3Q12 Conference Call Presentation

7/30/2019 3Q12 Conference Call Presentation

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JBS DAYNovember 14th, 2012Earnings Release 3Q12


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JBS S.A.


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3PAGE

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$53.8 billion accumulated in nine months of 2012

EBITDA of R$3.2 billion accumulated in nine month of 2012

Organic Growth of 16,0% in first 9 months of 2012 compared to 9M11

140,000 employees worldwide

307 production units in 5 continents


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4PAGE

JBS Ranking

Largest global beef andlamb producer1

st

Largest global leatherprocessor1

st

Largest global chickenproducer1

st

Largest pork producer

in the US3rd

Source: JBS


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5PAGE

Sustainable Growth

Adequate Capital Structure and Qualified Management to Promote Growth

Adequate the CapitalStructure

Debt to finance

Working Capital Equity to finance

growth

Constructing a globalmeat productionplatform

Geographicdiversification inregions with lowproduction costs

Protein diversification

Access to all consumermarkets

Leadership in countrieswith production surplus

Integration of the

operations and focus oncash generation

Reduction of OperatingCosts

Reduction of WorkingCapital Needs

Capture of SynergiesReduction of Cost of

DebtBenchmark between

production platforms

Economies of Scale

Global Distribution PlatformAnd Value Added Products

Increase in the portfolio

with high value addedproducts

Recognition and leadershipin brand and quality

Direct service to retail andfoodservice

Higher margins and cashgeneration

Investments in Marketing,Research andDevelopment.

Building Global Brands

LongTerm

2008 to2009

2010 to2012

2005 to2007


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6PAGE

EBITDAMargin

Our Strategy

RATIONALE

Associating quality and branding toincrease client loyalty

Customized and further processedproducts for the end users

Expanding a global distributionplatform to reach end clients

Developed an efficient anddiversified global productionplatform

Production platform

Sales and distribution platform

Value added products

Branding

FinancialStructure

ExperiencedManagement

Cost reduction,process

optimization

RiskManagement

JBSs Value & StrategyDone


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7PAGESource: JBS

Presence in More Than 100 Countries, in 5 Continents

Slaughterhouses andProduction Units

Sales Office

Pork

LeatherBeef

Distribution CenterBiodiesel

Strategic Geographical Distribution Exports to more than 150 countries and more the 300.000 clients

Chicken

GeographicPresence andProductionCapacity

81,400 heads/day

Beef

8.3 mm birds/day

Chicken

50,100 heads/day

Pork

18,265 heads/day

Lamb

86,300 hides/day

Leather

3

61

39

29

2 64

17

301

6 Lamb

3 Added ValueProducts

4 Brands

2 Sales andDistribution

Platform

1 ProductionPlatform

Brazil:11 DCs

Australia7 DCs

USA30 DCs


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8PAGE

FRESH BEEFSwift BlackSwift OrgnicoSwift MaturattaSwift Grill

Aougue SwiftSwift Linha ProfissionalSwiftFriboi

INDUSTRIALIZEDCanned vegetable

HamCorned beefFeijoada

PtJerky / Jerked BeefSausage

DEEP FROZEN PRODUCTSHamburger

Arab Cuisine SpecialtiesMeatballsPotatoesLamb productsFish products

High Value Added Products Portfolio

Top of Mind Brands

3 Added ValueProducts

4 Brands


Platform



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9PAGE

Well-recognized Brands, symbols of quality

USA

Australia

Mercosul3 Added Value

Products

4 Brands


Platform



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Perspectives for the animal protein market

Global Scenario


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11PAGE

Worlds Food* Surpluses and Deficits

1965

1990

1970

1995

1975

2000

1980

2005

1985

2010

Net intra-regional trade, million tonnes

150

100

50

0

50

100

150

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

NorthAmerica

SouthAmerica

Australia

Eastern Europeand former

Soviet Union

Western

Europe Asia

Middle East

& Africa

Central

America


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12PAGE

59.1

76.5

58.8

75.9

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E

Beef Production and Consumption Forecasts - 2000/2021

Global Scenario

CAGR1.2%

CAGR1.2%

Source: FAONote 1. Production CAGR / Note 2. Consumption CAGR

Beef Production Beef Consumption

(million tons)


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13PAGESource: USDA and JBS

US Cattle Herd and Beef Production

8

9

10

11

12

13

14

80

85

90

95

100

105

110

115

120

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012E 2014E 2016E 2018E 2020E

US Cattle Herd (million head) US Annual Beef Production (million tonnes cwt)

Substantial Recovery starting in 2014

Forecast


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14PAGESource: FAO

World Average Meat Consumption per Person, 60s to 2030

Consumption (kg/capita/year)

0 5 10 15 20 25 30 35 40 45 50

2030

1997-99

1964-66

Poultry Pork Lamb Beef


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15PAGE

Meat Consumption Forecast (Million tons) Expected increase in meat demand by country groupsbetween 2010 - 2020

Emerging

Developed

Source: FAO - OECD

Meat Consumption Growth Forecast 2011-2020

19%

81%

Poultry Pork Sheep Beef

2020

228.1

Ave 2008-10

278.2

2001

338.3

67.595.1

122.5

90.8

105.7

126.658.6

64.6

73.6

11.2

12.7

15.6


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16PAGESource: FAO

Protein Consumption in the World Today is Half That Recommended by FAO

Per Capita Meat Consumption (Kg/per capita)

The population growth coupled with rising living standards around the world will drive anincrease in demand for proteins in the emerging middle class

48

62 69

8088

121

42

82

China Rssia Mxico UE-27 Brasil EUA Mundo DesenvolvidosRussiaChina Mexico EU - 27 Brazil USA World Developed


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17PAGESource: USDA 2012 (Estimated)*Buffaloes / **Not considering Brazilian exports

Global Protein Trade Largest Exporters

JBS is present in the main exporter markets

Canada 5%

New Zealand 6%

Mercosul** 9%

Others 13%

USA 14%

India* 20%

Brazil 17%

Australia 17%

Chicken Exports

Beef Exports

Pork Exports

Turkey 3 %

Thailand 5%

Argentina 3%

E.U. 12%

Others 7%

Brazil 36%

USA 34%

Chile 2%

Brazil 9%

China 4%

Canada 17%

Others 4%

USA 34%

E.U. 30%


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3Q12 Highlights


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19PAGE

786.8

1,378.85.1

7.1

-12,0

8,0

0,0

200,0

400,0

600,0800,0

1000,0

1200,0

1400,0

1600,0

1800,0

2000,0

3Q11 3Q12

Positive Operating Cash Flow of R$630 million

R$157 million Free Cash Flow

Leverage decreased significantly and was 3.68x at the end of the quarter

3Q12 Highlights

Net Revenue (R$ billion) Net Income (R$ million)

15.6

19.4

3Q11 3Q12

24%75%

-67.5

495.4

-12-100,0

0,0

100,0

200,0

300,0

400,0

500,0

600,0

3Q11 3Q12

EBITDA margin (%)

EBITDA (R$ million)


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20PAGE

9M12 Highlights

44.9

53.8

9M11 9M12

20%

2,210.4

3,239.4

4.96.0

-12,0

8,0

0,0

500,0

1000,01500,0

2000,0

2500,0

3000,0

3500,0

4000,0

4500,0

5000,0

9M11 9M12

47%-101.3

948.6

-12-200,0

0,0

200,0

400,0

600,0

800,0

1000,0

9M11 9M12

EBITDA margin (%)

Net Revenue (R$ billion) Net Income (R$ million)EBITDA (R$ million)


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JBS entered the Canadian beef market through the signature of an agreement to manage and operate assets of XL

Foods in Canada, including a purchase option (2 plants, 1 feedlot and a farm) and XL Foods assets in the UnitedStates (2 plants).

Strategic Events

The Company also signed a term sheet to acquire 100% of the shares of Agrovneto S.A. a company specialized in

the production of chicken products which operates out of Nova Veneza in the southern Brazilian state of Santa

Catarina. The plant has capacity to process 140,000 birds per day.

JBS is scheduled to open 6 new beef plants in Brazil in the coming months as follows: Rolim de Moura, state ofRondonia which is due to initiate operations on 19.Nov.2012, Nova Andradina (Mato Grosso do Sul) with start-up

scheduled for 03.Dec.2012, Pontes e Lacerda and Vila Rica, both in the state of Mato Grosso, scheduled to start on

07.Jan.2013, Senador Canedo (Gois) scheduled for 04.Feb.2013 and Castelo dos Sonhos, in the Northern state of

Par, scheduled for 08.Apr.2013. These plants will add a total capacity of 1.2 million head of cattle by 2013, which

represents a 15% increase over the current capacity in Brazil.

JBS C lid d R l 3Q12


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22PAGESource: JBS

JBS Consolidated Results 3Q12

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

786.8940.6

696.5

1,012.8

1,378.85.15.6

4.35.5

7.1

-12,0

8,0

0,0

200,0

400,0

600,0

800,0

1000,0

1200,0

1400,0

1600,0

1800,0

3Q11 4Q11 1Q12 2Q12 3Q12

15,567.816,934.5

16,011.1

18,468.319,366.6

3Q11 4Q11 1Q12 2Q12 3Q12

+15.3%

+4.9%

+8.8% -5.5%

+45.4%

+36.1%+19.5%

-26.0%

EBITDA Margin (%)

JBS M l


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23PAGE

3.93.8 3.8

4.3

4.6

3Q11 4Q11 1Q12 2Q12 3Q12

Source: JBS

JBS Mercosul

Performance by Business Unit

Net revenue at JBS Mercosul came in at R$4,597.8 million in 3Q12,

increase of 17.7% in comparison with 3Q11.

EBITDA totaled R$665.6 million in 3Q12, an increase of 46.7% over

the same quarter last year.

EBITDA margin at JBS Mercosul was 14.5% in the quarter.

The result of this business unit reflects an improved cattle cycle in

Brazil, the Companys efforts to enhance operational efficiencies and to

capture synergies in addition to the Companys strategy.

24%

% Net Revenue JBS S

Net Revenue (R$ billion)

EBITDA (R$ million)

YoY

17.7%

EBITDA Margin (%)

453.8407.7

508.6630.3 665.6

11.6% 10.7%13.3% 14.6% 14.5%

-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%

-50

50

150

250

350

450

550

650

750

850

3Q11 4Q11 1Q12 2Q12 3Q12

JBS USA B f (i l di A t li )


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24PAGESource: JBS

JBS USA Beef (including Australia)


Net revenue for this business unit was US$4,275.9 million in thequarter.

This quarter was the turning point when margins becamepositive in 2012. EBITDA at JBS USA Beef unit totaled US$175.1million in the period, with an EBITDA margin of 4.1%.

The improvement in the dynamics of the sector in the U.S., dueto the better balance between supply and demand, permitted animprovement in margins at JBS USA.

Furthermore, the successful outcome of the operation inAustralia contributed to the results of this business unit.

45%

Net Revenue (US$ billion)

EBITDA (US$ million)

EBITDA Margin (%)

% Net Revenue JBS S

4.2

4.5

4.14.3 4.3

3Q11 4Q11 1Q12 2Q12 3Q12

184.1223.6

-45.4 -9.1

175.1

4.4% 5.0%

-1.1% -0.2%

4.1%

-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%

-100

0

100

200

300

400

500

3Q11 4Q11 1Q12 2Q12 3Q12

YoY

1.6%

JBS USA Pork9%


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25PAGESource: JBS

JBS USA Pork


Net revenue in the pork business for the quarter was US$846.1

million, 2.4% lower than 3Q11.

EBITDA was US$40.4 million in 3Q12 with an EBITDA margin of

4.8%.

The quarterly result was influenced by the reduction of average

selling prices in general, compared to last year, due to oversupply

of finished products in the period.

Net Revenue (US$ million)


EBITDA Margin (%)

% Net Revenue JBS S

867.1923.1 855.4 844.0

846.1

100,0

180,0

260,0

340,0

420,0

500,0

580,0

660,0

740,0

820,0

900,0

980,0

1060,0

1140,0

1220,0

1300,0

3Q11 4Q11 1Q12 2Q12 3Q12

75.9 77.055.8 49.2 40.4

8.8% 8.3%6.5% 5.8% 4.8%

-23,0%

-19,0%

-15,0%

-11,0%

-7,0%

-3,0%

1,0%

5,0%

9,0%

13,0%

-0,023

99,977

199,977

3Q11 4Q11 1Q12 2Q12 3Q12

YoY

-2.4%

JBS USA Poultry (Pilgrims Pride Corporation) 22%


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26PAGESource: JBS

JBS USA Poultry (Pilgrim s Pride Corporation)


Net revenue in the 3Q12 for this business unit came in atUS$2,068.5 million, 9.4% higher than the same period of 2011.

EBITDA in the 3Q12 was US$105.6 million, reversing the negativeUS$31.4 million in 3Q11.

EBITDA in the 3Q12 was US$105.6 million, reversing the negativeUS$31.4 million in 3Q11.

Reduction in the PPCs net debt to US$1.1 billion at the end ofSeptember, as a consequence primarily of the US$75.6 operating cash

flow.

22%

Net Revenue (US$ billion)


EBITDA Margin (%)

% Net Revenue JBS S

1.9 1.8 1.92.0 2.1

3Q11 4Q11 1Q12 2Q12 3Q12

-31.4 22.6

104.0 125.7105.6

-1.7%

1.2%

5.5% 6.4% 5.1%

-25,0%

-23,0%

-21,0%

-19,0%

-17,0%

-15,0%

-13,0%

-11,0%

-9,0%

-7,0%

-5,0%

-3,0%

-1,0%

1,0%

3,0%

5,0%

7,0%

9,0%

-200

-100

0

100

200

300

400

500

3Q11 4Q11 1Q12 2Q12 3Q12

YoY

9.4%

JBS Consolidated Exports Distribution in 3Q12


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27PAGESource: JBS

JBS Consolidated Exports Distribution in 3Q12

Approximately US$2.53 billion, an increase of 7,9% in relation to 2Q12

US$2,534.4million

Mexico 13.7%

Japan 11.6%

Russia 6.8%E.U 6.7%

Canada 4.3%

Chile 2.9%

Taiwan 1.6%

Others18.6%

Africa and Middle East 14.5%

South Korea 4.6%

Venezuela 2.0%

China, HK and Vietnam 12.7%


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Debt Profile

Debt Profile


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29PAGE

3Q12 Net debt to EBITDA was 3.68x, substantially lower than the 2Q12.

Source: JBS

Debt Profile

The Company ended the quarter with R$5,0 billion in cash, which represents more than 90% of short-term debt.

The percentage of short term debt increased from 23% in 2Q12 to 27% in 3Q12.

4.04 4.004.30 4.27

3.68

0

1

2

3

4

5

-100

100

300

500

700

900

1100

1300

1500

3Q11 4Q11 1Q12 2Q12 3Q12

. Leverage EBITDA (R$ million)

Leverage

.

27%

23%

27%

28%

73%

77%

73%

72%

3Q12

2Q12

1Q12

4Q11

Short Term Long Term

ST / LT Debt Profile

Debt Maturity Schedule and Profile


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30PAGE

Bonds39%

Other61%

3Q12

Debt Maturity Schedule and Profile

JBS S.A.59%

Subsidiaries41%

3Q12

Bonds / Other

Source: JBS Financial Statements 3Q12

Net Debt: 15,243.9 (R$ million)

-472 -202

-4,393

-1,454

-2,081

-172

-3,743

-2,727

Short Term Netof Cash 2013 2014 2015 2016 2017 2018 2019 and after

Breakdown by Currency and Company

R$ 27% USD 73%3Q12


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Sustainability and

Social Responsability

JBS actions related to cattle traceability and the Amazon Biome


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32PAGE

Amazon

Environmental

Satellite image

Social & 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.

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 intoJBSs 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 Brazils NationalInstitute for Space Research INPE.

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

Satellite image monitoring of the Amazon Biome.

ySustainability

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

JBS SA participates in CDP - Carbon Disclosure Project.

Also, JBS integrates the Carbon Efficient Index ofBOVESPA - ICO2.

JBS Institute funds Germinare School


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Classroom

Social

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

Laboratory

Social

GERMINARE SCHOOL

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

Number of students: 360 (2012)Capacity of 630 students.

Area: 6,000 m2Sport complex, swimming pool, computer lab and chemistry lab.

Amount invested: R$15 million

Selection process: tests and group dynamics.

Top Brazilian professors.

Social Responsibility

Source: JBS

Started in 2010.


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Mission

To be bestin what we set out to do, totally focusedonour business, ensuring the best products and services

for our customers, solidityfor our suppliers,

satisfactory profitabilityfor our shareholders and thecertainty of a better future to all our employees.

3Q12 Conference Call Presentation

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