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March
2011
JBS S.A.
Results Presentation
4Q10 and 2010
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Perspectives for the animal protein market
JBS is well positioned to attend the global demand for animal protein
A promising sector to invest in
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3
PAGE
Global consumption of animal protein has been increasing
Consumption by region over the past ten years
North America
Central America
South America
E.U. - 27
Middle East
North Asia
East Asia
Oceania
Southeast Asia
Africa
+70.2
%
+3.0%
+41.4
%
+47.7
%
+7.5%
+29
%
+32.2
%
+23.7%
+48.7
%
+23.3%
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4
PAGE
Brazil, Australia and the US continue to lead global beef exports
Source: USDA, MLA and Secex
Beef Exports
Average Price (US$/Ton)
Australian Beef Exports (tons)
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2005
2006
2007
2008
2009
2010
+11.8%
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2005
2006
2007
2008
2009
2010
+19.5%
+10.9%
Brazil, Australia and US represent, respectively, 24%, 18% and 15% of global beef trade
Brazilian Beef Exports (tons)
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
2005
2006
2007
2008
2009
2010
+2.7%
+24.4%
-1.9%
US Beef and Veal Exports (tons)
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5
PAGE
Chicken Exports Brazil vs US
Fonte: USDA e Secex
Brazilian Chicken Exports (tons)
US Chicken Exports (tons)
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
2005
2006
2007
2008
2009
2010
+13.4%
0
200
400
600
800
1.000
1.200
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
2005
2006
2007
2008
2009
2010
Chicken Exports
Average Price (US$/Ton)
+26.6%
-0.7%
Brazil and US represent, respectively, 39% and 34% of global chicken trade
-4.3%
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JBS
Competitive Advantages
Factors to understand the Company's sustained growth
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7
PAGE
JBS Ranking
Largest global beef and
lamb producer
1
st
Largest global leather
processor
1
st
Largest global chicken
producer
2
nd
Largest dairy
producer in Brazil
3
rd
Largest pork producer
in the US
3
rd
Source: JBS
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8
PAGE
EBITDA
Margin
Our Strategy
RACIONALE
Associating quality and branding to
increase client loyalty
Customized and further processed
products for the end users
Expanding a global distribution
platform to reach end clients
Developed an efficient and
diversified global production
platform
Production platform
Sales and distribution platform
Value added products
Branding
Financial
Structure
Experienced
Management
Cost reduction,
process
optimization
Risk
Management
JBS' Value & Strategy
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9
PAGE
Growth
Organic Growth & Acquisitions
Improved Scale
Transparent Strategy
New products
New markets
Process
Improvement
Efficiency in
production and logistics
Cost reduction and
increased profitability
Information
Tecnology
Qualified
Professionals
Expand
distribuion
network
Global direct
distribution
Retain margins
from the value
added chain
Sales Team
Logistics (leased or
own fleet)
Product
Diversification
Increased further
processed, industrialized
and branded products
Increase profit margins
and reduce price
volatility
Marketing
New production
facilities
Profissionalization
through
investing in
To achieve
Formation of future
leaders
Training
Development
Selection, Development and
Retention of qualified
professionals
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Performance
4Q10 Highlights showing organic growth and an increase of 294.3% in
2010 EBITDA compared to 2009
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11
PAGE
4Q10 and 2010 Highlights
JBS USA Beef presented EBITDA of
US$194.8 million and EBITDA margin of
5.4%.
JBS USA Pork presented EBITDA of
US$102.4 million, 258.0% higher than
the 4Q09, and a record EBITDA
margin of 12.8% in 4Q10.
The main operating highlighs were:
In 4Q10, the net revenue was R$14,319.6 million, EBITDA was R$865.9 million and EBITDA margin was
6.0%.
Consolidated EBITDA was R$3,756.2 million in 2010, almost triple compared to 2009. EBITDA margin was
6.8%.
JBS presented an organic growth of 14.2% in net sales in their local currency.
Net revenue in 2010 was R$55,055.8 million.
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12
PAGE
Source: JBS
JBS Consolidated Results
4Q10
398
862
1.000
1.026
866
5,4
6,9
7,1
7,3
6,0
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
0,0
200,0
400,0
600,0
800,0
1000,0
1200,0
1400,0
1600,0
1800,0
4Q09
1Q10
2Q10
3Q10
4Q10
EBITDA
Net Revenue (R$ million)
EBITDA and EBITDA Margin (R$ million)
7.408,9
12.550,3
14.116,3
14.069,6
14.319,6
4Q09
1Q10
2Q10
3Q10
4Q10
-69.4%
+12.5%
-0.3%
+1.8%
+ 116.7%
+ 16.0%
+2.6%
-15.7%
EBITDA Margin (%)
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13
PAGE
Source: JBS
Performance by Business Unit
Net sales (R$ billion)
1,6
1,6
1,7
1,7
1,8
4Q09
1Q10
2Q10
3Q10
4Q10
606
646
739
772
799
4Q09
1Q10
2Q10
3Q10
4Q10
2,8
2,8
3,3
3,4
3,6
4Q09
1Q10
2Q10
3Q10
4Q10
Net sales (US$ billion)
Net sales (US$ million)
Net sales (US$ billion)
EBITDA (R$ mi) EBITDA margin
EBITDA (US$ mi) EBITDA margin
EBITDA (US$ mi) EBITDA margin
EBITDA (US$ mi) EBITDA margin
EBITDA Margin (%)
JBS Mercosul
JBS USA
(Including Australia)
JBS USA
JBS USA (PPC)
28,6 34,9
48,7
90,8
102,4
4,7%
5,4%
6,6%
11,8%
12,8%
-10,0%
-5,0%
0,0%
5,0%
10,0%
0
100
4Q09 1Q10 2Q10 3Q10 4Q10
64,9 59,5
127,6
170
124,8
4,0% 3,6%
7,5%
9,9%
6,9%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
0
100
200
300
400
4Q09 1Q10 2Q10 3Q10 4Q10
117,6
352,6 334,5 363,7
238,8
7,7%
11,9%
9,5%
10,4%
7,1%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
0
100
200
300
400
500
600
4Q09 1Q10 2Q10 3Q10 4Q10
1,5
3,0
3,5
3,5
3,4
4Q09
1Q10
2Q10
3Q10
4Q10
126
170,5
194,9
103,5
194,8
4,5% 6,0% 5,9%
3,1%
5,4%
-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
0
100
200
300
400
4Q09 1Q10 2Q10 3Q10 4Q10
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14
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Source: JBS / *including Australia
Revenue Distribution by Market
25.8%
42.7%
9.8%
21.7%
44.9%
22.5%
22.6%
10.0%
Revenue Distribution by Business Unit
3Q10
4Q10
23%
29%
28%
24%
77%
71%
72%
76%
1Q10
2Q10
3Q10
4Q10
Revenue Distribution by Market
Exports
Domestic Market
*
*
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15
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EBITDA Distribution by Business Unit
EBITDA Distribution 4Q10
36.3%
18.1%
29.7%
15.9%
EBITDA Distribution 3Q10
27.0%
33.7%
21.6%
17.7%
Source: JBS / *including Australia
*
*
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16
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Source: JBS
JBS USA Beef Net Revenue (US$ million)
JBS USA Chicken Net Revenue (US$ million)
Organic Growth 2009 / 2010
JBS USA Pork Net Revenue (US$ million)
JBS Mercosul Net Revenue (R$ million)
2.500
2.700
2.900
3.100
3.300
3.500
3.700
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1.600
1.650
1.700
1.750
1.800
1.850
1Q10
2Q10
3Q10
4Q10
500
550
600
650
700
750
800
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
2.900
3.000
3.100
3.200
3.300
3.400
3.500
3.600
1Q10
2Q10
3Q10
4Q10
Each business unit presented double digit organic growth in their local currency, for the period.
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17
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JBS Consolidated Exports Distribution
Source: JBS
Indonesia 1.2%
Taiwan 2.2%
China 3.9%
US 3.5%
Canada 4.3%
South Korea 5.0%
Hong Kong 6.8%
Others 11.9%
E.U. 7.7%
Africa and Middle East 17.8%
Mexico 13.7%
Japan 11.6%
Russia 10.4%
Vietnam 1.5%
Taiwan 2.3%
China 3.5%
Canada 4.0%
South Korea 4.7%
Hong Kong 6.8%
Others 13.4%
E.U. 9.2%
Mexico 15.0%
Africa and Middle East 14.9%
Russia 12.5%
Japan 12.2%
US$ 8,506.8 million
2010
US$ 2,087.9 million
4Q10
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18
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3,1
3,1
3
2,9
3.0x
0
1
2
3
-100
100
300
500
700
900
1100
1300
1500
4Q09
1Q10
2Q10
3Q10
4Q10
The ratio of net debt to EBITDA was 3.0x in the 4Q10, compared with 2.9x in 3Q10.
It is important to note that the company incurred in non-recurring costs in the period such as: premium paid to debenture holders and
R$212.3 million use to repurchase shares of the Company. Excluding these items, the leverage would have reduced to 2.8x.
.
Leverage
EBITDA
Leverage
Source: JBS / * LTM including Bertin , Pilgrim's Pride pro-forma and Inalca
Debt Profile
*
Profile
Banks
67.0%
Capital Markets (Bonds)
28.0%
BNDES
5.0%
40%
36%
33%
33%
60%
64%
67%
67%
1Q10
2Q10
3Q10
4Q10
Short Term
Long Term
ST / LT Profile
4T10
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Mission
"
"
To be best
in what we set out to do, with
absolute focus
in our activities, ensuring the
best products and services
to customers, stability
to suppliers,
reasonable
return
to shareholders, and the
certainty of a better
future
to all employees.