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JBS DAY New York4Q13 and 2013 Results Presentation
March 25th, 2014
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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 ofJBSmanagement concerning the future of the business and its continued access to capitalto fund the Companys business plan. Such forward-looking statements depend,substantially, on changes in market conditions, government regulations, competitive
pressures, the performance of the Brazilian economy and the industry, among other factorsand risks disclosed in JBSfiled disclosure documents and are, therefore, subject to changewithout prior notice.
Disclaimer
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Management Here Today
Wesley BatistaCEO of JBS Global
Andr NogueiraCEO of JBS USA
Denilson MolinaCFO of JBS USA
Bill RuppPresident and COO of Beef USA
Bill LovetteCEO of Pilgrims Pride
Martin DooleyPresident and COO of Pork USA
Miguel GularteCEO of JBS Mercosul
Gilberto TomazoniCEO of JBS Foods
Eliseo FernandezChief Control Officer
Eduardo MacielFinance Director of JBS S.A.
Jerry OCallaghan Investor Relations Officer
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JBS at a Glance
Leadership position in the global food industry Estimated revenues of around US$50 billion in 2014 Presence in 5 continents and sales to more than 150 countries Production facilities in the low cost geographies
Founded in the 1950s in Midwest of Brazil IPO in 2007
Source: Company
More than 185,000 employees
Productioncapacity 12 million birds/day
Chicken
70 thousand hogs/day
Pork
25 thousand lambs/day
Lamb
100 thousand hides/day
Leather
100 thousand heads/day
Beef
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JBS 4Q13 Results Highlights
Net revenue of R$27.2 billion, an increase of R$5.4 billion, or 24.6% higher than4Q12, of which 54% came from organic growth.
Consolidated EBITDA was R$1,873.5 million, an increase of 60.0% over the sameperiod of last year. EBITDA margin for the quarter was 6.9%.
Annualizing 4Q13 EBITDA leverage ended the period at 3.17x.
JBS ended the year with leverage of 3.70x, considering all debt assumed with Searaacquisition and only one quarter of EBITDA.
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JBS 2013 Results Highlights
JBS net revenue increased 22.7% compared to prior year and reached R$92.9billion.
EBITDA totaled R$ 6.1 billion in 2013, 39.0% higher than 2012. EBITDA margin was6.6%, an increase of 80b.p. over the previous year.
JBS ended the year with Adjusted Net Income of R$1,194.0 and recorded R$926.9million of net income, 28.9% higher than 2012 and equivalent to R$323.32 perthousand shares.
JBS generated net cash from operating activities of R$2,541.0 million, with positivefree cash flow of R$635.1 million in 2013.
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Market Analysis
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Net intra-regional trade, million tonnes
Worlds Food* Surpluses and Deficits
* Cereals, rice, oilseeds, meals, oils and feed equivalent of meat.Source: The Economist
1965
1990
1970
1995
1975
2000
1980
2005
1985
2010
150
100
50
0
50
100
150
NorthAmerica
SouthAmerica
Australia
Eastern Europeand former
Soviet Union
Western
Europe Asia
Middle East
& Africa
Central
America
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Global Protein TradeLargest Exporters
JBS is present in the main exporter markets
Source: USDA 2013*Buffaloes / **Excluding Brazilian exports
Canada 3.4%
New Zealand 5.8%
Mercosul** 9.2%
Others 16.6%
USA 11.9%
Brazil 19.2%
India* 17.6%
Australia 16.3%
Chicken Exports
Beef Exports
Pork Exports
Turkey 3.5%
Thailand 5.2%
China 4.0%
E.U. 10.5%
Others 10.0%
Brazil 34.5%
USA 32.3%
Chile 2.6%
Brazil 8.5%
China 3.5%
Canada 17.6%
Others 4.1%
USA 32.5%
E.U. 31.2%
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67.595.2
122.5
90.8
105.7
126.7
11.2
12.8
15.6
58.6
64.6
73.6
Poultry Pork Sheep Beef
Meat Consumption Growth Forecast 2011-2020
Meat Consumption Forecast(Million tons)
Expected increase in meat demand by country
groups between 2010 - 2020
Emerging
Developed
Source: FAO - OECD
19%
81%
2020
228.1
Ave 2008-10
278.2
2001
338.3
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0
50
100
150
200
250
300
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013E 2015E 2017E 2019E 2021E
Global Protein Consumption Growth by Species
Strong Global Industry Fundamentals
Source: USDA FAS and FAO
(MT in mm)
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Average global per capita meat consumption, from 1960-2030
0 5 10 15 20 25 30 35 40 45 50
2030
1997-99
1964-66
Chicken Suine Ovine Bovine
Consumption (kg/person/year)
Source: FAO
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Consolidated Results
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3.43 3.403.28
4.033.70
0
500
1.000
1.500
2.000
2.500
3.000
4Q12 1Q13 2Q13 3Q13 4Q13
21,9
27,2
4Q12 4Q13
1.170,9
1.873,5
5,46,9
4Q12 4Q13
60.0%
3.17
Leverage EBITDA (R$ million)
Highlights
Annualizing 4Q13 EBITDA leverage
ended the period at 3.17x.
JBS ended the year with leverage
of 3.70x, considering all debt assumed
with Seara acquisition and only one
quarter of EBITDA.
Consolidated EBITDA wasR$1,873.5 million, an increase of60.0% over the same period of lastyear.
EBITDA margin for the quarter was6.9%.
Net revenue of R$27.2 billion,an increase of R$5.4 billion, or24.6% higher than 4Q12, of which54% came from organic growth.
24.6%
4Q13 Consolidated Results
[ Net Revenue - R$ billion] [ EBITDA - R$ million] [ LeverageNet Debt/EBITDA]
EBITDA Margin
Leverage considering annualized 4Q13 EBITDA
Source: Company
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1
[ EBITDA - R$ billion]
19,5 21,924,2 27,2
75,7
92,9
1Q13 2Q13 3Q13 4Q13 2012 2013
EBITDA
EBITDA margin (%)
EBITDA totaled R$ 6.1 billion in
2013, 39.0% higher than 2012.
EBITDA margin was 6.6%, an
increase of 80b.p. over the previous
year.
Highlights
JBS net revenue increased 22.7%
compared to prior year and reached
R$92.9 billion.
In 2013,net revenue increased more
than 10% in all quarters.
JBS Mercosul recorded net revenue of R$25,820.5 million, up 43.3% when compared to 2012.
The chicken unit in the USA (PPC)had the best year in its history in 2013 and posted a net revenue of US$8,411.1 million.
Acquisition of Seara and union with JBS Chicken Brazil forming JBS Foods.
JBS ended the year with R$926.9
million of net income, 28.9% higher
than 2012 and equivalent to R$323.32
per thousand shares.
227,9
338,5
219,8140,7
718,9
926,9
1Q13 2Q13 3Q13 4Q13 2012 2013
22.7%
[ Net Revenue - R$ billion]
0,91,7 1,7 1,9
4,4
6,14,5
7,6 7,1 6,95,8
6,6
1Q13 2Q13 3Q13 4Q13 2012 2013
39.0%
[Net Income - R$ million]
28.9%
2013 Consolidated Results
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1
Adjusted Net Income
Adjusted net income in 2013 was R$1,194.0 million, disregarding the portion of deferred
income tax liabilities, which refers to the goodwill held by the Parent company. Net income forthe year was R$926.9 million, R$323.32 per thousand shares.
Operational Net Cash
In 2013 the company generated net cash from operating activities of R$2,541.0. In 4Q13 net
cash from operating activities was R$357.8 million .
Capital Expenditure
In 2013 the total capital expenditure (CAPEX) was R$1,737.3 million, while in 4Q13 the
expenditure was R$585.2 million. The main investments in 4Q13 in North America weredestined to the units of Brooks in Alberta, in Canada, and in Mercosul the main investments
were concentrated on improving productivity and expanding operations in the beef business in
Brazil and JBS Foods.
2013 Consolidated Results
Source: Company
Free Cash Generation
In 2013 company generated free cash flow of R$635.1 million. In 4Q13 negative free cash flow
of R$230.4 million due to an expressive expansion of Mercosul exports in the period.
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1
Greater China*21,2%
Mexico14,6%
Africa and Middle East
9,8%Japan8,0%
E.U.6,1%
Russia5,7%
South Korea4,9%
Venezuela4,4%
Canada3,6%
Chile2,7%
Other19,2%
2013US$11,760.6
million
Increase of 19.6% in 2013
exports compared to 2012
Mexico14,6%
Greater China*14,0%
Japan11,0%
Africa and MiddleEast
10,3%Russia7,4%
E.U.6,2%
South Korea5,4%
Canada5,4%
Venezuela3,3%
Chile3,1%
Other19,4%
2012US$9,830.2
million
JBS Consolidated Exports Distribution in 2013 and 2012
*Considers China and Hong Kong
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Debt Profile
I d bt d
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3,43 3,40 3,28
4,033,70
0
500
1.000
1.500
2.000
2.500
3.000
4Q12 1Q13 2Q13 3Q13 4Q13
USD76%
R$24%
Annualizing 4Q13 EBITDA, that includes Seara results,
leverage ended the period at 3.17x.
LTM,Net debt/EBITDA was 3.70x in 4Q13, compared
to 4.03x in 3Q13, even after the integration of a relevantacquisition and strong foreign exchange variation.
The reduction of net debt/EBITDA reflects the
management commitment in improving financial
efficiencies, consequently, reducing its leverage.
ParentCompany
63%
Subsidaries37%
10.8% per annum
6.0% per annum
3.17
.Leverage EBITDA (R$ million)
Leverage considering annualized 4Q13 EBITDA
Indebtedness
Leverage Breakdown by Company
Breakdown by Currency & Average Cost
D bt P fil
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2
29%
35%
35%
28%
30%
71%
65%
65%
72%
70%
4Q13
3Q13
2Q13
1Q13
4Q12
Short term Long term
JBS ended the year with R$9,013.1 million in cash,
corresponding to 96% of short-term debt,
approximately.
Considering credit lines of immediate liquidity of
US$1.55 billion from JBS USA, availabilities of the
Company represents more than 100% of short-term
debt.
The percentage of short term debt (ST) in relation to
total debt declined from 35% in 3Q13 to 29% in4Q13.
418
3.000
4.558
1.084
5.030
32
5.073
2.651
86
1.816
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Debt Profile
Net Debt maturity (R$ million)
Source: JBS
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Stock Performance
Stock Performance
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During 2013, JBSS3 substantially outperformed the
Ibovespa Index, increasing 47%, while the indexdecreased 15%.
The Average Daily Traded Financial Volume in the year was
R$34.3 million, an increase of 34.1% compared to 2012.
As of December,31 2013 JBSmarket cap was R$25.8 billion.
During 2013, PPC stocks substantially outperformed theS&P 500 Index, increasing 129%, while the index increased31%.
As of December,31 2013 PPCs market cap was US$4.7
billion.
60%
80%
100%
120%
140%
160%
JBSS3 IBOV
60%
100%
140%
180%
220%
260%
300%
PPC SPX Index
Source: Bloomberg, 100% = 12/31/2013
Stock Performance
JBS Stock Performance PPC Stock Performance (Controlled by JBS)
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JBS Mercosul
JBS Mercosul
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JBS Mercosul
Net Revenue (R$ billion)
EBITDA (R$ billion)
EBITDA Margin (%)
Net revenue was R$9,203.7 million in the quarter, up 74.6%
over 4Q12.
Incorporation of JBS Foods results in 4Q13;
Improvement in the performance of the beef business in
Brazil;
Increase in the number of processed cattle year over year;
Exports 81.8% higher when compared to 4Q12.
EBITDA totaled R$ 919.7 with EBITDA margin of 10.0%
Increase in direct distribution and customer base;
Higher demand in the international market in the beef
segment.
5,3 5,0 5,4 6,29,2
18,0
25,8
4Q12 1Q13 2Q13 3Q13 4Q13 2012 2013
74,6%
0,7 0,60,5 0,7 0,9
2,5 2,7
12,6% 11,3% 10,0% 11,1% 10,0% 13,7% 10,5%
-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%
0,0
4Q12 1Q13 2Q13 3Q13 4Q13 2012 2013
JBS Mercosul
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2
Geographic Footprint and Capacity
Operation platform
90,000 hides per day
~55,000 head per day
36 Distribution Centers
09 Related Businesses
ARGENTINA
BRAZIL
URUGUAY
PARAGUAY
JBS Mercosul
JBS Uruguay
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2
0,0
200,0
400,0
600,0
800,0
1.000,0
1.200,0
1.400,0
1.600,0
1.800,0
2.000,0
0,0
100,0
200,0
300,0
400,0
500,0
600,0
Volume ('000 tons) Revenue (MM US$)
JBS Uruguay
JBS Beef Processing Facility
European Cattle Breed:Major breeds - Hereford and Angus (British).
Focus On Niche Markets: Quality rather than quantity.
Market Access:Access to all major beef importing markets.
Uruguay has about 15,000 m (or 135,000 square feet) for each animal in the farm.
More than 80% of the Uruguayan land dedicated to livestock
Uruguay Beef ExportsFootprint
JBS Tannery
Canelones
Montevideo
1beef processing facility900 head per day
2 Tanneries8,400 hides per day
Source: FAO and INAC UruguayNote 1: Exports revenue compound annual growth rate (2003-2013)Note 2: Exports volume compound annual growth rate (2014-2022)
CAGR
14% CAGR3.1%
JBS Paraguay
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2
0,0
100,0
200,0
300,0
400,0
500,0
600,0
700,0
800,0
900,0
1.000,
0,0
50,0
100,0
150,0
200,0
250,0
300,0
350,0
Volume ('000 tons) Revenue (MM US$)
JBS Paraguay
JBS Beef Processing Facility
Herd Growth of 8.0% in 2013, the highest in South America.
Paraguay also registered the highest growth in beef exports, with revenue growing from US$67.7 million to US$904.3 million in thelast decade, an increase of 1,237%.
High capacity utilization of processing facilities.
Production costs are very competitive.
JBS has around 25% of market share in Paraguayan Exports
Paraguay Beef ExportsFootprint
02 beef processing units1,300 head per day
Source: FAO and SENACSA
Asuncin
San Antonio
JBS Argentina
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2
0,0
200,0
400,0
600,0
800,0
1.000,0
1.200,0
1.400,0
1.600,0
1.800,0
0,0
100,0
200,0
300,0
400,0
500,0
600,0
700,0
Volume ('000 tons) Revenue (MM US$)
g
JBS Beef Processing Facility
Argentina's exports are restricted by the government due to the "Meat For All program, created in 2011 by the present government.
Concentration of activities in one plant in order to have efficiency gains, increasing productivity levels in order to reduceoperation costs.
Production focused on the domestic market due to tariffs on exports. Change in product mix and creation of customized and brandedproducts such as beef nuggets to attend local demand.
Argentina has one of the largest beef consumption.
Concentration of activities in one plant in order to have efficiency gains
Argentina Beef ExportsFootprint
5 beef processing units (only 1 active)1,750 head per day1 DC in Pillar
Source: FAO, IPCVA and USDA
Rosario
Venado Tuerto
Pontevedra
Berazategui
Colonia Caroya
JBS Brazil
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2
42 beef processing facilities with capacity toprocess 45,000 head of cattle per day
06 feedlots with capacity to feed 284,000 head of
cattle per period 19 hide facilities with capacity to process 73,000
hides per day
35 Distribution Centers (12 large + 23 regional)
11
4
15
5
3
4
6
2
1
2
2
6
2
2
2
1
1
1
1
1
213
31
2
2
3
3
1
4
1
1
AC
RO
PA
MA
PE
BATO
GO
MT
MS
MG
SP
PR
SC
RS
ES
RJ
JBS is present in 17 of 26 states in Brazil, through:
JBS increased the number of heads processed byabout 20% from 2012 to 2013, while total Brazilian
slaughter increased 4%.
Beef Processing
Feedlot
Distribution Center
Tannery
JBS has 9 businesses related to its Beef Industry thatadd value to by-products in Brazil.Examples are: biodiesel, collagen, casings, etc.
Brazil has over 200 million head of cattle, the worldslargest commercial herd, with double the size of the
second largest country.
2
1
4
4
1
9
JBS Brazil
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Export Market HighlightsDomestic Market Highlights
35 Distribution Centers (12 large + 23 regional)
Big demand from emerging markets; i.e. GreaterChina
Fresh Brazilian Beef to the US
JBS unique position due to its US and Brazilianfootprint
Exports and revenue exports growth of 25% in 2013
A further 30% revenue growth in local currency
Successful marketing and advertising campaign 10,000 new clients in 2013 2014: growth expectations due to important events in
Brazil
JBS Leather Business
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3
JBS is the worlds largest hides/leatherprocessor with capacity to process more than
91,000 hides per day with 26 tanneries andfinishing units in:
Brazil, Argentina, China, Germany, Italy,Mexico, South Africa, Vietnam and Uruguay
Note 1. Not considering leather operations in the US and Australia
JBS has been adding value internally, reducingthe sale of wet blue (first stage of production) andboosting its sales of finished and semi-finishedleather, which contributes to an increase of theprofitability of this operation.
JBS projects processing 15 million hides in 2014,generating revenues of more than US$1.5 billion.
JBS is the main leather supplier to theautomotive industry, which shows excellent growth
perspectives. More than 90% of our production isdirected to the international market.
Overview
JBS Related Businesses in Brazil
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3
Biosiesel
Cans
Trading
Collagen
Cleaning & Hygiene
Carriers
Vehicle Sales
Casings
EnvironmentalRecycler
JBSCore Business
(Meat)
Capacity to produce136,000 tons ofbiodiesel per yearusing beef tallow asprincipal raw material
71 MM cansmanufacturedper month,
100%recyclable
Opportunity toleverage new
businesses
Pioneer in beefbased collagenproduction
COLL GENAdding value to beef
tallow by producingpersonal hygiene and
also cleaning products
1,200 providingstrategic logistics
resulting in cheaperfreight
C RRIERS
Complementary
to JBS Carriers
Largest producerof sausage
casings in theworld
Recycling and reducingcarbon footprint
Closing Remarks JBS Mercosul
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JBS USA
JBS USA at a Glance
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JBS USA BeefIncluding Australia and Canada JBS USA Pork
JBS USA Chicken (Pilgrims Pride Corporation PPC)
WHEREWEARE
Why North America / Australia?
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STRONG DOMESTIC
MARKET
NATURAL RESOURCES &
CAPACITY TO PRODUCEGRAINS/OILSEEDS
WORKFORCE: QUALITY &
AVAILABILITY
INFRASTRUCTURE
LOW-COST ENERGY BEST ANIMAL
HUSBANDRY
PRACTICES
Why North America / Australia?
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Brazil
20%
India
19%
United
States
13%
Mercosul
10%
Canada
4%
Others
18%
Source: USDA WASDE March 2014.
United
States33%
Brazil9%
EU31%
Canada18%
Other9%
T O PEXPORTERSBEEF T O P
EXPORTERSPORK T O P
EXPORTERSCHICKEN
UnitedStates32%
MiddleEast 3%
Other 4%
Australia17%
Why North America / Australia?
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3
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
jan-88
jan-89
jan-90
jan-91
jan-92
jan-93
jan-94
jan-95
jan-96
jan-97
jan-98
jan-99
jan-00
jan-01
jan-02
jan-03
jan-04
jan-05
jan-06
jan-07
jan-08
jan-09
jan-10
jan-11
jan-12
jan-13
U.S. Meat Exports as a % of Production
(Beef + Pork + Broiler)
Exports % Production: Beef + Pork + Chicken Exports % Production: Beef + Pork + Chicken, 12 Month Moving Average
Exports account for 1 of every 5 pounds produced in the U.S.
Source: USDA
Why North America / Australia?
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449,6
670,9
2012 2013
0,19
0,500,51
1,03
2012 2013
Japan (US Beef exports do Japan in metric tonnes)Greater China (in million metric tonnes)
Examples Where Beef Exports Are Going
USA +70.4%
Australia +259%
102%
228%
Growth Rate
Australia
World
Source: USDA
Why North America / Australia?
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Colombia +85.4%
Chile +41.8%
Taiwan +24.7%
Angola3rd largest importer in
2013, 456K metric tonnes
Iraq + 45%
China + 38.1%
EXAMPLES WHERE PORKEXPORTS ARE GOING
EXAMPLES WHERE CHICKENEXPORTS ARE GOING
2013
Source: USDA
Our Team
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55,610
7,636
5,087
2,539
424
Headcount
United States Australia Mexico Canada Puerto Rico
71,296EMPLOYEESIN 4 COUNTRIES& PUERTO RICO
ANDRE NOGUEIRAJBS USA
BILL RUPPJBS USA BEEF
(CANADA & AUSTRALIA)
MARTY DOOLEYJBS USA PORK
BILL LOVETTEJBS USA CHICKEN
(PILGRIMS PRIDE CORPORATION PPC)
DENILSON MOLINAJBS USA CFO
Human Resources
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Continuously improve employee engagement and drive-down turnover
Turnover Results
REDUCTION
MORE THAN A
50%IN TURNOVEROF HOURLY
PRODUCTIONE M P L O Y E E S
F R O M 2 0 0 7 - 2 0 1 3
2007 2008 2009 2010 2011 2012 2013
Company TurnoverHourly
2007 2008 2009 2010 2011 2012 2013
Human Resources
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6,2
4,604,2
6,96,4 6,3
2010 2011 2012
JBS Industry
Safety ResultsMeat & Poultry Combined Recordable Rate
Consistently outperform our competitors
Source: Company
Human Resources
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200LEADERSHIPPROGRAM
TRAINEESIN 2013
Next generation of leaders
Sales GrowthHistorical Performance
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0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
2007 2008 2009 2010 2011 2012 2013
McElhaney
Cattle Co.
Acquisitions
JBS USA Holdings Net Sales (US$ Billion)
Turn Around + Growth = Value Generation
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63,5
1.415,0
2007 2013
JBS USA EBITDA
$ MILLION
JBS USA Acquisitions
McElhaney
Cattle Co.
=BILLION
$4.87
Investments
2013 EBITDA = 3.44 x
JBS USA PorkAt a Glance
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12MARKETS H A R E
BRANDSO O T P R I N T3 Pork Plants51,300 Head per Day
1 Lamb Plant2,800 Head per Day
1 Case Ready Plant
JBS USA PorkWhere We Are
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4
48
PORK
3 Processing Facilities; 1 CaseReady Louisville, Kentucky Marshalltown, Iowa Worthington, Minnesota Santa Fe Springs, California
(case ready) Daily Processing Capacity: 51,300
LAMB
1 Processing Facility Greeley, Colorado
Daily Processing Capacity: 2,800
PlantCase Ready
JBS USA Pork8%
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4
955,5842,0 868,5
903,3 904,9
3.501,1 3.518,7
0,0
500,0
1000,0
1500,0
2000,0
2500,0
3000,0
3500,0
4000,0
4Q12 1Q13 2Q13 3Q13 4Q13 2012 2013
-5,3%
42,7 46,8 50,7 43,886,3
188,1227,6
4,5% 5,6%5,8% 4,8%
9,5%5,4% 6,5%
-23,0%
-19,0%
-15,0%
-11,0%
-7,0%
-3,0%
1 ,0 %
5 ,0 %
9 ,0 %
-0,023
99,977
199,977
299,977
399,977
4Q12 1Q13 2Q13 3Q13 4Q13 2012 2013
Net Revenue (US$ million)
EBITDA (US$ million)
EBITDA Margin (%)
Net Revenue was US$3.5 billion, stable over 2012:
Lower number of processed animals, which resulted in a
decrease of sales volume that was offset by an increase in
prices.
EBITDA was US$227.6 million, increase of 21% over 2012:
Increase in selling prices both in the domestic and
international markets.
EBITDA margin of 9.5% in the 4th quarter 2013.
21%
Strategy
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5
BUY
Continue to focus on:
MAKE
Increase Japan chilled
Improve converted products volume
and margin
Expand case ready
Expand value-added
SELL
Safety
Turnover
Labor efficiency
All expenses elements
Yields
Additional automation
Maintain 70% contract supply Increase supply from medium/smaller producers
Increase programs, such as paylean free, marbled, weight sorted
US Pork - Added Value Products
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5
Swift PremiumDry Rubbed Ribs
Swift PremiumDry Rubbed
Boneless Backrib
Swift Premium DryRubbed Loin Filet
Swift PremiumSaddle Pack
Boneless PorkChops
Swift PremiumGround Pork
JBS USA BeefAt a Glance
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5
22MARKET
BRANDS
O O T P R I N T
CANADA
AUSTRALIA
9 Beef Plants27,000 Head per Day11 Feedlots / 1M Head Capacity1 Hide Plant / 5,000 Hides per Day
1 Beef Plant4,000 Head per Day1 Feedlot / 70,000 Head Capacity
8 Beef Plants
8,300 Head per Day5 Feedlots / 152,000 Head Capacity5 Lamb Plants / 22,000 Head per Day1 Hide Plant / 6,000 Hides per Day
34 27U.S. CAN AUSU.S.
SHARE
JBS USA BeefWhere We Are
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5
10 beef and small stockslaughtering plants located in
New South Wales, Queensland,Victoria and Tasmania
7 distribution centers situated inSydney, Melbourne, Brisbane,Perth, Adelaide, Dinmore &Townsville
5 cattle feedlots located inQueensland and New South Wales
AUSTRALIA
10 beef and small stock slaughtering plantslocated in Brooks, AB CA; Cactus, TX;Grand Island, NE; Greeley, CO; Green Bay,WI; Hyrum, UT; Omaha, NE; Plainwell, MI;Souderton, PA; and Tolleson, AZ.
11 cattle feedlots located in Brooks,AB, CA; Dalhart TX; Hartley, TX;Kersey, CO; Lamar, CO; LaSalle,CO;Malta, ID; Texhoma, OK; Ulysses,KS; Wellton, AZ; and Yuma, CO.
U.S. &CANADA
Daily Processing Capacity: 31,000 Daily Processing Capacity: 8,300
JBS USA Beef (including Australia and Canada)
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5
103,3-25,1
161,7125,3 113,9
223,9
375,8
2,1%-0,6%
3,4% 2,7% 2,4% 1,3% 2,0%
-30,0%
-28,0%
-26,0%
-24,0%
-22,0%
-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 %
-100
0
100
200
300
400
500
600
700
4Q12 1Q13 2Q13 3Q13 4Q13 2012 2013
4,9 4,3 4,8 4,7 4,8
17,5
18,6
4Q12 1Q13 2Q13 3Q13 4Q13 2012 2013
-1,0%
EBITDA Margin (%)
Net Revenue (US$ billion)
EBITDA (US$ million)
Net revenue was US$18.6 billion, increase of 6.3% compared
to 2012:Increase in domestic sales volume and in exports in Australia.
EBITDA was US$375.8 million, increase of 67.8% compared to
2012:
Increase in domestic market beef prices during the 4th quarter,
offsetting the increased costs of raw material.
JBS maintained the positive results registered during the year of
2013, a reflection of the focus on operational efficiency, costs
reduction and expansion in deals with key customers
The operation in Australia continues to deliver solid and consistent
results, influenced by strong demand from Asian countries, especially
China.
6.3%
68%
Marketing Conditions
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5
Tight supplies forecast in North America as strong signs of heifer
retention & rebuilding occur due to much improved moisture conditions
Global trade for North American and Australian Beef continues to bestrong.
Higher prices will impact demand for North American beef but a
downturn in protein supplies should support.
Strategy
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5
Capital investments in multiple ground beef capabilities and value
added production will improve top line revenue opportunities.
Continued alignment of cattle supplies with plants will lessen the impactof tight supplies.
Strong plant focus on yield improvement in plants.
Continued success in aligning with customers to jointlyoptimize value with the consumer.
JBS USA ChickenPilgrims Pride Co.
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5
57
19MARKETS H A R E
BRANDSO O T P R I N TU.S.
MEXICO
PUERTO RICO
31 Chicken Plants6.5M Birds per Day
3 Chicken Plants800,000 Birds per Day
1 Chicken Plant
JBS USA ChickenWhere We Are
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5
PILGRIMS
25 U.S. & Puerto Rican Processing Facilities
3 Mexican Processing Facilities Queretaro San Luis Potosi
Tepeji Del Rio
Daily Processing Capacity: 7.5 Million birds
Aibonito, PR
Athens, GA Broadway, VA Canton, GA Carrollton, GA Chattanooga, TN De Queen, AR Douglas, GA
Elberton, GA Ellijay, GA Enterprise, AL Gainesville, GA
Guntersville, AL
Live Oak, FL Lufkin, TX Marshville, N.C. Mayfield, KY Moorefield, WV Mt. Pleasant, TX Nacogdoches, TX Natchitoches, LA
Russellville, AL Sanford, N.C. Sumter, SC Waco, TX
JBS USA Chicken (Pilgrims Pride Corporation - PPC) 17%
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5
2,2 2,0 2,2 2,1 2,0
8,18,4
4Q12 1Q13 2Q13 3Q13 4Q13 2012 2013
-6,5%
67,4117,7
265,0 226,1197,2
402,6
805,4
3,1%5,8%
12,1% 10,6% 9,6%
5,0%
9,6%
-30,0%
-25,0%
-20,0%
-15,0%
-10,0%
-5,0%
0,0%
5,0%
10,0%
15,0%
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
4Q12 1Q13 2Q13 3Q13 4Q13 2012 2013
Net Revenue (US$ billion)
EBITDA (US$ million)
EBITDA Margin (%)
Net Revenue was US$8.4 billion, increase of 3.6% compared
to 2012.Growth in sales resulting primarily from an increase in industry
prices associated with good demand for poultry products
combined with a tight supply.
EBITDA of US$805.4 million, increase of 100% over 2012 and
margin of 9.6%:
Improved pricing, improved sales mix, improved yields,
reduction in processing cost and SG&A contributed to improve
PPC results.
Operating net cash flow was US$878.5 million for the full year,
adding strength to the Company's balance sheet.
3.6%
100%
Strategy
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6
Best of class qualitymanagement systems
Employ greater use ofcategory management
Execute effective operatorstrategy
Export dedicated assets
Export tailored products Development of new markets
Results- oriented culture
consistent with JBS values
Delayering and downsizing
management driving lowerSG&A
Growing talent internally and
developing people
Be a valued
partner with ourkey customers
Relentless
pursuit ofoperationalexcellence
Strategicallygrow valuedadded exports
Accountability
and ownershipculture
Be the bestmanaged & most
respectedcompany inour industry
Best of class yields Best of class live cost and
processing costs Optimal sales mix and price Quality, safety and turnover
On a Path Toward Growth
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Were ReadyRenewed Sales& Brand Focus
Mix andRationalization
CustomerProductsCapacity
OperationalEfficiency
Improvedcommitment
to quality
Whats Next
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6
Continue Pushing OperationalEfficiencies
Generate Superior Returns& Optimize Capital Structure
Capture Growth Opportunities
Higher, Less Volatile Earnings
SHAREHOLDERVALUE
Whats Next
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LeverageExistingAssets
Expand actual plants andlines with high-ROIC
investment opportunities
$150 million of CapExexpected
About half directed togrowth / increaseefficiency
AccretiveAcquisitions
Chicken: ComplementaryGeographies or Differentiated
Branded chicken
Prepared/ Packaged Foods:Branded and differentiatedproducts
Increase
Footprint inAttractiveMexicoChickenIndustry
Current footprint only coversa portion of the country
Opportunity to expandgeographically
Evaluate bolt-on acquisitionsor greenfield opportunities
FastGrowingValue-
AddedExports
Leverage JBS capabilities to
sell direct to customers inforeign markets
Develop brands / productsdesigned for local preferences
Focus on value-addedproducts, not just commoditydark meat
Capture significant expectedgrowth in chicken demand inforeign markets
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JBS Foods
JBS Foods at a Glance
JBS Foods is a leading platform with a strong brand portfolio across value added food products in Brazil
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JBS Foods is the branded convenience poultry andpork business of JBS in Brazil
2ndlargest meat based packaged food Company inLatin America
2ndlargest producer and exporter of poultry and porkin Brazil
53 productive units, 20 distribution centers and45,000 employees
Strong domestic and international presence withhigh growth potential
Integrated platform with diversified product portfolio
Fully integrated pork and poultry business
Source: CompanyNota1. Pending regulatory approval
JBS
Foods
JBS Foods: Footprint
National footprint with a production capacity of 4.4 mm bird / day and 85,000 tons of further processed products /month
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Industrial FootprintIndustrial Capacity per Product Line
month
22,200 hogs / day
4.4 mm birds / day
80,000 tons of value added further processedproducts / month
Source: Company
Distribution Centers
Production Facilities Footprint
Further Processed Products
Pizza
Lasagna
Hamburger
RefrigeratedPasta
Breaded
Products
Ready-to-eatMeals
JBS Foods focus on 5 pillars to make a strong and fast turnaround of Seara
Turnaround Under Way
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Management
Market Orientated
Performance
Growth Culture ofExcellence
Our Team and Our Culture Makes the Difference
JBS has built an exceptional team with deep knowledge in the industry
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6( Years of experience, occupying leadership positions in the industry)
Our Values
Determination
Simplicity
Discipline
Sincerity
Meritocracy
What We Believe
Best people in the right place
Ownership attitude
Leadership by Example
Team Work
Focus on Details
Culture of ExcellenceOur Team
Gilberto TomazoniCEO (30 years)
James ClearyInternational Market (24 years)
Srgio SampaioProduction (20 years)
Ivo DreherFinancial/Adm (17 years)
Osrio Dal BelloLive Production (34 years)
Joanita KaroleskiSupply Chain (10 years)
Almir PerukHuman Resources (25 years)
Ronaldo MullerQuality and R&D (27 years)
Ivan SiqueiraIndustrial (15 years)
Eduardo BernsteinMarketing (26 years)
Nelson TeixeiraDomestic Sales (26 years)
Market Orientated: Streamlining and Repositioning of Brands
JBS Foods is currently rationalizing its brand portfolio and focusing on the quality of its products and services
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JBS Foods Brands Pre-Acquisition JBS Foods Brands Repositioning
Premium
Mainstream
Source: Company
Access /Regional
Market Orientated: Improved Pricing Strategy
New pricing strategy, focused on results rather than volumes, with strict controls and defined responsibilities
http://www.seara.com.br/seara/linha/margarinas/http://www.seara.com.br/seara/linha/margarinas/http://www.seara.com.br/nhobento/5/27/2018 JBS Day Presentation
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Previous Model New Model
Structure
Commercial TeamAutonomy
Focus
Responsible for Price
Management
Decentralized, with lack of standard pricingprocess and management
Highcommercial team concentrated pricingstrategy
Volumes, with low commitment to pricing andconsequently financial results
Fragmented, mostly commercial department
Centralized, with standard and structuredprocess
Defined roles and responsibilities
Mediumfocus on policy execution
Financial results, based on mathematicalmodeling
Dedicated pricing department
Source: Company, Nielsen
JBS Foods: Global Positioning and International Growth Strategy
Comprehensive strategy to explore opportunities in further processed foods and international markets
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International Growth StrategyRevenue Breakdown per Category4Q13 (%)
Strategic approach Instead of transactionalapproach
Revenue Breakdown per Region4Q13 (%)
Source: Company
Develop strategic partnerships withimporters/distributors in our key markets
Develop Seara into a recognized global brand forquality poultry, pork and further processed products
Increase our presence in the supply of FPP toglobal QSR customers
Improve our product mix by increasing sales ofretail packs
Specific strategies for new markets (eg. Pork forJapan)
Middle East31%
Asia / Oceania14%
Japan12%
Africa11%
North Africa10%
Europe10%
Americas8%
CIS / Balkans4%
FreshExports
48%
FPP Exports6%
DomesticMarket46%
Improved Performance from Farm to Market
Efficiency gains in live costs, manufacturing and distribution
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Main InitiativesStage of Value Chain
Improved Distribution Network
Integrated demand planning
Renewed logistics network
Live Costs and Efficient Feed Conversion
Cycle optimization through revision of practices and improved feed conversion
Implementing best practices in feed nutrition and livestock handling
Increase in Yields and Optimization ofProduct Mix
Focus on operational excellence with new operational standards
Optimization of product mix per industrial unit
Product mix more aligned with availability and quality of raw materials, increasingrevenue generation
Renewed Go-To-Market Strategy
Marketing strategy focused on profitability and portfolio simplification
Simplification of brand architecture
Category management
JBS Foods has identified total potential gains of R$1.2 billion through internal management initiatives
Value Creation Through Management Initiatives in 2014
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Live Animal
Total Value of Opportunities: R$1.2 billion
Price and SalesStrategy
Industrial Domestic andInternationalLogistics
Finance andAdministration
Non Core Supplies
R$287 mm R$207 mm R$472 mm R$118 mm R$30 mm R$87 mm
Value of Opportunities Identified in JBS Foods (R$ mm)
Growth Opportunities Through Organic and Inorganic Growth
Additional growth opportunities through capacity expansion and product mix diversification
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JBS17%
Player A32%
Others51%
JBS14%
Player A29%
Others57%
Capacity Expansion Increase processing capacity and geographical
diversification
Product Mix Diversification Increase category diversification
Leasing of BR Frangosproduction unit in Northof Paran
Acquisition of Massa Leve in 2013 Main products include pastas, ready-to-eat
meals, pizzas and pastry based products
Rationale Recent Movements
Strategies for Inorganic Growth
Share of Pig Slaughter in Brazil2013 (%)Share of Birds Slaughter in BrazilLTM Until Sep13 (%)
Source: Company, SIF, SECEX, IBGE, JBS
Idle Capacity We have around 40% in idle capacity of FPP
Numerical Distribution We are servicing direct 58,000 customers and have potential to increase to 140,000
Extensive experience in integrating and extracting synergies in acquisitions
We Are Confident That We Will Continue to Deliver Value to OurStakeholders as Our Track Record Shows
Key Initiatives Value Creation in the Acquisition of Pilgrims Pride (US$ mm)
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7
800 42
144110 1,095
2,730
3,825
Dec-09 Nov-10 Jan-12 Mar-12/Nov-12 Total JBSInvestment
Value Creation Current MarketValue of JBS
Stake
Cost reduction
Margin improvement
SG&A control
Efficiency improvement
Integration of processes
Brand repositioning
Key Initiatives Value Creation in the Acquisition of Pilgrim s Pride (US$ mm)
Pilgrims Pride
acquisition (2009)
Swift acquisition
(2007)
JBS USA
acquisition of 64%stake in PPC
Increase
ownership to67.3%
JBS USA
oversubscription in
PPC rights
offering
Acquisition of
additional shares
from Lonnie Bo
Pilgrim and Don
Jackson1
64.0% 67.3% 68.0% 75.5%
JBS stake in PPC
1 JBS USA acquired 18.7 mm shares from Lonnie Bo Pilgrim, the founder and former controlling shareholder of PPC (US$107.2 mm) and 455.3 thousand shares from Don Jackson, JBS USAs former CEO(US$2.7 mm)2 PPC market value of US$4,958 mm (as of March 14, 2014)
Value Creationof 250%
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Mission
To be the best in what we set out to do, totally focusedonour business, ensuring the best products and
services for our customers, solidity for our suppliers,
satisfactory profitabilityfor our shareholders and thecertainty of a better future to all our employees.
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