3Q14 Presentation

8/10/2019 3Q14 Presentation

1/31

JBS 3Q14 Results PresentationNovember 13th, 2014


2/31

This release contains forward-looking statements relating to the prospects of the business, estimates for

operating and financial results, and those related to growth prospects of JBS. These are merely projections and,as such, are based exclusively on the expectations of JBSmanagement concerning the future of the businessand its continued access to capital to fund the Companys business plan. Such forward-looking statementsdepend, substantially, on changes in market conditions, government regulations, competitive pressures, theperformance of the Brazilian economy and the industry, among other factors and risks disclosed in JBS fileddisclosure documents and are, therefore, subject to change without prior notice.

Disclaimer


3/31

JBS Global

EstimatedNet Revenue of around US$50.0 billion in 2014

Bovines49%

Poultry17%

Pork7%

Preparedproducts and

others27%

Revenue2014E

US$50.0 bi

Capacity to process 100,000 bovinesper day in 73 unitsin seven countries

Capacity to process 72,000 hogsper day in11 unitsin Brazil and the United State

Capacity to process more than 13 million birdsper day in 57 unitsin the Americas

Capacity to producemore than 100 thousand hidesper day in31units worldwide

More than 80 thousand tons of convenient and value added products permonth in the world

More than 200 thousand employees around the world


4/31

Presence in20+ countries, Exports to150+ countriesand more than300,000 clients

Note 1. It considers only domestic salesNote 2. Includes beef and lamb operations in the USA and AustraliaNote 3. Includes leather and hides operations in Brazil, Uruguay, Mexico, Germany, Vietnam and China and also Rigamonti operations in Italy.

JBS Global

Tokyo

Hong Kong

Shanghai

Taipei

Santiago

Dubai

Moscow

London HamburgGhent

ChicagoToronto

So Paulo(headquarter)

Sales office

Sales office presence

Production Platform

North America

~51% of JBS revenue,

South America

~17% of JBS revenue,3

96% from Brasil

Seoul

Caracas

84% of JBS

Revenue is

denominated in US$

Exports

~32% of JBS revenue

16% of JBS

Revenueis

denominated inR$


5/31

JBS Evolution

Net Revenue (R$ billion)

EBITDA (R$ million)

30.3 34.3

54.761.8

75.7

92.9

113.4

2008 2009 2010 2011 2012 2013 LTM

1,156.1 1,285.2

3,497.0 3,072.04,410.3

6,130.3

9,664.2

3.8% 3.7%

6.4 %5.0%

5.8%

6.6%

8.5%

2008 2009 2010 2011 2012 2013 LTM

EBITDA margin (%)

+274%


6/31

Consolidated Results


7/31

Gross Profit Adjusted EBITDA

EBITDA

Net Revenue Net Income

3Q14 Highlights - Consolidated

24,222.027,222.2 26,419.1

28,968.930,778.6

3Q13 4Q13 1Q14 2Q14 3Q14

Net Revenue of R$30.8 billion,

expansion of R$6.6 billion, or 27.1%

superior than 3Q13

3Q14 Highlights (R$ Million)

Operational Cash Generation of R$3.0 billion and Free Cash Generation (after Investments) of R$2.1 billion.

JBS ended the quarter with leverage of 2.54x compared to 3.15x in 2Q14.

1,709.7 1,873.5 1,749.7

2,432.7

3,617.97.1 6.9 6.6

8.4

11.8

3Q13 4Q13 1Q14 2Q14 3Q14

EBITDA of R$3.6 billion, 111.6%

superior than 3Q13. EBITDA

margin was 11.8%.

27.1%

6.2%

Adjusted EBITDA Margin (%)

219.8 140.7 70.0254.3

1,092.90.08 0.05 0.02

0.09

0.38

3Q13 4Q13 1Q14 2Q14 3Q14

EPS (R$)

Net Income of R$1.1 billion,

equivalent to an EPS of R$0,38.

3,128.03,732.0 3,421.0

4,255.0

5,560.012.9 13.7 13.014.7

18.1

3Q13 4Q13 1Q14 2Q14 3Q14

Gross Margin (%)

Gross Profit of R$5.6 billion, an

increase of R$2.4 billion, or 77.7%

higher than 3Q13.


8/31

3Q14 Highlights - Businesses Units

JBS Foods recorded net revenue of R$3,376.8 million, 9.5% superior over 2Q14, and EBITDA of R$576.0 million, with an EBITDAmargin of 17.1%.

JBS Mercosul posted net revenue of R$6,470.5 million, 14.8% higher than 3Q13 and EBITDA of R$554.6 million, with EBITDAmargin of 8.6%.

JBS USA Beef posted net revenue of US$5,849.3 million, 24.7% higher than 3Q13. EBITDA was US$504.9 million, with anEBITDA margin of 8.6%

Net Revenue of JBS USA Pork totaled US$937.8 million, 3.8% higher than 3Q13, and EBITDA of US$113.2 million, with an EBITDAmargin of 12.1%.

JBS USA Chicken (PPC) reported net revenue of US$2,268.0 million, an increase of 5.8% compared to 3Q13. EBITDA wasUS$435.4 million, with a margin of 19.2%.


9/31


10/31


11/311

Cash Generation

CAPEX

Capex and Cash Generation

In 3Q14, total capital expenditure (CAPEX) was R$878.6 million, of which approximately 20% in

acquisitions, 25% in expansions and facilities modernization and 55% in maintenance.

In 3Q14 the Company generated net cash flow from operations of R$3.0 billion and free cash flow

(after capex) of R$2.1 billion, due to the strong performance of JBSbusinesses units.


12/311

4.03

3.70 3.26 3.15

2.54

0

1,000

2,000

3,000

4,000

5,000

6,000

3Q13 4Q13 1Q14 2Q14 4Q14

Debt Profile

Leverage EBITDA (R$ million)

JBS ended the quarter with leverage of 2.54x compared to 3.15x in2Q14.

The reduction in leverage is due to the improvement in operational

performance of JBS, combined with a strong cash generation in the

quarter.

This reduction in the leverage reflects the Management commitment in

improve continuously its capital structure in order to generate value to all

its stakeholders.

Leverage (Net Debt/EBITDA LTM)

Breakdown by Currency and Costs Breakdown by Company

US$80%

R$20%

JBS S.A.56%

JBS Foods13%

Subsidiaries31%

Breakdown by Source

CapitalMarkets40.0%

CommercialBanks 59.9%

BNDES 0.1%11.50% per

annum

5.71% perannum


13/31

1

-1,095

1,050

4,543

1,638

5,245

744

5,290

2,798

5,636

Short Term* 2015 2016 2017 2018 2019 2020 2021 after 2021

The Company ended the quarter with R$12,578.5 million in cash,

equivalent to 110% of its short-term debt.

JBS USA has US$1.33 billion fully available under

revolving credit facilities which, if added to the current cash

position, represents 121% of short term debt.

The percentage of short term debt (ST) in relation to total

debt was 30% in 3Q14.

* Net of Cash

Debt Profile and Maturity

Short Term Long Term

30%

28%

29%

29%

35%

70%

72%

71%

71%

65%

3Q14

2Q14

1Q14

4Q13

2Q13

Debt Profile

Maturity (R$ million)


14/31

1

Business Units


15/31

1

JBS Foods


16/31

1

EBITDA 9M14Net Revenue 9M14 R$9.2 billion

5.1 million birds per day

21,200 hogs per day

~80,000 tons per month

2ndlargest producer and exporter of poultry and pork in Brazil

Large production platform, with 60 production units1,2 and nearly 55,000 employees

National distribution platform serving ~79,000 points of sale

Strong international presence, exporting to over 100 countries

Complete product portfolio with leading and well-known brands

Uniquely positioned as the natural consolidator of the sector in Brazil, allowing accelerated growth

JBS Foods

Leading producer of prepared foods (PFPs) and fresh poultry and pork products

Operational Platform +55,000 employees

R$1,396 million

15.1% Margin

Brazil

29 slaughterhouses and deboning units

08 slaughterhouses and deboning units

23 PFP units

15 distribution centers


Production units located in the south,

southeast and mid-west regions

Production units located in the south

and mid-west regions

Production units located in the south,

southeast, northeast and mid-west

regions

In 12 states

Notes: 1 Industrial Complex: location with one or more units of production; 2 Includes Tyson acquired units, approved in October/14; 3 Total produced volume of PFP, poultry and pork of 182 mm tons, 359 mm tons and 54 mmtons in 3Q14, respectively. Total export volume of 331 mm tons in 3Q14

1

MTBA

MG

RJ

PR

RS

MS

DF

5

7

2

SC 8 3 7

SP 4 3

1

2

511

3

1

1

21

221

1

1

CE1

PE 1

1

1

3

1

2

1

1

AM

% JBS Net Revenue


17/31

1

2.9 2.83.1

3.4

4Q13 1Q14 2Q14 3Q14

JBS Foods


EBITDA (R$ million)

EBITDA Margin (%)

11%

24%

40%

8%

18%

Net Revenue of R$3,376.8 million in the quarter, 9.5% higher than

2Q14:

Increase of 16.8% in domestic volumes;

Increase of 2.9% in average prices of prepared products in domesticmarket;

Higher volume of fresh pork exports (+17.7%);

Increase of 6.4% in average export prices.

EBITDA totaled R$576.0 million, with an EBITDA margin of 17.1%,compared to 14.3% in 2Q14:

Higher productivity with lower production costs, as well as a decrease inthe cost of raw materials resulted in a COGS representing 71.5% of netrevenue, compared to 74.4% in 2Q14;

Reduction in SG&A (14.4% over net revenue compared to 15.2% in the2Q14), mainly due to lower logistics costs, reflecting the reorganization andoptimization of the companyslogistics network.

227.3

379.8440.4

576.07.9%

13.7% 14.3%17.1%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1000.0

4Q13 1Q14 2Q14 3Q14

9.5%


18/31

1

JBS Mercosul

JBS M l


19/31

1

EBITDA LTM14Net Revenue LTM14 R$27.8 billion

~ 55,000 bovines per day

90,000hides per day


09 related businesses

92% in Brazil, 3% in Argentina, 3% in

Paraguay and 2% in Uruguay

Facilities in Brazil, Argentina, Uruguay,

China, Vietnam and Mexico

11 central and 32 regional

Biodiesel

Can making

Collagen

JBS Carriers

Trading

Hygiene and Clean

Casings

TRPComplementary to JBSCarriers

Recycling

JBS Mercosul

Beef production in Brazil, Argentina, Paraguay and Uruguay, in addition to leather and other Related Business

Operational Platform +70,000 employees

R$2,477.4 million

10.0% Margin

Argentina

Leadership in beef production

05beef processing facilities02can making01tannery

ParaguayJBS is the leader in beef processing and has around 25% of market share inexports of Paraguay

02beef processing facility

Uruguay

Great access to export markets; the only country to export fresh beef to the US01beef processing02tanneries

Brazil

48 beef processing facilities

06 feedlots

29 tanneries


1

15

9

3

1

1

16

4

3

4

4

2 1

1

3

2

1

2

6

2

4

2

8

5

3

2

2

1

1

1

2

1

1

1 23 63

PA

AM

AC RO MT

MA

PEBA

MG

ES

RJ

SP

SC

PR

RS

MS

1

GO

1 CE

JBS Mercos l 7%% JBS Net Revenue


20/31

2

5.66.3

5.76.3 6.5

3Q13 4Q13 1Q14 2Q14 3Q14

JBS Mercosul


EBITDA (R$ million)

EBITDA margin (%)

11%

21%

44%

7%

17%

Net revenue of R$6.470,5 million in the quarter, 14.8% higher than

3Q13:

Increase in sales prices in the export market;

Compared to 2Q14, net revenue increased 2.8%;

The launching of convenience beef products reflected in an increase in thesales volumes in this category (processed products) coupled with anincrease in prices during the period.

EBITDA totaled R$554.6 million, with EBITDA margin of 8.6%:

Strong demand in the international market

More products towards exports in order to maximize profitability per animalprocessed

Strategy of investing in brands and product innovation in the domesticmarket

653.9 692.4 596.1 634.3 554.6

11.6% 11.0% 10.4% 10.1% 8.6%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

1400.0

1600.0

3Q13 4Q13 1Q14 2Q14 3Q14

2.8%

14.8%


21/31

2

Beef

JBS USA

JBS USA Beef


22/31

2

Australia

Leadership in beef exports

Leadership in the processing of lamb (22,000 lamb per day)

#1st in the Food Industry Ranking

Growth of 112% in revenues from 2007 to LTM2014

01beef processing facility01feedlot (bovine)01trading

13processing facilities08 bovine and 05 lamb

07feedlots05 bovine and 02 lamb

01tannery07distribution centers

03case ready facilities

~40,000 bovines per day

11,000hides per day


09 beef processing facilities

11 feedlots

01 tannery

06 carriers units

28,000 in the US

4,000 in Canada

8,000 in Australia

5,000 in the US

6,000 in Australia

07 DCs in Australia and 06 carriers

units in the US

JBS USA Beef

Beef production in the United States, Canada and Australia

Operational PlatformUnited States

Canada

Growth of 17% in revenues from 2013 to LTM2014

16 feedlots (bovine)

11 in the US/ Capacity of 1.0 million

bovines

01 in Canada / Capacity of 70,000

bovines

05 in Australia / Capacity of 152,000

bovines

Note 1. Source: Food&Drink Business Magazine

+30,000 employees

EBITDA LTM14Net Revenue LTM14 US$20.5 billionUS$704.9 million

3.4% Margin

1

NE 2

1CO 1

4

1

UT1

1

TX

1

3

1

2

WI1

1 MI1

PA1

AZ

1

ID 1

KS1

OK1

4

1

1

2

2

2

1

1

1

4

JBS USA Beef% JBS Net Revenue

7%


23/31

2

4.7 4.8 4.5

5.3

5.8

3Q13 4Q13 1Q14 2Q14 3Q14

JBS USA Beef

Net Revenue (US$ billion)

EBITDA (US$ million)

EBITDA margin (%)

Net revenue of US$5,849.3 million in the quarter, 24.7% higher than

3Q13:

Increase in sales volume in both domestic and export markets;

Increase in prices;

Compared with 2Q14, net revenue posted an increase of 9.7%;

Main destinations of this business unit were Japan, Greater China andSouth Korea;

EBITDA totaled US$504.9 million, with EBITDA margin of 8.6%:

Company strategy regarding the purchase of cattle permitted theimprovement in COGS;

Seasonal stronger beef demand in a scenario which beef supply remainsconstraint, contributing to an increase in sales prices;

Australia operations performed well and contributed to the strong resultsof this quarter.

125.3 113.9-22.5 108.6

504.92.7% 2.4%

-0.5%2.0%

8.6%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

-30.0

170.0

370.0

570.0

770.0

970.0

1170.0

3Q13 4Q13 1Q14 2Q14 3Q14

24.7%

9.7%

11%

21%

44%

7%

17%


24/31

2

PorkJBS USA

JBS USA Pork


25/31

2

~ 51,300 hogs per day

03 hogs processing facilities

02 case ready facilities

01lamb processing facility

100% in the US

JBS USA Pork

Pork production in the United States

United States

CO 1

IA1

KY1

CA

1

1

02 case ready facilities

~3,000 lamb per day

Main Brands

Swift Premium

Dry Rubbed Ribs

Swift PremiumRubbed Loin Filet

Products

Swift Premium

Boneless Backrib

Swift PremiumBoneless Pork Chops

Operational Platform+6,000 employees

EBITDA LTM14Net Revenue LTM14 US$3.8 billionUS$396.2 million

10.5% Margin

Convenience productsNC

1

JBS USA Pork% JBS Net Revenue

7%


26/31

2

903.3 904.9 896.91,028.3

937.8

3Q13 4Q13 1Q14 2Q14 3Q14

JBS USA Pork

Net Revenue (US$ million)


EBITDA margin (%)

Net revenue of US$937.8 million in the quarter, 3.8% higher than

3Q13: Increase of 18.7% in sales prices in the domestic market and an increase

of 14.7% in export prices;

Compared with 2Q14, net revenue decrease 8.8%, due to lower volumes.

EBITDA of US$113.2 million, with EBITDA margin of 12.1%:

In comparison with 2Q14, EBITDA remained stable;

The maintenance of pork prices in higher levels due to constraint supply,coupled with a decrease in raw material costs contributed to this quarterresults.43.8

86.3 82.9113.8 113.2

4.8%

9.5% 9.2%11.1% 12.1%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

-30.0

20.0

70.0

120.0

170.0

220.0

270.0

320.0

370.0

3Q13 4Q13 1Q14 2Q14 3Q14

11%

21%

44% 17%

3.8%

-8.8%


27/31

2

Pilgrims Pride

JBS USA Chicken (Pilgrims Pride Corporation - PPC)


28/31

2

United StatesOperational Platform

~ 7.5 million birds per day

24 poultry processing facilities 6.5 million in the US

250,000 in Porto Rico

800,000 in Mexico

( g p )

Poultry production in the United States, Porto Rico and Mexico

TX10 distribution centers

Located in Mexico

Mexico

With Tyson acquisition, PPC will have an additional of threefacilities, adding 600,000 birds per day of capacity and 9,000employees

03poultry processing facilities10distribution centers

4

1

3

AL

AR

1

NC 2

FL1

GA

7

KY 1

LA

Porto Rico

SC1

TN 1

VA1

WV1

01processing facility

+ de 3,500 contract growers

36 hatcheries

28 feed mills

+39,000 employees

EBITDA LTM14Net Revenue LTM14 US$8.5 billionUS$1,176.3 million

13.8% Margin

JBS USA Chicken (Pilgrims Pride Corporation - PPC)% JBS Net Revenue

7%


29/31

2

2.1 2.0 2.0 2.22.3

3Q13 4Q13 1Q14 2Q14 3Q14

( g p )

Net Revenue (US$ billion)


EBITDA margin (%)

Net revenue of US$2,268.0 million in the quarter, increase of 5.8%

compared to 3Q13: In the US, sales increased 4.8%, of which 2.4% is due to an increase in

volume and 2.4% is due to an increase in prices, as a reflect of a changein product mix, with an improvement in the participation of small anddeboned small birds, in addition to convenience products;

In Mexico, revenue increased 15.0%, as a result of an increase in price perkilo, due to the restriction in the supply of eggs sets for incubation, as wellas in the number of chicks placed. This increase in revenue was partially

offset by a decrease in volume sold and by the devaluation of MexicanPeso.

EBITDA in 3Q14 was US$435.4 million, with EBITDA margin of19.2%:

Reduction of US$102.8 million in feed costs in the US and of US$12.5million in Mexico;

Reduction in costs with labor, freights and storage, packaging and incontract growers, totaling US$13.8 million.

226.1 197.2 205.2

338.6

435.410.6% 9.6% 10.2%

15.5%19.2%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

-30.0

70.0

170.0

270.0

370.0

470.0

570.0

670.0

3Q13 4Q13 1Q14 2Q14 3Q14

11%

21%

44% 17%

5.8%

3.7%

Consumer Ready USA


30/31

3

y

Production capacity in 2014: 19.8 thousand tons per month

Production capacity in 2015: 30.2 thousand tons per month

Increase in production: +52.8%


31/31

Mission

To be the best in what we set out to do, completelyfocusedonour business, ensuring the best products

and services for our customers, consistency forour suppliers,profitabilityfor our shareholders and the

opportunity of a better future for all our team members.

3Q14 Presentation

Documents

Transcript of 3Q14 Presentation