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Agenda
Pgina
Conclusion of Swift's
Acquisition Process
July 12, 2007
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Disclaimer
1
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
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Agenda
2
2
3
4
Swift Acquisition Process Concluded!
Acquisition Process Timeline
Final Acquisition Structure
5
JBS + Swift (Pro-forma)
6
Recovery of Swift's Results
7
Actions of Turnaround Process
Final Considerations
1
Message from the Board of Directors
9
8
Turnaround in Numbers
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Message from the Board of Directors
It is with great satisfaction that the management of JBS
announces the conclusion of the Swift acquisition through the
cash payment of US$1,458,872,836.55, five days in advance of
the original schedule.
The acquisition was concluded with absolute success and
resulted in the creation of the world's largest beef company
with a significant share in the pork industry.
The capital structure used resulted in a company with a reduced
debt level and with one of the lowest financial leverages in the
sector, while it also generated a reduction in financial expenses.
All measures were taken with the objective of creating value to
all of the company's shareholders, creditors, employees and
partners of JBS.
The acquisition reaffirms JBS' commitment to its growth
objectives and its capabilities in achieving them!
3
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Swift Acquisition Process Concluded!
The world's largest beef company is born, with a slaughtering
capacity of 47.1 thousand heads per day;
The world's largest beef exporter;
And the largest Brazilian multinational company in the food
sector;
With production and distribution capacity in the world's 4
main beef producing countries;
Acessing 100% of the world's beef consuming markets;
Consolidating brands, plants and expertise;
And with a diversification platform in pork 3rd largest in the
US.
+
4
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5
Celebration of the Agreement and Plan of Merger
05/29/07
06/29/07
06/01/07
06/08/07
06/13/07
06/27/07
06/27/07
Board of Directors Meeting Approval of the acquisition by JBS
Board of Directors Meeting Approval of capital increase of JBS and
launching of consent solicitation process.
Call notice for Extraordinary Shareholders Meeting
Board of Directors Meeting Capital increase of 227.4 million shares
totaling US$950 million
Relevant Fact BNDESPAR approves subscription of up to US$750
million in the capital increase of JBS
Extraordinary Shareholders Meeting Approval of the Swift
acquisition and of the proposed capital increase
06/11/07
Comencement of Consent Solicitation process Swift as unrestricted
subsidiary.
07/11/07
Conclusion, 5 days in advance, of the Swift acquisition process with the
payment of US$1.459 million
07/10/07
Suspension of the bond issues and revolving facility by Swift
Acquisition Process Timeline
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1.
Simplified chart of the transaction structure for illustrative purposes only
2.
Simplification for subordination structure composed by 3 holdings
3.
Does not include fees, tender offer and other transaction costs
4.
Updated closing debt added of accumulated interest and tender offer expenses
5.
Estimated cash balance to be partially used for the payment of fees, tender offer expenses. The remainder will be
used for working capital.
6
NewCo
J & F
100%
US$1.234 MM
4
100%
US$225
MM
HM Capital
Final Structure
1,2,3
Final Structure
1,2,3
Payment of
Old Debt
BNDESPAR
Up to US$750 MM
Up to US$200 MM
Market
US$ ? MM
US$950 MM
US$950 MM
New Debt
US$750
MM
Capital increase by JBS of US$950
million;
Proceeds raised with financial
institutions in the amount of US$750
million (additional proceeds raised for
working capital purposes);
Payment of equity to HM Capital in the
amount of US$225 million and of debt
in the amount US$1.234 million,
totaling the acquisition amount of
US$1.459 million
3
;
Debt reduction, positioning Swift as a
company with one of the best financial
conditions of the sector in the USA;
Reduction in annual financial expenses
of approximately US$86 million due to
a reduced debt level and new debt
issued at lower rates;
Acquisition of Swift by JBS
Acquisition of Swift by JBS
Final Acquisition Structure
Cash Balance of
US$240 MM
5
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Slaughtering capacity
(Global ranking)
24,100 heads/day
(# 3)
23,000 heads/day
(# 4)
47,100 heads/day
(# 1)
Heads Slaughtered
2006
3,4 MM
6,2 MM
9,6 MM
Plants 28
12
40
Net Revenue
US$ 2,0 bln
2
US$ 9,5 bln
3
US$ 11,5 bln
Net Debt
US$ 0,7 bln
4
US$ 0,5 bln
5
US$ 1,2 bln
Net Debt/EBITDA
2,5x
5,2x
3,1x
Net Debt/Adjusted
EBITDA
2,5x 3,2x
6
2,7x

JBS + Swift (Pro-forma)
COMBINED
PRO-FORMA
7
Notes
1.
Considering beef only
2.
JBS 2006 net revenue converted into US$ at FX rate of R$2.1771
3.
Swift net revenues for LTM ended February 2007 (unaudited preliminary data 8-K Form)
4.
JBS net debt as per financial statements of 03/31/2007 converted in US$ at FX rate of R$2.0504
5.
Swift Net Debt after closing considering all raised proceeds and transaction payments
6.
Calculation considers adjusted EBITDA excluding non-recurrent expenses of US$53 million (US$53 MM ICE and US$9.4 MM in other costs)
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8
Net Revenue (US$ million)
Net Revenue (US$ million)
9.520
9.350
9.669
9.436
8.072
8.196
8.782
FY01
FY02
FY03
FY04
FY05
FY06
FY07*
Net Revenue and EBITDA Recovery at Swift
EBITDA (US$ million) and EBITDA margin
EBITDA (US$ million) and EBITDA margin
161,2 181,7
238,6 220,1
163,0
5,7
96,3
3,0%
1,0%
0,1%
1,7%
2,3%
2,2%
1,8%
FY01
FY02
FY03
FY04
FY05
FY06
FY07*
Margin (%)
Source: Swift & Co
Note: Unaudited pro-forma data related to the years of 2001, 2002 and
2003 from predecessor ConAgra
Swift's fiscal year ends in May
* Preliminary unaudited data (8-K Form)
Net revenue recovery during fiscal year
2007 due mainly to price increases in the
US beef division and to price and volume
increases in the US pork division and
Australia beef division;
EBITDA recovery in the fiscal 2007 to an
EBITDA margin of 1.0%, from 0.1% in
2006;
During fiscal year 2007, the company lost
employees at its US plants expenses due
to an immigration inspection process (ICE
Immigration and Customs Enforcement),
resulting in:
A temporary reduction in production
and, consequently, in sales;
Non-recurrent expenses in the
amount of US$53 million. If this
expense was not considered, EBITDA
would amount to US$158.6 million,
representing an EBITDA margin of
1.6%
There are no other issues related to this
event and all employees have been
replaced
Considerations FY2007
Considerations FY2007
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Actions of Turnaround Process
Management changes in key positions at Swift in the USA and
Australia and simplification of the organizational structure with
the elimination of duplicate positions;
Separation of the operational management of the beef and pork
divisions in the USA;
Reduction in annual financial expenses due to a reduced debt
level and new debt issued at lower rates;
Beginning of a second shift in the Greeley plant;
Better use of the installed capacity at existing plants;
Estimated transportation cost reduction by increasing
occupation rate from 92% to 99%;
Optimization of the price to quality ratio;
Estimated improvement in the rear de-boning process by 0.8%;
9
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Actions of Turnaround Process
Estimated improvement in the forequarter de-boning process by
1.2%;
Estimated improvement in the ribs de-boning process by 0.7%;
Estimated improvement in the yield of the leather by 1.5%;
Estimated improvement in the yield of the pork intestines
(US$1.0 per head);
Estimated fixed cost reductions at the plants of US$2.90 per
head;
Estimated variable cost reductions of US$2.10 per head;
Estimated reductions in expenses related to insurance,
consulting fees and IT;
Optimization of the sales teams;
Remuneration driven by results.
10
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Turnaround in Numbers
11
Increase in Revenues
Implmentation of second shift in Greeley
800,0
Optimization of installed capacity in the Grand Island, Dumas and Hyron plants
300,0
Potential Increase in Revenues
1.100,0
Cost Reductions
Sales, General and Administrative (SG&A)
Consulting
5,0
Reduction of Organizational Structure
4,0
Insurance
8,0
Information Technology (TI)
8,0
Sub-total
25,0
Variable Costs (Packaging, Supllies, Electricity, Gas)
11,6
Fixed Costs in Plants
16,0
Logistics Optimization
17,5
Improvements in Carcass Yield
Rear De-boning
18,4
Forequarter De-boning
23,5
Ribs De-boning
4,5
Leather
37,8
Pork Intestines
11,5
Sub-total
95,7
Potential Operational Gains Identified thus Far
165,7
Turnaround Financial Impacts - (US$ M M )
Preliminary Estimates
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Conclusion of the acquisition by JBS using the best capital
structure, resulting in savings of approximately US$86 million in
interest expenses;
Relevant support by BNDESPAR in the company's expansion and
internationalization process;
Considerable debt reduction at Swift, making it a company with
one of the best financial conditions of the sector in the USA;
Swift is already showing improvements in its operational results
(FY07 x FY06);
Turnaround process has already began, with a large portion of
the actions to be implemented quickly and to generate results in
the short to medium term;
The management team that will guarantee the success of the
turnaround process is already defined;
The conclusion of the Swift acquisition does not represent the
end of JBS' growth process, but one more stage in the
company's leadership expansion and consolidation in the world
beef industry;
Once again JBS' management reaffirms its excellent track
record in acquisitions
12
Final Considerations
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13
Questions & Answers

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