JBS S.A.
Results Presentation2Q122Q12
JBS S AJBS S.A.
JBS Ranking1 Market Leader
2 Track Record of successful acquisitions
Largest global beef and lamb producer1st3 Geographic and
market segment diversification
Largest global leather processor1st4 Well-recognized
brands
Largest global chicken producer1st
Largest pork producer 3rd g p pin the US3
3PAGESource: JBS
Our Strategy
RATIONALE
Associating quality and branding to increase client loyalty
Brandingy y
Customized and further processed products for the end usersValue added products
Expanding a global distribution platform to reach end clients
Developed an efficient and
Sales and distribution platform
pdiversified global production platform
Production platform
Financial Structure
ExperiencedManagement
Cost reduction, process
RiskManagement
EBITDA Margin
g poptimization
g
JBS’s Value & Strategy
4PAGE
Well-recognized Brands, symbols of quality1 Market Leader
B il
2 Track Record of successful acquisitions
Brazil
Argentina
3 Geographic and market segment diversification g
4 Well-recognized brands
USA
AustraliaAustralia
5PAGE
Perspectives for the animal protein marketPerspectives for the animal protein market
World’s Food* Surpluses and DeficitsNet intra-regional trade, million tonnes
Western A i
Middle East Central
NorthAmerica
SouthAmerica
Australia
Europe Asia & AfricaAmerica
Eastern Europeand former
Soviet Union
19651990
19701995
19752000
19802005
19852010
7PAGE* Cereals, rice, oilseeds, meals, oils and feed equivalent of meat.Source: The Economist
Global Protein Consumption Growth by SpeciesStrong Global Industry Fundamentals
(MT in mm)
250
200
150
100
50
0
8PAGESource: USDA FAS
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Brazil, Australia and the US continue to lead global beef exports
4 5005.0005.500
1.200.000
1.400.000
Brazilian Beef Exports (tons)
-2.7%
2 0002.5003.0003.5004.0004.500
600.000
800.000
1.000.000
1 6%
05001.0001.5002.000
0
200.000
400.000
2006 2007 2008 2009 2010 2011 1S11 1S12
1.6%
2006 2007 2008 2009 2010 2011 1S11 1S12
Australian Beef Exports (tons) US Beef and Veal Exports (tons)
4.5005.0005.500
1.200.000
1.400.000
1.2%5.5006.0006.500
1.200.000
1.400.000
17.0%
2 0002.5003.0003.5004.0004.500
600.000
800.000
1.000.000
2.5003.0003.5004.0004.5005.000
600.000
800.000
1.000.000
-11.4%-0.2%
05001.0001.5002.000
0
200.000
400.000
2006 2007 2008 2009 2010 2011 1S11 1S1205001.0001.5002.000
0
200.000
400.000
2006 2007 2008 2009 2010 2011 1S11 1S12
9PAGEBeef and Veal exports Average Price (US$/Ton)Source: USDA, MLA & Secex
2006 2007 2008 2009 2010 2011 1S11 1S12
Chicken Exports Brazil vs US
Brazilian Chicken Exports (tons) USA Chicken Exports (tons)
1 600
1.800
2.000
2.200
3.500.000
4.000.000
4.500.000
-6.5%
1.400
1.600
1.800
3.500.000
4.000.000
4.500.000
800
1.000
1.200
1.400
1.600
1 500 000
2.000.000
2.500.000
3.000.000
3.4%
600
800
1.000
1.200
1 500 000
2.000.000
2.500.000
3.000.000
13.3%
13.1%
0
200
400
600
800
0
500.000
1.000.000
1.500.000
0
200
400
600
0
500.000
1.000.000
1.500.000
Chicken Exports Average Price (US$/Ton)
2006 2007 2008 2009 2010 2011 1S11 1S12 2006 2007 2008 2009 2010 2011 1S11 1S12
10PAGESource: USDA & Secex
Pork Exports US vs Brazil
Brazilian Pork Exports (tons) USA Pork Exports (tons)
2 500
3.000
3.500
1.500.000
1.800.000
-7.2%
2 500
3.000
3.500
1.500.000
1.800.000
1.8%
1.500
2.000
2.500
600 000
900.000
1.200.000
1.500
2.000
2.500
600 000
900.000
1.200.000
21.2%
0
500
1.000
0
300.000
600.000
0
500
1.000
0
300.000
600.000
0.5%
Pork Exports Average Price (US$/Ton)
2006 2007 2008 2009 2010 2011 1S11 1S12 2006 2007 2008 2009 2010 2011 1S11 1S12
11PAGESource: USDA & Secex
2Q12 Hi hli ht2Q12 Highlights
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 an increase of 72.3% compared to 2Q11. EBITDA, p pmargin was 5.5%.
JBS Mercosul was highlight during the quarter reporting net revenue of R$4,317.7 million, an increase of 19.4%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’s Pride Corporation) posted net revenue of US$2.0 billion and EBITDA of US$125.7JBS USA Chicken (Pilgrim s Pride Corporation) posted net revenue of US$2.0 billion and EBITDA of US$125.7million 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 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$5.475 billion in cash or cash equivalent, corresponding to more than 110% of short-term debt.
13PAGE
JBS Consolidated Results – 2Q12
EBITDANet Revenue (R$ million) EBITDA and EBITDA Margin (R$ million)
4.05.1 5.6
4.35.5
8,0
1200 0
1400,0
1600,0
1800,0
14,116.3 15,567.8
16,934.5 16,011.1
18,468.3
+10 3% +8 8%
587.7786.8
940.6
696.5
1,012.8
600,0
800,0
1000,0
1200,0+15.3%+10.3% +8.8% -5.5%
+45.4%+33.9% +19.5% -26.0%
-12,00,0
200,0
400,0
2Q11 3Q11 4Q11 1Q12 2Q122Q11 3Q11 4Q11 1Q12 2Q12
45.4%33.9% 19.5% 26.0%
EBITDA M i (%)EBITDA Margin (%)
14PAGESource: JBS
Performance by Business Unit Quarterly Analysis
JBS Mercosul JBS USA(I l di A t li )
JBS USA JBS USA (PPC)
Net sales (R$ billion) Net sales (US$ billion) Net sales (US$ million) Net sales (US$ billion)
(Including Australia)
4.54 3
4.3
923.1 855 4 844 01060,0
1140,0
1220,0
1300,0
2.0 1.9 1.8 1.9 2.04.0
4.24.1
4.3
3.6
3.9 3.8 3.8 846.0 867.1 923.1 855.4 844.0
100,0
180,0
260,0
340,0
420,0
500,0
580,0
660,0
740,0
820,0
900,0
980,0
EBITDA (R$ million) EBITDA (US$ million) EBITDA (US$ million) EBITDA (US$ million)
2Q11 3Q11 4Q11 1Q12 2Q122Q11 3Q11 4Q11 1Q12 2Q122Q11 3Q11 4Q11 1Q12 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12
12
-2.4% -1.7%1.2%
5.5% 6.4%
-5 0%
-3,0%
-1,0%
1,0%
3,0%
5,0%
7,0%
9,0%
200
300
400
500
427.9 453.8 407.7508.6
630.311.8% 11.6% 10.7% 13.3% 14.6%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
400
500
600
700
800
184.1223.6
1.1% 4.4% 5.0%
-1.1% -0.2%
-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%
200
300
400
500
83.6 75.9 77.055 8 49 2
9.9% 8.8% 8.3% 6.5% 5.8%
-7,0%
-3,0%
1,0%
5,0%
9,0%
13,0%
99,977
199,977
-47.6 -31.422.6
104.0 125.7
-25,0%
-23,0%
-21,0%
-19,0%
-17,0%
-15,0%
-13,0%
-11,0%
-9,0%
-7,0%
-5,0%
-200
-100
0
100
200
2Q11 3Q11 4Q11 1Q12 2Q12-10,0%
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
0
100
200
300
2Q11 3Q11 4Q11 1Q12 2Q12
44.7-45.4 -9.1
-30,0%
-28,0%
-26,0%
-24,0%
-22,0%
-20,0%
-18,0%
-16,0%
-14,0%
-12,0%
-10,0%
-100
0
100
2Q11 3Q11 4Q11 1Q12 2Q12
55.8 49.2
-23,0%
-19,0%
-15,0%
-11,0%
-0,023
2Q11 3Q11 4Q11 1Q12 2Q12
15PAGESource: JBS
EBITDA Margin (%)
JBS Consolidated Exports Distribution in 1S12Approximately US$4.4 billion
Mexico 15.5%
Others 15.1%
China, Hong Kong and Venezuela 1.9%
US$4,387 Chile 3.6%
Taiwan 2.1%China, Hong Kong and
Vietnam 14.6%
millionJapan 11.7%Canada 4.8%
Chile 3.6%
Russia 9.3%E.U 6.1%
Africa and Middle East 9.1%
South Korea 6.2%
16PAGESource: JBS
Debt Profile
2Q12 Net debt to EBITDA was 4.27x.
The Company ended the quarter with R$5.475 billion in cash or cash equivalent, which represents more than 110% of short-term debt.
Leverage ST / LT Debt Profile
The percentage of short term debt decreased from 27% in 1Q12 to 23% in 2Q12
3.60
4.04 4.004.30 4.27
41300
1500
g
28% 72%3Q11
2
3
500
700
900
1100
27%
28%
73%
72%
1Q12
4Q11
0
1
-100
100
300
500
2Q11 3Q11 4Q11 1Q12 2Q12
23% 77%2Q12
. Leverage EBITDA
.Short Term Long Term
17PAGESource: JBS
Debt ProfileAnalysis of Consolidated Net Debt in USD
Converting the Company's total net debt from Real to U.S. Dollar to analyze the evolution of debt without the effects of exchange rate variations, considering that a significant portion of the debt and revenues come from JBS's overseas operations, a reduction of 3.0% of debt in USD can be observed in the last twelve monthsdebt in USD can be observed in the last twelve months.
R$ million 2Q11 3Q11 4Q11 1Q12 2Q12
Consolidated Net Debt in R$ 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
18PAGESource: JBS
JBS actions related to cattle traceability and the Amazon BiomeSustainability
EnvironmentalJBS SA participates in CDP - Carbon Disclosure Project.
Satellite image monitoring of the Amazon Biome
Also, JBS integrates the Carbon Efficient Index of BOVESPA - ICO2.
Purpose: reduce deforestation in the Amazon Biome; avoidpurchasing cattle from Environmentally Protected Areas – EPAs,Indigenous reserves and protected areas; eradication of slavelabor in Brazil.
AmazonSocial & Environmental
JBS Brazil monitors a 100% of its cattle suppliers properties viasatellite geo-referencing (GPS monitoring)satellite geo referencing (GPS monitoring).
Af h di ll d h d i k d i
JBS contains a database of almost 12,000 cattle ranches registeredin the Amazon Biome.
S lli i
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 NationalI tit t f S R h INPE
19PAGE
Satellite image Institute for Space Research – INPE.Source: JBS Sustainability Policy(1)Real Time Deforestation Detection(2)Legal Amazon Deforestation Monitoring Project
Mission
“ To be best i h t t t t d totally focused on“ 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.”