2. Agenda
Company Overview
JBSS3
Stock Performance Market Overview
and Ongoing Actions
3Q10 Highlights
2
3. Who We Are
Our Mission
To be the best at what we set out to do, totally focused on our business, ensuring the best
products and services for our customers, solidity for our suppliers, satisfactory profitability for
our shareholders and the certainty of a better future for all our employees.
Our Values
Excellence
Planning
Determination
Discipline
Availability
Openness
Simplicity
3
4. Corporate Structure
CHAIRMAN
JBS S.A.
Joesley Batista
CEO
President
JBS S.A.
Wesley Batista
Corporate Investors Corporate Commercial and
Finance CEO JBS
Law Relations And Adm. New business Distribution Dairy
Director Brazil MERCOSUL Hides
Department Jeremiah Controller José Luis International Gilson
Marcos Marco Roberto
Francisco O’Callaghan / Eliseo Medeiros Offices Teixeira
Bastos Bortolon Motta
de Assis e Silva Guilherme Arruda Fernandes Marco Bichieri
Marcos graduate from Francisco is the director Jerry has a Engineering Eliseo has a Business Marco has more than 10 José Luiz has a degree Marco has more than 24 Roberto has more than 20 Gilson has more than
Mackenzie University in of the Law Department. Degree from the University Administration and years experience in JBS. in Accounting and has years of experience in the years in the Leather 25 years experience in
Business Administration Has a post graduated of Cork College in Ireland. Accounting Degree from Initially started as a been working in the Beef Protein Sector. Worked Industry. Was Finance and Controller
and has a MBA in from the University of Immigrated to Brazil in the University Católica de Production Manager and Sector since 1975. 14 for more than 20 years in responsible for of business units of
Finance from San Mackenzie. 1979. Started working in Pernambuco and a post in 2009 was promoted to year in Bertin and Bertin. incorporating BMZ Hides Bertin, where he later
Francisco State the Beef Sector in 1983 graduate degree in Chief Operating Officer of started at JBS in 1997. with the JBS Group. served as a member of
Started working at JBS in
University. Worked in and in JBS in 1996 in order Business Administration the Brazil Beef Division. January 2010 became the Board for 5 years.
December of 2001 and
many financial institutions to develop the Trade Area from FGV. He started with the Director of New
later became a member
in Brazil, primarily in and eventually became the JBS in August 2005 and Business.
Investment banking, of the Executive Board in Investors Relations Officer. eventually became
Financial Projects, and January of 2007. Director of Administration
Guilherme graduated in
Portfolio management. Business and Economics and Corporate
Started in 2008 with JBS. from the University of Governance. He has 8
California. Start in the years Experience in
Company in 2009 after Auditing and Consulting
working for 7 years for and 10 years in the Retail
BTG Pactual. industry.
4
5. Corporate Structure
CEO
President
JBS S.A.
Wesley Batista
CEO
USA
Don Jackson
JBS Five Human
Pilgrim's Pride Pork CFO JBS Carriers Trading CEO
Beef USA Rivers Resources
William W. Martin André Moe Robert Australia
Bill Rupp Mike Bob
Lovette Dooley Nogueira Schroder Wadland Iain Mars
Thoren Daubenspeck
William is the President, Bill has learned the Beef Martin has a degree in André has a degree in Mike is the President and Moe has more than 30 Robert has 27 years of Robert assumed this Iain was born in England
CEO and Director of Industry from the ground Biology from the Economics from the CEO of Five Rivers since years experience in meat trading experience position in February and worked in the Beef
Pilgrim’s Pride since up. Right out of college, University of Eastern Universidade Federal the Start of the Company. Transportation Sector. with 17 years of that at 2009 and before that Industry for his whole life.
January 2010. He is he began learning the Illinois. Worked in Swift Fluminense, a Has a Masters of Science Graduated from the JBS enhancing exports was in JBS He became the President
bringing to Pilgrim’s 27 business at Cargill where for his whole life, having specialization in in Agricultural Economics University of Ryerson, out of Australia and New Packerland from 2002 and CEO of JBS Australia
years of experience in he worked for 25 years. started the company as a Marketing from PUC-SP, and has a degree in Toronto, Canada. Zealand. Recently to 2008. in 2007, after the
the poultry industry. He was a general plant manager trainee in 1983. a MBA from Fundação Agribusiness from the Occupied the position of transferred to the US to acquisition of Swift. He
Since 2008, he served as manager and eventually In 2007 was given the Don Cabral and a University of Washington Vice President of Sales, run the group’s trading has worked in JBS since
president and COO of went to build a meat position of president of the masters in Economics State. Dedicated Operations at business unit 2005.
Case Foods, Inc processing facility in Pork Division of JBS USA. from Universidade de KLLM and before that
. Furthermore, he spent Canada. He later Brasilia. Worked more was in various executive
25 years with Tyson became the VP of than 20 years in the positions at CR England .
Foods in various senior Operations, then was the banking sector and Moe Joined JBS to run
management roles. President of the Beef started at JBS USA in the carrier business
Business, and eventually 2007 after the Swift
became the president of acquisition.
Cargill Meat Solutions.
Bill joined JBS in 2010 as
the President of the US
Beef Business.
5
6. Shareholders
Treasury
1.7%
PROT - FIP
8.0%
Market
18.7%
FB Participações S.A.
54.5%
BNDESPAR
17.0%
Average daily trade volume of R$ 35.2 million in 4Q10
Source: JBS
6
7. Leading, Sizeable and Diversified Business Platform
Beef Chicken Pork Hides / Leather Dairy Lamb
Ranking 1st 2nd 3rd 1st 3rd 1st
Global Global U.S.A. Global Brazil Global
Production Units 65 39 3 23 7 6
‘000 heads/day: mm heads/day: ‘000 heads/day: ‘000 hides/day: ‘000 tons/day: ‘000 heads/day:
41.7 68.3 5.4
1.0
Geographic 5.0
Presence and
28.8 7.3 49.0 6.0 4.0
Installed
Capacity 9.0 6.0 20.0
3.0
0.9 0.6 2.0
Total: 89.4 Total: 7.9 Total: 49.0 Total: 82.3 Total: 5.4 Total: 24.0
Well-Recognized
Brands
7
9. Distribution Platform with Access to Key Markets
Growth 1
-2 %
3%
4% Growth 1
9%
13 %
8%
Growth 1
Growth 1
7%
2%
25 %
8%
16 %
5% Distribution Center
Sales Offices
1 Real growth of total consumption in tons – 2010E to 2015E
Source – OECD-FAO 9
10. Agenda
Company Overview
JBSS3
Stock Performance Market Overview
and Ongoing Actions
3Q10 Highlights
10
11. Animal Protein Consumption Growth in the Last Decade
47.7%
EU - 27
North America 41.4%
7.5% 23.7% East Asia
Central 29% Middle East
America Southeast
70.2% Asia
48.7%
Sub Saharan
Africa
South America 32.2%
23.3%
Oceania
3
Source: FAPRI February 2010
11
15. Global Supply-Demand for Poultry
GLOBAL SUPPLY-DEMAND FOR POULTRY
Choose Year for Chart: 2020
Estimates for Chart GS
Goldman Sachs Estimates 2020 GLOBAL SURPLUS (DEFICIT) OF POULTRY MEAT
Goldman Sachs Estimates
European Union Russia
Surplus Million tons
-
Deficit Million tons 0.6
1.1 0.9
3.7
8.9 9.1 3.2
Prod. Imports Exports Cons. Prod. Imports Exports Cons.
United States China
1.1 0.2
-
4.1
21.6 22.5
19.1
15.1
Prod. Imports Exports Cons. Prod. Imports Exports Cons.
Brazil India Thailand
0.1 - -
-
0.8
7.6
17.0 3.7 3.8 1.9
9.4 1.1
Prod. Imports Exports Cons. Prod. Imports Exports Cons. Prod. Imports Exports Cons.
Source: Goldman Sachs
15
16. Global Supply-Demand for Pork
GLOBAL SUPPLY-DEMAND FOR PORK
Choose Year for Chart: 2020
Estimates for Chart GS
Goldman Sachs Estimates 2020 GLOBAL SURPLUS (DEFICIT) OF PORK MEAT
Goldman Sachs Estimates
Canada European Union
Surplus Million tons
0.1 1.1
0.3 Deficit Million tons
1.3
22.7 21.6
2.2
1.2
Prod. Imports Exports Cons. Prod. Imports Exports Cons.
United States Russia
0.5 -
2.5 1.1
11.9 4.1
9.9 3.1
Prod. Imports Exports Cons. Prod. Imports Exports Cons.
Mexico Brazil China
0.3
-
0.2 1.4
0.8
55.8 56.4
4.4
2.2
1.6 3.0 (0.3)
Prod. Imports Exports Cons.
Prod. Imports Exports Cons. Prod. Imports Exports Cons.
Source: Goldman Sachs
16
17. Global Supply-Demand for Beef
GLOBAL SUPPLY-DEMAND FOR BEEF & VEAL
Choose Year for Chart: 2020
Estimates for Chart GS
Goldman Sachs Estimates 2020 GLOBAL SURPLUS (DEFICIT) OF BEEF & VEAL
Goldman Sachs Estimates
United States European Union
Surplus Million tons
1.5 1.6 0.2
Deficit Million tons 0.8
12.8 12.7 8.0 8.6
Prod. Imports Exports Cons. Prod. Imports Exports Cons.
Brazil China
1.2 -
0.2
6.0
15.4 7.3 8.5
9.5
Prod. Imports Exports Cons. Prod. Imports Exports Cons.
Argentina & Uruguay India Australia
- 0.4 - 0.4 -
1.6
3.6 3.2 4.1 2.4
3.7
0.8
Prod. Imports Exports Cons. Prod. Imports Exports Cons. Prod. Imports Exports Cons.
Source: Goldman Sachs
17
18. Beef
Exports Brazil vs USA
Both Brazil and the US continue to lead global beef exports.
Brazilian Beef Exports (Tons) US Beef and Veal Exports (Tons)
1,400,000 4,500 800,000 5,000
9,8%
24,4% 4,000 700,000 4,500
1,200,000
4,000
3,500 600,000 23,1%
1,000,000 2,7% 3,500
3,000 500,000 3,000
800,000 2,500 400,000 2,500
600,000 2,000 2,000
300,000
1,500 1,500
400,000 200,000
1,000
1,000
100,000 500
200,000
500
0 0
0 0 2005 2006 2007 2008 2009 Jan-Nov Jan-Nov
2005 2006 2007 2008 2009 2010 2009 2010
Br Beef Exports (Tons) Avg. Price (US$/Ton) USA Beef & Veal Exports (Tons) Avg. Price (US$/Ton)
Source: USDA and Secex
18
19. Chicken
Exports Brazil vs USA
The reopening of the Russian market in late August should boost US chicken exports
in the latter half of 2010.
Brazilian Chicken Exports (Tons) US Chicken Exports (Tons)
2,000 4,000,000 1,200
-4,8%
5,000,000 1,800
13,4% 3,500,000
1,000
1,600 -1,5%
3,000,000
4,000,000
1,400 800
6,0%
2,500,000
1,200
3,000,000 2,000,000 600
1,000
800 1,500,000
2,000,000 400
600 1,000,000
200
1,000,000 400 500,000
200
- -
0 0 2005 2006 2007 2008 2009 JAN-NOV JAN-NOV
2005 2006 2007 2008 2009 2010 09 10
BR Chicken exports (Tons) Avg. Price (US$/Ton) USA Broiler Meat Exports (Tons) Avg. Price (US$/Ton)
Source: USDA and Secex
19
20. Agenda
Company Overview
JBSS3
Stock Performance Market Overview
and Ongoing Actions
3Q10 Highlights
20
21. Highlights - 3Q10
Net revenue for the 3Q10 was R$14,069.6 million, practically stable in comparison to the 2Q10,
which was R$14,116.3 million.
Consolidated EBITDA increased by 2.6% q-o-q, reaching R$1,026.4 million for the
3Q10. EBITDA margin was 7.3% in the quarter. The main operating highlights were:
JBS Mercosul operations presented EBITDA of R$363.7 million and EBITDA margin of
10.4% for the quarter, versus 9.5% in 2Q10, despite challenges such as cost of raw materials
and FX-rate.
JBS USA Pork presented EBITDA of US$90.8 million and a historical EBITDA margin of
11.8% in 3Q10.
JBS USA Chicken (PPC) had an EBITDA of US$170.0 million, 33.2% higher q-o-q, with
EBITDA margin of 9.9%.
Consolidated customer base grew 15.3% q-o-q, primarily in Mercosul, and now exceeds 350
thousand clients globally.
21
22. 1
Consolidated Performance by Protein 1
R$ Millions Net Income EBITDA Margin EBITDA
Beef 8,624.2 448.2 5.2%
Pork 1,350.8 158.8 11.8%
Chicken 2,994.1 309.5 10.3%
Others 1,100.5 109.8 10.0%
Total 14,069.6 1,026.4 7.3%
Export Growth Customer Base Evolution
4,500.0
400.0
4,000.0
350.0
3,500.0
300.0
3,000.0
250.0
2,500.0
2,000.0 200.0
1,500.0 150.0
1,000.0 100.0
500.0 50.0
- -
4Q09 1Q10 2Q10 3Q10 4Q09 1Q10 2Q10 3Q10
Exports (R$ Millions) Exports (mil tons) Customers (thousand)
(1) in Local GAAP
22
25. Revenue Distribution by Market
Revenue Distribution by Market 3Q10 Revenue Distribution by Market 2Q10
Pork Chicken
Pork Chicken
Exports 1% Exports 2% Exports 2%
Exports 2%
Beef Exports
Beef Beef Exports
25% Beef
Domestic 44% 25% Domestic 44%
Chicken
Domestic 20% Chicken
Domestic 20%
Pork
Pork
Domestic 8%
Domestic 7%
Exports = 28% Domestic Market = 72%
Exports = 29% Domestic Market = 71%
Revenue Distribution by Business Units 3Q10 Revenue Distribution by Business Units 2Q10
USA Chicken Mercosul
22% 27%
USA Pork
9%
* USA Beef *
42%
Source: JBS
* Including Australia 25
26. EBITDA Distribution by Business Units
3Q10 2Q10
USA BEEF *
Mercosul 18.1% USA BEEF*
36.4% Mercosul 36.1%
43.9%
USA PORK
15.9%
USA PORK
USA Chicken USA Chicken 7.4%
29.7% 12.6%
Source: JBS
* Including Australia 26
27. JBS Consolidated Exports Distribution
JBS Exports 3Q10 JBS Exports 2Q10
Taiwan
Canada 2% Others
4% 12% Africa and Middle East
China 19%
4%
South Korea Mexico
5% USA 12%
7% E.U. Japan
7% Russia Hong Kong 10%
10% 8%
US$2,326.9 Millions US$2,3331.0 Millions
Source: JBS
27
28. Debt Profile
The ratio of net debt to EBITDA was 2.9x in the quarter, slightly less than 3.0x in 2Q10.
It is important to note that the liquidity of the balance sheet continues to improve, as the cash
position amounted to R$4,402.5 million (25.2% higher than 2Q10), almost 90% of short-term debt,
compared to 70.0% in the previous quarter and 55.0% in 1Q10.
Additionally, the debt profile also improved. ST debt reached 33.0% of total debt in the 3Q10,
compared to 36.0% in the 2Q10 and 40.0% in the 1Q10.
Leverage ST / LT Profile
3.3
3.1 3.1 3.0 2.9x*
60% 64% 67%
40% 36% 33%
1Q10 2Q10 3Q10
3Q09 4Q09 1Q10 2Q10 3Q10
Short term Long term
Source: JBS
*LTM including Bertin and Pilgrim’s Pride pro-forma.
EBITDA Margin EBITDA 28
29. Agenda
Company Overview
JBSS3
Stock Performance Market Overview
and Ongoing Actions
3Q10 Highlights
29
30. Stock Performance
JBS’ shares fell 7.5% when compared with the 2nd Quarter closing price. The Ibovespa and the
S&P 500 Indexes increased 13.4% and 11.1% respectively, in 3rd Quarter 2010.
The sector, in general, was impacted by factors such as FX-Rate and rising input cost.
The Company continues to focus on measures to enhance the share price.
JBS vs Ibovespa in the 3Q10
130.0
125.0
120.0
115.0
110.0
105.0
100.0
95.0
90.0
85.0
80.0
Jul-10 Aug-10 Sep-10
JBSS3 IBOV
Source: Bloomberg (Base 100 = 01/07/10)
30
31. Ongoing Actions
Pending issues Actions
JBS bought 50% of Inalca JBS in 2008 paying a total of € 218.5
INALCA JBS
million.
JBS filed a request at the International Chamber of Commerce
in Paris to guarantee the right to nominate the CFO, which has
been denied JBS from the outset.
The Company requested Ernst & Young to conduct a full audit,
which in progress.
The Company closed 3 plants and concentrated its production in a
Argentina more efficient industrial complex.
Laid off 1,500 employees from 4 plants.
Negotiated commercial agreements that will increase plants
utilization and deficiencies as well as maximizing the Pilar Distribution
Center.
Transferred headquarters from Buenos Aires to Rosario, reducing
administrative expenses.
3Q10 income already reflects an improvement over the previous
quarter due to these actions.
31
32. Ongoing Actions
Pending issues Actions
JBS paid a premium of R$ 521,940,000.00 to its Debenture holders
Convertible Debentures
on December 23rd, 2010.
JBS communicated that it is in advanced stages of negotiation with
its main Debenture holder for the 2nd issuance of mandatorily
convertible Debentures.
The new Debentures will have the following characteristics:
Amount: R$4 billion Conversion price of R$ 9.50 per
share (JBSS3), plus interest paid on
Period: 5 years
the debentures, net of taxes, minus the
Interest:8.5% per annum, paid remuneration paid to shareholders in
quarterly the period (dividends, interest on
equity, etc).
Mandatorily convertible into JBS
S.A. shares at the end of the 5th year.
The management is in advanced studies supported by specialized
Debt Distribution and Income Tax Rate
consultants, aiming to rebalance the Company's debt, according to the
cash flow of each region.
The Company believes that a solution will be implemented during the
first half of 2011, which should reduce the cost of capital and maximize
the goodwill amortization, increasing the Company's profitability
32
33. Coverage by Equity Analysts
The Company continues to work on increasing coverage by equity analysts.
Please find here below the list of present analysts covering JBS.
Institution Analyst Recommendation Target Price
Banco do Brasil Mariana Peringer Buy 13.18
Bradesco Ricardo Boiati Market Perform 8,80
BTG Pactual Fábio Monteiro Buy 9.30
Goldman Sachs Gustavo Wigman Neutral 7,30
HSBC Pedro Herrera Overweight 9.50
Merrill Lynch BofA Fernando Ferreira Neutral 8.00
Santander Luis Miranda Buy 9.60
Safra Erick Guedes Outperform 10.35
UBS Gustavo Oliveira Neutral 8.80
Votorantim Luiz Carlos Cesta Neutral 8.80
Source: Bloomberg and Company
33
34. IR Contacts:
ir@jbs.com.br
+55 11 3144 4447
www.jbs.com.br/ir
“In God We Trust, Nature We Respect”
34
