2011JBS S.A. August
September
JBS S.A.
3PAGE
JBS S.A. at a glance
Founded in the 1950’s in West Central Brazil
IPO in 2007
Leading protein producer and third largest food company in the World
Revenues of over R$ 29.3 billion in the 1st semester 2011
EBITDA of R$ 1.42 billion in the 1st semester 2011
Organic growth of 14.2% in local currency in 2010
125,000 employees worldwide
134 production units in 5 continents
Market cap of approximately R$ 13.8 billion(1)
(1) 31/07/2011
4PAGE
JBS Ranking
3 Geographic and
market segment
diversification
1 Market Leader
4 Well-recognized
brands
2 Track Record
of successful
acquisitions
Largest global beef and
lamb producer1st
Largest global leather
processor1st
Largest global chicken
producer2nd
Largest dairy
producer in Brazil3rd
Largest pork producer
in the US3rd
Source: JBS
5PAGE
Merger and Acquisition track record More than 30 acquisitions in 15 years
0.3 0.4 0.4 0.5 0.5 0.4 0.7 1.2 1.5 4.3
14,1
30.3
34.3
54.7
1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Barra do Garças (Sadia)
Andradina (Sadia)
Barretos (Anglo)
Pres. Epitácio e Campo grande (Bordon)
Araputanga(Frigoara)
Cáceres (Frigosol)
Iturama (Frigosol)
Rio BrancoCacoal 1Cacoal 2Porto VelhoVilhena (Frigovira)
Pedra Preta (Frigo Marca)
Venado
Tuerto
Pontevedra
(CEPA)
JV Beef Jerky
Merger with Bertin
JBS Couros
5 new units
Tatiara Meat
(Swift Austrália)
Net revenue (R$ billion)
Inalca
SB Holdings
Berazategui (Rio Platense)
Colonia Caroya
Maringá (Amambay)
Swift Foods Co.
JBS went international with the acquisition of Swift Argentina.
Construction of a sustainable global meat production and sales platform.
2005
JBS became the largest beef company in the world and the biggest Brazilian company in the food industry and entered the US pork market.
2007
2008
Diversification of market segments through the acquisition of Pilgrim’s Pride and merger with Bertin.
2009
JBS Swift became the leader in lamb production in Australia.
2010
RosárioSan Jose(Swift Argentina)
Pilgrim´s Pride
3 Geographic and
market segment
diversification
1 Market Leader
4 Well-recognized
brands
2 Track Record
of successful
acquisitions Rockdale Beef
Source: JBS
Smithfield
Beef
Five Rivers
Tasman
6PAGE
Diversified market segments
Beef
Pork
Chicken
Transportation
Biodiesel
Collagen
Leather
Dairy products
Lamb
1 Market Leader
4 Well-recognized
brands
3 Geographic
and market
segment
diversification
2 Track Record of
successful
acquisitions
7PAGESource: JBS
3 Geographic
and market
segment
diversification
1 Market Leader
4 Well-recognized
brands
2 Track Record of
successful
acquisitions
Presence in more than 100 countries, in 6 continents
Slaughterhouse and Industry
Sales Office
Pork
LeatherBeef
Distribution CenterDairy
Biodiesel
Strategic Geographical Distribution
Chicken
Geographic
Presence and
Production
Capacity
85,825 heads/day
Beef
7.9 mm birds/day
Chicken
50,000 heads/day
Pork
5,400 tons/day
Dairy
24,000 heads/day
Lamb
76,100 hides/day
Leather
3
60
37
20
7
1
58
7
134
u Units
8PAGE
Well-recognized Brands, symbols of quality
3 Geographic and
market segment
diversification
1 Market Leader
4 Well-recognized
brands
2 Track Record of
successful
acquisitions
EUA
Australia
Brazil
Argentina
9PAGE
EBITDA
Margin
Our Strategy
RATIONALE
Associating quality and branding to
increase client loyalty
Customized and further processed
products for the end users
Expanding a global distribution
platform to reach end clients
Developed an efficient and
diversified global production
platform
Production platform
Sales and distribution platform
Value added products
Branding
Financial
Structure
Experienced
Management
Cost reduction,
process
optimization
Risk
Management
JBS’s Value & Strategy
Perspectives for the animal protein market
JBS is well positioned to serve global demand for animal protein
A promising sector to invest in
11PAGE
Global consumption of animal protein has been increasing
Consumption by region over the past ten years
North America
Central America
South America
E.U. - 27
Middle East
North Asia
East Asia
Oceania
Southeast Asia
Africa
+3.0%
+41.4%
+47.7%+7.5%
+29%
+32.2%
+23.7%
+48.7%
+23.3%
Source: Rabobank
+70.2%
12PAGE
Global Protein Trade Continues to GrowJBS Has Presence in Markets That Represent Nearly 64% of Global Trade
0
50
100
150
200
250
300
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2019
Source: Historical figures per USDA FAS. Projected and forecasted data per OECD estimates.
(MT in mm)
Historical Forecast
13PAGE
Global Protein Consumption Growth
Source: USDA FAS
(MT in mm)
Strong Global Industry Fundamentals
0
50
100
150
200
250
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
14PAGE
Global Beef Trade
Source: USDA
E.U. 1.0%
Uruguay 5.0%
Argentina 5.0%
Canada 6.0%
New Zealand 7.0%
Others 10.0%
India 10.0%
Brazil 27.0%
Australia 18.0%
USA 11.0%
Largest Beef Exporters
15PAGE
Brazil, Australia and the US continue to lead global beef exports
Source: USDA, MLA and Secex
Beef Exports Average Price (US$/Ton)
Australian Beef Exports (tons)
Brazil, Australia and US represent, respectively, 27%, 18% and 11% of global beef trade
Brazilian Beef Exports (tons)
US Beef and Veal Exports (tons)
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2005 2006 2007 2008 2009 2010 1H10 1H11
+4.3%
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2005 2006 2007 2008 2009 2010 1H10 1H11
+25.8%
+13.0%
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2005 2006 2007 2008 2009 2010 1H10 1H11
-16.4%
+31.6%
+3.5%
16PAGE
Chicken Exports Brazil vs US
Source: USDA and Secex
Brazilian Chicken Exports (tons) US Chicken Exports (tons)
Chicken Exports Average Price (US$/Ton)
Brazil and US represent, respectively, 39% and 34% of global chicken trade
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
2005 2006 2007 2008 2009 2010 1H10 1H11
+21.4%
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
2005 2006 2007 2008 2009 2010 1H10 1H11
+6.4%-1.7%
+10.2%
17PAGE
Pork Exports US vs Brazil
Source: USDA and Secex
Brazilian Pork Exports (tons) US Pork Exports (tons)
Pork Exports Average Price (US$/Ton)
US and Brazil represent, respectively, 32% and 11% of global pork trade
0
500
1.000
1.500
2.000
2.500
3.000
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2005 2006 2007 2008 2009 2010 1H10 1H11
+12.0%
0
500
1.000
1.500
2.000
2.500
3.000
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2005 2006 2007 2008 2009 2010 1H10 1H11
-1.8%
+14.5%
+7.2%
18PAGE
$ Global Surplus (deficit)
Source: Goldman Sachs
Goldman Sachs forecast for animal protein in 2020
Beef & Veal
Surplus Deficit
Pork
Chicken
2Q11 Highlights
20PAGE
Net revenue in 2Q11 was R$14,621.8 million, 3.6% higher than 2Q10.
The Company ended the quarter with R$5.0 billion in cash more than a 100% of the short-term debt.
2Q11 Highlights
The main operating highlights were:
JBS concluded the capitalization of the debentures in shares of JBS S.A. at R$7.04.
The Company raised US$2.0 billion in long-term debt.
All the business units of JBS presented significant organic growth y-o-y.
JBS Mercosul presented EBITDA of R$427.9 million, with a EBITDA margin of 11.8%
JBS USA Pork presented EBITDA of US$83.6 million, 71.7% greater than 2Q10, with EBITDA margin of 9.9%.
21PAGESource: JBS
JBS Consolidated Results – 2Q11
1,000 1,026
866 836
588
7.1 7.36.0 5.7
4.0
-12,0
8,0
0,0
200,0
400,0
600,0
800,0
1000,0
1200,0
1400,0
1600,0
1800,0
2Q10 3Q10 4Q10 1Q11 2Q11
EBITDANet Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)
14,116.3 14.069,6 14,319.6 14,672.7 14,621.8
2Q10 3Q10 4Q10 1Q11 2Q11
+2.5% -0.3%-0.3% +1.8%
-29.7%
+2.6%-15.6%
-3.5%
EBITDA Margin (%)
22PAGESource: JBS
Semester Analysis
Net sales (R$ billion)
3.43.9
1H10 1H11
6.27.8
1H10 1H11
Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion)
EBITDA (R$ mi) EBITDA (US$ mi) EBITDA (US$ mi) EBITDA (US$ mi)
JBS Mercosul JBS USA
(Including Australia)
JBS USA JBS USA (PPC)
83.6
188.9
-0,2
-0,15
-0,1
-0,05
0
0,05
0,1
0,15
0
100
200
300
1H10 1H11
187.1
-102.8
-0,6
-0,58
-0,56
-0,54
-0,52
-0,5
-0,48
-0,46
-0,44
-0,42
-0,4
-0,38
-0,36
-0,34
-0,32
-0,3
-0,28
-0,26
-0,24
-0,22
-0,2
-0,18
-0,16
-0,14
-0,12
-0,1
-0,08
-0,06
-0,04
-0,02
0
0,02
0,04
0,06
0,08
0,1
0,12
0,14
0,16
0,18
0,2
-200
-100
0
100
200
300
400
500
600
700
800
900
1000
1H10 1H11
697.2 736.2
-0,15
-0,13
-0,11
-0,09
-0,07
-0,05
-0,03
-0,01
0,01
0,03
0,05
0,07
0,09
0,11
0,13
0
100
200
300
400
500
600
700
800
900
1000
1100
1H10 1H11
6.37.2
1H10 1H11
365.4314.4
-0,3
-0,28
-0,26
-0,24
-0,22
-0,2
-0,18
-0,16
-0,14
-0,12
-0,1
-0,08
-0,06
-0,04
-0,02
0
0,02
0,04
0,06
0,08
0,1
0,12
0,14
0,16
0
100
200
300
400
500
600
700
800
900
1000
1100
1H10 1H11
1.41.7
0
1H10 1H11
Performance by Business Unit
23PAGESource: JBS
Net sales (R$ billion) Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion)
EBITDA (R$ mi) EBITDA margin EBITDA (US$ mi) EBITDA margin EBITDA (US$ mi) EBITDA margin EBITDA (US$ mi) EBITDA margin
EBITDA Margin (%)
JBS Mercosul JBS USA
(Including Australia)
JBS USA JBS USA (PPC)
3.33.4
3.6
3.8
4.0
2Q10 3Q10 4Q10 1Q11 2Q11
3.5 3.53.4
3.6 3.6
2Q10 3Q10 4Q10 1Q11 2Q11
48.7
90.8102.4 105.3
83.6
6.6%
11.8% 12.8% 12.6%9.9%
-10,0%
-5,0%
0,0%
5,0%
10,0%
0
100
2Q10 3Q10 4Q10 1Q11 2Q11
127.6170
124.8
-55.2 -47.6
7.5% 9.9%6.9%
-2.9%
-2.4%
-30,0%
-28,0%
-26,0%
-24,0%
-22,0%
-20,0%
-18,0%
-16,0%
-14,0%
-12,0%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
18,0%
20,0%
-100
0
100
200
300
400
500
2Q10 3Q10 4Q10 1Q11 2Q11
334.5363.7
238.8
308.6
427.9
9.5% 10.4%
7.1%8.6%
11.8%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
0
100
200
300
400
500
600
2Q10 3Q10 4Q10 1Q11 2Q11
194.9
103.5
194.8
269.7
44.7
5.9%3.1%
5.4% 7.1%
1.1%
-30,0%
-28,0%
-26,0%
-24,0%
-22,0%
-20,0%
-18,0%
-16,0%
-14,0%
-12,0%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
0
100
200
300
400
500
2Q10 3Q10 4Q10 1Q11 2Q11
1.7 1.7 1.8 1.9 2.0
2Q10 3Q10 4Q10 1Q11 2Q11
739 772 799837 846
100
180
260
340
420
500
580
660
740
820
900
980
1060
1140
1220
1300
2Q10 3Q10 4Q10 1Q11 2Q11
Quarterly Analysis
Performance by Business Unit
24PAGESource: JBS
Revenue and EBITDA Distribution by Business Unit
Revenue - 2Q11
EBITDA - 2Q11
43.5%
25.4%21.5%
9.6%
73.4%
12.7%
26.5%
-12.6%
Revenue - 2010
34.7%
29.7%
12.6%
23.0%
43.0%
24.8%22.5%
9.7%
EBITDA
25PAGESource: JBS
Organic Growth
Each business unit presented double digit organic growth in their local currency, for the period.
JBS USA Beef – Net Revenue (US$ million) JBS USA Chicken – Net Revenue (US$ million)
JBS USA Pork – Net Revenue (US$ million) JBS Mercosul – Net Revenue (R$ million)
2.600
2.800
3.000
3.200
3.400
3.600
3.800
4.000
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
1.600
1.700
1.800
1.900
2.000
2.100
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
2.800
2.900
3.000
3.100
3.200
3.300
3.400
3.500
3.600
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
500
550
600
650
700
750
800
850
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
26PAGESource: JBS
Philippines 1.3%
Taiwan 2.5%
China 4.0%
Canada 4.4%
E.U. 5.2%
Hong Kong 6.8%
Others 14.0%
Russia 8.4%
Africa and Middle East 15.9%
Mexico 14.4%
Japan 13.1%
South Korea 10.1%
US$ 2,363.6 million
2Q11
US$ 2,450.3 million
1Q11
JBS Consolidated Exports Distribution
Vietnam1.2%
Taiwan 2.7%
China 4.1%
Canada 4.8%
South Korea 7.7%
Hong Kong 6.8%
Others 16.0%
E.U. 6.9%
Mexico 13.0%
Africa and Middle East 13.6%
Russia 9.5%
Japan 13.7%
27PAGE
. Leverage EBITDA
Leverage
Source: JBS
* subsidiary controlled by JBS with non-recourse debt.
Debt Profile
Short Term Long Term
ST / LT Profile
3.0 2.9 3.0 3.1
3.6x
0,0
1,0
2,0
3,0
-100
100
300
500
700
900
1100
1300
1500
2Q10 3Q10 4Q10 1Q11 2Q11
36%
33%
33%
30%
27%
64%
67%
67%
70%
73%
2Q10
3Q10
4Q10
1Q11
2Q11
Net debt to EBITDA, excluding Pilgrim’s Pride Corp. (PPC)*, went from 2.9x in 1Q11 to 3.2x in 2Q11
Net debt to EBITDA, including Pilgrim’s Pride Corp. (PPC)*, went from 3.1x in 1Q11 to 3.6x in 2Q11
The Company ended the quarter with R$5.0 billion in cash or cash equivalents, more than a 100% of the Company’s short-term debt
Stock MarketIn 2007, JBS was the first Company in the beef industry to trade its
shares on the stock market
29PAGE
Average daily
traded volume
of R$ 22.7
million in
2Q11
Shareholders
Source: JBS
3.0%
30PAGE
Sell-side analyst recommendation
Source: Bloomberg and JBS
Institution Analyst Recommendation Target Price (R$)
Mariana Peringer
Ricardo Boiati / Alan Cardoso
Fábio Monteiro / Thiago Duarte
Gustavo Wigman / Claudio Lensing
Pedro Herrera / Diego Maia
Fernando Ferreira / Isabella Simonato
Erick Guedes / Fernando Labes
Gustavo Oliveira / Flavio Barcala
Hold
Market Perform
Buy
Neutral
Neutral
Neutral
Outperform
Neutral
In revision– 10.20 (last)
8.80
9.30
7.30
6.40
5.00
10.35
5.10
Luis Miranda Hold 7.00
Banco do Brasil
Bradesco
BTG Pactual
Goldman Sachs
HSBC
Merrill Lynch BofA
Safra
UBS
Santander
$
Carlos Albano Hold 7.40Citi
31PAGE
Corporate Governance
Transparency
Good Governance Practices
Confidence
Best services and products
Solidity
Profitability
Future
1 president
5 permanent directors
5 permanent independent directors
Consist of shareholders or not, liable to
be elected or dismissed at any time of
the General Meeting.
Management and Board of Directors
Board of Directors Audit Committe
11 members 5 members
Elected by the board of directors, for
three-year terms, and are eligible for
reelection.
Board of Executive Officers
Audit
Finance
Human Resources
Corporate Strategy / Sustainability
Committes of Directors
4 committes
JBS is listed on the Novo Mercado, a segment in which companies are committed to
following a series of rules that provide better transparency and security to investors
*
JBS is listed on the Novo Mercado which guarantees transparency,
confidence and continuous improvements in best practices
Sustainability
33PAGE
Social, economic and environmental responsibility has always been a part of the
development and business growth of JBS
Source: JBS Sustainability Policy
Foundation
Risk and Crises
Management
Corporate Direction
Knowledge Management
Stakeholders
Engagement
Citizenship and
Education
Good Practices of Human
Resource
Human Capital
Development
Environmental
Management
Eco-efficiency
Sustainable Cattle
Breeding
Climate Changes
Economic Social Environmental
Ecologically viable
Ecologically correct
Socially responsible
Culturally acceptable
Premises Priorities
Sustainable use of the materials
Partnership with reputable organizations
Health and Quality of life
Climate
Residue Treatment
* Clean Development
Mechanism
**United Nations
Framework Convention
on Climate Change
34PAGE
Classroom
Social
Germinare School is a social initiative of the JBS Institute which
looks at Education as the principal instrument to transform society.
Laboratory
Social
GERMINARE SCHOOL
Purpose: to prepare well-educated and well-rounded citizens with a
broad cultural repertoire, sound ethical values and a positive
attitude toward life and society.
Number of students (2011): 270
Capacity of 630 students.
Area: 6,000 m2
Sport complex, swimming pool, computer lab and chemistry lab.
Amount invested: R$15 million
Selection process: tests and group dynamics.
Top Brazilian professors.
JBS Institute funds Germinare SchoolSocial Responsibility
Source: JBS
Started in 2010
35PAGE
Amazon
Social
Satellite image
Social
GTPS (Sustainable Livestock Working Group)
Purpose: reduce deforestation in the Amazon Biome; avoid
purchasing cattle from Environmentally Protected Areas – EPAs,
Indigenous reserves and protected areas; eradication of slave
labor in Brazil.
JBS Brazil monitors a 100% of its cattle suppliers properties via
satellite georeferencing (GPS monitoring).
After the property coordinates are collected, the data is keyed into
JBS’s registry of cattle suppliers and is sent to an outsource company
to be analyzed by superimposing on a map constructed from satellite
images and the DETER(1) and PRODES(2) produced by Brazil’s National
Institute for Space Research – INPE.
JBS contains a database of almost 12,000 cattle ranches registred
in the Amazon Biome.
Satellite image monitoring of the Amazon Biome
JBS actions related to cattle traceability and the Amazon BiomeSustainability
Source: JBS Sustainability Policy(1)Real Time Deforestation Detection(2)Legal Amazon Deforestation Monitoring Project
Mission
“
”
To be best in what we set out to do, totally focused on
our business, ensuring the best products and services for our customers, solidity for our suppliers,
satisfactory profitability for our shareholders and the
certainty of a better future to all our employees.
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