Pedro, say something so we can hear the volume here.

Good morning and welcome to JBS second quarter of 2026 results conference call. At this time, all participants are in listen-only mode. Following management's remarks, we will open the floor to a question and answer session, and instructions on how to participate will be provided at that time. Please note that to ensure all analysts have an opportunity to ask a question, we kindly request that each analyst limit themselves to just one question. As a reminder, this conference is being recorded. Any statements eventually made during this conference call in connection with the company business outlook, 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. Such expectations are highly dependent on the industry and market conditions and therefore are subject to change. Our president with us today, Gilberto Tomazoni, Global CEO of JBS, Guilherme Cavalcanti, Global CFO of JBS, Wesley Batista Filho, CEO of JBS USA, and Christiane Assis, Investor Relations Director. Now I'll turn the conference over to Gilberto Tomazoni. Mr. Tomazoni, you may begin your presentation.

is leading the business and ensuring a smooth transition. We have been planning this carefully from a position of stress and nothing changed in our strategy, our priorities, or the way we operate. This decision reflects the strength of the company we have built. Over the past several years, we have transformed JBS in many ways, building a more diversified, more global, and more resilient business. Our dual listing was a defining milestone in that journey, positioning the company for its next phase on value creation. With a strategy clear and a strong leadership team in place, I believe this is the right moment for JBS to begin in the next chapter of Underwater Leadership. Turning to our results, the second quarter once again demonstrated the resilience of our global operating model in an environment that remains complex and volatile. Supply and demand dynamics vary across geographies and proteins, while currency movements take disruption in geopolitical events under far more complexity. 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. Adjusted net income was 218 million U.S. dollars. Adjusted EBITDA totaled 1.143 billion U.S. dollars under IFRS. with a margin of 6% and 1.3 billion U.S. dollar under U.S. gap with a 5.3% margin. 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. While important to understand, these items do not change how we assess the business. Our focus is on operating performance, cash generation, and balance sheet discipline. Performance improved across several businesses during the quarter, although an important part of our portfolio still operates in a challenging environment. While U.S. beef continues to operate in a challenging environment, we have reorganized our operating structure and are very confident the results of those changes. I will leave the discussion to the business, to Wesley, who will provide more details on the quarter and our outlook for beef and pork in North America. In Australia, results improved further, supported by robust global demand for beef and attractive export opportunities. Before moving on, I would like to comment briefly on the strategic partnership we announced last Friday with the Antara Investment Management. The transaction includes a US$2.5 billion equity investment by Danatar in exchange for a 25% stake in our Australia and New Zealand operations. Together, the additional funding capacity expected through the joint venture gives us access to up to US$5 billion to fund acquisition, greenfield projects, 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 regions in the world, while preserving the strength of JBS balance sheets and reinforcing Australia as a strategic hub within our global operations. Importantly, it does not change how we manage the business. Our Australia and New Zealand operations remain fully consolidated under the same leadership and operating model. With that, let's turn to our operating performance. Global beef fundamentally remains constructive, although conditions vary considerably across markets. Supply is limited in several regions. Demand remains resilient, and our global footprint allows us to direct products to the market where returns are the strongest. JBS Brazil delivers 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%. Even with elevated care of price, JBS reported its highest EBITDA for a second quarter. A carol 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. A recent shift in trade flow reinforces 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. Our domestic business is another important competitive advantage. Through the Friboi brand and a long-standing customer relationship, we work alongside retailers and categories partners, helping them to grow value across the beef category. During the quarter, our barbecue portfolio performed particularly well. We have expanded commercial initiatives with major retailers across Brazil. and Chicken. Both Fugues 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, plant upgrades were completed, and expending assets continued to mature. At Seara, margin remaining 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 executions. We see further opportunities to improve mix, distribution, and execution in domestic markets while converting volume growth into a sustainable profitability. Our priorities for the second half are clear, execution and cash generation. We expect leverage increase during the quarter and reducing the remainder priorities. We are focused on strong cash generation, disciplined work in 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 an experienced team around the world, we believe we are well positioned to create value through the cycle. Thank you, and I will turn now the call over to Wesley.

Amazoni, 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. I'm very excited about what we can accomplish together. As we look forward, my focus remains the same. Operational excellence, disciplined capital allocation, customer service, and creating long-term value across our diversified global platform. We'll continue to live our values, strengthen our culture, and build on the tremendous work you've done over the past eight years. We'll keep evolving, growing, and making JBS an even stronger company for the future. With that, let me turn to our U.S. 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. Even so, U.S. 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. Over the past several quarters, we have improved plant performance, optimized our operating footprint, strengthened our commercial capabilities, and increased productivity across our plants. Many of the operational initiatives we've been working on are already translating into better results, and the announced capacity optimization will contribute progressively as they are fully implemented. At the same time, we 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. 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'll continue to see an increasing cattle available for slaughter during the first quarter of 2027, with slaughter volumes returning to a more normal level by the second quarter. Turning to pork. Market fundamentals proved more challenging during this quarter. Even so, our pork business delivered another quarter of solid performance. A Vidal 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'll 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'll now turn the call over to Guilherme.

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 U.S. domestic company and therefore reporting forms 10Q and 10K in IFRS for the time being. We believe this initiative represents a significant step in our strategy of alignment with the U.S. capital markets and may span our eligibility for inclusion in a more ample group of stock indexes. In this regard, I would like to highlight JDS 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 the second quarter 2026. Net sales reached a record of $24 billion for the second quarter. Adjusted EBITDA in IFRS totaled $1.4 billion, which represents a margin of 6% for the quarter. Adjusted EBITDA in US GAAP totaled $1.3 billion, which represents a margin of 5.3% for the quarter. Adjusted operating income was $790 million with a margin of 3.3% in IFRS and $866 million in US GAAP with a margin of 3.6%. The quarter's net loss was $102 million with a negative EPS of $0.10%. In addition to the year-over-year decline in operating results, we also reported $319 million 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 CRAB, Brazilian Local Venture, of which $147 million had a cash impact. 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 rates and longer tenors. Market-to-market of derivatives, net of exchange rate variation of $53 million. Monetary restatements and high interest expenses relate to increasing debt, which together amounted of approximately $120 million. Additionally, the net loss was also impacted by the final calculation of the bargaining price gain of the acquisition of Montiqueira Alimentos with no cash impact, totally $81 million, and antitrust settlements, totally $133 million. Excluding the non-recurring items adjusted, net income was $218 million and the earnings per share was worth 20 cents for the part. Pre-cash flow in the second quarter of 2026 improved by $195 million year-over-year, reaching a positive of $130 million, compared to a cash consumption of $55 million in the second quarter of 2025. This improvement was mainly driven by working capital, particularly the accounts receivable line, reflecting higher receivables discounts and larger advance payments from Chinese customers related to JBS Brazil's exports. The accounts payable line also increased, mainly driven by higher cattle prices and increased zolotter 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. Real appreciation that increased interest expenses in U.S. 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. Finally, we had lower tax payments year-over-year of $135 million. Not considering guidance, but simply updating the cash flow break-even exercise for this year, we expect $5.1 billion in 2026 to even buy. Capital expenditure of $2 billion in 2026, $400 million reduction versus the initial estimate. Working capital expectation of negative $350 million of working capital in 2026, a $500 million improvement versus last year, driven by higher receivables discounts and estimation previously. 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. 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. 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%. 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, slightly above our long-term target of keeping net debt to the top between two and three times. It's 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 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.

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 Tiago Bortolucci with Goldman and Sachs. Mr. Bortolucci, you may go ahead.

Yes, hi, thank you. Good morning, everyone. Good morning, Tiago. 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 in the animal protein industry. 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? We'll be looking forward to keeping up with the conversation. My question is on how you're seeing, Wesley, the state of the U.S. 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 mentioned that inflation is waiting down on pork. You had negative chicken sales growth on food service and retail, and some of your peers like Tyson Smithfield and even Gruma are cutting their guidance, right? When I looked at the beef cutout, it seems 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.

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, and we can see that when we talk to our customers and what we see in the marketplace. We have found out actually that, and we didn't think it, we used to think that proteins had more of a substitution effect depending on prices. And that was a big surprise of the inelasticity of protein demand when it comes to demand for beef, demand for pork, demand for chicken not being so substituted to each other. And we see that in demand a little bit. We see pork demand a little bit weaker than chicken and beef. Thank you very much. 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.

That's helpful, Wesley. Thanks very much. Thanks.

Thank you. And our next question comes from Mr. Ricardo Alves with Morgan & Stanley. Mr. Alves, you may go ahead.

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 U.S., but specifically on the side, the question that we asked the last time. You know, the spreads indicated much tougher second quarter versus the first quarter, but your numbers obviously showed actually a pretty significant improvement. So I wanted to explore more of that. I remember, Wesley, during the JVS day, you know, you spent quite some time talking about the in-house initiatives that you guys were looking at to improve the beef margins. So I'm just wondering if there's more There are more details that you can provide there, you know, some of the initiatives that may have already kicked in and helped the quarter. And if you can, you know, specifically say what you're doing differently, that would be helpful. Or even if, you know, there were 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. But it does seem like There has been a significant deal risking of a division that some people were really concerned about. Thank you very much.

Ricardo, good morning. So first, when we look at the comp, obviously last year, the same quarter we were 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. And that's the second quarter of 2026 does not have anything that's very material. There's only... Thank you for joining us. 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. And so we use it to run those two business units very separately. And the market has changed quite a lot. And actually, that separation didn't make sense anymore. So we went ahead and put those two business units together and run nowadays the business unit as one. And look, there is on both sides of the business, there are strengths that one had and the other one didn't have. And we think that there is going to be a lot of synergies there. And a lot of them are on the sales side. We've done a lot of work over the past three, four years in terms of yields. There is always a little bit more, but... Most of the plant 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. You might have seen that we actually had announced the plant closure of Sotherton, 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 for value-added items that we can continue to supply. So a lot of that's going to be in terms of sales that we're going to get most of that difference. I actually had a breakdown there on the presentation that talked about that, but we are seeing that and we are very confident. Actually, after we've done this integration, we're even more confident. The last thing I would say is That's very clear. Thanks, Wesley.

And our next question comes from Leonardo Alansar with XP Inventimentos. Mr. Alansar, you may go ahead.

Good morning, everyone. Thanks for taking my question. I want to congratulate for your move and also for you, Wesley. I've been enjoying discussing USB free fuel a lot. And sticking with that point, Wesley, just to understand it better. So Mexican border is open now. Well, it's expected for the first few cattle to arrive by the end of the month, right? And it's just one part open. I wanted to hear from you about Thank you very much. We'd 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 capacity utilization. Just understand how you're seeing the pace of impact from the Mexican border opening that just happened. Or if it's more like a... 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. Just to get your ideas on that. Thank you.

Donaldo, good morning. So, yeah, obviously we're 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. That's the port of Douglas, Douglas, Arizona. You know, that port by itself, With those three ports open, we are going to have They have, you know, right around one point, you know, over a million head capacity of, you know, flow capacity. 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? We're looking at historical numbers and looking at numbers provided in the public, for the public. So, you know, 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 through the U.S. Only two states, Mexican states, got approval to export to the U.S., 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 U.S. The other thing that I would mention is, yes, we have information from the market that there are obviously That cattle used to come very young to the U.S. and get backgrounded in the U.S. Once the border shut, and especially after two years of the border shutdown, that cattle had to be backgrounded somewhere else and it was backgrounded in Mexico. So there is cattle that's in the process of being backgrounded or cattle that's backgrounded and just waiting to go to a feedlot and to get finished in Mexico. So obviously there will be a part of feedlots in the U.S. 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, you know, because the 1.2 million head of cattle that came were just the calf crop that was destined to the U.S. 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. So on one hand, you only have two states, so about two-thirds of the cattle being able to come to the U.S. On the other hand, you probably have a little bit of a... A bigger number of cattle in further phases of the cattle feeding and cattle raising process. So, bottom line is, we think that because there is a lot of cattle that'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. And expecting that the two next ports of New Mexico open, we think beginning somewhere in the first quarter, we should start seeing cattle ready for slaughter that were born in Mexico. 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.

Okay, that's great information. Thank you.

And our next question comes from Pujan Sharma with Stevens. Mr. Sharma, you may go ahead.

Hey, good morning. Thanks for the question. And Tomazoni, congrats on a successful tenure here. And Wesley, congrats to you on the new role and really looking forward to continuing to work together here. I really wanted to get your thoughts on U.S. beef. And I know everybody's asking about Mexican beef. 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 U.S.?

Good morning. So, yeah, we obviously think that half herd retention and U.S. cattle herd rebuild is more timid than we expected and then that 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. And I think we're going to start seeing, we see signals that we're might going to start going up. You know, 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, you know, for us to wait for a cattle herd rebuild that takes a little bit longer, With another one, you know, a million head, million point five head, whatever that, you know, ends up coming from Mexico, is a much more different situation than without that. So it gives us a lot more, you know, a lot more balance and a lot more, you know, 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 are 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. 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. Thank you for watching! We don't see obviously in those reports, but it's very relevant because it's an open, you know, it's a market that, you know, U.S. cattle goes to Canada, Canadian cattle goes to the U.S. So that's a big deal. And look, I think we should see, you know, over the next years, a couple of years, three years, starting to see much stronger rebuild. But again, it's a very different situation having the Mexican cattle and waiting for A more longer term herd rebuild in the U.S. The other thing that I would just mention, not to take this too long here, but when you look at, you know, there's two things that you need to look at, right? Half a retention, but also the amount of cows that get processed to slaughter, right? And that number has been going down very fast as well. 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. So I think that's relevant as well.

Great. Thank you for the call.

Thank you. And our next question comes from Henrique Brustolin with Prodesco BBI. Mr. Brustolin, you may go ahead.

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

Thank you, Ricardo, for your question. Thank you for your words. Ciara, let's say, you still, if you compare the quarter with me below, but it's still a healthy margin that 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. The main difference is a pork. The price in domestic market was below. Some of the market ticket was below, the other would be higher. But look, in reality was many change across the one category to the other category. But if I make a summary, it was weaker in the domestic market.

Thank you very much Tomazoni.

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

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 U.S. and we haven't talked much about the pork business. 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 like gain a little bit of these like replacement dynamics, but it hasn't turned out to be the case yet. 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. 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. Thank you.

Man, good morning. So pork has had a weaker demand than chicken and beef for sure. Look, I think the biggest thing is First of all, if you look at just the volume processed by the industry, it's kind of stable and the cutout is lower. So that just tells you that demand seems weaker because it's the same amount of supply and lower price. And we think that part of that comes from a little bit of a weakness in not necessarily our prepared foods, but just in general, the market of prepared foods, just the demand. that we're seeing from customers and internal as well being a little bit more pressured and consumers deciding to, you know, to cut back maybe a little bit on those options. You know, it's a quarter, so I wouldn't say that that's a Thank you very much. Our next question comes from Lucas Ferreira with JP Morgan.

Mr. Ferreri, you may go ahead.

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 U.S. 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 in this cycle. So if you already see some some sort of a capacity reduction and volume production cuts in the in the industry, or when do you guys think we should we should see that happening, especially on like I said, in the on the most commodity commoditized part of the business in especially in the big bird. So that's my question. Thank you very much.

Thank you, Lucas. In Q2, chicken supply grew 4.5% in the U.S. It was above expectation, above expectation of the industry, because the growth was driven by the higher egg sets, N.V. Class A Common Shares, Juriana Sperandio Domingues, Alfred Al Almanza, Andre Nogueira De Souza, Guilherme Perboyre Cavalcanti, Vincent Trius, Agnaldo Dos Santos Moreira Thanks, Tomazoni.

And our next question comes from Thiago Duarte with BTG. Mr. Duarte, you may go ahead.

Yeah, hello, guys. Good morning, everybody. Tomazoni Wesley, safe 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. 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. 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 in the chicken exports out of Brazil. 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... Diago, thank you for the question. And I think it's...

You mentioned that compared to Pilgrims and Seara, they are really different. Even both of them export, but they export different types of products. They compete in very few markets, mainly in Africa, with La Coartes. Otherwise, there is no competition in that. And for Seara, exports are very important. Portugal is less important. That shows... This comes from this a little bit, the explanation about what's the difference. In U.S., Publius has a diversified portfolio. I think you had the opportunity to hear from Fabio. But what is so pretty in the U.S. is the category of Big Bird. This is a commodity that the product that we sell for processors. We increased too much the volume and the demand is not enough to meet the supply. And because of this, this is... And Pilgrims as a part, 25% of the business, around 25% of the business is commodity. and this part of the business offer. Even before we transform to factories and from Big Bird to Crazy Red. Because Crazy Red demand is strong, as I mentioned, when they talk about the U.S. market for beef, consumers eat more at home. And then because of that, the demand in retail for chicken increase. But, of course, as we have a balanced portfolio, we suffer with the commodity. And 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 disciplined in terms of supply and demand in the U.S. for this last, I think, many years. And this we are expecting for the food because the additional supply we have in the market, it was because, mainly because of the historic, we planted the pork, the survival rates for chicken lower than it was in the fact, in the quarter, because of that this oversupply. When you go to Brazil, We see now that the last 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, demand remained healthy, even at price below previous level. We believe that when you look ahead, it's difficult to predict or forecast what we have. I think just the number of the association means that they forecast for 2027, the production will grow 2.8%. And the export will grow through, the availability will be 2.7%. If that number is the normal number that the market could be... A set because it's normal growth of the market. 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, not all of them, but industry should be normal. Again, historically, you see that industry normally rebalance when we have this disbalance in the market. We see this quarter, the next, the coming quarter, will be... I think we are confident in terms of what marketing, what we will be able to do at Seara. And see, it's something that we are not managed, something that we not control. We focus on our key water control, we control the mix, we control the price, we control the diversification of chains and what we are doing.

Thank you so much, Tomazoni.

Our next question comes from Mrs. Isabella Simaton with Bank of America. Mrs. Simonato, you may go ahead.

Thank you. Good morning, everyone. So, echoing my colleagues, congratulations, Tomazoni. It's been a pleasure interacting with you in the last years. And, Wesley, congratulations as well. We wish you all the best in the years ahead. And my question is on Australia, right? I think we saw... A very important growth in top line, right? 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. 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. Thank you.

Isabela, Australia is, we see that we are very excited with the business in Australia. We are in the middle of the cycle. We see two, three years very positive for our Australia business. 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, but this, and because of the climate, we had very, we dry a lot in Australia, and we are not able to, Bring the cow to the plants, and because of the little bit of volume, we are able to produce more, and this is what we are seeing in the next quarter. And as you saw that with the joint venture we have done, we did that on time, we are recreating a platform Thank you Tomazoni. 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. As a way to get connected with Mrs. Jones, the next question comes from Gustavo Tiano from Itao. Mr. Tiano, you may go ahead.

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 future. A New Role Starting Next Year 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. 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. Thank you very much. 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. Thank you very much. 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. Thank you very much. Thank you very much. and if we don't have any inflationary pressure, we should be a good year for in terms of releasing working cattle. But of course, that all depends on grain prices, cattle prices and cut-out prices. With all the other lines already in line, I think... Just interest expenses also in line with what we've been presenting. So this all depends now on each one estimates of the data to plug into this equation.

Thanks, that was clear.

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.

Good morning. Thank you for the questions. And my congratulations to Tomazoni and Wesley as well. My question is for Wesley on U.S. beef. So in 24, Douglas represented about 15% of imports from Mexico. 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 U.S. beef EBITDA levels to break even? Thank you.

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. 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. So, we expect, obviously, especially for a while, it's going to be the only port that's going to be more than usual. And the way that we are looking at that volume, it's pretty simple. We look at the volume, how we estimate. We're basically looking at 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. So, that's how we're getting that number. Look, it's 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, 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. But we think that, you know, we have another, let's say, just another meat and head of cattle in the balance here. If we're right now at around 1, you know, 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 a medium head makes a big difference. 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 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.

Wonderful. Thank you so much.

Thank you.

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

Hi, morning, thank you for the time and also wish both Tomazoni and Wesley success in the new positions. On my question, I know you touched a bit on this for Seata, but when I 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. So my question is how are you 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. 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. Thank you.

Thank you for the question, Mateus. I think we are not seeing so far weak demand for our products. We see strong demand for all of the proteins. The price of pork is a little bit depressing because the supply, the demand is higher than, sorry, the supply is higher than demand. But for chicken, the We don't 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 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. I believe the accessibility of them will be higher. And we are so positive on that. Of course, we see that we have today, when you look for the market, as I mentioned, I answered Tiago before, there's a higher production of volume of chicken. And I think the English should be rebalanced that even the domestic export of chicken is very high and the demand, global demand is high for chicken. But I think we'll be rebalanced. Reveal the level of the chicken placed in Brazil. And about the margin, so look, we're not given forecast of that, but you can see that we have a strong gain of efficiency inside of the company, innovations and new mix, and we are confident that Seara will keep continuous delivery Good margins.

Very clear. Thank you.

And our next question comes from Renata Cabral with Citi. Mrs. Cabral, you may go ahead.

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. 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. 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 that gives us a first indication of post-quote 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. 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?

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 resume production for China in October with shipment restarting in November. And given the normal transit times, that commercial impact of those shipments will be reflected primarily in 2027. As always, we continue to measure our commercial strategy Dynamic 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. This period that will be restart China and now we have this volume. The harvest of the animal has fallen 20% in the first month. But the price of the live animal did not fall and should fall because the animal is in the field. And I believe that the farmers have prepared for the end of the quota. In the carol, as I mentioned before, are there. And the price should fall and then we re-equilibrate the cut-out and the margin in this business. Because, of course, Brazil will be with this without the quota of China. and probably with the European, quote, the European restriction I believe that we need to reduce the number of cattle harvested in Brazil. For this period, we don't have the coat of China. When the coat of China restarts again in October, that will be different. But so far, until October, we see that the price of cattle should fall because the number of cattle harvested will fall. And I think Friboi has unique conditions because we have brand, we have category management with the retails. I think when you combine this category management and the brand that we have, Thank you so much. Thank you so much.

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

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 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 any divisions. And you get a company now that it's a company listed in the U.S., 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 strategy. 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? What is the agenda that you will try to pursue? What will be the JBS of Wesley Filho from now on?

Guilherme, thanks for the question. You know, the good thing about a transition that's internal, like what we're doing, is that there is a lot of continuity, right? 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's new and, you know, they have to come up with something completely new and something completely different. Thank you for joining us. N.V. Class A Common Shares There is a lot of alignment in terms of leadership and in this transition here. The other thing too, I would not at all consider a JBS of Wesley or JBS. JBS has 280,000 team members and a very, very strong leadership team that's, I think it's, 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... We have a lot of new avenues of growth that have been opened in the last few years that need to continue to mature and need to continue to evolve. We just announced last week about this Holden Antara deal and all of the potential that we have in Southeast Asia. That's a market population of 700. If you consider the ASEAN block plus... and Oceania, Australia and 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. And obviously I'm talking about new geographies, but even in our traditional geographies like the U.S. and continuing to evolve our agenda on brands like what we're doing with JustBear. In Brazil, a lot of the growth that we've done in Seara has been matured, but there's still some to go and there's a lot for us to get done 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 pilgrims, 5 billion dollars, we don't talk quite as often. 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. But thank you for your question, Guilherme.

Thank you, Wesley.

Our next question comes from Ricardo Boyari with Safra. You may go ahead, Mr. Boyari. Zivogliani, it's possible you may be on mute if you're trying to speak.

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. 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. 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 GBS's global platform, it's not that relevant. So, in the scope of the partnership with Tenantara, 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? I mean, logistics-wise, it seems to be very competitive, right, to have Australia as a production platform in chicken. So how do you think Australia Thank you, Ricardo, for the question.

I think it's important to discuss a bit what is the long-term strategy of this partnership. Is to expand our investment capacity in Southeast Asia And when we preserve our operating model and give us a financial discipline and full operating control, the priority in these first two years is to invest in the regions for Indonesia. Indonesia is the focus and is the main focus of us with this partnership is these first two years in Indonesia. Then after that, We can invest in Australia or other places in South Asia. You mentioned that in Australia we are a very diversified product, but just we missed the chicken. Of course, chicken is something that we have all the time considered the opportunity to enter this sector, but we didn't find the right conditions that we believe that is accurate for us to go in. But it's still open as an opportunity. We don't have a pipeline of investment or acquisition to announce, but in reality, we are looking for opportunities that could be M&A or Greenfield and with a focus in Indonesia now. And Why we are so confident? Because of the size of the market. We're talking about 640 million population in this area. And we cannot go alone. It is something that is safe. And the way that we have organized this deal with creating conditions that we have an opportunity We are not, we will not stress our balance sheet. And I think it was, we have access, additional capital is not changing our investment discipline. At the same time, you can catch the opportunity, this growth market, and then growth consumption of proteins. I think this is, and we have a strong team there, We didn't change the business and GBS remained fully responsible for the management of the platform and we will retain full operational control. I think this was a perfect movement in the strategic area for the increase in consumption of protein.

Great, Tomazoni. 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. Moving to our next question comes from Priya Ori Gupta with Barclays. This is Ori Gupta. You may go ahead with your question.

Hi, good morning. This is Teresa on for Priya. Thank you for taking our questions and congrats Tomazoni and Wesley on the transition to our new roles. We're really looking forward to work with you and wish you both the best. So our question is, will we continue to expect that net leverage will end the year at or below three times? and in support of this, how should we think about the potential for any debt repayment over the rest of the year? Thank you.

I think the reason, yeah, Bear in mind that on the last of month rail, we are replacing very strong, especially from the chicken U.S. EBITDAs of last year to a more normalized margins for chicken U.S. this year. So this statistical effect tends to pressure the leverage. However, second half 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're thinking that we'll be finishing the year in the levels more or less the same as we got in the second quarter, slightly above three times. And as we generate free cash flow, and given we have no That matured 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 34, which have a 6.75 coupon, you should have still $300 million outstanding there, and some 33s or 35s. But let's see how the second half goes. Thank you. Ladies and gentlemen, there being no further questions, I would like to pass the floor to Mr. Gilberto Tomazoni.

Before we close, I want to just 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 shown me and over these past eight years, our interaction 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 a better company. 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 and being a team effort. And I'm very proud of what we have built together. We still have a few important months ahead of us, and my focus remains fully on leading JBS to deliver strong results and working closely with UASRI to ensure a smooth transition, successful transition. Thank you again for your trust, for your engagement, and your partnership over all these years. Thank you.

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