Jbs-a Aktie

Good morning, and welcome to JBS First Quarter of 2026 Results Conference Call.

[Operator Instructions]

As a reminder, this conference is being recorded. Any statements eventually made during this conference call in connection with the company's business outlook, projections, operating and financial targets and potential growth should be understood as merely forecast based on the company's management expectations in relation to the future of JBS. Such expectations are highly dependent on the industry and marketing conditions, and therefore, are subject to change.

Present with us today, Gilberto Tomazoni, Global CEO of JBS; Guilherme Cavalcanti, Global CFO of JBS; Wesley Batista Filho, CEO of JBS USA; and Christiane Assis, Investor Relations Director.

Now I'll turn the conference over to Gilberto Tomazoni, Global CEO of JBS. Mr. Tomazoni, you may begin your presentation.

Good morning, everyone. Thank you for joining us today. The first quarter of 2026 was a challenging period for JBS, shaped by market volatility seasonality, operational disruption and change in the global trade flows. This is consistent with what we have been signing. We understand the nature of our business and the cycles we operate in, and we manage the company with that in mind.

In the environment, we remain focused on what we can control: operational excellence, cost discipline, agility and long-term value creation. JBS delivered net growth -- sales growth of 11%, reaching $21 billion and record first -- is a record for our first quarter.

Net income was USD 221 million and EBITDA total approximately USD 1.1 billion, with a margin of 5.2%. Leverage increased to 2.77x reflecting pressure on earnings and cash generation, while we continue to strengthen our liability profile, extending average debt maturity to approximately 15.6 years.

From an operation perspective, the quarter reflected both the challenge of the cycle and the resilience of our platform. In Beef North America, the environment remained very difficult. EBITDA was negative USD 230 million, with margin at 2.3% negative impacted by [ constrained ] cattle supply and higher costs. During the quarter, we advanced organizational and operational adjustments across our U.S. beef platform, focused on rationalizing, refreshing and simplifying our structure in more challenging phase of the cattle cycle.

As the business has evolved, several areas were already operating and increased an integrated way. Building on that, we brought together fed beef, that is the 3 business units: fed beef, regional beef, and case-ready into a more unified structure. This is a natural step. It reduce duplication, improve coordination and allow us to leverage our skills and talent more efficiently, while strengthen decision-making and position the business to improve its performance over time. These actions are part of a broader effort driving efficiency across the company. Our focus is to extract more value from the existing assets, improve productivity and enhance execution through technology, automation and data.

At Friboi and Pilgrim's, we have been developing piloting artificial intelligence initiatives for over a year to support better decision-making, commercial execution and operational efficiency. And we are now scaling this capability globally.

At Seara, we continue to advance automation and process improvement to increase productivity, improve product quality and support expansion of higher value-added categories. This reflects our approach to the cycle. We act early, focus on what we control, and position the business for a stronger performance ahead. This quarter once again highlighted the importance of our diversified platform.

Despite the headwinds, our business helped balancing consolidation performance. Seara delivered an EBITDA margin of 15.5%, supported by strong export demand, innovation and growth in value-added products despite currency pressure and cost inflation.

The outlook for poultry in Brazil remained positive, supported by balancing supply-demand, including adjustment in breeder placement and continuous demand growth.

JBS Brazil reported EBITDA margin of 4.5%, a second higher first quarter margin in history, supported by a disciplined commercial execution and favorable demand.

Friboi also delivered a strong top line performance with a solid demand, both domestic and in exports.

The China trade war created an adjustment in the global trade flow during the quarter, but our team responded quickly, managing volume within the quota structure and develop alternative markets such as United States, Mexico, Indonesia, preserving value and expanding our commercial footprint.

In Australia, margin reached 7.1%, and operational fundamentals remain positive. In Queensland, cattle conditions are the best we have seen in the last 3 years, reinforcing our positive outlook for the business.

In the United States, Pilgrim's has a softer quarter, impacted by seasonality and Pilgrim's plant adjustments. These actions were necessary to improve efficiency, enhance productivity mix and better align our footprint with demand. The adjustments have been completed, and we have already seen improvement trends.

U.S. pork remained stable with a sign of gradual improvement supported by more balanced supply and demand dynamics.

Cash flow in the quarter was also impacted to grow CapEx with investment focused on efficiency, especially in value-added products and strengthening our global footprint, truly aligning with our long-term value creation.

Looking ahead, the fundamental of our global protein remains strong. Beef supply continues to be constrained in key markets. Poultry demand remains solid, and our brands continue to gain relevance with the consumers. Seasonality, we are playing an important role. The start of barbecue season in the United States typically support stronger consumption across protein and improve [ individual ] conditions to coming quarters.

At the same time, we will remain disciplined. Our priorities are clear. Operational excellence, [ strict ] control on cash generation. We also remain focused on addressing the company's long-term position in a global capital market, including creating the conditions for further expand our participation in relevant equity indices over time. We continue to review costs, optimize resources and improve productivity across the business. We understand the cycle. We operate with discipline, and we are taking the right action to navigate the current environment, while strengthening the company for the future. Thank you.

I will now turn the call over to Guilherme, who will be through the financial results in more details. Guilherme, please?

Thank you, Tomazoni. Well, let's now move on to the operational and financial highlights of the first quarter 2026. Net sales reached a record of $22 billion for our first quarter. Adjusted EBITDA in the IFRS totaled $1.1 billion, which represents a margin of 5.2% in the quarter. Adjusted EBITDA in U.S. GAAP totaled $916 million, which represents a margin of 4.2% in the quarter. Adjusted operating income was $516 million with a margin of 2.4% in IFRS and $544 million in U.S. GAAP with a margin of 2.5%.

Net income was $222 million in the quarter and an earnings per share of $0.21. Excluding the nonrecurring items, adjusted net income would be $241 million and earnings per share $0.23 per share in the quarter.

Finally, the return on equity was 22% and return on invested capital was 15%. Free cash flow in the first quarter 2026 was negative at $1.5 billion compared to a cash consumption of $917 million in the first quarter of 2025. In addition to the seasonal cash consumption, that typically occurs in the first quarter, the main drivers of a higher cash burn compared to the same period last year were a decline in adjusted EBITDA of approximately $400 million reflecting the weaker operating results, an increase in capital expenditures, which more than doubled compared to the first quarter 2025, totaling $566 million driven primarily by expansion CapEx of $319 million compared to $79 million in the first quarter of 2025. An additional of $252 million working capital impact resulting from the higher livestock suppliers payment deferral as previously flagged in our last earnings call. It is worth noting that if we execute the same level of livestock deferral in the fourth quarter 2026, this impact will be offset on the free cash flow for the full year.

Notably, working capital consumption was already below the same period last year because excluding the additional $252 million in deferred livestock payments, working capital would have been approximately 23% better compared to the first quarter of 2025.

In the first quarter, we also strengthened our balance sheet with the issuance of $2.5 billion in bonds in the market and the tender offer of $1.45 billion. This allowed us to extend our debt maturity profile, reaching an average debt term of 15.6 years and an average cost of 5.7%. We have no significant debt maturities until 2031. Our leverage ended the year at 2.77x in line with our long-term target of keeping net debt to EBITDA between 2x and 3x. Our $3.4 billion in revolving credit lines and $3.5 billion in available cash, provide us with the flexibility to continue executing our expansion CapEx, value creation projects, and shareholder returns, while maintaining a healthy and robust balance sheet.

Last night we also it announced that beginning next quarter, we will voluntarily file forms 10-K, 10-Q and 8-K with the SEC prepared under IFRS and supplemented on the earnings release by certain indicators reported under U.S. GAAP. This initiative is expected to broaden our eligibility for key benchmark indexes, such as S&P Composite 1500 family.

With that in mind, I would like to open up for the question-and-answer session.

[Operator Instructions]

Ladies and gentlemen, the first question comes from Isabella Simonato from Bank of America.

I have a couple of questions. First, Guilherme, if I may ask you for that breakeven EBITDA exercise you do every quarter, that's really helpful. If you could just walk through that, we really appreciate.

And also to the point of cash, right, and your leverage is pretty close to 3x, right? I know that's not how rating agencies look at that. But if you look to the EBITDA, U.S. GAAP, right, is even higher than that.

So I was wondering, you mentioned before, right, a CapEx of $2.4 billion for this year and $1.3 billion of expansion. If that continues to be the goal right or if you are reviewing that not only for this year but going forward, what type of levers you have, right, to bring leverage down, assuming you don't have a big jump, right, in your EBITDA for the next 18 to 24 months. So that would be my first point.

And also about the U.S. beef business, right? I think we have been discussing that for a while now, about how the cycle apparently is being -- has changed right or is being different than the previous down cycles and there is a matter of really how the cattle herd can be rebuilt at this point as the sector goes through generational transitions and issues? I mean, do you see the business model changing going forward? I mean, any type of vertical integration that would make sense on the cattle part for you to be supportive of the cattle herd growth over time, that would be my second point.

Isabella, so on the first question, I think it's early. We're still reviewing our estimates. And again, there's a lot of variable that's not in our control. But I would say that for this year, the breakeven EBITDA, the cash flow breakeven EBITDA will be anything between $5.7 billion and $6 billion. That's our better estimation moment.

In terms of cash usage. You're right, the leverage reached 2.77. So please bear in mind that our long-term target is to be between 2x and 3x. We -- being in this range, we think we keep investment grades above 3x -- we enter on the attention zone where when we start reviewing things like you mentioned, capital expenditures, dividends and so on.

Our dividend limit is at 3.75. And I think it's worth mentioning that in 2023, our leverage reached 4.84 in the third quarter, and we kept the investment grade because of the cyclicality nature of our business. Because in 2024, the leverage came down without any effort to 1.89. In fact, in 2024, I even unwind the discount receivables. So 2024, we use -- we would be printing a $2.8 billion free cash flow, but I used $500 million to unwind discount receivables. So I printed $2.3 billion free cash flow. So that's the kind of leverage that the levers that we have to use because we are not -- we don't use these levers recurrently, exactly to be able to use whenever we need.

So for example, I could increase my discount receivables again for anything from $500 million to $1 billion in discount receivables that I unwinded in 2024 when the cash flow was robust. I can also increase my supplier vendor finance because we have space for that. But these all have costs. So we use only if needed.

So that's how we will be managing leverage. So second quarter, we may be closer to our upper range limit on the long-term target. But bear in mind that the second semester, there's always a strong free cash flow generation. So we expect to end up the year in our target zone of between 2x and 3x net debt to EBITDA.

And as long as we keep inside this range, we've been managing to keep the $1 billion dividend that we already announced and around more than $1 billion in growth CapEx. If you look at -- since 2019, we did an average of expansion CapEx of almost $1 billion with an almost $1 billion average dividend as well. So I think being in this range, I think we can keep this pace of growth CapEx and dividends, but we will always be monitoring according to our leverage, which is our main variable for capital allocation decisions.

So obviously, this herd rebuild in the cycle of the U.S. business is taking longer than we all wish for. But for the industry to have any integration on the -- especially on the cow-calf side of the business is just not realistic for a few reasons. It's very specialized and the people that do it have very special knowledge that's very different than what we do. And other than that, especially on the cow-calf side of this supply chain, it's very expensive, right, expensive, not as in price.

I mean it's expensive. It has a lot of -- you need a lot of land and you need to manage a lot of land to be able to have a significant amount of livestock, and that's not our business. So we're not looking into that.

The next question comes from Henrique Brustolin with Bradesco.

I have 2 also on U.S. beef. The first is to understand a little bit more the profitability we delivered in the quarter. We know it's a seasonally weak [Technical Difficulty] quarter evolving into the barbecue season, right? We continue to see spreads that seem to be pressured as we heard...

Henrique, maybe can you repeat the question? You -- we lost half of the question. Can you repeat please?

Sorry, sure. The first one is if there was anything extraordinary in Q1 U.S. beef margins such as hedges or even the impact from the Greeley strike? And the second is how you see margins evolving into the barbecue season, spreads appear to be pressured back to the levels they were in the beginning of the year. So how do you see this favorable seasonality playing out under the current environment?

So no, there wasn't anything extraordinary from a hedge perspective or even the whole strike situation, didn't have a meaningful impact on our quarterly results. So nothing to do with that. It was simply margins, especially in January and February -- we're, for sure, very, very challenging and probably one of the most challenging periods we've ever seen in history. So talking about the next quarters, we expect obviously to be better than what we had in Q1. But for sure, 2026 will be a more challenging year than 2025.

Our next question comes from Benjamin Theurer with Barclays.

Just 2 very quick ones. So first, can we talk a little bit about Australia and some of the cost headwinds what you're seeing on the Australian cattle cycle maybe and if there was something in particular in the first quarter, that drove a little over 300 basis points of margin contraction.

And then second, if you could share a few thoughts as it relates to the cattle price in Brazil. It's been very erratic and volatile. So any background, any interpretation as what we should think about going forward for the Brazilian capital price? That would be helpful.

Ben, thank you for your question. Related to Australia, only the operation was very strong. We had a good quarter in terms of volume and sales. And the impact when you compare to the last quarter -- last year, the first quarter last year was FX was around 15% devaluation -- devaluation of the Aussie. And this is the only impact of the business. EBITDA remains strong in Queensland that where we have 40% of the cattle herd the conditions -- the environment conditions have tested -- the best we have seen in the last 3 years. And then we remain very positive with the Australia business.

About the volatility in Brazil, it's normal because, as you know, Brazil is focusing to accomplish the quota in -- China quota and all of the players in the market try to produce as much as they can in order to able to reach a part -- share of the quota. It is normal. The price of the cattle increased. But you saw in the last 2 weeks, the price start to go down. And we see that if the quota will be achieved, we believe at the end of June, the volume should be -- go down and the price of the cattle should be down as well in a way to accommodate that to where Brazil will be put in an additional 100,000 tonnes per month. This is normally that what we see in the situation that will be less cattle will be harvest and the price of the cattle will be down. I think it's a part of the -- we are seeing it as a normal.

And now Guilherme Guttilla from BTG would like to ask a question.

So we have 2 questions here also. The first one is regarding Seara. So just want to discuss a little bit more about the margin of the company. So margins stayed at quite strong levels, but they declined sequentially. So if you could provide us a bit more information on what drove the sequential decline; if it was more related to the pork business, to the chicken or maybe something else like any color you can provide us would be very helpful.

And if I may just do a quick follow-up also in the U.S. beef. There was some new reports like pointing to the postponing of the measure, but there was also the possibility of lower U.S. beef import tariffs. So how are you guys seeing this for the U.S. Beef segment and also for JBS Brazil and Australia, that should also benefit kind of from this.

Guilherme, related to Seara, Seara increased its sales volume, both domestic and export demand for all of the products remain very strong. The only explanation is the FX. If you take the FX compared to the last -- the quarters, you see the FX, the impact will be around 10%. And this is more than justify all of the -- this business is very strong. We are very confident with the results of Seara in the coming quarters.

And on the U.S. beef, Guilherme so -- if tariffs are lower, I actually see this as -- and there is a more -- a bigger income of Australian and Brazilian beef and from other geographies as well. I see this as mostly in a lot of -- in a big sense, very complementary. The U.S. has really gone into a production system that prioritizes prime and choice and heavier cattle.

And today, just the percentage of select, cattle that we see a lot smaller than what we used to have is basically a very, very small minority of cattle nowadays is ungraded or low-graded cattle. So I think that increase in imports -- potential increase in imports could complement that production that we're doing a lot less of.

And I actually think that the byproduct of having this priority of higher marbled, more premium beef that we're a production system that we have in the U.S. is that we have a lot of fat trim as part of our production. Actually, you could almost argue it's one of the main primals, one of the main products that comes out of cattle is fat trim. And the only reason why our fat trim is valued so high and it has such a good value is because we have available lean. And if we don't have available -- that available lean, we actually could see our fed cutout actually, reduced. And the price of that well-marbled beef actually have to be higher because we don't have the credit for that fat trim.

So my point is, in some cuts, yes, you would probably be in a way, competitive with domestic production. But I would say that the majority of what potentially would come in would actually be pretty complementary and not what we're targeting to produce in the U.S. right now.

And our next question comes from John Baumgartner from Mizuho.

This is Isabella on for John. So could you please discuss the next step that JBS plans to take in terms of increasing its presence in value-added need? Is there still more to do on the M&A front to secure assets? And does JBS have the necessary brands and assets right now for the next steps in its growth? And in terms of going to market, should we expect a strategy similar with the partnership between Seara and Netflix in Brazil? Or is there a different approach that you plan to take?

Isabella, in terms of M&A, it's -- we are -- it's part of our routine to look all the time the opportunities for M&A for growth. But at this moment, we are focused on the cash generation and to operational excellence. And this is the focus of the company now.

And our next question comes from Laura Hirata from Santander.

Actually, I have 2 from my end. First on Seara. The export scenario pressure have become somewhat more challenging in key markets as a result of as a result of disruptions in the Middle East, while we also saw the European Union considering banning retained exports from Brazil. So it would be very helpful to understand how Seara adjusted its commercial strategy in response to that environment, both in terms of logistics and also in terms of pricing?

And if I may add, you announced you're going to start publishing 10-Q and 10-K filings, which we see as positive in terms of eligibility for U.S. indexes. In this sense, what are your expectations for JBS' next steps towards being included in those indexes? And I was wondering if you could share with us some thoughts on the accounting standards that this broader discussion could potentially bring? That's all from my end.

Laura, I will start to answer the question about Seara that you have made. And Guilherme will be answering you about the 10-Q, 10-K we have published.

First, you asked about the Middle East war and how this impact the business. I will tell you this is the neutral impact because we have an input of cost additional because you need to skip some port and you need to use trucks for internal transportation to reach the customers. But demand in terms of volume has remained the same, remains strong, as it was before. And the extra cost is driven by the market means that we'll, let's say, this is neutral, this war in the business so far.

Related to the European that you mentioned, it's very new. I know that Brazil will provide the necessary clarification to the European Union regarded to the technical guidance, related to the subject. And for our side, we see Brazil is fully compliant with European Union requirements.

And the other thing is important to clarify, import point that is part have not been suspended. I think we have a period of clarifications, and this has not impacted the business so far. And we are very confident Brazil will be fine -- will be reaching an agreement with a European Union. And for our side, we continue to monitor the matter.

Regarding indices, it's worth mentioning that today, only around 40% of our free float is comes from passive funds with -- in this sector, generally, this number is 60%. And the reason is that is because we are not on the main indexes yet. However, we already have -- we think we already have the necessary criteria for the Russell. We entered last year, last September in the FTSE U.S. as a U.S. company. So now May, June, we have rebalancing of Russell. It's not in our control, but there's chances that we enter into Russell, creating demand for the shares and now having more than 50% of our sales in U.S.

And if we do 10-Ks and 10-Qs, and in June, we will complete 1 year of list of having our primary listing in U.S. This makes us eligible to the S&P family. So that's the perspective in terms of the index.

In terms of accounting standards, we are Netherlands incorporated. So the IFRS is the accounting standard for that. But in our press release, we put all the relevant information in U.S. GAAP. So you can compare and also the bridge from IFRS to U.S. GAAP. So with that, we think we can reach U.S. investors that are used to U.S. GAAP and we have the comparability and reach also European investors and Latin American investors that are used to IFRS.

And our next question comes from Leonardo Alencar with XP Investimentos.

I would like to discuss a little bit more about U.S. beef. You partly mentioned that the strike in the first quarter wasn't really impactful for the results. I would just say that without the strike situation would be a little worse for the first quarter or not? Or even if there's any lingering effects for the Q2 from this strike?

Another thing that I would like to understand from your side that we've been discussing this for the last few quarters, but just to get an update regarding the Mexican border, if you're expecting that to open anytime soon. If you think that we've changed the supply side in the short term, could be the tailwind for this second quarter, maybe for the second semester. So 2 questions for you, please.

And just a small thing about Seara. You mentioned, Tomazoni, regarding the exports, Middle East, I agree with that. But then looking on the domestic side, we've been seeing some erratic performance in prices between Natura or Fresh and processed goods. It looks like in the beginning of the year, we saw some strength from the processing side, and now we are seeing some transitioning to the more so in Natura.So just to get an understanding here what you're seeing if there is a demand is softening or if it's just a short-term pick up, let's say. So just to get a better view from Seara on the domestic market as well.

Leonardo, just on the -- just on this strike situation, we were able to redirect volumes in other plants. So we didn't lose volume because of this strike or maybe costs here and there that were extraordinary, but nothing significant enough to justify doing any adjustment or anything like that, that's relevant to the market. So we decided to just leave it as is with the results because it wasn't significant.

Mexico border opening for feeder cattle, absolutely no question. It's the most important thing that could ever happen in the short term to get this -- to get some sort of relief on the supply side on beef in the U.S.

Obviously, the USDA has been super as always, very responsible in making sure that, that's done whenever they feel the situation or they have assurance that the situation from the Mexico side is where exactly how they want so that they keep screwworm outside of the U.S. But having said that, whenever that the U.S. whenever, and if that ever happens with the U.S. government feeling that, that is the right time, absolutely will be the most significant thing that could happen to normalized supply in this industry in the short term.

And Leonardo related to your question about chicken in Brazil. Chicken in Brazil, we start the year -- beginning of the year, I think in January was a little bit softening. And in this quarter, but then February and March that recovery, I think the market demand in Brazil is very strong. And the demand in the export is strong. With that time, in the last quarter, we discussed that the statistics show that Brazil will grow high volume because of the genetic will be higher.

And at that moment, I saw that -- I said that we're not seeing the market, but I don't know statistical, but the reality statistical was some mistake that the association that republish the numbers and correct the information that the market will be grow around 10%, you're talking more about 4%. But 4% is very -- it is -- I think it's balanced with the demand we have a standard demand in the normal growing domestic market.

Okay and Tomazoni, just to be clear, you said there's improvement, but that is mostly in Natura or processed or both?

No. Processed, we are -- the market is, we can say, stable. The market is not growing but we are -- you say we are flat, but we sell more value-added, more premium products than the low -- more commodity products. But the demand, it used to the demand in January was weak, but they recovered in March. We are -- we made very good sales that we are still confident that this is a combination of our strategy to distributing domestic market, different channel, different category of product. We are able to manage this situation. But for chicken, it's very strong the demand for processed products, is strong in the premium and soft in the more commodity.

And our question comes from Heather Jones from Heather Jones.

Are you able to hear me now?

My question is on North American beef. And just due to a variety of factors, including drought, it just seems like the herd rebuild is getting pushed out and it's likely to be much more slow and meager than expected. And then like you mentioned, the border reopening, so it just seems like even if everything goes right from here, we're looking at like late '28 before any significant increase in cattle availability.

So it would seem additional industry rationalizations required. And so I was just wondering when do you see that happening and wondering if JBS has considered rationalizing some capacity, maybe one of your smaller facilities. So just hoping you could help me how to think through that?

So Heather, you're right. Especially with this drought, it's going to delay the herd rebuild. It's -- I don't think it will further liquidate, but it's probably going to delay the herd rebuild here. Look, we're not really focused on that right now with this -- talking about rationalization and all of that. So we're focused just on making our business better with the things that we can control given the footprint we have. So that's not something that we're looking at the moment. And it's very difficult for me to speculate on anything else, right, because anyway, it wouldn't be right -- it wouldn't be appropriate for me to speculate on other players in the market. But we're not looking at that right now.

Our next question comes from Ricardo Alves from Morgan Stanley.

One question for Wesley, one for Guilherme. First, on U.S. beef, Wesley, please. As we think about the grilling season, protein inventories are down big time in the U.S., red meat is down, chicken is down. And when you look at beef purchases to be delivered in June, July also down big time, 15% or so. How do you feel about channel inventory today when you're thinking about retailers and foodservice as we head into the grilling season.

These data points, I think that my point is that -- these data points would indicate to us that there's a lot of upside to cutout prices in the very near term. I wanted to see if you have that view? Or on the flip side, maybe it could also indicate that demand is expected to be softer, I guess, I don't know. I don't think that that's the case, but it is a possibility. So I just wanted to hear from you what you get from retailers and food service in your conversations on ground. I think that, that would be helpful for the very short term on the cutouts? That's my first question.

The second question, really a quick one to Guilherme. The pretty significant CapEx expansion that we've been discussing for the past couple of months, and we saw that taking place in the first quarter. Could you detail a little bit more -- I know that maybe you cannot quantify by division, but at least the main projects that you're working on for the rest of this year, just so that we have a better idea of what's going on in your U.S. pork division, even projects that you're doing on US beef, PPC and so forth, I think that, that would be helpful as well. Just a reminder of the CapEx expansion.

Ricardo, on beef, cutouts has already started the year already compared to the same time last year, much higher than 15% higher than on the whole quarter than compared to the same period of time. And the reason is lower volume and demand continues to be strong. So you have a constant demand and a shorter supply. Price tends to go up when that happens.

So looking forward, I would expect -- it's difficult to -- we have to wait and see and see how that's going to impact demand, this potentially higher prices, but supply is tighter. So we'll see what happens there. But we'll probably see demand continue to stay strong, and we know that supply is kind of short. So there is a potential for -- but we have to wait and see.

Ricardo, so the main projects continue to be one that's announced. So the Pilgrim's prepared foods facility in Walker County; the Ankeny, Iowa fully cooked bacon and sausage facility; the Perry, Iowa fresh sausage plant; Cactus, Texas; in Greeley, colorado modernization of the beef processing plants. Then we have investments in Brazil in [ Caaguazú ] in the Paraguay chicken plant and also the Oman acquisition. Bear in mind that the Oman acquisition will not be a cash effort, given that it will all be financed with the local banks there.

And our next question comes from Lucas Ferreira with JPMorgan.

Two follow-ups. One is on Australia. It seems like you guys have a sort of constructive view there on the quality of pastures in the business. I just wanted to understand potentially the trend for margins there, once at least if you look at the Australian dollar remains even a bit stronger than the levels we've been seeing in the first quarter?

And cattle prices seems to be sort of stable, but with the MLA outlook of some reduction in slaughtering this year, right, with the changing cycle. So I don't know in the regions you guys operate and all the other businesses in Australia, how to think about margin is going from here. If it's also some seasonal effects that should help lifting the margins going forward?

And number two is on -- still on the U.S. beef. Wesley, just so I understand your comment, you mentioned that you expect 2026 to be more challenged than '25. Last year, you had a 1.5% negative margin. Should we expect a weaker margin this year given your comments. And then 2Q was particularly weak last year, right, minus 3.9% margin. Again, remember the issues with the hedging, et cetera. So should this sort of weakness more skewed towards the second half or how to think about also the evolution of the business from here?

Lucas, thank you for your question. Related to Australia, I think where we operate, we are very positive in terms of the volume that will be harvested this year. I think it will be no different than the last year. Some period of the year, I think, will be higher. I mentioned at the beginning in one of the answers that we have Queensland that where we are main operation that the climate condition is very positive. I think it's the best in the last 3 years that -- and this is -- this shows us that there will be -- the coming months will be a good supply and talk about supply.

Then you talk about demand. Demand is very, very strong from -- and I think it's not just in U.S., but all of the premium markets that Australia sell that Japan, Korea and other ones. Japan is very -- Australia is very well positioned for catch this benefit from this demand, grow demand, global growth in and grow demand. So we are positive where we operate that will be a great year for this JBS Australia.

Lucas we -- so I'm going to say this without giving any guidance, but you could expect this year versus last year, I'm talking marketing in general to be 1, 1.5 percentage points worse than last year, 1% -- about 1%, I think, is fair. Obviously, then we have our internal dynamics, right, how our operations are. And like you said, last year, we had some hedging impact in a specific quarter. But overall, you could expect the market to be 1 to 1.5 percentage points worse than the last year.

Jack Hardin from Stephens.

This is Jack Hardin on for Pooran Sharma. For U.S. chicken, consumer demand remained strong, partly supported by tight beef supplies. But broiler processing margins remain below mid-cycle levels, how do you assess the current supply-demand balance in chicken? And do today's margin levels suggest the industry needs to moderate production?

Steve, we see very balance in the chicken demand in U.S. We had in the beginning of the year that the big bird was a little bit very challenged. But this -- that the price of breast recovered during the quarter, we see that demand is strong in value-added and prepared. We have strong demand. And all of the business, all of the other category that Pilgrim's sell in domestic market in the U.S. it's all of them are positive. And when you look further side in the supply, we see that balanced supply/demand. We are positive with our business in Pilgrim's business.

And our next question comes from Thiago Bortoluci from Goldman Sachs.

I think the question goes to Tomazoni. And this is just to try to gain perspective beyond the quarter on the benefits from diversification and portfolio. Tomazoni, this was a very rare quarter where we saw very strong demand. Actually, you mentioned in 3 business units, record high sales for our first quarter. But at the same time, virtually all the business units delivered lower margins versus last year. I think the exception was Brazil beef, which one could argue that this quarter, particularly diversification didn't quite help you.

I think my question for you is, once you think about the year and the buildup, you mentioned the grilling season in the U.S. Obviously, the year-end brings seasonality also to Brazil. Where are the opportunities where you think margins could show some clearer sequential improvements? Where are the main risks and how would you expect diversification to help you going forward?

Okay, Thiago. Good question, Thiago. I'm very positive on the diversification because when you look for our results this quarter, if you compare to the last quarter, the difference is around $400 million or -- if -- and we can explain this difference with 2 business units. First, in U.S., beef U.S. I think the results of beef U.S. was impact -- around 50% of the difference of EBITDA.

And Wesley still you explain about that. And I think we reached the bottom of the results. I think is we made some -- we are -- we see that the coming quarter, we cannot say that will be improve a lot, but I think it will be better than it was this quarter.

The market conditions didn't change. But I think we are more balanced, and we made some adjustments in our structure that I think will help us to navigate even inside of the company with a low cost of operation, more synergy and outside synergy in terms of commercial. I think this is -- this is one of the things that give us more confidence about that the results will be better than it was this quarter. if you can add in Wesley?

No, I was just going to add, Thiago, that I think a good way to think about diversification is always more so than comparing every time to the -- always on the comp versus last year. If you look just at the absolute number, right? You have pork U.S.A. and Seara with double-digit margins, you have Australia, even though this quarter was a lower quarter than what it has been. It's still in a very positive high single-digit right when you have the U.S. beef U.S. at the low cycle.

If you went back 5 years ago, you'd probably see all of the other businesses at a lower margin and beef higher. And I think the other way to look at the diversification as working even in this quarter is when you compare our portfolio of businesses with any one of our peers, right? And each one of them could be that they are in a singularly in a market, and that market is really good or really bad.

But our businesses are always going to have -- our portfolio of business is always going to give a more stable kind of result versus our peers just based on the uniqueness of our diversification. So I think I would say that even in this quarter, that was a weaker quarter, the diversification thesis that we have is actually pretty evident in my opinion.

And just to end -- to finish my point of view that we started that 50% was beef in U.S. The other 50% was Pilgrim's. Pilgrim's need to adapt its portfolio to the market demand. Before U.S. was just focused to export, they use the breast, the white meat and exported the dark meat that is part leg quarters. But the market changes. There is a demand in domestic market now in U.S. for dark meat and Pilgrim's need to adapt its layout of the 3 factories in order to be able to supply the demand of the market. Then we stop for 2 weeks, 3 plants, then this was affected the results and the climate conditions affected as well. Then these 2 things explain the difference in terms of the results compared to the last year, $400 million, that $200 million in Pilgrim's in and around $200 million in -- this is one thing about that.

The other thing is, you mentioned that the other business not delivered results. But that was the FX. FX was effect Seara and FX effect Australia. This is -- if you want to explain the business, it's that FX Seara in Australia and the Pilgrim's that I explained in beef U.S. Well, this is one thing about the results.

The other thing, if you talk about diversification, of course, if you have just the beef in U.S., we have a really tough situation. But as we have managed different business, in different geography, we are able to compensate. If you compare just a single company with one business, that will be a huge difference. Of course, the diversification is working. And I believe that this difference in terms of cycle is normal in our business. We need to be able and to focus and manage -- if the business -- when they have this low level they need to be better than the other competition, the high level will be better than our competiton. This is the part this is the game.

And our next question comes from Renata Cabral at Citi.

All right. Thank you so much for this space for questions. My first one is a follow-up related to the last one. Diversification, but in the angle of GLP-1 adoption. It was already mentioned by company's management that the adoption of GLP-1, it's a structural shift towards high-protein diet, of course, particularly in the U.S. as the adoption is higher right now due to costs. So could you please calibrate to us how tangible this trend is already in your day-to-day business? Are you seeing measurable change in the consumer behavior already, it was -- since it's a different perceptions of the consumers for PPC.

So in terms of innovation, GLP-1 is something that you think about when you are elaborating new products and mix in terms of smaller portion or anything different? And this focus in the U.S., but even for Brazil, are you seeing already this trend? Or you think the contribution can come in the future? And since you are investing expansion for Seara, so do you have this in mind in terms of the future products that you are going to release on those investments. So this is my first question.

The second one is related to grain prices that has been positive for the company for a while. Right now, there's the discussions on the potential risks on the El Niño and fertilizers costs. So if you can share your outlook for 2026, '27, it would be great as well.

Thank you for your questions. When you talk about GLP-1, I think it's GLP-1 is one of the factors that is affecting the global consumption of protein. When you look -- when you say -- when we are saying here that is strong demand for protein is globally in all of the market. And this is affected by, of course, as you mentioned, GLP-1. But GLP-1, I think, is now the most important issue. I think this is the perception and the -- and not just perception, but the knowledge that protein is very important for to have -- even in the new generation or the older generation. Because if you want to have longer life, you need to eat more protein. If you want to have muscle in the beginning, you need to add, to eat protein. That protein become very important for all of the generations.

The second, the regulatory. If you saw that the USFDA changed the pyramid. They inverted pyramid because that's -- they put that you need to have more protein in order to have more health. Then to eat more protein is healthier and this is globally. And then there is about this new technology about medicine that is because we want to lose weight. And if you lose weight, you need to get more protein, or in order not to lose muscle -- lose fat.

And this is -- it's not in one country. I think this is globally. We see that to be continuous high-protein, the consumption. And we are -- it's not new. Or now, what we see new now, all the companies try to adapt the portfolio to have more protein even that the company that work in high carbohydrate product, now they want to adopt for more protein. But this -- but if you look at our core, our core is focused on protein that we don't need to adopt our core. We just need to accelerate what we have done so far.

So we are -- for example, we have launched high-protein line of products in Seara and other parts of the world. And we are working innovation in order to facilitate how the people eat protein, for example, use our fry for simplified -- simplify the lives if you want to cook at home.

And we see that the people cook more at home. And if the -- if I say you, we have the right portfolio for the right brand. And we not see that in tenders. We see this is structural. They eat more protein. And we are investing in all of the innovation in order to facilitate that, too.

And the second question, I understood that you asked about grain, about the cost of the -- of course, of the nutrition of the animal. Look, if you look for -- despite a global inventories being at a comfortable level, there is significant volatility in the market and I think it's a lot of uncertainty regarding to the weather conditions and the fertilizer cost. If you look for corn, globally, demand remained very strong. We'll support the market even with the recent pressure on the grain price. I think is -- the trend is to increase the price because of the weather, because of the fertilizers. But in terms of what we see impact of our company, I can tell you that we believe that we are well positioned from a risk management perspective, while the crop conditions has improved, we remain prepared for the potential volatility including the possible reduction in the Brazilian safrinha crops.

And our next question comes from Ricardo Boiati with Safra.

Wesley, a couple of follow-ups here regarding North America. The first one, besides the tariffs discussions this week, right, there were some reports about the potential deregulation in the cattle industry. So in your view, what can be really done to incentivize ranchers to raise more cattle sustainably, I mean, in the longer term? And what is the likelihood of any potential policy change happening this year in that regard.

The second point here on the overall protein demand in North America. This summer, we have the FIFA World Cup happening in North America, right? So can we expect here any meaningful impact coming from that event specifically in North America, maybe a stronger than usual barbecue season or something like that?

And lastly, on Prepared Foods, this is a more broad question for the company. We see many CapEx initiatives to build or expand capacity in prepared foods. So my question is, if you can quantify a little more how fast prepared foods are growing within JBS portfolio? And do you have any particular long-term target for this category to represent in your overall portfolio in the long term?

So on the deregulation for sure, I mean, as we see cow-calf producers and ranchers in general, trying rebuild herd and deciding to rebuild herd regulation and overregulation can be an obstacle. And anything below may request to help. The ranchers is very helpful. And for sure, it's important.

On the protein side, demand is pretty strong overall. How impactful the FIFA World Cup? I don't know. I think it's helpful. It's not negative. But there is I think it might be relevant in a few days of the next few months. And -- but I don't think it moves the needle enough to say that this substantially structurally changes that -- how we're going to see the overall summer and spring year for this demand.

About our strategy for value added. We don't have a specific target for value added. We want to increase the share of prepared food in our portfolio. And why we want to do that? Because we talk now a lot about cycle. We're in the low part of the cycle, or high part of the cycle. Prepared there is particularly no cycle that the demand normally is very stable and with higher margin. And because of that, we are prioritize our investment in the prepared, and prepared food and brands, we are investing in brands and we are investing in the line of prepared foods.

And if you saw that investment we have, Guilherme just mentioned before, the investment in U.S. about sausages. It's breakfast sausages. It's value-added. Pilgrim's brings value-added from [ bred ] plant. And you saw in Brazil some investment in Seara CR was focused on that. We are prioritizing investments in value-added. This is the fact. We are not having a specific target on that.

And our next question comes from Priya Ohri-Gupta with Barclays.

Guilherme, can we talk a little bit about how we should think about net leverage trending through the end of the year? I think earlier, a couple of months ago at CAGNY, in particular, we had talked about scope for net leverage to be below 2.5x this year. And it sounds like it could be ending the year sort of in the upper range of that 2.5 to 3x area. I just want to make sure that we're thinking about that correctly.

And as part of that, highlighted sort of the new issuance and tender that you did recently. However, it does look like you tendered less than you issued. Should we expect some of that incremental amount to get deployed to debt reduction later this year or just kept on the balance sheet.

And then the second question I had was just on the free cash flow breakeven. You talked about it being $5.7 billion to $6 billion now. Last quarter, you had said it would be $5.7 billion. So if you could just walk us through what's driving the higher end of that range now, that would be helpful.

Priya, so from a net leverage perspective, you're right. I think the perspective to end this year more likely to be between 2.5 and 3x given again the weaker results we had in the first quarter. In terms of the tender, we did -- bear in mind, we have $1 billion in dividends to be paid in June. But our cash position is still at $3.5 billion, which is around at least around $500 million to $600 million above our minimum cash, given our cash conversion cycle and the different geographies that we are around the world.

So we have space to buy bonds with this excess cash. But this decision will probably be done in the second semester when is the period where our cash generation is stronger. In terms of the free cash flow breakeven, it's just an estimate. I think the account that we have continues to be on $5.7 billion. Working capital in the first quarter was better than the first quarter last year. But going forward, I just gave this range because there's a lot of moving things like energy prices that could impact grains. We know how much will be this impact basically on fertilizers and energy in the grain prices that could move working capital if prices go up. So that's why I gave the range from $5.7 billion to $6 billion because of the uncertainties that we have, given all the volatility in the markets.

Great. And just a quick follow-up. If you do think about looking at further debt paydown, should we expect you to use a similar approach to what you did in the beginning of the year? Or could you take other considerations into account sort of thinking through interest expense reduction versus maturity management and absolute debt reduction.

Yes. The approach will be absolutely the same given that all my debt, including the $2.9 billion maturing in 2032, all the coupons are below treasury. So it's not worth it to pay any of those debt. So any repurchase would be on '34, '33, '35 spots. The '34, for example, is the highest coupon, which we still have $300 million outstanding debt that could be a possible target.

And our next question comes from Matheus Enfeldt with UBS.

My first question on the beef demand in Brazil. We're still seeing it quite resilient despite of prices. So I'm just trying to get a sense if you're getting pushback from retailers or push back on the margin on demand growth or demand reduction? And what's the size or scale that we could expect for demand down in Brazil also and U.S. beef as a result of higher prices?

And then my second question is on sort of a longer-term view around production. We're seeing quite a lot of restrictions to trade flows, be it quotas or sanitary barriers for exports. I know the company is highly diversified, but whether there are some additional regions that could become focus for investments in the midterm, such as rest of LatAm or more investments in Europe that could help circumvent those sanitary and trade flow restrictions in general and how you're incorporating that into the longer-term investment decisions that the company is taking. Those are the 2 questions.

If I understood well, you asked about the demand for beef in Brazil and beef in U.S?

Yes, yes, both that.

Well, look, we -- in Brazil, given that we had the higher price of cow and the higher price of meat, the demand in Brazil remains strong. For beef and for all of the proteins. And we talk about JBS. We -- and now with I think is with the end of the quotas of China, May, the price of cattle will be decreased and I think it will be more favorable to sell in domestic market. It is important that we have developed a category management 2.0 say that call [indiscernible] reserve. It's -- in Brazil that we manage inside of the store of our customers, the budget area. And this shows that the stores they have, our model, they sell not just more meat, but they sell more for all of the stores.

And this project get a strong reception from our customers. And because of that, I see that even now with this situation that after the quarter of China and we are -- I think we are very well structured, even in Brazil, even in the U.S. to manage the volume for our business [ Friboi ], I think it's in U.S. whether we have to comment a little bit about the demand, but I think demand...

Demand continue strong, Matheus is, we think all the things I already mentioned before or just the overall protein trend and people understanding more about nutrition and prioritizing protein. We've seen that -- and just the overall preference also for protein and especially beef has been pretty strong. So that's obviously the demand in the U.S.

I think it is related to the first -- the question. First, we answered about the demand of protein GLP-1 and the other factor that is booster all of the consumption -- protein consumption globally. I think if Matheus, if I'm right, your question about the investment, the maturity station of our investment, is it correct?

Yes, how you're considering restrictions to trade flows with quotas and sanitary barriers into your investment process and investment decision for the mid, long term?

I think we are very well positioned and where we produce and where we sell our product. I think as we build this global platform and you look -- we are produced where is the most competitive way to produce. And we are present to sell where the market demand is. Then I think it's -- in terms of balance, we are very balanced. Of course, now our focus now for this year is to cash generation. We are not looking for a new project in our portfolio. We just start with the project in Paraguay, we started the project in Oman. I think now we need to develop this project in the greenfield that we are working on. No any new project in our pipeline now.

And our next question comes from Igor Guedes with Genial.

Can you hear me?

Yes.

Okay. Thank you very much for the opportunity. The first question is about CapEx. We observed CapEx essentially doubling year-over-year. And it came slightly higher than expected, reflecting an acceleration across the platform, but mainly related to renovation project stemming from the downtime at PPC with capacity expansion initiatives. It would be interesting to understand if you can share with us how the capacity expansion is progressing from an American standpoint. How much of increase you expect to achieve based on what production levels and whether we can expect CapEx to normalize as early as second quarter?

And my second question, I would like to get your perspective on what might happen in the second half of the year regarding the filling of China quotas. As you have already mentioned, it's possible that cattle prices will fall in Brazil, given the quota is being front loaded faster than initially expected which could reduce the number of slaughters in the second half of the year, leaving more cattle on hand and lowering price per [indiscernible]. But my question is more focused on the cattle side of the domestic market. Do you think it's possible that with the reduction in exports, part of the volume will be directed to the domestic market.

And with more meat supply here, the cutout price might face downward pressure. I would like to take your view on this variable going forward.

Look, we have -- when you talk about the CapEx, we have put $1 billion -- $1 billion in CapEx for expansions. The growth CapEx as we call, growth CapEx. And this is -- we are not disclosured one by one, but because many business units in different types of the CapEx, it will be different. It is difficult to explain the volume because, one is number of chicken. The other is a volume of, well, prepared food and to put together will be difficult to explain that we are not disclosed them.

But the CapEx is, as you mentioned, is a new compared for the last years is higher because we are seeing this strong demand. But we are not seeing now any moment that we need to review the CapEx because we are seeing the cash generation for the second semester of the year will be strong, but this is something we can see in the future.

If you -- because it's capital expansion, we can postpone, we can give more time to do. But we are not looking now because we are not seeing that is necessary for now, but could be in the future is something that we can take a look.

The other thing about the Brazilian situation about the market situation about beef. We said that the end of quota of China, we made -- the number of cattle will be harvested for the industry will be down -- should be down because we need to accommodate this, I mentioned, 120,000 tons per month for beef. We need to find a market for that, then the industry will be reduced the number of cattle by harvested. And if you do the number of cattle to be harvested, combined with more availability of cattle for feedlot. We believe that the price of cattle will be down as well, means that cutout could be down because more volume domestic, but the price of beef will be down as well.

Then I see that the spread between the both price the cutout and the live cattle will remain or depends in our case, could be enhanced that we have value-added product. When you talk value-added products, not with processed product. It's value-added raw product that I mentioned you better presentation, a better way to serve the customer in different cuts of beef. Then if you look to our side, I think we are very well structured in Brazil and outside of Brazil to take the advantage the impact of this end of the quotas of China.

Ladies and gentlemen, there being no further questions. I would like to pass the floor to Mr. Gilberto Tomazoni.

I would like to thank you, everyone, for joining us today and all JBS team members for their dedication and you look ahead, we have not changed our focus, execution, efficiency and disciplined capital allocation and cash generation. That is what allows us to deliver consistent results and build a long-term value creation. Thank you.

This is the end of the conference call held by JBS. Thank you very much for your participation, and have a nice day.

Good morning, and welcome to JBS Fourth Quarter and the Year of 2025 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Any statements eventually made during this conference call in connection with the company's business outlook projections, operating and financial targets and potential growth should be understood as merely forecast based on the company's management expectations in relation to the future of JBS.

Such expectations are highly dependent on the industry and market conditions, and therefore, are subject to change. Present with us today, Gilberto Tomazoni Global CEO of JBS; and over my Guilherme Cavalcanti, Global CFO of JBS; Wesley Batista Filho, CEO of JBS USA; and Christiane Assis, Investor Relations Director. Now I'll turn the conference over to Gilberto Tomazoni Global CEO of JBS. Mr. Tomazoni, you may begin your presentation. .

Good morning, everyone. Thank you for joining us today. We closed 2025 with a consistent performance and our continued progress in building a stronger, more efficient company. In the fourth quarter, we recorded a revenue of $23 billion with an EBITDA margin of 17.4%. For the full year, revenue reached $86 billion, a company record with a consolidated EBITDA margin of 7.9%.

This scale and the diversity of our multi-protein and multi-geography platform remain our arise strength, allowing JBS to navigate industry cycles or are disruption while capturing structural growth in protein demand. In both the fourth quarter and the full year, JBS delivered record sales with positive consolidated results, reflecting the resiliency of our global platform.

Net income totaled $415 million in the quarter and the $2 billion for the year, representing year-over-year growth of 15%, earnings per share of $1.89 per year. Free cash flow was $990 million in the quarter and $400 million for the year. Return on equity reached 25%, and the return on investment capital was 70%.

Our leverage ratio at the end of the fourth quarter was 2.39x in line with our long-term target. We also maintained a very strong debit profile with an average debt maturity of approximately 15 years and average cost of the debt of around 5.7%. No significant maturity in the short term. These strong results reflect our consistent performance in a year marked by a challenging environment in some global protein markets.

In the United States, the [indiscernible] cycle remains under pressure with a limited supply and high cost. This is expected to continue in the coming quarters. Despite this environment in U.S. beef sector, our global results remained positive reflecting the resilience of our diversifying platforms.

Australia was one of the highlights of the year. With a strong EBITDA growth and margin expansion as well as the top line growth of 30% year-over-year in the fourth quarter. Our Australian business benefit from the currently imbalance between global supply and demand of beef.

Combining with a strong execution and support solid profitability and reinforce the role of region in balancing our global results. In Brazil, the beef business operates with a historical margin range supported by strong export and steady domestic demand. The fourth quarter was particularly strong with the top line sales growing 26% year-over-year.

At the same time, livestock productivity continued to improve. Country recorded highest beef processing volume in its history at around 42 million heads. This reflect a total gain in production and reinforce and Brazil growing role in a global supply. In this context, Friboi delivered solid results. with growth in both export and domestic sales volume increase in key international markets, including Mexico, Europe and United States.

While the business also strengthened its presence in Brazil, programs such as Fribo's continues to deepen client and support growth in the domestic market. At Ceara, we continue to advance our strategy and strengthening brands and expanding high value-added products. In recent years, Ceara has expanded its portfolio entering new categories and strengthen in connection with the consumers. The business is now one of its strong moment in brand perception supported by innovation, execution, a more differentiated product mix. In the United States, our chicken business continued to benefit from the strong demand in both retail and food service.

Files delivered volume growth above the industry average in segments such as case ready in the small bird. The big birds segment also improved performance through better yields, mix and cost efficiency. Brand diversification continues to progress and just be surpassed $1 billion in retail sales. reflecting the strength of our brand strategy and the significant opportunity we see to capture further growth across our modern high-value prepared foods portfolio.

In U.S. Park business, performance remained stable, and the business closed the year with solid margins, supported by disciplined operation and balance supply and demand. Also, in 2025, we completed the dual-listed process, a milestone at the company's history and became a nice listed company and strengthened our capital market position.

Since then, we have seen a clear improvement in how the market values the company. Our trading multiply and expanded reflect greater visibility and investor confidence although we still trade at a discount to our global peers. Liquidity also has increased significantly with average trading volume up approximately 3x compared to the prior listing levels. At the same time, our shareholder base has become more global and diversified. U.S.-based investors now represent nearly 70% of the company free float.

Overall, this change reinforced our position in global capital market and support the next phase of growth. Global protein consumption continues to grow, supported by demographic health awareness and demand for balance dies. JBS is well positioned to meet this demand across markets and channels. Our structure remains clear. We will continue to strengthen our brand, expand our value portfolio and develop solutions that make protein more accessible and more convenient everyday life.

Thank you again for joining us today. And now I will turn the call over to Guilherme, who will walk through our financial results in more detail.

Thank you, Tomazoni. To the operational and financial highlights of the fourth quarter and fiscal year of 2025. Net sales reached a record of $23 billion in the quarter and $86 million in 2025. Adjusted EBITDA in IFRS totaled $1.7 billion, which represents a margin of $7.4 million in the quarter and $6.8 billion in 2025 with a margin of 7.9%. Adjusted EBITDA in U.S. GAAP totaled $1.5 billion which represents a margin of 6.5% in the quarter and $5.8 billion in 2025 with a margin of 6.7%. Adjusted operating income was $1.1 billion with a margin of 4.7% in IFRS and 4.8% in U.S. GAAP in the fourth quarter. .

In 2025, adjusted operating income was $4.5 billion in IFRS with a margin of 5.2% and $4.4 billion in U.S. GAAP with a margin of 5.1%. Net income was $415 million in the quarter and an earnings per share of $0.39. For the year, net income was $2 billion and earnings per share of $1.89. Excluding the nonrecurring items, adjusted net income would be $500 million and earnings per share of $0.47 in the quarter and for 2025, $2.2 billion with an earnings per share of $2.10. Finally, return on equity was 25% and return on invested capital was 17%. Free cash flow in fourth quarter 2025 reached $990 million compared to $906 million in the fourth quarter 2024. The main positive drivers were related to the deferred livestock, particularly in U.S. and inventories, reflecting strong revenue growth during the period.

Despite an $850 million in working capital consumption in 2025 the cash conversion cycle remained resilient and in line with prior year's levels. For the full year, free cash flow totaled $400 million. When we visited free cash flow breakeven, IFRS EBITDA exercise for 2025, the initial estimate EBITDA to a breakeven level was around $6 million. However, considering the actual results, the EBITDA breakeven would be approximately $300 million lower.

The main difference came from working capital, as mentioned earlier, mainly reflecting the deferred livestock effect and a decrease in inventories. On the other hand, CapEx came in about $100 million above estimates as we executed $1.1 billion in expansion CapEx during the period. We also saw a higher number of biological assets, largely driven by the increasing livestock volumes and prices, while the remaining items gave me broadly in line with our estimates.

Finally, the higher cash tax paid in 2025 were mainly related to the tax payments associated with the results of 2024. For 2026 and for the purpose of the EBITDA cash flow breakeven exercise, we can assume capital expenditures of $2.4 billion of which $1.3 billion is for expansion and $1.1 billion is for maintenance, interest expenses of $1.5 million and leasing expenses of $500 million in a consolidated effective tax rate of 25%.

Just to highlight, it is still too early to estimate the variation in working capital and biological assets as there are many factors beyond our control. such as grain and lifestyle prices. However, if you consider the same amount of working capital consumption in biological assets of 2025, EBITDA cash flow breakeven would be $5.7 billion, in line with 2025 numbers mentioned above.

On Page 24, we present our historical free cash flow breakdown to help analyst forecast. Our leverage ended the year at 2.39x, in line with our long-term target of keeping net debt to EBITDA between 2 and 3x. In 2025, we also strengthened our balance sheet by extending our debt maturity profile, reaching an average debt term of approximately 15 years and an average cost of 5.7%.

We have no significant debt maturities until 2031. The coupons of our debt are below treasury until and including 2032 maturities with 32% of our gross debt maturing beyond 2052 and approximately 90% of the total debt is at fixed rates.

It's worth mentioning that despite the 8% increase in net debt in the last 3 years, net financial expenses remained at the $1.1 billion per year. Our $3.5 billion in revolving credit lines and $4.8 billion in available cash provides us the flexibility to continue executing our expansion CapEx, value creation products and shareholder returns while maintaining a health and robust balance sheet.

For this reason and given our strong cash position and leverage, we announced last night, the payment of $1 per share in dividends to be paid in June '17. With that in mind, I would like to turn the operator for a question-and-answer session.

[Operator Instructions] We have our first question from Lucas Ferreira with JPMorgan. Mr. Ferreira, you may go ahead.

Hi, guys. Hope you listen to me well. I have 2. The first one, if you can give us an update on the business environment for PPC, especially in the U.S., but there were some renovation works at the VesselView plants, wondering if those are completed. If operations remain fine, this could be an issue at all for the quarter as well as any update you see in the market regarding crisis.

It seems that we are in an environment of a bit more supply than the first quarter of last year. So if you see how robust is the market and how balanced the market today? And the second question is on the U.S. beef operations. We saw a pretty steep recovery in deep spreads over the last few weeks.

So to what you attribute this, obviously, demand remains strong, but there have been some capacity rationalizations in the industry. Any updates on the Greeley situation will also be welcome with regards of what -- how that impacts your business and how you see the market for USB for now?

Lucas, thank you for your question. And I will start here to talk about update in terms of [indiscernible] and after that, Wesley will give us the perspective of beef in U.S. As you mentioned before, we completed the transformation of 3 plants of Pilgrim's already completed it. One, we transformed from big birth to case ready because we have a strong demand in the retails, and this strategy will support the retail growth of the demand of chicken.

In the other 2 plants, with -- in reality is not a transformation. It's adequate to produce the raw material for our prepared business. Before we sell -- we sell the press to the market because we are not able to deliver the appropriate cuts that our prepared food needs. Now we invest in machines and we are not need to sell in buying rebuy the raw material.

Now we deliver direct to our prepared business. This, of course, we catch the margin of the third party I think and we are keep best quality and be able to react quickly in case of the increasing demand.

And if -- and I understood that as a second point that you mentioned about supply/demand. I can say to you, the demand for chicken meat in U.S. is not just in U.S. It's a global demand is very high across all the chains. And if you take in consideration in U.S. the chicken placement in the beginning of the year, grew around 3% and the price of chicken breast increased in the market.

But this shows that a balance in supply and demand because we increased 3%, the placement of chicken you at the price of the press increase it. And if you -- USDA forecast for this year is that it will be 2% growth in ticket supply. If we grow 3% and the price market increase, we can anticipate if the forecast 2% will be a very good year for Pilgrims in U.S. I think this is 2 components. The verticalization of our raw material production, we get more margins in prepared. In the growth of our prepared business in Pilgrim's just bearing with us have a strong demand and you are to invest in new factors. We see that this year will be a good year for Pilgrims.

Lucas, Fourth quarter was a pretty good quarter given the market conditions on the beef side. It's common knowledge that given the market data that first -- at the beginning here of the first quarter has been really tough, really, really difficult, very challenging.

Probably the most challenge we've seen in this industry in a very long time. I don't know if there is any other time that we had such a -- actually a negative spread for January and February ever. And it seems now that current data shows that March is showing that it's going to be a little bit -- it's going to become better, sharply better than where we were from January, February. But let's see what comes out of that. When we are -- one of the things that has happened in this scenario that we have very low car availability and very low processing volumes is that the market has become more volatile than .

We're used to in this market. You see big fluctuations in cut out, peak fluctuations in cattle more so than what we're used to. So that's just an effect of having such a small volume, if the volume is a little bit higher, it has a big impact and it's become a little bit more volatile. .

When it comes to the strike and really, it's very difficult to forecast how that strike would go on. We have a very good deal in front of that local. We actually just did a national deal with 14 other unions in red meat, other locals from the same union in Red meat and it's a historic union company deal -- we have a variable pension plan.

That's the first time in forever, that the industry has brought back attention, something like that for people when they retire for our team members. So we have a very good deal actually even, I think, I would say it's probably one of the most innovative deals that we've had in a long time in this industry. So let's see. We think that -- we hope this gets resolved as soon as possible.

Ladies and gentlemen, we have Mr. Gustavo Troyano from Itau who would like to ask a question. Please go ahead, Mr. Troyano.

My first question is on Ceara and related to chicken supply here in Brazil. We acknowledge that discussions on the supply side should always be on a relative basis to demand, which seems quite strong at this point. But just wanted to get your updated thoughts on the balance between chicken supply in Brazil, what we expect going forward as we move into the second quarter of 2026, if you guys are expecting the chicken supply increase to outpace demand in a way that we could see some profitability compression going forward. So that would be the first question.

And the second one, still on USP and a follow-up. And the first question actually is -- would you say that the current balance between slowering capacity in the U.S. and demand and cattle availability will imply some capacity adjustments going forward from other players or even from you guys. So what could you say on further capacity adjustments going forward because catamavailability is restricted right now. So just wanted to get your updated thoughts on that as well.

Thank you, Gustavo. Talking about chicken in Brazil and Seara and after that to as it will complement the answer about beef in U.S. When you chicken in Brazil, the balance between supply and demand for chicken is still not very clear to us.

In one hand, we have strong and grow international demand and new cases of poultry farming influence in several countries with counter that produce as a competitor of Brazil. And this could boost demand even further. The other hand, we have to 3% increase the chick placement up to February. This is as a reasonable limit for growth in Brazil. There is some news that chicken breeder stock has increased. In this scenario, it's difficult to predict the unfolding events if production of exceed market capacity.

But in this case the industry, the sector, the industry many of tools to manage this. For example, we can export more far to eggs, we can reduce the average age of the breeding stock. We can reduce the weight of the birds among others, means that so far, the market is very balanced in the market, and we see a strong demand in the international market.

If because if you look for the breeders can increase more the volume domestic market, each industry needs to take its own decisions. but they have a lot of ways to manage of this supply because chicken is not still in the farm.

It still place it. It is in the genetic I can say -- I can talk to you about what in our side, how we are -- what we are doing. We are focused on stressing our export leadership. We have -- and enriched our value-add mix in domestic market. I think it's the both strategy we have. We have well positioned in international market and well positioned domestic market, and we are at value and be more innovate in terms of the way that you present the product to the consumers.

Gustavo. On the U.S. beef, this question about capacity adjustments, it's very difficult for me to answer about, especially when it's something that's not related to our business directly, right? So it would be a competitor. It's very difficult for me to respond on that. .

It's clear that there is more capacity in the U.S. than there is kind of available in the U.S., not too many years ago, 4 years ago, had a process to 33 million ahead, and now we're going to be below 27%. So we're around 27%, sorry. So that itself shows that yes, there is excess capacity. Having said that, it's very difficult for me to respond about something that's regarding other components.

Our next question comes from Lucas Mussi with Morgan Stanley.

My first one is related to Brazil beef in Australia. If you could talk to us a bit about how you're thinking about the export environment in the context of Brazil and also Australia eventually reaching the limit of the export quota to China? How are you thinking about how volumes are going to behave, perhaps in the second half of this year?

What are you thinking about your options here and potential impact to the business divisions and the second one, one for Guilherme. If you could share more details on derivative lines on or P&L that went a bit lower this quarter, that would be helpful. And also, I know that there's still -- we're still a bit early to talk about concrete working capital expectations for this year.

But if you had to evaluate looking at where commodity future is today or grains for livestock. What would be your assessment on working capital potential as things stands today for the year, maybe a little bit below 2025, in line of 25%, if you have any on working capital.

Thank you, Lucas, for your question. Let me to separate. I think in Australia and Brazil, that is a different scenario. Australia, we are not seeing any challenge in terms of the -- after the court of -- in Australia to China because Australia is a strong market demand and a very strong presence in Japan and Korea and all of the Asian markets in U.S. as well and Europe, then Australia is easy to manage the volume for each 1 of this market that we are not really worried about this situation.

In Brazil, may be more complicated. But our talk related to that. But our pre-bol team is very confident that is they will be able to deliver in this year 2026, this resulting with the line that the last year.

Why we are confident on that. Global demand for protein is high, special for beef. China's good, if you talk about -- we are expecting to end by the midyear. And in reality, we don't know how China will manage this volume restriction. I bet that some countries will likely not be able to complete their contest.

But this is -- we cannot speculate, but this is a fact. Regarding this situation, Friboi has developed a new international market, new sales chain and investing heavily in value-added and combined with customer service.

An example of this strategy is the program of Friboi plus now it ticks the last week at the supermarket conventional new thinness gave a presentation comparing a store with a regular butcher shop to 1 with 3b and the results showed that the start with the program has a higher revenue and 40% higher overall sales, not just the budget area, the overall thing there is it's a strong program to support the growth of our customers.

And at the same time, the retails now face a challenge because they need to improve the quality of the sales in the stores. because this shift for more protein, this program, what GLP1 and so on, that is booming the consumption of protein they need to enhance the portfolio in the retail.

And in our program is, I think it's perfect with this trend in the necessity of the supermarket. The other point, I believe in the second half of the year, when the supply of [indiscernible] can in Greece, this coinciding with the end of quarter of China, which is largely -- and we know that China is the largest port in channel, the price of cattle will likely be affected. I think this will be correlation because of that we are so confident that we are able to deliver this year and results in line with last year.

So -- on the derivatives line, what you saw there is any sort of derivatives that's not related to the operations. And the recent volatility in currencies and other commodity prices make this number higher despite we have a very limited VaR for those type of derivatives.

Now on the working capital side, so far, what can I say, it's only about the -- what we've seen in the first quarter. So first quarter 2025 we have a slightly lower working capital consumption than in the first quarter of 2024 despite the 200 million higher impact of the deferred livestock. So again, it's too early to say for the whole year. But if considering just the first quarter, we had a little lower consumption of working capital. doesn't mean a lower cash consumption, given that the operational side is slightly worse.

Our next question comes from Thiago Duarte at BTG. Mr. Duarte?

Yes, 2 follow-up questions going back into U.S. beef and then Seara. Wesley mentioned the strong quarter considering the circumstances that you had. But I'm still wondering what do you believe justifies that performance?

I mean, Q-over-Q margin rebound, it's not something typically happens considering the seasonality in Q4 and even looking at the industry cut out spread. So my question, you mentioned the volatility has been something that's even higher than usual and maybe that has something to do with a particularly good quarter in Q4, but if you could elaborate a little bit more on what you think justifies that in this quarter in particular.

And a follow-up question on Seara. I think Thomas on talked a lot about chicken demand and protein demand in general. So my sense is that what really drove this very good margin at the Seara division in the quarter was really related to chicken, fresh chicken in natura chicken exports as opposed to the domestic prepared food portfolio.

So my question is really if that understanding is that curate in terms of, again, natura margin versus prepared food margins for Seara in the quarter?

So especially when the market is has such a volatility in cattle prices and cut out values it's very possible, especially when you look at just the quarter, right, that you have a quarter that you position yourself really well and other ones that you position yourself a little bit worse. And between quarters, you could have those -- just from a positioning perspective, it could be either have a very good -- we look really good or look a lot worse than you expect?

And just given this such intense volatility that more than we were expecting, I saw some reports maybe question a little bit about if there was any hedging or derivatives there, there was nothing significant from that perspective.

I think it's just when markets are more volatile, and you make position selling out -- selling product upfront and all of that, sometimes you get good position sometimes could get worse. I would -- I think the best way to look at performance is look at overall longer term than just one quarter, 1 quarter could kind of misleading positive or negative to the way in this sort of business, especially with the sort of volatility that we've been having on [indiscernible] cattle price. Yes, that's [indiscernible]

Yes, let me make some assessment position about what you said, if the margin, if you understood well, you asked for the margin of prepared foods in domestic market and versus to export chicken commodity chicken to international market. .

If you take just in consideration, the margin, yes, the margin of international chicken was higher than the margin of preferred in domestic market. But say that -- we improved the margin of the prepared food and domestic market. If you remind some quarters ago, I mentioned that we are advancing as a process to improve our price management in order to get the real value of the brand in domestic markets. And this is a continuous process.

We are now focused on taking the advantage of we have the perception of the brand, we have CR in the market. The penetration of the brand and the rebuy of the brand from the consumers. And we are strengthening our process in order to get this in. And because of that, we are continuously improving the margin in domestic market. But yes, you are right.

If you compare this quarter, the margin of international market for chicken was higher than the margin of prepared in domestic market.

Kevin, just to complement something on beef that I meant to say and I forgot. For sure, this comparison quarter-by-quarter could create some -- a little bit of that when it comes to position, positioning of how you sell forward and how we buy and all of that. But having said that, we are very satisfied with the way we are operating.

There are still opportunities for sure. There's things that we're working on. But when we compare our operations, just the things that -- how we are running our plants and how we are running our sales strategy, our procurement strategy, compared to a few years ago, we think we've made a lot of progress, and I think we're doing a lot better than we've been doing in the past.

Next is Isabella Simonato from Bank of America.

First, on the working capital for the quarter, right? You mentioned the deferred payment of livestock as well as inventories. Can you just give a little bit more details on the inventory performance and versus where you were expecting, right, when you mentioned in Q3 for the remainder of the year.

What changed? And what can -- how can that -- if there is any impact to be postponed or translated into 2026 performance? And second, on Seara, you were mentioning right to Mosaic about the margins in Brazil. Can you comment how you're seeing Brazilian consumers behaving in the beginning of the year if there is room to increase a little bit prices and if volumes have picked up, we noticed that retailers were running with lower inventories in the end of 2025, and there was any significant change in behavior in the beginning of the year?

And finally, if you could give us a brief overview of how are your grain inventories and how you're seeing feed costs for the remaining of the year?

So on the working capital cycle, Isabella. So every fourth quarter is a quarter that we decrease inventories, and we'll review them in the first quarter. And the same happens to the livestock, which we postponed payments from 1 year to the other.

Between 2024 and 2025 and '26 we postponed this year $600 million in livestock. Last year, so we had a $200 million better impact on the fourth quarter. That will be a $200 million worse impact in the first quarter that I mentioned in the previous question. And then any inventory side, the same thing. We are seeing the same level of immune product we build that we saw in the last years.

Thank you for your question. When you look for -- we have 2 separate questions. One is, if I understood well, 1 is related to the behavior of the consumer and domestic market with CR. We see that the market starts a little bit weak in the beginning of the year in January. But in fact, now we are -- when we look for our sales, we have grown the sales compared to the last year but deep with different mix with a value-add mix growing much faster than the low -- the traditional and low value-added it's difficult to say what is value added.

We're not very well is prepared. But say, look, the trial, the traditional, they are selling less than the innovation. We have a huge growth in the innovation line with high-protein products, health pre-project design for airframe product clean label product, this kind of innovation. They grow much faster than the other ones.

But average, when we compare this year with the last year, we are growth even some challenge and some different chains, but it's growing. But we start as just to be clear, we start very tough very staff in the beginning and recover.

Now we are -- our sale is higher than the last year for prepared. And when you talk about the cost, I think you will talk about grains because there is a lot of consideration. We have different views in terms of corn and soy [indiscernible] with these 2 key elements for our fleet. In the core market, we see an upward trend. We should expect higher cost in 2026.

And due to -- if you look for reducing the global stock and solid demand, increased crude oil price that boosting ethanol margin as well the cost and availability of fertilizers. U.S. acreage at risk given the soya bean ratio. And the second crop in Brazil, in face of some climate risk.

Net we are, I think, is we expect higher costs for corn. In the soya bean mill, we see price stability and do the -- if you look for the crush margin, they are positive and as the cash made positive, we result in as abundant supply. And in the other part, weak Chinese demand to the tight pork margin in the market. But I think it's for soy being new, we need to monitor U.S. a great issue and the biofuel policy. But anyway, our outlook remains bearish.

Our next question comes from Henrique Brustolin with Bradesco.

I's have 2 -- the first on U.S. beef Wesley, if you could comment about the Mexico [indiscernible] imports, right? They have been shut for a while now. Maybe this could be a discussion the reopening could be a discussion amid the higher prices in the U.S. So it would be great to hear your thoughts in how relevant that could be in shaping the outlook for 2026 if we saw a reopening of the animal imports from Mexico to the U.S.?

That will be the first one. And the second is a quick follow-up on Seara but Seara has been through a very big investment cycle over the past few years. It would be great just to hear how those investments have already ramped up and what would you expect for volume growth into 2026 as probably complete the ramp of some of those plants?

So on Mexico, it's difficult to tell when that's going to reopen. I mean it's very meaningful. It's 1.2 million to 1.5 million per year. So it's more than the size of a double-shift plant, right. So it's a big bottom and it's very important, especially to the south of the U.S. I mean the USDA is doing -- I mean, it's doing a good job in doing a wean to keep the disease outside of the U.S.

They are working on the sterile [indiscernible] and all of that. And Mexico, obviously, is also trying to get this result as soon as possible. But for me to be able to tell you that I hope that this would get resolved within the year, but I have no way to forecast and to even have an indicator of if that's going to really happen anytime soon.

But it's really important is probably the most important short-term change that could happen to this whole beef supply and demand equation. The most relevant and the in the short term for short, this whole Mexico thing. It's very important, especially for the south of the U.S. But again, it's very difficult for me to tell you a forecast.

I hope it opens this year or as soon as possible, but very difficult for guests. Even about the investment of Seara, all of them will be completed this year. And we take completed the additional capacity will be around 10%, 13%. ION 10%, 13%, but can depend on the mix. There's some mix that is less volume, I'm there, but depends on that. But you can consider 10%, 13% in terms of volume capacity growth.

Our next question comes from Benjamin Theurer there with Barclays.

Yes. Just following up real quick on the CapEx side. I think you said about $1.4 billion for expansion. I mean, I know there is a lot that Programs pride as part of that and share of it with their outlook in terms of CapEx. But could you remind us a little bit about some of the other projects you're currently talking and working around as it relates to capacity expansion aside from what Tomazoni just mentioned on Seara. That would be my first question. I have a quick follow-up as well.

Ben, so basically, the cut is the Pilgrim's pride expansion on the prepared food parts on the rendering facilities, the pork sausage plant in Iowa. But the ones that we announced it, there's -- also the Oman project, we also announced a plant in Paraguay. Cactus Texas, also on the beef side, so anything that -- everything that we've been analyzing. And of course, all these CapEx expenditures are phased out throughout the years, and that's the portion for 2026.

Okay. Perfect. And then as you kind of like look from just general capital allocation, I mean, as you announced the $1 dividend per share in the very large CapEx program. We're seeing a bit more activity right now as it relates to M&A activity within food companies in general, but particularly between European and North American companies. .

So just wanted to get your latest as to your willingness or the opportunities you might be seeing on growth through M&A, which obviously has always been part of JBS's D&A to grow .

We're always looking at opportunities through our plan everywhere in the world, but there's nothing that we are looking very keen at the moment, and that's the reason that we increased our organic growth because we are not seeing many opportunities on the acquisition front.

So I think that I would say there's nothing that we could say that we expect to announce or anything in terms of M&A. So that's why we were -- we increased expansion CapEx, and that's why we are returning capital to the shareholders. And given that our net interest expenses continues to be at the $1 million billion level, we are very comfortable with this capital allocation.

Our next question comes from Tiago Bortoluci with Goldman Sachs.

Congrats on the results. I have 2 follow-ups. The first one this is on volumes, right? Thomas wondering, you have been very vocal on the solid momentum for global protein markets. And to be honest, when I look over the last few quarters.

Obviously, a lot of debate on the margin cycles, but volumes and top line has been consistently surprising everyone to the upside. And I think it might be a continuous source of upside going forward. It's difficult to break out for us your sales component between volume and pricing.

But internally, from a volume perspective, could you please share with us what business unit segments and destinations are the ones that are contributing the most with our growth and which regions make you more excited with the opportunities for 2026.

Particularly, if you could also comment on the opportunities in [indiscernible] I know you announced a few things last year. Just an update here, and then I can follow up with my second question.

Thank you for your question. If I understood well, you talk about Seara or I talk over about?

Volumes. Overall

Okay. Overall. Okay. Overall, we see that the demand, when you say all of the market, it's not just because we try to simplify, but it's the reality. We have a strong demand in Europe. Friboi increased a lot of the sales of red meat in Europe as CR increase in volumes in Europe in demand in chicken and Europe maybe is driven by the summer even influence in some countries. And the demand for beef is because the beef production in Europe decreased -- and I think it's not just Brazil, salmon Europe and Australia sell more.

And in Australia and the U.K., now they have a new agreement. And this is -- the demand is -- we are expecting to grow the demand from beef in Europe. The other part, we see demand in all of the Asia that take China out of this the component of Asia, but all of the Asia, the demand this growth are chicken.

And for beef as well, we see the demand and the market -- this is not new markets. We open a lot of new markets, but in traditional markets like Japan, like Korea, we increased the volume from the market. And I believe this is the trend. It's not a trend because price is 10 because the demand decrease in the local production decreased, decreased because of the cycles there are because of some disease in the market.

We see Middle East now we are facing are there, but the flow of the product to the market didn't change so far. They changed the logistic of vessels there, the logistics of internal logistics, we need to change part and when you change part, we need to use trucks to deliver the to the customer.

But the flow is still there. The demand is there. Because of this, we are investing in the Middle East, new factory opened some months ago and then Jean and the investment we have announced in Human because the demand is strong. The U.S., there is a strong demand for beef as Australia, Brazil, said a lot streamers and from U.S. we say a lot more than before, not say compared to the production in the matter.

Self-compare what its previous look, we are not seeing that 1 market is the restriction. We see the demand for all of the markets. Even in Brazil, the demand in Brazil for protein is high. look for what is the -- how Brazil have grown in terms of the number of process in Brazil is amazing.

And what is this? This is because the global demand for protein because there is a reason we have been talking before about that. There is a trend it's not a trend, it's a structural change in the demand of the market because of regulatory guidelines in U.S., they exchange annualized they put -- they need to add more protein to need to go to 1.1 grams per kilo per 1.62 grams per kilo.

You can manage how much we need to produce to fulfill this market that we -- that there is a lot of the held habits that for young generation for all generation, there's a new medicine technology, this GLP-1 combined all of this, the demand is very high, very high. I think the more I answered your question on the Thiago.

Perfectly. Tomazoni is very helpful. On the second one, still talking about the conflict in the Middle East. Obviously, this is a boring situation. But could you help us framing the impact so far in our freight expenses and by fact, mentioning seaborne freight, but also truck rights in Brazil and maybe a sensitivity of how this could impact your profitability if sustained going forward or how you plan to pass this along?

Yes, I think as I just mentioned before, the flow, the product to go to the market didn't change. It didn't change from Brazil. We didn't change for Australia and any of the other markets or didn't change, we keep supplying the market. .

We have -- what we saw the growth -- the cost, we have a contract with the marine agents and they put extra cost because of the risk to navigate in these regions. And this is one the cost.

The second cost is the cost that we need to change the port some -- the destination of the product, some of this initial wave change for one part to the other part. And when we change the destination for the different part, we need to have the truck transportation because to that is not -- there is no closer to the customers, then we need to have this cost of transportation.

But so far, this -- all of these costs was beared by the market. We not see impact in our results.

This is also true in Brazil. Tomazoni, with diesel prices.

No. In Brazil, we see the increase of price of diesel. And we see that increase in terms of the cost of rate. I talk about the Middle East, but when you look for Brazil, yes, you are right, increase the cost of the freight. .

I think if the crude oil keep this price and depends on the development of these or I believe that other costs will be increased, the cost of packaging and what does depend on the oil Greece as a raw material I think this will be the impact, I think, is fertilized will be impacted, and then it will be -- then I mentioned before, when they talk about the cost of the corn because the fertilizer will be higher, the availability of fertilizers and maybe the use of fertilizer will be reduced and then the productivity of the copper will be low.

But it's -- I believe it's too early to predict. Too early because you know how will be the end of this ore. I think this is -- I saw this impact in the short term. but could be back if they had are -- I think it would be a eat. It is -- we I think this is a situation that we are -- how we are looking and act in this situation.

Mr. Benjamin [indiscernible] from Bank of Montreal would like to ask a question. Please go ahead, Mr. [indiscernible]

Can you hear me okay? Yes. So a lot has been covered already, but I'd like to ask a high-level question to begin. So in looking at 2026 versus 2025, just across your global segments, where do you see pockets of improved market fundamentals and where do you see pockets of maybe not so strong fundamentals throughout the year? So we'll start there.

Ben, thank you for your question. at I think it's a rule of improvement we've seen in all of our business units because we have a methodology that mapping the gaps. It's a one-off model that we work. All business units need to understand, need to know very well what is the opportunity to improve then we call mapping the gaps and when you look -- when you have the budget, we go there and see the gaps, and we forecast our budget, some gap up in the -- each one of the operation.

And it's not just for the business, but -- we got the business because we deployed each one of the process in subdivisions of the business. That is if you look it's a huge opportunity we have yet because that new technology, a new way to do the things.

We have closed the gap. We open a bigger gap, and this is the way that we are -- or get personnel excellence. I think this is the mentality and the mindset for all of the business. But if you go to a structural we see that Brazil is 1 of that has a huge opportunity for growth in terms of meat beef in Brazil, I think, is if you compare Brazil in U.S. Brazil has more than double of the earth than U.S., more than double.

And we produce just this year or last year, Brazil produced a little bit more mid than U.S. It means that -- if we are able to get the same productivity in the U.S. or can double the production in Brazil of meat. Then we see Brazil in terms of red meat huge opportunity in the future for growth. But it's not just for growth. All of the protein produced in Brazil is very competitive because we are [indiscernible] competitive. Winters [indiscernible] the cost of the grain. We are very competitive. We have good quality management.

And I think it's -- Brazil is one. We see as a good opportunity. Chicken U.S. performed so well, and we see that demand in the U.S. for chicken grow before U.S. export a lot of red meat leg quarters. Now I think it's a huge jerk of the volume for red meat is stay in the market because we start to appreciate the product made by red meat from chicken, say, leg meat. [indiscernible] ticket in U.S. It's an opportunity for growth for chicken for pork demand. In U.S., we have -- if you look for the result of our pork business, they are a very consistent results for a long period of time, well managed business.

And we see that we can grow in our pork business because U.S. is very competitive to produce chicken and pork. So look, it's difficult for me because I'm booming in all of the markets that we are present.

Australia, we see -- we are very excited with the business there. We are delivering a great result there. The Australia import Australia now import pork meat but Australia export grain, when you export grain, the price of grain is international price, that does not make sense that you export in pork meat.

You can produce meat there. And we are investing in our pork business, build farms and improving the operation, the productivity of the operation. Then we are so so exciting with the opportunity for Australia. And our salmon business, we have announced an investment to improve more than 50% of our capacity of salmon in Tasmania. So we see Europe. Europe, I think, is an opportunity of our growing chicken mainly in chicken and value-added we are excited because we are in a segment in a sector that is growing.

It's a protein. And we -- we have our global platforms that we can easily meet this demand, I think is -- we have a good situation an advantage to take the opportunity and transform this opportunity result to the company. And I think it is -- I don't know if I answered your question .

Yes, you did. And I really appreciate all the detail. That's very helpful context. So my second and last question would just be around the beef cycles. Just wondering if you're seeing a little bit more progress on U.S. Hefer retention. So wondering about that. Also, curious about your thoughts on the durability of the Brazil cycle and then, of course, the Australian cycle. So if you could just kind of summarize that quickly. that would be amazing.

Thank you, Ben. So yes, we are seeing the herd rebuild more actively in Canada. We're seeing that in the dairy business as well in the U.S. which also obviously impacts the overall supply. When I look at the USDA data, it shows that I think we are retaining efforts, but it's relatively slower than we expected. But I think it's -- all the economics are there, everything should be there for us to be doing that.

Actually, I have an information that's pretty interesting is the beef cows later. In 2025, full year, we processed 2.3 million had in 2022 was 3.9 million. So we're almost half of what the beef slaughter was in 2022. I think those things -- that information is important, and it shows that if it wasn't for -- to keep more e-mails for breeding, we wouldn't see such a sharp decrease in -- it's almost half of what it was in 2022, not too long ago. So I think that there is some information that kind of makes us more optimistic, but obviously, it's lower than we would wish.

Then related to Australia, we see we are in the middle of the cycle in Australia. And back to Brazil, Brazil, we see that the reduction of production in terms of the number of cars -- but the other side, we have a different force. The Brazilian -- if you look Brazilian and compared to U.S., or compared to Brazilian cannot need to compare to U.S.

You can compare it for the high level of productivity in Brazil producers and the average of Brazil. The average of Brazil, they bring to harvest if at 4 years in -- but the good producer are the modern farmers. They live 2 years to get the product finished to get the car finished means that at the same time, we have a reduction in the age of the cars.

And this combined with increased a lot of pilot in Brazil before [indiscernible] Brazil was not well developed. Now you can see a lot of feed lots in Brazil. And the other part, we have an improvement in genetic improvement nutrition the Brazilian ethanol, corn ethanol industry, now they deliver good byproduct from the ethanol that is DDG, it is support a lot to grow the growth of improvements and fit.

We see that we are -- I think Brazil will be able to manage this situation and postpone the cycle, the cattle cycle, that is normal cattle cycle.

Our next question is from Heather Jones. You may now go ahead and Mrs. Jones. If you're trying to speak you might be on mute there, Mrs. Jones. For the moment, we'll move on to the next question on the list, which is Leonardo Alencar from XP Investimentos. Mr. Alencar?

I wanted to talk back to U.S. beef discussion. And then we mentioned many points on the supply side. I wanted to focus probably more on the demand side. So if we can get -- First, a view on the resilience of beef prices. We've been seeing some amazing beef prices in the beginning or even before the spring season. So just to understand if you -- this is this is feasible or even if it's possible for us to expect higher price throughout the next few months.

There was an interesting change in choice and select spreads. I don't know if there's any signal that point, if you could provide us with more information. And this discussion on the product of USA label, I understand it's really new. But if you have any early -- any views on that would be interesting as well.

And then on the second point, maybe more like an exercise here. I understand that we've been discussing value-added products and processed goods and that U.S. is the main focus for that. But you already have a lot of revenue on that channel. If we split that from the commodity business in U.S., would you say the performance for 20 even from the end of 2025 or 2026, maybe better than the commodity business. It is possible to do that exercise.

Sorry, demand is -- remains pretty strong for beef. Obviously, supply is pretty short. But it seems like beef continues to be very resilient. It seems like ground beef is especially ground beef. We've always measured ground beef versus chicken breast versus power points.

And it seems like the demand for beef in general, just there is -- obviously, there is a little bit of a substitution with other proteins, but the demand for beef stays still remains and remains pretty strong. So we see that going forward. And all these labor requirements and all that, it's something that we're always -- whenever something changes, we discussed with our retailers and see what our customers and see what are the impacts and cost of that. But it's not something that I'm super concerned right now.

Okay, in the value-added products? Sorry, that very added question was about which business unit.

Sorry, I missed that. Exactly not related to a business unit. If you could split remove or suggest value-added products and remove from the commodity business, would you say 2026 is expected to be better or not on that part of the business?

Look, our focus is to increase value-added in brand is the focus that investment, if you look for an investment we have done in the past, we prioritize the value-added product. And because it's we take the advantage of verticalization of the product. And the second 1 is a higher margin and more stable market that value add is one of our priorities.

Okay. And just 1 more follow-up here. On this split up deal that was being discussed in the U.S. government, I understand it's more noise than anything, but any comments here?

It seems like it doesn't have a lot of support in the -- so right now, it's not something that we're concerned about [indiscernible]

This is Heather Jones back online, if you would like to go ahead with your question. Seems we have some connection issues on Mrs. Jones' side, so we'll continue for now with our next question from Guilherme Palhares with Santander. You may go ahead, Mr. Palhares.

Good morning, everyone. Over the last couple of years, one of the main points here of the investment thesis of JBS has been a bit of the geographic diversification, right? And you do report of the businesses individually in terms of Australia, Brazil, the U.S. I just wonder if you could share a bit what is -- I think U.S. is a good indication there. In terms of the supply to the market, how much of beef meat in the U.S. is being sold through JBS.

Do you know a bit how much do your selling today that it's coming from Brazil and Australia. Just to give the point here is a bit of food security, right? So having this geographic diversification, how much you can maintain supply even when the cycle conditions are not there.

So if you could give us some color there, I think it would be appreciated. And the second question here, Tomazoni, over the last 2 years, you guys entered in a new protein, which is table eggs, of course, you still have a minority stake on the investment there. But I just want to hear a bit your thoughts going forward with this year behind you? What is your impression there? And how much -- how big is the opportunity there?

Sure. It's very relevant to have access to import meat from the Australia from Brazil when -- especially in periods of time when there is a shortage of beef in the U.S. So that does help, and it's I mean, and obviously, the volumes at Brazil and Australia produce are significant.

So it's -- so it's -- there is not -- there isn't a supply problem when it comes to that. Having said that, the U.S. is a very, very, very, very competitive place in the world, probably one of the most competitive places in the world the American renter is one of the most -- are among the most capable in the world to produce beef and high-quality beef. And so obviously, the shortage is a situational thing right now, but the U.S. it's a country that doesn't need to import in the long run, it doesn't need to depend on import.

It doesn't need to have imports to be able to supply its own demand. It should be able to, in the long run, to be able to have its -- for the domestic production to supply its domestic market and actually be an important exporter of beef, like it's always been.

Obviously, in the short term, we have the situation that we're importing a little bit more beef than usual. But -- and it's useful to have that when there is a shortage because the demand is still there. But the U.S. is a very, very productive place and doesn't need for beef and doesn't need doesn't -- in the long run, shouldn't depend on imports.

And Guilher related to table eggs, we are -- we enter in the segment because it's -- we see that the affordability of the protein, so one of the more affordable protein in the market in and we before to enter the study these categories, and we are excited the first impression, the first movement we have done is to buy a company in the U.S. and to -- we are building farms in Brazil, we are excited with the business.

This is one of the businesses you want to grow.

Okay, Tomazoni. And just one follow-up there. You guys are also entering in the U.S., right? So what is also out there that you want to do on table eggs that you think it is a relevant market that you can play and make a difference.

Look, we just buy this farms in U.S., and we are without I would say that the population of the check. Now we are populate our FOX and we are excited with this. I think is this -- we are on their strategy with both with [ Mantiqueira ] because [indiscernible] the know-how and this accelerate all of our lands in the market.

Our next question comes from Borja Sharma, you may go ahead with Stephens, you may go ahead, Mr. Sharma.

Appreciate the question here. And a lot of good content covered. So maybe I could just focus on the first question, maybe just on your U.S. pork business. We've been hearing from U.S. hog producers that they expect disease impacts to be the same, if not worse than last year. I was just wondering if you can kind of share what you've been hearing regarding a disease pressure in the U.S. and if you would expect that to weigh in on margins in FY '26.

Yes, it could be. And the margin impact -- it's not necessarily that it's -- it depends on how and when it does impact, it doesn't necessarily mean that it's actually a negative impact. It could actually we could have a short term -- obviously, we're not expecting disease, and we don't want disease.

And we do everything we can not to have them. But in the short term, you actually could have actually a higher -- given a shorter supply, you could actually have a better margin if that happens.

Okay. I appreciate the color there. And my follow-up, maybe just wanted to further on some of the comments you made about the listing on the NYSE. You mentioned [indiscernible] some liquidity and valuation benefits but that you're still expecting to get more. And in the past, you all have talked about, I think, index inclusions and the potential for -- to get into some of those and the timing to get into some of those. So I think as we're looking in FY '26, I was just wondering if you could maybe give us an update on what's out there in terms of inclusion on some of these passive indices.

Okay? So on the multiple side, if you look at our enterprise value EBITDA forward-looking, we are trading higher than we used to trade before the listing. So there was a multiple expansion already, but we still traded at a discount to our peers. One of the reasons is also the index inclusion.

There was a research that was sent last -- yesterday from Stephens. Saying that according to what we released on our financial statements in terms of information of revenues and assets breakdown. We should be included in the Russell, which is next June, and it could bring around 14 million shares demand from passive funds. But it's out of our control.

We cannot guarantee that but that's what is in the short term. On the longer term, at some point, most likely beginning next year, we will start to find -- to make files of 10Ks and in cubes instead of 60 in order to be eligible to the S&P family.

So then I think 2027. So I think this year, [indiscernible] the plan. Next year, the plan is to be on the S&P family. First on S&P 400. And once we reach it $22.7 billion market cap, that's the threshold for the although, again, it's not in our control. It's their committee decision for shares inclusion. Also worth mentioning that our average daily trading volume is 3x higher what it used to be before the listing. And the Brazilian investors fell to 10% of our free float. And the U.S. investment today, it's already 70% of our free float.

Our next question comes from Ricardo Boiati from Safra.

One. My first question goes to Wesley. I wanted to circle back to the U.S. if business. You, in fact, already answered part of my question here, which related to the competitiveness of the U.S. ranchers, right? We are seeing very favorable conditions, right, for a faster herd rebuilding in the U.S. with the beef prices, the cattle prices.

My question here would be exactly when you look from the renters perspectives, right, we see some concerns that labor, even succession plans could be an issue for the ranchers longer term. You expressed a very strong positive outlook for the U.S. beef industry, which is very, very good.

So I would ask you to elaborate a little further on the drivers for the industry especially from the ranges perspective, right? Is there anything that could prevent a more robust business expansion for the ranchers, anything that could be a risk in the horizon so that would be the first question. And the second one, just more broadly looking at the current market environment. the risk environment globally.

Does this situation here of increased volatility could imply an even more conservative approach when it comes to the balance sheet of the company. It's quite clear that the balance sheet is very strong. I mean, in terms of leverage, in terms of debt maturity, you already showed this in details. But the very short term, the current environment, does it imply an even greater conservativeness from your side or nothing relevant so far?

Ricardo yes, there is -- obviously, there is issues that are over a very relevant succession is always very relevant in labor and all that. But at the end of the day, I have a pretty simple view of this. It's the -- and obviously, like interest rates are relevant as well when it comes to herd rebuild, right, because you have to carry more working capital and livestock and all of that.

But at the end of the day, I think it's pretty simple. The U.S. has the nature has the culture, I mean in nature, I mean, like just environment, right, just the natural resources to do it, to have a thriving beef production has the culture to do it. It has the infrastructure like no other countries. So at the end of the day, we remain very optimistic about it in the medium long run.

In terms of balance sheet, I think it's worth mentioning that sometimes you should not look at the net debt absolute value itself. But not even on the net debt to EBITDA, I think it's where I mentioned that in the last 3 years, we increased our net debt in 8%.

However, financial expenses stayed the same. So through like big management exercises, we've been able to despite increases in net debt to keep the same level of interest expenses. So our capacity of debt repayment didn't change -- so as long as we have this comfort that capacity repayments, we have no -- not been needed any restrictions in terms of our return to shareholders or our growth given that we have discovered.

And also, as I mentioned before, we don't have significant maturities in the next 5 years. which gives a lot of comfort that we don't need to go to the market at any interest rates.

Our cash position is also -- we ended the quarter with $4.8 billion which is around $1.5 billion higher than what is our minimum cash given our cash conversion cycle. So again, we have a lot of questions that currently, we don't need to be restricted in any of our initiatives.

Our next question comes from Igor Guedes with Genial.

Can you hear me? Okay. Thank you. Good morning, everyone. Thank you for the opportunity. I would like to talk a little about Seara. Regarding the first part of the question, this quarter, we saw a resumption of shipments to China after several months of suspension due to even flu last year. I'd like to understand how the resumption went for you guys.

The resumption happened around November. So it didn't cover the entire quarter for Q1 '26, should we expect an ever stronger quarter in terms of volume? Is this recovery gradual? Or do you believe the full effect has already being captured in 4Q? And the second part of the question, I'd like to understand from the perspective of breaking down the positive impact -- we have volume growth as well as price improvements realized through premiums paid on certain chicken cuts China for China, such as chicken feet -- given the increase in volume, there is also an effect of improved fixed cost dilution.

So my question is, if you could break it down a bit, what we saw in terms of margin improvement what influence said the most? Was it -- was the increase in volume, the price improvement or the fixed cost dilution very much.

Igor, is not a simple answer for you. If you talk about the volume to China, when opened this helped a lot in terms of profitability because we have the best market for chicken wings and our chicken feet is China. Then we increase in terms of -- we -- few don't produce were not market to deliver all of the production. .

But then we do open the markets they improve volume and put price. And about winds, they improved the price because the value of the wins in China is higher than the other markets. means that we are -- we got part of the benefit because it was in November, I think it was October, November, and now we have got the benefit in the -- in this first quarter is all of the benefit.

When you talk about what is important, the cost of dilutions of price -- of course, the impact of the feed, it's a huge impact in terms of profitability because these represent 60% of our cost of chicken goes to fit around 50 around it. This is huge that is more than to get increased the volume to compensate this is, of course, volume compensate but not able to compensate all of these costs.

Our next question comes from Priya Ohri-Gupta with Barclays.

Great. I hope you can hear me. A lot of questions have been asked at this point. I would just like to ask 2, first, around just the capital allocation. You've already announced the $1 dividend per share that's going to be paid in June. That works out roughly to what you've been indicating for some time now around the ability to consistently pay about $1 billion to shareholders.

Is that sort of how we should think about the dividend for the entirety of the year? Or is there room to potentially increase that with a second payment later in the year? And then relatedly, how should we think about share repurchases? Just given that you guys did do about $600 million in '25. And then I'll ask my follow-up.

Priya. So at this moment, we are sticking to what we will try to do as long as our leverage ratio allows to have the $1 billion per year in dividends. So I think this $1 billion is what we plan to pay this year. And then depends on how much excess cash or cash flow generations, then we can reevaluate a share repurchase again or not. But that do depend on the cash generation in the next quarters.

Okay. Great. And then I know you're pretty clear just now about not having any maturities in the years or so, and so you don't have any real need to come to market.

But some of your bonds do become callable later this year and into early next year. Is there a scope for you to think about addressing those or consider other liability management? Or is this the react drop that -- or would this rate backdrop not necessarily went.

Now the callable bonds, they have very low interest rates. So it's not worth it. The coupons are below treasury. But there's opportunities to decrease interest rates and extend maturities on the 34 and 33 maturities.

So maybe I think it could be a liability management could be targeted on those 2 bonds, 33 and 34 which has high coupons and higher than what we could be issued today at 30 year, for example.

And next, we have Mr. John Baumgartner with Mizuho, who would like to ask your question. Go ahead, Mr. John Baumgartner.

Two for me on North America. First, on the value-add side. I mean traditionally, there's been a focus on value add through M&A. More recently, you've gotten involved in CapEx to build the Italian meats business. But I am curious, alternatively, I know you had a relationship with Wendy's.

You had done some test marketing of Wendy's burgers last summer. I'm curious what you sort of learned from that test market? And how you think about maybe licensing third-party brands to get those value-added brands in-house in lieu of making expensive acquisitions or even investing to build brands from scratch.

So look, we're looking at we obviously look at every option. For us, Greenfield has made more since recently just because of valuations and the price of building some of these things. And actually, some of these businesses that we did greenfields. It's better to do to have a new plant instead of buying old assets.

And so that was very specific to those greenfield acquisitions or greenfield projects, sorry. The project we won is what was very interesting was very -- it worked out well, and it's great partners. But it's an option as well, but it's not -- we'll look at that, too. But we've seen that it's not necessarily, as you mentioned, expensive as kind of prohibited to build brands.

Look at what we've done at just pay, right? It's we never had a on the earnings call or ibis hasn't had an earnings call that they said that they were -- had invested -- the results were good for 1 reason, had a negative impact because we were building brands, right? We build brands as we build the business and it was sustainable in itself.

So nowadays is a $1 billion brand. So it's in revenue. So I think it's possible to do those 2 things at the same time.

Okay. And a follow-up also in North America. Jeremy, I think you mentioned there's really no imminent M&A on the horizon here, but I am curious on the ag industry, seeing where prices are for eggs, I'd imagine there's a fair amount of distressed profitability in the industry.

I'm curious, looking at producer capitalization, that business specifically relative to beef, pork, other species, where you've made acquisitions at the down trend -- the down point in the cycle. How do you think about this profitability issue in eggs right now, maybe accelerating your ability to build out and maybe be opportunistic and acquire some assets in eggs.

John. So basically, it all depends on having the opportunity at the asset price. So sometimes it's not related to the current ag price and we're always looking at opportunities. So it's difficult to say and then that's our approach. It has to be an accretive acquisition.

Ladies and gentlemen, there being no further questions, I would like to pass the floor to Mr. Gilberto Tomazoni.

I would like to thank everyone for joining us today and all JBS team members for their dedication, the commitment to deliver the results. Let me close with 3 key points. First, though, we delivered record revenue of $86 billion and 13% growth for the prior year, reflecting the strength of the consistent of our global platform. .

Second, return, we continue to operate with a strong capital discipline with return on equity at 25% and return on investment cut out at 17%. Third, earnings per share, EPS reached $1.89, up 15% year-over-year, growing faster than net income and reinforce our focus on shareholder value. As we look ahead, we haven't changed our focus, execution, efficiency and disciplined capital allocation. That is what allowed us to deliver consistent results and build long-term value. Thank you .

This is the end of the conference call held by JBS. Thank you very much for your participation, and have a nice day.

Good morning, and welcome to JBS Third Quarter 2025 Results Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. Any statements eventually made during this conference call in connection with the company's business outlook, projections operating and financial targets and potential growth should be understood as merely forecast based on the company's management expectations in relation to the future of JBS. Such expectations are highly dependent on the industry and market conditions, and therefore, are subject to change.

Our present with us today, Gilbert Tomazoni, Global CEO of JBS; Guilherme Cavalcanti, Global CFO of JBS; Wesley Batista Filho, CEO of JBS USA; and Christiane Assis, Investor Relations Director.

Now I'll turn the conference over to Gilberto Tomazoni, Global CEO of JBS. Mr. Tomazoni, you may begin your presentation.

Good morning, everyone. Thank you for joining us today. The third quarter of 2025, once again demonstrated the stress and consistence of JBS global multi-protein platform. and more important, how we operate with discipline, agility and resilience.

We achieved a record net sales with growth across all business units. This performance reinforced the balance and the scales of our operation and show our ability to manage the platform proactively mitigated the impact of local market cycles.

Net income reached $581 million and return on equity over the last 12 months was 23.7%, reflecting solid sustainable performance. We continue to navigate a challenging cattle cycle in the United States, marked by historical high price and tight supply. Even in this environment, JBS Beef North America delivered a record debt to revenue, supported by resilient domestic demand, while capital availability remain limited, consumption held steady, and the team continues to execute with discipline, although careout value remain elevated, they were not sufficient to offset higher corn costs. Australia was a clear highlight. Profitability is staying strong, supported by improved care on availability and healthy global demand.

The regions continues to play an important role in diversifying our geographic exposure and balancing result across protein. In Brazil, [ Free boy ] delivered another consistent quarter with solid performance in both export and domestic sales. The team strengthened relationship with the key customer through our value-creation approach and remain focused on operational excellence and disciplined execution.

Seara also posted another quarter of consistent results in a period is still impacted by a restriction to export to Europe and China, which have recently been left. The business maintained healthy margins, driven by a disciplined commercial strategy, effective mix management and continuous innovation in its product portfolio. initiative such as the launch of high protein ready meals, the developer of a dedicated air freight portfolio and a partnership that brings the brand close to the consumer, included with Netflix illustrate our ongoing commitment to innovation and value creation.

In the United States, our chicken and pork business also remained resilient. [ Bigger ] price continues to grow, supported by a diversified portfolio and ongoing gain. The Prepared Foods segment stood out with sales raising more than 25% in U.S. while operation in Europe and Mexico also outperformed their markets.

In pork, lower grain cost and steady demand created a positive environment though supply constraints continue to limit overall growth market growth. These results show how we operate in our global platform, manage scale efficiency sharing knowledge across the region and make it quick informed the decision to protect per pharmacy. We continue to invest in innovation and value-added products, as part of our long-term strategy, strengthening brands and expanding higher-margin category remains central to sustainable growth. We end the period with a leverage of 2.39x, fully aligned with our long-term targets.

Overall, the company remains stable and well positioned. -- global protein demand continues to rise. And JBS is prepared to capture this growth with a balanced portfolio, solid execution and a long-term perspective. Thank you again for joining us today.

I will now turn the call over to Guilherme, who will be worked through the financial results in more details.

Thank you, Tomazoni. Let's now move on to the operational and financial highlights of the third quarter 2025. Net sales for our third quarter 2015 reached a record of $22.6 billion. Adjusted EBITDA in IFRS totaled $1.8 billion, which represents a margin of 8.1% in the quarter. Adjusted EBITDA in U.S. GAAP comparable totaled $1.6 billion, which represents a margin of 7.2% in the quarter. Adjusted operating income was $1.3 billion with a margin of 5.5% in IFRS and 5.6% in U.S. GAAP comparable.

Net income was $581 million in the quarter and earnings per share of $0.52. Excluding nonrecurring items, adjusted net income would be $602 million and earnings per share of $0.54 per share. Finally, the return on equity was 24% and and the return on invested capital was 17%.

The free cash flow of the third quarter 2025 was $383 million representing a difference of $612 million compared to the third quarter of 2024, mainly due to the following factors. Adjusted EBITDA decreased $319 million, but excluding noncash items, we have a reduction of $230 million, driven by the impact of the beef cycle in U.S. Avian flu in Seara and higher cattle costs in JBS Brazil.

An increase of $226 million in capital expenditures, mainly growth CapEx, an increase of $258 million in working capital, mainly reflecting higher revenues and costs resulting from the increasing livestock prices. Our cash conversion cycles in base remained stable in relation to the previous quarter, not considering a guidance, but simply updating the cash flow breakeven EBITDA exercise, it is expected to increase to $6 billion in 2025 and to $5 billion in 2026, driven by capital expenditures in 2025 and $2 billion in 2026, already including maintenance CapEx, although 2026 budget is still to be approved.

Working capital expected to increase to $1.3 billion in 2025 and $700 million in 2026. The 2025 increase in nominal terms is related to higher prices, higher sales volumes, increased cost of livestocks and fulfilling the pipeline of organic expansions. It is worth mentioning that 2026 working capital depends on variables not in controls of the company, like grains and livestock prices. Vigor settlements of $400 million in 2025. biological assets of $650 million in both 2025 and 2026. Interest expenses of $1.15 billion in 2025 and $1.15 billion in 2026. The leasing expenses of $500 million for 2025 and 2026.

Last week, we completed another debt issuance in Brazilian capital markets. The total amount of agribusiness receivables certificate was approximately $570 million, with 2/3 places in a 40-year tranche, the longest ever completed in the Brazilian capital markets. As a result, our pro forma average debt maturity reached 15.4 years with an average cost of 5.6% per year.

Leverage increased to 2.39x in the third quarter against a against second quarter of 2025, primarily due to $319 million decline in the last 12-month EBITDA and the payment of $362 million in share buyback. In this regard, we announced the completion of a $600 million share buyback program.

We believe this represent an efficient use of cash given the current valuation multiples relative to our global peers and the leverage at comfortable levels. Even with the share buyback program completed and the $1.2 billion dividends paid and the approximately expansion CapEx of $1 billion, we expect to end the year with leverage below 2.5x.

Our $3.4 billion revolving credit lines and $4 billion of available cash combined with the expected cash generation in the coming quarter, provide us with the flexibility to continue executing our expansion CapEx and value creation projects while maintaining a healthy and robust balance sheet.

With that in mind, I would like to open to question-and-answer session. Thank you.

The floor is now open for questions from investors and analysts.

[Operator Instructions]. Our first question is from Mr. Lucas Muse from Morgan Stanley.

I have 2 quick ones. The first 1 is related to the expansion CapEx, the ongoing expansion CapEx especially related to the pork expansion, the 2 plants in Iowa, if you could share more details on what should we expect as it pertains to revenue expansion or volume expansion into next year as you start opening up those additional capacity expansions in U.S. pork.

And my second question is related to U.S. chicken, the third quarter results of PPC were very solid, especially in the U.S. But given that chicken prices are significantly down, are significantly down into the fourth quarter, if you could give us an update what you are seeing in the fourth quarter as it pertains to profitability, especially in the U.S. if maybe the commodity part is suffering a bit, but a bit more resilient on the other part of the portfolio.

And coming into 2026, if you still see a solid supply and demand outlook, given USDA is still very constrained outlook on chicken supply in the U.S. Also in the light that one of your competitors was talking about cycling through a new genetic line that was a bit better than the one that was being used in the last 2 years or so. So maybe a little bit more details on U.S. chicken dynamics, both on a bit on the short term and looking in 2026. Those are my questions.

So on the expansion we're doing in prepared foods in the U.S. So it's 2 plants that we announced in Iowa, right? So one is the very plant that we're going to produce sausage there. And the other one is in Ankeny that we're going to do further ready-to-eat bacon and ready-to-eat sausage. Those are very complementary to what we are doing today. So we produce a lot of bacon in the U.S. We're going to start producing sausage.

That's going to be -- it's going to use a lot of our trends, a lot of our the meat that will come from our saw meat that we're going to harvest in that same plant. So it's very complementary on the supply side of our business and very complementary on the business on the sell side as well because there is sales side because there is a lot of demand right now from our customers there. So we think it's going to be a quick ramp up. That's what I'm getting at for those plants.

Next year, you're not going to see any impact because there are going to still be under construction, finalizing and we're just breaking ground right now in 1 of those plants and the other 1 where it's going to be more putting equipment and lead time for equipment. So you're not going to see anything for next year. 2027 is when you're going to start seeing a ramp up and start for us to start doing -- starting to see the revenue and the extra margin that's going to come from those businesses in our pork division.

Those 2 businesses, you could expect something around 50 -- $500 -- between $500 million and $750 million revenues as we ramp it up. So something like that. And we see the margin for this extra business in the higher double-digit margins for that. So -- we're very excited about that. And we think it's going to be a relatively quick ramp up for these plans given the complementarity of -- on the supply side and on the sales side.

Related to the chicken that you are mentioning that they dropped the price in the U.S. market, we see the drop on the price on the big bird segment. And -- but I think they found the limit for growth in the last weeks, they a little bit increase in terms of the price. And we -- but with a look for PPC. PPC has a balanced portfolio. We have a small bird, we have middle birds and then big birds, and we are prepared then prepared as part of our portfolio.

We remain confident about the chicken market next year in U.S. even in Brazil because even that we see that increase in terms of the 1-day chicken, we see that the product is emitted because we have infrastructure and the availability of genetic. You mentioned the new genetic of -- yes, there is a new genetic of core, we still start to go to the market. But this is not something that you put in the market is a quick reaction because you talk about genetic, you have time to get to the market.

We -- in our view, we will be more availability of chicken, but the export market remained very, very strong. if you have a consideration that Brazil that this year will be -- if the year-to-date, they are flat compared to the last year and domestic in the export market is in a lot of demand because if you just make the comparison with pork, Brazilian pork is more than the last year and chicken is flat. It is because chicken availability of chicks because of some market was closed and now ubiquity, as I can mention in Europe and China.

And I think it's next year -- we see that there will be a strong market, export mat from Brazil, we see the market from U.S. So look, we are still with this growth in terms of on the chicken place. We remain very confident about next year.

Our next question is with Isabella Simonato with Bank of America.

I think as you guys have been mentioning right, and Guilherme, you mentioned a higher working capital consumption given given higher raw material prices, but also given growth, right? And I wanted to maybe reconciliate when you look at the top line growth of this quarter or the year-to-date, right? -- and you try to look at the volume growth, can you tell us, I mean, how much came from -- first of all, what was the volume growth overall, but -- and how much came from expansion and new operating lines and et cetera, because I think at some point, we have a tough time, right? Looking at the expansion CapEx you have been doing that you should continue to do that translate that into into top line growth, right, which has actually been quite strong.

So if you could break down I mean, what has been as a result of top line growth of your organic expansion, I think that would be quite helpful.

And second, going back to the chicken market and especially in Brazil, right, both bands from Europe and China have been removed. -- if you guys could explore a little bit how you've been seeing the export market now in fourth quarter? And the dynamic also of mix -- and that includes the domestic market of Ceara. I would appreciate.

Thank you Isabella. So the major part of the working capital consumption was really due to prices. In terms of volumes, I would highlight Permian JBS Brazil had an increase in volumes of 3% and Seara, which we have been made in investments in organic expansion. We had volumes growing in 8%. So on the other hand, again, we have been in some business units, price going up 16%, sometimes 24%. So basically, the main variable is prices that made this first, increased revenues, increasing costs and consequentially increase in working capital.

With the question about -- Isabella about the chicken market, if I understood well, it's about the Brazilian chicken market, how we see that export market in this next quarter and next year. Is it correct?

Yes, especially because the main headwind, which was the ban, right, from China and Europe to understand that's gone. So.

Yes, yes. They just lifted restrictions from Europe and from China. You know that this is too important markets from Brazil because we Brazil is they optimize the mix of the [indiscernible] in these 2 markets play a very important role. Even for Seara, it's much more impact because Seara is the ever strong market share in Europe and then reopen Seara it's for make a lot of difference.

And of course, for China for all of the market made a lot of difference. Seara is the leader in the export market from Brazil, they are suffered more than the others. And -- but now I see that a strong market. We do not see any constraint in terms of demand. We have a strong demand and we see that next year, we will continue this demand because overall, we see that demand for protein remained very strong, not just for chicken, but for beef and for pork. Look, Brazil export this year compared to last year, year-to-date, 14% more pork and chicken was stable. Stable because of restrictions.

But next year, I think Brazil will get the same track as before. And even that is more -- I mentioned before, when the answer this question, you see it is more chicken in the market. But the limit to grow -- there is a limit to grow because infrastructure, you are not build a chicken house very easy. You have some genetic restrictions to increase production. Even that was mentioned before, the new genetic from Kobi, but will take time to go to the market and to be effective. We not see really -- we see more volume next year, but we see demand more than compensating.

Our next question comes from Ms. Heather Jones with Heather Jones.

Are you able to hear me now?

Yes, go ahead.

My questions are related to the U.S. Redknee business. I guess, first on the North American beef business, -- the volatility that we've seen in futures in the futures curve recently. Just wondering if you could help us understand how that may affect your Q4 results?

And then my second question is on pork. The sequential improvement in Yell's results stands in short contrast to industry benchmarks as well as your competitors. So I was just wondering if you could explain what drove that strong sequential improvement despite what was really tight spreads, et cetera.

Heather, this is Wesley. So on the beef volatility, for sure, when you have market futures being as volatile as it did, it creates stability in results. So recurring impact it could impact us. On the other hand, it's showing a decrease in cattle cost. So on the other hand, it could help a little bit to cutout is suffering a little bit in the recent weeks. So -- but -- when you're having stability like that in the future, it's always a challenge because it could create losses for us with our hedging position.

So -- but overall, on top of just the future has been more volatile. Margins have been tighter in the fourth quarter so far than the third quarter. And there are usually tighter on the fourth quarter than third quarter, just historically anyway. So yes, I think that could create a challenge for the fourth quarter on the beef business.

On the pork side, Heather, this pork business that we operate in the U.S., I think the -- I don't know what I can say about our business is -- we have very good plans. All of our plants are -- 4 of our 5 plants are double shift plants. They're very modern. They're very well invested. We've been adding a lot of value added in our business. So -- if you went back in history, we will be producing very little prepared foods.

And nowadays, it's becoming more and more of a bigger business of ours, and we intend to grow, as I mentioned in the last answer to Lucas.

Another thing, too, it's a business that we've developed that we're -- it's very integrated. We are integrated on the live side. We're integrated on the prepared side. We have key customers that are very good for us. I don't know how to pinpoint one thing or another, Heather. I think I couldn't do that because it's a lot of very little -- a lot of things. It is a very consistent business of ours.

So operational excellence is a big deal in that business. And if you look at our margins historically, they're pretty stable and it's a pretty stable business for us. I mentioned on the last call in the second quarter that it was a little bit of a tougher quarter for us. That margins were going to come back. And here we are, they are back, and I'm still pretty optimistic about the the fourth quarter as well.

It's a pretty good business for us. I don't know how to put it in a different way. It's a business that's very consistent and very integrated on both sides and operates at a very high level.

Our next question comes from Thiago Duarte with BTG.

I have 2 questions here. The first one is actually an extension of the some of the remarks that Guilherme made during the presentation regarding capital allocation, you mentioned the share buyback and the dividends, and it remains -- and how comfortable you remain with the leverage of the company towards the end of this year.

My question is how M&A opportunities fit into this strategy? Over the past several months, there have been rumors about JBS participating in potential bids for different companies, especially in the U.S. So my first question is really about how confident or not you are that you will have M&A opportunities to invest and particularly in the prepared foods segment, which has been the one of the main targets as you have been saying for quite some time. So that's the first question.

The second question is, I think, more to Wesley. There's an interesting chart in the company's presentation where you showed the retail price for U.S. beef, pork and chicken. And what we have been seeing is that beef retail prices are close to all-time high. Chicken and pork prices haven't really followed so even though they remain higher, but they haven't been following suit. And the price ratio between beef and the other protein is also at the all-time high, right?

So my question to you, Wesley, is how you see those trends unfolding going forward, right? Should we think more about beef demand at some point going off because of high prices and hampering further price hikes? Or do you believe that this high beef prices will continue to offer support for the other proteins to just continue to rise and catch up with beef, right? I think that's how you see the -- this very unique situation of coating prices and how the consumer will behave on the back of that. Those are my questions.

So in terms of capital allocation, I think it's more M&A. I think as you can see, we have leverage and we have a cash generation to couple with that. There's no big M&A that we are looking at the moment. But in case it appears a good opportunity, the first thing that I'm going to do is because I want to keep investment grade is to higher ratings assessment from rating agencies.

So at the end of the day, rating agencies will tell me what will be the capital structure that I should have in terms to pursue that M&A. And today, we have more flexibility in shares, given that we have 2 class of shares, and they are listed in ISE. So at the end of the day, I'm very confident that we can pursue any type of M&A once the opportunity appears, but the end of the capital structure will be dictated by the rating agencies.

So a few things about this beef prices and beef prices versus [ portion. ] So first thing, I mean just supply and demand, beef prices are going to be at the sort of levels where they are as long as suppliers is tight. When supplies increase, obviously, you're going to see probably this prices fall and the market adjusts to a more normal level. This is just what we should expect and what has happened in the past. So -- having said that, I think it's a big testament to the demand of beef to see even entry-level if items like ground beef being at the price levels where they are and there is still strong demand for them. So it's just a big testament for the quality of the product and just the structural demand that there is for all those products.

Now as it relates to pork and chicken. Again, there is some obviously substitution between the 3 proteins. And obviously, when beef is expensive and people beef, pork and chicken are good options for somebody who's trying to find an affordable -- a more affordable option than beef. So it kind of generates, it drives a little bit of demand for pork and chicken, and we obviously, we as -- as long as we have type supplies, we're going to see higher demand for other proteins as well.

And yes, so that's what we've been seeing. Now -- is it going to be a lot more than what it is? I don't know. It depends a lot on these deep supplies. I think it's, we're getting very close here to the bottom of the trough of this cattle supply shortage. So I think we'll see what happens. But -- and if we have more demand, if we have more supply for beef, we should see beef falling in the -- and that come back to a normality. If not, then obviously, chicken and pork is a big option for a budget, for a more affordable project solution.

And our next question is from Gustavo Troyano with Itau.

My first one is on Seara actually, and more focus on process foods here in the domestic markets. So some competitors reported like strong margins and volumes in the quarter. So I just wanted to touch base on how is your margin performing in the segment in the quarter? -- and what we could expect for these margins going forward? And if you could comment also on the ramp-up of the [ Hollande ] plan that we discussed a couple of quarters ago, -- and if we could expect more volumes to come within the processed food segments here in Brazil would be great.

And the second question relates to Australia actually. And we saw higher cattle prices in the region in the quarter. And despite that, margins remain quite resilient. And I just wanted to understand a little bit more what to expect for the fourth quarter because cattle prices kept increasing. And I just wanted to hear from you guys -- how do you see the balance between demand for Australian beef and supply going forward to understand a little bit more on the margins in the region. So if you could comment on the beef margins going forward and also how the other businesses in Australia are performing such as Huon are the processed foods operations compared to the beef margins that you reported in the quarter would be great.

Thank you for the question, Gustavo. Related to Seara, I think is Seara is just mentioned about the performance of the brand. The holds our penetration of the brand increased compared to the last year, we have increased the penetration in the good thinks about the penetration that we grow in repurchasing more than last year. It means that the brand is strong. We are gaining preference.

We gain top of market top of mind because of our leadership in innovation, we are bringing new things from the market. Then the brand is very, very healthy, and we are growing we are an -- we are growing the margins and we are growing the volume in prepared. You asked about specific about Rolândia.

Rolândia is full noble sheet and branded products -- and the other part of sauces and hot dogs and we are working through. And we are now thinking about the expansion of the plant. It means that Rolândia is -- we are -- in reality, we built -- the builder was preparing for this pension. Now we have to -- we are in part of them. We have put the machines. Now this machine is full. Now we are considered to expand.

In terms of volume, we have not disclose margin by category, but I can share with you that in terms of volume we have grown in domestic market quarter last year with quarter of this year, 70% in terms of volume in domestic markets.

And in terms of price, we have increased 5.5% in terms of price. So we combine all of the products, we sell in domestic market. Go to Australia. Australia is a -- they are performance very well. I know that the price of [indiscernible] increase but demand from Australia is very strong. We export 75% of we produce in Australia. And it's -- our operation there is a strong focus on export and export of beef, strong demand. alone is demand is strong for Brazil, is strong from Australia.

The demand of beef is strong because we increased the income of the population and because of this trend of the newer went with more protein and because of the adoption of the new drugs in Q1 and so on. And so, look, we see for the next year, we are very confident about the business there. availability of cattle it's good.

And the other business like like some is that we have there, we had in the past some challenge in terms of the disease this is over we are now performers in more than 20% of margin of this business that pork is going fair very well. We have increased the productivity. We share in best practice with the Brazil U.S. that bring a lot of leverage for our business there. We are investing in -- to update all of the farms that we have there. That help us to increase the yield increase productivity. And say, look, we are bullish in Australia business that we have there. And I think next year, we are seeing a stronger result from Australia as well.

Next, we have Ben Theurer with Barclays.

As well, 2 quick ones. So one, on the beef side, I mean, obviously, a lot being talked about, there's still a lot of like constraints, but maybe, Wesley, can you elaborate a little bit on what you're seeing in the market in terms of rebuild of the herd, how you think about 2026, the challenges maybe with an even tighter market if there's going to be some retentions to get a little bit of a sense how to think about '26 in the U.S. beef business versus 2025.

And then my second question is related to working capital. I remember back in the second quarter, you've talked a lot about building inventory, putting into the cold storage because of the product that was shipped out to China. So I just want to understand how you -- how we should think about the timing and the delay to basically put into our models as to when this inventory is supposed to come down a little bit. How long is it going to take you to ship this out.

Ben, so when it comes to BS 2026, yes, we're going to -- we're seeing half of retention that's happening a few [indiscernible] attention overall. Just a piece of data. This quarter, USD numbers, we processed 545 [indiscernible] was 545,000. Just as a reference, Q3 of 2022 was $973 million. So we're almost half of the quarter Q on a few years ago. So I mean it's a very important number, in my opinion. And we're seeing also just our team members traveling and meeting people seeing that it has happened.

So yes, we think 2026 will still be a challenging year from a supply perspective and then probably from there, it starts getting gradually better, not -- it's not going to be a an overnight get completely better, but it's going to be a gradual improvement from 2017 forward. So that's how we're seeing this.

On the working capital side for pork was a very, very short-term thing that was restricted to the second quarter of 2025. did not carry forward into the third quarter, we cleared all of that inventory that had the issues because of all the tariffs going back and forth. So no worry about that.

The working capital was more related to, like, out of Brazil on what you had to build because of Avianifluenza actually at the Seara site. No, no worries about. I mean it's helpful in the pork side as well.

I don't see that the Seara, there is we sell all of the additional number. I think it's volume yet because even flu. I don't see any is normal inventory of Seara. We don't see park we are selling a lot. We are the leader in this part park. We are the leader in far chicken. I think is normal.

Next, we have Mr. [ Ben Maho ] from Bank of Montreal.

First question is just on Seara. I just wanted to revisit the headwind with the China EU export bans on chicken -- is there any way to quantify the headwind during third quarter and the expected recovery pace of that headwind. That will be my first question.

Second question has to do with just the Brazil and Australian cattle offsets for the U.S. And just remind us on the beef cycles there. So it's my understanding that Brazil, the cycle plays out kind of first where availability gets tighter, and then second is Australia with kind of a longer tail and more of a hedge against the pressures that we're seeing in the U.S. So if you could just elaborate on that a little more.

Yes, it constrains the restriction to export to China and Europe is a place big role in terms of Seara export, the profitability of Seara because Seara is a strong market share in Europe.

In Europe is the premium market of breast reopen Europe make a lot of impact in the Seara P&L. Because we keep producing the breast, and we are not able to export to Europe. We changed this volume for the other market. When we go to the other market with this extra volume, we have a pressure in this market with extra volume, now we can back to reexport to Europe. That means that we reduce the presence in other markets.

The other market will be helped to increase the margin as well for the breast, then this is a huge impact. It's difficult to say how is the impact because there is a conjoined impact in the business.

The other thing about China, China plays a very important role in terms of the optimization of the carcass. The wins that we sold to China is a premium market compared to the other markets. Of course, the same explained about Europe, about breast, doing is the same. We move new wings from China to the other markets.

Now we are back to sell wins to China. And the other thing and important that fits and [indiscernible] that we are not market for all of the heating power that we have. Now we reopened that is reopened, it will make really extra revenue from the company. So look, this is a very important impact on the Seara business.

About the price increase, the price of livestock in Australia and Brazil, yes, this increase in price. But they can out more than compensate increase the price of the life count. We see strong demand from Australia. We have sold out our volume in Australia. We are seeing -- we are not seeing that this will be an impact next year for Australia will be a strong year.

In Brazil, yes, Brazil there is some reduction in the heart, the availability of -- but the reduction is considered the top we got this year and next year. We have grown more than 20%. Now some restrictions, but still much higher than the before means that we -- the market in Brazil will be key see a strong market next year as well.

And just to complement, obviously, that there is a as the U.S. exports a lot less, especially to Asian countries and other North American countries. It is a direct correlation to U.S. or to Australia and Brazil. export volumes being stronger, right? As we need more domestic beef in the U.S., we keep more beef in the U.S., export less out of the U.S., Automatically, you're going to see an advantage to our businesses in Australia and Brazil, and that's and that's a very important correlation that helps minimize the impact of the cycle in the U.S.

Next question comes from Carla Casella with JPMorgan.

You mentioned the Brazilian debt financing that you did. I'm just wondering, is that -- was that sold to the public markets? Or are there any concentration there of holders? And then I'm not sure if you gave a rate that you're paying on that.

Carla. So about the rate, yes, that depends on the tranches we had crunches, the longest one was a 4-year tranche was inflation plus 8%. But on a swapped basis, when you swap to dollars, it's dollar plus 6.2%. So all the tranches were launched at the rate that inside our bond curve in U.S. So that's one condition for any debt issuance is that it has to be inside my investment-grade curve. So that's what happened with this with these local debentures that we issued.

There was a lot of individual investors amended, but also treasuries from banks that generally they continue to be selling to individual investors throughout the next months because individual investors has a tax exemption on this kind of local debentures. And that's the reason why on a swapped basis, it is issued inside my bond curve.

Okay. That's great. And you do need -- I mean, you have cash flow in Brazil. So do you see, over time, putting more or less debt in Brazil? Or are you well balanced to where you'd like to be now in terms of Brazilian debt versus U.S. debt?

Great. Yes. I of my revenues, 12% of my rev -- total revenues is generated in Brazilian reals. Currently, I have around 10% of my debt in Brazilian reals. So I still have some room to put some local debentures that and to balance and have no need to hedge. So I have this current, we don't have currency exposure. So I still have some room to have more real out that but not that much. So I'm almost where we want to be in terms of currency exposure balance that is -- that in reals is more or less equivalent to my reals revenues.

Okay. That's great. And then just one other question. You mentioned the 2.5x leverage target for year-end. Is that using IFRS EBITDA or U.S. comp EBITDA.

Yes, IFRS EBITDA. So it will be below 2.5x in IFRS EBITDA.

Our next question comes from Henrique Brustolin, with Bradesco BBI.

A few follow-ups here on Seara as well. First, -- the seasonal offerings now at year-end have been gaining, I think, relevance in your portfolio. So I just like to hear a little more on how your expectations are for this year-end, especially thinking about the domestic market here in Brazil.

The second, on the production growth that we see for the Brazilian market, right? The there is the date of 7% growth in the breeder flock placements in Brazil this year. I know there are some bottlenecks. So I would just like to hear from you if you see that as a good proxy for what we should think about supply growth going forward? Or again, if given bottlenecks, it should be -- it could be a smaller number.

And the third one on the export prices, we see the softening of export prices at the margin, as you mentioned, Tomazoni, the question is whether that's entirely related to the point you mentioned before about relocation of volumes from Europe and China to these other markets. or if you also see maybe some signs of weakness in some specific markets. I think that would be really helpful in terms of thinking how Seara will shape up going forward.

First, the question for the period of that we see that this is become more and more important because we develop a portfolio of the product to attend this market. It's the customer market that we have a fit and some other products. And the market is -- we plan to grow above the next year. And we are seeing a strong market. We are just this morning before to have this call. I talked with the people from Seara's going to -- how we go the operation crystal operation and say they are very confident and happy with the demand so far.

Of course, this the first events go to the retail and the second demand iterative, the consumers buy the product in the shelf. But so far, we are seeing strong demand from the retailers. We are not seeing that any constraint in terms of the volume to sell in the -- and some of the news about the Brazilian market is the retail market is constrained.

But for our category, we are not seeing this constraint. We are sell not just the product further even. But just the current product and portfolio we have, we are selling well. We are not seeing this constrained in our portfolio.

The second question, if I understood it about export right?

It's about exports and prices whether that's related to the redirecting of volumes? And the other one was about the production growth if the 7% readers.

About it, we see now the -- with this reopened Europe and reopened China. We see we are opportunity for increase in price because some of the market with the extra volume, I mentioned before, was the present because not just us, but all of the Brazilian need to sell in this -- the market there is for this product, mainly for best in wins and see another opportunity for this product to grow in terms of price.

We are seeing some movements already in the market. And yes, for me, but the average price for Seara will be higher for sure because even we are not increasing the price, we just accept the new market, it will be increased our average price. And what is the challenge in terms of volume or pricing external market is the small birds that go to Middle East, but this remain very, very challenged market because they are -- there is a local production and the Brazilian before it was a big market for the Brazilian small bird and greener. And now we compete with the local production.

This is -- if you consider all of the market, you can see that this is the most difficult market. And about the increase in terms of the genetic and you mentioned the breeders, see, yes. But they increased, but they need increase in order to replace the old ones because we have restrictions in terms of availability of genetic before bridges before. And all of the -- or the Brazilian producer keep longer the bullets, the bleeders in the share in the farms in order to compensate the not availability of the new ones, -- now -- and then this is not good in terms of productivity, in terms of because when they get older, you the eggs that you can come from them is less ability, more mortality.

And now it's an opportunity to have to have a more healthy age in terms of breeders. And see, Brazil, I mentioned before that if you look at Brazil in this year, with a strong demand for the external market, fundamental protein, we are not go, they're not go because a lot of restriction really that come from the event I believe that next year, the export from Brazil will be strong. As we saw now in the last month was one of the record is part from Brazil.

I believe that Brazil will be compensated next year what we are not able to export this year far in the market.

Next question comes from John Baumgartner with Mizuho.

I'd like to ask about JBS Brazil. Thinking forward from here on the revenue side, can you speak to how resilient you expect domestic demand will be given higher prices just your expectations for resilience there. And then second, how export opportunities are evolving for Brazil.

And I'm curious about maybe the structural opportunities to diversify exports across Asia, Korea, Japan, maybe some opportunities to supply more into Mexico, the trade deal with the EU and Mercosur, how do you think about new export opportunities for Brazil that are longer lasting? And in 2026, specifically, the ability for any incremental demand from exports to support prices and minimize the pressure on profit margins from higher cattle costs.

Look, JBS Brazil is -- we have other correlated business we put together, but the main business is Friboi all of the in our beef business. We see that the market will be strong for the export to Brazil. Brazil in the last -- I think in the last 2 years, opened more than 100 new markets and they keep open market from Brazilian export for beef. And we see a strong demand and I think will remain next year, the demand from the market. and they are more than compensate the increase the cost of livestock more than compensate.

And the domestic market is remaining strong as well. I think it's -- for beef, we see that will be good next year for all of the market, even the Brazilian market because in Brazilian market, we are developing a special work with our key customers. we manage -- we call category of management 2.0 that we are managing the category inside of the retails. We manage the portfolio.

We manage the presentation. We training the people that they take care of the butcher area. And the good news from that decide to increase the volume of the beef, they are increased the volume for all other categories. It means that the retail, they have a partnership with Friboi they are able to grow not just in beef, but all of the categories that we have a strong program here is a mature program. It's proved the results here in Brazil. And the external market, I think, is this time of market demand that is huge. We are not seeing a restriction on that.

Our next question comes from Thiago Bortoluci with Goldman Sachs.

The first one, and I think is for Wesley. I remember was early in the year you mentioned a bunch of investments into your U.S. beef operations, right? And we know, obviously, those are aiming for the medium term, not necessarily this cycle. But I'd just like to understand from you, given the run rate profitability that we're delivering there, how much of those investments or any other work you could do in terms of efficiency could help protecting a little bit the sequential evolution in 2026. And how comparable you think margins could go on a sequential year versus where we are year-to-date. This is the first one.

And the second one, I think, is for Guilherme. You have the soft guidance right of returning $1 billion per year to shareholders. either through dividends and buybacks. I know this year was a very special 1 because of the listing, but you are delivering so far a run rate closer to EUR 2 billion maybe EUR 1.5 billion if you exclude the dividends related to the listing. Does it mean maybe there might be space for you guys to be a bit higher on shareholder returns particularly, as you mentioned, there is no clear M&A on the table for next year.

Sure. So the investments we're doing are not going to impact 2026. They're going to impact 2027 going forward. So we shouldn't be seeing anything there. Actually, it's perfect timing to think about it because 2026 will still be a low supply for cattle and all of those plants are going to be with their revamp and extra better efficiency, better capacity for us for value-added items even for more volume. Into 2027, which is when things should starting to look better, at least better than '26 and then from then on get better. So it's -- actually, the timing there couldn't have been better.

Just overall, we should probably think of 2026 in a year that's a margin perspective, I think will look similar to what 2025 looks like.

So in our decision to return money to shareholders, the main variable, so far is our leverage given that we want to keep investment ready, and we are a BBB company. So that's the main variable for that. So this year, again, we will -- besides having all these return that you mentioned, we'll finish the year below 2.5x, which is a very comfortable level. So we are now in the process of budgeting for next year.

We also have to wait for the first quarter. That's always a cash consumption quarter. So generally, those decisions will start to be doing in second quarter next year. So probably returns will be more skewed to the second half of 2026. But I think we are confident that we can continue to have the dividends of around $1 billion per year as long as we can keep leverage on our comfort zone.

And again, any excess, we will be deciding in terms of share buybacks or extra dividends and also depending on M&A opportunities.

And our next question is with Mr. Lucas Ferreira with JPMorgan.

I hope you hear me well. Quick follow-up, Guilherme that $700 million expected working capital investments for 20 just ballpark numbers, how much of that is volume growth and how much is pricing? So just we have a sensitivity here of how things could go.

I would say it could be half and half. This $700 million, as I mentioned, in the beginning depends on a lot of variables, that is out of our control. So basically, I did an average of many years before. But we won't -- it all depends on 3 things: on grains, prices, in livestock prices and finished product prices. This can swing a lot.

So this is again -- the $700 is working capital is something that is really what can swing more in terms of what we're forecasting for next year. So maybe, again, we can even have a neutral value, right, not consuming, not releasing, except for the biological assets that you always be consuming. That's why I separate biological assets.

But again, this number was just an average of years before because we will have some volumes that will impact that, especially from the expansion that we do, but the main impact will always be on the prices of these 3 elements that I mentioned.

A quick follow-up on the biological assets that you're guiding pretty much like a flattish number writing dollars. Obviously, there is the FX effect. But can we assume, given all the industry inflation and the cost of grandmothers, et cetera, that this implies also that your -- and obviously assume that chicken is most of this biological assets, right, that the -- your placements are sort of flattish or at least not growing significantly. Is it fair to assume.

Because the main variable that impacts this is the grain prices. So basically, we are considering that grain prices will not be much higher next year, so we can consider it flattish, okay? Because the livestock with chicken and pork, they basically are valued through their cost of feeling, that's the grain.

Next question comes from Pooran Sharma with Stephens.

Just wanted to follow up on some of the hedges you talked about last quarter. I think you mentioned you put on -- you took a $250 million loss due to some of the hedges. I was just curious if you're able to share how much of that rolled off in 3Q? And how much are -- should we expect to see roll off in 4Q?

Yes. Bear in mind that we are talking about the cash impact of the derivatives because they offset on the physical purchase.

But you're right. On the third quarter, we have this impact on this negative impact, that will be -- so far, it's been with the decrease in future market is being offsetting from a cash standpoint in the fourth quarter. Of course, this depends from now to the end of the quarter, how well the behavior. But so far, we are releasing cash on the derivative side. But bear in mind that it is on a margin basis, it's offset by the physical purchases.

Great. And just just thinking about the pork business here. I was just wondering, you mentioned the supplies, the industry supply still remain constrained. And I was just wondering just given where hog production margins are at, why don't you think you've seen any signs of expansion.

And the last hogs and pigs report seem to indicate that we're not going to see any expansion. I think other players within pork processing are also walking away from raising hogs. So at this point, when you look at your integrated operations, do you see the shorter hog supply situation here in the U.S. as a benefit to your business? Given just where hog production margins are at? Or is it more of a negative just given it it'd be impacting your pork packer side of your business? Would just love your thoughts on that.

So we see obviously this year, we had a lower volume of cues next year, we're probably going to see higher cues if help is better than this year and believe it will be better than this year. So we might see more hogs into next year.

Now this whole strategy of how much Hog we raise and how much -- we are basically for 25% of our more or less 25% of our -- of the hogs wood process we raised. It's a number that we think we like it. We like it to be around that. So our hog procurement is very well balanced, taking risk on hog prices, corn risk, hog risk and there is some cut-out businesses as well that's hogs that we buy indexed on cut out. So it's a very -- the way we buy hogs is a way that minimizes volatility on each one of the indicators.

So even in years that we don't have a great operations in great revenue or a great result in hogs in hog production. It ends up not being a terrible year for us. I think the way that we buy hogs and the way that we structured how procurement allows us not to feel huge impacts if one of these 3 price indexes, cut out, grain or hogs, if they have big swings, we're able to kind of hedge that a little bit.

So we're not obviously, we want our pork processing in our port hog production to do well at the same time. But if 1 does worse and the other one does better, it's almost a hedge for us.

Next question comes from Leonardo Alencar with XP.

I would like to discuss a little bit further about Brazilian cattle. This year was positive surprise, no surprise upside, but then we don't have much visibility for 2026. So first, what's your base case for cattle availability the next year?

And second, scenario, maybe a potential scenario of a tighter supply of cattle. Should we view of this project, this shift retail stores that we'll be building up for a long time now -- should we view that as a margin hedge? Or maybe the scenario of retailers with lower margins, squeezed margins, will be a good opportunity to increase the pace of growth on that area? Those are my 2 questions.

The availability of cattle in Brazil, we see that the information we have that will be last 3% to 5%. This is the market information about different search will be 3% to 5%. But Leonardo, it's important to see this 3% to 5% for a high level. It's -- and this still a lot of cell available in the market because we are not -- if you back to 2023, we are seeing that we are much, much higher than the time even that we have some reduction now, we have the reduction ever a different level that we remain much more availability as before.

This is one thing that we see that market and in Friboi have a special program to purchase the cattle in the market. We are long-term strategy with the farms in order to have a reliable supply along the years. It's one thing.

The second thing, we see the Brazilian market grow a lot of the [indiscernible]. And the rate of growth in feed is ungradable rate because with the booming of the ethanol card industry in Brazil, the availability of DDG helps to enhance the diet of the cattle. And the combination of the improvement of genetic and the improvement of diet we see that the age -- the size of the field of the Brazilian beef in Greece.

And this is another point that you need to put in consideration because of that, we improve the quality, we improve and we improve the let's say, we improved the quality of the projects that got to be harvest. And this is -- but because of that, we are so excited about the Brazilian market because if you compare to Brazilian to U.S. earned, U.S. has less than half of Brazilian herds, and they produce more beef opportunity for Brazil grow beef market.

It's a huge, huge opportunity to -- in terms of genetic, in terms of diet in terms of management of the herds. It is one thing. And the other thing you mentioned about our stock on Swift store, Swift store was developed because we believe that the frozen beef there is a market. And they -- and if you sell frozen, we save some waste in the chain, some yields that -- when you sell fresh, we are losing the yield and during the process still to go to the consumers.

And the consumer attitude, they go to the market, they not go every day to the stores. They go one day, they buy, they go to home, and then frozen, the met -- and this was the idea to develop the concept, why they [indiscernible] they at home, when they further at home, they don't have the best condition to frozen. Let's frozen that they need inside of the plant that we save the yields and we get better products.

And this was the idea to develop this market. And this market is going well. And we not compete with our customers because we have the solution to put in starting -- some of the customers, they want to have this frozen beef inside of this -- in the store, we go there and we build a swift store inside of the store. This is one segment we are growing. And the other segment, as I mentioned before, it is a category of management. We are -- we call a [indiscernible] we are teach the people that operate the budget area in order they are preparing to attend better the consumers.

And the other way, we help them to define the mix and to define the presentation of each one of the gut. And then that is a win-win strategy because they don't just sell more meat, but they sell more of the other products inside of the stores.

Our next question comes from Priya Ohri with Barclays.

One follow-up. I know you've gotten some questions around the working capital. But it does seem like relative to what you discussed on the second quarter call, in the breakeven calculation, the working capital need has gone up about $400 million for this year, $450 million for next year. Can you just walk us through sort of what specifically is driving that?

And then my second question is just around any progress you've made with regards to updating your bond ticker. I know that's something that you guys have been discussing for a little bit. So I just wanted to see where you were there.

So basically, this year, the increase was mainly because of livestock prices and also finished product prices. Next year, as I mentioned, there's a lot of variables of this uncertainty. So I just made an average of last year because this is, again, depends on the varies that I mentioned before.

So I can tell you what this year, it was mainly for the reasons of livestock prices and finished rather prices and some increase in volumes. The figure we are in the process of making the NV, so our Netherlands company now as a co-issue as well. So these will mean restructuring.

So maybe with this argument of being restructuring, the U.S. Bloomberg, if now they can take the ticket [indiscernible] from the ticker, but that's that's what our next trial will be once we finish making the NV as a poissuer.

Great. Do you have a time line around that possibly -- and then just one final question around whether you've gotten any indications from BNDES around how they're thinking about selling down their existing holding, which is for sale.

No, we don't have a time frame, but I think by next year, we will have the restructuring of the poise in place. And BNDES, we have no news on that.

Our next question is with Igor Guedes with Genial.

My question is about U.S. pork. We understand that although domestic demand remains resilient, supported by consumers switching to cheaper proteins. Margins still seems to reflect the effect of weaker prices for byproducts and of all -- the operation has made progress in expanding its high value-added portfolio, including the strengthening in prepared product line, but this has not yet been enough to offset the compression factors. We have an agreement at Chinese, the Chinese products will be subject to a 40% tariff in the U.S. Do you think this agreement will be enabled to return of sales of byproducts and of a to China? with the administration of the 2 countries reaching a better understanding on tariffs. Is it possible to see this margin improvement going forward. Thank you very much.

So obviously, if we have more markets for our products, including offs, it's always better and always going be better for margins overall to have more options. But margins are not compressed because of that. I mean we're just back to to a 10% EBITDA here, close to where we have been operating in the previous quarters, except for the second quarter.

So margins are not compressed because of that right now. It's just -- it was compressed in the second quarter because of some backup that we had on the experts, but not anymore.

And again, obviously, if we have more market access for meat or for us or for any one of our byproducts, it's always positive, but I wouldn't say the margins are compressed because of that though.

Thank you, ladies and gentlemen. With there being no further questions, I would like to pass the floor to Mr. Gilberto Tomazoni.

Thank you all for joining us today, and it's our continued interest in JBS. This quarter once again highlighted the stretch of our global protein platform and the way that we operate it. With discipline and that guides our work every day, as we close, I want to express my appreciation to our more than 280,000 team members around the world. They are committed to excellence in this is the foundation of our performance and the reason we continue to deliver consistent and long-term value. Thank you.

This is the end of the conference call held by JBS. Thank you very much for your participation, and have a nice day.