institutional presentation including 2q14 results

8/11/2019 Institutional Presentation Including 2Q14 Results

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JBS Institutional PresentationIncluding 2Q14 Results


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This release contains forward-looking statements relating to the prospects of the business, estimates for

operating and financial results, and those related to growth prospects of JBS. These are merely projections and,as such, are based exclusively on the expectations of JBSmanagement concerning the future of the businessand its continued access to capital to fund the Companys business plan. Such forward-looking statementsdepend, substantially, on changes in market conditions, government regulations, competitive pressures, theperformance of the Brazilian economy and the industry, among other factors and risks disclosed in JBS fileddisclosure documents and are, therefore, subject to change without prior notice.

Disclaimer


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JBS at a Glance

Leadership position in the global food industry

Estimated revenues of around US$50 billion in 2014

Presence in 5 continents and sales to more than 150 countries

Production facilities in the low cost geographies

Founded in the 1950s in Midwest of Brazil

IPO in 2007

More than 195,000 employees

Productioncapacity

12 million birds/day

Chicken

70,000 hogs/day

Pork

25,000 lambs/day

Lamb

100,000 hides/day

Leather

100,000 heads/day

Beef

76,000 tons/month

VAP

Note 1: Value Added Products


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Market Analysis


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Worlds Food* Surpluses and Deficits

1965

1990

1970

1995

1975

2000

1980

2005

1985

2010

150

100

50

0

50

100

150

NorthAmerica

SouthAmerica

Australia

Eastern Europeand former

Soviet Union

Western

Europe Asia

Middle East

& Africa

Central

America

Cereals, rice, oilseeds, meals, oils and feed equivalent of meat.Source: The Economist

Net intra-regional trade, million tonnes


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USA17%

Brazil13%

E.U.11%

China10% Argentina

4%

Others45%

USA

16%

Brazil15%

E.U.11%

China10%

India*5%

Others43%

Global Beef Consumption

Sector Overview: Beef

Global Beef Production

Source: USDA*Buffaloes

Total 2013: 67.7 mm tons cwe

2013

Beef Trade Commerce in 2013 (mm tons cwe)

# Largest exporters Largest importers

1 Brazil 1,849 20% Russia 1,031 14%

2 India* 1,765 19% USA 1,021 14%

3 Australia 1,593 17% Japan 760 10%

4 USA 1,172 13% Hong Kong 473 6%

5 New Zealand 529 6% China 412 6%

Total: 67.2 mm tons cwe

Brazil and the U.S. are responsible for 31% of the worlds beef production

Per Capita Consumption

Global Beef Production Forecasts

(mm tons cwe)

42

33

30

25

24

3.4

Argentina

Uruguai

Brasil

EUA

Austrlia

China

(kg/capita) 2013

Global avg.: 6.6 Kg

2013

Both Brazilian and American beef production should increase approximately

1mm tons until 2023, reaching 10.3 mm and 11.3 mm tons, respectively

JBS is present in the main beef exporting countries

Source: FAO*cwe = carcass weight equivalent

Source: FAO*Buffaloes

Source: FAO

67.2 67.4 68.2 68.7 69.8 71.0 72.1 72.9 73.974.8 75.6

0.0

25.0

50.0

75.0

100.0

2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E

Others USA Brazil

CAGR (%)

2013 - 2023Brazil1.4%USA0.1%

World1.2%


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107.4 110.0 112.6 115.3117.8 120.5 123.3 126.3

129.0 131.8 134.5

0.0

30.0

60.0

90.0

120.0

150.0

2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E

Others USA Brazil

50

48

45

34

32

10

Global Poultry Production Forecasts

Sector Overview: Poultry

USA18%

China16%

Brazil12%E.U.

12%

Russia4%

Mexico3%

Others35%

Total 2013A: 107.4 mm tons rtc

Global avg:12,8Kg

(mm tons rtc)

Poultry Trade Commerce in 2013 (mm tons rtc)

China17%

USA15%

E.U.11%

Brazil9%Russia

4%

Mexico3%

India2%

Others39%

Total 2013: 107.4 mm tons rtc

Poultry production should increase around 25% in the period from 2013 to 2023,

reaching 134.5 mm tonsBrazil and the U.S. are responsible for 30% of the worlds beef production


1 Brazil 3,755 34% Japan 850 8%

2 USA 3,692 33% Mexico 835 8%

3 E. U. 1,235 11% Saudi Arabia 810 7%

4 Thailand 540 5% E.U. 760 5%

5 China 415 4% Russia 554 4%

China shouldreach 14kg/capitaby 2023

2013

Global Poultry Production

GlobalPoultryConsumption Per Capita Consumption

(kg/capita) 2013

JBS is present in the main poultry exporting countries

Source: FAO Source: FAO

Source: USDASource: FAO*rtc = ready to cook

CAGR (%)

2013 - 2023

Brazil1.7%USA2.2%

World2.3%


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China48%

E.U.18%

USA7%

Russia3%

Vietnan3%

Brazil3%

Others18%

(mm tons cwe)

Global Pork Production Forecasts

GlobalPorkConsumption

Sector Overview: Pork

China48%

E.U.19%

USA9%

Brazil3%

Vietnan3%

Others18%

Total 2013A: 115.2 mm tons cwe

Global Pork Production

Total 2013A: 115.4 mm tons cwe

Pork production should increase 12% in the period from 2013 to 2023, reaching 129.4

mm tons in 2023Brazil and the US are two of the worlds largest pork producers

Per Capita Consumption

61

40

27

22

14

(kg / capita) 2013

Global avg. 2013A: 14.9Kg

Pork Trade Commerce in 2013 (mm tons cwe)


1 USA 2,292 32% Japan 1,240 18%

2 E.U. 2,204 31% Russia 900 13%

3 Canada 1,245 18% Mexico 785 11%

4 Brazil 600 9% China 750 11%

5 China 250 4% Hong Kong 400 6%

2013

115.4 116.9 118.8 120.3 121.4 122.7 123.8125.2 126.7 128.1 129.4

0.0

30.0

60.0

90.0

120.0

150.0

2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E

Others USA Brazil

JBS is present in the main pork exporting countries

Source: FAO Source: FAO

Source: USDASource: FAO*cwe = carcass weight equivalent

CAGR (%)

2013 - 2023

Brazil1.6%USA1.0%

World1.2%


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Consolidated Results


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Summary of 2Q14 Results

Net revenue of R$29.0 billion, an increase of R$7.0 billion, or 32.1% higher than 2Q13.

Gross profit of R$4.25 billion, expansion of R$1.3 billion, or 44.3% higher than 2Q13.

Consolidated EBITDA of R$2.4 billion, an increase of 45.9% over 2Q13. EBITDA margin was 8.4%.

Net income of R$254.3 million, which corresponds to an EPS of R$0.09.

The consolidated 2Q14 exports grew 45% compared 2Q13, reaching US$4.3 billion.

JBS ended 2Q14 with leverage (Net Debt/EBITDA LTM) of 3.15x, compared to 3.26x in 1Q14.


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Businesses Units Highlights 2Q14

JBS Foods recorded net revenue of R$3,084.5 million and EBITDA of R$440.4 million, with an EBITDA margin of 14.3%.

JBS Mercosul posted net revenue of R$6,291.4 million in 2Q14, 15.8% higher than 2Q13 and EBITDA of R$634.3 million, with anEBITDA margin of 10.1%.

JBS USA Beef posted net revenue of US$5,331.4 million, 10.9% higher than 2Q13. EBITDA was US$108.6 million, with anEBITDA margin of 2.0%

Net Revenue of JBS USA Pork totaled US$1,028.3 million, 18.4% higher than 2Q13, and EBITDA of US$113.8 million, with anEBITDA margin of 11.1%.

JBS USA Chicken (PPC) reported net revenue of US$2,186.8 million, stable compared to 2Q13. EBITDA was US$338.6 million,with a margin of 15.5%.


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Recent Events and Exports


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1

Recent Events

Footprint of Acquired Assets

Tyson de Mxico

Acquisition Price: US$400 mm

3 Vertically integrated processingfacilities

7 Distribution Centers

Tyson do Brasil

Acquisition Price: US$175 mm

3 Integrated Poultry Units

6 Distribution Centers

Cu Azul

Acquisition Price: R$246 mm

2 Integrated Poultry Units

3 Hatcheries

2 Feed mills

3 poultry units in Brazil and 3 in Mexico, in addition to 6distribution centers in Brazil and 7 in Mexico

Acquisition of Macedo (BR) and Del Dia (MEX) brandsTyson is the 3rdlargest poultry producer in Mexico, with ~10%of Market Share

Tyson is the 4thlargest poultry exports in Brazil, responsible for3.2% of exported volume in 2H14Cu Azul has 2 poultry units, including hatcheries, feed milland processing facilities

Distribution network for fresh poultry products in the State ofSo Paulo

Assets Description

Post 2Q14, JBS announced the acquisition of Tyson Foods, Inc. Poultry businesses in Brazil and Mexico

and the assets of Cu Azul in Brazil

These acquisitions are pending regulatory approval.


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1

JBS Consolidated Exports Breakdown in 2Q14 and 2Q13

Growth of 45% in 2Q14 exportscompared to 2Q13

Note 1. China and Hong Kong

Greater China18%

South America13%

Africa and Middle East12%

Mexico11%

Japan9%

E.U.

7%

Russia6%

South Korea4%

Canada3%

Others17%

2Q14US$4,305.1

million

Greater China 27.5%

Mexico 18.0%

Africa and Middle East10.1%

South America 5.9%

Russia 5.5%

E.U. 5.1%

South Korea 4.9%

Canada 4.2%

Japan 3.9%

Taiwan 2.2%

Others 12.7%

2Q13US$2,975.7

million


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1

CAPEX, Cash Generation

and Debt Profile


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1

Cash

Generation

CAPEX

Capex and Cash Generation

In 2Q14, total capital expenditure (CAPEX) was R$760.0 million, of which 40% in acquisitions,

expansion and facilities modernization and 60% in maintenance.

In addition, JBS recorded the payment of Massa Leve, which was made through the transfer of

shares held in treasury (R$203.5 million) and part in cash (R$55.1 million), in the statement of cash

flow in neteffect of working capital from acquired companies,which totaled R$266.6 million.

In 2Q14 the Company generated net cash flow from operations of R$147.3 million, due to an

increase in sales prices and an expansion of sales in general, besides the robust expansion of JBS

exports during the quarter.


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1

JBS S.A.63%

Subsidiaries37%

Debt Profile

USD77%

R$23%

Leverage EBITDA (R$ million)

JBS ended 2Q14 with leverage of 3.15x, compared to 3.26x in 1Q14.

In June 2014, JBS announced the issuance of Bonds in the amount of

US$750.0 million through its wholly-owned subsidiaries JBS USA, LLC

and JBS USA Finance, Inc. with maturity in 2024 and coupon of 5.875%

per annum.

This operation allowed JBS to reduce its financial costs and to extend

its debt profile.

Breakdown by Currency and Costs

Breakdown by Company

Leverage (Net Debt/EBITDA LTM)

11.25% per annum

5.67% per annum

3.28

4.033.70

3.26 3.15

0

500

1,000

1,500

2,000

2,500

3,000

3,5004,000

2Q13 3Q13 4Q13 1Q14 2Q14

D bt P fil


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1

-403

1,952

4,713

1,365

4,723

52

4,749

2,509

5,054

Short term netof cash

2015 2016 2017 2018 2019 2020 2021 After 2021

The Company ended the quarter with R$10,297.7 million

in cash, equivalent to approximately 104% of its short-

term debt.

JBS USA has US$1.27 billion fully available under

revolving credit facilities which, if added to the current

cash position, represents 133% of short term debt.

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

debt dropped to 28% in 2Q14.

Debt Profile

Short term Long termDebt maturity (R$ million)

28%

29%

29%

35%

35%

72%

71%

71%

65%

65%

2Q14

1Q14

4Q13

3Q13

2Q13


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1

JBS Foods

JBS Foods


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2

Europe29%

Asia/Oceania24%

Africa and MiddleEast24%

Americas21%

Others2%

JBS Foods

Footprint 2Q14 Revenue Breakdown

Exports by Region

Main Brands

Products

Overview

Domestic46%

Exports54%

AC

AM

RR

RO

PA

AP

MT

MS

GO

TO

MA

PI

CE

RN

PBPEALSE

BA

MGES

RJSP

PR

RS

SC

Production facilities

JBS Foods 8%% NR JBS S.A.
http://www.seara.com.br/seara/linha/margarinas/


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2

2.9 2.8 3.1

4Q13 1Q14 2Q14

JBS Foods

Net Revenue (R$ billion)

EBITDA (R$ million)

6.7%

EBITDA Margin (%)

11%

24%

40%

8%

18%

Net revenue of R$3,084.5 million in the quarter.

Improvement in sales volumes in both domestic and export markets.

Increase in prices in the domestic market, thanks to brands andcategories repositioning efforts.

Increase of 11.0% in pork export prices.

EBITDA reached R$440.4 million, with an EBITDA margin of 14.3%:

Relevant improvement in yields and productivity gains, in addition tocost reduction in the processing facilities.

Redesign and rationalization of the logistics network, which permittedcost reductions and increase in volume delivered.

Renewed go-to-market strategy, which provided efficiency gains inthe sales channels.

Increase in margins from prepared and convenient products

Increased access to customers abroad through synergies capturedand know-how already existing at JBS Group.

227.3379.8 440.4

7.9%

13.7% 14.3%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

1400.0

1600.0

4Q13 1Q14 2Q14


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2

JBS Mercosul

JBS Mercosul


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2

Domestic53%

Exports47%

JBS Mercosul

Beef facilities

Feedlots

Distribution Centers

Hides facilities

Main Brands

New Products in Brazil


Asia/Oceania36%

Europe9%

South America34%

North and CentralAmericas

3%

Others7%


Overview

Exports by Region

JBS Mercosul 8%% NR JBS S.A.


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2

5.4

6.2 6.35.7

6.3

2Q13 3Q13 4Q13 1Q14 2Q14

JBS Mercosul

Net Revenue (R$ billion)

EBITDA (R$ million)

15.8%

EBITDA Margin (%)

10%

22%

40% 18%

Note 1. Includes JBS Aves

Net revenue of R$6,291.4 million in 2Q14, 15.8% higher than 2Q13:

Compared to 1Q14, net revenue increased 9.9%.

Increase of 21.9% in beef exports.

EBITDA totaled R$634.3 million, with EBITDA margin of 10.1%:

Increase in raw material prices, partially offset by an increase in salesprices.

Operations in Paraguay and Uruguay presented an increase inexports average price, which contributed to the increase in sales in

addition to fixed costs dilution. In Brazil, the Company foresees an increase in sales volume to the

international market and an improvement in sales in the domesticmarket as a result of marketing investments to promote the Friboibrand.

543.5687.5 692.4

596.1 634.3

10.0% 11.1% 11.0% 10.4% 10.1%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

1400.0

1600.0

2Q13 3Q13 4Q13 1Q14 2Q14


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2

JBS USA Beef

JBS USA Beef (including Australia and Canada)


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2

Domestic

72%

Exports28%


Africa and Middle

East4%

Asia/Oceania68%

Europe2%

South America2%


14%

Others10%

Main Brands


Overview

Exports by Region

Production facilities and DCs

Notae1. Distribution Centers in Australia

JBS USA Beef (including Australia and Canada)% NR JBS S.A.

8%


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2

4.8 4.7 4.8 4.5

5.3

2Q13 3Q13 4Q13 1Q14 2Q14


Net Revenue (US$ billion)

EBITDA (US$ million)

10.9%

EBITDA Margin (%)

Net revenue of US$5,331.4 million, an increase of 10.9% compared

to 2Q13: Increase in sales volume in both domestic and export markets.

Increase in prices in domestic market.

Compared with 1Q14, net revenue posted an increase of 17.9%, dueto higher seasonal demand in the period and an increase in salesprices.

EBITDA was US$108.6 million, with an EBITDA margin of 2.0%:

The reduction in beef supply combined with an increased demandcontributed to the increase in beef prices and partially offset theincrease in cattle prices during the period.

Compared with 1Q14, the improved EBITDA margin is due to higherbeef prices and strong demand seasonally.

Export growth supported by strong sales to Asia.

161.7125.3 113.9

-22.5

108.6

3.4% 2.7% 2.4%-0.5%

2.0%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

-30.0

70.0

170.0

270.0

370.0

470.0

570.0

670.0

2Q13 3Q13 4Q13 1Q14 2Q14

10%

24%

42% 18%


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2

JBS USA Pork

JBS USA Pork


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2

Domestic

85%

Exports15%

Products

Processing Facilities

Case Ready

Main Brands

Swift Premium

Dry Rubbed Ribs

Swift Premium Dry

Rubbed Loin Filet

Swift Premium

Dry Rubbed Boneless Backrib

Swift Premium

Saddle Pack Boneless

Pork Chops

Swift Premium

Ground Pork

Asia/Oceania59%

Europe1%

South America1%

North and Central

Americas39%


Overview

Exports by Region

JBS USA Pork% NR JBS S.A.

8%


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3

868.5 903.3 904.9 896.91,028.3

2Q13 3Q13 4Q13 1Q14 2Q14

Net Revenue (US$ million)


18.4%

EBITDA Margin (%)

Net revenue of US$1,028.3 million, an increase of 18.4% compared

to 2Q13: Increase of 24.3% in sales prices in the domestic market and an

increase of 16.7% in export prices.

Compared with 2Q14, net revenue growth was 14.7%.

EBITDA of US$113.8 million, with an EBITDA margin of 11.1%:

In comparison with 2Q13, EBITDA grew 124.3%.

Hog supply remained tight and, combined with a strong demanddomestically and in the main consumer markets such as Hong Kong,Japan and South Korea, contributed to a better pricing of pork in the

US.

50.7 43.886.3 82.9

113.8

5.8% 4.8%

9.5% 9.2%11.1%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

-30.0

20.0

70.0

120.0

170.0

220.0

270.0

320.0

370.0

2Q13 3Q13 4Q13 1Q14 2Q14

10%

24%

40% 18%


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3

JBS USA Chicken

(Pilgrims Pride Corporation)

JBS USA Chicken (Pilgrims Pride Corporation - PPC)


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3


Asia/Oceania11%


80%

Others2%

Domestic

80%

Exports9%

Mexico11%

Main Brands Products

Other products: boneless/skinless, wings, breast, whole birds, breaded,marinated, strips, cooked, par-fried and others.


Overview

Exports by Region

Production Facilities

JBS USA Chicken (Pilgrims Pride Corporation - PPC)% NR JBS S.A.

40%

8%

17%


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3

2.2 2.1 2.0 2.0 2.2

2Q13 3Q13 4Q13 1Q14 2Q14

Net Revenue (US$ billion)


0.1%

EBITDA Margin (%)

Net revenue of US$2,186.8 million in 2Q14, stable compared to

2Q13: Increase in sales volume, partially offset by a decrease in sales price

both in the US and Mexico, due to a slightly change in sales mix.

Compared with 1Q14, PPC revenue grew by 8.4%, thanks to anincrease in chicken prices in both domestic and export markets.

EBITDA was US$338.6 million, with an EBITDA margin of 15.5%:

Reduction of US$89.0 million in feed costs.

Reduction of US$6.4 million in labor costs.

Reduction of US$4.6 million in freight and warehousing costs in the

US. Improvements in costs and sales mix, all rooted on operational

excellence.

265.0226.1 197.2 205.2

338.6

12.1%10.6% 9.6% 10.2%

15.5%

-20.0%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0 .0 %

2 .0 %

4 .0 %

6 .0 %

8 .0 %

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

-30.0

70.0

170.0

270.0

370.0

470.0

570.0

670.0

2Q13 3Q13 4Q13 1Q14 2Q14

10%

24%

40% 17%


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3

Sustainability and

Social Responsibility

Projects and Awards in Sustainability


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3

JBSTraceability System

To ensure the responsible origin of its raw

material, JBS has been developing a system

to monitor its cattle suppliers located in the

Amazon biome which is based on satellite

images, geospatial data of farms and official

information in order to analyze more than

70,000 cattle suppliers located in the country

since 2010.

The total area covered by the JBS

traceability system reaches 87 million

hectares (870 thousand Km).

In 2013, JBS was recognized byMcDonalds and KFC for adopting thebest practices in production processes

JBS received an international sustainabilityaward by the US restaurant chain KFC.The award is given to suppliers worldwidethat adopt innovative sustainability projects

at their production facilities.

From McDonalds,JBS received the Best ofSustainable Supply award in 2014,regarding investments in water efficiencyand waste as an energy source.

Evolution of JBS Annual andSustainability Report in GRI standardsfrom level C (2012) to level B (2013)Partnership between JBS and the

Brazilian NGO Instituto Centro de Vida(ICV) to promote sustainable cattleraising in the Amazon biome.

This project started in 2012. As a result it

was possible to observe an increase inproduction efficiency in the pilot area, whichincreased from 1 to 3 animals per hectare,without the need to convert new areas offorest into pasture to increase production.

In 2014, JBS scaled up the project to covera larger number of farms, as well assupporting the ICV in the training ofprofessionals who can replicate the modelto other farms in the Amazon region.

Stakeholders


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3

JBS actively participates in

the main discussion

forums onsustainable

livestock

Stakeholdersengagement

JBS received top marks in 7 units of leather forenvironmental and sustainability practices in theproduction process by the international organizationLeather Working Group (LWG). Totaling 7 unitsreceived gold medal and 2 Silver, all with "A" gradeon traceability.

Germinare School


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3

Germinare School is a social initiative of the Germinare Institute(JBS) which looks at Education as the principal instrument totransform society.

Laboratory

Social

GERMINARE SCHOOL

Purpose: to prepare well-educated and well-rounded citizens with abroad cultural repertoire, sound ethical values and a positiveattitude toward life and society.

Number of students: 450 (2013)Capacity of 630 students.

Area: 6,000 m2Sport complex, swimming pool, computer lab and chemistry lab.

Amount invested: R$15 million

Selection process: tests and group dynamics.

Top Brazilian professors.

Started in 2010.


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Mission

To be the best in what we set out to do, totally focusedonour business, ensuring the best products and

services for our customers, solidity for our suppliers,

profitabilityfor our shareholders and the opportunity of abetter future to all our employees.

institutional presentation including 2q14 results

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