JBS Institutional Presentation

June/July 2015

JBS Global

LTM to 1Q15 Net Revenue of R$127.9 billion

0%

Second largest global food company according to Bloomberg ranking

Capacity to process

Prepared
products and
others
Revenue
30% LTM to 1Q15

Bovines
40%

R$127.9 bi
Pork
10%
Poultry
20%

Note 1. Based on 2013 Net Sales

100,000 bovines per day in 73 units in seven countries

Capacity to process 72,000

States

Capacity to process more

in the Americas

hogs per day in 11 units in Brazil and the United

than 13 million birds per day in 58 units

Capacity to produce more than 100 thousand hides per day in 31

units worldwide

More than 215 thousand employees around the world

2

JBS Global
Presence in

20+ countries, Exports to 150+ countries and more than

300,000 clients
83% of JBS
Revenue is
Moscow

denominated in

US$

North America
London
Ghent

 ~49% of JBS revenue,

Chicago

Hamburg

Toronto
Seoul
Tokyo

Shanghai
Dubai

Caracas

17% of JBS
Revenue is

Exports
 ~30,7% of JBS revenue

So Paulo
(headquarter)

denominated in

R$

Taipei
Hong Kong

Santiago

South America
 ~17,6% of JBS revenue,3
Sales office
Sales office presence

Note 1. It considers only domestic sales

Note 2. Includes beef and lamb operations in the USA and Australia
Note 3. Includes leather and hides operations in Brazil, Uruguay, Mexico, Germany, Vietnam and China and also Rigamonti operations in Italy.

Production Platform

JBS Historical Performance

LTM to 1Q15, JBS reached R$127.9 billion in net revenue, EBITDA of R$12.1 billion,
equivalent to an EBITDA margin of 9.5%, and net income of R$3.36 billion.
Updating the results using FX at the end of 1Q15, net revenue reached R$153.9 billion
and EBITDA LTM was R$14.5 billion.

9,2%

4,3%

3,8%

6,6%

5,8%

5,5%

9,5%

127,9

120,5

5,0%

3,7%

92,9
75,7
61,8

54,7
34,3

30,3
14,1
2007

1,3

1,2

0,6
2008

3,5

2009

2010

Net Revenue (R$ billion)

12.1

11,1
3,1

2011
EBITDA (R$ billion)

6,1

4,4

2012

2013

2014

LTM1T15

EBITDA Margin(%)
4

JBS Performance Since IPO in 2007*

Sales Growth

Net Income CAGR

30x

36%

to R$128 billion

EBITDA
Improvement

Market Capitalization
Multiplied by

520bps

7.7x

from 4.3% to 9.5% margin

*LTM to 1Q15

since 2007
5

Value Creation

Proven M&A and turnaround track record

More than 50 acquisitions in the last 10 years

EBITDA and EBITDA margin

2,288.5M
1,506M
1,486M

2007
Pre JBS

LTM
Q1/2015

2009
Pre JBS

LTM
Q1/2015

2013
Pre JBS

LTM
Q1/2015
6

JBS Strategy

Step 3: Develop leading consumer brands

Branding
10+%

Value added products

8+%

4+%

Sales and distribution platform

Processing platform

Step 2:
Expand global distribution platform to reach
clients; sell direct to customers in foreign
markets
Step 1:
Develop efficient and diversified
global processing platform; optimize
mix

JBS has created an integrated platform that increasingly captures

maximum value across the value chain
7

Strong Global Industry Fundamentals

The Global Middle Class is Growing(1)

Supporting Global Consumption Growth(2)

Meat Consumption Forecast (tons in mm)

2009

2020

2030

21.6%
22%

338,3
278,2

1.8
Billion

3.2 Billion

4.9
Billion

228,1

Lamb
Beef
Pork
Poultry

2001

2008-2010

2020

Global Protein Trade(3) MT in 1000s

35,0
28,714

30,0
25,0

23,358
19,868

20,0
15,0

14,296

10,0
5,0
0,0
2000

2005

2010

2015E

____________________
(1) Source: OECD.
(2) Source: FAO OECD.
(3) Source: Foreign Agricultural Service, Official USDA Estimates. Expressed in millions of MT.

Global Protein Trade Largest Exporters & Importers

Top Beef Exporters in 2014 (68% JBS Presence)
Other
11%
Canada
Australia
4%
24%
Mercosul
9%

Top Chicken Exporters in 2014 (65% JBS Presence)

Middle East
4,6%

Mercosul
3,5%

Other
5,6%
Brazil
33,9%

Asia
9,9%

USA
12%

India
21%

EU
10,8%

Brazil
19%

USA
31,6%

Top Pork Exporters in 2014 (40% JBS Presence)

Brazil
8%

Total Imports in 2014

Other
11%

Other
19%

USA
32%

Asia
36%
Mexico
7%

Canada
18%

Africa
8%
EU
32%

(1)
May contain meat of other bovines.
Source: USDA FAS; Company defined regional grouping.
Note: Bolded countries indicate JBS presence.

USA
8%

Russia
8%

Middle East
14%
9

Why JBS?

GLOBAL LEADER

CONSISTENT GROWTH AND MARGIN EXPANSION

DIVERSIFICATION
GEOGRAPHY
PROTEIN
PRODUCT PORTFOLIO

CONSISTENT AND MORE

STABLE EARNINGS

BEST-IN-CLASS COST STRUCTURE

OPERATIONAL EXCELLENCE

BEST-IN-CLASS MANAGEMENT

10

Consolidated Results
1Q15

11

1Q15 Consolidated Highlights

Consolidated Net Sales (R$ Million)

Consolidated EBITDA (R$ Million)

EBITDA Margin (%)

8.2%
33,819

6.6%

26,419

2,758
1,750

28.0%

1Q14

1Q15

1Q14

57.6%

1Q15

Highest Revenue and EBITDA in a first Quarter.

EBITDA grew more than Revenues.
160 bps expansion in EBITDA margin over 1Q14.
12

1Q15 Consolidated Highlights

Cash Generation (R$ Million)

Consolidated Net Income (R$ Million)

Earnings per share (R$)
0.482

4,538

1,394

0.024

799.2%

1891.6%

505
1Q14

70

1Q15

1Q14

1Q15

Cash generation reached historical high for a first quarter.

Free Cash Flow generation of R$3.8 billion prior to acquisitions.
Effective hedging strategy to protect results.
13

JBS Consolidated Exports Breakdown in 1Q15 and 1Q14

Growth of 13% in 1Q15 exports

compared to 1Q14

South America
14,2%

Others
8,7%
Canada
2,3%

Africa and Middle East

13,4%

Russia
3,7%

1Q15
US$ 3,547.3
million

South Korea
6,2%

Africa and Middle East

14,7%

Others 11,3%
Canada 2,5%

Mexico 12,4%
South Korea 5,4%

Russia 6,4%

1Q14
US$3,145.5
million

Greater China
11,9%

E.U.
6,7%
Japan
9,9%
USA
11,0%

Mexico
11,9%

South America 12,1%

E.U. 7,1%
Greater China 11,5%

USA 7,1%
Japan 9,5%

Note 1. Including China and Hong Kong

14

1Q15 Consolidated Highlights

Net Debt (US$ Million)

Net Debt (R$ Million) / Leverage

Net Debt

10,464

Leverage (x)

3.3x
10,356

1,714

2.3x
Acquisitions
and dividends

1.9x

23,679

33,221
5,500

Acquisitions
and dividends

8,641

27,721

1Q14

1Q15

1Q14

1Q15

US$1.8 billion debt reduction compared to 1Q14 when analyzed before

acquisitions.
Leverage would have been 1.9x, prior to acquisitions.
Primos Revenue and EBITDA are not considered in a pro-forma analysis.
15

Debt Profile and Maturity

Debt Profile

The Company ended the quarter with R$14,120.8 million in cash,

equivalent to 104% of short term debt, approximately.

JBS USA has US$1.5 billion fully available under credit

facilities which, if added to the current cash position,
represents 140% of short term debt.

1Q14

29%

71%

2Q14

28%

72%

3Q14

30%

70%

4Q14

The percentage of short term debt (ST) in relation to total

debt was 29% in 1Q15.

1Q15

34%

66%

29%

71%

Short Term

Long Term

Maturity (R$ million)

9.027

8.969

5.311
4.069

3.672
2.067

-573

Short term*

* Net of Cash

680

2016

2017

2018

2019

2020

2021

after 2021

16

JBS Credit Ratings

JBS Credit Ratings have been upgraded consistently
Current Ratings: Moodys Ba2 and S&P BB+
Ba1 / BB+

Ba2 / BB

Ba3 / BB-

B1 / B+

Jan-06

May-15 Outlook

Jul-10

Mar-13

Apr-15

Moodys

Fitch

S&P

STABLE

STABLE

POSITIVE

May-15

Source: Moodys, Fitch and Standard & Poors.

17

JBS SA Shares Performance

JBSS3 vs IBOV

Period

JBSS3

IBOV

2014

30.2%

-0.7%

Jan-May 2015

46.8%

14.4%
18

Business Units

19

JBS Foods
Leading producer of prepared foods (PFPs) and fresh poultry and pork products
Operational Platform

Brazil

+66,000 employees

5.6 million birds per day

AM

Production units located in the south,

CE

southeast and mid-west regions

1

MT

21,200 hogs per day

MS

and mid-west regions

1

southeast, northeast and mid-west

regions .

18 distribution centers

In 13 states

MG

SP

PR

RS SC

Production units located in the south,

1
2
1

23 PFP units

3
1

80 thousand tons per month

08 slaughterhouses and deboning units

DF
1

Production units located in the south

30 slaughterhouses and deboning units

PE

BA

RJ

3
7

18 distribution centers

2nd largest producer and exporter of poultry and pork in Brazil

Large production platform, with 61 production units1 and nearly 66,700employees

National distribution platform serving ~79,000 points of sale

Strong international presence, exporting to over 100 countries

Complete product portfolio with leading and well-known brands

Uniquely positioned as the natural consolidator of the sector in Brazil, allowing accelerated growth

Net Revenue LTM to 1Q15

Notes. Industrial Complex: location with one or more units of production;

R$14.0 billion

EBITDA LTM to 1Q15

R$2,288.5 million
16.4% Margin
20

% NR JBS S.A.
7%

JBS Foods 1Q15

18%

44%

12%
20%

Net Revenue (R$ Million)

EBITDA (R$ Million)

3,874.5

15.9%

616.0

13.7%

2,780.0

379.8
62,2%

39.4%

1Q14

1Q15

1Q14

1Q15

Strong revenue growth, organic and inorganic.

Integration success and synergy capture.
Continuous improvement in quality indicators, level of service
and execution.
Market share gains in several product categories.
Strong appreciation and recognition of Seara brand.
21

JBS Mercosul
Beef production in Brazil, Argentina, Paraguay and Uruguay, in addition to leather and other Related Business
Operational Platform

Brazil

+70,000 employees
PA
AM

~ 55,000 bovines per day

92% in Brazil, 3% in Argentina, 3% in

Paraguay and 2% in Uruguay

90,000 hides per day

AC
1
1

RO

MA

2
4

MT
6

15

3
4

3
1
9

Facilities in Brazil, Argentina, Uruguay,

3
1
5

China, Vietnam and Mexico

4
2
2

2
1
2

MS

44 distribution centers

1
2
1

06 feedlots

MG
1
1

47 beef processing facilities

PE

3
2

6 GO

PR

BA

CE

29 tanneries

ES

RJ
2

43 distribution centers

SP

SC

RS

11 central and 32 regional in Brazil

and 01 in Argentina

09 related businesses

05 beef processing facilities

01 distribution center
01 tannery

Argentina
Leadership in beef production

Biodiesel

Can making

Collagen

Paraguay
JBS is the leader in beef processing and has around 25% of market share in
exports of Paraguay

02 beef processing facility

01 tannery

JBS Carriers

Trading

Uruguay

Hygiene and Clean

Great access to export markets; the only country to export fresh beef to the US

01 beef processing
02 tanneries

Casings

TRP Complementary to JBS
Carriers

Recycling

Net Revenue LTM to 1Q15

R$27.1 billion

EBITDA LTM to 1Q15

R$2,099.4 million
7.7% Margin
22

% NR JBS S.A.

JBS Mercosul 1Q15

20%

Net Revenue (R$ Million)

6,782.3

EBITDA (R$ Million)

10.4%
5.6%

596.1

5,725.3

376.4
18.5%

1Q14

-36.8%

1Q15

1Q14

1Q15

Profitability impacted by reduced cattle availability for

processing due to cow retention and a decrease in Brazilian
exports in 1Q15.
Focus on sales expansion of higher value-added products.
Continued investment in Friboi brand for differentiation and
development of its products in the Brazilian market.
23

JBS USA Beef

Beef production in the United States, Canada and Australia
Operational Platform

United States

+30,000 employees
WI

~41,000 bovines per day

ID

NE

28,000 in the US

UT

4,000 in Canada

CO

1
2

PA

KS

9,000 in Australia

09 beef processing facilities

OK

AZ

11 feedlots

11,000 hides per day

MI

01 tannery

TX

5,000 in the US

3
1

06 carriers units

6,000 in Australia

16 feedlots (bovine)

bovines

01 in Canada / Capacity of 70,000

bovines

05 in Australia / Capacity of 152,000

bovines

14 distribution centers
1

15 processing facilities

Australia and New Zealand

11 in the US/ Capacity of 1.0 million

2
2

4
1

Leadership in beef exports

Leadership in the processing of lamb (22,000 lamb
per day)
#1st in the Food Industry Ranking
Growth of 17% in revenues from 2013 to 2014

Canada
Growth of 49% in revenues from 2013 to 2014

14 DCs in Australia and 06 carriers

 09 bovine, 05 lamb and 01 hogs

07 feedlots
 05 bovine and 02 lamb

01 tannery
14 distribution centers
03 case ready and 03 small goods facilities
01 beef processing facility
01 feedlot (bovine)
01 trading

units in the US

Net Revenue LTM to 1Q15

Note 1. Source: Food&Drink Business Magazine; Note 2. Includes Primo Smallgoods

US$22.3 billion

EBITDA LTM to 1Q15

US$1,125.2 million
5.0% Margin
24

% NR JBS S.A.

JBS USA Beef (including Australia and Canada) 1Q15

Net Revenue (US$ Million)

44%

EBITDA (US$ Million)

5,190.5
3.6%

4,520.7

-0.5%

186.6

14.8%

-22.5

1Q14

1Q15

1Q14

1Q15

Strong recovery in US cattle herd.

Production diversification (Australia, Canada, fed cattle and
regional units) provides greater flexibility and agility to adapt
to market conditions.
Acquisition of Primo Group, leader in the production of
processed products in Australia and NZ, expands the
Company's presence in value-added products with brands.
25

JBS USA Pork

Pork production in the United States
Operational Platform

United States

+6,000 employees

~ 51,300 hogs per day

MN
1

100% in the US
IA
1

02 case ready facilities

03 hogs processing facilities

CO
1

Convenience products

KY

CA

NC
1

02 case ready facilities

~3,000 lamb per day

01 lamb processing facility

Products

Main Brands
Swift Premium
Dry Rubbed Ribs

Swift Premium
Boneless Backrib

Net Revenue LTM to 1Q15

Swift Premium
Rubbed Loin Filet

Swift Premium
Boneless Pork Chops

US$3.7 billion

EBITDA LTM to 1Q15

US$415.9 million
11.3% Margin
26

% NR JBS S.A.
7%

JBS USA Pork 1Q15

Net Revenue (US$ Million)

EBITDA (US$ Million)

896.9
12.2%

762.3

93.2

9.2%

82.9
12,4%
12.4%

-15.0%

1Q14

1Q15

1Q14

1Q15

Growth in number of animals available for processing and

consequent increase in sales volume.
Organic growth in ready to cook and convenience products
segment.

27

JBS USA Chicken (Pilgrims Pride Corporation - PPC)

Poultry production in the United States, Porto Rico and Mexico
Operational Platform

United States

+44,000 employees

~ 8.1 million birds per day

6.5 million in the US

250,000 in Porto Rico

WV

1,4 million in Mexico

TN

AR

17 distribution centers

TX
4
1

Located in Mexico

KY
AL

LA

3
1
1

VA
1

NC

1
1

24 processing facilities
2

SC
GA

05 case ready facilities

7
1

FL
1
1

+ de 3,500 contract growers

36 hatcheries

Mexico

28 feed mills

With Tyson acquisition, PPC now have an additional of three

facilities, adding 600,000 birds per day of capacity and 5,400
employees

06 poultry processing facilities

17 distribution centers

Porto Rico

01 processing facility

Net Revenue LTM to 1Q15

US$8.6 billion

EBITDA LTM to 1Q15

US$1,505.3 million
17.5% Margin
28

% NR JBS S.A.

JBS USA Chicken (Pilgrims Pride Corporation - PPC) 1Q15

Net Revenue (US$ Million)

18%

EBITDA (US$ Million)

2,052.9

17.7%

2,018.1

363.5
10.2%

1.7%

205.2

1Q14

1Q15

77.2%

1Q14

1Q15

Relentless focus on operational excellence.

Effective strategy in product portfolio and management of sales
channels.
Sales growth in value-added products.

29

JBS Mission

To be the best in all that we do,

completely focused
on our business, ensuring
the best products and services
to our customers, a relationship of
trust for our suppliers, profitability for
our shareholders and the
opportunity
of a better future
for all of our team members.

30

JBS Values

DETERMINATION
Be relentless. Deliver superior results. Adopt a sense of urgency. Make things happen.

SIMPLICITY
Be practical. Focus on what is important. Adopt a hands-on approach. Avoid bureaucracy.

AVAILABILITY
Be receptive and open. Always be prepared and motivated to take on new challenges.

HUMILITY
Listen. Be helpful and thoughtful. Act with respect. Prioritize the team over yourself. Value the opinion of others.

SINCERITY
Be direct, truthful and transparent. Respectfully express opinion. Know how to say no, but be positive and offer
solutions.

DISCIPLINE
Be punctual. Fulfill commitments. Deliver results. Do not make excuses.

OWNERSHIP
Be committed to results. Focus on details. Take responsibility.
31