-31.2%
Other Income (expense) Operating Income Income and social contribution taxes
Adjusted EBITDA Net Income per share (R$)
0.15
3.5
1Q17 vs 1Q16
0.26
0.3
0.0%
515.3%
104.7
0.2%
-79.0%
(3,802.6) -8.7% 1,157.9
2,137.2
2.6%
4.9%
n.a.
-42.3%
-33.8% 0.2% -
Net Revenue JBS consolidated net revenue in 1Q17 totaled R$37,616.4 million, a decrease of 14.3% in relation to 1Q16, due to a net revenue reduction at Seara and JBS Mercosul of 4.7% and 11.1%, respectively, in addition to the appreciation of the real against the US dollar, from R$3.91 in 1Q16 to R$3.14 in 1Q17. In 1Q17 approximately 74% of JBS global sales came from markets where the company operates and 26% from exports.
EBITDA JBS EBITDA for the quarter was R$2,140.5 million, stable compared with 1Q16. EBITDA margin was 5.7%. R$ million
1Q17
4Q16
∆%
1Q16
Net income for the period
486.2
739.1
-34.2% (2,644.6)
Financial income (expense), net
410.8
939.8
-56.3%
189.1
250.9
-24.6% (1,157.9)
1,056.2
1,153.6
Current and deferred income taxes Depreciation and amortization Equity in subsidiaries Restructuring, reorganization, donations and indemnity (=) EBITDA
-8.4%
4,765.3 1,165.9
∆% -91.4% -9.4%
(1.8)
(3.5)
-48.8%
0.0
32.9
-99.9%
8.9
-99.5%
-31.2%
2,137.2
0.2%
2,140.5
3,112.9
(0.3) 515.3%
4
1Q17 Consolidated Results Net Financial Results JBS registered net financial expense of R$410.8 million in 1Q17. Net result from FX variation and the fair value of adjustments on derivatives was positive R$441.1 million. Interest expense was R$909.3 million, while interest income was R$73.2 million. Taxes, contributions, tariffs and others resulted in an expense of R$15.8 million.
Net Income JBS recorded net income of R$422.3 million in 1Q17, reverting the negative results from the same period last year, which represents an EPS of R$0.15.
Cash Flow used in Operational Activities In 1Q17, net cash used in operating activities was R$285.4 million.
Cash Flow used in Investing Activities In 1Q17, total cash flow used in investing activities was R$1,742.8 million, of which R$1,125.1 million was related to the acquisition of GNP.
5
1Q17 Consolidated Results Indebtedness JBS ended 1Q17 with net debt of R$47,806.0 million. Leverage considering LTM results from GNP was 4.20x.
R$ million
03/31/17
12/31/16
Var.%
Gross debt
58,550.3
56,260.4
4.1%
(+) Short Term Debt
17,872.9
18,148.8
-1.5%
(+) Long Term Debt
40,677.4
38,111.6
6.7%
(-) Cash and Equivalents
10,744.3
9,355.6
14.8%
47,806.0
46,904.8
1.9%
4.20x
4.16x
Net debt Leverage
Net Debt (R$ Million) and Leverage
Leverage
3.84x
4.10x
4.32x
48,745
49,178
48,855
1Q16
2Q16
3Q16
4.16x
4.20x
46,905
47,806
4Q16
1Q17
6
1Q17 Consolidated Results Indebtedness (cont.) The Company ended the quarter with R$10,744.3 million in cash. Additionally, JBS USA has a US$1,384.0 million fully available unencumbered line under revolving credit facilities equivalent to R$4,385.1 million at the exchange rate of the end of the quarter. At the end of 1Q17, short-term debt (ST) in relation to total debt was 31%, of which 74% is trade finance related to exports from the JBS Brazilian businesses.
Breakdown of ST debt by type
Debt profile ST / LT 1Q16
33%
67%
2Q16
32%
68%
3Q16
31%
69%
4Q16
32%
68%
1Q17
31%
69% Short Term
Others 8%
Bonds 2%
Working Capital 16%
Trade Finance 74%
Long Term
At the end of the period, 92.2% of JBS consolidated debt was denominated in U.S. dollars, with an average cost of 5.11% per annum. The proportion of debt denominated in BRL was 7.8% of the consolidated debt, which had an average cost of 12.45% per annum.
Breakdown by Currency & Average Cost
Breakdown by Source
Breakdown by Company
ďƒź 12.45% p.a. R$ 7.8%
Commercial Banks 62.1%
US$ 92.2%
ďƒź 5.11% p.a.
Capital Markets 37.8%
BNDES 0.1%
JBS USA 47.0%
JBS S.A. 41.5%
Seara 11.5%
7
1Q17 Highlights by Business Units Seara (R$) Net Revenue (million)
JBS Mercosul (R$)
EBITDA (million) and % EBITDA
4,286.6
Net Revenue (million)
10.9%
6,983.4
4,085.2
6,211.4
13.5% 5.3%
761.4
-11.1%
579.5
-4.7%
1.0%
-92.2%
-62.8% 215.8 1Q16
1Q17
1Q16
1Q17
59.4
1Q16
1Q17
JBS USA Beef (US$) Net Revenue (million)
EBITDA (million) and % EBITDA
Net Revenue (million)
EBITDA (million) and % EBITDA
1,396.9
11.4%
8.1%
-4.6%
5.8%
159.4
183.4 102.1
11.2% 1Q16 1Q17
Net Revenue (million)
56.1%
1Q17
-214.8
1Q16
JBS USA Chicken – PPC (US$)
1Q17
1Q16
1Q17
JBS Europe - Moy Park (£ - pounds sterling)
EBITDA (million) and % EBITDA
Net Revenue (million)
EBITDA (million) and % EBITDA
2,020.5
1,962.9
11.9%
10.1%
2.9% 233.5
-12.6%
1Q16
1Q17
3.7% 1,256.6
1Q16
1Q16
JBS USA Pork (US$)
4,919.6
4,649.6
EBITDA (million) and % EBITDA
1Q17
1Q16
370.4
347.5
8.2%
30.6
6.6%
204.0
8.8%
30.2
-1.1% 1Q17
1Q16
1Q17
1Q16
1Q17
8
1Q17 Consolidated Results Analysis of the main financial indicators of JBS by Business Unit (in local currency) Million Net Revenue Seara JBS Mercosul JBS USA Beef JBS USA Pork JBS USA Chicken JBS Europe EBITDA Seara JBS Mercosul JBS USA Beef JBS USA Pork JBS USA Chicken JBS Europe EBITDA Margin Seara JBS Mercosul JBS USA Beef JBS USA Pork JBS USA Chicken JBS Europe
1Q17
4Q16
∆%
1Q16
∆%
R$ R$ US$ US$ US$ £
4,085.2 6,211.4 4,919.6 1,396.9 2,020.5 370.4
4,683.5 7,227.6 5,333.0 1,373.0 1,908.2 372.3
-12.8% -14.1% -7.8% 1.7% 5.9% -0.5%
4,286.6 6,983.4 4,649.6 1,256.6 1,962.9 347.5
-4.7% -11.1% 5.8% 11.2% 2.9% 6.6%
R$ R$ US$ US$ US$ £
215.8 59.4 183.4 159.4 204.0 30.2
298.9 143.7 387.6 171.5 172.2 36.5
-27.8% -58.7% -52.7% -7.1% 18.4% -17.2%
579.5 761.4 -214.8 102.1 233.5 30.6
-62.8% -92.2% 56.1% -12.6% -1.1%
% % % % % %
5.3% 1.0% 3.7% 11.4% 10.1% 8.2%
6.4% 2.0% 7.3% 12.5% 9.0% 9.8%
-1.10 p.p. -1.03 p.p. -3.54 p.p. -1.08 p.p. 1.07 p.p. -1.64 p.p.
13.5% 10.9% -4.6% 8.1% 11.9% 8.8%
-8.24 p.p. -9.95 p.p. 8.35 p.p. 3.29 p.p. -1.80 p.p. -0.63 p.p.
Seara (R$) Net Revenue (billion) 4.3
4.6
4.6
JBS Mercosul (R$)
EBITDA (million) and % EBITDA
4.7
4.1
13.5%
579.5
1Q16 2Q16 3Q16 4Q16 1Q17
8.3% 7.3% 6.4% 5.3%
Net Revenue (billion) 7.0
7.2
6.8
5.2
4.6
5.4
5.3
4.9
1Q16 2Q16 3Q16 4Q16 1Q17
10.9%
7.2
5.0% 2.0% 1.0%
457.2
382.0 334.8 298.9 215.8
1Q16 2Q16 3Q16 4Q16 1Q17
EBITDA (million) and % EBITDA 7.3% 5.0% 3.7% 0.5% -4.6% 387.6 269.9 183.4 -214.8 27.0
1Q16 2Q16 3Q16 4Q16 1Q17
JBS USA Chicken – PPC (US$) Net Revenue (billion) EBITDA (million) and % EBITDA 11.9% 13.9% 10.4% 9.0% 10.1% 2.0 2.0 2.0 1.9 2.0
1Q16 2Q16 3Q16 4Q16 1Q17
1Q16 2Q16 3Q16 4Q16 1Q17
339.0
143.7 59.4
1Q16 2Q16 3Q16 4Q16 1Q17
JBS USA Pork (US$) Net Revenue (billion) 1.3
1.4
1.4
1.4
1.4
EBITDA (million) and % EBITDA 8.1% 10.0%
102.1
1Q16 2Q16 3Q16 4Q16 1Q17
136.9
14.0% 12.5% 11.4% 188.9 171.5 159.4
1Q16 2Q16 3Q16 4Q16 1Q17
JBS Europe - Moy Park (£ - pounds sterling) Net Revenue (million) EBITDA (million) and % EBITDA
347.5 364.7 352.8 372.3 370.4
8.8% 9.2% 8.9% 9.8% 8.2% 30.6 33.5 31.4 36.5 30.2
233.5 282.7 210.8 172.2 204.0
1Q16 2Q16 3Q16 4Q16 1Q17
6.3%
6.2 761.4
JBS USA Beef (US$) Net Revenue (billion)
EBITDA (million) and % EBITDA
1Q16 2Q16 3Q16 4Q16 1Q17
1Q16 2Q16 3Q16 4Q16 1Q17
9
1Q17 Results by Business Unit Seara Seara posted net sales of R$4,085.2 million in 1Q17, a reduction of 4.7% over 1Q16 due to an appreciation of 24.4% of the Real against the US dollar during this period. In the domestic market, volumes grew in comparison with 1Q16 in all segments, specially in the Prepared Foods category (+11.5%). Average sales prices were lower due to trade down movements by consumers and a change in the mix of categories. At the end of this quarter, Seara reached a base of 152,000 customers in the domestic market, an increase of 3,000 this year, which supports its execution strategy and consumer preference. Exports, on the other hand, aligned with market conditions, saw a 5.0% volume decline and lower prices due to the appreciation of the real in the quarter. Seara EBITDA in 1Q17 was R$215.8 million, a reduction of 62.8% in relation to 1Q16, mainly due to the impact of the real appreciation. EBITDA margin was 5.3%. Highlights R$ Million
1Q17 R$
∆%
4Q16
% NR
R$
% NR
∆%
1Q16
QoQ
R$
% NR
YoY
Net Revenue
4,085.2
100.0% 4,683.5
100.0%
-12.8%
4,286.6
100.0% -4.7%
COGS
(3,479.1)
-85.2% (3,981.9)
-85.0%
-12.6%
(3,233.1)
-75.4%
15.0%
-13.6%
1,053.5
24.6% -42.5%
6.4% -27.8%
579.5
13.5% -62.8%
Gross Profit
606.1
14.8%
701.5
EBITDA
215.8
5.3%
298.9
7.6%
10
1Q17 Results by Business Unit JBS Mercosul
Net revenue from JBS Mercosul was R$6,211.4 million, a decrease of 11.1% compared with 1Q16. This reduction reflects a decrease of 4.7% in sales prices in the domestic market and 16.4% in the export market, with the latter being impacted by the exchange rate variation, which was R$3.91 in 1Q16 and R$3.14 in 1Q17. The reduction in net revenue, coupled with an increase of 2.5% in COGS, pressured gross margin, which was 26.3% in 1Q16 and decreased to 15.1% in 1Q17. Additionally, exchange rate variation in the period impacted the exports profitability and resulted in a 17.2% decrease in export revenues. All factors combined led to an EBITDA reduction of 92.9% compared with 1Q16, decreasing from R$761.4 million with margin of 10.9% in 1Q16 to R$59.4 million with margin of 1.0% in 1Q17.
Highlights R$ Million
1Q17 R$
∆%
4Q16
% NR
R$
% NR
QoQ
∆%
1Q16 R$
% NR
YoY
Net Revenue
6,211.4
100.0% 7,227.6
100.0%
-14.1%
6,983.4
100.0% -11.1%
COGS
(5,276.0)
-84.9% (5,923.3)
-82.0%
-10.9%
(5,147.1)
-73.7%
935.4
15.1% 1,304.3
18.0%
-28.3%
1,836.3
26.3% -49.1%
2.0% -58.7%
761.4
10.9% -92.2%
Gross Profit EBITDA
59.4
1.0%
143.7
2.5%
11
1Q17 Results by Business Unit JBS USA Beef (including Australia and Canada)
Net revenue totaled US$4,919.6 million in 1Q17, an increase of 5.8% over 1Q16, due to an increase in sales volumes in both markets, domestic and international. A greater cattle availability during this quarter favored a reduction in cost per head greater than the decrease in beef prices. Domestic demand increased in the period, boosted by more competitive prices and promotional initiatives at large retail chains. Beef exports also grew more than 25% in the period, positively impacting results of the North American operation. In Australia, exports continued to be impacted by low cattle availability, however, the Company posted an increase in prices in the domestic market as a result of operations and brand investments at Primo and Andrews Meats. As a result, this business unit registered an EBITDA of US$183.4 million in 1Q17, a reversal of the negative results from the same period last year. EBITDA margin was 3.7%. Highlights (US GAAP) US$ Million
1Q17 US$
∆%
4Q16
% NR
US$
∆%
1Q16
% NR
QoQ
US$
% NR
YoY
Net Revenue
4,919.6
100.0% 5,333.0
100.0%
-7.8%
4,649.6
100.0%
5.8%
COGS
(4,725.7)
-96.1% (4,931.9)
-92.5%
-4.2%
(4,854.4) -104.4%
-2.7%
Gross Profit
193.9
3.9%
401.1
7.5%
-51.7%
(204.8)
-4.4%
-
EBITDA
183.4
3.7%
387.6
7.3% -52.7%
-214.8
-4.6%
-
12
1Q17 Results by Business Unit JBS USA Pork
JBS USA Pork posted net revenue of US$1,396.9 million for the quarter, an increase of 11.2% compared with 1Q16, mainly due to an increase in animals processed during the period, coupled with higher sales prices in both markets, domestic and international. EBITDA was US$159.4 million, a 56.1% increase over the same period of last year. Higher demand for pork meat both domestically and internationally, greater hog availability in the U.S., as well as continuous improvements in production, product mix and customer relationships served as the backdrop for this quarter’s results. EBITDA margin was 11.4%. On May, 2nd, the Company announced the conclusion of the Plumrose USA acquisition, which, with its five prepared foods plants and highly recognized brands, will contribute to JBS’ expansion in the value added and convenience product segment in the US. Plumrose’s annual net revenue is approximately US$500 million and the acquisition was valued at US$230 million. Highlights (US GAAP) US$ Million
1Q17 US$
∆%
4Q16
% NR
US$
∆%
1Q16
% NR
QoQ
US$
% NR
YoY
Net Revenue
1,396.9
100.0% 1,373.0
100.0%
1.7%
1,256.6
100.0% 11.2%
COGS
(1,231.9)
-88.2% (1,197.2)
-87.2%
2.9%
(1,157.2)
-92.1%
6.5%
Gross Profit
165.0
11.8%
175.8
12.8%
-6.2%
99.4
7.9% 66.0%
EBITDA
159.4
11.4%
171.5
12.5%
-7.1%
102.1
8.1% 56.1%
13
1Q17 Results by Business Unit JBS USA Chicken (PPC)
Pilgrim’s Pride (PPC) posted net revenues of US$2,020.5 million in 1Q17, an increase of 2.9% in comparison with 1Q16. Net revenues from US operations increased by 4.0% over 1Q16, mainly from the inclusion of net revenues from GNP, which was acquired in January, as well as higher poultry sales prices. In Mexico, net sales decreased by 2.9% due to FX effect during the period. EBITDA totaled US$204.0 million, 12.6% lower than the same period of last year, impacted by costs and G&A expenses related to GNP’s assets in the US, and higher marketing expenses associated to the launching of new prepared food products in the US and Mexico, partially offset by 5.2% lower operational costs in Mexico. EBITDA margin in 1Q17 was 10.1%. PPC’s net income was US$93.3 million, with an EPS of US$0.38. Operational cash generation was US$61.5 million. GNP integration is on track with additional US$10.0 million synergies already identified, increasing total annualized run-rate to $30 million, up from $20 million. Highlights (US GAAP) 1Q17
US$ Million US$
∆%
4Q16
% NR
US$
% NR
QoQ
∆%
1Q16 US$
% NR
YoY
Net Revenue
2,020.5
100.0% 1,908.2
100.0%
5.9%
1,962.9
100.0%
2.9%
COGS
(1,805.3)
-89.3% (1,727.7)
-90.5%
4.5%
(1,725.4)
-87.9%
4.6% -9.4%
Gross Profit
215.2
10.7%
180.5
9.5%
19.3%
237.6
12.1%
EBITDA
204.0
10.1%
172.2
9.0%
18.4%
233.5
11.9% -12.6%
14
1Q17 Results by Business Unit JBS Europe (Moy Park)
JBS Europe’s net revenue totaled £370.4 million in 1Q17, 6.6% higher when compared to 1Q16, mainly from a 24.9% increase in fresh poultry domestic volumes, partially offset by lower sales prices in the same segment. EBITDA for the quarter was £30.2 million, practically stable over the £30.6 million EBITDA posted for 1Q16, with the £0.4 million reduction being mainly related to non-recurring SOX compliance costs. Excluding this effect, performance in relation to 1Q16 would have been positive, thanks to strong operational performance and volume growth. Moy Park recorded volume and revenue growth in 1Q17, mainly due to a positive performance of the fresh poultry segment, thanks to a larger operational capacity. Management remains focused on cost control, strong customer relationships and on its culture of constant innovation providing a secure platform for future performance. Highlights 1Q17
£ Million £
∆%
4Q16
% NR
£
% NR
QoQ
∆%
1Q16 £
% NR
YoY
Net Revenue
370.4
100.0%
372.3
100.0%
-0.5%
347.5
100.0%
6.6%
COGS
(328.4)
-88.7%
(325.2)
-87.3%
1.0%
(307.5)
-88.5%
6.8%
Gross Profit
42.0
11.3%
47.2
12.7%
-11.0%
40.0
11.5%
5.0%
EBITDA
30.2
8.2%
36.5
9.8% -17.2%
30.6
8.8% -1.1%
15
Tables and Charts Graph I - JBS Consolidated Exports Breakdown in 1Q16 and 1Q17 Greater China¹ 20.6%
Others 12.1% Singapore 2.6% Russia 5.1%
1Q17 US$ 3,252.0 million
South America 5.2%
Africa & Middle East 13.5%
Mexico 6.1%
Japan 11.5%
E.U. 7.4% South Korea 7.5%
Others 8.8%
Canada 2.8% Mexico 3.4% Russia 4.6%
South America 20.4%
1Q16 US$3,258.9 million
South Korea 6.6%
USA 8.4%
Greater China¹ 14.7%
E.U. 7.8% Africa & Middle East 11.3% Japan 9.6%
USA 10.0%
Note 1. Considers China and Hong Kong
Table I – 1Q17 Breakdown of Production Costs by Business Unit (%) 1Q17 (%)
Consolidated
JBS Mercosul
Seara
USA Beef
USA Pork
USA Chicken
JBS Europe
Raw material (livestock)
76.6%
85.6%
69.3%
84.5%
75.4%
52.1%
52.5%
Processing (including ingredients and packaging)
12.2%
8.1%
19.5%
5.6%
12.5%
28.7%
31.4%
Labor Cost
11.3%
6.4%
11.2%
9.9%
12.1%
19.2%
16.0%
16
Indexes
Contact
Head Office Avenida Marginal Direita do Tietê, 500 ZIP Code: 05118-100 – São Paulo – SP Brasil Phone.: (55 11) 3144-4000 www.jbs.com.br
Investor Relations Phone.: (55 11) 3144-4224 E-mail: ir@jbs.com.br www.jbs.com.br/ir
17
1Q17 Results Statement of financial position In thousands of Brazilian Reais - R$ Current Assets Cash and cash equivalents Trade accounts receivable Inventories Biological assets Recoverable taxes Derivative assets Other current assets TOTAL CURRENT ASSETS Non-Current Assets Biological assets Recoverable taxes Related party receivables Investments in associates, subsidiaries and joint ventures Property, plant and equipment Deferred Income Taxes Intangible assets Goodwill Other non-current assets
Company March 31, 2017 December 31, 2016 5,636,370 4,712,796 1,887,853 2,767,655 1,901,013 1,673,501 698,885 698,885 590 342,362 369,246 10,467,073
10,222,083
March 31, 2017 December 31, 2016 2,958,316 2,948,627 2,672,085 5,231,553 16,782,051 16,334,231 11,445,521 11,475,628 47,985 46,494 9,085,970 9,085,970 453,320 455,627
Consolidated March 31, 2017 December 31, 2016 10,744,308 9,355,622 8,085,940 9,589,185 10,386,576 9,608,474 2,672,662 2,673,113 1,732,118 1,677,791 43,163 38,250 930,426 977,370 34,595,193
33,919,805
March 31, 2017 December 31, 2016 984,055 977,040 4,678,773 4,718,535 1,135,006 1,315,526 364,441 362,627 33,577,814 33,110,891 501,301 454,117 5,194,017 5,012,095 22,094,804 21,916,694 1,065,497 1,028,433
TOTAL NON-CURRENT ASSETS
43,445,248
45,578,130
69,595,708
68,895,958
TOTAL ASSETS
53,912,321
55,800,213
104,190,901
102,815,763
18
1Q17 Results Statement of financial position In thousands of Brazilian Reais - R$ Current Liabilities Trade accounts payable Loans and financing Accrued income taxes and other taxes Payroll and social charges Dividends payable Other financial liabilities Derivative liabilities Other current liabilities TOTAL CURRENT LIABILITIES Non-Current Liabilities Loans and financing Accrued income taxes and other taxes Accrued Payroll and social charges Other financial liabilities Deferred income taxes Provisions Other non-current liabilities TOTAL NON-CURRENT LIABILITIES Equity Share capital - common shares Capital reserve Other reserves Profit reserves Accumulated other comprehensive income (loss) Retained earnings Attributable to company shareholders Attributable to non-controlling interest
Company March 31, 2017 December 31, 2016 1,529,075 2,050,265 10,665,667 12,281,028 167,249 165,030 396,420 412,296 90,458 90,503 7,659 7,659 714,935 684,898 13,571,463
15,691,679
March 31, 2017 December 31, 2016 13,651,216 14,021,384 60,329 71,841 29,777 31,427 2,027,677 1,935,493 236,723 222,407 50,455 54,657 16,056,177
16,337,209
March 31, 2017 December 31, 2016 23,576,206 23,576,206 (134,549) (1,743,893) 71,612 73,516 3,458,025 5,045,937 (3,110,808) (3,180,441) 424,195 24,284,681 23,771,325 -
Consolidated March 31, 2017 December 31, 2016 9,651,414 10,716,987 17,872,941 18,148,818 452,559 500,930 2,317,482 2,595,381 90,458 90,503 152,701 161,114 177,093 133,125 834,603 1,001,766 31,549,251
33,348,624
March 31, 2017 December 31, 2016 40,677,350 38,111,596 215,146 228,752 416,394 437,218 78,777 102,145 3,915,815 3,828,080 1,287,006 1,245,239 598,012 599,482 47,188,500
44,552,512
March 31, 2017 December 31, 2016 23,576,206 23,576,206 (134,549) (1,743,893) 71,612 73,516 3,458,025 5,045,937 (3,110,808) (3,180,441) 424,195 24,284,681 23,771,325 1,168,469 1,143,302
TOTAL EQUITY
24,284,681
23,771,325
25,453,150
24,914,627
TOTAL LIABILITIES AND EQUITY
53,912,321
55,800,213
104,190,901
102,815,763
19
1Q17 Results Statements of income (loss) for the three month periods ended March 31, 2017 and 2016 In thousands of Brazilian Reais - R$ Company
Consolidated
2017
2016
2017
2016
6,030,384 (5,175,930) 854,454
6,839,758 (5,098,763) 1,740,995
37,616,352 (33,195,380) 4,420,972
43,911,939 (39,148,148) 4,763,791
General and administrative expenses Selling expenses Other expense Other income OPERATING EXPENSE
(517,857) (479,198) 1,501 (995,554)
(443,464) (746,764) 1,479 (1,188,749)
(1,289,212) (2,069,466) (7,774) 29,722 (3,336,730)
(1,227,613) (2,678,493) 104,703 (3,801,403)
OPERATING PROFIT
(141,100)
552,246
1,084,242
962,388
Finance income Finance expense
760,035 (414,053) 345,982
2,017,774 (5,915,724) (3,897,950)
525,505 (936,269) (410,764)
2,100,015 (6,865,290) (4,765,275)
Share of profit of equity-accounted investees, net of tax
309,593
(501,732)
1,815
295
PROFIT (LOSS) BEFORE TAXES
514,475
(3,847,436)
675,293
(3,802,592)
Current income taxes Deferred income taxes
731 (92,915) (92,184) 422,291
466 1,105,808 1,106,274 (2,741,162)
(132,147) (56,970) (189,117) 486,176
(72,858) 1,230,806 1,157,948 (2,644,644)
422,291 63,885 486,176
(2,741,162) 96,518 (2,644,644)
0.15 0.15
(0.97) (0.97)
NET REVENUE Cost of sales GROSS PROFIT
NET INCOME ATTRIBUTABLE TO: Company shareholders Non-controlling interest
Basic earnings per share - common shares (R$) Diluted earnings per share - common shares (R$)
0.15 0.15
(0.97) (0.97)
20
1Q17 Results Statements of cash flows for three month period ended March 31, 2017 and 2016 In thousands of Brazilian Reais - R$ Cash flows from operating activities Net income (loss) Adjustments for: Depreciation and amortization Allowance for doubtful accounts Share of profit of equity-accounted investees Gain (loss) on assets sales T ax expense Finance expense (income), net Share-based compensation Provisions
Company 2017
2016
Consolidated 2017 2016
422,291
(2,741,162)
486,176
(2,644,644)
179,296 5,091 (309,593) (1,411) 92,184 (345,982) 25,007 14,316 81,199
168,618 7,286 501,732 (933) (1,106,274) 3,897,950 41,838 5,689 774,744
1,056,219 8,848 (1,815) 5,599 189,117 410,764 54,600 42,445 2,251,953
1,165,855 27,047 (295) (60,458) (1,157,948) 4,765,275 39,551 22,397 2,156,780
Changes in assets and liabilities: T rade accounts receivable Inventories Recoverable taxes Other current and non-current assets Biological assets T rade accounts payable Other current and non-current liabilities Changes in operating assets and liabilities
732,714 (227,512) (9,690) 26,529 (513,822) (39,911) (31,692)
137,688 132,869 (44,295) 125,112 (373,196) (250,025) (271,847)
1,048,901 (799,050) 1,482 (131,485) (257,506) (978,383) (551,887) (1,667,928)
940,460 (155,768) (403,515) 53,668 (474,324) (1,541,100) (451,294) (2,031,873)
Interest paid Interest received Income taxes paid
(345,109) 254,667 -
(341,323) 366,774 -
(806,613) 73,168 (136,017)
(784,278) 246,040 (688,617)
528,348
(285,437)
(1,101,948)
Net cash provided by (used in) operating activities
(40,935)
Cash flow from investing activities Purchases of property, plant and equipment Purchases of intangible assets Proceeds from sale of property, plant and equipament Additional investments in associates, joint-ventures and subsidiaries Acquisitions, net of cash acquired Dividends Received from associates and joint-ventures Related party transactions
(157,493) (3,437) 11,661 78,291 2,053,138
(70,152) (2,347) 386,560
(788,347) (5,412) 22,635 (1,125,088) 153,462
(840,083) 83,120 (130,000) 10,008
Net cash provided by (used in) investing activities
1,982,160
314,061
(1,742,750)
(876,955)
Cash flow from financing activities Proceeds from loans and financings Payments of loans and financings Derivatives received Settlement of derivative instruments Stock option premium received upon exercise PPC share repurchase Purchase of treasury shares Others Net cash provided by (used in) financing activities
1,899,352 (2,900,952) (4,015) (1,005,615)
4,863,539 (3,430,940) (3,475,670) 3,311 (821,139) (2,860,899)
16,035,327 (12,603,146) 88,204 (24,019) (45,825) (9) 3,450,532
10,203,716 (7,047,592) (3,356,263) 3,311 (4,324) (821,139) (1,022,291)
(12,036) 923,574 4,712,796 5,636,370
(2,018,490) 11,257,943 9,239,453
(33,659) 1,388,686 9,355,622 10,744,308
(555,566) (3,556,760) 18,843,988 15,287,228
Effect of exchange rate changes on cash and cash equivalents Net change in cash and cash equivalents Cash and cash equivalents beginning of period Cash and cash equivalents at the end of period Non-cash transactions
Increase in subsidiaries' investments through assumption of credit Negative investment transference T reasury shares cancellation Payments of loans through settlement of related parties
Company 2017 2016 111,986 38,474 28,885 1,539,573 394,612 -
Consolidated 2017 2016 1,539,573 -
-
21
Disclaimer 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 JBS’ management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in JBS’ filed disclosure documents and are, therefore, subject to change without prior notice.
22
1Q17 EARNINGS PRESENTATION
A GLOBAL FOOD COMPANY São Paulo, May 16th, 2017
CONSOLIDATED RESULTS 1Q17 2
1Q17 CONSOLIDATED HIGHLIGHTS NET SALES (R$ MILLION)
GROSS PROFIT (R$ MILLION) Gross Margin (%)
43,912
-14.3%
37,616
4,764
1Q16
1Q17
11.8%
10.8%
1Q16
-7.2%
4,421
1Q17
| Net revenue of R$37.6 billion in 1Q17, a reduction of 14.3% over 1Q16, impacted by FX effect. | Gross profit of R$4.4 billion, with gross margin increasing from 10.8% in 1Q16 to 11.8% in 1Q17. 3
1Q17 CONSOLIDATED HIGHLIGHTS EBITDA (R$ MILLION)
NET INCOME (R$ MILLION)
EBITDA Margin (%)
5.7%
4.9%
422 2,137
0.2%
2,141 1Q16
1Q16
1Q17
1Q17
-2,741
| EBITDA was R$2.1 billion, with EBITDA margin increasing from 4.9% in 1Q16 to 5.7% in 1Q17. | Net income was R$422 million, with an EPS of R$0.15. 4
1Q17 CONSOLIDATED HIGHLIGHTS NET DEBT (R$ MILLION) / LEVERAGE Leverage
3.84x
4.10x
4.32x
48,745
49,178
48,855
1Q16
2Q16
3Q16
4.16x
4.20x
46,905
47,806
4Q16
| The Company ended the quarter with R$10.7 billion in cash. | JBS’ net debt was R$47.8 billion at the end of 1Q17.
1Q17
| Adjusted leverage including the LTM results of GNP was 4.20x.
5
DEBT PROFILE 1Q17 BREAKDOWN BY CURRENCY AND COST
BREAKDOWN BY SOURCE
BREAKDOWN BY COMPANY
12.45% p.a. R$ 7.8%
Commercial Banks 62.1% Capital
US$ 92.2%
JBS S.A. 41.5%
Markets 37.8%
5.11% p.a.
BNDES 0.1%
DEBT PROFILE ST/LT Short Term
JBS USA 47.0%
Seara 11.5%
SHORT TERM DEBT BREAKDOWN BY TYPE Long Term
1Q16
33%
67%
2Q16
32%
68%
3Q16
31%
69%
4Q16
32%
68%
1Q17
31%
69%
Working Capital 16%
Others 8%
Bonds 2%
Trade Finance 74%
6
BUSINESS UNITS 1Q17 7
SEARA 1Q17 NET REVENUE (R$ MILLION) 4,286.6
-4.7% 4,085.2
EBITDA (R$ MILLION) 13.5% 5.3%
579.5
-62.8%
215.8
1Q16
1Q17
1Q16
1Q17
| Appreciation of 24.4% of the Real against US dollar impacted net revenue. | Increase of volumes in all segments in the domestic market, specially in the Prepared Foods category (+11.5%).
| Growth of the customer base, reaching 152,000 in the domestic market. | Lower exported volumes. | Reduction in EBITDA due to the impact of the Real appreciation and cost of grains. 8
JBS MERCOSUL 1Q17 NET REVENUE (R$ MILLION) 6,983.4
-11.1%
EBITDA (R$ MILLION) 10.9%
6,211.4
761.4 761.4
1.0% -92.2%
59.4
1Q16
1Q17
1Q16
1Q17
| Net revenue impacted by a decrease in sales prices in the domestic and export markets. | Impact of the exchange rate variation, which was R$3.91 in 1Q16 and R$3.14 in 1Q17. | EBITDA was pressured by increase in costs.
| Exchange rate variation in the period impacted the exports profitability. 9
JBS USA BEEF 1Q17 INCLUDING AUSTRALIA AND CANADA NET REVENUE (US$ MILLION) 5.8%
4,649.6
EBITDA (US$ MILLION)
4,919.6
3.7%
-4.6%
183.4 -214.8
Swift (bolinha) e Primo
1Q16
1Q17
1Q16
1Q17
| Increase in sales volumes in both markets, domestic and international. | Greater cattle availability during the quarter favored a reduction in cost per head higher than the decrease in beef prices. | Beef exports grew more than 25% in the period, positively impacting results of the North America operation. | Increase in prices in the australian domestic market as a result of operations and brand investments at Primo and Andrews Meats. 10
JBS USA PORK 1Q17 NET REVENUE (US$ MILLION) 1,256.6
11.2%
EBITDA (US$ MILLION)
1,396.9 11.4%
8.1%
102.1
1Q16
1Q17
1Q16
56.1%
159.4
1Q17
| Increase in the number of animals processed. | Higher sales prices in both markets, domestic and international. | Growth in EBITDA due to continuous improvements in production, product mix and customer relationships.
| Conclusion of the Plumrose USA acquisition. 11
JBS USA CHICKEN (PPC) 1Q17 NET REVENUE (US$ MILLION) 1,962.9
2.9%
EBITDA (US$ MILLION)
2,020.5
11.9%
233.5
1Q16
1Q17
1Q16
10.1% -12.6%
204.0
1Q17
| Increase in net revenue due to higher poultry sales prices, as well as the inclusion of net revenues from GNP, which was acquired in January.
| EBITDA impacted by costs and G&A expenses related to GNP’s assets in the US, and higher marketing expenses associated to the launching of new PFP in the US. | Lower operational costs in Mexico. | Additional US$ 10.0 million synergies already identified from GNP integration, increasing total annualized run-rate to $30 million. 12
JBS EUROPE (MOY PARK) 1Q17 NET REVENUE (£ MILLION)
347.5
6.6%
370.4
EBITDA (£ MILLION) 8.8%
30.6
1Q16
1Q17
8.2%
-1.1%
1Q16
30.2
1Q17
| Volume growth and strong operational performance. | Reduction in EBITDA due to non-recurring SOX compliance costs.
| Focus on cost control, strong customer relationships and constant innovation culture.
13
DISCLAIMER 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 JBS’ management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in JBS’ filed disclosure documents and are, therefore, subject to change without prior notice.
14
Mission “To be the best in what we set out to do, completely focused on our business, ensuring the best products and services for our customers, consistency for our suppliers, profitability for our shareholders and the opportunity of a better future for all our team members.
15
JBS S.A. Financial statements auditors' review report As of March 31, 2015 and 2014
and
Independent
Tel.: +55 11 3848 5880 Fax: + 55 11 3045 7363 www.bdobrazilrcs.com.br
Rua Major Quedinho 90 Consolação – São Paulo, SP - Brasil 01050-030
(Convenience translation into English from the original previously issued in Portuguese)
INDEPENDENT INFORMATION
AUDITORS’
REVIEW
REPORT
ON
THE
INTERIM
FINANCIAL
To the Shareholders, Board of Directors and Management of JBS S.A. São Paulo – SP
Introduction We have reviewed the individual and consolidated interim financial information of JBS S.A. (“Company”) contained within the Quarterly Financial Information – ITR, identified as Company and Consolidated, respectively, for the quarter ended on March 31, 2015, which comprise the balance sheet on March 31, 2015 and the related statements of income, comprehensive income, changes in equity and cash flows for the three-month period then ended, as well as a summary of the significant accounting practices and other notes. Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with Technical Pronouncement CPC 21 (R1) – Interim Financial Reporting and with the International Accounting Standard (IAS) 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), and for the presentation of these interim financial information in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the Quarterly Financial Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of the review We conducted our review in accordance with Brazilian and International Standard on Review of interim financial information (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
traded American Depositary Receipts (“ADRs”) of JBS between June 2, 2015 and March 17, 2017, both dates inclusive (the “Class Period”). Plaintiff seeks to recover compensable damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. JURISDICTION AND VENUE 2.
The claims asserted herein arise under and pursuant to §§10(b) and 20(a) of the
Exchange Act (15 U.S.C. §§78j(b) and §78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R. §240.10b-5). 3.
This Court has jurisdiction over the subject matter of this action under 28 U.S.C.
§1331 and §27 of the Exchange Act. 4.
Venue is proper in this District pursuant to §27 of the Exchange Act (15 U.S.C.
§78aa) and 28 U.S.C. §1391(b) as the Company’s US subsidiary maintains two facilities in this Judicial District. 5.
In connection with the acts, conduct and other wrongs alleged in this Complaint,
Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including but not limited to, the United States mail, interstate telephone communications and the facilities of the national securities exchange. PARTIES 6.
Plaintiff, as set forth in the accompanying Certification, purchased JBS securities
at artificially inflated prices during the Class Period and was damaged upon the revelation of the alleged corrective disclosures.
2
7.
Defendant JBS processes and sells beef, lamb, pork, and chicken products in
Brazil and internationally. The Company is incorporated in the Federative Republic of Brazil and its principal executive offices are in São Paulo – SP, Brazil. The Company’s Level 1 Sponsored ADRs trade on the OTCQX market (the “OTC Market”) under the symbol “JBSAY.” 8.
Defendant Wesley Mendonça Batista (“Batista”) has been the Chief Executive
Officer (“CEO”) of JBS since February 1, 2011 and serves as its Member of the Executive Board. 9.
Defendant Gilberto Tomazoni (“Tomazoni”) has been the Global President of JBS
Operations Management Team at JBS since September 2015. 10.
Defendants Batista and Tomazoni are sometimes referred to herein as the
“Individual Defendants.” 11.
Each of the Individual Defendants:
(a)
directly participated in the management of the Company;
(b)
was directly involved in the day-to-day operations of the Company at the highest levels;
(c)
was privy to confidential proprietary information concerning the Company and its business and operations;
(d)
was directly or indirectly involved in drafting, producing, reviewing and/or disseminating the false and misleading statements and information alleged herein;
(e)
was directly or indirectly involved in the oversight or implementation of the Company’s internal controls;
(f)
was aware of or recklessly disregarded the fact that the false and misleading statements were being issued concerning the Company; and/or
3
(g)
approved or ratified these statements in violation of the federal securities laws.
12.
The Company is liable for the acts of the Individual Defendants and its employees
under the doctrine of respondeat superior and common law principles of agency because all of the wrongful acts complained of herein were carried out within the scope of their employment. 13.
The scienter of the Individual Defendants and other employees and agents of the
Company is similarly imputed to the Company under respondeat superior and agency principles. 14.
The Company and the Individual Defendants are referred to herein, collectively,
as the “Defendants.” SUBSTANTIVE ALLEGATIONS Materially False and Misleading Statements
15.
On June 2, 2015, JBS issued its Annual Report for the fiscal year ended
December 31, 2014 entitled “Annual and Sustainability Report 2014,” (the “2014 Annual Report”). The 2014 Annual Report contained a letter from Defendant Batista, stating in pertinent part: We achieved satisfactory results at the JBS Foods unit, one year after its creation. During this period, we implemented the necessary operational adjustments. We captured synergies, reformulated products, launched new products and initiated a broad marketing campaign, focusing on the Seara brand, with an emphasis on healthy products of superior quality, offering convenience and practicality to consumers. [Emphasis added.] 16.
The 2014 Annual Report touted the quality of JBS’ products, stating in pertinent
part: Quality Control The Company has full control over its processes with the help of cutting-edge technology and structured programs. The care that JBS puts into its products is reflected in its nationally and internationally recognized quality. 4
*
*
*
JBS has a market leading portfolio of brands recognized by the public as being synonymous with quality and reliability. In addition to the strong reputation of quality and transparency in the sourcing of products – both important for customer confidence and loyalty – the company’s recent marketing efforts have incentivized a change in consumption habits among Brazilian consumers. *
*
*
In the poultry and pork operations, the origin and quality of the raw material are guaranteed through JBS’ integrated relationship with the breeders. The Agriculture team conducts regular visits and audits supplier processes to ensure that the production practices are in line with the criteria required by JBS. With regard to product quality, JBS has a dedicated area – the Quality Assurance Department – to monitor the entire production process, which is constantly audited by different regulatory agencies and customers in order to maintain the credentials needed to serve all markets. *
*
*
Responsibility for the Quality of the Products GRI G4 FP12 To ensure the quality, health and sustainability of its entire line of products, JBS has rigorous processes that permeate its entire chain of production. There are more than 30 programs for beef production, the most important of which are described in this chapter, which meet the requirements of the Ministry of Agriculture, Livestock and Supply (MAPA) and which, taken together, are responsible for the production of reliable, safe, healthy and quality foods. In addition, all of the JBS processing units are part of the National Waste Control Plan for Products of Animal Origin (PNCRC), an initiative by the Federal Inspection System (SIF) that collects samples of raw materials used in the industrial processes for human food in order to evaluate food safety items, such as contaminants. Certifications GRI G4- FP5 In the Brazilian cattle operations, JBS has certifications that attest to compliance with international norms (ISO 9001, ISO 14001, BRC, SQMS, among others) at its plants. These certifications involve food safety, animal welfare, the quality management model, the environmental management model, and generally ensure and certify the food safety and quality of JBS’s processes and products. The certified units in 2014 represent, in terms of production volume, 51% of JBS’s total production volume in Brazil. 5
[Emphasis added]. 17.
The 2014 Annual Report touted JBS’ adherence to the best practices in corporate
governance, stating in pertinent part: Transparency & Communication with Stakeholders JBS adheres to the best practices in corporate governance – including transparency and equity in the disclosure of information – which qualifies the Company to the Novo Mercado segment of the BM&FBovespa. [Emphasis added]. 18.
The 2014 Annual Report touted the experienced managers and executives at JBS
and their alignment with JBS’ values, stating in pertinent part: Experienced and Industry-Specialized Management JBS has a team of experienced managers with expertise in the market, focused on growing sales, optimizing resources and increasing operational efficiency. JBS is highly professionalized and each business unit has its own management. of the strategy for selecting competent executives takes into consideration experience in the sector and alignment with the company’s values, such as an ownership attitude and a focus on results. [Emphasis added]. 19.
The 2014 Annual Report stated that JBS maintains relationships with different
governments and makes donations to political parties, stating in pertinent part: Government GRI G4 SO6 JBS maintains, through local entities and agencies, relationship with the different governments in the countries in which it operates. *
*
*
In order to contribute to the political debate and the development of democracy, JBS makes donations to political parties provided that the projects presented by the organizations are in line with the Company’s values and beliefs. All of the information regarding the donations made by JBS is available on the website of the Superior Electoral Court.
6
20.
The 2014 Annual Report touted the policies concerning the issues that are
relevant to the Company’s best practices, stating in pertinent part:
Policies To ensure ethical conduct and integrity in the management of its business, JBS has clear policies regarding the issues relevant to the company’s best practices. They are: Disclosure Policy for Material Information Based on the principles of transparency and fairness in dealing with investors and the capital markets, this policy establishes the use and disclosure of information classified as material facts, as well as rules and guidelines about the use, publication and maintenance of the confidentiality of information that has not been released to the public yet. *
*
*
Integrated Management System Policy (Environment, Quality, and Occupational Health and Safety) JBS Beef Division in Brazil instituted a policy that consolidates into a single document JBS’ commitments in relation to Quality, the Environment and Occupational Health and Safety, which aims to upgrade and continuously improve its processes. *
*
*
Ethical Conduct GRI G4-56 In order to guide the conduct of its team members and suppliers in the business environment, JBS prepared a Manual of Ethical Conduct that addresses issues related to violations, conflicts of interest, third-party contracts, employment practices, receiving gifts, decision making, anti-corruption practices and other sensitive topics. In 2014, JBS’ legal deparment began the process to reformulate the document to adhere to Brazilian Law 12,846/13 regarding anti-corruption and the acts that regulate it. The new version of the Ethics Manual is scheduled for release in 2015. 21.
On June 10, 2016, JBS issued its Annual Report for the fiscal year ended
December 31, 2015 entitled “Annual and Sustainability Report 2015,” (the “2015 Annual
7
Report”). The 2015 Annual Report contained a letter from Defendant Batista, stating in pertinent part: We are confident in our global food production platform and in our highly qualified team to lead JBS in our strategy. We will remain focused on operational excellence and food safety, while we base our business in the highest quality standards and service level to meet and exceed our customer’s and consumer’s requirements. [Emphasis added].
22.
The 2015 Annual Report contained a letter from Defendant Tomazoni, stating in
pertinent part:
At JBS, the quest for quality is more than a strategy. It is part of the Company’s culture. We believe that the success of our business is directly related to our ability to produce and deliver the highest quality products, managing the business in a sustainable manner and providing clients and consumers with superior products and services. Earning recognition for the quality of our products is a journey, and we have made significant progress. Again, people are critical in this context. We believe that the quality of what we produce and the excellence of our services is a daily responsibility for all of those who work with us. The determination and persistence of each JBS employee, in every area of business or place in the world, strengthen our values and beliefs daily. [Emphasis added]. 23.
The 2015 Annual Report touted the quality of JBS’ products and operations,
stating in pertinent part: In order to achieve JBS’s goal of strengthening ties with clients and consumers through a portfolio of brands and value-added products, the Company’s operations are focused on quality. And quality, for JBS, goes beyond the product. Quality involves operating in accordance with the highest social, economic and environmental standards, having the best team of employees, with the right people in the right positions, cutting-edge factories and partnerships
8
with its stakeholders. JBS’s main purpose is to provide quality to its clients and consumers. [Emphasis added.]
24.
The 2015 Annual Report touted the ethics and integrity of JBS, stating in
pertinent part: Ethics and Integrity GRI G4-56, G4-DMA Trust is what guides JBS in all of its relations with stakeholders. It therefore pervades the Company’s daily activities. In line with this value and with the aim of reinforcing conduct guidelines, improving and standardizing certain procedures and implementing risk prevention initiatives where needed, in 2015 the Company created the Corporate Compliance Office. Reporting directly to the Institutional Relations Department, the new structure serves all JBS Group businesses and is responsible for identifying, assessing and monitoring risks, as well as developing training and communication programs for all employees and suppliers. One of the new area’s first initiatives was the reissue of JBS’s Code of Ethics. The document, which is intended both for the Company’s employees and suppliers, established twelve guidelines governing expected conduct in regard to issues related to security, sustainability, anti-corruption practices, money laundering and conflicts of interest. The document, together with its English and Spanish versions, is already available on the Company’s intranet. [Emphasis added].
25.
The 2015 Annual Report touted the quality of JBS’ products, stating in pertinent
part:
JBS Foods has based its activities on the development of higher value-added products, focusing on quality and working closely with customers and suppliers. *
*
*
Adopts strict quality standards in order to meet the international standards required by customers in Europe, Asia, the Middle East, Oceania, Africa and the
9
Americas, which are its export markets. These same requirements are in place for the production destined for consumers in Brazil. *
*
*
PRODUCT INTEGRITY GRI G4-DMA JBS works to ensure the quality and integrity of its products. To ensure quality product reaches the tables of consumers, there is an extensive effort made with regard to food quality and safety, value chain management (including the responsible purchase of raw materials), supplier partnerships and team member training. Care is also taken to ensure that operations are in line with regulatory requirements and applicable certifications. All products, in all business areas, receive appropriate packaging, and are transported and distributed in accordance with the best practices adopted by the industry. One of the highlights in Brazil was the inauguration of the JBS Foods Distribution Center (DC), in Fortaleza (Ceará), the final piece in the renovation of the Company’s distribution network. There are now 15 DCs serving as a support base for the commercial area, all standardized according to the definitions of the Pillars of Excellence, which are essential to ensuring the best customer service. Throughout 2015, all of the JBS units carried out numerous actions focused on the Company’s value chain, based on corporate guidelines that consolidated the culture of quality. The Company meets the different labeling requirements in 100% of its products, as determined by the laws of the markets where it operates. The labels have information regarding composition, the nutritional table, name, net weight, storage conditions, manufacturing date, expiration date and manufacturing unit. In total, 100% of the Company’s product labels in Brazil have the Federal Inspection Service (SIF) seal of the Ministry of Agriculture, Livestock and Food Supply (MAPA). In the United States, all products bear the inspection seal of the United States Department of Agriculture, Food Safety and Inspection Service (USDA, FSIS). Some products also present information regarding preparation and consumption, as well as offering different recipes for the preparation of the product and its accompaniments. GRI G4-PR3 Furthermore, the Company lists the ingredients and additives used, specifies those that may contain allergens and specifies any fortification of vitamins, minerals, fiber, etc. GRI FP7
10
The Company does not sell products prohibited in the markets in which it operates and adheres to their respective standards and best practices. GRI G4-PR6 *
*
*
JBS is committed to supplying its clients and consumers, in all markets in which it operates, with the highest quality products. All of the purchases made in 2015 are in accordance with the procurement policies adopted by the respective JBS business areas. *
*
*
c. Food Quality and Safety GRI G4-DMA Quality is an obsession for JBS. It is a fundamental value that permeates the Company’s culture and is present in all of its production processes. JBS BEEF (BRAZIL) GRI G4-DMA This business unit includes a structure with 13 in-house laboratories, developing the necessary microbiological analyses to provide food security indicators, ensuring their quality. In 2015, the Company initiated investments to upgrade and standardize the laboratories in terms of layout, equipment and software. With the changes, the laboratories now have structure to issue results in 24 hours, halving the time previously spent. With this, the Company gained agility in obtaining results and greater efficiency in decision making. Three new laboratories are scheduled to be built in 2016. This structure will cover nearly 100% of the national territory. *
*
*
JBS FOODS (BRAZIL) At JBS Foods, the quality and health of the poultry and pork is the result of the integrated management of the supply chain. There is a strict management system that covers all production stages, from the selection of the genetics of animals, through processing, to the transportation of goods to the final point of sale. The Company works in partnership with integrated producers, which guarantees the origin of the raw material of the poultry and pork that it sends to market. Thus, the Company has more control over the health and nutritional conditions of the animals, ensuring the quality, safety and cost efficiency of products. All of the businesses of JBS Foods undergo reviews on criteria such as the health and safety of the products and services. GRI G4-DMA, GRI G4-PR1
11
The JBS Foods Quality System includes the best and most current concepts defined by national and international organizations. To help disseminate these concepts, the Company adheres to guidelines established in its “Quality Book,� a set of 15 management tools aimed at planning, execution, control and improvement, as well as defining the responsibilities and authorities of each link in the production chain. Based on this material, JBS Foods held training cycles in the months of July and August 2015, training 150 team members who will become ambassadors of this expertise. *
*
*
The Company also has laboratories with facilities for the analysis of food, and all the results of these analyses are entered into the Laboratory Information Management System (LIMS). Through this system, a database is generated with information from across the enterprise on performance and the compliance with established standards, which is updated periodically. With this, it is possible to determine the results for each unit - in relation to products, processes, microbiological and physicochemical analyses - as well as the monthly evolution of the results. This practice is in line with the commitment of JBS Foods to validate its processes to provide a high level of product quality and safety through all that laboratories can measure. *
*
*
d. Certifications GRI FP2, GRI FP5 The various units of JBS Beef (Brazil) underwent 178 audits in 2015 in order to maintain and gain certifications to allow products to be exported to various markets. The plants obtained 97% approval and have been audited according to international standards such as BRC Global Standards, ISO9001, ISO17025, and audits by the Ministry of Agriculture of Brazil, clients and markets (health missions from other countries). GRI G4-DMA, GRI G4-PR1, GRI FP5 In Brazil, all slaughterhouses must submit to some form of sanitary inspection, whether at the municipal, state or federal level. In the case of JBS, all of the Company’s units are under the Federal Inspection Service (SIF) of the Brazilian Ministry of Agriculture, enabling the Company to export from any of its units and market products with the highest level of food safety on the domestic market. [Emphasis added].
12
26.
The 2015 Annual Report touted JBS’ commitment to adhering to the highest
standards of integrity, ethics, and transparency when interacting with government officials and public officials, stating in pertinent part: c. Governments GRI G4-SO6 JBS is committed to adhering to the highest standards of integrity, ethics and transparency when interacting with government officials and public officials. To guide the conduct of team members and outsourced consultants who interact with the government in the performance of their duties, the Policy on Relations with Government Entities and Public Officials was published in Brazil in 2015. The document, which is applicable to operations in the country, establishes criteria and rules of conduct in the relations of JBS companies with government and/or public officials for meetings, the delivery and receipt of documents and other contact necessary to obtain licenses and permits, present claims, participate in bids and discuss matters relating to the JBS operations that depend on government action. In all jurisdictions in which JBS operates worldwide, ethics and anti-corruption training is offered in order to ensure compliance with local laws. [Emphasis added].
27.
The statements referenced in ¶¶ 15 - 26 above were materially false and/or
misleading because they misrepresented and failed to disclose the following adverse facts pertaining to the Company’s business, operational and financial results, which were known to Defendants or recklessly disregarded by them. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) JBS executives bribed regulators and politicians to subvert food inspections of its plants and overlook unsanitary practices such as processing rotten meat and running plants with traces of salmonella; and (2) as a result, Defendants’ statements about the Company’s business, operations and prospects were materially false and misleading and/or lacked a reasonable bases at all relevant times.
13
The Truth Emerges 28.
On March 17, 2017, Reuters published a report entitled “Brazil police accuse
BRF, JBS of subverting food inspections,” stating in pertinent part: Brazil police accuse BRF, JBS of subverting food inspections March 17, 2017, 11:13:00 AM EDT By Reuters (Recasts with companies involved, comments from JBS, police investigator, share reaction) CURITIBA, Brazil, March 17 (Reuters) - Brazilian federal police raided dozens of meatpacker offices on Friday, including industry giants JBS SA and BRF SA, following a two-year investigation into alleged bribery of regulators to subvert inspections of their plants. The probe, known as “Operation Weak Flesh,” had uncovered about 40 cases of meatpackers who had bribed inspectors and politicians to overlook unsanitary practices such as processing rotten meat and running plants with traces of salmonella, police said. Police investigator Mauricio Moscardi Grillo said there was evidence of some companies manipulating certificates of meat for export to Spain and Italy, raising the risk of foreign restrictions on Brazil's powerhouse protein industry. Police said they arrested three BRF employees and two JBS employees, as well as 20 public officials. Shares of JBS, the world's biggest meat producer, and BRF, the largest poultry exporter, fell more than 7 percent each in Sao Paulo trading. JBS said in a securities filing that three of its plants and one of its employees were targeted in the probe, but its executives and headquarters were not targeted. The company said it followed rigorous quality standards and sanitary regulations. BRF did not have an immediate comment on the investigation. Brazil’s agriculture ministry declined to comment immediately, calling a press conference for 4 p.m. local time (1900 GMT). In a statement, police said more than 1,100 officers were deployed for 194 raids, and as many as 38 detention orders across six Brazilian states, in the largest-ever search and seizure operation by the federal police. 14
The food industry investigation is the latest of several sweeping probes into corruption in Brazil as a tougher judiciary takes on cozy relations between the government and powerful businesses amid public outrage during a deep economic depression. Police said regulators in the food-producing states of Paraná, Minas Gerais and Goiás helped producers place adulterated products in the marketplace. Food processors would also bribe state food safety auditors to issue fake sanitary permits and forgo normal oversight work. (Reporting by Sergio Spagnuolo; Additional reporting by Pedro Fonseca in Rio de Janeiro, Guillermo Parra-Bernal and Brad Brooks in Sao Paulo; Writing and additional reporting by Brad Haynes; Editing by Daniel Flynn and Bernadette Baum) [Emphasis added]. 29.
On this news, shares of JBS fell $0.71 per share or over 9.2% from its previous
closing price to close at $6.96 per share on March 17, 2017, damaging investors. 30.
On March 17, 2017, during aftermarket hours, The Wall Street Journal published
an article entitled “Brazil Police Launch Massive Anticorruption Probe of Meatpacking Industry,” stating in pertinent part: Brazil Police Launch Massive Anticorruption Probe of Meatpacking Industry Police allege officials of companies including JBS SA and BRF SA bribed sanitary inspectors By ROGERIO JELMAYER and LUCIANA MAGALHAES Updated March 17, 2017 6:06 p.m. ET SÃO PAULO—Brazilian authorities are investigating some of the world’s biggest meatpacking companies for allegedly bribing food-sanitation inspectors to approve sales to domestic and foreign buyers of meats that might otherwise have failed to pass muster. Among the dozens of firms targeted are JBS SA and BRF SA, which both have substantial operations outside Brazil. JBS, the world’s leading meatpacking
15
company, owns Swift Foods and a majority share of Pilgrim’s, both familiar U.S. brands. BRF is one of the world’s biggest chicken exporters. “[The firms under investigation] didn’t care about the quality of the meat or food” they sold, said a Federal Police official, Mauricio Moscardi Grillo. “They didn’t care at all about what they were selling to consumers.” Shares of JBS plunged 10.6% on Friday, and shares of BRF were down 7.6%. Brazil’s benchmark Ibovespa stocks index was down 2.4% on the day. The investigation could threaten a planned initial public offer by JBS for its international operations, and could cause problems for a possible sale by BRF of a stake in one of its units as well, said Shin Lai, an investment strategist at São Paulo-based research firm Upside Investor. JBS announced in December a reorganization plan that includes an IPO in the U.S. of shares in its international businesses. An inspector-veterinarian employed by JBS at one of its plants was allegedly involved in the scheme, documents provided by judicial authorities show. Police said an executive linked to JBS was also under investigation. JBS, with units on five continents, said it and its units “rigidly follow” all regulations regarding health inspection of its products and supports all efforts aimed at punishing violations. BRF said that it meets all regulations and that its products pose no risk to consumers in Brazil or abroad. The company added it was cooperating with authorities on the probe. An Agriculture Ministry official said the ministry was still investigating how much of the affected meat and meat derivatives were exported, noting most of it was probably sold in the Brazilian market. The official, Eumar Novacki, said participants in the scheme falsified sanitation certifications for beef and chicken as well as for hot dogs, bologna, animal feed and pet food. “The crime against the Brazilian people is grave,” said Mr. Novacki, adding the Brazilian government was also concerned about the impact on the country’s image abroad. “We’re big players in the world market, and consumers can seek products from our competitors,” he said. “We’re worried and we’re taking steps” to maintain confidence in Brazilian products. *
* 16
*
Friday’s operation was one of the biggest on record in Brazil, authorities said. Police said 1,100 officers acting in six Brazilian states and the Federal District were part of the operation, executing 38 arrest warrants and court orders to collect evidence and seize assets. The police spokesman, Mr. Grillo, said Friday that some of the bribes went to political parties, but that police still don’t know exactly how much. He didn’t provide any names of politicians or parties. [Emphasis added]. 31.
On March 17, 2017, during aftermarket hours, Reuters published an article
entitled “Brazil police raid BRF and JBS meat plants in bribery probe,” stating in pertinent part: WORLD NEWS | Fri Mar 17, 2017 | 7:47pm EDT Brazil police raid BRF and JBS meat plants in bribery probe By Brad Haynes and Sergio Spagnuolo | SAO PAULO/CURITIBA, BRAZIL Brazilian police raided the premises of global meatpacking companies JBS SA and BRF SA on Friday, as well as dozens of smaller rivals, in a crackdown on alleged bribery of health officials that could threaten $12 billion in annual exports. The probe, known as “Operation Weak Flesh,” found evidence of meatpackers bribing inspectors and politicians to overlook unsanitary practices such as processing rotten meat and shipping exports with traces of salmonella, police said. Police investigator Mauricio Moscardi Grillo said there was evidence of some companies manipulating certificates for meat exports to European markets, raising the risk of foreign restrictions on Brazil’s powerhouse protein industry. “We've never seen a scandal like this in the sector ... It's horrifying,” said Alex Silva, a livestock analyst with Scot Consultoria. “This stains the entire system that Brazil has spent years building.” Brazil exported $6.9 billion of poultry and $5.5 billion of beef last year, according to industry groups, as producers ramped up shipments to China and started sending fresh beef to the United States. Shares of JBS and BRF plunged 11.0 percent and 7.0 percent, respectively, in Sao Paulo. JBS, the world's biggest meat producer, booked net revenue of 170 billion 17
reais ($55 billion) last year from sales in 150 countries. BRF, the largest poultry exporter, booked net revenue of 39 billion reais in 2016. Police said they arrested three BRF employees and two from JBS in Friday’s raids, as well as 20 public officials. JBS said in a securities filing that three of its plants and one of its employees were targeted in the probe, but its senior executives and headquarters were not targeted. The company said it followed rigorous quality standards and sanitary regulations. BRF also said it followed industry regulations and was cooperating with authorities in the investigation. Court documents cited recordings of BRF director Andre Luiz Baldissera allegedly discussing on March 13 how health officials could help defend the company after inspectors in Italy found traces of salmonella in four containers shipped from a plant in Goiás state in central Brazil. The ruling by federal judge Marcos Silva also included transcripts of BRF government relations executive Roney Nogueira allegedly discussing bribery of health inspectors, including one called on to help avoid the closure of the same Goiás plant. The judge also ordered that BRF Vice President José Roberto Pernomian Rodrigues be brought in for questioning. Baldissera, Nogueira and Rodrigues could not be reached for comment. PLANTS CLOSED Brazil’s Agriculture Ministry temporarily closed three plants cited in the investigation, one run by BRF and two run by smaller rival Grupo Peccin, and began removing their meat products from supermarkets. Eumar Novacki, the ministry’s executive secretary, said there was some concern that other countries would begin blocking shipments of Brazilian meat. Agriculture Minister Blairo Maggi will meet on Monday with foreign ambassadors to allay concerns. Sergio De Zen, a livestock expert at the University of Sao Paulo, said other countries may be eager to block Brazilian exports in the fiercely competitive protein market. “But the impact will not be as big as it would be if another country had discovered this problem,” he said. “It is Brazil itself that is revealing this.” 18
United States food safety body FSIS said it was in contact with Brazil's government and monitoring the situation. It said food supply in the U.S. was safe due to a re-inspection system applied to all imported meats. The food industry investigation is the latest in a string of corruption probes in Brazil, as a tougher judiciary takes on cozy relations between the government and powerful businesses, backed by public outrage during a deep economic s8lump. After investigations into political kickbacks on public works and oil and gas contracts, Friday’s probe struck at the heart of the booming agricultural sector, one of the few bright spots in Brazil's economy and a major source of exports. Police said there was evidence that meatpackers falsified documentation for exports to Europe, China and the Middle East. Judge Silva wrote in his ruling that employees of some meatpackers, including BRF, arranged bribes and favors for inspectors ranging from political donations and favorable bank loans to small bribes including hams and other meat products. In some cases, those inspectors would then allow employees of the meatpackers to enter government offices, access computers and issue their own export certificates, investigators said. (Reporting by Brad Haynes; Additional reporting by Sergio Spagnuolo in Curitiba, Pedro Fonseca in Rio de Janeiro, Guillermo Parra-Bernal, Brad Brooks, Marcelo Teixeira and Alberto Alerigi in Sao Paulo, Mark Weinraub in Washington; Editing by Daniel Flynn, Marguerita Choy and Bernard Orr) [Emphasis added].
32.
On March 18, 2017, the Associated Press published an article entitled “Brazilian
firms 'bribed inspectors to keep rotten meat on market’ as plants raided in corruption probe,” stating in pertinent part: Brazilian firms ‘bribed inspectors to keep rotten meat on market’ as plants raided in corruption probe By Associated Press 18 MARCH 2017 • 12:51AM
19
Two big Brazilian meatpackers bribed inspectors to keep rotten meat on the market, police charged on Friday in issuing dozens of arrest warrants, while a judge accused the Agriculture Ministry of betraying the country. Part of the money allegedly paid by meatpackers JBS and BRF was channelled to two major political parties, including the one of President Michel Temer, police said after a two-year investigation. Authorities warned that the case was a severe blow to the international image of Brazil's agribusiness sector, which officials have been counting on heavily for helping Brazil recover from its worst recession in decades. Investigator Mauricio Moscardi Grillo said at a news conference that the two meatpackers used chemicals to improve the appearance and smell of expired meats. He said at least one executive reported that rotten meat was mixed with healthy meat to be sold to consumers. Cheaper products like water and manioc flour were also blended with meat sold by the two companies, Grillo said, adding that three plants have been shut down. The investigator said school children in the southern state of Parana were fed with dangerous meat. “They are getting food made of outdated, rotten and many times cancerous products so the economic interest of this mighty crime gang is obeyed,” Grillo said. Police said the meatpackers had direct influence in the Agriculture Ministry so they could pick the inspectors who would visit their plants. Those inspectors would produce sanitary certificates regardless of the adulteration of the products, police said. In his decision to authorize arrests, Judge Marcos Josegrei da Silva said the Agriculture Ministry has a “staggering” involvement in fraud and corruption. “The ministry was taken hostage by a group of individuals that repeatedly betrayed their obligation of serving society,” Silva wrote. Grillo said some of the expired meat was exported to Europe. He said four containers of BRF meat contaminated with salmonella were stopped in Italy in 2016, but nothing was done against the company. *
*
*
Novacki said there were “very small risks” in consuming meat processed by JBS and BRF. “It is not the majority of the meat. But there is (a risk),” he said. “The three or four plants where this happened were shut down today for us to see what happened in each of them.”
20
Shares in JBS closed on Friday on the Sao Paulo stock exchange down more than 11 percent, while those of BRF fell almost 8 percent. Grillo said some of the bribes paid to inspectors were channelled to two political parties – Temer’s centrist Brazilian Democratic Movement Party and the rightleaning Progressive Party, which is part of the president’s governing coalition. [Emphasis added]. 33.
As a result of Defendants’ wrongful acts and omissions, and the precipitous
decline in the market value of the Company’s ADRs, Plaintiff and other Class members have suffered significant losses and damages. PLAINTIFF’S CLASS ACTION ALLEGATIONS 34.
Plaintiff brings this action as a class action pursuant to Federal Rule of Civil
Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or otherwise acquired JBS ADRs publicly traded on the OTC Market during the Class Period (the “Class”); and were damaged upon the revelation of the alleged corrective disclosures. Excluded from the Class are Defendants herein, the officers and directors of the Company, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns and any entity in which Defendants have or had a controlling interest. 35.
The members of the Class are so numerous that joinder of all members is
impracticable. Throughout the Class Period, JBS securities were actively traded on the OTC Market. While the exact number of Class members is unknown to Plaintiff at this time and can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds or thousands of members in the proposed Class. Record owners and other members of the Class may be identified from records maintained by the Company or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions. 21
36.
Plaintiff’s claims are typical of the claims of the members of the Class as all
members of the Class are similarly affected by Defendants’ wrongful conduct in violation of federal law that is complained of herein. 37.
Plaintiff will fairly and adequately protect the interests of the members of the
Class and has retained counsel competent and experienced in class and securities litigation. Plaintiff has no interests antagonistic to or in conflict with those of the Class. 38.
Common questions of law and fact exist as to all members of the Class and
predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: a.
whether the federal securities laws were violated by Defendants’ acts as alleged herein;
b.
whether statements made by Defendants to the investing public during the Class Period misrepresented material facts about the financial condition, business, operations, and management of the Company;
c.
whether Defendants’ public statements to the investing public during the Class Period omitted material facts necessary to make the statements made, in light of the circumstances under which they were made, not misleading;
d.
whether the Individual Defendants caused the Company to issue false and misleading SEC filings and public statements during the Class Period;
e.
whether Defendants acted knowingly or recklessly in issuing false and misleading SEC filings and public statements during the Class Period;
f.
whether the prices of JBS securities during the Class Period were artificially inflated because of the Defendants’ conduct complained of herein; and
22
g.
whether the members of the Class have sustained damages and, if so, what is the proper measure of damages.
39.
A class action is superior to all other available methods for the fair and efficient
adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. 40.
Plaintiff will rely, in part, upon the presumption of reliance established by the
fraud-on-the-market doctrine in that: a.
Defendants made public misrepresentations or failed to disclose material facts during the Class Period;
b.
the omissions and misrepresentations were material;
c.
JBS securities are traded in efficient markets;
d.
the Company’s securities were liquid and traded with moderate to heavy volume during the Class Period;
e.
the Company traded on the OTC Market, and was covered by multiple analysts;
f.
the misrepresentations and omissions alleged would tend to induce a reasonable investor to misjudge the value of the Company’s securities; and
g.
Plaintiff and members of the Class purchased and/or sold JBS securities between the time the Defendants failed to disclose or misrepresented material facts and the time the true facts were disclosed, without knowledge of the omitted or misrepresented facts.
23
41.
Based upon the foregoing, Plaintiff and the members of the Class are entitled to a
presumption of reliance upon the integrity of the market. 42.
Alternatively, Plaintiff and the members of the Class are entitled to the
presumption of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v. United States, 406 U.S. 128, 92 S. Ct. 2430 (1972), as Defendants omitted material information in their Class Period statements in violation of a duty to disclose such information, as detailed above. COUNT I Violation of Section 10(b) of The Exchange Act and Rule 10b-5 Against All Defendants 43.
Plaintiff repeats and realleges each and every allegation contained above as if
fully set forth herein. 44.
This Count is asserted against the Company and the Individual Defendants and is
based upon Section 10(b) of the Exchange Act, 15 U.S.C. ยง 78j(b), and Rule 10b-5 promulgated thereunder by the SEC. 45.
During the Class Period, the Company and the Individual Defendants,
individually and in concert, directly or indirectly, disseminated or approved the false statements specified above, which they knew or deliberately disregarded were misleading in that they contained misrepresentations and failed to disclose material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. 46.
The Company and the Individual Defendants violated ยง10(b) of the 1934 Act and
Rule 10b-5 in that they: employed devices, schemes and artifices to defraud; made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or 24
engaged in acts, practices and a course of business that operated as a fraud or deceit upon plaintiff and others similarly situated in connection with their purchases of JBS securities during the Class Period. 47.
The Company and the Individual Defendants acted with scienter in that they knew
that the public documents and statements issued or disseminated in the name of the Company were materially false and misleading; knew that such statements or documents would be issued or disseminated to the investing public; and knowingly and substantially participated, or acquiesced in the issuance or dissemination of such statements or documents as primary violations of the securities laws. These defendants by virtue of their receipt of information reflecting the true facts of the Company, their control over, and/or receipt and/or modification of the Company’s allegedly materially misleading statements, and/or their associations with the Company which made them privy to confidential proprietary information concerning the Company, participated in the fraudulent scheme alleged herein. 48.
Individual Defendants, who are the senior officers and/or directors of the
Company, had actual knowledge of the material omissions and/or the falsity of the material statements set forth above, and intended to deceive Plaintiff and the other members of the Class, or, in the alternative, acted with reckless disregard for the truth when they failed to ascertain and disclose the true facts in the statements made by them or other personnel of the Company to members of the investing public, including Plaintiff and the Class. 49.
As a result of the foregoing, the market price of JBS securities was artificially
inflated during the Class Period. In ignorance of the falsity of the Company’s and the Individual Defendants’ statements, Plaintiff and the other members of the Class relied on the statements described above and/or the integrity of the market price of JBS securities during the Class Period
25
in purchasing JBS securities at prices that were artificially inflated as a result of the Company’s and the Individual Defendants’ false and misleading statements. 50.
Had Plaintiff and the other members of the Class been aware that the market price
of JBS securities had been artificially and falsely inflated by the Company’s and the Individual Defendants’ misleading statements and by the material adverse information which the Company’s and the Individual Defendants did not disclose, they would not have purchased JBS securities at the artificially inflated prices that they did, or at all. 51.
As a result of the wrongful conduct alleged herein, Plaintiff and other members
of the Class have suffered damages in an amount to be established at trial. 52.
By reason of the foregoing, the Company and the Individual Defendants have
violated Section 10(b) of the 1934 Act and Rule 10b-5 promulgated thereunder and are liable to the Plaintiff and the other members of the Class for substantial damages which they suffered in connection with their purchases of JBS securities during the Class Period. COUNT II Violation of Section 20(a) of The Exchange Act Against The Individual Defendants 53.
Plaintiff repeats and realleges each and every allegation contained in the
foregoing paragraphs as if fully set forth herein. 54.
During the Class Period, the Individual Defendants participated in the operation
and management of the Company, and conducted and participated, directly and indirectly, in the conduct of the Company’s business affairs. Because of their senior positions, they knew the adverse non-public information regarding the Company’s business practices. 55.
As officers and/or directors of a publicly owned company, the Individual
Defendants had a duty to disseminate accurate and truthful information with respect to the 26
Company’s financial condition and results of operations, and to correct promptly any public statements issued by the Company which had become materially false or misleading. 56.
Because of their positions of control and authority as senior officers, the
Individual Defendants were able to, and did, control the contents of the various reports, press releases and public filings which the Company disseminated in the marketplace during the Class Period. Throughout the Class Period, the Individual Defendants exercised their power and authority to cause the Company to engage in the wrongful acts complained of herein. The Individual Defendants therefore, were “controlling persons� of the Company within the meaning of Section 20(a) of the Exchange Act. In this capacity, they participated in the unlawful conduct alleged which artificially inflated the market price of JBS securities. 57.
Each of the Individual Defendants, therefore, acted as a controlling person of the
Company. By reason of their senior management positions and/or being directors of the Company, each of the Individual Defendants had the power to direct the actions of, and exercised the same to cause, the Company to engage in the unlawful acts and conduct complained of herein. Each of the Individual Defendants exercised control over the general operations of the Company and possessed the power to control the specific activities which comprise the primary violations about which Plaintiff and the other members of the Class complaint. 58.
By reason of the above conduct, the Individual Defendants are liable pursuant to
Section 20(a) of the Exchange Act for the violations committed by the Company. PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment against Defendants as follows:
27
A.
Determining that the instant action may be maintained as a class action under
Rule 23 of the Federal Rules of Civil Procedure, and certifying Plaintiff as the Class representative; B.
Requiring Defendants to pay damages sustained by Plaintiff and the Class by
reason of the acts and transactions alleged herein; C.
Awarding Plaintiff and the other members of the Class prejudgment and post-
judgment interest, as well as their reasonable attorneys’ fees, expert fees and other costs; and D.
Awarding such other and further relief as this Court may deem just and proper. DEMAND FOR TRIAL BY JURY
Plaintiff hereby demands a trial by jury. Dated: March __, 2017
Respectfully submitted, THE ROSEN LAW FIRM, P.A. By: Jacob A. Goldberg, (PA ID: 66399) Gonen Haklay (PA ID: 764446) 101 Greenwood Avenue, Suite 203 Jenkintown, PA 19046 Tel: (215) 600-2817 Fax: (212) 202-3827 jgoldberg@rosenlegal.com ghaklay@rosenlegal.com THE ROSEN LAW FIRM, P.A. Laurence Rosen, Esq. Phillip Kim, Esq. 275 Madison Avenue, 34th Floor New York, New York 10016 Tel: (212) 686-1060 Fax: (212) 202-3827 lrosen@rosenlegal.com pkim@rosenlegal.com Counsel for Plaintiff
28
EEOC’s Pattern-Or-Practice Claims Against JBS to Proceed to Trial, Fed...
1 of 2
https://www1.eeoc.gov//eeoc/newsroom/release/7-24-15.cfm?renderforpr...
U.S. Equal Employment Opportunity Commission
PRESS RELEASE 7-24-15
EEOC’s Pattern-Or-Practice Claims Against JBS to Proceed to Trial, Federal Judge Orders Federal Court Denies Meat Processor's Motion for Summary Judgment on Agency's Title VII Race, National Origin, and Religious Discrimination and Retaliation Case DENVER - A federal judge has denied, in its entirety, the motion for summary judgment by major meat processor JBS in a race, national origin, and religious discrimination case brought by the U.S. Equal Employment Opportunity Commission (EEOC) in Colorado, the federal agency announced today. On Aug. 30, 2010, EEOC filed two similar discrimination lawsuits against JBS, one in Colorado (EEOC v. JBS USA, LLC, d/b/a JBS Swift & Co., 10-cv-02103-PAB-KLM) and one in Nebraska. In its Colorado lawsuit, EEOC charged that JBS engaged in wide-scale religious discrimination when it failed to reasonably accommodate its Muslim employees by refusing to allow them to pray according to their religious tenets. EEOC also charged that JBS retaliated against Muslim employees by disciplining or firing them when they requested that their evening break be moved so that they could break their fast and pray closer to sundown during Ramadan 2008, an Islamic holy month requiring daytime fasting. Such alleged conduct violates Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of religion. It also requires employers to make reasonable accommodations to their employees' sincerely held religious beliefs or practices, unless it would cause an undue hardship to do so. EEOC filed suit after first attempting a prelitigation settlement through its conciliation process. On Aug. 8, 2011, U.S. District Judge Philip A. Brimmer bifurcated the case into two phases. Phase I will be tried before the judge and includes EEOC's claims alleging a pattern or practice of (a) denying Muslim employees religious accommodations, (b) discriminatory discipline and discharge, and retaliation. The Phase I claims are limited to events during Ramadan 2008. EEOC's Nebraska case proceeded more quickly. At trial in May 2013, the judge in the Nebraska case found that EEOC had satisfied its initial burden of proving a prima facie case of religious discrimination, but concluded that JBS had established its affirmative defense of undue hardship, and entered judgment in JBS's favor. On March 31, 2014, JBS filed its motion for summary judgment in the Colorado case, seeking to dismiss all of EEOC's Phase I claims. JBS first argued that the decision in the Nebraska case controlled the Colorado case. Judge Brimmer rejected JBS's argument, finding numerous factual differences between the two cases. Additionally, the court held that because JBS had succeeded in keeping evidence about the Colorado events from being introduced in the Nebraska case, the Nebraska holding could not be applied to the Colorado facts. The court similarly rejected JBS's numerous arguments relating to the alleged undue burden of the religious accommodations proposed by EEOC. The court observed that religious accommodation might be accomplished through a combination of measures, rather than considering each proposed measure individually and rejecting it as insufficient if it could not alone resolve the problem. The court also rejected the notion that an accommodation must completely eliminate all conflict between work rules and all the various individuals' religious beliefs, recognizing that religious accommodation does not have to be perfect to be reasonable. The court also rejected JBS's argument that its "en masse"terminations of a group of Somali Muslim employees during Ramadan 2008 was a one-time event that could not constitute a pattern or practice of unlawful discrimination. The court noted at least six different potentially discriminatory decisions during Ramadan 2008 that could lead a fact finder to conclude that the events of Ramadan 2008 consisted of multiple events or occurrences of discrimination and that discrimination was JBS's standard operating procedure during that time. Judge Brimmer's decision denying JBS's motion for summary judgment clears the way for trial of the EEOC's Phase I claims, which is estimated to require four to six weeks. According to its website, JBS is a leading processor of beef, pork, and lamb in the United States, a leading processor of beef in Canada, and the largest cattle feeder in the world. JBS is the North American arm of JBS S.A., the world's
7/19/17, 2:50 PM
EEOC’s Pattern-Or-Practice Claims Against JBS to Proceed to Trial, Fed...
2 of 2
https://www1.eeoc.gov//eeoc/newsroom/release/7-24-15.cfm?renderforpr...
leading animal protein processor with more than 200,000 employees world-wide. The EEOC enforces federal laws prohibiting employment discrimination. Further information about EEOC is available on its website at www.eeoc.gov .
7/19/17, 2:50 PM
US Labor Department’s lawsuit alleges hiring discrimination at federal c...
1 of 2
https://www.dol.gov/newsroom/releases/ofccp/ofccp20161213
Please note: As of January 20, 2017, information in some news releases may be out of date or not reflect current policies.
US LABOR DEPARTMENT’S LAWSUIT ALLEGES HIRING DISCRIMINATION AT FEDERAL CONTRACTOR’S BEEF-PROCESSING PLANT IN CACTUS, TEXAS Complaint seeks back wages, jobs for applicants from JBS USA Date of Action: Dec. 9, 2016 Type of Action: Lawsuit filed with the U.S. Department of Labor (http://www.dol.gov)’s Office of Administrative Law Judges Defendant(s): JBS USA Lux S.A. Swift Beef Co. Allegations: The U.S. Department of Labor alleges that JBS USA Lux S.A. and Swift Beef Co. have systematically discriminated against qualified American Indian/Alaskan Native, African-American, Hispanic, and Caucasian applicants, while favoring Asian applicants, for general production jobs at their beef processing plant in Cactus, Texas, from at least September 2007 through at least June 2010. The complaint further alleges that the discrimination may continue to the present. The full complaint can be viewed here (https://www.dol.gov /sites/default/files/newsroom/newsreleases/OFCCP20160173.pdf). Background: A compliance review by the department’s Office of Federal Contract Compliance Programs (http://www.dol.gov/ofccp) found that the Texas facility violated Executive Order 11246 (http://1.usa.gov /1iu6B1z), which prohibits federal contractors from discriminating against job applicants on the basis of race or national origin. This is the second lawsuit OFCCP has filed with the department’s OALJ against the company. The first complaint – filed on Dec. 1, 2014, – alleges that JBS’s Hyrum, Utah, facility systematically discriminated against qualified female, Caucasian, African-American and Native American applicants seeking entry-level jobs at its beef processing plant there. JBS USA Lux S.A. (a Luxembourg Société Anonyme) and Swift Beef Co. (a Delaware corporation) are wholly owned indirect subsidiaries of Brazilian meat processing industry giant JBS S.A. Since 2007, JBS companies have collectively received millions in federal contracts as providers of meat products to federal agencies, such as the departments of Defense and Agriculture. Resolution: The department seeks an order requiring the defendants to provide complete relief to the affected applicants, including hiring some into general production jobs and paying back pay and interest. The department also seeks an order permanently prohibiting the defendants from violating the Executive Order, canceling all of the defendants’ federal contracts and debarring the defendants from entering into future federal contracts unless they come into compliance with the Executive Order and remedy their prior violations. Quote: “JBS and its subsidiaries are required to comply with anti-discrimination laws that apply to federal contractors,” said Office of Federal Contract Compliance Programs’ Acting Director Thomas (http://www.dol.gov /ofccp/about/patricia_shiu.htm) M. Dowd. “We have filed this lawsuit to enforce those requirements.” Docket Number: 2017-OFC-2 (https://www.dol.gov/sites/default/files/newsroom/newsreleases
7/19/17, 2:51 PM
US Labor Department’s lawsuit alleges hiring discrimination at federal c...
2 of 2
https://www.dol.gov/newsroom/releases/ofccp/ofccp20161213
/OFCCP20160173.pdf) Information: In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 (http://www.dol.gov/compliance/laws/comp-rehab.htm) and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (http://www.dol.gov/compliance/laws/comp-vevraa.htm). These laws, as amended, make it illegal for contractors and subcontractors doing business with the federal government to discriminate in employment because of race, color, religion, sex, sexual orientation, gender identity, national origin, disability or status as a protected veteran. In addition, contractors and subcontractors are prohibited from discriminating against applicants or employees because they have inquired about, discussed or disclosed their compensation or that of others, subject to certain limitations. For more information, please call OFCCP’s toll-free helpline at 800-397-6251 or visit http://www.dol.gov/ofccp/ (http://www.dol.gov/ofccp/). OFCCP News Brief: 12/13/2016 Contact Name: Juan Rodriguez Email: rodriguez.juan@dol.gov (mailto:rodriguez.juan@dol.gov) Phone Number: (972) 850-4709 (tel:%28972%29850-4709) Contact Name: Chauntra Rideaux Email: rideaux.chauntra.d@dol.gov (mailto:rideaux.chauntra.d@dol.gov) Phone Number: (972) 850-4710 (tel:%28972%29850-4710) Release Number: 16-0173-DAL
7/19/17, 2:51 PM
FILED: OCTOBER 20, 2008 08CV5992 JUDGE BUCKLO MAGISTRATE JUDGE KEYS TC
Exclusive: Three sides agree on seven rounds of NAFTA talks - sources
1 of 13
http://www.reuters.com/article/us-usa-trade-nafta-exclusive-idUSKBN1...
7/19/17, 2:53 PM
Dirty Family Secret Is Behind JBS's $20 Billion Buying Spree - Bloomberg https://www.bloomberg.com/news/articles/2017-05-26/the-dirty-family-s...
2 of 7
➞ ➞
7/19/17, 2:56 PM
Dirty Family Secret Is Behind JBS's $20 Billion Buying Spree - Bloomberg https://www.bloomberg.com/news/articles/2017-05-26/the-dirty-family-s...
3 of 7
7/19/17, 2:56 PM
Dirty Family Secret Is Behind JBS's $20 Billion Buying Spree - Bloomberg https://www.bloomberg.com/news/articles/2017-05-26/the-dirty-family-s...
4 of 7
7/19/17, 2:56 PM
Dirty Family Secret Is Behind JBS's $20 Billion Buying Spree - Bloomberg https://www.bloomberg.com/news/articles/2017-05-26/the-dirty-family-s...
5 of 7
7/19/17, 2:56 PM
Dirty Family Secret Is Behind JBS's $20 Billion Buying Spree - Bloomberg https://www.bloomberg.com/news/articles/2017-05-26/the-dirty-family-s...
6 of 7
7/19/17, 2:56 PM
The meat of Brazil’s latest bribery scandal | Compliance Week
1 of 4
https://www.complianceweek.com/blogs/enforcement-action-global-gli...
Blogs (http://www.complianceweek.com/blogs) / Blogs (http://www.complianceweek.com/blogs/enforcement-action-global-glimpses) / The meat of Brazil’s latest bribery scandal
The meat of Brazil’s latest bribery scandal Jaclyn Jaeger (http://www.complianceweek.com/authors/jaclyn-jaeger) | April 4, 2017 Still reeling from “Operation Car Wash (https://www.complianceweek.com /news/news-article/petrobras-probe-showcases-global-enforcementefforts-jaeger1220#.WOOaoWf_rct),” Brazil has a new corruption scandal on its hands, this one dubbed “Operation Weak Flesh.” Brazilian enforcement authorities are currently investigating some of the world’s largest meatpackers over allegations that agribusiness leaders bribed inspectors from Brazil’s Ministry of Agriculture to overlook unsanitary practices—such as processing rotten beef and poultry, and shipping exports with traces of salmonella—so that their sales to domestic and foreign meat and poultry buyers would be approved. Operation Weak Flesh is one of the largest scale operations on record in Brazil. Federal police last month announced that 1,100 federal agents carried out 309 judicial warrants across multiple Brazilian states. Among companies at the center of the investigation are Brazil-based poultry-exporter BRF and meat-producing giant JBS, which owns Swift Foods and holds a majority share in Pilgrim’s, both well-known brands in the United States.
Related articles Petrobras probe showcases global enforcement efforts (http://www.complianceweek.com /news/news-article/petrobras-probeshowcases-global-enforcement-effortsjaeger1220) Braskem to pay $957M settlement in Petrobras corruption probe (http://www.complianceweek.com/blogs /enforcement-action-global-glimpses /braskem-to-pay-957m-settlement-inpetrobras-corruption) Is Venezuela’s state oil company creating the next Petrobras scandal? (http://www.complianceweek.com/blogs /the-man-from-fcpa/is-venezuela %E2%80%99s-state-oil-companycreating-the-next-petrobras-scandal)
Europe and Petrobras—What Has a Car In a statement (http://www.publicnow.com Wash Wrought? /view/519C6FA006B3F47919FF8F9684F2454F9FA17069?2017-03-17-16:30:56+00:00(http://www.complianceweek.com/blogs xxx9458), JBS confirmed that the Brazilian Federal Police had conducted /the-man-from-fcpa/europe-and-petrobras raids in several regions of Brazil, including three JBS facilities—two in %E2%80%94what-has-a-car-washParaná and one in Goiás. “No judicial measures have been taken against the wrought) company’s executives,” Jeremiah O’Callaghan, JBS’ investor relations officer, said in a statement. “In addition, the company's headquarters were not a target of the operation.”
JBS did admit, however, that a “judicial measure” was issued in its facility located in Lapa, in the state of Paraná, against one of its veterinarians, a JBS employee, who performs auxiliary inspections services for the Ministry of Agriculture.
7/19/17, 2:57 PM
The meat of Brazil’s latest bribery scandal | Compliance Week
2 of 4
https://www.complianceweek.com/blogs/enforcement-action-global-gli...
In a separate statement (http://ir.brf-global.com /conteudo_en.asp?idioma=1&tipo=52177&conta=44&id=240188), BRF said it has taken measures “to clarify the facts around the recent events related to the investigation.” Specifically, BRF said it has established a quality certification group “to re-attest that the company adheres to international food safety standards. This group will be advised by renowned professionals and companies in the area.” Additionally, BRF said it has formed a special response committee led by Luiz Fernando Furlan, former State Minister for Development, Industry and Commerce of Brazil and BRF’s board member. This committee will closely monitor the company’s current situation and recommend solutions, BRF stated.
Recently Viewed
“The company strongly repudiates any practices related to product adulteration or tampering, whether in the production or sale of products,” O’Callaghan stated. “JBS and its subsidiaries rigidly follow all regulatory guidelines in connection with the production and sale of food products in Brazil and globally, and supports all efforts aimed at punishing any violation.”
“The internal investigation of the facts mentioned above will be led by the company’s statutory audit committee, with a mandate to conduct an independent investigation with the collaboration of the Brazilian and international external counsels, Pedro de Andrade Faria, global chief executive and investor relations officer, said in a statement. “BRF does not concur with illicit conduct and categorically refutes any insinuation to the contrary. If anything unlawful is discovered as part of this ongoing investigation, BRF will take all necessary and appropriate action to address the situation.” A federal class-action lawsuit (http://www.rosenlegal.com/media /casestudy /927_JBS%20-%20Initial%20Complaint%20-%20web%20-%20secured.pdf), filed in the U.S. District Court for the Eastern District of Pennsylvania, is already in the works against JBS. The lawsuit alleges violations of federal securities laws.
Survey of the Week Third-Party Benchmark Survey (https://www.research.net/r/GXDQLSY)
Wilmington plc
show
7/19/17, 2:57 PM
2 Rotten Meat And Deforestation Scandals Impact JBS's And BRF's USD...
1 of 4
https://seekingalpha.com/article/4059755-2-rotten-meat-deforestation-sc...
2 Rotten Meat And Deforestation Scandals Impact JBS's And BRF's USD 2.5 Billion IPOs And Brazilian Economy Apr. 3.17 | About: JBS S.A. (JBSAY)
Summary Financial Impacts Material for JBS and BRF. Class Action Lawsuit. Cattle Ranching #1 Cause of Deforestation in Amazon. Two Rotten Meat and Deforestation Scandals Threaten JBS and BRF's IPOs As reported by Chain Reaction Research, JBS SA (OTCQX:JBSAY) (OTC:JBSAF), the world's biggest meatpacking company, halted beef production at all but three of its 36 plants in Brazil last week as federal police released results from their two-year investigation of pork, poultry and beef meatpackers. They found that health inspectors and politicians took bribes to allow domestic and international sales of rotten meats. Countries around the world responded by ceasing imports of Brazilian meats. JBS announced on March 29 that it would furlough workers at 10 of its 36 beef plants in Brazil because of reduced sales after some countries suspended imports. JBS also is caught in a second scandal as Ibama, Brazil's environmental protection agency, raided JBS meatpackers in Redenção and Santana do Araguaia, in the state of Pará last week. Ibama's raid identified 59,000 cattle sourced from land deforested illegally. This illegal deforested land equals the size of Manhattan - roughly 200 square miles. JBS sourced 90 percent of the animals from this illegally deforested land. In 2014, Brazil's National Institute for Space Research reported that cattle ranching caused 65 percent of deforestation in the Amazon. In 2012, Tesco canceled its contract with JBS after JBS sold deforestation-linked beef to Tesco.
7/19/17, 2:58 PM
2 Rotten Meat And Deforestation Scandals Impact JBS's And BRF's USD...
2 of 4
https://seekingalpha.com/article/4059755-2-rotten-meat-deforestation-sc...
Financial Impacts: JBS and BRF Allegedly Sold Rotten Meat A two-year effort, "Operation Weak Flesh" showed that JBS and BRF (NYSE:BRFS) sold rotten poultry, beef and pork to domestic and export markets. Companies added chemicals and acids into meat products to improve taste, smell and look, and mixed safe meat with expired meat. JBS's Initial Public Offering on the NYSE as JBS Foods International was expected in May or June at a value of USD one billion. JBS sells its meat products under the brands Swift, Friboi, Seara, Pilgrim's Pride, Gold Kist Farms, Pierce, 1855, Primo and Beehive. BRF's potential USD 1.5 billion IPO plans for its halal One Foods Holdings Inc. was also rocked by the news. Morgan Stanley & Co. and Bank of America Corp are advising the potential BRF London IPO. One Foods has 45 percent market share in the poultry sector in Saudi Arabia, United Arab Emirates, Kuwait, Qatar and Oman. BRF is now mulling canceling the IPO. Instead they have started talks for a private stake sale to sovereign wealth and buyout funds If they go forward, JBS and BRF's combined IPO's could bring USD 2.5 billion to the Brazilian economy. China, Japan, the European Union, Argentina, Chile, and Mexico are just some of the countries to ban Brazilian meat imports. This has led to hundreds of tons of meat stranded at sea on commercial vessels prevented from offloading their products. The crisis destroyed about one-fifth of the market value of the Brazilian meatpackers markets last week. JBS and BRF lead Brazil's export market, which shipped USD 5.9
7/19/17, 2:58 PM
2 Rotten Meat And Deforestation Scandals Impact JBS's And BRF's USD...
3 of 4
https://seekingalpha.com/article/4059755-2-rotten-meat-deforestation-sc...
billion worth of poultry and USD 4.3 billion worth of beef in 2015. Some markets have recovered since given post-crises assurances. Class Action Lawsuit After the new broke March 17, JBS ADR's fell USD 0.71 per share (9.2 percent) to close at USD 6.96 per share. JBS is the second largest food company globally with 235,000 employees and 2016 revenue of R170.4 billion. 5 percent, 12 percent, 47 percent of their revenue comes from sales to the EU, East Asia and the United States respectively. Brazilian meat exports fell from a daily average of USD 63 million to USD 74,000 by March 21 of this year. JBS and BRF's equity value decreased by over USD 2.2 billion over the same period. As of March 27, China had lifted its ban of Brazilian beef imports. As of March 29, Brazilian government officials had closed six meatpacking plants while banning 15 others from the export market. On March 29, Wolf Haldenstein Adler Freeman & Herz LLP launched a securities class action lawsuit against JBS in the Eastern District of Pennsylvania. The lawsuit is on behalf of shareholders who purchased JBS American Depositary Receipts between June 2, 2015, and March 17, 2017. The lawsuit alleges that JBS executives bribed regulators and politicians to hide rotten meat and plants with traces of salmonella. This means that JBS may have produced materially false and misleading financial statements. Cattle Ranching #1 Cause of Deforestation According to Chain Reaction Research's 2016 report Economic Drivers of Deforestation: Sectors exposed to sustainability and financial risks, over 70 percent of combined deforestation is linked to cattle ranching in Brazil, Colombia, Ecuador and Peru. Brazil's annual forest loss was 984,000 hectare (HA) per year 2010-2015. Cattle herding is often the first economic activity to use newly deforested areas. In South America, pasture for livestock is a primary driver of forest loss. Previously cleared land gains value and is later sold to soy farmers. This leads to new forests cleared for cattle as livestock farmers seek new pastures. Brazil has the largest commercial cattle herd in the world and the highest beef production of the Amazon countries. Beef production is forecast to increase in 2016, driven by higher export demand and depreciation of the Brazilian currency. In 2015, beef production
7/19/17, 2:58 PM
2 Rotten Meat And Deforestation Scandals Impact JBS's And BRF's USD...
4 of 4
https://seekingalpha.com/article/4059755-2-rotten-meat-deforestation-sc...
reached 9.4 million metric tons, a large increase over the previous decade. Of that total, 21 percent was destined for exports. Cattle herding accounted for more than 80 percent of deforestation in Brazil between 1990 and 2005. By late 2016, only a handful of ranchers, whose combined holdings represent less than one percent of Brazil's pastureland, had received certification to the Sustainable Agriculture Network beef products "chain of custody" mechanism. Investors Key Takeaways Key takeaways for investors are that they need to analyze corporate behavior for potential illicit behavior. When revenue is generated from unknown or not well described supply chains, these supply chains may have embedded financial risks. Whether operational risks - related to bribery, regulatory risks - related to sourcing from protected landscapes, deforestation-related risks are increasing material to investors as industry further expands into agriculture frontiers. With increasing pressures for corporations to improve the transparency of their supply chains, investors may want to consider investments where corporations describe transparently their supply chains. Transparency allows for improved financial analysis of supply chains and the revenue it generates. Simply put, when two large scandals independently develop at the same time at a corporation seeking to pursue an IPO, one must question overall management and governance structures, and where this investment may reside in an investor's portfolio.
7/19/17, 2:58 PM
Brazilian Corruption Scandal Spreads to Meat Industry, U.S. Securities L...
1 of 6
http://www.dandodiary.com/2017/03/articles/securities-litigation/brazilia...
Brazilian Corruption Scandal Spreads to Meat Industry, U.S. Securities Litigation Follows By Kevin LaCroix on March 23, 2017 Posted in Securities Litigation
The massive Brazilian corruption scandal that began with an investigation of the state-owned oil company Petrobras and that has since spread both to other industries, including the construction industry, and to other Latin American countries, has now spread to an investigation of unsanitary practices and corruption in Brazil’s meatpacking industry. Among the Brazilian companies caught up in this latest scandal is JBS S.A., which is the world’s largest meat processing company. As has been the case with other companies caught up in Brazilian corruption scandal, JBS, whose Level 1 ADRs trade over-the-counter in the U.S., has now been hit with a follow-on securities class action lawsuit in the United States. This lawsuit is the latest in the string of lawsuits filed against companies from Brazil and elsewhere Latin America that have been hit with U.S. securities suits following news of their involvement in the burgeoning corruption scandal.
Background On March 17, 2017, Brazilian police raided the facilities of two of the country’s largest meat processing companies, JBS and BRF SA, as well as numerous other small facilities. Among other things, the investigation is reportedly examining whether these companies bribed government officials to approve the sale and export of tainted meat. There are allegations that the target companies sold adulterated meat products. The investigation apparently is part of a long-running investigation known as “Operation Weak Flesh.”
According to news reports, policy arrested three BRF employees and two JBS employees, as well as 20 public
7/19/17, 2:59 PM
Brazilian Corruption Scandal Spreads to Meat Industry, U.S. Securities L...
2 of 6
http://www.dandodiary.com/2017/03/articles/securities-litigation/brazilia...
officials. In its March 17, 2017 press statement about the raid (here), JBS noted that the Brazilian police operation had not targeted the company’s executives and that the company’s headquarters were not a target of the operation. The news of the investigation and police raid caused the prices of JBS ADR’s to decline.
The Complaint On March 22, 2017, a JBS investor filed a securities class action lawsuit in the Eastern District of Pennsylvania against JBS, it CEO, and the global head of the company’s operations management team. The complaint, which appears on the court’s electronic docket in four parts, can be found here, here, here, and here. The plaintiff’s lawyers’ March 22, 2017 press release about the lawsuit can be found here.
The complaint recites at length numerous statements in the public filings of JBS about the company’s commitment to food safety, as well as its commitment to ethical business practices. The complaint then alleges (in paragraph 27) that the defendants misrepresented or failed to disclose that:
(1) JBS executives bribed regulators and politicians to subvert meat inspections of its plants and overlook sanitary practices such as processing rotten meat and running plants with traces of salmonella; (2) According to Brazilian authorities, JBS “didn’t care at all about the quality of the meat or food” they sold. “They didn’t care at all about what they were selling to consumers;” (3) Defendants falsified documentation for exports to Europe, China and the Middle East; (4)Defendants arranged bribes and favors for inspectors ranging from political donations and favorable bank loans to small bribes including hams and other meat products; (5) in coordination with government inspectors who Defendants used their direct influence in the Agriculture Ministry to select and whom they had bribed, Defendants’ employees entered government offices, accessed computers and issued their own export certificates; Defendants processing plants suffered from unsanitary practices such as rotten mean and shipping exports with traces of salmonella; (7) Defendants produced sanitary certificates regardless of the adulteration of the products.
The complaint, which purports to be filed on behalf of a class of investors who purchased JBS ADRs over the counter between June 2, 2015 and March 17, 2017. The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the ’34 Act.
7/19/17, 2:59 PM
Brazilian Corruption Scandal Spreads to Meat Industry, U.S. Securities L...
3 of 6
http://www.dandodiary.com/2017/03/articles/securities-litigation/brazilia...
Discussion As I have noted in prior posts on this blog (most recently here), as the Brazilian corruption scandal has spread, a number of the Brazilian companies caught up in the investigation have been sued in securities class action lawsuits in the U.S. This phenomenon of the filing of follow-on securities lawsuits against companies involved in the investigation recently spread to a company from Peru that has become involved in the investigation of corruption in the Brazilian construction industry.
JBS is the first of the company’s caught up in the Brazilian meatpacking industry scandal to be hit with a U.S. securities suit. However, it may not be the last. BRF, the other large Brazilian meat industry company caught up in the investigation, has ADRs that trade on the NYSE. The possibility that BRF too could be hit with a follow-on U.S. securities lawsuit seems not unexpected.
As the Brazilian corruption investigation continues to spread, it seems likely that companies in other industries could also face scrutiny or even possible future investigative involvement. This possibility not only presents the possibility for further U.S. securities lawsuit filings against Brazilian companies whose securities trade in the U.S. The possible civil follow-on litigation is not limited just to companies that have securities trading on the U.S. exchanges. Petrobras, for example, faces a number of group arbitration actions in Brazil based on the corruption scandal. The point is that these companies caught up in these kinds of investigations could face litigation exposures in their home countries, even if they do not face litigation exposures in the U.S.
Given the recent U.S. lawsuit filed against a Peruvian company caught up in the Brazilian scandal, these future claims possibilities are not limited just to Brazilian companies, but also include other Latin American companies. Nor are these exposures limited just to Latin America; to cite but two recent examples (there are many others), authorities in South Korea and Romania have recently initiated anti-corruption initiatives. As regulators step up their efforts to combat corruption in their respective countries, the possible outcomes include not only the prospect for high-profile bribery investigations, but also the same kind of follow-on civil litigation that has hit a number of the companies caught up in the Brazilian anti-corruption investigation.
One interesting question that the JBS lawsuit presents and that likely will arise regarding other companies involved in the corruption scandal is whether or not, based on the principles the U.S. Supreme Court enunciated in Morrison v. National Australia Bank, the company or companies are subject to the U.S. securities
7/19/17, 2:59 PM
Brazilian Corruption Scandal Spreads to Meat Industry, U.S. Securities L...
4 of 6
http://www.dandodiary.com/2017/03/articles/securities-litigation/brazilia...
laws. Specifically, there is a recurring question of whether or not having Level 1 ADRs trading over-thecounter is a sufficient basis for a company to be held subject to U.S. securities laws.
An ADR is a U.S. dollar denominated form of equity ownership that represents foreign shares of the company held by a custodian bank in the company’s home country. According to the complaint, JBS’s ADRs are sponsored Level 1 ADRs. Unlike Level 2 ADRs, which may trade on U.S exchanges, or Level 3 ADRs, which permit a non-U.S. company to raise capital in the U.S., Level 1 ADRs may not trade on U.S. exchanges and entail minimal U.S. reporting requirements. (Refer here for further background on the difference between the various ADR levels).
Courts have reached divergent opinions with respect to Level 1 ADRs, based on whether or not the ADRs are sponsored. For example, in the May 2016 decision in the Toshiba case specifically held that transactions in unsponsored ADRs purchased OTC in the U.S. are not sufficient to satisfy Morrison’s requirements. By contrast, in January 2017 (and as discussed here), Northern District of California Judge Charles R. Breyer held that the U.S. securities laws do apply to over-the-counter transactions in the U.S. of Volkswagen’s sponsored Level 1 ADRs. Questions remain on these issues, but the plaintiff in the JBS case seems likely to try to rely on the Court’s holding in the Volkswagen case that because the U.S. securities laws apply to transactions in JBS ADRs because the securities are sponsored.
One final note about the JBS case is that it seems to represent yet another phenomenon on which I have commented on this blog, which is the prevalence of U.S. securities class action litigation involving companies domiciled outside the U.S. As I noted in my year-end review of 2016 securities class action litigation, one of the factors driving the increase in U.S. securities litigation lawsuit filings during the year was the elevated frequency of securities suit filings involving non-U.S. companies. As the JBS case itself exemplifies, the filing of U.S. securities litigation against non-U.S. companies has continued in the U.S.
Just to put this activity against non-U.S. companies into statistical context, of the 74 non-merger related securities class action lawsuits filed year-to-date so far in 2017 (through March 22, 2017), 17 of them have involved non-U.S. companies, representing about 23% of all filings. Since non-U.S. companies represent only about 16% of U.S. listed companies, the frequency of lawsuits against non-U.S. companies is and remains disproportionately higher than for domestic U.S. companies listed on U.S. exchanges.
7/19/17, 2:59 PM
Brazilian Corruption Scandal Spreads to Meat Industry, U.S. Securities L...
5 of 6
http://www.dandodiary.com/2017/03/articles/securities-litigation/brazilia...
Class Actions in Australia: Among countries outside the U.S., among countries with class action regimes, th Australia is one of the most active. 2017 marks the 25 anniversary of Australia’s class action regime. A March 2017 paper from the Jones Day law firm entitled “Class Actions in Australia: 2016 in Review” (here) takes a comprehensive look at the current state of class actions in Australia, concluding with respect to the year just passed that “while the year provided examples of some of the major wins for defendants, a number of key court rulings and statutory reforms have set the stage for more and larger class actions in the year ahead and beyond.” The suggestion of the possibility of greater Australian class action activity is consistent with earlier posts on this blog (for example, here).
The law firm paper discusses a number of important class action case law developments in Australia during 2016, including in particular the decision of the Full Court of the Federal Court in Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Limited [2016] FCAFC 148, which for the first time permitted a common fund order (that is, allowing a litigation funder to be paid from any fund created as a result of a successful class action settlement or judgment).
The paper also reports that there were at least 25 new class actions filed in Australia in 2016, including 12 new class cations filed on behalf of investors. There were at least five investor class action settlements in Australia in 2016, the details of which are also detailed in the report.
D&O in South Africa: A March 22, 2017 Biznews.com article entitled “D&O Liability: Is Corporate South Africa Ignoring the Issue?” (here) takes a look at the state of D&O in South Africa. The article notes that while there is a great take up of D&O among companies whose shares trade the Johannesburg Stock Exchange (JSE), that take up among other companies, particularly small and medium enterprises (SME). In the past ten years, the article note, D&O claims against smaller enterprises are increasing but, according to the article “70% of SMEs do not have adequate D&O cover.”
The D&O claims environment in South Africa has evolved as, among other things, changes has been introduced to the Companies Act (effective in 2011), and as other claims have emerged. In particular the article notes that a director of Blue Platinum Ventures was held personally liable because the company did not adhere to environmental regulations. It was, the article notes, the “first example of a director held liable on the African Continent for not adhering to environmental regulations.” The implications are that there is likely to be a much more active claims environment in the future.
7/19/17, 2:59 PM
Ex-Brazil President Lula sentenced to nearly 10 years for corruption
1 of 6
http://www.reuters.com/article/us-brazil-corruption-lula-idUSKBN19X2FO
7/19/17, 2:59 PM
Ex-Brazil President Lula sentenced to nearly 10 years for corruption
2 of 6
http://www.reuters.com/article/us-brazil-corruption-lula-idUSKBN19X2FO
7/19/17, 2:59 PM
Ex-Brazil President Lula sentenced to nearly 10 years for corruption
3 of 6
http://www.reuters.com/article/us-brazil-corruption-lula-idUSKBN19X2FO
7/19/17, 2:59 PM
Ex-Brazil President Lula sentenced to nearly 10 years for corruption
4 of 6
http://www.reuters.com/article/us-brazil-corruption-lula-idUSKBN19X2FO
7/19/17, 2:59 PM
Ex-Brazil President Lula sentenced to nearly 10 years for corruption
5 of 6
http://www.reuters.com/article/us-brazil-corruption-lula-idUSKBN19X2FO
7/19/17, 2:59 PM
Cattle group alleges corruption in meatpacking industry
http://www.greatfallstribune.com/story/news/local/2016/02/17/cattle-gro...
Cattle group alleges corruption in meatpacking industry David Murray , dmurray@greatfallstribune.com
Published 9:46 p.m. MT Feb. 17, 2016 | Updated 2:33 p.m. MT Feb. 18, 2016
Less than a year ago, Montana beef producers were riding high on the steer. Cattle prices were at or near historic highs, and there was no end in sight to the gold rush in beef. In February 2015, the U.S. Department of Agriculture projected the price of fat cattle in the U.S. would continue to creep up toward $1.64 per pound through the end of 2017 – doubling what ranchers and feedlot owners had Buy Photo
(Photo: TRIBUNE PHOTO/JULIA MOSS)
received for their animals just eight years earlier. The USDA was not alone in its rose-colored projections. Many prominent market forecasters — including the Livestock Marketing Information Center, Kansas State University and CattleFax — concluded U.S. cattle prices would remain at or near historic levels for the next two or three years.
But something went wrong. Beginning in March 2015, U.S. cattle prices began to slide. At first the changes were subtle, amounting to only a few cents on the dollar. By August the average price for fat cattle (those ready for slaughter) had dropped 14.8 cents a pound. Then the bottom dropped out. According to USDA statistics, between August and December 2015 the average price for fat cattle dropped another 26.6 cents a pound. Overall, in the last three quarters of 2015, the value of fat cattle in the U.S. plummeted 26 percent. The USDA estimates the sudden price drop cost U.S. beef producers, and especially feedlot operators, more than $800 million in November 2015 alone. How much do you know about Montana agriculture?
(http://www.greatfallstribune.com/story/news/local/2016/02/01/snapshot-lifestats-montana-ag/79660020/)
So how could so many industry analysts have been so wrong? At least one cattle trade association is alleging the crash in cattle prices was not an accident. On Jan. 5, the Ranchers-Cattlemen Action Legal Fund (RCALF USA) submitted a request to the U.S. Senate Judiciary Committee asking for a formal investigation into illegal price-fixing by the U.S. meatpacking industry. Headquartered in Billings, R-CALF USA describes itself as “the largest ‘producer only’ national cattle trade association in the United States.” “During the third and fourth quarters of 2015, cattle prices collapsed farther and faster than during any time in history,” R-CALF’s request states. “Independent cattle feeders suffered losses never before experienced in our industry’s history. With losses exceeding $500 per head, it is likely the very foundation of the U.S. cattle industry’s feeding sector — its independent cattle feeders — was irreparably damaged. “We respectfully request an investigation to determine … the cause for the dramatic, unprecedented collapse of U.S. cattle prices in 2015; whether there are structural problems in the U.S. cattle market that contributed to the market collapse in 2015; and, whether dominant meat packers or other major market participants engage in unlawful conduct that adversely influenced the cattle futures market and the cash market in 2015.” The financial impact of the price collapse in cattle did not fall on all shoulders equally. While cow/calf producers ranchers both large and small — were undoubtedly discouraged by the sudden decline in value of their herds, the extreme volatility had its most immediate impact on independent feedlot owners. The large majority of calves in Montana are born between the last half of February and the first half of April. Ranchers typically keep the newborn livestock for seven to eight months, growing the calves out until they reach a weight of between 550- and 650-pounds. The calves are then most often sold to a feeder, who holds on to the livestock for another four to six months, adding on another 600- to 800-pounds.
Feeders make their money on the margins, relying upon their knowledge of futures markets and their expertise in (Photo: Courtesy R-CALF USA/David Smith, RightImage)
1 of 5
growing livestock efficiently to profit on the weight added to the calves before delivering “fat cattle” to the meatpackers for processing. At the end of 2015 many feeders were caught offguard, having contracted to buy
7/19/17, 3:00 PM
Cattle group alleges corruption in meatpacking industry
http://www.greatfallstribune.com/story/news/local/2016/02/17/cattle-gro...
calves at near historically high prices in the summer, then having to absorb the loss when prices bottomed out in November and December. An analysis published by Kansas State University in Dec. 2015 found that feedlot losses in October 2015 were the largest on record since January 2002, and anticipated losses in November 2015 would be even larger. “Currently, the net returns projected for closeouts in November are losses of -$547.24/head and -$510.63/head for steers and heifers, respectively,” the KSU report states. With more than 1.5 million cattle sold in November 2015, total losses likely exceeded $800 million. However, feedlot owners themselves are not in uniform agreement that the fault lies at the doorstep of the meatpackers. “I do not agree with R-CALF’s allegations,” said Mark DeBruycker, a former owner of North Montana Feeders north of Choteau. “There’s no question that the decline in prices is going to hurt some feeding operations, large and small, but I feel that the fall and winter of 2015 was a perfect storm of a strong U.S. dollar attracting imports and inhibiting exports.” DeBruycker also noted that a drop in corn prices prompted some feedlot owners to hold their cattle longer, hoping to add extra carcass weight to the animals before sale. Though the number of cattle in the U.S. beef herd remains historically low, the amount of beef they produced increased, putting downward pressure on the markets. Buy Photo (Photo: TRIBUNE PHOTO/JULIA MOSS)
“I feel the U.S. meatpacking industry does a tremendous job providing safe and healthy beef to the American consumer,” DeBruycker said. “If I had to guess, I’d bet the meatpackers would probably tell you they were as shocked by the break in fat cattle prices as the average cattle feeder.”
DeBruycker’s observations were confirmed by an official representative of Tyson Foods, the nation’s largest meatpacking corporation. “First of all, we depend on thousands of independent cattle producers to supply our beef operations, and it’s very important to us for them to succeed and have long-term viability,” said Gary Mickelson, senior director of public relations for Tyson. “Second, as required by law through mandatory price reporting regulations, we already report all livestock transactions and boxed beef pricing to the federal government daily, so our pricing levels are available to government officials. Data from the USDA shows packer revenue for beef cuts and byproducts have declined along with cattle prices.” R-CALF’s allegations rely heavily upon economic analysis, suggesting that market forces alone are insufficient to explain the fourth-quarter price collapse. As evidence, R-CALF notes that retail prices for beef at the grocery store have not dropped as rapidly or as low as cattle prices. R-CALF CEO Bill Bullard points out that the rancher’s share of a dollar spent on steaks, roasts and ground beef has dropped from 58 cents in November 2014 to 45 cents in November 2015. “If you look at the spread between what a cattle producer receives for cattle and what the consumer pays for beef, that spread represents cost of converting cattle into consumable beef,” Bullard said during an interview with the Great Falls Tribune. “Our contention is that the meatpackers are interfering with market forces and are capturing a large percentage of the consumers’ beef dollar that a competitive market should be allocating to the producers themselves.” “The cattle industry is the ‘last frontier’ for the multinational meatpackers that want to capture complete control over our live cattle supply chain away from independent farmers and ranchers,” he added. “From the packers’ perspective, they simply don’t need all those pesky small feeders and producers out there. We allege the unexplainable demise of our industry, at a time when beef demand remains relatively strong, is an indication of market failure. We allege that the meatpackers have caused that market failure.” What R-CALF lacks is hard evidence that anything illegal took place. The group has yet to present any “smoking gun” of emails, internal memorandums or sworn testimony that would confirm a flagrant violation U.S. antitrust laws. What it has been able to produce is interest from the chairman of the Senate Judiciary Committee. During a teleconference on Jan. 12, 2015, Sen. Chuck Grassley (R-Iowa) told ag reporters that Iowa cattlemen had told him there are few market reasons for the 2015 price collapse. Though he stopped short of suggesting collusion as a possible cause for the downturn, Grassley did suggest it may be time for the Senate Judiciary Committee to consider holding hearings. “If the accusations are credible, I think I would have a responsibility to look into this,” Grassley said. “Any violation of antitrust laws I’m very willing to look into. I’ve always felt most people working in the antitrust division at DOJ (the Department of Justice) didn’t have a lot of understanding of agriculture.” It would not be the first time Grassley has been willing to take on the meatpacking industry.
2 of 5
7/19/17, 3:00 PM
Cattle group alleges corruption in meatpacking industry
http://www.greatfallstribune.com/story/news/local/2016/02/17/cattle-gro...
In 2008, Grassley allied himself with a bipartisan group of senators – including Montana’s Jon Tester, a Democrat – seeking to stiffen the Grain Inspection, Packers and Stockyards Administration’s authority to ensure open and competitive markets. Grassley also co-sponsored a 2012 bill to ban most meatpackers from owning livestock, and an amendment to the 2013 farm bill to create a special counsel to coordinate antitrust enforcement within the farm and food industries. All this stems from widely held concerns over growing market concentration within the U.S. meat production and packing industries. Over the past 35 years, every stage of beef production in the United States has been consolidated into fewer and fewer hands. According to USDA statistics, the number of cow/calf ranch operations in the U.S. has plummeted from 1.6 million in 1980 to less than 950,000 today. Similarly, the number of small farmer/feeders – those who fatten the cattle in preparation for eventual slaughter – has declined by 38,000. Today fewer than 2,000 commercial feeders finish 87 percent of the cattle grown in the United States. Several operate centralized feeder facilities that can hold more than 200,000 animals at a time.
Buy Photo
(Photo: TRIBUNE PHOTO/JULIA MOSS)
At the top of the beef production pyramid stand four mega meatpacking corporations: Cargill Inc., JBS, Tyson Foods and the National Beef Packing Company. Together, these four packers process approximately 80 percent of all the beef slaughtered in the U.S. — and their footprint extends far beyond cattle or U.S. borders. It is the immense size and disproportionate economic power of these multinational corporations that R-CALF alleges is the source of the 2015 price collapse – these corporations’ ability to manipulate imports and exports, to dictate contract terms and/or coerce feedlot owners who don’t comply, and their power to limit competitive bidding in markets where only one packing house actively seeks sales contracts. “R-CALF USA believes the meatpackers exerted their considerable market power in 2015 to extinguish competition and drive down U.S. cattle prices,” an R-CALF letter to the Senate Judiciary Committee states. “An investigation will determine the extent to which that market power, known to be pervading the U.S. cattle market, is harming competition for independent U.S. cattle producers.” However, R-CALF’s analysis is not universally accepted, even among popular cattlemen’s interest groups like the Montana Stockgrowers Association and the National Cattlemen’s Beef Association. “We don’t see any merit in R-CALF’s claim,” said Chase Adams, director of communications for the National Cattlemen’s Beef Association. “Most recently, some of the aspects that have affected the market include a strong U.S. dollar that has made our exports overseas less attractive.” “We also had issues in other competing proteins,” Adams added. “We’re seeing significant upticks in pork and chicken production. We still have historically low supplies of beef … and you have more pork and chicken. That pork and chicken is much cheaper than beef, and the economy as a whole is not just going gangbusters out there.” Some analysts suggest the dramatic rise in U.S. cattle prices in 2013 and 2014 was itself an overreaction, and that U.S. markets are only now returning to sustainable levels.
3 of 5
7/19/17, 3:00 PM
Cattle group alleges corruption in meatpacking industry
http://www.greatfallstribune.com/story/news/local/2016/02/17/cattle-gro...
“You could have made the case then that bullish fundamentals and speculation didn’t quite add up,” said livestock analyst John Harrington in interview with the DTN network last January. “That bullish enthusiasm really exceeded sound marketing reasoning. My guess is that the seeds of 2015 destruction were planted to some extent by the crazy bullishness of the two preceding years.” “The naysayers to the potential for meatpackers to be manipulating the market try to explain the current world as if the structure was the same as it was 30 years ago,” R-CALF CEO Bill Bullock responded. “We have far surpassed efficiencies associated with economies of scale, and have gone into an era of market abuse associated with a non-competitive marketplace controlled by monopolistic packers.” The Senate Judiciary Committee has yet to announce any intention or time frame in which to launch an investigation into the U.S. meatpacking industry. Nation’s four largest beef packers In 2001, Arkansas poultry giant Tyson Foods, bought IBP Inc. (Iowa Beef Processors) for $3.2 billion, making Tyson the world’s second-largest producer of chicken, beef and pork. The company operates 123 food processing plants worldwide and controls roughly 26 percent of U.S. beef production. Tyson Foods manufactures a variety of prepared food products for KFC, Taco Bell, McDonald’s, Burger King, Wendy’s, Wal-Mart, Kroger and IGA. With revenues of more than $120 billion in 2015, Cargill Inc. is the United States’ largest privately owned company. It runs the world’s largest flour-milling operation, is responsible for roughly a quarter of all U.S. grain exports and is a leading global distributor of soy beans, corn syrup, palm oil, chocolate and livestock feeds. Cargill’s diversified portfolio includes energy, steel, transport and financial services. The company also supplies about 22 percent of the U.S. domestic meat market. Brazilian corporation JBS was already the largest beef packer in South America when it purchased Swift & Company, the third largest U.S. beef packer in 2007. One year later, JBS announced plans to acquire National Beef Packing Company and Smithfield Beef Group, the nation’s fourth- and fifth-largest beef packers. These acquisitions would have given JBS a 30 percent stake in the U.S commercial beef market, but JBS dropped its plans to purchase National Beef after 16 states (including Montana) filed a complaint with the Department of Justice. JBS currently controls about 20 percent of U.S. beef production. National Beef Packing Company began in 1992 after member-owned agricultural supply company Farmland Industries bought one of the nation’s largest meatpacking plants in Dodge City, Kan. National Beef evolved to become one of the largest exporters of U.S. beef to the Pacific Rim. In 2011, the company’s majority owners approved the sale of 79 percent of National Beef to Leucadia National, a U.S. holding company specializing in mining, telecommunications, healthcare, banking and real estate. National Beef currently controls about 12 percent of the U.S. beef market. Officials weigh in on 2015 cattle price collapse Errol Rice, executive vice president Montana Stockgrowers Association: “MSGA does not have reason to believe at this time that the end of 2015 decline in the cattle market had a direct correlation to concentration in the beef processing industry. It is also important to note that all of the major beef processors are already under strict antitrust guidance from the U.S. Justice Department as a way to prevent collusion in the market. The market decline based upon analysts we have talked to had more to do with economic fundamentals such as excess supply of beef, lower consumer demand and a decline in international exports due to an increase in U.S. currency value.” Montana Gov. Steve Bullock: “The Packers and Stockyards Act is almost 100 years old, and in the last century we have seen greater consolidation and concentration in the industry, not less. Montana’s agricultural producers deserve a fair price for their products free from the potential of interference from large corporate collusion and anti-trust activities. We should do all we can to make sure that’s the case. We should also look for solutions closer to home, and not dependent upon what happens in Washington. We should explore all options that keep more of the money in the pockets of the producers, and more of the food dollar here in Montana.” Mike Martin, director of communications, Cargill Inc.: “In recent months there has been volatility in numerous commodities in the agricultural and energy markets, typically driven by supply and demand. This has led to downward pressure across many commodity markets. We look forward to working with interested policymakers, and we understand the challenges faced by U.S. ranchers and farmers with the current market conditions.” Montana Sen. Jon Tester: “Consolidation in the marketplace hurts our free market system and denies folks in production agriculture a fair price. If there has been any illegal activity, we need to get to the bottom of it. Congress has a role to play in ensuring that the laws we pass strengthen family farms and ranches and consumers.” Read or Share this story: http://gftrib.com/1Xz2ylk
4 of 5
7/19/17, 3:00 PM
U.S. cattlemen see opportunity to reopen JBS anti-trust issue | Food Safe...
1 of 2
http://www.foodsafetynews.com/2017/06/cattlemen-see-opportunity-to-r...
U.S. cattlemen see opportunity to reopen JBS antitrust issue By News Desk | June 12, 2017 Some U.S. cattle ranchers are seeing an opportunity in the way JBS Corp. has gotten itself tied up in Brazil’s political scandal. JBS USA is the wholly owned subsdiary of JBS S.A., the Brazilian corporation that is the world’s largest fresh beef and pork processor with sales of $52.3 billion in 2016, The cattlemen are asking for a U.S. Department of Justice investigation into JBS’s cattle procurement practices, saying the company’s “business model relied heaily on unlawful and othe corrupt practices to influence government actions and policies as well as to influence decisions by government regulated entities…” The request was made this past week in an 11-page letter from the Billings, MT-based R-CALF United Stockgrowers of America. It was sent to President Trump, Senate Judiciary Committee Chairman Charles Grassley, Attorney General Jeff Session, and Secretary of Agriculture Sonny Perdue. The letter, signed by R-CALF CEO Bill Bullard, urges the government to “reject any type of leniency” with JBS. It further calls for review of previous decisions that favored JBS in DOJ antitrust reviews. JBS acquired most of its beef processing assets in North American by purchasing Swift in 2007, the Smithfield Beef Group and Five Rivers Cattle Feeding in 2008, and Pilgrim’s Pride in 2009. A DOJ investigation of its U.S. activities would add to the JBS management, financial, and image crisis that’s been boiling over for the last month since former JBS Chairman Joesley Batista turned a tape recording over to authorities that sounded as if Brazil’s President Michel Temer was endorsing the payment of bribes and hush money to inspectors and others. Batista resigned as JBS Chairman and from its Board of Directors. Temer remains as President of Brazil after the nation’s top electoral court Friday dismissed his removal from office by a 4-3 vote. Also on Friday, JBS Corp. announced the sale of its operations in Argentina, Uruguay and Paraguay to South American rival Minera Corp. for $300 million. The transaction is expected to close next month.
7/19/17, 3:01 PM
U.S. cattlemen see opportunity to reopen JBS anti-trust issue | Food Safe...
2 of 2
http://www.foodsafetynews.com/2017/06/cattlemen-see-opportunity-to-r...
The sale was likely in reaction to pressure by creditor banks on JBS, which has a net debt of around $14.6 billion. JBS USA assets, including Pilgrim’s Pride, are other potential sources of cash. Pilgrim’s Pride has about a 20 percent share of the U.S. poultry market. Also on Friday, Brazil’s Federal Police conducted a search and seizure operation at the headquarters of JBS S.A. and an associated company. Four unnamed people were detained for questioning about potential insider trading. Both JBS Corp. and J&F Investments, owned by the Batista brothers, previously entered into so-called leniency agreements with federal prosecutors. JBS agreed to pay a fine of $183.8 million, while J&F agreed to pay $3.2 billion over 25 years. The J&F “leniency” fine is said to be the largest in Brazil’s history and represents bribes and kickbacks to 1,829 Brazilian politicians. The fines between JBS and J&F were structured to protect JBS minority shareholders. The Batista brothers admitted bribing nearly 1,900 politicians, including Temer and his two predecessors.
© Food Safety News More Headlines from Enforcement »
7/19/17, 3:01 PM
JBS restructures for larger global reach - Meat & Poultry | MEAT+POULTRYhttp://www.meatpoultry.com/articles/news_home/Global/2016/08/JBS_re...
1 of 7
7/19/17, 3:26 PM
JBS restructures for larger global reach - Meat & Poultry | MEAT+POULTRYhttp://www.meatpoultry.com/articles/news_home/Global/2016/08/JBS_re...
2 of 7
7/19/17, 3:26 PM
JBS restructures for larger global reach - Meat & Poultry | MEAT+POULTRYhttp://www.meatpoultry.com/articles/news_home/Global/2016/08/JBS_re...
3 of 7
7/19/17, 3:26 PM
JBS restructures for larger global reach - Meat & Poultry | MEAT+POULTRYhttp://www.meatpoultry.com/articles/news_home/Global/2016/08/JBS_re...
4 of 7
7/19/17, 3:26 PM
JBS restructures for larger global reach - Meat & Poultry | MEAT+POULTRYhttp://www.meatpoultry.com/articles/news_home/Global/2016/08/JBS_re...
5 of 7
7/19/17, 3:26 PM
Batista Bonds Worst in Emerging Markets on JBS Debt Concerns - Blo...
2 of 5
https://www.bloomberg.com/news/articles/2017-05-23/batista-bonds-wor...
➞ ➞
7/19/17, 3:03 PM
Batista Bonds Worst in Emerging Markets on JBS Debt Concerns - Blo...
3 of 5
https://www.bloomberg.com/news/articles/2017-05-23/batista-bonds-wor...
7/19/17, 3:03 PM
Batista Bonds Worst in Emerging Markets on JBS Debt Concerns - Blo...
4 of 5
https://www.bloomberg.com/news/articles/2017-05-23/batista-bonds-wor...
7/19/17, 3:03 PM
Batista Bonds Worst in Emerging Markets on JBS Debt Concerns - Blo...
5 of 5
https://www.bloomberg.com/news/articles/2017-05-23/batista-bonds-wor...
Terms of Service Trademarks Privacy Policy Š2017 Bloomberg L.P. All Rights Reserved Careers Made in NYC Advertise Ad Choices Website Feedback Help
7/19/17, 3:03 PM