JBS S.A. Institutional Presentation Including 2Q18 Results 1
About JBS Over 230 thousand direct and 700 thousand indirect employees. Around 350 thousand Customers in 150 countries. JBS has been a public company since 2007 and its shares are traded on the New Market of the São Paulo Stock Exchange (B3). Number One in global beef production; in global chicken production; in global leather processing. US$ 51billion (R$169Bn) in net revenue (LTM 2Q18). Number Two in global pork production; in global lamb production. 2
3 A Unique Global Platform 3% CANADA 5% EUROPE 53% USA MEXICO 5% AFRICA AND THE MIDDLE EAST 3% 15% ASIA BRAZIL 12% SOUTH AMERICA 1% 3% GLOBAL PLATFORM Present in over 15 countries with over 400 production units and offices. % of Total Revenues Beef Lamb Pork Leather Poultry AUSTRALIA AND NEW ZEALAND
4 Global Management Structure Food Quality and Safety José Batista Sobrinho Chairman and Global CEO of JBS Center of Excellence and Innovation André Nogueira CEO of JBS USA Gilberto Tomazoni Global Chief Operating Officer Global Sourcing Wesley Batista Filho President of Operations South America Joanita Karoleski President of Seara Renato Costa President of JBS Meats Nelson Dalcanale President of JBS New Business Roberto Motta President of JBS Leather Bill Lovette Global CEO of PPC Al Byers President of JBS USA Beef Regional Marty Dooley President of JBS USA Pork Tim Schellpeper President of JBS USA Fed Beef Brent Eastwood President of JBS Australia David Colwel President of JBS Canada Tom Lopez President of Plumrose USA
5 Strategy Global and Diversified Production and Distribution Platform evolving towards value added products with brands Branding Value added products Sales and distribution platform +350,000 customers and sales to +150 countries Production platform +400 production units in +15 countries
Consolidated Exports Greater China¹ 22.8% Japan 14.1% Africa & Middle East 11.1% USA 10.3% South Korea 9.2% Mexico 6.5% 6.5% 3.5% 10.3% 6.3% 22.8% 9.2% 14.1% E.U. 6.3% Canada 3.5% South America 3.0% Outhers 13.2% 3.0% 11.1% Greater China, Africa & Middle East and Japan corresponded to ~48% of the total of exports 2T17 US$3,682.1mi 2T18 US$3,223.9mi Note 1: Considers China and Hong Kong 6
2Q18 Business Units 7
8 Seara Production of prepared foods and fresh poultry and pork products in Brazil Brazil CE PE Operational Platform 4.9 million birds per day ~70,500 team members MT DF BA Production units located in the south, southeast and mid-west regions 23,970 hogs per day Production units located in the south and mid-west regions 29 poultry processing facilities 08 hogs processing facilities 21 PFP units 14 distribution centers MS RS PR SC SP MG RJ 115,000 tons per month Production units located in the south, southeast, northeast and mid-west regions Main Brands Net Revenue LTM 2Q18 R$17.1 Bn EBITDA LTM 2Q18 R$1.6 Bn 9.1% Margin
JBS Brazil Beef production in Brazil, in addition to leather and other Related Business Brazil PA CE Operational Platform 34,240 bovines per day AC RO TO BA PE 100% in Brazil 70,434 hides per day ~50,000 team members MT GO MG 18 facilities in Brazil 35 beef processing facilities MS 01 facility in Mexico, Vietnam and Italy 03 feedlots PR SP RJ 04 facilities in Uruguay 02 facilities in Argentina 21 distribution centers 10 central and 11 regional 18 tanneries¹ 21 distribution centers 07 PFP units RS 08 related business Main Brands Biodiesel Can making Collagen JBS Carriers / TRP Trading Hygiene and Clean Casings Recycling Net Revenue LTM 2Q18 R$22.8 Bn R$30.0 million EBITDA LTM 2Q18 0.1% Margin Note 1: Does not consider facilities outside Brazil 9
10 JBS USA Beef Beef production in the United States, Canada and Australia United States WI MI ~35,000 team members UT CO NE PA Operational Platform 42,533 bovines per day 28,130 in the US 4,200 in Canada 19 beef processing facilities 06 feedlots 03 tanneries Australia and NZ AZ TX GA 10,203 in Australia 08 carrier units 13,850 hides per day 08 case ready facilities Canada 5,950 in the US 08 distribution centers 7,900 in Australia 03 lamb processing facilities 06 feedlots 01 hogs processing facility (Primo) 06 in Australia / Capacity of 162,000 bovines Main Brands 08 distribution centers 07 DCs in Australia 01 DC in New Zealand 08 carriers units in the US Net Revenue LTM 2Q18 US$21.9 Bn EBITDA LTM2Q18 US$1.7 billion 7.7% Margin
11 JBS USA Pork Pork and value added production in the United States United States Operational Platform MN IA VT 92,000 hogs per day IL IN 100% in the US ~11,000 team members CA OK AR KY NC 07 PFP facilities 05 hogs processing facilities MS Examples of products 07 PFP facilities 02 genetic units 02 distribution centers Main Brands Net Revenue LTM 2Q18 US$6.2 Bn EBITDA LTM 2Q18 US$724 million 11.7% Margin
Pilgrim s Pride Poultry production in the United States, Mexico, Puerto Rico and Europe United States & Puerto Rico MN WI Operational Platform 8.7 million birds per day TX AR LA WA VA KY TN NC AL GASC Europe 25 facilities / 6.6 million birds in the US 01 facility / 66,000 birds in Porto Rico 06 facilities / 1,2 million birds in Mexico 04 facilities / 871,000 birds in UK 40,800 tons of products per month 04 facilities in the US ~60,000 team members 36 poultry processing facilities 19 PFP facilities 22 distribution centers Mexico FL 02 facilities in Mexico 06 facilities in the UK 03 facilities in France Main Brands 03 facilities in Italy 01 facility in Netherlands 22 distribution centers 21 located in Mexico 01 located in Porto Rico Net Revenue LTM 2Q18¹ US$11.1 Bn EBITDA LTM 2Q18¹ US$1.3 billion 11.3% Margin Note 1: includes Moy Park results in all quarters. 12
Evolution by Business Units Seara (R$)¹ Net Revenue (billion) EBITDA (million) and % 8.2% 11.1% 10.9% 8.3% 4.6 5.5% 4.3 4.5 4.0 4.1 JBS Brazil (R$) Net Revenue (billion) EBITDA (million) and % 6.2 5.9 5.9 5.8 5.1 4.2% 6.2% 1.4% -5.2% -1.6% 356.1 508.5 488.4 330.2 226.7 261.0 72.5-308.6-92.5 358.6 2Q17 3Q17 4Q17 1Q18 2Q18 JBS USA Beef (US$) 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 JBS USA Pork (US$) 2Q17 3Q17 4Q17 1Q18 2Q18 Net Revenue (billion) EBITDA (million) and % Net Revenue (billion) EBITDA (million) and % 5.5 5.5 5.7 5.1 5.6 5.9% 7.3% 7.0% 6.1% 10.2% 11.7% 15.1% 11.7% 12.1% 7.2% 324.2 405.1 395.9 308.2 570.1 1.5 1.7 1.6 1.5 1.4 177.8 255.8 186.9 177.7 103.4 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Pilgrim s Pride² (US$) 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Net Revenue (billion) EBITDA (million) and % 16.3% 16.6% 2.8 2.8 2.8 2.7 2.7 8.8% 9.9% 10.0% 448.9 463.6 241.0 271.8 282.5 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 ¹ Adjusted EBITDA excluding the R$112.9 million impact from the truckers strike in Brazil at Seara. ² Adjusted EBITDA in accordance with PPC reported earnings release. 13
2Q18 Consolidated Results 14
2Q18 HIGHLIGHTS N et rev enue was R$45.2bn, up 8.4% Consolidated adjusted EBI TDA¹ i ncreased by 12.8% to R$4.2bn A d j usted net i ncome² was R$3.0bn and reported accounti ng l oss was R$911.1 mi F ree cash f l ow was R$1.9bn Reducti on i n net d ebt of US$2.1bn compared wi th 2 Q 17 Lev erage i n US $ reduced to 2.98x, compared to 4.07x i n 2Q17 Lev erage i n R$ reduced to 3.47x, compared to 4.16x in 2Q17 ¹ Adjusted EBITDA excluding the R$112.9 million impact from the truckers strike in Brazil at Seara ² Adjusted net income excluding the non-cash effect of FX variation 15
16 2Q18 Consolidated Results Net Revenue (R$ million) Gross Profit (R$ million) Gross margin (%) 41,674.8 8.4% 45,175.6 14.8% 6,159.1 13.5% 15.5% 6,987.5 2Q17 2Q18 2Q17 2Q18 Net revenue was Gross profit was R$45.2Bn Increase of 8.4% compared with 2Q17 R$7.0Bn Increase in gross margin from 14.8% in 2Q17 to 15.5% in 2Q18
2Q18 Consolidated Results Adjusted EBITDA¹ (R$ million) Adjusted Net Income (R$ million) EBITDA margin (%) 9.0% 9.4% 2Q17 2Q18 2Q18² 2,998.3 3,757.8 12.8% 4,237.6 309.8 2Q17 2Q18-911.1 Adjusted EBITDA was R$4.2Bn Increase in EBITDA margin from 9.0% in 2Q17 to 9.4% in 2Q18 Adjusted net income² was R$3.0Bn Reported accounting loss was R$911.1 Mn ¹ Adjusted EBITDA excluding the R$112.9 million impact from the truckers strike in Brazil at Seara ² Adjusted net income excluding the non-cash effect of FX variation 17
18 2Q18 Consolidated Results Operating Cash Flow (R$ million) Free Cash Flow (R$ million) 177.2% 2,493.1 2Q17 2Q18 1,929.6 899.5 2Q17 2Q18-432.3 Cash flow from operational activities was R$2.5Bn Free cash flow was R$1.9Bn
2Q18 Consolidated Results Net debt (million)/leverage Net debt decreased by US$2.1 billion in relation to 2Q17 4.16 4.07 Net Debt (R$) Net Debt (US$) Leverage (R$) Leverage in US$ reduced to 2.98x from 4.07x in 2Q17 3.42 3.45 3.38 3.26 3.24 3.47 3.13 2.98 Leverage (US$) Leverage in R$ reduced to 3.47x from 4.16x in 2Q17 50.4 45.5 45.3 45.5 50.5 15.2 14.4 13.7 13.7 13.1 2Q17 3Q17 4Q17 1Q18 2Q18 19
2Q18 Consolidated Results Cash at the end of 2Q18 was R$13.1Bn In addition, JBS USA has US$1,856.5 mln (R$7,158.3 mln)¹ fully available unencumbered line under revolving credit facilities Total liquidity at the end of 2Q18 was Debt profile ST/LT LT 93.0% ST 7.0% Source breakdown Commercial Banks 43% R$20.3Bn Five times higher than short-term debt Capital Markets 57% Entity breakdown Seara 7.0% JBS USA 59.6% Currency and cost breakdown 9.06% p.a. R$ 4.0% JBS S.A. 33.4% US$ 96.0% 5.67% p.a. ¹ Converted using the prevailing FX rate at the end of the period 20
21 JBS Priorities C onti nuous focus on operational efficiency Organic g r owth I nv estments i n innovation and quality F ocus on deleveraging World-class G l o b a l Compliance Program
Other Relevant Topics 22
23 Compliance JBS has implemented a number of initiatives to strengthen its compliance culture, such as the Always Do It Right program, where each employee serves as a multiplier of best practices. JBS received an 8.1 grade on the Transparency International ranking the average grade in Brazil is 5.7. The company is a signatory of the Business Integrity and Anticorruption Compact from the Ethos Institute, and has implemented a Global Code of Ethics & Integrity.
24 Sustainability JBS maintains several sustainability initiatives that positively influence the entire value chain, from sourcing raw materials to product packaging disposal. A satellite monitoring system maintained by JBS covers around 59 million hectares of the Amazon region, including 437 municipalities, aiming environmental preservation (deforestation) and indigenous land criteria and taking steps to combat labor analogous to slavery. JBS operates in the circular economy (take, make and dispose) and uses its raw material to produce leather and collagen. It also employs structured programs to transform waste into biodiesel and fertilizer, reducing water use and greenhouse gas emissions.
25 Animal Well-Being In 2017, JBS invested R$ 14.7 million in Animal Well-Being improvements. JBS Supply Chain Seal assesses all animal quality and well-being criteria, certifying guaranteed beef sourcing. The protocol is certified by the SBC, the Brazilian Certification Service. In 2017, JBS was ranked one of the best companies in the world in Animal Well-Being practices by the BBFAW.
26 Quality JBS is ISO 9001 certified and the Brazilian company with the largest number of facilities certified by the BRC (British Retail Consortium). The company s rigorous quality control procedures carry out over 120 international audits every year in Brazil alone. Worldwide, over 70 thousand employees have undergone mandatory food safety training.
OUR 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. 27