JBS S.A.Voluntary Public Offering – Share SwapFebruary 10th, 2012
Presenters             Wesley Mendonça Batista                          CEO                 Gilberto Xandó                ...
Summary of the Exchange Offering Transaction: Voluntary Public Tender Offer, directed to JBS’ shareholders, in which JBS o...
Strategic Rationale                                     Market is possibly not fully perceiving Vigor’s value within JBS’ ...
CONFIDENCIALExchange Ratio Definition               “JBS’ share price”:                                 “Equity Value of V...
CONFIDENCIALShareholders’ Maximum Amount of JBS’ Shares Object of the Exchange Offering                                   ...
CONFIDENCIALExchange Offering Timeline                                                                                    ...
Vigor’s Corporate GovernanceVigor will be part of the Novo Mercado segment in which companies agree to follow a set of rul...
Corporate Governance - Board of Directors    7 members, 5 of whom independent with vast business experience.              ...
Vigor Overview                     Mr. Gilberto Meirelles Xandó Baptista holds a Bachelor degree in Business Administratio...
Broad Distribution Network and Operations in Strategic Areas   Plants  Seven units, capacity of more than 50,000 tons/mon...
Highly Renowned Brands and Products                                      PAGE   12
Market Leadership                        1 liter Yogurt                  Cheese Spread                            31% mark...
Dairies and Cheese Markets in Brazil                              Dairies                                          Cheese ...
Market Highlights    Revenue breakdown by product (%)                                    Sales breakdown by state (%)     ...
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Market presentation vigor final

  1. 1. JBS S.A.Voluntary Public Offering – Share SwapFebruary 10th, 2012
  2. 2. Presenters Wesley Mendonça Batista CEO Gilberto Xandó Vigor’s CEO Jeremiah O’Callaghan Investor Relations Director PAGE 2
  3. 3. Summary of the Exchange Offering Transaction: Voluntary Public Tender Offer, directed to JBS’ shareholders, in which JBS offers Vigor’s shares in exchange for JBS’ shares AS a result of the Exchange Offer, Vigor will be a publicly listed company in Brazil, focused on the consumer sector and listed on the BM&FBovespa“Novo Mercado” segment The Offering is subject to certain conditions which will be mentioned in the Offering Notice: • Analysis and approval by CVM, the Brazilian SEC, of certain exemptions from compliance with certain regulatory provisions of CVM 361/02 and 10/80 • Consent of holders of Bonds issued by JBS and its subsidiaries Creditors: Covenants of the JBS USA notes due 2014, Bertin notes due 2016 and JBS S.A. notes due 2016. The transaction is subject to the consent of bondholders and from the other creditors of other financings of JBS when applicable Corporate governance: Same standards as JBS, listing in BM&FBovespa “Novo Mercado” segment, Board of Directors composed of 7 members, 5 of which independent The definition of the valuation of Vigor and its shares, JBS’ shares and the exchange ratio of the Exchange (1) Offering will occur in a future JBS Board Meeting to be held prior to the publication of the Offering Notice*The announcement of the Offering will be published after the registration by CVM. Read the Proclamation in full to analyze the Offering conditions. Thispresentation does not constitute an offering of securities for sale in the United States. The securities mentioned herein may not be offered or sold in theUnited States absent registration or an exemption from registration under U.S. law. JBS S.A. does not intend to register or conduct a public offering ofthese securities in the United States.” PAGE 3
  4. 4. Strategic Rationale Market is possibly not fully perceiving Vigor’s value within JBS’ corporate structure Valuation of Vigor Vigor may potentially be valued at comparable consumer companies’ multiples No impact on JBS’ The Exchange Offering will not impact JBS’ participation in the current indexes (for stock liquidity example: Ibovespa, MSCI, among others) Higher visibility and Flexibility to support growth strategy flexibility for Capital structure independent from JBS potential strategic moves Own corporate governance, strategy and management team Clear market Discussions with market analysts, from relevant banks and brokers positioning Independent and dedicated Investor Relations activities PAGE 4
  5. 5. CONFIDENCIALExchange Ratio Definition “JBS’ share price”: “Equity Value of Vigor”: total Equity value of Vigor to be defined by to be defined by JBS’ Board of Directors JBS’ Board of Directors before the publication of the Offering Notice “Number of JBS’ Shares Object of the Exchange Offering”: Calculated by the formula: “Equity Value of Vigor” “JBS’ Share Price" PAGE 5
  6. 6. CONFIDENCIALShareholders’ Maximum Amount of JBS’ Shares Object of the Exchange Offering “Stake of a Given Shareholder in JBS”: Calculated by the formula: Amount of JBS’ Shares Owned by the Given Shareholder 2,963,924,2961 “Maximum Amount of JBS’ Shares Object of the Exchange Offering by a Given Shareholder”: “Number of JBS shares “Stake of the Given Shareholder Calculated by the formula: × object of the Exchange in JBS” Offer”2 JBS’ shareholders will be allowed to determine the amount of shares which they intend to tender in the Exchange Offering and, in case of non-participation in the Exchange Offering and, thus, non-participation in the auction, there will be no change to their quality as JBS’ shareholders nor in their ownership of shares issued by JBS, subject to a possible adjustment in the stake owned, which will depend on the result of the Exchange OfferNote: 1. Total amount of JBS shares after the cancellation of the treasury shares 2. Please refer to the previous slide for further information PAGE 6
  7. 7. CONFIDENCIALExchange Offering Timeline Interval until the Auction – 2 Document Analysis by “CVM” – X days Qualification Period for the Auction – 30 days days Filing of the Share Base Date Auction Exchange Offering documents with“CVM” (February 9, 2012) Procedure to Participate in the AuctionThe commencement of the Exchange Offering is pending approval by the CVM, which is currently reviewing the documents relatingto the Exchange Offer. JBS’ shareholders interested in participating in the auction will have 30 days from the share base date toexpress their interest to a broker that is authorized to operate in the BOVESPA segment of BM&FBOVESPA. Participation in theauction shall be in accordance with the requirements established by the regulations of BM&FBOVESPA, as well as therequirements mentioned in the Offering Notice. Each shareholder of JBS interested in participating in the Exchange Offering mustcomplete a Form of Intention, indicating, among other information, the amount of shares owned as of the date of the Launch andthe amount of shares subject to the auction, which will be restricted to such shareholder’s percentage ownership in JBSshareholders’ equity PAGE 7
  8. 8. Vigor’s Corporate GovernanceVigor will be part of the Novo Mercado segment in which companies agree to follow a set of rulesthat provide greater transparency and certainty for investors. Transparency Executive Directors and Board of Directors Best practices Board of Directors Permanent Fiscal Committee Reliability 7 members 3 members Best products and services 1 president Elected and removed at any time by the 5 independent members General Assembly. Solidity 1 effective member Profitability Future * Executive Directors Board of Directors Committees Elected by the Board of Directors for a term of three years and eligible for reelection. 3 committees Sustainability Risk Management Financial PAGE 8
  9. 9. Corporate Governance - Board of Directors 7 members, 5 of whom independent with vast business experience. Chairman Wesley Batista Mr. Wesley Batista has become CEO of JBS’ global operations in Feb/2011. Prior to his current position, he was president and CEO of JBS USA, where he supervised the growth and development of the market in the USA after Swift & Company’s acquisition in 2007. Under his management, JBS USA more than doubled its revenues in the last 4 years, acquiring Smithfield Beef, JBS Five Rivers Feedlot, a majority stake in Pilgrim’s Pride, as well as expanding its Australian operations acquired along with Swift. During the previous fifteen years, Mr. Batista acted as Chief Operating Officer (COO) of JBS’ beef operations in Brazil and Argentina. Independent Independent Independent Independent Independent Member Member Member Member Member Member Vicente Falconi Betânia Tanure Sérgio Carvalho Joesley Batista Evandro Guimarães Cristiana Arcangeli Campos de Barros Mandin FonsecaMr. Vicente Falconi Campos is Professor at PUC MG, PhD Mr. Evandro holds a Mrs. Cristiana Arcangeli Bachelor in Industrial Mr. Joesley Batista is thea member of the Board of from the Brunel University Bachelor degree in Business has graduated in Dentistry Engineering from Escola current Chairman of JBS,Directors at Ambev and (England), Post-graduate in Administration from with specialization in Politécnica at the University of elected on January 2nd,Institutional Board of Management Consulting by Fundação Getúlio Vargas in Endodontics and has been São Paulo, post-graduate in 2007, and has more thanManagerial Development Henley Management College Rio de Janeiro in 1970. working in the cosmetics Sales and Marketing Strategic 20 years of experience in(Conselho do Instituto de (England), specialized in He started his career at Ciba segment for more than 25 Administration by the Univ. of beef production at the JBSDesenvolvimento Gerencial - management by INSEAD, Geigy as Product Manager, years, in which she has California, Berkeley, and PGA Group. Mr. Joesley BatistaINDG), as well as an Emeritus psychologist by PUC – MG. then moved to Bicicletas created brands such as – Advanced Management has been working at theprofessor at the Federal Works as a BTA-certified Caloi S.A. as a Marketing Phytoervas, Éh Cosméticos Program by Fund. Dom Cabral JBS Group since 1988 andUniversity of Minas Gerais. Mr. technical consultant, and and Beauty´in. Mrs. and Insead, France. He was is member of the Batista Manager.Campos has been a Board professor at national and Arcangeli has received the Retail Director at Martins family. He then moved to São Paulo Comércio e Atacado frommember of Sadia and international companies such in 1980 in the Sales Division different awards for her Joesley was also CEO ofUnibanco and has received influence in the cosmetics 1987 to 2003, and Vice- as: ArcelorMittal, Banco of TV Globo and in 1984 was JBS SA between 2006 inawards from different public and fragrances segment President for Domestic Market Santander, Banco Central do promoted to National Sales 2011, a period in whichorganizations, both from the and for her entrepreneurial at Sadia from 2004 to 2009. Brasil, Banco Itaú, Brasilprev, Director. From 1989 till 1997, revenues have grown byExecutive and Legislative actions, as well as being Member of the Executive Embraer, Gerdau, Kimberly- he headed Globo’s Center of 1,200%, and the Companybranches, and business the first female member of Committee at Apprimus from Clark, IBM, Natura, RBS, Affiliates and Expansion and has made different 2002 to 2003; member of theassociations, as well as having Sadia, Samarco, TAP, was nominated as the Brazilian Marketing transformational Board of Directors at Excelsiorpublished six books on Usiminas, Vale, Via Retail and Institutional Relations Vice- Academy, a volunteer at acquisitions in North Alimentos from 2008 to 2009;Business Administration. Weg. Board Member at RBS President at Organizações Endeavor, a writer of three America and Australia, in current member of the BoardBachelor in Mining and and GOL Linhas Aéreas, Acts Globo, directly interacting books and participant on addition to going public in at Associação Comercial eMetallurgy Engineering from as speaker at events in Brazil with the Executive, TV shows. 2007. Industrial de Uberlândia.the Federal University of Minas and abroad and has published Legislative and JudicialGerais, as well as a M.Sc. and books in Brazil and abroad. branches until the end ofPh.D. from the Colorado 2011.School of Mines (EUA). PAGE 9
  10. 10. Vigor Overview Mr. Gilberto Meirelles Xandó Baptista holds a Bachelor degree in Business Administration from Fundação Getúlio Vargas, a CEO Master Degree in Retail from USP/FEA and specialization in Business Management PGA from Fundação Dom Cabral/INSEAD, in Gilberto Xandó France. He has large multidisciplinary experience and has worked in the areas of Finance, Controlling, Trade Marketing, Marketing, Commercial (Brazil and other countries) and Business Unit Management at Natura, Sadia S.A. and Coopers & Lybrand. Vigor was founded in 1917 and is headquartered in São Paulo. Vigor produces and commercializes dairy products, fats and vegetable oils, pasta, juices, among others Vigor is one of the largest dairy companies in Brazil, with leading position in different categories Vigor collects of 22 mm liters of milk / month ~80% of Vigor’s revenues come from the Southeast region with ~70% coming from the State of São Paulo Strong and renowned brands, such as: Vigor, Leco, Faixa Azul, Serrabella and Danúbio 2011 Revenues: R$ 1.2+ billion Approximately 3,300 employees Facilities  Production plants – 6 (Goiás, São Paulo, Minas Gerais and Paraná)  J.V. production plants – 1 (São Paulo-Cruzeiro do Sul, Joint Venture - Arla Foods)  Milk Collection Centers – 4 (Minas Gerais, São Paulo and Paraná)  Distribution Centers – 7 (Pernambuco, Bahia, Minas Gerais, Rio de Janeiro, São Paulo, Ceará and Rio Grande do Sul)Source: Company information PAGE 10
  11. 11. Broad Distribution Network and Operations in Strategic Areas Plants  Seven units, capacity of more than 50,000 tons/month Collection Centers  Four Milk Collection Centers  1,280 producers  Approximately 22 million liters collected per month Distribution Centers  Seven distribution centers Dairies plant  More than 20,000 active clients Vegetable Fat plant Mixed plant Collection Centers Distribution CentersSource: Company information PAGE 11
  12. 12. Highly Renowned Brands and Products PAGE 12
  13. 13. Market Leadership 1 liter Yogurt Cheese Spread 31% market share in the Metropolitan region of São Paulo 11% market share in Brazil and 17% in the Metropolitan region of São paulo Natural Yogurt Parmesan Cheese 30% in the Metropolitan region of São PauloSource: Nielsen, 2011 PAGE 13
  14. 14. Dairies and Cheese Markets in Brazil Dairies Cheese Vol ktons Vol % Val R$MM Val % Vol ktons Vol % Val R$MM Val % Market 834 + 3 4,8 +9 Market 79 + 6 1,2 + 13 VIGOR 51 + 14 280 + 19 VIGOR 11 + 18 184 + 25 Vigor grows twice as much as the Market LEADERSHIP IN CHEESE SPREAD LEADERSHIP IN FAIXA AZUL “PARMESAN” CHEESE LEADERSHIP IN LIQUID LEADERSHIP IN NATURAL YOGURTS IN SÃO PAULO YOGURTS IN SÃO PAULOSource: Nielsen, 2011 PAGE 14
  15. 15. Market Highlights Revenue breakdown by product (%) Sales breakdown by state (%) Other UHT Milk 8,0% 14,6% Goiás/DF/MS/MT Other 8,0% 4,8% RS 2,1% 61,0% Dairy Products MG 4,2% 64,6% SP Margarines and 23,0% PR 4,1%Vegetable Oils RJ 5,7% Distribution channels (%) Other 2,0% Wholesale / Distributor 14,0% 67,0% Small and Medium Retail Key Account 17,0%Source: Company information PAGE 15
  16. 16. Thank you!
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