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    JBS
    Earnings call· Jun 2025(Q2 FY25)

    JBS N.V. JBS

    Aug 14, 2025 Source

    Executive summary

    JBS Q2 FY25 — Record Net Sales and Strategic Investments Amidst Challenging Cycles

    JBS achieved record net sales in Q2 FY25, demonstrating the resilience of its diversified global platform amidst macroeconomic headwinds and challenging cycles in key segments. The company completed its dual listing, enhancing global visibility, and continues strategic investments in prepared foods, while maintaining financial discipline and returning value to shareholders through dividends and a new share buyback program.

    Highlights

    5

    • Record net sales reached $21 billion, marking a 9% increase year-over-year.

    • Pilgrim's Pride achieved its highest EBITDA in history at $687 million, driven by lower grain costs and resilient U.S. demand.

    • Seara delivered consistent results with an 18.1% EBITDA margin despite the avian influenza outbreak.

    • Net leverage stood at 2.27x, aligning with long-term targets and reflecting strong financial management.

    • The company announced a $400 million share repurchasing program, complementing $1.2 billion in dividends paid this quarter.

    Concerns

    4

    • The U.S. beef business faced pressure from an unfavorable cattle cycle, narrowing the spread between livestock costs and beef prices.

    • The pork business was temporarily affected by trade restrictions, impacting short-term performance.

    • An avian influenza outbreak in Brazil led to temporary market closures for Seara, impacting its EBITDA by 1.5-2 percentage points.

    • Free cash flow saw a $1.1 billion difference year-over-year, attributed to higher CapEx, increased inventories, negative livestock hedging impact, and higher tax payments.

    Guidance & targets

    20
    CategoryTargetConfidence
    Free cash flow breakeven
    $5.5 billion
    high materiality
    High
    Free cash flow breakeven
    $4.5 billion
    high materiality
    High
    Capital expenditures
    $2 billion
    medium materiality
    High
    Capital expenditures
    $2 billion
    medium materiality
    Medium
    Working capital
    $900 million
    medium materiality
    High
    Working capital
    $250 million
    medium materiality
    High
    Legal settlements
    $300 million
    low materiality
    High
    Legal settlements
    0
    low materiality
    High
    Biological assets
    $650 million
    low materiality
    High
    Biological assets
    $650 million
    low materiality
    High
    Interest expenses
    $1.15 billion
    medium materiality
    High
    Interest expenses
    $1.1 billion
    medium materiality
    High
    Leasing expenses
    $500 million
    low materiality
    High
    Leasing expenses
    $500 million
    low materiality
    High
    Leverage
    below 2.5x
    high materiality
    High
    Interest coverage
    consistent with 7.4x
    medium materiality
    High
    Dividends
    around $1 billion
    high materiality
    High
    Growth CapEx
    around $1 billion
    medium materiality
    High
    Prepared foods projects ROI
    around 20%
    medium materiality
    High
    Prepared foods margins
    around 15%
    medium materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Pilgrim's Pride (Poultry)
    Achieved highest EBITDA in its history, supported by lower grain costs and resilient U.S. demand. Results also reflected continued growth in the prepared foods portfolio, strong relationship with key customers, and solid performance across Fresh and Case Ready segments in U.S., Mexico, and Europe.
    EBITDA: $687 millionEBITDA margin: highest in its history
    		4% increase——$687 million
    Seara (Brazil Poultry)
    Delivered another quarter of consistent results despite the avian influenza outbreak in Brazil. Driven by a disciplined commercial strategy, product mix management, and a strong focus on innovation. The outbreak impacted EBITDA by 1.5-2 percentage points due to temporary market closures.
    EBITDA margin: 18.1%
    		———18.1%
    JBS Brazil (Friboi Beef)
    Recorded net revenue 20% higher than in Q2 2024, driven by strong demand in both international and domestic markets, which partially offset the sharp increase in cattle prices. Lost a little bit in gross margins but compensated with higher volume.
    EBITDA margin: 6.4%
    		20% higher20%—6.4%
    JBS Beef North America
    Net revenue grew 14% year-over-year driven by strong demand and record cutout values in the U.S. However, profitability continues to be pressured by the challenging cattle cycle, with live cattle prices at record highs, and additional headwinds related to global trade and animal health concerns in Mexico. Management expects internal performance to improve in Q3.
    		14% growth14%—pressured
    JBS Australia
    Revenue growth was primarily driven by higher volumes of beef exports. EBITDA margin reached 12.7%, increasing 50 basis points year-over-year, reflecting greater availability of animals for slaughter and gains in operational efficiency. Strong performance came from beef, with other businesses stable. Expects 2-digit margins in coming quarters.
    EBITDA margin: 12.7%EBITDA margin change: increasing 50 basis points compared to the same period last year
    		20% growth20%—12.7%
    JBS USA Pork
    Net revenues decreased by 5% year-over-year. The business was affected on a short-term basis by trade restrictions, but performance is expected to return to normal levels over the next few quarters, with an immediate recovery in margins expected in Q3 2025. The IFRS margin for the quarter was 6.5%.
    IFRS margin: 6.5%
    		decreased by 5%-5%—6.5%

    Operational metrics

    52
    Net sales
    $21 billion9% increase year-over-year
    Q2 FY25

    Record net sales for the quarter.

    Adjusted EBITDA
    $1.8 billion
    Q2 FY25

    Company-wide adjusted EBITDA.

    Adjusted operating income
    $1.2 billion
    Q2 FY25

    Company-wide adjusted operating income.

    Net profit
    $528 million
    Q2 FY25

    Company-wide net profit.

    Adjusted net income (excluding nonrecurring item)
    $583 million
    Q2 FY25

    Adjusted for a nonrecurring item.

    Earnings per share
    $0.48
    Q2 FY25

    Reported earnings per share.

    Adjusted earnings per share (excluding nonrecurring item)
    $0.53
    Q2 FY25

    Adjusted for a nonrecurring item.

    Return on equity
    25.7%
    Q2 FY25

    Company-wide return on equity.

    Return on invested capital
    17%
    Q2 FY25

    Company-wide return on invested capital.

    Capital expenditures increase
    $104 millionhigher
    Q2 FY25

    Increase in capital expenditures year-over-year.

    Finished goods inventories increase
    $242 millionincrease
    Q2 FY25

    Increase in finished goods inventories in the U.S., expected to return to operating results over coming quarters.

    Livestock hedging negative cash impact
    $250 millionnegative impact
    Q2 FY25

    Negative cash impact on operating results due to hedging, expected to return in following quarters as physical purchases settle.

    Legal settlements increase
    $122 millionincrease
    Q2 FY25

    Increase in legal settlements.

    Tax payments increase
    $257 millionhigher
    Q2 FY25

    Higher tax payments, mainly due to improved results from PVC and Australia in recent quarters.

    Seara chicken inventory impact
    $51 millionimpact
    Q2 FY25

    Impact on Seara's chicken inventory caused by market closure due to a single avian flu case.

    Net leverage
    2.27x
    Q2 FY25

    Net leverage at the end of the quarter, in line with long-term targets.

    Average debt maturity
    15 yearsextended from 11 years
    Q2 FY25

    Extended due to bond refinancing.

    Average debt cost
    5.6%increased by 25 basis points
    Q2 FY25

    Average cost of debt after refinancing.

    Interest coverage
    7.7xstable compared to previous quarter
    Q2 FY25

    Interest coverage ratio.

    Share buyback program
    $400 million
    Q2 FY25

    New share buyback program announced.

    Revolving credit lines
    $3.4 billion
    Q2 FY25

    Available revolving credit lines.

    Available cash
    $3 billion
    Q2 FY25

    Available cash position, including excess cash.

    LTM EBITDA decline
    $141 milliondecline
    LTM Q2 FY25

    Decline in last 12-month EBITDA, primarily contributing to increased leverage.

    Dividends paid
    $1.5 billion
    Q2 FY25

    Dividends paid in the quarter, contributing to increased leverage.

    Bond issuance size
    $3.5 billion
    Q2 FY25

    Upsized bond issuance due to strong investor demand.

    Seara local debentures
    $160 million
    Q2 FY25

    Issued by Seara.

    Debt retired
    $3 billion
    Q2 FY25

    Used to efficiently retire nearly all maturities through 2031.

    Excess cash retained from bond issuance
    $500 million
    Q2 FY25

    Retained from the $3.5 billion bond issuance.

    2029 bond coupon
    3%
    2029

    Bond kept outstanding due to low coupon.

    2031 bond coupon
    3.75%
    2031

    Bond kept outstanding.

    2022 notes coupons
    3.625% and 3%
    2022

    Notes kept outstanding.

    Cattle price
    $190
    Q4 FY24

    Cattle price at the last quarter of last year.

    Cattle price
    $230-$238
    Peak

    Peak cattle price.

    Cattle price
    $225
    Q2 FY25

    Cattle price during the second quarter.

    Cow slaughter decrease
    10-15%decrease year after year
    Annual

    Compounding decrease in cow slaughter, indicating herd review.

    Mexican feeder cattle imports
    1 million-1.2 million
    Annual

    Number of feeder cattle typically imported from Mexico to the U.S., currently disrupted.

    Dividends paid (average)
    $975 millionaverage
    2020-2023

    Average annual dividends paid since 2020.

    Dividends paid
    $800 million
    FY20

    Dividends paid in fiscal year 2020.

    Dividends paid
    $800 million-$900 million
    FY21

    Dividends paid in fiscal year 2021.

    Dividends paid
    $450 million
    FY23

    Dividends paid in fiscal year 2023, with a listing dividend promised for this year.

    Prepared foods as % of total sales
    15%
    Current

    Estimate for what is considered 'really processed process'.

    Prepared foods as % of total sales (including brands)
    50%
    Current

    Estimate if including brands and value-added products.

    Pilgrim's prepared foods capacity increase
    almost double
    Future

    Expected increase in capacity from new plant in Walker County.

    Pork sausage and cooked sausage capacity increase
    20-25%
    Future

    Expected increase in capacity from new plant investments.

    Average capacity increase (U.S. prepared foods)
    25-30%
    Future

    Average expected increase in total capacity on volumes in the U.S. from new projects.

    Average daily trading volume increase
    more than doubledcompared to last year
    Post-listing

    Increase in average daily trading volume since NYSE listing.

    Meetings with JBS at conferences increase
    60%increase
    Upcoming

    Increase in scheduled meetings with JBS at upcoming conferences in September.

    Assets under management (passive)
    54%
    Current

    Percentage of assets under management that are passive, highlighting importance of index inclusion.

    Brazil beef price increase
    20%increase
    Q2 FY25

    Increase in beef price in Brazil during the quarter.

    Brazil livestock price increase
    40%increase
    Q2 FY25

    Increase in livestock price in Brazil during the quarter.

    Seara avian flu EBITDA impact (June)
    5%
    June FY25

    EBITDA impact on Seara during the month of June when the outbreak happened.

    Seara avian flu EBITDA impact (current)
    1.5-2%
    Current

    Current EBITDA impact on Seara due to remaining market closures.

    Industry KPIs

    5
    MetricValueDetails
    Brand platform growthStrong performance
    Organic net revenue growth9%%
    Adjusted EPS operating income$1.2 billionUSD
    Volume mix vs pricing decompositionBeef price increased 20%, livestock price increased 40%%
    Elasticity consumer response commentaryResilient demand

    Deals & partnerships

    1
    MantiqueiraAcquisition of 50% stake in Mantiqueira, a Brazilian egg producer.

    JBS acquired 50% of Mantiqueira, viewing it as a new wave of growth and an opportunity to become a global leader in the egg category. This investment increases diversification of the platform and is a priority for growth in Brazil and the U.S. egg sector.

    Capital programs

    4
    New Fresh Sausage Facility in Iowaannounced$135 million

    Benefit: supports growth of prepared foods portfolio

    Disclosed in May, designed to support the growth of JBS' prepared foods portfolio and meet growing demand.

    Beef Plant Upgrades in Texas and Coloradounderway$200 million

    Benefit: supports growth of prepared foods portfolio

    Allocated for upgrading beef plants, designed to support the growth of JBS' prepared foods portfolio.

    New Prepared Foods Facility in Georgia (Pilgrim's)underway$400 million

    Benefit: supports growth of prepared foods portfolio

    Pilgrim's is building this facility, designed to support the growth of JBS' prepared foods portfolio.

    Iowa Facility Acquisition and Expansionannounced$100 million

    Benefit: transformed into largest ready-to-eat bacon and sausage plant in U.S. operation

    Announced yesterday (August 13, 2025), designed to support the growth of JBS' prepared foods portfolio and meet growing demand. Expected to increase pork sausage/cooked sausage capacity by 20-25%.

    Risks & headwinds

    5
    Unfavorable Cattle Cycle (U.S. Beef)Bottom expected this year and early next year; gradual recovery from late 2027/early 2028.

    Narrowed spread between livestock costs and beef prices; live cattle prices at record highs (e.g., ~$225 per hundredweight in Q2 FY25).

    Mitigation: Focus on operational efficiencies; short-term positioning adjustments; confidence in ongoing herd review (cow slaughter down 10-15% compounding, less heifers to market).

    Trade Restrictions (Pork)Short-term impact in Q2 FY25; immediate recovery expected in Q3 FY25.

    Pork business net revenues decreased by 5% year-over-year in Q2 FY25 due to trade disruptions with China (100%+ tariff).

    Mitigation: Product reshuffling; trade with China has resumed to normal after a truce.

    Avian Influenza Outbreak (Brazil)Q2 FY25 impact; expected reopening of markets in coming weeks.

    Initially impacted Seara's EBITDA by 5% in June; currently impacting EBITDA by 1.5-2 percentage points due to temporary market closures (Europe, China).

    Mitigation: Robust biosecurity protocols; swift and technical response from Brazilian sanitary authorities; diplomatic efforts to reopen markets (e.g., President Lula discussed with President Xi Jinping).

    Mexican Feeder Cattle Import DisruptionShort to medium term; ongoing since November last year.

    Disruption of ~1 million-1.2 million head of feeder cattle typically imported to the U.S.; border shut since November last year, reopened, then shut again.

    Mitigation: Mexican government working with U.S. government to reopen and ensure continued flow of cattle.

    U.S. Tariffs on Brazil BeefRecent; full impact to be seen as inventory is used and global market rebalances.

    Impact on JBS globally will be immaterial due to platform diversification; specific plants that exported more to U.S. may be affected. Too early to estimate real impact.

    Mitigation: Global platform allows production to be redirected; rebalancing of global market (other countries substituting Brazilian product, U.S. product remaining domestic).

    What to watch in Q3 FY25

    5

    U.S. Pork Margins Recovery

    Q3 FY25
    CurrentAffected by trade restrictions in Q2 FY25
    TargetNormalized margins

    Why it matters

    Indicates resilience and immediate recovery from one-off📎 disruptions, impacting overall profitability.

    The pork business was affected on a short-term basis by trade restrictions, but the expected performance to return to normal levels over the next few quarters.

    Q&A highlights

    5

    Clarification on FCF breakeven for 2025/2026 and the $250 million hedging impact, specifically how much is expected to return to EBITDA.

    Guilherme reiterated CapEx, working capital, legal settlements, biological assets, interest, and leasing expenses for both years. He explained the hedging impact as a temporary cash outflow due to rising cattle prices, expected to return as physical purchases settle, and that the cash margins deposited will be released as cattle prices normalize.

    “This cash is expected to return in the following quarters as the physical purchases are settled.”

    asked by Lucas Ferreira · answered by Guilherme Cavalcanti

    2 min read6 chapters

    Detailed Narrative

    01

    Dual Listing Milestone

    JBS completed its dual listing on the New York Stock Exchange, a strategic move to enhance global visibility, broaden its investor base, and reinforce its position as a leading food company. This milestone marks a new chapter focused on long-term value creation through operational excellence, diversification, innovation, and strong brands, positioning JBS for future global demand.

    02

    Strategic Investments in Prepared Foods

    The company is making significant investments in its U.S. prepared foods portfolio, including a new $135 million fresh sausage facility in Iowa, $200 million for beef plant upgrades in Texas and Colorado, and $400 million for a new Pilgrim's prepared foods facility in Georgia. An additional $100 million investment was announced to expand the Iowa facility into the largest ready-to-eat bacon and sausage plant in U.S. operations, aiming to meet growing customer demand and increase capacity by an average of 25-30% across both chicken and pork prepared foods.

    03

    Financial Discipline and Capital Structure

    JBS reaffirmed its commitment to financial discipline, ending the quarter with net leverage at 2.27x, in line with long-term targets. The company successfully refinanced $3.5 billion in bonds, extending average debt maturity from 11 to 15 years while maintaining a low average cost of 5.6% (up only 25 basis points). This robust financial position, combined with $3.4 billion in revolving credit lines and $3 billion in available cash, supports continued value creation opportunities.

    04

    Avian Influenza Management in Brazil

    Seara demonstrated resilience despite an avian influenza outbreak in Brazil. The swift and technical response from Brazilian sanitary authorities, coupled with strict industry-wide controls, ensured only one isolated case was confirmed in a commercial farm. While the outbreak initially impacted Seara's EBITDA by 5% in June, the current impact is reduced to 1.5-2 percentage points due to ongoing market closures in Europe and China, with confidence in their reopening soon.

    05

    Cattle Cycle Dynamics and Outlook

    The U.S. beef business continues to face pressure from an unfavorable cattle cycle, characterized by record high live cattle prices and narrowed spreads. Management anticipates the bottom of the cycle to be this year and early next year, with a gradual recovery expected from late 2027 to early 2028. In Brazil, the cattle sector is undergoing a transformation with increased feedlot usage and genetic improvements, leading to optimism for livestock production in the coming years.

    06

    Shareholder Base Evolution and Index Inclusion

    Following the NYSE listing, JBS has seen its average daily trading volume more than double, and its IR team is receiving increased inquiries from new U.S. investors. The company is actively engaging with the investment community through non-deal roadshows and aims to broaden its foreign investor base. Efforts are underway to meet eligibility criteria for major indices like FTSE (rebalancing in September) and Russell (expected June next year), given that 54% of assets under management are passive.

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