JBS (JBS) Q4 2025 Earnings Call Transcript

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Date

Wednesday, Feb. 11, 2026, at 8 a.m. ET

Call participants

• Chief Executive Officer — Gilberto Tomazoni
• Chief Financial Officer — Guilherme Cavalcanti
• President, Global Beef — Wesley Mendonça Filho

Takeaways

• Net revenue -- $23 billion in the quarter and $86 billion for the year, both records for the company.
• IFRS EBITDA margin -- 17.4% in the quarter and 7.9% for the year.
• U.S. GAAP EBITDA margin -- 6.5% in the quarter and 6.7% for the year.
• Net income -- $415 million for the quarter and $2 billion for the year, growing 15% year over year.
• Earnings per share -- $0.39 for the quarter and $1.89 for the year.
• Adjusted net income -- $500 million for the quarter and $2.2 billion for the year, with EPS of $0.47 and $2.10, respectively, excluding nonrecurring items.
• Free cash flow -- $990 million for the quarter, up from $906 million in the same quarter last year; $400 million for the year.
• Return on equity -- 25% reported for the year.
• Return on invested capital -- 17% for the year.
• Leverage ratio -- 2.39x at period end, within long-term net debt to EBITDA target band of 2x-3x.
• Average debt maturity -- Debt portfolio averages 15 years with a 5.7% average borrowing cost; no significant maturities until 2031.
• Liquidity position -- $3.5 billion in revolving credit lines and $4.8 billion in cash on hand as of quarter end.
• Dividend announcement -- $1 per share announced, payable June 17, 2026.
• U.S. listing impact -- Average trading volume is "up approximately 3x" since NYSE listing; U.S. investors now account for "nearly 70% of the company free float."
• Australia segment topline growth -- 30% year-over-year revenue growth in the quarter; "strong EBITDA growth and margin expansion."
• Brazil beef business sales -- 26% year-over-year growth in the fourth quarter, with historic beef processing volume at "around 42 million heads."
• Seara division -- "International chicken margins were higher than prepared foods domestic margins," with continued growth in the value-added and innovation product lines.
• Pilgrim’s Pride (U.S. Chicken) -- Volume growth outpaced industry average in "case ready and the small bird" segments; "Just Bare" surpassed $1 billion in retail sales.
• CapEx spending -- $1.1 billion in expansion CapEx in 2025; planned capital expenditures of $2.4 billion for 2026 ($1.3 billion for expansion, $1.1 billion for maintenance).
• EBITDA cash flow breakeven -- Estimated at approximately $5.7 billion for 2026, assuming similar working capital and biological asset changes as in 2025.
• Seara investment ramp-up -- Division's capacity expected to increase by "around 10%-13%" upon completion of investments in 2026, depending on mix.
• Working capital -- 2025 saw an $850 million working capital consumption; $600 million of livestock payments were postponed from 2025 to 2026.

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Risks

• Wesley Mendonça Filho said, "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," referencing U.S. beef operating conditions.
• CEO Tomazoni stated, "it's difficult to predict the unfolding events if production of exceed market capacity," highlighting potential profitability compression if supply outpaces demand.
• CFO Cavalcanti noted, "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," emphasizing continued uncertainty in commodity and biological asset-driven working capital swings.
• Tomazoni indicated, "We should expect higher costs in 2026" for corn-based feed, citing upward price trends and global supply factors.

Summary

JBS N.V. (NYSE:JBS) management confirmed that adjusted net income was $2.2 billion and adjusted earnings per share was $2.10 for 2025. The Australia and Brazil beef units delivered double-digit revenue increases, driven by supply/demand imbalances and record processing volumes, respectively. U.S. capital markets activity post-NYSE listing led to expanded liquidity and global investor participation, with management citing a "multiple expansion" yet noting continued valuation at a peer discount. Announced CapEx for 2026 targets both organic growth — across U.S., Brazil, and Australia — and enhanced value-added production, as recent acquisitions in eggs and planned plant projects reach completion. Near-term headwinds in U.S. beef and higher feed costs prompted the company to reiterate its focus on brand strength, channel diversity, and free cash flow resilience in the face of global volatility.

• Management expects Seara's production increases and innovation pipeline to drive incremental export and domestic value-add sales upon investment completion.
• Filho stated, "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 and February," flagging increased volatility and rapid changes in U.S. beef market conditions.
• Cavalcanti explained, "on the derivatives line, what you saw there is any sort of derivatives that's not related to the operations," directly addressing a P&L line item of analyst concern.
• CEO Tomazoni highlighted global demand for protein, structural consumption drivers, and geographic diversification as key to sustained growth, citing trends in "is -- we are expecting to grow the demand from beef in Europe. The other part, we see demand in all of the Asia. Take China out of this the component of Asia, but all of the Asia, the demand is growing for 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. It's a trend because the demand decrease in the local production decreased, decreased because of the cycles there or because of some disease in the market. We see Middle East now we are facing a war there, but the flow of the product to the market didn't change so far." alongside new market entries.
• NYSE index inclusion may bring additional passive fund demand, with Cavalcanti referencing potential Russell index inclusion "around 14 million shares demand."
• Dividend policy calls for $1 billion in annual distributions, with excess cash flow used for share repurchases or further CapEx based on future conditions.
• CFO Cavalcanti clarified, "no significant debt maturities until 2031," supported by "90% of the total debt is at fixed rates" and extended debt portfolio duration.
• Regional outbreaks of avian flu, climate risks to grain supply, and war-related logistics were cited as active operational variables, with management reporting that incremental freight costs in the Middle East have thus far been absorbed by the market.
• Gilberto Tomazoni described the recent resumption of Seara's exports to China as positive for margins due to premium pricing on select chicken cuts.

Industry glossary

• Cutout: The calculated value of a carcass based on primal (major) meat cuts, reflecting the market price of the processed meat product.
• Case ready: Packaged meat products prepared for immediate display and sale at retail locations without further butchering.
• Big bird/small bird segments: Poultry processing lines differentiated by bird size, affecting product mix, yields, and market targeting.
• Friboi+: Branded beef program in Brazil designed to deepen client relationships and drive category sales growth through differentiated retail offerings.
• GLP-1: Glucagon-like peptide-1, referenced in the context of demand for protein linked to health and nutrition trends.
• Deferred livestock: Livestock for which payment or recognition is postponed to a future period, impacting working capital timing and cash flow.
• EBITDA breakeven: The level of EBITDA necessary to generate free cash flow neutrality after adjusting for expected capital expenditures, interest, working capital, and other recurring costs.

Full Conference Call Transcript

Gilberto Tomazoni: 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 $8 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 greatest strength, allowing JBS to navigate industry cycles or any 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 debt 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 cattle 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 Friboi+ continues to deepen client relationship and support growth in the domestic market. At Seara, we continue to advance our strategy and strengthening brands and expanding high value-added products. In recent years, Seara 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. Pilgrim's delivered volume growth above the industry average in segments such as case ready and the small bird.

The big birds segment also improved performance through better yields, mix and cost efficiency. Brand diversification continues to progress and Just Bare 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. Pork 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 balanced diets. 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-added 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.

Guilherme Cavalcanti: 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 billion in 2025. Adjusted EBITDA in IFRS totaled $1.7 billion, which represents a margin of 7.4% 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 billion. 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 came in 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 $1.15 billion 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 healthy 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: [Operator Instructions] We have our first question from Lucas Ferreira with JPMorgan. Mr. Ferreira, you may go ahead.

Lucas Ferreira: 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 Russellville plant wondering if those are completed. If operations remain fine, if 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 beef 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 U.S. beef for now?

Gilberto Tomazoni: Lucas, thank you for your question. And I will start here to talk about update in terms of Pilgrim's 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 bird 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, in reality is not a transformation. It's adequate to produce the raw material for our prepared business.

Before we sell -- we sell the breast 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 and buy and 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 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 and at the price of the breast increased. And if you -- USDA forecast for this year is that it will be 2% growth in chicken supply. If we grow 3% in the price market increase, we can anticipate if the forecast 2% will be a very good year for Pilgrim's 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 Bare have a strong demand and we are investing in new factories. We see that this year will be a good year for Pilgrims.

Wesley Mendonça Filho: 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, 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 and 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 cattle 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 cutout, big fluctuations in cattle, more so than what we're used to. So that's just an effect of having such a small volume. If you -- 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 striking really, it's very difficult to forecast how that a 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 -- 14 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 pension, 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.

Operator: Ladies and gentlemen, we have Mr. Gustavo Troyano from Itau would like to ask a question.

Gustavo Troyano: My first question is on Seara 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 to 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 U.S. beef and a follow-up on the first question actually is, would you say that the current balance between slaughtering 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 cattle availability is restricted right now. So just wanted to get your updated thoughts on that as well.

Gilberto Tomazoni: Thank you, Gustavo. Talking about chicken in Brazil and Seara and after that Wesley 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 growing international demand and new cases of poultry farming influenza in several countries with culture that produce as a competitor of Brazil. And this could boost demand even further. The other hand, we have 2% 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 has many of tools to manage this. For example, we can export more fertile 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 strengthening 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 innovative in terms of the way that you present the product to the consumers.

Wesley Mendonça Filho: 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 processed 33 million head, and now we're going to be below 27 million. So we're around 27 million, 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 companies.

Operator: Our next question comes from Lucas Mussi with Morgan Stanley.

Lucas Mussi: 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 your 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 with 2025, if you have any on working capital.

Gilberto Tomazoni: 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 quota of Australia to China because Australia is a strong market demand and has a very strong presence in Japan and Korea and all of the Asian markets and U.S. as well and Europe, then Australia is easy to manage the volume for each one of these markets that we are not really worried about this situation. In Brazil, may be more complicated. But our I will talk related to that.

But our Friboi team is very confident that 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, especially for beef. China's quota, 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 believe that some countries will likely not be able to complete their quotas. 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+ now I think last week at the supermarket conventional in Rio de Janeiro, Nielsen, you know Nielsen, gave a presentation comparing a store with a regular butcher shop to one with Friboi+ and the results showed that the start with the program has a higher revenue and 40% higher overall sales, not just the butcher area, the overall sales, that it's a strong program to support the growth of our customers.

And at the same time, the retailers 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 fits 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 feed lot in Greece, this coinciding with the end of quota of China, which is large -- and we know that China is the largest pork selling 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.

Guilherme Cavalcanti: 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. It doesn't mean a lower cash consumption, given that the operational side is slightly worse.

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

Thiago Duarte: Yes, two 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 Tomazoni 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 natural chicken exports as opposed to the domestic prepared food portfolio. So my question is really if that understanding is accurate in terms of, again, natural margin versus prepared food margins for Seara in the quarter?

Wesley Mendonça Filho: So especially when the market 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 -- 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, one quarter could kind of misleading positive or negative either way in this sort of business, especially with the sort of volatility that we've been having on cutout and cattle price. Yes, that's in that foundation.

Gilberto Tomazoni: Thiago, 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 prepared 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 Seara 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 value. 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.

Wesley Mendonça Filho: Thiago, 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.

Operator: Next is Isabella Simonato from Bank of America.

Isabella Simonato: 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, Tomazoni, 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?

Guilherme Cavalcanti: 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, we had postponed $400 million. 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 that is in the inventory side, the same thing.

We are seeing the same level of inventory rebuild that we saw in the last years.

Gilberto Tomazoni: Isabella, thank you for your question. When you look for -- we have two separate questions. One is, if I understood well, one is related to the behavior of the consumer and domestic market with Seara. We see that the market starts a little bit weak in the beginning of the year in January but they're back, now we are -- when we look for our sales, we are growing 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 or not value-added it's prepared.

But say, look, the traditional, they are selling less than the innovation. We have a huge growth in the innovation line with high-protein products, air-fry products designed for air fryers, 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 growing, even some challenge and some different chains, but it's growing. But it start as just to be clear, we start very tough, very tough 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 soybean meal with these 2 key elements for our feed. In the corn market, we see an upward trend. We should expect higher costs in 2026. And due to -- if you look for reducing the global stock and solid demand, increased crude oil price that boost in ethanol margin as well the cost and availability of fertilizers. U.S. acreage at risk given the soybean ratio. And the second crop in Brazil, in face of some climate risk. That we are, I think, is we expect higher costs for corn.

In the soybean mill, we see price stability and do the -- if you look for the crush margin, they are positive and as the crush margin 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 soybean meal, we need to monitor U.S. acreage issue in the biofuel policy. But anyway, our outlook remains bearish.

Operator: Our next question comes from Henrique Brustolin with Bradesco.

Henrique Brustolin: I have 2. The first on U.S. beef Wesley, if you could comment about the Mexico cattle 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 you complete the ramp of some of those plants?

Wesley Mendonça Filho: Henrique, 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 head 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 all we can to keep the disease outside of the U.S. They are working on the sterile flies 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 like 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 in the short term for sure, it's 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 forecast.

Gilberto Tomazoni: Henrique, about the investment of Seara, all of them will be completed this year. And when completed the additional capacity will be around 10%, 13%. I will say 10%, 13%, but can depend on the mix. There's some mix that is less volume, high value, but it depends on that. But you can consider 10%, 13% in terms of volume capacity growth.

Operator: Your next question comes from Benjamin Theurer there with Barclays.

Benjamin Theurer: 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 Pilgrim's Pride has 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.

Guilherme Cavalcanti: Ben, so basically, 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. Also the Oman project, we also announced a plant in Paraguay. Cactus, Texas, also on the beef side, so everything that we've been announcing. And of course, all these capital expenditures are phased out throughout the years, and that's the portion for 2026.

Benjamin Theurer: Okay. Perfect. And then as you kind of like look from just general capital allocation, I mean, obviously 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 generally 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 DNA to grow .

Guilherme Cavalcanti: 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 $1.1 billion level, we are very comfortable with this capital allocation.

Operator: Our next question comes from Thiago Bortoluci with Goldman Sachs.

Thiago Bortoluci: Congrats on the results. I have two follow-ups. The first one this is on volumes, right? Tomazoni, 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 your growth and which regions make you more excited with the opportunities for 2026. Particularly, if you could also comment on the opportunities in Africa. I know you announced a few things last year. Just an update here, and then I can follow up with my second question.

Gilberto Tomazoni: Thiago, thank you for your question. If I understood well, you talk about Seara or you talk over about...

Thiago Bortoluci: Volumes. Overall.

Gilberto Tomazoni: 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 Seara increased in volumes in Europe. And the demand in chicken in Europe mainly is driven by some 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, sell more in 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. Take China out of this the component of Asia, but all of the Asia, the demand is growing for 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.

It's a trend because the demand decrease in the local production decreased, decreased because of the cycles there or because of some disease in the market. We see Middle East now we are facing a war 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 port and when you change port, we need to use trucks to deliver the product 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 in Jeddah and the investment we have announced in Oman because the demand is strong. The U.S., there is a strong demand for beef as Australia, Brazil, sell a lot streamers and from U.S. When we say a lot more than before, I would not say compared to the production in the matter. Sales compared to what previous forecast. If you look, we are not seeing that one 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 fed processed 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 change the guidelines and 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 health habits that for young generation for old generation, there's a new medicine technology, this GLP-1. And combined all of this, the demand is very high, very high. I don't know if I answered your question, Thiago.

Thiago Bortoluci: Perfectly, Tomazoni. This is very helpful. On the second one, still talking about the conflict in the Middle East. Obviously, this is an ongoing situation. But could you help us framing the impact so far in your freight expenses -- and by freight, I'm mentioning seaborne freight, but also truck freight 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?

Gilberto Tomazoni: Thiago, I think I just mentioned before, the flow, the product to go to the market didn't change. Didn't change from Brazil. Didn't change from Australia and any of the other markets 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 of the cost. The second cost is the cost that we need to change the port -- some -- the destination of the product, some destination will change from one port to the other port.

And when we change the destination for the different part, we need to have the truck transportation because to there 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.

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

Gilberto Tomazoni: No. In Brazil, we see the increase of price of diesel. And we see that increase in terms of the cost of freight. 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 how far the development of this war, I believe that other costs will be increased, the cost of packaging and what is depend on the oil will be increased as a raw material.

I think this will be the impact, I think, the fertilizer will be impacted, and then it could be -- then I mentioned before, when they talk about the cost of the corn because the fertilizer will be higher, the availability of fertilizers, maybe the use of fertilizer will be reduced and then the productivity of the crop will be low. But it's -- I believe it's too early to predict. Too early because you don't know how will be the end of this war. I think this is -- I saw this impact in the short term, but could be back if they end the war. I think it would all be back.

It is -- I think this is a situation that we are -- how we are looking and act in this situation.

Operator: Mr. Benjamin Mayhew from Bank of Montreal would like to ask a question.

Benjamin Mayhew: Can you hear me okay? Yes.

Gilberto Tomazoni: Yes, good morning.

Benjamin Mayhew: 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.

Gilberto Tomazoni: Ben, thank you for your question, Ben. 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 of the model that we work. All business units need to understand, need to know very well, where 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 in 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 deploy each one of the process and subdivisions of the business. That is when you look -- if you look it's a huge opportunity we have yet because that new technology, a new way to do the things. We are closing the gap. We open a bigger gap, and this is the way that we see -- or get operational 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 and U.S., brazil has more than double of the [indiscernible] than U.S., more than double. And we produce just this year or last year, Brazil produced a little bit more meat 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 [indiscernible] all of the protein produced in Brazil is very competitive because we are grain competitive in terms of the cost of the grain. We are very competitive. We have good quality management. And I think it's -- Brazil is one. We see U.S. 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 [indiscernible]. Now I think it's a huge chunk of the volume for red meat is [indiscernible] in the market because they start to appreciate the product made by red meat from chicken, say, leg meat.

This is I think in U.S. is 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 pork 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 grain 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 excited 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 .

Benjamin Mayhew: 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. heifer 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.

Wesley Mendonça Filho: Thank you, Ben. So yes, we are seeing the herd review 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 heifers, 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 cow slaughter in 2025, for full year, we processed 2.3 million head. In 2022 was 3.9 million heads. So we're almost half of what the beef cow slaughter was in 2022.

I think those things -- that information is important, and it shows that if it wasn't for -- to keep more females 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.

Gilberto Tomazoni: 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 cows 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 age in -- but the good producer or the modern farmers.

They live 2 years to get the product finished, to get the cattles finished means that at the same time, we have a reduction in the age of the cattles. And this combined with increased a lot of feedlot in Brazil. The feedlot in Brazil was not well developed. Now you can see a lot of feedlots 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 in feed.

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.

Operator: Our next question is from Heather Jones with 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?

Leonardo Alencar: I'd like to go -- 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 -- even from the end of 2025 or 2026, maybe better than the commodity business. It is possible to do that exercise?

Wesley Mendonça Filho: So demand is -- it 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 pork loins. 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.

Leonardo Alencar: Okay, in the value-added products?

Wesley Mendonça Filho: Sorry, that value-added question was about which business unit? Sorry, I missed that.

Leonardo Alencar: 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?

Gilberto Tomazoni: 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.

Leonardo Alencar: 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?

Wesley Mendonça Filho: 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, Leonardo.

Operator: We have Mrs. Heather Jones back online, if you would like to go ahead with your question Mrs. Jones.

Unknown Analyst: Are you able to hear me now?

Gilberto Tomazoni: Now, yes.

Operator: 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.

Guilherme Palhares: 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 each 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?

Wesley Mendonça Filho: 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 competitive place in the world, probably one of the most competitive places in the world the American rancher 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 it doesn't need doesn't -- in the long run, shouldn't depend on imports.

Gilberto Tomazoni: And Guilherme 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 we 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.

Guilherme Palhares: 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.

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

Operator: Our next question comes from Pooran Sharma, you may go ahead -- with Stephens, you may go ahead, Mr. Sharma.

Pooran Sharma: Can you hear me okay?

Gilberto Tomazoni: Yes.

Pooran Sharma: 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 hog disease pressure in the U.S. and if you would expect that to weigh in on margins in FY '26?

Wesley Mendonça Filho: 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.

Pooran Sharma: 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 stock has seen 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?

Guilherme Cavalcanti: 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 10-Ks and 10-Qs instead of 6-K in order to be eligible to the S&P family. So then I think 2027. So I think this year, Russell is 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 S&P 500, 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.

Operator: And our next question comes from Ricardo Boiati from Safra.

Ricardo Boiati: One. My first question goes to Wesley. I wanted to circle back to the U.S. 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 ranchers' 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 ranchers' 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?

Wesley Mendonça Filho: Ricardo yes, there is -- obviously, there is issues that are very relevant, succession is always very relevant, and 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, it 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.

Guilherme Cavalcanti: 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 comfortable debt 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.

Operator: Our next question comes from Igor Guedes with Genial.

Igor Guedes: Can you hear me?

Gilberto Tomazoni: Yes.

Igor Guedes: Okay. 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 avian 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 even 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 standard 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 influenced it the most? Was it the increase in volume, the price improvement or the fixed cost dilution?

Gilberto Tomazoni: 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 for chicken feet is China. Then we increase in terms of -- we -- feed don't produce were not market to deliver all of the production. But then we do open the markets, they improve volume and improve price.

And about wings, they improved the price because the value of the wings 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 of 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 feed, around 50.

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.

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

Priya Ohri-Gupta: 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.

Guilherme Cavalcanti: 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.

Priya Ohri-Gupta: Okay. Great. And then I know you're pretty clear just now about not having any maturities in the next 5 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 rate backdrop that -- or would this rate backdrop not necessarily went?

Guilherme Cavalcanti: 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 -- 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.

Operator: And next, we have Mr. John Baumgartner with Mizuho.

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?

Wesley Mendonça Filho: 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 there, right? It's we never had an the earnings call or Pilgrim's 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.

John Baumgartner: Okay. And a follow-up also in North America. Guilherme, I think you mentioned there's really no imminent M&A on the horizon here, but I am curious on the egg 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.

Guilherme Cavalcanti: John. So basically, it all depends on having the opportunity at the asset price. So sometimes it's not related to the current egg 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.

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

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, and 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.

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

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