Q2 2026 Jbs NV Earnings Call

August 11, 2026

Speaker #1: Projections, operating and financial targets, and potential growth should be understood as merely forecasts based on the company's management expectations, in relation to the future of JBS.

Speaker #1: Such expectations are highly dependent on the industry and market conditions, and therefore are subject to change. Our present with us today, Gilberto Tomazoni, Global CEO of JBS, Guilherme Cavalcanti, Global CFO of JBS, Wesley Batista Filho, CEO of JBS USA, and Christiane Aziz, Investor Relations Director.

Speaker #1: Now I'll turn the conference over to Gilberto Tomazoni, Mr. Tomazoni, you may begin your presentation.

Speaker #2: Based in on leading the business and ensuring a smooth transition. We have been planning this subsectionally carefully, from a position of stress, and nothing changed in our strategy.

Speaker #2: 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.

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Speaker #2: 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 underwhelming leadership.

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Speaker #2: 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.

Speaker #1: 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.

Gilberto Tomazoni: 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-wear leadership. Turning to our results, the Q2, once again, demonstrated resilience of our global operating model in an environment that remains complex and volatile. Supply and demand dynamic vary across geographies and proteins, while currency movements, trade disruption in 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 total $1.143 billion under IFRS, with a margin of 6%, and $1.3 billion under the U.S. GAAP, with a 5.3% margin.

Speaker #2: While currency movements trade disruption in geopolitical events, under far more complexity. Against these backdrops, our priorities are clear: improving efficiency, protecting margin, and strengthening commercial performance allocation production to the markets where we create the most value.

Speaker #2: Name Milestone. In that journey. Position in 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.

Gilberto Tomazoni: 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 underwear leadership. Turning to our results, the Q2, once again, demonstrated resilience of our global operating model in an environment that remains complex and volatile. Supply and demand dynamic vary across geographies and proteins, while currency movements, trade disruption in 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 total $1.143 billion under IFRS, with a margin of 6%, and $1.3 billion under the U.S. GAAP, with a 5.3% margin.

Speaker #2: Turning to our results, the second quarter, once again demonstrated resilience of our global operating model. In an environment that remained complex and volatile, supply and demand dynamics vary across geographies and proteins, while currency movements trade disruption in geopolitical events under far more complexity.

Speaker #2: Adjusted net income was 218 million US dollars, adjusted EBITDA total 1.43 billion US dollars, under IFRS, with a margin of 6%. And 1.3 billion US dollars under US gap, with a 5.3% margin.

Speaker #2: Against this backdrop, our priorities are clear: improving efficiency, protecting margin, and strengthening commercial performance allocation production to the markets where we create the most value.

Speaker #2: Compared to the first quarter, profitability already showed an improvement in the majority of our business units. Net income was significantly affected by not recurring items.

Speaker #2: 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 #2: 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 gap, with a 5.3% margin.

Speaker #2: 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: Compared to the Q1, profitability already show an improvement in the majority of our business units. Net income was significant affected by not 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 business during the quarter. Although important part of our portfolio still operate in a challenged environment. While US Beef continues to operate in a challenged environment, we are reorganizing our operating structure and are very confident at the results of those changes. I will leave the discussion to the business, to Alzy, who will be 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.

Gilberto Tomazoni: Compared to the Q1, profitability already show an improvement in the majority of our business units. Net income was significant affected by not 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 business during the quarter. Although important part of our portfolio still operate in a challenged environment. While US Beef continues to operate in a challenged environment, we are reorganizing our operating structure and are very confident at the results of those changes. I will leave the discussion to the business, to Welsey, who will be 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.

Speaker #2: Compared to the first quarter, profitability already showed an improvement in the majority of our business units. Net income was significantly affected by not recurring items.

Speaker #2: 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 #2: 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 #2: 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 #2: The transaction includes a 2.5 billion US dollar equity investment by the Nantara in exchange for a 25% stake in our Australia and New Zealand operation.

Speaker #2: I will leave the discussion to the business, to ask who will provide more details on the quarter and our outlook for beef and pork in North America.

Speaker #2: Together, the additional funding capacity expected through the joint venture, this gives us access to up 5 billion US dollars to fund acquisition, greenfield projects, and other growth opportunities.

Speaker #2: Across Indonesian 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: Before moving on, I would like to comment briefly on the strategic partnership we announced last Friday with Danantara Investment Management. The transaction includes a $2.5 billion equity investment by Danantara 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 to fund acquisition, greenfield project, and other growth opportunities across Indonesia and Southeast Asia. This creates a well-capitalized platform to accelerate our expansion in one of the fastest-growing protein consumption region in the world, 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. Our Australia-New Zealand operation remains fully consolidated under the same leadership and operating model. With that, let's turn to our operating performance.

Speaker #2: The transaction includes a $2.5 billion equity investment by the Nantara 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 $5 billion to fund acquisition, greenfield projects, and other growth opportunities.

Speaker #2: 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 #2: 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 constructed although conditions vary considerably across markets.

Speaker #2: Across Indonesian 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.

Speaker #2: 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 #2: While preserving the threat 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 #2: JBS Brazil delivered a strong quarter, driven by export demand and disciplined commercial execution. Under IFRS, adjusted EBITDA total 269 million US dollars, with a margin of 5.9%.

Speaker #2: 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 fundamentals remain, but conditions vary considerably across markets.

Speaker #2: Even with elevated cattle price, JBS reported its highest EBITDA for a 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: Global beef fundamentally remains constructive, although conditions vary considerably across markets. Supply is limited in several regions. Demand remains resilient. Our global footprint allows us to direct products to the market where returns are the strongest. JBS Brazil delivered a strong quarter, driven by the export demand and disciplined commercial execution. Under IFRS, adjusted EBITDA totaled $269 million with a margin of 5.9%. Even with elevated cattle price, 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 markets, export markets, and the domestic market, we protect margins and maximize value per animal.

Speaker #2: 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 #2: China, remains an important destination, and 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 the domestic market, we protect margins and maximize value per animal.

Speaker #2: JBS Brazil delivered a strong quarter, driven by export demand and disciplined commercial execution. Under IFRS, adjusted EBITDA total $269 million with a margin of 5.9%.

Speaker #2: 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.

Speaker #2: Our domestic business is another important competitive advantage. Through the Freeboy brand and a long-standing customer relationship, we work alongside retailers and categories partners, helping them to grow value across the beef categories.

Speaker #2: 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 #2: During the quarter, our barbecue portfolio performance is particularly well. We have expanded commercial initiatives with a major retailers across Brazil. And chicken, both pilgrim's pride in Seattle, delivered a solid result.

Speaker #2: Although market dynamic involved different across regions. At PPC, demand remains 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.

Speaker #2: 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.

Gilberto Tomazoni: Our domestic business is another important competitive advantage. Through the Friboi brand and a longstanding customer relationship, we work alongside retailers and categories partners, helping them to grow value across the beef categories. During the quarter, our barbecue portfolio performed particularly well. We have expanded commercial initiatives with our major retailers across Brazil. In chicken, both Pilgrim's Pride and Seara delivered solid results, although market dynamics evolved differently across regions. 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, margin 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.

Speaker #2: Plan of progress were completed and expanded assets continue to mature. At Seattle, margin remaining strong despite a tougher year over year comparison. Unless a favorable sorry, unless favorable currency environment and changing export market dynamics.

Speaker #2: 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 #2: Although market dynamics involved differently across regions. 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.

Speaker #2: The business grew volumes, reflecting improvements in operating quality, and commercial execution. We see further opportunities to improve mix distribution and execution in domestic market.

Speaker #2: While conversion volume growth into a sustainable profitability. Our priority for the second half are clear, execution and cash generation. We expect leverage increase during the quarter, and reducing the remaining priority.

Speaker #2: Plan of progress were completed and expanded assets continue to mature. At Ciara, margin remained strong despite a tougher year over year comparison. Unless a favorable sorry, unless favorable accuracy environment and changing export market dynamics.

Speaker #2: We are focused on strong cash generation, disciplined working capital management, and a prudent capital allocation. The environment remains dynamics. But our priority are unchanged.

Speaker #2: The business grew volumes reflecting improvements in operating quality, and commercial execution. We see further opportunities to improve mix distribution and execution in domestic market while converting volume growth into a sustainable profitability.

Speaker #2: 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 see further opportunities to improve mix, distribution, and execution in domestic markets, while converting volume growth into sustainable profitability. Our priorities for the H2 are clear, execution and cash generation. We expect leverage increase during the quarter, and reducing will remain a 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. We are focused on execution, cash generation, and disciplined capital allocation. With a diversified portfolio, a strong market position, and experienced team 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 #2: 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 #2: Thank you, and I will turn now the call over to Wesley.

Speaker #1: 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 #1: 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.

Speaker #2: The environment remains dynamic, but our priorities 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.

Speaker #1: 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 #1: 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: Thank you, and I will now turn the call over to Wesley.

Speaker #3: Tomasoni, 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.

Wesley Batista Filho: Gilberto 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 #1: 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.

Speaker #3: 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 #1: 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 #3: 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 #1: 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 #3: 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 #1: Even so, US beef delivered a quarter of solid improvements. 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.

Speaker #3: 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.

Wesley Batista Filho: I am 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 will continue to live our values, strengthen our culture, and build on the tremendous work you have done over the past eight years. We will 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 continued to pressure margins. Even so, US beef delivered a quarter of solid improvement.

Speaker #1: 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 #3: 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 #3: 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 #1: 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, balanced over time.

Speaker #3: 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 have been working on are already translating into better results, and the announced capacity optimization will continue contribute progressively as they are fully implemented. At the same time, we are 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 #1: 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.

Speaker #3: 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 #1: 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 #3: At the same time, we're 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 #1: 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 an 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 #3: 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.

Speaker #1: 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.

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 increase in cattle available for slaughter during the Q1 2027, with slaughter volumes returning to a more normal level by the Q2. Turning to pork. Market fundamentals proved more challenging during this quarter. Even so, our pork business delivered another quarter of solid performance.

Speaker #3: 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 #1: Our pork business once again demonstrated its ability to compete at the highest level. We'll continue focusing on operational excellence, customer service, disciplined capital allocation, and continuous improvement.

Speaker #1: 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: 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 an 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: 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 Q2 and Q3 in IFRS for the time being.

Speaker #3: 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.

Wesley Batista Filho: EBITDA margin reached 8.9%, compared to 6.5% a year ago. 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: 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 indices.

Speaker #3: Our pork business once again demonstrated its ability to compete at the highest level. We'll continue focusing on operational excellence, customer service, disciplined capital allocation, and continuous improvement.

Speaker #2: In this regard, I would like to highlight JBS inclusion in the Russell 1000 and Russell 3000 indices in June. This inclusion, as well as the potential for inclusion in additional indices going forward, is key to expanding our investor base, increasing liquidity, enhancing global visibility, and unlocking value to shareholders.

Speaker #3: 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 #2: Thank you, Tomasoni, 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 and therefore reporting forms. Thank you, and take care, 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 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's now move on to the operational and financial highlights of Q2 2026.

Speaker #2: 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.

Speaker #2: Adjusted EBITDA in IFRS totaled $1.4 billion, which represents a margin of 6% for the quarter. Adjusted EBITDA in US gap totaled $1.3 billion, which represents a margin of 5.3% for the quarter.

Speaker #2: 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 indices.

Speaker #2: In this regard, I would like to highlight JBS 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 shareholder.

Speaker #2: Adjusted operating income was $790 million with a margin of 3.3% in IFRS, and $866 million in US gap with a margin of 3.6%. The quarter's net loss was $102 million with a negative EPS of $0.10.

Speaker #2: In addition, to the year-over-year decline in operating results, we also reported $319 million increasing 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 craft Brazilian local venture, of which $147 million had a cash impact.

Speaker #2: 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 U.S. 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 U.S. 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 #2: 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 #2: 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 a more attractive rate and longer tenors.

Speaker #2: 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 #2: Market-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.

Speaker #2: 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 #2: Additionally, the net loss was also impacted by the final calculation of the bargaining price gain of the acquisition of Montecare Alimentos, with no cash impact, totaling $81 million.

Speaker #2: The main drivers were $172 million in premiums, interest, and costs related to the tender offer for the bond and the CRAB Brazilian local venture, of which $147 million had a cash impact.

Speaker #2: And anti-trust settlements totally $133 million. Excluding the non-recurring items adjusted, net income was $218 million, and the earnings per share was worth $0.20 for the quarter.

Speaker #2: 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's 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 rates and longer tenors. Mark to mark 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 $218 million, and the earnings per share was worth $0.20 for the quarter. Free cash flow.

Speaker #2: Free cash flow. Free cash flow into the second quarter of 2026 improved by $145 million year over year, reaching a positive of $130 million, compared to a cash consumption of $55 million in the second quarter 2025.

Speaker #2: Mark-to-market of the derivatives, net of exchange rate variation, was $53 million. Monetary restatements and high interest expenses related to the increase, which together amounted to approximately $120 million.

Speaker #2: 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 #2: 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 #2: Totally $81 million in dollars and anti-trust settlements totaled $133 million. Excluding the non-recurring items, adjusted net income was $218 million, and earnings per share were $0.20 for the quarter.

Speaker #2: 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, 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 #2: 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 the 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 increasing total debt.

Speaker #2: Real appreciation that increased interest expenses in US dollars of the Brazilian local debentures and increasing total debt. Moreover, total capital expenditures increased by $163 million of which $159 million was expansion capex.

Speaker #2: 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 #2: 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.

Speaker #2: 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 higher 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 #2: Working capital expectation of the work expectation of negative $350 million of working capital in 2026, a $500 million improvement versus last year, driven by higher receivable discounts and estimation previously.

Speaker #2: Real appreciation has increased interest expenses in US 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 to even buy. Capital expenditure of $2 billion in 2025, a $400 million reduction versus the initial estimate. The 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 #2: Legal settlements of $100 million already realized in 2026. Biological assets of $850 million flat versus 2025. Interest expenses of $1.3 billion and increase of $150 million versus the initial estimates due to higher net debt.

Speaker #2: 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 #2: Leasing expenses flat at $500 million, 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 to $4.2 billion, while reducing the owing cost of this line.

Speaker #2: Working capital expectation of a 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 #2: Our cash liquidity, combined with the revolving credit facility, totaled approximately $7.7 billion. Our average debt term reached $15.3 years, and an average cost of $5.7%.

Speaker #2: Legal settlements of 100 million dollars already realized in 2026. Biological assets of 850 million dollars flat versus 2025. Interest expenses of 1.3 billion dollars and increase in of 150 million dollars versus the initial estimates due to higher net debt.

Speaker #2: 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 #2: 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.

Speaker #2: It's likely above our long-term target of keeping net debt 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.

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 reaches 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 3.1 times. It is slightly above our long-term target of keeping net debt to EBITDA between two and three times. 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 #2: 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 for the question-and-answer session.

Speaker #2: 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 #1: Thank 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 #2: As we anticipated in our last conference call, due to the 1 billion dollar 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 #1: With your excuse, if you have any questions, please press 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: 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 for the question and answer session.

Speaker #3: Yes. Hi. Thank you. Good morning, everyone.

Speaker #4: Good morning, Thiago.

Speaker #3: My question, thank you, Wesley. I can't start this call other than say congrats to Tomazoni on what has been a remarkable job, not just in JBS, but also on the animal protein industry.

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.

Operator: 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 #3: And 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?

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

Speaker #3: 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?

Speaker #3: Throughout your press release, I see comments of sticky demand on beef and poultry, but then on the other hand, I also see you mentioned that inflation is weighing down on pork.

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

Speaker #3: Yes, hi. Thank you. Good morning, everyone.

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

Speaker #3: You had negative chicken sales growth on food service and retail. And some of your peers, like Tyson Smithfield and even Grooma, are cutting their guidance, right?

Speaker #4: Good morning, Tiago.

Guilherme Cavalcanti: Good morning, Thiago.

Wesley Batista Filho: 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 #3: My question, thank you, Wesley. I can't start this call other than say congrats to Tomazoni on what has been a remarkable job not just in JBS but also on the animal protein industry.

Speaker #3: 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?

Speaker #3: And also, wishing you, Wesley, continued success on your expanded responsibilities in a chair that I think is sensitive not only to your investors, but also to the country, right?

Speaker #3: 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 #3: 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: Thanks, Thiago.

Wesley Batista Filho: Thanks, Thiago.

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 Foods, Smithfield Foods, 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 can't erode more prominently going forward? This is the question. Thank you.

Speaker #3: Thank you.

Speaker #4: Thiago, good morning. So 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.

Speaker #3: 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.

Speaker #4: 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.

Speaker #3: 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?

Speaker #3: When I look to the beef cutout, it seems it has somehow reached a ceiling—not necessarily following the seasonality. And this is the reason for my question, right?

Speaker #4: And that was a big surprise of 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.

Speaker #3: 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 #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.

Speaker #3: Thank you.

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—there is plenty of data in the market about that.

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 our customers and what we see in the marketplace. We have found out actually that, and we used to think that proteins had more of a substitution effect, depending on prices. That was a big surprise that of 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. 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.

Wesley Batista Filho: 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 our customers and what we see in the marketplace. We have found out actually that, and we used to think that proteins had more of a substitution effect, depending on prices. That was a big surprise that of 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. 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.

Speaker #4: And actually, I think that, again, I keep on saying, a few years ago, I cut out about $300. I would have thought it was going to be a very tough we would have a tough time achieving that.

Speaker #4: 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 it to think that proteins had more of a substitution effect depending on prices.

Speaker #4: And we've reached way above that, almost in the $400. So look, I think demand is super strong. What we are seeing is where the consumer is consuming that protein changing.

Speaker #4: And going more into retail, more eating at home than away from home, and food service, that's something we've seen. But again, for the time being, as we see the marketplace right now, we think the protein demand will continue to be strong.

Speaker #4: And that was a big surprise of 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.

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.

Speaker #3: That's helpful, Wesley. Thanks very much.

Speaker #4: Thanks.

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

Speaker #4: 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.

Guilherme Cavalcanti: 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 a very tough. We would have a tough time achieving that, and we've

Wesley Batista Filho: 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 a very tough. We would have a tough time achieving that, and we've reached way above the head, almost into the 400. Look, I think demand is still pretty strong. 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's something we've 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: And we've reached way above that almost in the 400. So look, I think demand is still pretty strong. What we are seeing is where the consumer is consuming that protein changing.

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 continue the interaction.

Wesley Batista Filho: reached way above the head, almost into the 400. Look, I think demand is still pretty strong. 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's something we've 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 #5: This is great news for everybody. I have another one on the US, but specifically on the side. The question that we asked the last time: the spreads indicated much tougher second quarter versus the first quarter, but your numbers obviously showed actually a pretty significant improvement.

Speaker #4: And going more into retail, more eating at home than away from home and food service, that's something we've seen. But again, for the time being, as we see the marketplace right now, we think the protein demand will continue to be strong.

Speaker #3: That's helpful, Wesley. Thank you very much.

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

Speaker #4: Thanks.

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.

Wesley Batista Filho: Thanks.

Speaker #1: Thank you. And our next question comes from Mr. Ricardo Alvez with Morgan and 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.

Operator: 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. I think 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'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.

Speaker #5: So I'm just wondering if there's more details that you can provide there some of the initiatives that may have already kicked in and helped the quarter.

Speaker #5: 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.

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: 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.

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 #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 U.S. beef going forward.

Speaker #4: It was 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.

Ricardo Alves: If you can specifically say what you're doing differently, that would be helpful. Or even if there were a couple of issues in Q1 that were not present, if we're able to quantify that would be helpful. Just so that we have a better base now to model the US beef going forward. 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.

Speaker #4: Does not have anything that's very material. There is only minor things. And so nothing related to hedging or anything like that. So the comparison is something to keep in mind.

Speaker #4: But when you just compare the second quarter to the first quarter in just the business in general, it was relatively solid performing compared to performance given the market conditions.

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.

Speaker #4: So look, we use it to run our business in two different business units. And 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.

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

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. The Q2 of 2026 does not have anything that is very material. There is only minor things, nothing related to hedging or anything like that. The comparison is something to keep in mind. But even when you just compare the Q2 to the Q1 and 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. The reason for that is when we acquired Swift & Company and afterwards the Packerland acquisition.

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

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

Speaker #4: There is 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 in just the business in general, it was relatively solid performing compared to performance given the market conditions.

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.

Speaker #4: And we think that there is going to be a lot of synergies there and a lot of them are on the sales side. We've done a lot of work over the past three, four years in terms of yields.

Speaker #4: So look, we use 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.

Speaker #4: There is always a little bit more, but most of the plan that I presented in New York was not related to yields, was related to being able to sell more ground beef, sell more value-added ground beef, sell more value-added items.

Wesley Batista Filho: Packerland focused on a completely different type of cattle, different types of size of plants, different kind of cattle procurement. We used to run those two business units very separate. The market has changed, has changed quite a lot. Actually that separation did not make sense anymore. 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 is 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. The market has changed, though—it has changed quite a lot. And actually, that separation didn't make sense anymore.

Speaker #4: We 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 just shows the size of the demand that we have actually for value-added items and that we can continue to supply.

Speaker #4: So we went ahead and put those two business units together and now run the business unit as one. And look, on both sides of the business, there are strengths that one had and the other one didn't have.

Speaker #4: So a lot of 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 on the presentation.

Speaker #4: And we think that there is going to be a lot of synergies there. And a lot of them are on the sales side. We've done a lot of work over the past three, four years in terms of yields.

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

Speaker #4: 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, and 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 have the 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: And we are just beginning. So we've performed this result that we had here. But this is without the we are just getting started on that 3% improvement plan that we think we have.

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. That just shows the size of the demand that we actually have for value-added items and that we can continue to supply.

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

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 on the presentation.

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

Speaker #6: Hello, good morning, everyone. Thanks for taking my question. Tomazoni, congrats for your move and also for you, Wesley. I've been enjoying discussing US beef with you a lot.

Speaker #4: That talked about that. But we are seeing that and we're 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.

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

Wesley Batista Filho: The last thing I would say is most of that capture has not been seen yet, and we are just beginning. 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: And we are just beginning. So we've achieved this result that we had here, but this is without— we are just getting started on that 3% improvement plan that we think we have.

Speaker #6: And it's just one port open. I wanted to hear from you both from the volume that is expected, 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 this opening is already relevant for any changes in strategies?

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

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

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

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

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

Leonardo Alencar: Good morning, everyone. Thanks for taking my question. Tomazoni, congrats for your move and also for you, Wesley. I will be enjoying discussing USB free cash flow a lot. Sticking with that point, Wesley, just to understand it better. Mexican border is open now. Well, it is expected for a few 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 capacity utilization, 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 congratulate you, Wesley. I’ll be enjoying discussing U.S. beef refuel a lot.

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?

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

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

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 at which this volume is growing.

Speaker #6: You already said 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 this opening is already relevant for any changes in strategies?

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

Speaker #4: Leonardo, 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, first port is going to open here on the 24th.

Speaker #6: Would you say, talking about this historical level of 1.5 to 2 million heads per year, would you expect that number to happen by the end of this year, only 2007, 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? At least the volume will be enough for us to expect a higher capacity utilization. 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 signal 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 #4: That's the port of Douglas. Douglas, Arizona. That port by itself could probably handle 300, 400,000 heads. That's just an estimate. It's difficult to predict.

Speaker #4: Something around 300, 400 is. So a third of what the usual amount they use it to come from Mexico can come from that port.

Speaker #6: Just understand how you're seeing the pace of impact from the Mexican border opening that just happened. Or if it's more like since it opened, there's a ceiling for the cattle prices and that is already helping margins, but then no direct not real impact yet.

Speaker #4: But then in the announcement that the USDA made is, they're going to analyze how that port opening in Douglas looks like and open two more ports in New Mexico.

Speaker #4: So sensitive Risa and Columbus. So if with those three ports open, we are going to have they have right around 1. over a million head capacity of flow capacity.

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

Speaker #4: Leonardo, good morning. So yeah, obviously we are forecasting the market and there's 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.

Wesley Batista Filho: No, good morning. Yeah, obviously, we're forecasting the market, and there is a lot of things that we don't know. What we know is the first port is going to open is here on 24th. That's the Port of Douglas, Arizona. That port by itself could probably handle 300,000, 400,000 heads. It's just an estimate. It's difficult to predict. Something around 300,000, 400,000 is. A third of what the usual amount that usually comes from Mexico can come from that port. Then, in the announcement that the US made is they're going to analyze how that port opening in Douglas looks like and open two more ports in New Mexico, Santa Teresa and Columbus. With those three ports open, we are going to have, they have right around over 1 million head capacity of flow capacity.

Speaker #4: So 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, right?

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

Speaker #4: We're looking at historical numbers and looking at numbers provided in the public for the public. So I think it's going to be possible within those three ports.

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: If those three ports opening, to have a big part of what Mexico uses to trade flow through the US. Only two states, Mexican states, got approval to export to the US.

Speaker #4: 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.

Speaker #4: So Santa Teresa and Columbus. So if with those three ports open, we are going to have—they have right around 1 over a million head capacity of flow capacity.

Speaker #4: The other thing that I would mention is, yes, we have information from the market that there obviously, that cattle use it to come very young to the US and get backgrounded in the US.

Speaker #4: So 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, 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, right? We're looking at historical numbers and looking at numbers provided for the public. 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. 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 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 uses to become very young to the US and get backgrounded in the US.

Speaker #4: Once the border shut, and especially after two years of the border shut down, that cattle had to be backgrounded somewhere else, and it was backgrounded in Mexico.

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: 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 feedlots in the US, actually buying that cattle and actually having that flow happen. But we don't see any reason why that wouldn't happen.

Speaker #4: Only two states, 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.

Speaker #4: We also think that there is because the 1.2 million head of cattle that came were just the calf crop that was passed into 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: The other thing that I would mention is, yes, we have information from the market that there obviously that cattle use it to be come very young to the US and get backgrounded in the US once the border shut and especially after two years of the border shut down, that cattle had to be backgrounded somewhere else.

Speaker #4: So on one hand, you only have two states. So 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.

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. 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 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 don't see any reason why that wouldn't 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's being fed. We think that the cattle that's available is bigger than the traditional 1.2.

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

Speaker #4: In Mexico, so obviously that would be a part of the feedlots in the US 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 U.S.

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

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: 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 for coming from Mexico and into ready for slaughter in the second quarter.

Speaker #4: So, on one hand, you only have two states, so about two-thirds of the cattle are able to come to the U.S. 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: On one hand, you only have two states, 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. Bottom line is, we think that because there is a lot of cattle that's already in further stages of cattle production and are heavier, that we're going to start seeing flows, obviously, end of this month and into the end of the year. Expecting that the two next ports of New Mexico open, we think beginning somewhere in Q1, we should start seeing cattle ready for slaughter that were born in Mexico.

Speaker #1: Okay. That's great

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

Speaker #6: information. Thank you, Wesley.

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 the successful tenure here. And Wesley, congrats to you on the new role and really looking forward to continuing to work together here.

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 Q2.

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

Leonardo Alencar: 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.

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

Speaker #5: Was the 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: Hey, good morning. Thanks for the question. And Tom, is there any 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.

Pooran Sharma: Hey, good morning. Thanks for the question. Gilberto 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'll ask. Just updated thoughts on heifer retention, and 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 #4: Burhan, good morning. So yeah, we obviously think that heifer retention and US cattle herd rebuild is more timid than we expect than obviously we wished for to get back to a more balanced stage in this of a situation in cattle supply.

Speaker #5: I really wanted to get your thoughts on U.S. beef. And I know everybody's asking about Mexican border flow, so maybe I'll ask: Can you give us your updated thoughts on heifer retention? And could you also share any updated thoughts on the timeline for fed cattle supplies to be rebuilt?

Speaker #4: But at the end of the day, what really matters is, number one, it seems like it has or 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 going to start going up. One thing that I'll just mention, and not to keep on going back to Mexico and, but I think it's, again, I think it's super relevant.

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.?

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

Wesley Batista Filho: Pooran, good morning. 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. But 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's a big deal. I think we're going to start seeing, we see signals that we might going to start going up.

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 wish for, to get back to a more balanced stage in this—of a situation in cattle supply.

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.

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

Wesley Batista Filho: 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, 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. So 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.

Speaker #4: So I think it brings us a lot more and it gives us more patience to see what's going to happen. Weather is a big deal.

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

Speaker #4: Weather is a big deal for sure. And we'll have to see what comes out of that. One part of the number that doesn't get shown, Puran, that I think is 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.

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

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 Canada, Canadian cattle goes to the US.

Speaker #4: I think it probably brings us more to a little bit, if all goes according to plan, right? And if 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 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 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 is two things that you need to look at, right?

Wesley Batista Filho: I think it brings us a lot more, and it gives us more patience to see what's 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. One part of the number that doesn't get shown, Pooran, that I think is relevant, and we have anecdotally heard it seems pretty promising, is the heifer retention and just cattle rebuild that we're seeing in Canada. We don't see, obviously, in those reports, but it's very relevant because it's a market that US cattle goes to Canada, Canadian cattle goes to the US. That's a big deal. Look, I think we should see, over the next years, couple of years, three years, starting to see much stronger rebuild.

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 is relevant and we've anecdotally heard that it seems pretty promising, is the heifer retention and just cattle rebuild that we're seeing in Canada.

Speaker #4: Heifer retention, but also the amount 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: We don't see that obviously in those reports, but it's very relevant because it's a market where US cattle go to Canada, and Canadian cattle go to the US.

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

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

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

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

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: But again, it's 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 is two things that you need to look at, right? 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're processing half of the beef cattle that we were processing in 2022. I think that's relevant as well.

Speaker #5: Hello everyone. Thank you for taking my questions and Tomazoni, Wesley, congratulations on the transition. And wishing you both all the best. My question is on Seara.

Speaker #5: We see another strong quarter, right, but margins weakening relative to Q1. So just like to hear a little more, if you could qualify where the sequential margin drop came from, if we're mostly talking about export markets or the domestic market.

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're processing half of the beef cows that we were processing in 2022.

Speaker #5: 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: So, I think that's relevant as

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

Pooran Sharma: Great. Thank you for the color.

Speaker #1: Thank you. And our next question comes from Henrique Bristolen with Pradesco 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.

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

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

Speaker #6: Hello, everyone. Thank you for taking my questions, and Tomas and Wesley, congratulations on the transition and wishing you both all the best. My question is on Seara.

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

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 clarify where the sequential margin drop came from. Are we mostly talking about export markets, or the domestic market?

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

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: But look, in reality, it 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: Thank you, Ricardo, for your question. Thank you for your words. Seara, I would say you're still, if you compare, the quarter will be below.

Gilberto Tomazoni: Thank you, Henrique, for your question, and thank you for your words. Seara, let us say, if you compare this quarter, was a 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 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. Look, in reality it was many changes across the one category to the other category. If I make a summary, it was weaker in the domestic markets.

Speaker #5: Thank you very much, Tomazoni.

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

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

Speaker #4: The main difference is in 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, it was many changes across the one category to the other category. But if I make a summary, it was weaker in the domestic markets.

Speaker #5: So if you could maybe explain us a little bit more what you're seeing within the pork. You've highlighted that you expected it to kind of gain a little bit of these replacement dynamics, but it 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 cutouts and what's been a little bit of a headwind, if you want to call it this way.

Speaker #6: Thank you very much, Tomasoni.

Henrique Brustolin: Thank you very much, Tomazoni.

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

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

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

Speaker #5: 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: 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. If you could maybe explain us a little bit more what you're seeing within the pork. You've highlighted that you expected it to kind of gain a little bit of these replacement dynamics, but it hasn't turned out to be the case. The demand picture for pork. Maybe just talk a little bit what you're seeing, what are the differences across the different cutouts and what's been a little bit of a headwind, if you want to call it this way.

Speaker #5: Yeah, good morning, and I'll just follow suit with those wishes to you, Tomasoni 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: Thank you.

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

Speaker #5: So if you could maybe explain to us a little bit more what you're seeing within 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.

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

Benjamin Theurer: 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 #4: And consumers 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.

Speaker #5: Thank you.

Speaker #4: Good morning. So, pork has had weaker demand than chicken and beef, for sure. And look, 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.

Wesley Batista Filho: Ben, good morning. Pork has had a 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 is kind of stable and the cutout is lower. That just tells you that demand seems weaker because of the same amount of supply and lower price. We think that part of that comes from a little bit of a weakness in the prepared, 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.

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

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

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

Speaker #5: Hi, good morning, everybody. So first of all, congrats, Tomazoni, on the tenure. And Wesley for the new position. So very well deserved. My question is on the US.

Speaker #4: And consumers 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: 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. 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: Poultry industry 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 #5: So if you already see some sort of a capacity reduction in 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, especially on the big bird.

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 J.P. Morgan. Mr. Ferreira, you may go ahead.

Operator: Your next question comes from Lucas Ferreira with J.P. Morgan. Mr. Ferreira, you may go ahead.

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

Speaker #5: So that's my question. Thank you very much.

Speaker #6: Hi, good morning, everybody. First of all, congrats to Tomasoni on the tenure, and Wesley for the new position—both 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 #4: Thank you, Lucas. In Q2 and chicken supply clear 4.5% in US was above expectation. 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 to with last year.

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, or when do you guys think we should see that happening, especially on, like I said, in the most commoditized part of the business, especially in the big bird.

Speaker #4: When respiratory disease and low pet air influence increases the mortality. Means that the industry taken a historical rates of the survival rates and based on that placed the chicken for the this year.

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. Above expectation of the industry. 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 and low path avian influenza increased the mortality. It means that the industry has taken a historical rate of the survival rates, and based on that, plated the chicken for this year. And how the rate was better, we had more chicken. What do we expect? 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.

Gilberto Tomazoni: Thank you, Lucas. In Q2, chicken supply grew 4.5% in US, was above expectation. Above expectation of the industry. 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 and low path avian influenza increased the mortality. It means that the industry has taken a historical rate of the survival rates, and based on that, plated the chicken for this year. And how the rate was better, we had more chicken. What do we expect? 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: And how the rate was better, we had more chicken. What we expect from? We expect the industry will be adjust in the coming months.

Speaker #4: It's what be if you look for the historical industry is very disciplined in terms of to manage the supply demand in this business.

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 #5: Thanks, Tomazoni.

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

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 #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.

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

Speaker #5: It's interesting to see how Pilgrims 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 and you guys mentioned in the press release strong export markets and the Middle Eastern market in particular sustaining good profitability on the chicken exports out of Brazil.

Speaker #6: Thanks, Tomasoni.

Lucas Ferreira: Thanks, Tomazoni.

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

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

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

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 Seara's export business or you expect the other way, you expect Pilgrims margins to eventually improve before any erosion on the Seara business.

Speaker #5: Yeah, hello, guys. Good morning, everybody. Tomasoni 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: Yeah. Hello, guys. Good morning, everybody. Tomazoni and 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 and hence into lower margins. While Seara doesn't seem to be suffering from the same phenomenon, you guys mentioned in the press release, the 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 Pilgrims has been suffering from this higher supply of chicken, translating into lower chicken prices and, hence, into lower margins.

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

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

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

Speaker #5: So, my question to you is how you see those two moving parts unfolding in the coming months and quarters. Do you see this chicken price pressure at some point spilling over into Seara’s export business, or do you expect the other way? Do you expect Pilgrim’s margins to eventually improve before any erosion on the Seara 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. So how you expect this global chicken price environment to unfold into the two subsidiaries? That would be my question. Thank you.

Speaker #4: They compete in very few markets. Mainly in Africa. With La Quartes. Otherwise, there is no competition on that. And for Seara export, I'm very important.

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

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: Yeah, thank you for the question. And I think, as you mentioned, compared to Pilgrims and Seara, they are really different. Even though both of them export, they export different types of products.

Wesley Batista Filho: Thiago, thank you for the question. I think it is. You mentioned that as compared Pilgrim's and Seara, they are really different. Even both of them export, but they export different type of products. They compete in very few markets, mainly in Africa, with like quarters. Otherwise, there is no competition than 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 different. In US, Pilgrim's has a diversified portfolio. I think you had the opportunity to hear from Fabio. But what is suffering in US is the category of Big Bird. This is a commodity. That is the product that we sell for processors.

Gilberto Tomazoni: Thiago, thank you for the question. I think it is. You mentioned that as compared Pilgrim's and Seara, they are really different. Even both of them export, but they export different type of products. They compete in very few markets, mainly in Africa, with like quarters. Otherwise, there is no competition than 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 different. In US, Pilgrim's has a diversified portfolio. I think you had the opportunity to hear from Fabio. But what is suffering in US is the category of Big Bird. This is a commodity. That is the product that we sell for processors.

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

Speaker #4: We increase too much the volume. And the demand is not enough to met the supply. And because of this, this is and Pilgrims has a part 25% of the business is around 25% of the business is commodity.

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: And this part of the business of even before we transform to factories and from big bird to cage ready. Because cage ready demand is strong as well as I mentioned when they talk about the US markets of beef, consumers eat more at home.

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: And then because of that, the demand in retail for chicken increase. But of course, as we have a as we have a balanced portfolio, we suffer with the commodity.

Gilberto Tomazoni: We increase too much the volume, and the demand is not enough to match the supply. Because of this, in Perdue, as a part, around 25% of the business is commodity. This part of the business suffered. Even before we transformed two factories from Big Bird to Case Ready. Because Case Ready demand is strong, as was mentioned when they talk about the US market of beef. Consumers eat more at home, and then because of that, the demand in retail for chicken increased. But 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 the US for this last, I think it is many years.

Speaker #4: We increased the volume too much, 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, around 25% of the business, is 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 the US for this less I think is many years.

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

Speaker #4: And this we are expecting for the future because the additional supply we have in the market, it was because mainly because of historic we planted the pork the survival rates or 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: When you go to Brazil, we see now that the less numbers of the Brazilian association that the production growth 6.5.6%. I think this but export increased 20%.

Speaker #4: And we see that this, I mentioned the question that I answered before. If you look at the historical, normally the industry, they have been very disciplined in terms of supply and demand in the US for this. Less, I think, in 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 lower survival rates for chicken than was actually the fact in the quarter.

Gilberto Tomazoni: And 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. When you go to Brazil, we see now that the less numbers of the Brazilian Association, that the production grew 5.6%. I think this. But export increased 20%, means that because of that, the availability in domestic market was 3.1. In export market, sorry. In export market, demand remained health even at price below previous level. We believe that when you look ahead, it's difficult to predict or forecast what we have.

Speaker #4: Means that because of that, the availability in domestic market was 3.1. In export market, sorry, in export market, demand remain health even at price below previous level.

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

Speaker #4: We believe that when you look ahead, I can it's difficult to predict or forecast what to be at. I think just the number of the association means that they forecast for 2000 to 2027, the production will be grow 2.8%.

Speaker #4: And the export will be grow through the availability will be 2.7%. If that numbers is the normal numbers that the market could be could be assessed because it's normal growth of the market.

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

Speaker #4: 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.

Speaker #4: Even at prices below previous levels, we believe that when you look ahead, it's difficult to predict or forecast what that will be at.

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

Gilberto Tomazoni: 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%. If that number is the normal number that the market could be upset because it's normal growth, the market. Means that 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 size. Again, historic, you see that industries normally rebalance when we have this balance in the market. We see this quarter, the coming quarter, I think we are confident in terms of what market, what we'll be able to do with CRA and see.

Speaker #4: We see this quarter the next the coming quarter will be I think we are confident in terms of what market what will be able to do with Seara.

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.

Speaker #4: And see it's something that we are not managed something that we not control we focus in our Q1 to control we control the mix we control the price we control the diversification of chains and what we are doing.

Speaker #4: But we see that the demand for our sport in Brazil is high. And I believe that it will be possible to compensate, not all of them, but the industry should be—normally, if you look again at the historic data—you'll see that the industry normally rebalances when we have this disbalance in the market.

Speaker #5: Thank you so much, Tomazoni.

Speaker #2: Gentlemen, our next question comes from Mrs. Isabella Simaton. With Bank of America. Mrs. Simonato, you may go ahead.

Speaker #3: Thank you. Good morning, everyone. So my colleagues, congratulations Tomazoni. It's been a pleasure. Interacting with you in the last years and Wesley, congratulations as well.

Speaker #4: We see this quarter, and in the coming quarter, we are confident in terms of what the market will be able to do with SEATA.

Speaker #3: We wish you all the best. In the years ahead. And my question is from Australia, right? I think we saw a very important growth in top line, right?

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.

Gilberto Tomazoni: It's something that we are not managed, something that we not control. We focus in our Q1 to control. We control the mix, we control the price, we control the diversification of chains and what we are doing.

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

Speaker #3: 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.

Speaker #5: Thank you so much, Tomasoni.

Thiago Duarte: Thank you so much, Gilberto Tomazoni.

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

Operator: Then gentlemen, our next question comes from Isabella Simonato with Bank of America. Mrs. Simonato, you may go ahead.

Speaker #6: And gentlemen, our next question comes from Mrs. Isabella Simaton. Voice Bank of America. Mrs. Simonato, you may go ahead.

Speaker #3: And 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.

Speaker #7: Thank you. Good morning, everyone. So actually, my colleagues, congratulations, Tomasoni. It's been a pleasure interacting with you in 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. You mentioned about JBS Brazil, how China quota impacted exports. 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 #3: Thank you.

Speaker #7: We wish you all the best in the years ahead. And my question is about Australia, right? I think we saw very important growth in the top line, right?

Speaker #4: Isabella, Australia is we see that 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.

Speaker #7: You mentioned JBS Brazil and 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 #4: And all of the business in Australia is performing well. When you look for the Australia results below the comparison of the same period last year, mainly because of the currency.

Speaker #7: And on top of that, how can we think about performance ahead, not only in terms of revenues, but also in terms of the potential impact on the profitability of this division?

Speaker #7: Thank you.

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

Gilberto Tomazoni: Isabella, we see that we are very excited with the business in Australia. We are in middle of the cycle. We see 2, 3 years, very positive for our Australia business. All of the business in Australia performs well. When you look for the Australia results below the comparison of the same period of last year, mainly because of the currency. Because of the climate, we dry a lot in Australia, right? We are not able to bring the cattle to the plants. Because of a little bit of volume, we are able to produce more. This is what we are seeing in the next quarter. As you saw that with this joint venture we have done with Danantara, we are recreating a platform for growth in Australia, in Indonesia, and South Asia. The Australians really well. Asia. Sorry. Asia.

Speaker #4: Isabella, Australia is we see that 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.

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

Speaker #4: And as you saw that with this joint inventory, we have done with the entire we recreate in a platform for grow in Australia and Indonesia and South Africa.

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

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

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 #3: Thank you, Tomazoni.

Speaker #4: And because of a little bit the volume, we are able to produce more. And we are—this is what we are seeing in the next, in the next, that with this joint venture we have done with the entire, we are creating a platform for growing Australia in Indonesia and South Africa.

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

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

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

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

Speaker #7: Thank you, Tomasoni.

Isabella Simonato: Thank you, Tomazoni.

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 Tomazoni in your role starting next year.

Speaker #6: 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.

Operator: 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 #5: And my question actually relates to free cash flow going forward. And a couple of months ago in the JBS day 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 dollars.

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, enables a re-acceleration of the expansion capex agenda for next year.

Speaker #6: As we wait to get connected with Mrs. Jones, the next question comes from Gustavo Tiano from Itaú. Mr. Tiano, you may go ahead.

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: Hello, everyone. Thanks for taking my question, and congrats, Wesley, on your new position at the company. Best of luck to both you and Tomasoni in your new roles starting next year.

Gustavo Troyano: Hello, everyone. Thanks for taking my question. 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: Thank you very much.

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

Speaker #5: And my question actually relates to free cash flow going forward. A couple of months ago, in the JBS 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.

Speaker #4: So bear in mind that the entire is to put 800 million dollars in first place and then adding up to 2.5 billion dollars in equity.

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, enables a reacceleration of the expansion capex agenda for next year.

Speaker #4: And then after that we start to raise that. 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 #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 #4: Now coming back to JBS consolidated free cash flow, remember that last year we had a working capital consumption of 850 million dollars mainly due to increasing prices.

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. So beginning with the joint venture, that's a way for us to continue with the agenda of growth, and accelerate the agenda in that region of the world without putting more pressure on the balance sheet. So bear in mind that Danantara 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. 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. 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. We see that this Q2 we had record revenues of $24 billion.

Guilherme Cavalcanti: Thank you, Gustavo. So beginning with the joint venture, that's a way for us to continue with the agenda of growth, and accelerate the agenda in that region of the world without putting more pressure on the balance sheet. So bear in mind that Danantara 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. 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. 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. We see that this Q2 we had record revenues of $24 billion.

Speaker #4: Which continue to happen this year we see that this second quarter we had record revenues of 24 billion dollars. So increasing prices, increasing revenues drags working capital.

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. After that, we start to raise that.

Speaker #4: However, we had anticipation of Chinese we have and we had discounts receivables discounts. So we with that we are that's why we are forecasting that this year the working capital consumption will be 500 million dollars better.

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: For next year, again, we should because of the USB and if we don't have an inflationary pressure, we should be a good year for in terms of releasing working capital.

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

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 had receivables discounts.

Gilberto Tomazoni: So increasing prices, increasing revenues drags working capital. However, we had anticipation of Chinese, and we had receivables discounts. So with that is why we are forecasting that this year, the working capital consumption will be USD 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 in terms of releasing working capital. But 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. So this all depends now on each one estimates of EBITDA to plug into this equation.

Guilherme Cavalcanti: So increasing prices, increasing revenues drags working capital. However, we had anticipation of Chinese, and we had receivables discounts. So with that is why we are forecasting that this year, the working capital consumption will be USD 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 in terms of releasing working capital. But 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. So this all depends now on each one estimates of EBITDA to plug into this equation.

Speaker #4: So this all depends now on each one estimates of the 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 #5: Thanks. That was clear.

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

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 #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 #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 #4: So this all depends now on each one's estimates to plug into this equation.

Speaker #6: Thank you.

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 #5: Thanks. That was clear.

Gustavo Troyano: Thanks. That was clear.

Speaker #6: Thank you. And for the next question, we'll go back to Mrs. Heather Jones from Heather Jones. You may go ahead with your question, Mrs. Jones.

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

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

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.

Heather Jones: Good morning. Thank you for the questions. My congratulations to Gilberto 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 has been some expansion there that would allow for greater flows through 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 #2: Good morning. Thank you for the questions. And my congratulations to Tomasoni and Wesley as well. My question is for Wesley on USB. So in '24, Douglas represented about 15% of imports from Mexico.

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 #2: 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 #4: We look at the volume that how we estimate. We basically looking at what were what was a high volume day back then before you know 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.

Speaker #2: Thank you.

Wesley Batista Filho: Heather, good morning. 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. 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.

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

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: If they're going to come up, you know, 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, you know, we've another, let's say just another meeting head of cattle in the balance here. If we're right now at around 1, 1 and a half, you know, between 2 and 1% negative, we should be closer to a break even.

Wesley Batista Filho: 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, and 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.

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.

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 meeting head makes a big difference.

Speaker #4: It's the size of a two-shift plant, right? So it's a it's a big deal. So we think that it's going to be much better.

Speaker #4: How much if it's going to be above or right below break even, I'm not quite sure yet. It's going to be much better than what we are right now.

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: That's what I mean. That's what I think.

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 #6: Wonderful. Thank you so much.

Speaker #4: Thank you.

Speaker #2: Thank you, and our next question comes from Matheus Enfeldt with UBS. Mrs. Enfeldt, you may go ahead with your question.

Speaker #4: But we think that we've got another, let's say, just another meeting 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 break even.

Wesley Batista Filho: But 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 1, 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? So it's a big deal. We think that it's going to be much better. How much? If it's going to be above or right below the breakeven, I'm not quite sure yet. It's going to be much better than where we are right now. That's what I mean. That's what I think.

Speaker #5: Hi. Good 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 Seattle.

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 #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 meeting 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.

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 #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 #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 #2: Wonderful. Thank you so much.

Heather Jones: Wonderful. Thank you so much.

Speaker #4: Thank you.

Wesley Batista Filho: Thank you.

Speaker #6: Thank you. And our next question comes from Mateus Enfield with UBS. Mr. 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.

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

Speaker #5: Thank you.

Speaker #4: Thank you for the question, Matheus. 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.

Speaker #5: Hi, good morning. Thank you for the time. And also wish both Tomasoni and Wesley success in the new positions. On my question, I know you touched a bit on this for SIADA.

Matheus Enfeldt: Hi, morning. Thank you for the time. 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: 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 #4: But for chicken, the chicken and the value added and our value added business, the demand is strong. It's tough to say. It's normal. We are not seeing depressed.

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: 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: 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, Mathias. 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 depressed because the supply is higher than demand. For chicken and the value-added, our value-added business, the demand is strong. It is normal. We are not seeing depression. 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. Many reasons, you know that. Many reasons that protein become very strong globally, in Brazil even. This GLP-1 in Brazil is spent a lot now with the new brands come to the market of this GLP-1. I believe the accessibility of them will be higher.

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: 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: 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.

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: There are many reasons. You know, there are many reasons why protein has become very strong globally, even in Brazil. And this GLP-1 in Brazil is being spent on a lot now, with new brands coming to the market for this GLP-1.

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

Gilberto Tomazoni: 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's a higher production of volume of chicken. 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, so look, we're not giving forecast of that, but you can see that we are a strong gain of efficiency inside of the company, innovations and the new mix. We are confident that Seara will keep continuing deliver good margins.

Speaker #4: Innovations and the new mix and we are confident that Seattle will be keep continue deliver good margins.

Speaker #5: Very clear. Thank you.

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

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

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.

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

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 and EBITDA growth.

Matheus Enfeldt: Very clear. Thank you.

Speaker #5: Very clear. Thank you.

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

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

Speaker #6: And our next questions comes from Renata Cabral with Citi. Mrs. Cabral, you may go ahead.

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

Speaker #2: Thanks for taking my question. Good morning, everyone. Congratulations to Wesley for the appointment. Wishing you every success in the role. And Tomasoni, 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'm 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: That gives us a force 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.

Speaker #2: 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 looking through the reminder of the year, the second half, how should we think about China demand and the ability to redirect the volumes to other markets?

Speaker #2: 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 #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 #2: 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.

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 measure our commercial strategy dynamically.

Speaker #2: And looking through the reminder of the year, the second half, how should we think about China demand and the ability to redirect the volumes to other markets?

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

Speaker #4: 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.

Gilberto Tomazoni: Thank you, Renata. I give you an overview about the beef in Brazil because it is a very complex environment now with the China quotas. Based on the current expectation, Brazil should resume production for China in October, with the 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 event. There is not a market that can accommodate the volume of 150,000 tons that China was exporting this period that will 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. It should fall, because the animal is in the field.

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 live 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.

Speaker #4: Optimization of production allocation across export markets to maximize value. But there isn't a market that can accommodate the volume of 150,000 tons that China was exporting.

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

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

Speaker #4: Because of course, Brazil will be with this without 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: 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, I mentioned before, are there, and the price should fall, and 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 without the quota of China. When the quota of China restarts again, October, that will be different. 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: 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: 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 because of course Brazil will be with this without quota of China and probably with the European restriction that we have.

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

Speaker #4: I believe that we need to reduce the number—the number of cattle harvested in Brazil for this period. We don't have the quota from China.

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

Speaker #4: 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: So look, we are 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: Because the number of cattle will fall. Harvest will fall. And I think it's three. As unique conditions, because we have brand, we have category management with retailers.

Gilberto Tomazoni: I think Friboi has a unique conditions because we have brands, we have category management with 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 will be back on a healthy situation very soon, in the coming months.

Speaker #4: When it comes months.

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

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

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

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 and not only for JBS but for the entire sector and a great voice defending the sector globally.

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

Speaker #7: 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?

Speaker #4: When it comes months.

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

Speaker #2: That's helpful context, Tomasoni. Thank you so much.

Speaker #7: 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 #6: Our next question comes from Guilherme Paleris with Santander. Mr. Paleris, you may go ahead with your question.

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

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

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: Good morning. Wesley, Tomasoni, Guilherme, thank you for taking my question. Again, as everyone mentioned, congrats on the move Wesley. And Tomasoni, you'll be truly missed as one of the key executives on the protein space and not only for JBS, but for the entire sector as a great voice.

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'll 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? So you have been all over the place in many divisions. You get a company now that it's 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: So 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?

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

Speaker #7: 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 #4: Guilherme, thanks for the question. You know, the good thing about transition that's internal, like what we're doing, is that there is a lot of continuity, right?

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 #4: So you know, 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 you know, they have to come up with something completely new and something completely different sometimes, right?

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 #4: Just to, you know, maybe mark, you know, kind of what direction that they think is relevant. And that's exactly not the case, right? I mean, Tomazoni and I have been working together for the past 10 years.

Speaker #7: So, I want to get your thoughts, having 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 #4: So a lot of what has been done within JBS for the past, you know, 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 #7: What is the agenda that you will try to pursue? What will be the JBS of Wesley Filiu from now on?

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

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

Wesley Batista Filho: Guilherme, thanks for the question. The good thing about a transition that's internal, like what we're doing

Wesley Batista Filho: Guilherme, thanks for the question. The good thing about a transition that's internal, like what we're doing is that there is a lot of continuity, right? 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's 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, and that's exactly not the case, all 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've had the privilege to be part of that team that was doing that, and I was alongside Tomazoni all the time here doing that.

Wesley Batista Filho: is that there is a lot of continuity, right? 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's 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, and that's exactly not the case, all 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've 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: 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.

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 a JBS, you know, JBS has 280,000 team members and a very, very strong leadership team that's I think it's, you know, maybe I'm biased, but I think it's the best in the industry.

Speaker #4: And that's exactly not the case, right? I mean, Tomasoni 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: So I, you know, I think that 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 need, you know, to continue to mature and need to continue to evolve.

Speaker #4: And it was alongside Tomasoni 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'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. The other thing, too, I would not at all consider a JBS of whether a JBS. JBS has 280,000 team members and a very, very strong leadership team that maybe I'm biased, but I think it's the best in the industry. So I think that's something else that I just mentioned. 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 we need to continue to mature and need to 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: And, you know, we just announced the, you know, really just last week about this whole Atlanta deal and all of the potential that we have in Southeast Asia.

Speaker #4: That's a population market population of 700. If you consider the ASEAN block plus, you know, Oceania, Australia, and New Zealand, right? Or New Zealand as well.

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: You're talking about, you know, 750 million people. So it's a huge market that we come, you know, we trade a little bit, but not very, very much.

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 to continue to mature and to continue to evolve.

Speaker #4: That opens a whole new avenue of growth for us. Australia is a huge platform for us to get started in that, you know, 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, you know, a lot of the growth that we've done in Seattle, has been matured, but there is still some to go and there is a lot for us to get done there.

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's a market population of 700. If you consider the ASEAN bloc plus Oceania, Australia, and 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. 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. 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 Atlanta 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, and 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: Our business in the UK is a business that gets talked relatively little about, but it's a great business, you know, about 5 billion business within programs that, you know, 5 billion dollars that doesn't we don't talk quite as often.

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: 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: 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.

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

Wesley Batista Filho: I am talking about new geographies, but even in our traditional geographies like the US, we 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 grow there. Our business in the UK is a business that gets talked relatively little about, but it is a great business. About $5 billion business within Pilgrim's that, $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 #7: Thank you, Wesley.

Speaker #2: You had our next question comes from Ricardo Boiati with Safra. You may go ahead, Mr. Boiati. Mr. Boiati is possibly you may be on mute if you're trying to speak.

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 #6: 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 #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 continuity and alignment going forward.

Speaker #6: 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 #4: But thank you for your question, Guilherme.

Speaker #7: Thank you, Wesley.

Guilherme Palhares: Thank you, Wesley.

Speaker #6: 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.

Operator 2: Thank you. 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.

Operator: Thank you. 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.

Speaker #6: You had our next question comes from Ricardo Boyadi with Safra. You may go ahead, Mr. Boyadi. Mr. Boyadi is possibly you may be on mute if you're trying to speak.

Speaker #6: So in the scope of the partnership with Atlanta 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: Hi. Good morning, everyone. I would 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 has been a pleasure, and hope to keep in touch. Wesley, congrats on the new role. Truly a well-deserved step, and I 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. In terms of JBS's global platform, it is not that relevant. In the scope of the partnership with Danantara, 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 Tomasoni, 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. It's really a well-deserved step and wish you all the best on the new position.

Speaker #6: So how do you think about this and how is this being considered in the scope of the deal with Atlanta? Thank you.

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 #4: Thank you, Ricardo, for the question. I think it's important 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 in our operating model and give us a financial discipline in the full operate control.

Speaker #5: So in the scope of the partnership with Atlanta 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 #4: The priority in this first two years is to invest 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 #5: So how do you think about this and how is this being considered in the scope of the deal with Atlanta? Thank you.

Speaker #4: Then after that, we are can invest 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.

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

Wesley Batista Filho: Thank you, Ricardo, for the question. I think it is important to discuss a bit, what is the long-term strategy of this partnership? It is 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 in these first 2 years is to investing in the regions for Indonesia. Indonesia is the focus, and the main focus on us with this partnership is these first 2 years in Indonesia. After that, we can invest in Australia or the other places in South Asia.

Gilberto Tomazoni: Thank you, Ricardo, for the question. I think it is important to discuss a bit, what is the long-term strategy of this partnership? It is 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 in these first 2 years is to investing in the regions for Indonesia. Indonesia is the focus, and the main focus on us with this partnership is these first 2 years in Indonesia. After that, we can invest in Australia or the other places in South Asia.

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

Speaker #4: But we didn't find the right conditions that we believe that is a great thing 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: Then after that, we can invest in Australia or other places 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 always considered; we've always seen the opportunity to enter this sector.

Gilberto Tomazoni: But you mentioned that in Australia we are a very diversified platform. We just missed the chicken. Of course, chicken is something that we have all the time considered the opportunity to enter this sector. But we did not find the right conditions that we believe that is accretive for us to go in. But it is still open as an opportunity. We do not 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. Why we are so confident, because of the size of the market. We are talking about 640 million population in this area, and we cannot go alone in this, something that is safe. The way that we have organized this deal with the creating conditions that we have, we are not stressed our balance sheet.</seg <seg id="3">I think it was, we have a certain additional capital is not changing our investment discipline. At the same time, you can catch the opportunity. There is this growth market and then growth consumption of proteins. We have a strong team there. We did not change the business, and JBS remain fully responsibility for the manage the platform, and we will retain full operational control. I think this was a perfect movement in a strategical area for the increasing consumption of protein.

Speaker #4: And while 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: 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: In this something that is safe and the way that we have organized this deal, with the create and a conditions that we have we are not stress our balance sheet.

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: 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: 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: I think this is and we have a strong team there. We didn't change the business and JBS remained fully responsible for the management, the platform, and we will retain full operational control.

Speaker #4: It's something that is safe and the way that we have organized this deal with create a conditions that we have we are not stress our balance sheet.

Gilberto Tomazoni: The way that we have organized this deal with the creating conditions that we have, we are not stressed our balance sheet. I think it was, we have a certain additional capital is not changing our investment discipline. At the same time, you can catch the opportunity. There's this growth market and then growth consumption of proteins. We have a strong team there. We didn't change the business, and JBS remain fully responsibility for the manage the platform, and we will retain full operational control. I think this was a perfect movement in a strategical area for the increasing consumption of protein.

Speaker #4: I think this is was a perfect movement in a strategic area for the increase the consumption of protein. Very great, Tomazoni. Thank you very much.

Gilberto Tomazoni: I think it was, we have a certain additional capital is not changing our investment discipline. At the same time, you can catch the opportunity. There's this growth market and then growth consumption of proteins. We have a strong team there. We didn't change the business, and JBS remain fully responsibility for the manage the platform, and we will retain full operational control. I think this was a perfect movement in a strategical area for the increasing consumption of protein.

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

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

Speaker #4: I think this is, and we have a strong team there. We didn't change the business, and JBS remains fully responsible for the management, the platform, and we will retain full operational control.

Speaker #2: Moving to our next question, it comes from Priya Ohri-Gupta with Barclays. Mrs. Ohri-Gupta, you may go ahead with your question.

Speaker #4: I think this is was a perfect movement in a strategic area for the increase the consumption of protein. I hear the great

Speaker #5: 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.

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

Speaker #6: Tomasoni. Thank you very much. Our next question comes from Carla Casella with JP Morgan. You may go ahead, Mrs. Casella. Mrs. Casella, if you are speaking, you may be on mute.

Speaker #5: We'd 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?

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

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

Speaker #5: 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 #4: Hi, thanks Theresa. Yeah, bear in mind that on a last of Montreal, we are replacing a very strong especially from the chicken US EBITDAs of last year.

Speaker #6: Okay, moving to our next question. It comes from Priya Ori Gupta with Barclays. Mrs. Ori Gupta, you may go ahead with your question.

Speaker #4: To a more normalized margins for chicken US this year. 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.

[Analyst] (Barclays): Hi, good morning. This is Teresa 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 #2: Hi, good morning. This is Theresa on for Priya. Thank you for taking our questions. And congrats, Tomasoni and Wesley on the transition to our new roles.

Speaker #2: We're really looking forward to working 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 #4: So one thing's probably tends to balance the other. So we 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 maturities 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.

Speaker #2: 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 #4: Hi, thanks, Theresa. Yeah, bear in mind that on the last of Montreal, we are replacing a very strong especially from the chicken US EBITDAs of last year.

Guilherme Cavalcanti: Thanks, Teresa. 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.

Speaker #4: To a more normalized margin for chicken in the US this year. So, this statistical effect tends to pressure the leverage. However, the second half of the year is where we generate the bulk of our free cash flow.

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

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 #5: Great, that's helpful. Thank you.

Speaker #4: It's likely above three times. And as we generate free cash flow, and given we have no debt that matures 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—there's still $300 million outstanding there.

Guilherme Cavalcanti: As we generate free cash flow, given we have no debt mature 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, we should have still $300 million outstanding there, and some 2033s or 2035s. Let's see how the H2 behaves, and then we can make a decision of repaying or not those more expensive debts.

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

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

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

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.

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

Speaker #2: Great. That's helpful. Thank you.

Speaker #4: I ever 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.

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

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

Speaker #6: Ladies and gentlemen, there being no further questions, I would like to pass the floor to Mr. Gilberto Tomasoni.

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. I also thank you for the attention, respect, and support you have shown me over these past eight years.

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

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

Speaker #4: Our interactions have always been very productive. Your questions, your perspective, and even your challenges have helped us improve the way we communicate, sharpen our focus, and become a 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 am very proud of what we have built together.

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

Speaker #6: This is the end of the conference call held by JBS. Thank you very much for your participation and have a nice day.

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.

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

[Analyst]: Goodbye.

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