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
Marcos graduate from Francisco is the director of Jerry has a Engineering Eliseo has a Business Marco has more than 10 José Luiz has a degree Marco has more than 24 Roberto has more than 20 Gilson has more than
Mackenzie University in the Law Department. Has Degree from the University Administration and years experience in JBS. in Accounting and has years of experience in the years in the Leather 25 years experience in
Business Administration a post graduated from the of Cork College in Ireland. Accounting Degree from Initially started as a been working in the Beef Protein Sector. Worked Industry. Was responsible Finance and Controller
and has a MBA in University of Mackenzie. Immigrated to Brazil in the University Católica de Production Manager and Sector since 1975. 14 for more than 20 years in for incorporating BMZ of business units of
Finance from San 1979. Started working in Pernambuco and a post in 2009 was promoted to year in Bertin and Bertin. Hides with the JBS Group. Bertin, where he later
Started working at JBS in
Francisco State the Beef Sector in 1983 and graduate degree in Chief Operating Officer of started at JBS in 1997. served as a member of
December of 2001 and
University. Worked in in JBS in 1996 in order to Business Administration the Brazil Beef Division. January 2010 became the Board for 5 years.
later became a member of
many financial institutions develop the Trade Area and from FGV. He started with the Director of New
the Executive Board in
in Brazil, primarily in eventually became the JBS in August 2005 and Business.
Investment banking, January of 2007. Investors Relations Officer. eventually became
Financial Projects, and Guilherme graduated in Director of Administration
Portfolio management. Business and Economics and Corporate
Started in 2008 with JBS. from the University of Governance. He has 8
California. Start in the years Experience in
Company in 2009 after Auditing and Consulting
working for 7 years for BTG and 10 years in the Retail
Pactual. industry.
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 Bill Rupp Iain Mars Mike Bob
Dooley Schroder Wadland Nogueira
Thoren Daubenspeck
Don is the President, Bill has learned the Beef Martin has a degree in Iain was born in England Mike is the President and Moe has more than 30 Robert has 27 years of Robert assumed this André has a degree in
CEO and Director of Industry from the ground Biology from the University and worked in the Beef CEO of Five Rivers since years experience in meat trading experience position in February Economics from the
Pilgrim’s Pride since up. Right out of college, of Eastern Illinois. Worked Industry for his whole life. the Start of the Company. Transportation Sector. with 17 years of that at 2009 and before that Federal University
January 2009. For 9 he began learning the in Swift for his whole life, He became the President Has a Masters of Science Graduated from the JBS enhancing exports was in JBS Fluminense, a masters in
years was the president business at Cargill where having started the and CEO of JBS Australia in Agricultural Economics University of Ryerson, out of Australia and New Packerland from 2002 Capital Markets from
of the chicken division of he worked for 25 years. company as a manager in 2007, after the and has a degree in Toronto, Canada. Zealand. Recently to 2008. FGV – Fundação Getúlio
Foster Farms and vice He was a plant general trainee in 1983. In 2007 acquisition of Swift. He Agribusiness from the Occupied the position of transferred to the US to Vargas, and masters in
president of Food manager and eventual was given the position of has worked in JBS since University of Washington Vice President of Sales, run the group’s trading Economics from
Services in ConAgra went to build a meat president of the Pork 2005. State. Dedicated Operations at business unit University of Brasilia in
Poultry Company. processing facility in Division of JBS USA. KLLM and before that was 2003. Worked more than
Before this he worked Canada. He later in various executive 20 years at Bank of
at Seaboard farms of became the VP of positions at CR England . Brazil and started at JBS
Athens for 22 years, Operations, then was the Moe Joined JBS to run the USA in 2007 after the
including 4 years as the President of the Beef carrier business Swift acquisition.
CEO of the Chicken Business, and eventual
Division became the president of
Cargill Meat Solutions.
Bill joined JBS in 2010 as
the President of the US
Beef Business.
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 76 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 9.5 6.0 23.0
3.0
1.0 0.7 1.2
Total: 91.1 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
