JBS Day NY – ADR Program
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JBS Day NY – ADR Program Presentation Transcript

  • 1. JBS S.A. JBS DAY NY - ADR Program December 4th, 2008 “In God we Trust”
  • 2. 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. 1
  • 3. Our Mission To be the best at 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 for all our employees. 2
  • 4. Our Values The Foundation Of Our Culture Planning Determination Discipline Availability Openness Simplicity 3
  • 5. JBS American Depositary Receipt (JBSAY) The Bank of New York Mellon, has been selected by JBS S.A. as the depositary bank for its American depositary receipt (ADR) program. Each JBS ADR represents two common shares and they are traded on the over-the-counter market under the symbol “JBSAY“.  The new program did not represent an increase in the share capital or issuance of new shares.  This step represents an opportunity to increase the liquidity, visibility and value of JBS shares.  We believe that the program will help readjusting the share price to its reasonable currency level, considering that more than 80% of the Company’s revenue is in American Dollars and Real has depreciated significantly. 4
  • 6. JBS American Depositary Receipt (JBSAY) 5
  • 7. The Global Beef Industry 8 8
  • 8. GLOBAL BEEF TRADE AND CONSUMPTION Largest Beef Exporters Largest Beef Importers Others USA EU 10% Others Brazil 17% Uruguay 1% 33% 27% 5% Russia Argentina 15% 5% Egypt C anada 3% 6% Australia C anada Japan New Zeland 18% 4% 10% 7% Mexico India South Korea EU 7% USA 10% 5% 6% 11% Source: USDA – 2008 Estimate Source: USDA – 2008 Estimate Beef per Capita Consumption (in kg/year) 69.3 54.6 41.2 37.2 34.7 32.2 24.1 16.0 16.3 9.3 4.7 Argentina Uruguay USA Brazil Australia Canada Mexico EU Russia Japan China Source: USDA – 2008 Estimate 7
  • 9. RELEVANT PLAYERS IN THE GLOBAL BEEF TRADE Global Beef Trade Balance (Thousand tons)1 JBS Global Leadership 1999 2008*  Leader in countries with surplus production. Brazil  Leader in exports to the main beef import Argentina countries. Australia  Access to all global beef markets. USA  Sustainable and long term relationship with C hina its global customer base. European Union Russia South Korea Japan (1,500) (500) 500 1,500 2,500 1 Production- Consumption Source: USDA * 2008 Estimate 8
  • 10. Herd (million of heads) 19 600,0 700,0 800,0 900,0 1000,0 1100,0 1200,0 60 19 62 19 64 Source: USDA 19 66 19 68 19 70 19 72 19 1960 – 2009 74 19 76 19 78 19 80 Total Herd 19 82 19 84 19 86 19 88 19 90 19 92 Production 19 94 19 96 19 98 20 00 20 02 GLOBAL SCENARIO – HERD & PRODUCTION 20 04 20 06 20 08 10,0 20,0 30,0 40,0 50,0 60,0 70,0 Production (million of tons) 9
  • 11. WORLD POPULATION GROWTH AND BEEF CONSUMPTION (1960 – 2050) 10.000,0 160,0 9.000,0 Population growth, a beef 140,0 consumption driver. 8.000,0 120,0 7.000,0 Consumption (million tons) 100,0 Population (million) 6.000,0 5.000,0 80,0 4.000,0 60,0 3.000,0 40,0 2.000,0 Developed countries 20,0 1.000,0 0,0 - 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010* 2015* 2020* 2025* 2030* 2035* 2040* 2045* 2050* Beef Consumption World Population Population - More developed regions Population - Less developed regions Beef consumption trend considering CAGR of 2,0% (from 1960 to 2008) Source: UN (United Nations) and USDA *UN Estimates 10
  • 12. BEEF MARKET USA 1991 – 2009 (thousand tons) 14.000 Exports Recovering 3500 after BSE in 2003. 13.000 3000 12.000 2500 Production, Consumption Stocks, Import, Export 11.000 2000 10.000 1500 9.000 1000 8.000 500 7.000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Ending Stocks Production Consumption Imports Exports Source: USDA 11
  • 13. BEEF MARKET European Union 1997 – 2013 (thousand tons) 9.000 1600 EU - 15 EU - 25 8.000 1400 7.000 1200 Increased dependence Production, Consumption 6.000 Stocks, Import, Export 1000 on imports. 5.000 800 4.000 600 3.000 400 2.000 1.000 200 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013* Ending Stocks Production Consumption Import Export Source: EU Commission / DG AGRI *Estimates 12
  • 14. BEEF MARKET RUSSIA 1991 – 2009 (thousand tons) 5000 4000 44.4% of Russian consumption comes from imports. 3000 2000 1000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Ending Stocks Production Import Export Consumption Source: USDA 13
  • 15. Our Strategy 8 8
  • 16. OUR STRATEGY Examples: - Brazilian Slaughterhouses - Swift Armour - Swift & Company - Inalca - Tasman Pursue Growth Opportunities - National Beef * Through Acquisitions - Smithfield Beef * * The closing of these transactions are subject to certain closing conditions, including expiration or termination of applicable waiting periods under U.S. antitrust law Mitigate Potential Risks as Sanitary Barriers & Seasonality Create satisfactory and consistent return to shareholders Experienced management team with over 50 years of experience in the beef processing industry. 15
  • 17. JBS’ HISTORY HAS BEEN BUILT THROUGH MORE THAN 30 ACQUISITIONS IN 15 YEARS WITH APROPRIATED CAPITAL STRUCTURE AND MANAGEMENT Inalca National Beef Swift Foods Co. Net Sales (in US$ billion) (1) Maringá (Amambay) Companies and assets acquired Berazategui Tasman (Rio Platense) Smithfield Beef Colonia Caroya Five Rivers SB Holdings JV Beef Jerky Goiânia Barretos (Anglo) Rio Branco Venado (Anglo) Pres. Epitácio (Bordon) Cacoal 1 Tuerto Campo Grande (Bordon) Cacoal 2 Pontevedra Porto Velho (CEPA) 24.8 Vilhena (Frigovira) Barra do Pedra Preta Cáceres Garças (Frigo Marca) (Frigosol) (Sadia) Rosário Iturama (Swift ARG) (Frigosol) San Jose Araputanga Anápolis Andradina (Swift ARG) (Bordon) (Sadia) (Frigoara) 12.7 1.2 1.5 1.9 0.3 0.4 0.4 0.5 0.5 0.4 0.7 1993 1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007* 2008** R$/US$ end of the year cotation R$/US$: 1.91 Source: JBS * Pro forma JBS S.A. LTM Dec07 (includes JBS USA) ** Pro Forma JBS S.A. LTM Sep08 (includes JBS USA, Tasman and 50% of Inalca); National LTM May08; Smithfield Beef LTM Sep07; (1) The closing of this transaction is subject to certain closing conditions, including expiration or termination of applicable waiting periods under U.S. antitrust law 16
  • 18. MANAGEMENT Board of Directors Marcus CEO Demósthenes Wesley José José Vinicius Chairman Marques BNDES Mendonça Batista Batista Jr. Pratini de Joesley (Independent (Independent) Batista Sobrinho Moraes PROT FIP) Batista (Independent) Management Italy Financial Investor Brazil Argentina Legal & Controlling Luigi Director Relations Humberto Nelson Francisco Director Scordamaglia / Sérgio Jerry Magalhães Dalcanale de Assis e Silva Eliseo Paolo Boni Longo O’Callaghan Fernandez Mr. Humberto de Mr. Nelson Mr. Scordamaglia, Mr. Sérgio Longo, has Mr. Francisco de Mr. Jerry Mr. Eliseo Campos Dalcanale started his career as been serving JBS as a Assis e Silva, General O’Callaghan holds a Fernandez holds a Magalhães holds has been working at Professor in the Financial Director since Counsel, holds a law degree in Engineering degree in business a degree in biology JBS since 2001 and is Veterinary University April 2003 and he has degree and a master from UCC (University administration and from Universidade currently the CEO of of Perugia and as an been a member of JBS’ degree in College Cork) in accounting from Federal do Mato the division in advisor in the legal board of executive environmental law from Ireland. He immigrated Universidade Católica Grosso. He is Argentina. Before and QA departments officers since 2005. Pontifícia Universidade to Brazil in 1979. Mr. de Pernambuco and a currently the chief joining JBS, he had of Inalca. He was Before joining JBS he Católica at Paraná O’Callaghan entered master’s degree in operating officer of 21 years of appointed CEO of had over 25 years of State, a master degree the beef sector in 1983 business the Brazilian experience in the Inalca in 2007. experience working in and joined JBS in 1996 administration from in corporate law and a division. Before meat industry. Mr. Paolo Boni financial institutions. to develop FGV. He joined JBS in master’s degree in joining JBS in holds a degree in International Trade for August 2005 and is public law from 1999, he had over accounting. Before the group. He is currently the Universidade currently our Investor management and 8 years of joining JBS he had Mackenzie, and an MBE Relations Officer. controlling director. experience working over 25 years of in labor economics from Before joining JBS Mr in the meat experience in the Universidade de São Fernandez worked for industry. beef industry sector. He has been a Board Paulo. He has been a eight years in the Member of Inalca member of JBS’ board auditing and advisory since 1996. of executive officers industry and 10 years since January 2, 2007 . in the retail industry. He has been working for the JBS Group since 17 December 2001.
  • 19. MANAGEMENT CEO USA/AUS Wesley Batista JBS JBS Five Pork Trading CFO Australia Packerland Rivers Beef USA Martin Brent André Iain Mars Beef Mike David Colwell Dooley Eastwood Nogueira Richard Vesta Thoren Mr. Iain Mars Mr. Martin Mr. Brent Mr. André Mr. Richard Vesta Mr. Thoren has Mr. David Colwell was born in Dooley Eastwood had Nogueira holds a joined Smithfield served as President holds a degree from England. Iain has worked for Swift & degree in Economics Foods following the and CEO of Five University of South Holds a degree of from Universidade acquisition of Rivers since the been involved in Company for over Florida and has been Science in Federal Fluminense, Packerland in 2001 Company’s the beef industry 18 years. working for JBS Swift Biology/Medical a master degree in and now serves as inception. & Company for 11 for all his life. Mr Technology – He moved to the Capital Markets from President and CEO Mike received his years. David has Mars was Eastern Illinois USA in 2007 to be FGV – Fundacão of JBS Packerland. Master of Science been the President of appointed University - 1982 Vice President / Getúlio Vargas, a degree in JBS Beef since 2007. President and CEO Marty has worked Director of JBS master degree in in Agricultural of JBS Australia in Trading USA, the Economics from Economics and his at Swift & Universidade de 2007, after the Company all his Swift Distribution degree in acquisition of Brasilia in 2003. Agribusiness from life, having started Centers USA, Swift & Company. He worked for more Washington State as a management Australia Trading, He joined JBS in than 20 years in University. trainee in 1983. Australia Banco do Brasil and 2005. Distribution He was appointed joined JBS in 2007, Centers and the following the bought in 2007 to be the Global Trading Swift & Co President of JBS Business in Brazil. acquisition. Pork division. 18
  • 20. JBS HAS A GLOBAL PRODUCTION AND DISTRIBUTION PLATFORM JBS’ main units and markets x = Legend Slaughterhouse (Beef) Slaughterhouse and Industry Distribution Center Vegetable Canning Plant Beef Canning Plant Beef Jerky Plant (Beef Snack’s) Slaughterhouse (Pork) Slaughterhouse (Lamb) x Beef and Pork Processing Plant = Wet Blue Processing Plant Headquarters Office Feed Lot Package Industry Inland Container Terminal Commercial Office 19
  • 21. BRIEF DESCRIPTION Global Production Platform Production Units Employees Daily Slaugther Capacity JBS Brazil 22 16.993 18.900 B JBS Argentina 6 5.059 6.700 B 28.100 B JBS USA 18 24.295 47.900 P 4.000 S 8.500 B JBS Australia 10 6.995 16.500 S Inalca JBS 8 2.019 3.000 B 65.200 B Total JBS 64 55.361 47.900 P 20.500 S Additional Distribution Platform Russia Angola Congo Argeria Dem. Rep. of the Congo Poland (B) Beef; (P) Pork; (S) Smalls; 20
  • 22. JBS BRAZIL Brief Description  JBS Brazil’s operations are distributed thru 22 production plants, with a total slaughter capacity of 18,900 heads of cattle per day and more than 16,900 employees.  JBS’s clients in Brazil are primarily large retailers, restaurants, and tanneries, JBS’s portfolio currently includes more than 6,000 domestic market companies.  JBS is Brazil’s largest exporter of beef products, with revenues of US$ 1.1 billion in 2007, according to the SECEX (Brazilian Secretariat of Foreign Trade). It is also 22nd among the main Brazilian exporters from all sectors. Platform Structure In Brazil the Company’s plants are distributed as follows: – 19 slaughtering plants located in the Brazilian states of Acre, Goiás, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Rondônia, São Paulo and Paraná, five of which also have processed beef production plant; – 1 canned beef production plant located in the state of Rio de Janeiro, Brazil; – 1 canned vegetable plant located in the state of Minas Gerais, Brazil; and Legend Slaughtering Plant – 1 beef jerky plant located in São Paulo state, Brazil. Slaughtering and Industrial Plant – Beside that, it has 1 cattle feedlot located in the state São Paulo, Brazil. Distribution Centers Canned Vegetable Plant Canned Beef Plant Administrative Headquarters Container Yard Feedlot 21
  • 23. JBS ARGENTINA Brief Description  In 2005, it was acquired by JBS and is currently known as JBS Argentina, it has a total slaughter capacity of 6,700 heads of cattle per day and more than 5,000 employees.  The Company was first meatpacker in Argentina to meet the regulations established by ISO 9001:2000 in its entire production process.  In Argentina, the company is the absolute leader in the canned meat segment of the domestic market, having a share of 77% of all sales in 2007. The Argentina client portfolio is comprised of 786 companies.  In the last year, JBS Argentina accounted for 87% of processed beef exports in Argentina, which were shipped to the United States and Europe, and includes approximately 190 clients. Platform Structure  In Argentina the Company’s plants are distributed as follows:  6 slaughtering plants located in four provinces of Argentina (Buenos Aires, Entre Rios, Santa Fé and Córdoba), 5 of which also have processed beef production plants.  1 can making factory in the province of Buenos Aires, Argentina. Legend Slaughtering Plant Slaughtering and Industrial Plant Plant and Offices 22
  • 24. JBS USA Brief Description  JBS USA’s operations are distributed thru 18 production plants, with a total slaughter capacity of 28,100 heads of cattle, 47,900 heads of pork per day and 4,000 heads of smalls per day and 11 Feed Yards with a one time capacity to fatten 820,000 head of cattle . The company has more than 24,200 employees.  The Company, has been a recognized provider of beef and pork quality products for more than 150 years. Platform Structure  At present, in the USA the Company’s plants are distributed as follows:  8 cattle slaughtering plants in the U.S. states of Colorado, Utah, Texas, Nebraska, Wiscosin, Michigan, Pennsylvania and Arizona;  3 pork slaughtering plants in the U.S. states of Minnesota, Iowa, and Kentucky;  1 case-ready beef plant in the U.S. state of California;  1 lamb plant in the U.S. state of Colorado;  1 Wet Blue leather producing plant in the U.S. state of Texas.  2 beef jerky plants located in the U.S. states of Minnesota and Texas; and  2 rendering located in the U.S. state of Pennsylvania. Legend Slaughtering Plant  Beside that, it has 11 feed yard in the U.S. states of Colorado, Texas, Oklahoma, Kansas, Ohio e Distribution Centers Idaho; Pork Plant Beef and Pork Plant Lamb Plant Administrative Headquarters Plant and Offices 23
  • 25. JBS AUSTRALIA Brief Description  JBS Australia’s operations are distributed thru 10 production plants, with a total slaughter capacity of 8,500 heads of cattle per day and more than 6,900 employees.  JBS Australia is the largest and broadest Australian meat processor and exporter, maintaining commercial relations with more than 30 countries, especially in the Pacific Coast and in North America. Platform Structure  In Australia the Company’s plants are distributed as follows:  10 cattle and smalls slaughtering plants.  5 cattle feedlots located in the Australian states of Queensland and New South Wales. Legend Slaughtering Plant Distribution Centers Administrative Headquarters Feedlot 24
  • 26. INALCA JBS ITALY ‘ Company Summary Platforms Structure  Responsible for fresh beef production, industrialized, smoked and snacks  Broad Distribution beef from Cremonini Group; Moscow  Revenue of €$1,039 million and assets of €$771 million; Saint Petersburg  The division is composed by 2 companies; INALCA S.p.A. and Montana Alimentari S.p.A.; Luanda (Angola)  Largest beef producer in Italy; Lobito (Angola)  Largest industrialized beef producer in Europe; Melangje (Angola)  Largest hamburger producer in Italy; Brazzaville (Congo)  Only not American company supplier of hamburger to McDonald’s; Kinshasa (Congo)  Distribution capillarity in Europe, Africa and Russia; Point-noir (Congo)  Benchmark in technology to the beef slaughter market; Algiers (Algeria)  Production Facilities  10 production plants; Poland – Slaughtering facility  Processing capacity of 800,000 cattle head/year; Moscow – Logistic and distribution platform  40,000 tons of hamburger/year; Legend  2,019 employees. Slaughtering Plant Customers INALCA JBS has more than 8,000 customers in the domestic market and 660 in the international market, supplying 65 countries, highlighting France, Spain, Greece, England and Germany. 50% 50% Inalca JBS 25
  • 27. BRIEF DESCRIPTION – CUSTOMERS BASE Customers Base by Business Units Customers Nº of Countries Main Customers 11.240 DM Russia JBS Brasil 102 436 IM European Union European Union 653 DM JBS Argentina 46 137 IM USA 3.978 DM Mexico JBS USA 37 507 IM Canada 185 DM South Korea JBS Austrália 35 396 IM China 8.061 DM France Inalca JBS 65 665 IM England DM – Domestic Market; IM – International Market 2626
  • 28. JBS LAUNCHS  In middle of October JBS launched the new Swift product “Assa Fácil”, produced in Presidente Epitácio/SP.  The new line has three options of beef: rib eye, rump tail and eye round.  The prices goes from R$17.00 to R$19.00 per kilo.  The packaging is made of polyethylene and can be placed in the freezer for up to 12 months and ranges from 950g to 2.7 kilos depending on the cut. 27
  • 29. LANÇAMENTOS JBS LAUNCHS JBS  With five options of flavors (manioc with beef, cheese, beef with veggies, champignon and broccolis), the line of ready soups Swift Moments was launched in May, 2008.  The soup comes ready to eat and has a stand-up pouch packaging, a sachet which maintains the product quality without storage in the fridge.  With individual portions of 200 grams, the price suggested is R$2.50.  On September 9, 2008, the soup line received the “IS Awards”, organized by ABIA (Brazilian Association of the food industry) and by Nielsen Business Media, as the most innovative food product of the year. 38 28
  • 30. 3Q08 Results 8 8
  • 31. SHORT TERM DEBT PROFILE – 3rd QUARTER 2008 The Administration of the Company is secure that even if the present financial crisis has not abated until the next quarter the Company will not have difficulties in refinancing its short term debt and believes that in the final analysis there will be a possible increase in the cost of the debt. The Company did a sensitivity analysis considering firstly a probable scenario and secondly a pessimistic one in relation to the renewal of its short term financing facilities. JBS S.A. Consolida ted (R$ m illion) Proba ble Scena rio Pessim istic Scena rio Short Term Debt Amortiza tion Amortiza tion Short Term Debt 4 Q 0 8 1 Q 0 9 2 Q 0 9 3 Q 0 9 Tota l %** 4Q08 1Q09 2Q09 3Q09 %** 4Q08 1Q09 2Q09 3Q09 Fina ncing for purcha se of fix ed a ssets FIN AME / FIN EM - Enterprise financing 48 12 12 12 84 100% 48 12 12 12 100% 48 12 12 12 N otes Payable 2 - - - 2 100% 2 0 0 0 100% 2 0 0 0 Sub Total 1 50 12 12 12 86 100% 50 12 12 12 100% 50 12 12 12 Loa ns for w ork ing ca pita l purposes ACC - Exchange advance contracts 116 174 216 122 628 0% - - - - 20% 23 35 43 24 EXIM - BN DES export credit facility 103 69 0 0 172 0% - - - - 20% 21 14 0 0 Fixed Rate N otes with final maturity in February 2011 7 - - - 7 100% 7 - - - 100% 7 0 0 0 W orking Capital - American Dollars * 7 22 24 17 70 75% 5 16 18 13 75% 5 16 18 13 W orking Capital - Australian Dollars - - 97 - 97 0% - - - - 0% 0 0 0 0 W orking Capital - Euros 218 - - - 218 0% - - - - 0% 0 0 0 0 W orking Capital - Reais 101 - - - 101 0% - - - - 30% 30 0 0 0 Export prepayment 5 130 13 13 161 0% - - - - 20% 1 26 3 3 Fixed Rate N otes with final maturity February 2016 (144-A) - 10 - - 10 100% - 10 - - 100% 0 10 0 0 N CE / COMPROR 63 245 - 92 400 0% - - - - 20% 13 49 0 18 Sub Total 2 6 2 2 6 4 9 3 5 0 2 4 4 1 .8 6 4 4% 12 26 18 13 20% 100 149 64 58 Tota l 672 661 362 2 5 5 1 .9 5 0 8% 62 38 30 24 23% 150 162 76 70 Amortiza tion of Short Term Debt 155 457 Ca sh, ca sh equiva lents a nd Short-term investments 3 rd Q ua rter 2 0 0 8 *** 2 .2 5 6 2 .1 9 4 2 .1 5 6 2 .1 2 6 2 .1 0 1 2 .1 0 6 1 .9 4 4 1 .8 6 8 1 .7 9 9 EBITDA 3 rd Q ua rter 2 0 0 8 471 Obs: The Finame, Finem and Finimp credit lines are automatically liquidated, meaning they are paid on expiry and are not renewable Trade finance, Working Capital and other credit lines are interchangeable, meaning they can be refinanced but not necessarily in the same category under which they were initially contracted. *Including Finimp **Percentage to be paid in the period ***Simulation of the availabilities and applications after the amortizations programmed for the respective quarter without taking into consideration cash to be generated in future quarters. 30
  • 32. LIQUIDITY EVALUATION Brazilian Peers USA Peers Balance * JBS S.A. (average) (average) ASSETS R$ (million) R$ (million) US$ (million) Cash, cash equivalents and Short-term investments ## 2,256 1,223 57 Trade accounts receivable, net ## 2,169 623 1,017 Inventories ## 2,381 988 2,776 Prepaid expenses and other ## 326 100 215 Total Permanent assets ## 4,995 2,312 3,493 LIABILITIES R$ (million) R$ (million) US$ (million) Loans and financings Short Term ## 1,950 1,234 297 Payroll, social charges ## 299 192 0 Trade accounts payable ## 1,410 527 1,369 Other current liabilities ## 186 134 384 Loans and financings Long Term ## 2,802 2,072 3,158 Other non-current liabilities ## 114 121 531 Net Sale Revenue ** ## 29,979 5,590 20,187 Ebitda ** ## 1,079 596 653 Ebitda Margin (%) ## 3.60% 10.66% 3.24% Working Capital ## 2,866 718 1,726 Net Debt ## 2,496 2,083 3,398 ( Deficit ) or Surplus ## 370 (1,365) (1,672) Net Debt / Ebitda** # 2.3x 3.5x 5.2x Net Debt / Net Sale Revenue (per month)** # 1.0 month 4.5 months 2.0 months Source: * Companies’ last public information 31 ** Companie’s Last Twelve Months
  • 33. JBS – NET DEBT/EBITDA Net Debt / EBITDA Pro Forma per TRIMESTER (R$ million) JBS’s Net debt in relation to its Ebitda (last twelve months pro forma) is Net Debt/ EBITDA affected by weak results in the 4th Exchange rates: R$ / US$ = 1.91 – 09/30/2008 US$ / €$ = 1.41 – 09/30/2008 quarter 2007 and 1st quarter 2008. 3,7 Good results expected for the 4th 2,9 2,8 quarter 2008 and 1st quarter 2009 will reduce the relation between Net Debt 2,3 over Ebtida. 471 X 291 176 95 4Q07 1Q08 2Q08 3Q08 4Q08e Source: JBS Without considering National Beef and Smithfield Beef acquisitions. 32
  • 34. JBS CONSOLIDATED RESULTS NET REVENUE, EBITDA AND EBITDA MARGIN Net Sales Revenue (R$ million) EBITDA and Margin (R$ million) 14,141.6 EBITDA Margin(%) 6.1% 7,771.5 4.2% 4.1% 7,129.5 3.0% 6,650.7 5,859.1 1.4% 591.1 470.5 -11.9% 21.7% 9.0% 290.8 176.3 94.8 86.0% 64.5% 61.8% 12M07 4Q07 1Q08 2Q08 3Q08 12M07 4Q07 1Q08 2Q08 3Q08 Source: JBS Without considering National Beef and Smithfield Beef acquisitions. 33
  • 35. PERFORMANCE BY BUSINESS UNITS JBS USA (Beef) Including Australia JBS USA (Pork) INALCA JBS MERCOSUL Net Sales Net Sales Net Sales Net Sales (US$ million) (US$ million) (€ million) (R$ million) 7,375 4,892 2,630 2,756 521 2,175 1,811 1,976 1,425 1,271 620 682 155 143 536 132 FY07 1Q08 2Q08 3Q08 FY07 1Q08 2Q08 3Q08 FY07 1Q08 2Q08 3Q08 FY07 1Q08 2Q08 3Q08 (1) (2) (3) (1) (2) (3) EBITDA (US$ mi) EBITDA (US$ mi) EBITDA (€ mi) EBITDA (R$ mi) margin EBITDA margin EBITDA margin EBITDA margin EBITDA Margin (%) Margin (%) Margin (%) Margin (%) 7.6% 15.3% 5.1% 5.6% 4.9% 5.6% 5.3% 3.2% 4.8% 3.2% 2.9% 10.4% 0.3% -0.1% 5.6% 692.0 155.6 4.1% 132.9 70.3 52.1 26.0 25.8 15.7 19.9 7.4 7.5 7.6 132.7 102.2 58.2 -0.9 FY07 1Q08 2Q08 3Q08 FY07 1Q08 2Q08 3Q08 FY07 1Q08 2Q08 3Q08 FY07 1Q08 2Q08 3Q08 (1) (2) (3) (1) (2) (3) Source: JBS FY of Swift used to be from June to May and INALCA period is from January to December. (1) 13 weeks ended 03/30/2008. (2) 13 weeks ended 06/29/2008. (3) 13 weeks ended 09/28/2008. 34
  • 36. JBS: GLOBAL PRODUCTION & DISTRIBUTION PLATFORM The geographic diversification of its operations allows it to source meat efficiently, serve its customers cost-effectively, capitalize on increasing international trade opportunities and helps to mitigate the potential impacts of sanitary barriers. Exchange rates: US$11,839 R$ / US$ = 1.91 – 09/30/2008 US$ / €$ = 1.41 – 09/30/2008 US$778 5% US$42 76% Revenue Ebitda US$265 Revenue Ebitda US$3,043 19% US$257 Revenue Ebitda JBS Mercosul JBS USA / Australia Inalca JBS Source: JBS 35 * JBS S.A. LTM Sep08, Pro forma JBS USA LTM Sep08 (includes Tasman) and Pro forma 50% of Inalca LTM Sep08
  • 37. EVOLUTION OF THE EBITDA MARGINS OF JBS USA (BEEF) COMPARED WITH ITS LOCAL PEERS EBITDA (%) 5.3% 3.6% 4.2% 2.3% 3.2% 1.3% 1.3% 0.9% 0.9% 0.9% 0.7% -0.4% -0.4% -0.7% -0.9% -1.2% -1.3% -1.7% Peers Average Beef USA JBS Beef USA -5.3% FY03* FY04* FY05* FY06* FY07* 3Q07** 4Q07** 1Q08** 2Q08** 3Q08** Previous Management JBS S.A. Management Source: JBS and estimates of JBS based upon public data from peers EBITDA margins of the Companies taking into consideration beef only in the US *Fiscal years for the Companies differ one from the other: FY Tyson: October to September FY Smithfield: May to April FY National Beef: September to August FY JBS USA: June to May (altered after the acquisition) **The relevant quarterly period and adjustments made to the calendar year 36
  • 38. CONSOLIDATED PRO-FORMA OCTOBER 2008 Combined Companies Pro-forma (US$ million) INTEGRATED and Five Rivers Net Revenue (US$ mm) 15.660 3.033 18.694 EBITDA (US$ mm) 564 139 703 EBITDA Margin 3,6% 4,6% 3,8% Cash (US$ mm) 1.178 10 1.188 Short Term Debt (US$ mm) 1.019 0 1.019 Long Term Debt (US$ mm) 1.464 400 * 1.864 Net Debt (US$ mm) 1.304 0 1.694 Net Debt / Ebitda 2,3x 0,0x 2,4x Slaughter Capacity (thousand head/day) 57,6 7,6 65,2 Units 98 16 114 Employees 48.991 6.370 55.361 Exchange rates: R$ / US$ = 1.91 – 09/30/2008 Source: Company Estimates JBS – annual report, quartely reports - Pro-forma LTM Sep08 (including JBS USA, Tasman and 50% of Inalca) Smithfield Beef – Managerial numbers LTM Sep08 and 100% of Five Rivers LTM Sep08 *ABL – Asset Based Loan contracted by JBS USA 37
  • 39. JBS USA BEEF EXPORT VOLUMES JBS USA EXPORTS 55 50 45 40 Million pounds 35 30 25 20 JBS Beef exports up 15 64%; industry up 33% 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: JBS 2007 2008 12 38
  • 40. CUTOUT PRICE VS. CATTLE PRICE IN USA C utout P ric e vs . C attle P ric e in T he US 5.3 4.2 % 175 % 100 90 80 165 -0.7% -1.3% 70 60 -5.3% 50 155 40 Marg in (US $ / Head) 30 US $ / 100 pounds 20 145 10 0 -10 135 -20 -30 -40 125 -50 -60 E B IT DA Margin of J B S US A B eef -70 (excluding Aus tralia) 115 -80 J ul-07 Aug-07 S ep-07 O ct-07 Nov-07 D ec-07 J an-08 F eb-08 Mar-08 Apr-08 May-08 J un-08 J ul-08 Aug-08 S ep-08 O ct-08 Nov-08 Margin/H ead C attle P rice B eef P rice 12 Source: Bloomberg 39
  • 41. JBS CONSOLIDATED – GROSS REVENUE DISTRIBUTION Revenue Distribution by Business Units 3Q08 Revenue Distribution by Market 3Q08 Beef Italy 5% Beef Argentina 3% Beef Australia 13% Exports Pork USA Beef Brazil 22% 36% 14% Domestic Market 64% Beef USA 43% Source: JBS Source: JBS 40
  • 42. JBS CONSOLIDATED – EXPORTS DISTRIBUTION Exports Distribution 3Q08 Exports JBS 3Q08 US$ 1.7 billion Others Russia 25% 18% Japan Taiwan 15% 3% Mexico E.U. 10% Hong 10% Kong 3% USA 3% China 4% South Korea 4% Canada 5% Source: JBS 41
  • 43. ENTERPRISE VALUE AND EBITDA MULTIPLE SMITHFIELD BEEF ACQUISITION SWIFT USA ACQUISITION US$565.0 mm EV / EBITDA US$1,458.8 mm EV / EBITDA 15.1x 8.1x 5.5x 4.1x 264.8 139.3 96.3 70.0 99% 175% Oct-07 Sep-08 Jul-07 Sep-08 Source: JBS 42
  • 44. Ibovespa Index 43 8 8
  • 45. JBS S.A. Investor Relations THANK YOU ir@jbs.com.br + 55 11 3144 4055 “In God we Trust” www.jbs.com.br