4q08 conference call presentation

7/30/2019 4Q08 Conference Call Presentation

1/17

2008 Consolidated Results

JBS S.A.February 20

th

, 2009

In God we Trust

3.74

2.89

2.77

2.31

1.96

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09

JBS lives an intense process of deleverage reducing

the net debt / EBITDA ratio from 3.74x in 2007 to

1.95x in 2008.

Leverage

1.95


2/17

Rodrigo Gagliardi

Investor Relations Manager

Jeremiah OCallaghanInvestor Relations Director

Joesley Mendona BatistaCEO

1

Presenters


3/17

Our ValuesThe Foundation Of Our Culture

Planning

Determination

Discipline

Availability

Openness

Simplicity

2


4/17

2008 Highlights2008 Highlights

Debt ProfileDebt Profile

Consolidated ResultsConsolidated Results

Questions and AnswersQuestions and Answers

3

Agenda


5/17

JBS lives an intense process of deleverage reducing the net debt / EBITDA ratio from 3.74x in 2007to 1.95x in 2008.

Adjusted pro forma net income in 2008 of R$1.05 billion, if adjusted by the exchange variation offoreign investments and excluded the goodwill amortization.

Net revenue increased 114.5% YoY from R$14.1 billion in 2007 to R$30.3 billion in 2008.

EBITDA YOY increased 95.6% from R$591.1 million in 2007 to R$1,156.1 million in 2008.

Proposed dividend distribution has increased threefold from R$17.5 million in 2007 to R$51.1million in 2008.

Integration of the Tasman Group, of Smithfield Beef and the Five Rivers Feedlot grew the globalproduction platform of JBS as well as increasing penetration in the world market while introducingcost cutting synergies.

Distribution network of INALCA JBS enhanced the contact with customers in Africa and EasternEurope.

Proven risk control and management policy preserved the financial health of JBS during a period of

uncertainty and high volatility particularly during the second semester of 2008.4

4

2008 Highlights


6/17

* Including Finimp** Percentual to be paid in the period.

*** Working Capital due short term and automatically renewable.

5

JBS S.A. Consolidated (R$ million)1Q09 2Q09 3Q09 4Q09 Total %** 1Q09 2Q09 3Q09 4Q09

Financing for purchase of fixed assets

FINAME / FINEM - Enterprise financing 11 11 11 59 91 100% 11 11 11 59

Notes Payable 1 1 1 2 5 100% 1 1 1 2

Subtotal 1 12 12 11 61 96 100% 12 12 11 61

Loans for working capital purposes

ACC - Exchange advance contracts 214 322 150 29 715 0% - - - -

EXIM - BNDES export credit facility 72 0 0 0 72 100% 72 - - -Fixed Rate Notes with final maturity in February 2011 9 - - - 9 100% 9 - - -

Working Capital - American Dollars * 33 71 0 0 104 0% - - - -

Working Capital - Australian Dollars 86 74 0 - 160 0% - - - -

Working Capital - Euros *** 1 11 2 288 302 0% - - - -

Working Capital - Reais 51 - - - 51 0% - - - -

Export prepayment 160 16 16 16 208 0% - - - -

Fixed Rate Notes with final maturity February 2016 (144-A) - 30 - - 30 100% - 30 - -

NCE / COMPROR 330 - 100 37 467 0% - - - -

Subtotal 2 957 524 268 371 2.119 5% 81 30 0 0

Total 969 536 279 431 2.215 9% 93 42 11 61

Amortization of Short Term Debt 2.215

Cash, cash equivalents and Short-term investments 12/31/2008 2.292 2.199 2.157 2.145 2.085

Working Capital 2.704

Short Term Debt

Probable Scenario

Short Term Debt

207

The Administration of the Company is secure that even if the present financial crisis has not abated, the Company will not havedifficulties in refinancing its short term debt and believes that in the final analysis there will be a possible increase in the cost of thedebt.

Debt Profile 4Q08


7/17

Net Sales Revenue (R$ million)Net Sales Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)EBITDA and EBITDA Margin (R$ million)

6

345.1

564.9 591.1

1,156.1

4.2% 3.8%

14.2%

9.6%

12M05 12M06 12M07 12M08

3,577.1 3,967.6

14,141.6

30,340.3

12M05 12M06 12M07 12M08

114.5%95.6%

Source: JBS

EBITDA Margin (%)

4.6%63.7%10.9% 256.4%

2008 Consolidated Results


8/17

94.8

176.3

290.8

470.5

265.9

2.8%

4.1%

6.1%

3.0%

1.4%

4Q07 1Q08 2Q08 3Q08 4Q08

9,633.2

7,771.5

6,650.7

5,859.1

7,129.5

4Q07 1Q08 2Q08 3Q08 4Q08

Net Sales Revenue (R$ million)Net Sales Revenue (R$ million) EBITDA and Margin (R$ million)EBITDA and Margin (R$ million)

-11.9%

86.0%

21.7%

64.9%

9.0%

61.8%

24.0%

-43.5%

Source JBS

EBITDA Margin (%) 7

180.5%

2008 Consolidated Results by Quarter


9/17

8

2.82.8

2.31.9

2.6

4Q07 1Q0 8 2Q08 3 Q08 4Q08

Net Sales(US$ million)


EBITDA (US$ mi)margin EBITDA


60.4

155.6

-84.5

-0.9

132.9

2.2%

5.6%5.1%

-0,1%

-3.7%

4Q0 7 1Q0 8 2 Q08 3 Q08 4 Q0 8

JBS USA (Beef)Including Australia

620536598

682600

4Q07 1Q08 2Q08 3Q0 8 4Q08





25.6

52.1

40.5

15.719.9

4.3%

7.6%

3.2%2.9%

6.8%

4 Q0 7 1Q0 8 2 Q08 3 Q08 4 Q0 8

JBS USA (Pork)

143140132

162

1Q08 2Q08 3Q08 4Q08

Net Sales( million)

Net Sales( million)

EBITDA ( mi)margin EBITDA

EBITDA ( mi)margin EBITDA

8.37.4

6.67.6

5.1%5.3%4.7%5.6%

1Q08 2 Q08 3Q0 8 4Q0 8

INALCA JBS

1.61.8

1.3 1.31.4

4Q07 1Q08 2Q08 3Q0 8 4Q08

Net Sales(R$ million)

Net Sales(R$ million)

EBITDA (R$ mi)margin EBITDA

EBITDA (R$ mi)margin EBITDA

69.4102.2

199,1

132.7

58,2

10.4 %

15.1%

4.3%4.1%5.6%

4Q07 1Q08 2Q08 3Q08 4Q08

JBS MERCOSUL

Source JBS

EBITDA Margin (%)

Performance by Business Unit


10/17

Source: JBS

Net Debt / EBITDA

JBSs Net debt in relation to itsEBITDA (last twelve months proforma) is affected by weak results inthe 4th quarter 2007 and 1st

quarter 2008.

Good results expected for 1stquarter 2009 will reduce the

relation between Net Debt overEbtida.

9

2.77

3.74

2.31

1.95

2.89

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09

Net Debt / EBITDA Pro Forma per TRIMESTER

*

Net Debt = R$ 3,325 MM

EBITDA pro forma = R$ 1,706 MM= 1,95

Exchange Rate:

R$ / US$ = 2.34 12/31/2008US$ / $ = 1.39 12/31/2008

Debt Profile

1.95Net Debt = R$ 3,325 MM

EBITDA pro forma = R$ 1,706 MM= 1.95


11/17

10

-0.4%

1.3% 1.3%

3.6%

0.9% 0.9%

6.4%

1.1%

3.2%

-0.9%

2.3%

-5.3%

-0.7%

-0.4%

-1.7%

4.2%

2.0%

5.3%

-1.3%-1.2%

0.9%0.7%

FY03* FY04* FY05* FY06* FY07* 3Q07** 4Q07** 1Q08** 2Q08** 3Q08** 4Q08**

Peers Average Beef USA

JBS Beef USA

Source: JBS and estimates of JBS based upon public data from peersEBITDA margins of the Companies taking into consideration beef only in the US*Fiscal years for the Companies differ one from the other:

FY Tyson: October to SeptemberFY Smithfield: May to AprilFY National Beef: September to AugustFY JBS USA: June to May (altered after the acquisition)**The relevant quarterly period and adjustments made to the calendar year

EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)EBITDA Margin (%)

JBS S.A. ManagementJBS S.A. ManagementJBS S.A. ManagementJBS S.A. ManagementPrevious ManagementPrevious ManagementPrevious ManagementPrevious Management

7.3 p.p Gain

JBS USA Beef EBITDA Margin Evolution


12/17

Revenue Distribution by Business Units 12M08Revenue Distribution by Business Units 12M08 Revenue Distribution by Market 12M08Revenue Distribution by Market 12M08

Source: JBS Source: JBS

11

Consolidated Gross Revenue Distribution

Beef ItalyBeef ItalyBeef ItalyBeef Italy5%5%5%5%

Beef ArgentinaBeef ArgentinaBeef ArgentinaBeef Argentina3%3%3%3%

Beef BrazilBeef BrazilBeef BrazilBeef Brazil19%19%19%19%

Beef USABeef USABeef USABeef USA47%47%47%47%

Pork USAPork USAPork USAPork USA14%14%14%14%

Beef AustraliaBeef AustraliaBeef AustraliaBeef Australia12%12%12%12%

Domestic MarketDomestic MarketDomestic MarketDomestic Market68%68%68%68%

ExportsExportsExportsExports32%32%32%32%


13/17

Exports Distribution 12M08Exports Distribution 12M08

Source: JBS

12

Consolidated Exports Distribution

MexicoMexicoMexicoMexico18%18%18%18%

RussiaRussiaRussiaRussia

13%13%13%13%

E.U,E.U,E.U,E.U,

11%11%11%11%JapanJapanJapanJapan9%9%9%9%

CanadaCanadaCanadaCanada8%8%8%8%

Middle EastMiddle EastMiddle EastMiddle East7%7%7%7%

Hong KongHong KongHong KongHong Kong

5%5%5%5%

South KoreaSouth KoreaSouth KoreaSouth Korea

4%4%4%4%

TaiwanTaiwanTaiwanTaiwan

4%4%4%4%

USAUSAUSAUSA

3%3%3%3%

ChinaChinaChinaChina

3%3%3%3%

OthersOthersOthersOthers15%15%15%15%

Exports JBS 12M08: US$ 5.6 billion


14/17

Source: JBS

SWIFT USA ACQUISITIONSWIFT USA ACQUISITION

EV / EBITDAUS$1,458.8 mm

SMITHFIELD BEEF ACQUISITIONSMITHFIELD BEEF ACQUISITION

EV / EBITDAUS$565.0 mm

13

96.3

370.5

3.9x

15.1x

Jul-07 Dec-08

285%70.0

163.1

3.5x

8.1x

Oct-07 Dec-08

133%

Enterprise Value and EBITDA Multiple


15/17

Commitment from the Management to reduce the leverage of theCompany.

Appropriate liquidity level.

We will continue to grow. We see the present crisis as an immense

opportunity.

Regardless of the negative aspects of the present macroeconomic

scenario, the Management of this Company forecasts substantiallyimproved consolidated operational results for 2009.

Planning and discipline contributed to risk reduction.

14

Final Considerations

A


16/17

JBS S.A.February 20th, 2009

In God we Trust

3.74

2.89

2.77

2.31

1.96

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09

JBS lives an intense process of deleverage reducing

the net debt / EBITDA ratio from 3.74x in 2007 to

1.95x in 2008.

Leverage

1.95

Questions & Answers

D l


17/17

The forward-looking statements presented herein are subject to risks and uncertainties. Thesestatements are based on the beliefs and assumptions of our management, and on informationcurrently available to us.

Forward-looking statements are not guarantees of performance. They involve risks, uncertaintiesand assumptions because they relate to future events and therefore depend on circumstances thatmay or may not occur. Our future operating results, financial condition, strategies, market shareand values may differ materially from those expressed in or suggested by these forward-lookingstatements. 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 futureoperating 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.

Disclaimer

4q08 conference call presentation

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