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    JBS
    Earnings call· Mar 2026(Q1 FY26)

    JBS N.V. Q1 FY26 earnings call JBS

    May 13, 2026 Source

    Executive summary

    JBS Q1 FY26 — Diversified Platform Navigates Challenging Market with Record Sales

    JBS navigated a challenging Q1 FY26 with its diversified global platform, achieving record net sales despite significant headwinds in North American Beef and a higher cash burn. The company focused on operational excellence and cost discipline, while strategic investments in value-added products and balance sheet strengthening position it for improved performance as market conditions normalize. Management remains committed to its long-term leverage target and capital allocation strategy.

    Highlights

    5

    • Achieved record first-quarter net sales of $22 billion, an 11% growth.

    • Seara delivered a strong EBITDA margin of 15.5% supported by export demand and innovation.

    • JBS Brazil reported a 4.5% EBITDA margin, its second-highest first-quarter margin in history.

    • Australia's operations remained positive with a 7.1% margin, benefiting from improved cattle conditions.

    • Strengthened balance sheet with $2.5 billion bond issuance, extending average debt maturity to 15.6 years.

    Concerns

    5

    • Beef North America reported a negative EBITDA of $230 million with a -2.3% margin due to constrained cattle supply and higher costs.

    • Free cash flow was negative $1.5 billion, a higher cash burn compared to Q1 2025's $970 million consumption.

    • Adjusted EBITDA declined by approximately $400 million, reflecting weaker operating results.

    • Leverage increased to 2.77x net debt to EBITDA, nearing the upper end of the target range.

    • U.S. Pork experienced a softer quarter impacted by seasonality and plant adjustments, contributing to a $200 million EBITDA impact.

    Guidance & targets

    3
    CategoryTargetConfidence
    Cash flow breakeven EBITDA
    $5.7 billion to $6 billion
    high materiality
    Medium
    Growth CapEx
    more than $1 billion
    medium materiality
    High
    Net Debt to EBITDA
    between 2.5 and 3x
    high materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Beef North America
    Impacted by constrained cattle supply and higher costs. Organizational and operational adjustments were advanced to unify business units and improve performance.
    EBITDA: negative $230 million
    		———-2.3%
    Seara
    Supported by strong export demand, innovation, and growth in value-added products, despite currency pressure and cost inflation. The outlook for poultry in Brazil remains positive.
    		———15.5%
    JBS Brazil
    Second-highest first-quarter margin in history, supported by disciplined commercial execution and favorable demand. Friboi delivered strong top-line performance.
    		———4.5%
    Australia
    Operational performance remained positive. Cattle conditions in Queensland are the best in the last 3 years, reinforcing a positive outlook.
    		———7.1%

    Operational metrics

    26
    Net sales growth
    11%YoY
    Q1 FY26

    Achieved record first-quarter net sales of $22 billion.

    EBITDA
    $1.1 billion
    Q1 FY26

    Total EBITDA for the quarter.

    Adjusted EBITDA
    $960 million
    Q1 FY26

    Adjusted EBITDA for the quarter.

    Adjusted operating income
    $544 million
    Q1 FY26

    Adjusted operating income for the quarter.

    Adjusted operating income
    $444 million
    Q1 FY26

    Adjusted operating income for the quarter.

    Adjusted net income
    $241 million
    Q1 FY26

    Adjusted net income for the quarter.

    Adjusted earnings per share
    $0.23
    Q1 FY26

    Adjusted earnings per share for the quarter.

    Return on equity
    22%
    Q1 FY26

    Return on equity for the quarter.

    Return on invested capital
    15%
    Q1 FY26

    Return on invested capital for the quarter.

    Capital expenditures
    $566 millionmore than doubled vs Q1 2025
    Q1 FY26

    Increased capital expenditures, primarily driven by expansion CapEx.

    Expansion CapEx
    $390 millionvs $79 million in Q1 2025
    Q1 FY26

    Significant increase in expansion-focused capital expenditures.

    Working capital impact
    $252 million
    Q1 FY26

    Additional working capital consumption. Excluding this, working capital would have been approximately 23% better compared to Q1 2025.

    Average debt term
    15.6 years
    Q1 FY26

    Extended debt maturity profile through bond issuance and tender offer.

    Average cost of debt
    5.7%
    Q1 FY26

    Average cost of the company's debt.

    Net Debt to EBITDA
    2.77x
    Q1 FY26

    Leverage ratio at the end of the quarter, in line with the long-term target of 2x to 3x.

    Revolving credit lines
    $3.4 billion
    Q1 FY26

    Available revolving credit lines providing financial flexibility.

    Available cash
    $3.5 billion
    Q1 FY26

    Available cash providing financial flexibility.

    Free float passive funds
    40%
    Q1 FY26

    Percentage of free float held by passive funds, compared to a sector average of 60%.

    Net Debt to EBITDA
    4.84x
    Q3 2023

    Leverage reached this level in Q3 2023, but investment grade was maintained due to cyclicality.

    Net Debt to EBITDA
    1.89x
    2024

    Leverage came down in 2024 without specific effort.

    Adjusted EBITDA decline
    $400 millionYoY
    Q1 FY26

    Reflecting weaker operating results compared to Q1 2025.

    EBITDA impact
    $200 million
    Q1 FY26

    US Beef contributed approximately $200 million to the $400 million YoY EBITDA decline.

    EBITDA impact
    $200 million
    Q1 FY26

    US Pork contributed approximately $200 million to the $400 million YoY EBITDA decline.

    Operating margin
    -3.9%
    Q2 2025

    Q2 2025 was particularly weak for US Beef, impacted by hedging issues.

    Debt maturity
    $2.9 billion
    2032

    No significant debt maturities until 2031, with $2.9 billion maturing in 2032.

    Dividend limit (leverage)
    3.75%
    Ongoing

    Leverage threshold for dividend decisions; above 3x enters attention zone.

    Industry KPIs

    2
    MetricValueDetails
    Manufacturing network modernizationunderway
    Elasticity consumer response commentarystrong

    Deals & partnerships

    1
    Omanacquisition

    Acquisition mentioned as an international project, financed locally.

    Capital programs

    6
    Pures prepared foods facilityunderway

    Located in Walker County, part of expansion CapEx for value-added products.

    Key Iowa fully cooked Becle and sausage facilityunderway

    Part of expansion CapEx for value-added products.

    Perry Iowa fresh sausage plantunderway

    Part of expansion CapEx for value-added products.

    Cactus Texas beef processing plant modernizationunderway

    Modernization project for beef processing plants.

    Greene Colorado beef processing plant modernizationunderway

    Modernization project for beef processing plants.

    Paraguay chicken plantunderway

    International expansion project.

    Risks & headwinds

    6
    Constrained cattle supply and higher costs in North America BeefOngoing, expected to be a challenging year (2026).

    Negative EBITDA of $230 million, -2.3% margin in Q1 FY26.

    Mitigation: Organizational and operational adjustments, unifying business units, focus on efficiency.

    Higher cash burn and increased leverageQ1 FY26, with expectation to normalize by year-end.

    Free cash flow negative $1.5 billion in Q1 FY26 (vs. $970 million cash consumption in Q1 2025); leverage 2.77x.

    Mitigation: Stronger cash generation expected in H2, flexibility with credit lines and cash, monitoring capital allocation.

    FX impact on Seara and AustraliaQ1 FY26.

    Seara margin impacted by ~10% FX devaluation; Australia margin impacted by ~15% Aussie dollar devaluation.

    Mitigation: Seara's strong export demand and value-added products; Australia's positive operational performance.

    Geopolitical disruptions (Middle East) and regulatory scrutiny (EU) for Seara exportsQ1 FY26 for Middle East; ongoing for EU.

    Additional input costs for logistics due to Middle East disruptions; no quantified impact from EU considerations yet.

    Mitigation: Demand in Middle East remains strong, extra costs absorbed by market; Brazil is providing clarifications to EU, confident in compliance.

    Grain price volatility and uncertaintyFY26-FY27 outlook.

    Potential for increased prices due to weather, fertilizer costs.

    Mitigation: Well-positioned from a risk management perspective, prepared for potential volatility including reduction in Brazilian safrina crops.

    Brazilian cattle price volatility and potential domestic market oversupplyAfter June (post-China quota fulfillment).

    Price of cattle expected to decrease after China quota fulfillment, leading to reduced harvest and potential for more volume in domestic market.

    Mitigation: JBS Brazil's strong commercial execution, value-added product strategy, and category management in retail.

    Q&A highlights

    6

    Asked for the breakeven EBITDA, how JBS manages leverage near the 3x limit, and if the U.S. beef business model might change, e.g., vertical integration.

    Guilherme estimated breakeven EBITDA for FY26 between $5.7 billion and $6 billion. He explained that JBS manages leverage within 2x-3x, using levers like discount receivables or vendor finance if needed, and expects to end the year within target. Gilberto stated vertical integration in cattle ranching is unrealistic due to specialization and high costs.

    “for this year, the breakeven EBITDA, the cash flow breakeven EBITDA will be anything between $5.7 billion and $6 billion.”

    asked by Isabella Simonato · answered by Guilherme Cavalcanti

    2 min read6 chapters

    Detailed Narrative

    01

    Market Volatility and Operational Adjustments

    JBS experienced a challenging Q1 2026 marked by market volatility🌐, seasonality, and operational disruptions, particularly in North American Beef. The company responded by implementing organizational and operational adjustments across its U.S. beef platform, unifying fed beef, regional beef, and case-ready business units to reduce duplication and improve coordination. These actions aim to enhance efficiency and performance during a difficult cattle cycle.

    02

    Diversified Platform Resilience

    Despite headwinds, JBS's diversified global platform demonstrated resilience. Seara delivered strong results with a 15.5% EBITDA margin, driven by export demand and value-added products, while JBS Brazil achieved its second-highest first-quarter EBITDA margin of 4.5%. Australia also maintained positive operational performance with a 7.1% margin, benefiting from favorable cattle conditions in Queensland.

    03

    Strategic Investments and Efficiency Focus

    The company continues to invest in efficiency and long-term value creation, with capital expenditures more than doubling to $566 million, primarily for expansion CapEx of $390 million. Initiatives include piloting AI for decision-making and commercial execution at Friboi and JBS Brazil, and advancing automation at Seara to increase productivity and support higher value-added categories.

    04

    Balance Sheet Management and Capital Allocation

    JBS strengthened its balance sheet by issuing $2.5 billion in bonds and tendering $1.45 billion, extending its average debt maturity to 15.6 years. While leverage increased to 2.77x, the company aims to remain within its 2x to 3x net debt to EBITDA target range by year-end, leveraging strong second-half cash generation and maintaining flexibility with $3.4 billion in credit lines and $3.5 billion in cash.

    05

    U.S. Beef Outlook and Industry Dynamics

    The U.S. beef business faces prolonged challenges due to constrained cattle supply and high costs, with Q1 EBITDA being negative $230 million. Management does not foresee vertical integration into cattle ranching as a realistic solution but emphasizes internal operational improvements. The potential reopening of the Mexican border for Friboi cattle is highlighted as the most significant short-term relief for U.S. supply.

    06

    Global Protein Trends and Product Innovation

    JBS observes strong global demand for protein, influenced by factors like GLP-1 adoption and a broader understanding of protein's health benefits. The company is adapting its portfolio to this structural trend, accelerating innovation in high-protein and value-added products, and investing in prepared foods to capitalize on stable demand and higher margins.

    AI-generated summary of the company’s earnings call. Not investment advice.