1. 2nd Quarter 2010 Results
August 16th, 2010
The Company posted a landmark EBITDA of R$1.0 billion in 2Q10.
2. 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.
2
3. Presenters
Joesley Mendonça Batista
CEO of JBS S.A.
Wesley Mendonça Batista
CEO of JBS USA
Jeremiah O’Callaghan
Investors Relations Officer
Guilherme Arruda
Investors Relations
3
4. Agenda
Company Overview
Market Overview 2Q10 Highlights
Short Term Outlook
4
5. 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
5
6. 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 75 33 3 26 7 6
Units
‘000 heads/day: mm heads/day: ‘000 heads/day: ‘000 hides/day: ‘000 tons/day: ‘000 heads/day:
41.2 55.6 1.4
1.1
Geographic 6.7
Presence 28.6 6.9 48.5 28.6 4.5
and Installed
Capacity 8.7 6.0 23.0
3.0
1.0 0.7 1.2
Total: 90.3 Total: 7.6 Total: 48.5 Total: 91.4 Total: 1.4 Total: 27.5
Well-
Recognized
Brands
6
7. Our Strategy
Rationale
Branding • Associating quality and branding to
increase client loyalty
• Customized and further processed
Value added products products for the
end users
Sales and distribution platform • Expanding a global distribution
platform to reach end clients
• Developed an efficient
Production platform and diversified global
production platform
Cost reduction,
Financial Experienced Risk
process
structure management management
EBITDA Margin optimization
JBS’ Value & Strategy
7
8. 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 8
9. Agenda
Company Overview
Market Overview 2Q10 Highlights
Short Term Outlook
9
11. Animal protein consumption growth in the last decade
Former USSR
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
12. Beef Exports
Rising demand in emerging economies drove export volumes up in the semester both
in Brazil and in the US but more importantly, pricing was very strong. As beef production
is long cycle, some of this export demand will tend to boost chicken exports, particularly
out of the US, in the coming years.
US Beef and Veal Exports (Tons) Brazilian Beef Exports (Tons)
700.000 4.600 1.400.000 4.500
4.000
600.000 5,3% 4.500 1.200.000
26,6%
3.500
4.400
500.000 1.000.000
3.000
4.300
400.000 24,3% 800.000 2.500
4.200 7,0%
300.000 600.000 2.000
4.100
1.500
200.000 400.000
4.000
1.000
100.000 3.900 200.000
500
0 3.800 0 0
2005 2006 2007 2008 2009 JAN-JUN 09 JAN-JUN 10 2005 2006 2007 2008 2009 JAN-JUN 09 JAN-JUN 10
Beef Exports Avg Price in US$ per Ton Beef Exports Avg Price in US$ per Ton
Source: USDA and Secex
12
13. Chicken Exports
Strong domestic demand in both Brazil and the US limited exports in the first
semester although it is clear that prices will tend to push up export volumes from now on
particularly taking into account the reopening of the Russian market for US product.
Brazilian Chicken Exports (Tons) US Poultry Exports (Tons)
3.500 2.000 3.500.000 1.200
1.800 -2,9%
3.000 3.000.000
17,3% 1.000
1.600
2.500 1.400 2.500.000
800
1.200
2.000 2.000.000
1,1%
1.000 -6,5% 600
1.500 1.500.000
800
400
1.000 600 1.000.000
400
500 200
500.000
200
0 0 - -
2005 2006 2007 2008 2009 JAN-JUN 09 JAN-JUN 10 2005 2006 2007 2008 2009 JAN-JUN 09JAN-JUN 10
Chicken Exports Avg Price in US$ per Ton Chicken Exports Avg Price in US$ per Ton
Source: USDA and Secex
13
14. Agenda
Company Overview
Market Overview 2Q10 Highlights
Short Term Outlook
14
15. Highlights for the 2nd Quarter 2010
Revenues increased 52.5% y-o-y and 12.5% to R$14,116.3 million
• JBS USA increased 67.6% y-o-y and 12.9% q-o-q
• JBS MERCOSUL increased 123.1% y-o-y and 19.1% q-o-q
• JBS Exports increased 37.0% q-o-q reaching 29% of sales
EBITDA increased 163.3% y-o-y and 16.0% q-o-q.
Leverage remained fairly stable at 3.0x
Consolidated customer base grew by 22.2% q-o-q, reaching more than 300
thousands customers in 2Q10.
15
18. Revenue Distribution by Market
Revenue Distribution by Market 2Q10 Revenue Distribution by Market 1Q10
Pork Chicken
Pork Chicken
Exports 2% Exports 1% Exports 2%
Exports 2%
Beef
Beef Exports Exports 20%
Beef Beef
25% Domestic 44% Domestic 47%
Chicken
Domestic 22%
Chicken
Domestic 20%
Pork
Pork
Domestic 8%
Domestic 7%
Exports = 29% Domestic Market = 71% Exports = 23% Domestic Market = 77%
Revenue Distribution by Market 2Q10 Revenue Distribution by Market 1Q10
USA Chicken Mercosul USA Chicken Mercosul
22% 27% 25% 23%
USA Pork
9% USA Pork
10%
USA Beef USA Beef
42% 42%
Source: JBS
18
19. EBITDA Distribution by Business Units
2Q10 1Q10
Mercosul USA BEEF USA BEEF
33,5% 34,7% Mercosul 36,1%
43,9%
USA PORK USA PORK
USA Chicken 8,7% USA Chicken 7,4%
22,7% 12,6%
Source: JBS
19
20. JBS Consolidated Exports Distribution
JBS Exports 2Q10 JBS Exports 1Q10
Taiwan Taiwan
Canada 2% Others Canada 2% Others
12% Africa and Middle East Africa and Middle East
4% 4% 12%
China 19% China 16%
4% 4%
Mexico
South Korea Mexico South Korea 14%
5% USA 12% 4% USA
7% E.U. Japan 7% Japan
E.U.
7% Russia Hong Kong 10% 8% Russia Hong Kong 12%
10% 8% 8% 9%
US$2,3331.0 Million US$1,765.4 Million
Source: JBS
20
21. Debt
While JBS leverage remained fairly constant in the quarter (at 3.0x LTM EBITDA), the liquidity of the
balance sheet improved significantly.
The company’s cash position increased 17,5% when compared with 1Q10 (which represents 70% of
the company’s ST debt, from 55% in the previous quarter), while ST debt decreased 7,7% in the same
period.
Considering the US$700mm bond issuance in July, ST debt on a pro-forma basis would represent
roughly 33% of total debt, closer to the company’s target of having less than 30% of its total debt
maturing in the ST.
Leverage ST / LT Profile
3,3 3,1 3,1 3,0x *
2,6
61% 60% 64% 67%
39% 40% 36% 33%
2Q09 1Q10 2Q10 **
(Pro-Forma)*
2Q09 3Q09 4Q09 1Q10 2Q10
Short term Long term
Source: JBS
*LTM including Bertin and Pilgrim’s Pride pro-forma.
** Pro-Forma takes into account senior unsecured notes issued July, 2010
21
22. Shareholders
PROT - FIP
8%
Market
19,1%
Controlling
Holding
55,5%
BNDESPAR
17,3%
Average daily trade volume of USD 50,4 million in 2Q10
Source: JBS
22
23. Agenda
Company Overview
Market Overview 2Q10 Highlights
Short Term Outlook
23
24. A Closer look at synergies – Pilgrim’s Pride
JBS already captured US$ 150 million in synergies with Pilgrim’s Pride acquisition of a
total estimated amount of US$ 220 million. Descrição
The next graphic shows the origin of the captured synergies.
Captured Synergies On going Synergies
Size Time
US$ 150 Million
Efficiency gains in the average
Logistics Optimization US$50mm 2 years
load factor for trucks
General Logistics
23% Reaching final customers
administrative Exports through the JBS current sales US$20mm 2010
expenses structure.
34%
Suppliers
20%
Corporative Total US$70mm
23%
Source: JBS
24
25. A Closer look at synergies – Bertin S.A.
JBS already captured R$ 154 million in synergies due to the merger with Bertin of a total
estimated amount R$ 485 million. Descrição
The next graphic shows the origin of the captured synergies.
Captured Synergies On going Synergies
Size Time
R$154 Million Maximization of sales channels
Exports and reviewing contracts for R$31mm 2010
freight
Suppliers Capturing value with the
Administrative Hides R$45mm 2010
16% greatest volume of processed
expenses
Logistics 26%
13%
Review of terms of contract non-
Suppliers R$10mm 2010
core suppliers (eg packaging)
Exports Optimization of fixed costs and
45% Industrial Processes streamlining of existing R$245mm 2 Years
contracts
Total R$331mm
Source: JBS
25
26. Final Considerations
Having seen double digit revenue growth and EBITDA of R$1 billion in the last quarter, we are on track to
deliver the top line growth and EBITDA budgeted for 2010.
An increase in our exports q-o-q of 37% demonstrates the recovery of international trade which we believe
will continue to grow and serve as a driver for better margins.
Rating agencies upgrades demonstrate recognition for the effort we continue to make to maintain financial
improvements with a view towards reaching Investment grade category.
We surpassed 300 thousand active customers globally in 2Q10, proving that our distribution strategy
(another margin driver) continues to gain traction.
26
27. IR Contacts:
ir@jbs.com.br
Q&A +55 11 3144 4447
www.jbs.com.br/ir
“In God We Trust, Nature We Respect”
27
