Acquisition of Cargill Pork Business July 2, A Global Food Company

Transcription

1 Acquisition of Cargill Pork Business July 2, 205 A Global Food Company

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 Agenda Industry Fundamentals Acquired Business (Cargill USA Pork Business) JBS USA Pork Combined Business Post Acquisition Transaction Rationale Estimated Synergies Transaction Structure Transaction Multiple and Leverage 3

4 Strong Demand Growth Global Outlook for Pork Meat Consumption and Production (million metric tons) +40% E 206E 207E 208E 209E 2020E 202E Pork Production Pork Consumption Source: USDA 4

5 USA is the Most Competitive Pork Producer Live Hog Prices Comparison by Country (USA = 00)* USA Mexico Chile Brazil E.U. Vietnam Russia Korea China Australia Japan Hog Price (00 basis) Hog Price in the USA (USA = 00) *Hog Prices can fluctuate depending on the variation of the input costs for hog production Source: Company s research 5

6 Strong Growth in USA Pork Exports Pork Exports from the USA Million Pounds ~32% Market Share in Global Pork Exports 6,000 4,500 3,000,500 ~0% '90 '9 '92 '93 '94 '95 '96 '97 '98 '99 '00 '0 '02 '03 '04 '05 '06 '07 '08 '09 '0 ' '2 '3 '4 '5E Source: USDA Red Meat and Poultry Forecasts 6

7 The US is a Leading Pork Exporter Brazil 8% Others % USA 32% Canada 8% E.U. 32% Source: USDA Red Meat and Poultry Forecasts 7

8 Acquired Business Overview Company Highlights Pork Processing Facilities Annual Net Revenue of US$2.56 billion. 2 well-invested Pork Processing Facilities. Estimated EBITDA of US$22 million based on JBS USA Pork 5-year average EBTIDA Margin of 8.3%. Slaughter capacity of 38.2 thousand hogs/day. 8% Net Revenue in the US and 9% in Exports. Bacon production of 2 million pounds/week. Genetic Units Feed Mills 4 Genetic Units, ~60 thousand Sows that supply 33% of the total hogs processed by the business. 5 Feed Mills. Dalhart, TX ~ 22,000 acres, 68,000 Sows and advanced live hog production through Group Housing and antibiotic free (ABF) systems.. million metric tons of annual feed capacity annually. 8

9 Acquired Business Footprint and Production Capacity Production Pork Processing Facilities Ottumwa, IA 8,500/ hogs/day Beardstown, IL 9,700 hogs/day Feed Mills IA London, AR 50K metric tons/year Hedrick, IA 350K metric tons/year Centralia, MO 225K metric tons/year Smithton, MO 30K metric tons/year Dalhart, TX 250K metric tons/year IL MO 2 OK Genetic Units Morrilton, AR AR 2 TX 4,000 gilts annually Umpire, AR 300 boars annually Cameron, OK 350 boars annually Processing Facilities Dalhart, TX 68,600 sows annually 5,000 weaned pigs weekly Feed Mills Genetic Units 9

10 JBS USA Pork (Pre-Acquisition) Pork production in the United States Operational Platform United States ~ 5,300 hogs per day EBITDA LTM Q/5 US$45.9 million.3% margin MN 00% in the US IA 03 case ready facilities Convenience products KY CA NC 2 03 hogs processing facilities Products 03 case ready facilities Swift Premium Dry Rubbed Ribs Swift Premium Boneless Backrib Swift Premium Rubbed Loin Filet Swift Premium Boneless Pork Chops Main Brands Net Revenue LTM to Q5 US$3.7 billion # Team Members +6,000 0

11 JBS USA Pork Today Performance Highlights Net Revenue (US$ million) EBITDA and EBITDA Margin (US$ million and %) 2,957 3,473 3,50 3,59 3,827 3, % 9.7% EBITDA EBITDA Margin (%) 5.4% 6.5% 0.6%.3% EBTIDA Margin average last 5 years: 8.3% LTM Q/ LTM Q/205 Operational Margin (US$ million and %) SG&A (US$ million and %) EBIT EBIT Margin (%) 8.4% 8.9% 4.4% 5.5% 9.6% 0.3% SG&A % of Net Revenue % 0.88% 0.87% 0.97% 0.97%.08% LTM Q/ LTM Q/205 Source: JBS

12 Combined Business Post Acquisition Pro Forma Net Revenue US$6.3 billion. Pro Forma EBITDA US$565 million¹ (Pre-Synergies). Production Capacity: Pork Processing 89,300 head per day Prepared Products 5 million pounds per week Bacon Production 2 million pounds per week Note : Consider Business to be acquired estimated EBITDA based on the JBS US Pork 5-year EBTIDA Margin average of 8.3% Source: JBS 2

13 Combined Business Footprint Post Acquisition MN JBS USA Pork IA 03 hog processing facilities IL 03 consumer ready facilities MO NC KY CA OK AR Acquired Business 02 hog processing facilities 05 feed mills TX 04 genetic units Main Brands 3

14 Transaction Rationale Full Further Well Expansion alignment with JBS strategy. improvement in balance and diversification of JBS product portfolio. located and invested assets. of Premium Pork product mix (Group Housing, ABF, Bacon). 4

15 Transaction Rationale USA Diversified Relevant Leverage is the lowest cost producer and export leader. hog procurement, with no geographic overlap. synergies of +US$75 million. best-in-class operation. 5

16 Estimated Synergies Synergies of +US$75 million: Synergies in the purchase of non-core materials. Optimization of administrative structure. Best practices in operations. Logistics optimization. Prepared / Value-added products portfolio expansion. Maximize JBS export knowledge and capabilities. 6

17 Transaction Structure Transaction Value of US$,450 million, on a debt-free, cash-free basis to be paid in cash at closing, adjusted by Working Capital variation. Asset Purchase Deal Assets of Cargill Pork business plus its respective Working Capital of US$225 million. Assets Tax purchased by JBS USA LLC. benefit estimated NPV in US$250 million. 7

18 Transaction Multiple and leverage Annual Net Revenue of Acquired Company (US$ MM) EBITDA Margin Multiple of the Transaction (x) Without Synergies and Tax Benefict With Synergies and Tax Benefict Assumption.30% JBS USA Pork LTM EBITDA 2, % JBS USA Pork last 2 year average EBITDA 8.30% JBS USA Pork last 5 year average EBITDA Tax benefit NPV estimated in US$250 Million Synergies estimated in US$75 million Based on LTM Q5 Net Debt to EBITDA and including the Moy Park acquisition, JBS leverage will increase ~0.2x due to this transaction, and would be on a proforma basis at the end of Q5 around 2.74x. 8

19 Mission To be the best in all that we do, completely focused on our business, ensuring the best products and services to our customers, a relationship of trust with our suppliers, profitability for our shareholders and the opportunity of a better future for all of our team members. 9