public meeting presentation
TRANSCRIPT
PRESENTERS
88
GLOBAL BEEF TRADE AND CONSUMPTION
69.354.6
41.2 37.2 34.7 32.224.1
16.0 16.39.3 4.7
Argentina Uruguay USA Brazil Australia Canada Mexico EU Russia Japan China
USA
17%
EU
6%
Russia
15%
Egypt
3%
Canada
4%
Others
33%
South Korea
5%
Japan
10%Mexico
7%
Brazil
27%
India
10%USA
11%
Canada
6%
EU
1%
Others
10%
Argentina
5%
Uruguay
5%
Australia
18%New Zeland
7%
RELEVANT PLAYERS IN THE GLOBAL BEEF TRADE
(1,500) (500) 500 1,500 2,500
Brazil
Argentina
Australia
USA
China
European Union
Russia
South Korea
Japan
1999 2008*
GLOBAL SCENARIO – HERD & PRODUCTION
1960 – 2009
600,0
700,0
800,0
900,0
1000,0
1100,0
1200,0
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Herd
(m
illio
n o
f h
ead
s)
10,0
20,0
30,0
40,0
50,0
60,0
70,0
Pro
du
cti
on
(m
illio
n o
f to
ns)
Total Herd Production
WORLD POPULATION GROWTH AND BEEF
CONSUMPTION (1960 – 2050)
0,0
1.000,0
2.000,0
3.000,0
4.000,0
5.000,0
6.000,0
7.000,0
8.000,0
9.000,0
10.000,0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010* 2015* 2020* 2025* 2030* 2035* 2040* 2045* 2050*
Po
pu
lati
on
(m
illio
n)
-
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
180,0
200,0
Co
nsu
mp
tio
n (
mil
lio
n t
on
s)
World Population Population - More developed regions Population - Less developed regions Beef Consumption
BEEF MARKET
USA 1991 – 2009 (thousand tons)
7.000
8.000
9.000
10.000
11.000
12.000
13.000
14.000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Pro
du
cti
on
, C
on
su
mp
tio
n
0
500
1000
1500
2000
2500
3000
3500
Sto
cks
, Im
po
rt, E
xp
ort
Ending Stocks Production Consumption Imports Exports
BEEF MARKET
European Union 1997 – 2013 (thousand tons)
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013*
Pro
du
cti
on
, C
on
su
mp
tio
n
0
200
400
600
800
1000
1200
1400
1600
Sto
cks
, Im
po
rt, E
xp
ort
Ending Stocks Production Consumption Import Export
EU - 25EU - 15
BEEF MARKET
RUSSIA 1991 – 2009 (thousand tons)
0
1000
2000
3000
4000
5000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Ending Stocks Production Import Export Consumption
88
OUR STRATEGY
* The closing of these transactions are subject to certain closing conditions, including expiration or termination of applicable waiting periods under U.S. antitrust law
Mitigate Potential Risksas Sanitary Barriers &
Seasonality
0.3 0.4 0.4 0.5 0.5 0.4 0.7 1.2 1.5 1.9
12.7
24.8
1993 1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007* 2008**
JBS’ HISTORY HAS BEEN BUILT THROUGH MORE THAN 30 ACQUISITIONS IN 15 YEARS
WITH APROPRIATED CAPITAL STRUCTURE AND MANAGEMENT
Source: JBS* Pro forma JBS S.A. LTM Dec07 (includes JBS USA)** Pro Forma JBS S.A. LTM Sep08 (includes JBS USA, Tasman and 50% of Inalca); National LTM May08; Smithfield Beef LTM Sep07; (1) The closing of this transaction is subject to certain closing conditions, including expiration or termination of applicable waiting periods under U.S. antitrust law
Net Sales (in US$ billion)
Companies and assets acquired
Cáceres
(Frigosol)
Iturama
(Frigosol)Araputanga
(Frigoara)
Barretos (Anglo)
Pres. Epitácio (Bordon)
Campo Grande (Bordon)
Pedra Preta
(Frigo Marca)
Rosário
(Swift ARG)
San Jose
(Swift ARG)
Inalca
Swift Foods Co.
Maringá (Amambay)
Berazategui
(Rio Platense)
Colonia Caroya
SB Holdings
JV Beef Jerky
Venado
Tuerto
Pontevedra
(CEPA)
Rio Branco
Cacoal 1
Cacoal 2
Porto Velho
Vilhena (Frigovira)
Andradina
(Sadia)
Barra do
Garças
(Sadia)
Goiânia
(Anglo)
Anápolis
(Bordon)
R$/US$ end of the year cotation R$/US$: 1.91
National Beef
Tasman
Smithfield Beef
Five Rivers
(1)
MANAGEMENT
Investor
Relations
Jerry
O’Callaghan
Brazil
Humberto
Magalhães
Argentina
Nelson
Dalcanale
Italy
Luigi
Scordamaglia /
Paolo Boni
Legal
Francisco
de Assis e Silva
Financial
Director
Sérgio
Longo
CEO
Chairman
Joesley
Batista
Mr. Humberto de Campos Magalhães holds a degree in biology from Universidade
Federal do Mato Grosso. He is currently the chief operating officer of the Brazilian division. Before joining JBS in 1999, he had over 8 years of experience working in the meat industry.
Mr. Sérgio Longo, has been serving JBS as a Financial Director since April 2003 and he has been a member of JBS’ board of executive officers since 2005.
Before joining JBS he had over 25 years of experience working in financial institutions.
Mr. Francisco de
Assis e Silva, General
Counsel, holds a law
degree and a master
degree in
environmental law from
Pontifícia Universidade
Católica at Paraná
State, a master degree
in corporate law and a
master’s degree in
public law from
Universidade
Mackenzie, and an MBE
in labor economics from
Universidade de São
Paulo. He has been a
member of JBS’ board
of executive officers
since January 2, 2007 .
He has been working
for the JBS Group since
December 2001.
Mr. Nelson Dalcanale
has been working at JBS since 2001 and is currently the CEO of the division in Argentina. Before joining JBS, he had 21 years of experience in the meat industry.
Mr. Jerry O’Callaghan holds a degree in Engineering from UCC (University College Cork) in Ireland. He immigrated to Brazil in 1979. Mr. O’Callaghan entered the beef sector in 1983 and joined JBS in 1996 to develop International Trade for the group. He is currently our Investor Relations Officer.
Mr. Scordamaglia, started his career as Professor in the Veterinary University of Perugia and as an advisor in the legal and QA departments of Inalca. He was appointed CEO of Inalca in 2007.
Mr. Paolo Boniholds a degree in accounting. Before joining JBS he had over 25 years of experience in the beef industry sector. He has been a Board Member of Inalca since 1996.
Management
& Controlling
Director
Eliseo
Fernandez
Mr. Eliseo Fernandez holds a degree in business administration and accounting from Universidade Católica de Pernambuco and a master’s degree in business administration from FGV. He joined JBS in August 2005 and is currently the management and controlling director. Before joining JBS Mr Fernandez worked for eight years in the auditing and advisory industry and 10 years in the retail industry.
Wesley
Mendonça
Batista
José
Batista
Sobrinho
José
Batista Jr.
Marcus
Vinicius
Pratini de
Moraes (Independent)
Board of Directors
Demósthenes
Marques (Independent
PROT FIP)
BNDES (Independent)
CFO
André
Nogueira
Australia
Iain Mars
Pork
Martin
Dooley
JBS
Packerland
Beef
Richard Vesta
JBS Five
Rivers
Mike
Thoren
Beef USA
David Colwell
CEO
USA/AUSWesleyBatista
MANAGEMENT
Trading
Brent
Eastwood
Mr. André Nogueira holds a degree in Economics from Universidade Federal Fluminense, a master degree in Capital Markets from FGV – Fundacão Getúlio Vargas, a master degree in in Economics from Universidade de Brasilia in 2003.
He worked for more than 20 years in Banco do Brasil and joined JBS in 2007, following the bought Swift & Co acquisition.
Mr. Brent Eastwood had worked for Swift & Company for over 18 years.
He moved to the USA in 2007 to be Vice President / Director of JBS Trading USA, the Swift Distribution Centers USA, Australia Trading, Australia Distribution Centers and the Global Trading Business in Brazil.
Mr. Thoren has served as President and CEO of Five Rivers since the Company’s inception.
Mike received his Master of Science degree in Agricultural Economics and his degree in Agribusiness from Washington State University.
Mr. David Colwell holds a degree from University of South Florida and has been working for JBS Swift & Company for 11 years. David has been the President of JBS Beef since 2007.
Mr. Richard Vesta joined Smithfield Foods following the acquisition of Packerland in 2001 and now serves as President and CEO of JBS Packerland.
Mr. Martin Dooley
Holds a degree of Science in Biology/Medical Technology –Eastern Illinois University - 1982
Marty has worked at Swift & Company all his life, having started as a management trainee in 1983.
He was appointed in 2007 to be the President of JBS Pork division.
Mr. Iain Mars was born in England. Iain has been involved in the beef industry for all his life. Mr Mars was appointed President and CEO of JBS Australia in 2007, after the acquisition of Swift & Company. He joined JBS in 2005.
JBS’ main units and markets
JBS HAS A GLOBAL PRODUCTION AND DISTRIBUTION PLATFORM
x =
x
=
Legend
Slaughterhouse (Beef)
Slaughterhouse and Industry
Distribution Center
Vegetable Canning Plant
Beef Canning Plant
Beef Jerky Plant (Beef Snack’s)
Slaughterhouse (Pork)
Slaughterhouse (Lamb)
Beef and Pork Processing Plant
Wet Blue Processing Plant
Headquarters Office
Feed Lot
Package Industry
Inland Container Terminal
Commercial Office
* The closing of this transaction are subject to certain closing conditions, including expiration or termination of applicable waiting periods under U.S. antitrust law. (B) Beef; (P) Pork; (S) Smalls;
Production Units Employees
28.100 B
47.900 P
4.000 S
8.500 B
16.500 S
65.200 B
47.900 P
20.500 S
79.200 B
47.900 P
20.500 S
3.000
6.700 5.059
Daily Slaugther Capacity
2.019
6.995
24.295
B
B
B
6
18
10
8
Total JBS 64 55.361
JBS Argentina
JBS USA
JBS Australia
Inalca JBS
JBS Brazil 22 16.993 18.900
Total Consolidated 70 64.161
BNational Beef 6 8.800 14.000
BRIEF DESCRIPTION
Brief Description
JBS Brazil’s operations are distributed thru 22 production plants, with a total slaughter
capacity of 18,900 heads of cattle per day and more than 16,900 employees.
JBS’s clients in Brazil are primarily large retailers, restaurants, and tanneries, JBS’s
portfolio currently includes more than 6,000 domestic market companies.
JBS is Brazil’s largest exporter of beef products, with revenues of US$ 1.1 billion in
2007, according to the SECEX (Brazilian Secretariat of Foreign Trade). It is also 22nd
among the main Brazilian exporters from all sectors.
Platform Structure
In Brazil the Company’s plants are distributed as follows:
– 19 slaughtering plants located in the Brazilian states of Acre, Goiás, Mato Grosso, Mato Grosso
do Sul, Minas Gerais, Rondônia, São Paulo and Paraná, five of which also have processed beef
production plant;
– 1 canned beef production plant located in the state of Rio de Janeiro, Brazil;
– 1 canned vegetable plant located in the state of Minas Gerais, Brazil;
– 1 cattle feed lot located in the state São Paulo, Brazil; and
– 1 beef jerky plant located in São Paulo state, Brazil.
JBS BRAZIL
Slaughtering Plant
Slaughtering and Industrial Plant
Distribution Centers
Canned Vegetable Plant
Canned Beef Plant
Administrative Headquarters
Container Yard
Feedlot
Customers
In 2008 JBS Brasil served 11,240 customers supplied in the domestic market and 436 customers in the
international market, supplying more than 100 countries, highlighting Russia, the European Union, Middle
East, Hong Kong and South Arabia.
Brief Description
In 2005, it was acquired by JBS and is currently known as JBS Argentina, it has a total slaughter capacity of
6,700 heads of cattle per day and more than 5,000 employees.
The Company was first meatpacker in Argentina to meet the regulations established by ISO 9001:2000 in its
entire production process.
In Argentina, the company is the absolute leader in the canned meat segment of the domestic market,
having a share of 77% of all sales in 2007. The Argentina client portfolio is comprised of 786 companies.
In the last year, JBS Argentina accounted for 87% of processed beef exports in Argentina, which were
shipped to the United States and Europe, and includes approximately 190 clients.
Platform Structure
In Argentina the Company’s plants are distributed as follows:
6 slaughtering plants located in four provinces of Argentina (Buenos Aires, Entre Rios, Santa Fé and
Córdoba), 5 of which also have processed beef production plants; and
1 metal package producing factory in the province of Buenos Aires, Argentina.
JBS Argentina has more than 650 customers in the domestic market and approximately 140 customers in the
international market, supplying 43 countries, highlighting The European Union, USA, Uruguay, Middle East
and Canada.
JBS ARGENTINA
Slaughtering Plant
Slaughtering and Industrial Plant
Plant and Offices
Brief Description
JBS USA’s operations are distributed thru 18 production plants, with a total
slaughter capacity of 28,100 heads of cattle, 47,900 heads of pork per day
and 4,000 heads of smalls per day and 11 Feed Yards with a one time
capacity to fatten 820,000 head of cattle . The company has more than
24,200 employees.
The Company, has been a recognized provider of beef and pork quality
products for more than 150 years.
Platform Structure
At present, in the USA the Company’s plants are distributed as follows:
8 cattle slaughtering plants in the U.S. states of Colorado, Utah, Texas, Nebraska, Wisconsin, Michigan, Pennsylvania and Arizona;
3 pork slaughtering plants in the U.S. states of Minnesota, Iowa, and Kentucky;
1 case-ready beef plant in the U.S. state of California;
1 lamb plant in the U.S. state of Colorado;
11 feed yard in the U.S. states of Colorado, Texas, Oklahoma, Kansas, Ohio e Idaho;
1 Wet Blue leather producing plant in the U.S. state of Texas.
2 beef jerky plants located in the U.S. states of Minnesota and Texas; and
2 rendering located in the U.S. state of Pennsylvania.
JBS USA
Brief Description
JBS Australia’s operations are distributed thru 10 production plants,
with a total slaughter capacity of 8,500 heads of cattle per day and
more than 6,900 employees.
JBS Australia is the largest and broadest Australian meat processor and
exporter, maintaining commercial relations with more than 30
countries, especially in the Pacific Coast and in North America.
Platform Structure
In Australia the Company’s plants are distributed as follows:
10 cattle and smalls slaughtering plants; and
5 cattle feed lots located in the Australian states of Queensland and New South Wales.
JBS AUSTRALIA
‘
INALCA JBS ITALY
24
DM – Domestic Market; IM – International Market
BRIEF DESCRIPTION – CUSTOMERS BASE
88
SHORT TERM DEBT PROFILE – 3rd QUARTER 2008
The Administration of the Company is secure that even if the present financial crisis has not abated until the next
quarter the Company will not have difficulties in refinancing its short term debt and believes that in the final
analysis there will be a possible increase in the cost of the debt. The Company did a sensitivity analysis
considering firstly a probable scenario and secondly a pessimistic one in relation to the renewal of its short
term financing facilities.
Obs: The Finame, Finem and Finimp credit lines are automatically liquidated, meaning they are paid on expiry and are not renewable
Trade finance, Working Capital and other credit lines are interchangeable, meaning they can be refinanced but not necessarily in the same category under which they were initially contracted.
*Including Finimp
**Percentage to be paid in the period
***Simulation of the availabilities and applications after the amortizations programmed for the respective quarter without taking into consideration cash to be generated in future quarters.
LIQUIDITY EVALUATION
Source: * Companies’ last public information
** Companie’s Last Twelve Months
95176
291
X471
2,8
2,3
2,9
3,7
4Q07 1Q08 2Q08 3Q08 4Q08e
Exchange rates:
R$ / US$ = 1.91 – 09/30/2008
US$ / €$ = 1.41 – 09/30/2008
JBS – NET DEBT/EBITDA
JBS CONSOLIDATED RESULTS
NET REVENUE, EBITDA AND EBITDA MARGIN
591,1
94,8176,3
290,8
470,5
6,1%
3,0%4,1%
1,4%
4,2%
12M07 4Q07 1Q08 2Q08 3Q08
14.141,6
6.650,7
5.859,1
7.129,57.771,5
12M07 4Q07 1Q08 2Q08 3Q08
PERFORMANCE BY BUSINESS UNITS
2.6301.976
7.375
2.756
FY07 1Q08 2Q08 3Q08
155,6
25,8
-0,9
132,9
5,6%5,1%
-0,1%0,3%
FY07 1Q08 2Q08 3Q08
Source: JBSFY of Swift used to be from June to May and INALCA period is from January to December. (1) 13 weeks ended 03/30/2008. (2) 13 weeks ended 06/29/2008. (3) 13 weeks ended 09/28/2008.
620536
2.175
682
FY07 1Q08 2Q08 3Q08
52,1
70,3
15,7 19,9
7,6%
3,2%2,9%3,2%
FY07 1Q08 2Q08 3Q08
155132
521
143
FY07 1Q08 2Q08 3Q08
7,6
26,0
7,4 7,5
5,3%4,8%
5,6%4,9%
FY07 1Q08 2Q08 3Q08
1.4251.271
4.892
1.811
FY07 1Q08 2Q08 3Q08(1) (2) (3)
102,2
692,0
132,758,2
5,6%
4,1%
10,4%
15,3%
FY07 1Q08 2Q08 3Q08
(1) (2) (3)
(1) (2) (3) (1) (2) (3)
Net Sales
(US$ million)
JBS USA (Beef)
Including Australia
(US$ )
JBS USA (Pork)
(€ )
INALCA JBS MERCOSUL
(R$ )
EBITDA (US$ mi) margin EBITDA
Margin (%)
EBITDA (US$ mi) margin EBITDA
Margin (%)
EBITDA (€ mi) margin EBITDA
Margin (%)
EBITDA (R$ mi) margin EBITDA
Margin (%)
The geographic diversification of its operations allows it to source meat efficiently, serve its customers cost-effectively, capitalize on increasing international trade opportunities and helps
to mitigate the potential impacts of sanitary barriers.
JBS: GLOBAL PRODUCTION & DISTRIBUTION PLATFORM
JBS Mercosul JBS USA / Australia Inalca JBS
Revenue Ebitda
Revenue Ebitda
Revenue Ebitda
76%
19%
5% US$42
Source: JBS
* JBS S.A. LTM Sep08, Pro forma JBS USA LTM Sep08 (includes Tasman) and Pro forma 50% of Inalca LTM Sep08
Exchange rates:
R$ / US$ = 1.91 – 09/30/2008
US$ / €$ = 1.41 – 09/30/2008
US$265
US$257
US$3,043
US$778
US$11,839
EVOLUTION OF THE EBITDA MARGINS OF JBS USA (BEEF) COMPARED
WITH ITS LOCAL PEERS
-0,4%
1,3% 1,3%
3,6%
0,9% 0,9%
3,2%
-0,9%
2,3%
-5,3%
-0,7%
-0,4%
-1,7%
4,2%
5,3%
-1,3%-1,2%
0,9%0,7%
FY03* FY04* FY05* FY06* FY07* 3Q07** 4Q07** 1Q08** 2Q08** 3Q08**
Peers Average Beef USA
JBS Beef USA
Source: JBS and estimates of JBS based upon public data from peersEBITDA margins of the Companies taking into consideration beef only in the US*Fiscal years for the Companies differ one from the other:FY Tyson: October to SeptemberFY Smithfield: May to AprilFY National Beef: September to AugustFY JBS USA: June to May (altered after the acquisition)**The relevant quarterly period and adjustments made to the calendar year
EBITDA (%)
JBS S.A. ManagementPrevious Management
CONSOLIDATED PRO-FORMA SEPTEMBER 2008
Combined Companies Pro-forma (US$ million)
Exchange rates:
R$ / US$ = 1.91 – 09/30/2008
Source: Company Estimates
JBS – annual report, quartely reports - Pro-forma LTM Sep08 (including JBS USA, Tasman and 50% of Inalca)
Smithfield Beef – Managerial numbers LTM Sep08 and 100% of Five Rivers LTM Sep08
*ABL – Asset Based Loan contracted by JBS USA
Net Revenue (US$ mm) 15.660 3.033 18.694
EBITDA (US$ mm) 564 139 703
EBITDA Margin 3,6% 4,6% 3,8%
Cash (US$ mm) 1.178 10 1.188
Short Term Debt (US$ mm) 1.019 0 1.019
Long Term Debt (US$ mm) 1.464 400 1.864
Net Debt (US$ mm) 1.304 0 1.694
Net Debt / Ebitda 2,3x 0,0x 2,4x
Slaughter Capacity (thousand head/day) 57,6 7,6 65,2
Units 98 16 114
Employees 48.991 6.370 55.361
INTEGRATED
and Five Rivers
*
JBS USA BEEF EXPORT VOLUMES
10
15
20
25
30
35
40
45
50
55
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Millio
n p
ou
nd
s
2007 2008
JBS CONSOLIDATED – GROSS REVENUE DISTRIBUTION
Domestic Market64%
Exports36%
Beef Italy5% Beef Argentina
3%
Beef Brazil22%
Beef USA43%
Pork USA14%
Beef Australia13%
JBS CONSOLIDATED – EXPORTS DISTRIBUTION
Russia18%
Japan15%
Mexico10%E.U.
10%
Canada5%
South Korea4%
China4%
USA3%
Hong Kong3%
Taiwan3%
Others25%
Exports JBS 3Q08US$ 1.7 billion
ENTERPRISE VALUE AND EBITDA MULTIPLE
Source: JBS
96.3
264.8
5.5x
15.1x
Jul-07 Sep-08
70.0
139.3
4.1x
8.1x
Oct-07 Sep-08
4088
DISCLAIMER
