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.
2
3. Agenda
Company Overview
Market Overview 2Q10 Highlights
Short Term Outlook
3
4. Who We Are
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.
Our Values
Excellence
Planning
Determination
Discipline
Availability
Openness
Simplicity
4
5. Corporate Structure
CEO
President
Joesley
Batista
Corporate Investors Corporate Commercial and
Finance CEO JBS
Law Relations And Adm. New business Distribution Dairy
Director Brazil MERCOSUL Hides
Department Jeremiah Controller José Luis International Gilson
Marcos Cunha Marco Roberto
Francisco O’Callaghan / Eliseo Medeiros Offices Teixeira
Bastos Bortolon Motta
de Assis e Silva Guilherme Arruda Fernandes Marco Bichieri
Mr. Marcos Bastos, Mr. Francisco de Assis Mr. Jeremiah Mr. Eliseo Fernandez Mr. Marco Bortolon, has Mr. José Luiz Mr. Marco Bichieri, has Mr. Roberto Motta, has Mr. Gilson Teixeira,
Graduate from the e Silva, Director of the O’Callaghan, Has a Has a Business more than 10 years Medeiros, has a degree more than 24 years of more than 20 years in has more than 25 years
Mackenzie University in Law Department. Has a Engineering Degree from Administration and experience in JBS. in Accounting and has experience in the Protein the Leather Industry. experience in Finance
Business Administration post graduated from the the University of Cork Accounting Degree from Initially started as a been working in the Beef Sector. Worked for more Was responsible for and Controller of
and has a MBA in University of Mackenzie. College in Ireland. the University Católica de Production Manager and Sector since 1975. 14 than 20 years in Bertin. incorporating BMZ Hides business units of Bertin,
Finance from San Immigrated to Brazil in Pernambuco and a post in 2009 was promoted to year in Bertin and with the JBS Group. where he later served as
Started working at JBS
Francisco State 1979. Started working in graduate degree in Chief Operating Officer of started at JBS in 1997. a member of the Board
in December of 2001
University. Worked in the Beef Sector in 1983 Business Administration the Brazil Beef Division. January 2010 became for 5 years.
many financial and later became a and in JBS in 1996 in from FGV. Started with the Director of New
institutions in Brazil, member of the Executive order to develop the JBS in August 2005 and Business.
primarily in Investment Board in January of Trade Area and eventually became
banking, Financial 2007. eventually became the Director of Administration
Projects, and Portfolio Investors Relations and Corporate
management. Started Officer. Governance. 8 years
in 2008 with JBS. Mr. Guilherme Arruda Experience in Auditing
graduated in Business and Consulting and 10
and Economics from the years in the Retail
University of California. industry.
Start in the Company in
2009 after working for 7
years for BTG Pactual
5
6. Corporate Structure
CEO
USA/AUS
Wesley
Batista
JBS Five Human
Pork JBS Carriers Trading CFO
Pilgrim's Pride Beef USA Australia Rivers Resources
Martin Mr. Moe Robert André
Don Jackson Richard Vesta Iain Mars Mike Bob
Dooley Schroder Wadland Nogueira
Thoren Daubenspeck
Mr. Moe Schroder has
Mr. Don Jackson is the Mr. Richard Vesta, Mr. Martin Dooley Mr. Iain Mars, born Mr. Thoren, Mr. Robert Wadland Mr. Robert Mr. André Nogueira has
more than 30 years
President, CEO and joined Smithfield Foods Has a degree in Biology in England and is the President and 27 years of meat Daubenspeck a degree in Economics
experience in
Director since January with the Acquisition of from the University of worked in the Beef CEO of Five Rivers trading experience with assumed this position from the Federal
Transportation Sector.
2009. For 9 years was Parkerland in 2001 and Eastern Illinois. Worked Industry for his whole since the Start of the 17 years of that at JBS in February 2009 and University Fluminense, a
Graduated from the
the president of the now serves as the in Swift for his whole life, life. He became the Company. Has a to enhance exports out before that was in masters in Capital
University of Ryerson,
chicken division of Foster president and CEO of having started the President and CEO Masters of Science in of Australia and New JBS Packerland from Markets from FGV –
Toronto, Canada.
Farms and vice president JBS Packerland company as a manager of JBS Australia in Agricultural Economics Zealand. Recently 2002 to 2008. Fundação Getúlio
Occupied the position
of Food Services in trainee in 1983. In 2007 2007, after the and has a degree in transferred to the US to Vargas, and masters in
of Vice President of
ConAgra Poultry was given the position of acquisition of Swift. Agribusiness from the run the group’s trading Economics from
Sales, Dedicated
Company. president of the Pork He has worked in University of business unit University of Brasilia in
Operations at KLLM
Before this worked at Division of JBS USA. JBS since 2005. Washington State. 2003. Worked more than
and before that was in
Seaboard farms of 20 years at Bank of Brazil
various executive
Athens for 22 years, and started at JBS USA
positions at CR
including 4 years as the in 2007 after the Swift
England for a period of
CEO of the Chicken acquisition.
15 years;
Division
6
7. Shareholders
PROT - FIP
8.1%
Market
19.1%
Controlling Holding
55.5%
BNDESPAR
17.3%
Average daily trade volume of USD 50.4 million in 2Q10
Source: JBS
7
8. Leading, Sizeable and Diversified Business Platform
Beef Chicken Pork Hides / Leather Dairy Lamb
Ranking 1st 2nd 3rd 1st 3rd 1st
Global Global U.S.A. Global Brazil Global
Production 75 33 3 26 7 6
Units
‘000 heads/day: mm heads/day: ‘000 heads/day: ‘000 hides/day: ‘000 tons/day: ‘000 heads/day:
41.2 55.6 1.4
1.1
Geographic 6.7
Presence 28.6 6.9 48.5 28.6 4.5
and Installed
Capacity 8.7 6.0 23.0
3.0
1.0 0.7 1.2
Total: 90.3 Total: 7.6 Total: 48.5 Total: 91.4 Total: 1.4 Total: 27.5
Well-
Recognized
Brands
8
9. Our Strategy
Rationale
Branding • Associating quality and branding to
increase client loyalty
• Customized and further processed
Value added products products for the
end users
Sales and distribution platform • Expanding a global distribution
platform to reach end clients
• Developed an efficient
Production platform and diversified global
production platform
Cost reduction,
Financial Experienced Risk
process
structure management management
EBITDA Margin optimization
JBS’ Value & Strategy
9
10. Distribution Platform with Access to Key Markets
Growth 1
-2 %
3%
4% Growth 1
9%
13 %
8%
Growth 1
Growth 1
7%
2%
25 %
8%
16 %
5% Distribution Center
Sales Offices
1 Real growth of total consumption in tons – 2010E to 2015E
Source – OECD-FAO 10
11. Agenda
Company Overview
Market Overview 2Q10 Highlights
Short Term Outlook
11
13. Animal protein consumption growth in the last decade
Former USSR
47.7%
EU - 27
North America 41.4%
7.5% 23.7% East Asia
Central 29% Middle East
America Southeast
70.2% Asia
48.7%
Sub Saharan
Africa
South America 32.2%
23.3%
Oceania
3
Source: FAPRI February 2010
13
14. Beef Exports
Rising demand in emerging economies drove export volumes up in the semester both
in Brazil and in the US but more importantly, pricing was very strong. As beef production
is long cycle, some of this export demand will tend to boost chicken exports, particularly
out of the US, in the coming years.
US Beef and Veal Exports (Tons) Brazilian Beef Exports (Tons)
700.000 4.600 1.400.000 4.500
4.500 4.000
600.000 5.3% 1.200.000 26.6%
4.400 3.500
500.000 1.000.000
3.000
4.300
400.000 800.000 2.500
24.3% 4.200
300.000 600.000 7.0% 2.000
4.100
1.500
200.000 400.000
4.000 1.000
100.000 3.900 200.000
500
0 3.800 0 0
2005 2006 2007 2008 2009 JAN-JUN JAN-JUN 2005 2006 2007 2008 2009 JAN-JUN JAN-JUN
09 10 09 10
Beef Exports Avg Price in US$ per Ton Beef Exports Avg Price in US$ per Ton
Source: USDA and Secex
14
15. Chicken Exports
Strong domestic demand in both Brazil and the US limited exports in the first
semester although it is clear that prices will tend to push up export volumes from now on
particularly taking into account the reopening of the Russian market for US product.
Brazilian Chicken Exports (Tons) US Poultry Exports (Tons)
3.500 2.000 3.500.000 1.200
-
1.800 2.9%
3.000 17.3%
3.000.000 1.000
1.600
2.500 1.400 2.500.000
800
2.000 1.200
1.1% 2.000.000
1.000 -6.5% 600
1.500 800 1.500.000
400
1.000 600 1.000.000
400
500 500.000 200
200
0 0 - -
2005 2006 2007 2008 2009 JAN-JUN JAN-JUN 2005 2006 2007 2008 2009 JAN-JUN JAN-JUN
09 10 09 10
Chicken Exports Avg Price in US$ per Ton Chicken Exports Avg Price in US$ per Ton
Source: USDA and Secex
15
16. Agenda
Company Overview
Market Overview 2Q10 Highlights
Short Term Outlook
16
17. Highlights for the 2nd Quarter 2010
Revenues increased 52.5% y-o-y and 12.5% to R$14,116.3 million
• JBS USA increased 67.6% y-o-y and 12.9% q-o-q
• JBS MERCOSUL increased 123.1% y-o-y and 19.1% q-o-q
• JBS Exports increased 37.0% q-o-q reaching 29% of sales
EBITDA increased 163.3% y-o-y and 16.0% q-o-q.
Leverage remained fairly stable at 3.0x
Consolidated customer base grew by 22.2% q-o-q, reaching more than 300
thousands customers in 2Q10.
17
20. Revenue Distribution by Market
Revenue Distribution by Market 2Q10 Revenue Distribution by Market 1Q10
Pork Chicken
Pork Chicken
Exports 2% Exports 1% Exports 2%
Exports 2%
Beef
Beef Exports Exports 20%
Beef Beef
25% Domestic 44% Domestic 47%
Chicken
Domestic 22%
Chicken
Domestic 20%
Pork
Pork
Domestic 8%
Domestic 7%
Exports = 29% Domestic Market = 71% Exports = 23% Domestic Market = 77%
Revenue Distribution by Market 2Q10 Revenue Distribution by Market 1Q10
USA Chicken Mercosul USA Chicken Mercosul
22% 27% 25% 23%
USA Pork
9% USA Pork
10%
USA Beef USA Beef
42% 42%
Source: JBS
20
21. EBITDA Distribution by Business Units
2Q10 1Q10
Mercosul USA BEEF USA BEEF
33,5% 34,7% Mercosul 36,1%
43,9%
USA PORK USA PORK
USA Chicken 8,7% USA Chicken 7,4%
22,7% 12,6%
Source: JBS
21
22. JBS Consolidated Exports Distribution
JBS Exports 2Q10 JBS Exports 1Q10
Taiwan Taiwan
Canada 2% Others Canada 2% Others
12% Africa and Middle East Africa and Middle East
4% 4% 12%
China 19% China 16%
4% 4%
Mexico
South Korea Mexico South Korea 14%
5% USA 12% 4% USA
7% E.U. Japan 7% Japan
E.U.
7% Russia Hong Kong 10% 8% Russia Hong Kong 12%
10% 8% 8% 9%
US$2,3331.0 Million US$1,765.4 Million
Source: JBS
22
23. Debt
While JBS leverage remained fairly constant in the quarter (at 3.0x LTM EBITDA), the liquidity of the
balance sheet improved significantly.
The company’s cash position increased 17,5% when compared with 1Q10 (which represents 70% of
the company’s ST debt, from 55% in the previous quarter), while ST debt decreased 7,7% in the same
period.
Considering the US$700mm bond issuance in July, ST debt on a pro-forma basis would represent
roughly 33% of total debt, closer to the company’s target of having less than 30% of its total debt
maturing in the ST.
Leverage ST / LT Profile
3.3 3.1 3.1 3.0x *
2.6
61% 60% 64% 67%
39% 40% 36% 33%
2Q09 1Q10 2Q10 **
(Pro-Forma)*
2Q09 3Q09 4Q09 1Q10 2Q10
Short term Long term
Source: JBS
*LTM including Bertin and Pilgrim’s Pride pro-forma.
** Pro-Forma takes into account senior unsecured notes issued July, 2010
23
24. Agenda
Company Overview
Market Overview 2Q10 Highlights
Short Term Outlook
24
25. A Closer look at synergies – Pilgrim’s Pride
JBS already captured US$ 150 million in synergies with Pilgrim’s Pride acquisition of a
total estimated amount of US$ 220 million. Descrição
The illustration bellow the origins of the captured synergies.
Captured Synergies On going Synergies
Size Time
US$ 150 Million
Efficiency gains in the average
Logistics Optimization US$50mm 2 years
load factor for trucks
Logistics
Adminstrative 23% Reaching final customers
expenses Exports through the JBS current sales US$20mm 2010
34% structure.
Suppliers
20%
Corporate Total US$70mm
23%
Source: JBS
25
26. A Closer look at synergies – Bertin S.A.
JBS already captured R$ 154 million in synergies due to the merger with Bertin of a total
estimated amount R$ 485 million. Descrição
The next graphic shows the origin of the captured synergies.
Captured Synergies On going Synergies
Size Time
R$154 Million Maximization of sales channels
Exports and reviewing contracts for R$31mm 2010
freight
Suppliers Capturing value with the
Administrative Hides R$45mm 2010
16% greatest volume of processed
expenses
Logistics 26%
13%
Review of terms of contract non-
Suppliers R$10mm 2010
core suppliers (ex packaging)
Exports Optimization of fixed costs and
45% Industrial Processes streamlining of existing R$245mm 2 Years
contracts
Total R$331mm
Source: JBS
26
27. IR Contacts:
ir@jbs.com.br
+55 11 3144 4447
www.jbs.com.br/ir
“In God We Trust, Nature We Respect”
27
