4Q09 Conference Call Presentation

7/30/2019 4Q09 Conference Call Presentation

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4th Quarter 2009 Results

In God We Trust, Nature We RespectJBS S.A.

March 8th, 2010

32 51 73150 185

345 432548 602

1.156

3.058

4,92% 5,73%6,0%

11,0%9,7% 10,5%

11,2%

13,6%

4,3% 3,8%5,5%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

EBITDA R$ mm EBITDA Mar in

JBS remains a Growth Company

*Pro forma including Bertin and Pilgrims Pride.

Source: JBS


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Presenters

Jeremiah OCallaghan

Investor Relations Director

Joesley Mendona Batista

Chief Executive Officer

Guilherme Arruda

Investor Relations

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DISCLAIMER

The forward-looking statements presented herein are subject to risks and uncertainties. These

statements are based on the beliefs and assumptions of our management, and on information

currently available to us.

Forward-looking statements are not guarantees of performance. They involve risks,

uncertainties and assumptions because they relate to future events and therefore depend on

circumstances that may or may not occur. Our future operating results, financial condition,

strategies, market share and values may differ materially from those expressed in or

suggested by these forward-looking statements. Many of the factors that will determine these

results and values are beyond our ability to control or predict.

Forward-looking statements also include information concerning our possible or assumed

future operating results, as well as statements preceded by, followed by, or including the words

''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,' ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or

similar expressions.

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Our Values

Excellence

Planning

Determination

Discipline

Availability

Openness

Simplicity

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Agenda

Company Overview

Market Overview

4Q09 Highlights

Short Term Outlook

Final Considerations

4


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Company Overview

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JBS S.A. at a Glance

Founded 1953 in central Brazil

IPO in 2007

Ibovespa ticker: JBSS3

ADR ticker: JBSAY

Leading animal protein producer in the World

Production platform in South America, North America, Europe and

Oceania

125,000 employees worldwide

Revenues of about US$ 30 Billion per annum

Market cap of R$ 22 billion

*Source: Bloomberg 25/02/2010

*

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JBS S.A. Growth Through Acquisitions

JBS History has been built throughmore than 30 acquisitions in 15 yearswith adequate capital structure andmanagement

Cceres

(Frigosol)

Iturama

(Frigosol)

Araputanga

(Frigoara)

Barretos (Anglo)

Pres. Epitcio (Bordon)

Campo Grande (Bordon)

Pedra Preta

(Frigo Marca)

Rosrio

(Swift ARG)

San Jose

(Swift ARG)

Inalca

Swift Foods Co.

Maring (Amambay)

Berazategui

(Rio Platense)

Colonia Caroya

SB Holdings

JV Beef Jerky

Venado

Tuerto

Pontevedra

(CEPA)

Rio Branco

Cacoal 1

Cacoal 2

Porto Velho

Vilhena (Frigovira)

Andradina

(Sadia)

Barra do

Garas

(Sadia)

Tasman

Smithfield

Beef

Five Rivers

R$/US$ end of the year quotation

Bertin Association

Pilgrims Pride

JBS Hides

5 new units

(1) (2) (3)

Net Sales (in US$ billion)

Companies and assets acquired

Source: JBS(1) Pro Forma JBS S.A. LTM Dec07(2) Pro Forma JBS S.A. LTM Dec08(3) Pro Forma JBS S.A. LTM Jun09 (including 5 new units and hides operation); Pilgrims Pride Sep09 (Estimated); Bertin LTM J un09

0.3 0.4 0.4 0.5 0.5 0.4 0.7 1.21.5 1.9

12.7

19.8

30.3

1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Goinia

(Anglo)

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EBITDA Growth

JBS remains a Growth Company.

*Pro forma includingBertin and Pilgrims Pride.Source: JBS

8

32 51 73150 185

345432

548 602

1.156

3.058

4,92%5,73% 6,0%

11,0%9,7%

10,5%

11,2%

13,6%

4,3% 3,8%

5,5%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

EBITDA (R$ mm) EBITDA Margin


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Our Strategy

2005/2006AdequateFinancialStructure

2007/2008

Global ProductionPlatform

2009/2010Global Sales &

DistributionPlatform

2011/2012Value AddedProducts &Branding

- Access to raw materialsupply globally.

- Leader in countries withsurplus production.

- Scale.- Leader in exports globally.- Access to all meat

markets.- Exchange of best

practices.

- Efficiency cost gains.- Cost reduction

opportunities.- Margin improvements.

- Integrate the sales anddistribution platform toserve efficiently, local andexternal markets, smallretailers, food processors,restaurants, and othercustomers globally.

- Sales force distributed overthe globe.

- Efficiency on selling the bestproduct, to the best market,

with the best price.- Cost reduction on sales and

transport.- Margin improvements.

- High liquidity level.- Debt equalized to cash

generation.- Strong cash position.- Access to international

capital markets to financegrowth.

- Development of long termfinancing plan.

- Use of export platform togrow.

- Hands-on working capitalmanagement.

South America

North America

Australia

European Union

Asia

Russia

Africa

Middle East

SouthAmerica

North

America

Australia

EuropeanUnion

Debt forWorking

CapitalEquity

toFinance

Growth

Cooked Products

Case ReadyProducts

Global Brands

Marketing

Investments

Minced Products

Fresh Products

Cured Products

Ready to EatProducts

- High technologyinvestments to producevalue added products.

- Increase value addedproducts portfolio.

- Customized products toeach market.

- Convenience to consumersday to day.

- Brand and Qualityrecognition and leadership.

- Marketing investments tobe present in consumerminds.

- Margin improvements.

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Our Strategy

Branding

ValueAdded

Products

Sales &Distribution

Platform

Production Platform

Foundation

Financial

Structure

Experienced

Management

Cost Reduction,Productivity,

ProcessOptimization

Risk

Management

EBITDA

Margin

4%

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Batista Family Bertin Family

ControllingHolding Market(Free Float)

JBS S.A.

(including Bertin)

JBS U.S.A.Includes AUS

Pilgrims Pride

BNDES

Othersubsidiaries

59% 41%

100% 80% - 75%

20% - 25%

64%Other

shareholders

36%

US$ 2 Bn

Corporate Structure

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Shareholders

12

Controlling

Holding

59%

BNDESPAR

19%

Individual

1%

Foreign

Investors

10%

Others

10%


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Production Units Employees

28,600 B

48,500 P

4,500 S

8,690 B

20,000 S

92,090 B

48,500 P

24,500 S

7,200,000 C

CPilgrims Pride 37 39,000 7,200,000

8,4006,217

125,000

Daily Slaughter Capacity

3,500

6,995

24,295

B

B

B

JBS MERCOSUR

JBS USA

JBS Austrlia

Inalca JBS

8

16

10

8

Total

JBS Brasil 61 44,993 43,400

140

3,000

(B) Beef; (P) Pork; (S) Smalls; (C) Chicken

Global Production Platform

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Market Overview

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Market Highlights

Robust domestic consumption in Brazil.

Growing middle classes in the Emerging Market sourcing moreproduct through imports.

Recovery of exports from US allied with improved domestic Americanconsumption.

European protein production declining.

Gradual Improvement in exports generally with the reduction and/orremoval of trade barriers.

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Per capita food consumption curve

(Kg / Year)

0

20

40

60

80

10 0

12 0

14 0

16 0

18 0

Cereals Roots and

Tubers

Beans, Peas

and Lentils

Sugar Oils Crops

and its

products

Meat Milk and its

products

1969/ 71

1979/ 81

1989/ 91

1999/ 01

2030

2050

Source: FAO

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Source: Secex

Brazilian Beef exports

(Thousand Tons)

1,086

1,218

1,4911,425

1,263

1,095

78 0

0

20 0

40 0

60 0

80 0

1,000

1,200

1,400

1,600

2003 2004 2005 2006 2007 2008 2009

E.U. Russia Egypt Venezuela Algeria USA Hong Kong Others

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Source: USDA ERS

1.8671.888

1.433

1.146

697

461

2.5202.449

2.269

2.4672.412

0

500

1.000

1.500

2.000

2.500

3.000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Mexico Canada South Korea Japan Vietnam China Hong Kong Netherlands Others

US Beef and Veal Exports (Million Pounds)

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Source: USDA ERS

4.128

4.667

3.1422.995

2.667

2.181

1.7171.6121.560

1.2871.278

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Japan China Hong Kong Mexico Russia Canada South Korea Australia Others

US Pork Exports (Million Pounds)

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Source: USDA ERS

6.9067.109

6.070

5.3675.333

4.9975.0134.942

5.738

5.1384.980

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Russia China (Mainland) Iraq Mexico Canada Cuba Other Chicken Others

US Poultry Exports (Million Pounds)

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Strong Long-term Industry Fundamentals

Meats Consumption Per Capita

Percapitacons

umption

(kg/capita)

Source: FAO

Recommendedconsumption80kg/capita

Population growth coupled with rising worldwide standards of living will drivean increase in protein demand on emerging global middle class

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4Q09 Highlights

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Highlights for the 4th Quarter 2009

Net Profit of R$127.9 million in 4Q09.

Net Revenue for 2009 was R$34,311.8 million, representing a 13.1% increase y-o-y.

In 4Q09 the consolidated EBITDA increased 49.6% compared to 4Q08, from

R$265.9 million to R$397.8 million. The consolidated EBITDA margin was 5.4% forthe period, compared with 2.8% for 4Q08

Completion of the Bertin S.A. Merger and the acquisition of a controlling interest inPilgrims Pride Corporation.

A pro forma Net Revenue in 2009 of R$55,223.6 million, 82.0% higher than 2008.

EBITDA pro forma of R$3,058.0 million in 2009, increase of 164.5% over theprevious year.

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JBS Consolidated Results

Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)

Source: JBS

EBITDA Margin (%)

-11.6%

36.3%

-3.8%

-20.4%

-0.1%

81.6%

-9.5%

-24.0%

13.1% 11.2%

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Performance by Business Units

Net Sales(US$ billion)

EBITDA (US$ mi)EBITDA margin

JBS USA (Beef)

Including Australia

Net Sales

(US$ million)

EBITDA (US$ mi)EBITDA margin

JBS USA (Pork)Net Sales( million)

EBITDA ( mi)

EBITDA margin

INALCA JBSNet Sales(R$ billion)

EBITDA (R$ mi)EBITDA margin

JBS MERCOSUL

Source JBS

EBITDA Margin (%)

2.82.7

2.9 2.8 2.8

4Q08 1Q09 2Q09 3Q09 4Q09

108.4126.0

104.6

59.760.4

2.2% 2.2%3.6% 3.8%

4.5%

4Q08 1Q09 2Q09 3Q09 4Q09

600 526 554 559606

4Q08 1Q09 2Q09 3Q09 4Q09

25.6

7.5

24.7

15.3

28.6

4.3%

1.4%

4.5%

2.7%

4.7%

4Q08 1Q09 2Q09 3Q09 4Q09

162144 144 146 141

4Q08 1Q09 2Q09 3Q09 4Q09

8.3

5.66.6

9.7

7.0

5.1%3.9% 4.6%

6.6%

5.0%

4Q08 1Q09 2Q09 3Q09 4Q09

1.61.4

1.7 1.71.7

4Q08 1Q09 2Q09 3Q09 4Q09

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Debt

The Net Debt/EBITDA reduced from 3.3x in 3Q09 to 3.1x in 4Q09.

JBS raised US$2.0 billion by issuing two million Debentures.

The companys cash position is sufficient to cover, almost entirely, the short term debt of JBS

Current assets exceed current liabilities by almost 50%, demonstrating the liquidity of theCompanys balance sheet.

Net Debt / EBITDA Pro Forma per Quarter

Source: JBSNet Debt/ EBITDA EBITDA pro-forma

* LTM including Bertin and Pilgrims Pride pro-forma.

Gross debt Profile (R$ million)

26

*

37% 38%

63% 62%

2009 2008

Short Term Long Term

5,479.614,429.8


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Revenue Distribution by Market

2009 2008

Source: JBS Source: JBS

Exports

23%

Domestic

Market

77%

Exports

33% Domestic

Market

67%

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JBS Consolidated Exports Distribution

JBS Exports 2009

Source: JBS

JBS Exports 2008

28

Mexico18%

Russia13%

E.U,11%Japan

9%Canada

8%

Middle East7%

Hong Kong5%

South Korea4%

Taiwan4%

USA3%

China3%

Others15%

US$ 5.6 billion

Japan

13%E.U.

11%

Russia

10%Canada

8%Mexico

8%

Africa and Middle East

7%

South Korea

6%

Hong Kong

6%

USA

5%

China

4%

Taiwan

2%

Others

19%

US$ 5.0 billion


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Short Term Outlook

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A Closer look at synergies Pilgrims Pride

USD 95 Million already captured, through initiatives in the personnel, transportation, andpackaging supply areas.

USD 65 Million further by mid year, principally through G&A, exports, and logistic efficiencies.

USD 200 / 300 Million total annual synergies.

30

0

2

4

6

8

10

12

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10

Announcement of the

PPC acquisition by JBS

Closing of the

acquisition

Pilgrims Pride Stock Price

Source: Bloomberg


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A Closer look at synergies Bertin S.A.

R$145 million implemented by end of 1Q10 in packaging,

industrial processes, formulation and corporate.

R$100 million further synergies to be realized particularly at

corporate and exports in the coming six months.

Total annual synergies expected to reach R$500 million by

2011.

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Final Considerations

JBS remains a Growth Company.

Focus on synergy gains through the integration of Bertin in Brazil and Pilgrims

Pride in the USA.

JBS continues to build its distribution platform to add value to its products and

expand its margins.

Commitment to the Companys financial health and the reduction of the financial

leverage, maintaining a strong cash generation.

Having taken the Company public and having elevated its corporate governance,

JBS is now focused upon the financial fundamentals to take the Company to

Investment Grade.

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Questions & Answers

In God We Trust, Nature We Respect

IR Contacts:

[email protected]

+55 11 3144 4055

www.jbs.com.br/ir34

4Q09 Conference Call Presentation

Documents

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