presentation jbs jan english

JBS S.A.

January / February, 2012

JBS S.A.JBS S.A.

JBS S.A. at a glance

Founded in the 1950’s in West Central Brazil

IPO in 2007

Leading protein producer in the World

Revenues of over US$27 billion in the first nine months of 2011

EBITDA of US$1.3 billion in the first nine months of 2011

3PAGE

EBITDA of US$1.3 billion in the first nine months of 2011

Net revenue organic growth of 11.1% in local currency in 9M11 y.o.y.

125,000 employees worldwide

134 production units in 6 continents

Market cap of approximately US$ 10 billion(1)

(1) 12/30/2011

JBS Ranking

3 Geographic and market segment diversification

1 Market Leader

4 Well-recognized brands

2 Track Record of successful acquisitions

Largest global beef and lamb producer1

st

Largest global leather processor1

st

4PAGE

brands

Largest global chicken producer2

nd

Largest dairy producer in Brazil3rd

Largest pork producer in the US3rd

Source: JBS

Merger and Acquisition track record More than 30 acquisitions in 15 years

31.1

Rio BrancoCacoal 1Cacoal 2

VenadoTuerto

JV Beef Jerky

Merger with BertinJBS Couros5 new units

Tatiara Meat (Swift Austrália)

Inalca

SB Holdings

Berazategui (Rio Platense)Colonia Caroya

Maringá (Amambay)

Swift Foods Co.

JBS went international with the acquisition of Swift Argentina.

Construction of a sustainable global meat production and sales platform.

2005

JBS became the largest beef company in the world and the biggest Brazilian company in the food industry and entered the US pork market.

2007

2008

Diversification of market segments through the acquisition of Pilgrim’s Pride and merger with Bertin.

2009

JBS Swift became the leader in lamb production in Australia.

2010

Pilgrim´s Pride


1 Market Leader


2 Track Record of successful acquisitions Rockdale Beef

SmithfieldBeefFive Rivers

Tasman

5PAGE

0.3 0.4 0.4 0.5 0.5 0.4 0.7 1.2 1.5 2.0

7.2

16.5 17.2

1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Barra do Garças (Sadia)

Andradina (Sadia)

Barretos (Anglo)

Pres. Epitácio e Campo grande (Bordon)

Araputanga(Frigoara)

Cáceres (Frigosol)

Iturama (Frigosol)

Cacoal 2Porto VelhoVilhena (Frigovira)

Pedra Preta (Frigo Marca)

TuertoPontevedra (CEPA)

Net revenue (USD billion)

RosárioSan Jose(Swift Argentina)

brands

Source: JBS

Diversified market segments

Beef

Pork

Chicken

Transportation

Leather

1 Market Leader




6PAGE

Biodiesel

Collagen

Dairy products

Lamb

brands


1 Market Leader



Presence in more than 100 countries, in 6 continents

Strategic Geographical Distribution

7PAGESource: JBS

brands

Slaughterhouse and Industry

Sales Office

Pork

LeatherBeef

Distribution CenterDairy

Biodiesel

Chicken

Geographic Presence andProductionCapacity

85,825 heads/day

Beef

7.9 mm birds/day

Chicken

50,000 heads/day

Pork

5,400 tons/day

Dairy

24,000 heads/day

Lamb

76,100 hides/day

Leather

3

60

37

20

7

1

58

17

134

6 Lamb

Our Strategy

RATIONALE

Associating quality and branding to increase client loyalty

Customized and further processed products for the end users

Value added products

Branding

8PAGE

EBITDA Margin

Expanding a global distribution platform to reach end clients

Developed an efficient and diversified global production platform

Production platform

Sales and distribution platform

Financial Structure

ExperiencedManagement

Cost reduction, process

optimization

RiskManagement

JBS’s Value & Strategy

Well-recognized Brands, symbols of quality


1 Market Leader



Brazil

Argentina

9PAGE

brands

USA

Australia

Marketing Campaign

In October of 2011, JBS launched an innovative beef marketing campaign, initially in the State of São Paulo, Brazil


1 Market Leader



10PAGE

Brand building to enhance value

brands

Perspectives for the animal protein market

JBS is well positioned to serve global demand for animal protein

A promising sector to invest in

Global consumption of animal protein has been increasing

Consumption by region over the past ten years

North America

E.U. - 27

Middle East

North Asia

East Asia

+3.0%

+41.4%

+47.7%+7.5%

+23.7%

12PAGE

Central America

South America

East Asia

Oceania

Southeast Asia

Africa

+29%

+32.2%

+23.7%

+48.7%

+23.3%

Source: Rabobank

+70.2%

Global Protein Consumption Growth by Species

(MT in mm)

Strong Global Industry Fundamentals

150

200

250

13PAGESource: USDA FAS

0

50

100

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

US Cattle Herd Projection

(million)

105

115

125

14PAGESource: USDA

65

75

85

95

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012e 2014e 2016e 2018e 2020e

Global Beef TradeLargest Beef Exporters

E.U. 3.8%

Uruguay 4.5%

Paraguay 4.0%

Others 9.2% Brazil 20.7%

15PAGESource: USDA 2011 (Estimated)

Uruguay 4.5%

Canada 6.8%

New Zealand 6.2%

India 12.9%

Australia 17.4%

USA 14.5%

Brazilian Beef Exports (tons)

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

5.500

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

2005 2006 2007 2008 2009 2010 9M10 9M11

-20%

+30%

Brazil, Australia and the US continue to lead global beef exports

Brazil, Australia and US represent, respectively, 20.7%, 17.4% and 14.5% of global beef trade

16PAGE

Beef and Veal exports Average Price (US$/Ton)

Australian Beef Exports (tons)

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

5.500

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

2005 2006 2007 2008 2009 2010 8M10 8M11

+4%

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

5.500

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

2005 2006 2007 2008 2009 2010 9M10 9M11

+28%

+11%

2005 2006 2007 2008 2009 2010 9M10 9M11

+1%

US Beef and Veal Exports (tons)

Source: USDA, MLA & Secex

Brazilian Chicken Exports (tons) USA Chicken Exports (tons)

1.600

1.800

2.000

3.500.000

4.000.000

4.500.000

+20%

1.400

1.600

1.800

3.500.000

4.000.000

4.500.000

Chicken Exports Brazil vs US

Brazil and US represent, respectively, 39% and 34% of global chicken trade

17PAGESource: USDA & Secex

0

200

400

600

800

1.000

1.200

1.400

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

2005 2006 2007 2008 2009 2010 9M10 9M11

Chicken Exports Average Price (US$/Ton)

+1%

0

200

400

600

800

1.000

1.200

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

2005 2006 2007 2008 2009 2010 9M10 9M11

+6%

+12%

2.500

3.000

1.200.000

1.400.000

Brazilian Pork Exports (tons) USA Pork Exports (tons)

+11%

2.500

3.000

1.200.000

1.400.000 +7%

Pork Exports US vs Brazil

US and Brazil represent, respectively, 32% and 11% of global pork trade

18PAGE

0

500

1.000

1.500

2.000

0

200.000

400.000

600.000

800.000

1.000.000

2005 2006 2007 2008 2009 2010 9M10 9M11

Source: USDA & Secex

0

500

1.000

1.500

2.000

0

200.000

400.000

600.000

800.000

1.000.000

2005 2006 2007 2008 2009 2010 9M10 9M11

Pork Exports Average Price (US$/Ton)

-7%

+20%

Global Surplus (deficit)

Goldman Sachs forecast for animal protein in 2020

19PAGESource: Goldman Sachs

Beef & Veal

Surplus Deficit

Pork

Chicken

3Q11 Highlights3Q11 Highlights

Net revenue in 3Q11 was R$15,567.8 million, 10.6% higher than 3Q10.

The Company ended the quarter with R$5.6 billion in cash, more than a 100% of its short-term debt.

3Q11 Highlights

JBS generated net cash provided by operating activities of R$897 million in the quarter.

JBS USA Beef presented EBITDA in 3Q11 of R$184.1 million , an increase of 77.9% over the last

EBITDA margin increased 101 bps to 5.1% in the quarter.

Gross Margin expanded 102bps, compared to 2Q11 and reached 10.9%.

21PAGE

The main operating highlights were:

Net debt reduced approximately R$530 million, excluding the FX variation effect in the net debt in US

dollar denominated.

JBS Mercosul presented EBITDA of R$453.8 million, with an EBITDA margin of 11.6%.

JBS USA Beef presented EBITDA in 3Q11 of R$184.1 million , an increase of 77.9% over the last quarter.

JBS USA Pork business unit presented cumulative 2011 EBITDA of US$264.8 million, 51.8% higher than in the same period of 2010.

JBS Consolidated Results – 3Q11

EBITDANet Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)

7.36.0 5.7 5.1

8,0

1600,0

1800,0

14,069.6 14,319.6 14,672.7 14,621.8 15,567.8

22PAGESource: JBS

1,026

866 836

588

787

5.7

4.05.1

-12,00,0

200,0

400,0

600,0

800,0

1000,0

1200,0

1400,0

1600,0

3Q10 4Q10 1Q11 2Q11 3Q11

14,069.6 14,319.6 14,672.7 14,621.8

3Q10 4Q10 1Q11 2Q11 3Q11

+2.5% -3.8% +6.5%+1.8%

-3.4%

-29.7%+33.9%

-15.7%

EBITDA Margin (%)

Nine Month Analysis (January to September 2011)

Net sales (R$ billion) Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion)

JBS Mercosul JBS USA(Including Australia)

JBS USA JBS USA (PPC)

Performance by Business Unit

5.15.7

9.5

12.0

9.811.1 2.2

2.5

0

23PAGESource: JBS

EBITDA (R$ bi) EBITDA (US$ mi) EBITDA (US$ mi) EBITDA (US$ mi)

9M10 9M119M10 9M119M10 9M11

0

9M10 9M11

174.4

261.5

-0,2

-0,15

-0,1

-0,05

0

0,05

0,1

0,15

0

100

200

300

9M10 9M11

357.1

-134.2

-0,9

-0,88

-0,86

-0,84

-0,82

-0,8

-0,78

-0,76

-0,74

-0,72

-0,7

-0,68

-0,66

-0,64

-0,62

-0,6

-0,58

-0,56

-0,54

-0,52

-0,5

-0,48

-0,46

-0,44

-0,42

-0,4

-0,38

-0,36

-0,34

-0,32

-0,3

-0,28

-0,26

-0,24

-0,22

-0,2

-0,18

-0,16

-0,14

-0,12

-0,1

-0,08

-0,06

-0,04

-0,02

0

0,02

0,04

0,06

0,08

0,1

0,12

0,14

0,16

0,18

0,2

-200

-100

0

100

200

300

400

500

600

700

800

900

1000

9M10 9M11

1.1

1.2

-0,15

-0,13

-0,11

-0,09

-0,07

-0,05

-0,03

-0,01

0,01

0,03

0,05

0,07

0,09

0,11

0,13

0,15

1000

1100

1200

9M10 9M11

468.9 515.5

-0,3

-0,28

-0,26

-0,24

-0,22

-0,2

-0,18

-0,16

-0,14

-0,12

-0,1

-0,08

-0,06

-0,04

-0,02

0

0,02

0,04

0,06

0,08

0,1

0,12

0,14

0,16

0

100

200

300

400

500

600

700

800

900

1000

1100

9M10 9M11

Performance by Business Unit

Net sales (R$ billion) Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion)

JBS Mercosul JBS USA(Including Australia)

JBS USA JBS USA (PPC)

Quarterly Analysis

1.7 1.8 1.9 2.0 1.9

3.4

3.6

3.8

4.0

4.2

3.53.4

3.6 3.6

3.9772 799 837 846 867

100

180

260

340

420

500

580

660

740

820

900

980

1060

1140

1220

1300

24PAGE

Source: JBS

EBITDA (R$ mi) EBITDA (US$ mi) EBITDA (US$ mi) EBITDA (US$ mi)

EBITDA Margin (%)

3Q10 4Q10 1Q11 2Q11 3Q113Q10 4Q10 1Q11 2Q11 3Q113Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11

170124.8

-55.2 -47.6-31.4

9.9%6.9%

-2.9%

-2.4%

-1.7%

-30,0%

-28,0%

-26,0%

-24,0%

-22,0%

-20,0%

-18,0%

-16,0%

-14,0%

-12,0%

-10,0%

-8,0%

-6,0%

-4,0%

-2,0%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

18,0%

20,0%

-200

-100

0

100

200

300

400

500

3Q10 4Q10 1Q11 2Q11 3Q11

373.7

238.8308.6

427.9 453.8

10.7%

7.1%8.6%

11.8% 11.6%

-10,0%

-8,0%

-6,0%

-4,0%

-2,0%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

0

100

200

300

400

500

600

3Q10 4Q10 1Q11 2Q11 3Q11

103.5

194.8

269.7

44.7

184.1

3.1% 5.4%7.1%

1.1%4.4%

-30,0%

-28,0%

-26,0%

-24,0%

-22,0%

-20,0%

-18,0%

-16,0%

-14,0%

-12,0%

-10,0%

-8,0%

-6,0%

-4,0%

-2,0%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

0

100

200

300

400

500

3Q10 4Q10 1Q11 2Q11 3Q11

90.8102.4 105.3

83.6 75.9

11.8% 12.8% 12.6% 9.9% 8.8%

-23,0%

-19,0%

-15,0%

-11,0%

-7,0%

-3,0%

1,0%

5,0%

9,0%

13,0%

0

100

200

3Q10 4Q10 1Q11 2Q11 3Q11

45.3%

25.1%20.3%

9.3%

Revenue and EBITDA Distribution by Business Unit

Net Revenue - 3Q11

25PAGE

Source: JBS

59.6%

39.6%

16.3%

-15.6%

EBITDA – 3Q11

Organic Growth

Each business unit presented double digit organic growth in their local currency, for the analyzed period.

JBS USA Beef – Net Revenue (US$ million) JBS USA Chicken – Net Revenue (US$ million)

3.000

3.200

3.400

3.600

3.800

4.000

4.200

1.700

1.800

1.900

2.000

2.100

26PAGESource: JBS

JBS USA Pork – Net Revenue (US$ million) JBS Mercosul – Net Revenue (R$ million)

2.600

2.800

3.000

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q111.600

1.700

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

500

550

600

650

700

750

800

850

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q112.800

3.000

3.200

3.400

3.600

3.800

4.000

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

JBS Consolidated Exports Distribution in 3Q11Approximately US$2.4 billion in the 3Q11 and US$7.2 billion in 9M11

Taiwan 2.4%

Others 17.9%

Mexico 14.5%

Africa and Middle East 14.0%

Vietnam 1.6%

US$ 2,374.2

27PAGE

Source: JBS

Taiwan 2.4%

China 4.4%

Canada 5.5%

South Korea 6.0%

Russia 7.0% Hong Kong 7.2%

Japan 11.7%

E.U. 7.8%

US$ 2,374.2 million

4

Leverage

Debt Profile: 3Q11

ST / LT Profile

Net debt to EBITDA, excluding Pilgrim’s Pride Corp. (PPC)*, reduced from 3.2x in 2Q11 to 3.0x in 3Q11.

Net debt to EBITDA, including Pilgrim’s Pride Corp. (PPC)*, went from 3.6x in 2Q11 to 4.0x in 3Q11.

The Company ended the quarter with R$5.6 billion in cash or cash equivalents, more than a 100% of the Company’s short-term debt.

28% 72%3Q11

The Company generated R$897 million of operating cash flow and R$620 million of net cash flow.

4.0x 41500

28PAGE

2.9 3.0 3.1 3.23.0x

0

1

2

3

4

. EBITDA. Leverage

Source: JBS* subsidiary controlled by JBS with non-recourse debt.

Short Term Long Term

33%

33%

30%

27%

67%

67%

70%

73%

3Q10

4Q10

1Q11

2Q11

2.9 3.0 3.1

3.6

4.0x

0

1

2

3

4

-100

100

300

500

700

900

1100

1300

1500

3Q10 4Q10 1Q11 2Q11 3Q11

. Leverage Ex-PPC EBITDA Ex-PPC

Stock MarketStock MarketIn 2007, JBS was the first Company in the beef industry to trade its

shares on the stock market

Average daily traded volume

of R$ 22.5 million in 4Q11

Shareholders

3.1%

30PAGESource: JBS

Sell-side analyst recommendation

Institution Analyst Recommendation Target Price (R$)

Henrique Koch

Ricardo Boiati / Alan Cardoso

Thiago Duarte / Fábio Monteiro

Pedro Herrera / Diego Maia

Fernando Ferreira / Isabella Simonato

Hold

Market Perform

Buy

Neutral

Underperform

In revision– 10.20 (last)

5.20

7.70

7.50

5.70

Banco do Brasil

Bradesco

BTG Pactual

HSBC

Merrill Lynch BofA

$

Carlos Albano Sell 5.20Citi

Gabriel Vaz Lima Equal Weight 6.50Barclays Capital

31PAGESource: Bloomberg and JBS

Fernando Ferreira / Isabella Simonato

Erick Guedes / Fernando Labes

Gustavo Oliveira / Flavio Barcala

Underperform

Outperform

Neutral

5.70

7.29

5.10

Luis Miranda Hold 7.00

Merrill Lynch BofA

Safra

UBS

Santander

Luiz Cesta /Marco Richieri Buy 5.70Votorantim

Gustavo Lomonaco / Kent Lucas Unattractive 6.60XP Equity Research

Wesley Brooks Overweight 7.50Morgan Stanley

Corporate Governance

Transparency

Good Governance Practices

Confidence

Best services and products

Solidity

1 president5 permanent directors5 permanent independent directors

Consist of shareholders or not, liable to be elected or dismissed at any time of the General Meeting.

Management and Board of Directors

Board of Directors Audit Committe

11 members 5 members

JBS is listed on the Novo Mercado, a segment in which companies are committed to following a series of rules that provide better transparency and security to investors

32PAGE

Solidity

Profitability

Future

5 permanent independent directors the General Meeting.

Elected by the board of directors, for three-year terms, and are eligible for reelection.

Board of Executive Officers

AuditFinanceHuman ResourcesCorporate Strategy / Sustainability

Committes of Directors

4 committes

*

JBS is listed on the Novo Mercado which guarantees transparency,

SustainabilityJBS is listed on the Novo Mercado which guarantees transparency,

confidence and continuous improvements in best practices

Social, economic and environmental responsibility has always been a part of the

development and business growth of JBS

Foundation

Risk and Crises Management

Corporate Direction

Knowledge Management

Stakeholders

Citizenship and Education

Good Practices of Human Resource

Human Capital Development

Environmental Management

Eco-efficiency

Sustainable Cattle Breeding

Economic Social Environmental

34PAGESource: JBS Sustainability Policy

Stakeholders Engagement

DevelopmentClimate Changes

Ecologically viable

Ecologically correct

Socially responsible

Culturally acceptable

Premises Priorities

Sustainable use of the materials

Partnership with reputable organizations

Health and Quality of life

Climate

Residue Treatment

* Clean Development Mechanism**United Nations Framework Convention on Climate Change

Classroom

Social

Germinare School is a social initiative of the JBS Institute which looks at Education as the principal instrument to transform society.

GERMINARE SCHOOL

Purpose: to prepare well-educated and well-rounded citizens with a broad cultural repertoire, sound ethical values and a positive attitude toward life and society.

JBS Institute funds Germinare SchoolSocial Responsibility

Started in 2010

35PAGE

Classroom

Laboratory

Social

Number of students (2011): 270Capacity of 630 students.

Area: 6,000 m2

Sport complex, swimming pool, computer lab and chemistry lab.

Amount invested: R$15 million

Selection process: tests and group dynamics.

Top Brazilian professors.

Source: JBS

Environmental

Purpose: reduce deforestation in the Amazon Biome; avoidpurchasing cattle from Environmentally Protected Areas – EPAs,Indigenous reserves and protected areas; eradication of slavelabor in Brazil.

Satellite image monitoring of the Amazon Biome

JBS actions related to cattle traceability and the Amazon BiomeSustainability

JBS SA participates in CDP - Carbon Disclosure Project.Also, JBS integrates the Carbon Efficient Index of BOVESPA - ICO2.

36PAGE

Amazon

Satellite image

Social & Environmental

labor in Brazil.

JBS Brazil monitors a 100% of its cattle suppliers properties viasatellite geo-referencing (GPS monitoring).

After the property coordinates are collected, the data is keyed intoJBS’s registry of cattle suppliers and is sent to an outsource companyto be analyzed by superimposing on a map constructed from satelliteimages and the DETER(1) and PRODES(2) produced by Brazil’s NationalInstitute for Space Research – INPE.

JBS contains a database of almost 12,000 cattle ranches registeredin the Amazon Biome.

Source: JBS Sustainability Policy(1)Real Time Deforestation Detection(2)Legal Amazon Deforestation Monitoring Project

Mission

“ To be best in what we set out to do, totally focused onour business, ensuring the best products and services for our customers, solidity for our suppliers,

”

for our customers, solidity for our suppliers,

satisfactory profitability for our shareholders and the

certainty of a better future to all our employees.

presentation jbs jan english

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