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JBS S.A.
JBS S.A.
JBS S.A.
February, 2010
"In God we trust, nature we respect"
JBS S.A
.
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Our Values
The Foundation Of Our Culture
Planning
Determination
Discipline
Availability
Openness
Simplicity
1
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88
Who we are
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Batista
Family
Bertin
Family
Controlling
Holding
Market including
BNDES
JBS S.A.
Bertin
JBS U.S.A.
Includes AUS
Pilgrim's
Pride
Ownership structure post transactions
Ownership structure post transactions
Investor
Other
subsidiaries
~60%
~40%
*
*
* Controlling shareholders' estimates
100%
80% - 75%
20% - 25%
64%
Old
shareholders
36%
3
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Free Float
Shareholders Base
3
BNDESPAR
47%
Individual
2%
Foreign
Investors
26%
Institutional
25%
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Novo Mercado
JBS is part of the of BM&FBOVESPA´s Novo Mercado, is in accordance with all requirements of this market and with the obligations imposed by the
current Brazilian legislation.
Management and Board of Directors
Board of Directors -
JBS' Board of Directors is formed by 7 members ­
a president, a vice-president, 2 effective councils without specific
denomination and 3 independent effective councils.
Audit Board - The Audit Board shall consist of at least 3 and at most five 5 sitting members and alternates in the same number, shareholders or not,
liable to be elected or dismissed at any time of the General Meeting.
Board of Executive Officers -
The members of the Company's board of executive officers are elected by the board of directors, for three
-year terms,
and are eligible for reelection.
Board of Directors' Committees
The Board of Directors has approved the establishment of the following Committees: Audit, Financial, Personnel Management and Corporate
Strategy, that incorporates the Sustainability matters.
Publishing and Use of Information
JBS is completely in accordance with the CVM 358 instruction that revised and consolidated the requirements regarding the disclosure and use of
information related to material facts and acts of publicly held companies, including the disclosure of information in the trading and acquisition of
securities issued by publicly held companies.
Conduct and Ethic Manual
JBS Executive Officers have developed a Conduct and Ethic Manual according to the corporate governance best practices concept. The conduct
code embraces the relationship between the members of the board, shareholders, employees, suppliers and all the other stakeholders.
Corporate Governance
JBS has embraced a Corporate Governance model with a view to implant the best practices in the Company. The view is that the model
demonstrates transparency and confidence to the public, guaranteeing the best products and services for customers, solidity for
suppliers, satisfactory return for shareholders and the certainty of a better future for all JBS collaborators.
5
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·
JBS' History has been built through
more than 30 acquisitions in 15 years
with appropriated capital structure and
management
JBS' History
Cáceres
(Frigosol)
Iturama
(Frigosol)
Araputanga
(Frigoara)
Barretos (Anglo)
Pres. Epitácio (Bordon)
Campo Grande (Bordon)
Pedra Preta
(Frigo Marca)
Rosário
(Swift ARG)
San Jose
(Swift ARG)
Inalca
Swift Foods Co.
Maringá (Amambay)
Berazategui
(Rio Platense)
Colonia Caroya
SB Holdings
JV Beef Jerky
Venado
Tuerto
Pontevedra
(CEPA)
Rio Branco
Cacoal 1
Cacoal 2
Porto Velho
Vilhena (Frigovira)
Andradina
(Sadia)
Barra do
Garças
(Sadia)
Tasman
Smithfield
Beef
Five Rivers
R$/US$ end of the year quotation
Bertin Association*
Pilgrim's Pride
JBS Hides
5 new units
(1)
(2)
(3)
Net Sales (in US$ billion)
Companies and assets acquired
Source: JBS
(1) Pro Forma JBS S.A. LTM Dec07
(2) Pro Forma JBS S.A. LTM Dec08
(3) Pro Forma JBS S.A. LTM Jun09 (including 5 new units and hides operation); Pilgrim's Pride Sep09 (Estimated); Bertin LTM J
un09
* Transaction subject to customary conditions for this type of business
0.3
0.4
0.4
0.5
0.5
0.4
0.7
1.2
1.5
1.9
12.7
19.8
30.3
1996
1997
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
6
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Slaughterhouses and Industry
Distribution Centers / Commercial Offices
Processed products
Pork
Ovine
Leather
Poultry
Beef
Distribution centers
Leather
Dairy
Vegetable fat
Pet products
Source: Companies
X
Presence in over 23 countries across five continents
Expansion of global leadership and geographic
diversification
7
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Production Units
Employees
28,600
B
48,500
P
4,500
O
8,690
B
15,000
O
9 0 ,3 9 0
B
4 8 ,5 0 0
P
1 9 ,5 0 0
O
C
Pilgrims Pride
37
41,000
7,200,000
6,700
5,059
1 2 4 ,3 6 1
Daily Slaughter Capacity
2,019
6,995
24,295
B
B
B
JBS Argentina
JBS USA
JBS Austrália
Inalca JBS
6
16
10
8
Tota l
JBS Brasil
63
44,993
43,400
1 4 0
3,000
Global Production Platform
(B) Beef; (P) Pork; (S) Smalls; (C) Chicken
Brief Description
8
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Combined company will have a leading position in the global market
Creation of the largest protein company in the world
1
a
largest global protein
company
28,725
28,130
12,717
12,488
12,088
10,494
9,457
6,755
Source: Companies, Exame, Valor Econômico and CNN (Global 500)
1 Based in net revenues of 2008 and including Pilgrim's Pride in Bertin + JBS
Global ranking of protein companies (US$ million)
1
9
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Brazil / Argentina
/ Italy / Australia /
U.S.A. / Uruguay /
Paraguay
Brazil: 43,400 heads/day
Latin America: 6,700 heads /day
U.S.A.: 28,600 heads/day
Italy: 3,000 heads/day
Australia: 8,690 heads/day
Total: 89,790 heads/day
Brazil: 39
Latin America: 8
U.S.A.: 13
Italy: 8
Australia: 10
Total: 82
U.S.A. / Mexico
U.S.A. / Mexico:
7.2mm birds/day
Total: 7.2mm birds/day
U.S.A.: 34
Mexico: 3
Total: 37
U.S.A.
U.S.A.: 48,500 heads/day
U.S.A.: 3
Brazil / U.S.A. /
China
Brazil: 148,500 m
2
/day
Brazil: 12
Brazil
Brazil: 1,266 ton/day
Brazil: 7
Beef
Poultry
Pork
Leather
Dairy
1
Ranking
Installed capacity
Industrial units
Leader company in the protein industry
2
3
1
3
Presence
10
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JBS Consolidated Net Revenue Distribution
(Including Bertin S.A. and Pilgrim's Pride)
Source: JBS
.
Net Revenue Distribution 9M09
11
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Poultry
World Wide Well Known Brands
Beef
Dairy
Beef
Beef
Beef
Beef
Leather
12
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88
Our Strategy
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Our Strategy
2005/2006
Adequate Financial
Structure
2007/2008
Global Production
Platform
2009/2010
Global Sales &
Distribution Platform
2011/2012
Value Added
Products &
Branding
-
Access to raw material supply
globally.
-
Leader in countries with
surplus production.
-
Scale.
-
Leader in exports globally.
-
Access to all meat markets.
-
Exchange of best practices.
-
Efficiency cost gains.
-
Cost reduction opportunities.
-
Margin improvements.
-
Integrate the sales and
distribution platform to serve
efficiently, local and external
markets, small retailers, food
processors, restaurants, and
other customers globally.
-
Sales force distributed over the
globe.
-
Efficiency on selling the best
product, to the best market, with
the best price.
-
Cost reduction on sales and
transport.
-
Margin improvements.
-
High liquidity level.
-
Debt equalized to cash
generation.
-
Strong cash position.
-
Access to international capital
markets to finance growth.
-
Development of long term
financing plan.
-
Use of export platform to grow.
-
Hands-on working capital
management.
South America
North America
Australia
European Union
Asia
Russia
Africa
Middle East
South America
North America
Australia
European Union
Debt for
Working
Capital
Equity
to
Finance
Growth
Cooked Products
Case Ready
Products
Global Brands
Marketing
Investments
Minced Products
Fresh Products
Cured Products
Ready to Eat
Products
-
High technology investments to
produce value added products.
-
Increase value added products
portfolio.
-
Customized products to each
market.
-
Convenience to consumers
day to day.
-
Brand and Quality recognition
and leadership.
-
Marketing investments to be
present in consumer minds.
-
Margin improvements.
14
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Our Strategy
Branding
Value
Added
Products
Sales &
Distribution
Platform
Production Platform
Foundation
Financial
Structure
Experienced
Management
Cost Reduction,
Productivity,
Process
Optimization
Risk
Management
Consolidated
Average
EBITDA
Margin
4%
8%
12%
50%
15
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88
The Global Beef Industry
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Global Market
Largest beef importers
Others
38%
South Korea
4%
EU-27
8%
Japan
10%
Mexico
5%
United States
19%
Russia
16%
Source: USDA 2009
Largest beef consumers
Others
31%
Mexico
4%
China
10%
Brazil
13%
Argentina
5%
United States
22%
EU-27
15%
Largest beef exporters
Others
25%
New Zealand
7%
India
8%
United States
11%
Canada
7%
Brazil
23%
Australia
19%
Largest beef producers
Others
31%
India
4%
China
10%
EU-27
14%
Argentina
5%
United States
21%
Brazil
15%
17
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Source: UN (United Nations) and USDA
*UN Estimates
**Beef consumption trend considering CAGR of 2.0% (from 1960 to 2008)
World Population Growth and Beef Consumption
(1960
­
2050)
0
2000
4000
6000
8000
10000
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010* 2015* 2020* 2025* 2030* 2035* 2040* 2045* 2050*
P
op
ulat
i
on

(
mi
l
l
i
on
)

0
20
40
60
80
100
120
140
C
on
su
mpt
i
on

(
mi
l
l
i
on

t
on
s)
Population - Developed countries
Population - Developing countries
Beef Consumption**
Population growth, a beef
consumption driver.
18
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Per capita food consumption (Kg / Year)
19
0
20
40
60
80
100
120
140
160
180
Cereals
Roots and
Tubers
Beans, Peas
and Lentils
Sugar
Oils Crops
and its
products
Meat
Milk and its
products
1969/ 71
1979/ 81
1989/ 91
1999/ 01
2030
2050
Source: FAO
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US Beef and Veal Exports (Million Pounds)
20
Source: USDA ERS
1752
1698
1,698
1,888
1,433
1,146
697
461
2,520
2,449
2,269
2,467
2,412
0
500
1,000
1,500
2,000
2,500
3,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Mexico
Canada
South Korea
Japan
Vietnam
China
Hong Kong
Netherlands
Others
Until November
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US Pork Exports (Million Pounds)
21
Source: USDA ERS
4,355
3,764
3,764
4,667
3,142
2,995
2,667
2,181
1,717
1,612
1,560
1,287
1,278
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Japan
China
Hong Kong
Mexico
Russia
Canada
South Korea
Australia
Others
Until November
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US Poultry Exports (Million Pounds)
22
Source: USDA ERS
6,377
7,109
6,070
5,367
5,333
4,997
5,013
4,942
5,738
5,138
4,980
6,377
6,579
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Russia
China (Mainland)
Iraq
Mexico
Canada
Cuba
Other Chicken
Others
Until November
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Brazilian beef exports (USD billion)
Source Secex
23
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88
3rd Quarter 2009 Results
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Net Revenue (R$ million)
EBITDA and EBITDA Margin (R$ million)
25
Source: JBS
EBITDA Margin (%)
-9.5%
-24.0%
24.0%
-44.0%
-3.8%
-20.4%
-0.1%
81.6%
JBS Consolidated Results
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9,255.0
8,379.9
4.460.7
4.486.8
2Q09
3Q09
2Q09
3Q09
Net Revenue (Million)
0.6%
Source: JBS
Source: Banco Central
26
Currency effects in the net revenue
R$
US$
Exchange rate
average of the period:
2Q09
­
2.0748
3Q09
­
1.8677
-9.5%
·
Excluding the exchange rate effect in
the period, net revenue increased
0.6% over 2Q09.
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27
Net Sales
(US$ billion)
EBITDA (US$ mi)
EBITDA margin
JBS USA (Beef)
Including Australia
Net Sales
(US$ million)
EBITDA (US$ mi)
EBITDA margin
JBS USA (Pork)
Net Sales
( million)
EBITDA ( mi)
EBITDA margin
INALCA JBS
Net Sales
(R$ billion)
EBITDA (R$ mi)
EBITDA margin
JBS MERCOSUL
Source JBS
EBITDA Margin (%)
2.7
2.8
2.7
2.9
2.8
3Q08
4Q08
1Q09
2Q09
3Q09
59.7
60.4
104.1
104.6 108.4
5.2%
2.2%
2.2%
3.6%
3.8%
3Q08
4Q08
1Q09
2Q09
3Q09
144
162
143
144
146
3Q08
4Q08
1Q09
2Q09
3Q09
9.7
6.6
7.6
8.3
5.6
6.6%
4.6%
3.9%
5.1%
5.3%
3Q08
4Q08
1Q09
2Q09
3Q09
1.8
1.6
1.4
1.7
1.7
3Q08
4Q08
1Q09
2Q09
3Q09
47.3
82.6
199,1
69.4
58,2
4.3%
5.6%
2.9%
3.7%
4.9%
3Q08
4Q08
1Q09
2Q09
3Q09
Performance by Business Units
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·
The net debt / EBITDA ratio increased from 2.6x in 2Q09 to 3.3x in 3Q09, reflecting
the EBITDA decline when compared with 3Q08.
·
The company projects a reduction in leverage levels by the end of the year.
·
The gross and net debt reduced 5.6% and 2.2%, respectively, over 2Q09.
2.3
2.0
2.5
2.6
3.3
3Q08
4Q08
1Q09
2Q09
3Q09
Net Debt / EBITDA Pro Forma per Quarter
*
Source: JBS
Net Debt/ EBITDA EBITDA pro-forma
* LTM including Smithfield Beef pro-forma.
Gross debt Profile (R$ million)
28
Debt
5,971.8
6,226.4
5,877.1
1T09
2T09
3T09
Short term
Long term
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JBS Brazil continues to reduce its working capital needs, which decreased from 37 days in 2Q09
to 33 days in 3Q09.
29
Working Capital
Production & Stock
21 dias
CLIENT = 33 days
SUPPLYER = 21 days
Product
Delivery
Supplyer
payment
Client's payment
to JBS
WORKING CAPITAL &
INTERESTS
33 days
3º Quarter 2009
Client's order
to JBS
Production & Stock
21 dias
CLIENT = 37 days
SUPPLYER = 21 days
Product
Delivery
Supplyer
payment
Client's payment
to JBS
WORKING CAPITAL &
INTERESTS
37 days
2º Quarter 2009
Client's order
to JBS
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Exports Distribution 2Q09
Source: JBS
JBS Consolidated Exports Distribution
Revenue Distribution by Market 2Q09
Exports Distribution 3Q09
Revenue Distribution by Market 3Q09
Japan
18%
E.U.
15%
USA
9%
Africa and
Middle East
8%
Russia
7%
Mexico
7%
South Korea
6%
Canada
5%
Hong Kong
5%
China
4%
Taiwan
2%
O thers
14%
JBS Exports 2Q09
US$ 1,169.1 Million
30
Domestic
Market
74%
Exports
26%
Domestic Market
76%
Exports
24%
Japan
19%
E.U.
12%
Russia
9%
USA
8%
Mexico
7%
Canada
6%
Africa and
Middle East
6%
Hong Kong
5%
South Korea
4%
China
4%
Indonesia
3%
Others
18%
JBS Exports 3Q09
US$ 1,127.4 Million
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Sustainability Policies
JBS is aware of its responsibilities as the largest beef Company in the world and all the impacts its operations
generates in every region. The Company has a appropriate sustainability program in each of its units including:
Environmental Policy
Procedures Adopted
Informative Policy
Community Relationship and Environmental Investments
Sustainability
Sustainability Principles
·
Ecological feasability
·
Ecological correctness
·
Social concern
·
Cultural acceptance
Priorities
·
Sustainable use of materials
·
Partnership with organizations equally
concerned
·
Health and Quality of Life
·
Climate
·
Waste
Actions
50% Effluent reutilization
50% Solid waste recycling
Energetic Matrix development
Use of certified wood
25% Consume reduction
Flora conservation
Animal origination control
Laws
Legislative compliance
Environmental awareness
Physical activities
Health Care
Formal education
E
m
i
s
s
i
o
n
s
,

E
f
f
l
u
e
n
t
s
a
n
d

W
a
s
t
e
E
n
e
r
g
y
Reduction of Greenhouse
Gases emission (GHG)
W
a
t
e
r
35% Consume reduction
(2m
3
per head)
S
o
ci
e
t
y
B
i
o
d
i
v
e
r
s
i
t
y
M
a
t
e
r
i
a
l
s
Focus on environmentally
friendly materials
JBS is the first and only beef Company to register a CDM project at the
UNFCCC (United Nations Framework Convention on Climate Change).
The project is in validation phase at the designated national authority.
The environmental and social responsibility have always been part of JBS´s development and business growth.
The Company's extensive experience proves the importance of the reduction of environmental impacts and the
improvement of its relations with the community, throughout constant investments that focus these issues.
31
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Thank You!
IR Contacts:
ir@jbs.com.br
+55 11 3144 4055
www.jbs.com.br/ir
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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.
33