jsl sa logistics credit report 24 october 2017 brazil credit report ii... · for the acquisition of...

Credit Update DW-LA 24 October 2017

Credit Report 24 October 2017 Brazil

JSL SA Logistics

JSL: NEW USD BOND EXTENDS DEBT MATURITIES, ALLOWS FOCUS ON DELEVERING

JSL extended its maturity profile and increased its cash position by BRL 1.42bn in July through the issuance of USD 325m (BRL 1.02bn) in bonds maturing July 2024, and BRL 400m in domestic debentures at its Movida rental car subsidiary, which mature 2019-2022. The Brazilian transportation and logistics specialist had a cash and equivalents balance of BRL 1.9bn as of 30 June. It is in the process of addressing BRL 2.79m in debt maturities through December 2018 via prepayments and extensions. JSL is also in negotiations with creditors to extend debt maturities totaling BRL 3.9bn for the years 2019-2021.

Net debt declined to BRL 5.17bn at June 2017 from BRL 5.26bn at December 2016. Net debt to EBITDA reached 4.76x for the LTM ended June 2017, compared to 5x for 2016, and management plans to continue focusing on deleveraging in order to stay within covenant limits. The bond indenture contains a covenant that limits the company’s ability to incur new debt if leverage exceeds 4.75x through 31 December 2018.

Declines in capital expenditures net of asset sales

The company’s cash flow statement for 2016 includes BRL 1.79bn for the acquisition of property, plant and equipment (PP&E). In addition, it took on BRL 775.8m of government lender Finame’s loans and capital leases for financing PP&E purchases. Movida accounted for BRL 1.74bn of capital expenditures in 2016. Movida’s capex will decline as the pace of growth slows relative to the two-year period ended June 2017. The Movida fleet increased to 70,843 cars at June 2017 from 54,816 cars at June 2016.

Revenue from asset sales totaled BRL 1.69bn for the LTM ended June 2017 and BRL 1.39bn for 2016. Movida accounted for 75% of asset sales for 2016. The number of cars sold by Movida increased to 20,009 for 1H17 from 15,673 for 1H16. Management noted that capex net of asset sales reflects investment growth by the company. JSL estimates capex net of asset sales to decline to BRL 650m for 2017 from BRL 1.2bn for 2016.

Potential IPO of heavy assets subsidiary

JSL is in preliminary talks with banks for the potential IPO of the Rental and Commercialization of Heavy Assets subsidiary, consisting of the heavy machinery and heavy vehicles and tractors operations of the JSL Logistica Management and Outsourcing segment. These operations account for approximately 20% of JSL Logistics revenues. The Management and Outsourcing segment generated revenues of BRL 1.06bn for 2016 and BRL 552.9m for the six months ended June 2017.

Funds from the IPO would improve the capital structure and support vehicle growth in the Heavy Assets segment. Clients are seeking financing alternatives for heavy assets other than Finame, as the government has stopped subsidizing these loans. The carve-out of the operations would also include some heavy Authorized Vehicle Dealerships (AVDs) to process the sale of used assets. JSL could also apply proceeds to delevering itself. Plans are for the company to maintain a controlling interest and to continue managing the subsidiary.

BUSINESS OVERVIEW

JSL is the leading logistics services provider in Brazil in terms of net revenues. The company employs a flexible and integrated business model to offer customized services to Brazilian clients operating in more than 16 economic sectors.

Founded in 1956 as Julio Simoes Logistica, JSL has had clients for several decades. Movida is the second-largest Brazilian rent-a-car provider in terms of revenue and fleet size. JSL divides operations into the segments of Logistics, AVDs, Leasing and Movida, and attempts to generate cross-selling opportunities and synergies between them.

Contracts for Logistics vary between two and 10 years, with an average of five years. The principal currency denomination for contracts is the BRL. The majority of contracts in the Logistics segment have annual price adjustment clauses, with adjustments based on inflation associated with the components representing the cost structure of the contract. Management noted that the renewal of logistics contracts is historically close to 90%.

RECENT DEBTWIRE COVERAGE

JSL secures option to purchase Borgato companies (19-October-2017) JSL eyes IPO for truck and machinery subsidiary (22-September-2017) JSL to repay debt maturing through December 2018, starts talks to extend longer maturities - CFO (11-August-2017) JSL’s proposed senior notes of USD 325m rated BB by Fitch (19-July-2017) JSL’s proposed notes of USD 325m rated BB by S&P (19-July-2017)

INTERNATIONAL BONDS

Instrument Currency Coupon

(%) Maturity

Original amount (USDm)

Amount outstanding

(USDm) Price Yield (%)

Z-spread (bps)

Rating: M/S&P/F

2024 Senior Unsecured USD 7.75% 26-Jul-2024 325 325 106.69 6.51 423.2 nr / BB / BB

Source: Debtwire Analytics, market data as of 23 October 2017

LATIN AMERICA CREDIT RESEARCH

Marcelo Burone Credit Analyst +1 212-500-1392 [email protected]

https://www.debtwire.com/intelligence/view/2522062








JSL SA Logistics

The largest client has more than 10 contracts with JSL, which does not have any clients that exceed 8% of gross revenues from logistics services. The company has contracts with top-tier companies in Brazil that have been clients for decades, including Suzano (for 61 years), Unilever (44 years), Caterpillar (42 years), Fibria (39 years), Danone (25 years), Volkswagen (22 years) and Ford (22 years).

Simpar SA, which holds 56.5% of JSL’s capital stock, directly controls the company. In turn, JSL Chairman and CEO Fernando Antonio Simoes, who holds 52% of Simpar voting capital and also 10.3% of JSL capital stock, controls Simpar.

Logistics segment

JSL has offered general cargo transportation services since 1956, and a wide range of integrated supply-chain services since 1995. These include supply-chain management, such as inbound logistics to the plant gate from the supplier, in-plant logistics and storage, inventory management, outbound logistics and delivery of finished products to the final point of sale. The Logistics segment represented 60% of net revenue before eliminations from intra-group transactions for 2016. Within the segment, supply chain and fleet management services represented 60% (BRL 2.5bn) and 25% (BRL 1.06bn) of revenues, respectively.

Supply chain services include the transportation of cargo and provision of logistics services. Principal clients are in the automotive, pulp and paper, agriculture, food and beverage, and mining industries. They include MAN, Volkswagen, Toyota, Ford, GM, Cummins, Fibria, Suzano, Vale and Cosan. As of March 2017, the fleet for supply-chain services included 1,400 tractor trucks and 3,200 trailers. Fleet management services include fleet customization and leasing. As of March 2017, this segment operated a company-owned fleet of 4,600 heavy vehicles and tractors, and 15,000 light vehicles. JSL’s clients include Vale, Cemig, Bunge, Bimbo, Light and Ultragaz.

JSL Concessionarias (AVD)

JSL Concessionarias operates 16 light AVDs and 13 heavy AVDs. This segment represented 12.3% of net revenue before eliminations from intra-group transactions for 2016. Leasing is the smallest segment created to foster sales in JSL’s AVDs and used vehicle stores (Seminovos), by providing financing alternatives to customers. This segment represented 0.4% of net revenue before eliminations from intra-group transactions for 2016.

Movida

JSL acquired Movida in 2013 in order to enter the rent-a-car (RAC) business, and has since offered RAC and fleet management services throughout Brazil. This segment represented 27.3% of net revenues before eliminations from intra-group transactions for 2016.

Since acquiring Movida, JSL has established its position as the second-largest player in the rent-a-car market, as measured by number of vehicles. Movida’s fleet increased to 70,843 vehicles as of 30 June 2017 from 2,400 in 2013. JSL does not have contractual agreements with auto manufacturers for the purchase of vehicles.

The fleet of 70,843 vehicles consisted of 56,765 cars in the RAC operation and 14,078 cars in the fleet management operation. RAC retail stores increased to 183 as of 30 June from 29 in 2013. As of 30 June, the utilization rate for rental vehicles was 74%. Management indicated that individuals represent the largest portion of the RAC business.

Movida’s BRL 567.1m IPO on 8 February 2017 raised BRL 506.1m from the issuance of new shares in a primary offering, and BRL 61m from the sale of Movida shares owned by JSL in a secondary offering. JSL maintains control of Movida with 65.59% ownership and consolidates its results. The allocation of proceeds from the primary offering were to: (i) finance the growth of operations by improving Movida’s capital structure and strengthening liquidity; (ii) pay dividends already declared to shareholders, including JSL; and (iii) support Movida’s growth plan in the local market through fleet expansion and new store openings.

FIGURE 1: LOGISTICS REVENUES BY BUSINESS LINE - LTM JUNE 2017

Dedicated Services

57.7%

Management and

Outsourcing23.0%

Passenger Transportation

10.7%

General Cargo7.1%

Other1.5%

Source: Debtwire Analytics, company filings

FIGURE 2: LOGISTICS REVENUES BREAKDOWN BY SECTOR - LTM JUNE 2017

Pulp and Paper14.7%

Automotive13.3%

0.0%

Public11.4%

Steel and Mining

9.9%

Food Industry9.6%

Agribusiness9.2%

Chemical7.3%

Passenger Transportation

6.8%

Other17.8%




JSL SA Logistics

JSL also operates a network of 60 stores for used vehicles (Movida Seminovos) under the Movida segment, which has experienced a considerable increase from eight stores in June 2015. Movida has a financing and insurance (F&I) desk, where the customer information is forwarded during the sale process. The F&I desk consults with various financial institutions in order to provide financing to final customers.

Sale of assets used to provide services

JSL recognizes as revenue the sale of assets used to provide services, including light, utility and heavy vehicles, machinery and equipment removed from active service and subsequently placed on sale. The renewal of the light and utility vehicle fleet generally takes place every two or three years within the Logistics segment. The renewal of trucks and tractor units is generally every five years. JSL depreciates 100% of the value of heavy machinery over the life of the contract. For Movida, the holding period is one year.

The increase in points of sale has led to faster turnover of the fleet. Revenue from asset sales increased 46.6% (BRL 293.5m) to BRL 923.2m for 1H17, which accounted for 23% of total net revenues prior to the application of deductions (taxes, returns and discounts), compared to BRL 629.7m for 1H16. The higher revenues for 1H17 led to an increase from asset sales to BRL 1.69bn for the LTM ended June 2017, from BRL 1.39bn for 2016. Revenues from asset sales represented 21.5% of total net revenues prior to the application of deductions for the LTM ended June 2017, and 18.8% for 2016.

Movida represented a substantial portion of asset sales with revenues of BRL 719.1m (79% of total asset sales) for 1H17 and BRL 494.9m (79% of total asset sales) for 1H16. Asset sales from Movida accounted for 75% and 74% of total sales for the LTM ended June 2017 and the year 2016, respectively.

RECENT PERFORMANCE

Revenue increases from Logistics and Movida operations

JSL reported an increase in revenues of 13.9% (BRL 437.4m) to BRL 3.59bn for 1H17 from BRL 3.15bn for 1H16. The Logistics segment accounted for BRL 2.04bn, or 57% of total 1H17 net revenues, a 5.1% increase (BRL 99.9m) from 1H16 revenues of BRL 1.94bn. An increase in gross revenues from Same Contracts (RSC) of 5.9%, (BRL 106.9m) to BRL 1.92bn for 1H17 from BRL 1.82bn for 1H16, resulted mainly from the Automotive, as well as Pulp and Paper segments. Gross revenues of BRL 1.92bn from RSC accounted for 88.7% of Logistics gross revenues from services totaling BRL 2.17bn for 1H17.

Movida’s net revenues of BRL 1.2bn represented an increase of 38.4% (BRL 334.7m) from 1H16 revenues of BRL 870.9m. The expansion of the company’s fleet and RAC service centers was the reason for the increase. The total fleet increased to 70,843 cars at June 2017 from 54,816 cars at June 2016, and at June 2017 consisted of 56,765 in the RAC operation and 14,078 in the fleet management operation. RAC service centers increased to 183 at June 2017 from 166 at June 2016. The utilization rate increased to 74.3% for 2Q17 from 73.6% for 2Q16.

The rise in fleet and RAC centers led to an increase in revenues from RAC operations of 36.9% (BRL 105.3m) to BRL 390.5m for 1H17 from BRL 285.2m for 1H16. Revenues from fleet management increased 5.7% (BRL 5.2m) to BRL 95.9m for 1H17 from BRL 90.7m for 1H16. JSL has been focusing on contracts with higher profitability in fleet management, and has achieved an increase in monthly revenue per vehicle to BRL 1,378 per month for 2Q17 from BRL 1,184 in 2Q16.

Movida revenues from used car sales increased 45.3% (BRL 224.2m) to BRL 719.1m for 1H17 from BRL 494.9m for 1H16. In addition, Movida Seminovos stores increased to 60 at June 2017 from 43 at June 2016. Cars sold increased 27.7% to 20,009 cars for 1H17 from 15,673 cars in 1H16. Total fleet sold through Seminovos stores increased to 60% for 2Q17, compared to 44.8% in 2Q16.

FIGURE 3: HISTORICAL EBITDA MARGIN (BRLM)

5,990 6,523 6,961

18.2%

16.3%15.6%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FY15 FY16 LTM 2Q17

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Net Revenues EBITDA margin


FIGURE 4: HISTORICAL LEVERAGE (NET DEBT TO EBITDA—BRL M)

4,658 5,258 5,169

4.27x

4.96x4.76x

0

1,000

2,000

3,000

4,000

5,000

6,000

FY15 FY16 LTM 2Q17

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0xNet debt Net debt/EBITDA




JSL SA Logistics

Management attributed an increase in the average price of cars sold of 13.6%, to BRL 35,989 during 1H17 from BRL 31,678 in 1H16, to the choice of models and a change in the sales channel mix.

Increases in costs lead to decline in margins

The costs of services for Logistics increased 4.3% (BRL 61.9m) to BRL 1.51bn for 1H17 from BRL 1.45bn in 1H16. Higher costs related to independent contractors and third parties, an amount that increased 25.2% (BRL 83.4m) to BRL 414.1m for 1H17 from BRL 330.7m for 1H16, were the principal reason for the increase. A rise in Logistics vehicle sales led to an increase in the cost of sales to BRL 200.7m for 1H17 from BRL 117.3m for 1H16. The gross profit margin for Logistics declined to 16.1% for 1H17 from 19.3% for 1H16, and the EBITDA margin declined to 21.7% for 1H17 from 23.1% for 1H16. Logistics EBITDA declined to BRL 444.1m for 1H17 from BRL 449.3m for 1H16.

Total costs for Movida increased (BRL 234.1m) to BRL 887.2m for 1H17 from BRL 653.1m for 1H16. A higher volume of cars sold for Movida led to an increase in cost of sales of 46% (BRL 215.4m), to BRL 682.2m for 1H17 from BRL 466.8m for 1H16. Fleet expansion, new store openings and maintenance of the fleet for sale were the

reasons for a 1.3% (BRL 23.9m) increase in costs for the RAC segment, to BRL 172m for 1H17 from BRL 148.1m in 1H16.

An increase in general and administrative expenses for RAC, to BRL 118.4m for 1H17 from BRL 57.4m for 1H16, resulted from an expansion of the administrative team, as well as increases in the provision for damaged vehicles, doubtful accounts and stolen vehicles. EBITDA margin for RAC declined to 30.4% for 1H17 from 34% for 1H16.

Higher administrative expenses from RAC, as well as an increase in Movida Seminovos stores, caused an increase in administrative expenses to BRL 197.4m for 1H17 from BRL 123m for 1H16. The EBITDA margin for Movida declined to 13% for 1H17 from 15.8% for 1H16. Higher revenues led to an increase in EBITDA for Movida to BRL 156.6m for 1H17 from BRL 137.4m for 1H16.

TABLE 1—CONSOLIDATED FINANCIAL SUMMARY (BRL M)

FY15 FY16 LTM 2Q17 1H16 1H17

Logistics 3,907.5 4,179.7 4,279.6 1,944.5 2,044.4

Movida 1,271.4 1,893.2 2,227.9 870.9 1,205.6

Dealerships 1,009.6 835.5 802.6 430.3 397.4

Leasing, I/C, Deductions (198.6) (385.3) (349.6) (94.8) (59.1)

Consolidated Net Revenues 5,989.9 6,523.1 6,960.5 3,150.9 3,588.3

Revenue from Services 5,656.5 6,010.1 6,163.2 2,936.1 3,089.2

Revenue from Asset Sales 905.0 1,393.9 1,687.4 629.7 923.2

Deductions (Taxes / Returns / Discounts) (571.6) (880.9) (889.9) (415.2) (424.2)

Consolidated EBITDA 1,092,1 1,060.9 1,085.3 587.4 611.8

Consolidated EBITDA % (of net revenues) 18.2% 16.3% 15.6% 18.6% 17.1%

Cost of Sales of Assets used in services rendered 877.6 1,289.1 1,570.5 594.3 875.7

Consolidated Adjusted EBITDA 1,969.7 2,350.0 2,655.8 1,181.7 1,487.5

Consolidated Adjusted EBITDA % (of net revenues) 32.9% 36.0% 38.2% 37.5% 41.5%

Interest Income 155.7 161.4 143.8 80.3 62.7

Interest Expense (657.7) (777.6) (769.9) (379.9) (372.2)

Other + Non-Recurring + Derivative + F/X (14.3) (132.0) (122.9) (33.4) (24.3)

Net Financial Result (516.3) (748.2) (749.0) (333.0) (333.8)

Interest paid (654.4) (591.7) (763.2) (305.1) (476.6)

Free Cash Flow 566.5 297.9 152.9 (67.5) (212.5)

Cash and Equivalents + ST Securities 1,676.3 1,043.2 1,906.7

Total Debt (Including Finance Leases and Confirming Payable) 6,334.5 6,300.8 7,076.1

Net Debt to EBITDA 4.3 5.0 4.8

Net Debt to Adjusted EBITDA 2.4 2.2 1.9

Adjusted EBITDA to Net Interest Expense 3.9 3.8 4.2

EBITDA to Interest Expense 1.7 1.4 1.4

Source: Company Filings, Debtwire Analytics.



JSL SA Logistics

INDEBTEDNESS

Debt composition

In July, JSL issued USD 325m (BRL 1.02bn) in bonds maturing July 2024, and BRL 400m in domestic debentures at its rental car subsidiary of Movida maturing 2019-2022. Management stated that financial policy does not include having exposure to foreign currency, and accordingly, JSL has hedged the total amount of USD bond proceeds (principal and interest) brought to its Brazilian operations.

As of 30 June 2017, the company had indebtedness totaling BRL 7.08bn, consisting of BRL 1.77bn in short-term debt and BRL 5.31bn in long-term debt. Components of debt at June 2017 consisted of financings totaling BRL 4.23bn, debentures totaling BRL 1.96bn, suppliers financing of BRL 580.3m and financial leases of BRL 304.1m.

The company is in the process of addressing BRL 2.79m in debt maturities through December 2018 via prepayments and extensions. It is prioritizing the reduction of its exposure to government lender Finame (BRL 1.27bn outstanding at 30 June), agribusiness receivables certificates (BRL 565.6m at 30 June) and domestic debentures (BRL 1.96bn at 30 June). JSL is also in negotiations with creditors to extend maturities totaling BRL 3.9bn for the years 2019-2021.

The principal components of financing as of 30 June included bank credit bills (CCBs), Finame loans and agribusiness receivables certificates (CRAs). CCBs outstanding at 30 June totaled BRL 1.4bn (19.8% of total debt). The raising of CCBs with financial institutions is for financing working capital and the purchase of vehicles, machinery and equipment. These agreements have quarterly or semi-annual maturities until August 2023.

Finame loans outstanding at 30 June totaled BRL 1.27bn (17.9% of total debt). These loans finance investments in vehicles, machinery and equipment, and have maturities through January 2025. JSL signs new agreements, which the financed assets collateralize, on a monthly basis for the purchase of new assets under the fleet renewal process.

JSL had BRL 565.6m (8% of total debt) CRAs, outstanding at 30 June, backed by receivables from agribusiness clients. The company issued BRL 270m in June 2017, with installments due in both June 2019 and June 2020.

The largest debentures are the BRL 483.8m (6.8% of total debt) sixth issuance due July 2020, and the BRL 417.2m (5.9% of total debt) seventh due June 2021. During 1H17, JSL completed the 10th and 11th issuances of BRL 359.3m and BRL 393.7m, respectively, both of which mature in March 2021.

JSL and its subsidiaries entered into suppliers financing agreements to manage the amounts to be paid for the purchase of vehicles to car makers. Through this operation, suppliers transfer the right to receive the payment of bills for vehicle sales to the financial institutions. The balance of BRL 580.3m (8.2% of total debt) at June 2017 is due April 2018.

Improvement in leverage for LTM ended June 2017

Consolidated EBITDA reported by JSL of BRL 611.8m for 1H17 represented an increase of 4.2% from 1H16 EBITDA of 587.4m. The higher EBITDA for 1H17 led to an improvement in LTM EBITDA to BRL 1.09bn from BRL 1.06bn for 2016.

Total debt of BRL 7.08bn at June 2017 represented an increase from BRL 6.3bn at December 2016. The cash and equivalents balance increased to BRL 1.9bn at June 2017 from BRL 1.04bn at December 2016. A decline in net debt and increasing EBITDA led to an improvement in leverage, with net debt to EBITDA reaching 4.76x for the LTM ended June 2017 as compared to 5x for the year 2016. EBITDA to interest expense of 1.4 for the LTM ended June 2017 was comparable to full-year 2016.

The company presents an adjustment to EBITDA by adding the residual costs associated with the sale of fixed assets. These costs represent the write-off of assets at the time of sale, and accordingly, do not represent operational cash disbursements. The cost of sales of assets increased to BRL 875.7m for 1H17 from BRL 594.3m for 1H16. Accordingly, adjusted EBITDA increased to BRL 1.49bn for 1H17 from BRL 1.18bn for 1H16. The higher adjusted EBITDA for 1H17 led to an improvement in LTM adjusted EBITDA to BRL 2.66bn from BRL 2.35bn for 2016.

As a result of the decline in net debt and increase in adjusted EBITDA, net debt to adjusted EBITDA improved to 1.9x for the LTM ended June 2017 as compared to 2.2x for the year 2016. Adjusted EBITDA to net interest expense improved to 4.2x for the LTM ended June 2017, as compared to 3.8x for the year 2016.

Some of the CCB agreements require compliance with certain financial indicators based on the consolidated performance of JSL. The committed limits are net debt to adjusted EBITDA of less than 3.5x, and adjusted EBITDA to net interest expense of more than 2x. The company was in compliance with these covenants for both the LTM ended June 2017 and the year 2016.

FIGURE 5: DEBT AMORTIZATION SCHEDULE - PRO FORMA FOR FUND RAISING 3Q17 (BRL M)

1,783

1,008

1,550 1,481

975

477

131

1,045

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Jul 17 -Jun 18

Jul 18 -Dec 18

2019 2020 2021 2022 2023 2024 -2025




JSL SA Logistics

TABLE 2: BOARD OF DIRECTORS

Name Position Independent

Fernando Antonio Simoes Chairman No

Fernando Antonio Simoes Filho Director No

Adoberto Calil Director No


Cash generation

The principal source of cash flows for both the LTM ended June 2017 and the year 2016 was adjusted EBITDA, equal to BRL 2.66bn and BRL 2.35bn, respectively. The principal application of cash during these corresponding periods was for capital expenditures of BRL 2.14bn and BRL 1.79bn. Interest payments for the corresponding periods totaled BRL 763.2m and BRL 591.7m.

Free cash flow totaled BRL 152.9m for the LTM ended June 2017, and BRL 297.9m for the year 2016. Excluding growth capital expenditures, JSL generated free cash flow of BRL 894.6m and BRL 987.2m for the corresponding periods.

Principal non-cash transactions consist of the incurring of finance leases and Finame loans for the acquisition of PP&E. These transactions totaled BRL 625.6m and BRL 775.8m for the LTM ended June 2017 and the year 2016, respectively.

OWNERSHIP

Simpar SA, which holds 56.5% of JSL’s capital stock, directly controls the company. In turn, JSL Chairman and CEO Fernando Antonio Simoes controls Simpar with 52% of its voting capital. Simoes also directly holds 10.3% of JSL capital stock. The son of founder Julio Simoes, he has worked with JSL since 1981, and was first elected to the board of directors in November 2009.

Other holders of Simpar shares, with holdings of 12% of voting capital each, are members of the Simoes family: Julio Eduardo, Jussara Elaine, Marita and Solange Maria.

Fernando Antonio Simoes Filho, the son of Fernando Simoes, is a member of the board of directors. He joined JSL in 2003, working as an adviser to the CEO for five years. Since 2012, Simoes Filho has served as executive director of JSL’s dealer network.

Denys Marc Ferrez is the CFO and investor relations officer. He joined JSL as an executive director in charge of the Financial and Commercial divisions in May 2008. Eduardo Pereira joined JSL in 2004, and has been an executive officer in charge of the Commercial and Fleet Management division, as well as the Outsourcing division, since January 2007.

FIGURE 6: JSL OWNERSHIP

Simpar56.5%Float

25.8%

Fernando Simoes10.3%

Simoes Family7.2%

Treasury0.2%

Source: Company filings, Debtwire Analytics

TABLE 3: SENIOR MANAGEMENT

Name Position Appointment

Fernando Antonio Simoes CEO 2009

Denys Marc Ferrez CFO 2008

Eduardo Pereira Commercial and Fleet Management 2007




JSL SA Logistics

FINANCIAL SUMMARY (BRL M)

FY 2016 LTM

2Q16 LTM

2Q17

Δ %

(LTM 2Q16 -

LTM 2Q17)

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

Δ %

(2Q16 - 2Q17)

Net Revenue 6,523.1 6,253.0 6,960.8 11.3% 1,537,7 1,564.7 1,494.9 1,655.7 1,677.7 1,694.8 1,757.8 1,830.5 10.6%

Cost of Sales (5,225.8) (4,992.8) (5,598.6) 12.1% (1,233.3) (1,274.8) (1,157.6) (1,327.9) (1,355.3) (1,384.9) (1,396.6) (1,461.7) 10.1%

Selling and Admin Exp (669.7) (569.6) (715.8) 25.7% (124.3) (133.3) (152.8) (159.3) (154.4) (203.2) (175.7) (182.5) 14.6%

Other Income (Exp) Net (128.8) (53.0) (125.7) 137.2% (13.4) (9.5) (20.7) (8.4) (23.4) (76.4) (14.3) (11.7) 39.3%

Financing Inc (Exp) Net (748.3) (627.3) (749.0) 19.4% (152.6) (141.7) (147.1) (186.0) (185.1) (230.1) (180.7) (153.1) (17.7%)

Income Tax (Exp) / Ben. 66.3 (0.9) 57.8 (5.9) 1.6 (5.6) 9.0 13.5 49.4 2.5 (7.6)

Net Income (Loss) (183.2) 9.4 (170.5) 8.2 7.0 11.1 (16.9) (27.0) (150.4) (7.0) 13.9

Total Assets 8,868.3 8,802.4 10,103.0 14.8% 8,357.0 8,742.6 8,574.1 8,802.4 8,975.5 8,868.3 9,306.6 10,103.0

Current Assets 2,716.6 3,224.3 3,865.4 19.9% 3,104.9 3,371.0 2,987.9 3,224.3 3,220.5 2,716.6 3,235.6 3,865.4

Cash and Equivalents 585.9 630.8 557.7 (11.6%) 778.8 951.2 817.9 630.8 640.6 585.9 552.5 557.7

Securities 457.3 694.3 1,349.1 94.3# 542.6 725.1 409.6 694.3 681.8 457.3 890.4 1,349.1

Accounts Receivable 1,021.4 1,090.6 1,165.6 6.9% 1,079.1 1,007.8 986.9 1,090.6 1,084.0 1,021.4 1,013.2 1,165.6

Inventories 164.6 165.7 164.8 (0.5%) 217.2 199.3 179.3 165.7 172.6 164.6 172.6 164.8

Recoverable Taxes 95.6 173.0 166.4 (3.8%) 177.7 178.8 170.7 173.0 162.4 95.6 149.2 166.4

Other Current Assets 60.6 136.3 118.5 (13.1%) 123.5 82.5 155.2 136.3 105.7 60.6 119.5 118.5

Assets Avail. for Sale 331.2 333.6 343.3 2.9% 186.0 226.3 268.3 333.6 373.4 331.2 338.2 343.3

Non-Current Assets 6,151.7 5,578.1 6,237.6 11.8% 5,252.1 5,371.6 5,586.2 5,578.1 5,755.0 6,151.7 6,071.0 6,237.6

PP&E 5,386.7 5,003.8 5,566.3 11.2% 4,629.2 4,764.3 4,970.6 5,003.8 5,128.9 5,386.7 5,398.8 5,566.3

Intangibles 346.0 382.6 345.9 (9.6%) 323.5 361.8 382.9 382.6 382.5 346.0 343.2 345.9

Investments 1.2 0.2 1.2 1.5 1.5 1.6 0.2 1.2 1.2 1.2 1.2

Other Non-Current 417.8 191.5 324.2 69.3% 297.9 244.0 231.1 191.5 242.4 417.8 327.8 324.2

Total Liabilities 8,259.4 8,018.0 8,933.7 11.4% 7,326.7 7,722.8 7,759.4 8,018.0 8,222.4 8,259.4 8,153.4 8,933.7

Current Liabilities 3,194.2 2,425.5 3,317.0 36.8% 2,452.0 2,414.2 2,546.5 2,425.5 2,877.4 3,194.2 3,016.5 3,317.0

Loans and Financing 888.9 635.3 849.0 33.6% 463.9 526.8 592.2 635.3 781.5 888.9 790.8 849.0

Debentures 142.2 70.4 181.9 158.4% 148.5 126.8 159.2 70.4 77.1 142.2 44.6 181.9

Leasing payable 165.7 168.2 157.7 (6.2%) 139.7 160.7 159.6 168.2 166.9 165.7 162.5 157.7

Suppliers 992.4 657.5 1,014.0 54.2% 522.7 505.2 607.8 657.5 714.5 992.4 989.7 1,014.0

Confirming Payable 551.4 409.1 580.3 41.9% 660.5 625.2 567.8 409.1 612.4 551.4 565.2 580.3

Other ST Liabilities 453.6 485.0 534.1 10.1% 516.7 469.5 459.9 485.0 525.0 453.6 463.7 534.1

Non-Current Liabilities 5,065.2 5,592.5 5,676.7 1.5% 4,874.7 5,308.6 5,212.9 5,592.5 5,345.0 5,065.2 5,136.9 5,676.7

Loans and Financing 2,957.2 3,389.3 3,380.8 (0.3%) 3,064.1 3,213.6 3,022.9 3,389.3 3,190.4 2,957.2 3,070.7 3,380.8

Debentures 1,406.4 1,506.3 1,780.0 18.2% 1,214.5 1,487.8 1,499.9 1,506.3 1,500.8 1,406.4 1,505.0 1,780.0

Leasing payable 189.0 198.8 146.4 (26.4%) 156.4 193.6 205.5 198.8 197.8 189.0 164.7 146.4

Other LT Liabilities 512.6 498.1 369.5 (25.8%) 439.7 413.6 484.6 498.1 456.0 512.6 396.5 369.5

Shareholders’ Equity 609.0 784.5 1,109.2 41.4% 1,030.4 1,019.9 814.5 784.5 753.4 609.0 1,153.4 1,109.2

EBITDA 1,060.9 1,170.5 1,085.5 (7.3%) 298.1 285.0 291.9 295.5 285.1 188.5 307.1 304.8 3.1%



JSL SA Logistics

Simpar (100% owned by

Simoes family) Free float

JSL SA

10.3%

Mogi Passes Com. de Bilhetes

Eletronicos Ltda

7.2%

JSL Corretora de Seguros

Ltda

Transrio Caminhoes e Motores Ltda

Avantes Veiculos Ltda

Ponto Veiculos Ltda

Original Veiculos Ltda

99.9%

Movida Gestao de Frotas SA

Movida Locacao de

Vehiculos SA

JSL Empreendimentos Imobiliarios Ltda

ISSUER GUARANTOR

Other members of Simoes family

Fernando Antonio Simoes

Treasury shares

56.5% 25.8% 0.2%

Riograndense Navegacao Ltda

JSL Investmentos em Concessionarias e Lojas de Veiculos e

Maquinas SA

JSL Locacoes de Maquinas e

Vehiculos Pesados Ltda

Quick Logistica Ltda. e Quick

Armazens Gerais

MedLog Prestacao de Servicos de

Logistica SA

CS Brasil - Public Services

Activities

JSL Europe

Yolanda Logistics Ltda

San Jose Passes Com. de Bilhetes Electronicos Ltda

JSL Holding Financeira

JSL Arrendamento Mercantil

Movida Participacoes SA

Consorcio 123

Consorcio Sorocaba

99.9%

99.9%

99.9%

100%

99.9%

99.9%

99.9%

100%

99.9%

50%

99.9%

65.6%

99.9%

99.9%

99.9%

99.9%

33%

50%

99.9%

45.9%

54.1%

100%


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