JBS S.A. is a leading global protein producer founded in the 1950s in Brazil. In the first nine months of 2011, JBS reported revenues of over $27 billion and EBITDA of $1.3 billion. JBS has 125,000 employees worldwide and 134 production units across 6 continents. The presentation highlights JBS' strong organic revenue growth across its business units in local currencies, with most reporting double digit growth year-over-year in the third quarter of 2011. JBS' geographic and market segment diversification has supported its continued financial success.
3. JBS S.A. at a glance
Founded in the 1950’s in West Central Brazil
IPO in 2007
Leading protein producer in the World
Revenues of over US$27 billion in the first nine months of 2011
EBITDA of US$1.3 billion in the first nine months of 2011
Net revenue organic growth of 10.6% in local currency in 3Q11 y.o.y.
125,000 employees worldwide
134 production units in 6 continents
Market cap of approximately US$9.3 billion(1)
(1) 11/11/2011 PAGE 3
4. JBS Ranking
1 Market Leader
2 Track Record
of successful
acquisitions
3 Geographic and st Largest global beef and
market segment
diversification
1 lamb producer
st Largest global leather
4 Well-recognized 1 processor
brands
nd Largest global chicken
2 producer
rd Largest dairy
3 producer in Brazil
3rd Largest pork producer
in the US
Source: JBS PAGE 4
5. Presence in more than 100 countries, in 6 continents
1 Market Leader Strategic Geographical Distribution
2 Track Record of
successful
acquisitions
3 Geographic
and market
segment
diversification
4 Well-recognized
brands
3 Pork 37 Chicken 7 Dairy 58 Distribution Center 134 Slaughterhouse and Industry
60 Beef 20 Leather 1 Biodiesel 17 Sales Office u Units
Geographic Beef Chicken Pork Leather Dairy Lamb
Presence and 85,825 heads/day 7.9 mm birds/day 50,000 heads/day 76,100 hides/day 5,400 tons/day 24,000 heads/day
Production
Capacity
Source: JBS PAGE 5
6. Well-recognized Brands, symbols of quality
1 Market Leader
2 Track Record of
successful
acquisitions
Brazil
3 Geographic and
market segment
diversification Argentina
4 Well-recognized
brands
USA
Australia
PAGE 6
8. 3Q11 Highlights
Gross Margin expanded 102bps, compared to 2Q11 and reached 10.9%.
EBITDA margin increased 101 bps to 5.1% in the quarter.
Net revenue in 3Q11 was R$15,567.8 million, 10.6% higher than 3Q10.
The Company ended the quarter with R$5.6 billion in cash, more than a 100% of its short-term debt.
JBS generated net cash provided by operating activities of R$897 million in the quarter.
JBS USA Beef presented EBITDA in 3Q11 of R$184.1 million , an increase of 77.9% over the last
quarter.
Net debt reduced approximately R$530 million, excluding the FX variation effect in the net debt in US
dollar denominated.
The main operating highlights were:
JBS Mercosul presented JBS USA Pork business unit
EBITDA of R$453.8 million, with presented cumulative 2011
an EBITDA margin of 11.6%. EBITDA of US$264.8 million,
51.8% higher than in the same
period of 2010.
PAGE 8
12. Revenue and EBITDA Distribution by Business Unit
Net Revenue - 3Q11
20.3% 25.1%
9.3%
45.3%
EBITDA – 3Q11
-15.6%
59.6%
16.3%
39.6%
PAGE 12
Source: JBS
13. Organic Growth
Each business unit presented double digit organic growth in their local currency, for the analyzed period.
JBS USA Beef – Net Revenue (US$ million) JBS USA Chicken – Net Revenue (US$ million)
2.100
4.200
4.000 2.000
3.800
3.600 1.900
3.400
1.800
3.200
3.000
1.700
2.800
2.600 1.600
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
JBS USA Pork – Net Revenue (US$ million) JBS Mercosul – Net Revenue (R$ million)
4.000
850
3.800
800
750 3.600
700 3.400
650
3.200
600
3.000
550
500 2.800
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
PAGE 13
Source: JBS
14. JBS Consolidated Exports Distribution
Approximately US$2.4 billion in the 3Q11 and US$7.2 billion in 9M11
Mexico 14.5%
Others 17.9%
Vietnam 1.6% Africa and
Middle East 14.0%
Taiwan 2.4%
US$ 2,374.2
million
China 4.4%
Japan 11.7%
Canada 5.5%
Sulth Korea 6.0% E.U. 7.8%
Russia 7.0% Hong Kong 7.2%
PAGE 14
Source: JBS
15. Debt Profile
Net debt to EBITDA, excluding Pilgrim’s Pride Corp. (PPC)*, reduced from 3.2x in 2Q11 to 3.0x in 3Q11.
Net debt to EBITDA, including Pilgrim’s Pride Corp. (PPC)*, went from 3.6x in 2Q11 to 4.0x in 3Q11.
The Company ended the quarter with R$5.6 billion in cash or cash equivalents, more than a 100% of the Company’s short-term debt.
The Company generated R$897 million of operating cash flow and R$620 million of net cash flow.
Leverage ST / LT Profile
3Q11 28% 72%
1500 4.0x 4
1300 3.6
3.2 2Q11 27% 73%
3.1
1100 2.9 3.0 3.0x 3
900
1Q11 30% 70%
700 2
500 4Q10 33% 67%
300 1
100
3Q10 33% 67%
-100 3Q10 4Q10 1Q11 2Q11 3Q11 0
. Leverage EBITDA Short Term Long Term
. Leverage Ex-PPC EBITDA Ex-PPC
Source: JBS PAGE 15
* subsidiary controlled by JBS with non-recourse debt.
16. $ Sell-side analyst recommendation
Institution Analyst Recommendation Target Price (R$)
Banco do Brasil Henrique Koch Hold In revision– 10.20 (last)
Barclays Capital Gabriel Vaz Lima Overweight 5.50
Bradesco Ricardo Boiati / Alan Cardoso Market Perform 5.20
BTG Pactual Thiago Duarte / Fábio Monteiro Buy 6.20
Citi Carlos Albano Hold 7.40
HSBC Pedro Herrera / Diego Maia Neutral 5.00
Merrill Lynch BofA Fernando Ferreira / Isabella Simonato Underperform 5.00
Santander Luis Miranda Hold 7.00
Safra Erick Guedes / Fernando Labes Outperform 7.29
UBS Gustavo Oliveira / Flavio Barcala Neutral 5.10
Votorantim Luiz Cesta /Marco Richieri Buy 5.70
Source: Bloomberg and JBS PAGE 16
17. Marketing Campaign
JBS started in October, in the state of Sao Paulo, an unprecedented marketing campaign in the media
The construction of a brand aims at selling a product with higher added value
PAGE 17
18. JBS actions related to cattle traceability and the Amazon Biome
Sustainability
Environmental
JBS SA participates in CDP - Carbon Disclosure Project.
Also, JBS integrates the Carbon Efficient Index of BOVESPA - ICO2.
Satellite image monitoring of the Amazon Biome
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.
Amazon
Social & Environmental
JBS Brazil monitors a 100% of its cattle suppliers properties via
satellite geo-referencing (GPS monitoring).
JBS contains a database of almost 12,000 cattle ranches registered
in the Amazon Biome.
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
Satellite image Institute for Space Research – INPE.
Source: JBS Sustainability Policy
(1)Real Time Deforestation Detection
PAGE 18
(2)Legal Amazon Deforestation Monitoring Project
19. 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.
”