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Transcription:

JBS S.A. A GLOBAL FOOD COMPANY Institutional Presentation Including 4Q17 and 2017 Results São Paulo

ABOUT JBS Net Revenue of R$ 163.2 billion (FY 2017) Second largest global food company¹ Global and diversified platform Value added product portfolio with brands High performance team with ~235,000 team members Focus on Operational Excellence Note 1: according to Bloomberg ranking 2

A UNIQUE GLOBAL PLATFORM 1 facility ~2,800 employees 47 facilities ~67,000 employees 52% 3% CANADA USA 17 facilities ~14,000 employees 5% EUROPE RUSSIA 1% 13% 8 facilities ~12,000 employees MEXICO 4% AFRICA & MIDDLE EAST 3% ASIA 1 facility ~1,000 employees BRAZIL SOUTH AMERICA 1% 14% 114 facilities ~127,000 employees 23 facilities ~11,300 employees 4% AUSTRALIA & NEW ZEALAND % As % of Total Revenue Note: total employees includes third parties Beef Pork Poultry Lamb Leather 3

Tim Schellpeper President JBS USA Fed Beef Al Byers President JBS USA Regional Beef Marty Dooley President JBS USA Pork Bill Lovette Global CEO Pilgrim s Janet McCollum President Moy Park STRONG GLOBAL OPERATIONAL TEAM DRIVING INDUSTRY-LEADING RESULTS Charles Von Der Heyde President Pilgrim s Mexico Brent Eastwood David Colwell Thomas Lopez Joanita Karoleski Renato Costa Roberto Motta Nelson Dalcanale President JBS Australia President JBS Canada President Plumrose USA President Seara President JBS Brazil Beef President JBS Leather President JBS Brazil New Business 4

EVOLUTION From a Brazilian beef company in 2006 to a Global food company IPO JBS SA Net Revenue: R$14.1 bi 19,000 EMPLOYEES 2007 BERTIN 2009 2013 CARGILL PORK 2015 ~235,000 EMPLOYEES 2017 2006 Net Revenue: R$3.9 bi 2008 Net Revenue: R$30.3 bi 2010 EXPANSION IN USA AND AUSTRALIA Net Revenue: R$54.7 bi 2014 ACQUISITIONS: TYSON IN BRAZIL AND MEXICO 2016 Net Revenue: R$163.2 bi 5

STRATEGY Global and Diversified Production and Distribution Platform progressing 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 6

CONSOLIDATED EXPORTS Export Destinations Breakdown in 2017 Greater China¹ 20.9% Africa & Middle East 14.2% 6.5% 9.0% 2.9% 7.2% 20.9% 7.7% 12.4% 3.6% Japan 12.4% USA 9.0% South Korea 7.7% E.U. 7.2% Mexico 6.5% 14.2% Russia 3.6% 3.6% South America 3.6% Canada 2.9% Others 11.9% 2016 US$13,932.3mi -0.6% 2017 US$13,849.1mi Greater China, Africa & Middle East and Japan corresponded to ~48% of the total of exports Note 1: Considers China and Hong Kong 7

Business Units 8

SEARA Production of prepared foods and fresh poultry and pork products in Brazil Operational Platform 4.7 million birds per day Brazil +71,000 team members Production units located in the south, southeast and mid-west regions CE PE 23,000 hogs per day MT DF BA Production units located in the south and mid-west regions MS MG 29 poultry processing facilities 115,000 tons per month SP PR RJ 08 hogs processing facilities Production units located in the south, southeast, northeast and mid-west regions RS SC 21 PFP units 14 distribution centers Main Brands Net Revenue FY 2017 R$17.5 billion EBITDA FY 2017 R$1.6 billion 9.0% Margin 9

JBS BRAZIL Beef production in Brazil, in addition to leather and other Related Business Operational Platform 34,240 bovines per day Brazil +48,000 team members 100% in Brazil PA CE 83,000 hides per day AC RO TO BA PE 16 facilities in Brazil 01 facility in Argentina, Mexico, Uruguay and Vietnam 02 facilities in Italy 27 distribution centers 08 central and 19 regional MT MS PR RS GO SP MG RJ 35 beef processing facilities 03 feedlots 16 tanneries¹ 27 distribution centers 08 related business Main Brands Biodiesel Can making Collagen JBS Carriers / TRP Trading Hygiene and Clean R$84.3 million Net Revenue FY17 R$23.4 billion EBITDA FY17 Casings 0.4% Margin Recycling Note 1: Does not consider facilities outside Brazil 10

JBS USA BEEF Beef production in the United States, Canada and Australia Operational Platform United States +35,000 team members 42,400 bovines per day WI 28,000 in the US 4,200 in Canada 10,200 in Australia UT CO NE MI PA 19 beef processing facilities 06 feedlots 12,900 hides per day 5,000 in the US 7,900 in Australia AZ Australia and NZ TX GA 02 tanneries 06 carrier units 08 case ready facilities 06 feedlots 06 in Australia / Capacity of 150,000 bovines Canada 08 distribution centers 03 lamb processing facilities 01 hogs processing facility (Primo) 08 distribution centers Main Brands 07 DCs in Australia 01 DC in New Zealand 06 carriers units in the US Net Revenue FY17 US$21.7 billion EBITDA FY17 US$1.3 billion 6.0% Margin 11

JBS USA PORK Pork and value added production in the United States Operational Platform United States +11,000 team members 92,000 hogs per day 100% in the US MN IA VT IL IN 07 PFP facilities Examples of products CA OK AR KY NC MS 05 hogs processing facilities 07 PFP facilities 02 genetic units 02 distribution centers Main Brands Net Revenue FY17 US$6.2 billion EBITDA FY17 US$780 million 12.6% Margin 12

PILGRIM S PRIDE Poultry production in the United States, Mexico, Puerto Rico, UK and Continental Europe Operational Platform 8.3 million birds per day United States & Puerto Rico MN WI Europe +59,000 team members 25 facilities / 6.6 million birds in the US 01 facility / 66,000 birds in Porto Rico 06 facilities / 820,000 birds in Mexico TX AR LA WA VA KY TN NC AL GASC FL 04 facilities / 860,000 birds in UK 34,000 tons of products per month Mexico 04 facilities in the US 36 poultry processing facilities 02 facilities in Mexico 14 PFP facilities 04 facilities in the UK 03 facilities in France 01 facility in Netherlands Main Brands 21 distribution centers 21 distribution centers 20 located in Mexico 01 located in Porto Rico Net Revenue FY17¹ US$10.8 billion EBITDA FY17¹ US$1.4 billion 12.9% Margin Note 1: includes Moy Park results in all quarters. 13

EVOLUTION BY BUSINESS UNITS Seara (R$) Net Revenue (billion) EBITDA (million) and % 4.7 6.4% 5.3% 8.2% 11.1% 10.9% 4.6 4.3 4.5 4.1 298.9 356.1 508.5 488.4 215.8 JBS Brazil (R$) Net Revenue (billion) EBITDA (million) and % 7.2 6.2 6.2 5.9 4.2% 2.0% 1.0% 1.4% 5.1-5.2% 143.7 261.0 59.4 72.5-308.6 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 JBS USA Beef (US$) JBS USA Pork (US$) Net Revenue (billion) EBITDA (million) and % 7.3% 5.9% 7.3% 7.0% 5.3 5.5 5.5 5.7 3.7% 4.9 387.6 405.1 395.9 324.2 183.4 Net Revenue (billion) EBITDA (million) and % 12.5% 11.4% 11.7% 15.1% 1.7 11.7% 1.5 1.6 1.4 1.4 255.8 171.5 159.4 177.8 186.9 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 Pilgrim s Pride¹ (US$) Net Revenue (billion) EBITDA (million) and % 2.4 2.5 2.8 2.8 2.7 8.7% 9.7% 16.9% 16.6% 8.8% 464.0 463.6 205.4 241.4 241.0 Note 1: includes Moy Park results in all quarters. 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 14

Consolidated Results 4Q17 and 2017 15

2017 CONSOLIDATED RESULTS Net Revenue (R$ million) Gross Profit (R$ million) Gross margin (%) 14.6% 170,381 163,170 12.5% -4.2% Net revenue in 2017 was R$163.2Bn Reduction of 4.2% compared with 2016 21,314 11.5% 23,772 Gross profit in 2017 was R$23.8Bn Increase in gross margin from 12.5% in 2016 to 14.6% in 2017 2016 2017 2016 2017 Adjusted EBITDA (R$ million) Net Income (R$ million) 6.6% 8.2% EBITDA margin (%) Adjusted¹ EBITDA in 2017 was Earnings per share (R$) 0.75 Adjusted¹ net income in 2017 was 11,287 18.9% 13,416 R$13.4Bn Increase in EBITDA margin from 6.6% in 2016 to 8.2% in 2017 0.09 233.6 804.0% 2,111.4 0.19 534.2 R$2.1Bn Reported net income in 2017 was R$534.2 million, a 128.7% increase in relation to 2016, with EPS of R$0.19 2016 2017 2016 2017¹ 2017 Note 1: adjusted by the net effect of PERT 16

2017 CONSOLIDATED RESULTS Operational Cash Flow (R$ million) Free Cash Flow (R$ million) 5,204 2,778 3,667 41.9% 2070% 128 2016 2017 Cash flow generated by operational activities increased by 41.9% in 2017, reaching R$5.2Bn 2016 2017 Free cash flow in 2017 increased by 2070%, reaching R$2.8Bn 17

4Q17 CONSOLIDATED RESULTS Net Revenue (R$ million) Gross Profit (R$ million) Gross margin (%) 41,631 42,734 Net revenue in 4Q17 was 14.3% 14.8% 5,936 6,341 R$42.7Bn 2.7% 6.8% 2.7% increase compared with 4Q16. Gross profit in 4Q17 was R$6.3Bn Increase in gross margin from 14.3% in 4Q16 to 14.8% in 4Q17 4Q16 4Q17 4Q16 4Q17 EBITDA (R$ million) Net Income / Loss (R$ million) EBITDA margin (%) 7.5% 7.5% EBITDA in 4Q17 de Loss in 4Q17 was 3,113 3,198 2.7% R$3.2Bn 7.5% EBITDA margin in both quarters 663 R$451.7mn 4Q16 4Q17 4Q16 4Q17-452 18

2017 CONSOLIDATED NET DEBT Net Debt (R$ million) / Leverage 4.16x 3.38x Leverage Net debt reduced by R$1.6Bn Including FX impact 46,905-3.5% 45,283 In US$ terms, Net debt was reduced by US$700 million 2016 2017 Leverage reduced to 3.38x in 2017 from 4.16x at the end of 2016 Net Debt (US$ million) Cash at the end of 2017 was 14,392-4.9% 13,689 R$11.7Bn In addition, JBS USA has a US$1.0 billion (R$3.5 billion)¹ fully available unencumbered line under revolving credit facilities 2016 2017 Note 1: Converted using the prevailing FX rate at the end of the period 19

2017 DEBT PROFILE Breakdown by Currency and Interest Rate Debt Profile ST/LT 2016 2017 9.13% p.a. R$ 5.0% US$ 95.0% 5.40% p.a. LT 68% ST 32% LT 76% ST 24% 2016 2017 % Short Term Debt R$18.1 bn R$13.5 bn -25% Total liquidity was R$15.2 Billion R$1.7 billion higher than short-term debt 20

Compliance and Recent Events 21

COMPLIANCE JBS is implementing initiatives to strengthen its Compliance and establish a new industry standard. In 2017, the Company: Appointed respected lawyer & academic Marcelo Proença as Global Head of Compliance Hired White & Case to support implementation of the JBS Global Compliance Program and to advise on the development of best compliance practices Hired Deloitte to conduct a thorough review of all third-party contracts Established new Whistleblower Hotline Launched the Always Do It Right compliance program Strengthened role of the Compliance Department which now reports directly to the JBS SA Board Worked with Transparency International, to improve transparency in corporate reports 22

DIVESTMENT PLAN COMPLETED JBS RAISED ~R$6.0 Billion Through the Divestment Plan Jun 20, 2017 Announcement of the Divestment Plan Oct 2, 2017 Sale of Moy Park to PPC for ~ 1 billion Oct 30, 2017 Sale of feedlot and farm in Canada for C$50 million July 31, 2017 Sale of beef operations in Argentina, Paraguay and Uruguay for US$300 million* Oct 26, 2017 Sale of 19.43% stake in Vigor for ~R$1.1 billion March 16, 2018 Sale of Five Rivers in the US for ~US$200 million The sale of the majority of the assets included in the Divestment Plan was concluded in 2017. A substantial portion of the proceeds received from these asset sales was used to reduce debt. At the end of 2017, leverage was 3.38x. *The intention to sell these assets was announced on June 6, 2017 23

Our Values DETERMINATION Be relentless. Deliver superior results. Adopt a sense of urgency. Make things happen. SIMPLICITY Be practical. Focus on what is important. Adopt a hands-on approach. Avoid bureaucracy. AVAILABILITY Be receptive and open. Always be prepared and motivated to take on new challenges. HUMILITY Listen. Be helpful and thoughtful. Act with respect. Prioritize the team over yourself. Value the opinion of others. SINCERITY Be direct, truthful and transparent. Respectfully express opinion. Know how to say no, but be positive and offer solutions. DISCIPLINE Be punctual. Fulfill commitments. Deliver results. Do not make excuses. OWNERSHIP Be committed to results. Focus on details. Take responsibility. 24

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.