JBS Institutional Presentation Including 3Q14 Results

Transcription

1 JBS Institutional Presentation Including 3Q4 Results

2 Disclaimer 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 JBS management concerning the future of the business and its continued access to capital to fund the Company s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in JBS filed disclosure documents and are, therefore, subject to change without prior notice. 2

3 JBS Global Estimated Net Revenue of around US$50.0 billion in 204 Prepared products and others 27% Revenue 204E US$50.0 bi Pork 7% Poultry 7% Bovines 49% Capacity to process 00,000 bovines per day in 73 units in seven countries Capacity to process 72,000 hogs per day in units in Brazil and the United States Capacity to process more than 3 million birds per day in 57 units in the Americas Capacity to produce more than 00 thousand hides per day in 3 units worldwide More than 80 thousand tons of convenient and value added products per month in the world More than 200 thousand employees around the world 3

4 JBS Global Presence in 20+ countries, Exports to 50+ countries and more than 300,000 clients 84% of JBS Revenue is Moscow denominated in US$ North America ~5% of JBS revenue¹, ² Chicago Toronto London Ghent Hamburg Shanghai Seoul Tokyo Dubai Taipei Hong Kong 6% of JBS Revenue is denominated in R$ Caracas Santiago São Paulo (headquarter) South America Exports ~32% of JBS revenue ~7% of JBS revenue¹,3 96% from Brazil Note. 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. Sales office Sales office presence Production Platform 4

5 JBS Evolution Net Revenue (R$ billion) +274% LTM¹ EBITDA (R$ million) EBITDA margin (%) 8.5% 6.4 % 5.0% 5.8% 6.6% 9, % 3.7% 6,30.3 3, , ,40.3,56., LTM¹ 5

6 Market Analysis 6

7 World s Food* Surpluses and Deficits Net intra-regional trade, million tonnes North America South America Australia Eastern Europe and former Soviet Union Central America Western Europe Asia Middle East & Africa Cereals, rice, oilseeds, meals, oils and feed equivalent of meat. Source: The Economist 7

8 Sector Overview: Beef Global Beef Production 203 Source: FAO *Buffaloes Others 43% India* 5% China 0% USA 6% Brazil 5% E.U. % Total: 67.2 mm tons cwe Brazil and the U.S. are responsible for 3% of the world s beef production Global Beef Production Forecasts (mm tons cwe) Source: FAO Others USA Brazil E 205E 206E 207E 208E 209E 2020E 202E 2022E 2023E Both Brazilian and American beef production should increase approximately mm tons until 2023, reaching 0.3 mm and.3 mm tons, respectively CAGR (%) Brazil.4% USA 0.% World.2% Global Beef Consumption Per Capita Consumption Beef Trade Commerce in 203 (mm tons cwe) 203 Brazil 3% E.U. % USA 7% China 0% Argentina 4% Others 45% (kg/capita) 203 Global avg.: 6.6 Kg Argentina Uruguai 33 Brasil 30 EUA 25 Austrália 24 China # Largest exporters Largest importers Brazil,849 20% Russia,03 4% 2 India*,765 9% USA,02 4% 3 Australia,593 7% Japan 760 0% 4 USA,72 3% Hong Kong 473 6% 5 New Zealand 529 6% China 42 6% Total 203: 67.7 mm tons cwe JBS is present in the main beef exporting countries Source: FAO *cwe = carcass weight equivalent Source: USDA *Buffaloes 8

9 Sector Overview: Poultry Global Poultry Production Global Poultry Production Forecasts 203 Others 35% Mexico 3% Russia 4% E.U. 2% USA 8% Brazil 2% China 6% (mm tons rtc) Others USA Brazil E 205E 206E 207E 208E 209E 2020E 202E 2022E 2023E CAGR (%) Brazil.7% USA 2.2% World 2.3% Source: FAO Total 203A: 07.4 mm tons rtc Brazil and the U.S. are responsible for 30% of the world s beef production Source: FAO Poultry production should increase around 25% in the period from 203 to 2023, reaching 34.5 mm tons Global Poultry Consumption Others 39% India 2% Mexico 3% Russia 4% Brazil 9% China 7% USA 5% E.U. % Total 203: 07.4 mm tons rtc Source: FAO *rtc = ready to cook Per Capita Consumption (kg/capita) Global avg:2,8kg China should reach 4kg/capita by 2023 Poultry Trade Commerce in 203 (mm tons rtc) # Largest exporters Largest importers Brazil 3,755 34% Japan 850 8% 2 USA 3,692 33% Mexico 835 8% 3 E. U.,235 % Saudi Arabia 80 7% 4 Thailand 540 5% E.U % 5 China 45 4% Russia 554 4% JBS is present in the main poultry exporting countries Source: USDA 9

10 Sector Overview: Pork Global Pork Production 203 Source: FAO Others 8% Vietnan 3% Brazil 3% USA 9% E.U. 9% China 48% Total 203A: 5.4 mm tons cwe Brazil and the US are two of the world s largest pork producers Global Pork Production Forecasts (mm tons cwe) Source: FAO Others USA Brazil E 205E 206E 207E 208E 209E 2020E 202E 2022E 2023E CAGR (%) Brazil.6% USA.0% World.2% Pork production should increase 2% in the period from 203 to 2023, reaching 29.4 mm tons in 2023 Global Pork Consumption Vietnan 3% Brazil 3% Russia 3% USA 7% Others 8% E.U. 8% China 48% Total 203A: 5.2 mm tons cwe Per Capita Consumption (kg / capita) Global avg. 203A: 4.9Kg Pork Trade Commerce in 203 (mm tons cwe) # Largest exporters Largest importers USA 2,292 32% Japan,240 8% 2 E.U. 2,204 3% Russia 900 3% 3 Canada,245 8% Mexico 785 % 4 Brazil 600 9% China 750 % 5 China 250 4% Hong Kong 400 6% Source: FAO *cwe = carcass weight equivalent Source: USDA JBS is present in the main pork exporting countries 0

11 Consolidated Results

12 3Q4 Highlights - Consolidated 3Q4 Highlights (R$ Million) Net Revenue Gross Profit EBITDA Adjusted EBITDA Net Income Gross Margin (%) Adjusted EBITDA Margin (%) EPS (R$) 27.% 24, , ,49. 28, % 30, , , , , , ,709.7,873.5, , , , Q3 4Q3 Q4 2Q4 3Q4 3Q3 4Q3 Q4 2Q4 3Q4 3Q3 4Q3 Q4 2Q4 3Q4 3Q3 4Q3 Q4 2Q4 3Q4 Net Revenue of R$30.8 billion, Gross Profit of R$5.6 billion, an EBITDA of R$3.6 billion,.6% Net Income of R$. billion, expansion of R$6.6 billion, or 27.% increase of R$2.4 billion, or 77.7% superior than 3Q3. EBITDA equivalent to an EPS of R$0,38. superior than 3Q3 higher than 3Q3. margin was.8%. Operational Cash Generation of R$3.0 billion and Free Cash Generation (after Investments) of R$2. billion. JBS ended the quarter with leverage of 2.54x compared to 3.5x in 2Q4. 2

13 3Q4 Highlights - Businesses Units JBS Foods recorded net revenue of R$3,376.8 million, 9.5% superior over 2Q4, and EBITDA of R$576.0 million, with an EBITDA margin of 7.%. JBS Mercosul posted net revenue of R$6,470.5 million, 4.8% higher than 3Q3 and EBITDA of R$554.6 million, with EBITDA margin of 8.6%. JBS USA Beef posted net revenue of US$5,849.3 million, 24.7% higher than 3Q3. EBITDA was US$504.9 million, with an EBITDA margin of 8.6% Net Revenue of JBS USA Pork totaled US$937.8 million, 3.8% higher than 3Q3, and EBITDA of US$3.2 million, with an EBITDA margin of 2.%. JBS USA Chicken (PPC) reported net revenue of US$2,268.0 million, an increase of 5.8% compared to 3Q3. EBITDA was US$435.4 million, with a margin of 9.2%. 3

14 JBS Consolidated Exports Breakdown in 3Q4 and 3Q3 Canada 2.4% Others 8.2% Greater China¹ 6.8% Others 4.% Growth of 48% in exports in the quarter compared to 3Q3 Greater China¹ 20.4% South Korea 4.7% E.U. 6.5% Russia 9.% USA 9.5% 3Q4 US$4,36. million MENA 0.5% Mexico.0% South America 0.5% Japan 0.9% Canada 4.2% South Korea 5.5% E.U. 5.6% 3Q3 US$2,954.0 million Mexico 5.6% Russia 5.6% South America 8.2% MENA 9.0% Japan.9% Note. China and Hong Kong 4

15 Capex, Cash Generation and Debt Profile 5

16 Capex and Cash Generation CAPEX In 3Q4, total capital expenditure (CAPEX) was R$878.6 million, of which approximately 20% in acquisitions, 25% in expansions and facilities modernization and 55% in maintenance. Cash Generation In 3Q4 the Company generated net cash flow from operations of R$3.0 billion and free cash flow (after capex) of R$2. billion, due to the strong performance of JBS businesses units. 6

17 Debt Profile Leverage (Net Debt/EBITDA LTM) 6,000 5,000 4,000 3,000 2,000, Q3 4Q3 Q4 2Q4 4Q4 Leverage EBITDA (R$ million) JBS ended the quarter with leverage of 2.54x compared to 3.5x in 2Q4. The reduction in leverage is due to the improvement in operational performance of JBS, combined with a strong cash generation in the quarter. This reduction in the leverage reflects the Management commitment in improve continuously its capital structure in order to generate value to all its stakeholders. Breakdown by Currency and Costs Breakdown by Source Breakdown by Company.50% per annum BNDES 0.% R$ 20% US$ 80% Commercial Banks 59.9% Capital Markets 40.0% Subsidiaries 3% JBS Foods 3% JBS S.A. 56% 5.7% per annum 7

18 Debt Profile and Maturity Debt Profile The Company ended the quarter with R$2,578.5 million in cash, equivalent to 0% of its short-term debt. 2Q3 35% 65% JBS USA has US$.33 billion fully available under revolving credit facilities which, if added to the current cash position, represents 2% of short term debt. 4Q3 Q4 29% 29% 7% 7% The percentage of short term debt (ST) in relation to total debt was 30% in 3Q4. 2Q4 3Q4 28% 30% 72% 70% Maturity (R$ million) Short Term Long Term 4,543 5,245 5,290 5,636 2,798 -,095,050, Short Term* after 202 * Net of Cash 8

19 Business Units 9

20 JBS Foods 20

21 JBS Foods Leading producer of prepared foods (PFPs) and fresh poultry and pork products Operational Platform 5. million birds per day Brazil +55,000 employees Production units located in the south, southeast and mid-west regions 2,200 hogs per day Production units located in the south and mid-west regions ~80,000 tons per month AM 2 MT MS 5 2 PR DF 2 MG 3 RJ SP 4 3 BA CE 2 3 PE 29 slaughterhouses and deboning units 08 slaughterhouses and deboning units 23 PFP units 5 distribution centers Production units located in the south, southeast, northeast and mid-west regions RS 5 7 SC distribution centers In 2 states 2 nd largest producer and exporter of poultry and pork in Brazil³ Large production platform, with 60 production units,2 and nearly 55,000 employees National distribution platform serving ~79,000 points of sale Strong international presence, exporting to over 00 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 9M4 R$9.2 billion EBITDA 9M4 R$,396 million 5.% Margin Notes: Industrial Complex: location with one or more units of production; 2 Includes Tyson acquired units, approved in October/4; 3 Total produced volume of PFP, poultry and pork of 82 mm tons, 359 mm tons and 54 mm tons in 3Q4, respectively. Total export volume of 33 mm tons in 3Q4 2

22 JBS Foods JBS Foods has grown significantly over the last 2 years through the strategic acquisitions of complimentary business, that have been or are in process of being successfully integrated Total Capacity ( 000 tons / month) and Main Acquisitions since May 202 Fresh Meat Capacity PFP Capacity Current Production Capacity Prepared Food Products 23 PFP units Processing Capacity: ~80 k tons of PFPs / month May/2 Jan/3 Mar/3 May/3 Sep/3 Dec/3 Jan/4 Feb/4 Mar/4 May4 Jul/4 Leasing of 3 poultry slaughtering units, 2 processing production plants and distribution center from Doux Frangosul expansion into fresh poultry segment in Brazil Leasing of poultry slaughtering unit from Tramonto expansion of fresh poultry capacity Acquisition of Agrovêneto expansion of fresh poultry capacity Acquisition of pork/poultry slaughtering and processing unit from BRF Acquisition of Seara Brasil expansion in PFPs Acquisition of Massa Leve expansion into the pasta segment Leasing of BR Frango plant in Paraná expansion of fresh poultry capacity Acquisition of Frinal expansion of fresh poultry capacity Corporate restructuring and creation of JBS Foods Acquisition of Sul Valle expansion of fresh poultry & pork capacity Acquisition of Belafoods expansion of fresh poultry capacity Acquisitions of Céu Azul Alimentos and Tyson do Brasil expansion of fresh poultry capacity Excelsior transfer from JBS S.A. to JBS Foods PFP capacity Expansion Poultry 29 processing and deboning units Processing Capacity: 5. million birds / day Pork 8 processing and deboning units Processing Capacity: 2,200 hogs / day Source: JBS Foods ¹ Acquisition of Tyson do Brasil approved by the Brazilian Antitrust Board (CADE) on 0/23/4 22

23 JBS Foods JBS Foods has streamlined and repositioned its brand portfolio and increased the efficiency of its commercial and marketing strategy, with a high brand recognition among consumers JBS Foods Market Position in Main Product Categories Brands Products Old Mkt Share New Mkt Share 2 Ranking +2.7pp Frozen 6.3% Dec/Jan % Aug/Sep o +.3pp Chilled.8% Jan/Feb % Jul/Aug o +.3pp Pizzas & Pastas 8.4% Jan/Feb % Jul/Aug o +0.2pp Margarine 7.2% Dec/Jan % Aug/Sep o Source: Nielsen Data for Dec-Jan/4 for frozen products and margarine and Jan-Feb/4 for chilled products and pizza. 2 Data for Aug-Setp4 for frozen products and margarine and Jul-Aug/4 for chilled products and pizza. 23

24 % 20.0% 8.0% 6.0% 4.0% 2.0% 0.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -0.0% -2.0% -4.0% -6.0% -8.0% -20.0% JBS Foods % JBS Net Revenue 8% 8% 40% % Net Revenue (R$ billion) 24% 9.5% Net Revenue of R$3,376.8 million in the quarter, 9.5% higher than 2Q4: Increase of 6.8% in domestic volumes; Increase of 2.9% in average prices of prepared products in domestic market; Higher volume of fresh pork exports (+7.7%); Increase of 6.4% in average export prices. 4Q3 Q4 2Q4 3Q4 EBITDA (R$ million) 3.7% 4.3% 7.% 7.9% Q3 Q4 2Q4 3Q4 EBITDA totaled R$576.0 million, with an EBITDA margin of 7.%, compared to 4.3% in 2Q4: Higher productivity with lower production costs, as well as a decrease in the cost of raw materials resulted in a COGS representing 7.5% of net revenue, compared to 74.4% in 2Q4; Reduction in SG&A (4.4% over net revenue compared to 5.2% in the 2Q4), mainly due to lower logistics costs, reflecting the reorganization and optimization of the company s logistics network. EBITDA Margin (%) 24

25 JBS Mercosul 25

26 JBS Mercosul Beef production in Brazil, Argentina, Paraguay and Uruguay, in addition to leather and other Related Business Operational Platform ~ 55,000 bovines per day 92% in Brazil, 3% in Argentina, 3% in Paraguay and 2% in Uruguay 90,000 hides per day Facilities in Brazil, Argentina, Uruguay, China, Vietnam and Mexico 43 distribution centers central and 32 regional Brazil AM AC RO MT PA MS PR RS GO MA SC BA MG RJ CE ES SP PE +70,000 employees 48 beef processing facilities 06 feedlots 29 tanneries 43 distribution centers 09 related businesses Biodiesel Can making Collagen JBS Carriers Trading Hygiene and Clean Casings TRP Complementary to JBS Carriers Recycling Argentina Leadership in beef production Paraguay JBS is the leader in beef processing and has around 25% of market share in exports of Paraguay Uruguay Great access to export markets; the only country to export fresh beef to the US Net Revenue LTM4 R$27.8 billion EBITDA LTM4 05 beef processing facilities 02 can making 0 tannery 02 beef processing facility 0 beef processing 02 tanneries R$2,477.4 million 0.0% Margin 26

27 JBS Mercosul Highlights 3Q4 Revenue Breakdown Evolution of JBS Exports (R$ million) Exports 48% Asia and Oceania¹ 22% Exportation by Region Greater China 20% Europe % MENA 9% Others 4% 2, , % 2, , % 3,080.0 Domestic 52% South America 32% North America 2% 3Q3 4Q3 Q4 2Q4 3Q4 Brands Restructuring Launching of 32 new SKU s Intensification of investments in the Friboi Brand Value creation with market segmentation through the development of special lines programs Value creation through channel segmentation Super Premium Premium Special Programs Frozen Prepared Everyday Launching: April Region: Brazil Launching: Sep Region: SP, MG and RJ Beef Burguer Launching: May Region: Brazil Dry Beef and Jerked Beef Launching: Jan Region: Brazil Friboi Reserva Launching: Oct Region: Brazil Gran Reserva Launching: Sep Region: SP and RJ Mainstream Note. Excluding Greater China 27

28 % 26.0% 24.0% 22.0% 20.0% 8.0% 6.0% 4.0% 2.0% 0.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -0.0% -2.0% -4.0% -6.0% -8.0% -20.0% JBS Mercosul % JBS Net Revenue 7% 44% 7% % Net Revenue (R$ billion) 2% 4.8% Net revenue of R$6.470,5 million in the quarter, 4.8% higher than 3Q3: Increase in sales prices in the export market; % Compared to 2Q4, net revenue increased 2.8%; The launching of convenience beef products reflected in an increase in the sales volumes in this category (processed products) coupled with an increase in prices during the period. 3Q3 4Q3 Q4 2Q4 3Q4 EBITDA (R$ million) EBITDA totaled R$554.6 million, with EBITDA margin of 8.6%:.6%.0% 0.4% 0.% 8.6% Strong demand in the international market More products towards exports in order to maximize profitability per animal processed Strategy of investing in brands and product innovation in the domestic market 3Q3 4Q3 Q4 2Q4 3Q4 EBITDA margin (%) 28

29 Beef JBS USA 29

30 JBS USA Beef Beef production in the United States, Canada and Australia Operational Platform United States +30,000 employees ~40,000 bovines per day 28,000 in the US 4,000 in Canada 8,000 in Australia ID UT CO 4 NE 2 KS WI MI PA 09 beef processing facilities,000 hides per day 5,000 in the US 6,000 in Australia AZ TX OK 3 2 feedlots 0 tannery 06 carriers units 6 feedlots (bovine) in the US/ Capacity of.0 million bovines 0 in Canada / Capacity of 70,000 bovines 05 in Australia / Capacity of 52,000 bovines Australia Leadership in beef exports Leadership in the processing of lamb (22,000 lamb per day) #st in the Food Industry Ranking¹ Growth of 2% in revenues from 2007 to LTM204 3 processing facilities 08 bovine and 05 lamb 07 feedlots 05 bovine and 02 lamb 0 tannery 07 distribution centers 03 case ready facilities 07 distribution centers 07 DCs in Australia and 06 carriers units in the US Net Revenue LTM4 Canada Growth of 7% in revenues from 203 to LTM204 US$20.5 billion EBITDA LTM4 0 beef processing facility 0 feedlot (bovine) 0 trading US$704.9 million 3.4% Margin Note. Source: Food&Drink Business Magazine 30

31 % 26.0% 24.0% 22.0% 20.0% 8.0% 6.0% 4.0% 2.0% 0.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -0.0% -2.0% -4.0% -6.0% -8.0% -20.0% JBS USA Beef % JBS Net Revenue 7% 44% 7% % Net Revenue (US$ billion) 24.7% % 3Q3 4Q3 Q4 2Q4 3Q4 Net revenue of US$5,849.3 million in the quarter, 24.7% higher than 3Q3: Increase in sales volume in both domestic and export markets; Increase in prices; Compared with 2Q4, net revenue posted an increase of 9.7%; Main destinations of this business unit were Japan, Greater China and South Korea; 2% EBITDA (US$ million) 2.7% 2.4% -0.5% 2.0% 8.6% EBITDA totaled US$504.9 million, with EBITDA margin of 8.6%: Company strategy regarding the purchase of cattle permitted the improvement in COGS; Q3 4Q3 Q4 2Q4 3Q4 Seasonal stronger beef demand in a scenario which beef supply remains constraint, contributing to an increase in sales prices; Australia operations performed well and contributed to the strong results of this quarter. EBITDA margin (%) 3

32 Pork JBS USA 32

33 JBS USA Pork Pork production in the United States Operational Platform United States +6,000 employees ~ 5,300 hogs per day 00% in the US MN 02 case ready facilities Convenience products CA CO IA KY NC 03 hogs processing facilities 02 case ready facilities ~3,000 lamb per day 0 lamb processing facility Products Main Brands Swift Premium Dry Rubbed Ribs Swift Premium Boneless Backrib Swift Premium Rubbed Loin Filet Swift Premium Boneless Pork Chops Net Revenue LTM4 US$3.8 billion EBITDA LTM4 US$396.2 million 0.5% Margin 33

34 % 26.0% 24.0% 22.0% 20.0% 8.0% 6.0% 4.0% 2.0% 0.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -0.0% -2.0% -4.0% -6.0% -8.0% -20.0% JBS USA Pork % JBS Net Revenue 7% 44% 7% % Net Revenue (US$ million) 2% 3.8% Net revenue of US$937.8 million in the quarter, 3.8% higher than 3Q3: , Increase of 8.7% in sales prices in the domestic market and an increase of 4.7% in export prices; Compared with 2Q4, net revenue decrease 8.8%, due to lower volumes. -8.8% 3Q3 4Q3 Q4 2Q4 3Q4 EBITDA (US$ million) 4.8% 9.5% 9.2%.% 2.% EBITDA of US$3.2 million, with EBITDA margin of 2.%: In comparison with 2Q4, EBITDA remained stable; The maintenance of pork prices in higher levels due to constraint supply, coupled with a decrease in raw material costs contributed to this quarter results. 3Q3 4Q3 Q4 2Q4 3Q4 EBITDA margin (%) 34

35 Pilgrim s Pride 35

36 JBS USA Chicken (Pilgrim s Pride Corporation - PPC ) Poultry production in the United States, Porto Rico and Mexico Operational Platform United States +39,000 employees ~ 7.5 million birds per day 6.5 million in the US 250,000 in Porto Rico 800,000 in Mexico KY WV VA 24 poultry processing facilities 0 distribution centers TX 4 AR LA TN AL 3 GA 7 NC 2 SC Located in Mexico FL + de 3,500 contract growers 36 hatcheries 28 feed mills Mexico With Tyson acquisition, PPC will have an additional of three facilities, adding 600,000 birds per day of capacity and 9,000 employees 03 poultry processing facilities 0 distribution centers Porto Rico 0 processing facility Net Revenue LTM4 US$8.5 billion EBITDA LTM4 US$,76.3 million 3.8% Margin 36

37 % 26.0% 24.0% 22.0% 20.0% 8.0% 6.0% 4.0% 2.0% 0.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -0.0% -2.0% -4.0% -6.0% -8.0% -20.0% JBS USA Chicken (Pilgrim s Pride Corporation - PPC ) % JBS Net Revenue 7% 44% 7% % Net Revenue (US$ billion) 2% 5.8% Net revenue of US$2,268.0 million in the quarter, increase of 5.8% compared to 3Q3: % In the US, sales increased 4.8%, of which 2.4% is due to an increase in volume and 2.4% is due to an increase in prices, as a reflect of a change in product mix, with an improvement in the participation of small and deboned small birds, in addition to convenience products; 3Q3 4Q3 Q4 2Q4 3Q4 EBITDA (US$ million) 9.2% 5.5% 0.6% 9.6% 0.2% In Mexico, revenue increased 5.0%, as a result of an increase in price per kilo, due to the restriction in the supply of eggs sets for incubation, as well as in the number of chicks placed. This increase in revenue was partially offset by a decrease in volume sold and by the devaluation of Mexican Peso. EBITDA in 3Q4 was US$435.4 million, with EBITDA margin of 9.2%: Reduction of US$02.8 million in feed costs in the US and of US$2.5 million in Mexico; 3Q3 4Q3 Q4 2Q4 3Q4 Reduction in costs with labor, freights and storage, packaging and in contract growers, totaling US$3.8 million. EBITDA margin (%) 37

38 Consumer Ready (North America and Australia) Production capacity in 204: 9.8 thousand tons per month Production capacity in 205: 30.2 thousand tons per month Increase in production: +52.8% 38

39 Sustainability and Social Responsibility 39

40 Projects and Awards in Sustainability JBS Traceability 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 200. The total area covered by the JBS traceability system reaches 87 million hectares (870 thousand Km²). In 203, JBS was recognized by McDonald s and KFC for adopting the best practices in production processes JBS received an international sustainability award by the US restaurant chain KFC. The award is given to suppliers worldwide that adopt innovative sustainability projects at their production facilities. From McDonald s, JBS received the Best of Sustainable Supply award in 204, regarding investments in water efficiency and waste as an energy source. Partnership between JBS and the Brazilian NGO Instituto Centro de Vida (ICV) to promote sustainable cattle raising in the Amazon biome. This project started in 202. As a result it was possible to observe an increase in production efficiency in the pilot area, which increased from to 3 animals per hectare, without the need to convert new areas of forest into pasture to increase production. In 204, JBS scaled up the project to cover a larger number of farms, as well as supporting the ICV in the training of professionals who can replicate the model to other farms in the Amazon region. Evolution of JBS Annual and Sustainability Report in GRI standards from level C (202) to level B (203) 40

41 Stakeholders JBS actively participates in the main discussion forums on sustainable livestock Stakeholders engagement JBS received top marks in 7 units of leather for environmental and sustainability practices in the production process by the international organization Leather Working Group (LWG). Totaling 7 units received gold medal and 2 Silver, all with "A" grade on traceability. 4

42 Germinare School GERMINARE SCHOOL Started in 200. Germinare School is a social initiative of the Germinare Institute (JBS) which looks at Education as the principal instrument to transform society. Purpose: to prepare well-educated and well-rounded citizens with a broad cultural repertoire, sound ethical values and a positive attitude toward life and society. Social Number of students: 450 (203) Capacity of 630 students. Top Brazilian professors. Area: 6,000 m 2 Sport complex, swimming pool, computer lab and chemistry lab. Selection process: tests and group dynamics. Amount invested: R$5 million Laboratory 42

43 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.