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    JBS
    Earnings call· Jun 2026(Q2 FY26)

    JBS N.V. Q2 FY26 earnings call JBS

    Aug 11, 2026 Source

    Executive summary

    JBS Q2 FY26 — Resilient Performance Amid Volatility, Strategic Expansion in Asia

    JBS delivered a resilient Q2 FY26, navigating complex global protein markets with improved profitability in several segments and record net sales. The company announced a significant strategic partnership to accelerate expansion in Southeast Asia, while managing headwinds in U.S. beef and pork demand. Management remains focused on operational excellence, cash generation, and disciplined capital allocation.

    Highlights

    6

    • Adjusted net income was $218 million for the quarter.

    • Adjusted EBITDA (IFRS) totaled $1.43 billion with a 6% margin.

    • U.S. Beef EBITDA margin improved from a negative 3.9% last year to a negative 1.3% this year.

    • U.S. Pork EBITDA margin reached 8.9% compared to 6.5% a year ago.

    • Net sales reached a record of $24 billion for the second quarter.

    • Strategic partnership with GIC includes a $2.5 billion equity investment, providing access to up to $5 billion for growth in Asia.

    Concerns

    5

    • Net loss was $102 million with a negative EPS of $0.10, impacted by non-recurring items.

    • Net financial expenses increased by $319 million due to bond premiums, derivatives, and higher interest.

    • Net leverage ended the quarter at 3.1x, slightly above the long-term target of 2-3x.

    • U.S. Beef continues to operate in a challenging environment with tight cattle supplies and historically high cattle costs.

    • Brazil beef market faces challenges with the suspension of the China quota, expected to resume in October.

    Guidance & targets

    8
    CategoryTargetConfidence
    FCF breakeven EBITDA
    $5.1 billion
    high materiality
    High
    Capital expenditure
    $2 billion
    high materiality
    High
    Working capital consumption
    negative $350 million
    medium materiality
    High
    Leasing expenses
    $500 million
    low materiality
    High
    Effective tax rate
    25%
    medium materiality
    High
    Mexican cattle flow to U.S.
    normalized level
    high materiality
    Medium
    Brazil chicken production growth
    2.8%
    low materiality
    Medium
    Brazil chicken export growth
    2.7%
    low materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    JBS Brazil (Beef)
    Delivered a strong quarter driven by export demand and disciplined commercial execution. Reported its highest EBITDA for the second quarter even with elevated car price. Focus on maximizing value per animal through integrated commercial network.
    Adjusted EBITDA (IFRS): $269 millionAdjusted EBITDA Margin (IFRS): 5.9%
    		———$269 million
    U.S. Beef
    Delivered a quarter of solid improvement despite challenging environment with tight cattle supplies and high cattle costs. Improvement reflects better plant performance, optimized operating footprint, and strengthened commercial capabilities. Expects further benefits from capacity optimization and Mexican border reopening.
    EBITDA Margin: -1.3% (Q2 FY26)EBITDA Margin (YoY comparison): -3.9% (Q2 FY25)
    		———-1.3%
    U.S. Pork
    Delivered another quarter of solid performance despite more challenging market fundamentals. Demonstrated ability to compete at the highest level, focusing on operational excellence and customer service.
    EBITDA Margin: 8.9% (Q2 FY26)EBITDA Margin (YoY comparison): 6.5% (Q2 FY25)
    		———8.9%
    Seara (Brazil Chicken)
    Margins remained strong despite a tougher year-over-year comparison, less favorable currency environment, and changing export market dynamics. Volume growth reflects improvements in operating quality and commercial execution. Domestic market pork price was below expectations.
    EBITDA Margin: 14-15% (healthy)Volume growth: Grew volumes
    		———14-15%

    Operational metrics

    42
    Adjusted net income
    $218 million
    Q2 FY26

    Excluding non-recurring items.

    Adjusted EBITDA (IFRS)
    $1.43 billion
    Q2 FY26

    Reported under IFRS.

    Adjusted EBITDA (U.S. GAAP)
    $1.3 billion
    Q2 FY26

    Reported under U.S. GAAP.

    Adjusted operating income (IFRS)
    $790 million
    Q2 FY26

    Reported under IFRS.

    Adjusted operating income (U.S. GAAP)
    $866 million
    Q2 FY26

    Reported under U.S. GAAP.

    Net loss
    $102 million
    Q2 FY26

    Significantly affected by non-recurring items.

    EPS
    -$0.10
    Q2 FY26

    Negative EPS for the quarter.

    Adjusted EPS
    $0.20
    Q2 FY26

    Excluding non-recurring items.

    Net financial expenses increase
    $319 million
    Q2 FY26

    Main drivers were premiums increase in bond tender offer, market-to-mark derivatives, and monetary restatements/interest expenses.

    Premiums increase in bond tender offer/debenture
    $172 million
    Q2 FY26

    Related to tender offer for bonds and Brazilian local debenture.

    Market-to-mark derivatives, net of FX
    $53 million
    Q2 FY26

    Impact on net financial expenses.

    Monetary restatements and high interest expenses
    approximately $120 million
    Q2 FY26

    Impact on net financial expenses due to increasing debt.

    Bargain price gain (acquisition)
    $81 million
    Q2 FY26

    Final calculation of bargain price gain of the acquisition of [indiscernible].

    Antitrust settlements
    $133 million
    Q2 FY26

    Impact on net loss.

    Adjusted EBITDA decline (driver of FCF)
    $324 million
    Q2 FY26

    Partially offset free cash flow improvement.

    Net cash interest expenses (driver of FCF)
    $129 million
    Q2 FY26

    High due to higher concentration of interest related to bonds issued in 2025, Real appreciation, and increasing total debt.

    Total capital expenditures increase
    $163 million
    Q2 FY26

    Increase in total capex.

    Expansion CapEx
    $159 million
    Q2 FY26

    Portion of total capital expenditures.

    Lower tax payments YoY (driver of FCF)
    $135 million
    Q2 FY26

    Contributed to free cash flow improvement.

    Working capital consumption
    -$350 million$500 million improvement versus last year
    FY26

    Expected for full-year 2026, driven by higher receivable discounts and larger advanced payments from Chinese customers.

    Legal settlements
    $100 million
    FY26

    Already realized in 2026.

    Biological assets
    $850 millionflat versus 2025
    FY26

    Expected for full-year 2026.

    Interest expenses
    $1.3 billionincrease of $150 million versus initial estimates
    FY26

    Expected for full-year 2026 due to higher net debt.

    Revolving credit line
    $4.2 billionincreased from $3.5 billion
    August 2026

    Increased while reducing the owning cost.

    Cash liquidity combined with RCF
    approximately $7.7 billion
    Q2 FY26

    Total liquidity position.

    Average debt term
    15.3 years
    Q2 FY26

    Average maturity of debt.

    Average cost of debt
    5.7%
    Q2 FY26

    Average cost of debt.

    Net leverage
    3.1xslightly above long-term target of 2-3x
    Q2 FY26

    Net debt to EBITDA ratio.

    Dividend payment
    $1 billion
    June 2026

    Dividend payment made in June.

    Mexican cattle flow to U.S. (historical)
    1.52 million
    historical

    Historical level of cattle flow from Mexico to the U.S.

    Douglas Arizona Port capacity
    300,000-400,000
    annual estimate

    Estimated capacity for the Port of Douglas Arizona, representing about 1/3 of usual Mexican flow.

    Mexican states approved for U.S. export
    2
    current

    Only Chihuahua and Sonora have approval to export cattle to the U.S.

    U.S. Chicken supply growth
    4.5%
    Q2 FY26

    Industry supply grew faster than demand.

    Brazil chicken production growth
    5.6%
    Q2 FY26

    Growth in chicken production in Brazil.

    Brazil chicken export growth
    20%
    Q2 FY26

    Strong growth in chicken exports from Brazil.

    Brazil domestic chicken availability growth
    3.1%
    Q2 FY26

    Growth in chicken availability in the domestic market.

    Southeast Asia + Oceania population
    750 million
    current

    Market population for expansion opportunities.

    Southeast Asia population
    640 million
    current

    Population in the focus area for strategic partnership.

    Beef cows processed (vs 2022)
    halfvs 2022
    Q2 FY26

    Volume of beef cows processed has significantly decreased compared to 2022.

    Net sales
    $24 billion
    Q2 FY26

    Record net sales for the second quarter.

    JBS UK business revenue
    $5 billion
    annual

    Revenue for the UK business.

    China beef quota volume
    150,000 tons
    prior period

    Volume of beef that China was importing from Brazil before the quota suspension.

    Industry KPIs

    4
    MetricValueDetails
    Brand platform growthGrew volumes
    Adjusted EPS operating income$0.20USD
    Retailer trade negotiation statusworking alongside retailers and categories partners
    Elasticity consumer response commentaryinelasticity of protein demand

    Deals & partnerships

    1
    GIC (Temasek Investment Management)Strategic equity investment in Australia and New Zealand operations to fund expansion in Indonesia and Southeast Asia.$2.5 billion equity investment for a 25% stake; access to up to $5 billion for acquisitions and growth opportunities.

    JBS's Australia and New Zealand operations remain fully consolidated under JBS management. GIC contributes $800 million initially, then up to $2.5 billion in equity. The priority for the first 2 years is to invest in Indonesia.

    Risks & headwinds

    6
    U.S. Beef challenging environmentongoing

    EBITDA margin -1.3% (improved from -3.9% YoY)

    Mitigation: Improved plant performance, optimized operating footprint, strengthened commercial capabilities, increased productivity, capacity optimization, Mexican border reopening.

    Pork market challengesQ2 FY26

    Weaker demand than chicken and beef, especially in prepared foods.

    Mitigation: Focus on operational excellence, customer service, disciplined capital allocation.

    Net financial expenses increaseQ2 FY26

    $319 million increase

    Mitigation: Liability management (issued $2.5 billion bonds at attractive rates/tenors).

    Net leverage above targetQ2 FY26

    3.1x net debt to EBITDA (target 2-3x)

    Mitigation: Strong cash generation focus, disciplined working capital management, prudent capital allocation. Expects to finish year at similar levels.

    Brazil Beef China Quota Suspensionuntil October 2026

    150,000 tons of volume impacted; potential fall in cattle prices.

    Mitigation: Dynamic optimization of commercial strategy, production allocation across export markets, strong brand and category management in domestic market. Production for China expected to resume in October, shipments in November.

    U.S. Chicken over-supplyQ2 FY26, expected to continue in coming quarters

    Industry supply grew 4.5% in Q2, leading to lower spreads in commodity big bird segments.

    Mitigation: Industry historically disciplined in managing supply/demand; expects adjustment.

    What to watch in Q3 FY26

    5

    Mexican Cattle Flow to U.S.

    End of Q3 FY26 (Douglas), Q1 FY27 (other ports/slaughter-ready cattle), Q2 FY27 (normalized volume).
    CurrentPort of Douglas Arizona opening on 24th, 1/3 of historical flow capacity.
    TargetOpening of Santa Teresa and Columbus ports in New Mexico; increased cattle availability for slaughter.

    Why it matters

    Significant impact on U.S. beef supply, capacity utilization, and margin recovery.

    Assuming the ports reopen as expected, we believe we'll continue to see an increasing cattle available for slaughter during the first quarter of 2027 with slaughter volumes returning to a more normal level by the second quarter.

    Q&A highlights

    7

    Despite peers cutting guidance and beef cutout reaching a ceiling, what gives comfort that U.S. protein demand remains healthy, and why won't spreads erode further?

    Wesley stated that demand remains very strong, especially for beef and chicken, noting the inelasticity of protein demand. He observed a shift from away-from-home to at-home consumption but believes overall protein demand will continue to be strong.

    “We have found out actually that -- and we didn't think it -- we use it to think that proteins had more of a substitution effect depending on prices. And there was a big surprise of the inelasticity of protein demand when it comes to demand for beef, demand for pork and meat for chicken not being so substituted to each other.”

    asked by Thiago Bortoluci · answered by Wesley Batista Filho

    2 min read7 chapters

    Detailed Narrative

    01

    Leadership Transition and Strategic Vision

    Gilberto Tomazoni is transitioning out as Global CEO in January 2027, with Wesley Batista Filho taking over. The company emphasizes continuity in strategy, focusing on diversification, global resilience, and value creation, highlighted by the dual listing and recent strategic partnerships. This internal transition ensures alignment and continued focus on established priorities.

    02

    Global Operating Model Resilience

    JBS's diversified global operating model demonstrated resilience amidst complex and volatile market conditions, with profitability improving in most business units despite varying supply/demand dynamics and currency movements. The company's ability to allocate production to markets with the strongest returns was key to navigating these challenges.

    03

    Strategic Expansion in Asia

    A significant strategic partnership with GIC involves a $2.5 billion equity investment for a 25% stake in JBS's Australia and New Zealand operations. This deal provides access to up to $5 billion for acquisitions and growth opportunities in Indonesia and Southeast Asia, accelerating expansion in a region with a population of 640 million people, while preserving JBS's balance sheet.

    04

    U.S. Beef Turnaround Efforts

    Despite tight cattle supplies and high costs, U.S. Beef showed solid improvement, with EBITDA margin improving from -3.9% to -1.3% YoY. This was driven by improved plant performance, optimized operating footprint, strengthened commercial capabilities, and increased productivity. Further benefits are expected from capacity optimization and the progressive implementation of a 3% improvement plan.

    05

    Mexican Border Reopening Impact

    The gradual reopening of the Mexican border, particularly the Port of Douglas Arizona (estimated 300,000-400,000 head capacity), is expected to restore cattle flow into the U.S. This is anticipated to increase cattle availability for slaughter in Q1 2027, returning to more normal levels by Q2 2027, significantly impacting U.S. beef supply and potentially improving margins.

    06

    Brazil Beef Market Dynamics

    JBS Brazil delivered a strong quarter driven by export demand and disciplined commercial execution, achieving its highest Q2 EBITDA despite elevated car prices. However, the market faces challenges with the suspension of China's beef quota, expected to resume in October. This situation may lead to reduced harvest and falling cattle prices in Brazil until the quota is reinstated.

    07

    Pork and Chicken Performance

    U.S. Pork delivered solid performance with an 8.9% EBITDA margin, though demand was weaker than chicken and beef, particularly in prepared foods. U.S. Chicken (Pilgrim's Pride) saw solid results, but industry supply grew faster than demand (4.5% growth in Q2) due to better bird survival rates, leading to lower spreads in commodity big bird segments. Seara (Brazil Chicken) maintained healthy margins despite some sequential weakening due to domestic market pork prices.

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