JSL S A : Integrated Annual Report 2020

Message From The Management

Message

In 2020, we concluded our corporate restructuring and JSL resigned the role of holding company, to become an exclusively operating company with the largest and most integrated portfolio of logistics services in Brazil. Amid the restrictions imposed by the Covid-19 pandemic, we stayed focused on our strategy of generating sustainable value for our shareholders, society and the market in general, without neglecting the health and well-being of our employees and society.

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Identity

About JSL

JSL is domestic leader in highway logistics services - especially cargo transportation and logistics chain management - providing services to companies in the key economic sectors. In Brazil, it has over 200 branches in 19 states, in addition to 19 distribution centers. It is also present in Argentina, Chile, Uruguay and Paraguay.

In 2020, following the corporate restructuring, JSL embarked on a new growth cycle. This movement enhanced the company's strategic positioning as it began to operate with its own management, an independent budget, greater agility and focused exclusively on its area of operations.

Click here for the full profile of JSL.

DRIVERS

Business

Industrial and social integration services and solutions.

Mission

To provide services and logistics solutions with people committed to creating value for customers and shareholders while contributing to the development of the communities where it operates.

Vision

Maintain the position as logistics market leader, with a largest offering of services and innovative solutions recognized for their quality and which address customers' needs. To be recognized for having professionalized its management. To become the benchmark in the use and commercialization of assets.

VALUES

Customers

Understanding to serve, ensuring continuous relationships.

People

Make the difference in our business.

Work

Nothing gets built without it.

Simplicity

Objectivity of action, ensuring agility.

Profit

Essential for growth and perpetuity.

PRODUCTS AND SERVICES

Cargo transport

• Network of more than 100,000 independent contractor and third-party drivers.

• Technology that connects JSL's customers with the truck drivers and our customers' clients.

Urban distribution

• Last mile distribution with point of sales supply and return management

• Dry, refrigerated or frozen cargo, with on-line temperature control.

• Return trips from/to warehouses operated or not by JSL, or directly from the industry to the retail sector.

Dedicated logistics operations

• Closed circuit operations as part of the customer's production.

• High level of specialization and customization.

• High degree of technological integration and monitoring.

Warehousing services

• Management of 137,000 m2 of dedicated multi-customer warehouses.

• Recebimento, armazenamento, sequenciamento e abastecimento de linha de produção.

• Supply packaging and packaging equipment.

• Customer's sales systems connected to JSL for delivery within 24 hours.

2020 HIGHLIGHTS

• Following the corporate restructuring, JSL has become a company operating exclusively in logistics services and with its own development agenda.

• Initial Public Offering (IPO) on the Brazilian Stock Exchange, B3.

• Acquisition of a 75% equity stake in Fadel.

• Acquisition of 100% of the company Transmoreno.

VALUE GENERATION

STRATEGY AND MANAGEMENT MODEL

JSL is always alert to the opportunities for expansion, and it draws up objectives and targets for a three-year horizon.

The on-going guidelines are:

Expansion of the range of services with active customers - To boost opportunities for cross-selling, expanding the services provided through tailor-made innovative solutions.

Expansion and diversification of the customer portfolio- To offer innovative solutions in logistics services, both to new companies and sectors somewhat less explored.

Customization of services- To be at the customer's service, focusing on higher productivity and process optimization.

Introduction of services into the current portfolio- To develop new projects to comprise the current portfolio, enhancing logistics integration.

Sectorial diversification- To expand the opportunity for sustainable growth and mitigate possible risks, but without being dependent on any specific industry.

Acceleration of growth through strategic acquisitions- To grow the share of strategic segments and geographical regions, with new possibilities for cross-selling, in addition to organic growth.

Higher value-added services -To maximize the return on invested capital by adding new services with the same level of assets, or even with the slight necessity for investment to replace assets to expand the operation, which increases the aggregate amount of the agreement with the potential to generate more revenue.

Sustainability- To foster the incorporation of sustainability into the company's strategy, decision making and purpose, prioritizing how to maximize positive socioenvironmental impacts.

Click here and find out more about management and corporate governance at JSL.

BUSINESS MODEL

Capital as an input

Financial capital

• R$ 3,387 million in Gross Revenues

• Gross Investment of R$ 327.7 billion, of which R$ 310.7 billion in expansion and R$ 17.1 billion in renovation

Natural capital

• 3,831,527.08 GJ of fuel used

• 12.26 ML of water consumed

• Emissions Management Program

•Waste recycling and disposal program

Manufactured capital

• 1,446 heavy vehicles

• 19 distribution centers in Brazil

• More than 200 branches in 19 Brazilian states

Social capital

• Customers across a wide range of economic sectors

• Instituto Julio Simões (Julio Simoes Institute)

• Na Mão Certa Program

Human capital

• 13,613 direct employees (18,500 when the employees of Fadel and Transmoreno are factored in)

• Around 2,000 contract drivers and over 10,000 third-party drivers

• The Ligado em Você Program

Value creation

Economic value

• R$ 41.0 million in net income

• R$ 15,430,000.00 of return to shareholders

• 12.7% appreciation of the price-per-share (between 2019 and 2020)

Environmental value

• 1.07 ML of water saved every year due to ecoefficiency actions

Social value

• 100 managers with an average of 10 years with the company

• 43,000 hours of training and qualification for employees

• Integrated and flexible solutions for each customer (>700 customers with long-term relationships)

• 10 largest customers have been part of the portfolio for over 25 years.

• R$ 5.1 million in donations for ant-Covid-19 actions

• Development of the national fleet and safer highways (average age of the fleet is 3.57 years)

MANUFACTURED CAPITAL

In line with its expansion strategy, in November JSL acquired 75% of the capital stock of Fadel, a company operating in the beverage, food, consumer goods and e-commerce sector. Another acquisition last October was the entire capital stock of Transmoreno, a company in the new car transportation sector that users car carrier trucks and provides logistics services to the automotive industry.

HIGHWAY CARGO TRANSPORTATION

With its modern and diversified vehicle fleet, JSL provides services to various segments in every region of Brazil. All operational processes involved in the service are monitored in great detail for our safety, the safety of the customers and that of our customers' customers. In the segment, JSL has a network of more than 100,000 contract and partner truck drivers.

INTERNAL LOGISTICS

JSL provides its customers with across-the-board management of activities involving receival, storage, control of inventories and dispatch on the customers' premises. Years of experience in this segment bring assertiveness in putting together projects, selecting the most appropriate equipment, analyzing the best investments and the operating costs involved.

WAREHOUSE SERVICES

JSL owns nine warehouses and is capable of structuring an operation from zero, fully personalizing it in less than 60 days. Another differential are the multiple customer warehouses equipped with in-house technology for controlling goods, as well as a specialized team, resulting in a more competitive and attractive model.
In both internal logistics and the warehousing service, the expectation is to diversify the operations, extending to the overseas market those operations currently confined to the domestic market.

URBAN DISTRIBUTION

Using its agile urban distribution network, JSL serves several segments through its own or third-party warehouses located throughout Brazil. The company employs specific assets, according to its customers' needs. Moreover, the scale of the operations enables the company to rely on over 40 transportation branches for cross-docking and customer cargo sharing, thereby reducing costs.

COMMODITIES LOGISTICS

With 100% of the services customized in the commodities logistics segment, the company works with processes involving supply, loading and internal handling of raw materials. To achieve production economies and enable the customers to focus on their own business, the company's qualified professionals calculate the ideal equipment for each operation, thereby obtaining higher productivity.

CHARTERS

JSL transports employees for companies using buses, micro buses or vans, according to the customer. The itineraries are drawn up based on the best roadmaps, and the boarding and disembarkation of passengers is controlled remotely(on-line). The company focuses its attention on the safety of people and assets, and it invests in training and refresher courses for drivers, in addition to having a vehicle conservation and maintenance policy, scheduling the fleet for tire changes and corrective and preventive checkups.

Click here for more about the operating performance of JSL.

HUMAN CAPITAL

INTERNAL STAKEHOLDERS

At JSL, human capital comes first and is a major differential. The team of young talent and experienced managers guarantees the organizational culture of the company whose challenge is to grow while respecting the individual and, more importantly, without losing the simplicity of listening to those who have been with us during our history of more than 64 years, and make them feel welcome.

Number of employees by gender1
2018	2019	2020
Men	13,178	12,060	11,993
Women	1,678	1,664	1,620
Total	14,856	13,724	13,613

OCCUPATIONAL SAFETY

JSL seeks the engagement of everyone in the commitment to 'zero accidents', investing in training and technologies. The company also strives to perfect and monitor all processes to ensure the physical safety of the employees. Short-term and long-term driver health risks are also monitored through annual periodic examinations, and evaluations with a GP and dietician.

MANAGEMENT SYSTEM

JSL operates a management system consisting of measures aimed at continuous improvement and physical, social and mental well-being, in order to guarantee safety and compliance with transportation legislation.

● Procedure for breathalyzer tests.

● Hazard identification and risk assessment.

● Incident/accident notification and investigation process.

● Legislation on transporting hazardous products.

● Safety when working at height.

● Safety when working in confined spaces

● Directive established and execution of behavioral audits.

● Program for preventing the abuse of alcohol

● Right of refusal.

Click here for more about people management at JSL.

SOCIAL AND RELATIONSHIP CAPITAL

CUSTOMERS

The slogan 'Understanding to serve' expresses the commitment of JSL to carefully evaluating demands in order to provide quality services. Thus, what drives JSL is:

• Understanding the customer's real need so as to offer technical and commercial solutions aligned with their demands.

• Complying with rules and agreements predefined in proposals while the services are being provided, with quality, safety and agility.

• Striving to be practical and agile in giving feedback about the demands, ensuring good relationships;

• Searching for operational improvements that lead to technical and commercial advantages, sharing these among the parties involved.

• Ensuring the quality of material information when attending to customers;

• Achieving preestablished KPIs and performance in order to perpetuate the partnership;

Commitment to customers

In 2020, to ensure customer well-being in the face of the sanitary crisis, the company came up with mitigation plans that reflected the peculiarities of the operations. The initiative included taking on additional staff to immediately substitute those employees in the risk groups and to intensify cleanliness at the units. In addition, the company embarked on joint actions with customers.

Click here to see the initiatives of JSL for recognizing the value of customers.

SUPPLIERS

Respect for human rights, the environment, labor and health and safety standards are the fundamental premises in the relationships of JSL with its business partners. At the end of 2020, there were 7,455 suppliers whose contracts involved resources of R$ 1.05 billion, with preference for local companies.

Click here for more about the production chain of JSL.

SOCIAL MANAGEMENT

In the search for peaceful coexistence, and to contribute to the development of the areas surrounding its operations, JSL adopts corporate policies covering the issues of impact on the communities and social investment. The Sustainability Policy, approved in 2020, describes the practices for mitigating social impacts.

Click here for more about JSL's development social initiatives.

COMMITMENTS

• GHG Protocol: In 2019, it became a member of the GHG Protocol Program, as the JSL Group (2020 Cycle). This tool is used to understand, quantify and manage GHG emissions. The inventory is available to the general public, enhancing the transparency of the emissions. For the year 2020, the emissions inventory will continue following the GHG Protocol method, and will be published on the Public Record of Emissions.

• Movimento Mulher 360: the company signed up, in 2019, to the Movimento Mulher 360 whose aim is to contribute to the economic empowerment of Brazilian women by fostering, systematizing and disclosing advances in business policies and practices, with the emphasis on engaging the Brazilian business community and society in general.

• Business Pact for Integrity and Against Corruption: JSL has been a signatory to the Pact of Instituto Ethos since 2018, in addition to having a seat on the organization's Working Group on Integrity .

• Global Compact: Since 2020, JSL has been committed to the corporate responsibility initiative of the UN Global Compact and its principles in the areas of human rights, labor, the environment and anticorruption.

• Na Mão Certa Program: Since 2007, JSL has been a signatory to the Na Mão Certa Program that aims to unite efforts to put an end to sexual exploitation of minors on Brazilian highways.

• Instituto Liberta: The company is a partner of Liberta Institute whose mission is to counter the sexual exploitation of minors in Brazil.

NATURAL CAPITAL

THE ENVIRONMENT

JSL is continually striving to foster the rational use of fuel and the renewal of its fleet in order to mitigate one of the main impacts of its operations: Greenhouse Gas (GHG) Emissions. The company has developed Greenhouse Gas (GHG) Emissions Management Program and is actively contributing to the target of all SIMPAR subsidiaries of reducing GHG emissions by 15% within 10 years.

Click here for more about the environmental preservation initiatives of JSL.

FINANCIAL CAPITAL

ECONOMIC AND FINANCIAL RESULTS

In 2020, the world experienced a sanitary crisis scenario because of the Covid-19 pandemic and, in Brazil, it was no different. The logistics industry experienced a reduction in the volumes transported, partially reflected in the revenues of JSL. However, the results show the company's resilience and the beginning of the uptick in the economy in the logistics sector.

NET INCOME

JSL posted Net Income of R$ 41.0 million in 2020, 45.1% above the previous year.

INVESTMENTS

Gross Investment by JSL amounted to R$ 327.7 million, of which R$ 310.7 million for expansion, and R$ 17.1 million in renewals. Net Investment, after asset sales, was R$ 154.0 million.

Click here for more about the financial performance of JSL in 2020.

ABOUT THIS REPORT

TRANSPARENCY

This is the first Annual Report published by JSL following the corporate restructuring that converted the company into a subsidiary of SIMPAR, with independent management. Through this publication, the company seeks to account to stakeholders for its business strategy and the actions for achieving its objectives and, to do so, the document was drawn up in accordance with:

• The standards of the GRI (Global Reporting Initiative).
• The Principles of the International Integrated Reporting Council - IIRC.
• The disclosure recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
• Data of the Carbon Disclosure Program (CDP).

MATERIALITY

Click on the titles to see more!

• ODS: 3 and 8

  Officers,
  customers,
  employees,
  members of the Sustainability Committee and class entities

• ODS: 3, 7, 12, 13, 14 and 15

  Officers,
  customers,
  members of the Sustainability Committee and class entities

• ODS: 12

  Officers,
  members of the Sustainability Committee and class entities

• ODS: 16

  Customers,
  communities,
  suppliers and others (financial institutions, investors, third-party drivers and the media)

• ODS: 1 and 2

  Officers,
  customers, c
  ommunities,
  members of the Sustainability Committee and class entities

• ODS: 4, 5, 8 and 10

  Officers,
  employees,
  communities and members of the Sustainability Committee

• ODS: 3, 8 and 10

  Officers,
  class entities and others (financial institutions, investors, third-party drivers and the media)

• ODS: 8, 9 and 12

  Officers,
  employees,
  class entities,
  suppliers and others (financial institutions, investors, third-party drivers and the media)

• ODS: 9

  Officers,
  employees,
  class entities,
  suppliers and others (financial institutions, investors, third-party drivers and the media)

*Transverse topics

Click here for more about the process for preparing the 2020 Integrated Annual Report of JSL.

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