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7/28/2019 Seara Acquisition Presentation

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Seara Brasil Acquisition


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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 capitalto fund the Companys business plan. Such forward-looking statements depend,substantially, on changes in market conditions, government regulations, competitivepressures, the performance of the Brazilian economy and the industry, among other factorsand risks disclosed in JBS filed disclosure documents and are therefore sub ect to chan e

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without prior notice..


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JBS S.A. at a glanceAfter Seara Brasil acquisition

Leadership position in the global food industry

Estimated revenues of around US$50 billion

185,000 employees

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Production

capacity 12 million birds/day

Chicken

70 thousand hogs/day

Pork

25 thousand lambs/day

Lamb

100 thousand hides/day

Leather

85 thousand heads/day

Beef

rong ran por o o across va ue a e oo pro uc s

Distribution network with over 100k points of sale in Brazil and exports to more than 150countries in 6 continents

Production facilities in the low cost geographies


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Seara Brasil Successful history

2005

2009

2013

Ceval incorporates Seara Agro Industrial S/A

and Seara becomes one of Cevals brand

Obtains an ISO 9002 certification for the

whole chicken production chain Itapiranga,

SC (1st. Company in Brazil)

JBS

acquisition of

Seara Brasil

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Seara Brasil: Leading platform resulting from the integration and acquisition of over 20 assets/brands since 2007

19561980

1982

1989

1996

Frigorfico Seara is

founded

Acquisition of Frigorfico

Seara by Ceval Agro

Industrial S.A

First Brazilian company

to export chicken cuts to

Europe

Seara is acquired by

Cargill

Marfrig acquires Seara and starts the

integration of previously acquiredassets in the sector


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Seara Brasil Operations at a glance

Company highlights

2nd largest producer and exporter of poultry and porkin Brazil

32 production units and 21 distribution centers

45 thousand employees

Strong domestic and international presence

Global integrated platform with product diversification

Highly recognized brands

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Poultry54%

Processed34%

Pork 8%

Other 4%

Revenue by category

Europe23%

Middle East27%

Asia 27% Central &South

America 6%

Africa

7%

Russia8%

NorthAmerica

2%

Revenue by market Export by destination

Exports62%

Domestic

38%


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Seara Brasil Assets overview

Geographic Footprint and Capacity

Sizeable operation platform

2.6 million birds per day

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16.2 thousand hogs per day

10 thousand hides per day

80 thousand tons of processed

products per month

Slaughterhouses

Industrialized/Processed Products


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Presence across the food industry chain

Pork

Beef

Chicken

Seara Brasil Leadership in the global food industry

50

34

Sales estimates (US$ bn)1

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Genetics Breeders Hatchery Farms Slaughter Processing Distribution

Processed products

Distribution /Food service

Global presence

Integrated value chain and multiprotein platform

- - - -

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Source: Company filings and Bloomberg as of June 11, 20131 Tyson, BrasilFoods and Smithfield sales estimates based on Bloombergmarket consensus for 2013E as of June 11, 2013


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Seara Brasil Strong brand portfolio with more than 2.2 thousand SKU

Strong brand awareness at different price points with Seara as a global brand

Processed & elaborated Processed & frozen Margarines

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ProcessedProcessed & frozenProcessed & elaborated

Processed & frozenProcessed & elaborated Light processed & elaborated


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Zenda Leather derived from beef and lamb

Location

Employees

Hides/day

Max. hides/yearArea

Montevideo, Uruguay4064,000

1,200,00030,000m2 / 320,000sq.ft.

Zenda Uruguay Wet End and Conditioning

Overview of Zendas acquired assets

Location

Employees

Hides/day

Montevideo, Uruguay4506,000

Zenda Uruguay Finishing & Headquarters

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Montevideo

Max. hides/year

Area

1,800,000

12,000m2 / 129,000sq.ft.

Location

Employees

Hides/day

Max. hides/year

Area

Montevideo, Uruguay1641000250,0004,000m2 / 43,000sq.ft

Zenda Uruguay Cutting (I)

Location

Employees

Hides/day

Max. hides/year

Area

Montevideo, Uruguay1931500375,0004,000m2 / 43,000sq.ft.

Zenda Uruguay Cutting (II)


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Strategic rationale of the acquistion

1

2

Consolidates JBS leadership position in the

global food industry

Creates the second largest processed meatsplatform in Latin America

Consolidates global leadership position in thepoultry sector

Expands portfolio of branded, value added

products and enhances brand awareness

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3

4

5

Expands national distribution platform,

providing access to additional 60 thousand

points of sale

Potentializes the expansion into the international

market of branded further processed products

Substantial value creation through synergies

and performance improvements


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Seara Brasil acquisition Transaction overview

Research commentaries on the transaction

Granted, strategically deal makes sense for JBS. It allows them the flexibility to

export poultry to the world as it does with beef: either from Brazil or from the U.S.,

two of the most efficient producers. It also opens an avenue for growth in a

potentially higher-margin business of processed foods competing against BRF.

Longer-term, JBS could benefit strategically and financially from Seara

Broker A

June 10, 2013

Brief transaction overview

Proforma situation will create the

Acquisition of Seara Brasil and Zenda (Uruguay) from Marfrig

Firm value of Seara Brasil and Zenda: R$5.85bn, being

R$5.6bn for Seara Brasil and R$250mm for Zenda Transaction subject to approval of CADE (Brazils antritrust

authority)

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The deal will help JBS , Brazil's dominant beef processor, boost its share of

the country's poultry and pork market.

Reuters

June 10, 2013

No.1 Worlds largest producer of beef and sheep meat

No.1 Worlds largest leather processor

No.1 Worlds largest chicken producer

No.2 Brazils second largest pork meat producer

No.2 Second largest processed meat platform in Latin

America

No.3 Third largest pork meat producer in the US


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88,5% 87,9%91,0%

94,9% 94,8% 94,2%

97,0%95,8% 94,9% 95,5% 94,0% 94,8%96,0%

94,9%

112,2% 112,5% 111,6% 110,3%111,9% 111,3% 111,3%

Seara Brasil Strong market momentum

Nielsen price index Meat processed products

KPI Seara Brasil

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Jan/Feb 2012 Mar/Apr 2012 May/Jun 2012 Jul/Aug 2012 Sep/Oct 2012 Nov/Dec 2012 Jan/Feb 2013

Sales mix by product domestic market (R$ mm)Sales mix by market (R$ mm)

384 392621

776 740186 212

341

411 392

570 604

962

1.187 1.132

1Q12 2Q12 3Q12 4Q12 1Q13

Processed products In natura

570 604962 1.187 1.132

816 1.000

1.012 986 9171.386

1.604

1.9742.173 2.049

1Q12 2Q12 3Q12 4Q12 1Q13

Domestic market Exports

Source: Nielsen


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Current favorable market dynamics (contd)

16.62113.700 12.645

9.510

3.160 2.958

29.678

Overview of the global poultry market

Producers (000 tons)1

3.508

3.303

1.090

538 411 336

1.569

Exporters (000 tons)1

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.

USA China Brazil EU-27 India Mexico Other

Poultry production in Brazil (000 tons)

5.980 6.5677.449 7.645 8.408

9.350 9.35510.305

11.033 11.02312.312 12.863 12.645

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Brazil USA EU-27 Thailand China Argentina Other

Source: USDA1 Data for 2012


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Current favorable market dynamics (contd)

1,31,4

1,71,9

2,0 2,22,4

2,62,8

3,1

Ready-made processed foods market size in Brazil (R$ billion)1

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2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E

Processed frozen food market size in Brazil (R$ billion)1

2,7 2,93,2 3,6

3,94,2

4,55,0

5,56,0

2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E

Source: Euromonitor. Latest data available1 Market size measured by sales


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JBS successful track record of turnaround and integrating operations

Pilgrims Pride acquisition (2009)Swift acquisition (2007)

Key initiativesKey initiatives

Cost reductionEfficiency improvement

Margin improvementIntegration of processes

SG&A controlBrand repositioning

Proven management team with experience to integrate and extract synergies

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1.095

2.710

80042

144 110

1.615

Dec-09 Nov-10 Jan-12 Mar-12/Nov-12 Total JBS investment Value creation toJBS

Current market valueof JBS in PPC

Example: JBS value creation in Pilgrims Pride acquisition

JBS USA acquisition

of 64% stake in PPC

Increase ownership

to 67.3%JBS USA

oversubscription in

PPC rights offering

Acquisition of additional

shares from Lonnie Bo

Pilgrim and Don

Jackson1

Total JBS investment in PPC

1 JBS USA acquired 18.7 mm shares from Lonnie Bo Pilgrim, the founder and former controlling shareholder of PPC (US$107.2 mm) and 455.3 thousand shares from Don Jackson, JBSUSAs former CEO (US$2.7 mm)2 PPC market value of US$3,585mm (as of june 11, 2013)

64.0%JBS

stake in

PPC

67.3% 68.0% 75.6%

2


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Mission

To be bestin what we set out to do, totally focusedonour business, ensuring the best products and services

, ,

satisfactory profitabilityfor our shareholders and thecertainty of a better future to all our employees.

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