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 Invetsidors Corporate Comercial and
Finance CEO JBS
Law Relations And Adm. New business Distribution Dayry
Director Brazil MERCOSUL Hides
Department Jeremiah Controler 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
Mr. Marcos Mr. Francisco de Assis Mr. Jeremiah Mr. Eliseo Fernandez Mr. Marco Bortolon, has Mr. José Luiz Mr. Marco Bichieri, has Mr. Roberto Motta, has Mr. Gilson Teixeira,
Bastos, Graduate e Silva, Director of the O’Callaghan, Has a Has a Business more than 10 years Medeiros, has a degree more than 24 years of more than 20 years in has more than 25 years
from the Law Department. Has A Engineering Degree from Administration and experience in JBS. in Accounting and has experience in the Protein the Leather Industry. experience in Finance
Mackenzie post graduated from the the University of Cork Accounting Degree from Initially started as the worked in the Beef Sector. Worked for more Was responsible for and Controler of
University in University of Mackenzie. College in Ireland. the University Católica de manager of production Sector since1975. 14 than 20 years in Bertin. incorporating BMZ Hides business units of Bertin,
Business Immigrated to Brazil in Pernambuco and a post and afterwards was year in Bertin and with the JBS Group. where he later served as
Started working at JBS
Administration and 1979. Started working in graduate degree in promoted to be Chief started in JBS in 1997. a member of the Board
in December of 2001
has a MBA in the Beef Sector in 1983 Business Administration Operating Officer of the January 2010 became for 5 years.
and later became a
Finance from San and in JBS in 1996 in from FGV. Started with Brazil Beef Division. the Director of New
Francisco State member of the Executive order to develop the JBS in August 2005 and Business.
University. Worked Board in January of Trade Area and eventually became
in many financial 2007. eventually became the Director of Administration
institutions in Investors Relations and Corporate
Brazil, primarily in Officer. Governance. 8 years
the Investment Mr. Guilherme Arruda Experience in Auditing,
banking, Financial graduated in Business Consulting and 10 years
Projects, and and Economics from the in the Retail industry.
Portfolio University of California.
management. Start in the Company in
Started in 2008 2009 after working for 7
with JBS. years for the Bank
Pactual
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 Richard Vesta Iain Mars Mike Bob
Dooley Schroder Wadland Nogueira
Thoren Daubenspeck
Mr. Don Jackson is the Mr. Richard Vesta, Mr. Martin Dooley Mr. Iain Mars, born Mr. Thoren, Mr. Moe Schroder has Mr. Robert Wadland Mr. André Nogueira has
Mr. Robert
President, CEO and joined Smithfield Foods Has a degree in Biology in England and is the President and more than 30 years 27 years of meat a degree in Economics
Daubenspeck
Director since January with the Acquisition of from the University of worked in the Beef CEO of Five Rivers experience in trading experience with from the Federal
assumed the position
2009. Originally was the Parkerland in 2001 and Eastern Illinois. Worked Industry for his whole since the Start of the Transportation Sector. 17 years at JBS University Fluminense, a
in February 2009 and
president of the chicken serves as the president in Swift for his whole live, life. He became the Company. Has a Majored at the enhancing exports out masters in Capital
before that in JBS
division of Foster Farms and CEO of JBS having started the President and CEO Masters of Science in University of Ryerson, of Australia and New
Packerland from 2002 Markets from FGV –
for 9 years and vice Packerland company as a manager of JBS Australia in Agricultural Economics Toronto, Canada. Zealand. Recently Fundação Getúlio
to 2008.
president of Food trainee in 1983. In 2007 2007, after the and has a degree in Occupied the position transferred to the US to Vargas, masters in
Service in ConAgra was given the position of acquisition of Swift. Agribusiness from the of Vice President of run the groups trading Economics from
Poultry Company. president of the Pork He has worked in University of Sales and Dedicated business unit University of Brasilia in
Before this worked for Division of JBS USA. JBS since 2005. Washington State. Operations at KLLM 2003. Worked more than
the Seaboard farm of and before that has 20 years at Bank of Brazil
Athens or 22 years, occupied executive and started at JBS USA
including 4 years as the positions for 15 years in 2007 after the Swift
CEO of the Chicken at CR England acquisition.
Division
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 75 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 8.7 6.0 23.0
3.0
1.0 0.7 1.2
Total: 90.3 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
600.000 5.3% 4.500 4.000
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
