JBS Institutional Presentation

Including 2Q15 Results

A Global Food Company

JBS Global

Prepared &
Others
30%

LTM to 2Q15 Net Revenue of R$137.8 billion

Second largest global food company according to Bloomberg ranking

Capacity to process

LTM Revenue
2Q15
R$137.8 bi

Bovines
40%

Pork
10%

Note 1. Based on 2013 Net Sales

Capacity to process 72,000

States

Capacity to process more

in the Americas

Poultry
20%

100,000 bovines per day in 73 units in seven countries

hogs per day in 11 units in Brazil and the United

than 13 million birds per day in 58 units

Capacity to produce more than 100 thousand hides per day in 31

units worldwide

More than 215 thousand employees around the world

2

Unique Global Protein Platform

Presence in

20+ countries, Exports to 150+ countries and more than

300,000 clients
83% of JBS
Revenue is
Moscow

denominated in

US$

North America
London
Ghent

 ~49% of JBS revenue,

Chicago

Hamburg

Toronto
Seoul
Tokyo

Shanghai
Dubai

Caracas

17% of JBS
Revenue is

Exports
 ~30.7% of JBS revenue

So Paulo
(headquarter)

denominated in

R$

Taipei
Hong Kong

Santiago

South America
 ~17.6% of JBS revenue,3
Sales office
Sales office presence

Note 1. It considers only domestic sales

Note 2. Includes beef and lamb operations in the USA and Australia
Note 3. Includes leather and hides operations in Brazil, Uruguay, Mexico, Germany, Vietnam and China and also Rigamonti operations in Italy.

Production Platform

JBS Historical Performance

JBS diversified products portfolio shows a consistent growth

performance

- Sales CAGR: 33%

- EBITDA CAGR: 47%
9.6%

9.2%

5.5%
4.3%

3.8%

6.6%

5.8%

5.0%

137.8

3.7%
120.5
92.9
75.7
61.8

54.7
30.3
14.1

1.2

0.6
2007

2008

13.2

11.1

34.3
1.3
2009
2010
Net Revenue (R$ billion)

3.5

3.1
2011
2012
EBITDA (R$ billion)

4.4

6.1

2013
EBITDA Margin(%)

2014

LT2Q15

Value Creation

Proven M&A and turnaround track record

More than 50 acquisitions in the last 10 years

EBITDA and EBITDA margin

17.2%

18.8%

6.2%

2,638M
1,592M

1,611M

2007
Pre JBS

LTM
Q2/2015

2009
Pre JBS

LTM
Q2/2015

2013
Pre JBS

LTM
Q2/2015
5

JBS Strategy

Step 3: Develop leading consumer brands

Branding
10+%

Value added products

8+%

4+%

Sales and distribution platform

Processing platform

Step 2:
Expand global distribution platform to reach
clients; sell direct to customers in foreign
markets
Step 1:
Develop efficient and diversified
global processing platform; optimize
mix

JBS has created an integrated platform that increasingly captures

maximum value across the value chain
6

Why JBS?

GLOBAL LEADER

CONSISTENT GROWTH AND MARGIN EXPANSION

DIVERSIFICATION
GEOGRAPHY

CONSISTENT AND MORE

PROTEIN
PRODUCT PORTFOLIO

STABLE EARNINGS

BEST-IN-CLASS COST STRUCTURE

OPERATIONAL EXCELLENCE

BEST-IN-CLASS MANAGEMENT

Consolidated Results

2Q15 Consolidated Highlights

Consolidated Net Sales (R$ Million)

Consolidated EBITDA (R$ Million)

EBITDA Margin (%)

9.2%

38,905

8.4%

28,969

3,577
2,433

34.3%

2Q14

2Q15

2Q14

47.0%

2Q15

Revenue growth of 34.3%.

EBITDA growth of 47.0% (more than Revenues).
80 bps expansion in EBITDA margin over 2Q14.
9

2Q15 Consolidated Highlights

Consolidated Net Income (R$ Million)

Cash Generation (R$ Million)

Earnings per share (R$)

0.09

675

0.03

358.4%

254
147

80
2Q14

2Q14

2Q15

2Q15

Net Income affected by FX hedging expenses.

Cash generation increase of 358.4% over 2Q14.
Hedging strategy continues to be effective, though negative in 2Q15.
10

2Q15 Consolidated Highlights

Net Debt (US$ Million)

Net Debt (R$ Million) / Leverage

Net Debt

Leverage (x)
Adjusted Leverage*

3.2x
2.4x
2.3x

34,824

11,221

11,224

24,714

2Q14

2Q15

2Q14

2Q15

Stable USD Net Debt over 2Q14 .

Leverage was 2.4x in 2Q15 and adjusted leverage was 2.3x.
*Considering the pro-forma results from the acquisitions made since 2H14
(Tyson in Brazil and Mexico, Big Frango, Cu Azul and Primo Group), of R$1.0
billion incremental EBITDA, leverage would be 2.3x.
11

JBS Consolidated Exports Breakdown in 2Q15 and 2Q14

Greater China
14.7%

Others
9.2%
Canada
2.5%
Russia
4.6%
E.U.
5.2%

Africa & Middle East

14.1%

2Q15
US$ 3,970.8
million

South Korea
7.1%
Others 16.6%

South America
11.7%

Greater China 18.5%

USA
10.2%

2Q14
US$4,305.1
million

Canada 2.5%
South Korea 4.1%

Russia 6.5%

South America 12.6%

Japan
10.4%

Mexico
10.4%

Africa & Middle East

12.4%

E.U. 6.6%
Japan 9.5%

Mexico 10.7%

Note 1. Including China and Hong Kong

12

Capex, Cash Generation and

Debt Profile

13

Capex and Cash Generation

 In 2Q15, JBS total CAPEX was R$2,090.6 million, from which:

 R$1,092.3 million refers to the acquisition of Tyson in Mexico.

CAPEX

 R$998.3 million from Additions to property, plant and equipment and intangible assets, of
which approximately 50% was related to expansion and modernization of facilities and 50%
in maintenance.

 In 2Q15 , the Company generated net cash flow from operations of R$675.1 million.

Cash Generation

 Free cash flow generation, after Capex, was negative in R$ 1,415.5 million, due to payment for the
acquisition of Tyson Mexico of US$400 million.

14

Debt Profile

Net Debt (R$ Million) & Leverage

Net Debt

Net Debt (US$ Million)

Leverage (x)
Adjusted Leverage*

3.2x
2.4x
2.3x

34,824
24,714

2Q14

2Q15

Breakdown by Currency and Costs

13.14% p.a.

11,221

11,224

2Q14

2Q15

Breakdown by Source

JBS ended 2Q15 with leverage of 2.4x,

compared to 3.2x in 2Q14.

*Considering the pro-forma results

from the acquisitions made in the
2H14 (Tyson in Brazil and Mexico, Big
Frango, Cu Azul and Primo Group), of
R$1.0 billion incremental EBITDA,
leverage would be 2.3x.

Breakdown by Company

R$
13%
Commercial
Banks
52.6%

JBS USA
Holdings
38%

Capital
Market
47.3%

US$
87%

JBS S.A.
49%

JBS Foods
13%

4.92% p.a.
BNDES
0.1%

15

Debt Profile and Maturity

Debt Profile

The Company ended the quarter with R$13,907.7 million in cash,

equivalent to 87% of short term debt, approximately.

2Q14

28%

72%

JBS USA has US$1.6 billion fully available under credit

facilities which, if added to the current cash position,
represents 118% of short term debt.

3Q14

30%

70%

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

debt was 33% in 2Q15.

1Q15

4Q14

34%

66%

29%

2Q15

71%

33%

67%
Short Term

Maturity (R$ million)

Long Term

11,471
8,361

2,075

Short term*
* Net of Cash

2,866

2,771

3,529

3,017
734

2016

2017

2018

2019

2020

2021

after 2021
16

Business Units

17

Performance by Business Unit

JBS Foods

JBS Mercosul

JBS USA Beef

JBS USA Pork

JBS USA (PPC)

Net sales (US$ million)

Net sales (US$ billion)

(Including Australia & Canada)

Net sales (R$ billion)

Net sales (R$ billion)

7.5

4.5
3.4

3.1

3.6

3.9

6.3

2Q14 3Q14 4Q14 1Q15 2Q15

EBITDA (R$ million)

14.3%

6.8

6.5

7.2

2Q14 3Q14 4Q14 1Q15 2Q15

440.4

1,028.3

EBITDA (US$ million)

2.2

937.8 964.0

634.3

8.6%

7.1%

5.5%
5.6% 5.2%

2.0%

554.6 534.1

3.6% 3.8%

504.9
376.4 376.8

325.1

2Q14 3Q14 4Q14 1Q15 2Q15

2.3

2.1

2.1

2.1

762.3 795.0

5.2

2Q14 3Q14 4Q14 1Q15 2Q15

2Q14 3Q14 4Q14 1Q15 2Q15

EBITDA (US$ million)

2Q14 3Q14 4Q14 1Q15 2Q15

EBITDA (US$ million)

11.1% 12.1% 9.9% 12.2% 8.1%

15.5%

113.8 113.2

338.6

95.7

93.2

186.6 228.5

64.6

2Q14 3Q14 4Q14 1Q15 2Q15

2Q14 3Q14 4Q14 1Q15 2Q15

108.6

2Q14 3Q14 4Q14 1Q15 2Q15

5.9

5.9

8.6%
10.1%

789.4
656.1 616.0

5.8
5.3

EBITDA (R$ million)

17.1% 18.0% 15.9% 17.7%

576.0

Net sales (US$ billion)

19.2% 17.4% 17.7% 20.7%

435.4

367.8 363.5

425.8

2Q14 3Q14 4Q14 1Q15 2Q15

EBITDA margin (%)

18

JBS Foods
Leading producer of prepared foods (PFPs) and fresh poultry and pork products
Operational Platform

Brazil

+66,000 employees

5.6 million birds per day

AM

CE

Production units located in the south,

southeast and mid-west regions

PE

BA

21,200 hogs per day

MT

DF

1
1
1

MG

SP

Production units located in the south

MS

and mid-west regions

1

RS SC

Production units located in the south,

southeast, northeast and mid-west
regions .

17 distribution centers

In 13 states

PR
5

08 slaughterhouses and deboning units

23 PFP units

3
1

80 thousand tons per month

30 slaughterhouses and deboning units

RJ

17 distribution centers

2nd largest producer and exporter of poultry and pork in Brazil

Large production platform, with 61 production units1 and nearly 66,700employees

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

Net Revenue LTM to 2Q15

Notes. Industrial Complex: location with one or more units of production;

R$15.4 billion

EBITDA LTM to 2Q15

R$2,637.6 million
17.2% Margin
19

% NR JBS S.A.

JBS Foods

47%

12%
19%

Net Revenue (R$ Million)

EBITDA (R$ Million)

17.7%

4,459.6

789.4

14.3%

3,084.5
440.4

44.6%

2Q14

2Q15

79.3%

2Q14

2Q15

Strong revenue growth, organic and inorganic.

EBITDA Margin expansion to 17.7% in 2Q15.
Revenue growth of 29.9% from PFPs in the domestic Market.
Continuous improvement in quality indicators, level of service and execution.
Client base enlargement in small and medium retail.
Successful international strategy.
20

JBS Foods
External Market Seara Presence in Retail

Domestic Market
Size of the Brazilian and its Growth
(k tons) (1)

18
163

JBS Foods
Market Share Gain( (2)

+0.9%

18

+9.7 p.p.

-0.4%

162

+1.2 p.p.

+ 7.2%

463

+2.3 p.p.

497

+ 7.5%

107
1S14
Frozen Products

+10.9 p.p.

115
1S15
Processed Products

Margarines

Pizzas

Source: AC Nielsen
(1) Processed Products + Margarines 1S (Jan-Jun) 2S Jul-Dec / Frozen Products +Pizzas: 1S (Dez-May) 2S (Jul-Nov)
(2) Includes Excelsior. Pizzas and Processed Products May/Jun14 x May/Jun15 and Fronzen Products and Margarines
Abr//May14 x Apr//Ma15

Innovation

Launching of 46 new SKUs

21

JBS Mercosul
Beef production in Brazil, Argentina, Paraguay and Uruguay, in addition to leather and other Related Business
Operational Platform

Brazil

+70,000 employees
PA
AM

~ 55,000 bovines per day

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

Paraguay and 2% in Uruguay

90,000 hides per day

AC
1
1

RO

MA

2
4

MT
6

15

3
4

3
1
9

Facilities in Brazil, Argentina, Uruguay,

3
1
5

China, Vietnam and Mexico

4
2
2

2
1
2

MS

44 distribution centers

1
2
1

06 feedlots

MG
1
1

47 beef processing facilities

PE

3
2

6 GO

PR

BA

CE

30 tanneries

ES

RJ
2

43 distribution centers

SP

SC

RS

11 central and 32 regional in Brazil

and 01 in Argentina

09 related businesses

05 beef processing facilities

01 distribution center
01 tannery

Argentina
Leadership in beef production

Biodiesel

Can making

Collagen

Paraguay
JBS is the leader in beef processing and has around 25% of market share in
exports of Paraguay

02 beef processing facility

01 tannery

JBS Carriers

Trading

Uruguay

Hygiene and Clean

Great access to export markets; the only country to export fresh beef to the US

01 beef processing
02 tanneries

Casings

TRP Complementary to JBS
Carriers

Recycling

Net Revenue LTM to 2Q15

R$28.0 billion

EBITDA LTM to 2Q15

R$1,841.9 million
6.6% Margin
22

% NR JBS S.A.

JBS Mercosul
19%

Net Revenue (R$ Million)

7,205.4

EBITDA (R$ Million)

10.1%

6,291.4

5.2%

634.3
376.8

14.5%
-40.6%

2Q14

2Q15

2Q14

2Q15

Margin compression due to shortage of cattle supply and

expressive reduction in Brazilian exports.
Highlight of the quarter was the industrialized/further
processed category, which posted increase in volume and
prices in both the domestic and external markets.
Investments in marketing and product portfolio innovation.
Improved supply and demand balance and recovery of exports
to major markets will be positive for the Company in the
coming quarters.
23

JBS USA Beef

Beef production in the United States, Canada and Australia
Operational Platform

United States

+30,000 employees
WI

~41,000 bovines per day

ID

NE

28,000 in the US

UT

4,000 in Canada

CO

1
2

PA

KS

9,000 in Australia

09 beef processing facilities

OK

AZ

11 feedlots

11,000 hides per day

MI

01 tannery

TX

5,000 in the US

3
1

06 carriers units

6,000 in Australia

16 feedlots (bovine)

bovines

01 in Canada / Capacity of 70,000

bovines

05 in Australia / Capacity of 152,000

bovines

14 distribution centers
1

15 processing facilities

Australia and New Zealand

11 in the US/ Capacity of 1.0 million

2
2

4
1

Leadership in beef exports

Leadership in the processing of lamb (22,000 lamb
per day)
#1st in the Food Industry Ranking
Growth of 17% in revenues from 2013 to 2014

Canada
Growth of 49% in revenues from 2013 to 2014

14 DCs in Australia and 06 carriers

 09 bovine, 05 lamb and 01 hogs

07 feedlots
 05 bovine and 02 lamb

01 tannery
14 distribution centers
03 case ready and 03 small goods facilities
01 beef processing facility
01 feedlot (bovine)
01 trading

units in the US

Net Revenue LTM to 2Q15

Note 1. Source: Food&Drink Business Magazine; Note 2. Includes Primo Smallgoods

US$22.9 billion

EBITDA LTM to 2Q15

US$1,245.1 million
5.4% Margin
24

% NR JBS S.A.

JBS USA Beef (including Australia and Canada)

6%
16%

47%

12%
19%

Net Revenue (US$ Million)

5,941.9
5,331.4

3.8%
2.0%

228.5

11.5%

2Q14

EBITDA (US$ Million)

108.6

2Q15

2Q14

110.4%

2Q15

Volume and price improvement both in domestic Market and

exports.
Primo Group Results consolidation in JBS Australia.
Resilient US demand for beef with growth in imports, mainly
from Australia.
Increase in Australia exports.
Strong cow retention for herd rebuilding in the US, cow
inventories growing 2.5% and heifer growth of 6.5%.
25

JBS USA Pork

Pork production in the United States
Operational Platform

United States

+6,000 employees

~ 51,300 hogs per day

MN
1

100% in the US
IA
1

02 case ready facilities

03 hogs processing facilities

CO
1

Convenience products

KY

CA

NC
1

02 case ready facilities

~3,000 lamb per day

01 lamb processing facility

Products

Main Brands
Swift Premium
Dry Rubbed Ribs

Swift Premium
Boneless Backrib

Net Revenue LTM to 2Q15

Swift Premium
Rubbed Loin Filet

Swift Premium
Boneless Pork Chops

US$3.5 billion

EBITDA LTM to 2Q15

US$366.7 million
10.6% Margin
26

% NR JBS S.A.
6%

JBS USA Pork

Net Revenue (US$ Million)

EBITDA (US$ Million)

11.1%

1,028.3

113.8

8.1%

795.0

64.6

-22.7%

2Q14

-43.2%

2Q15

2Q14

2Q15

Growth in number of animals available for processing and

consequent increase in sales volume.
Growth in exports volume.

Increase in sales of higher value added products.

27

JBS USA Chicken (Pilgrims Pride Corporation - PPC)

Poultry production in the United States, Porto Rico and Mexico
Operational Platform

United States

+44,000 employees

~ 8.1 million birds per day

6.5 million in the US

250,000 in Porto Rico

WV

1,4 million in Mexico

TN

AR

17 distribution centers

TX
4
1

Located in Mexico

KY
AL

LA

3
1
1

VA
1

NC

1
1

24 processing facilities
2

SC
GA

05 case ready facilities

7
1

FL
1
1

+ 3,500 contract growers

36 hatcheries

Mexico

28 feed mills

With Tyson acquisition, PPC now have an additional of three

facilities, adding 600,000 birds per day of capacity and 5,400
employees

06 poultry processing facilities

17 distribution centers

Porto Rico

01 processing facility

Net Revenue LTM to 2Q15

US$8.5 billion

EBITDA LTM to 2Q15

US$1,592.4 million
18.8% Margin
28

% NR JBS S.A.

JBS USA Chicken (Pilgrims Pride Corporation - PPC)

Net Revenue (US$ Million)

16%

EBITDA (US$ Million)

20.7%

2,186.8
2,053.9

15.5%

425.8

338.6

-6.1%

25.7%

2Q14

2Q15

2Q14

2Q15

Focus on operational excellence.

Effective strategy in product portfolio and management of sales
channels.
Geographic, portfolio and sales channels diversification,
optimization of risk management and product pricing.
Integration of the PPC and Tyson Mexico progressing as per
schedule.

29

Recently Announced
Acquisitions

30

Moy Park

The Enterprise Value was fixed at US$1.5 billion, adjusted by:

a. Assumption of debt, including GBP300 million bond with maturity in
05/2021.
b. Cash.
c. Working Capital Variation.

31

Moy Park - Overview

Company Description

Source: Company

Net Revenue (R$ Million)

Others
7%

+37.5%

+70 years of activity.

5,508
Processed
food
51%

4,723

Fresh poultry sales mainly to UK retailers &

convenience foods sales to retailers and food service
channels.

4,006

Fresh poultry
42%

Vertically integrated poultry producer.

2012

Market leader in high value added

categories.
A leading poultry processing company in
UK.
13 production units with 11.8 thousand
team members.
79% of Revenues comes in the UK and 21%
in Continental Europe.

2013

2014

Footprint
Fresh poultry
UK Convenience
EU Convenience
Breeding Grounds

Ballymena
Dungannon

Craigavon

Dublin

Anwick
Ashbourne
Grantham
Huntingdon

Peterborough

Schagen
Marquise
HninBeaumont
Orleans

32

Cargill Pork
Business Unit

Transaction Value of US$1,450 million, on a debt-free, cash-free basis to be

paid in cash at closing, adjusted by Working Capital variation.

33

Cargill Pork U.S. - Overview

Company Description

2 well-invested pork processing facilities

Slaughter capacity of 38.2 thousand hogs/day

Bacon production of 2 million pounds/week

4 Genetic Units, ~160 thousand Sows that supply 33%
of the total hogs processed by the business.

Financial Highlights

Annual Net Revenue of US$2.56 billion.

Estimated EBITDA of US$212 million based on JBS

USA Pork 5-year average EBTIDA Margin of 8.3%.
81% Net Revenue in the US and 19% in Exports.

Footprint

Dalhart, TX ~ 22,000 acres, 68,000 Sows and

advanced live hog production through Group Housing
and antibiotic free (ABF) systems.

1
1
1

5 Feed Mills.

2
1

1.1 million metric tons of annual feed capacity

annually.

1
2

1
Feed mill
Procesing facilities

Genetics

34

Mission

To be the best in what we set out to do, completely

focused on our business, ensuring the best products
and services for our customers, consistency for our
suppliers, profitability for our shareholders and the
opportunity of a better future for all our team
members.