JBS N.V. Q3 FY2025 earnings call

• The third quarter demonstrated JBS' strength with record net sales, net income of $581 million, and 12-month return on equity of 23.7%.
• Navigated challenging cattle cycle in US, with JBS Beef North America achieving record net revenue despite limited cattle availability.
• Australia showed strong profitability due to improved cattle availability and healthy global demand.
• In Brazil, Friboi had solid performance in export and domestic sales, while Seara maintained margins with disciplined strategy and innovation, including new product launches.
• US operations: Chicken and Pork businesses resilient, Pilgrim's Pride growing, Prepared Foods segment sales up in US.
• Continues to invest in innovation and value-added products, with leverage at 2.39x, aligned with long-term target.

In the third quarter of 2025, JBS' segments showed varied performances. JBS Beef North America had a record net revenue but was affected by higher cattle costs despite elevated cutout value. Australia was a highlight with strong profitability due to improved cattle availability and healthy global demand. In Brazil, Friboi had solid performance in both export and domestic sales, while Seara maintained healthy margins despite export restrictions to Europe and China, driven by disciplined strategy and innovation. In the United States, chicken and Pork businesses were resilient; Pilgrim's Pride grew, Prepared Foods sales in US rose over 25%, and Pork had lower grain costs but supply constraints. Revenue contributions: Beef North America, Australia, Brazil (Friboi and Seara), and US chicken/pork each played distinct roles in the company's overall revenue.

• Cash flow breakeven EBITDA expected to increase to $6 billion in 2025 and $5 billion in 2026.
• Capital expenditures expected to be $2 billion in 2025 and $2 billion in 2026 (including maintenance CapEx).
• Working capital expected to increase to $1.3 billion in 2025 and $700 million in 2026.
• Completed $600 million share buyback program, expects leverage below 2.5x by year-end.
• $3.4 billion revolving credit lines and $4 billion available cash provide flexibility for expansion and value creation.

• Challenging cattle cycle in US with high prices and tight supply.
• Avian flu impact on Seara.
• Legal settlements of $400 million in 2025.
• Currency and commodity price fluctuations affecting working capital and profitability.
• Supply constraints limiting market growth in Pork.

Q: About expansion CapEx in US Pork and U.S. chicken market dynamics?

A: Wesley mentioned 2 Iowa plants for Pork will start ramping in 2027, expecting $500-$750 million in revenues with double-digit margins. Gilberto noted chicken price drop in U.S. big bird segment but PPC has balanced portfolio, confident in U.S. and Brazil chicken markets next year with strong demand.

Q: Breakdown of top line growth from organic expansion and working capital consumption?

A: Guilherme said main working capital consumption due to prices, Pilgrim's Pride and JBS Brazil had volume growth of 3%, Seara had 8% volume growth. Gilberto discussed Brazil chicken market export post-reopening of Europe and China, seeing strong demand and potential price improvement.

Q: Impact of beef volatility on Q4 results and strong sequential improvement in Pork?

A: Wesley said beef volatility creates instability, could impact Q4 results. On Pork, Wesley noted well-invested modern plants, integrated business, operational excellence, and consistent margins, optimistic about Q4 performance.

Q: M&A opportunities and protein price trends?

A: Guilherme said small M&As possible with flexible capital structure, rating agencies dictating M&A capital structure. Wesley discussed beef price trends tied to supply, substitution between proteins, and expected adjustments in beef prices as supply changes.

Q: Seara processed foods margins, Rolândia plant ramp-up, and Australia beef margins?

A: Gilberto said Seara margins strong, Rolândia plant expanding with volume growth in domestic market. Australia beef margins resilient due to strong demand, salmon business outperforming, pork business growing with productivity improvements.

Q: Beef herd rebuild in US and working capital timing?

A: Wesley said 2026 will still be challenging for US beef supply, gradual improvement expected from 2027. Guilherme said pork working capital issues in second quarter 2025 cleared, no carryover to third quarter.

Q: Seara export impact of China and Europe bans, and Brazil/Australia cattle offsets?

A: Gilberto said reopening Europe and China has significant positive impact on Seara's P&L, reducing pressure on other markets. Wesley complemented that U.S. exporting less benefits Australia and Brazil exports.

Q: Brazilian debt financing and leverage target?

A: Guilherme discussed Brazilian debt issuance, rate details, and leverage target below 2.5x using IFRS EBITDA.

Q: Seara seasonal offerings, export prices, and production growth?

A: Gilberto said Seara seasonal offerings in domestic market have strong demand, export prices expected to improve with reopened markets, and breeders' increase with genetic and diet improvements.

Q: JBS Brazil domestic demand resilience and export opportunities?

A: Gilberto said JBS Brazil domestic demand resilient with category management, external demand strong with new markets, and beef market in Brazil has growth opportunities due to genetic, diet, and feedlot improvements.

Q: U.S. beef investments efficiency and shareholder returns?

A: Wesley said U.S. beef investments impact 2027, 2026 margins likely similar to 2025. Guilherme discussed shareholder returns tied to leverage, planning dividends around $1 billion per year with M&A considerations.

Q: Working capital and biological assets guidance?

A: Guilherme said working capital $700 million in 2026 half due to volume and half to pricing, biological assets flat due to stable grain prices.

Q: Hedging and Pork supply constraints?

A: Guilherme said hedges' cash impact offset by physical purchases, Wesley said Pork procurement balanced, minimizing volatility with indexed purchases.

Q: Brazilian cattle availability and Swift stores?

A: Gilberto said Brazil cattle availability reduced 3-5% but still higher than before, feedlot growth enhancing beef production. Swift stores developed for frozen beef market, growing well with store-in-store partnerships.

Q: Working capital breakeven and bond ticker update?

A: Guilherme said working capital increase due to prices and volumes, bond ticker restructuring in progress with Netherlands company as co-issuer.

Q: U.S. Pork margins and market access?

A: Wesley said U.S. Pork margins not compressed due to market access, more markets beneficial but margins stable, and no compression due to export restrictions.