relevant fact

7/30/2019 Relevant Fact

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Agenda

Pgina

Conclusion of Swifts

Acquisition Process

Ju l y 1 2 , 2 0 0 7


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Disclaimer

1

The forward-looking statements presented herein are subject to risks anduncertainties. These statements are based on the beliefs and assumptions of ourmanagement, and on information currently available to us.

Forward-looking statements are not guarantees of performance. They involverisks, uncertainties and assumptions because they relate to future events andtherefore depend on circumstances that may or may not occur. Our futureoperating results, financial condition, strategies, market share and values may

differ materially from those expressed in or suggested by these forward-lookingstatements. Many of the factors that will determine these results and values arebeyond 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

2

2

3

4

Swift Acquisition Process Concluded!

Acquisition Process Timeline

Final Acquisition Structure

5 JBS + Swift (Pro-forma)

6 Recovery of Swifts Results

7 Actions of Turnaround Process

Final Considerations

1 Message from the Board of Directors

9

8 Turnaround in Numbers


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Message from the Board of Directors

I t i s w i t h g r e a t s a t i s f a c t i o n t h a t t h e m a n a g em e n t o f JB S

a n n o u n ce s t h e co n c l u s i o n o f t h e Sw i f t a c q u i s i t i o n t h r o u g h t h e

ca s h p a y m en t o f US$ 1 ,4 5 8 ,8 7 2 ,8 3 6 .5 5 , f i v e d a y s i n a d v a n ce o f

t h e o r i g i n a l s ch e d u l e .

Th e a cq u i s i t i o n w a s co n c l u d e d w i t h a b s o l u t e s u c c e s s a n d

r e s u l t e d i n t h e c r e a t i o n o f t h e w o r l d s l a r g e s t b e e f co m p a n y

w i t h a s i g n i f i c a n t sh a r e i n t h e p o r k i n d u s t r y .

Th e c a p i t a l s t r u c t u r e u se d r e s u l t e d i n a co m p a n y w i t h a r e d u ce d

d e b t l e v e l a n d w i t h o n e o f t h e l o w e s t f i n a n c i a l l e v e r a g e s i n t h e

s e c t o r , w h i l e i t a l s o g e n e r a t e d a r e d u c t i o n i n f i n a n c i a l e x p e n s e s .

A l l m e a su r e s w e r e t a k e n w i t h t h e o b j e c t i v e o f c r e a t i n g v a l u e t o

a l l o f t h e c o m p a n y s s h a r e h o l d e r s , c r e d i t o r s , em p l o y e e s a n d

p a r t n e r s o f JB S.

Th e a cq u i s i t i o n r e a f f i r m s JB S co m m i t m e n t t o i t s g r o w t h

o b j e c t i v e s a n d i t s c a p a b i l i t i e s i n a ch i e v i n g t h em !

3


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Swift Acquisition Process Concluded!

The worlds largest beef company is born, with a slaughteringcapacity of 47.1 thousand heads per day;

The worlds largest beef exporter;

And the largest Brazilian multinational company in the foodsector;

With production and distribution capacity in the worlds 4main beef producing countries;

Acessing 100% of the worlds beef consuming markets;

Consolidating brands, plants and expertise;

And with a diversification platform in pork 3rd largest in theUS.

+

4


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5

Celebration of the A g r ee m en t an d P la n o f M er g er05/29/07

06/29/07

06/01/07

06/08/07

06/13/07

06/27/07

06/27/07

Board of Directors Meeting Approval of the acquisition by JBS

Board of Directors Meeting Approval of capital increase of JBS andlaunching of consent solicitation process.

Call notice for Extraordinary Shareholders Meeting

Board of Directors Meeting Capital increase of227.4 million sharestotaling US$950 million

Relevant Fact BNDESPAR approves subscription of up to US$750million in the capital increase of JBS

Extraordinary Shareholders Meeting Approval of the Swiftacquisition and of the proposed capital increase

06/11/07 Comencement ofCon se n t So l i c i t a t io n p r o ce ss Sw i f t a s u n r e st r ic t e dsu b s id ia r y .

07/11/07 Conclusion, 5 days in advance, of the Swift acquisition process with the

payment of US$1.459 million

07/10/07 Suspension of the bond issues and revolving facility by Swift

Acquisition Process Timeline


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1. Simplified chart of the transaction structure for illustrative purposes only

2. Simplification for subordination structure composed by 3 holdings

3. Does not include fees, tender offer and other transaction costs

4. Updated closing debt added of accumulated interest and tender offer expenses

5. Estimated cash balance to be partially used for the payment of fees, tender offer expenses. The remainder will beused for working capital.

6

NewCo

J & F

100%US$1.234 MM4

100%

US$225MM

HM Capital

Final Structure 1,2,3Final Structure1,2,3

Payment of

Old Debt

BNDESPAR

Up to US$750 MM Up to US$200 MM

Market

US$ ? MM

US$950 MM

US$950 MM

New Debt US$750MM

9 Capital increase by JBS of US$950million;

9 Proceeds raised with financial

institutions in the amount of US$750million (additional proceeds raised for

working capital purposes);

9 Payment of equity to HM Capital in theamount of US$225 million and of debt

in the amount US$1.234 million,totaling the acquisition amount of

US$1.459 million3;

9 Debt reduction, positioning Swift as acompany with one of the best financial

conditions of the sector in the USA;

9 Reduction in annual financial expensesof approximately US$86 million due to

a reduced debt level and new debt

issued at lower rates;

Acquisition of Swift by JBSAcquisition of Swift by JBS

Final Acquisition Structure

Cash Balance ofUS$240 MM5


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Slaughtering capacity(Global ranking)

24,100 heads/day

(# 3)

23,000 heads/day

(# 4)

47,100 heads/day

(# 1)

Heads Slaughtered2006

3,4 MM 6,2 MM 9,6 MM

Plants 28 12 40

Net Revenue US$ 2,0 bln2 US$ 9,5 bln3 US$ 11,5 bln

Net Debt US$ 0,7 bln4 US$ 0,5 bln5 US$ 1,2 bln

Net Debt/EBITDA 2,5x 5,2x 3,1x

Net Debt/AdjustedEBITDA

2,5x 3,2x6 2,7x

JBS + Swift (Pro-forma)

COMBINEDPRO-FORMA

7

Notes

1. Considering beef only

2. JBS 2006 net revenue converted into US$ at FX rate of R$2.1771

3. Swift net revenues for LTM ended February 2007 (unaudited preliminary data 8-K Form)

4. JBS net debt as per financial statements of 03/31/2007 converted in US$ at FX rate of R$2.0504

5. Swift Net Debt after closing considering all raised proceeds and transaction payments

6. Calculation considers adjusted EBITDA excluding non-recurrent expenses of US$53 million (US$53 MM ICE and US$9.4 MM in other costs)


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8

Net Revenue (US$ million)Net Revenue (US$ million)

9.5209.3509.6699.436

8.0728.1968.782

FY01 FY02 FY03 FY04 FY05 FY06 FY07*

Net Revenue and EBITDA Recovery at Swift

EBITDA (US$ million) and EBITDA marginEBITDA (US$ million) and EBITDA margin

161,2181,7

238,6220,1

163,0

5,796,3

3,0%

1,0%

0,1%

1,7%

2,3%2,2%

1,8%

FY01 FY02 FY03 FY04 FY05 FY06 FY07*

Margin (%)

Source: Swift & CoNote: Unaudited pro-forma data related to the years of 2001, 2002 and

2003 from predecessor ConAgraSwifts fiscal year ends in May* Preliminary unaudited data (8-K Form)

9 Net revenue recovery during fiscal year2007 due mainly to price increases in the

US beef division and to price and volume

increases in the US pork division and

Australia beef division;

9 EBITDA recovery in the fiscal 2007 to anEBITDA margin of 1.0%, from 0.1% in

2006;

9 During fiscal year 2007, the company lost

employees at its US plants expenses dueto an immigration inspection process (ICE

Immigration and Customs Enforcement),

resulting in:

9 A temporary reduction in productionand, consequently, in sales;

9 Non-recurrent expenses in theamount ofUS$53 million. If this

expense was not considered, EBITDA

would amount to US$158.6 million,

representing an EBITDA margin of

1.6%

9 There are no other issues related to thisevent and all employees have been

replaced

Considerations FY2007Considerations FY2007


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Actions of Turnaround Process

Management changes in key positions at Swift in the USA andAustralia and simplification of the organizational structure withthe elimination of duplicate positions;

Separation of the operational management of the beef and porkdivisions in the USA;

Reduction in annual financial expenses due to a reduced debtlevel and new debt issued at lower rates;

Beginning of a second shift in the Greeley plant;

Better use of the installed capacity at existing plants;

Estimated transportation cost reduction by increasingoccupation rate from 92% to 99%;

Optimization of the price to quality ratio;

Estimated improvement in the rear de-boning process by 0.8%;

9


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Actions of Turnaround Process

Estimated improvement in the forequarter de-boning process by1.2%;

Estimated improvement in the ribs de-boning process by 0.7%;

Estimated improvement in the yield of the leather by 1.5%;

Estimated improvement in the yield of the pork intestines(US$1.0 per head);

Estimated fixed cost reductions at the plants of US$2.90 perhead;

Estimated variable cost reductions of US$2.10 per head;

Estimated reductions in expenses related to insurance,

consulting fees and IT; Optimization of the sales teams;

Remuneration driven by results.

10


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Tu r n a r o u n din Numbers

11

Increase in Revenues

Implmentation of second shift in Greeley 800,0

Optimization o f installed capacity in the Grand Island, Dumas and Hyron plant 300,0

Potential Increase in Revenues 1.100,0

Cost Reductions

Sales, General and Admin istrative (SG&A)

Consulting 5,0

Reduction of Organizational Structure 4,0Insurance 8,0

Information Technology (TI) 8,0

Sub-total 25,0

Variable Costs (Packaging, Supllies, Electricity, Gas) 11,6

Fixed Costs in Plants 16,0

Logistics Optimization 17,5

Improvements in Carcass Yield

Rear De-boning 18,4

Forequarter De-boning 23,5

Ribs De-boning 4,5

Leather 37,8

Pork Intestines 11,5

Sub-total 95,7

Potential Operational Gains Identified thus Far 165,7

Turnaround Financial Impacts - (US$ MM)Preliminary Estimates


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Conclusion of the acquisition by JBS using the best capitalstructure, resulting in savings of approximately US$86 million ininterest expenses;

Relevant support by BNDESPAR in the companys expansion andinternationalization process;

Considerable debt reduction at Swift, making it a company withone of the best financial conditions of the sector in the USA;

Swift is already showing improvements in its operational results(FY07 x FY06);

Turnaround process has already began, with a large portion ofthe actions to be implemented quickly and to generate results inthe short to medium term;

The management team that will guarantee the success of the

turnaround process is already defined; The conclusion of the Swift acquisition does not represent the

end of JBS growth process, but one more stage in thecompanys leadership expansion and consolidation in the worldbeef industry;

Once again JBS management reaffirms its excellent trackrecord in acquisitions

12

Final Considerations


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Questions & Answers

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