2015 and 4Q15 Earnings Presentation

8/19/2019 2015 and 4Q15 Earnings Presentation

1/27

4Q15 AND 2015

EARNINGS

PRESENTATION

A GLOBAL

FOOD

COMPANY

São Paulo, March 17th, 201


2/27

CONSOLIDATED RESULTS2015

2


3/27

3

2015 CONSOLIDATED HIGHLIGHTS

Gross Margin (%)

CONSOLIDATED NET SALES (R$ MILLION) CONSOLIDATED GROSS PROFIT (R$ MILLION)

| Sales growth with an expansion of R$42.4 billion (+35.2%) y-o-y.

| Increase of 21.0% in gross profit.

120,470

162,915

2014 2015

35.2%

18,673

22,590

15.5%13.9%

2014 2015

21.0%


4/27

4


EBITDA Margin (%)

CONSOLIDATED EBITDA (R$ MILLION) CONSOLIDATED NET INCOME (R$ MILLION)

| Increase of 20% in Consolidated EBITDA .| Incremental EBITDA of acquisitions concluded throughout the year and not included in JBS results

corresponds to R$1.5 billion¹.

| Expansion in net income of 128% over 2014.

11,090

13,300

9.2%8.2%

2014 2015

19.9%

2,036

4,640

0.71

1.60

2014 2015

EPS (R$)

127.9%

Note 1. Tyson de México, Primo Group, Moy Park, Cargill Pork, among others.


5/27

8,987

21,206

2014 2015

5

OPERATIONAL CASH FLOW (R$ MILLION) FREE CASH FLOW EX-ACQUISITIONS (R$ MILLION)

| Strong operational cash generation.

| Free cash flow after CAPEX and before acquisitions was R$17.0 billion.


136.0%

169.3%

6,295

16,955

2014 2015

169.3%


6/27

9,475 12,046

2014 2015

25,169

47,039

2.10x

3.18x

2014 2015

6

NET DEBT

(US$ MILLION)NET DEBT

(R$ MILLION)/ LEVERAGE

2.91x¹

Note 1. Leverage considers the proforma results of recent acquisitions (Company estimates)


RECENT ACQUISITIONS CONSIDERED TO CALCULATE PROFORMA EBITDA¹

| Tyson de Mexico

| Primo Group

| Moy Park

| Big Frango

| Anhambi

| Cargill Pork

| Total cost: ~US$5.0 billion / R$20.0 billion

| Incremental EBITDA in the year: ~R$1.5 billion


7/27


8/27


9/27

PRIORITIES IN 2016

Organic growth

Operational excellence

Reduction in working capital

Free cash flow generation

Reduction in leverage

More efficient tax structure

Return on Equity ROE)

Focus on prepared and branded products

9


10/27

CONSOLIDATED RESULTS4Q15

10


11/27

34,303

47,161

4Q14 4Q15

5,436

5,694

15.8%12.1%

4Q14 4Q15

11

4Q15 CONSOLIDATED HIGHLIGHTS

CONSOLIDATED NET SALES

(R$ MILLION)CONSOLIDATED GROSS PROFIT

(R$ MILLION)

| Expansion in net revenue of 37.5% compared to 4Q14.

| Increase in gross profit from R$ 5.4 billion in 4Q14 to R$ 5.7 billion in 4Q15.

37.5%

Gross Margin (%)

4.7%


12/27

3,290 3,132

9.6%

6.6%

4Q14 4Q15

12


| Reduction in EBITDA impacted by Beef and Chicken operations in North America.

| Loss in the quarter due to non-recurring expenses of R$ 460.6 million.

-4.8%

EBITDA Margin (%)

CONSOLIDATED EBITDA

(R$ MILLION)CONSOLIDATED NET INCOME LOSS)

(R$ MILLION)

619

-275

4Q14 4Q15


13/27

4,437

2,552

4Q14 4Q15

5,320

3,578

4Q14 4Q15

13

| Operational Cash Flow generation of R$ 3.6 billion in 4Q15.

| Free cash flow after CAPEX and before acquisitions was R$2.6 billion in 4Q15.


-42.5%

-32.7%

OPERATIONAL CASH FLOW

(R$ MILLION)FREE CASH FLOW EX-ACQUISITIONS

(R$ MILLION)


14/27

BUSINESS UNITS2015 AND 4Q15

14


15/27

2,052.3

3,371.8

15.9% 18.0%

2014 2015

12,890.3

18,715.1

2014 2015

15

JBS FOODS 2015

| Growth in sales due to acquisitions and organic.

| Launching of more than 100 products in 2015, focused on innovationand convenience.

| Improvement in service levels.

| Solid results in 2015 with EBITDA margin expansion.

NET REVENUE

(R$ MILLION)EBITDA

(R$ MILLION)

45.2% 64.3%


16/27


17/27

26,191.7

28,622.2

2014 2015

17

JBS MERCOSUL 2015

| Revenue growth due to an increase in sales prices.

| Reduction in the number of livestock processed and in the volumesold.

| Profitability maintained, despite adverse conditions in the market.

| Opening of new export markets.

2,319.0 2,315.1

8.9% 8.1%

2014 2015

9.3%

-0.2%

NET REVENUE

(R$ MILLION)EBITDA

(R$ MILLION)


18/27

534.1

921.1

7.1%

12.3%

4Q14 4Q15

7,545.7 7,487.6

4Q14 4Q15

18

JBS MERCOSUL 4Q15

| Increase in sales prices offset the reduction in volume sold.

| Expansion of 72.5% in EBITDA and strong margin improvement.

| Recovery in exports with diversification of market destinations.

-0.8%

NET REVENUE

(R$ MILLION)EBITDA

(R$ MILLION)

72.5%


19/27

19

JBS USA BEEF 2015

Swift

(bolinha) e

Primo

NET REVENUE

(US$ MILLION)EBITDA

(US$ MILLION)

| Slight improvement in sales via increase in volumes.

| Maintenance of cow/heifer retention generating reduced availabilityof cattle.

| Perspective of growth in the cattle herd from 2016 onwards shouldbenefit the profitability of the industry.

| Increase in sales of value added products in Australia.

21,625.2 22,134.0

2014 2015

916.1

586.7

4.2%2.7%

2014 2015

2.4%

-36.0%


20/27

5,923.7

5,250.7

4Q14 4Q15

20

JBS USA BEEF 4Q15

Swift

(bolinha) e

Primo

| Reduction in beef prices and devaluation of AUD impactedrevenues.

| Increase in average weight caused over supply of beef in themarket.

| High volatility in cattle prices during the quarter.

| Reduction in gross margin and EBITDA.

-11.4%

NET REVENUE

(US$ MILLION)EBITDA

(US$ MILLION)

325.1

-25.2

5.5%

-0.5%

4Q14 4Q15


21/27

21

JBS USA PORK 2015

| Increase in volume sold impacted sales prices.

| Stability of operational margins.| Relevant synergy capturing through the integration of acquired

assets.

3,827.03,430.4

2014 2015

405.6347.5

10.6% 10.1%

2014 2015

-10.4%

-14.3%

NET REVENUE

(US$ MILLION)EBITDA

(US$ MILLION)


22/27

95.7

141.39.9%

13.0%

4Q14 4Q15

964.0

1,087.7

4Q14 4Q15

22

JBS USA PORK 4Q15

| Beginning of Cargill Pork assets integration in 4Q15.

| Expansion in EBITDA and EBITDA margin.

| Recovery of exports, mainly to South Korea and Mexico.

12.8%

47.6%

NET REVENUE

(US$ MILLION)EBITDA

(US$ MILLION)


23/27

8,583.48,180.1

2014 2015

23

JBS USA CHICKEN (PPC) 2015

| Lower sales prices impacted revenues.

| Diversification in the product portfolio and sales channels permitted

JBS to deliver solid and consistent results in 2015.

| Management identified US$185 million in operational improvementsfor 2016.

| Expansion of Mexican operations.

1,352.21,213.5

15.8% 14.8%

2014 2015

-10.3%

-4.7%

NET REVENUE

(US$ MILLION)EBITDA

(US$ MILLION)


24/27

2,110.41,960.8

4Q14 4Q15

367.8

150.0

17.4%

7.6%

4Q14 4Q15

24

JBS USA CHICKEN (PPC) 4Q15

| Adverse and seasonal conditions impacted revenue and EBITDA.

| Reduction in prices in the international market.

| Case ready and small bird operations continued to deliver strongresults.

| Investments in innovation and customization of products to meet theneeds of key clients.

-7.1%

-59.2%

NET REVENUE

(US$ MILLION)EBITDA

(US$ MILLION)


25/27

Mission


26/27

26

Mission

“ To be the best in what

we set out to do,completely focused onour business, ensuring the

best products and

services for ourcustomers, consistencyfor our suppliers,

profitability for our

shareholders and theopportunity of a betterfuture for all our team

members.


27/27

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 projectionsand, as such, are based exclusively on the expectations of JBS’ management concerning the future of thebusiness and its continued access to capital to fund the Company’s business plan. Such forward-lookingstatements depend, substantially, on changes in market conditions, government regulations, competitivepressures, 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.

Documents

2015 and 4Q15 Earnings Presentation