JBS moves primary listing to US: CFO explains why
Guilherme Cavalcanti, JBS CFO, joins Market Domination co-host Julie Hyman at the NSYE to outline the company's growth plans and its message to US investors.
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Indeed, I'm here with uh, Calvacante who is the global CFO of JBS which now has its primary listing here in the United States. Thank you so much for joining us.
Thank you.
For people who are in the US who might not be familiar with JBS, they're certainly familiar with your products. You're one of the biggest meatpackers in the world. You own an 80% stake in Pilgrim's Pride, the poultry company, mostly poultry company here in the US. What do you hope to achieve with this primary listing, which the company has been working on for quite some time?
Yeah, well, first of all, um, the the first thing that we want to achieve is to get uh, an access to a much broader investor base. So basically the the investor base that can invest uh with the SEC as our regulator is like four to five times larger, the whole emerging markets together. So first is to get access to the much broader investor base. And because again, as you mentioned, we are a big global company, we have more than 50% of our sales here in US. The second thing that we want to achieve having our primary listing here because part of that we could achieve the investor base through an ADR program, but the reason for having a primary listing here is that with that and having again a bigger presence here in US, we can also start to apply to be part of the main indexes like Russell, Crispy, Footsie and then one day S&P 500.
Yes, aspirations, right? Your CEO told analysts today that you expect sales to rise at an annual pace of about 4 to 6% over the next five years. Where does that growth come from? What does that growth trajectory look like for JBS?
Yeah, basically this is what's an exercise, first based on the past. So if you look at our the last 10 years, we'll grow an average of four to six percent or revenue. So it's basically to continue the trajectory. We are also investing around $1 billion per year in growth capex. So this is also part of the reason of this growth. And we are also investing the last years, we invested $3.3 billion since 2019 acquisitions. So also part of these growth will come from acquisitions as well.
Well, I was going to I'm glad that you mentioned that because um, I know that you continue to look around. You also spoke to analysts today and you said nothing was on your radar in the short term. Um, why not? And where would you be looking for opportunities? What kind of opportunities are you looking for in acquisition?
Okay. So first, we are looking acquisition all over the world. So mainly here in US and Europe in the prepared food segments because we want to downstream our production, get closer to the customer, more value-added brands. So that's one of our priorities. We started in the salmon business in Australia. So we can want to be relevant in salmon as we are in the other proteins. So those are also and then we start just very recently, we bought biggest South American company of eggs. So eggs is another venue of growth. So that's that's a lot of things and again as I mentioned there's nothing on the radar. Given evaluation is still high in terms of multiples and I think we have to be right to buy what I used to say, right asset for the right price. So and that's why so if has an opportunity again at the right price, then we will go for it, but now there's nothing on the radar.
I'm curious since you all are so heavily in the beef business and we know there has been increased price sensitivity, at least here in the United States with inflation and really globally as well. Have you seen any demand shifts and changes as a result of those beef prices going higher?
No, first, the demand even even with the higher prices, the demand for beef continues to be very strong if you look. Uh, but of course with the higher price, what we're seeing is uh, chicken sales are increasing. So I think last year was a record sales of chicken in US. So there's always this downtrend when the price of beef goes up. But I would say that the demand for all proteins are very strong.
And finally, Guilherme, I want to ask you about the the company's recent history a little bit because there have been some scandals in Brazil that you all are moving past at this point. But what is your message to US investors who perhaps are familiar with the company's recent history that you are clear of those kinds of issues?
Yeah, first again, this is not recently, uh, lots things happened eight, nine years ago. So I think this is history. Uh, since then, we start a very robust compliance program all over the world, training, so just to make sure that anything like that or that like that will never happen again.
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