Q2 2026 Jbs NV Earnings Call

Speaker #1: Welcome to Zoom. Enter your meeting ID followed by pound. Enter your participant ID followed by pound. Otherwise just press pound to continue. You have joined the meeting as an attendee and will be muted throughout the meeting.

Operator 1: Welcome to Zoom. Enter your meeting ID followed by pound. Enter your participant ID followed by pound. Otherwise, just press pound to continue. You have joined the meeting as an attendee and will be muted throughout the meeting.

Speaker #2: And therefore our subject to change. Our present with us today: Gilberto Tomazoni, Global CEO of JBS, Guilherme Cavalcanti, Global CFO of JBS, Wesley Batista Fidio, CEO of JBS USA, and Christiane Assise, Investor Relations Director.

Operator 2: Therefore are subject to change. Present with us today are Gilberto Tomazoni, Global CEO of JBS, Guilherme Cavalcanti, Global CFO of JBS, Wesley Batista Filho, CEO of JBS USA, and Christiane Assis, Investor Relations Director. Now I will turn the conference over to Gilberto Tomazoni. Mr. Tomazoni, you may begin your presentation.

Speaker #2: Now I'll turn the conference over to Gilberto Tomazoni. Mr. Tomazoni, you may begin your presentation.

Gilberto Tomazoni: Is in leading the business and ensuring a smooth transition. We have been planning this succession carefully from a position of strength and nothing changed in our strategy, our priorities, or the way we operate. This decision reflects the strength of the company we have built. Over the past several years, we have transformed JBS in many ways, building a more diversified, more global, and more resilient business. Our dual listing was a defining milestone in that journey, positioning the company for its next phase on value creation. With a strategy clear and a strong leadership team in place, I believe this is the right moment for JBS to begin in the next chapter of under new leadership. Turning to our results, the Q2, once again, demonstrated resilience of our global operating model in an environment that remains complex and volatile.

Speaker #3: It is in leading the business and ensuring a smooth transition. We have been planning this successionally, carefully, from a position of stress and not think change in our strategy.

Speaker #3: Our priorities are the way we operate. This decision reflects the strength of the company we have built. Over the past several years, we have transformed JBS in many ways, building a more diversified, more global, and more resilient business.

Speaker #3: Our dual listing was a defining milestone in that journey. Positioning the company for its next phase on the value creation. With a strategy clear and a strong leadership team in place, I believe this is the right moment for JBS to begin in the next chapter of underwriter leadership.

Speaker #3: Turning to our results, the second quarter, once again demonstrated resilience of our global operating model. In an environment that remains complex and volatile, supply and demand dynamics vary across geographies and proteins.

Gilberto Tomazoni: Supply and demand dynamic vary across geographies and proteins, while currency movements, trade disruption, and geopolitical events under far more complexity. Against this backdrop, our priorities are clear: improving efficiency, protecting margin, and assessing commercial performance, allocation production to the markets where we create the most value. Adjusted net income was $218 million. Adjusted EBITDA totaled $1.143 billion under IFRS, with a margin of 6%, and $1.3 billion under US GAAP, with a 5.3% margin. Compared to the Q1, profitability already showed an improvement in the majority of our business units. Net income was significantly affected by non-recurring items. While important to understand, these items do not change how we assess the business. Our focus is on operating performance, cash generation, and balance sheet discipline. Performance improved across several businesses during the quarter. Although important part of our portfolio still operates in a challenged environment.

Speaker #3: While currency movements, trade disruption, and geopolitical events add far more complexity, against these backdrops, our priorities are clear: improving efficiency, protecting margin, and strengthening commercial performance by allocating production to the markets where we create the most value.

Speaker #3: Adjusted net income was $218 million adjusted EBITDA total $1.43 billion under IFRS, with a margin of 6% and $1.3 billion under US GAAP, with a 5.3% margin.

Speaker #3: Compared to the first quarter, profitability already showed an improvement in the majority of our business units. Net income was significantly affected by non-recurring items.

Speaker #3: While important to understand, these items do not change how we assess the business. Our focus is on operating performance. Cash generation and balance sheet discipline.

Speaker #3: Performance improved across several businesses during the quarter. Although important part of our portfolio is still operating in a challenging environment. While US business continues to operate in a challenging environment, we have reorganized our operating structure and are very confident the results of those changes.

Gilberto Tomazoni: While US Beef continues to operate in a challenged environment, we are reorganizing our operating structure and are very confident as a result of those changes. I will leave the discussion to the business, to Wesley, who will provide more details on the quarter and our outlook for beef and pork in North America. In Australia, results improved further, supported by robust global demand for beef and attractive export opportunities. Before moving on, I would like to comment briefly on the strategic partnership we announced last Friday with Tantara Investment Management. The transaction includes a $2.5 billion US equity investment by Tantara in exchange for a 25% stake in our Australia and New Zealand operation. Together, the additional funding capacity expected through the joint venture, this gives us access to up to $5 billion US to fund acquisition, greenfield projects, and other growth opportunities across Indonesia and Southeast Asia.

Speaker #3: I will leave the discussion to the business to ask the who will be provide more details on the quarter and our outlook for beef and pork in North America.

Speaker #3: In Australia, results improved further, supported by robust global demand for beef and attractive export opportunities. Before moving on, I would like to comment briefly on the strategic partnership we announced last Friday with the Nantara Investment Management.

Speaker #3: The transaction includes a $2.5 billion equity investment by Nantara in exchange for a 25% stake in our Australia and New Zealand operation. Together with the additional funding capacity expected through the joint venture, this gives us access to up to $5 billion to fund acquisitions, greenfield projects, and other growth opportunities.

Speaker #3: Across Indonesia and Southeast Asia, this creates a well-capitalized platform to accelerate our expansion in one of the fastest-growing protein consumption regions in the world.

Gilberto Tomazoni: This creates a well-capitalized platform to accelerate our expansion in one of the fastest-growing protein consumption regions in the world, while preserving the strength of JBS's balance sheet and reinforcing Australia as a strategic hub within our global operations. Importantly, this does not change how we manage the business. Our Australia and New Zealand operations remain fully consolidated under the same leadership and operating model. With that, let's turn to our operating performance. Global beef fundamentals remain constructive, although conditions vary considerably across markets. Supply is limited in several regions. Demand remains resilient, and our global footprint allows us to direct products to the markets where returns are the strongest. JBS Brazil delivered a strong quarter, driven by export demand and disciplined commercial execution. Under IFRS, adjusted EBITDA totaled $269 million US, with a margin of 5.9%.

Speaker #3: While preserving the strength of JBS balance sheet and reinforcing Australia as a strategic hub within our global operation. Importantly, does not change how we manage the business.

Speaker #3: Our Australia and New Zealand operation remains fully consolidated under the same leadership and operating model. With that, let's turn to our operating performance. Global beef fundamentally remains constructive although conditions vary considerably across markets.

Speaker #3: Supply is limited in several regions. Demand remains resilient. In our global footprint, allow us to direct products to the market where returns are the strongest.

Speaker #3: JBS Brazil delivered a strong quarter, driven by export demand and disciplined commercial execution. Under IFRS, adjusted EBITDA totaled $269 million, with a margin of 5.9%.

Speaker #3: Even with elevated cattle price, JBS reported its highest EBITDA for the second quarter. A cattle availability has improved in Brazil, our focus has been on maximizing the value of every animal through our integrated commercial network.

Gilberto Tomazoni: Even with elevated cattle prices, JBS reported its highest EBITDA for a second quarter. Cattle availability has improved in Brazil. Our focus has been on maximizing the value of every animal through our integrated commercial network. China remains an important destination, and recent shifts in trade flow reinforce the importance of maintaining balanced exposure across export and domestic markets. By balancing volumes across China, other export markets, and the domestic market, we protect margins and maximize value per animal. Our domestic business is another important competitive advantage. Through the Friboi brand and a longstanding customer relationship, we work alongside retailers and category partners, helping them to grow value across the beef category. During the quarter, our barbecue portfolio performed particularly well. We have expanded commercial initiatives with major retailers across Brazil. In chicken, both Seara and Friboi delivered solid results, although market dynamics evolved differently across regions.

Speaker #3: China, remains an important destination. In recent shift in trade flow reinforced the importance of maintaining balance exposure across export and domestic markets. By balancing volumes across China, other markets export markets and domestic market, we protect margins and maximize value per animal.

Speaker #3: Our domestic business is another important competitive advantage. Through the Freeboy brand and a longstanding customer relationship, we work alongside retailers and category partners helping them to grow value across the beef categories.

Speaker #3: During the quarter, our barbecue portfolio performance particularly well. We have expanded commercial initiatives with a major retailers across Brazil. In chicken, both Pugen Sprite and Ciara delivered a solid result.

Speaker #3: Although market dynamics evolved differently across regions, at PPC, demand remains healthy across retail and food service. Although industry supply expanded faster than demand, results improved from the first quarter as operating conditions normalized.

Gilberto Tomazoni: At PPC, demand remained healthy across retail and food service, although industry supply expanded faster than demand. Even so, results improved from the first quarter as operating conditions normalized, planned upgrades were completed, and expanding assets continued to mature. At Seara, margins remained strong despite a tougher year-over-year comparison, a less favorable currency environment, and changing export market dynamics. The business grew volumes, reflecting improvements in operating, quality, and commercial execution. We see further opportunities to improve mix, distribution, and execution in domestic markets while converting volume growth into sustainable profitability. Our priorities for the second half are clear, execution and cash generation. We expect leverage increase during the quarter, and reducing the remainder priority. We are focused on strong cash generation, disciplined working capital management, and a prudent capital allocation. The environment remains dynamic, but our priorities are unchanged.

Speaker #3: Plan of progress were completed and expanded assets continue to mature. At Ciara, margin remaining strong despite a tougher year over year comparison. Unless a favorable sorry, unless favorable accuracy environment and changing export market dynamics.

Speaker #3: The business grew volumes, reflecting improvements in operating quality and commercial execution. We see further opportunities to improve mix, distribution, and execution in the domestic market while converting volume growth into sustainable profitability.

Speaker #3: Our priority for the second half are clear: execution and cash generation. We expect leverage increase during the quarter and reducing the remaining priority. We are focused on strong cash generation disciplined working capital management and a prudent capital allocation.

Speaker #3: The environment remains dynamic but our priority are unchanged. We are focused on execution cash generation and disciplined capital allocation. With a diversified portfolio strong market position and experienced team around the world, we believe we are well positioned to create value through the cycle.

Gilberto Tomazoni: We are focused on execution, cash generation, and disciplined capital allocation. With a diversified portfolio, a strong market position, and experienced teams around the world, we believe we are well-positioned to create value through this cycle. Thank you, and I will turn now the call over to Wesley.

Speaker #3: Thank you, and I will now turn the call over to Wesley.

Wesley Batista Filho: Tomazoni, thank you for everything you've done for JBS over the past 15 years, and congratulations on the leadership you have shown. You have lived our values every day, challenged our teams to keep raising the bar, and helped us deliver stronger results. We've worked together for more than a decade, and I've learned a lot from working alongside you, and I'm very grateful for the trust and partnership we've built over the past years, which will help ensure a smooth transition and continuity in our strategy and priorities. I'm incredibly proud and excited to have the opportunity to lead JBS starting in January 2027. This is a company where I've spent my entire professional life, and it means a great deal to me. We're fortunate to have an exceptionally strong leadership team and an extraordinary group of 280,000 team members around the world.

Speaker #2: Tomazoni, thank you for everything you've done over for JBS over the past 15 years and congratulations on the leadership you have shown. You have lived our values every day, challenged our teams, to keep raising the bar and helped us deliver stronger results.

Speaker #2: We've worked together for more than a decade, and I've learned a lot from working alongside you. I'm very grateful for the trust and partnership we've built over the past years.

Speaker #2: Which will help ensure a smooth transition and continuity in our strategy and priorities. I'm incredibly proud and excited to have the opportunity to lead JBS starting in January 2027.

Speaker #2: This is a company where I've spent my entire professional life and it means a great deal to me. We're fortunate to have an exceptionally strong leadership team and an extraordinary group of 280,000 team members around the world.

Speaker #2: I'm very excited about what we can accomplish together. As we look forward, my focus remains the same, operational excellence, disciplined capital location, customer service, and creating long-term value across our diversified global platform.

Wesley Batista Filho: I'm very excited about what we can accomplish together. As we look forward, my focus remains the same, operational excellence, disciplined capital allocation, customer service, and creating long-term value across our diversified global platform. We'll continue to live our values, strengthen our culture, and build on the tremendous work you've done over the past eight years. We'll keep evolving, growing, and making JBS an even stronger company for the future. With that, let me turn to our US operations. The Q2 reflected resilient protein consumption in the United States, despite a challenging environment for the beef industry, where tight cattle supplies and historically high cattle costs continue to pressure margins. Even so, US beef delivered a quarter of solid improvement.

Speaker #2: We'll continue to live our values, strengthen our culture, and build on the tremendous work you've done over the past eight years. We'll keep evolving, growing, and making JBS an even stronger company for the future.

Speaker #2: With that, let me turn to our US operations. The second quarter reflected resilient protein consumption in the United States, despite a challenging environment for the beef industry, where tight cattle supplies and historically high cattle costs continue to pressure margins.

Speaker #2: Even so, US beef delivered a quarter of solid improvement. Our EBITDA margin improved from a negative 3.9% in the second quarter of last year to a negative 1.3% this year, reflecting an important step forward despite the ongoing challenges of the cattle cycle.

Wesley Batista Filho: Our EBITDA margin improved from a -3.9% in the Q2 of last year to a -1.3% this year, reflecting an important step forward despite the ongoing challenges of the cattle cycle. Over the past several quarters, we have improved plant performance, optimized our operating footprint, strengthened our commercial capabilities, and increased productivity across our plants. Many of the operational initiatives we've been working on are already translating into better results, and the announced capacity optimization will contribute progressively as they are fully implemented. At the same time, we're beginning to see early signs that industry fundamentals are moving in the right direction. The gradual reopening of the Mexican border and the first indications of herd rebuilding reinforce our confidence that supply and demand are heading towards a healthier balance over time. The reopening of the Mexican border is particularly important.

Speaker #2: Over the past several quarters, we have improved plant performance optimized our operating footprint, strengthened our commercial capabilities, and increased productivity across our plants. Many of the operational initiatives we've been working on are already translating into better results and the announced capacity optimization will continue contribute progressively as they are fully implemented.

Speaker #2: At the same time, we're beginning to see early signs that industry fundamentals are moving in the right direction. The gradual reopening of the Mexican border and the first indications of herd rebuilding reinforce our confidence that supply and demand are heading towards a healthier balance over time.

Speaker #2: The reopening of the Mexican border is particularly important. The expected reopening of the three ports of entry should restore most of the historical flow of cattle from Mexico into the United States.

Wesley Batista Filho: The expected reopening of the three ports of entry should restore most of the historical flow of cattle from Mexico into the United States. Cattle from Mexico have represented about 5% of US slaughter, so restoring that flow is very meaningful for the industry. We also expect many of the first cattle crossing the border to be heavier than what they used to be prior to the border closure. That should allow them to reach slaughter weight much sooner than normal. Assuming the ports reopen as expected, we believe we will continue to see an increasing cattle available for slaughter during Q1 2027, with slaughter volumes returning to a more normal level by Q2. Turning to pork, market fundamentals proved more challenging during this quarter. Even so, our pork business delivered another quarter of solid performance. EBITDA margin reached 8.9% compared to 6.5% a year ago.

Speaker #2: Cattle from Mexico have represented about 5% of US slaughter, so restoring that flow is very meaningful for the industry. We also expect many of the first cattle crossing the border to be heavier than what they used to be prior to the border closure.

Speaker #2: That should allow them to reach slaughter weight much sooner than normal. Assuming the ports reopen as expected, we believe we'll continue to see increased cattle available for slaughter during the first quarter of 2027, with slaughter volumes returning to a more normal level by the second quarter.

Speaker #2: Turning to pork. Market fundamentals proved more challenging during this quarter. Even so, our pork business delivered another quarter of solid performance, EBITDA margin reached 8.9% compared to 6.5% a year ago.

Speaker #2: Our pork business once again demonstrated its ability to compete at the highest level. We will continue focusing on operational excellence, customer service, disciplined capital allocation, and continuous improvement.

Wesley Batista Filho: Our pork business once again demonstrated its ability to compete at the highest level. We will continue focusing on operational excellence, customer service, disciplined capital allocation, and continuous improvement. Those are the levers we control, and they position us to create greater value over the long term as cattle supplies recover. I will now turn the call over to Guilherme.

Speaker #2: Those are the levers we control and they position us to create greater value over the long term as cattle supplies recover. I'll now turn the call over to Guilherme.

Speaker #3: Thank you, Tomazoni and Wesley. Before we move on to the quarter's operating results, I would like to highlight that starting in the second quarter, we voluntarily began reporting results as a US domestic company in the four reporting forms 10Q and 10K in IFRS for the time being.

Guilherme Cavalcanti: Thank you, Tomazoni and Wesley. Before we move on to the quarter's operating results, I would like to highlight that starting in Q2, we voluntarily began reporting results as a US domestic company, and therefore, reporting forms 10-Q and 10-K in IFRS for the time being. We believe this initiative represents a significant step in our strategy of alignment with the US capital markets and may expand our eligibility for inclusion in a more ample group of stock indexes. In this regard, I would like to highlight JBS's inclusion in the Russell 1000 and Russell 3000 indexes in June. This inclusion, as well as the potential for inclusion in additional indexes going forward, is key to expanding our investor base, increasing liquidity, enhancing global visibility, and unlocking value to shareholders. Let us now move on to the operational and financial highlights of Q2 2026.

Speaker #3: We believe this initiative represents a significant step in our strategy of alignment with the US capital markets and may spend our eligibility for inclusion in a more ample group of stock indexes.

Speaker #3: In this regard, I would like to highlight JBS's inclusion in the Russell 1000 and Russell 3000 Indexes in June. This inclusion, as well as the potential for inclusion in additional indexes going forward, is key to expanding our investor base, increasing liquidity, enhancing global visibility, and unlocking value for shareholders.

Speaker #3: Let's now move on to the operational and financial highlights of the second quarter 2026. Net sales reached a record of $24 billion for the second quarter.

Guilherme Cavalcanti: Net sales reached a record of $24 billion for Q2. Adjusted EBITDA in IFRS totaled $1.4 billion, which represents a margin of 6% for the quarter. Adjusted EBITDA in US GAAP totaled $1.3 billion, which represents a margin of 5.3% for the quarter. Adjusted operating income was $790 million with a margin of 3.3% in IFRS and $866 million in US GAAP with a margin of 3.6%. The quarter's net loss was $102 million with a negative EPS of $0.10. In addition to the year-over-year decline in operating results, we also reported $319 million increase in net financial expenses. The main drivers were $172 million in premiums, interest, and costs related to the tender offer for the bond and the CRA, Brazilian local debenture, of which $147 million had a cash impact.

Speaker #3: Adjusted EBITDA in IFRS totaled $1.4 billion, which represents a margin of 6% for the quarter. Adjusted EBITDA in US GAAP totaled $1.3 billion, which represents a margin of 5.3% for the quarter.

Speaker #3: Adjusted operating income was 790 million dollars with a margin of 3.3% in IFRS and 866 million dollars in US gap with a margin of 3.6.

Speaker #3: The quarter's net loss was 102 million dollars with a negative EPS of 10 cents. In addition, to the year-over-year decline in operating results, we also reported 319 million dollars increasing in net financial expenses.

Speaker #3: The main drivers were 172 million in premiums interest and cost related to the tender offer for the bond and the crab Brazilian local venture, of which 147 million dollars had a cash impact.

Speaker #3: It's worth remembering that this reflects the liability management we carried out in the first quarter, in which we issued $2.5 billion in bonds at more attractive rates and longer tenors.

Guilherme Cavalcanti: It is worth remembering that this reflects the liability management we carried out in Q1, in which we issued $2.5 billion in bonds at a more attractive rate and longer tenors. Mark-to-market of derivatives, net of exchange rate variation of $53 million. Monetary restatements and high-interest expenses related to increasing debt, which together amounted of approximately $120 million. Additionally, the net loss was also impacted by the final calculation of the bargain price gain of the acquisition of Monchique Alimentos with no cash impact, totaling $81 million, and antitrust settlements totaling $133 million. Excluding the non-recurring items adjusted, net income was $280 million, and the earnings per share was worth $0.20 for the quarter. Free cash flow.

Speaker #3: Mark-to-market of the derivatives, net of exchange rate variation, was $53 million. Monetary restatements and high interest expenses relate to increases in debt, which together amounted to approximately $120 million.

Speaker #3: Additionally, the net loss was also impacted by the final calculation of the bargaining price gain of the acquisition of Manchiqueira Alimentos, with no cash impact.

Speaker #3: Totally 81 million dollars and anti-trust settlements totally 133 million dollars. Excluding the non-recurring items adjusted, net income was 218 million dollars and the earnings per share was worth 20 cents for the quarter.

Speaker #3: Free cash flow. Free cash flow into in the second quarter of 2026 improved by 185 million dollars year over year, reaching a positive of 130 million dollars compared to a cash consumption of 55 million dollars in the second quarter 2025.

Guilherme Cavalcanti: Free cash flow in Q2 2026 improved by $185 million year-over-year, reaching a positive of $130 million compared to a cash consumption of $55 million in Q2 2025. This improvement was mainly driven by working capital, particularly accounts receivable line reflecting higher receivable discounts and larger advanced payments from Chinese customers related to JBS Brazil's exports. The accounts payable line also increased, mainly driven by higher cattle prices and increases in slaughter volumes, particularly in Brazil. This improvement was partially offset by a decline in adjusted EBITDA of $324 million, high net cash interest expenses of $129 million due to a higher concentration in Q2 of interest related to the bonds issued in 2025. Real appreciation that increased interest expenses in US dollars of the Brazilian local debentures and increase in total debt.

Speaker #3: This improvement was mainly driven by working capital, particularly the accounts receivable line reflecting higher receivable discounts and larger advance payments from Chinese customers related to JBS Brazil's exports.

Speaker #3: The accounts payable line also increased, mainly driven by higher cattle prices and increased slaughter volumes, particularly in Brazil. This improvement was partially offset by a decline in adjusted EBITDA of $324 million, and high net cash interest expenses of $129 million due to a higher concentration in the second quarter of interest related to the bonds issued in 2025.

Speaker #3: Real appreciation increased the interest expenses in U.S. dollars of the Brazilian local debentures and increased total debt. Moreover, total capital expenditures increased by $163 million, of which $159 million was expansion capex.

Guilherme Cavalcanti: Moreover, total capital expenditures increased by $163 million, of which $159 million was expansion CapEx. Finally, we had lower tax payments year-over-year of $135 million. Not considering guidance, but simply updating the cash flow breakeven EBITDA exercise for this year, we expect $5.1 billion in 2026 driven by capital expenditure of $2 billion in 2026, $400 million reduction versus the initial estimate. Expectation of -$350 million of working capital in 2026. A $500 million improvement versus last year, driven by higher receivable discounts as mentioned previously. Legal settlements of $100 million already realized in 2026. Biological assets of $850 million, flat versus 2025. Interest expenses of $1.3 billion, an increase of $150 million versus the initial estimates due to higher net debt. Leasing expenses flat at $500 million in 2026, an effective tax rate estimated at 25%. We continue to strengthen our liquid position.

Speaker #3: Finally, we had lower tax payments year over year of 135 million dollars. Not considering guidance, but simply updating the cash flow break even EBITDA exercise for this year, we expect 5.1 billion dollars in 2026 driven by capital expenditure of 2 billion dollars in 2026, 400 million dollars reduction versus the initial estimate.

Speaker #3: Working capital expectation of the work expectation of negative 350 million dollars of working capital in 2026, a 500 million dollars improvement versus last year, driven by higher receivable discounts and expansion previously.

Speaker #3: Legal settlements of $100 million already realized in 2026. Biological assets of $850 million, flat versus 2025. Interest expenses of $1.3 billion, an increase of $150 million versus the initial estimates due to higher net debt.

Speaker #3: Leasing expenses flat at 500 million dollars in 2026 and effective tax rate estimated at 25%. We continue to strengthen our liquidity position. In August, we announced an increase in our revolving credit line from 3.5 billion dollars to 4.2 billion dollars, while reducing the all-in cost of this line.

Guilherme Cavalcanti: In August, we announced an increase in our revolving credit line from $3.5 billion to $4.2 billion, while reducing the owing cost of this line. Our cash liquidity, combined with the revolving credit facilities, totaled approximately $7.7 billion. Our average debt term reached 15.3 years and an average cost of 5.7%. As we anticipated in our last conference call, due to the $1 billion dividend payment in June and the typical cash consumption of the H1 of the year, our net leverage ended up the quarter at 3.1x, is slightly above our long-term target of keeping net debt to EBITDA between 2x and 3x. It is important to highlight that we have no significant debt maturities for the next five years until 2031. And up to 2032, all the coupons are below the current treasury rate, and 35% of our gross debt is beyond 2050.

Speaker #3: Our cash liquidity combined with the revolving credit facility totaled approximately 7.7 billion dollars. Our average debt term reached 15.3 years and an average cost of 5.7%.

Speaker #3: As we anticipated in our last conference call, due to the $1 billion dividend payment in June and the typical cash consumption of the first half of the year, our net leverage ended up the quarter at 3.1 times.

Speaker #3: It's likely above our long-term target of keeping net debt to EBITDA between 2 and 3 times. It's important to highlight that we have no significant debt maturities for the next five years, until 2031.

Speaker #3: And up to 2032, all the coupons are below the current Treasury rates, and 35% of our gross debt is beyond 2050. With that in mind, I would like to open up the question and answer session.

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

Operator 2: The floor is now open for questions from investors and analysts. As previously mentioned, we kindly request that each analyst limit themselves to just one question. With your excuse, if you have any questions, please press the Raise Hand button. Thank you. Ladies and gentlemen, our first question comes from Thiago Bortoluci with Goldman Sachs. Mr. Bortoluci, you may go ahead.

Speaker #1: You, the floor is now open for questions from investors and analysts. As previously mentioned, we kindly request that each analyst limit themselves to just one question.

Speaker #1: With your permission, if you have any questions, please use the raise hand button. Thank you. Ladies and gentlemen, our first question comes from Tiago Bortolucci with Goldman Sachs.

Speaker #1: Mr. Bortolucci, you may go ahead.

Speaker #2: Yes, hi. Thank you. Good morning, everyone.

Thiago Bortoluci: Yes. Hi. Thank you. Good morning, everyone.

Speaker #4: Good morning, Tiago.

Guilherme Cavalcanti: Good morning, Thiago.

Thiago Bortoluci: My question, thank you, Wesley. I cannot start this call other than say congrats to Tomazoni on what has been a remarkable job, not just in JBS, but also in the animal protein industry. Also wishing you, Wesley, continued success on your extended responsibilities in a chair that I think is sensitive, not only to your investors, but also for the country, right? We will be looking forward to keeping up with the conversation. My question

Speaker #2: My question—thank you, Wesley. I can't start this call without saying congratulations to Tomazoni on what has been a remarkable job, not just at JBS, but also in the animal protein industry.

Speaker #2: And also, wishing you, Wesley, continued success on your extended responsibilities in a chair that I think sensitive not only to your investors, but also for the country, right?

Speaker #2: We'll be looking forward to keeping up with the conversation. My question is on how you're seeing, Wesley, the state of the US demand, right?

Guilherme Cavalcanti: Thank you.

Thiago Bortoluci: on how you are seeing, Wesley, the state of the US demand, right? Throughout your press release, I see comments of sticky demand on beef and poultry, but then on the other hand, I also see you mention that inflation is weighing down on pork. You had negative chicken sales growth on food service and retail, and some of your peers, like Tyson, Smithfield, and even Gruma, are cutting their guidance, right? When I look to the beef cutout, it seems it has reached somehow of a ceiling, not necessarily following the seasonality, and this is the reason for my question, right? What gives you comfort that demand remains healthy, and why should we think that spreads cannot erode more prominently going forward? This is the question. Thank you.

Speaker #2: Throughout your press release, I see comments about sticky demand for beef and poultry, but on the other hand, I also see you mention that inflation is weighing down on pork. You had negative chicken sales growth in food service and retail, and some of your peers—like Tyson, Smithfield, and even Gruma—are cutting their guidance, right?

Speaker #2: When I look to the beef cut out, it seems it has reached somehow of a ceiling, not necessarily following the seasonality, and this is the reason for my question, right?

Speaker #2: What gives you comfort that demand remains healthy, and why should we think that spreads can't erode more prominently going forward? This is the question.

Speaker #2: Thank you.

Guilherme Cavalcanti: Thiago, good morning. We still think that demand is very strong. What we have seen, and we can tell this by everything we look on protein trends in general, there is plenty of data in the market about that, and we can see that when we talk to

Speaker #4: Tiago, good morning. So, we still think that demand is very strong. What we have seen—and we can tell this by everything we look at on protein trends in general—is there is plenty of data in the market about that, and we can see that when we talk to our customers and what we see in the marketplace. We have found out, actually, that—and we didn't think it; we used to think that proteins had more of a substitution effect depending on prices, and that was a big surprise—the inelasticity of protein demand when it comes to demand for beef, demand for pork, and demand for chicken not being so substituted to each other.

Wesley Batista Filho: To our customers and what we see in the marketplace. We have found out, actually, and we used to think that proteins had more of a substitution effect depending on prices. That was a big surprise of the inelasticity of protein demand when it comes to demand for beef, demand for pork, demand for chicken not being so substituted to each other. We see that in demand a little bit. We see pork demand a little bit weaker than chicken and beef. Beef demand is very strong. I actually think that, again, I keep on saying, a few years ago, a cutout above $300, I would have thought it was going to be very tough. We would have a tough time achieving that. We have reached way above that, almost into the 400. Look, I think demand is still pretty strong.

Speaker #4: And we see that in demand a little bit. We see pork demand a little bit weaker than chicken and beef. Beef demand is very strong, and actually think that, again, I keep on saying, a few years ago, a cut out about 300 dollars, I would have thought it was going to be a very tough we would have a tough time achieving that, and we've reached way above that, almost in the 400.

Speaker #4: So, look, I think demand is still pretty strong. What we are seeing is where the consumer is consuming that protein is changing—more into retail, more eating at home rather than away from home and food service. That's something we've seen.

Wesley Batista Filho: What we are seeing is where the consumer is consuming that protein changing and going more into retail, more eating at home than away from home and food service. That is something we have seen. But again, for the time being, as we see the marketplace right now, we think the protein demands will continue to be strong.

Speaker #4: But again, for the time being, as we see, the marketplace right now, we think the protein demand will continue to be strong.

Thiago Bortoluci: That is helpful, Wesley. Thank you very much.

Speaker #2: That's helpful, Wesley. Thank you very much.

Speaker #4: Thanks.

Wesley Batista Filho: Thanks.

Speaker #1: Thank you. And our next question comes from Mr. Ricardo Alvez with Morgan Stanley. Mr. Alvez, you may go ahead.

Operator 2: Thank you. Our next question comes from Mr. Ricardo Alves with Morgan Stanley. Mr. Alves, you may go ahead.

Speaker #5: Hello, everybody—Tomazoni, Guilherme, Wesley. Congrats to both of you—Tomazoni on the great tenure, for sure, and Wesley on the CEO appointment. Looking forward to continuing the interaction.

Ricardo Alves: Hello, everybody. Tomazoni, Guilherme, Wesley. Congrats to both of you. Tomazoni on the great tenure, for sure, and Wesley on the CEO appointment. Looking forward to continue the interaction. This is great news for everybody. I have another one on the US, but specifically on the beef side. The question that we asked the last time. The spreads indicated much tougher Q2 versus Q1, but your numbers obviously showed actually a pretty significant improvement. So I wanted to explore more of that. I remember, Wesley, during the JBS Day, you spent quite some time talking about the in-house initiatives that you guys were looking at to improve the beef margin. So I am just wondering if there are more details that you can provide there. Some of the initiatives that may have already kicked in and helped the quarter.

Speaker #5: This is great news for everybody. I have another one on the US, but specifically on the side—I think the question that we asked the last time, the spreads indicated a much tougher second quarter versus the first quarter, but your numbers obviously showed actually a pretty significant improvement.

Speaker #5: So I wanted to explore more of that. I remember, Wesley, during the JBS day, you spent quite some time talking about the in-house initiatives that you guys were looking at to improve the beef margins.

Speaker #5: So, I'm just wondering if there are more details that you can provide there—some of the initiatives that may have already kicked in and helped the quarter—and if you can specifically say what you're doing differently, that would be helpful. Or even if there are a couple of issues in the first quarter that were not present, if we're able to quantify that, that would be helpful, just so that we have a better base now to model the US beef going forward.

Ricardo Alves: If you can specifically say what you are doing differently, that would be helpful. Or even if there were a couple of issues in Q1 that were not present, if we are able to quantify that would be helpful. Just so that we have a better base now to model the US beef going forward. It does seem like there has been a significant de-risking of a division that some people were really concerned about. Thank you very much.

Speaker #5: But it does seem like there has been a significant de-risking of a division that some people were really concerned about. Thank you very much.

Wesley Batista Filho: Good morning. First, when we look at the comp, obviously last year, the same quarter we are comparing last year was a quarter where we had some extraordinaries. It was a tough quarter and had some other impacts like hedging that kind of mixed the number a little bit. Q2 2026 does not have anything that is very material. There are only minor things, so nothing related to hedging or anything like that. The comparison is something to keep in mind. Even when you just compare Q2 to Q1 in just the business in general, it was relatively solid performing compared to the performance given the market conditions. Look, we used to run our business in two different business units.

Speaker #4: Ricardo, good morning. So first, when we look at the comp, obviously, last year, the same quarter we are comparing – last year was a quarter where we had some extraordinaries.

Speaker #4: It wasn't a tough quarter, and had some other impacts like hedging that kind of mixed the number a little bit, and that's the second quarter of 2026 does not have anything that's very material.

Speaker #4: There are only minor things, and so nothing related to hedging or anything like that. So the comparison is something to keep in mind. But even when you just compare the second quarter to the first quarter, and just the business in general, it was relatively solid performing compared to performance given the market conditions.

Speaker #4: So look, we used it to run our business in two different business units, and the reason for that is when we acquired Swift, and afterwards, the Packard Land acquisition, Packard Land focused on a completely different type of cattle, different types of size of plants, different kind of cattle procurement.

Wesley Batista Filho: The reason for that is when we acquired Swift and afterwards the Packerland acquisition, Packerland focused on a completely different type of cattle, different types of size of plants, different kind of cattle procurement. So we used to run those two business units very separate. The market has changed then, has changed quite a lot. Actually, that separation did not make sense anymore. So we went ahead and put those two business units together and run nowadays the business unit as one. Look, there is, on both sides of the business, there are strengths that one had and the other one did not have. We think that there is going to be a lot of synergies there, and a lot of them are on the sales side. We have done a lot of work over the past 3, 4 years in terms of yields.

Speaker #4: And so we used it to run those two business units very separately. And the market has changed—has changed quite a lot. And actually, that separation didn't make sense anymore.

Speaker #4: So we went ahead and put those two business units together and run nowadays the business unit as one. And look, there is on both sides of the business, there are strengths that one had and the other one didn't have, and we think that there is going to be a lot of synergies there and a lot of them are on the sales side.

Speaker #4: We've done a lot of work over the past three, four years in terms of yields. There is always a little bit more, but most of the plan that I presented in New York was not related to yields; it was related to being able to sell more ground beef, sell more value-added ground beef, sell more value-added items.

Wesley Batista Filho: There is always a little bit more, but most of the plan that I presented in New York was not related to yields. It was related to being able to sell more ground beef, sell more value-added ground beef, sell more value-added items. You might have seen that we actually had announced the plant closure of Souderton, but now we have reversed and decided to run that as a value-added facility. It just shows the size of the demand that we have actually for value-added items and that we can continue to supply. A lot of that is going to be in terms of sales that we are going to get most of that difference. I actually had a breakdown there on the presentation that talked about that. But we are seeing that, and we are very confident. Actually, after we have done this integration, we are even more confident.

Speaker #4: You might have seen that we actually had announced the plant closure of Southerton, but now we have reversed and decided to run that as a value-added facility. It just shows the size of the demand that we actually have for value-added items and that we can continue to supply.

Speaker #4: So a lot of that, that's going to be on in terms of sales, that we're going to get most of that difference. I actually had a breakdown there in the presentation.

Speaker #4: That talked about that, but we are seeing that, and we are very confident. Actually, after we've done this integration, we're even more confident. The last thing I would say is most of the that capture has not been seen yet, and we are just beginning.

Wesley Batista Filho: The last thing I will say is most of that capture has not been seen yet, and we are just beginning. So we have performed this result that we have here. But this is without the, we are just getting started on that 3% improvement plan that we think we have.

Speaker #4: So we've achieved the results that we had here. But this is without—we are just getting started on that 3% improvement plan that we think we have.

Speaker #5: That's very clear. Thanks, Wesley.

Ricardo Alves: That is very clear. Thanks, Wesley.

Operator 2: Our next question comes from Leonardo Alencar with XP Investimentos. Mr. Alencar, you may go ahead.

Speaker #1: And our next question comes from Leonardo Alonsar with XP Inventimentos. Mr. Alonsar, you may go ahead.

Leonardo Alencar: Good morning, everyone. Thanks for taking my question. Everybody, congrats for your move, and also for you, Wesley. I will be enjoying discussing US beef with you a lot. Sticking with that point, Wesley, just to understand it better. Well, Mexican border is open now. It is expected for those two cattle to arrive by the end of the month, right? It is just one port open. I wanted to hear from you, both from the volume that is expected, the pace of this volume growing. You said already that you are expecting even heavier cattle to come from Mexico. If we talk about the pace of imports and connect that information with capitalization, would you say this opening is already relevant for any changes in strategies?

Speaker #6: Good morning, everyone. Thanks for taking my question. I want to congratulate you on your move, and also you, Wesley. I’ll be enjoying discussing U.S. beef refill a lot.

Speaker #6: And sticking with that point, Wesley, just to understand it better—so, the Mexican border is open now. Well, it's expected that the first few cattle will arrive by the end of the month, right?

Speaker #6: And it's just one port open. I wanted to hear from you both about the volume that is expected, and the pace of this volume growing.

Speaker #6: You said already that you're expecting even heavier cattle to come from Mexico. But if we talk about the space of imports and connect that information with capacitization, would you say these openings already relevant for any changes in strategies?

Speaker #6: Would you say talking about this historical level of 1.5, 2 million heads per year, would you expect that number to happen by the end of this year, only 2027, or at least the volume will be enough for us to expect a higher capacitization?

Leonardo Alencar: Would you say, talking about the historical level of 1.5, 2 million heads per year, would expect that number to happen by the end of this year or in 2027, or at least the volume will be enough for us to expect a higher capitalization? Just understand how you are seeing the pace of impact from the Mexican border opening that just happened, or if it is more like, since it opened, there is a ceiling for the cattle prices, and that is already helping margins, but then no direct, not real impact yet. Just to get your ideas on that. Thank you.

Speaker #6: Just wanted to understand how you're seeing the pace of impact from the Mexican border opening that just happened. Or is it more like, since it opened, there's a ceiling for the cattle prices and that is already helping margins, but there's no direct, real impact yet?

Speaker #6: Just to get your ideas on that. Thank you.

Wesley Batista Filho: Leonardo, good morning. Yeah. Obviously, we are forecasting the market, and there is a lot of things that we do not know, but what we know is the first port is going to open is here on 24 May. That is the Port of Douglas, Arizona. That port by itself could probably handle 300,000, 400,000 heads. It is just an estimate. It is difficult to predict. Something around 300,000, 400,000 is a third of what the usual amount that uses to come from Mexico can come from that port. Then, in the announcement that the USDA made is, they are going to analyze how that port opening in Douglas looks like and open two more ports in New Mexico, so Santa Teresa and Columbus. With those three ports open, they have right around over 1 million head capacity of flow capacity.

Speaker #4: No, no, good morning. So yeah, obviously, we are forecasting the market, and there is a lot of things that we don't know. But what we know is the first port is going to open is here on the 24th.

Speaker #4: That's the port of Douglas, Arizona. That port by itself could probably handle 300, 400,000 heads. That's just an estimate. It's difficult to predict. Something around 300, 400 is.

Speaker #4: So a third of what the usual amount they use to come from Mexico can come from that port. But then, in the announcement that the USDA made, they're going to analyze how that port opening in Douglas looks like and open two more ports in New Mexico.

Speaker #4: So, Santa Teresa and Columbus. So, with those three ports open, we are going to have—they have right around 1.0, over a million head capacity of flow capacity.

Speaker #4: So those three ports should be able to handle a large part, if not 100%, of the normalization of the border. Again, these are all estimates that we have, right?

Wesley Batista Filho: Those three ports should be able to handle a big part, if not 100% of the normalization of the border. Again, these are all estimates that we have. We are looking at historical numbers and looking at numbers provided for the public. So, I think it is going to be possible within those three ports, if those three ports opening, to have a big part of what Mexico uses to trade flow to the US. Only two Mexican states got approval to export to the US, so Chihuahua and Sonora. Those two states are the biggest states. Both of them are over two-thirds of the Mexican flow of cattle to the US. The other thing that I would mention is, yes, we have information from the market that, obviously, that cattle used to come very young to the US and get backgrounded in the US.

Speaker #4: We're looking at historical numbers and looking at numbers provided in the public for the public. So it's I think it's going to be possible within those three ports if those three ports opening, to have a big part of what Mexico uses to trade flow to the US.

Speaker #4: Only two states—Mexican states—got approval to export to the US: Chihuahua and Sonora. Those two states are the biggest states. Both of them account for over two-thirds of the Mexican flow of cattle to the US.

Speaker #4: The other thing that I would mention is, yes, we have information from the market that there obviously, that cattle used to become very young to the US and get backgrounded in the US. Once the border shut, and especially after two years of the border shutdown, that cattle had to be backgrounded somewhere else, and it was backgrounded in Mexico.

Wesley Batista Filho: Once the border shut, and especially after two years of the border shutdown, that cattle had to be backgrounded somewhere else, and it was backgrounded in Mexico. So there is cattle that is in the process of being backgrounded or cattle that is backgrounded and just waiting to go to feedlot and to get finished in Mexico. Obviously, there will be a part of feedlots in the US actually buying that cattle and actually having that flow happen, but we do not see any reason why that would not happen. We also think that there is because the 1.2 million head of cattle that came were just the calf crop that was destined to the US. On top of that, there is the cattle that is being fed. So we think that the cattle that is available is bigger than the traditional 1.2. So on one hand, you only have two states.

Speaker #4: So there is cattle that's in the process of being backgrounded or cattle that's backgrounded and just waiting to go to feedlot and to get finished.

Speaker #4: In Mexico. So, obviously, that would be a part of the feedlots in the U.S. actually buying that cattle and actually having that flow happen.

Speaker #4: But we don't see any reason why that wouldn't happen. We also think that is because the 1.2 million head of cattle that came were just the calf crop that was destined to the US.

Speaker #4: On top of that, there is the cattle that's being fed. So we think that the cattle that's available is bigger than the traditional 1.2.

Speaker #4: So on one hand, you only have two states, so about two-thirds of the cattle are able to come to the US. On the other hand, you probably have a little bit of a bigger number of cattle in further phases of the cattle feeding and cattle raising process.

Wesley Batista Filho: About two-thirds of the cattle being able to come to the US. On the other hand, you probably have a little bit of a bigger number of cattle in further phases of the cattle feeding and cattle raising process. So bottom line is, we think that because there is a lot of cattle that is already in further stages of cattle production and are heavier, that we are going to start seeing flows, obviously, end of this month and into the end of the year. And expecting that the two next ports of New Mexico open, we think beginning somewhere in the first quarter, we should start seeing cattle ready for slaughter that were born in Mexico.

Speaker #4: So, bottom line is, we think that because there are a lot of cattle already in the further stages of cattle production and are heavier, we're going to start seeing flows, obviously, at the end of this month and into the end of the year.

Speaker #4: And expecting that the two next ports of New Mexico open, we think beginning somewhere in the first quarter, we should start seeing cattle ready for slaughter that were born in Mexico.

Speaker #4: And if all goes according to plan, we should go back to a much more normalized, if not all, most of the volume—or a big part of the volume—that we had coming from Mexico into ready for slaughter in the second quarter.

Wesley Batista Filho: If all goes according to plan, we should go back to a much more normalized, if not all, most of the volume, or a big part of the volume that we had coming from Mexico and ready for slaughter in the second quarter.

Leonardo Alencar: Okay. That is great information. Thank you, gentlemen.

Speaker #6: Okay, that's great information. Thank you, Wesley.

Operator 2: Our next question comes from Pooran Sharma with Stephens. Mr. Sharma, you may go ahead.

Speaker #1: And our next question comes from Burhan Sharma with Stevens. Mr. Sharma, you may go ahead.

Speaker #5: Hey, good morning. Thanks for the question. And Tomazoni, congrats on a successful tenure here. And Wesley, congrats to you on the new role, and I'm really looking forward to continuing to work together here.

Pooran Sharma: Hey, good morning. Thanks for the question. Tomazoni, congrats on a successful tenure here, and Wesley, congrats to you on the new role, and really looking forward to continuing to work together here. I really wanted to get your thoughts on US beef. I know everybody's asking about Mexican border flow, so maybe I will ask just updated thoughts on heifer retention. Can you maybe give us your thoughts, any updated thoughts on the timeline for fed cattle supplies to be rebuilt? What you saw in the report, was that a surprise, just given all the commentary with drought concerns regarding heifer retention in the US?

Speaker #5: I really wanted to get your thoughts on US beef. And I know everybody's asking about Mexican border flow. So maybe I'll ask, just updated thoughts on heifer retention and can you maybe give us the your thoughts, any updated thoughts on the timeline for fed cattle supplies to be rebuilt?

Speaker #5: Was what you saw in the report, was that a surprise? Just given all the commentary with drought concerns regarding heifer retention in the U.S.?

Wesley Batista Filho: Poorna, good morning. Yes, we obviously think that heifer retention and US cattle herd rebuild is more timid than we expected and than obviously we wished for, to get back to a more balanced stage of a situation in cattle supply. At the end of the day, what really matters is, number one, it seems like it has, for now, it has stopped dropping, and that is a big deal. I think we are going to start seeing signals that we might start going up. One thing that I will just mention, and not to keep on going back to Mexico, but I think it is super relevant, is that for us to wait for a cattle herd rebuild, that takes a little bit longer with another 1 million head, 1.5 million head, whatever that ends up coming from Mexico, is a much more different situation than without that.

Speaker #4: Burhan, good morning. So, yeah, we obviously think that heifer retention and U.S. cattle herd rebuild is more timid than we expected. And then, obviously, we wished to get back to a more balanced stage in this situation in cattle supply.

Speaker #4: But at the end of the day, what really matters is, number one, it seems like, for now, it has stopped dropping, and that's a big deal.

Speaker #4: And I think we're going to start seeing—we see signals that we might be going to start going up. One thing that I'll just mention, and not to keep on going back to Mexico, but I think it's—again, I think it's super relevant.

Speaker #4: Is that for us to wait for cattle herd rebuild, that takes a little bit longer with another one million head, million and a half head, whatever that ends up coming from Mexico, is a much different situation than without that.

Speaker #4: So it gives us a lot more a lot more balance and a lot more structure for us to see and wait this cattle rebuild without the margins that we have seen in 2025, 2026.

Wesley Batista Filho: It gives us a lot more balance and a lot more structure for us to see and wait this cattle rebuild without the margins that we have seen in 2025, 2026. I think it probably brings us more to a little bit, if all goes according to plan, right, and all the ports open, we should go back to an equilibrium more like what we saw in 2024, maybe 2023, depending on the amount of cattle that comes. I think it brings us a lot more, and it gives us more patience to see what is going to happen. Weather is a big deal. Weather is a big deal for sure and we will have to see what comes out of that.

Speaker #4: I think it probably brings us more to, a little bit, if all goes according to plan, right—and all the ports open—we should go back to an equilibrium more like what we saw in 2024, maybe 2023, depending on the amount of cattle that comes.

Speaker #4: So I think it brings us a lot more, and it gives us more patience to see what's going to happen, whether it's a big deal—whether it's a big deal, for sure.

Speaker #4: And we'll have to see what comes out of that. One part of the number that doesn't get shown, Burhan, that I think it's relevant and it's and we have anecdotally heard that it seems pretty promising is the heifer retention and just cattle rebuild that we're seeing in Canada.

Wesley Batista Filho: One part of the number that does not get shown, Poorna, that I think is relevant, and we have anecdotally heard it seems pretty promising, is the heifer retention and just cattle rebuild that we are seeing in Canada. We do not see, obviously, in those reports, but it is very relevant because it is a market that US cattle goes to Canada, Canadian cattle goes to the US. That is a big deal. Look, I think we should see over the next years, couple of years, three years, starting to see much stronger rebuild. Again, it is a very different situation having the Mexican cattle and waiting for a more longer-term herd rebuild in the US. The other thing that I would just mention, not to take this too long here, but when you look at, there are two things that you need to look at, right?

Speaker #4: We don't see obviously in that in those reports, but it's very relevant because it's an open it's a market that US cattle goes to Canada, Canadian cattle goes to the US.

Speaker #4: So that's a big deal. And look, I think we should see over the next years, a couple of years, three years, starting to see much stronger rebuild.

Speaker #4: But again, it's a very different situation, having the Mexican cattle and waiting for a longer-term herd rebuild in the US. The other thing that I would just mention—not to take this too long here—but when you look at it, there are two things that you need to look at, right?

Wesley Batista Filho: Heifer retention, but also the amount of cows that get processed to slaughter, right? That number has been going down very fast as well. If you look at the number compared to 2022, we are processing half of the beef cattle that we were processing in 2022. I think that is relevant as well.

Speaker #4: Heifer retention, but also the number of cows that get processed to slaughter, right? And that number has been going down very fast as well.

Speaker #4: So if you look at the number compared to 2026 or 2022, we have we're processing half of the beef cows that we were processing in 2022.

Speaker #4: So it's I think that's relevant as well.

Pooran Sharma: Great. Thank you for the color.

Speaker #5: Great. Thank you for the color.

Speaker #1: Thank you. And our next question comes from Henrique Bristolen with Bradesco BBI. Mr. Bristolen, you may go ahead.

Operator 2: Thank you. Our next question comes from Henrique Brustolin with Bradesco BBI. Mr. Brustolin, you may go ahead.

Henrique Brustolin: Hello, everyone. Thank you for taking my questions. Tomazoni, Wesley, congratulations on the transition, and wishing you both all the best. My question is on Seara. We see another strong quarter, but margins weakening relative to Q1. I would just like to hear a little more, if you could qualify where the sequential margin drop came from, if we are mostly talking about export markets or the domestic market. What are the main trends you are seeing for both of these going into the H2 of the year? Thank you very much.

Speaker #6: Hello, everyone. Thank you for taking my questions. And Tomazoni, Wesley, congratulations on the transition. Wishing you both all the best. My question is on SEARA.

Speaker #6: We see another strong quarter, right, but margins are weakening relative to Q1. So, I’d just like to hear a little more, if you could qualify where the sequential margin drop came from. Are we mostly talking about export markets or the domestic market?

Speaker #6: And what are the main trends you are seeing for both of these going into the second half of the year? Thank you very much.

Speaker #4: Thank you, Ricardo, for your question. Thank you for your words. Seara, I would say, if you compare the quarter, will still be below.

Wesley Batista Filho: Thank you, Henrique, for your question, and thank you for your words. Seara, let's say, if you compare the quarter, a little bit below, but it is still a healthy margin. 14% to 15% is really a healthy margin for this business. It is what we look for this business. When you compare quarter to quarter, there is some difference. The main difference is the pork. Pork price in domestic market was below. Some of the market chicken was below, the other would be higher. But look, in reality was many change across the one category to the other category. But if I make a summary, it was weaker in the domestic market.

Speaker #4: But still, a healthy margin. And 14% to 15% is really a healthy margin for this business, which is what we look for. When you compare quarter to quarter, there is some difference.

Speaker #4: The main difference is pork. Pork prices in the domestic market were below. Some of the market chicken was below. The other will be higher.

Speaker #4: But look, in reality, there were many changes across one category to the other category. But if I make a summary, it was weaker in the domestic markets.

Speaker #6: Thank you very much, Tomazoni.

Henrique Brustolin: Thank you very much, Tomazoni.

Operator 2: Our next question comes from Benjamin Theurer with Barclays. Mr. Theurer, you may go ahead.

Speaker #1: And our next question comes from Benjamin Thurer with Barclays. Mr. Thurer, you may go ahead.

Benjamin Theurer: Yeah, good morning. I will just follow suit with those wishes to you, Tomazoni and Wesley. Looking forward to working more with you together. Just coming back to the US, we have not talked much about the pork business. If you could maybe explain us a little bit more what you are seeing within the pork. You have highlighted that you expected it to kind of gain a little bit of these replacement dynamics, but it has not turned out to be the case.

Speaker #5: Yeah, good morning, and I'll just follow suit with those wishes to you, Tomazoni. And Wesley, looking forward to working more with you together. Just coming back to the US, and we haven't talked much about the pork business.

Speaker #5: So, if you could maybe explain to us a little bit more what you're seeing within the pork. You've highlighted that you expected it to gain a little bit of these replacement dynamics, but that hasn't turned out to be the case.

Speaker #5: So the demand picture for pork. So maybe just talk a little bit what you're seeing what are the differences across the different across the different cutouts and what's been a little bit of a headwind, if you want to call it this way, not major, just a little bit obviously in terms of profitability in pork as we look into where it is where it stands right now slightly below what usually the target is for you guys closer to the very high end of the high single digit.

Benjamin Theurer: So the demand picture for pork. Maybe just talk a little bit what you are seeing, what are the differences across the different cutouts and what has been a little bit of a headwind, if you want to call it this way. Not major, just a little bit, obviously, in terms of profitability in pork as we look into where it stands right now, slightly below what usually the target is for you guys, closer to the very high end of the high single digit. Thank you.

Speaker #5: Thank you.

Wesley Batista Filho: Dan, good morning. Pork has had a weaker demand than chicken and beef for sure. Look, I think the biggest thing is, first of all, if you look at just the volume processed by the industry, it is kind of stable and the cutout is lower. That just tells you that demand seems weaker because it is the same amount of supply and lower price. We think that part of that comes from a little bit of a weakness in, not necessarily our prepared foods, but just in general, the market of prepared foods, just the demand that we are seeing from customers and internal as well, being a little bit more pressured, and consumers deciding to cut back maybe a little bit on those options. It is a quarter, so I would not say that that is a long-term trend that we should expect for the coming quarters and years.

Speaker #4: Good morning. So, pork has had weaker demand than chicken and beef, for sure. I think the biggest thing is, first of all, if you look at just the volume processed by the industry, it's kind of stable, and the cutout is lower.

Speaker #4: So that just tells you that demand seems weaker because it's the same amount of supply and a lower price. We think that part of that comes from a little bit of weakness in the prepared foods market—not necessarily our prepared foods, but just in general, the market for prepared foods. The demand we're seeing from customers and internally as well is a little bit more pressured.

Speaker #4: And consumers are deciding to cut back maybe a little bit on those options. It's a quarter, so I wouldn't say that that's a long-term trend that we should expect for the coming quarters and years, but that's something just to keep in mind—that we've seen a little bit more weakness coming from processors that we sell to, and just in our prepared foods business in general, a little bit weaker demand than usual.

Wesley Batista Filho: But that is something just to keep in mind that we have seen a little bit more weakness coming from processors that we sell to and just in our prepared foods business in general, a little bit weaker demand than usual.

Speaker #5: All right. Thank you very much.

Benjamin Theurer: All right. Thank you very much.

Operator 2: Your next question comes from Lucas Ferreira with JPMorgan. Mr. Ferreira, you may go ahead.

Speaker #1: Your next question comes from Lucas Ferreira with the JP Morgan. Mr. Ferreira, you may go ahead.

Speaker #6: Hi, good morning, everybody. First of all, congrats to Tomazoni on the tenure, and Wesley for the new position—very well deserved. My question is on the U.S. poultry industry.

Lucas Ferreira: Hi, good morning, everybody. First of all, congrats, Tomazoni, on the tenure, and Wesley for the new position. Very well deserved. My question is on the US poultry industry, which clearly is suffering from lower spreads, especially on the commodity part of the business, on the big birds. My question to you guys is where you guys think we are in this cycle. If you already see some sort of a capacity reduction and volume production cuts in the industry, or when do you guys think we should see that happening, especially on, like I said, on the most commoditized part of the business and especially on the big bird. That is my question. Thank you very much.

Speaker #6: Which clearly is suffering from lower spreads, especially on the commodity part of the business, on the big birds. So my question to you guys is where we think where you guys think we are in this cycle.

Speaker #6: So if you already see some sort of a capacity reduction and volume production cuts in the industry, when do you guys think we should see that happening? Especially, like I said, in the most commoditized part of the business, particularly in the big bird segment.

Speaker #6: So that's my question. Thank you very much.

Wesley Batista Filho: Thank you, Lucas. in Q2, chicken supply grew 4.5% in US, was above expectation of the industry. Because the growth was driven by the higher egg sets and chicken placement. But the most significant was the better bird survival rates compared with last year, when respiratory disease in low path avian influenza increases the mortality. Means that the industry has taken a historical rate of the survival rates, and based on that, placed the chicken for this year. And how the rate was better, we had more chicken. What do we expect from? We expect that the industry will be adjusted in the coming months. It is part B. If you look for historical, industry is very disciplined in terms of to manage the supply demands in these periods.

Speaker #4: Thank you, Lucas. In Q2, chicken supply increased 4.5% in the US, which was above the expectation of the industry. The growth was driven by higher egg sets and chicken placements.

Speaker #4: But the most significant was the better bird survival rates compared to last year, when respiratory disease and low-path avian influenza increased the mortality.

Speaker #4: It means that the industry took historical survival rates and, based on that, placed the chickens for this year. And since the rate was better, we had more chickens.

Speaker #4: What do we expect from this? We expect the industry will adjust in the coming months, or if you look at the historical industry, it is very disciplined in terms of managing the supply and demand in this business.

Speaker #6: Thanks, Tomazoni.

Lucas Ferreira: Thanks, Tomazoni.

Operator 2: Our next question comes from Thiago Duarte with BTG. Mr. Duarte, you may go ahead.

Speaker #1: And our next question comes from Tiago Duarte with BTG. Mr. Duarte, you may go ahead.

Speaker #5: Yeah, hello, guys. Good morning, everybody. Tomazoni, Wesley, same for me—congrats on the transition, and good luck to you both. Yeah, so I'll stick to the chicken business, but in a different way.

Thiago Duarte: Hello, guys. Good morning, everybody. Tomazoni, Wesley, same from me. Congrats on the transition and good luck to you both. I will stick to the chicken business, but in a different way. It is interesting to see how Pilgrim's has been suffering from this higher supply of chicken and translating into lower chicken prices, enhancing to lower margins. While Seara does not seem to be suffering from the same phenomenon, you guys mentioned in the press release, strong export markets and the Middle Eastern market in particular, sustaining good profitability in the chicken exports out of Brazil. My question to you is how you see those two moving parts unfolding in the coming months and quarters.

Speaker #5: It's interesting to see how Pilgrim's has been suffering from this higher supply of chicken and translating into lower chicken prices, and hence into lower margins.

Speaker #5: And while Seara doesn't seem to be suffering from the same phenomenon you guys mentioned, and the press release is strong—export markets and the Middle Eastern market in particular are sustaining good profitability and the chicken exports out of Brazil.

Speaker #5: So my question to you is how you see those two moving parts unfolding in the coming months and quarters, whether do you see this chicken price pressure at some point spilling over into SEATA's export business or you expect the other way, you expect pilgrims margins to eventually improve before any erosion on the SEATA business.

Thiago Duarte: Whether do you see this chicken price pressure at some point spilling over into Seara's export business, or you expect the other way, you expect Pilgrim's margins to eventually improve before any erosion on the Seara business. How you expect this global chicken price environment to unfold into the two subsidiaries? That would be my question. Thank you.

Speaker #5: So, how do you expect this global chicken price environment to unfold for the two subsidiaries? That would be my question. Thank you.

Speaker #4: Yeah, thank you for the question. And I think it's you mentioned that as compared pilgrims and SEATA, they are really different. Even both of them export, but they export different types of products.

Wesley Batista Filho: Thiago, thank you for the question. I think you mentioned that as compared Pilgrim's and Seara, they are really different.

Gilberto Tomazoni: Even both of them export, but they export different types of products. They compete in very few markets, mainly in Africa, with the like quarters. Otherwise, there is no competition on that. For Seara, export are very important. For Pilgrim's, is less important. This come from this a little bit, the explanation about what is difference. Pilgrim's has a diversified portfolio. I think you had the opportunity to hear from Fabio. What is suffered in US is the category of big bird. This is a commodity. That is the product that we sell for processors. We increase too much the volume, and the demand is not enough to meet the supply. Because of this, Pilgrim's as a part of 25% of the business, is around 25% of the business, is commodity. This part of the business suffer.

Speaker #4: They compete in very few markets, mainly in Africa, with La Cuartes. Otherwise, there is no competition on that. And for SEATA export, I'm very important.

Speaker #4: For pilgrim is less important. That show this come from this a little bit the explanation about what is difference. In US, pilgrims has a diversified portfolio.

Speaker #4: I think you had the opportunity to hear from Fabio. But what is suffering in the US is the category of big birds. This is a commodity that the product that we sell for processors.

Speaker #4: We increased too much the volume, and the demand is not enough to meet the supply. And because of this, this is—and Pilgrim's has a part—25% of the business is, around 25% of the business is commodity.

Speaker #4: And this part of the business offer— even we mentioned before, we transformed two factories from big bird to case-ready, because case-ready demand is strong as well. As I mentioned when they talk about the US markets of beef.

Gilberto Tomazoni: Even before we transform two factories from big bird to case-ready. Because case-ready demand is strong as was mentioned when they talk about US market for beef. Consumers eat more at home. Because of that, the demand in retailer for chicken increase. Of course, as we have a balanced portfolio, we suffer with the commodity. We see that this, I mentioned in the question that I answered before. If you look for the historical, normally the industry, they have a very discipline in terms of supply and demand in US for this last, I think it is many years. This we are expecting for the future because the additional supply we have in the market, it was mainly because of historic. We planted the product, the survival rates for chicken lower than was in the fact in the quarter because of that is oversupply.

Speaker #4: Consumers eat more at home, and then because of that, the demand in retail for chicken increases. But of course, as we have a balanced portfolio, we suffer with the commodity.

Speaker #4: And we see that this I mentioned the question that I answered before. If you look for the historical, normally the industry, they have a very disciplined in terms of supply and demand in US for this less, I think is many years.

Speaker #4: And this we are expecting for the future because the additional supply we have in the market, it was mainly because historically we planned for the survival rates for chicken to be lower than what was in fact in the quarter.

Speaker #4: Because of that, this oversupply. When you go to Brazil, we see now that the latest numbers of the Brazilian association show that production grew 6.5–6%.

Gilberto Tomazoni: When you go to Brazil, we see now that the less numbers of the Brazilian Association, that the production grow 5.6%. I think this, but export increased 20%. Means that because of that, the availability in domestic market was 3.2. In export market, sorry. In export market, demand remain health even at price below previous level. We believe that when you look ahead, it is difficult to predict or forecast what we have. I think just the number of the association means that they forecast for 2000 to 2027, the production will be grow 2.8%. The export will be grow through, the availability will be 2.7%. If that number is the normal number that the market could be upset because it is normal growth of the market. Means a thing.

Speaker #4: I think this, but export increased 20%. That means, because of that, the availability in the domestic market was 3.1. In the export market—sorry, in the export market, demand remained healthy.

Speaker #4: Even at price below previous level, we believe that when you look ahead, I can it's difficult to predict or forecast what to be at.

Speaker #4: I think just the number of the association means that they forecast for 2000 to 2027, the production will be grow 2.8%. And the export will be grow through the availability will be 2.7%.

Speaker #4: If that numbers is the normal numbers that the market could be could be assessed because it's normal growth of the market. Means I think we see that today we have the level of placement of chicken is higher but we see that the demand for a sport in Brazil is high and I believe that it will be possible to compensate one not all of them but industry should be normally if you look for the again the historic you'll see that industry normally rebalance when we have this disbalance in the market.

Gilberto Tomazoni: We see that today, we have the level of placement of chicken is higher, but we see that the demand for export in Brazil is high, and I believe that it will be possible to compensate, well, not all of them, but industries should be normal. If you look for the price, again, historic, you see that industries normally rebalance when we have this imbalance in the market. We see this quarter, the coming quarter, I think we are confident in terms of what market, what we will be able to do with CRA. It is something that we are not managed, something that we not control. We focus on our Q4 to control. We control the mix, we control the price, we control the diversification of chains and what we are doing.

Speaker #4: We see this quarter, the next, the coming quarter, we'll be—I think we are confident in terms of what the market, what we'll be able to do with SEATA.

Speaker #4: And see, it's something that we do not manage, something that we do not control. We focus in our Q1 to control. We control the mix.

Speaker #4: We control the price. We control the diversification of change and what we are doing.

Speaker #5: Thank you so much, Tomazoni.

Thiago Duarte: Thank you so much, Tomazoni.

Operator 2: Gentlemen, our next question comes from Ms. Isabella Simonato with Bank of America. Ms. Simonato, you may go ahead.

Speaker #2: And gentlemen, our next question comes from Mrs. Isabella Simonato, Voice Bank of America. Mrs. Simonato, you may go ahead.

Speaker #6: Thank you. Good morning, everyone. So, actually, my colleagues, congratulations, Tomazoni. It's been a pleasure interacting with you over the last years. And Wesley, congratulations as well.

Isabella Simonato: Thank you. Good morning, everyone. Echoing my colleagues, congratulations, Tomazoni. It has been a pleasure interacting with you in the last years. Wesley, congratulations as well. We wish you all the best in the years ahead. My question is on Australia. I think we saw a very important growth in top line, which you mentioned about JBS Brazil, how China quota impacted exports. But I wanted to understand if we can assume this is the same reason why Australia's top line has been so strong this quarter. On top of that, how can we think performance ahead, not only in terms of revenues, but in terms of maybe the impact on the profitability of this division? Thank you.

Speaker #6: We wish you all the best. In the years ahead. And my question is almost Australia, right? I think we saw a very important growth in top line, right?

Speaker #6: When you mentioned JBS Brazil, you talked about how the China quota impacted exports. But I wanted to understand if we can assume this is the same reason why Australia's top line has been so strong this quarter.

Speaker #6: And on top of that, how can we think about performance ahead, not only in terms of revenues, but in terms of the impact on the profitability of this division?

Speaker #6: Thank you.

Gilberto Tomazoni: Isabella, Australia, we are very excited with the business in Australia. We are in middle of the cycle. We see two, three years very positive for our Australia business, and all of the business in Australia is performed well. When you look for the Australia results below the comparison of the same period last year, mainly because of the currency, and because of the climate, we dry a lot in Australia, right? We are not able to bring the cattle to the plants, and because of that a little bit volume, we are able to produce more, and this is what we are seeing in the next quarter. As you saw that with this joint venture we have done with Danone, we are recreating a platform for growing Australia, in Indonesia, and Southeast Asia. Australia is really well-

Speaker #4: Isabella, Australia—we see that we are very excited with the business in Australia. We are in the middle of the cycle. We see the next two to three years as very positive for our Australia business.

Speaker #4: And all of the business in Australia is performing well. When you look for the Australia results, they are below the comparison of the same period last year, mainly because of the currency.

Speaker #4: But this, and because of the climate, we had very—we tried a lot in Australia. And we are not able to bring the cattle to the plants.

Speaker #4: And because of that, a little bit the volume, we are able to produce more. And this is what we are seeing in the next quarter.

Speaker #4: And as you saw, with this joint venture we have done with the entire team, we are recreating a platform for growing Australia in Indonesia and South Africa.

Speaker #4: The Australians really well—Asia, sorry, Asia. In Australia, it is very well positioned. It's close to this market. And we have a strong team. And so, look, we are bullish on Australia.

Isabella Simonato: Asia.

Gilberto Tomazoni: Asia, sorry. Asia. Australia is very well-positioned. It is close to this market, and we have a strong team. So look, we are bullish on Australia.

Speaker #6: Thank you, Tomazoni.

Isabella Simonato: Thank you, Tomazoni.

Speaker #2: Thank you. And our next question comes from Heather Jones. Heather, you may go ahead. Mrs. Jones, if you're speaking, you may be muted.

Operator 2: Thank you. Our next question comes from Heather Jones. From Heather Jones. You may go ahead, Mrs. Jones. Mrs. Jones, if you are speaking, you may be muted. As we wait to get connected with Mrs. Jones, the next question comes from Gustavo Troyano from Itaú. Mr. Troyano, you may go ahead.

Speaker #2: As we wait to get connected with Mrs. Jones, the next question comes from Gustavo Tiano from Itaú. Mr. Tiano, you may go ahead.

Gustavo Troyano: Hello, everyone. Thanks for taking my question, and congrats, Wesley, on your new position at the company, and best of luck to you both and Tomazoni in your annual role starting next year. My question actually relates to free cash flow going forward. A couple of months ago in the JBS Day presentation, it was mentioned that CapEx for 2026 should be slightly lower than previously stated in other conference calls, reaching something close to $2 billion. My question is on what to expect for 2027, and if you understand that the current cycle conditions at this point, especially with the Mexican border reopening, enables a re-acceleration of the expansion CapEx agenda for next year. If the JV in Australia changes your appetite towards accelerating the consolidated investment level going forward, since this new variable was added into the equation last week. Thank you very much.

Speaker #5: Hello, everyone. Thanks for taking my question. And congrats, Wesley, on your new position at the company, and best of luck to you both and to Tomazoni in your new role starting next year.

Speaker #5: And my question actually relates to free cash flow going forward. And a couple of months ago in the JBS, they presentation, it was mentioned the capex for 2026 should be slightly lower than previously stated in other conference calls, reaching something close to $2 billion.

Speaker #5: But my question is on what to expect for 2027. And if you understand that the current cycle conditions at this point—especially with the Mexican border reopening—enable a reacceleration of the expansion capex agenda for next year.

Speaker #5: And if the JV in Australia changes your appetite towards accelerating the consolidated investment level going forward, since this new variable was added into the equation last week.

Speaker #5: Thank you very much.

Speaker #4: Thank you, Gustavo. So, beginning with the joint venture, that's a way for us to continue with the agenda of growth and accelerate this agenda in that region of the world, without putting more pressure on the balance sheet.

Gilberto Tomazoni: Thank you, Gustavo. Beginning with the joint venture, that is a way for us to continue with the agenda of growth, and accelerate this agenda in that region of the world without putting more pressure on the balance sheet. Bear in mind that Danone is to put $800 million in first place, and then adding up to $2.5 billion in equity. After that, we start to raise that. Basically, there will be no pressure in terms of free cash flow from the investments in that region, given this capital structure that was designed. Now, coming back to JBS' consolidated free cash flow. Remember that last year we had a working capital consumption of $850 million, mainly due to increasing prices, which continued to happen this year. We see that this Q2, we had record revenues of $24 billion.

Speaker #4: So bear in mind that the entire idea is to put $800 million in first place and then add up to $2.5 billion in equity. And then after that, we start to raise that.

Speaker #4: So, basically, there will be no pressure in terms of free cash flow from the investments in that region, given this capital structure that was designed.

Speaker #4: Now, coming back to JBS consolidated free cash flow, remember that last year we had a working capital consumption of $850 million, mainly due to increasing prices, which continue to happen this year.

Speaker #4: We see that this second quarter, we had record revenues of $24 billion. So, increasing prices and increasing revenues drags working capital. However, we had anticipation of Chinese—we have, and we have discounts, receivables discounts.

Gilberto Tomazoni: Increasing prices, increasing revenues, drags working capital. However, we had anticipation of Chinese, and we had receivables discounts. With that is why we are forecasting that this year, the working capital consumption will be $500 million better. For next year, again, because of the US beef, and if we do not have any inflationary pressure, we should be a good year for in terms of releasing working capital. Of course, that all depends on grain prices, cattle prices, and cutout prices. All the other lines are in line, I think, just interest expense is also in line what we have been presenting. This all depends now on each one estimates of the data to plug into this equation.

Speaker #4: So we with that, we are that's why we are forecasting that this year the working capital consumption will be $500 million better. For next year, again, we should because of the USP and if we don't have an inflationary pressure, we should be a good year for in terms of releasing working capital.

Speaker #4: But of course, that will all depends on grain prices, cattle prices, and the cut out prices. With all the other lines already in line, I think just interest expenses also in line what we've been presenting.

Speaker #4: So this all depends now on each one estimates over the to plug into this equation.

Gustavo Troyano: Thanks. That was clear.

Speaker #5: Thanks. That was clear.

Speaker #2: Thank you. And for the next question, we'll go back to Mrs. Heather Jones. You may go ahead with your question, Mrs. Jones.

Operator 2: Thank you. For the next question, we will go back to Heather Jones from Heather Jones. You may go ahead with your question, Mrs. Jones.

Heather Jones: Good morning. Thank you for the questions and my congratulations to Tomazoni and Wesley as well. My question is for Wesley on US beef. In 2024, Douglas represented about 15% of imports from Mexico. I was just wondering if there's been some expansion there that would allow for greater flows to that port. If Mexico cattle flows return to levels approximately two-thirds of where they were prior to the closing, is that factor alone enough to return JBS's US beef EBITDA levels to breakeven? Thank you.

Speaker #6: Good morning. Thank you for the questions. And my congratulations to Tomazoni and Wesley as well. My question is for Wesley on USB. So in '24, Douglas represented about 15% of imports from Mexico.

Speaker #6: So I was just wondering if there's been some expansion there that would allow for greater flows to that port. And if Mexico cattle flows return to levels approximately two-thirds of where they were prior to the closing, is that factor alone enough to return JBS's USB EBITDA levels to break even?

Speaker #6: Thank you.

Wesley Batista Filho: Heather, good morning. Yeah, for sure. It wasn't as much as what I'm predicting. Obviously there were many options, right? There were options all over Texas. All of the options were open. Obviously, if you have just Douglas opening, it's going to be more than if you have Douglas and plus five more ports, or I don't know how many there were back then. We expect obviously, especially for a while, it's going to be the only port, that's going to be more than usual. The way that we are looking at that volume, it's pretty simple. We look at the volume, that's how we estimate. We're basically looking at what was a high volume day back then, before, what was a very high day for Douglas, how much could Douglas handle?

Speaker #4: Heather, good morning. So yeah, for sure, it wasn't as much as what I'm predicting. But obviously, there were many options, right? There were options all over Texas.

Speaker #4: There were the all of the options were open. So obviously, if you have just Douglas opening, it's going to be more than if you have Douglas and plus five more ports or I don't know how many there were back then.

Speaker #4: So we expect obviously especially for a while, it's going to be the only port that's going to be more than than usual. And what the way that we are looking at that volume, it's pretty simple.

Speaker #4: We look at the volume that how we estimate. We're basically looking at what were what was a high volume day back then before what was a very high day for Douglas, how much could Douglas handle and we're just multiplying that and trying to estimate how much that means in a year.

Wesley Batista Filho: We're just multiplying that and trying to estimate how much that means in a year. That's how we're getting that number. Look, obviously, we're dealing with a lot of assumptions here and things that we're going to know pretty soon if they're going to come up, turn out to be as expected or not, and we're going to know pretty soon actually how this all is going to look like. We think that with another, let's say just another 1 million head of cattle in the balance here. If we're right now at around between 2% and 1% negative, we should be closer to a breakeven. I don't know if it's going to be enough for us to be at a breakeven or above breakeven. I'm pretty sure that 1 million head makes a big difference. It's the size of a two-shift plant, right?

Speaker #4: So that's how we're getting that number. Look, obviously, we're dealing with a lot of assumptions here and things that we're going to know pretty soon.

Speaker #4: If they're going to come up, turn out to be as expected or not, and we're going to know pretty soon, actually, how this all is going to look like.

Speaker #4: But we think that we've we've another, let's say, just another meet and head of cattle in the balance here. If we're right now at around 1, 1 and a half, between 2 and 1% negative, we should be closer to a break even.

Speaker #4: I don't know if it's going to be enough for us to be at a break even or above break even. I'm pretty sure that a meet and head makes a big difference.

Speaker #4: It's the size of a two-shift plant, right? So it's a big deal. So we think that it's going to be much better. How much—if it's going to be above or right below break-even—I'm not quite sure yet.

Wesley Batista Filho: It is a big deal. We think that it is going to be much better. How much? If it is going to be above or right below the breakeven, I am not quite sure yet. It is going to be much better than where we are right now. That is what I mean. That is what I think.

Speaker #4: It's going to be much better than what we are right now. That's what I mean. That's what I think.

Speaker #6: Wonderful. Thank you so much.

Heather Jones: Wonderful. Thank you so much.

Speaker #4: Thank you.

Wesley Batista Filho: Thank you.

Speaker #2: Thank you. And our next question comes from Mateus Enfield with UBS. Mrs. Enfield, you may go ahead with your question.

Operator 2: Thank you. Our next question comes from Matheus Enfeldt with UBS. Mr. Enfeldt, you may go ahead with your question.

Matheus Enfeldt: Hi. Morning. Thank you for the time and also wish both Tomazoni and Wesley success in the new positions. On my question, I know you touched a bit on this for Seara, but wanted to get a sense of the demand landscape in Brazil. Retailers are quite negative on the outlook for H2 2026 and early 2027. My question is, how are you seeing that? If you are already seeing some impact on demand weakness throughout the operations there, some shift from beef to pork to chicken to eggs. What is your perception around that and the risk on margins if we do see the consumer sort of downgrading their protein consumption? That is it. Thank you.

Speaker #5: Hi, good morning. Thank you for your time. I'd also like to wish both Tomazoni and Wesley success in their new positions. Regarding my question, I know you touched a bit on this for Siada.

Speaker #5: But I want to get a sense of the demand landscape in Brazil. Retailers are quite negative on the outlook for the second half of '26 and early 2027.

Speaker #5: So my question is how you're seeing that if you're already seeing some impact on demand weakness throughout the operations there. Some shift from beef to pork to chicken to eggs.

Speaker #5: And what's your perception around that and the risk on margins if we do see the consumer sort of downgrading their protein consumption? That's it.

Speaker #5: Thank you.

Speaker #4: Thank you for the question, Mateus. I think we are not seeing so far weak demand for our products. We see strong demand. And for all of the proteins, price of pork is a little bit depressed because the supply, the demand is higher than the sorry, the supply is higher than demand.

Gilberto Tomazoni: Thank you for the question, Matheus. I think we are not seeing, so far, weak demand for our products. We see strong demand for all of the proteins. The price of pork is a little bit depressing because the supply is higher than demand. But for chicken, the grilled chicken and the value-added, our value-added business, the demand is strong. It is normal. We are not seeing depressing. We do not see that people will be downgrade in terms of one product to the other. We see that protein now is on the top of the priority for all of the population. You know that many reasons of that protein become very strong globally, in Brazil even, and this GLP-1 in Brazil is spent a lot now with the new brands come to the market of this GLP-1.

Speaker #4: But for chicken, the chicken and the value added and our value-added business, the demand is strong. It's strong, I'd say. It's normal. We are not seeing depressed.

Speaker #4: We don't see that people be downgrade in terms of one product to the other. We see that protein now is on the top of the priority for all of the population.

Speaker #4: Many reasons. You know that many reasons of that protein become very strong globally in Brazil even. And this GLP-1 in Brazil is spent a lot now with the new brands come to the market of this GLP-1.

Speaker #4: I believe the accessibility of them will be higher. And see, we are so positive on that. Of course, we see that we have today when you look for the market, as I mentioned, I answered Tiago before, that our production of volume of chicken and I think in the English should be rebalanced that even the domestic export of chickens is very high and the demand global demand is high for chicken.

Gilberto Tomazoni: I believe the accessibility of them will be higher, and we are so positive on that. Of course, we see that we have, today, when you look for the market, as I mentioned, I answered Thiago before, there is a higher production of volume of chicken, and I think the industry should rebalance that. Even the domestic export of chicken is very high and the global demand is high for chicken. But I think it will be revealed the level of the chicken placed in Brazil. About the margin. Look, we are not giving forecast of that, but what you can see that we are a strong gain of efficiency inside of the company, innovations and new mix. We are confident that Seara will keep continuing deliver good margins.

Speaker #4: But I think it will be revealed, the level of the chicken placed in Brazil. And about the margin—so, look, we're not giving forecast of that, but you can see that we have a strong gain of efficiency inside of the company.

Speaker #4: Innovations and the new mix and we are confident that SIADA will keep continuing to deliver good margins.

Matheus Enfeldt: We are clear. Thank you.

Speaker #5: Very clear. Thank you.

Operator 2: Our next question comes from Renata Cabral with Citi. Mrs. Cabral, you may go ahead.

Speaker #2: And our next questions comes from Renata Cabral with Citi. Mrs. Cabral, you may go ahead.

Speaker #6: Thanks for taking my question. Good morning, everyone. Congratulations to Wesley for the appointment. Wishing you every success in the role. And Tomazoni, congratulations on the extraordinary run as a global CEO.

Renata Cabral: Thanks for taking my question. Good morning, everyone. Congratulations to Wesley for the appointment. Wish you every success in the role. Tomazoni, congratulations on the extraordinary run as our global CEO. My question is, I am going to shift to Brazil beef. The company had a strong quarter with record Q2 in EBITDA growth. The exports were clearly an important part of that performance, particularly because of the purchase of China. Now we have July export data for the industry that gives us a first indication of post-quota environment. My question for you is if you could help us to understand whether what you have seen so far in terms of exports volumes for the company and pricing is broadly in line with your expectations for this environment.

Speaker #6: So my question is, I'm going to shift to Brazil a bit. The company had a strong quarter with record second quarter in EBITDA growth.

Speaker #6: And the exports were clearly an important part of that performance. Particularly because of the purchase of China. And now we have July export data for the industry.

Speaker #6: That gives us a first indication of post-quarter environment. So my question for you is, if you could help us to understand whether what you have seen so far in terms of exports volumes for the company and pricing is broadly in line with your expectations for this environment.

Renata Cabral: Looking through the reminder of the year, the H2, how should we think about China demand and the ability to redirect volumes to other markets?

Speaker #6: And looking through the remainder of the year, the second half, how should we think about China demand and the ability to redirect the volumes to other markets?

Gilberto Tomazoni: Thank you, Renata. I give you an overview about the beef in Brazil because it is very complex environment now with the China quotas. Based on the current expectation, Brazil should resume production for China in October, with shipment restarting in November. Given the normal transit times, that commercial impact of those shipments will be reflected primarily in 2027. As always, we continue to manage our commercial strategy dynamically, optimization, production allocation across the export market in order to maximize the value. There is not market that can accommodate the volume of 150,000 tons that China was exporting this period that will be restart China, and now we have this volume. The harvest of the animal has fallen 20% in the first month, but the price of the live animal did not fall, and should fall because the animal is in the field.

Speaker #4: Thank you, Renata. I give you an overview about the beef in Brazil. Because it's very complex environment now with the China quotas. Because based on the current expectation, Brazil should presume production for China in October.

Speaker #4: With shipment restarting in November. And given the normal transit times that commercial impact of those shipment will be reflected primarily in 2027. As always, we continue to manage our commercial strategy.

Speaker #4: Dynamically, optimization production allocation across export market to maximum market in order to maximize the value. But there isn't market that can accommodate the volume of 150,000 tons that China was exporting.

Speaker #4: This period that will be restart China and now we have this volume. The harvest of the animal has fallen 20% in the first month.

Speaker #4: But the price of the life animal did not fall. And should default because the animal is in the field. And I believe that the farmers have prepared for the end of the quota.

Gilberto Tomazoni: I believe that the farmers have prepared it for the end of the quota. The cattle, as I mentioned before, are there, and the price should fall. Then we recalibrate the cutout and the margin in this business. Because, of course, Brazil will be without this quota of China and probably with the European restriction that we have. I believe that we need to reduce the number of cattle harvest in Brazil for this period we do not have the quota of China. When the quota of China restarts again, October, that will be different. But so far, with June, October, we see that the price of cattle should fall because the number of cattle will fall, harvest will fall.

Speaker #4: And the cattle, I mentioned before, are there. And the price should default and then we recalibrate the cut out the margin in this business.

Speaker #4: Because, of course, Brazil will be with this, without the quota of China and probably with the European restriction that we have. I believe that we need to reduce the number, the number of cattle harvest in Brazil.

Speaker #4: For this period, we don't have the quota of China. When the quota of China restart again, October, that will be different. But so far, we till October, we see that the price of cattle should be fall.

Speaker #4: Because the number of cattle will be fall. Harvest will be fall. And I think it's 3. As a unique conditions because we have brand we have category management with the retails.

Gilberto Tomazoni: I think it has a unique conditions because we have brand, we have category management with the retails that provide. I think when you combine this category manage and the brand that we have, provide for us a very competitive advantage in the sector. Look, we feel tough now, the market, for this period of the time, but we believe that the market here will be back on a healthy situation very soon in the coming months.

Speaker #4: That provide I think is when you combine this category manage and the brand that we have provide for us a very competitive advantage in the sector.

Speaker #4: So look, we feel tough now the market for this period of the time. But we believe that market will be back on a healthy situation, very soon.

Speaker #4: When it comes months.

Renata Cabral: That is helpful context, Tomazoni. Thank you so much.

Speaker #6: That's helpful context, Tomazoni. Thank you so much.

Operator 2: Our next question comes from Guilherme Palhares with Santander. Mr. Palhares, you may go ahead with your question.

Speaker #2: And our next question comes from Guilherme Padares with Santander. Mr. Padares, you may go ahead with your question.

Guilherme Palhares: Good morning, Wesley, Tomazoni, Guilherme. Thank you for taking my question. Again, as everyone mentioned, congrats on the move, Wesley and Tomazoni. You will be truly missed as one of the key executives on the protein space, not only for JBS, but for the entire sector as a great voice defending the sector globally. Wesley, I know that you have not taken office already, but you have been with JBS in any part of the organization, I think now, right? You have been all over the place in any divisions. You get a company now that is a company listed in the US, a global player, which in the last couple of years changed a bit the strategy from M&A and integration as it was in the past, towards more of an organic growth value-added.

Speaker #7: Good morning, Wesley. Tomazoni, Guilherme, thank you for taking my question. Again, as everyone mentioned, congrats on the move Wesley. And Tomazoni, you'll be truly missed as one of the key executives on the protein space.

Speaker #7: And not only for JBS, but for the entire sector as a great voice. Defending the sector globally. Wesley, I know that you have not taken office already, but you have been with JBS in any part of the organization.

Speaker #7: I think now, right? So you have been all over the place in any divisions. And you get a company now that it's a company listed in the US, a global player.

Speaker #7: Which in the last couple of years, changed a bit the strategy from M&A and integration as it was in the past towards more of an organic growth, value added.

Speaker #7: So I want to get your thoughts, having had experience in all divisions so far. Seeing every operation, what do you think lies ahead for the organization?

Guilherme Palhares: I want to take your thoughts, having experience in all divisions so far, seeing every operation, what do you think lies ahead for the organization? What is the agenda that you will try to pursue? What will be the JBS of Wesley Filho from now on?

Speaker #7: What is the agenda that you will try to pursue? What will be the JBS of Wesley Filiu from now on?

Wesley Batista Filho: Guilherme, thanks for the question. The good thing about a transition that is internal, like what we are doing, is that there is a lot of continuity, right? When you get a new CEO that comes from a market, or that is not on the day-to-day of the operations, and the guy is new and they have to come up with something completely new and something completely different sometimes, right? Just to maybe mark what direction that they think is relevant then. That is exactly not the case, right? Tomazoni and I have been working together for the past 10 years, so a lot of what has been done within JBS for the past decade here, in a lot of ways, I have had the privilege to be part of that team that was doing that, and I was alongside Tomazoni all the time here doing that.

Speaker #4: Guilherme, thanks for the question. You know, the good thing about a transition that's internal, like what we're doing, is that there is a lot of continuity, right?

Speaker #4: So when you get a new CEO that comes from a market, from the market, or that's not on the day-to-day of the operations, and the guy is new and they have to come up with something completely new and something completely different, sometimes, right, just to maybe mark kind of what direction that they think is relevant, then that's exactly not the case, right?

Speaker #4: I mean, Tomazoni and I have been working together for the past 10 years. So a lot of what has been done within JBS for the past for the past decade here in a lot of ways, I've had the privilege to be part of that team that was doing that.

Speaker #4: And I was alongside Tomazoni all the time here doing that. So you should not at all see JBS have a big change in the strategy, in the way we do things.

Wesley Batista Filho: You should not at all see JBS have a big change in the strategy in the way we do things. Again, because we are just one team, and we have been working together for all of that time. There is a lot of alignment, in terms of leadership, and in this transition here. The other thing, too, I would not at all consider a JBS of Wesley or JBS. JBS has 280,000 team members and a very strong leadership team that is I think it is. Maybe I am biased, but I think it is the best in the industry. I think that is something else that I just mentioned. Now, in terms of where we are going to go, Guilherme, for sure, we have a lot of new avenues of growth that have been opened in the last few years that continue to mature and continue to evolve.

Speaker #4: Again, because we are just one team and when we've been working together for all of that time. So there is a lot of alignment in terms of leadership and in this transition here.

Speaker #4: The other thing too, I would not at all consider a JBS of Wesley or JBS. JBS has 280,000 team members and a very, very strong leadership team that's I think it's maybe I'm biased, but I think it's the best in the industry.

Speaker #4: So I think that's something else that I'll just mention. Now, in terms of where we're going to go, Guilherme, for sure we have a lot of new avenues of growth that have been opened in the last few years, that continue to mature and continue to evolve.

Wesley Batista Filho: We just announced really just last week about this whole Danantara deal and all of the potential that we have in Southeast Asia. That is a market population of 700. If you consider the ASEAN bloc plus Oceania, Australia, and New Zealand as well, you are talking about 750 million people. It is a huge market that we trade a little bit, but not very much that opens a whole new avenue of growth for us. Australia is a huge platform for us to get started in that, a huge competitive advantage for us to grow in that area of the world. We have the project in Oman that continues to grow our business in the Middle East.

Speaker #4: And we just announced really just last week about this whole Danantara deal and all of the potential that we have in Southeast Asia. That's a population market population of 700.

Speaker #4: If you consider the ASEAN block plus Oceania Australia, New Zealand, right, or New Zealand as well, you're talking about 750 million people. So it's a huge market that we trade a little bit, but not very, very much.

Speaker #4: That opens a whole new avenue of growth for us. Australia is a huge platform for us to get started in that huge competitive advantage for us to grow in that area of the world.

Speaker #4: We have the project in Oman that continues to grow our business in the Middle East. And obviously, I'm talking about new geographies, but even in our traditional geographies, like the US and doing continue to evolve, our agenda on brands like what we're doing with just bear, in Brazil, a lot of the growth that we've done in Seattle, has been matured, but there is still some.

Wesley Batista Filho: I am talking about new geographies, but even in our traditional geographies like the US and continue to evolve our agenda on brands, like what we are doing with Just Bare. In Brazil, a lot of the growth that we have done in Seara has been matured, but there is still some to go there. Our business in the UK is a business that gets talked relatively little about, but it is a great business, about a $5 billion business within Pilgrim's, $5 billion that we do not talk quite as often. Anyway, we are going to continue to grow on the avenues that we have been growing and you will see a lot of continuity and alignment, going forward. Thank you for your question, Guilherme.

Speaker #4: There. Our business in the UK is a business that gets talked relatively little about, but it's a great business. About 5 billion business within programs that 5 billion dollars that doesn't we don't talk quite as often.

Speaker #4: But anyway, we're going to continue to grow on the avenues that we have been growing. And you'll see a lot of a continuity and alignment going forward.

Speaker #4: But thank you for your question, Guilherme.

Guilherme Palhares: Thanks, Wesley.

Speaker #7: Thank you, Wesley.

Speaker #2: Our next question comes from Ricardo Boyadi with Safra. You may go ahead, Mr. Boyadi. Mr. Boyadi, it’s possible you may be on mute if you're trying to speak.

Operator 2: You bet. Our next question comes from Ricardo Boiati with Safra. You may go ahead, Mr. Boiati. Mr. Boiati, it is possible you may be on mute if you are trying to speak.

Ricardo Boiati: Hi. Good morning, everyone. I'd like to join the crowd here on the compliments. Tomazoni, congrats on a job well done. Thank you for the interactions during these years. It's been a pleasure, and hope to keep in touch. Wesley, congrats on the new role. Truly a well-deserved step, and wish you all the best on the new position. My question is on Australia. I would like to continue this conversation, Wesley, about the potential of Australia, as a production platform. Obviously, you are relevant there. But in terms of JBS's global platform, it's not that relevant. In the scope of the partnership with Danantara, and when you look at the country's potential there in terms of grain production, land availability, and so on, how big an opportunity Australia could be, especially for the production of chicken, in the future?

Speaker #5: Hi, good morning, everyone. I'd like to join the crowd here on the compliments. So Tomazoni, congrats on a job well done. Thank you for the interactions during these years.

Speaker #5: It's been a pleasure and hope to keep in touch. And Wesley, congrats on the new role. Truly a well-deserved step and wish you all the best on the new position.

Speaker #5: My question is on Australia. I'd like to continue this conversation, Wesley, about the potential of Australia. As a production platform, obviously, you are relevant there, but in terms of JBS's global platform, it's not that relevant.

Speaker #5: So in the scope of the partnership with Danantara and when you look at the countries' potential there in terms of grain production, land availability, and so on, how big an opportunity Australia could be, especially for the production of chicken, in the future, I mean, logistics-wise, it's very it seems to be very competitive, right, to have Australia as a production platform in chicken.

Ricardo Boiati: Logistics-wise, it seems to be very competitive, right? To have Australia as a production platform in chicken. How do you think about this, and how is this being considered in the scope of the deal with Danantara? Thank you.

Speaker #5: So how do you think about this, and how is this being considered in the scope of the deal with Danantara? Thank you.

Gilberto Tomazoni: Thank you, Ricardo, for the question. I think it's important to discuss a bit what is the long-term strategy of this partnership. It's to expand our investment capacity in Southeast Asia. And when we preserve our operating model and give us a financial discipline and a full operating control. The priority these first 2 years is to invest in the regions. For Indonesia is the focus, and the main focus of us with this partnership is these first 2 years in Indonesia. After that, we can invest in Australia or the other countries in South Asia. But you mentioned that in Australia, we are a very diversified platform, just we missed the chicken. Of course, chicken is something that we have all the time considered the opportunity to enter this sector.

Speaker #4: Thank you, Ricardo, for the question. I think it's important I think is to discuss a bit what is the long-term strategy this partnership is to expand our investment capacity in Southeast Asia and when we preserve our operating model and give us a financial discipline in full operate control.

Speaker #4: The priority in this first two years is to investing in the regions for Indonesia, Indonesia is the focus, and it's the main focus on us with this partnership is this first two years in Indonesia.

Speaker #4: Then after that, we are can investing in Australia or the other places and South Asia. But you mentioned that in Australia we are a very diversified platform just we missed the chicken of course chickens is something that we are we have all the times considered the opportunity to enter this sector.

Gilberto Tomazoni: But we didn't find the right conditions that we believe that it's attractive for us to go in. But it's still open as an opportunity. We don't have a pipeline of investments or acquisitions to announce, but in reality, we are looking for good opportunity that could be M&A or greenfield, and with a focus in Indonesia now. And why we are so confident? Because of the size of the market. We're talking about 640 million population in this area. We cannot go alone in this. Something that is safe, and the way that we have organized this deal with the creating conditions that we are not stressed our balance sheet. I think it was, we have a certain additional capital. It's not changed our investment discipline. At the same time, we can catch the opportunity, this growth market and then grow consumption of proteins.

Speaker #4: But we didn't find the right conditions that we believe that is attractive for us to go in. That but still open as an opportunity.

Speaker #4: We don't have a pipeline of investment or acquisition to announce. But in reality, we are looking for opportunity that could be M&A or greenfield and with a focus in Indonesia now.

Speaker #4: Why we are so confident? Because of the size of the market. We talked about 640 million population in this area. And we cannot go alone.

Speaker #4: It's something that is safe. And the way that we have organized this deal will create conditions so that we are not stressing our balance sheet.

Speaker #4: And I think it was we have assessed additional capital is not changing our investment discipline at the same time you can't catch the opportunity that this growth market and then grow consumption of proteins.

Speaker #4: I think this is and we have a strong team there. We didn't change the business. And JBS remains fully responsibility for the manage, the platform.

Gilberto Tomazoni: And we have a strong team there. We did not change the business. JBS remains fully responsible for the management, the platform. And we will retain full operational control. I think this was a perfect movement in a strategic area for the increasing consumption of protein.

Speaker #4: And we will retain full operational control. I think this was a perfect move in a strategic area for the increase in the consumption of protein.

Ricardo Boiati: Great, Tomazoni. Thank you very much.

Speaker #4: I hear the great Tomazoni. Thank you very much.

Operator 2: Our next question comes from Carla Casella with JPMorgan. You may go ahead, Mrs. Casella. Mrs. Casella, if you are speaking, you may be on mute. Okay, moving to our next question. It comes from Priya Ohri-Gupta with Barclays. Mrs. Ohri-Gupta, you may go ahead with your question.

Speaker #2: Our next question comes from Carla Casella with JP Morgan. You may go ahead, Ms. Casella. Ms. Casella, if you are speaking, you may be on mute.

Speaker #2: Moving to our next question. It comes from Priya Aurigupta with Barclays. Mrs. Aurigupta, you may go ahead with your question.

[Analyst] (Barclays): Hi, good morning. This is Theresa on for Priya. Thank you for taking our questions. And congrats, Tomazoni and Wesley, on the transition to your new roles. We are really looking forward to work with you and wish you both the best. So our question is, will we continue to expect that net leverage will end the year at or below 3x? And in support of this, how should we think about the potential for any debt repayment over the rest of the year? Thank you.

Speaker #6: Hi, good morning. This is Theresa on for Priya. Thank you for taking our questions. And congrats, Tomazoni and Wesley on the transition to our new roles.

Speaker #6: We'd really look we're really looking forward to work with you and wish you both the best. So our question is, will we continue to expect that net leverage will end the year at or below three times?

Speaker #6: And in support of this, how should we think about the potential for any debt repayment over the rest of the year? Thank you.

Gilberto Tomazoni: Thanks, Theresa. Bear in mind that on a last of month rail, we are replacing very strong, especially from the chicken US EBITDA of last year, to more normalized margins for chicken US this year. So this statistical effect tends to pressure the leverage. However, H2 of the year is where we generate the bulk of our free cash flow. So one thing probably tends to balance the other. So we are thinking that we will be finishing the year in the levels more or less the same as we got in Q2, slightly above 3x. As we generate free cash flow, and given we have no debt maturity in the short term, and because all of the coupons up to 2032 are below Treasury, the efficient debt to be repurchased, I would say probably the 2034, which have a 6.75% coupon.

Speaker #4: Thanks, Theresa. Yeah, bear in mind that on the last of replacing very strong especially from the chicken US EBITDAs of last year. To a more normalized margins for chicken US this year.

Speaker #4: So this is statistical effect. Tends to pressure the leverage. However, second half of the year is where we generate the bulk of our free cash flow.

Speaker #4: So one thing's probably tends to balance the other. So we're thinking that we'll be finishing the year in the levels more or less the same as we got in the second quarter.

Speaker #4: It's likely above three times. And as we generate free cash flow, and given we have no debt mature this in the short term, and because all of the coupons up to 2032 are below treasury, the efficient debt to be repurchased, I would say probably the 34s which have a 6.75 coupon is to have still 300 million dollars outstanding there.

Gilberto Tomazoni: We should have still $300 million outstanding there, and some 2033s or 2035s. But let's see how H2 behaves, and then we can make a decision of repaying or not those more expensive debts.

Speaker #4: And some '33s or '35s. But let's see how the second half behaves, and then we'll make a decision about repaying or not those more expensive debts.

[Analyst] (Barclays): Great. That's helpful. Thank you.

Speaker #6: Great. That's helpful. Thank you.

Operator 2: Ladies and gentlemen, there being no further questions, I would like to pass the floor to Mr. Gilberto Tomazoni.

Speaker #2: Ladies and gentlemen, there being no further questions, I would like to pass the floor to Mr. Gilberto Tomazoni.

Gilberto Tomazoni: Before we close, I want to thank all of you for your kind words and congratulations today for me on behalf of Wesley. I also thank you for the attention, respect, and support you have showed me, and over these past eight years, our interactions have always been very productive. Your question, your perspective, even your challenge have helped us improve the way we communicate, sharpen our focus, and become a better company. I have learned a great deal from all of you. Of course, I want to thank our entire team around the world. Everything we have accomplished over these years has been a team effort, and I am very proud of what we have built together.

Speaker #4: Before we close, I want to just thank all of you for your kind words and congratulations today for me and on behalf of Wesley. Also, thank you for the attention, respect, and support you have showed me over these past eight years.

Speaker #4: Our interactions have been always been very productive. Your question, your perspective, even your challenge have helped us improve the way we communicate sharpen our focus and become better company.

Speaker #4: I have learned a great deal from all of you. And of course, I want to thank our entire team around the world. Everything we have accomplished over these years has been a team effort, and I'm very proud of what we have built together.

Gilberto Tomazoni: We still have a few important milestones ahead of us, and my focus remains fully on leading JBS, continue to deliver strong results, and work closely with Wesley to ensure a smooth transition, successful transition. Thank you again for your trust, for your engagement, and your partnership over all these years. Thank you.

Speaker #4: We still have a few important months ahead of us, and my focus remains fully on leading JBS to continue to deliver strong results and working closely with Wesley to ensure a smooth and successful transition.

Speaker #4: Thank you again for your trust, for your engagement and your partnership over all these years. Thank you.

Operator 2: This is the end of the conference call held by JBS. Thank you very much for your participation, and have a nice day.

Speaker #2: This is the end of the conference call held by JBS. Thank you very much for your participation and have a nice day.

Ricardo Boiati: Goodbye