Acquisition of Big Frango (JBS Foods) and Primo Smallgoods Group (JBS Australia) November 21, 2014 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 Big Frango 3 Big Frango Acquisition Acquisition is part of JBS Foods’ strategy to assemble a platform in the north of Paraná, with access to exports and able to generate synergies with existing units and distribution centers Big Frango Acquisition Operation Description Acquisition through JBS Aves of 3 companies from the Big Frango Group, a fresh chicken producer located in the north of Paraná Fresh poultry production complex with 2 units (Rolândia and Santa Fé), and slaughter capacity of 460 thousand birds/day Fully integrated plants able to export to the main markets such as EU, China, Middle East and Japan Acquisition integrates with assets previously acquired by the company: hatchery, feed mill and farms Annual revenues of more than R$1 billion, out of which 60% to the domestic market and 40% exports Acquisition of the “Big Frango” brand, top of mind in Paraná and 3rd poultry brand in Brazil (fresh, frozen, seasoned and IQF) Big Frango Products Big Frango Source: JBS Foods Acquisition value: R$430 million 1 integrated poultry complex Payment by debt assumption Annual revenues of ~ R$ 1 billion Fresh IQF Frozen Frozen Fresh Seasoned Seasoned Frozen Fresh Frozen 4 Big Frango Acquisition Fresh poultry production complex with 2 units (Rolândia and Santa Fé) and installed capacity to process 460 thousand birds/day Big Frango units in Paraná State Capacity 460k birds/day Highlights Number of employees: 4,600 Number of integrated growers: 830 Strong exports to EU, China, Japan, amongst others Big Frango Units (Rolândia e Santa Fé) Source: JBS Foods 5 Grupo Primo Smallgoods 6 Transaction Overview On November 20, JBS entered into an agreement to purchase 100% of the share capital of Primo Group Consideration of AU$1,450 million (equivalent to US$1,250 million) in cash Primo Group will be acquired through JBS Australia, a subsidiary of JBS S.A. Incremental annual revenue of approximately AU$1,600 million and EBITDA of AU$150 million Expected synergies of approximately AU$30 million Acquisition multiple of 8x EV/EBITDA post-synergies Transaction remains subject to Australian regulatory approvals 7 Company Overview Leading producer of ham, bacon and package foods in Australia and New Zealand Also supplies fresh pork and beef to domestic and export markets Operates from five manufacturing plants, seven distribution centres and 37 retail stores Substantial capacity to further expand production and service export markets Highly recognisable portfolio of leading brands Directly employs over 3,000 staff Australian Smallgoods Grocery Market Share Brands Product Examples CATEGORY Other Smallgoods Fresh Meat Retail Butcher Stores Ham Bacon Other smallgoods Fresh beef Fresh pork Fresh meats Smallgoods Source: Aztec data 8 Manufacturing and Processing Plants Chullora (NSW) Smallgoods manufacturing (3) Distribution centre (7) Beef abattoir (1) Pork abattoir (1) * 37 retail butcher stores located in NSW / QLD Wacol (QLD) Wacol (QLD) Port Wakefield (SA) Port Wakefield (SA) Chullora (NSW) Scone (NSW) Carterton (NZ) Average weekly smallgoods production capacity (tonnes) Scone (NSW) Avg weekly kill capacity Total: 2,482 tonnes 20,000 pigs 3,084 1,920 307 Wacol (QLD) Chullora (NSW) Carterton (NZ) 5,400 cow s Scone (NSW) Port Wakefield (SA) 9 Strategic Rationale for the Acquisition 1 Consistent with global strategy to expand portfolio of branded, value-added products 2 Highly recognisable brands in its domestic markets 3 Best-in-class facilities, existing production capacity and a reputation for high quality and food safety mean that Primo Group enjoys significant export opportunities, with strong sales momentum already being realised in key Asian markets Highly synergistic transaction 6 Positions JBS as the #1 player in the New Zealand ham and bacon categories, with further opportunities to extend Primo Group’s product portfolio into other smallgoods categories Offers a platform to service the growing Asian market 5 Primo Group has a portfolio of iconic brands, with significant heritage in its local markets – Primo, Hans and Beehive Entry into the New Zealand smallgoods market 4 The acquisition is strongly aligned with JBS’s global strategy to expand our presence in the value-added product category, where Primo Group is attractively positioned as the market leader in Australia and New Zealand Through the acquisition, JBS is expected to capture approximately A$30 million in annualised synergies given JBS’s existing presence in the Australian market and ability to leverage the Primo Group product portfolio in export markets Entry into the Australian fresh pork market Port Wakefield (SA) fresh pork abattoir vertically integrates into Primo Group’s smallgoods manufacturing operations, enabling strategically important control over the upstream supply of raw materials 10 Estimated Synergies + Sourcing and operations AU$17m JBS export platform AU$9m SG&A (back office consolidation, freight and distribution consolidation) AU$4m Total synergies AU$30m 11 “ Mission To be the best in what we set out to do, completely focused on our business, ensuring the best products and services for our customers, consistency for our suppliers, profitability for our shareholders and the opportunity of a better future for all our team members. ”
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