1Q10 Conference Call Presentation

7/30/2019 1Q10 Conference Call Presentation

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1st Quarter 2010 ResultsMay 14th, 2010


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Presenters

Jeremiah OCallaghan

Investor Relations Director

Joesley Mendona Batista

Chief Executive Officer

Guilherme Arruda

Investor Relations


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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.

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Agenda

Company Overview

Market Overview

1Q10 Highlights

Short Term Outlook

4


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Company Overview

5


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JBS S.A. at a Glance

Founded in the 1950s in Central West Brazil

IPO in 2007

Ibovespa ticker: JBSS3

ADR ticker: JBSAY

Leading protein producer in the World

Production platform in South America, North America, Europe andOceania

125,000 employees worldwide

Market cap of approximately R$19 billion

*Source: Bloomberg 13/05/2010

*

6


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Shareholders

7

Controlling

Holding 55.5%

BNDESPAR 17.3%

Market 19.1%

PROT - FIP

8%


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8

EBITDA (R$mm)

.

Bertin Merger

Pilgrims Pride

JBS Hides

5 new units

Tasman

Smithfield Beef

Five RiversInalca

Swift Foods Co.

SB HoldingsVenadoTuertoPontevedra(CEPA)

CAGR (2001-2009): 62%

2001 2006

pre IPO 2009% of total revenues of R$1,212mm % of total revenues of R$4.3bn % of total revenues of R$55.2bn

Beef Beef

Industrialized/

Further

Processed

Beef

Poultry

Industrialized/

Further

Processed

Pork

100%

23%

77%

52%

13%6%

29%

JBS S.A. Growth Through Acquisitions


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Global Low Cost Production Platform

9

World Beef Producers World Pork Producers World Chicken Producers

Total Number of Plants

65

33

3

6

3

10 544

OthersBrazil

EU

34%16%

14%

21%

10% China

5%

IndiaUS

OthersBrazil

EU

17%3%

10%48%

China

22%

US

Others

Brazil

EU

34%

15%

22%

17% China

12%

US

8 33 3 1


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10

1stRanking

Well-Recognized

Brands

ProductionUnits

GeographicPresence

andInstalledCapacity

2nd 3rd 1st 3rd 1st

Global Global U.S.A. Global Brazil Global

Beef

41.2

1.1

6.7

28.6

8.7

3.0

1.0

000 heads/day:

6.9

0.7

mm heads/day:

48.5

000 heads/day: 000 hides/day:

1.4

000 tons/day:

4.5

23.0

000 heads/day:

Total: 90.3 Total: 7.6 Total: 48.5 Total: 91.4 Total: 1.4 Total: 27.5

Chicken Pork Hides /Leather

Dairy Lamb

65 33 3 26 7 6

55.6

28.6

6.0

1.2

Leading, Sizeable and Diversified Business Platform


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11

Our Strategy

Production platform

Sales and distribution platform

Value added products

Branding

JBS Value & Strategy

EBITDA Margin

Financial

structure

Experienced

management

Cost

reduction,

process

optimization

Risk

management

Developed an efficient

and diversified global

production platform

Expanding a global distribution

platform to reach end clients

Customized and further

processed products for the

end users

Associating quality and branding

to increase client loyalty

Rationale


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12

Protein Consumption in Key Markets (millions of Ton, 2009E)

53 Distribution Centers

Growth 1

2 %

5 %

8 %

Growth 1

7 %

16 %

25 %

Growth 1

9%

8%

13 %

Growth 1

4 %

3 %

-2 %

Total: 46 mm ton Total: 74 mm ton Total: 86 mm ton

Asia & Middle

East

13

North America

15

Europe

8

Latin America

10

28%17%

22%

33%

Asia & Middle

East

30

North America

21

Europe

12

Latin America

1141%

16%

15%

28%

Asia

51

North America

11

Europe

21

Latin America

359%

24%

3%

13%

1 Real growth of total consumption in tons 2010E to 2015ESource OECD-FAO

Distribution Platform with Access to Key Markets


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Market Overview

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Market Highlights

Domestic growth in Brazil remains strong

Grain prices are competitive

Signs of growing importance of international trade with increaseddemand in all major importing markets

Increase in US Exports

Declining production in Europe

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Per capita food consumption curve

(Kg / Year)

Source: FAO

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Source: Secex* Until March

Brazilian Beef exports

(Thousand Tons)

16

780

1,095

1,263

1,4251,491

1,218

1,086

258231

0

200

400

600

800

1,000

1,200

1,400

1,600

2003 2004 2005 2006 2007 2008 2009 2010

E.U. Russia Egypt Venezuela Algeria USA Hong Kong Others Until March

*


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Source: USDA ERS* Until March

US Beef and Veal Exports (Million Pounds)

17

*

2,412 2,467

2,269

2,4492,520

461

697

1,146

1,433

1,888 1,867

478384

0

500

1,000

1,500

2,000

2,500

3,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mexico Canada South Korea Japan Vietnam China Hong Kong Netherlands Others Until March


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Source: USDA ERS

* Until March

US Pork Exports (Million Pounds)

18

*

1,278 1,287

1,560 1,6121,717

2,181

2,667

2,9953,142

4,667

4,128

1,047

1,034

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Japan China Hong Kong Mexico Russia Canada South Korea Australia Others Until March


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Source: USDA ERS

* Until March

US Poultry Exports (Million Pounds)

19

*

4,9805,138

5,738

4,942 5,013 4,9975,333 5,367

6,070

7,1096,906

1,508

1,754

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Russia China (Mainland) Iraq Mexico Canada Cuba Other Chicken Others Until March


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20

Beef & Veal Supply and Demand in 2020

Source: Goldman Sachs

14.3

0.2

9.4

5.1

4.1

0.5

3.6 2.40.8

1.6

12.7

1.5 1.2

13.0 8.6

0.5

8.18.0

0.8 0.2

8.6

India

Europe

Australia

China

Brazil

Argentina & Uruguay

Global Surplus (Deficit) of Beef & Veal (Million metric tons)

USA

3.6

0.4

3.2

Production Imports Exports ConsumptionProduction Imports Exports ConsumptionProduction Imports Exports Consumption

Production Imports Exports Consumption

Production Imports Exports Consumption Production Imports Exports Consumption Production Imports Exports Consumption


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21

Chicken Supply and Demand in 2020

1.91.0

0.8

19.1 15.1

4.1

8.9

1.1 0.9

9.119.2

0.2

20.0

2.23.4

1.2

India

Russia

Thailand

China

Brazil

USA

Global Surplus (Deficit) of Chicken (Million metric tons)

Europe


3.7 3.7

Deficit

Surplus

Production Imports Exports ConsumptionProduction Imports Exports Consumption



16.29.4

6.9



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22

Pork Supply and Demand in 2020

1.6 2.1

0.2

4.2 3.056.9 56.4

0.8

11.9 9.9

2.5

2.2

0.3

1.21.3 2.7

3.822.7 21.6

0.1

Brazil

Europe

China

Russia

Mexico

USA

Global Surplus (Deficit) of Pork Meat (Million metric tons)

Canada

1.11.1

0.5

0.7 1.2

0.3

Deficit

Surplus

Production Imports Exports ConsumptionProduction Imports Exports ConsumptionProduction Imports Exports Consumption





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1Q10 Highlights

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Highlights for the 1st Quarter 2010

Net Revenue increased by 35.4%, from R$9,267.9 million in 1Q09 to R$12,550.3million in 1Q10, mainly due to the incorporation of Bertin and acquisition of Pilgrims

Pride.

The 1Q10 consolidated EBITDA increased 307.5% compared to the same period in

2009, from R$211.5 million to R$862.0 million. The EBITDA margin was 6.9% for theperiod, compared with 2.3% for 1Q09.

Net Profit of R$99.4 million in 1Q10, compared to a net loss of R$322.7 million in1Q09.

Beef US posted EBITDA of US$170.5 million, on margin of 6.0%, a record for 1Q.

In Mercosul, JBS posted EBITDA of R$352.6 million, with 11.9% margin.

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JBS Consolidated Results

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

Source: JBS

EBITDA Margin (%)

-11.6%

36.3%

-0.1%

81.6%

-9.5%

-24.0%

25

69.4%95,2%


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Performance by Business Units

Source JBS

EBITDA Margin (%)

Net Sales(R$ billion)

EBITDA (R$ mi) EBITDAmargin

JBS MERCOSUL

26

Net Sales( million)

EBITDA ( mi)

EBITDA margin

INALCA JBS


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Performance by Business Units

Source JBS

EBITDA Margin (%)

Net Sales(US$ billion)

EBITDA (US$ mi)EBITDA margin

JBS USA (Beef)

Including Australia

Net Sales(US$ million)


JBS USA (Pork)

27

Net Sales(US$ million)


JBS USA Poultry


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Debt

Net debt / EBITDA ratio remained at 3.1x q-o-q. Gross debt declined 5.7%, while Net Debtincreased 12.2%, reflecting working capital requirements to ramp up recent acquisitions, as wellas investments in fixed assets, further impacted by FX fluctuations.

The vast majority of the companys short debt is composed of revolving trade finance creditlines.

As demonstrated below, the percentage of short term debt was 40% in 1Q10, compared with

37% in 4Q09 and 47% in 1Q09.Net Debt / EBITDA Pro Forma per Quarter

Source: JBSNet Debt/ EBITDA EBITDA pro-forma

* LTM including Bertin and Pilgrims Pride pro-forma.

Gross debt Profile (R$ million)

28

*


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Revenue Distribution by Market

1Q10 1Q09

Source: JBS Source: JBS

29

Domestic

Market

77%

Exports23%

Domestic

Market

78%

Exports22%


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JBS Consolidated Exports Distribution

JBS Exports 1Q10

Source: JBS

JBS Exports 1Q09

30

US$ 1,765.4 Million

Japan

16%

E.U.

16%

USA

11%Mexico

9%

Russia

8%

South Korea

6%

China

5%Hong Kong

5%

Canada

4%

Middle East

4%

Taiwan

2%Others

14%

US$ 901.4 Million


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Short Term Outlook

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A Closer look at synergies Pilgrims Pride

32

US$35mn

US$30mn

US$50mn

US$50mn

US$35mn

US$20mn

US$220mn

Description Size Timing

Transportation

Suppliers

G&A

Logistics optimization

Corporate

Exports

Total

Review of contract terms with carriers

Review of contract terms with packaging and other suppliers

Review of service contracts (e.g. Legal, insurance and IT)

Increase efficiency in average weight per truck

Streamlining of corporate structure and headquarters closure

Reach-out to end clients through JBS existing sales network 2010

1H10

Pilgrims Pride Acquisition: Synergies of over US$220mm/year

1H10

2 years


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A Closer look at synergies Bertin S.A.

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R$45mn

R$20mn

R$40mn

R$35mn

R$245mn

R$100mn

Hides / Leather

Logistics

Corporate/G&A

Suppliers

Industrial Processes

Exports

Total R$485mn

Value enhancement through further processing

Review of transportation contracts

Offices, personnel, services contracts and third parties

Review contract terms of non core suppliers (e.g. packaging)

Optimization of fixed costs and rationalization of existing contracts

Maximization of the combined sales channels and review of freight contracts

Description Size Timing

1H10

1H10

2 years

2010

Association with Bertin: Synergies to Achieve at Least R$485mm/year


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3434

Final ConsiderationsIn God We Trust, Nature We Respect

IR Contacts:

[email protected]

+55 11 3144 4055

www.jbs.com.br/ir34


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Q & AIn God We Trust, Nature We Respect

IR Contacts:

[email protected]

+55 11 3144 405535

1Q10 Conference Call Presentation

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