JBS S.A.

October / November, 2012

JBS S.A.

JBS S.A. at a glance

Founded in the 1950s in Midwest of Brazil
IPO in 2007 Leading protein producer in the World Net Revenue of R$34.5 billion in 1st semester of 2012

EBITDA of R$1.7 billion in 1st semester of 2012

Net revenue organic growth of 18% in 1st semester of 2012 135,000 employees worldwide 301 production units in 5 continents

PAGE

1 Market Leader 2 Track Record of

successful acquisitions

JBS Ranking

3 Geographic and

market segment diversification

1 1
1
3

st Largest global beef and

lamb producer

4 Well-recognized
brands

st

Largest global leather processor

st Largest global chicken

producer

rd Largest pork producer

in the US

Source: JBS

PAGE

1 Market Leader 2 Track Record of

successful acquisitions

Merger and Acquisition track record

More than 30 acquisitions in 15 years
2005 2007
JBS went international with the acquisition of Swift Argentina. JBS became the largest beef company in the world and the biggest Brazilian company in the food industry and entered the US pork market. Construction of a sustainable global meat production and sales platform. Diversification of market segments through the acquisition of Pilgrims Pride and merger with Bertin. JBS Swift became the leader in lamb production in Australia.

2008

Inalca Swift Foods Co.

3 Geographic and

Pilgrims Pride

Rockdale Beef Tatiara Meat (Swift Austrlia)

market segment diversification

2009

Maring (Amambay) Berazategui (Rio Platense) Colonia Caroya SB Holdings JV Beef Jerky Rio Branco Venado Cacoal 1 Tuerto Cacoal 2 Porto Velho Pontevedra Vilhena (CEPA) (Frigovira) Pedra Preta (Frigo Marca) Cceres (Frigosol) Iturama (Frigosol) Rosrio San Jose (Swift Argentina)

2010

Merger with Bertin JBS Couros 5 new units Tasman

36.9 31.1

4 Well-recognized
brands
Barretos (Anglo) Pres. Epitcio e Campo grande (Bordon) Barra do Garas (Sadia)

Smithfield Beef Five Rivers

16.5

17.2

Andradina (Sadia)

Araputanga (Frigoara)

7.2

0.4
1997

0.4
1999

0.5
2000

0.5
2001

0.4
2002

0.7
2003

1.2
2004

1.5
2005

2.0
2006 2007 2008 2009 2010 2011

Net revenue (USD billion)

Source: JBS

PAGE

1 Market Leader 2 Track Record of

successful acquisitions

Diversified market segments

Beef Transportation Pork

3 Geographic and

market segment diversification

4 Well-recognized
brands

Leather Chicken

Biodiesel Lamb

Collagen

PAGE

1 Market Leader 2 Track Record of

successful acquisitions

Presence in more than 100 countries, in 5 continents

Strategic Geographical Distribution

3 Geographic and

market segment diversification

4 Well-recognized
brands

3 61

Pork Beef

39

Chicken Lamb

2 29

Biodiesel Leather

64 17

Distribution Center Sales Office

301

Slaughterhouses and Production Units

Geographic Presence and Production Capacity

Source: JBS

Beef
81,400 heads/day

Chicken
8.3 mm birds/day

Pork
50,100 heads/day

Leather
86,300 hides/day

Lamb
18,265 heads/day

PAGE

Our Strategy

RATIONALE

Branding

Associating quality and branding to increase client loyalty Customized and further processed products for the end users Expanding a global distribution platform to reach end clients Developed an efficient and diversified global production platform Risk Management EBITDA Margin

Value added products

Sales and distribution platform

Production platform Financial Structure Experienced Management Cost reduction, process optimization

JBSs Value & Strategy

PAGE

1 Market Leader 2 Track Record of

successful acquisitions

Well-recognized Brands, symbols of quality

Brazil

3 Geographic and

market segment diversification

Argentina

4 Well-recognized
brands

USA

Australia

PAGE

Perspectives for the animal protein market

Global consumption of animal protein has been increasing

Consumption growth by region over the past ten years

North Asia North America

+7.5%

E.U. - 27 +3.0%
Middle East

+47.7%
+41.4%
+23.7%
East Asia

Central America

+29%

+70.2%
Southeast Asia

+48.7%
Oceania

+32.2%
South America Africa

+23.3%

Source: Rabobank, 2010.

PAGE

11

Worlds Food* Surpluses and Deficits

Net intra-regional trade, million tonnes

Central America North America South America Australia Eastern Europe and former Soviet Union

Western Europe

Asia

Middle East & Africa

1965 1990

1970 1995

1975 2000

1980 2005

1985 2010

* Cereals, rice, oilseeds, meals, oils and feed equivalent of meat. Source: The Economist

PAGE

12

Global Protein Consumption Growth by Species

Strong Global Industry Fundamentals
(MT in mm)

250

200

150

100

50

0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Source: USDA FAS

PAGE

13

Global Beef Trade

Largest Beef Exporters

Others 12%

Brazil 17%

Argentina 3%

Uruguay 4%
Canada 5%

Australia 17%

E.U 6% New Zealand 6% USA 16%

India 14%

Source: USDA 2011 (Estimated)

PAGE

14

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

Brazilian Beef Exports (tons)
1.400.000 1.200.000 1.000.000 800.000 600.000
1.6% -2.7%

5.500 5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 2006 2007 2008 2009 2010 2011 1S11 1S12

400.000 200.000 0

Australian Beef Exports (tons)

1.400.000 1.200.000 1.000.000
1.2%

US Beef and Veal Exports (tons)

5.500 1.400.000 1.200.000 1.000.000 800.000 600.000 400.000 200.000 0 2006 2007 2008 2009 2010 2011 1S11 1S12
-11.4% 17.0%

5.000
4.500 4.000 3.500 3.000

800.000
600.000 400.000 200.000 0 2006 2007 2008 2009 2010 2011 1S11 1S12
-0.2%

2.500 2.000 1.500 1.000 500 0

6.500 6.000 5.500 5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0

Source: USDA, MLA & Secex

Beef and Veal exports

Average Price (US$/Ton)

PAGE

15

Chicken Exports Brazil vs US

Brazilian Chicken Exports (tons)

4.500.000 4.000.000 3.500.000 -6.5% 2.200 2.000 1.800

USA Chicken Exports (tons)

4.500.000 4.000.000 3.500.000 3.000.000 2.500.000 2.000.000 1.500.000 1.000.000 500.000 13.3% 13.1% 1.800 1.600 1.400 1.200 1.000 800 600 400 200

1.600
1.400 1.200 3.4% 1.000 800 600 400 200 0 2006 2007 2008 2009 2010 2011 1S11 1S12

3.000.000
2.500.000 2.000.000 1.500.000 1.000.000 500.000 0

0
2006 2007 2008 2009 2010 2011 1S11 1S12

Chicken Exports

Average Price (US$/Ton)

Source: USDA & Secex

PAGE

16

Pork Exports US vs Brazil

Brazilian Pork Exports (tons)

1.800.000 -7.2% 3.500 3.000 2.500 2.000 900.000 1.500 600.000 0.5% 1.000

USA Pork Exports (tons)

1.800.000 3.500 3.000 2.500 2.000 900.000 21.2% 1.500 600.000 1.000 500

1.500.000

1.500.000

1.8%

1.200.000

1.200.000

300.000

500
0

300.000

0 2006 2007 2008 2009 2010 2011 1S11 1S12

0
2006 2007 2008 2009 2010 2011 1S11 1S12

Pork Exports

Average Price (US$/Ton)

Source: USDA & Secex

PAGE

17

Global Surplus (deficit)

Goldman Sachs forecast for animal protein in 2020

Surplus

Deficit

Beef & Veal Pork Chicken

Source: Goldman Sachs
PAGE

18

2Q12 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 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 (Pilgrims 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

20

JBS Consolidated Results 2Q12

Net Revenue (R$ million)

15,567.8
+8.8%

EBITDA EBITDA and EBITDA Margin (R$ million)

18,468.3 16,011.1
1800,0 1600,0 1400,0
-5.5% +15.3%

16,934.5

8,0

14,116.3

4.0

5.1

5.6

4.3

5.5

+10.3%

1200,0 1000,0 800,0 600,0 400,0 200,0 0,0

940.6 786.8 587.7

+33.9% +19.5% -26.0%

1,012.8 696.5
+45.4%

2Q11

3Q11

4Q11

1Q12

2Q12

2Q11

3Q11

4Q11

1Q12

2Q12 EBITDA Margin (%)

-12,0

Source: JBS

PAGE

21

Quarterly Analysis
Performance by Business Unit

JBS Mercosul
Net sales (R$ billion)
4.3

JBS USA (Including Australia)

Net sales (US$ billion)
4.5

JBS USA
Net sales (US$ million)
1300,0 1220,0 1140,0

JBS USA (PPC)

Net sales (US$ billion)

3.9 3.6

3.8

3.8

4.2 4.0

4.3 4.1

1060,0

980,0

846.0 867.1

923.1 855.4 844.0 2.0 1.9 1.8 1.9

900,0

2.0

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

3Q11

4Q11

1Q12

2Q12

2Q11

3Q11

4Q11

1Q12

2Q12

2Q11

3Q11

4Q11

1Q12

2Q12

EBITDA (R$ million)

500 800

EBITDA (US$ million)

16,0% 14,0%

EBITDA (US$ million)

12,0% 199,977

EBITDA (US$ million)

11.8% 11.6%

700

600

500

13.3% 10.7% 630.3 508.6 427.9 453.8 407.7

14.6%

16,0%

14,0%

400

12,0%

10,0%

1.1%
300

4.4%

5.0% 223.6

10,0%

9.9%

8,0%

8.8%

13,0%

500

8.3%

6,0%

6.5% 5.8%

9,0%

5.5%
400

6.4%

9,0%

7,0%

8,0%

-1.1% -0.2% 184.1

4,0% 5,0%

5,0%

2,0%

0,0% 1,0% -2,0% 300 -4,0% 99,977 -6,0%

1.2% -2.4% -1.7% 104.0 125.7 -47.6 -31.4 22.6

3,0%

1,0%

6,0%

4,0% 400 2,0% 200

83.6

75.9

77.0 55.8 49.2

-3,0%

-1,0%

-3,0% -7,0%

-8,0%

300

0,0%

200

-5,0%

-10,0%

-2,0%

-12,0%

-11,0%

-7,0%

200 -4,0% 100

-6,0% 100

44.7 2Q11 3Q11 4Q11

-14,0% -15,0% -16,0% 100

-9,0%

-45.4 1Q12

-9.1 2Q12

-11,0%

-18,0% -19,0% -20,0%

-8,0%

-13,0%

-10,0%

-22,0%

-0,023

-23,0%

-15,0%

-24,0%

2Q11

3Q11

4Q11

1Q12

2Q12
-100

-26,0%

-28,0%

2Q11

3Q11

4Q11

1Q12

2Q12
-100 -200

2Q11

3Q11

4Q11

1Q12

2Q12

-17,0%

-19,0%

-30,0%

-21,0%

-23,0%

-25,0%

EBITDA Margin (%)

Source: JBS

PAGE

22

JBS Consolidated Exports Distribution in 1S12

Approximately US$4.4 billion

Mexico 15.5% Others 15.1%

Venezuela 1.9% Taiwan 2.1% Chile 3.6% China, Hong Kong and Vietnam 14.6%

US$4,387 million
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

23

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

Leverage
1500 1300 1100 900 700 500 300

ST / LT Debt Profile
4.30 4.00 4.27

4.04
3.60

4 3 2 1

3Q11

28%

72%

4Q11

28%

72%

1Q12

27%

73%

100
-100 2Q11 3Q11 4Q11 1Q12 2Q12

2Q12

23%

77%

0
Short Term Long Term

. .

Leverage

EBITDA

Source: JBS

PAGE

24

Debt Maturity Schedule and Profile

Net Debt: 15,276.9 (R$ million)
Short Term Net of Cash

2013

2014

2015

2016

2017

2018

2019 and after

656 169

883

1,381 2,567 4,469 3,726 2,738

Breakdown by Currency and Company

Bonds / Other

2Q12

JBS S.A. 57%

Subsidiaries 43%
2Q12

Bonds 37%

Other 63%

2Q12

R$ 25%

USD 75%

Source: JBS Financial Statements 2Q12

PAGE

25

JBS Institute funds Germinare School

Social Responsibility Social GERMINARE SCHOOL Started in 2010 Germinare School is a social initiative of the JBS Institute which looks at Education as the principal instrument to transform society. 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.
Classroom

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

Top Brazilian professors.

Area: 6,000 m2 Sport complex, swimming pool, computer lab and chemistry lab. Selection process: tests and group dynamics. Amount invested: R$15 million
Source: JBS

Laboratory
PAGE

26

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-referencing (GPS monitoring). JBS contains a database of almost 12,000 cattle ranches registered in the Amazon Biome. After the property coordinates are collected, the data is keyed into 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 Institute for Space Research INPE.
PAGE

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

27

Mission

To be best in what we set out to do, totally focused on our business, ensuring the best products and services for our customers, solidity for our suppliers, satisfactory profitability for our shareholders and the certainty of a better future to all our employees.