JBS S.A.

January / February, 2012

JBS S.A.

JBS S.A. at a glance

Founded in the 1950s 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$1.3 billion in the first nine months of 2011 Net revenue organic growth of 11.1% in local currency in 9M11 y.o.y. 125,000 employees worldwide 134 production units in 6 continents Market cap of approximately US$ 10 billion(1)

(1) 12/30/2011

PAGE

1 Market Leader 2 Track Record

of successful acquisitions

JBS Ranking

3 Geographic and

market segment diversification

1 1
2
3

st

Largest global beef and lamb producer

st

4 Well-recognized
brands

Largest global leather processor

nd Largest global chicken

producer

rd Largest dairy
producer in Brazil

3rd
Source: JBS

Largest pork producer in the US

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.

2008

Inalca Swift Foods Co.

Pilgrims Pride

Rockdale Beef Tatiara Meat (Swift Austrlia)

3 Geographic and

market segment diversification

2009 2010

Diversification of market segments through the acquisition of Pilgrims Pride and merger with Bertin. JBS Swift became the leader in lamb production in Australia.

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)

Merger with Bertin JBS Couros 5 new units Tasman Smithfield Beef Five Rivers

31.1

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

16.5

17.2

Andradina (Sadia)

Araputanga (Frigoara)

7.2

0.3
1996

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

Net revenue (USD billion)

Source: JBS

PAGE

1 Market Leader 2 Track Record of

successful acquisitions

Diversified market segments

Beef

3 Geographic

Transportation

Pork

and market segment diversification

Leather Chicken

4 Well-recognized
brands

Biodiesel

Dairy products

Collagen

Lamb

PAGE

1 Market Leader 2 Track Record of

successful acquisitions

Presence in more than 100 countries, in 6 continents

Strategic Geographical Distribution

3 Geographic

and market segment diversification

4 Well-recognized
brands

3 60

Pork Beef

37 6

Chicken Lamb

7 20

Dairy Leather

58 17

Distribution Center Sales Office

134 1

Slaughterhouse and Industry Biodiesel

Geographic Presence and Production Capacity

Source: JBS

Beef
85,825 heads/day

Chicken
7.9 mm birds/day

Pork
50,000 heads/day

Leather
76,100 hides/day

Dairy
5,400 tons/day

Lamb
24,000 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

1 Market Leader 2 Track Record of

successful acquisitions

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

3 Geographic and

market segment diversification

4 Well-recognized
brands

Brand building to enhance value

PAGE

10

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 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

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

US Cattle Herd Projection

(million)
125

115

105

95

85

75

65 1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012e

2014e

2016e

2018e

2020e

Source: USDA

PAGE

14

Global Beef Trade

Largest Beef Exporters

Others 9.2% E.U. 3.8% Paraguay 4.0% Uruguay 4.5%

Brazil 20.7%

New Zealand 6.2%

Australia 17.4%

Canada 6.8%

India 12.9%

USA 14.5%

Source: USDA 2011 (Estimated)

PAGE

15

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 Brazilian Beef Exports (tons)
1.400.000 1.200.000
+30%

5.500 5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 2005 2006 2007 2008 2009 2010 9M10 9M11

1.000.000 800.000 600.000 400.000 200.000 0

-20%

Australian Beef Exports (tons)

1.400.000 1.200.000 1.000.000 800.000 600.000 400.000 200.000 0 2005 2006 2007 2008 2009 2010 8M10 8M11
+1%

US Beef and Veal Exports (tons)

5.500
+4%

1.400.000 1.200.000 1.000.000 800.000 600.000 400.000 200.000 0 2005 2006 2007 2008 2009 2010 9M10 9M11
+28%

5.500
+11%

5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0

5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0

Beef and Veal exports

Average Price (US$/Ton) PAGE

Source: USDA, MLA & Secex

16

Chicken Exports Brazil vs US

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

Brazilian 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 0 2005 2006 2007 2008 2009 2010 9M10 9M11 +1% +20% 2.000 1.800 1.600 1.400 1.200

USA Chicken Exports (tons)

4.500.000 4.000.000 3.500.000 3.000.000 +12% 2.500.000 1.000 800 600 400 200 0 2.000.000 1.500.000 1.000.000 500.000 0 2005 2006 2007 2008 2009 2010 9M10 9M11 +6% 800 600 400 200 0 1.000 1.800 1.600 1.400 1.200

Chicken Exports

Average Price (US$/Ton)

Source: USDA & Secex

PAGE

17

Pork Exports US vs Brazil

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

Brazilian Pork Exports (tons)

3.000 1.400.000 1.200.000 1.000.000 800.000 600.000 -7% 400.000 200.000 0 2005 2006 2007 2008 2009 2010 9M10 9M11 500 1.000 +11% 2.500

USA Pork Exports (tons)

3.000 1.400.000 1.200.000 1.000.000 800.000 600.000 1.000 400.000 200.000 0 2005 2006 2007 2008 2009 2010 9M10 9M11 500 +20% +7% 2.500

2.000

2.000

1.500

1.500

Pork Exports

Average Price (US$/Ton)

Source: USDA & Secex

PAGE

18

Global Surplus (deficit)

Goldman Sachs forecast for animal protein in 2020

Surplus

Deficit

Beef & Veal Pork Chicken

Source: Goldman Sachs
PAGE

19

3Q11 Highlights

3Q11 Highlights

Gross Margin expanded 102bps, compared to 2Q11 and reached 10.9%. EBITDA margin increased 101 bps to 5.1% in the quarter. 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. 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 quarter. Net debt reduced approximately R$530 million, excluding the FX variation effect in the net debt in US dollar denominated.

The main operating highlights were:

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

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

21

JBS Consolidated Results 3Q11

Net Revenue (R$ million)

1800,0

EBITDA EBITDA and EBITDA Margin (R$ million)

15,567.8
7.3 6.0 5.7 4.0 5.1 8,0 1600,0 1400,0 1200,0 1000,0 800,0 600,0 400,0 200,0
-29.7%

14,069.6

14,319.6
+1.8%

14,672.7
+2.5% -3.8%

14,621.8

+6.5%

1,026
-15.7%

866

-3.4%

836 588
+33.9%

787

3Q10

4Q10

1Q11

2Q11

3Q11

0,0

3Q10

4Q10

1Q11

2Q11

3Q11 EBITDA Margin (%)

-12,0

Source: JBS

PAGE

22

Nine Month Analysis (January to September 2011)

Performance by Business Unit

JBS Mercosul

JBS USA (Including Australia)

Net sales (US$ billion)
11.1 9.5 12.0

JBS USA

JBS USA (PPC)

Net sales (R$ billion)

Net sales (US$ million)

2.5 2.2

Net sales (US$ billion)

5.1 5.7

9.8

9M10

9M11

9M10

9M11

9M10

9M11

9M10

9M11

EBITDA (R$ bi)

1100 1200

EBITDA (US$ mi)

0,16

EBITDA (US$ mi)

0,14 0,12 0,15 0,1

EBITDA (US$ mi)

1000 0,2 0,18 0,16

1.2

1000 0,15

0,13

900

0,08 300 0,06

0,11 0,04 800 0,09 0,02

261.5 174.4

0,14 0,12 900 0,1 0,08 0,06 0,04 800 0,02 0 -0,02 0,05 0,1

0,07 700

-0,04 -0,06

-0,02 0,05

700

600 0,03

1100

1.1

0,01 500

468.9

515.5

-0,08 -0,1 -0,12 -0,14

-0,04 200 -0,06

0 600

-0,16 -0,18

-0,08

-0,2 -0,22

-0,1 -0,01 -0,12 400 -0,14 400 -0,05 500

-0,24 -0,26

-0,03

357.1
300 200

-0,28 -0,3 -0,32 -0,34 -0,36 -0,38

-0,05 300

-0,16 100

-0,18 -0,07 -0,2

-0,1

-0,4 -0,42 -0,44 -0,46

-0,09

200

-0,22

-0,48 -0,5

-0,24 -0,11 100 -0,13 -0,28 -0,26

-0,15

-0,52 -0,54

100 1000 -0,15 0 -0,3 0 -0,2

-134.2

-0,56 -0,58 -0,6 -0,62 -0,64 -0,66 -0,68

9M10

9M11

9M10

9M11

9M10

9M11

-0,7 0 -0,72 -0,74 -0,76 -0,78 -100 -0,8 -0,82 -0,84 -0,86

-200

9M10

9M11

-0,88 -0,9

Source: JBS

PAGE

23

Quarterly Analysis
Performance by Business Unit

JBS Mercosul

JBS USA (Including Australia)

Net sales (US$ billion)
4.2 3.9 4.0 3.8 3.6 3.4

JBS USA

JBS USA (PPC)

Net sales (R$ billion)

Net sales (US$ million)

1300 1220 1140

Net sales (US$ billion)

1060

980

900

772

799

837

846

867 1.7 1.8 1.9 2.0 1.9

820

3.5

3.6 3.4

3.6

740

660

580

500

420

340

260

180

100

3Q10

4Q10

1Q11

2Q11

3Q11

3Q10

4Q10

1Q11

2Q11

3Q11

3Q10

4Q10

1Q11

2Q11

3Q11

3Q10

4Q10

1Q11

2Q11

3Q11

EBITDA (R$ mi)

500 600

EBITDA (US$ mi)

16,0%

EBITDA (US$ mi)

14,0% 12,0% 200

EBITDA (US$ mi)

500 20,0%

10.7% 7.1% 373.7 238.8 8.6% 308.6

11.8% 11.6%
12,0%

500

427.9 453.8

400 10,0%

3.1%

5.4%

7.1% 1.1% 269.7

11.8%

4.4%

10,0%

12.8% 12.6% 9.9% 8.8%

13,0% 9,0% 5,0%

8,0%

18,0%

6,0%

16,0%

4,0%

8,0%

2,0%

400

9.9% 6.9% -1.7% -2.4% -55.2 -47.6 2Q11 -31.4 3Q11

14,0%

12,0%

0,0%

10,0%

6,0% 300

-2,0%

400

-4,0% 4,0%

2,0%

300

194.8
200

-6,0%

184.1 44.7

-8,0% 100

90.8

102.4 105.3

8,0%

1,0% 300 6,0%

-10,0%

83.6

4,0%

0,0%

-12,0%

75.9

-3,0%

-7,0% -14,0% 200

170

2,0%

-2,0% 200

103.5
100

-16,0% -11,0% -18,0%

124.8

-2.9%

0,0%

-2,0%

-4,0%

-6,0%

-4,0% -20,0% -15,0% -22,0%

-8,0% 100

100

-6,0%

-10,0%

-24,0%

-26,0% -8,0% -28,0%

-19,0%

-12,0%

-14,0%

-10,0%

-30,0%

-23,0%

-16,0%

-18,0%

3Q10

4Q10

1Q11

2Q11

3Q11

3Q10

4Q10

1Q11

2Q11

3Q11

3Q10

4Q10

1Q11

2Q11

3Q11
-100 -200

3Q10

4Q10

1Q11

-20,0%

-22,0%

-24,0%

-26,0%

-28,0%

-30,0%

EBITDA Margin (%) PAGE

24

Source: JBS

Revenue and EBITDA Distribution by Business Unit

Net Revenue - 3Q11

20.3% 25.1%

9.3% 45.3%

EBITDA 3Q11
-15.6% 59.6%

16.3%

39.6%
PAGE

Source: JBS

25

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)

4.200 4.000 3.800 3.600 3.400 3.200 3.000 2.800 2.600 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 1.600 1.800 1.700 1.900 2.100 2.000

JBS USA Chicken Net Revenue (US$ million)

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

JBS USA Pork Net Revenue (US$ million)

4.000 850 800 750 700 650 600 550 500 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3.000 2.800 1Q10 3.800 3.600 3.400 3.200

JBS Mercosul Net Revenue (R$ million)

2Q10

3Q10

4Q10

1Q11

2Q11

Source: JBS

3Q11 PAGE

26

JBS Consolidated Exports Distribution in 3Q11

Approximately US$2.4 billion in the 3Q11 and US$7.2 billion in 9M11

Mexico 14.5% Others 17.9%

Vietnam 1.6% Taiwan 2.4% China 4.4% Canada 5.5%

Africa and Middle East 14.0%

US$ 2,374.2 million

Japan 11.7%

South Korea 6.0%

E.U. 7.8%

Russia 7.0%
Source: JBS

Hong Kong 7.2%

PAGE

27

Debt Profile: 3Q11

Net debt to EBITDA, excluding Pilgrims Pride Corp. (PPC)*, reduced from 3.2x in 2Q11 to 3.0x in 3Q11. Net debt to EBITDA, including Pilgrims 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 Companys short-term debt. The Company generated R$897 million of operating cash flow and R$620 million of net cash flow.

Leverage
4.0x 3.6 2.9 3.0 3.1 3.2 3.0x

ST / LT Profile

1500 1300 1100 900 700 500 300 100 -100 3Q10 4Q10 1Q11 2Q11

4 3 2

3Q11

28%

72%

2Q11

27%

73%

1Q11

30%

70%

4Q10

33%

67%

1
3Q10 3Q11

33%

67%

0
Short Term Long Term

. .

Leverage Leverage Ex-PPC

EBITDA EBITDA Ex-PPC

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

PAGE

28

Stock Market
In 2007, JBS was the first Company in the beef industry to trade its shares on the stock market

Shareholders
Average daily traded volume of R$ 22.5

million in 4Q11

3.1%

Source: JBS

PAGE

30

Sell-side analyst recommendation

Institution
Banco do Brasil Barclays Capital Bradesco BTG Pactual Citi HSBC Merrill Lynch BofA Santander Safra UBS Votorantim XP Equity Research Morgan Stanley

Analyst
Henrique Koch Gabriel Vaz Lima Ricardo Boiati / Alan Cardoso Thiago Duarte / Fbio Monteiro Carlos Albano Pedro Herrera / Diego Maia Fernando Ferreira / Isabella Simonato Luis Miranda Erick Guedes / Fernando Labes Gustavo Oliveira / Flavio Barcala Luiz Cesta /Marco Richieri Gustavo Lomonaco / Kent Lucas Wesley Brooks

Recommendation
Hold Equal Weight Market Perform Buy Sell Neutral Underperform Hold Outperform Neutral Buy Unattractive Overweight

Target Price (R$)

In revision 10.20 (last)

6.50 5.20 7.70 5.20 7.50 5.70 7.00 7.29 5.10 5.70 6.60 7.50

Source: Bloomberg and JBS

PAGE

31

Corporate Governance
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

Transparency Good Governance Practices Confidence Best services and products Solidity Profitability Future
*

Management and Board of Directors

Board of Directors 11 members
1 president 5 permanent directors 5 permanent independent directors

Audit Committe 5 members

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

Board of Executive Officers

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

Committes of Directors 4 committes

Audit Finance Human Resources Corporate Strategy / Sustainability

PAGE

32

Sustainability
JBS 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

Economic
Risk and Crises Management Corporate Direction Knowledge Management Stakeholders Engagement

Social
Citizenship and Education Good Practices of Human Resource Human Capital Development

Environmental
Environmental Management Eco-efficiency Sustainable Cattle Breeding Climate Changes

Premises
Ecologically viable Ecologically correct Socially responsible Culturally acceptable

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

Source: JBS Sustainability Policy

PAGE

34

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

35

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

36

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.