Proposed Scheme of Arrangement SCOTT + JBS Roadshow Presentation - - PowerPoint PPT Presentation

Proposed Scheme of Arrangement

SCOTT + JBS Roadshow Presentation November 2015

Important Notice

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• INDUSTRY. THE WORDS “BELIEVE,” “ANTICIPATE,” “INVESTMENT,” “PLAN,” “ESTIMATE,” “EXPECT,” “INTEND,” “WILL LIKELY RESULT” OR “WILL CONTINUE” AND OTHER SIMILAR EXPRESSIONS IDENTIFY

FORWARD-LOOKING STATEMENTS. RECIPIENTS OF THIS DOCUMENT ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THEIR DATES. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. IMPORTANT NOTICE This overview of the Company (“Overview”) is provided to each recipient on and subject to the terms and conditions set out in this Important Notice. Acceptance of this Overview by a recipient will constitute that recipient’s irrevocable agreement to those terms and conditions. This Overview contains confidential information regarding the Company and its subsidiaries (together, the “Scott Group”) and their respective businesses and intended businesses, and is only being made available to persons who are not members of the public for securities law purposes. By accepting this Overview, each recipient accepts the terms on which it is delivered as set out in this Important Notice and agrees that they have been selected other than as members of the public for securities law purposes. Each recipient must keep this Overview and the information in it confidential and not disclose it to any other person, copy it (or any part of it) or use it for any purpose other than that for which it is provided – except to the extent (if any) that disclosure is required by law, or the Company has approved the disclosure in writing, or any such information enters the public domain other than as a breach by the recipient (or, to the knowledge of the recipient, any other person) of an obligation of confidentiality. If requested by the Company, a recipient will immediately return to the Company or destroy this Overview. The information contained in this Overview has been prepared solely by the Company and its advisors. It has not been independently verified by the Company or any other person (including any organisation named or identified in it). Any estimates, targets or other forward-looking statements contained herein have been prepared by the management of the Company and involve significant elements of subjective judgment and analysis which may or may not prove to be correct. Actual future events or results may vary significantly from any forward-looking statements. While the Company believes at the date of this Overview that the information within this Overview is in all material respects accurate, neither the Company; any person named in this Overview; any of their respective affiliates, related companies, holding companies, subsidiaries or controlling persons; nor any of the directors, officers, partners, employees, agents, representatives or advisors of any of the foregoing (each an “Affiliate”) jointly or separately makes any representation or warranty, express or implied (except, in the case of each party individually, to the extent (if any) that they are implied by law and cannot be excluded by law by that party), as to the accuracy, adequacy or completeness of any or all of the information contained in this Overview or otherwise made available to the recipient (whether orally or in writing) nor as to the reasonableness or reliability of any assumption made in such information. This Overview has been prepared solely for general information purposes and does not purport to contain all of the information that may be required by any recipient. Each recipient must conduct, and by accepting this Overview agrees to conduct, its own independent analysis of the Company and the Scott Group and the information provided to the recipient. Neither the Company; any person named in this Overview; nor any of their respective Affiliates are or will be responsible for any costs incurred by the recipient in reviewing this Overview or in taking or not taking any further action in relation to it and/or any matter to which it relates. Neither the Company; any person named in this Overview; nor any of their respective Affiliates undertakes to, or expects to, or shall be in any way required to, update or otherwise revise this Overview or any other materials supplied. By accepting this Overview each recipient irrevocably agrees and undertakes not to rely on it for any purpose. The Company and each Affiliate expressly excludes any responsibility or liability (whether in contract, tort (including negligence), at equity, under statute or otherwise, and whether in respect of direct, indirect, special, consequential or other loss or damage) relating to this Overview (including any errors or omissions howsoever caused), or the recipient or any other person placing reliance on this Overview or its contents, to the maximum extent permitted by law. Each recipient, by accepting delivery of this Overview, irrevocably agrees that it waives, and will not take any action in relation to, any rights (if any) it may now or at any future time have against any or all of the Company or any of its Affiliates in relation to or in connection with this Overview. No information set out in this Overview will form the basis of any contract. This Overview does not constitute an offer or invitation to enter into any transaction with or involving the Company or the Scott Group

• r any other person, and shall not give rise to any obligation on any person to make any such offer or invitation or otherwise deal, negotiate or discuss any transaction or other matter with any person. The

Company and the Scott Group may provide information to and/or deal with any person or group of persons, whether or not a recipient of this Overview, and shall neither be liable to any recipient for doing so, nor obliged to notify any recipient of any intention to do so or of having done so. No person is authorised to give any information or to make any statement relating to the Company or the Scott Group that is not contained in this Overview. Therefore, no such information or statement may be treated as having been authorised by the Company or any of its Affiliates except to the extent (if any) specifically authorised in writing by the Company. This Overview must not be distributed in any jurisdiction to the extent that its distribution in that jurisdiction is restricted or prohibited by law or would constitute a breach by the Company of any law. Recipients must inform themselves of and comply with all restrictions or prohibitions in such jurisdiction and not accept delivery of this Overview if that would constitute a breach of applicable law by the recipient, the Company or any other person. None of the Company, any person named in this Overview, nor any of their respective Affiliates accept or shall have any liability to any person in relation to the distribution or possession of this Overview from or in any jurisdiction.

2

Scott Technology: Automation + Robotics

At Scott we automate the Future. Across everything we do you will discover true quality, advanced engineering and a renowned design aesthetic. Scott. Quality that lasts. Quality that inspires.

Presentation Outline

4

Summary of

• ffer
• Details
• Voting

Who is JBS?

• Introduction to JBS Global
• A strong strategic partner
• Acquisition history
• JBS Australia

Why JBS Investment?

• Industry 4.0, the meat sector and our history with JBS
• Scott’s R&D efforts and meat processing technology
• Additional areas for growth

Action!

• Board and management
• Corporate governance

Additional information

• Current trading
• Independent adviser report
• Directors recommendation

Summary of proposed transaction

5

• A placement of 10 million shares at $1.39.
• OBECTIVE: Provides cash to the company to reduce bank debt.

Placement

• An offer to purchase shares at $1.39 from any shareholder who would

like to exit or reduce their shareholding.

• OBJECTIVE: Provides a “liquidity event” for shareholders to sell some

(or all) of their shares at $1.39.

Offer to purchase

• A 1 for 8 non-renounceable rights issue at $1.39 for shareholders who

do not want to sell but would like to increase their shareholding.

• OBJECTIVE: Allow shareholders who don’t sell to also invest at the

same price as JBS ($1.39).

Rights issue

• If required, after the above have been completed, a further placement

at $1.39 to provide JBS a shareholding of 50.1%.

• OBJECTIVE: Allows JBS to reach 50.1% also provides further capital to

deliver on strategy

Top up

JBS’s investment offer is in the form of a Scheme of Arrangement (‘the Scheme’) and consists of the following three components.

What do Shareholders need to do?

Action - Part 1

All shareholders asked to vote for or against the scheme at the meeting or by Proxy. If not attending the meeting on the 26th November then proxy forms should be with the Share register by 24th November 2015.

Action - Part 2

In addition, all shareholders also need to decide if they want to:

• a. sell shares to JBS or
• b. hold (do nothing) or
• c. take up rights

Important to note that you should consider and decide on your actions here even if you vote against the scheme. Your acceptance form (either accepting JBS offer or taking up your rights) needs to be completed and returned to the share registrar by 24 November 2015.

Voting options and outcomes

No

• Return to planning for

a discounted rights issue for $15-$20m.

• No liquidity event to

sell shares.

Yes

Sell shares to JBS at $1.39 and do not participate in rights issue. Retain shares and can take up 1:8 rights issue at $1.39.

Either

• r

JBS Institutional Presentation

A Global Food Company

JBS Global

    

LTM to 2Q15 Net Revenue of R$137.8 billion (NZ$64.3 billion)

 Second largest global food company according to Bloomberg ranking¹



Capacity to process 100,000 bovines per day in 73 units in seven countries Capacity to process 72,000 hogs per day in 11 units in Brazil and the United States Capacity to process more than 13 million birds per day in 58 units in the Americas

Capacity to produce more than 100 thousand hides per day in 31

units worldwide More than 215 thousand employees around the world

Bovines 40% Poultry 20% Pork 10% Prepared & Others 30%

LTM Revenue

2

Note 1. Based on 2013 Net Sales

2Q15 R$137.8 bi

Presence in 20+ countries, Exports to 150+ countries and more than

300,000 clients

Note 1. It considers only domestic sales Note 2. Includes beef and lamb operations in the USA and Australia

Unique Global Protein Platform

North America

• ~49% of JBS’ revenue¹,²

South America

• ~17.6% of JBS’ revenue¹,3

Exports

• ~30.7% of JBS’ revenue

1

Note 3. Includes leather and hides operations in Brazil, Uruguay, Mexico, Germany, Vietnam and China and also Rigamonti operations in Italy.

JBS – A strong strategic partner for Scott JBS diversified products portfolio shows a consistent growth performance

2013 EBITDA Margin(%) 2011 2012 EBITDA (R$ billion) 2009 2010 Net Revenue (R$ billion)



• Sales CAGR: 33%
• EBITDA CAGR: 47%

0.6 1.2 1.3 3.5 3.1 4.4 6.1 11.1 13.2 14.1 30.3 34.3 54.7 61.8 92.9 75.7 120.5 137.8

2007 2008 2014 LTM2Q15

4.3%

1 1

3.8% 3.7% 5.5% 5.0% 5.8% 6.6% 9.2% 9.6%

JBS – A successful history of corporate activity

EBITDA and EBITDA margin US$

Proven M&A and turnaround track record

 

More than 50 acquisitions in the last 10 years

2007 Pre JBS L TM Q2/2015 2009 Pre JBS L TM Q2/2015 L TM Q2/2015 2013 Pre JBS 2,638M 1,592M 1,611M

6.2% 18.8% 17.2%

1 2

US$ R$

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

• pportunity of a better future for all our team

members.

JBS’ 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.

JBS Australia Company Overview

JBS Australia Management

Wesley Batista Global CEO

JBS USA

André Nogueira CEO

JBS Australia

Brent Eastwood CEO

COO Northern Anthony Pratt COO Primo James Cleary Manager Human Resources Michael Doyle CFO Edison Alvares

• Mgr. Corp. & Regulatory

Affairs John Berry Director Andrews Meats Peter Andrews DR Johnston General Manager Harry Tancred COO Southern Sam McConnel

André Nogueira

CEO of JBS USA

• CEO of JBS USA since 2013;
• Began his career at JBS in 2007, serving as CFO through 2011 and as CEO of JBS

Australia throughout 2012;

• Prior to JBS, he held corporate banking positions at Banco do Brasil in the U.S.

and Brazil;

• Currently serves on the Board of Directors and Executive Committee of the North

American Meat Institute, Rabobank North America Advisory Board, and the Colorado State University, College of Agricultural Sciences, Dean’s Leadership Council.

Wesley Batista

Global CEO of JBS

• CEO of JBS since 2011;
• Previously acted as CEO of JBS Mercosul and JBS USA;
• Shareholder of J&F Participações, the controlling entity of Grupo JBS, and

member of the Board of Directors;

• Works at JBS Group since 1988.
• CEO of JBS Australia since September 2012;
• Previously served as COO for JBS Australia (Northern);
• Eastwood has held several executive roles at JBS USA including Head of JBS

Trading Worldwide, VP Beef Sales USA and President of JBS Carriers USA;

• Prior to JBS, Eastwood held positions at Australia Meat Holdings, the DR Johnson

Group and served three years as CEO of the ConAgra Trade Group in Sydney;

• Member of the Business Council of Australia’s Global Engagement Taskforce.

Brent Eastwood

CEO of JBS Australia

JBS Australia Footprint

JBS Australia is one of Australia’s leading prepared foods, beef and pork producers, with a national footprint

JBS Australia – Business Divisions  01 pork abattoir  Processing Capacity: 20,000 hogs / week Pork  09 beef processing facilities & 05 feedlots  Processing Capacity: 10,000 bovine / day Beef  03 Smallgoods manufacturing units and 02 case ready units  Processing Capacity: +5,000 tons of products / week Smallgoods and Case Ready

Smallgoods (3) Case Ready (2) Pork abattoir (1) * 37 retail butcher stores located in NSW / QLD Beef abattoir (9) Lamb abattoir (5) Beef feedlot (5)

Western Australia (WA) Northern Territory (NT) South Australia (SA) Queensland (QLD) New South Wales (NSW) Victoria (VIC) Tasmania (TAS) New Zealand (NZ)

 05 lamb processing facilities  Processing Capacity: 23,000 lamb / day Lamb

+12,300 employees

Distribution center (14) *Note: colors on the map refer to the graphs in the next slide

JBS Australia Operations

• Acquisition of

Australian Meat Holdings (AMH) (04 facilities & 04 feedlots)

History of High Growth and Leadership

• Acquisition of

Tasman Group (06 facilities & 01 feedlot)

• Majority

shareholding of Andrews Meat Industry (value-add & domestic distribution network)

• Acquisition of

Rockdale (01 facility & 01 feedlot)

• Acquisition of

Tatiara (01 facility)

JBS Australia has grown significantly over the last 8 years through the strategic acquisitions of complimentary business, that have been successfully integrated

• Acquisition of Primo

Smallgoods Net Revenue (AU$ million)

2007 2008 2009 2010 2014 2015

2,630 2,951 3,181 3,509 4,420 5,007 915 5,922 2010 2011 2012 2013 2014 2015E

+125% JBS Australia Evolution JBS Farm Assurance – example of leadership and innovation

• Implemented in 2011



• Features

 Free range  Grass fed  No antibiotics  No hormones (HGPs)  ISO/IEC 17065 3rd party (independent) audited  No GMOs



• Benefits

 Developed though strong (international) market consultation – supply and demand  Gives customers the guarantees they deserve.  Covering: Food safety, Animal welfare, Quality assurance, Traceability and OHS



• An integral part of farm management practices



Primo 9M

Step 3: Develop leading consumer brands Step 2: Expand distribution platform to reach clients; sell direct to customers in foreign markets Step 1: Develop efficient and diversified global processing platform; optimize mix Processing platform Branding Value added products Sales and distribution platform

4+% 8+% 10+%

JBS Australia has created an integrated platform that increasingly captures maximum value across the value chain JBS Australia Strategy

Why does JBS S.A. want to take a shareholding in Scott?

20

Industry 1.0

• Mechanisation

using water and steam Industry 2.0

• Mass production using

electrical power Industry 3.0

• Digital revolution

Industry 4.0

• Computerisation
• f manufacturing

End of 18th Century Start of 20th Century Start of 1970s Since 2010

Early adopters

• Automotive
• Warehousing

Mid adopters

• Furniture
• Mining

Late adopters

• Electronics
• Agriculture

Scott is a leading supplier of automated and robotic equipment solutions that improves productivity, reliability and safety across a diverse range of industries.

• Industry 4.0 (i.e. the computerisation and

automation of manufacturing activities) is still at an early stages in the meat processing sector.

• This automation can provide JBS with important

yield, productivity and efficiency gains along with food and staff safety improvements.

Scott’s current relationship with JBS Australia

Over the past two, JBS Australia and Scott have worked together installing an automated meat processing system for its lamb plant in Bordertown and elsewhere in Australia.

• The production line at Bordertown is

running daily, at commercial line speeds (approx. 10 head of sheep per minute or

• approx. 8,000 per day).
• Rather than leading to redundancies, staff

have been relocated to other parts of the plant, with consequent expansion in throughput.

• Scott’s automation equipment is also
• perating at JBS’s Brooklyn plant (lamb)

and beef plants at Dinmore and Beef City.

An overview of Scott’s Research & Development

Annual EBITDA and R&D Spend (NZ$m)

22

In excess of $40m (~10% of revenue) spent on R&D over the past six years.

Scott's patent portfolio has increased four-fold (from 7 to 35) over the past six years. More than 20 patent applications are pending.

• New meat processing products, Milktech and
• ther automated products are at or near the

commercialisation phase.

• Currently in the process of commercialising MAR’s

Bladestop (under license) as well as Rocklabs’ Boyd Crusher Elite.

• Active IP management through trademarking.

2 4 6 8 10 12 14 16 18 2010 2011 2012 2013 2014 2015

$ Millions

EBITDA R & D Spend

Scott’s involvement in automating the meat processing sector

X-Ray Primal and Grading Middle Forequarter Hindquarter

23

• To apply Scott’s automation technology to revolutionise the meat processing

sector. Goal

• Scott uses advanced imaging and sensing to measure and determine the composition of each carcass.
• The yield of each carcass is optimised by using robotic equipment for precision cutting and processing.

How

• Higher yield, reduced waste, labour efficiency, health and safety improvements.

Key Benefits

• 23 patents secured across different processes and in different geographical regions;
• First and only company (to date) to handle extreme carcass variation within automation process;
• X-ray is key patented enabling technology.

Scott’s achievements

• Further automation and expansion into other meat processing lines (e.g. beef and pork);
• New technologies (automation of different cuts, downstream processing and packing);
• Expansion into new geographies (e.g. Asia, USA, South America).

Growth drivers

Patent protection within meat processing

24

The Future Additional beef applications Pork (X-ray trials under way) Band saw safety (Bladestop)

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

X-Ray (NZ, Rotary Primal (NZ, Au, Beef Aitchbone & Knuckle Puller De-Gambrelling Knuckle Tipping Bone In Processing Chine

Hindquarter (NZ)

Primal (NZ, Australia and UK) X-Ray (NZ, Australia) Rotary primal (NZ, Australia and UK) Beef aitchbone & knuckle puller (NZ, Au, UK and Mexico) De-gambrelling (NZ, Australia and UK) Knuckle tipping (NZ, Australia and UK) Bone in processing (NZ - via 3 individual patents)

Pending US, China, Mexic, Canada, Au, Brazil

Chine boning (NZ)

Pending Australia, UK

Further complementary opportunities with meat industry customers

25

BladeStop

Prevention of band saw accidents. (trials already underway at 12 sites)

General Automation & Robotics

Packing lines, distribution and value add processing

The Board of Directors, staff and day-to-day operations

26

• Senior management will not change and staffing levels will continue to be

determined by our current business strategies;

• JBS will not be involved in the day to day operating of Scott (although

influence will come from the Board).

Management and staff

• JBS will have Board representatives appointed to give them proportional

representation;

• The Chairman is expected to remain independent;
• NZX listing requirements for at least two independent directors;
• Existing policies to remain.

Governance

• Scott will continue to pursue ambitions in all market sectors (not just

meat);

• Scott will continue to service existing and new customers regardless of

their competitive relationship with JBS;

• There are no plans by JBS to move or otherwise change any part of the

business.

Day to day

• perations

BUSINESS AS USUAL!

JBS believes it is important the unique culture and character of Scott remains intact, independent and subject to normal business forces; and market tensions

Independent Advisers Report (Northington Partners)

27

• “The full underlying value of Scott’s shares is in a range between $1.08 and

$1.26 per share”

• “The $1.39 purchase price is approx. 10% higher than the top end of our

value range and we therefore conclude that the JBS Offer is full priced”.

Northington’s Valuation Range

• “The most fundamental collective decision is whether or not to approve the

Scheme of Arrangement and thereby cede control of the company to JBS”. Key factors that Scott shareholders need to consider are as follows:

• New capital is needed but alternatives are limited;
• “JBS will potentially provide strategic benefits to Scott”;
• “Scott will continue to face significant challenges if the business continues

under its current structure”;

• “The Offer prices represents a meaningful premium over our assessed value

range”.

Northington’s Summary

Directors recommendation to shareholders

The independent Directors are in favour of the scheme of arrangement and encourage all shareholders to vote for its approval. The Directors acknowledge that your subsequent decision (if the scheme of arrangement is approved) to either sell, hold or to invest further, is a personal decision by you as an individual.

Remember …

Completion of transaction is five business days after final Court order (which will be on receipt of Overseas Investment Office approval)

28

Action Your first decision is whether to support the scheme and should be cast at the meeting on the 26th November or by proxy which needs to be with the share registrar by 24 November Your further decision to either sell, hold or invest more by taking up your rights also needs to be made now and the appropriate forms completed and sent to the share registrar By 24 November

✔