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1
ANNUAL REPORT
SUSTAINABILITY 2011
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SUMMARY
ANNUAL REPORT SUSTAINABILITY 2011
2
Mission, Vision and Values
4
Main Operating
and Financial Indicators
6
Corporate Profile
8
A Message from the CEO
10
Operations and Markets
16
Financial Results
24
Corporate Governance
28
Awards in 2011
30
Sustainability
38
Sustainable Farming
40
Employees
46
Corporate Information
SUMMARY
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2
MISSION, VISION AND VALUES
To be the best at whatever we set out to do, focusing
exclusively on our activities, ensuring the best products
and services for our customers, solidity with our suppliers,
satisfactory profitability for our shareholders and the
certainty of a better future for all our employees.
Planning
Determination
Discipline
Accessibility
Honesty
Simplicity
MISSION
OUR VALUES
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3
Planning
Determination
Discipline
Accessibility
Honesty
Simplicity
Our culture, our
people, our products,
and our customers.
People with the
same attitude,
complementary
expertise, a sense of
urgency and a spirit
of leadership.
Trust.
OUR PILLARS
WhO WE ARE
WhAT BRING US TOGEThER
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4
MAIN OPERATING AND FINANCIAL INDICATORS
ECONOMIC AND FINANCIAL INDICATORS
R$ (million)
2011
2010
%
Net revenue
61,796.8
54,712.8
12.9%
Cost of goods sold
(55,100.2)
(47,994.8)
14.8%
Gross income
6,696.6
6,718.0
-0.3%
Gross margin
10.8%
12.3%
-
Selling expenses
(3,144.1)
(2,627.2)
19.7%
General and administrative expenses
(1,739.2)
(1,641.0)
6.0%
Financial expense, net
(2,010.7)
(2,223.0)
-9.5%
Other income (expenses)
(32.7)
(168.2)
-
Operating result
(230.1)
58.6
-
Net income from discontinued operations
12.2
-
Income Tax and social contributions
(92.8)
(325.4)
-71.5%
Share for non-controlling shareholders
(247.2)
38.2
-
Net income/loss
(1)
(75.7)
(292.8)
-
EBITDA
3,151.0
3,766.1
-16.3%
EBITDA margin
5.1%
6.9%
-
Net profit / loss per share
(0.03)
(0.12)
-
MAIN OPERATING AND
FINANCIAL INDICATORS
DISTRIBUTION OF NET REVENUE AND
EBITDA BY BUSINESS UNIT IN 2011
EBITA BY BUSINESS UNIT 2011
JBS USA
pork business
12%
JBS USA
beef business
26%
JBS USA
chicken
business
5%
JBS Mercosul
57%
NET REVENUE BY BUSINESS UNIT 2011
JBS USA
pork business
8%
JBS USA
beef business
39%
JBS USA chicken
business
18%
JBS Mercosul
35%
¹ RESULTS ATTRIBUTED TO ThE PARTICIPATION OF CONTROLLING ShAREhOLDERS.
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5
2010
54,713
2009
2011
34,312
61,797
2008
30,340
2007
14,142
NET REVENUE (R$ MILLION)
EBITDA (R$ MILLION)
EBITDA MARGIN (%)
TOTAL NET REVENUES
BY SEGMENT
EBITDA
BY SEGMENT
NET REVENUE
BY REGION
EBITDA
BY REGION
NET REVENUE AND EBITDA BY SEGMENT AND REGION
2007
2008
2009
2010
2011
4.3
3.8
3.7
6.9
5.10
OPERATIONAL AND COMMERCIAL INDICATORS
2011
2010
%
Head slaughtered (thousand)
Cattle
15,088.9
15,112.6
-0.2%
hogs
13,132.2
12,841.8
2.3%
Smalls*
3,198.3
2,531.1
26.4%
Volume Sold ('000 tons)*
Domestic Market
6,642.5
6,696.6
-0.8%
Exports
2,055.4
2,030.9
1.2%
TOTAL
8,697.9
8,727.5
-0.3%
2010
2009
2011
1,276
3,151
2008
1,156
2007
602
3,766
Others
6%
Others
7%
Chicken
20%
Chicken
6%
Pork
10%
Pork
15%
Beef
64%
Beef
72%
USA and
Austrália
73%
USA and
Austrália
49%
South
America
51%
South
America
24%
Others
3%
* NOT INCLUDING ChICkEN.
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RETRANCA
6
CORPORATE PROFILE
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7
CORPORATE PROFILE
J
BS is the world leader in production of animal protein and
the second largest private Brazilian multinational com-
pany. With net revenue of R$61.8 billion in 2011, the
Company has a global platform for producing and distributing
meats, with operations in Brazil, the United States, Australia,
Mexico, Paraguay, Uruguay and Argentina. Its operations also
extend to Europe, Asia and Africa, through sales offices and
distribution centers. JBS' 286 production units employ over
135,000 global citizens across five continents.
In late 2011 the Company's slaughter capacity reached
81,400 head of cattle, 18,300 lambs, 7.2 million birds and
50,100 hogs a day. The Company is the only one in the sec-
tor that operates directly in the world's three main produc-
ing countries (Brazil, the USA and Australia), also having a
relevant share of global markets for beef, lamb (the world's
leader in both markets), chicken (second largest company in
the world) and pork (third-ranked on the US market). JBS is
also the world's largest leather processor, with plants in Brazil,
the United States, China and Australia, with a daily production
capacity of 86,300 hides.
Privileged geographical distribution allows JBS to reach
consumers in over 140 countries on five continents. In ad-
dition to the supply of fresh meat, the Company operates in
high value added sectors, with several brands around the
world, such as Friboi, Maturatta, Organic Beef (Brazil), Swift
(Brazil, the USA and Argentina), Pilgrim's Pride, Gold kist
Farms (USA), king Island Beef and Tasmanian Premium Beef
(Australia). In 2011 the Company invested in a high profile
advertising campaign to strengthen the Friboi brand in Brazil.
The Company's main goals are operational excellence and the
continuous search for the best margins in the various markets
in which it operates, always in full compliance with the best
JBS PURSUES OPERATIONAL
ExCELLENCE AND
CONTINUOUSLY STRIVES
FOR ThE BEST MARGINS
IN ThE VARIOUS MARkETS
IN WhICh IT OPERATES
CORPORATE hEADqUARTERS IN ThE UNITED STATES
JBS IS ALWAYS MODERNIzING, STRIVING FOR IMPROVED PRODUCT AND RAW MATERIAL qUALITY
social and environmental practices. JBS was the first company
in the beef industry to go public in Brazil, in 2007, and it is
run in accordance with the corporate governance rules estab-
lished by the Novo Mercado of BMF&BOVESPA. The Board of
Directors, made up of 11 members, participates actively in
the decision making process of JBS.
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8
MESSAGE FROM THE CEO
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9
W
e take great pride in the fact that over the last 59
years we have built a company that today is the
global leader in the animal protein market. We
have the world's largest and best-positioned platform for
meat production and distribution, with direct access to con-
sumers in over 140 countries. Our growth cycle was fast and
intense, especially as of 2005. In seven years we went from
the leadership in Brazil to the leadership in the world's prin-
cipal and most efficient production centers: the United States
and Australia. We knew how to take the opportunities that
arose at a time of economic uncertainty in developed coun-
tries. At the same time we managed to gain the confidence
of capital markets and we have had the invaluable support of
our shareholders in making the decisions that have led us to
our current position.
We pride ourselves in being a company that was founded
modestly in Goiás and which has reached its current size with-
out ever compromising our principles or values. Always faith-
ful to our roots and our culture, we have proven that we have
the expertise and talent needed to take on a global role.
We are constantly striving to maintain levels of excellence
in everything we do, but we want to go further. We want
to be the best at what we do, the most efficient, the most
profitable, the most remembered by consumers, and the most
sustainable. We want all of this while keeping our feet on the
ground and without betraying the culture of simplicity and ef-
ficiency that has brought us this far.
The integration of our operations around the world moved
forward in 2010 and 2011. JBS operates nowadays according
to the same procedures and quality standards in its four divi-
sions: JBS Mercosul, JBS USA Bovines (including Australia), JBS
USA Pork and Pilgrim's Pride, which operates our chicken divi-
sion. We have overcome cultural shocks and economic barri-
ers to introduce our way of producing animal protein to each
of our plants ­ whether they are in the Midwest of Brazil, the
Australian coast, or the Great Plains of the United States.
Now it is time to reap the rewards of the operational in-
tegration project we have been involved in and, as of 2012,
entered the fine tuning phase. Thanks to this integration, we
have been able to reduce our corporate costs by over US$100
million. This is the moment to go after results and pay our
shareholders back with financial returns for the trust they have
put into our work. I am convinced that our management team
is able to make the most of our productive platform.
In 2011 we performed better than the year before in most
of our units - except in the chicken business in the United
States, which had an atypical year. Our organic growth was
12.9% and we achieved a cash flow from operational activi-
ties of R$606.5 million, reversing the negative results in 2010.
In addition to the gains from synergies and the constant
striving for improvements in our plants, JBS is expanding its
operations in product lines of higher added value, through
meat processing and the use of our various brands. One ex-
ample of this effort was the campaign launched in 2011 to
strengthen the Friboi brand among beef consumers in Brazil.
I must take this opportunity to reiterate JBS' commitment
to best social and environmental practices. This report pro-
vides several examples of how the Company leads the meat
industry not only in volume and revenue, but also in terms of
sustainable action. JBS' Sustainability Committee works hand
in hand with the highest levels of the Company's manage-
ment, which makes our social and environmental practices a
strategic element of the Company's operations.
I also want to thank the 135,000 people who working at
JBS worldwide. Our executive team and our workforce are
what truly support the Company on a daily basis and have
made it the benchmark on the markets where it operates.
Best regards,
Wesley Mendonça Batista
MESSAGE FROM THE CEO
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10
OPERATIONS AND MARKETS
ITS PRIVILEGED GEOGRAPhICAL
DISTRIBUTION ALLOWS JBS TO
REACh CONSUMERS IN OVER 140
COUNTRIES ON FIVE CONTINENTS
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11
JBS MERCOSUL
M
ercosul operation encompasses activities in Brazil,
Paraguay, Uruguay, and Argentina. In 2011, the di-
vision posted R$14.9 billion and accounted for ap-
proximately 25% of the Company's global net revenue, which
had an increase of 11.9% over 2010.
JBS is the leading company in the beef market in Mer-
cosul. In Brazil, the Company also operates in leather, being
the world's largest processor and exporter, in dairy, through its
subsidiary Vigor, and it also has a division called New Business,
which covers operations directly related to the production and
processing of the by-products of its slaughter business.
Besides striving for operational efficiency at its plants,
in 2011 JBS adopted as strategic elements in Mercosul the
strengthening of its own distribution network, investment
in strengthening the Friboi brand in Brazil, and its continued
efforts to maintain the premium positioning enjoyed by the
Swift brand throughout the region.
It should be noted that in Brazil, in 2011, the merger with
Bertin, which was absorbed in 2009 by JBS, went through.
More than R$500 million in redundant costs and expenses
were eliminated during the integration project. Guided by
the pursuit of operational efficiency, the effort involved the
standardization of procedures, the concentration of activities
in larger and more efficient plants, and the modernization of
facilities. JBS so began 2012 ready to reap the rewards of its
intense integration work done in 2010 and 2011.
BOVINES
The most relevant of JBS businesses in Mercosul is its bovines
operation. The division involves more than 55,000 employees
in 50 slaughterhouse units, 12 distribution centers, and five
feedlots. Considering all the countries in the region, JBS has
a total daily slaughter capacity of 53,000 head of cattle. The
units are strategically distributed throughout every region of
Brazil, in the major cattle farming states in the country. In ad-
dition, the Company is recognized for being present in the
largest production hubs in Argentina, Paraguay and Uruguay.
OPERATIONS AND MARKETS

The bovine division also includes five feedlots that the Com-
pany has in Brazil. In 2011, more than 211,000 animals were
finished in feedlots owned by JBS in partnership with farmers
around the country, ensuring top quality meat for the industry
and closer contact with the farmers, who also achieved attrac-
tive returns due to the partnerships that were developed.
JBS's operations in Mercosul are capable of serving large
retailers to small and medium markets, in addition to various
food service segments. Starting from industrial kitchens and
going through to the finest haute cuisine restaurants, in 2011
more than 150,000 customers were served.
Among the division's main products are fresh and frozen
beef, special cuts, offal and processed products, including
frozen pre-cooked or cooked meat, dried meat, diced meat,
burgers and sausages.
As for exports, JBS Mercosul certified to sell its prod-
ucts to more than 140 countries. Last year, beef exports from
Mercosul went to Russia, hong kong, Egypt, the Middle
East, Italy, the Netherlands, Peru and Singapore, some of the
major importers, earning R$5.3 billion in revenue, 2% up on
the previous year.
DAIRY
Also at JBS Mercosul are the dairy businesses, which the Com-
pany operates through its subsidiary Vigor Alimentos. The
Company only operates in Brazil, where it ranks fourth-largest
in its segment, and it has features that put it in a prominent
position in relation to its competitors. It focuses on the develop-
ment and marketing of high value added products and it is a
market leader in several categories it operates in. The Company
lends its name to its main brand, but also has consumer brands
such as Leco, Faixa Azul, Danubio and Serrabella in its portfolio.
With 3,300 employees at its seven production units, four
dairy stations, and seven distribution centers in Brazil, Vigor
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12
OPERATIONS AND MARKETS
ALWAYS TRUE TO ITS
CULTURE AND ORIGINS,
JBS hAS ThE PROVEN
COMPETENCE AND TALENT
NEEDED FOR A GLOBAL ROLE
JBS COUROS IS ThE LARGEST LEAThER PROCESSOR AND PRODUCER IN ThE WORLD
ended 2011 with net revenue of R$1.2 billion. Approximately
80% of this revenue came from sales in the Southeast, with
the state of São Paulo being Vigor's largest consumer market.
The dairy stations are strategically positioned in the states of
São Paulo, Paraná and Minas Gerais, where the main dairy
production in Brazil is located. The nearly 1,300 farmers, with
whom Vigor has had a relationship for decades, provide about
22 million liters a month, supplying all the Company's plants.
JBS Mercosul`s main dairy products are yogurt, ferment-
ed milk, UhT milk, cheese, butter, dairy drinks, fresh white
cheese, light cheese, cream cheese, small Swiss cheeses, and
other desserts, as well as products derived from animal and
vegetable fat, such as margarine, mayonnaise, vegetable
creams and edible vegetable oils.
In 2009 Vigor was integrated into JBS in the merger with
Bertin. Between 2010 and 2011 the Company went through
a process to strengthen the executive body and investments
in its product line. In 2012 a voluntary public exchange offer
of shares is being made, to make Vigor more independent
and visible, making it a publicly traded company, listed on
the stock exchange, complying with the highest and most
rigorous levels of corporate governance established by the
Novo Mercado.
LEATHER
JBS Leather is the world's largest leather producer and pro-
cessor, accounting for one third of all Brazil's exports in the
segment, with an integrated production system that runs
throughout every stage of the process. With 26 units, all in
Brazil, JBS Mercosul's leather division markets its products to
footwear, automotive, and furniture sectors and it has the ca-
pacity to turn 35,000 tons a month of raw hide into 4.5 mil-
lion square meters of semi-finished and finished leather.
In 2011, JBS Leather completed the reorganization process
of its operation when it absorbed Bertin. It invested more than
US$60 million in the units in Cascavel (CE), Itumbiara (GO), Lins
(SP) and Uberlândia (MG). This investment was required to en-
sure that the production lines were the most modern on the
market, to improve efficiency and working conditions, and to
reduce social and environmental impacts. This reorganization
saved the Company US$45 million a year through better logis-
tics and production processes.
Another milestone in 2011 for JBS Leather was its interna-
tional expansion. The division organized and structured pro-
duction outside Brazil with a factory in China and distribution
centers in Italy and the Czech Republic. This made it possible to
increase the efficiency and its participation on the world's lead-
ing leather markets, also ensuring that all the group's units were
standardized. JBS Leather hold certification from the interna-
tional standards bodies, ISO 9001, the Leather Working Group
(environmental) and SATRA (in the footwear industry).
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13
ITS ENTIRE FLEET IS TRACkED TO ENSURE TARGETS ARE MET
NEW BUSINESS
Another big business division at JBS Mercosul is JBS Novos
Negócios (New Business). This division runs complementary
operations to the beef business and have their own strategies
and goals, working as companies within the group in Brazil.
This New Business division employs approximately 4,500 peo-
ple in ten plants, serving eight different businesses:
Ambiental Recicladora (Environmental Recycler):
with its main center in the city of Lins, São Paulo state, the
Company manages solid waste from JBS' industrial activities,
transforming and reusing materials and industrial waste into
reusable inputs.
JBS Biodiesel: the Company's two biodiesel plants, in
Colíder (MT) and Lins (SP), have the capacity to produce 240
million liters of biodiesel per year. Its raw material is fat from
cattle slaughtered by the JBS Meat Division, and vegetable oils,
primarily from soybeans. In 2011 JBS Biodiesel accelerated its
selective collection program, in which the Company swaps
used cooking oil from cities in São Paulo state outside the
capital for new oil. For every five liters of used oil, the Com-
pany offers a liter of fresh oil.
JBS Transportadora (Transporter): The Company trans-
ports animals between farms and JBS meat division's slaugh-
terhouses and it is responsible for loading the meat containers
sent to Brazil's ports for export. The fleet is entirely tracked by
satellite, which ensures that the commitments to both cattle
suppliers and end customers are met. A total of 1,200 vehicles
operate within the cattle farming, retailing, tanker, bagasse, re-
frigerated and container segments.
JBS Higiene e Limpeza (Hygiene and Cleaning):
focused solely on B2B, the division uses beef fat in soap pro-
duction. With modern facilities using the latest technology,
JBS h&L has an annual production capacity of 165,600 tons
of soap, and 132,000 tons of base paste, marketed for the
cosmetic industries.
JBS Embalagens Metálicas (Metal Packaging): Brazil's
second-largest tin mill facility, with two production units, in
Lins (SP) and Barretos (SP), the Company provides packaging
for products manufactured by the meat division. It has a pro-
duction capacity of 70 million cans a month, 40% of which are
sold to JBS and the remaining 60% to others, including some
of the leading manufacturers of vegetables, tomato sauces
and dairy products in Brazil. With one of the most modern
industrial complexes in Latin America, JBS Embalagens Metáli-
cas is also among the leaders in the field of sustainability. Pro-
ducing 100% recyclable cans, the Company adopts the best
practices available, such as printing with UV inks and using
machines that apply and cure the coating with the Regenera-
tive Thermal Oxidizer (RTO) system, which eliminates the emis-
sion of solvents into the atmosphere and provides fresh air for
the employees and society.
NovaProm: a pioneer in the production of bovine col-
lagen, used in the food, cosmetics and beauty treatment in-
dustries, as well as the pharmaceutical industry. NovaProm,
founded in 2002, is based at the industrial park in Lins (SP).
JBS Trading: marketing varied inputs, both to JBS and
other companies, JBS Trading operates on domestic and inter-
national markets. In 2011 it sold 22,300 tons of vegetable oil,
23,200 tons of chemicals, and 172 tons of animal fat, among
other products.
JBS Envoltórios (Casings): a strong presence on the in-
ternational market, the Company sells beef tripe to sausage
producers. JBS Envoltórios is the world's largest producer in
this category and has three manufacturing units, in Goiânia
(GO), Ituiutaba (MG) and Lins (SP). It meets global standards in
veterinary procedures and food safety, and is recognized as a
premium producer. Its largest customers are in Russia, Eastern
Europe and Asia.
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14
OPERATIONS AND MARKETS
JBS USA
BOVINES
JBS got into the beef and lamb markets in the United States
in 2007 through the acquisition of Swift Foods, which also
had operations in Australia. One year later, the Company took
over the beef division of Smithfield Beef and then became the
country's largest company in the sector, with a market share
of approximately 22%. The division also manages the assets
acquired from SB holding in the USA and the Australian com-
panies Tasman Group, Rockdale, and Tatiara Meat. JBS USA
now operates 24 cattle slaughtering units and 19 feedlots in
the two countries. Its slaughter capacity is 34,100 head of
cattle and 18,300 head of lambs and sheep a day.
The integration process of the assets related to bovines
in the United States and Australia moved forward in 2011,
the year that net revenue reached US$16.5 billion, with an
EBITDA margin of 4.5%. Sales growth for the year was a
very impressive 25.6% on 2010. This strong result was due
mainly to the expansion of exports from the US operations.
hitherto unexplored markets by the division, such as Japan
and Southeast Asian countries, were made a priority, while
countries that already consumed meat produced in North
America - such as Mexico and Canadá and South korea per-
formed well. In 2012, the Company will continue to push for
gains in productivity and efficiency at its plants.
JBS WORkS TO ENSURE ThE SUPPLY OF EThICALLY AND PROFESSIONALLY PRODUCED MEAT
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15
JBS IS ExPANDING hIGhER
ADDED VALUE PRODUCT
LINES, PROCESSING MEAT AND
USING ITS VARIOUS BRANDS
About 20% of revenue for the division came from exports,
following a growth trend that is expected to take hold in the
coming years. The Australian unit exports about 80% of its
production, mainly to Asian and European countries. JBS is the
market leader in Australia.
The domestic market in the United States continued to ex-
perience strong demand, despite the economic crisis in the
country. About a third of the cattle slaughtered by the divi-
sion came from its own feedlots, which enable JBS to produce
meat with unique characteristics, tailored to the demand from
certain groups of consumers.
CHICKEN
JBS got into the chicken market in 2009, through the acquisi-
tion of US Company Pilgrim's Pride, the world's second- larg-
est company in the sector. The Company has a production
capacity of 7.2 million birds per day in its 31 slaughter units in
the United States. Three plants in Mexico, one in Puerto Rico,
and 27 distribution centers in the three countries complete its
structure. The division, headquartered in Greeley, Colorado,
employs over 45,000 people.
In 2011, net revenue reached US$7.5 billion, up by 9.5%
on the previous year. Unusual market conditions, however, led
to the EBITDA margin closing at -2%. Since late 2010, the
sector has had to live with over-production, which has strongly
impacted prices. This has been accentuated by the decrease in
domestic consumption over the same period, and has caused
major losses for every company in the sector in the USA.
The crisis led JBS to speed up and further the changes that
had been made in Pilgrim's Pride since its acquisition. More
than US$200 million in costs were identified and removed
from operation. The administrative structure was streamlined
with the elimination of hierarchical levels and downsizing.
The division thus began 2012 ready to make positive margins.
Besides the internal adjustments, the market as a whole got
through overproduction and resumed operations under nor-
mal conditions at the beginning of the year.
The difficulties on the US market also led the JBS division
to look for new markets in Asia, the Middle East and Africa.
Exports grew by 50% in 2011. About 20% of revenue came
from exports, and JBS believes that there are still many oppor-
tunities to be explored in this area.
HOGS
The segment was created in 2007, through the acquisition of
Swift Foods, and it has three slaughterhouses and one indus-
trial plant in the United States. Production capacity is 50,100
head a day. In 2011 net revenue reached US$3.5 billion, with
an EBITDA margin of 9.8%. Sales rose by a significant 17.5%
in the year. JBS USA hogs ranks in third place in the US sector,
with a 14% market share.
The constant search for efficiency in industrial operations
and a continued effort to develop sales channels were mainly
responsible for the successful outcome in the year. The seg-
ment also benefited from the opening of new export markets
for US pork, including China, Japan and South korea. In the
past two years export volume has grown from 15% to 20%
of total production at JBS USA hogs.
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FINANCIAL RESULTS
16
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17
I
n 2011, JBS focused mainly on the integration of the ac-
quisitions it made in recent years. Upon completing the
period of high investment in plants in order to obtain ef-
ficiency and integration, the Company finished its phase of
heavy outlay.
JBS earned, in 2011, net revenue of US$61.8 billion, a
significant organic growth of 12.9% comparing to 2010. Re-
versing 2010's negative cash position, in 2011 JBS generated
an operating cash flow of R$606.5 million.
All its business units performed better in 2011 than the
previous year, except the chicken division in the United
States, operated by Pilgrim's Pride (PPC). Oversupply on the
domestic market caused a sharp fall in prices and, conse-
quently, losses for the entire industry. PPC ended the year
with revenues of US$7.5 billion (up by 9.5% on 2010) and
negative EBITDA of US$149.8 million.
NET REVENUE AND EBITDA
The Company's EBITDA in 2011 was R$3.2 billion, a decrease
of 16.3% comparing to 2010, once more due to the nega-
tive results of Pilgrim's Pride. The consolidated EBITDA mar-
gin was 5.1%.
Net revenue for beef at JBS USA, including Australia, to-
taled US$16.5 billion in the year, up by 25.6% comparing to
2010. EBITDA was US$739.1 million, up 11.4% on the same
period the year before.
IN 2011 JBS FILED RECORD NET
REVENUE OF R$ 61.8 BILLION,
UP BY 12.9% ON 2010
FINANCIAL RESULTS
JBS RESULTS (CONSOLIDATED)
R$ (million)
2011
2010
%
Net revenue
61,796.8
54,712.8 12.9%
Gross income
6,696.6
6,718.0
-0.3%
Gross Margin
10.8%
12.3%
­
Net financial results
(2,010.7)
(2,223.0) -9.5%
Results Before Tax
(230.1)
58.6
­
Net profit-/loss
(1)
(75.7)
(292.8)
­
EBITDA
3,151.0
3,766.1
-16.3%
EBITDA margin
5.1%
6.9%
­
NET REVENUE AND EBITDA BY UNIT
Net revenue (billion ­ local currency)
2011
2010
%
JBS USA Bovinos US$
16.5
13.1
25.6
JBS USA Suínos US$
3.5
2.9
17.5
JBS USA Frangos US$
7.5
6.9
9.5
JBS Mercosul R$
14.9
13.3
11.9
Ebitda (million ­ local currency)
JBS USA Bovinos US$
739.1
663.7 11.4
JBS USA Suínos
338.2
276.8 22.2
JBS USA Frangos US$
(149.8) 481.9 --
JBS Mercosul R$
1,600
1,289 23.9
Net revenue in pork at JBS USA was US$3.5 billion, up by
17.5% on 2010. EBITDA was US$338.2 million, 22.2% up on
the previous year.
The operation of JBS Mercosul obtained R$ 14.9 billion in
net revenue, 11.9% over 2010. EBITDA was up by 23.9% on
the same period, to R$1.6 billion.
The loss for the period was R$75.7 million, due to the
negative results in the chicken segment in the USA (PPC), at
US$495.7 million (US GAAP) in 2011. Eliminating this result,
JBS would have made a profit of R$482.6 million.
Net revenue was up significantly in every business unit
in 2011. The significant organic growth of the Company in
2011 was due to the effective increase in sales at every unit.
In particular, with an increase of 25.6% in sales, the beef divi-
sion in the United States was the one that contributed most
significantly. Net revenue at the chicken and pork units in the
United States was up by 9.5% and 17.5%, respectively.
At JBS Mercosul, sales were up by 11.9%, even with the
situation in Argentina, which forced the Company to concen-
trate on just two units in that country in 2011.
¹ RESULT ATTRIBUTED TO CONTROLLING ShAREhOLDER PARTICIPATION.
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18
FINANCIAL RESULTS
INDEBTEDNESS
The Company ended the year with R$5.3 billion held in cash,
equivalent to 100% of its short-term debt.
The leverage has been stable at 3.0x EBITDA, excluding the
chicken business in the USA. JBS considers this appropriate for
the moment, but expects to reduce it on the next few years.
CAPITAL ExPENDITURE
Capital expenditure by JBS on goods, plant and equipment
was R$1.2 billion, 4.2% down on 2010. The main investments
were concentrated on improving productivity and increasing
storage and distribution capacity in all the regions where the
Company operates.
VALUE ADDED
In 2011 the Company achieved R$13 billion in added value,
which was distributed as follows:
DEBT
JBS (Excluding Pilgrim's Pride)
R$ (million)
12/31/2011 9/30/2011 Var. %
Gross debt
16,201.8
16,501.1
-1.8%
(+) Short term
5,310.1
5,315.7
-0.1%
(+) Long term
10,891.7
11,185.3
-2.6%
(-) Available
5,195.7
5,387.8
-3.6%
Net debt
11,006.1
11,113.3
-1.0%
Net debt / EBITDA
(1)
3.0x
3.0x
DEBT
JBS (including Pilgrim's Pride)
R$ (million)
31/12/11 30/9/11
Var. %
Gross debt
18,872.2
19,235.4
-1.9%
(+) Short term
5,339.4
5,344.7
-0.1%
(+) Long term
13,532.8
13,890.7 -2.6%
(-) Available
5,288.2
5,581.0
-5.2%
Net debt
13,584.0
13,654.4
-0.5%
Net debt /EBITDA
(1)
4.0x
4.0x
VALUE ADDED (IN R$ BILLION)
People
6.8
Fees, taxes and contributions
1.7
Third-party equity remuneration
4.8
Equity remuneration
-0.3
Total
12.98
¹ EBITDA IN ThE LAST 12 MONThS. DOLLAR RATE ON ThE LAST DAY IN ThE PERIOD.
¹ EBITDA IN ThE LAST 12 MONThS. DOLLAR RATE ON ThE LAST DAY IN ThE PERIOD.
Value added remained stable comparing to 2010, at R$13
billion. The major portion of that capital (52.4%) was distrib-
uted among the Company's employees, which demonstrates
how important the human capital is to the Company. The fi-
nancial sector (third party capital) accounted for 37% of value
added, while the different levels of government accounted for
13%, showing how important social efforts are to JBS.
RISK MANAGEMENT
JBS uses an integrated risk management model, taking into
account market, credit and liquidity risks. These risks arise dur-
ing the operation of the various areas of the Company and
are constantly monitored. Given its nature as a processor of
commodities and exporter, price fluctuation risk is significant
at JBS and gets special attention.
The global nature of JBS requires international analysis of
variables that could affect the prices of its inputs, such as the
peculiarities of supply and demand, changes in the weather,
sanitary issues, restrictions on exports and the economic envi-
ronment. Likewise, the exchange rates that impact the value
of its exports are observed closely and influence its commercial
and financial decisions, seeking balance and greater efficiency
in its global operations. The risk management team is respon-
sible for this monitoring, acting in a way to protect the finan-
cial flow at the Company.
SHARES
JBS went public in 2007 and since then its shares have been
traded on the BM&FBovespa market (under the code JBSS3)
and the Over The Counter market (OTCqx) in the United
States (under the code JBSAY). In 2011 US$6.6 billion worth
of shares in the Company were traded, or 19.1% of the shares
in the sector and 2.2% of the shares on the Bovespa market
in the year.
JBS shares are traded on the Bovespa Index (Ibovespa), the
main on the country, Brazil Index 50 (IBrx-50), Brazil Index
(Ibrx), Carbon Efficient Index (ICO2), Index of Differentiated
Corporate Governance (IGC), The Differentiated Tag Along
Stock Market (ITAG) and the Industrial Sector Index (INDx),
among others.
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19
JBS USES AN INTEGRATED
MANAGEMENT MODEL,
COVERING MARkET, CREDIT,
AND LIqUIDITY RISkS
The Company is currently controlled by FB Participações,
with 47% of the shares. BNDESPar has 31% and the market
trades 22% of JBS' shares.
RETURN TO SHAREHOLDERS
JBS' mandatory dividend is at least 25% of adjusted net profit,
in the form of Brazil's corporations act and the Company's
bylaws, determined in the non-consolidated financial state-
ments. The annual declaration of dividends, including divi-
dends in excess of the mandatory minimum, requires approval
by the General Ordinary Meeting, by a majority vote of the
shareholders of JBS and depends on several factors. These
include the operating results, its financial condition, cash re-
quirements and the future prospects for the Company, and
other factors that the board of directors and shareholders in
JBS deem relevant.
DIVIDEND PAYMENT RECORD
JBS distributed to its shareholders dividends and interest on
capital of R$0.8 million for 2002, R$21.8 million for 2004,
R$31.7 million for 2005, R$11.2 million for 2006, R$17.5 mil-
lion for 2007, R$12.3 million for 2008, and R$61.5 million for
2009. There was no payment of dividends for the years ending
in 2010 and 2011 due to accounting losses in the period.
SHAREHOLDER STRUCTURE AT
JBS ON DECEMBER 31, 2011
SHAREHOLDER STRUCTURE AT
JBS ON FEBRUARY 1, 2012
Treasury
3%
Market
21%
Market
22%
FB Participações
S.A.
46%
FB Participações
S.A.
47%
BNDESPAR
30%
BNDESPAR
31%
On January 31, 2012, the board approved the cancellation
of the shares held by the treasury and the shareholder base
looked like this:
In 2011 its shares began the year trading at R$7.14 and fell
by 14.85%. In the first quarter of 2012, the Company's shares
gained 33.45%, ending the quarter priced at $ 7.50 per share.
STOCK VARIATIONS THROUGHOUT 2011 AND THE 1ST QUARTER OF 2012
Jan.
2011
7.0
9.0
6.0
8.0
5.0
4.0
3.0
2.0
1.0
0.0
Feb.
2011
Mar.
2011
Apr.
2011
May
2011
June
2011
July
2011
Aug.
2011
Sept.
2011
Oct.
2011
Nov.
2011
Dec.
2011
Jan.
2012
Fev.
2012
Mar.
2012
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20
FINANCIAL RESULTS
JBS S.A. BALANCE SHEETS
JBS S.A. BALANCE SHEETS (IN THOUSANDS OF REAIS)
Company
Consolidated
12.31.2011
12.31.10
12.31.2011
12.31.10
CURRENT ASSETS
Cash and cash equivalents
3,612,867
3,000,649
5,288,194
4,074,574
Trade accounts receivable, net
1,883,093
1,672,729
4,679,846
4,036,104
Inventories
1,544,261
1,109,472
5,405,705
4,476,934
Biological assets
-
-
209,543
417,028
Recoverable taxes
1,330,609
1,088,310
1,690,311
1,419,784
Prepaid expenses
8,148
13,844
131,033
107,825
Other investment and discontinued operations
-
504,002
-
504,002
Other current assets
256,225
161,066
526,649
351,817
TOTAL CURRENT ASSETS
8,635,203
7,550,072
17,931,281
15,388,068
NON-CURRENT
Realizable in the Long Term
Credits with related parties
88,505
-
552,197
332,679
Judicial deposits and others
104,207
88,218
389,947
448,875
Recoverable taxes
562,027
553,770
626,126
616,297
Total Realizable in the Long Term
754,739
641,988
1,568,270
1,397,851
Investments in subsidiaries
7,561,574
10,443,000
-
-
Property, plant and equipment, net
7,803,582
7,598,963
15,378,714
14,624,201
Intangible assets, net
9,531,506
9,531,739
12,532,619
12,425,499
24,896,662
27,573,702
27,911,333
27,049,700
TOTAL NON-CURRENT
25,651,401
28,215,690
29,479,603
28,447,551
TOTAL ASSETS
34,286,604
35,765,762
47,410,884
43,835,619
ALL ITS BUSINESS UNITS PERFORMED
BETTER IN 2011 ThAN ThE YEAR
BEFORE, ExCEPT ThE ChICkEN
DIVISION IN ThE UNITED STATES.
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21
JBS S.A. BALANCE SHEETS (IN THOUSANDS OF REAIS)
Company
Consolidated
12.31.11
12.31.10
12.31.11
12.31.10
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable
666,375
566,982
3,323,886
2,962,395
Loans and financings
4,574,702
4,342,593
5,339,433
4,966,198
Income taxes
-
-
211,528
14,251
Payroll, social charges and tax obligation
347,863
375,600
1,167,163
1,095,687
Payables related to facilities acquisitions
10,589
45,746
10,589
45,746
Other current liabilities
466,402
509,482
343,100
332,208
TOTAL CURRENT LIABILITIES
6,065,931
5,840,403
10,395,699
9,416,485
NON-CURRENT LIABILITIES
Loans and financings
7,095,193
6,679,915
13,532,761
10,217,156
Convertible debentures
1,283
3,462,212
1,283
3,462,212
Payroll, social charges and tax obligation
-
-
683,812
317,633
Payables related to facilities acquisitions
2,048
5,144
2,048
5,144
Deferred income taxes
289,798
390,774
678,372
1,003,050
Provision for lawsuits risk
140,975
136,002
251,560
321,660
Debts with related parties
-
1,532,002
-
-
Other non-current liabilities
27,554
124,939
266,161
397,430
TOTAL NON-CURRENT LIABILITIES
7,556,851
12,330,988
15,415,997
15,724,285
SHAREHOLDERS' EQUITY
Capital stock
21,506,247
18,046,067
21,506,247
18,046,067
Capital transaction
(10,212)
(9,949)
(10,212)
(9,949)
Capital reserve
985,944
985,944
985,944
985,944
Revaluation reserve
101,556
106,814
101,556
106,814
Profit reserves
1,440,799
1,511,246
1,440,799
1,511,246
Treasury shares
(610,550)
(485,169)
(610,550)
(485,169)
Valuation adjustments to shareholders' equity in subsidiaries 127,071
(1,719)
127,071
(1,719)
Accumulated translation
(2,877,033)
(2,558,863)
(2,877,033)
(2,558,863)
Attributable to controlling interest
20,663,822
17,594,371
20,663,822
17,594,371
Attributable to non-controlling interest
-
-
935,366
1,100,478
TOTAL SHAREHOLDERS' EQUITY
20,663,822
17,594,371
21,599,188
18,694,849
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
34,286,604
35,765,762
47,410,884
43,835,619
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22
FINANCIAL RESULTS
STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010(IN THOUSANDS OF REAIS)
Company
Consolidated
12.31.2011
12.31.2010
12.31.2011
12.31.2010
NET SALE REVENUE
13,060,853
11,770,293
61,796,761
54,712,832
Cost of goods sold
(10,023,868)
(9,338,628)
(55,100,207)
(47,994,792)
GROSS INCOME
3,036,985
2,431,665
6,696,554
6,718,040
OPERATING INCOME (ExPENSE)
General and administrative expenses
(595,453)
(503,405)
(1,739,198)
(1,641,024)
Selling expenses
(1,274,996)
(995,067)
(3,144,069)
(2,627,201)
Financial expense, net
(1,468,238)
(1,927,045)
(2,010,728)
(2,223,021)
Equity in earnings of subsidiaries
113,264
815,611
-
-
Other income (expenses), net
28,031
(85,645)
(32,667)
(168,224)
(3,197,392)
(2,695,551)
(6,926,662)
(6,659,470)
INCOME (LOSS) BEFORE TAxES
(160,407)
(263,886)
(230,108)
58,570
Current income taxes
2,710
2,853
(520,711)
(358,774)
Deferred income taxes
81,992
(44,012)
427,934
33,346
84,702
(41,159)
(92,777)
(325,428)
LOSS OF CONTINUED OPERATIONS
(75,705)
(305,045)
(322,885)
(266,858)
Net income of discontinued operations
-
12,246
-
12,246
LOSS OF THE YEAR
(75,705)
(292,799)
(322,885)
(254,612)
ATTRIBUTABLE TO:
Controlling interest
(75,705)
(292,799)
Non-controlling interest
(247,180)
38,187
(322,885)
(254,612)
Loss basic per thousand shares - in reais
(27.77)
(117.46)
(27.77)
(117.46)
Loss diluted per thousand shares - in reais
(27.77)
81.71
(27.77)
81.71
ONE OF ThE MAIN FOCAL
POINTS IN 2011 WAS
A ThE INTEGRATION
OF ThE ACqUISITIONS
MADE IN RECENT YEARS
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23
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 (IN THOUSANDS OF REAIS)
Company
Consolidated
12.31.2011
12.31.2010
12.31.2011
12.31.2010
Cash flow from operating activities
Loss of the year attributable to controlling interest
(75,705)
(292,799)
(75,705)
(292,799)
Adjustments to reconcile loss to cash provided on operating activities
Depreciation and amortization
436,501
286,115
1,291,411
1,215,454
Allowance for doubtful accounts
10,021
7,180
15,577
16,132
Equity in earnings of subsidiaries
(113,264)
(815,611)
-
-
Net income on discontinued operations
-
(12,246)
-
(12,246)
Gain on assets sales
(24,998)
6,961
(8,132)
11,005
Deferred income taxes
(81,992)
44,012
(427,934)
(33,346)
Current and non-current financial charges
1,544,673
448,829
1,611,274
642,763
Provision for lawsuits risk
5,562
(73,368)
9,865
(22,509)
Impairment
-
25,514
63,193
83,831
1,700,798
(375,413)
2,479,549
1,608,285
Decrease (increase) in operating assets
Trade accounts receivable
(149,369)
(531,026)
(278,778)
(957,276)
Inventories
(433,292)
(350,936)
(627,902)
(1,251,438)
Recoverable taxes
(195,802)
(239,357)
(295,794)
(275,947)
Other current and non-current assets
(104,145)
31,791
(43,156)
225,296
Related party receivable
(360,521)
-
(171,501)
(2,101)
Biological assets
-
-
247,255
(189,908)
Increase (decrease) operating liabilities
Trade accounts payable
77,789
(60,870)
(28,742)
344,962
Other current and non-current liabilities
(100,210)
(311,617)
(75,275)
(67,419)
Related party payable
-
1,598,237
-
-
Non-controlling interest
-
(247,180)
38,187
Valuation adjustments to shareholders' equity in subsidiaries
-
(351,964)
(943,717)
Net cash provided by (used in) operating activities
435,248
(239,191)
606,512
(1,471,076)
Cash flow from investing activities
Additions to property, plant and equipment and intangible assets
(569,741)
(533,831)
(1,173,780)
(1,225,581)
Increase in investments in subsidiaries
(963,638)
(3,038,408)
-
-
Decrease in investments in subsidiaries
2,491,708
-
-
-
Proceeds received from termination of Inalca JBS agreement
504,002
-
504,002
-
Net effect of working capital of acquired (merged) company
718
-
(34,584)
(338,119)
Net cash provided by (used in) investing activities
1,463,049
(3,572,239)
(704,362)
(1,563,700)
Cash flow from financing activities
Proceeds from loans and financings
6,181,618
5,693,809
17,532,838
14,191,471
Payments of loans and financings
(7,341,304) (4,309,777)
(16,224,978) (13,462,647)
Debentures payment
(749)
-
(749)
-
Capital increase
-
1,600,000
-
1,600,000
Transaction costs for issuing of titles and securities
-
(55,252)
-
(55,252)
Capital transactions
(263)
-
(263)
-
Shares acquisition of own emission
(125,381)
(213,728)
(125,381)
(213,728)
Net cash provided by (used in) financing activities
(1,286,079) 2,715,052
1,181,467
2,059,844
Effect of exchange variation on cash and cash equivalents
-
-
130,003
11,122
Variance in cash and cash equivalents
612,218
(1,096,378)
1,213,620
(963,810)
Cash and cash equivalents at the beginning of the year
3,000,649
4,097,027
4,074,574
5,038,384
Cash and cash equivalents at the end of the year
3,612,867
3,000,649
5,288,194
4,074,574
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CORPORATE GOVERNANCE
24
background image
25
J
BS bases its conduct on the highest principles of ethics
and transparency, and strictly follows the corporate gov-
ernance model provided by the BM&F's Novo Mercado,
on which been traded since 2007. Because it operates on a
global scale and in highly dynamic markets which require fast
decision making, JBS seeks to keep its governance structure
as small as possible and always very close to the situation ex-
perienced by the executive body. As a result, the Company
believes it can meet the demands of its shareholders, and the
different levels of government and society, without running
the risk of jeopardizing the progress of the business.
JBS' main strategic decisions are made at the General Share-
holders Meeting, where each share is equal to one vote - once
again following the model recommended by the Novo Mercado.
The corporate governance structure is headed up by the
Board of Directors, comprising eleven members who are
responsible for determining long-term strategies and over-
CORPORATE GOVERNANCE
seeing the Company's performance. The ordinary meetings
are held quarterly, but the board members are constantly
monitoring the business and are often called upon to make
decisions. An information technology system integrating the
Company's data will be made available to members in 2012,
which will make them more familiar with the managers.
BOARD OF DIRECTORS
Currently the Board of Directors at JBS is made up of eleven
members - a chairman, seven members without any specific
denomination, and three independent members.
The Company's Board of Directors is responsible for,
among other things, determining policies and guidelines.
The Board also oversees the directors and monitors the im-
plementation of policies and guidelines established periodi-
cally by the Board.
The Board of Directors at JBS is made up of the following
members:
¹ INDEPENDENT MEMBER.
JBS BASES ITS CONDUCT
AND GOVERNANCE ON ThE
hIGhEST PRINCIPLES OF
EThICS AND TRANSPARENCY
MODERNITY AND INNOVATION ARE PART OF JBS' DECISION-MAkING PROCESS
MEMBERS OF THE BOARD
POSITION
DATE ELECTED
MANDATE ENDS
Joesley Mendonça Batista
President
04/29/2011
Aug. of 2013
Wesley Mendonça Batista
Vice President
04/29/2011
Aug. of 2013
José Batista Sobrinho
Member
04/29/2011
Aug. of 2013
José Batista Jr.
Member
04/29/2011
Aug. of 2013
Marcus Vinicius Pratini de Moraes¹
Member
04/29/2011
Aug. of 2013
Natalino Bertin¹
Member
04/29/2011
Aug. of 2013
Peter Dvorsak
Member
04/29/2011
Aug. of 2013
Valere Batista Mendonça Ramos
Member
04/29/2011
Aug. of 2013
Vanessa Mendonça Batista
Member
04/29/2011
Aug. of 2013
Guilherme Radolfo Laager
Member
04/29/2011
Aug. of 2013
Carlos Alberto Caser¹
Member
05/03/2012
Aug. of 2013
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26
CORPORATE GOVERNANCE
The Board has the support of the following internal bodies:
Sustainability Committee: it assists in the formula-
tion of best social and environmental practices applied to the
business. It may have three to five professionals appointed
by the Board.
Corporate Strategy Committee: develops and propos-
es policies relating to the Company's business strategy. Com-
prises three to five members appointed by the Board.
Audit Committee: advises on the evaluation of stan-
dards, business rules, internal systems and the disclosure of
financial results. Also comprised of three to five members
appointed by the Board.
Finance Committee: analyzes the economic situation
and identifies possible impacts on the Company's financial
position, and monitors the Company's financial policy. Com-
prised of three to five people.
People Management Committee: analyzes and vali-
dates the Company's human resources policies. This Com-
mittee is comprised of three to five members, who can be
members of the Board or Company executives.
BOARD OF ExECUTIVE OFFICERS
JBS' board of executive officers is its managing executive body.
The members of the board of executive officers are its legal
representatives and are responsible for the internal organiza-
tion, decision-making, day-to-day operations and the imple-
mentation of the general policies and guidelines established
from time to time by the board of directors.
The members of the Company's board of executive officers
are elected by the board of directors and are eligible for reelec-
tion. JBS' board meets whenever called by the President or by
the majority of its members.
The direct management of the Company is the responsibil-
ity of the Board of Executive Officers, comprised of the follow-
ing people:
DIRECTORS
POSITION
DATE ELECTED
MANDATE ENDS
Wesley Mendonça Batista
Chief Executive Officer
1/26/2011
5/13/2013
Francisco de Assis e Silva
Executive Director of Institutional Relations
5/13/2010
5/13/2013
Jeremiah O'Callaghan
Director of Investor Relations
5/13/2010
5/13/2013
Eliseo Santiago Perez Fernandez
Executive Director of Administration and Control
11/11/2010
5/13/2013
ThE CORPORATE GOVERNANCE
STRUCTURE IS LED BY ThE
BOARD OF DIRECTORS
ALL ThE BUSINESS UNITS PERFORMED BETTER IN 2011
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27
MEMBER NAME
POSITION
DATE ELECTED
MANDATE
Divino Aparecido dos Santos
President of the Audit Committee
04/27/2012
1 year
Florisvaldo Caetano de Oliveira
Member
04/27/2012
1 year
John Shojiro Suzuki
Member
04/27/2012
1 year
Demetrius Nichele Macei
Member
04/27/2012
1 year
Alexandre Aparecido de Barros
Member
04/27/2012
1 year
AUDIT COMMITTEE
The primary responsibilities of the Audit Committee are to
oversee the managers, to report on proposals made by ad-
ministrative bodies to be submitted to the general meeting
for deliberation, and to review the financial accounts.
Following the Ordinary and Extraordinary General Meet-
ing held on April 27, 2012, JBS' Audit Committee has been
made up of the following members:
JBS hAS A LEAN AND qUICk
GOVERNANCE STRUCTURE
ThAT MEETS ThE DEMANDS
OF ALL ITS STAkEhOLDERS
ThE ELECTED MEMBERS OF ThE AUDIT COMMITTEE WILL CARRY OUT ThEIR DUTIES UNTIL ThE ORDINARY GENERAL MEETING IN 2013, WhEN ThEY MAY BE RE-ELECTED.
ThE COMPANY IS MANAGED IN ACCORDANCE WITh EThICAL PRACTICES, ShARED BY ThE MANAGEMENT AND ALL ThE EMPLOYEES
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28
AWARDS AND RECOGNITION
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29
AWARDS AND RECOGNITION
CATEGORY
ORGANIZATION
RECOGNIITON
New Business Leader
Fórum de Líderes
Leadership Forum 2011 Trophy ­
Wesley Batista
10 Biggest Employers
Valor Grandes Grupos
1
st
Place
20 Biggest Companies in Industry
Valor Grandes Grupos
3
rd
Place
20 Biggest Companies in Net Assets
Valor Grandes Grupos
7
th
Place
20 fastest growing companies in gross revenue
Valor Grandes Grupos
5
th
Place
16
th
Ponto Extra Award (APAS) ­ Meat Category
Ponto Extra (APAS)
Ponto Extra Apas Trophy
Best Meat Supplier
Supermercado Moderno
Top Five Award
Agribusiness Leader
Líderes do Brasil
Wesley Batista
Ranking of Biggest Feedlots in Brazil
BeefPoint
1
st
Place
Produz Brasil Award ­
Environmental responsibility category
Revista Produz
2
nd
Place
Most-used brand in Brazilian cattle farming ­
Slaughterhouse Category
Touro de Ouro
Touro de Ouro Award
Ranking of Brazilian Trans-national Companies
Fundação Dom Cabral
1
st
Place ­ Most Trans-national Brazi-
lian Company
Supplier of the Year Award
Supermercado Nordestão
Swift Butchers ­ Meat Category
Executive of the Year Award
Valor Econômico
Agriculture Executive
Sustainable Action
APAS ­ Associação Paulista
de Supermercados
Sustainable Action Award
Gold Seal Award
Johnson & Johnson
SEM Best Board J&J quality
Exporter of the Year Award
Comissão de Comércio Exterior ­ Ceará
Winning New Markets
JBS IS NOW REAPING ThE REWARDS
OF ThE IMMENSE TASk OF
INTEGRATING ITS OPERATIONS
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30
SUSTAINABILITY AT JBS
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31
JBS IS NOW REAPING ThE REWARDS
OF ThE IMMENSE TASk OF
INTEGRATING ITS OPERATIONS
F
rom the beginning ­ when JBS processed only five head
of cattle per day - to its current position as the largest
animal protein company in the world, sustainability has
been a fundamental part of the JBS culture.
While the term is relatively new, sustainability is part of
the three pillars the company is built upon: social respon-
sibility, economic viability, and environmental sustainability.
At JBS, this is a vision guided by the company's culture and
its mission to be the best at what it do while securing a
brighter future for its employees, shareholders, suppliers
and the next generation.
JBS recognizes the scale and scope of its global business
comes with the obligation to contribute to the well-being of
its employees and the communities in which the Company
operates. By successfully managing its operations, JBS satis-
fies its shareholders, customers and suppliers, and responsibly
marshals its natural resources and protects the environment.
This is why it works hard on efficiency, going beyond regula-
tory and legislative requirements, to promote improvements
throughout the value chain, to contribute to the social fabric,
and to invest in the future.
Sustainability Vision
Sustainability is a fundamental part of the JBS culture and is
based on the triple bottom line of social responsibility, eco-
nomic viability, and environmental sustainability. This commit-
ment is demonstrated by the manner in JBS does business, by
its internal guidelines established to foster progress, and the
way in which it enters into partnerships.
SUSTAINABLE BUSINESS
For JBS, sustainability is a critical element in the success of its
operations. Proof of this lies in its social and environmental
actions and commitments that exceed legislative and regu-
latory guidelines. These are actions that demonstrate JBS'
willingness to maintain the same entrepreneurial spirit under
which it was founded.
JBS strives to incorporate environmental soundness and so-
cial justice in its operations, and it has adopted a posture of
transparency in openly communicating its efforts to improve
the management of its operations and to promote the well-
being of its workforce and the community. Added to this is the
constant challenge of including new social and environmental
targets in its operations.
The company recognizes that its actions alone are not suffi-
cient to address the challenges of today, and thus it collaborates
to guide suppliers and other supply chain partners. In addition,
JBS also has several initiatives to address social progress, such
as the Germinare Institute, which provides free primary and
secondary education to talented students at a learning facility
located on the grounds of its corporate campus in São Paulo.
Finally, JBS believes in the future. Through a three-year environ-
mental investment plan that will drive improved environmental
SUSTAINABILITY AT JBS
TIMELINE ­ SUSTAINABILITY
2000
Establishment of the
Environmental Department
2004
Introduction of the JBS
Ethical Conduct Manual
2005
Joined the UM's International Pact
for the Eradication of Child Labor,
Analogous to Forced Labor
2006
Inclusion of a clause in the "Boi a
Termo" (Long-term Cattle) contract
regarding the mandatory nature
of complying with all Labor and
Environmental regulations.
Development of the 1st Project to
Reduce Greenhouse Gases
2007
Participation as Member of the
Sustainable Livestock Farming
Workshop (GTPS)
2008
Creation of the Business Strategy
and Sustainability Committee and
Sustainability Committee
Signed the The Animal Husbandry Pact
of the São Paulo-Amazônia Sustainable
Connections Initiative - Ethos
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SUSTAINABILITY AT JBS
2009
Greenhouse Gas Emission
Inventory at units of JBS Brasil
Participation on the Carbon
Disclosure Project (CDP)
Participation at COP-15
(Copenhagen ­ Denmark)
Founding of the JBS Institute
Public commitment to end logging
2010
Beginning of the Amazon
Biome Satellite Image Monitoring
ProgramPartnership with the
Brazilian Agricultural Research
Corporation (Embrapa) to promote
the implementation of the Program
for Best Agricultural Practices (BPA)
with the farmers
Opening of the Germinare School
Development and launch of JBS'
Sustainability Guidelines
Structuring of the Technicians in
Sustainability team to support suppliers
Social and environmental
diagnosis of all the Company's units
Participation in structuring the
Carbon Efficient Index - BM&F Bovespa
Implementation of Traceability
System on the JBS institutional website
demonstrating its transparency in
relation to the end consumers and
ensuring the legal origin of meat
JBS Brasil Greenhouse
Gas Emissions Inventory
TIMELINE ­ SUSTAINABILITY
performance across its operations which includes setting opera-
tional targets in water consumption, waste water management
and treatment, emissions reductions, and waste disposal.
JBS SUSTAINABILITY GUIDELINES
JBS sustainability vision is expressed through its adherence to
the sustainability guidelines established by JBS executives, in-
cluding members of the Board and Operational Directors, and
results in a uniform management model that provides clarity
for its daily activities and prioritizes a balance between the
three pillars of sustainability.
The JBS guidelines are consistent with the parameters set
forth by some of the major national and international refer-
ences in Corporate Sustainability, such as: the Dow Jones Sus-
tainability Index, the Business Sustainability Index (ISE), the GRI
(Global Reporting Initiative) and the United Nations Global Pact.
SUSTAINABLE PARTNERSHIPS
JBS' commitment to sustainability is evidenced by the man-
ner in which it relates to partners who seek a positive work-
ing agenda. JBS has established dialogue with Non-Govern-
mental Organizations (NGOs), such as the World Wildlife
Fund (WWF), Solidaridad, Aliança da Terra, The Nature Con-
servancy (TNC), and the National Wildlife Federation (NWF),
and is a member of GTPS ­ the Brazilian Roundtable on
Sustainable Livestock Farming (BRSLF), where it serves on
the Steering Committee.
In addition, JBS is a founding member of and serves on
the Executive Committee and Executive Board of the Global
Roundtable for Sustainable Beef (GRSB), a multi-stakeholder
forum that includes companies, NGOs, and producer and re-
tailer organizations, whose mission is to "advance continu-
ous improvement in sustainability of the global beef value
chain through leadership, science and multi-stakeholder en-
gagement and collaboration."
SOCIAL RESPONSIBILITY
Being a sustainable company is an essential part of JBS' mis-
sion. The company acknowledges that, besides the economic
impact by global generation of more than 135,000 jobs, it also
play a positive role in the communities where JBS is present
and thereby contribute to social and economic development
farther beyond the direct and indirect impacts of its operations.
JBS believes a strong relationship with local communities
is crucial for the success of its business. Each of its facilities
seeks to play an active and positive manner within the com-
munities in which it operates. JBS provides financial support
for several charities and supports local events near its facili-
ties, such as cancer prevention campaigns, food drives, and
educational projects. In addition, in 2009, it founded the JBS
Institute, which recently changed its name to the Germinare
Institute, focused on social initiatives.
Germinare School
One of the main initiatives run by the Germinare Institute is the
Germinare School. Established in February 2010, the school,
built next to JBS' headquarters in São Paulo, offers free prima-
ry and secondary education to qualified students with the goal
of better preparing citizens to meet life's challenges through
rigorous academic training and broad cultural exposure.
Currently, 360 students are enrolled, receiving free school
supplies, food and uniforms. This investment in future genera-
tions will empower these youth with moral and ethical values
that will allow them to positively contribute to society. The
Germinare School represents what JBS believes to be the main
instrument for societal transformation: education.
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33
Participation in the 2010
Carbon Disclosure Project (CDP)
Participation in COP-16
(Cancun - Mexico)
2011
Structuring and implementation
of the Environment Investment
Plan for the next three years
Creation of the portfolio Carbon
Efficient Index (ICO2)- BM&FBOVESPA
Integration of the Strategic
Sustainability and Operational
Environment areas for better synergy
in finishing projects in the areas
Integration of the Quality Farms
Program with Sustainable Livestock
Farming, supporting our suppliers
Inventory of Greenhouse
Gas Emissions at JBS Brasil
Creation of ICO2 ­ BM&FBOVESPA
Participation in Carbon
Disclosure Project (CDP) 2011
Auditing of Cattle Purchasing
Procedure, focused on criteria
in the Legal Origin Guarantee
Meetings with federal bodies
to set up programs that provide
data to comply with social and
environmental commitments
Preparation of the 1st JBS
Sustainability Report ­ GRI Guidelines
- With reference to 2010
JBS hAS CONSOLIDATED ITS SUSTAINABILITY GUIDELINES IN A PUBLIC DOCUMENT
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SUSTAINABLE LIVESTOCK
TRAINING FOR SUPPLIERS
JBS supports the sustainable growth of the Brazilian live-
stock sector through its Sustainable Livestock Program,
which raises awareness and trains suppliers on socio-envi-
ronmental themes, food safety and animal welfare. To facili-
tate this training, JBS signed a partnership with the Brazilian
Agricultural Research Corporation (EMBRAPA). The Sustain-
able Livestock Farming Program offers free technical sup-
port and assistance to JBS' suppliers through a specialized
technical team.
ECONOMIC VIABILITY
As a public company, JBS recognizes its responsibility to pro-
duce positive financial results for its investors, shareholders
and employees. Its opportunities to drive improvement in the
lives of its employees and to make investments that enhance
its stewardship of the environment are only possible due to
the Company's successful financial performance.
In 2011 JBS filed growth in consolidated net revenue of
12.9% (compared with 2010). The company is today focused
on creating opportunities in export markets, as evidenced by
its sales distribution. In 2011 approximately 75% of global
sales were generated in domestic markets (where its facilities
are located), and 25% of sales came from exports. JBS gener-
ated R$ 606.5 million in cash flow from operating activities
in 2011 (before investments). In the same year, the Company
invested more than R$ 1 billion in property, plant and equip-
ment. This reinvestment ensures the continuity of operations
and the confidence of consumers, suppliers and clients.
ADDED ECONOMIC VALUE
In 2011, JBS posted R$ 13 billion in added economic value,
distributed as shown below:
JBS EMPLOYEES
JBS enjoys a diverse, global workforce and bases its em-
ployment decisions on meritocracy, respecting the diversity
among its employees and making no distinction between
age, race, religion or sexual orientation.
The company offers its employees an initiation program
which takes in the company's values, mission and princi-
ples. The training program includes areas such as Corporate
Governance, human Resources, quality Control, Sustain-
ability, the Environment and Ethics.
ENVIRONMENTAL RESPONSIBILITY
With 286 facilities and offices on five continents, JBS em-
braces its obligation to responsibly manage natural re-
sources, mitigate its environmental footprint, and ethically
source its raw materials. To accomplish these goals, JBS has
adopted an environmental management system to improve
its performance in critical areas, such as water and energy
consumption, waste reduction, and mitigation of green-
house gas emissions. In addition, the company has devel-
oped a livestock procurement system to aid in the fight
against illegal deforestation in the Amazon Biome.
ENVIRONMENTAL MANAGEMENT SYSTEM
In January 2011, JBS began the implementation of the En-
vironmental Management System (EMS, based on the ISO
14001:2004 standard) in all its beef operations. Each meat
plant will have completed the implementation by December
2012 to ensure the minimization of environmental impacts
related to operations, and to improve environmental perfor-
mance by focusing on three distinct areas:
Pollution prevention
Compliance with all applicable legal requirements
The establishment of goals for continuous improvement
ENVIRONMENTAL INVESTMENTS
In addition to the Environmental Management System, JBS has
adopted an Environmental Investment Plan to provide finan-
cial support to its operations for specific projects focused on:
Reduced water consumption
Treatment of waste water
Management and control of GhG emissions
Proper storage and disposal of solid waste
ADDED ECONOMIC VALUE (R$ BILLION)
Labor
6.8
Taxes and contributions
1.7
Capital Remuneration from third parties
4.8
Capital remuneration from the company
0.3
Total
12.98
The main share of this capital (52.4%) was distributed to the
Company's employees, which demonstrates the importance
of the workforce to JBS. Various levels of government collect-
ed 13%, which represents the company's social relevance and
its contribution to local economies and the tax base.
JBS' SOCIAL AND ENVIRONMENTAL
COMMITMENTS GO
BEYOND COMPLIANCE WITh
CURRENT LEGISLATION
SUSTAINABILITY AT JBS
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35
* REFORESTATION, EROSION RECOVERY, WATER CONSUMPTION AND
EFFLUENT DISChARGE MONITORING EqUIPMENT, INFRASTRUCTURE
IMPROVEMENTS FOR EMPLOYEES, AND OThER PROJECTS.
ENVIRONMENTAL INVESTMENTS
2011 ­ JBS MEAT DIVISION
BY TYPE OF INVESTMENT
Liquid
effluent
74,52%
Others
*
4,4%
Atmospheric
emissions
12,49%
Solid waste
8,59%
WASTEWATER TREATMENT
Each JBS Brasil facility has a wastewater treatment system
that properly handles such discharges. These facilities have
a combined total daily capacity to handle 125,400.91 cubic
meters of wastewater.
JBS has made significant investments in modernizing its
treatment facilities to ensure a high level of efficiency in the
removal of waste, byproducts and pollutants.
OPTIMIZATION OF WATER USE
JBS has adopted goals for water consumption in all its units.
As part of the policy to address the efficient use of natural re-
sources, several projects were implemented to optimize water
use. As a result, JBS was able to reduce water consumption by
approximately 6% in its slaughterhouses.
WATER - JBS MERCOSUL
Water consumption ³
Brazil
Paraguay
Uruguay
Argentina
Mercosul
Volume (milhões de m³/ano)
33,8
0,30
0,75
28,6
4,2
Captured by source ³
Surface
66,57%
96,02%
25,09%
-
68,40%
Underground
30,26%
3,98%
62,88%
86,90%
28,53%
Rain
1,16%
-
-
-
0,98%
Public supply
2,01%
-
12,04%
13,10%
2,09%
LIQUID EFFLUENT - JBS MERCOSUL
By type of disposal
4
Brazil
Paraguay
Uruguay
Argentina Mercosul
Water body
82.59%
100%
39.82%
100%
84.98%
Fertirrigation
11.01%
-
-
-
9.16%
Reuse
3.32%
-
-
-
2.76%
Public network
3.08%
-
60.18%
-
3.10%
ExAMPLES OF PROJECTS IMPLEMENTED
AND SUCCESSFUL CASE STUDIES:
1. Replacement of the
sprinkler system in the stalls,
to keep the temperature
comfortable for the animals
before slaughter, and to
improve efficiency in animal
welfare. The system reduced
the consumption from
700 L / h to 40 L / h (per piece).
2. Installation of sprinkler
nozzles the industrial
sinks, reducing water
consumption by 69%.
3. Withdrawal of dry
ruminal matter.
4. Automation of
industrial equipment.
5. Reuse of water in
external operations for
secondary purposes.
6. Raising awareness
among employees about
the efficient use of water
in the production process.
WATER CAPTURED AT SOURCE ­ JBS MERCOSUL
Surface
68,40%
Public supply
2,09%
Rain
0,98%
Underground
28,53%
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36
MANAGEMENT OF GREENHOUSE
GAS (GHG) EMISSIONS
JBS develops tools to measure and mitigate greenhouse gas
emissions from its activities. Since 2009 it has produced a
Greenhouse Gas Emissions Inventory. This diagnosis allows the
company to identify and prioritize actions to mitigate GhG
emissions through the implementation of low carbon projects.
Since 2009, the Company has produced an Inventory of
Emissions of Greenhouse Gases. This diagnosis allows the
company to identify and prioritize actions to mitigate GhG
emissions through the implementation of low carbon projects.
In addition, to maintain transparency regarding its emissions,
since 2010 JBS has been a member of the ICO2 Portfolio
(BM&FBOVESPA), an index that includes the degree of effi-
ciency related to emissions and the company's revenue.
2010
858,364
2009
417,920
2008
417,451
*2008: JBS CARNES E COUROS
2009: JBS COUROS E CARNES
2010: JBS COUROS E CARNES
(INCORPORATION OF ThE UNITS)
2011: IN ThE PREPARATION PERIOD, WITh ThE
JBS GLOBAL SCOPE.
(TCO2E ­ TONS OF CO2 EqUIVALENT
TOTAL EMMISSIONS (TCO2E)
ThE FIRST COMPANY IN ThE SECTOR TO REGISTER A CLEAN DEVELOPMENT PROJECT
BY CLASSIFICATION
JBS MERCOSUL
hazardous
0,43%
Non-hazardous
99,57%
JBS joined the CDP (Carbon Disclosure Project) in 2009,
where it discloses its management and strategies related to
climate change mitigation.
SOLID WASTE
Every JBS unit has a Solid Waste Management Program that
governs the storage, processing and disposal of solid waste
produced in its facilities. The program also supports a long
term strategy on solid waste impact mitigation.
JBS promotes selective collection of recyclable and non-recy-
clable waste at all of its units.
JBS uses organic waste (rumen) from its slaughtering houses
as biomass for the boilers, reducing fossil fuels consumption.
At the Leather / hide Division, JBS has invested R$ 5 million
in the deployment of a Recycling Unit for hide waste. This unit,
located in Campo Grande (Mato Grosso do Suk state), has an
annual processing capacity of 4,800 tons.
JBS AMBIENTAL
A division of the JBS Group, JBS Ambiental (Environmental),
provides solutions for solid waste management through the
treatment, processing, reuse and/or proper disposal of re-
cyclable, non-recyclable, and hazardous industrial material
and waste.
The industrial unit in the city of Lins (São Paulo state), de-
velops, from industrial plastic waste, recycled products such as
high Density Polyethylene (hDPE), Low Density Polyethylene
(LDPE ), Linear Low Density Polyethylene (LLDPE ) and polypro-
pylene (PP ), for producing new products.
With an installed capacity to recycle 500 tons of plastic
waste a month, the unit has modern and innovative equip-
ment that keeps the technical characteristics very similar to
the original inputs. The unit also manages more than 1,000
tons a month of other waste (such as paper, cardboard and
ferrous and nonferrous scrap metal) which is recycled.
SUSTAINABILITY AT JBS
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37
BY TYPE OF DISPOSAL - JBS MERCOSUL
Composting
68%
landfill
14,36%
recycling
5,52%
Recovery
2,72%
Reuse
8,49%
Others
0,91%
INDIRECT ENERGY (GJ)
Argentina
59.023,44
Paraguay
29.474,93
Uruguay
57.762,56
Brazil
2.193.960,31
JBS Mercosul
2.340.221,24
DIRECT ENERGY
RENEWABLE: FIREWOOD,
WOOD ChIPS, BRIqUETTES,
SUGARCANE BAGASSE,
RUMINAL CONTENT,
EThANOL, ANIMAL FAT.
NON-RENEWABLE: DIESEL
OIL, GASOLINE, LPG, GMP,
NATURAL GAS, NITROGEN.
Non-renewable
11%
Renewable
89%
JBS is in the process of establishing other JBS Ambiental
branches in its other industrial units to manage solid waste.
ENERGY
JBS has established a goal to introduce renewable energy
sources to its industrial boilers and its fleet of vehicles. In 2011,
direct energy consumption from renewable sources was 89%,
which represented an 11% increase on 2010.
Thermal Power Station
Biolins, a unit of JBS, produces electricity and steam from
cogeneration, using bagasse from sugar cane as fuel. The
Biolins power station has an installed capacity of 28,000kw,
enough to supply the JBS industrial complex in Lins and pro-
duce a surplus of energy. The available surplus is sold to oth-
er companies in the area.
Biodiesel
JBS Biodiesel has the capacity to produce biodiesel from veg-
etable oils and animal fat in fully automated plants, using a
modern production system and laboratory testing. JBS Trans-
portation performed tests using B20 and B100 fuel (20% and
100% biodiesel, respectively) in its fleet of trucks and found
that there was a significant reduction in the emission of pol-
lutants. Through the use of biodiesel, JBS aims to mitigate the
environmental impacts of its fleet and encourage the auto-
motive industry to develop new technologies that can further
improve vehicle performance and mitigate harmful emissions.
Recycling of waste oil
Since 2009 JBS has run a project to collect and recycle used
cooking vegetable oil in several Brazilian municipalities. The
project aims to increase environmental awareness and encour-
age recycling. In 2011, the company collected 313,450 liters
of used vegetable oil. All of this was sent for reuse and trans-
formed into biodiesel. In the same year, the company won
the Sustainable Action Award from the Paulista Association of
Supermarkets (APAS), at the 27th International Congress and
Fai, for its collection of used vegetable oil.
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SUSTAINABLE LIVESTOCK FARMING
JBS has the compromise to buy cattle only from regular
farms, which respected and fulfilled the Brazilian legislation..
In order to guarantee adherence to this policy and provide
the highest level of transparency, the Company invested con-
tinuously in a system of monitoring through the most high
technology which allowed for the verification of the fulfill-
ment of the legal criteria of each supplier before the pur-
chase of cattle and so guaranteeing the legal origin of every
cattle bought.
In addition, JBS has implemented a satellite-based track-
ing system to monitor the Amazon biome area. This moni-
toring system involves a series of procedures and analytical
data tools that allow the Company to identify its suppliers
and determine their sustainability status. The integrated live-
stock procurement system follows guidelines issued from the
boardroom and is supported by the company's most senior
executives.
ETHICAL SOURCING OF CATTLE
JBS' commitment
Rejection of illegal deforestation
Rejection of slave labor and/or child labor
Rejection of land disputes and/or squatting
Rejection of the invasion of Indigenous Lands or
Protected Areas
Monitoring of the Amazon Biome
100% of JBS's cattle supplier properties in Brazil are geo-
referenced
1100% of the geo-referenced points are monitored via sat-
ellite images of the Amazon Biome
Any property that is included on the official lists of the
Brazilian Institute of Environment and Natural Resources (IB-
AMA) and/or the Ministry of Labor and Employment (MTE)
for illegal activities is automatically blocked on the JBS live-
stock procurement system
The consultation of these official lists occurs in three stages:
- When the animals are purchased
- Before entering the property
- Before the animals go to slaughter
In an effort to promote transparency, JBS invites its cus-
tomers, consumers and the public to review its livestock pro-
curement system at: www.jbs.com.br/Rastreabilidade.aspx.
Moreover, to affirm its commitment to sustainability, JBS
executed the International Covenant on the Elimination of
Child Labor Similar to Slavery - United Nations and the Pact
of Livestock Initiative for Sustainable Connections São Paulo -
Amazônica - Ethos.
Brazilian Roundtable on Sustainable Livestock Farming
(BRSLF)
JBS supports and participates as a Board Member the BRSLF,
formed by representatives of different segments of the cat-
tle value chain in Brazil. The BRSLF includes representatives
of companies and organizations in the sector, associations of
farmers, retailers, banks, civil society organizations, research
centers and universities.
The group discusses and formulates, in a transparent man-
ner, principles, standards and common practices to be ad-
opted by the sector, which contribute to the development of
sustainable livestock farming, meaning socially responsible,
environmentally correct, and economically viable.
JBS Feedlots
The JBS Feedlot Division provides farmers interested in increas-
ing their production structure with cutting edge technology
that addresses the areas of nutrition, livestock management
SUSTAINABILITY AT JBS
WITh ThE SUSTAINABLE
LIVESTOCk FARMING PROGRAM,
JBS PROVIDES BRAzILIAN CATTLE
FARMERS WITh INFORMATION
ON BEST PRACTICES IN
ThE SECTOR TODAY
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39
and animal welfare, in addition to offering modern marketing
techniques. The company currently has five feedlots in São
Paulo, Mato Grosso and Goiás.
In 2011 approximately 211,000 animals were fed in its
feedlot system. That same year, in the feedlots in Goiás, JBS
began composting projects to produce bio-fertilizer (enriched
with phosphate), recycling approximately 21% of the waste
generated at that facility.
JBS Hides/Leather
The JBS Leather Division plays an important role in promot-
ing sustainable livestock through its actions to verify the
legal origin of hides and the traceability of materials. As
a member of the Leather Working Group (LWG), a multi-
stakeholder forum that seeks to improve the tanning in-
dustry through alignment of environmental priorities and
guidelines for continuous improvement, the company
seeks to achieve high levels of hide traceability. Nine of
the company´s facilities are certified by the LWG as having
achieved "Grade A" ­ that is, the hides can be traced back
to the packing plant and the supplier farm.
JBS hides/Leather prioritizes clean production techniques
to minimize its environmental impact. Investments in research,
technology and training allow the more efficient use of raw
materials and natural resources, while also reducing the gen-
eration of waste and minimizing its environmental footprint.
The leather shavings and trimmings recycling plant in Campo
Grande applies a pioneering concept that allows the com-
pany to transform leather waste into reusable raw materials
for leather processing and other industrial applications. These
raw materials also provide an excellent source of nitrogen that
can be used in agricultural production. In addition, JBS hides/
Leather has developed several projects focused on reduc-
ing the use of water in its operations. In 2011, these actions
resulted in a reduction of approximately 23% in water con-
sumption in the tanning plants.
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40
COLABORADORES
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41
J
BS enjoys a diverse, global workforce and bases its em-
ployment decisions on meritocracy, respecting the diver-
sity among our employees and making no distinction be-
tween age, race, religion or sexual orientation.
JBS provides a training program for employees to expose
them to the Company's values, mission and principles. The
program includes training in several areas including Corporate
Governance, human Resources, quality Control, Sustainabili-
ty, Environment and Ethics.
At JBS S.A. there are seasonal closures of some production
units. When this is necessary, the labor union involved and
the Department of Labor (STR) are notified of the shutdown
two weeks in advance, and usually collective vacations for em-
ployees are granted. Collective holidays are also granted in the
case of unit closure for maintenance, which depends on the
complexity of the work.
JBS S.A. has a Transfer Policy to support its employees if a
plant is shut down, being transferred to the nearest unit, or
being offered support to move and temporary board.

In Brazil, every employee is represented by a labor union
and is covered by collective bargaining agreements.
JBS in the United States follows market practices to offer
jobs with competitive salaries and benefits for its employees.
The Company runs various initiatives to attract, develop and
retain a world class workforce, including personal planning,
recruitment, selection and hiring, special guidance on mana-
gement, training, team development and building, succession
planning, and leadership development.
To avoid hiring unauthorized workers, in the United States
JBS has strict controls and programs to verify the immigration
status of its employees. This led the Company to participate
voluntarily in the E-Verify system, which checks on the eligibi-
lity for employment of new hires.
EMPLOYEES
JBS RESPECTS DIVERSITY AND MAkES
NO DISTINCTION BETWEEN RACE,
RELIGION, OR SExUAL ORIENTATION
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COLABORADORES
COUNTRY
Brazil
59,055
Argentina
2,121
USA
59,180
Australia
7,905
Mexico
4996
Others
1930
TOTAL
135,187
BY BUSINES DIVISION
Meat
64.489
Leather
7.661
Dairy
3.614
Pork
6.994
Sheep and Lamb
1.114
Chicken
45.560
Corporate
1.006
New Business
4.748
TOTAL
135.187
TRAINEE PROGRAM
The Trainee Program is conducted at the JBS Meat Division,
lasts 18 months and focuses on the production of fresh beef,
and processed products. Its goal is to create opportunities for
young professionals, to fast-track leaders, enhance the trai-
ning, expertise and people management, and to produce peo-
ple who are better prepared for succession, with international
job opportunities.
In 2011, the JBS Trainee selection process was applied to by
approximately 14,500 people, and 22 young people were hired.
EMPLOYMENT - NUMBER OF EMPLOYEES (JBS GLOBAL)
Brazil
44%
México
4%
Others
1%
Argentina
1%
USA
44%
Australia
6%
Meat
48%
New Business
3%
Leather
5%
Lácteos
3%
Pork
5%
Ovinos 1%
Chicken
34%
Corporate
1%
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INTERNAL TALENT PROGRAM
The Internal Talent Program aims to develop and train poten-
tial employees in order to produce qualified professionals who
can meet the Company's demands and take on positions as
production supervisors.
For six months, employees get technical and behavioral trai-
ning at their base unit, during which they are dedicated exclusi-
vely to the program, being away from their current role.
After completion of training, the employees take on a posi-
tion as production supervisors at their unit, or they are relocated.
In 2011, 300 people applied for the program, which offered
15 Production Supervisor positions. The successful applicants
were invited to have lunch with Wesley Mendonça Batista,
Company President, José Batista Sobrinho, the founder of JBS,
and other directors.
EMPLOYEE AWARENESS
In 2011 JBS has trained all its employees at its Meat and Le-
ather units in the conscientious use of water. The practices
discussed were not restricted to the work workplace, but also
explained how to make proper use of water at home.
In celebration of World Environment Day (June 5), JBS held
Environment Week at several production units. These events
addressed issues related to the sustainable use of natural re-
sources, with various activities, ranging from treasure hunts
to the donation of native plants, getting employees involved
with the topic and changing their behavior.
In the production units there is also Project ESW, focusing
on consumer awareness of Energy, Steam and Water. It includes
periodic internal audits and employee awareness programs.
Employees at the head office (Anhanguera - the adminis-
trative unit), Distribution Centers (DCs) and Beef Shopping
- Meat Market - who were not familiar with the production
processes at a slaughterhouse, had the opportunity to visit an
industrial unit, with costs paid for by the Company, to learn
about the Company's business.
EVERY EMPLOYEE TAkE PART IN
AN INTEGRATION PROGRAM TO
FACILITATE ThEIR ADAPTATION TO
ThEIR NEW JOB AND TO DISSEMINATE
kNOWLEDGE, PRINCIPLES, AND VALUES
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DESEMPENHO SOCIAL
GERMINARE OFFERS ExCELLENT,
FREE PRIMARY AND SECONDARY
EDUCATION, PRODUCING PEOPLE
WhO ARE BETTER PREPARED IN
ACADEMIC AND hUMAN TERMS
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SOCIAL PERFORMANCE
THE GERMINARE INSTITUTE
Since 2009, the Company's activities in the social have gone
through the Germinare Institute. It shares the same principles
as the Company's in the constant search for innovation and
entrepreneurship, according to strict ethical and quality stan-
dards, in the building of a fairer society.
Founded in February 2010, the Germinare School is the
Germinare Institute's main focal point. Built along with the
Company's headquarters in São Paulo (SP), Germinare offers
excellent free primary and secondary school education, produ-
cing citizens who are better prepared in academic and human
terms, with a broad cultural repertoire, consolidated ethical
values and positive attitudes with regard to life and society.
With the opening of the Germinare School, education became
the center point of JBS' policy on social responsibility.
The school offers free education to students from the 6th
grade of elementary school to the 3rd grade of high school.
In 2011, about 1,200 students applied, and 87 students were
selected. Germinare now has 360 students enrolled who are
given free school supplies, food and uniforms.
In 2012, it began its third school year, with groups in the
6th, 7th, 8th and 9th grades, completing Elementary School
II. From 2013, classes in high school, up to the 3rd year, will
begin. Study is full time, with access to a computerized library,
complete laboratories, a gymnasium and semi-Olympic swim-
ming pool. S The young people complete their education with
physical and competitive exercises, which also developed team
spirit, respect for rules and a sense of achievement.
All the laboratories are well equipped for experimental
work in the field of physical, chemical and biological sciences,
as well as educational technology. In a project that aims for
meaningful education, these are of great importance and are
made great use of.
A member of the UNESCO Associated Schools Project, in
2011 Germinare participated in UNESCO's International Year
of Chemistry. The project gave students a new view of che-
mistry as a tool for a more sustainable world, far removed
from the idea still prevalent in society that associates chemis-
try with pollution.
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46
INFORMAçõES CORPORATIVAS
IDENTIFICATION
JBS S.A.
CNPJ/MF: 02.916.265/0001-60
NIRE: 35300330587
CVM : 20575
Institutional website: www.jbs.com.br
HQ
Avenida Marginal Direita do Tietê, 500 - CEP 05118-100 - São Paulo/SP, Brasil
INVESTOR RELATIONS
Jeremiah Alphonsus O'Callaghan
­ Director of Investor Relations
Eduardo Pavanelli Galvão ­ Manager of Investor Relations
Address: Av. Marginal Direita do Tietê, 500 - CEP 05118-100 - São Paulo/SP, Brasil
Tel.: (55 11) 3144-4224
Fax: (55 11) 3144-4171
E-mail: ri@jbs.com.br
Website: www.jbs.com.br/ri
INDEPENDENT AUDITORS
KPMG Auditores Associados
Avenida Paulista, 2.313, 6º andar, CEP 01311-300 ­ São Paulo/SP, Brasil
Tel.: (55 11) 3138-5000
Fax.: (55 11) 3138-5058
BANK
Banco Bradesco S.A.
SHAREHOLDER SERVICES
Investor Relations
(see above)
Banco Bradesco S.A.
In charge: José Donizetti de Oliveira
Av. Yara, S/N, Prédio Amarelo, 2º Andar, Cidade de Deus ­
CEP 06029-900 ­ Osasco/SP, Brasil
Tel.: (55 11) 3684-3749 e (55 11) 3684-8013
Fax: (55 11) 3684-2714
E-mail: donizetti@bradesco.com.br.
STOCKS AND BONDS ISSUED
The Company's stocks, exclusively ordinary with voting rights, are listed
on the BM&FBOVESPA market - Bolsa de Valores, Mercadorias e Futuros
(BM&FBOVESPA) under code JBSS3, in the Novo Mercado segment.
NEWSPAPERS FOR THE RELEASE OF INFORMATION
Diário Oficial do Estado de São Paulo
O Estado de S. Paulo
CORPORATE INFORMATION
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CREDITS
Overall Coordination
JBS Investor Relations Team
Collaboration
Departments of Sustainability,
Press Relations, and Institutional
Marketing at JBS.
Content and editorial
TV1 Conteúdo
Departments of Investor
Relations, Sustainability,
and Press Relations at JBS.
Design and Layout
TV1 Conteúdo