JBS S.A.

Results Presentation
2Q12

JBS S
S.A.
A

1 Market Leader

JBS Ranking

2 Track Record of
successful
acquisitions

3 Geographic and

Largest global beef and

lamb producer

4 Well-recognized

Largest global leather

processor

st

market segment
diversification

st

brands

1
3

Source: JBS

st Largest global chicken

producer

g ppork pproducer
rd Largest
in the US

PAGE

Our Strategy

RATIONALE

Branding

Associating quality and branding to

increase client loyalty
y y
Customized and further processed
products for the end users

Value added products

Expanding a global distribution

platform to reach end clients

Sales and distribution platform

Developed
p an efficient and
diversified global production
platform

Production platform
Financial
Structure

Experienced
Management
g

Cost reduction,
pprocess
optimization

JBSs Value & Strategy

Risk
Management
g
EBITDA
Margin

PAGE

1 Market Leader

Well-recognized Brands, symbols of quality

2 Track Record of
successful
acquisitions

B il
Brazil

3 Geographic and

market segment
diversification

Argentina
g

4 Well-recognized
brands

USA

Australia

PAGE

Perspectives for the animal protein market

Worlds Food* Surpluses and Deficits

Net intra-regional trade, million tonnes

Central
America
North
America

South
America

Western
Europe

Middle East
& Africa

A i
Asia

Australia
Eastern Europe
and former
Soviet Union

1965
1990

* Cereals, rice, oilseeds, meals, oils and feed equivalent of meat.

Source: The Economist

1970
1995

1975
2000

1980
2005

1985
2010

PAGE

Global Protein Consumption Growth by Species

Strong Global Industry Fundamentals
(MTinmm)

250

200

150

100

50

0
1981

1983

Source: USDA FAS

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

PAGE

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

Brazilian Beef Exports (tons)
1.400.000

5.500
-2.7%

5.000

1.200.000

4 500
4.500
4.000

1.000.000

3.500
800.000

3.000

600.000

2.500
2 000
2.000

1 6%
1.6%

400.000

1.500
1.000

200.000

500

0
2006

2007

2008

Australian Beef Exports (tons)

2009

2010

2011

1S11

1S12

US Beef and Veal Exports (tons)

1.400.000

5.500
5.000

1.2%

1.200.000

4.500
4.000

1.000.000

1.400.000

6.500
6.000
17.0%

1.200.000

5.000

1.000.000

4.500

3.500
800.000

3.000

600.000

2.500

-0.2%

1.500
1.000

200.000

500

0
2006

2007

Source: USDA, MLA & Secex

2008

2009

2010

2011

1S11

4.000

800.000

3.500

600.000

-11.4%

2 000
2.000

400.000

1S12

5.500

3.000
2.500

400.000

2.000

200.000

1.000

1.500
500

0
2006

2007

2008

Beef and Veal exports

2009

2010

2011

1S11

1S12

Average Price (US$/Ton)

PAGE

Chicken Exports Brazil vs US

Brazilian Chicken Exports (tons)

USA Chicken Exports (tons)

4.500.000
-6.5%

4.000.000

2.200

4.500.000

1.800

2.000

4.000.000

1.600

3.500.000

1.400

1.800

3.500.000

1 600
1.600

3.000.000

1.400

2.500.000
3.4%

2.000.000

1.200

2.500.000

1.000

2.000.000

800

1 500 000
1.500.000

600

1.000.000

400

500.000

200

0
2006

2007

2008

2009

2010

2011

1S11

1S12

13.1%

3.000.000

1.000
13.3%

800

1 500 000
1.500.000

600

1.000.000

400

500.000

200

0
2006

2007

2008

Chicken Exports

Source: USDA & Secex

1.200

2009

2010

2011

1S11

1S12

Average Price (US$/Ton)

PAGE

10

Pork Exports US vs Brazil

Brazilian Pork Exports (tons)

USA Pork Exports (tons)

1.800.000

3.500
3.000

-7.2%

1.500.000

2 500
2.500

1.200.000

1.800.000

3.500
3.000

1.8%

1.500.000

2 500
2.500

1.200.000

2.000
900.000

2.000
21.2%

900.000
1.500

600 000
600.000

1.000
0.5%

300.000

500

0
2006

2007

2008

2009

2010

2011

1S11

1S12

1.500
600 000
600.000

1.000

300.000

500

0
2006

2007

2008

Pork Exports

Source: USDA & Secex

2009

2010

2011

1S11

1S12

Average Price (US$/Ton)

PAGE

11

2Q12 Highlights
Hi hli ht

2Q12 Highlights
JBS posted consolidated net revenue of R$18.5 billion, 26.3% higher than 2Q11.
Consolidated EBITDA was R$1,012.8
,
million which represents
p
an increase of 72.3% compared
p
to 2Q11. EBITDA
margin was 5.5%.

JBS Mercosul was highlight during the quarter reporting net revenue of R$4,317.7 million, an increase of 19.4%
over 2Q11. EBITDA increased 47.3% over the same period and was R$630.3 million, EBITDA margin was 14.6%.

JBS USA Chicken (Pilgrim

(Pilgrimss Pride Corporation) posted net revenue of US$2.0 billion and EBITDA of US$125.7
million in the period, reversing the negative result presented in 2Q11.
Adjusted net Income in the period was R$212.9 million excluding deferred income tax liabilities generated by
goodwill (this only generates effective income tax payment if the company sells the investment that generated
goodwill). Consolidated reported net income was R$169.5 million.
The Company ended the quarter with R$5.475 billion in cash or cash equivalent, corresponding to more than 110%
of short-term debt.

PAGE

13

JBS Consolidated Results 2Q12

EBITDA
EBITDA and EBITDA Margin (R$ million)

Net Revenue (R$ million)

15,567.8

18,468.3

16,934.5

16,011.1

1600,0

14,116.3

1400,0

+10 3%
+10.3%

+8 8%
+8.8%

5.6

5.1

4.0

800,0
600,0

1,012.8

940.6

1000,0

786.8

696.5

587.7
+33.9%
33.9%

400,0

5.5

4.3

1200 0
1200,0

+15.3%

-5.5%

8,0

1800,0

+19.5%
19.5%

-26.0%
26.0%

+45.4%
45.4%

200,0
2Q11

3Q11

4Q11

1Q12

2Q12

0,0

2Q11

3Q11

4Q11

1Q12

-12,0

2Q12
EBITDA M
Margin
i (%)

Source: JBS

PAGE

14

Quarterly Analysis
Performance by Business Unit

JBS Mercosul

JBS USA
(I l di A
(Including
Australia)
t li )

JBS USA

Net sales (R$ billion)

Net sales (US$ billion)

Net sales (US$ million)

4.3
3.8

Net sales (US$ billion)

1300,0

1220,0

4.5
3.9

JBS USA (PPC)

1140,0

43
4.3

4.2

3.8

4.0

3.6

1060,0

980,0

4.1

846.0 867.1

923.1 855.4
844 0
855 4 844.0

900,0

2.0

1.9

1.8

1.9

2.0

2Q11

3Q11

4Q11

1Q12

2Q12

820,0

740,0

660,0

580,0

500,0

420,0

340,0

260,0

180,0

100,0

2Q11

3Q11

4Q11

1Q12

2Q12

2Q11

EBITDA (R$ million)

3Q11

4Q11

1Q12

2Q11

2Q12

EBITDA (US$ million)

3Q11

4Q11

1Q12

2Q12

EBITDA (US$ million)

500

EBITDA (US$ million)

16,0%

14,0%

800

700

600

500

14.6%

13.3%
10.7%
630.3
508.6
453.8
427.9
407.7

11.8% 11.6%

12,0%

16,0%

14,0%

400

1.1%

12,0%

10,0%

4.4%

5.0%

199,977

9.9%

10,0%

8,0%

8.8%

13,0%

8.3%

6,0%

-1.1% -0.2%

4,0%

300

5.5%

223.6

6,0%

2,0%

1.2%

-2,0%
300
-4,0%
99,977
-6,0%

83.6

200

75.9

-8,0%

0,0%

-12,0%

200
100

-6,0%

-45.4

-9.1

1,0%

-1,0%

-7,0%

49 2
49.2

200

12
104.0 125.7

-11,0%

100

-16,0%

-8,0%

3,0%

-1.7%

-15,0%

100

-10,0%

-2.4%

-14,0%

44.7

-18,0%
-19,0%

-47.6

-31.4

22.6

-22,0%

-5 0%
-5,0%

-7,0%

-9,0%

-11,0%

-13,0%

-20,0%

7,0%

-3,0%

55 8
55.8

-10,0%

-2,0%

-4,0%

-3,0%

77.0

9,0%

5,0%

5,0%

1,0%

184.1

6.4%

400

0,0%

4,0%

500

9,0%

2,0%

8,0%

400

300

6.5% 5.8%

-0,023

-23,0%

-15,0%

-24,0%

2Q11

3Q11

4Q11

1Q12

2Q12

2Q11

3Q11

4Q11

1Q12

2Q12

-26,0%

-28,0%

2Q11

3Q11

4Q11

1Q12

2Q12

2Q11

3Q11

4Q11

1Q12

2Q12

-17,0%

-19,0%

-100
-100

-30,0%

-21,0%

-23,0%

-200

-25,0%

EBITDA Margin (%)

Source: JBS

PAGE

15

JBS Consolidated Exports Distribution in 1S12

Approximately US$4.4 billion

Mexico 15.5%
Others 15.1%

Venezuela 1.9%
China, Hong Kong and
Vietnam 14.6%

Taiwan 2.1%

US$4,387
million

Chile 3.6%

Japan 11.7%

Canada 4.8%

E.U 6.1%
Russia 9.3%
South Korea 6.2%
Africa and Middle East 9.1%

Source: JBS

PAGE

16

Debt Profile
2Q12 Net debt to EBITDA was 4.27x.
The Company ended the quarter with R$5.475 billion in cash or cash equivalent, which represents more than 110% of short-term debt.
The percentage of short term debt decreased from 27% in 1Q12 to 23% in 2Q12

ST / LT Debt Profile

Leverage
g
4.30

1500

4.04
1300

4.00

4.27

3.60

1100

4
3

900
700

500

3Q11

28%

72%

4Q11

28%

72%

1Q12

27%

73%

300

2Q12

100
-100

2Q11

Leverage

Source: JBS

3Q11

4Q11

1Q12

EBITDA

2Q12

23%

77%

0
Short Term

Long Term

PAGE

17

Debt Profile

Analysis of Consolidated Net Debt in USD

Converting the Company's total net debt from Real to U.S. Dollar to analyze the evolution of debt without the effects of exchange rate
variations, considering that a significant portion of the debt and revenues come from JBS's overseas operations, a reduction of 3.0% of
debt in USD can be observed in the last twelve months.
months

R$ million

2Q11

3Q11

4Q11

1Q12

2Q12

12.164,1

13.654,4

13.584,0

13.924,7

15.276,9

Exchange Rate

1,5611

1,8544

1,8758

1,8221

2,0213

Consolidated Net Debt in US$

7.792,0

7.363,2

7.241,7

7.642,1

7.558,0

Consolidated Net Debt in R$

Source: JBS

PAGE

18

JBS actions related to cattle traceability and the Amazon Biome

Sustainability

Environmental
JBS SA participates in CDP - Carbon Disclosure Project.
Also, JBS integrates the Carbon Efficient Index of BOVESPA - ICO2.
Satellite image monitoring of the Amazon Biome
Purpose: reduce deforestation in the Amazon Biome; avoid
purchasing cattle from Environmentally Protected Areas EPAs,
Indigenous reserves and protected areas; eradication of slave
labor in Brazil.
Social & Environmental

Amazon

JBS Brazil monitors a 100% of its cattle suppliers properties via

satellite geo
geo-referencing
referencing (GPS monitoring).
monitoring)
JBS contains a database of almost 12,000 cattle ranches registered
in the Amazon Biome.

S lli image
Satellite
i
Source: JBS Sustainability Policy
(1)Real Time Deforestation Detection
(2)Legal Amazon Deforestation Monitoring Project

After the
Af
h property coordinates
di
are collected,
ll
d the
h data
d
i keyed
is
k d into
i
JBSs registry of cattle suppliers and is sent to an outsource company
to be analyzed by superimposing on a map constructed from satellite
images and the DETER(1) and PRODES(2) produced by Brazils National
I tit t for
Institute
f Space
S
R
Research
h INPE.
INPE
PAGE

19

Mission

To be best in
i what
h t we sett outt tto ddo, totally focused on
our business, ensuring the best products and services
for our customers, solidity for our suppliers,
suppliers
satisfactory profitability for our shareholders and the
certainty of a better future to all our employees.