6-K
JBS N.V. (JBS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of May 2025
Commission File Number: 333-273211
JBS B.V.
(Exact Name asSpecified in its Charter)
N/A
(Translation ofregistrant’s name into English)
Stroombaan 16, 5th Floor,
1181 VX, Amstelveen, Netherlands
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F: ☒ Form 40-F: ☐
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: May 15, 2025 | ||
|---|---|---|
| JBS B.V. | ||
| By: | /s/ Guilherme Perboyre Cavalcanti | |
| Name: Guilherme Perboyre Cavalcanti | ||
| Title: Chief Financial Officer |
EX-99.1
Exhibit 99.1
| JBS S.A. |
|---|
| Unaudited condensed consolidated interim financial<br><br><br>information |
| As of and for the three-month period ended March 31, 2025 |
Unaudited condensed consolidated interim statements of financial position
In thousands of United States dollar - US$
| Note | March 31, 2025 | December 31, 2024 | ||||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents | 3 | **** | 4,825,982 | 5,613,672 | ||
| Margin cash | 3 | **** | 347,063 | 136,554 | ||
| Trade accounts receivable | 4 | **** | 3,501,107 | 3,735,540 | ||
| Inventories | 5 | **** | 5,787,078 | 5,015,989 | ||
| Biological assets | 6 | **** | 1,660,759 | 1,608,223 | ||
| Recoverable taxes | 7 | **** | 717,038 | 637,728 | ||
| Derivative assets | **** | 165,452 | 84,468 | |||
| Other current assets | **** | 373,032 | 288,842 | |||
| TOTAL CURRENT ASSETS | **** | 17,377,511 | **** | 17,121,016 | ||
| NON-CURRENT ASSETS | ||||||
| Recoverable taxes | 7 | **** | 1,662,641 | 1,412,455 | ||
| Biological assets | 6 | **** | 549,284 | 518,234 | ||
| Related party receivables | 8 | **** | 85,087 | 77,355 | ||
| Deferred income taxes | 9 | **** | 501,494 | 651,178 | ||
| Other non-current assets | **** | 273,277 | 268,737 | |||
| **** | 3,071,783 | **** | 2,927,959 | |||
| Investments in equity-accounted investees | **** | 39,866 | 38,312 | |||
| Property, plant and equipment | 10 | **** | 12,173,433 | 11,780,880 | ||
| Right of use assets | 11 | **** | 1,592,643 | 1,596,873 | ||
| Intangible assets | 12 | **** | 1,825,466 | 1,803,199 | ||
| Goodwill | 13 | **** | 5,624,986 | 5,417,134 | ||
| TOTAL NON-CURRENT ASSETS | **** | 24,328,177 | **** | 23,564,357 | ||
| TOTAL ASSETS | **** | 41,705,688 | **** | 40,685,373 |
The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.
Unaudited condensed consolidated interim statements of financial position
In thousands of United States dollar - US$
| Note | March 31, 2025 | December 31, 2024 | ||||
|---|---|---|---|---|---|---|
| LIABILITIES AND EQUITY | ||||||
| CURRENT LIABILITIES | ||||||
| Trade accounts payable | 14 | **** | 4,823,951 | 5,465,513 | ||
| Supply chain finance | 14 | **** | 1,020,042 | 728,710 | ||
| Loans and financing | 15 | **** | 794,942 | 2,084,225 | ||
| Income taxes | 16 | **** | 188,874 | 233,027 | ||
| Other taxes payable | 16 | **** | 129,774 | 113,734 | ||
| Payroll and social charges | 17 | **** | 1,223,367 | 1,435,751 | ||
| Lease liabilities | 11 | **** | 347,448 | 335,681 | ||
| Dividends payable | 18 | **** | 1,037,091 | 358,621 | ||
| Provisions for legal proceedings | 19 | **** | 224,644 | 280,804 | ||
| Derivative liabilities | **** | 284,165 | 165,979 | |||
| Other current liabilities | **** | 632,383 | 455,020 | |||
| TOTAL CURRENT LIABILITIES | **** | 10,706,681 | **** | 11,657,065 | ||
| NON-CURRENT LIABILITIES | ||||||
| Loans and financings | 15 | **** | 19,130,419 | 17,242,571 | ||
| Income and other taxes payable | 16 | **** | 407,862 | 406,655 | ||
| Payroll and social charges | 17 | **** | 360,618 | 352,718 | ||
| Lease liabilities | 11 | **** | 1,398,338 | 1,398,348 | ||
| Deferred income taxes | 9 | **** | 1,062,416 | 1,095,291 | ||
| Provisions for legal proceedings | 19 | **** | 232,166 | 216,659 | ||
| Derivative liabilities | **** | 100,301 | 100,087 | |||
| Other non-current liabilities | **** | 50,827 | 81,615 | |||
| TOTAL NON-CURRENTLIABILITIES | **** | 22,742,947 | **** | 20,893,944 | ||
| EQUITY | 20 | |||||
| Share capital - common shares | **** | 13,177,841 | 13,177,841 | |||
| Capital reserve | **** | (174,804) | (180,586) | |||
| Other reserves | **** | (37,844) | (37,470) | |||
| Profit reserves | **** | 3,452,926 | 4,211,944 | |||
| Accumulated other comprehensive loss | **** | (9,376,573) | (10,077,264) | |||
| Retained earnings | **** | 500,597 | – | |||
| Attributable to company shareholders | **** | 7,542,143 | **** | 7,094,465 | ||
| Attributable to non-controlling interest | **** | 713,917 | 1,039,899 | |||
| TOTAL EQUITY | **** | 8,256,060 | **** | 8,134,364 | ||
| TOTAL LIABILITIES AND EQUITY | **** | 41,705,688 | **** | 40,685,373 |
The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.
Unaudited condensed consolidated interim statements of income for the three-month period ended March 31, 2025and 2024
In thousands of United States dollar - US$ (except for earnings per share)
| Three-month period ended March 31, | |||||
|---|---|---|---|---|---|
| 2025 | 2024 | ||||
| NET REVENUE | 21 | **** | 19,526,520 | **** | 17,998,712 |
| Cost of sales | 25 | **** | (16,901,969) | (15,640,402) | |
| GROSS PROFIT | **** | 2,624,551 | **** | 2,358,310 | |
| Selling expenses | 25 | **** | (1,187,597) | (1,105,121) | |
| General and administrative expenses | 25 | **** | (556,427) | (528,961) | |
| Other income | 25.1 | **** | 30,345 | 21,207 | |
| Other expenses | 25.1 | **** | (27,957) | (22,509) | |
| NET OPERATING EXPENSES | **** | (1,741,636) | **** | (1,635,384) | |
| OPERATING PROFIT | **** | 882,915 | **** | 722,926 | |
| Finance income | 22 | **** | 235,660 | 168,224 | |
| Finance expense | 22 | **** | (427,206) | (516,969) | |
| NET FINANCE EXPENSE | **** | (191,546) | **** | (348,745) | |
| Share of profit of equity-accounted investees, net of tax | **** | 2,735 | (6,532) | ||
| PROFIT BEFORE TAXES | **** | 694,104 | **** | 367,649 | |
| Current income taxes | 9 | **** | (224,791) | (3,810) | |
| Deferred income taxes | 9 | **** | 87,021 | 1,017 | |
| TOTAL INCOME TAXES | **** | (137,770) | **** | (2,793) | |
| NET INCOME | **** | 556,334 | **** | 364,856 | |
| ATTRIBUTABLE TO: | |||||
| Company shareholders | **** | 500,224 | 332,327 | ||
| Non-controlling interest | **** | 56,110 | 32,529 | ||
| **** | 556,334 | **** | 364,856 | ||
| Basic and diluted earnings per share - common shares (US) | 23 | **** | 0.23 | **** | 0.15 |
All values are in US Dollars.
The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.
Unaudited condensed consolidated interim statements of comprehensive income for three-month period ended March31, 2025 and 2024
In thousands of United States dollar - US$
| Three-month period ended March 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| Net income | **** | 556,334 | **** | 364,856 |
| Other comprehensive income | ||||
| Items that are or may be subsequently reclassified to statement ofincome: | ||||
| Gain (loss) on net investment in foreign operations | **** | 126,386 | (52,929) | |
| Gain (loss) on foreign currency translation adjustments | **** | 451,293 | (402,462) | |
| Gain on cash flow hedge | **** | 376 | 448 | |
| Deferred income tax on loss on cash flow hedge | **** | (94) | (114) | |
| Other fair value adjustments through other comprehensive income | **** | (25) | (5) | |
| Items that will not be reclassified to statement of income: | ||||
| Gain (loss) associated with pension and other postretirement benefit obligations | **** | (494) | 4,453 | |
| Income tax on gain associated with pension and other postretirement benefit obligations | **** | (16) | (1,130) | |
| Total other comprehensive income (loss) | **** | 577,426 | **** | (451,739) |
| Comprehensive Income (loss) | **** | 1,133,760 | **** | (86,883) |
| Total comprehensive income (loss) attributable to: | ||||
| Company shareholders | **** | 1,200,914 | (134,307) | |
| Non-controlling interest | **** | (67,154) | 47,424 | |
| **** | 1,133,760 | **** | (86,883) |
The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.
| Unaudited condensed consolidated interim statements of changes in equity for three-month period ended March 31, 2025 and2024<br> <br>In thousands of United States dollar - US$ | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Capital reserves | Profit reserves | Other comprehensiveincome | ||||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Share<br>capital | Premium<br>onissue<br>of shares | Capitaltransaction^(1)^ | Stock<br>options | Other<br>reserves | Legal | Investments<br>statutory | Tax-<br>incentive<br>reserve | VAE | FCTA | Retained<br>earnings<br>(loss) | Total | Non-<br>controlling<br>interest | Total equity | |||||||||||||||||||||||
| BALANCE ON JANUARY 1, 2024 | **** | 13,177,841 | **** | 36,321 | **** | (232,475 | ) | **** | 10,145 | **** | (36,413 | ) | **** | 603,603 | **** | 2,232,528 | **** | **** | 787,501 | **** | 60,443 | **** | **** | (7,614,450 | ) | **** | – | **** | 9,025,044 | **** | **** | 682,742 | **** | **** | 9,707,786 | **** |
| Net income | – | – | – | – | – | – | – | – | – | – | 332,327 | 332,327 | 32,529 | 364,856 | ||||||||||||||||||||||
| Gain (loss) on foreign currency translation adjustments | – | – | – | – | – | – | – | – | – | (416,774 | ) | (416,774 | ) | 14,312 | (402,462 | ) | ||||||||||||||||||||
| Loss on net investment in foreign operations | – | – | – | – | – | – | – | – | – | (52,929 | ) | – | (52,929 | ) | – | (52,929 | ) | |||||||||||||||||||
| Gain on cash flow hedge, net of tax | – | – | – | – | – | – | – | – | 334 | – | – | 334 | – | 334 | ||||||||||||||||||||||
| Valuation adjustments to equity in subsidiaries | – | – | – | – | – | – | – | – | (5 | ) | – | – | (5 | ) | – | (5 | ) | |||||||||||||||||||
| Gain associated with pension and other postretirement benefit obligations, net of tax | – | – | – | – | – | – | – | – | 2,740 | – | – | 2,740 | 583 | 3,323 | ||||||||||||||||||||||
| Total comprehensive income (loss) | **** | – | **** | – | **** | – | **** | **** | – | **** | – | **** | **** | – | **** | – | **** | **** | – | **** | 3,069 | **** | **** | (469,703 | ) | **** | 332,327 | **** | (134,307 | ) | **** | 47,424 | **** | **** | (86,883 | ) |
| Share-based compensation | – | – | 3,916 | – | – | – | – | – | – | – | – | 3,916 | 829 | 4,745 | ||||||||||||||||||||||
| Realization of other reserves | – | – | – | – | (292 | ) | – | – | – | – | – | 292 | – | – | – | |||||||||||||||||||||
| Dividends to non-controlling interest | – | – | – | – | – | – | – | – | – | – | – | – | (784 | ) | (784 | ) | ||||||||||||||||||||
| Others | – | – | – | – | – | – | – | – | – | – | – | – | (94 | ) | (94 | ) | ||||||||||||||||||||
| BALANCE ON MARCH 31, 2024 | **** | 13,177,841 | **** | 36,321 | **** | (228,559 | ) | **** | 10,145 | **** | (36,705 | ) | **** | 603,603 | **** | 2,232,528 | **** | **** | 787,501 | **** | 63,512 | **** | **** | (8,084,153 | ) | **** | 332,619 | **** | 8,894,653 | **** | **** | 730,117 | **** | **** | 9,624,770 | **** |
| BALANCE ON JANUARY 1, 2025 | **** | 13,177,841 | **** | 36,321 | **** | (227,052 | ) | **** | 10,145 | **** | (37,470 | ) | **** | 691,999 | **** | 2,070,113 | **** | **** | 1,449,832 | **** | 67,583 | **** | **** | (10,144,847 | ) | **** | – | **** | 7,094,465 | **** | **** | 1,039,899 | **** | **** | 8,134,364 | **** |
| Net income | – | – | – | – | – | – | – | – | – | – | 500,224 | 500,224 | 56,110 | 556,334 | ||||||||||||||||||||||
| Gain (loss) on foreign currency translation<br>adjustments ^(3)^ | – | – | – | – | – | – | – | – | – | 574,457 | – | 574,457 | (123,164 | ) | 451,293 | |||||||||||||||||||||
| Gain on net investment in foreign operations<br>^(2)^ | – | – | – | – | – | – | – | – | – | 126,386 | – | 126,386 | – | 126,386 | ||||||||||||||||||||||
| Gain on cash flow hedge, net of tax ^(4)^ | – | – | – | – | – | – | – | – | 282 | – | – | 282 | – | 282 | ||||||||||||||||||||||
| Valuation adjustments to equity in subsidiaries^^ | – | – | – | – | – | – | – | – | (25 | ) | – | – | (25 | ) | – | (25 | ) | |||||||||||||||||||
| Loss associated with pension and other postretirement benefit obligations, net of tax | – | – | – | – | – | – | – | – | (409 | ) | – | – | (409 | ) | (101 | ) | (510 | ) | ||||||||||||||||||
| Total comprehensive income (loss) | **** | – | **** | – | **** | – | **** | **** | – | **** | – | **** | **** | – | **** | – | **** | **** | – | **** | (152 | ) | **** | 700,843 | **** | **** | 500,224 | **** | 1,200,915 | **** | **** | (67,155 | ) | **** | 1,133,760 | **** |
| Share-based compensation | – | – | 5,782 | – | – | – | – | – | – | – | – | 5,782 | 1,219 | 7,001 | ||||||||||||||||||||||
| Realization of other reserves | – | – | – | – | (374 | ) | – | – | – | – | – | 373 | (1 | ) | – | (1 | ) | |||||||||||||||||||
| Distribution of interim dividends | – | – | (759,018 | ) | (759,018 | ) | (759,018 | ) | ||||||||||||||||||||||||||||
| Dividends to non-controlling interest | – | – | – | – | – | – | – | – | – | – | – | – | (260,331 | ) | (260,331 | ) | ||||||||||||||||||||
| Others | – | – | – | – | – | – | – | – | – | – | – | – | 285 | 285 | ||||||||||||||||||||||
| BALANCE ON MARCH 31, 2025 | **** | 13,177,841 | **** | 36,321 | **** | (221,270 | ) | **** | 10,145 | **** | (37,844 | ) | **** | 691,999 | **** | 1,311,095 | **** | **** | 1,449,832 | **** | 67,431 | **** | **** | (9,444,004 | ) | **** | 500,597 | **** | 7,542,143 | **** | **** | 713,917 | **** | **** | 8,256,060 | **** |
^(1)^ Refers to the purchase of PPC treasury shares and share-based payment expenses incurred by subsidiaries.
^(2)^ Foreign Currency Translation Adjustments (FCTA) and exchange variation in subsidiaries.
^(3)^ Refers to the net investment on foreign operations of intercompany balances between JBS S.A. and its indirect subsidiaries JBS Luxembourg S.à.r.l. and JBS Investments Luxembourg S.à.r.l.. Thus, since the balances are an extension of that entity’s investment, they are considered as equity instruments.
^(4)^ Refers to the hedge accounting in the indirect subsidiary Seara Alimentos.
The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.
| Unaudited condensed consolidated interim statements of cash flows for three-month period ended March 31, 2025 and 2024<br><br><br>In thousands of United States dollar - US$ | ||||||||
|---|---|---|---|---|---|---|---|---|
| Three-month period ended March 31, | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Note | 2025 | 2024 | ||||||
| Cash flows from operating activities | ||||||||
| Net income | **** | 556,334 | **** | **** | 364,856 | **** | ||
| Adjustments for: | ||||||||
| Depreciation and amortization | **** | 6, 11, 12 and 13 | **** | 535,644 | **** | 544,505 | ||
| Expected credit losses | **** | 4 | **** | 12,896 | **** | 4,570 | ||
| Share of profit of equity-accounted investees | **** | (2,735 | ) | 6,532 | ||||
| Gain on sales of assets | **** | (10,771 | ) | (5,259 | ) | |||
| Tax expense | **** | 9 | **** | 137,770 | **** | 2,793 | ||
| Net finance expense | **** | 22 | **** | 191,546 | **** | 348,745 | ||
| Share-based compensation | **** | 7,001 | **** | 4,745 | ||||
| Provisions for legal proceedings | **** | 18 | **** | 14,020 | **** | 14,305 | ||
| Impairment of goodwill and property, plant and equipment | **** | 578 | **** | – | ||||
| Net realizable value inventory adjustments | **** | 5 | **** | 17,140 | **** | (8,955 | ) | |
| DOJ (Department of Justice) and antitrust agreements | **** | 19 | **** | 79,549 | **** | 4,691 | ||
| Fair value adjustment of biological assets | **** | 6 | **** | 9,191 | **** | (115,894 | ) | |
| Asset impairment | **** | 5,662 | **** | – | ||||
| **** | 1,553,825 | **** | **** | 1,165,634 | **** | |||
| Changes in assets and liabilities: | ||||||||
| Trade accounts receivable | **** | 236,929 | **** | 46,912 | ||||
| Inventories | **** | (640,928 | ) | (220,504 | ) | |||
| Recoverable taxes | **** | 42,046 | **** | (65,995 | ) | |||
| Other current and non-current assets | **** | (288,542 | ) | (67,676 | ) | |||
| Biological assets | **** | (191,303 | ) | (63,247 | ) | |||
| Trade accounts payable and supply chain finance | **** | (547,375 | ) | (631,835 | ) | |||
| Taxes paid in installments | **** | (6,948 | ) | (12,664 | ) | |||
| Other current and non-current liabilities | **** | (68,455 | ) | (98,005 | ) | |||
| DOJ and Antitrust agreements payment | **** | (139,709 | ) | (90 | ) | |||
| Income taxes paid | **** | (234,334 | ) | (27,992 | ) | |||
| Changes in operating assets and liabilities | **** | (1,838,619 | ) | **** | (1,141,096 | ) | ||
| Cash used in by operating activities | **** | (284,794 | ) | **** | 24,538 | **** | ||
| Interest paid | **** | (311,521 | ) | (327,465 | ) | |||
| Interest received | **** | 41,786 | **** | 67,512 | ||||
| Net cash flows used in operating activities | **** | (554,529 | ) | **** | (235,415 | ) | ||
| Cash flows from investing activities | ||||||||
| Purchases of property, plant and equipment | **** | (264,656 | ) | (284,131 | ) | |||
| Dividends received | **** | 1,943 | **** | 3,028 | ||||
| Purchases and disposals of intangible assets | **** | (2,672 | ) | (2,372 | ) | |||
| Acquisitions, net of cash acquired | – | (1,468 | ) | |||||
| Related party transactions | – | 260 | ||||||
| Proceeds from sale of property, plant and equipment | **** | 21,863 | **** | 11,988 | ||||
| Cash used in investing activities | **** | (243,522 | ) | **** | (272,695 | ) | ||
| Cash flows from financing activities | ||||||||
| Proceeds from loans and financing | **** | 2,181,040 | **** | 70,431 | ||||
| Payments of loans and financing | **** | (1,750,652 | ) | (668,692 | ) | |||
| Derivative instruments received (settled) | **** | (8,853 | ) | (7,464 | ) | |||
| Margin cash | **** | 22,205 | **** | 13,138 | ||||
| Dividends paid | **** | (379,505 | ) | – | ||||
| Dividends paid to non-controlling interest | **** | (906 | ) | (784 | ) | |||
| Payments of leasing contracts | **** | (98,282 | ) | (105,829 | ) | |||
| Cash provided (used in) by financing activities | **** | (34,953 | ) | **** | (699,200 | ) | ||
| Effect of exchange rate changes on cash and cash equivalents | **** | 45,314 | **** | **** | 38,813 | **** | ||
| Net change in cash and cash equivalents | **** | (787,690 | ) | (1,168,497 | ) | |||
| Cash and cash equivalents beginning of period | **** | 5,613,672 | **** | 4,466,490 | ||||
| Cash and cash equivalents at the end of period | **** | 4,825,982 | **** | **** | 3,297,993 | **** | ||
| Non-cash transactions: | Three-month period ended March 31, | |||||||
| Note | 2025 | 2024 | ||||||
| Non-cash additions to<br>right of use assets and lease liabilities | **** | 11 | **** | 71,466 | **** | 148,398 | ||
| Capitalized interest | **** | 10 | **** | 10,015 | **** | 11,023 | ||
| Dividends accrued and not paid | **** | 1.018.463 | **** | – |
The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
1 Background information
1.1 Reporting entity
JBS S.A (“JBS” or the “Company”), is a corporation with its headquarters office in Brazil, at Avenue Marginal Direita do Tietê, n^o^. 500, Vila Jaguara, in the City of São Paulo, and is controlled by J&F Investimentos S.A. Unaudited condensed consolidated interim financial information comprise the Company and its subsidiaries (collectively, the ‘Group’) as of and for the three-month periods ended March 31, 2025 and 2024, that were authorized by the Board of Directors on May 15, 2025. The Group has its shares publicly traded and listed on the “Novo Mercado” segment of the Sao Paulo Stock Exchange (B3 - Brasil, Bolsa eBalcão) under the ticker symbol “JBSS3”. In addition, American Depository Receipts related to shares issued by JBS are also publicly traded in the United States of America under the symbol “JBSAY”.
The Group operates in the processing of animal protein, such as beef, pork, lamb and chicken, and operates in the production of convenience foods and other products. In addition, it sells leather, hygiene and cleaning products, collagen, metal packaging, biodiesel, among others. The Group has a broad portfolio of brands including Seara, Doriana, Pilgrim’s, Moy Park, Primo, Adaptable Meals, Ozo, Friboi, Maturatta and Swift.
The unaudited condensed consolidated interim financial information includes the Group’s operations in Brazil as well as the activities of its subsidiaries.
1.2 Main events that occurred during the period:
1.2.1 Investment in JBS Terminais Ltda:
On 1 January 2025, the Group acquired 70% of JBS Terminais shares. The Company acts as a temporary lessee of part of the Port of Itajaí in the State of Santa Catarina - Brazil, to operate a public area and infrastructure for the movement and storage of containerized cargo and general cargo.
1.2.2 New Senior Notes Issuances (Bonds): On January 6, 2025, the Group, through its indirect subsidiaries JBS USA Holding Lux S.a.r.l., JBS USA Food Company and JBS USA Foods Group Holdings, Inc. (together, the “Issuers”), announced the pricing of its senior notes to be offered on the international market in the amount of US$ 1.75 billion. The issues were divided into two series: The first series consists of a US$ 1.0 billion bond with an interest rate of 5.95% per year and maturity in 2035, and the second series consists of a US$ 750 million bond with an interest rate of 6.375% per year and maturity in 2055. The offer was concluded on January 21, 2025. Additionally, the Issuers entered into a registration rights agreement, committing to register an exchange offer with the United States Securities and Exchange Commission (SEC) and to complete it within 365 days.
1.2.3 Investment in Mantiqueira Alimentos Ltda.: On January 27, 2025, the Group entered into an investment agreement with Mantiqueira Alimentos Ltda., to acquire 48.5% of its total share capital and 50% of its voting shares (joint venture). The value of the investment was established, based on 100% of Mantiqueira’s valuation in the amount of US$ 330 million. On February 26, 2025, the interest acquisition was approved without restrictions by CADE (Administrative Council for Economic Defense). On April 1, 2025, the Group completed the transaction. The transaction marks the company’s entry into the egg sector, in line with its strategy of diversifying and expanding its global protein platform.
1.2.4 Agribusiness ReceivablesCertificates (CRA): On January 28, 2025, an offering of three series of Agribusiness Receivables Certificates (CRAs) was issued by the indirect subsidiary Seara Alimentos Ltda. and guaranteed by JBS S.A., with maturities scheduled for 2035, 2045, and 2055, totaling a principal amount of US$140,000.The completion of the offering took place on March 6, 2025.
1.2.5 Conditional Partial Redemption of JBS USA’s 5.500% Senior Notes due2030: On March 21, 2025, JBS USA Food Company sent a conditional notice of redemption to redeem US$850.0 million aggregate principal amount of its 5.500% Senior Notes due 2030 (the “2030 Notes”). The redemption was conditioned upon Pilgrim’s Pride paying a special cash dividend of $6.30 per share to its shareholders. On April 17, 2025, the indirect subsidiary PPC paid its special dividend of US$1.5 billion to shareholders. Of this total, US$264.1 million went to non-controlling shareholders. The notes were settled on May 1, 2025. The redemption price for the 2030 Notes will be equal to 102.750% of the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest, if any.
1.2.6 Proposal toPay Dividends: On March 25, 2025, JBS S.A.’s board of directors approved a proposal to distribute dividends from profit reserves with respect to the 2024 fiscal year in the amount of R$4.4 billion (equivalent to US$766.3 million considering the exchange rate on March 31, 2025), corresponding to R$2.00 (equivalent to US$0.34 considering the exchange rate on March 31, 2025) per common share. The proposal was approved at the Annual General Meeting of Shareholders held on April 29, 2025, and the dividend was paid on May 14, 2025.
1.3 Subsequent events:
1.3.1 The process of dual listings in both Brazil and the United States is ongoing: On April 22, 2025, JBS S.A. called a shareholders’ meeting to resolve on a series of matters relating to the Group’s proposed dual listing in Brazil and the United States, in accordance with applicable legal and regulatory requirements. On April 22, 2025, the U.S. Securities and Exchange Commission (SEC) declared effective the registration statement on Form F-4 relating to an offering to shareholders of JBS S.A. of Class A Shares of JBS N.V., a company incorporated in the Netherlands. If the transaction is approved, JBS S.A.’s shareholders will receive one JBS N.V. Class A Share, initially in the form of a Brazilian Depositary Receipt (BDR), for every two JBS S.A. shares held, and JBS S.A. will become a wholly-owned subsidiary of JBS N.V. JBS is seeking approvals to list the JBS N.V. Class A Shares on the New York Stock Exchange (NYSE) and the JBS N.V. BDRs on the B3. JBS believes that this transaction will result in the creation of a structure that will allow it to better reflect its global presence and international operations, as well as to implement its growth strategy, with the aim of improving its ratings and maximizing value for its shareholders. The JBS S.A. shareholder’s meeting to resolve on the matters relating to the dual listing is scheduled to take place on May 23, 2025.
1.3.2 Certificates of Agribusiness Receivables (CRA):
On May 9, 2025, the preliminary prospectus for an offering of Agribusiness Receivables Certificates (CRAs) was filed with the CVM. The offering is valued at US$ 139 million, with a potential maximum of US$ 174 million. The transaction will be executed through the indirect subsidiary, Seara Alimentos Ltda., fully guaranteed by JBS S.A. Up to three series of securities will be issued, with maturities set for 2035, 2045, and 2055. The offering is scheduled to conclude on June 4, 2025. The proceeds will be allocated to finance grain acquisitions.
1.4 Seasonality
Demand for chicken is relatively stable throughout the year in the United States, Europe and Brazil, but there are seasonal variations in the sales volume of some specific products at certain times of the year, such as: Christmas, New Year and Easter. Demand in the United States beef industry is highest in the second and third quarters, due to favorable weather conditions for outdoor activities. In Australia, the beef industry faces a drop in slaughter in the fourth quarter, as the rainy season affects cattle’s availability and transport. In Brazil, beef sales do not fluctuate significantly during the year. The pork industry in The United States and Australia have peaks in demand in the first and fourth quarters, due to the supply of pork and the holidays, which stimulate the consumption of certain pork products, with no significantnt fluctuation in pork numbers in other locations.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
2 Basis of preparation
The unaudited condensed consolidated interim financial information as of and for the three-month period ended March 31, 2025 have been prepared in accordance with IAS 34 Interim Financial Reporting, as issued by International Accounting Standards Board (IASB), and should be read in conjunction with the Group´s last annual consolidated financial statements as of and for the year ended December 31, 2024 (“last annual financial statements”). They do not include all the information required for a complete set of financial statements prepared in accordance with IFRS Accounting Standards. However, selected explanatory notes are included to describe events and transactions that are significant to an understanding of the changes in the Group´s financial position and performance since the last annual financial statements.
In preparing these unaudited condensed consolidated interim financial statements, Management has made judgments and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements.
2.1 New standards, amendments and interpretations
a. Standards, amendments and interpretations recently issued and adopted by the Group
IAS 21 – Effects of changes in exchange rates and translation of financial statements.
As of January 1, 2025, this amendment establishes the accounting requirements for when a functional currency cannot be converted into other currencies. In such cases, the Group is required to utilize the most recent observable exchange rate to translate the results and financial position of the foreign operation into its presentation currency. The entity must also disclose this exchange rate, the date on which it was observed, and the reasons why the currency is not exchangeable. The company has not identified any impacts as a result of this change.
b. New standards, amendments and interpretations that are not yet effective
IFRS 18 - Presentation and Disclosure of Financial Statements.
As of January 1, 2027, IFRS 18 will replace IAS 1 Presentation of Financial Statements. The new standard introduces the following main new requirements:
- Companies are required to classify all income and expenses into five categories in the income statement: operating, investing, financing, discontinued operations, and income tax. Entities are also required to present a newly defined operating profit subtotal. The entities’ net income will not change.
Management has defined performance measures, which are disclosed in a single note in the financial statements.
Enhanced guidance will be provided on how to group information in the financial statements.
Additionally, all entities are required to use the subtotal of operating profit as the starting point for the cash flow statement when presenting operating cash flows using the indirect method.
The Group is currently evaluating the impact of the new standard and will adjust the disclosure in accordance with the standard’s requirements in the annual financial statements.
3 Cash and cash equivalents and margin cash
| Cash and cash equivalents | March 31, 2025 | December 31, 2024 | ||
|---|---|---|---|---|
| Cash on hand and at banks | **** | 2,026,924 | 2,197,822 | |
| CDB (bank certificates of deposit) and National Treasury Bills (Tesouro Selic)<br>^(1)^ | **** | 2,799,058 | 3,415,850 | |
| **** | 4,825,982 | **** | 5,613,672 | |
| Margin cash | ||||
| Margin cash (Restricted cash) | **** | 335,370 | 104,220 | |
| Investments in Treasury Bills | **** | 11,693 | 32,334 | |
| **** | 347,063 | **** | 136,554 |
^(1)^ CDBs are held at financial institutions and earn interest based on floating rates and are pegged to the Brazilian overnight interbank lending rate (Certificado de Depósito Interbancário - CDI). Tesouro Selic are bonds purchased from Brazilian government financial institutions having conditions and characteristics that are similar to CDB’s.
The availability of revolving credit facilities in the United States was US$2.9 billion as of March 31, 2025 (US$2.9 billion as of December 31, 2024). In Brazil, the availability of revolving credit facilities was US$500,000 as of March 31, 2025 (US$500,000 as of December 31, 2024).
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
4 Trade accounts receivable
| March 31, 2025 | December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Current receivables | ||||||
| Domestic sales | **** | 1,991,746 | **** | 1,994,667 | ||
| Foreign sales | **** | 1,038,744 | **** | 1,176,603 | ||
| Subtotal | **** | 3,030,490 | **** | **** | 3,171,270 | **** |
| Overdue receivables: | ||||||
| From 1 to 30 days | **** | 379,310 | **** | 444,687 | ||
| From 31 to 60 days | **** | 49,888 | **** | 61,314 | ||
| From 61 to 90 days | **** | 17,960 | **** | 20,603 | ||
| Above 90 days | **** | 129,684 | **** | 130,845 | ||
| Expected credit losses | **** | (101,579 | ) | (89,060 | ) | |
| Present value adjustment | **** | (4,646 | ) | (4,119 | ) | |
| Subtotal | **** | 470,617 | **** | **** | 564,270 | **** |
| Trade accounts receivable, net | **** | 3,501,107 | **** | **** | 3,735,540 | **** |
Present value adjustment - The Group discounts its receivables to present value using interest rates directly related to customer credit profiles. The weighted average discount rate used to calculate the present value of trade accounts receivable on March 31, 2025, was 0.45% per transaction (1.0% per transaction on March 31, 2024). Realization of the present value adjustment is recognized as deduction item to sales revenue.
The Group carries out credit assignment transactions with financial institutions, which these institutions acquire credits held against certain third-party customers in the domestic and foreign markets. The assignment transactions are negotiated with a permanent transfer of the risks and benefits to the financial institutions - described within Note 8 - Related party transactions.
Changes in expected credit losses:
| March 31, 2025 | March 31, 2024 | |||
|---|---|---|---|---|
| Balance at the beginning of the period | **** | (89,060) | **** | (84,913) |
| Additions | **** | (12,896) | (4,570) | |
| Write-offs/Reversals | **** | 2,768 | 2,392 | |
| Exchange rate variation | **** | (2,391) | 2,342 | |
| Balance at the end of the period | **** | (101,579) | **** | (84,749) |
5 Inventories
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Finished products | **** | 3,644,352 | 3,018,302 | |
| Work in process | **** | 569,087 | 492,015 | |
| Raw materials | **** | 905,442 | 847,909 | |
| Supplies | **** | 668,197 | 657,763 | |
| **** | 5,787,078 | **** | 5,015,989 |
During the three-month period ended March 31, 2025 and 2024, the Company recognized net adjustments to the net realizable value of inventories, which include additions and write-offs recorded in the cost of goods sold, amounted to US$(17,141) and US$8,955, respectively.
6 Biological assets
| Changes in biological assets: | Current | Non-current | ||||||
|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | March 31, 2024 | March 31, 2025 | March 31, 2024 | |||||
| Balance at the beginning of the period | **** | 1,608,223 | **** | 1,712,153 | **** | 518,234 | **** | 531,477 |
| Increase by reproduction (born) and cost absorption including death | **** | 2,693,960 | 2,703,473 | **** | 365,078 | 338,588 | ||
| Reduction for slaughter, sale or consumption | **** | (3,006,017) | (3,125,593) | **** | (15,297) | (17,890) | ||
| Purchases | **** | 102,411 | 105,124 | **** | 51,167 | 59,545 | ||
| Fair value adjustments | **** | (9,177) | 115,894 | **** | (14) | – | ||
| Reclassification from non-current to current | **** | 231,663 | 235,038 | **** | (231,663) | (235,038) | ||
| Exchange rate variation | **** | 39,696 | (27,301) | **** | 11,586 | (4,747) | ||
| Amortization | **** | – | – | **** | (149,807) | (154,863) | ||
| Balance at the end of the period | **** | 1,660,759 | **** | 1,718,788 | **** | 549,284 | **** | 517,072 |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
7 Recoverable taxes
Recoverable taxes as of March 31, 2025 and December 31, 2024 was comprised of the following:
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Value-added tax on sales and services – ICMS / IVA / VAT / GST | **** | 728,533 | 650,728 | |
| Social contribution on billings - PIS and COFINS | **** | 433,408 | 404,673 | |
| Withholding income tax - IRRF / IRPJ ^(1)^ | **** | 1,181,170 | 960,161 | |
| Excise tax – IPI | **** | 17,710 | 16,176 | |
| Reintegra | **** | 7,847 | 7,657 | |
| Other | **** | 11,010 | 10,788 | |
| **** | 2,379,678 | **** | 2,050,183 | |
| Current | **** | 717,038 | 637,728 | |
| Non-current | **** | 1,662,641 | 1,412,455 | |
| **** | 2,379,679 | **** | 2,050,183 |
^(1)^As outlined in the December 31, 2024 Financial statement, the Company recognized a tax provision in Brazil, of US$761 million of tax uncertainties, specifically related to the treatment of profits earned abroad (TBU). Of this amount, US$108 million pertained to the 2016 fiscal year. During the period, following a decision from the Administrative Council for Tax Appeals (CARF) unfavorable to the Company by a casting vote, the Company, despite maintaining confidence in its legal argument, opted for settlement the 2016 tax assessment due to the favorable economic benefit of settlement that included the complete cancellation of late payment penalties and interest, as well as the ability to utilize tax losses and negative CSLL bases calculated by the subsidiaries within the same economic group. This was in accordance with Brazilian tax Law 14,689/2023, which amended §3 of Art. 25 of Decree 70,235/1972. As a result of the CARF decision an additional provision of US$86 million was recognized against current income tax expenses. Then, the Company settled the full amount (US$ 194 million) of the related taxes against the provision for uncertain tax position. As of March 31, 2025 the provision for uncertain tax position amounted to US$ 700 million.
8 Related party transactions
The main balances and transactions between related parties are presented and described below. Amounts charged include borrowing costs, interest and management fees, when applicable.
Related party receivables
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| J&F Investimentos S.A. ^(1)^ | **** | 85,087 | **** | 77,355 |
| **** | 85,087 | **** | 77,355 |
^(1)^Refers to the agreement signed between JBS S.A. and J&F Investimentos S.A. and some of the Company’s former executives, which represents the definitive settlement of the dispute that was the subject of CAM Arbitration No. 186/21, whereby J&F undertook to settle according to the terms and conditions specified in the agreement.
Other financial transactions in the Group
The Group entered into an assignment agreement with Banco Original S.A, direct subsidiary of the parent Group J&F, pursuant to which Banco Original S.A. acquires credits held against certain clients in the domestic and foreign markets. The assignments are negotiated with no right of recourse, through the definitive transfer of the risks and benefits of the receivables to Banco Original. On March 31, 2025, the Group had US$760,922 (US$517,677 on December 31, 2024) of assigned receivables. In the quarter ended March 31, 2025, the Group incurred in a loss from the sale of the receivables of US$26,577 (US$32,363 on March 31, 2024), recorded in interim financial information as financial expenses.
On March 31, 2025, the Group held investments with Banco Original in the amount of US$483,727 (US$303,195 on December 31, 2024), recorded in cash and cash equivalents. The cash investments and cash equivalents, CDBs and similar have yields equivalent to the CDI (Interbank Deposit Certificate), according to the term and amount invested, following market practices. In the quarter ended March 31, 2025, the Group earned interest from these investments of US$7,090 (US$9,366 on March 31, 2024) recognized as financial income.
The Group has commitments to purchase cattle for future delivery signed with certain suppliers, including the related party JBJ, guaranteeing the acquisition of cattle for a fixed price, or to be fixed, with no cash effect on the Group until the cattle are delivered. On March 31, 2025, the Group has these commitments agreements in the amount of US$83,609 (US$48,317 on December 31, 2024).
The Group has transactions with Prima Foods S.A. for the purchase of bovine slaughtering residues for greasing operations.
The Group is the sponsor of Institute J&F, a youth-directed business school, whose goal is to educate future leaders by offering free, high-quality education. In the quarter ended March 31, 2025, the Company made donations in the amount of US$3,307 (US$8,989 on March 31, 2024), recognized as general and administrative expenses.
On December 30, 2024, the Group entered into an agreement for the sale of its Hygiene and Beauty operation to the related party Flora Produtos de Higiene e Limpeza S.A. The transaction covers the transfer of assets and operations related to the manufacture and sale of hygiene and beauty products, in accordance with the terms agreed between the parties. The sale value was set at US$54 million, subject to working capital adjustments. The transaction will be concluded after the conditions precedent stipulated in the contract have been met. The Group did not classify the operation as discontinued on March 31, 2025, as it does not represent an individually significant line of business, corresponding to only 0.2% of the Parent Company’s net assets.
No expense for doubtful accounts or bad debts relating to related-party transactions were recorded during the three-month period ended March 31, 2025 and 2024.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
Remuneration of key management
The Group’s key management is comprised of its executive officers and members of the Board of Directors. The aggregate amount of compensation received by the Group’s key management during the three-month period ended March 31, 2025 and 2024 was:
| Three-month period ended March 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| Salaries and wages | **** | 2,146 | 1,720 | |
| Variable cash compensation | **** | 19,023 | 16,599 | |
| **** | 21,169 | **** | 18,319 |
The Chief Executive Officer, the Administrative and Control Officer, the Chief Financial Officer and the Executive Officer are employed under the Brazilian employment contract regime referred to as CLT (Consolidation of Labor Laws), which sets legal prerogatives for employee benefits.
Except for those described above, the Board of Directors members are not party to any employment contract or any other contracts for additional employee benefits such as post-employment benefits, other long-term benefits or termination benefits that do not conform to Brazilian Labor Law.
9Income taxes
a. Composition of deferred tax income and social contribution
| March 31, 2025 | December 31, 2024 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Deferred income taxes assets | **** | 501,494 | **** | **** | 651,178 | **** | |||||||||
| Deferred income taxes liabilities | **** | (1,062,416 | ) | **** | (1,095,291 | ) | |||||||||
| **** | (560,922 | ) | **** | (444,113 | ) | ||||||||||
| Balance at<br>January 1, 2025 | Income<br>statement | Exchange<br>variation | Other <br>adjustments ^(2)^ | Balance at March<br>31, 2025 | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Tax Loss and Negative Social Contribution Base | **** | 679,275 | **** | **** | 36,156 | **** | **** | 34,822 | **** | **** | (191,303 | ) | **** | 558,950 | **** |
| Expected credit losses on trade accounts receivable | **** | 42,304 | **** | **** | (10,404 | ) | **** | 1,877 | **** | **** | – | **** | **** | 33,777 | **** |
| Provisions for contingencies | **** | 94,487 | **** | **** | (11,402 | ) | **** | 5,638 | **** | **** | – | **** | **** | 88,723 | **** |
| Fair Value Adjustment | **** | (105,836 | ) | **** | 4,111 | **** | **** | (4,373 | ) | **** | – | **** | **** | (106,098 | ) |
| Tax Credits - Foreign Subsidiaries | **** | 8,798 | **** | **** | (322 | ) | **** | (76 | ) | **** | – | **** | **** | 8,400 | **** |
| Provision for Work Accident Insurance - Foreign Subsidiaries | **** | 8,964 | **** | **** | (553 | ) | **** | – | **** | **** | – | **** | **** | 8,411 | **** |
| Pension Plan - Foreign Subsidiaries | **** | 3,209 | **** | **** | (441 | ) | **** | – | **** | **** | (7 | ) | **** | 2,761 | **** |
| Trade accounts payable accrual | **** | 249,853 | **** | **** | (39,378 | ) | **** | 4,158 | **** | **** | – | **** | **** | 214,633 | **** |
| Non-Deductible Interest Portion - U.S.<br>Tax Reform | **** | 279,572 | **** | **** | (98,810 | ) | **** | 1 | **** | **** | – | **** | **** | 180,763 | **** |
| Right of use assets | **** | 25,967 | **** | **** | 1,816 | **** | **** | 1,396 | **** | **** | – | **** | **** | 29,179 | **** |
| Goodwill amortization | **** | (727,377 | ) | **** | 44,825 | **** | **** | (48,802 | ) | **** | – | **** | **** | (731,354 | ) |
| Business Combinations | **** | (465,917 | ) | **** | (7,709 | ) | **** | (2,448 | ) | **** | – | **** | **** | (476,074 | ) |
| Inventory valuation | **** | (83,507 | ) | **** | 19,021 | **** | **** | 4,723 | **** | **** | – | **** | **** | (59,763 | ) |
| Hedge Operations<br>^(1)^ | **** | 45,961 | **** | **** | (3,040 | ) | **** | 3,544 | **** | **** | (239 | ) | **** | 46,226 | **** |
| Realization of other reserves | **** | (88,113 | ) | **** | 615 | **** | **** | (6,896 | ) | **** | – | **** | **** | (94,394 | ) |
| Accelerated depreciation and amortization | **** | (479,922 | ) | **** | 144,710 | **** | **** | (1 | ) | **** | – | **** | **** | (335,213 | ) |
| Cut Off Adjustments (sales) | **** | 15,274 | **** | **** | 564 | **** | **** | 1,207 | **** | **** | – | **** | **** | 17,045 | **** |
| Other Temporary Differences | **** | 52,895 | **** | **** | 7,262 | **** | **** | (7,197 | ) | **** | 146 | **** | **** | 53,106 | **** |
| Deferred taxes, net | **** | (444,113 | ) | **** | 87,021 | **** | **** | (12,427 | ) | **** | (191,403 | ) | **** | (560,922 | ) |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
| Balance at<br>January 1, 2024 | Income<br>statement | Exchange<br>variation | Other<br>Adjustments ^(2)^ | Balance at March<br>31, 2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Tax losses and negative basis of social contribution | **** | 840,172 | **** | (30,277 | ) | (18,087 | ) | – | **** | 791,808 | **** | ||||
| Expected credit losses on trade accounts receivable | **** | 38,086 | **** | 2,133 | (720 | ) | – | **** | 39,499 | **** | |||||
| Provisions for contingencies | **** | 78,840 | **** | 977 | 43,282 | – | **** | 123,099 | **** | ||||||
| Present value adjustment | **** | 7,648 | **** | 1,450 | (250 | ) | – | **** | 8,848 | **** | |||||
| Tax credits | **** | 23,685 | **** | (24 | ) | – | (24 | ) | **** | 23,637 | **** | ||||
| Labor accident accruals | **** | 7,927 | **** | (477 | ) | (1 | ) | – | **** | 7,449 | **** | ||||
| Pension plan | **** | 11,956 | **** | (433 | ) | 10 | (1,117 | ) | **** | 10,416 | **** | ||||
| Trade accounts payable accrual | **** | 277,512 | **** | 9,059 | (47,813 | ) | – | **** | 238,758 | **** | |||||
| Non-deductible interest | **** | 211,958 | **** | 9,435 | 1 | – | **** | 221,394 | **** | ||||||
| Right of use assets | **** | 25,417 | **** | 815 | (524 | ) | – | **** | 25,708 | **** | |||||
| Goodwill amortization | **** | (851,840 | ) | (4,359 | ) | 23,530 | – | **** | (832,669 | ) | |||||
| Present value adjustment - Trade accounts payable | **** | (6,064 | ) | 1,962 | 171 | – | **** | (3,931 | ) | ||||||
| Business combinations | **** | (444,250 | ) | 4,077 | 1,291 | – | **** | (438,882 | ) | ||||||
| Inventory valuation | **** | (207,085 | ) | 5,609 | (2 | ) | – | **** | (201,478 | ) | |||||
| Hedge operations<br>^(1)^ | **** | (25,364 | ) | 15,158 | 658 | (174 | ) | **** | (9,722 | ) | |||||
| Realization of other reserves | **** | (115,640 | ) | 751 | 3,579 | – | **** | (111,310 | ) | ||||||
| Accelerated depreciation and amortization | **** | (514,285 | ) | 6,668 | – | – | **** | (507,617 | ) | ||||||
| Other temporary differences | **** | 55,931 | **** | (21,507 | ) | 5,103 | – | **** | 39,527 | **** | |||||
| Deferred taxes, net | **** | (585,396 | ) | **** | 1,017 | **** | **** | 10,228 | **** | **** | (1,315 | ) | **** | (575,466 | ) |
^(1)^ Hedge and hedge accounting operations are demonstrated in Note 25
- Risk management and financial.
^(2)^ Changes in deferred tax assets that do not directly impact the income statement are presented in the column “Other adjustments” above. The primary adjustment pertains to the transfer of tax losses and negative basis of Social Contribution on Net Income from the subsidiary SEARA and its indirect subsidiaries to JBS S/A, to settle the infraction notice related to the taxation of profits earned abroad (TBU) for the 2016 calendar year. Following a thorough review, the Administrative Council for Tax Appeals (CARF) upheld this notice by a casting vote. The settlement was reached through the utilization of tax credits and discounts.
b. Reconciliation ofincome tax and social contribution expense:
| Three-month period ended March 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| Profit before taxes | **** | 694,104 | **** | 367,649 |
| Brazilian statutory corporate tax rate | **** | (34)% | **** | (34)% |
| Expected tax expense | **** | (235,995) | **** | (125,001) |
| Adjustments to reconcile taxable income tax expense(benefit): | ||||
| Share of profit of equity-accounted investees | **** | 930 | (2,220) | |
| Non-taxable tax benefits ^(3)^ | **** | 50,922 | 53,148 | |
| Transfer pricing adjustments | **** | – | (2,507) | |
| Difference of tax rates on taxable income from foreign subsidiaries | **** | 24,705 | 35,314 | |
| Profits taxed by foreign jurisdictions ^(4)^ | **** | (112,681) | 29,750 | |
| Deferred income tax not recognized | **** | 102,172 | (10,695) | |
| Non-taxable interest - Foreign<br>subsidiaries | **** | 3,118 | 6,145 | |
| Donations and social programs<br>^(5)^ | **** | – | (2,099) | |
| SELIC interest on tax credits | **** | 27,623 | 735 | |
| Other permanent differences | **** | 1,436 | 14,637 | |
| Current and deferred income taxexpense | **** | (137,770) | **** | (2,793) |
| Current income tax | **** | (224,791) | (3,810) | |
| Deferred income tax | **** | 87,021 | 1,017 | |
| **** | (137,770) | **** | (2,793) | |
| Effective income tax rate | **** | (19.85)% | **** | (0.76)% |
Additional information: analysis of the variation in the effective rate:
The average effective tax rate is calculated as the ratio between tax expense (income) and accounting profit. This rate can be influenced by operations that impact tax expense (income), but which have no direct relationship with net income for the period. The following are examples of these operations: the effects of unrecognized deferred taxes, income tax, and social contributions on the realization of the revaluation reserve. In our opinion, this information should be considered when analyzing the effective tax rate.
^(3)^ The group and its subsidiaries have subsidies granted by state governments, as a presumed credit, in accordance with the regulations of each state. The amounts appropriated from this tax incentive as revenue in the income statement are excluded in the calculation of taxes on profit, when the requirements set out in current legislation are met. ntives as revenue in the statement of income are excluded from the calculation of taxes on income, when the requirements set forth in current legislation are achieved.
^(4)^ According to Law No. 12,973/14, the income from foreign subsidiaries must be taxed at the Brazilian statutory tax rate of 34%, and the income tax paid abroad by these subsidiaries may be used to compensate income taxes to be paid in Brazil. The results obtained from foreign subsidiaries are subject to taxation by the countries where they are based, according to applicable rates and legislation (profits taxed by-foreign jurisdictions included in the reconciliation of income tax and social contribution expense). The Group analyzes the results of each subsidiary for the application of its income tax legislation, in order to respect the treaties signed by Brazil and avoid double taxation.
^(5)^ Refers to donations made by the Group, as described in note 25 - Expenses by nature.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
Global Minimum Tax
From the 2024 calendar year onward, Pillar II rules came into effect in various jurisdictions, impacting multinationals operating in these markets.
Since the Group operates in several jurisdictions that adopted the global minimum tax from 2024, including Australia, Canada, France, Ireland, Luxembourg, Malta, the Netherlands, and the United Kingdom, the Company assessed the potential impact of these regulations. Based on current assessments, the Company has not identified any significant tax exposure resulting from this tax.
10 Property, plant and equipment
Changes in property, plant and equipment:
| Balance at January<br><br><br>1, 2025 | Additions net of transfers ^(1)^ | Disposals | Depreciation | Exchange rate<br><br><br>variation | Balance at March<br><br><br>31, 2025 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Buildings | 3,982,477 | 76,631 | (2,279 | ) | (60,711 | ) | 128,144 | **** | 4,124,262 | |||||||
| Land | 1,069,392 | 2,617 | (1,396 | ) | – | 46,584 | **** | 1,117,197 | ||||||||
| Machinery and equipment | 4,038,196 | 153,451 | (719 | ) | (155,514 | ) | 109,328 | **** | 4,144,742 | |||||||
| Facilities | 682,348 | 29,983 | (1,001 | ) | (12,387 | ) | 53,315 | **** | 752,258 | |||||||
| Computer equipment | 187,164 | 20,708 | (1,205 | ) | (14,153 | ) | 2,742 | **** | 195,256 | |||||||
| Vehicles (land and air) | 275,582 | 30,778 | (6,717 | ) | (10,985 | ) | 12,091 | **** | 300,749 | |||||||
| Construction in progress | 1,238,785 | (69,170 | ) | (1,194 | ) | – | 47,653 | **** | 1,216,074 | |||||||
| Other | 306,936 | 22,780 | (110 | ) | (11,554 | ) | 3,902 | **** | 321,954 | |||||||
| **** | 11,780,880 | **** | 267,778 | **** | **** | (14,621 | ) | **** | (265,304 | ) | **** | 403,759 | **** | **** | 12,172,492 | |
| Balance at January<br><br><br>1, 2024 | Additions net oftransfers ^(1)^ | Disposals | Depreciation | Exchange rate<br><br><br>variation | Balance at March<br><br><br>31, 2024 | |||||||||||
| Buildings | 4,305,145 | 110,120 | (2,341 | ) | (63,822 | ) | (71,906 | ) | **** | 4,277,196 | ||||||
| Land | 1,209,739 | 12,612 | (720 | ) | – | (26,803 | ) | **** | 1,194,828 | |||||||
| Machinery and equipment | 4,310,590 | 175,963 | (1,417 | ) | (154,084 | ) | (62,193 | ) | **** | 4,268,859 | ||||||
| Facilities | 764,036 | 40,822 | (9 | ) | (12,881 | ) | (23,136 | ) | **** | 768,832 | ||||||
| Computer equipment | 166,291 | 16,915 | (39 | ) | (12,204 | ) | (1,405 | ) | **** | 169,558 | ||||||
| Vehicles (land and air) | 272,663 | 11,993 | (1,953 | ) | (11,247 | ) | (7,134 | ) | **** | 264,322 | ||||||
| Construction in progress | 1,636,719 | (100,116 | ) | (196 | ) | – | (32,892 | ) | **** | 1,503,515 | ||||||
| Other | 253,006 | 23,439 | (54 | ) | (9,635 | ) | (1,936 | ) | **** | 264,820 | ||||||
| **** | 12,918,189 | **** | 291,748 | **** | **** | (6,729 | ) | **** | (263,873 | ) | **** | (227,405 | ) | **** | 12,711,930 |
^(1)^ Additions for each category includes transfers from construction in progress during the period.
For the three-month period ended March 31, 2025, the amount of capitalized interest added to construction in progress and included in additions was US$10,015 (US$11,023 for the three-month period ended March 31, 2024).
The Group assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. When future undiscounted cash flows of assets are estimated to be insufficient to recover their related carrying value, the Group compares the asset’s estimated future cash flows, discounted to present value using a risk-adjusted discount rate, to its current carrying value and records a provision for impairment as appropriate.
For the three-month period ended March 31, 2025, the capitalization rate used was 13.79% p.a., in Brazil and 5.10% p.a. in the United States.
11 Leases
The Group uses the optional exemption to not recognize a right of use asset and lease liability for short term (less than 12 months) and low value leases. The average discount rate used for measuring lease liabilities was 5.90% for the three-month period ended March 31, 2024 (5.16% at December 31, 2024).
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
11.1 Right of use asset
Changes in the right of use asset:
| Balance at<br><br><br>January 1, 2025 | Additions ^(1)^ | Terminated<br><br><br>contracts | Amortization | Exchange rate<br><br><br>variation | Balance at March<br><br><br>31, 2025 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Growing facilities | 632,267 | 28,121 | (5,529 | ) | (36,082 | ) | 25,293 | **** | 644,070 | ||||||
| Buildings | 638,981 | 7,319 | (5,578 | ) | (23,082 | ) | 15,627 | **** | 633,267 | ||||||
| Vehicles (land) | 189,036 | 9,177 | (3,402 | ) | (17,685 | ) | 1,483 | **** | 178,609 | ||||||
| Machinery and equipment | 106,597 | 8,116 | (1,305 | ) | (13,008 | ) | 4,942 | **** | 105,342 | ||||||
| Operating plants | 8,622 | 507 | – | (784 | ) | 622 | **** | 8,967 | |||||||
| Land | 15,999 | (4 | ) | – | (623 | ) | 100 | **** | 15,472 | ||||||
| Computer equipment | 5,371 | (16 | ) | – | (1,708 | ) | 391 | **** | 4,038 | ||||||
| Concession Agreement | – | 3,771 | – | (943 | ) | 50 | **** | 2,878 | |||||||
| **** | 1,596,873 | **** | 56,991 | **** | **** | (15,814 | ) | **** | (93,915 | ) | **** | 48,508 | **** | 1,592,643 | |
| Balance at<br><br><br>January 1, 2024 | Additions ^(1)^ | Terminated<br><br><br>contracts | Amortization | Exchange rate<br><br><br>variation | Balance at March<br><br><br>31, 2024 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Growing facilities | 805,370 | 39,189 | (21,452) | (41,007) | (12,619) | **** | 769,481 | ||||||||
| Buildings | 532,104 | 74,357 | (13,562) | (22,445) | (11,840) | **** | 558,614 | ||||||||
| Vehicles (land) | 223,720 | 14,966 | (77) | (18,676) | (1,909) | **** | 218,024 | ||||||||
| Machinery and equipment | 90,101 | 17,667 | (1,637) | (11,044) | (1,581) | **** | 93,506 | ||||||||
| Operating plants | 19,695 | 589 | – | (1,480) | (572) | **** | 18,232 | ||||||||
| Land | 19,186 | 171 | – | (648) | (654) | **** | 18,055 | ||||||||
| Computer equipment | 15,534 | 57 | – | (2,369) | (462) | **** | 12,760 | ||||||||
| **** | 1,705,710 | **** | 146,996 | **** | (36,728) | **** | (97,669) | **** | (29,637) | **** | 1,688,672 |
^(1 )^The additions have already been reduced by the PIS/COFINS tax effect. The net impact is US$(1,208) (US$(1,427) in the consolidated total as of March 31, 2024).
11.2 Lease liabilities
| March 31, 2025 | December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Undiscounted lease payments | **** | 2,166,934 | **** | 2,135,128 | ||
| Present value adjustment | **** | (421,148 | ) | (401,099 | ) | |
| **** | 1,745,786 | **** | **** | 1,734,029 | **** | |
| Breakdown: | ||||||
| Current liabilities | **** | 347,448 | **** | 335,681 | ||
| Non-current liabilities | **** | 1,398,338 | **** | 1,398,348 | ||
| **** | 1,745,786 | **** | **** | 1,734,029 | **** |
Changes in the lease liability:
| Balance at<br><br><br>January 1, 2025 | Additions | Interest accrual | Payments | Terminated<br><br><br>contracts | Exchange rate<br><br><br>variation | Balance at<br><br><br>March 31, 2025 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Lease liability | 1,734,029 | 71,466 | 25,038 | (119,739 | ) | (23,824 | ) | 58,816 | **** | 1,745,786 | |||||||
| Balance at<br><br><br>January 1, 2024 | Additions | Interest accrual | Payments | Terminated<br><br><br>contracts | Exchange rate variation | Balance at<br><br><br>March 31, 2024 | |||||||||||
| Lease liability | 1,841,227 | 148,398 | 25,543 | (117,779 | ) | (40,026 | ) | (33,485 | ) | **** | 1,823,878 |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
The non-current portion of the lease liability schedule is as follows:
| March 31, 2025 | |||
|---|---|---|---|
| 2026 | **** | 262,311 | **** |
| 2027 | **** | 227,500 | **** |
| 2028 | **** | 180,397 | **** |
| 2029 | **** | 156,594 | **** |
| 2030 | **** | 131,701 | **** |
| Maturities after 2030 | **** | 768,795 | **** |
| Total Future Minimum Lease Payments | **** | 1,727,298 | **** |
| Less: Imputed Interest | **** | (328,961 | ) |
| Present Value of Lease Liabilities | **** | 1,398,337 | **** |
12 Intangible assets
Changes in intangible assets:
| Balance at<br><br><br>January 1, 2025 | Additions | Disposals | Amortization | Exchange rate<br><br><br>variation | Balance at<br><br><br>March 31, 2025 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amortizing: | |||||||||||||||
| Trademarks | 293,519 | 300 | – | (6,780 | ) | 10,339 | **** | 297,378 | |||||||
| Software | 30,611 | 1,214 | (984 | ) | (1,597 | ) | 2,234 | **** | 31,478 | ||||||
| Customer relationships | 408,149 | 685 | – | (16,641 | ) | 5,789 | **** | 397,982 | |||||||
| Commercial rights assignment | – | – | – | – | 9,177 | **** | 9,177 | ||||||||
| Supplier contracts | 20,548 | – | – | (900 | ) | 1,023 | **** | 20,671 | |||||||
| Others | 13,975 | 2,249 | (3,773 | ) | (1,647 | ) | (8,164 | ) | **** | 2,640 | |||||
| Non-amortizing: | |||||||||||||||
| Trademarks | 1,025,095 | 94 | – | – | 29,612 | **** | 1,054,801 | ||||||||
| Water rights | 11,302 | – | – | – | 37 | **** | 11,339 | ||||||||
| **** | 1,803,199 | **** | 4,542 | **** | (4,757 | ) | **** | (27,565 | ) | **** | 50,047 | **** | **** | 1,825,466 | |
| Balance at<br><br><br>January 1, 2024 | Additions | Amortization | Exchange rate<br><br><br>variation | Balance at<br><br><br>March 31, 2024 | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Amortizing: | |||||||||||||||
| Trademarks | 341,183 | 203 | (7,546 | ) | (6,811 | ) | **** | 327,029 | |||||||
| Software | 24,941 | 1,789 | (1,218 | ) | (759 | ) | **** | 24,753 | |||||||
| Customer relationships | 486,166 | – | (18,315 | ) | (3,012 | ) | **** | 464,839 | |||||||
| Supplier contracts | 28,077 | – | (959 | ) | (565 | ) | **** | 26,553 | |||||||
| Others | 1,044 | 17 | (62 | ) | (16 | ) | **** | 983 | |||||||
| Non-amortizing: | |||||||||||||||
| Trademarks | 1,092,793 | 364 | – | (20,167 | ) | **** | 1,072,990 | ||||||||
| Water rights | 11,391 | – | – | (140 | ) | **** | 11,251 | ||||||||
| **** | 1,985,595 | **** | 2,373 | **** | (28,100 | ) | **** | (31,470 | ) | **** | 1,928,398 |
13 Goodwill
Goodwill represents the positive difference between consideration paid to purchase a business and the net fair value of identifiable assets and liabilities of the acquired entity. Goodwill is recognized as an asset and included in “Goodwill” in the Statement of Financial Position. Goodwill is related to an expectation of future earnings of the acquired subsidiary after assets and liabilities are combined with the Group and cost savings resulting from synergies expected to be achieved upon the integration of the acquired business.
Changes in goodwill:
| March 31, 2025 | March 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Balance at the beginning of theperiod | **** | 5,417,134 | **** | **** | 6,105,020 | **** |
| Business combinations adjustments<br>^(1)^ | **** | (1,086 | ) | – | ||
| Exchange rate variation | **** | 208,938 | **** | (125,350 | ) | |
| Balance at the end of the period | **** | 5,624,986 | **** | **** | 5,979,670 | **** |
^(1)^Refers to the business combination adjustment for the acquisition of JBS Terminais Ltda.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
| CGUs | March 31, 2025 | December 31, 2024 | ||
|---|---|---|---|---|
| Brazil Beef | **** | 1,579,521 | 1,464,710 | |
| Seara | **** | 648,824 | 602,869 | |
| USA Pork | **** | 694,534 | 694,534 | |
| Australia Smallgoods | **** | 286,679 | 283,441 | |
| Australia Meat | **** | 259,324 | 256,395 | |
| PPC – Fresh Poultry | **** | 413,030 | 401,396 | |
| PPC – Brands & Snacking | **** | 270,863 | 262,431 | |
| PPC – Fresh Pork/Lamb | **** | 208,382 | 202,512 | |
| PPC – Food Service | **** | 178,143 | 173,125 | |
| PPC – Meals | **** | 60,070 | 58,178 | |
| Others CGUs without significant goodwill ^(1)^ | **** | 1,025,616 | 1,017,543 | |
| Total | **** | 5,624,986 | **** | 5,417,134 |
For the three-month period ended March 31, 2025 and 2024 there were no indicators of impairment of goodwill within any CGU.
(1) Correspond to 19 Cash Generating Units (CGUs) which, because their individual values are immaterial, have been grouped in the “Others CGUs without significant goodwill”.
14 Trade accounts payable
| **** | March 31, 2025 | December 31, 2024 | ||
|---|---|---|---|---|
| Domestic: | ||||
| Commodities | **** | 1,479,329 | 1,961,391 | |
| Materials and services | **** | 3,060,458 | 3,138,734 | |
| Finished products | **** | 79,635 | 81,608 | |
| Present value adjustment | **** | (11,335) | (9,685) | |
| **** | 4,608,087 | **** | 5,172,048 | |
| Foreign: | ||||
| Commodities | **** | 3,154 | 20,357 | |
| Materials and services | **** | 209,167 | 271,481 | |
| Finished products | **** | 3,543 | 1,627 | |
| **** | 215,864 | **** | 293,465 | |
| Total trade accounts payable | **** | 4,823,951 | **** | 5,465,513 |
| Supplier finance arrangements^(1)^ | ||||
| Domestic | **** | 1,013,467 | 718,884 | |
| Foreign | **** | 6,575 | 9,826 | |
| Total supplier finance arrangements | **** | 1,020,042 | **** | 728,710 |
| Total | **** | 5,843,993 | **** | 6,194,223 |
^(1)^ The Group carry out transactions with financial institutions that allow the suppliers to anticipate their receivables in the domestic market. These transactions do not extend payment terms beyond the normal terms with other suppliers. In addition, this operation did not bring any other cost to the Group and all financial costs of the operation are the responsibility of the suppliers.
Commitment to Purchase for Future Delivery
The Group has commitments to purchase cattle for future delivery signed with certain suppliers, in which the Group guarantees the acquisition of cattle for a fixed price, or to be fixed, with no cash effect on the Group until the cattle are delivered. Based on these future delivery contracts, JBJ has already advanced this operation with the banks under the supply chain finance method. As of March 31, 2025, the amount of this transaction was US$102,294 (US$58,944 at December 31, 2024), this operation is recognized as supply chain finance.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
15 Loans and financing
| Type | Averageannual interest rate | Currency | Paymentterms / non-<br>current debt | Current | Non-current | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31,<br>2024 | March 31, 2025 | December 31,<br>2024 | |||||||||||
| Foreigncurrency | ||||||||||||||
| FINIMP – Import Financing | **** | 5.46% | **** | e | Euribor | **** | 2025 | **** | 254 | 614 | **** | – | – | |
| White Stripe credit facility | **** | 8.45% | **** | e CAD | – | **** | – | **** | – | – | **** | – | – | |
| Working capital - Dollar | **** | 7.45% | **** | SOFR | **** | 2030 | **** | 4,431 | 6,238 | **** | 2,134 | 2,223 | ||
| CRA - Agribusiness Credit Receivable Certificates | **** | 5.36% | **** | – | **** | 2029 | **** | 2,055 | 719 | **** | 97,468 | 65,189 | ||
| Scott credit facilities | **** | 2.20% | **** | – | **** | 2030 | **** | – | – | **** | – | – | ||
| Export credit note | **** | 6.39% | **** | SOFR | **** | 2025 | **** | 103,943 | 102,367 | **** | – | – | ||
| Others | **** | 6.89% | **** | Several | Several | **** | – | **** | 1,736 | 3,584 | **** | 1,800 | 1,691 | |
| **** | 112,419 | **** | 1,228,828 | **** | 101,402 | 69,103 | ||||||||
| Local currency | ||||||||||||||
| FINAME ^(1)^ | **** | 6.00% | **** | BRL | – | **** | 2025 | – | 5 | – | – | |||
| FINEP ^(2)^ | **** | – | **** | BRL | – | **** | – | – | – | – | – | |||
| Prepayment | **** | 7.09% | **** | , | BoE, SOFR | **** | 2025 | – | – | – | – | |||
| Notes 2.50% JBS Lux 2027 | **** | 2.50% | **** | – | **** | 2027 | 5,278 | 11,458 | 991,344 | 990,319 | ||||
| Notes 5.13% JBS Lux 2028 | **** | 5.13% | **** | – | **** | 2028 | 7,685 | 19,085 | 890,075 | 889,288 | ||||
| Notes 6.5% JBS Lux 2029 | **** | 6.50% | **** | – | **** | 2029 | – | 934 | – | 69,842 | ||||
| Notes 3.00% JBS Lux 2029 | **** | 3.00% | **** | – | **** | 2029 | 2,950 | 7,399 | 589,533 | 588,860 | ||||
| Notes 5.50% JBS Lux 2030 | **** | 5.50% | **** | – | **** | 2030 | 14,319 | 31,312 | 1,241,712 | 1,241,293 | ||||
| Notes 3.75% JBS Lux 2031 | **** | 3.75% | **** | – | **** | 2031 | 6,163 | 1,489 | 489,130 | 488,985 | ||||
| Notes 3.00% JBS Lux 2032 | **** | 3.00% | **** | – | **** | 2032 | 11,333 | 3,750 | 983,253 | 982,670 | ||||
| Notes 3.63% JBS Fin 2032 | **** | 3.63% | **** | – | **** | 2032 | 7,414 | 16,096 | 955,996 | 955,546 | ||||
| Notes 5.75% JBS Lux 2033 | **** | 5.75% | **** | – | **** | 2033 | 47,773 | 23,621 | 1,627,323 | 1,626,266 | ||||
| Notes 6.75% JBS Lux 2034 | **** | 6.75% | **** | – | **** | 2034 | 4,239 | 30,068 | 1,486,309 | 1,485,757 | ||||
| Notes 5,95% JBS USA 2035 | **** | 5.95% | **** | – | 11,570 | 16,188 | 986,300 | 887,691 | ||||||
| Notes 4.38% JBS Lux 2052 | **** | 5.95% | **** | – | **** | 2035 | 6,453 | 8,106 | 887,804 | 1,526,099 | ||||
| Notes 6.50% JBS Lux 2052 | **** | 4.38% | **** | – | **** | 2052 | 33,540 | 8,038 | 1,526,297 | 883,217 | ||||
| Notes 7.25% JBS Lux 2053 | **** | 6.50% | **** | – | **** | 2052 | 24,531 | – | 883,360 | – | ||||
| Notes 6,38% JBS USA 2055 | **** | 6.38% | **** | – | 9,297 | 7,577 | 730,285 | 844,203 | ||||||
| Notes 5.88% PPC 2027 | **** | 7.25% | **** | – | **** | 2053 | – | 10,413 | – | 892,253 | ||||
| Notes 4.25% PPC 2031 | **** | 6.38% | **** | – | **** | 2055 | 16,731 | 30,285 | 842,683 | 966,001 | ||||
| Notes 3.50% PPC 2032 | **** | – | **** | – | **** | 2027 | 2,625 | 4,201 | 892,521 | 486,078 | ||||
| Notes 6.25% PPC 2033 | **** | 4.25% | **** | – | **** | 2031 | 15,118 | – | 964,861 | – | ||||
| Notes 6.88% PPC 2034 | **** | 3.50% | **** | – | **** | 2032 | 12,891 | – | 486,457 | – | ||||
| PPC Credit Line - Term loan | **** | 6.25% | **** | – | **** | 2033 | – | 21,789 | – | 8,684 | ||||
| Working capital - Reais | **** | 6.88% | **** | – | **** | 2034 | – | – | – | – | ||||
| Working capital - Euros | **** | 2.73% | **** | Euribor | **** | 2025 - 28 | 23,350 | 858 | 8,712 | 847 | ||||
| Working capital - Pound | **** | 10.99% | **** | BRL | TJLP | **** | 2028 | – | 9,346 | – | 815 | |||
| Export credit note | **** | 2.73% | **** | Euribor | **** | 2025 - 28 | 928 | 341,493 | 723 | – | ||||
| CDC - Direct Consumer Credit | **** | 15.48% | **** | BRL | — | **** | 2028 | 6,932 | – | 264 | – | |||
| Livestock financing - Pre | **** | 15.76% | **** | BRL | CDI | **** | 2025 - 30 | 369,036 | 11,415 | – | 1,218,300 | |||
| Livestock financing | **** | 15.48% | **** | BRL | – | **** | 2028 | – | – | – | – | |||
| CRA - Agribusiness Receivables Certificate | **** | 10.99% | **** | BRL | – | **** | 2025 - 37 | 9,008 | – | 1,445,148 | – | |||
| Credit line - Scott | **** | – | **** | – | – | **** | – | – | – | – | – | |||
| Credit line - Beardstown Pace | **** | 6.98% | **** | BRL | CDI e IPCA | **** | 2029 | – | 202,144 | – | – | |||
| Others | **** | 6.63% | **** | Several | Several | **** | – | **** | 33,359 | **** | 38,327 | **** | 118,927 | 140,454 |
| Total | **** | 682,523 | **** | 855,397 | **** | 19,029,017 | 17,173,468 | |||||||
| **** | 794,942 | **** | 2,084,225 | **** | 19,130,419 | 17,242,571 |
All values are in US Dollars.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
^(1)^ FINAME - Government Agency for Machinery and Equipment Financing
^(2)^ FINEP - Research and projects financing
Average annual interest rate: Refers to the weighted average nominal cost of interest at the reporting date. The loans and financings are fixed by a fixed rate or indexed to rates: CDI, TJLP (the Brazilian government’s long-term interest rate), LIBOR and EURIBOR, among others.
The availability of revolving credit facilities for JBS USA was US$2.9 billion as of March 31, 2025 (US$2.9 billion as of December 31, 2024). In Brazil, the availability of revolving credit facilities was US$500,000 (US$500,000 at December 31, 2024).
The non-current portion of the principal payment schedule of loans and financing is as follows:
| Maturity | March 31, 2025 | |
|---|---|---|
| 2026 | **** | 16,681 |
| 2027 | **** | 1,013,038 |
| 2028 | **** | 987,591 |
| 2029 | **** | 640,566 |
| 2030 | **** | 1,379,379 |
| Maturities after 2030 | **** | 15,093,164 |
| **** | 19,130,419 |
15.1 Guarantees and contractual restrictions (“covenants”)
The Group was in compliance with all of its financial debt covenants restrictions for the three-month period ended March 31, 2025.
The Company, together with its indirect subsidiaries JBS Global Luxembourg S.à.r.l., JBS Holding Luxembourg S.à r.l., JBS USA Holding Lux S.à r.l. and JBS Global Meat Holdings Pty. Limited, are guarantors of certain senior notes listed with the U.S. Securities and Exchange Commission.
16 Income and other taxes payable
Income and other taxes payable are comprised of the following:
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Taxes payable in installments | **** | 45,498 | 44,426 | |
| PIS / COFINS tax payable | **** | 17,102 | 15,378 | |
| ICMS / VAT / GST tax payable | **** | 39,069 | 37,868 | |
| Withholding income taxes | **** | 368,446 | 346,785 | |
| IPTU and others | **** | 67,521 | 75,932 | |
| Subtotal | **** | 537,636 | **** | 520,389 |
| Income taxes payable | **** | 188,874 | 233,027 | |
| Total | **** | 726,510 | **** | 753,416 |
| Breakdown: | ||||
| Current liabilities | **** | 318,648 | 346,761 | |
| Non-current liabilities | **** | 407,862 | 406,655 | |
| **** | 726,510 | **** | 753,416 |
17 Payroll and social charges
Payroll and social charges are comprised of the following:
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Social charges in installments | **** | 378,314 | 356,545 | |
| Bonus and vacation along with related social charges | **** | 682,024 | 804,551 | |
| Salaries and related social charges | **** | 495,879 | 561,990 | |
| Others | **** | 27,768 | 65,383 | |
| **** | 1,583,985 | **** | 1,788,469 | |
| Breakdown: | ||||
| Current liabilities | **** | 1,223,367 | 1,435,751 | |
| Non-current liabilities | **** | 360,618 | 352,718 | |
| **** | 1,583,985 | **** | 1,788,469 |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
18 Dividends payable
The Group’s bylaws requires the payment of dividends equal to at least 25% of the annual net income attributable to company shareholders, after the allocation of 5% for the legal reserve. The Group recognizes a liability at year-end for the minimum unpaid yearly dividend amount. Dividends payable are recognized as a liability at December 31 of each year.
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Declared dividends on 2021 - Residual | **** | 11 | **** | 10 |
| Declared dividends on 2022 - Residual | **** | 7 | **** | 7 |
| Declared dividends on 2023 - Residual | **** | 314 | **** | 291 |
| Declared dividends on 2024 - Residual | **** | 116 | **** | 107 |
| Interim dividends on 2024 | **** | – | **** | 358,206 |
| Dividends Declared in 2025 | **** | 1,036,643 | **** | – |
| Total | **** | 1,037,091 | **** | 358,621 |
On March 14, 2025, PPC announced that its Board of Directors had approved the distribution of a special cash dividend in the amount of US$6.30 per share. The payment, totaling US$1.5 billion, was made on April 17, 2025, to shareholders. Of this total, US$264.1 million was allocated to non-controlling shareholders.
On March 25, 2025, JBS S.A.’s board of directors approved a proposal to distribute dividends from profit reserves with respect to the 2024 fiscal year in the amount of US$766.3 million (equivalent to R$4.4 billion considering the exchange rate on March 31, 2025), corresponding to US$0.34 (equivalent to R$2.00 considering the exchange rate on March 31, 2025) per common share. The proposal was approved at the Annual General Meeting of Shareholders held on April 29, 2025, and the dividend was paid on May 14, 2025.
19 Provisions for legal proceedings
The Group is party to several lawsuits arising in the ordinary course of business for which provisions are recognized for those deemed probable based on estimated costs determined by management as follow:
| Breakdown: | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | |||||||||||||||
| Current liabilities | **** | 224,644 | 280,804 | |||||||||||||
| Non-current liabilities | **** | 232,166 | 216,659 | |||||||||||||
| **** | 456,810 | **** | 497,463 | |||||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||||
| Labor | **** | 93,982 | 87,127 | |||||||||||||
| Civil | **** | 287,311 | 340,644 | |||||||||||||
| Tax and Social Security | **** | 75,517 | 69,692 | |||||||||||||
| Total | **** | 456,810 | **** | 497,463 | ||||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Labor | Civil | Tax and Social<br>Security | Total | Labor | Civil | Tax and Social<br>Security | Total | |||||||||
| Brasil | 93,928 | 62,622 | 74,790 | **** | 231,340 | 87,075 | 59,796 | 68,516 | **** | 215,387 | ||||||
| USA | – | 224,645 | – | **** | 224,645 | – | 280,804 | – | **** | 280,804 | ||||||
| Others jurisdictions | 53 | 45 | 727 | **** | 825 | 52 | 44 | 1,176 | **** | 1,272 | ||||||
| Total | **** | 93,981 | **** | 287,312 | **** | 75,517 | **** | 456,810 | **** | 87,127 | **** | 340,644 | **** | 69,692 | **** | 497,463 |
19.1 - Labor - Changes in provisions:
| Jurisdiction | Balance at<br>January 1, 2025 | Additions,<br>reversals and<br>changesin<br>estimates | Payments | Indexation | Exchange rate<br>variation | Balance at March<br>31, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Brazil | 87,075 | 12,187 | (14,107 | ) | 1,948 | 6,825 | 93,928 | |||||||
| Other jurisdictions | 52 | 38 | – | – | (37 | ) | 53 | |||||||
| Total | **** | 87,127 | **** | 12,225 | **** | (14,107 | ) | **** | 1,948 | **** | 6,788 | **** | **** | 93,981 |
| Jurisdiction | Balance at<br>January 1, 2024 | Additions,<br>reversals and<br>changesin<br>estimates | Payments | Indexation | Exchange rate<br>variation | Balance at March<br>31, 2024 | ||||||||
| Brazil | 107,940 | 12,901 | (15,605 | ) | 2,019 | (3,341 | ) | 103,914 | ||||||
| Other jurisdictions | 64 | 50 | – | – | – | 114 | ||||||||
| Total | **** | 108,004 | **** | 12,951 | **** | (15,605 | ) | **** | 2,019 | **** | (3,341 | ) | **** | 104,028 |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
19.2 - Civil - Changes in provisions:
| Jurisdiction | Balance at<br>January 1, 2025 | Additions,<br>reversals and<br>changesin<br>estimates | Payments | Indexation | Exchange rate<br>variation | Balance at March<br>31, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Brazil | 59,796 | 831 | (4,735 | ) | 2,076 | 4,654 | 62,622 | |||||||
| USA | 280,804 | 83,549 | (139,709 | ) | – | 1 | 224,645 | |||||||
| Other jurisdictions | 44 | 18 | (1 | ) | – | (16 | ) | 45 | ||||||
| Total | **** | 340,644 | **** | 84,398 | **** | (144,445 | ) | **** | 2,076 | **** | 4,639 | **** | **** | 287,312 |
| Jurisdiction | Balance at<br>January 1, 2024 | Additions,<br>reversals and<br>changesin<br>estimates | Payments | Indexation | Exchange rate<br>variation | Balance at March<br>31, 2024 | ||||||||
| Brazil | 73,502 | 6,013 | (5,904 | ) | 2,237 | (2,299 | ) | 73,549 | ||||||
| USA | 197,439 | 4,691 | (90 | ) | – | – | 202,040 | |||||||
| Other jurisdictions | 48 | – | (4 | ) | – | (2 | ) | 42 | ||||||
| Total | **** | 270,989 | **** | 10,704 | **** | (5,998 | ) | **** | 2,237 | **** | (2,301 | ) | **** | 275,631 |
Civil legal proceedings (probable loss):
United States
The civil legal proceedings involve class-action lawsuits alleging violations of federal and state antitrust laws, as well as laws governing unfair competition, unjust enrichment, unusual business practices, and consumer protection related to beef, pork and chicken sales, as well as Canada and US State Matters.
The Group, together with its legal department and external counsel, continues to monitor the progress of the antitrust cases and believes that the accounting provisions recorded as of the date of these interim financial statements are sufficient to cover the associated risk.
19.3 - Tax and Social Security - Changes in provision:
| Jurisdiction | Balance at<br>January 1, 2025 | Additions,<br>reversals and<br>changesin<br>estimates | Payments | Indexation | Exchange rate<br>variation | Balance at March<br>31, 2025 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Brazil | 68,516 | (3,560 | ) | (534 | ) | 4,982 | 5,386 | 74,790 | ||||||||
| Other jurisdictions | 1,176 | 507 | (507 | ) | – | (449 | ) | 727 | ||||||||
| Total | **** | 69,692 | **** | (3,053 | ) | **** | (1,041 | ) | **** | 4,982 | **** | **** | 4,937 | **** | **** | 75,517 |
| Jurisdiction | Balance at<br>January 1, 2024 | Additions,<br>reversals and<br>changesin<br>estimates | Payments | Indexation | Exchange rate<br>variation | Balance at March<br>31, 2024 | ||||||||||
| Brazil | 133,006 | 252 | (278 | ) | (3,551 | ) | (4,093 | ) | 125,336 | |||||||
| Other jurisdictions | 1,394 | (4,911 | ) | – | 4,914 | (30 | ) | 1,367 | ||||||||
| Total | **** | 134,400 | **** | (4,659 | ) | **** | (278 | ) | **** | 1,363 | **** | **** | (4,123 | ) | **** | 126,703 |
Legal proceedings (possible loss):
In the three-period ended March 31, 2025, the Company did not identify any significant changes in the amount of the legal proceedings which the probability of loss is considered possible.
| • | Brazil |
|---|
a. Profits abroad
Between the calendar years 2006 and 2018, the Group was subject to assessments arising from tax charges on profits earned abroad that were supposed to be included in the IRPJ and CSLL calculation basis, also including invoices disallowances paid by investees abroad, on the grounds that they could not have been used to offset IRPJ and CSLL due in Brazil. These charges also involve the imposition of officio fines, isolated fines and interest. The Group clarifies that a large part of the collection of IRPJ and CSLL on profits from abroad refers to profits from investees located in jurisdictions with which Brazil has agreements to avoid double taxation. In addition, a relevant part of the charge covers the discussion regarding the formal requirements demanded by the inspection authorities for the purposes of consolidating the results abroad of its direct or indirect investees, and it is certain that the Group disagrees with the criteria applied by the inspection authorities and has submitted a defense. For almost all of the debts, the Group is defending itself at the administrative level and is awaiting judgment. In accordance with the IFRIC23 technical interpretation, the Board assessed the relevant tax rulings, verifying any divergences in relation to the tax positions adopted by the group. Based on this analysis, and taking into account legal opinions and applicable jurisprudence, the Group has a provision in the total amount of US$ 696 million, referring to the divergence of positions on the taxation of profits of affiliates abroad in countries with international agreements recorded and reducing the heading of taxes to be recovered, reflecting the possible possibility of future realization of these amounts.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
20 Equity
| a. | Share capital: Share capital on March 31, 2025 and December 31, 2024 was<br>US$13,177,841 (US$13,177,841 as of December 31, 2024), represented by 2,218,116,370 common shares, having no nominal value and there were no changes in the three-month period ended March 31, 2025. |
|---|---|
| b. | Dividends: On March 14, 2025, PPC announced that its Board of Directors had<br>approved the distribution of a special cash dividend in the amount of US$6.30 per share. The payment, totaling US$1.5 billion, was made on April 17, 2025, to shareholders. Of this total, US$264.1 million was allocated to non-controlling shareholders. |
| --- | --- |
On March 25, 2025, JBS S.A.’s board of directors approved a proposal to distribute dividends from profit reserves with respect to the 2024 fiscal year in the amount of US$766.3 million (equivalent to R$4.4 billion considering the exchange rate on March 31, 2025), corresponding to US$0.34 (equivalent to R$2.00 considering the exchange rate on March 31, 2025) per common share. The proposal was approved at the Annual General Meeting of Shareholders held on April 29, 2025, and the dividend was paid on May 14, 2025.
| c. | Non-controlling interest: Material non-controlling interest as of March 31, 2025 consisted of the 17.7% (17.6% as of December 31, 2024), of PPC common stock not owned by JBS USA. JBS USA’s voting rights in PPC are limited to 82.3% as<br>of March 31, 2025 (82.4% as of December 31, 2024) of the total. The profit allocated to the PPC non-controlling interest was US$52,468 and US$31,066 for the three-month period ended March 31,<br>2025 and 2024, respectively. The accumulated non-controlling interest in PPC was US$689,517 as of March 31, 2025 (US$880,810 as of December 31, 2024). For the three-month period ended March 31,<br>2025, purchase of treasury stock by PPC was nil (nil for the three-month period ended March 31, 2024). Below are the PPC total net sales, net income, cash provided by operations, total assets and total liabilities for the periods indicated.<br> | |||
|---|---|---|---|---|
| Three-month period ended March 31, | ||||
| --- | --- | --- | --- | --- |
| 2025 | 2024 | |||
| Net Revenue | **** | 4,463,009 | 4,361,934 | |
| Net Income | **** | 296,033 | 174,421 | |
| Net cash provided by operating activities | **** | 126,891 | 271,027 | |
| March 31, 2025 | December 31, 2024 | |||
| Total assets | **** | 10,963,759 | 10,650,576 | |
| Total liabilities | **** | 7,816,312 | 6,397,180 | |
| Total equity | **** | 3,147,447 | 4,253,396 |
21 Net revenue
| Three-month period ended March 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| Domestic sales | **** | 14,609,063 | 13,472,484 | |
| Export sales | **** | 4,917,457 | 4,526,228 | |
| Net revenue | **** | 19,526,520 | **** | 17,998,712 |
21.1 Contract balances - Advances from customer
Customer advance revenues are related to payments received in advance of satisfying the performance obligation under the contract. Moreover, a contract liability is recognized when the Group has an obligation to transfer products to a customer from whom the consideration has already been received. The recognition of the contractual liability occurs at the time when the consideration is received and settled. The Group recognizes revenue upon fulfilling the related performance obligation. Contract liabilities are presented as advances from customers in the balance sheet.
The following table provides information about trade accounts receivable and contract liabilities from contracts with customers:
| Note | March 31, 2025 | December 31, 2024 | ||||
|---|---|---|---|---|---|---|
| Trade accounts receivable | 4 | **** | 3,501,107 | 3,735,540 | ||
| Contract liabilities | **** | (218,928) | (151,947) | |||
| Total customer contract revenue | **** | 3,282,179 | **** | 3,583,593 |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
22 Net finance expense
| Three-month period ended March 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| Exchange rate variation | **** | 51,843 | 77,887 | |
| Fair value adjustments on derivatives | **** | 20,227 | (76,094) | |
| Interest expense ^(1)^ | **** | (414,739) | (419,717) | |
| Interest income ^(2)^ | **** | 163,591 | 90,337 | |
| Bank fees and others | **** | (12,468) | (21,158) | |
| **** | (191,546) | **** | (348,745) | |
| Finance income | **** | 235,661 | 168,224 | |
| Finance expense | **** | (427,206) | (516,969) | |
| **** | (191,545) | **** | (348,745) |
^(1)^For the three-month period ended March 31, 2025, the amount of US$315,204 (US$300,708 for the three-month period ended March 31, 2024) refers to interest expenses from loans and financings.
^(2)^ For the three-month period ended March 31, 2025, the amount of US$54,935 (US$27,775 for the three-month period ended March 31, 2024) refers to interest income from short-term investments.
23 Earnings (loss) per share
Basic and diluted: There was no change in the assumptions for calculating earnings per share - basic in relation to the financial statements for the year ended December 31, 2024.
| 2024 | |||
| Net income attributable to Company shareholders | 500,224 | **** | 332,327 |
| Weighted average - common shares outstanding | 2,218,116 | **** | 2,218,116 |
| Basic and diluted earnings (loss) per share - (US) | 0.23 | **** | 0.15 |
All values are in US Dollars.
24 Operating segments
The Group’s Management has defined operating segments based on the reports that are used to make strategic decisions, analyzed by the Chief Operating Decision Maker (CODM) - our Chief Executive Officer (CEO), there are seven reportable segments: Brazil, Seara, Beef North America, Pork USA, Pilgrim’s Pride, Australia and Others. The segment operating profit or loss is evaluated by the CODM, based on Adjusted EBITDA.
Adjusted EBITDA consists of profit or loss before taxes, applying the same accounting policies described in these financial statements, except for the following adjustments as described below: exclusion of financial income and expenses, exclusion of depreciation and amortization expenses, exclusion of profit sharing from equity investments, net of taxes; exclusion of expenses with antitrust agreements; exclusion of donations and social programs expenses; exclusion impairment of assets; exclusion of restructuring and exclusion of certain other operating income (expense), net.
Brazil: this segment includes the operating activities, mainly represented by slaughter facilities, cold storage and meat processing, fattening, feed and production of beef by-products such as leather, collagen and other products produced in Brazil. Revenues are generated from the sale of products predominantly to restaurant chains, food processing companies, distributors, supermarket chains, wholesale supermarket and other significant food chains.
Seara: this segment includes all the operating activities of Seara and its subsidiaries, mainly represented by chicken and pork processing, production and commercialization of food products and value-added products. Revenues are generated from the sale of products predominantly to restaurant chains, food processing companies, distributors, supermarket chains, wholesale supermarket and other significant food chains.
Beef North America: this segment includes JBS USA beef processing operations in North America and the plant-based businesses in Europe. Beef also sells by-products to the variety meat, feed processing, fertilizer, automotive and pet food industries and also produces value-added meat products including toppings for pizzas. Finally, Sampco LLC imports processed meats and other foods such as canned fish, fruits and vegetables to the US and Vivera produces and sells plant-based protein products in Europe.
Pork USA: this segment includes JBS USA’s pork operations, including Swift Prepared Foods. Revenues are generated from the sale of products predominantly to retailers of fresh pork including trimmed cuts such as loins, roasts, chops, butts, picnics and ribs. Other pork products, including hams, bellies and trimmings, are sold predominantly to further processors who, in turn, manufacture bacon, sausage, and deli and luncheon meats. In addition, revenues are generated from the sale of case ready products, including the recently acquired TriOak business. As a complement to our pork processing business, we also conduct business through our hog production operations, including four hog farms and five feed mills, from which, JBS Lux will source live hogs for its pork processing operations.
Pilgrim’s Pride: this segment includes PPC’s operations, including Moy Park, Tulip and Pilgrim’s Consumer Foods as well, mainly represented by chicken processing, production and commercialization of food products and prepared foods in the United States of America, Mexico, United Kingdom and France. The fresh chicken products consist of refrigerated (non-frozen) whole or cut-up chicken, either pre-marinated or non-marinated, and pre-packaged chicken in various combinations of freshly refrigerated, whole chickens and chicken parts. The prepared chicken products include portion-controlled breast fillets, tenderloins and strips, delicatessen products, salads, formed nuggets and patties and bone-in chicken parts. These products are sold either refrigerated or frozen and may be fully cooked, partially cooked or raw. In addition, these products are breaded or non-breaded and either pre-marinated or non-marinated. The segment also generates revenue from the sale of prepared pork products through PPL, a subsidiary acquired by PPC in October 2019. The segment includes PPC’s PFM subsidiary, acquired in September 2021, and generates revenues from branded and private label meats, meat snacks, food-to-go products, and ethnic chilled and frozen ready meals.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
Australia: Our Australia segment includes our fresh, frozen, value-added and branded beef, lamb, pork and fish products in Australia and New Zealand. The majority of our beef revenues from our operations in Australia are generated from the sale of fresh beef products (including fresh and frozen chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef, offal and other products). We also sell value-added and branded beef products (including frozen cooked and pre-cooked beef, corned cooked beef, beef cubes and consumer-ready products, such as hamburgers and sausages). We also operate lamb, pork, and fish, processing facilities in Australia and New Zealand, including the recently acquired Huon and Rivalea businesses. JBS Australia also generates revenues through their cattle hoteling business. We sell these products in the countries where we operate our facilities, which we classify as domestic sales, and elsewhere, which we classify as export sales.
Others: includes certain operations not directly attributable to the primary segments, such as corporate expenses, international leather operations and other operations in Europe.
There are no revenues arising out of transactions with any single customer that represents 5% or more of the total revenues.
The Group manages its loans and financing and income taxes at the corporate level and not by segment.
The information by operational segment are as follows:
| three-month period ended March 31, 2025 | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Brazil | Seara | Beef NorthAmerica | Pork USA | Pilgrim’sPride | Australia | Others | Total reportablesegments | Elimination (*) | Total | |||||||||||
| Net revenue | **** | 3,169,982 | **** | 2,150,468 | **** | 6,421,610 | **** | 2,001,663 | **** | 4,459,422 | **** | 1,621,529 | **** | 118,366 | **** | 19,943,040 | **** | (416,520) | **** | 19,526,520 |
| Adjusted EBITDA^(1)^ | **** | 131,078 | **** | 425,693 | **** | (100,473) | **** | 247,302 | **** | 660,201 | **** | 160,355 | **** | 3,571 | **** | 1,527,727 | **** | – | **** | 1,527,727 |
| Three-month period ended March 31, 2024 | ||||||||||||||||||||
| Brazil | Seara | Beef NorthAmerica | Pork USA | Pilgrim’sPride | Australia | Others | Total reportablesegments | Elimination (*) | Total | |||||||||||
| Net revenue | 2,873,896 | 2,083,097 | 5,581,099 | 1,910,351 | 4,358,111 | 1,446,364 | 164,638 | 18,417,556 | (418,844) | 17,998,712 | ||||||||||
| Adjusted EBITDA^(1)^ | 129,885 | 240,658 | (9,812) | 313,296 | 500,647 | 123,968 | 14 | 1,298,656 | (679) | 1,297,977 |
^(*)^Includes intercompany and intersegment transactions.
^(1)^ The Adjusted EBITDA is reconciled with the consolidated profit (loss) before taxes, as follows:
| Three-month period ended March 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| Profit before taxes | **** | 694,104 | 367,649 | |
| Share of profit of equity-accounted investees, net of tax | **** | (2,735) | 6,532 | |
| Net finance expense | **** | 191,546 | 348,745 | |
| Depreciation and amortization | **** | 535,648 | 544,506 | |
| Antitrust agreements^(1)^ | **** | 79,549 | 4,692 | |
| Donations and social programs^(2)^ | **** | 527 | 9,795 | |
| Impairment of assets ^(5)^ | **** | 5,662 | – | |
| Restructuring^(3)^ | **** | 17,002 | 16,017 | |
| Other operating income (expense), net ^(4)^ | **** | 6,424 | **** | 41 |
| Total Adjusted EBITDA | **** | 1,527,727 | **** | 1,297,977 |
| Reversal of elimination | – | 679 | ||
| Total Adjusted EBITDA for reportable segments | **** | 1,527,727 | **** | 1,298,656 |
^(1)^ Refers to the Agreements entered by JBS USA and its subsidiaries as described in Note 19 – Provisions for legal proceedings.
^(2)^ Refers to the donations, as described in Note 25 – Expenses by nature.
^(3)^Refers to the project implementation of multiple restructuring initiatives mainly in the indirect subsidiary Pilgrim’s Pride Corporation (PPC), which are registered as Other expenses, as well as other non-significant restructuring projects that are registered as General and administrative expenses.
^(4)^Refers^^to^^several^^adjustments^^basically in JBS USA’s jurisdiction such as third-party advisory expenses related to acquisitions, insurance recovery, among others.
^(5)^ This mainly refers to the impairment of fixed assets and the impairment of recoverable tax credits.
Below is net revenue and total assets based on geography, presented for supplemental information.
| three-month period ended March 31, 2025 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| North andCentralAmerica ^(1)^ | SouthAmerica | Australia | Europe | Others | Total<br>reportable<br>segments | Intercompanyelimination | Total | |||||||||
| Net revenue | **** | 11,695,354 | **** | 5,401,709 | **** | 1,436,247 | **** | 1,461,712 | **** | 90,259 | **** | 20,085,281 | (558,761) | **** | 19,526,520 | |
| Total assets | **** | 16,432,016 | **** | 15,037,205 | **** | 4,995,038 | **** | 5,142,949 | **** | 318,480 | **** | 41,925,688 | (220,000) | **** | 41,705,688 |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
| Three-month period ended March 31, 2024 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| North andCentralAmerica ^(1)^ | SouthAmerica | Australia | Europe | Others | Total<br>reportable<br>segments | Intercompanyelimination | Total | ||||||||||
| Net revenue | 10,568,490 | 5,022,690 | 1,316,695 | 1,463,041 | 81,009 | **** | 18,451,925 | (453,213 | ) | **** | 17,998,712 | ||||||
| Total assets | 18,488,384 | 13,926,766 | 4,827,633 | 5,002,706 | 309,238 | **** | 42,554,727 | (1,869,354 | ) | **** | 40,685,373 |
^(1)^ Including the holdings located in Europe that are part of the North American operation.
25 Expenses by nature
Expenses by nature are disclosed as follows:
| Three-month period ended March 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| Cost of sales | ||||
| Cost of inventories, raw materials and production inputs | **** | (14,344,924) | (13,136,414) | |
| Salaries and benefits | **** | (2,082,712) | (2,023,083) | |
| Depreciation and amortization | **** | (474,333) | (480,905) | |
| **** | (16,901,969) | **** | (15,640,402) | |
| Selling | ||||
| Freight and selling expenses | **** | (930,585) | (917,491) | |
| Salaries and benefits | **** | (132,653) | (79,599) | |
| Depreciation and amortization | **** | (18,469) | (13,697) | |
| Advertising and marketing | **** | (77,812) | (76,637) | |
| Net impairment losses (recovery) | **** | (10,559) | (2,441) | |
| Commissions | **** | (17,519) | (15,256) | |
| **** | (1,187,597) | **** | (1,105,121) | |
| General and administrative | ||||
| Salaries and benefits | **** | (282,862) | (307,946) | |
| Fees, services held and general expenses | **** | (147,400) | (156,626) | |
| Depreciation and amortization | **** | (42,842) | (49,902) | |
| DOJ and Antitrust agreements | **** | (79,548) | (4,692) | |
| Donations and social programs ^(1)^ | **** | (3,775) | (9,795) | |
| **** | (556,427) | **** | (528,961) |
^(1)^ Refers to donations made to Instituto J&F regarding improvements on school’s building, the social program “Fazer o Bem Faz Bem” created by the Group to support actions for social transformation where the Company is present and donations to Fundo JBS Pela Amazônia.
For the three-month period ended March 31, 2025, the Company incurred expenses with internal research and development, in the amount of US$1,189 (US$7,291 for the Three-month period ended March 31, 2024).
For the three-month period ended March 31, 2025 and 2024, other income (expenses) includes gain (losses) of sale of assets, insurance recovery, asset impairment expenses, restructuring expenses, among others.
25.1 Other income and other expenses
Other income: For the three-month period ended March 31, 2025,the Company has recorded in other income the amount of US$30,345 (US$21,207 for the three-month period ended March 31, 2024), which mainly refers to the gain on the sale of assets totaling US$16,055 (US$15,319 for the three-month period ended March 31, 2024), extemporaneous tax credits totaling US$1,646 (US$3,342 for the Three-month period ended March 31, 2024) among other non-significant items.
Other expenses: For the three-month period ended March 31, 2025, the Company has recorded in other expenses the amount of US$27,957 (US$22,509 em three-month period ended March 31, 2024), which mainly refers to restructuring expenses totaling US$17,002 (US$16,017 for the three-month period ended March 31, 2024), loss on sale of assets totaling US$3,994 (US$8,244 for the three-month period ended March 31, 2024), impairment of assets totaling US$3,003 (zero for the three-month period ended March 31, 2024).
Restructuring related expenses
In the three-month period ended March 31, 2025 and 2024 the Group recognized US$17,002 (US$16,017 for the Three-month period ended March 31, 2024), related to restructuring expenses, of which US$ 16,612 relates to the subsidiary PPC, as described below.
In 2022, PPC began restructuring initiatives in its European operations. Additional restructuring initiatives also commenced in 2023 and 2024. The purpose of the ongoing restructuring activities is to integrate central operations and reallocate processing capacities between production facilities resulting in closures of some facilities in the European operations.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
The following table provides a summary of PPC’s estimates of timelines and costs associated with these restructuring initiatives by major type of cost:
| Pilgrim’s<br>Food Masters | Pilgrim’s<br>Europe Central | Total | ||||
|---|---|---|---|---|---|---|
| Earliest implementation date | 2024 | 2024 | ||||
| Expected predominant completion date | 2025 | 2025 | ||||
| Costs incurred and expected to be incurred: | ||||||
| Employee-related costs | 19,760 | 49,202 | 68,962 | |||
| Asset impairment costs | 10,871 | 1,824 | 12,695 | |||
| Contract termination costs | 855 | 1,747 | 2,602 | |||
| Other exit and disposal costs^(1)^ | 10,580 | 3,633 | 14,213 | |||
| Total exit and disposal costs | **** | 42,066 | **** | 56,406 | **** | 98,472 |
| Costs incurred since earliest implementation date: | ||||||
| Employee-related costs | 19,760 | 40,144 | 59,904 | |||
| Asset impairment costs | 10,871 | 1,824 | 12,695 | |||
| Contract termination costs | 855 | 1,747 | 2,602 | |||
| Other exit and disposal costs^(1)^ | 10,580 | 3,633 | 14,213 | |||
| Total exit and disposal costs | **** | 42,066 | **** | 47,348 | **** | 89,414 |
^(1)^Comprised of other costs directly related to the restructuring initiatives, including maintenance costs and Pilgrim’s Food Masters consulting fees.
During the three months ended March 31, 2025, PPC recognized the following expenses and paid the following cash related to each restructuring initiative:
| 2025 | ||||||
|---|---|---|---|---|---|---|
| Provisions | Expenses | Cash Outlays | ||||
| Pilgrims Europe Central | 17,520 | 14,655 | 1,813 | |||
| Pilgrim’s Food Masters | 5,348 | 1,331 | 3,226 | |||
| Pilgrim’s Pride Ltd. | 332 | 572 | 346 | |||
| Moy Park | 1,836 | 54 | – | |||
| Total | **** | 25,036 | **** | 16,612 | **** | 5,385 |
| 2024 | ||||||
| Provisions | Expenses | Cash Outlays | ||||
| Pilgrims Europe Central | 7,677 | 14,450 | 6,703 | |||
| Pilgrim’s Food Masters | 2,528 | – | 2,909 | |||
| Pilgrim’s Pride Ltd. | 1,753 | 109 | 318 | |||
| Moy Park | 2,763 | 54 | – | |||
| Total | **** | 14,721 | **** | 14,613 | **** | 9,930 |
The following table reconciles liabilities and reserves associated with each restructuring initiative from December 31, 2024 to March 31, 2025 and from December 31, 2023 to December 31, 2024. Ending liability balances for employee termination benefits and other charges are reported in accrued payroll and social charges in the Consolidated Statements of financial position. The ending reserve balance for inventory adjustments is reported in inventories, net in the Consolidated Statements of financial position. The ending reserve balance for asset impairments is reported in property, plant and equipment, net in the Consolidated Statements of financial position.
| Liability reserve as<br>of December 31,<br>2024 | Restructuring charges incurred | Cash payments<br>and disposals | Currency translation | Liability reserve as<br>of March 31,<br>2025 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Severance | 4,781 | 12,059 | (2,579) | 397 | 14,658 | |||||
| Contract termination | 1,718 | 2,048 | (6) | 106 | 3,866 | |||||
| Asset impairment | 91 | 86 | 34 | 3 | 214 | |||||
| Other | 7,092 | 1,819 | (2,806) | 193 | 6,298 | |||||
| Total | **** | 13,682 | **** | 16,012 | **** | (5,357) | **** | 699 | **** | 25,036 |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
| Liability reserve as<br>of December 31,<br>2023 | Restructuring charges incurred | Cash payments and disposals | Currency translation | Liability reserve as<br>of March 31,<br>2024 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Severance | 3,651 | 13,914 | (8,297) | (89) | 9,179 | |||||
| Contract termination | 1,597 | 117 | (1,284) | (7) | 423 | |||||
| Asset impairment | 359 | – | – | (5) | 354 | |||||
| Other | 4,631 | 582 | (349) | (99) | 4,765 | |||||
| Total | **** | 10,238 | **** | 14,613 | **** | (9,930) | **** | (200) | **** | 14,721 |
26 Risk management and financial instruments
Financial instruments:
Financial instruments are recognized in the unaudited condensed consolidated financial statements as follows:
| Note | March 31, 2025 | December 31, 2024 | ||||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Fair value through profit or loss ^(1)^ | ||||||
| Financial investments | 3 | **** | 2,704,406 | 3,350,654 | ||
| National treasury bills | 3 | **** | 94,652 | 65,197 | ||
| Margin cash | 3 | **** | 11,693 | 32,334 | ||
| Derivative assets | **** | 165,452 | 84,468 | |||
| Amortized cost ^(2)^ | ||||||
| Cash at banks | 3 | **** | 2,026,924 | 2,197,822 | ||
| Margin cash | 3 | **** | 335,370 | 104,220 | ||
| Trade accounts receivable | 4 | **** | 3,501,107 | 3,735,540 | ||
| Related party receivables | 8 | **** | 85,087 | 77,355 | ||
| Total | **** | 8,924,691 | **** | 9,647,590 | ||
| Liabilities | ||||||
| Amortized cost | ||||||
| Loans and financing | 15 | **** | (19,925,360) | (19,326,796) | ||
| Trade accounts payable and supply chain finance | 14 | **** | (5,843,993) | (6,194,223) | ||
| Lease | 11.2 | **** | (1,745,786) | (1,734,029) | ||
| Other financial liabilities | **** | (58,755) | (56,872) | |||
| Fair value through profit or loss | ||||||
| Derivative liabilities | **** | (384,466) | (266,066) | |||
| Total | **** | (27,958,360) | **** | (27,577,986) |
^(1)^CDBs are updated at the contractual rate but have a short-term and the counterparties are financial institutions, and their carrying amount is approximate to fair value; (ii) national treasury bill are measured at fair value.
^(2)^Loans and receivables are classified as amortized cost. The trade accounts receivable are short-term and net of expected losses.
Fair value of assets and liabilities through profit orloss: The Group determine fair value measurements in accordance with the hierarchical levels that reflect the significance of the inputs used in the measurement, with the exception of those maturing in the short term, equity instruments without an active market and contracts with discretionary characteristics that the fair value cannot be measured reliably, according to the following levels:
Level 1 - Quoted prices in active markets (unadjusted) for identical assets or liabilities;
Level 2 - Inputs other than Level 1, in which prices are quoted for similar assets and liabilities, either directly by obtaining prices in active markets or indirectly through valuation techniques that use data from active markets;
| March 31, 2025 | December 31, 2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||
| Financial assets | ||||||||||||
| Financial investments | **** | – | **** | 2,704,406 | **** | 2,704,406 | – | 3,350,654 | **** | 3,350,654 | ||
| National treasury bills | **** | 94,651 | **** | – | **** | 94,651 | 65,197 | – | **** | 65,197 | ||
| Margin cash | **** | 11,693 | **** | – | **** | 11,693 | 32,334 | – | **** | 32,334 | ||
| Derivative assets | **** | – | **** | 165,452 | **** | 165,452 | – | 84,468 | **** | 84,468 | ||
| Financial liabilities | ||||||||||||
| Derivative liabilities | **** | 384,467 | **** | 384,467 | – | 266,066 | **** | 266,066 |
**Fair value of assets and liabilities carried at amortized cost:**The fair value of the Notes, are estimated using the closing sale price of these securities informed by a financial newswire on March 31, 2025 and December 31, 2024, considering there is an active market for these financial instruments. The book value of the remaining fixed-rate loans approximates fair value since the interest rate market, the Group’s credit quality, and other market factors have not significantly changed since entering into the loans. The book value of variable-rate loans and financings approximates fair value given the interest rates adjust for changes in market conditions and the quality of the Group’s credit rating has not substantially changed. For all other financial assets and liabilities, book value approximates fair value due to the short duration of the instruments. The following details the estimated fair value of notes:
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
| March 31, 2025 | December 31, 2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Description | Principal | Price (% of the Principal) | Fair value | Principal | Price (% of the Principal) | Fair value | ||||||
| Notes 2.50% JBS Lux 2027 | **** | 1,000,000 | 96.23% | **** | 962,330 | 1,000,000 | 94.98% | 949,770 | ||||
| Notes 5.13% JBS Lux 2028 | **** | 899,740 | 101.05% | **** | 909,205 | 899,740 | 99.50% | 895,205 | ||||
| Notes 3.00% JBS Lux 2029 | **** | 599,957 | 93.54% | **** | 561,224 | 599,957 | 91.20% | 547,161 | ||||
| Notes 6.5% JBS Lux 2029 | **** | – | – | **** | – | 69,906 | 100.52% | 70,273 | ||||
| Notes 5.5% JBS Lux 2030 | **** | 1,249,685 | 101.70% | **** | 1,270,905 | 1,249,685 | 99.77% | 1,246,786 | ||||
| Notes 3.75% JBS Lux 2031 | **** | 493,000 | 91.31% | **** | 450,158 | 493,000 | 88.93% | 438,435 | ||||
| Notes 3.00% JBS Lux 2032 | **** | 1,000,000 | 86.14% | **** | 861,360 | 1,000,000 | 83.22% | 832,210 | ||||
| Notes 3.625% JBS Lux 2032 | **** | 968,780 | 90.34% | **** | 875,225 | 968,780 | 87.96% | 852,178 | ||||
| Notes 5.75% JBS Lux 2033 | **** | 1,661,675 | 101.71% | **** | 1,690,056 | 1,661,675 | 99.54% | 1,654,048 | ||||
| Notes 6.75% JBS Lux 2034 | **** | 1,507,046 | 108.20% | **** | 1,630,639 | 1,507,046 | 105.85% | 1,595,148 | ||||
| Notes 5,95% JBS USA 2035 | **** | 1,000,000 | 102.85% | **** | 1,028,480 | – | – | – | ||||
| Notes 4.375% JBS Lux 2052 | **** | 900,000 | 77.43% | **** | 696,852 | 900,000 | 110.50% | 994,482 | ||||
| Notes 6.50% JBS Lux 2052 | **** | 1,548,000 | 103.72% | **** | 1,605,539 | 1,548,000 | 101.53% | 1,571,731 | ||||
| Notes 7.25% JBS Lux 2053 | **** | 900,000 | 112.79% | **** | 1,015,137 | 900,000 | 74.94% | 674,487 | ||||
| Notes 6,375% JBS USA 2055 | **** | 750,000 | 102.51% | **** | 768,817 | – | – | – | ||||
| Notes 4.25% PPC 2031 | **** | 853,725 | 94.20% | **** | 804,234 | 855,725 | 92.24% | 789,303 | ||||
| Notes 3.5% PPC 2032 | **** | 900,000 | 88.08% | **** | 792,684 | 900,000 | 86.34% | 777,033 | ||||
| Notes 6.25% PPC 2033 | **** | 978,421 | 103.76% | **** | 1,015,239 | 980,000 | 102.16% | 1,001,178 | ||||
| Notes 6.875% PPC 2034 | **** | 500,001 | 107.72% | **** | 538,600 | 500,000 | 106.73% | 533,650 | ||||
| **** | 17,710,030 | **** | 17,476,684 | **** | 16,033,514 | **** | 15,423,078 |
Risk management:
The Group during the regular course of its operations is exposed to a variety of financial risks that include the effects of changes in market prices, (including foreign exchange, interest rate risk and commodity price risk), credit risk and liquidity risk. Such risks are fully disclosed in the last annual financial statements. There were no changes in the nature of these risks in the current period.
Below are the risks and operations to which the Group is exposed and a sensitivity analysis for each type of risk, consisting in the presentation of the effects in the finance income (expense), net, when subjected to possible changes, 50% and 100%,, 25% and 50%, of 15% to 30%, in the relevant variables for each risk. For each probable scenario, the Group utilizes the Value at Risk Methodology (VaR),for the confidence interval (C.I.) of 99% and a horizon of one day.
| a. | Interest rate risk |
|---|
The quantitative data referring to the risk of exposure to the Group’s interest rates on March 31, 2025 and December 31, 2024, are in accordance with the Financial and Commodity Risk Management Policy of the Group and are representative of the exposure incurred during the period. The main exposure to financial risks as of March 31, 2025 and December 31, 2024 are shown below:
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Net exposure to the CDI rate: | ||||
| CDB-DI (Bank certificates of deposit) | **** | 896,197 | 790,370 | |
| Margin cash | **** | 343,320 | 132,687 | |
| Related party transactions | – | 527 | ||
| Credit note - export | **** | (1,651) | (1,704) | |
| Subtotal | **** | 1,237,866 | **** | 921,880 |
| Derivatives (Swap) | **** | (1,394,960) | (1,285,133) | |
| Total | **** | (157,094) | **** | (363,253) |
| Net exposure to the IPCA rate: | ||||
| CDB-DI (Bank certificates of deposit) | **** | 38,150 | – | |
| Margin cash | **** | 3,743 | 3,867 | |
| Related party transactions | **** | 85,087 | 77,336 | |
| Treasury bills | – | 35,127 | ||
| CRA - Agribusiness Credit Receivable Certificates | **** | (1,396,667) | (1,163,028) | |
| Subtotal | **** | (1,269,687) | **** | (1,046,698) |
| Derivatives (Swap) | **** | 992,089 | 906,886 | |
| Total | **** | (277,598) | **** | (139,812) |
| Liabilities exposure to the SOFR rate: | ||||
| Export credit note | **** | (103,943) | (102,367) | |
| Prepayment | – | (100,296) | ||
| Prepayment - exchange agreement | **** | (2,513) | (2,599) | |
| Total | **** | (106,456) | **** | (205,262) |
Sensitivity analysis as of March 31, 2025:
| Scenario (I) VaR 99% C.I. 1 day | Scenario (II) Interest rate variation - 50% | Scenario (III) Interest rate variation - 100% | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Contracts exposure | Risk | Current scenario | Rate | Effect on income | Rate | Effect on income | Rate | Effect on income | ||||||||
| CDI | Decrease | 14.15% | 14.24% | (145) | 21.23% | (11,708) | 28.30% | (23,415) | ||||||||
| **** | (145) | **** | (11,708) | **** | (23,415) | |||||||||||
| Scenario (I) VaR 99% C.I. 1 day | Scenario (II) Interest rate variation - 25% | Scenario (III) Interest rate variation - 50% | ||||||||||||||
| Contracts exposure | Risk | Current scenario | Rate | Effect on income | Rate | Effect on income | Rate | Effect on income | ||||||||
| IPCA | Increase | 5.06% | 5.07% | (18) | 6.33% | (3,450) | 7.59% | (6,900) | ||||||||
| SOFR | Increase | 4.41% | 4.42% | (5) | 5.51% | (1,154) | 6.62% | (2,306) | ||||||||
| **** | (41) | **** | (8,054) | **** | (16,106) | |||||||||||
| March 31, 2025 | December 31,2024 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| Instrument | Risk<br><br><br>factor | Maturity | Notional | Fair value<br><br><br>(Asset) - US$ | Fair value(Liability) - US$ | Fair value | Notional | Fair value<br><br><br>(Asset) - US$ | Fair value(Liability) - US$ | Fair value | ||||||
| IPCA | 2027 | 200,162 | 218,189 | (235,240) | (17,051) | 158,004 | 162,453 | (171,479) | (9,026) | |||||||
| IPCA | 2031 | 194,249 | 225,664 | (238,738) | (13,074) | 189,071 | 212,403 | (224,840) | (12,437) | |||||||
| IPCA | 2032 | 195,740 | 210,700 | (234,801) | (24,101) | 183,123 | 192,464 | (216,650) | (24,186) | |||||||
| IPCA | 2034 | 137,404 | 139,230 | (150,570) | (11,340) | 127,416 | 124,373 | (135,650) | (11,277) | |||||||
| Swap | IPCA | 2037 | 170,337 | 198,306 | (241,769) | (43,463) | 189,239 | 215,192 | (263,254) | (48,062) | ||||||
| IPCA | 2038 | 153,476 | 154,127 | (167,283) | (13,156) | 142,320 | 143,557 | (159,263) | (15,706) | |||||||
| IPCA | 2039 | 22,489 | 22,569 | (24,241) | (1,672) | 20,854 | 20,363 | (21,830) | (1,467) | |||||||
| IPCA | 2044 | 87,075 | 88,174 | (102,318) | (14,144) | 80,745 | 79,880 | (92,168) | (12,288) | |||||||
| 1,160,932 | 1,256,959 | (1,394,960) | (138,001) | 1,090,772 | 1,150,685 | (1,285,134) | (134,449) |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
b. Exchange rate risk
Below are presented the risks related to the most significant exchange rates fluctuation given the relevance of these currencies in the Group’s operations and the stress analysis scenarios and VaR to measure the total exposure as well as the cash flow risk with B3 and the Chicago Mercantile Exchange. The Group discloses these exposures considering the fluctuations of an exchange rate in particular towards the functional currency of each subsidiary.
| AUD | CAD | CNY | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31,<br>2025 | December<br><br><br>31, 2024 | March 31,<br>2025 | December<br><br><br>31, 2024 | March 31,2025 | December<br><br><br>31, 2024 | March 31,2025 | December<br><br><br>31, 2024 | March 31,2025 | December<br><br><br>31, 2024 | March 31,2025 | December<br><br><br>31, 2024 | |||||||||||||||||||||
| OPERATING | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | **** | 1,639,584 | **** | 50,341 | **** | 16,097 | **** | – | **** | 90 | **** | 4,600 | **** | **** | 483 | **** | **** | 6,993 | **** | **** | 7,051 | |||||||||||
| Trade accounts receivable | **** | 1,073,398 | **** | 165,016 | **** | 65,684 | **** | 789 | **** | 543 | **** | 16,487 | **** | **** | 14,387 | **** | **** | 3,194 | **** | **** | 2,964 | |||||||||||
| Sales orders | **** | 1,062,765 | **** | 78,854 | **** | 54,370 | **** | – | **** | – | **** | 2,182 | **** | **** | 2,896 | **** | **** | 12,858 | **** | **** | 7,197 | |||||||||||
| Trade accounts payable | ) | (297,536 | ) | ) | (78,268 | ) | ) | (16,271 | ) | **** | (458 | ) | (2,535 | ) | **** | – | **** | **** | – | **** | **** | – | **** | **** | – | |||||||
| Purchase orders | ) | (83,493 | ) | ) | (8,928 | ) | ) | – | **** | – | **** | – | **** | – | **** | **** | – | **** | **** | (375 | ) | **** | – | |||||||||
| Subtotal | **** | **** | 3,394,718 | **** | **** | **** | 207,015 | **** | **** | **** | 119,880 | **** | **** | 331 | **** | **** | (1,902 | ) | **** | 23,269 | **** | **** | 17,766 | **** | **** | 22,670 | **** | **** | 17,212 | |||
| FINANCIAL | ||||||||||||||||||||||||||||||||
| Margin cash | **** | 220 | **** | – | **** | – | **** | – | **** | – | **** | – | **** | **** | – | **** | **** | – | ||||||||||||||
| Advances to customers | ) | (4,683 | ) | ) | (1,562 | ) | **** | (191 | ) | **** | – | **** | – | **** | – | **** | **** | – | **** | **** | (118) | |||||||||||
| Loans and financing | ) | (1,290,871 | ) | ) | (614 | ) | **** | – | **** | – | **** | – | **** | – | **** | **** | (585 | ) | **** | – | ||||||||||||
| Subtotal | ) | **** | (1,295,334 | ) | ) | **** | (2,176 | ) | **** | **** | (191 | ) | **** | – | **** | **** | – | **** | **** | – | **** | **** | (585 | ) | **** | – | **** | **** | (118) | |||
| Subtotal | **** | **** | 2,099,384 | **** | **** | **** | 204,839 | **** | **** | **** | 119,689 | **** | **** | 331 | **** | **** | (1,902 | ) | **** | 23,269 | **** | **** | 17,181 | **** | **** | 22,670 | **** | **** | 17,094 | |||
| Total exposure | **** | **** | 2,099,384 | **** | **** | **** | 204,839 | **** | **** | **** | 119,689 | **** | **** | 331 | **** | **** | (1,902 | ) | **** | 23,269 | **** | **** | 17,181 | **** | **** | 22,670 | **** | **** | 17,094 | |||
| DERIVATIVES | ||||||||||||||||||||||||||||||||
| Future contracts | **** | 1,840 | ) | (85,595 | ) | ) | (34,095 | ) | **** | – | **** | – | **** | (2,000 | ) | **** | (8,000 | ) | **** | (23,600 | ) | **** | (21,600) | |||||||||
| Deliverable Forwards (DF´s) | ) | (664,084 | ) | **** | 70,949 | ) | (26,785 | ) | **** | 9,696 | **** | 2,760 | **** | (55,412 | ) | **** | (29,612 | ) | **** | – | **** | **** | – | |||||||||
| Non-Deliverable Forwards (NDF´s) | ) | (417,158 | ) | ) | (19,559 | ) | ) | (6,262 | ) | **** | – | **** | – | **** | – | **** | **** | – | **** | **** | – | **** | **** | – | ||||||||
| Total derivatives | ) | **** | (1,079,402 | ) | ) | **** | (34,205 | ) | ) | **** | (67,142 | ) | **** | 9,696 | **** | **** | 2,760 | **** | **** | (57,412 | ) | **** | (37,612 | ) | **** | (23,600 | ) | **** | (21,600) | |||
| NET EXPOSURE | **** | **** | 1,019,982 | **** | **** | **** | 170,634 | **** | **** | **** | 52,547 | **** | **** | 10,027 | **** | **** | 858 | **** | **** | (34,143 | ) | **** | (20,431 | ) | **** | (930 | ) | **** | (4,506) |
All values are in US Dollars.
b1 Sensitivity analysis and derivative financial instruments breakdown:
b1.1 US Dollar (amounts in thousands of US$):
| Scenario (i) VaR 99% C.I. 1 day | Scenario (ii) Interest rate variation - 15% | Scenario (iii) Interest rate variation - 30% | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Exposure of US$ | Risk | Current<br>exchange rate | Exchange rate | Effect on income | Exchange rate | Effect on income | Exchange rate | Effect on income | ||||||||
| Operating | Appreciation | 5.7422 | 5.6318 | (63,984) | 4.8809 | (499,108) | 4.0195 | (998,216) | ||||||||
| Financial | Depreciation | 5.7422 | 5.6318 | 4,004 | 4.8809 | 31,234 | 4.0195 | 62,469 | ||||||||
| Derivatives | Depreciation | 5.7422 | 5.6318 | 16,947 | 4.8809 | 132,198 | 4.0195 | 264,396 | ||||||||
| **** | (43,033) | **** | (335,676) | **** | (671,351) | |||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Instrument | Risk factor | Nature | Quantity | Notional <br>(US) | Fair value | Quantity | Notional <br>(US) | Fair value | ||||||||
| Future Contract | American dollar | Short | **** | **** | **** | 273 | 12 | |||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||||
| Instrument | Risk factor | Nature | Notional<br>() | Notional<br>(US) | Fair value | Notional<br>() | Notional<br>(US) | Fair value | ||||||||
| Deliverable Forwards | American dollar | Long | ) | ) | **** | 4,349 | ) | ) | (16,868 | ) | ||||||
| Non-Deliverable Forwards | American dollar | Long | ) | ) | **** | 855 | ) | ) | (950 | ) |
All values are in US Dollars.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
b1.2 € - EURO (amounts in thousands of US$):
| Scenario (i) VaR 99% C.I. 1 day | Scenario (ii) Interest rate variation - 15% | Scenario (iii) Interest rate variation - 30% | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Exposure of US$ | Risk | Current<br><br><br>exchange | Exchange rate | Effect on income | Exchange rate | Effect on income | Exchange rate | Effect on income | ||
| Operating | Appreciation | 6.1993 | 6.0836 | (3,724) | 5.2694 | (29,922) | 4.3395 | (59,845) | ||
| Financial | Depreciation | 6.1993 | 6.0836 | 31 | 5.2694 | 252 | 4.3395 | 504 | ||
| Derivatives | Depreciation | 6.1993 | 6.0836 | 493 | 5.2694 | 3,962 | 4.3395 | 7,923 | ||
| (3,200) | (25,708) | (51,418) | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Instrument | Risk factor | Nature | Notional<br>() | Notional<br>(US) | Fair value | Notional <br>() | Notional <br>(US) | Fair value | ||
| Future Contract | Euro | Long | **** | 98 | 49 | |||||
| Deliverable Forwards | Euro | Short | **** | 3,364 | 2,376 | |||||
| Non-Deliverable Forwards | Euro | Long | **** | 209 | 420 |
All values are in Euros.
b1.3 £ - British Pound (amounts in thousands of US$):
| Scenario (i) VaR 99% C.I. 1 day | Scenario (ii) Interest rate variation- 15% | Scenario (iii) Interest ratevariation - 30% | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Exposure of US$ | Risk | Current<br>exchange | Exchange rate | Effect on<br>income | Exchange rate | Effect on<br>income | Exchange rate | Effect on<br>income | ||||||||
| Operating | Appreciation | 7.4046 | 7.2641 | (2,675) | 6.2939 | (21,139) | 5.1832 | (42,278) | ||||||||
| Derivatives | Depreciation | 7.4046 | 7.2641 | 1,046 | 6.2939 | 8,270 | 5.1832 | 16,539 | ||||||||
| **** | (1,629) | **** | (12,869) | **** | (25,739) | |||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| Instrument | Risk factor | Nature | Notional <br>() | Notional <br>(US) | Fair value | Notional <br>() | Notional <br>(US) | Fair value | ||||||||
| Future Contract | British pound | Short | **** | 61 | **** | 12 | ||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||||
| Instrument | Risk factor | Nature | Notional <br>() | Notional <br>(US) | Fair value | Notional <br>() | Notional <br>(US) | Fair value | ||||||||
| Deliverable Forwards | British pound | Short | **** | (773) | (675) | |||||||||||
| Non-Deliverable Forwards | British pound | Short | **** | (50) | (128) |
All values are in British Pounds.
b1.4 AUD – Australian Dollar (amounts in thousands of US$):
| Scenario (i) VaR 99% C.I. 1 day | Scenario (ii) Interest rate<br>variation - 15% | Scenario (iii) Interest rate variation - 30% | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Exposure of US$ | Risk | Current<br>exchange<br>rate | Exchange rate | Effect on income | Exchange rate | Effect on<br>income | Exchange rate | Effect on<br>income | ||||||
| Operating | Appreciation | 3.5808 | 3.5185 | 3.0437 | (49) | (98) | ||||||||
| Derivatives | Appreciation | 3.5808 | 3.5185 | 3.0437 | (1,429) | (2,858) | ||||||||
| **** | (1,478) | **** | (2,956) | |||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||
| Instrument | Risk factor | Nature | Notional (AUD) | Notional <br>(US) | Fair value | Notional (AUD) | Notional <br>(US) | Fair value | ||||||
| Deliverable Forwards | Australian dollar | Short | 15,549 | (2) | 4,452 | 2 |
All values are in US Dollars.
b1.5 CAD – Canadian Dollar (amounts in thousands of US$):
| Scenario (i) VaR 99% C.I. 1 day | Scenario (ii) Interest rate variation- 15% | Scenario (iii) Interest ratevariation - 30% | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Exposure of US$ | Risk | Current<br>exchange<br>rate | Exchange rate | Effect on<br>income | Exchange rate | Effect on<br>income | Exchange rate | Effect on<br>income | ||||||||
| Operating | Appreciation | 3.9937 | 4.0617 | 396 | 4.5928 | 3,490 | 5.1918 | 6,980 | ||||||||
| Derivatives | Depreciation | 3.9937 | 4.0617 | (977) | 4.5928 | (8,611) | 5.1918 | (17,223) | ||||||||
| **** | (581) | **** | (5,121) | **** | (10,243) |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
| March 31, 2025 | December 31, 2024 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Instrument | Risk factor | Nature | Notional (CAD) | Notional <br>(US) | Fair value | Notional (CAD) | Notional<br>(US) | Fair value | |||||||||
| Future Contract | Canadian dollar | Long | **** | (200 | ) | ) | **** | -8 | (800 | ) | ) | – | |||||
| March 31, 2025 | December 31, 2024 | ||||||||||||||||
| Instrument | Risk factor | Nature | Notional (CAD) | Notional<br>(US) | Fair value | Notional (CAD) | Notional<br>(US) | Fair value | |||||||||
| Deliverable Forwards | Canadian dollar | Long | **** | (79,672 | ) | ) | **** | 84 | (42,597 | ) | ) | (675 | ) |
All values are in US Dollars.
b1.6 CNY - Yuan (amounts in thousands of US$):
| Scenario (i) VaR 99% C.I. 1 day | Scenario (ii) Interest rate variation - 15% | Scenario (iii) Interest ratevariation - 30% | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Exposure of US$ | Risk | Currentexchangerate | Exchange rate | Effect onincome | Exchange rate | Effect on<br>income | Exchange rate | Effect onincome | ||||||
| Operating | Appreciation | 0.7913 | 0.8062 | 0.9100 | 3,401 | 6,801 | ||||||||
| Derivatives | Depreciation | 0.7913 | 0.8062 | 0.9100 | (3,540) | (7,080) | ||||||||
| **** | (139) | **** | (279) | |||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||
| Instrument | Risk factor | Nature | Notional (CNY) | Notional<br>(US) | Fair value | Notional (CNY) | Notional<br>(US) | Fair value | ||||||
| Future Contract | Chinese Renminbi<br> <br>Yuan | Long | **** | 57,700 | **** | (3) | 158,000 | (3) |
All values are in US Dollars.
c. Commodity price risk
The Group operates globally (the entire livestock protein chain and related business) and during the regular course of its operations is exposed to price fluctuations in feeder cattle, live cattle, lean hogs, corn, soybeans, and energy, especially in the North American, Australian and Brazilian markets. Commodity markets are characterized by volatility arising from external factors including climate, supply levels, transportation costs, agricultural policies and storage costs, among others. The Risk Management Department is responsible for mapping the exposures to commodity prices of the Group and proposing strategies to the Risk Management Committee, in order to mitigate such exposures.
c1. Position balance in commodities (cattle) and corn (grain) contracts of JBS S.A.:
| Exposure in Commodities (Cattle) | March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|---|
| DERIVATIVES | |||||
| Future contracts | **** | 19,823 | 111 | ||
| NET EXPOSURE | **** | 19,823 | **** | 111 | **** |
| Exposure in Corn (Grain) | March 31, 2025 | December 31, 2024 | |||
| DERIVATIVES | |||||
| Future contracts | **** | 2,149 | (46) | ||
| Subtotal | **** | 2,149 | **** | **** | (46) |
| NET EXPOSURE | **** | 2,149 | **** | **** | (46) |
Sensitivity analysis as of March 31, 2025:
| Scenario (i) VaR 99% C.I. 1 day | Scenario (ii) @ Variation - 25% | Scenario (ii) @ Variation - 50% | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Exposure | Risk | Current price ( per head) | Price | Effect on income | Price | Effect on income | Price | Effect onincome | |||||||
| Derivatives | Depreciation | 55 | – | 42 | **** | (5 | ) | 28 | (10) |
All values are in US Dollars.
Derivatives financial instruments breakdown:
| March 31, 2025 | December 31, 2024 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Instrument | Risk factor | Nature | Quantity | Notional | Fair value | Quantity | Notional | Fair value | ||||||
| Future Contracts | Commodities (Cattle) | Long | **** | 1,075 | **** | 19,823 | **** | 9 | 6,548 | 111 | **** | (2,718) |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
| March 31, 2025 | December 31, 2024 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Instrument | Risk factor | Nature | Quantity | Notional | Fair value | Quantity | Notional | Fair value | ||||||
| Future Contracts | Grain | Short | **** | 1,157 | **** | 2,149 | **** | (1,377) | 4,161 | 15 | (1) |
c2. Position balance in commodities (grain) derivatives financial instruments of Seara Alimentos:
| EXPOSURE in Commodities (Grain) | March 31, 2025 | December 31, 2024 | ||
|---|---|---|---|---|
| OPERATING | ||||
| Purchase orders | **** | 86,467 | 57,260 | |
| Subtotal | **** | 86,467 | **** | 57,260 |
| DERIVATIVES | ||||
| Future contracts | **** | 17,904 | 17,769 | |
| Subtotal | **** | 17,904 | **** | 17,769 |
| NET EXPOSURE | **** | 104,371 | **** | 75,029 |
Sensitivity analysis as of March 31, 2025:
| Scenario (i) VaR 99% C.I. 1 day | Scenario (ii) Price variation - 25% | Scenario (ii) Price variation - 50% | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Exposure | Risk | Price ( per tonne) | Effect on income | Price | Effect on income | Price | Effect on income | |||||
| Operating | Depreciation | (2,693) | (25)% | (21,238) | (50)% | (42,476) | ||||||
| Derivatives | Depreciation | (558) | (25)% | (4,397) | (50)% | (8,795) |
All values are in US Dollars.
| Scenario (i) VaR 99% C.I. 1 day | Scenario (ii) @ Variation - 25% | Scenario (ii) @ Variation - 50% | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Exposure | Risk | Price | Effect on income | Price | Effect on income | Price | Effect on income | ||||||
| Derivatives | Corn depreciation | (1.07)% | – | 25% | (1) | 50% | (1) |
Derivatives financial instruments breakdown:
| March 31, 2025 | December 31, 2024 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Instrument | Risk factor | Nature | Quantity | Notional | Fair value | Quantity | Notional | Fair value | ||||||
| Future contracts | Commodities (Grains) | Short | **** | 817 | **** | 17,904 | **** | (135) | 2,788 | 17,769 | 84 |
c3. Hedge accounting of Seara Alimentos:
The derivative financial instruments designated for the three-month period ended March 31, 2025, as hedge accounting, according to the Cash Flow method, to protect the operating results in relation to the price of commodities are:
| Hedge accounting - Derivativeinstruments | Risk factor | Quantity | Notional | Fair value | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Future contracts | Commodities | (37 | ) | (969 | ) | (114 | ) | |||
| Non Deliverable Forwards | Commodities | 854 | 18,873 | (21 | ) |
c3.1. Hedge accounting:
The Group applies hedge accounting for grain purchases by the subsidiary Seara Alimentos, aiming at bringing stability to the results. The designation of these instruments is based on the guidelines outlined in the Financial and Commodity Risk Management Policy defined by the Risk Management Committee and approved by the Board of Directors.
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
Financial instruments designated for hedge accounting were classified as cash flow hedge. The effective amount of the instrument’s gain or loss is recognized under “Other comprehensive income (expense)” and the ineffective amount under “Financial income (expense), net”, and the accumulated gains and losses are reclassified to profit and loss or to the balance sheet when the object is recognized, adjusting the item in which the hedged object was recorded.
In these hedge relationships, the main sources of ineffectiveness are the effect of the counterparties and the Group’s own credit risk on the fair value of the forward foreign exchange contracts, which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in exchange rates; changes in commodities prices; and changes in the timing of the hedged transactions.
Below are the effects on the statement of income, after the adoption of hedge accounting:
| March 31, 2025 | March 31, 2024 | |||
|---|---|---|---|---|
| Statements of income: | ||||
| Cost of sales before hedge accounting adoption | **** | (1,696,193) | **** | (1,823,704) |
| Derivatives operating income (loss) | **** | (363) | **** | 1,375 |
| Currency | **** | – | (11) | |
| Commodities | **** | (363) | 1,386 | |
| Cost of sales with hedge accounting | **** | (1,696,556) | **** | (1,822,329) |
| Financial income (expense), net excluding derivatives | **** | 45,325 | **** | (15,043) |
| Derivatives financial income (expense), net | **** | (63) | **** | (27,666) |
| Currency | **** | – | (2,895) | |
| Commodities | **** | (63) | (7,857) | |
| Interest | **** | – | (16,914) | |
| Financial income (expense), net | **** | 45,262 | **** | (42,709) |
Below are the effects on other comprehensive income (expense), after the adoption of hedge accounting:
| Statements of other comprehensive income (expense): | March 31, 2025 | March 31, 2024 | ||||
|---|---|---|---|---|---|---|
| Financial instruments designated as hedgeaccounting: | **** | 599 | **** | (31) | ||
| Commodities | **** | 599 | (31) | |||
| Gain on cash flow hedge | **** | 275 | **** | 507 | ||
| Deferred income tax on hedge accounting | ||||||
| Total of other comprehensive income (expense) | **** | 275 | **** | 507 | ||
| Hedge cash flow movement | December 31, 2024 | OCI | March 31, 2025 | |||
| --- | --- | --- | --- | --- | --- | --- |
| Hedge accounting operations at the parent company | **** | 186 | **** | 280 | **** | 466 |
| (-) Income Tax | **** | (63) | **** | (95) | **** | (158) |
| Impact of Hedge Operations on Subsidiaries | **** | 123 | **** | 185 | **** | 308 |
Below are the effects on the statement of financial position, after the adoption of hedge accounting:
| Statement of financial position: | March 31, 2025 | December 31, 2024 | ||
|---|---|---|---|---|
| Derivative (liabilities)/assets | **** | (135) | **** | 603 |
| Financial instruments designated as hedgeaccounting: | ||||
| Commodities | **** | (135) | **** | 84 |
| Derivative (liabilities)/assets | **** | 51 | **** | 69 |
| Financial instruments not designated as hedgeaccounting: | ||||
| Exchange | **** | 51 | **** | 69 |
| Interest | **** | – | **** | – |
| Other comprehensive income (expense) | **** | 610 | **** | 306 |
| Currency | **** | – | **** | – |
| Commodities | **** | 610 | **** | 306 |
| Inventories | **** | 710 | **** | 20 |
| Currency | **** | – | **** | – |
| Commodities | **** | 710 | **** | 20 |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
| Open amounts in statement of financial position of derivative assets and liabilities: | ||||
|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | |||
| Assets: | ||||
| Not designated as hedge accounting | **** | 51 | **** | 84 |
| Interest | **** | – | **** | – |
| Current assets | **** | 51 | **** | 153 |
| Non-current assets | **** | – | **** | – |
| (Liabilities): | ||||
| Designated as hedge accounting | **** | 135 | **** | – |
| Interest | **** | – | **** | – |
| Current liabilities | **** | 135 | **** | – |
c4. Position balance in commodities derivatives financial instruments of JBS USA:
| Exposure in Commodities | March 31, 2025 | December 31, 2024 | ||
|---|---|---|---|---|
| OPERATIONAL | ||||
| Firm contracts of cattle purchase | **** | 3,434,082 | 3,699,290 | |
| Subtotal | **** | 3,434,082 | **** | 3,699,290 |
| DERIVATIVES | ||||
| Deliverable Forwards | **** | (335,338) | 8,534,720 | |
| Subtotal | **** | (335,338) | **** | 8,534,720 |
| NET EXPOSURE | **** | 3,098,744 | **** | 12,234,010 |
Sensitivity analysis as of March 31, 2025:
| Scenario (i) VaR 99% I.C. 1 day | Scenario (ii) Price variation - 15% | Scenario (iii) Price variation - 30% | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Exposure | Risk | Price ( per head) | Effect on income | Price | Effect on income | Price | Effect on income | ||||||
| Operating | Depreciation | (66,701) | (15.00)% | (506,079) | (30.00)% | (1,012,157) | |||||||
| Derivatives | Appreciation | 6,513 | (15.00)% | 49,419 | (30.00)% | 98,837 |
All values are in US Dollars.
Derivatives financial instruments breakdown:
| March 31, 2025 | December 31, 2024 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Instrument | Risk factor | Nature | Notional (US) | Notional (R) | Fair value | Notional (US) | Notional (R) | Fair value | |||
| Deliverable Forwards | Commodities (Cattle) | Short | **** | (179,913) | (60,240) |
All values are in US Dollars.
d. Credit risk
The information about the exposure to weighted average loss rate, gross carrying amount, expected credit loss recognized in profit or loss and credit-impaired on financial assets were as follows:
| Weighted average loss rate | Gross carrying amount | Expected credit loss | ||||
|---|---|---|---|---|---|---|
| March 31, 2025 | ||||||
| Cash and cash equivalents | – | **** | 4,825,982 | **** | – | |
| Margin cash | – | **** | 347,063 | **** | – | |
| Trade accounts receivable | **** | (2.90)% | **** | 3,501,107 | **** | (101,579) |
| Related party receivables | – | **** | 85,087 | **** | – | |
| – | **** | 8,759,239 | **** | (101,579) |
Notes to unaudited condensed consolidated interim financial information for the three-month period ended March 31, 2025 and 2024
(Expressed in thousands of United States dollar)
e. Liquidity risk
The table below shows the contractual obligation amounts from financial liabilities of the Group according to their maturities:
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Less than 1year | Between 1and 3 years | Between 4and 5 years | More than 5years | Total | Less than 1year | Between 1and 3 years | Between 4and 5 years | More than 5years | Total | |||||||||||
| Trade accounts payable and supply chain finance | **** | 5,843,993 | **** | – | **** | – | **** | – | **** | 5,843,993 | 6,194,223 | – | – | – | **** | 6,194,223 | ||||
| Loans and financing | **** | 794,942 | **** | 2,017,310 | **** | 2,019,945 | **** | 15,093,164 | **** | 19,925,361 | 2,084,225 | 2,029,192 | 2,071,582 | 13,141,797 | **** | 19,326,796 | ||||
| Estimated interest on loans and financing ^(1)^ | **** | 492,534 | **** | 2,812,028 | **** | 1,846,476 | **** | 9,003,829 | **** | 14,154,867 | 2,458,318 | 2,440,620 | 839,949 | 5,670,017 | **** | 11,408,904 | ||||
| Derivatives liabilities (assets) | **** | 284,165 | **** | 100,301 | **** | – | **** | – | **** | 384,466 | 165,979 | 100,087 | – | – | **** | 266,066 | ||||
| Payments of leases | **** | 347,448 | **** | 542,568 | **** | 233,390 | **** | 622,380 | **** | 1,745,786 | 335,681 | 574,118 | 235,423 | 588,807 | **** | 1,734,029 | ||||
| Other liabilities | **** | 44,061 | **** | 14,694 | **** | – | **** | – | **** | 58,755 | 16,297 | 16,351 | – | 24,224 | **** | 56,872 |
^(1)^Includes interest on all loans and financing outstanding. Payments are estimated for variable rate debt based on effective interest rates for the three-month period ended March 31, 2025 and for the year ended December 31, 2024. Payments in foreign currencies are estimated using the March 31, 2025 and December 31, 2024 exchange rates.
The Group has future commitment for purchase of grains and cattle whose balances as of March 31, 2025 is US$36.3 billion (December 31, 2024 is US$33.5 billion).
The Group has securities pledged as collateral for derivative transactions with the commodities and futures whose balance as of March 31, 2025 is US$8,761 (US$28,687 at December 31, 2024). This guarantee exceeds the amount of the collateral.
The indirect subsidiary JBS USA and its subsidiaries, have securities pledged as collateral for derivative transactions with the commodities and futures whose balance as of March 31, 2025 is US$334,559 (US$104,000 at December 31, 2024). This guarantee exceeds the amount of the collateral.
Also, the direct subsidiary Seara Alimentos has securities pledged as collateral for derivative transactions with the commodities and futures whose balance as of March 31, 2025 is US$3,743 (US$3,867 at December 31, 2024). This guarantee exceeds the amount of the collateral.
A future breach of covenant may require the Group to repay the loan earlier than indicated in the above table. Detailed information on the opening of the Group’s covenants is disclosed annually.
The interest payments on variable interest rate loans and bond issues in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change. The future cash flows on derivative instruments may be different from the amount in the above table as interest rates and exchange rates or the relevant conditions underlying the derivative change. Except for these financial liabilities, it is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
e. Risks linked to climate change and the sustainability strategy
In view the Group’s operations, there is inherent exposure to risks related to climate change. Certain Group assets, which are mainly biological assets that can be measured at fair value, may be impacted by climate change and are considered in the preparation process of this interim financial information.
For the three-month period ended March 31, 2025, Management considered as main risk the data and assumptions highlighted below:
(i) possible impacts on the determination of fair value in biological assets due to the effects of climate change, such as temperature rise, scarcity of water resources, may impact some assumptions used in accounting estimates related to the Group’s biological assets, as follows:
• losses of biological assets due to heat waves and droughts which occur with greater frequency and intensity;
• reduction in the expected growth of our biological assets due to natural disasters, fires, pandemics or changes in rainfall patterns; and
• interruption in the production chain due to adverse weather events, causing power outages, fuel shortages, disruption of transportation channels, among other things.
(ii) structural changes and their impacts on the business, such as:
• regulatory and legal: regulation and legislation arising from Brazilian and/or international authorities that encourage the transition to a low-carbon economy and/or with greater biodiversity and that increase the risk of litigation and/or commercial restrictions related to the alleged contribution, even if indirect, for the intensification of climate change;
• reputational: related to customers’ perceptions and the society in general regarding the positive or negative contribution of an organization to a low carbon economy.
* * * * *
EX-99.2
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (this “MD&A”)contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from those discussed in the forward-looking statements for several reasons, including those described under “—CautionaryStatement Regarding Forward-Looking Statements” below and in the section entitled “Risk Factors” in the prospectus dated April 22, 2025 (as supplemented or amended from time to time, the “Prospectus”), contained in theRegistration Statement on Form F-4 for JBS B.V., effective as of April 22, 2025 (Registration File No. 333-273211) (the “Form F-4”), and other issues discussed herein.
This MD&A should be read in conjunction with,and is qualified in its entirety by reference to: (1) JBS S.A.’s unaudited condensed consolidated interim financial information as of March 31, 2025 and for the three-month periods ended March 31, 2025 and 2024, and the relatednotes thereto (“JBS S.A.’s unaudited interim financial statements”), furnished to the United States Securities and Exchange Commission (the “SEC”), as part of the current report on Form6-K to which this MD&A is attached as an exhibit (the “Form 6-K”); (2) JBS S.A.’s audited consolidated financial statements as of December 31,2024, 2023 and 2022 and for each of the years in the three-year period ended December 31, 2024, and the related notes thereto, which are included in the Prospectus (“JBS S.A.’s audited financial statements” and, together with JBSS.A.’s unaudited interim financial statements, “JBS S.A.’s financial statements”); and (3) the information presented under the section of the Prospectus entitled “Presentation of Financial and Other Information.”
JBS S.A.’s audited financial statements have been prepared in accordance with International Financial Reporting Standards(IFRS) - Accounting Standards, as issued by the International Accounting Standards Board (IASB) (“IFRS – Accounting Standards”). JBS S.A.’s unaudited interim financial statements have been prepared in accordance with IAS 34 -Interim Financial Reporting, as issued by the IASB.
Except where the context otherwise requires, in this MD&A:
| • | “JBS Group,” “we,” “our,” “us,” “our company” or like termsrefer to JBS S.A. and its consolidated subsidiaries. |
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| • | “JBS S.A.” refers to JBS S.A., a Brazilian corporation (sociedade anônima).<br> |
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| • | “JBS USA” refers to JBS USA Holding Lux S.à r.l., a private limited liability company(société à responsabilité limitée) incorporated and existing under the laws of Luxembourg. JBS USA is an indirect wholly-owned subsidiary of JBS S.A. |
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| • | “PPC” refers to Pilgrim’s Pride Corporation, a Delaware corporation. JBS S.A. beneficially ownsapproximately 83% of PPC’s outstanding common stock. |
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| • | “Seara” refers to Seara Alimentos Ltda., a Brazilian limited liability company (sociedade<br>limitada). Seara and its subsidiaries produce poultry, pork and processed foods in Brazil. Seara is an indirect wholly-owned subsidiary of JBS S.A. |
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Overview
We are the largest protein company and one of the largest food companies in the world in terms of net revenue for the year ended December 31, 2024, according to Bloomberg’s Food Index and publicly available sources. Our net revenue was US$19.5 billion and US$18.0 billion for the three-month periods ended March 31, 2025 and 2024, respectively, and US$77.2 billion, US$72.9 billion and US$72.6 billion for the years ended December 31, 2024, 2023 and 2022, respectively. We recorded a net income of US$0.6 billion and US$0.4 billion for the three-month periods ended March 31, 2025 and 2024, respectively. We recorded a net income of US$2.0 billion for the year ended December 31, 2024, a net loss of US$0.1 billion for the year ended December 31, 2023 and a net income of US$3.1 billion for the year ended December 31, 2022. Our Adjusted EBITDA was US$1.5 billion and US$1.3 billion for the three-month periods ended March 31, 2025 and 2024, respectively, and US$7.2 billion, US$3.5 billion and US$6.7 billion for the years ended December 31, 2024, 2023 and 2022, respectively. Through strategic
acquisitions and capital investment, we have created a diversified global platform that allows us to prepare, package and deliver fresh and frozen, value-added and branded beef, poultry, pork, fish and lamb products to leading retailers and foodservice customers. We sell our products to more than 320,000 customers worldwide in approximately 180 countries on six continents.
As of March 31, 2025, we were:
| • | the #1 global beef producer in terms of capacity, according to Nebraska Public Media, with operations in the<br>United States, Australia, Canada and Brazil and an aggregate daily processing capacity of approximately 78,000 heads of cattle; |
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| • | the #1 global poultry producer in terms of capacity, with operations in the United States, Brazil, United<br>Kingdom, Mexico, Puerto Rico and Europe, and an aggregate daily processing capacity of more than 13.5 million chickens according to WATT Poultry, a global resource for the poultry meat industries; |
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| • | the #2 largest global pork producer in terms of capacity, with operations in the United States, Brazil, the<br>United Kingdom, Australia and Europe, and an aggregate daily processing capacity of approximately 147,000 hogs according to WATT Poultry; |
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| • | a leading lamb producer in terms of capacity, according to Levante, with operations in Australia and Europe and<br>an aggregate daily processing capacity of approximately 23,500 heads; |
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| • | a leading regional fish producer in terms of capacity, according to Forbes, with operations in Australia and an<br>aggregate daily processing capacity of approximately 220 tons; and |
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| • | a significant global producer of value-added and branded meat products. |
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We primarily sell protein products, which include fresh and frozen cuts of beef, pork, lamb, fish, whole chickens and chicken parts, to retailers (such as supermarkets, club stores and other retail distributors), and foodservice companies (such as restaurants, hotels, foodservice distributors and additional processors). Our food products are marketed under a variety of national and regional brands, including: in North America, “Swift,” “Just Bare,” “Pilgrim’s Pride,” “1855,” “Gold Kist Farms,” “Del Dia,” “Northern Gold” and “Canadian Diamond” and premium brand “Sunnyvalley”; in Brazil, “Swift,” “Seara,” “Friboi, “Maturatta,” “Reserva Friboi,” “Seara Da Granja,” “Seara Nature,” “Massa Leve,” “Marba,” “Doriana,” “Delícia,” “Primor,” “Delicata,” “Incrível,” “Rezende,” “LeBon,” “Frango Caipira Nhô Bento,” “Seara Turma da Mônica,” and premium brands “1953,” “Seara Gourmet,” “Hans” and “Eder”; in Australia, “Great Southern” and “AMH”; and in Europe, “Moy Park” and “O’Kane.” We also produce value-added and branded products marketed, primarily under our portfolio of widely recognized consumer brands in some of our key markets, including “Seara” in Brazil, “Primo,” “Rivalea” and “Huon” in Australia and “Beehive” in New Zealand.
We are geographically diversified. In the three-month periods ended March 31, 2025 and 2024 and in the year ended December 31, 2024, we generated 74.8%, 74.9% and 74.1%, respectively, of our net revenue from sales in the countries where we operate our facilities, which we classify as domestic sales, and 25.2%, 25.1% and 25.9%, respectively, of our net revenue represented export sales. The United States, Brazil and Australia are leading exporters of protein to many fast-growing markets, including Asia, Africa and the Middle East. Asia represented 48.1%, 47.6% and 48.9% of our net revenue from export sales in the three-month periods ended March 31, 2025 and 2024 and in the year ended December 31, 2024, respectively, primarily from sales in China, Japan and South Korea. Africa and the Middle East collectively represented 14.0%, 16.7% and 14.2% of our net revenue from export sales in the three-month periods ended March 31, 2025 and 2024 and in the year ended December 31, 2024, respectively.
Reportable Segments
Our management has defined our operating segments based on the reports that are used to make strategic decisions, analyzed by our chief operating decision maker, who is our chief executive officer. We operate in the following seven reportable business segments: (1) Brazil; (2) Seara; (3) Beef North America; (4) Pork USA; (5) Pilgrim’s Pride; (6) Australia; and (7) Others. For additional information, see note 24 to JBS S.A.’s unaudited interim financial statements, which are included in the Form 6-K, and note 25 to JBS S.A.’s audited financial statements, which are included in the Prospectus, and “Information about JBS S.A.—Description of BusinessSegments” in the Prospectus. Each segment’s operating performance is evaluated by our chief operating decision maker based on Adjusted EBITDA. See “—Reconciliation of Adjusted EBITDA” below for more information about Adjusted EBITDA, including a reconciliation of Adjusted EBITDA to net income (loss).
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Description of Main Consolidated Statement of Income Line Items
Net Revenue
The vast majority of our net revenue is derived from contracts which are based upon a customer ordering our products. Net revenues are recognized when there is a contract with the customer, the transaction price is reliably measurable and when the control over the goods sold is transferred to the customer. We account for a contract, which may be verbal or written, when it is approved and committed by both parties, the rights of the parties are identified along with payment terms, the contract has commercial substance and collectability is probable. While there may be master agreements, the contract is only established when the customer’s order is accepted by us.
We evaluate the transaction for distinct performance obligations, which are the sale of our products to customers. Each performance obligation is recognized based upon a pattern of recognition that reflects the transfer of control to the customer at a point in time, which is upon destination (customer location or port of destination), which depicts the transfer of control and recognition of net revenue. There are instances of customer pick-up at our facility, in which case control transfers to the customer at that point and we recognize net revenue. Our performance obligations are typically fulfilled within days to weeks of the acceptance of the order.
The measurability of the transaction price can be impacted by variable consideration (i.e., discounts, rebates, incentives and the customer’s right to return products). Some or all of the estimated amount of variable consideration is included in the transaction price but only to the extent that it is highly probable a significant reversal in the amount of cumulative net revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. This is usually at the point of dispatch or on delivery of the products. This varies from customer to customer according to the terms of sale. However, due to the nature of our business, there is minimal variable consideration.
Allocating the transaction price to a specific performance obligation based upon the relative standalone selling prices includes estimating the standalone selling prices including discounts and variable consideration.
Shipping and handling activities are performed before a customer obtains control of the goods and its obligation is fulfilled upon transfer of the goods to a customer. Shipping and handling costs are recorded within cost of sales. We can incur incremental costs to obtain or fulfill a contract, such as payment of commissions, which are not expected to be recovered. The amortization period for such expenses is less than one year; therefore, the costs are expensed as incurred and included in deductions from sales.
We receive payments from customers based on terms established with the customer. Payments are typically due within seven days of delivery for domestic accounts and 30 days for international accounts. Customer contract liabilities relate to payments received in advance of satisfying the performance obligation under the contract. Moreover, a contract liability is recognized when we have an obligation to transfer products to a customer from whom the consideration has already been received. The recognition of the contractual liability occurs at the time when the consideration is received and settled. We recognize net revenue upon fulfilling the related performance obligation. Contract liabilities are presented as advances from customers in the statement of financial position.
We disaggregate our net revenues by (i) domestic sales, which refer to sales within each geographical location and; (ii) export sales, which refer to sales outside of each geographical location.
We also disaggregate our net revenues between Brazil, Seara, Beef North America, Pork USA, Pilgrim’s Pride, Australia and Others to align with our segment presentation in note 24 to JBS S.A.’s unaudited interim financial statements, which are included in the Form 6-K, and note 25 to JBS S.A.’s audited financial statements, which are included in the Prospectus.
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We sell our products in the countries where we operate our facilities, which we classify as domestic sales, and elsewhere, which we classify as export sales, as follows:
| For the three-month period ended March <br>31, | |||
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| 2025 | 2024 | ||
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| Domestic sales | 13,472.5 | ||
| Export sales | 4,526.2 | ||
| Net revenue | **** | 17,998.7 |
All values are in US Dollars.
Our net revenue is derived from our seven segments as set forth below.
| • | Net Revenue from Sales of Brazil. Our Brazil segment includes all of our operating activities in Brazil,<br>mainly represented by slaughter facilities, cold storage and meat processing, fat, feed and production of beef by-products, such as leather, collagen and other products produced in Brazil. Net revenues are<br>generated from the sale of products predominantly to restaurant chains, food processing companies, distributors, supermarket chains, wholesale supermarket and other significant users within the food chain. |
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| • | Net Revenue from Sales of Seara. Our Seara segment includes all the operating activities of Seara and its<br>subsidiaries, mainly represented by chicken and pork processing, production and commercialization of food products and value-added products. Net revenues are generated from the sale of products predominantly to restaurant chains, food processing<br>companies, distributors, supermarket chains, wholesale supermarket and other significant users within the food chain. |
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| • | Net Revenue from Sales of Beef North America. Our Beef North America segment includes JBS USA’s beef<br>processing operations in North America and the plant-based businesses. This segment also sells by-products to the variety meat, feed processing, fertilizer, automotive and pet food industries and also produces<br>value-added meat products including toppings for pizzas. Finally, Sampco LLC imports processed meats and other foods such as canned fish, fruits and vegetables to the United States and Vivera Topholding BV produces and sells plant-based protein<br>products in Europe. |
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| • | Net Revenue from Sales of Pork USA. Our Pork USA segment includes JBS USA’s pork operations,<br>including Swift Prepared Foods. Net revenues are generated from the sale of products predominantly to retailers of fresh pork, including trimmed cuts such as loins, roasts, chops, butts, picnics and ribs. Other pork products, including hams, bellies<br>and trimmings, are sold predominantly to further processors who, in turn, manufacture bacon, sausage, and deli and luncheon meats. In addition, net revenues are generated from the sale of case ready products. As a complement to our pork processing<br>business, we also conduct business through our hog production operations, including four hog farms and five feed mills, from which, JBS USA will source live hogs for its pork processing operations. |
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| • | Net Revenue from Sales of Pilgrim’s Pride. Our Pilgrim’s Pride segment includes PPC’s<br>operations, the majority of whose revenues are generated from United States, United Kingdom, Europe and Mexico sales of fresh and prepared chicken. The fresh chicken products consist of refrigerated<br>(non-frozen) whole or cut-up chicken, either pre-marinated or non-marinated, and pre-packaged chicken in various combinations of freshly refrigerated, whole chickens and chicken parts. The prepared chicken products include portion-controlled breast fillets, tenderloins and strips, delicatessen<br>products, salads, formed nuggets and patties and bone-in chicken parts. These products are sold either refrigerated or frozen and may be fully cooked, partially cooked or raw. In addition, these products are<br>breaded or non-breaded and either pre-marinated or non-marinated. The segment also generates net revenue from the sale of<br>prepared pork products through Pilgrim’s Pride Limited. The segment includes the specialty meats and ready meals businesses of Pilgrim’s Food Masters and generates net revenues from branded and private label meats, meat snacks, food-to-go products, and ethnic chilled and frozen ready meals. |
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| • | Net Revenue from Sales of Australia. Our Australia segment includes our fresh, frozen, value-added and<br>branded beef, lamb, pork and fish products in Australia and New Zealand. The majority of our beef net revenues from our operations in Australia are generated from the sale of fresh beef products (including fresh and frozen chuck cuts, rib cuts, loin<br>cuts, round cuts, thin meats, ground beef, offal and other products). We also sell value-added and branded beef products (including frozen cooked and pre-cooked beef, corned cooked beef, beef cubes and<br>consumer-ready products, such as hamburgers and sausages). We also operate lamb, pork and fish processing facilities in Australia and New Zealand, as the result of the acquisitions of Huon Aquaculture Group Ltd and the Rivalea hog breeding and<br>processing business in Australia. JBS Australia also generates net revenues through their cattle hoteling business. |
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| • | Net Revenue from Sales of Others. Our Others segment includes certain operations not directly attributable<br>to our primary segments set forth above, such as international leather operations and other operations in Europe. |
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Cost of Sales
A significant portion of our cost of sales consists of raw materials, primarily biological assets and feed ingredients. We incur costs to (1) purchase livestock (cattle, hogs and lamb) ready for slaughter in the production of beef, pork and lamb products and (2) feed live animals (chickens, hogs and fish) for breeding and slaughter in the production of chicken, pork and fish products in our vertically-integrated operations. Raw materials costs are generally influenced by fluctuations in prices to purchase (i) livestock in the spot market or under contracts and (ii) feed ingredients, primarily corn and soy meal, which are the main feed ingredients required in our vertically integrated operations. In addition to purchasing livestock and feed ingredients, our cost of sales also consists of other production costs (including packaging and other raw materials) and labor. The key drivers of costs by segment are as follows:
| • | Brazil. In Brazil we generally purchase cattle livestock in the spot market or under contracts that<br>fluctuate with market conditions as we do not keep or raise our own cattle. Our Brazil operations are impacted primarily by grass-fed cattle supply. Reductions in the breeding herds can affect supply, and thus<br>costs, over a period of years. |
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| • | Seara. Our vertically-integrated chicken and pork operations are impacted primarily by fluctuations in the<br>price of feed ingredients. |
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| • | Beef North America. We generally purchase cattle livestock in the spot market or under contracts that<br>fluctuate with market conditions as we do not keep or raise our own cattle. Our beef operations are impacted primarily by fed cattle supply. Our beef business is directly affected by fluctuations in the spot market based on available supply and<br>indirectly influenced by fluctuations in the price of feed ingredients. |
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| • | Pork USA. In North America, we generally purchase pork livestock in the spot market or under contracts<br>that fluctuate with market conditions and we raise approximately 25% of our hogs. Our pork business is directly affected by fluctuations in the price of feed ingredients. |
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| • | Pilgrim’s Pride. Our vertically-integrated chicken operations are impacted primarily by fluctuations<br>in the price of feed ingredients. |
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| • | Australia. Our Australian beef operations are impacted primarily by<br>grass-fed cattle supply, in addition to fish feed ingredients and hog prices. |
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| • | Others. Includes certain costs and expenses related to our operations not directly attributable to the<br>primary segments, such as certain of our corporate expenses and our costs and expenses related to our international leather operations and other operations in Europe. |
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Adjusted EBITDA
Adjusted EBITDA is calculated by making the following adjustments to net income, as further described below under “—Reconciliation of Adjusted EBITDA”: exclusion of net finance expenses; exclusion of current and deferred income taxes; exclusion of depreciation and amortization expenses; exclusion of share of profit of equity-accounted investees, net of tax; exclusion of antitrust agreements expenses; exclusion of donations and social programs expenses; exclusion of J&F Leniency expenses refund; exclusion of impairment of assets; exclusion of restructuring expenses; exclusion of tax payments and installments; exclusion of Rio Grande do Sul losses; exclusion of extemporaneous litigation expenses; exclusion of reversal of tax credits; and exclusion of certain other operating income (expense), net.
Operating Expenses
Our operating expenses consists primarily of:
| • | General and Administrative Expenses. This line item primarily includes expenses relating to corporate<br>payroll, utilities and maintenance of our corporate offices and headquarters. |
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| • | Selling Expenses. This line item includes expenses relating to advertising, freights, payment of<br>commissions and salaries to members of our sales team and allowances for doubtful accounts. |
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Net Finance Expense
Net finance expense includes expenses relating to interest incurred on our indebtedness, interest income, gains and losses related to our net exposure to foreign currencies and fair value adjustments from financing and commodity-related derivative transactions.
Items Affecting Comparabilityof Financial Results
Acquisitions
We have a track record of acquiring and integrating operations. Through strategic acquisitions, we have built a diversified global platform, which has significantly increased our net revenues, partially due to these acquisitions. Since 2022, we have entered into several acquisitions, including primarily JBS USA’s acquisition of TriOak Foods, an American pork producer and grain marketer, which closed on December 2, 2022.
Revenues, expenses and cash flows of acquired businesses are recorded for transactions consummated commencing after the closing date of the business acquired.
Currency
As a global company, our results of operations and financial condition have been, and will continue to be, exposed to foreign currency exchange rate fluctuations. The financial statements of each entity included in the consolidation are prepared using the functional currency of the main economic environment it operates.
Any depreciation or appreciation of the foreign currency exchange rate compared to an entity’s functional currency may impact our revenues, costs and expenses causing a monetary increase or decrease, provided that the other variables remain unchanged. In addition, a portion of our loans and financings is denominated in foreign currencies (foreign currency indicates loans denominated in a different currency from an entity’s functional currency). For this reason, any movement of the currency exchange rate compared to an entity’s functional currency may significantly increase or decrease our finance expense and our current and non-current loans and financings. Additionally, the results and financial position of all entities with a functional currency different from our functional currency (Brazilian real) have been translated to Brazilian real and then translated into the Group’s presentation currency (U.S. dollar).
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Our risk management department enters into derivative instruments previously approved by our board of directors to protect financial assets and liabilities and future cash flow from commercial activities and net investments in foreign operations. Our board of directors has approved financial instruments to hedge our exposure to loans, investments, cash flows from interest payments, export estimate, acquisition of raw material, and other transactions, whenever they are quoted in currencies different than our or our subsidiaries’ functional currency. The primary exposures to exchange rate risk are in U.S. dollars, euros, British pounds, Mexican pesos and Australian dollars.
Principal Factors Affecting our FinancialCondition and Results of Operations
Our results of operations have been influenced and will continue to be influenced by a variety of factors. In addition to the factors discussed below, factors that impact the results of our operations include outbreaks of livestock and poultry disease, product contamination or recalls, our ability to implement our business plan and the level of demand for our products in the countries in which we operate. Demand for our products in those countries is affected by the performance of their respective economies in terms of GDP, as well as prevailing levels of employment, inflation and interest rates.
Brazil, Seara, Beef North America, Pork USA, Pilgrim’s Pride and Australia Segments
We operate globally and during the regular course of our operations are exposed to price fluctuations in feeder cattle, live cattle, lean hogs, corn, soybeans, and energy, especially in our North American, Australian and Brazilian markets. Commodity markets are characterized by volatility arising from external factors including climate, supply levels, transportation costs, agricultural policies and storage costs, among others.
Our risk management department is responsible for mapping our exposure to commodity prices and proposing strategies to our risk management committee in order to mitigate such exposure. Biological assets are a very important raw material used by us. In order to maintain future supply of these materials, we enter into forward contracts to anticipate purchases with suppliers. To complement these forward purchases, we use derivative instruments to mitigate each specific exposure, most notably futures contracts, to mitigate the impact of price fluctuations - on inventories and sales contracts. We take the historical average amount spent on materials as an indication of the operational value to be protected by firm contracts.
In addition to the above, our risk management department monitors a number of other metrics and indicators that affect our operations in our Brazil, Seara, Beef North America, Pork USA, Pilgrim’s Pride and Australia segments, including the following:
| • | production volume; |
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| • | plant capacity utilization; |
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| • | sales volume; |
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| • | selling prices; |
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| • | customer demand and preferences (see “Risk Factors—Risks relating to our Business andIndustries—Changes in consumer preferences and/or negative perception of the consumer regarding the quality and safety of our products could adversely affect our business” in the Prospectus); |
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| • | commodity futures prices for livestock (see “Risk Factors—Risks relating to our Business andIndustries—Our results of operations may be adversely affected by fluctuations in market prices for, and the availability of, livestock and animal feed ingredients” in the Prospectus); |
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| • | the spread between livestock prices and selling prices for finished goods; |
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| • | utility prices and trends; |
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| • | livestock availability; |
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| • | production yield; |
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| • | seasonality; |
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| • | the economy performance of the countries where we sell our products; |
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| • | competition and industry consolidation; |
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| • | taxation; |
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| • | perceived value of our brands; |
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| • | interest rate fluctuations; |
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| • | currency exchange rate fluctuations (see “Risk Factors—Risks relating to our business and the beef,pork and chicken industries—Our exports pose special risks to our business and operations” in the Prospectus); and |
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| • | trade barriers, exchange controls and political risk and other risks associated with export and foreign<br>operations (see “Risk Factors—Risks relating to our business and the beef, pork and chicken industries—Our exports pose special risks to our business and operations” in the Prospectus). |
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Effects of the variation of prices for the purchase of raw materials on our costs of goods sold
Our principal raw materials are livestock and feed ingredients for our chicken, pork and fish operations. Raw materials accounted for a majority of the total cost of products sold during the three-month period ended March 31, 2025 and the year ended December 31, 2024. Changes in the price of cattle, pork and feed ingredients have a direct impact on operating costs and are based on factors beyond our management’s control, such as climate, the supply volume, transportation costs, agricultural policies and others. We seek to hedge the price paid for cattle purchased through financial instruments in order to attempt to protect ourselves from price variations between their date of the purchase and their date of the delivery. Our risk management department is responsible for mapping the exposures to commodity prices of the JBS Group and proposing strategies to our risk management committee, in order to mitigate such exposures. Biological assets are a very important raw material used by us. In order to maintain future supply of these materials, we participate in forward contracts to anticipate purchases with suppliers. To complement these forward purchases, we use derivative instruments to mitigate each specific exposure, most notably futures contracts, to mitigate the impact of price fluctuations - on inventories and sales contracts. We take the historical average amount spent on materials as an indication of the operational value to be protected by firm contracts.
The price of cattle, pork and feed ingredients in the domestic markets has significantly fluctuated in the past, and we believe that it will continue to fluctuate over the next few years. Any increase in the price of cattle, pork and feed ingredients and, consequently, production costs may adversely impact our gross margins and our results of operations if we are not able to pass these price increases to our clients. Conversely, any decrease in the price of cattle, pork and feed ingredients and, consequently, our production costs, may positively impact our gross margins and our results of operations.
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Effect of level of indebtedness and interest rates
As of March 31, 2025, our total outstanding indebtedness was US$19,925.4 million, consisting of US$794.9 million of current loans and financings and US$19,130.4 million of non-current loans and financings, representing 59.6% of our total liabilities, which totaled US$33,449.6 million as of March 31, 2025.
As of December 31, 2024, our total outstanding indebtedness was US$19,326.8 million, consisting of US$2,084.2 million of current loans and financings and US$17,242.6 million of non-current loans and financings, representing 59.4% of our total liabilities, which totaled US$32,551.0 million as of December 31, 2024.
The interest rates that we pay on our indebtedness depend on a variety of factors, including local and international interest rates and risk assessments of our company, our industry and the global economies.
Fluctuations in domestic market prices of fresh and processed products cansignificantly affect our operating revenues
Domestic market prices for fresh and processed products are generally determined in accordance with market conditions. These prices are also affected by the additional markup that retailers charge end consumers. We have negotiated these margins with each network of retailers and depending on the network, with each store individually.
Effects of fluctuations in export prices of fresh and processed products on operating revenues
Fluctuations in export prices of our raw and processed products can significantly affect our net operating income. The prices of fresh and processed products that we charge in domestic and export markets have fluctuated significantly in recent years, and we believe that these prices will continue to fluctuate in the future.
Effects of fluctuations in foreign exchange rates currencies
As our presentation currency is the U.S. dollars and some of our entities have other currencies as their functional currency (for example the Brazilian real), all else being equal, any strengthening of the U.S. dollar against these currencies will reduce the revenues and expenses of these entities, whereas any depreciation of the U.S. dollar against these currencies will increase their revenues and expenses.
For further information on our presentation currency, functional currencies and translation of foreign currencies see “—Items Affecting Comparability of Financial Results—Currency” above.
Impacts from Russia-Ukraine andIsrael-Hamas conflicts
The Russia-Ukraine war began in February 2022. The impact of the ongoing war and sanctions has not been limited to businesses that operate in Russia and Ukraine and has negatively impacted and will likely continue to negatively impact other global economic markets including where we operate. The impacts have included and may continue to include, but are not limited to, higher prices for commodities, such as food products, ingredients and energy products, increasing inflation in some countries, and disrupted trade and supply chains. The conflict has disrupted shipments of grains, vegetable oils, fertilizer and energy products. Russia’s recent suspension of the Black Sea Grain Initiative, which allowed Ukraine to export grain and other food items, will likely further exacerbate rising food prices and supply chain issues if not reinstated.
The impact on the agriculture markets falls into two main categories: (1) the effect on Ukrainian crop production, as the region is key in global grain production; and (2) the duration of the disruption in trade flows. Safety and financing concerns in the region are restricting export execution, which is in turn forcing grain and oil demand to find alternative supply. The duration of the war and related volatility makes global markets extremely sensitive to growing-season weather in other global grain producing regions and has led to a large risk premium in futures prices. The continued volatility in the global markets as a result of the war has adversely impacted our costs by driving up prices, raising inflation and increasing pressure on the supply of feed ingredients and energy products throughout the global markets.
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In addition, the U.S. government and other governments in jurisdictions in which we operate have imposed sanctions and export controls against Russia, Belarus and interests therein and threatened additional sanctions and controls. The impact of these measures, now and in the future, could adversely affect our business, supply chain or customers. See “ Risk Factors—Risks Relating to the Markets in Which We Operate—Our business may be negatively impacted by economic or other consequences from Russia’s war against Ukraine and the sanctions imposed as aresponse to that action” in the Prospectus for additional information.
Moreover, on October 7, 2023, Hamas attacked Israel, with Israel then declaring war on Hamas in the Gaza Strip. Escalation or expansion of hostilities, interventions by other groups or nations, the imposition of economic sanctions, disruption of shipping transit in the Straits of Hormuz or other significant trade routes, or similar outcomes could adversely affect the international trade, our business, results of operations, financial condition and cash flows. Although we do not have manufacturing operations in the affected regions, we are monitoring the development and unfolding of the situation and its potential effects on our sector and operations. As of the date of this MD&A, no significant impacts on our business have been measured.
Impact of Inflation
Most of the countries and regions in which we operate, including the United States, Brazil, Australia, Mexico and Europe, are currently experiencing pronounced inflation. None of the locations in which we operate are experiencing hyperinflation. All segments experienced inflation in operating costs, especially in labor, freight and transportation and certain materials. We have also experienced high average sales prices impacted by the current inflationary environment. We have responded to inflationary challenges in 2023, 2024 and 2025 by continuing negotiations with customers to pass through costs increases in order to recoup the increased expenses we have experienced. We also continue to focus on operational initiatives that aim to deliver labor efficiencies, better agricultural performance and improved yields.
For more information about the risks of inflation on our operations, see “Risk Factors—Risks Relating to the Markets in Which We Operate—Deterioration of global economic conditions could adversely affect our business” and “—We are exposed to emerging and developing countryrisks,” —The Brazilian government exercises, and will continue to exercise, significant influence over the Brazilian economy. These influences, as well as the political and economic conditions of the country, could negatively affectour activities” and “—Our business may be negatively impacted by economic or other consequences from Russia’s war against Ukraine and the sanctions imposed as a response to that action” in the Prospectus.
Recent Developments
Mantiqueira Acquisition
On April 1, 2025, JBS S.A. concluded its acquisition of 48.5% of the total capital stock and 50% of the voting shares of Mantiqueira Alimentos Ltda. (“Mantiqueira”). The value of the investment was established based on an enterprise value for 100% of Mantiqueira of R$1.9 billion. Since the completion of the investment in the joint venture, we share control of Mantiqueira with its founding member, Mr. Leandro Pinto.
The acquisition of Mantiqueira represents our entry into the egg sector and reinforces our global platform diversified by geography and protein. Mantiqueira currently has a static capacity of 17.5 million laying and rearing birds, 4 billion table eggs produced per year and a focus on free-range egg production since 2020. It has more than 3,000 employees, with units in six Brazilian states and a presence in markets in 16 Brazilian states with exports to South America, Asia, Africa and the Middle East. Mantiqueira’s “Happy Eggs” brand focuses on free-range chickens and “Fazenda da Toca” operates in the organic eggs segment.
Payment of PPC Dividends
On April 17, 2025, PPC distributed a special dividend totaling US$1.5 billion to its shareholders. Of this amount, US$264.1 million was allocated to PPC’s non-controlling shareholders and the remainder was allocated to JBS USA, as PPC’s controlling shareholder. JBS USA used a portion of the funds it received from the PPC special dividend to partially redeem JBS USA’s 5.500% Senior Notes due 2030. See “—Partial Redemption of JBS USA’s 5.500% Senior Notes due 2030” below.
10
Developments Relating to the JBS Dual Listing
On April 22, 2025, the SEC declared effective a registration statement on Form F-4 relating to an offering of Class A common shares of JBS N.V. (“JBS N.V. Class A Common Shares”) to be issued to holders of common shares of JBS S.A., initially in the form of Brazilian Depositary Receipts (“BDRs”) and the distribution of a special cash dividend of R$1.00 per JBS S.A. common share (collectively, the “Proposed Equity Transaction”). The Proposed Equity Transaction is subject to regulatory and corporate approvals, including approval by the shareholders of JBS S.A. at a general meeting. If the Proposed Equity Transaction is approved, JBS S.A.’s shareholders will receive one JBS N.V. Class A Share, initially in the form of a BDRs, for every two JBS S.A. shares held, and JBS S.A. will become a wholly-owned subsidiary of JBS N.V. We are also seeking approvals to list the JBS N.V. Class A Shares on the New York Stock Exchange (NYSE) and the JBS N.V. BDRs on the B3 (the “Dual Listing”). We believe that the Proposed Equity Transaction and the Dual Listing will result in the creation of a structure that will allow us to better reflect our global presence and international operations, as well as to implement our growth strategy, with the aim of improving our ratings and maximizing value for our shareholders. The JBS S.A. shareholder’s meeting to resolve on matters relating to the Proposed Equity Transaction was called on April 22, 2025 and is scheduled to take place on May 23, 2025. This MD&A shall not constitute an offer to sell or the solicitation of an offer to buy any securities in connection with the Proposed Equity Transaction.
Approval of Dividend Distribution
On April 29, 2025, JBS S.A.’s shareholders approved a proposal to distribute dividends from profit reserves with respect to the 2024 fiscal year in the amount of R$4.4 billion (equivalent to US$766.3 million considering the exchange rate on March 31, 2025), corresponding to R$2.00 (equivalent to US$0.34 considering the exchange rate on March 31, 2025) per common share. The dividend payment was made on May 14, 2025.
Partial Redemption of JBS USA’s 5.500% Senior Notes due 2030
On May 1, 2025, JBS USA Food Company redeemed US$850.0 million aggregate principal amount of its 5.500% Senior Notes due 2030 (the “2030 Notes”). The redemption was conditioned upon the receipt of a special cash dividend of US$6.30 per share from PPC, which was paid on April 17, 2025 (see “Payment of PPC Dividends” above). The redemption price for the 2030 Notes was equal to 102.750% of the principal amount of the 2030 Notes redeemed, plus accrued and unpaid interest, to, but excluding, the redemption date.
Seara Certificates of Agribusiness Receivables (CRA) (Certificados de Recebíveis do Agronegócio)
On May 9, 2025, Seara announced a filing with the CVM to register a new offering of agribusiness receivables certificates (Certificados de Recebíveis do Agronegócio) (“CRAs”) to qualified investors in Brazil an aggregate principal amount between R$800.0 million and R$1,000.0 million, in three series maturing in 2035, 2045 and 2055. These CRAs will represent rural financial product notes (Cédulas de Produto Rural Financeiras—CPR-Financeiras) to be issued by Seara and guaranteed by JBS S.A. Seara plans to use the net proceeds from the issuances of the rural financial product notes primarily to acquire raw materials, namely cornin natura, in the ordinary course of its business. The book-building process, which will determine the final principal amounts and interest rates for each series, is scheduled to conclude on June 4, 2025.
11
Overview of Results
We recorded a net income of US$556.3 million for the three-month period ended March 31, 2025, as compared to a net income of US$364.9 million for the three-month period ended March 31, 2024.
Summary of Results
Three-Month Period Ended March 31, 2025 Compared to the Three-Month Period Ended March 31, 2024
| For the three-month period ended March <br>31, | |||||
|---|---|---|---|---|---|
| 2025 | 2024 | % Change | |||
| (in millions of US) | |||||
| Consolidated statement of income: | |||||
| Net revenue | 17,998.7 | 8.5% | |||
| Cost of sales | (15,640.4) | 8.1% | |||
| Gross profit | **** | 2,358.3 | **** | 11.3% | |
| Selling expenses | (1,105.1) | 7.5% | |||
| General and administrative expenses | (529.0) | 5.2% | |||
| Other income | 21.2 | 43.1% | |||
| Other expenses | (22.5) | 24.2% | |||
| Net operating expenses | **** | (1,635.4) | **** | 6.5% | |
| Operating profit | **** | 722.9 | **** | 22.1% | |
| Finance income | 168.2 | 40.1% | |||
| Finance expense | (517.0) | (17.4)% | |||
| Net finance expense | **** | (348.7) | **** | (45.1)% | |
| Share of profit of equity-accounted investees, net of tax | (6.5) | n.m. | |||
| Profit before taxes | **** | 367.6 | **** | 88.8% | |
| Current income taxes | (3.8) | n.m. | |||
| Deferred income taxes | 1.0 | n.m. | |||
| Total income taxes | **** | (2.8) | **** | n.m. | |
| Net income | **** | 364.9 | **** | 52.5% |
All values are in US Dollars.
n.m. = not meaningful.
Net Income
| For the three-month <br>period ended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US, unless otherwise indicated) | |||||||
| Net income (loss) | 364.9 | 191.5 | 52.5% | ||||
| Net margin (net income as percentage of net revenue) | 2.0% | 0.8 p.p. | — |
All values are in US Dollars.
For the reasons described below, our net income increased by US$191.5 million, or 52.5%, in the three-month period ended March 31, 2025, as compared to the same period in 2024. Our net margin was 2.8% for the three-month period ended March 31, 2025, compared to 2.0% for the same period in 2024.
Net Revenue
| For the three-month <br>period ended March 31, | Change | % Change | ||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||
| (in millions of US, unless otherwise indicated) | ||||||||
| Net revenue | 17,998.7 | 1,527.8 | 8.5 | % |
All values are in US Dollars.
12
Our net revenue increased by US$1,527.8 million, or 8.5%, in the three-month period ended March 31, 2025, as compared to the same period in 2024. Our net revenue was positively impacted by an overall 6.3% increase in our average sales prices and by a 2.0% increase in sales volumes in all segments. For more information, see “—Segment Results” below.
Cost of Sales
| For the three-month <br>period ended March 31, | Change | % Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||||
| (in millions of US, unless otherwise indicated) | |||||||||
| Cost of sales | ) | (15,640.4 | ) | 1,261.6 | 8.1% | ||||
| Gross profit | 2,358.3 | 266.3 | 11.3% | ||||||
| Cost of sales as percentage of net revenue | 86.9% | (0.3) p.p. | — |
All values are in US Dollars.
Our cost of sales increased by US$1,261.6 million, or 8.1%, in the three-month period ended March 31, 2025, as compared to the same period in 2024, primarily due to a 9.2% increase in the cost of inventories, raw materials and production inputs to US$14,344.9 million in the three-month period ended March 31, 2025 from US$13,136.4 million in the same period in 2024, primarily due to the increase in the cost of cattle, which reached record levels.
Selling Expenses
| For the three-month period ended March 31, | Change | % Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||||
| (in millions of US, unless otherwise indicated) | |||||||||
| Selling expenses | ) | (1,105.1 | ) | 82.5 | 7.5% | ||||
| Selling expenses as percentage of net revenue | 6.1% | 0.0 p.p. | — |
All values are in US Dollars.
Our selling expenses increased by US$82.5 million, or 7.5%, in the three-month period ended March 31, 2025, as compared to the same period in 2024, primarily due to: (1) a 66.7% increase in salaries and benefits to US$132.7 million in the three-month period ended March 31, 2025 from US$79.6 million in the same period in 2024, primarily due to bonus and collective bargaining agreement; and (2) a 1.4% increase in freight and selling expenses to US$930.6 million in the three-month period ended March 31, 2025 from US$917.5 million in the same period in 2024, primarily due to the increase of revenue and volume of sales.
General and Administrative Expenses
| For the three-month <br>period ended March 31, | Change | % Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||||
| (in millions of US, unless otherwise indicated) | |||||||||
| General and administrative expenses | ) | (529.0 | ) | 27.5 | 5.2% | ||||
| General and administrative expenses as percentage of net revenue | 2.9% | (0.1) p.p. | — |
All values are in US Dollars.
Our general and administrative expenses increased by US$27.5 million, or 5.2%, in the three-month period ended March 31, 2025, as compared to the same period in 2024, primarily due to:
| • | DOJ and Antitrust agreements – DOJ and Antitrust agreements increased by US$74.9 million, to<br>US$79.5 million in the three-month period ended March 31, 2025 from US$4.7 million in the same period in 2024, primarily as a result of addition of new agreements in Pork and Beef. |
|---|
13
Our net finance expense decreased by US$157.2 million, or 45.1%, in the three-month period ended March 31, 2025, as compared to the same period in 2024, primarily due to:
| • | Fair value adjustments on derivatives –Fair value adjustments on derivatives changed to a gain of<br>US$20.2 million in the three-month period ended March 31, 2025 from a loss of US$76.1 million in the same period in 2024, primarily as a result of the depreciation of the U.S. dollar against the Brazilian real in the period.<br> |
|---|---|
| • | Interest Income – Interest income increased by US$73.3 million, or 81.1%, in the three-month<br>period ended March 31, 2025, as compared to the same period in 2024, due to a US$27.2 million increase in interest income from short-term investments as a result of a higher position in cash and cash equivalents in the three-month period<br>ended March 31, 2025. |
| --- | --- |
| • | Interest Expense – Interest expense decreased by US$5.0 million, or 1.2%, in the three-month<br>period ended March 31, 2025, as compared to the same period in 2024. This reduction was primarily due to a US$ 21.5 million decrease in interest expenses from loans and financings at JBS S.A. parent company level. This decrease was<br>partially offset by a US$ 15.5 million increase in interest expenses on loans and financings at JBS Global Meat level, driven by a higher volume of loans and financings outstanding in the first quarter of 2025 compared to the same period in<br>2024. |
| --- | --- |
| • | Bank fees and others – Bank fees and others decreased by US$8.7 million, or 41.1%, in the<br>three-month period ended March 31, 2025, compared to the same period in 2024. This reduction was primarily driven by (a) penalty fees incurred in 2024 for the early prepayment of trade finance loans, and (b) a tax penalty paid to the<br>Brazilian authorities during the first quarter of 2024, neither of recurred in the same period of 2025. |
| --- | --- |
Partially offset by:
| • | Gains from exchange rate variation – Gains from exchange rate variation decreased by<br>US$26.0 million, or 33.4%, in the three-month period ended March 31, 2025, as compared to the same period in 2024. This decrease was primarily driven by unfavorable exchange rate impacts on cash and cash equivalents, trade accounts<br>receivable and intercompany note balances denominated in non-functional currencies at JBS S.A. parent company level, which recorded a loss of US$50.1 million in the first quarter of 2025 versus a gain of<br>US$19.4 million in the corresponding period of 2024. |
|---|
Current and Deferred Income Taxes
| For the three-month <br>period ended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US, unless otherwise indicated) | |||||||
| Profit before taxes | **** | 367.6 | **** | 326.5 | **** | 88.8% | |
| Nominal rate | 34.00% | — | — | ||||
| Expected tax expense | **** | (125.0) | **** | 111.0 | **** | 88.8% | |
| Current income taxes | (3.8) | 221.0 | n.m. | ||||
| Deferred income taxes | 1.0 | 86.0 | n.m. | ||||
| Total income taxes | **** | (2.8) | **** | (135.0) | **** | n.m. | |
| Effective income tax rate | **** | 0.76% | **** | 19.09 p.p. | **** | — |
All values are in US Dollars.
n.m. = not meaningful.
The nominal tax rate for Brazilian income tax and social contribution is 34%. However, our effective tax rate may change in each period based on fluctuations in the taxable income generated by each of our foreign subsidiaries, different tax rates in countries where we operate and the tax credits generated by tax payments made by foreign subsidiaries, which can be used to offset taxes that would be paid in Brazil.
15
Therefore, the nature and timing of the permanent differences that arise during the period also affect our effective tax rate. These permanent differences generally refer to subsidies made for investments in Brazil and abroad, differences in tax rates on foreign subsidiaries, unrecognized deferred taxes in the current year, income from untaxed interest on foreign subsidiaries and the impact of taxation on companies with dual jurisdiction.
Effective income tax rate increased by 19.09 p.p. to 19.85% in the three-month period ended March 31, 2025, compared to 0.76% in the same period in 2024.
In the three-month period ended March 31, 2025, although some subsidiaries recorded profits and paid the corresponding taxes, the consolidated result was impacted by losses from other units, reducing total taxable income in Brazil and generating an additional balance of taxes paid abroad. In addition, since the Parent Company had a tax loss in the period, part of these taxes paid abroad was recognized as a credit in the consolidated result. Despite these offsetting effects, the Company recorded tax expenses in the three-month period ended March 31, 2025, mainly due to the settlement of an infraction notice related to the taxation of profits abroad from previous years, which reduced the positive impact of income tax credits paid outside Brazil.
Segment Results
| For the three-month periodended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US) | |||||||
| Net revenue | |||||||
| Brazil segment | 2,873.9 | 296.1 | 10.3% | ||||
| Seara segment | 2,083.1 | 67.4 | 3.2% | ||||
| Beef North America segment | 5,581.1 | 840.5 | 15.1% | ||||
| Pork USA segment | 1,910.4 | 91.3 | 4.8% | ||||
| Pilgrim’s Pride segment | 4,358.1 | 101.3 | 2.3% | ||||
| Australia segment | 1,446.4 | 175.2 | 12.1% | ||||
| Others segment | 164.6 | (46.3) | (28.0)% | ||||
| Total reportable segments | **** | 18,417.6 | **** | 1,525.5 | **** | 8.3% | |
| Eliminations (1) | (418.8) | (2.3) | (0.6)% | ||||
| Total net revenue | **** | 17,998.7 | **** | 1,527.8 | **** | 8.5% | |
| Adjusted EBITDA | |||||||
| Brazil segment | 129.9 | 1.2 | 0.9% | ||||
| Seara segment | 240.7 | 185.0 | 76.9% | ||||
| Beef North America segment | (9.8) | (90.7) | 924.0% | ||||
| Pork USA segment | 313.3 | (66.0) | (21.1)% | ||||
| Pilgrim’s Pride segment | 500.6 | 159.6 | 31.9% | ||||
| Australia segment | 124.0 | 36.4 | 29.4% | ||||
| Others segment | 0.0 | 3.6 | n.m. | ||||
| Total reportable segments | **** | 1,298.7 | **** | 229.1 | **** | 17.6% | |
| Eliminations (1) | (0.7) | n.m. | n.m. | ||||
| Total Adjusted EBITDA | **** | 1,298.0 | **** | 229.8 | **** | 17.7% |
All values are in US Dollars.
n.m. = not meaningful.
(1) Includes intercompany and intersegment transactions.
We measure our segment profitability using Adjusted EBITDA, which is calculated by making the following adjustments to net income, as further described below under “—Reconciliation of Adjusted EBITDA”: exclusion of net finance expenses; exclusion of current and deferred income taxes; exclusion of depreciation and amortization expenses; exclusion of share of profit of equity-accounted investees, net of tax; exclusion of antitrust agreements expenses; exclusion of donations and social programs expenses; exclusion of impairment of assets; exclusion of restructuring expenses; and exclusion of certain other operating income (expense), net.
16
Brazil Segment
| For the three-month periodended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US, unless otherwise indicated) | |||||||
| Net revenue | 2,873.9 | 296.1 | 10.3% | ||||
| Adjusted EBITDA | 129.9 | 1.2 | 0.9% |
All values are in US Dollars.
Net Revenue. The increase in our Brazil segment net revenue was impacted by (1) a 9.9% increase in sales prices, especially fresh meat in both domestic and export markets; and (2) 0.9% increase in volumes, especially in the export market.
Adjusted EBITDA. Adjusted EBITDA in our Brazil segment remained relatively stable in the three-month period ended March 31, 2025 as compared to the same period in 2024, primarily due to the increase in our net revenue, as mentioned above.
Seara Segment
| For the three-month periodended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US, unless otherwise indicated) | |||||||
| Net revenue | 2,083.1 | 67.4 | 3.2% | ||||
| Adjusted EBITDA | 240.7 | 185.0 | 76.9% |
All values are in US Dollars.
Net Revenue. The increase in our Seara segment net revenue was impacted by (1) an increase of 4.0% in volumes, mainly for chicken in natura in the export market, partially offset by (2) a decrease of 0.8% in the average sales price.
Adjusted EBITDA. Adjusted EBITDA in our Seara segment increased by US$185.0 million, or 76.9%, to US$425.7 million in the three-month period ended March 31, 2025 from US$240.7 million in the same period in 2024, primarily due to the increase in our net revenue and the impact of the depreciation of the Brazilian real compared to the U.S. dollar.
Beef North America Segment
| For the three-month periodended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US, unless otherwise indicated) | |||||||
| Net revenue | 5,581.1 | 840.5 | 15.1% | ||||
| Adjusted EBITDA | (9.8) | 90.7 | 924.0% |
All values are in US Dollars.
n.m. = not meaningful.
NetRevenue. The increase in our Beef North America segment net revenue was impacted by (1) a 10.1% increase in average sales price in both domestic and export markets, and (2) a 4.5% increase in sales volume, mainly in the domestic market.
Adjusted EBITDA. Adjusted EBITDA in our Beef North America segment changed to a loss of US$100.5 million in the three-month period ended March 31, 2025, from a loss of US$9.8 million in the same period in 2024 primarily due to the significant increase in cattle prices. This cost increase was partially offset by the increase in net revenue.
17
Pork USA Segment
| For the three-month periodended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US, unless otherwise indicated) | |||||||
| Net revenue | 1,910.4 | 91.3 | 4.8% | ||||
| Adjusted EBITDA | 313.3 | (66.0) | (21.1)% |
All values are in US Dollars.
Net Revenue. The increase in our Pork USA segment net revenue was impacted by a 6.8% increase in average sales prices driven by an increase in average sales prices in both domestic and export markets.
AdjustedEBITDA. Adjusted EBITDA in our Pork USA segment decreased by US$66.0 million, or 21.1%, to US$247.3 million in the three-month period ended March 31, 2025 from US$313.3 million in the same period in 2024, primarily due to (1) the increase of 3.5% in hog prices, and (2) the smaller fair value of live hogs in the three-month period ended March 31, 2025 compared to the same period in 2024, as the three-month period ended March 31, 2024 includes a US$136 million positive impact from the increase in fair value as hog futures prices increased significantly at the end of March 2024.
Pilgrim’s Pride Segment
| For the three-month periodended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US, unless otherwise indicated) | |||||||
| Net revenue | 4,358.1 | 101.3 | 2.3% | ||||
| Adjusted EBITDA | 500.6 | 159.6 | 31.9% |
All values are in US Dollars.
Net Revenue. The increase in our Pilgrim’s Pride segment net revenue was impacted by a 1.5% increase in average sales prices, especially in the export market, combined with a 0.8% increase in volumes, especially in the domestic market.
Adjusted EBITDA. Adjusted EBITDA in our Pilgrim’s Pride segment increased by US$159.6 million, or 31.9%, to US$660.2 million in the three-month period ended March 31, 2025 from US$500.6 million in the same period in 2024, primarily due to the increase in our net revenue and a reduction in the costs, mainly driven by Europe as a result of lower labor and feed costs, along with a decrease in other operating costs as a result of the restructuring initiatives.
AustraliaSegment
| For the three-month periodended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US, unless otherwise indicated) | |||||||
| Net revenue | 1,446.4 | 175.2 | 12.1% | ||||
| Adjusted EBITDA | 124.0 | 36.4 | 29.4% |
All values are in US Dollars.
Net Revenue. The increase in our Australia segment was impacted by (1) an increase of 6.4% in sales volumes, mainly in the domestic market, and (2) an increase of 5.3% in average sales prices, mainly in the export market.
Adjusted EBITDA. Adjusted EBITDA in our Australia segment increased by US$175.1 million, or 12.1%, to US$160.4 million in the three-month period ended March 31, 2025 from US$124.0 million in the same period in 2024, primarily due to the increase in our net revenue partially offset by the increase in some costs, mainly as a result of higher cattle prices in the beef business.
18
Others Segment
| For the three-month periodended March 31, | Change | % Change | |||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (in millions of US, unless otherwise indicated) | |||||||
| Net revenue | 164.6 | (46.3) | (28.0)% | ||||
| Adjusted EBITDA | 0.0 | 3.6 | n.m. |
All values are in US Dollars.
n.m. = not meaningful.
NetRevenue*.* Our Others segment net revenue in the three-month period ended March 31, 2025 decreased by 28.0% when compared with the same period in 2024.
Adjusted EBITDA. Adjusted EBITDA in our Others segment increased to US$3.6 million in the three-month period ended March 31, 2025 from US$0.0 million in the same period in 2024.
Liquidity and Capital Resources
Our financial condition and liquidity is and will continue to be influenced by a variety of factors, including:
| • | our ability to generate cash flows from operations; |
|---|---|
| • | the level of our outstanding indebtedness and the interest we are obligated to pay on our indebtedness, which<br>affects our net financial results; |
| --- | --- |
| • | prevailing domestic and international interest rates, which affect our debt service requirements;<br> |
| --- | --- |
| • | our ability to continue to borrow funds from financial institutions or to access the capital markets;<br> |
| --- | --- |
| • | our working capital needs, based on our growth plans; |
| --- | --- |
| • | our capital expenditure requirements, which consist primarily of purchasing property, plant and equipment; and<br> |
| --- | --- |
| • | strategic investments and acquisitions. |
| --- | --- |
Our principal cash requirements consist of the following:
| • | the purchase of raw materials, most of which represents the purchase of feed ingredients for the production of<br>chicken and hogs and the purchase of livestock for our processing operations; |
|---|---|
| • | our working capital requirements; |
| --- | --- |
| • | the servicing of our indebtedness; |
| --- | --- |
| • | capital expenditures related mainly to our purchases of property, plant and equipment; |
| --- | --- |
| • | strategic investments, and acquisitions; |
| --- | --- |
| • | dividends and other distributions; and |
| --- | --- |
| • | taxes in connection with our operations. |
| --- | --- |
19
Our main sources of liquidity consist of the following:
| • | cash flows from operating activities; and |
|---|---|
| • | short-term and long-term borrowings. |
| --- | --- |
As of March 31, 2025, our total outstanding indebtedness was US$19,925.4 million, consisting of US$794.9 million of current loans and financings and US$19,130.4 million of non-current loans and financings, representing 59.6% of our total liabilities, which totaled US$33,449.6 million as of March 31, 2025. We believe we have a strong liquidity position and a well-staggered debt maturity profile. As of March 31, 2025, we had cash,cash equivalents and cash margin of US$5,173.0 million. In addition, as of the same date, we are permitted to borrow up to US$3,378.1 million under our revolving credit facilities. The chart below shows our debt amortization schedule, together with our cash and cash equivalents as of March 31, 2025 and our borrowing capacity under our revolving credit facilities as of March 31, 2025.
Debt Amortization Schedule
(in US$ millions)
We believe that our cash and cash equivalents and margin cash balance together with our borrowing capacity under our revolving credit facilities as of March 31, 2025 should be sufficient to meet our outstanding debt requirements through mid-2032. However, this balance and our ability to continue to generate sufficient cash is subject to certain general economic, financial, industry, legislative, regulatory and other factors beyond our control. For more information, see “Risk Factors” in the Prospectus.
Cash Flows
The table below shows our cash flows from operating, investing and financing activities for the periods indicated:
| For the three-month period ended March <br>31, | |||
|---|---|---|---|
| 2025 | 2024 | ||
| (in millions of US) | |||
| Net cash used in operating activities | (235.4) | ||
| Net cash used in investing activities | (272.7) | ||
| Net cash used in financing activities | (699.2) |
All values are in US Dollars.
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| For the three-month period ended March <br>31, | |||
|---|---|---|---|
| 2025 | 2024 | ||
| (in millions of US) | |||
| Effect of exchange rate changes on cash and cash equivalents | 38.8 | ||
| Change in cash and cash equivalents, net | **** | (1,168.5) | |
| Cash and cash equivalents at the beginning of the period | 4,466.5 | ||
| Cash and cash equivalents at the end of the period | **** | 3,298.0 |
All values are in US Dollars.
Operating Activities
Cash flow provided by (used in) operating activities may vary from time to time according to the fluctuation of sales revenues, cost of sales, operating expenses, changes in operating activities, interest paid and received and income tax paid.
Net cash used in operating activities increased by US$319.1 million, to US$554.5 million in the three-month period ended March 31, 2025, from US$235.4 million in the same period in 2024. This change was primarily due to:
| • | an increase in cash consumption of inventories of US$420.4 million, to US$640.9 million in the<br>three-month period ended March 31, 2025, from US$220.5 million in the same period in 2024; |
|---|---|
| • | an increase in income taxes paid of US$206.3 million, to US$234.3 million in the three-month period<br>ended March 31, 2025, from US$28.0 million in the same period in 2024; |
| --- | --- |
| • | an increase in payments relating to DOJ and antitrust agreements of US$139.6 million, to<br>US$139.7 million in the three-month period ended March 31, 2025, from US$0.1 million in the same period in 2024. |
| --- | --- |
This increase in net cash consumption in operating activities was partially offset by:
| • | an increase in net income adjusted for non-cash effects of<br>US$388.2 million, to US$1,553.8 million in the three-month period ended March 31, 2025, from US$1,165.6 million in the same period in 2024. |
|---|
Investing Activities
Cash flow provided by (used in) investing activities is primarily related to: (1) our acquisition of subsidiaries minus net cash at the time of acquisition; (2) our acquisition of property, plant and equipment; (3) our acquisition of intangible assets; and (4) our receipt of payment from the sale of property, plant and equipment.
For the three-month period ended March 31, 2025, net cash used in investing activities totaled US$243.5 million, of which US$264.7 million was cash used in purchases of property, plant and equipment, partially offset by US$21.9 million in cash provided by sales of property, plant and equipment.
For the three-month period ended March 31, 2024, net cash used in investing activities totaled US$272.7 million, of which US$284.1 million was cash used in purchases of property, plant and equipment, partially offset by US$12.0 million in cash provided by sales of property, plant and equipment.
Financing Activities
Cash flow provided by financing activities includes primarily proceeds from new loans and financings and derivatives settled in cash. Cash flow used in financing activities includes primarily principal payments on loans and financings, payments related to derivatives settled in cash, payments for purchase of treasury shares and payments of dividends.
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For the three-month period ended March 31, 2025, net cash used in financing activities totaled US$35.0 million, of which (1) US$1,750.7 million was cash used in payments of loans and financings; (2) US$379.5 million was dividend payments; and (3) US$98.3 million was payments of leasing contracts; which was partially offset by US$2,181.0 million in cash proceeds from loans and financing.
For the three-month period ended March 31, 2024, net cash used in financing activities totaled US$699.2 million, of which US$668.7 million was cash used in payments of loans and financings; which was partially offset by US$70.4 million in cash proceeds from loans and financing.
Indebtedness and Financing Strategy
As of March 31, 2025, our total outstanding indebtedness was US$19,925.4 million, consisting of US$794.9 million of current loans and financings and US$19,130.4 million of non-current loans and financings, representing 59.6% of our total liabilities, which totaled US$33,449.6 million as of March 31, 2025.
As of December 31, 2024, our total outstanding indebtedness was US$19,326.8 million, consisting of US$2,084.2 million of current loans and financings and US$17,242.6 million of non-current loans and financings, representing 59.4% of our total liabilities, which totaled US$32,551.0 million as of December 31, 2024.
Our financing strategy has been and will be, over the next several years, to: (1) extend the average maturity of our outstanding indebtedness, including by refinancing short-term debt through longer-term borrowings and issuing longer-term debt securities, in order to increase our liquidity levels and improve our strategic, financial and operational flexibility; and (2) reduce our financing costs by accessing lower-cost sources of finance, including through the capital markets and export finance.
Based on the profile of our indebtedness as of March 31, 2025 and our track record, we believe we will continue to be able to raise funds in U.S. dollars, euros and reais to meet our financial obligations. We further believe that our capital expenditures during recent years, in addition to capital expenditures that we intend to make in the near future, will allow us to increase our ability to generate cash, to strengthen our credit ratios and to enhance our capacity to meet our financial obligations.
We maintain lines of credit with various financial institutions to finance working capital requirements, and we believe we will continue to be able to obtain additional credit to finance our working capital needs based on our past track record and current market conditions.
Indebtedness Summary and Maturities
The table below sets forth our consolidated loans and financings as of March 31, 2025. A “foreign currency” instrument refers to an instrument whose currency is different from the functional currency of the borrower. A “local currency” instrument refers to an instrument whose currency is the same as the functional currency of the borrower.
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| Type | Average<br>annual interest rate | Currency | Index | Maturity | As of March 31, 2025 |
|---|---|---|---|---|---|
| (in millions of US) | |||||
| Foreign currency: | |||||
| FINIMP – Import Financing | 5.46% | USD, EUR | Euribor | 2025 | |
| Working capital – Dollar | 7.45% | USD | SOFR | 2030 | |
| CRA – Agribusiness Credit Receivable Certificates | 5.36% | USD | — | 2029 | |
| Export Credit Note | 6.39% | USD | SOFR | 2025 | |
| Others | 6.89% | USD | — | ||
| Total foreign currency | |||||
| Local currency: | |||||
| Notes 2.50% JBS USA 2027 | 2.50% | USD | — | 2027 | |
| Notes 5.13% JBS USA 2028 | 5.13% | USD | — | 2028 | |
| Notes 3.00% JBS USA 2029 | 3.00% | USD | — | 2029 | |
| Notes 5.50% JBS USA 2030 | 5.50% | USD | — | 2030 | |
| Notes 3.75% JBS USA 2031 | 3.75% | USD | — | 2031 | |
| Notes 3.00% JBS USA 2032 | 3.00% | USD | — | 2032 | |
| Notes 3.63% JBS USA 2032 | 3.63% | USD | — | 2032 | |
| Notes 5.75% JBS USA 2033 | 5.75% | USD | — | 2033 | |
| Notes 6.75% JBS USA 2034 | 6.75% | USD | — | 2034 | |
| Notes 5.95% JBS USA 2035 | 5.95% | USD | — | 2035 | |
| Notes 4.38% JBS USA 2052 | 4.38% | USD | — | 2052 | |
| Notes 6.50% JBS USA 2052 | 6.50% | USD | — | 2052 | |
| Notes 7.25% JBS USA 2053 | 7.25% | USD | — | 2053 | |
| Notes 6.38% JBS USA 2055 | 6.38% | USD | — | 2055 | |
| Notes 4.25% PPC 2031 | 4.25% | USD | — | 2031 | |
| Notes 3.50% PPC 2032 | 3.50% | USD | — | 2032 | |
| Notes 6.25% PPC 2033 | 6.25% | USD | — | 2033 | |
| Notes 6.88% PPC 2034 | 6.88% | USD | — | 2034 | |
| Working capital – Euros | 3.78% | EUR | Euribor | 2025 - 28 | |
| Credit note – export | 13.48% | BRL | CDI | 2025 - 30 | |
| CDC – Direct credit to consumers | 15.29% | BRL | — | 2028 | |
| Livestock financing – Pre | 11.01% | BRL | — | 2025 | |
| CRA – Agribusiness Credit Receivable Certificates | 6.85% | BRL | CDI and IPCA | — | |
| Others | 6.63% | Several | Several | — | |
| Total local currency | |||||
| Total | |||||
| Breakdown: | |||||
| Current loans and financings | |||||
| Non-current loans and financings | |||||
| Total |
All values are in US Dollars.
* Balances classified as current which have their maturities between April 1, 2025 and March 31, 2026.
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The table below sets forth the payment schedule of our consolidated loans and financings in the total amount of US$19,925.4 million, as of March 31, 2025:
| As of March 31, 2025 | |||
|---|---|---|---|
| (in millions ofUS) | (%) | ||
| Total current | **** | 4.0% | |
| 2026 | 0.1% | ||
| 2027 | 5.1% | ||
| 2028 | 5.0% | ||
| 2029 | 3.2% | ||
| 2030 | 6.9% | ||
| After 2030 | 75.7% | ||
| Total non-current | **** | 96.0% | |
| Total | **** | 100.00% |
All values are in US Dollars.
Certain of our indebtedness is secured or guaranteed by the following: (1) receivables and inventories; (2) letters of credit; (3) guarantees by parent companies or subsidiaries; and (4) mortgages and liens on real estate, equipment and other items.
For a description of the material debt agreements of JBS S.A. and its subsidiaries, see “—Description of MaterialIndebtedness” below.
Capital Expenditures
We make capital expenditures primarily for acquisitions, strategic investments as well as equipment purchases and maintenance, expansions and modernization of our facilities including: (1) expansion and modernization of our Seara plants; (2) buildings and earthwork for our facilities in the United States; (3) investments in our new business (Novos Negócios) units and (4) the construction of a new Italian specialties **** and pepperoni plant in Columbia, South Carolina.
Our capital expenditures for the three-month period ended March 31, 2025 totaled US$264.7 million in cash used in the purchase of property, plant and equipment, of which 70% were investments in facilities and 30% were investments in capacity expansion.
The source of cash for our capital expenditures generally tends to be our own cash flows.
Description of Material Indebtedness
The following summarizes our material indebtedness as of the date of this MD&A, unless otherwise noted.
Fixed-Rate Notes
We have the following series of material, fixed-rate debt securities in the international capital markets as of March 31, 2025.
| Security | Outstanding Principal Amount | ||
|---|---|---|---|
| (in millions) | |||
| JBS USA 2.500% Notes due 2027 (1)(2) | US1,000.00 | July 2027 | |
| JBS USA 5.125% Notes due 2028 (1) | US899.7 | February 2028 | |
| JBS USA 3.000% Notes due 2029 (1) | US600.0 | February 2029 | |
| JBS USA 5.500% Notes due 2030 (1)(4) | US1,249.7 | January 2030 |
All values are in US Dollars.
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| Security | Outstanding Principal Amount | ||
|---|---|---|---|
| (in millions) | |||
| JBS USA 3.750% Notes due 2031 (1) | US493.0 | December 2031 | |
| JBS USA 3.625% Sustainability-Linked Notes due 2032 (1)(2) | US968.8 | January 2032 | |
| JBS USA 3.000% Sustainability-Linked Notes due 2032 (1) | US1,000.0 | May 2032 | |
| JBS USA 5.750% Notes due 2033 (1) | US1,661.7 | April 2033 | |
| JBS USA 6.750% Notes due 2034 (1) | US1,507.0 | March 2034 | |
| JBS USA 5.950% Notes due 2035 (1) | US1,000.0 | April 2035 | |
| JBS USA 4.375% Notes due 2052 (1) | US900.0 | February 2052 | |
| JBS USA 6.500% Notes due 2052 (1) | US1,548.0 | December 2052 | |
| JBS USA 7.250% Notes due 2053 (1) | US900.0 | November 2053 | |
| JBS USA 6.375% Notes due 2055 (1) | US750.0 | February 2055 | |
| PPC 4.250% Sustainability-Linked Notes due 2031 (3) | US853.7 | April 2031 | |
| PPC 3.500% Notes due 2032 (3) | US900.0 | March 2032 | |
| PPC 6.250% Notes due 2033 (3) | US978.4 | July 2033 | |
| PPC 6.875% Notes due 2034 (3) | US500.0 | May 2034 |
All values are in US Dollars.
| (1) | The issuers of these notes are JBS USA, JBS USA Food Company and JBS USA Foods Group Holdings (formerly known as<br>JBS Luxembourg Company S.à r.l.), and these notes are fully and unconditionally guaranteed by JBS S.A. and certain other direct and indirect parent companies of JBS USA. |
|---|---|
| (2) | In August, 2022, JBS USA launched offers to exchange any and all outstanding (i) 2.500% Senior Notes due 2027<br>and (ii) 3.625% Sustainability-Linked Senior Notes due 2032 issued by JBS USA Food Company (originally issued by JBS Finance Luxembourg S.à r.l.) and guaranteed by JBS S.A. for new notes to be issued by JBS USA, JBS USA Food Company and JBS<br>USA Foods Group Holdings (formerly known as JBS Luxembourg Company S.à r.l.) and guaranteed by JBS S.A. and certain other direct and indirect parent companies of JBS USA and (2) cash. JBS USA received tenders with respect to<br>approximately 97% of the aggregate principal amount of the 2.500% Senior Notes due 2027 and 93% of the aggregate principal amount of the 3.625% Sustainability-Linked Senior Notes due 2032. The outstanding principal amount of these two series of<br>notes set forth in the table above includes (1) US$8.6 million in aggregate principal amount of the 2.500% Senior Notes due 2027 and (2) US$25.4 million in aggregate principal amount of the 3.625% Sustainability-Linked Senior<br>Notes due 2032 that were not tendered in the exchange offers. The issuer and the guarantor of the notes that were not tendered in the exchange offers remain JBS USA Food Company and JBS S.A., respectively. |
| --- | --- |
| (3) | These notes were issued by PPC and are guaranteed by Pilgrim’s Pride Corporation of West Virginia, Inc.,<br>Gold’n Plump Poultry, LLC, Gold’n Plump Farms, LLC, and JFC LLC. |
| --- | --- |
| (4) | On May 1, 2025, JBS USA Food Company redeemed US$850.0 million aggregate principal amount of its<br>5.500% Senior Notes due 2030. See “Recent Developments—Partial Redemption of JBS USA’s 5.500% Senior Notes due 2030.” |
| --- | --- |
The indentures governing these notes contain negative covenants that limit JBS USA or PPC, as applicable, and their respective significant restricted subsidiaries that guarantee these notes from creating liens on future Principal Property (as defined in the applicable indentures governing each series of notes) to secure debt and entering into certain sale and leaseback transactions. In addition, the indentures governing these notes restrict JBS USA’s or PPC’s, as applicable, ability to merge, consolidate, sell or otherwise dispose of all or substantially all of their respective assets. These covenants are subject to certain exceptions and qualifications, including that as of the date of this MD&A, there are no Principal Properties. For more information about these covenants and the indentures governing each series of these notes, see Exhibits 4.5 through 4.56 to the Form F-4. We are currently in compliance with the covenants under the indentures governing our notes.
Sustainability-Linked Bonds
As described above, we have issued three series of fixed-rate sustainability-linked debt securities in the international capital markets, as follows:
| • | JBS USA’s 3.625% Sustainability-Linked Notes due January 2032 in an aggregate principal amount of<br>US$968.8 million; |
|---|---|
| • | JBS USA’s 3.000% Sustainability-Linked Notes due May 2032 in an aggregate principal amount of<br>US$1.0 billion; and |
| --- | --- |
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| • | PPC’s 4.250% Sustainability-Linked Notes due April 2031 in an aggregate principal amount of<br>US$853.7 million. |
|---|
As further described below, each series of sustainability-linked notes contains certain sustainability performance targets of JBS S.A., JBS USA or PPC that if unsatisfied will result in an increase in the interest rate payable on the respective notes. The applicable sustainability performance targets are specifically tailored to the business, operations and capabilities of JBS S.A., JBS USA and PPC and do not easily lend themselves to benchmarking against sustainability performance targets that may be used by other companies. In connection with these notes, none of JBS S.A., JBS USA or PPC has committed to (i) allocate the net proceeds specifically to projects or business activities meeting sustainability criteria or (ii) be subject to any other limitations or requirements that may be associated with green instruments, social instruments or sustainability instruments or other financial instruments in any particular market.
Furthermore, as there is currently no generally accepted definition (legal, regulatory or otherwise) of, nor market consensus as to what criteria a particular financial instrument must meet to qualify as, “green,” “social,” “sustainable” or “sustainability-linked” (and, in addition, the requirements of any such label may evolve from time to time), no assurance was or could be given to investors in these notes or to any other party by the issuers or the guarantors of the notes or any second party opinion providers or any qualified provider of third-party assurance or attestation services appointed by each company (an “external verifier”) that the notes will meet any or all investor expectations regarding the sustainability performance target qualifying as “green,” “social,” “sustainable” or “sustainability-linked,” or satisfy an investor’s requirements or any future legal, quasi-legal or other standards for investment in assets with sustainability characteristics, or that any adverse social and/or other impacts will not occur in connection with JBS S.A., JBS USA and/or PPC striving to achieve the sustainability performance target or the use of the net proceeds from the offering of notes.
In addition, no assurance or representation was given by the issuers and guarantors of the notes, any second party opinion providers or any external verifier as to the suitability or reliability for any purpose whatsoever of any opinion, report or certification of any third party in connection with the offering of the notes or the respective sustainability performance targets to fulfill any green, social, sustainability, sustainability-linked and/or other criteria. Any such opinion, report or certification is not, nor shall it be deemed to be, incorporated in and/or form part of this MD&A.
There can be no assurance of the extent to which JBS S.A., JBS USA and/or PPC will be successful in significantly decreasing their greenhouse gas emissions. Although a failure to achieve the applicable sustainability performance targets will give rise to an upward adjustment of the applicable interest rates, any such failure would not be an event of default under the notes, nor would such failure result in a requirement to redeem or repurchase such securities.
See “Risk Factors—Risks Relating to Our Business and Industries—Failure by us to achieve our sustainability performance targets may result in increased interest payments under future financings and harm to our reputation” in the Prospectus.
JBS USA’s 3.625% Sustainability-Linked Notes due January 2032
Under the terms of JBS USA’s 3.625% Sustainability-Linked Notes due January 2032, if JBS S.A. does not satisfy the sustainability performance target it established under its Sustainability-Linked Framework adopted in June 2021 (the “JBS S.A. June 2021 Sustainability-Linked Framework”) to reduce its Global Greenhouse Gas Emissions Intensity by 16.364% by December 31, 2025, based on linear annual improvements against the 2019 baseline year, and provide confirmation thereof to the trustee together with a related confirmation by an external verifier at least 30 days prior to January 15, 2027, the interest rate payable on the notes will be increased by 25 basis points from and including January 15, 2027 to and including the maturity date of January 15, 2032. For more information about the JBS S.A. June 2021 Sustainability-Linked Framework, including the sustainability performance target, see “Information about JBS S.A.—Climate Change Reduction Goals—Sustainability-Linked Frameworks—JBS S.A. June 2021 Sustainability-Linked Framework” in the Prospectus.
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JBS USA’s 3.000% Sustainability-Linked Notes due May 2032
Under the terms of JBS USA’s 3.000% Sustainability-Linked Notes due May 2032, if JBS USA does not satisfy the sustainability performance target it established under its Sustainability-Linked Framework adopted in November 2021 (the “JBS USA Sustainability-Linked Framework”) to reduce its Global Greenhouse Gas Emissions Intensity by 20.30% by December 31, 2026, based on linear annual improvements against the 2019 baseline year, and provide confirmation thereof to the trustee together with a related confirmation by an external verifier within six months after December 31, 2026, the interest rate payable on the notes will be increased by 25 basis points from and including November 15, 2027 to and including the maturity date of May 15, 2032. For more information about the JBS USA Sustainability-Linked Framework, including the sustainability performance target, see “Information about JBS S.A.—Climate Change Reduction Goals—Sustainability-Linked Frameworks— JBS USA Sustainability-Linked Framework” in the Prospectus.
PPC’s 4.250% Sustainability-Linked Notes due April 2031
Under the terms of PPC’s 4.250% Sustainability-Linked Notes due April 2031, if PPC does not satisfy the sustainability performance target it established under the its Sustainability-Linked Framework adopted in March 2021(the “PPC Sustainability-Linked Framework”) to reduce its Global Greenhouse Gas Emissions Intensity by 17.679% by December 31, 2025, based on linear annual improvements against the 2019 baseline year, and provide confirmation thereof to the trustee together with a related confirmation by an external verifier at least 30 days prior to October 15, 2026, the interest rate payable on the notes will be increased by 25 basis points from and including October 15, 2026 to and including the maturity date of April 15, 2031. For more information about the PPC Sustainability-Linked Framework, including the sustainability performance target, see “Information about JBS S.A.—Climate Change Reduction Goals—Sustainability-Linked Frameworks— PPC Sustainability-Linked Framework” in the Prospectus.
JBS S.A. Revolving Credit Facility
On August 5, 2022, JBS S.A. and its subsidiaries JBS Investments Luxembourg S.à r.l., Seara Meats B.V. and Seara Alimentos Ltda., as borrowers and guarantors, entered into a US$450.0 million revolving unsecured credit facility (the “JBS S.A. Revolving Credit Facility”). Any borrowing made by a borrower will be guaranteed by the other three obligors. The capacity of JBS S.A. Revolving Credit Facility could be increased up to US$500.0 million, with an accordion expansion feature, which was put into effect in November 2024, after obtaining lender commitments. The JBS S.A. Revolving Credit Facility initially matured in August 2025 and included two one-year extensions that were exercised at the borrowers’ option and duly accepted by all counterparties. Pursuant to the terms of the JBS S.A. Revolving Credit Facility, the interest rate under any borrowings will accrue at an adjusted secured overnight financing rate (“SOFR”), plus applicable margins that are based on the corporate rating of JBS S.A. As of March 31 2025, there were no outstanding borrowings under the JBS S.A. Revolving Credit Facility.
The JBS S.A. Revolving Credit Facility contains customary representations, covenants and events of default. The JBS S.A. Revolving Credit Facility contains negative covenants that restrict the borrowers and guarantors thereunder and significant restricted subsidiaries from creating liens on their property or assets to secure debt and entering into certain sale and leaseback transactions. In addition, the JBS S.A. Revolving Credit Facility restrict the borrowers’ and guarantors’ ability to merge, consolidate, sell or otherwise dispose of all or substantially all of their respective assets. These covenants are subject to certain exceptions and qualifications. For more information about these covenants and the JBS S.A. Revolving Credit Facility, see Exhibit 10.1 to the Form F-4. We are currently in compliance with the covenants under the JBS S.A. Revolving Credit Facility.
JBS USA Senior Unsecured Revolving Facility
On November 1, 2022, JBS USA, JBS USA Food Company, JBS USA Finance, Inc. (prior to its dissolution), JBS Australia and JBS Canada, as borrowers, entered into an unsecured revolving credit facility (as amended by that certain First Amendment, dated as of July 28, 2023, that certain Second Amendment, dated as of January 19, 2024, and that certain Third Amendment, dated as of May 20,2024, the “JBS USA Senior Unsecured Revolving Facility”), with Bank of Montreal, as administrative agent, and the lender parties thereto. The JBS USA Senior Unsecured Revolving Facility provides for a revolving credit commitment in an amount up to US$1,500.0 million with a maturity in 2027, with two one-year extension options at each lender’s discretion. The facility is available in two tranches of US$800.0 million and US$700.0 million and in multiple currencies, subject to sub-limits with respect to any amounts borrowed in currencies other than amounts borrowed in Dollars. These loans bear interest at the applicable benchmark rate or the prime rate plus applicable margins that are based on the corporate credit or family rating of JBS USA.
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Guarantees. Subject to the JBS USA Collateral Cure (as described below), borrowings are guaranteed by JBS S.A., certain other direct or indirect parent companies of JBS USA, each of the borrowers under the JBS USA Senior Unsecured Revolving Facility (subject to certain exceptions) and any subsidiary of JBS USA that guarantees material indebtedness of any borrower or any subsidiary that is a guarantor. Following a JBS USA Collateral Cure, the direct parent entity of each borrower and each wholly-owned subsidiary of each borrower is required to become a guarantor (other than, in each case, certain excluded subsidiaries that are not required to become a guarantor).
Covenants. The JBS USA Senior Unsecured Revolving Facility contains customary representations and warranties, covenants and events of default. The JBS USA Senior Unsecured Revolving Facility imposes certain limitations and restrictions on JBS USA and its restricted subsidiaries, including, without limitation (1) restricting any restricted subsidiary of JBS USA that is not a borrower or guarantor of the JBS USA Senior Unsecured Revolving Facility from incurring additional debt, subject to certain significant exceptions and (2) creating liens, entering into certain transactions with affiliates and consolidating or merging, in each case, subject to certain significant exceptions. In addition, the JBS USA Senior Unsecured Revolving Facility and subject to the JBS USA Collateral Cure described below, includes a financial maintenance covenant that requires compliance with a maximum total debt to capitalization of 55.0%, which shall be tested at the end of each fiscal quarter of the borrowers (the “JBS USA Financial Maintenance Covenant”). For more information about these covenants and the JBS USA Senior Unsecured Revolving Facility, see Exhibits 10.2 and 10.3 to the Form F-4. We are currently in compliance with the covenants under the JBS USA Senior Unsecured Revolving Facility.
Collateral Cure. After the end of any fiscal quarter, the borrowers may give notice that they will not be in compliance with the JBS USA Financial Maintenance Covenant and instead may elect to cause the borrowers and each subsidiary guarantor, in each case organized in the United States, and the direct parent entity of each borrower to provide security interests in the collateral that secured the prior secured revolving credit facility (the “JBS USA Collateral Cure”). From and after the date of the JBS USA Collateral Cure, the JBS USA Financial Maintenance Covenant will no longer be in effect and availability under the JBS USA Senior Unsecured Revolving Facility will be limited and subject to collateral coverage utilizing a 75% advance rate on U.S. receivables and a 50% advance rate on U.S. inventory, subject to certain exceptions.
As of March 31, 2025, JBS USA had outstanding letters of credit and available borrowings under the revolving credit commitment of US$199.3 million and US$1,499.8 million, respectively. There were no outstanding borrowings as of March 31, 2025.
JBS USA Commercial Paper Program
On December 2, 2024, we launched our commercial paper program. The program allows JBS USA, JBS USA Food Company and JBS USA Foods Group Holdings to issue up to US$1.0 billion in aggregate principal amount of short-term, unsecured notes without registration under the Securities Act. As of March 31, 2025, there were no outstanding borrowings under the Commercial Paper Program.
PPC Credit Facility
On October 4, 2023, PPC and certain of PPC’s subsidiaries entered into a Revolving Syndicated Facility Agreement (the “PPC Revolving Credit Facility”) with CoBank, ACB as administrative agent and collateral agent, and the other lenders party thereto. The PPC Revolving Credit Facility provides for a revolving loan commitment of US$850.0 million with a maturity in 2028. Outstanding borrowings under the PPC Revolving Credit Facility bear interest at a per annum rate equal to either SOFR or the prime rate plus applicable margins based on PPC’s credit ratings.
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The PPC Revolving Credit Facility is not guaranteed by any of PPC’s subsidiaries. Following the PPC Collateral Cure, each wholly-owned subsidiary of each borrower is required to become a guarantor (other than certain excluded subsidiaries that are not required to become a guarantor). The PPC Revolving Credit Facility contains customary representations and warranties, covenants and events of default. The PPC Revolving Credit Facility imposes certain limitations and restrictions on PPC and its restricted subsidiaries, including, without limitation on (1) liens, (2) indebtedness, (3) sales and other dispositions of assets, (4) dividends, distributions, and other payments in respect of equity interest, (5) investments, and (6) voluntary prepayments, redemptions or repurchases of junior debt, in each case, subject to certain exceptions which can be material and certain of such clauses only apply to PPC upon the occurrence of certain triggering events. In addition, the PPC Revolving Credit Facility and subject to the PPC Collateral Cure, includes a financial maintenance covenant that requires PPC not to permit its interest coverage ratio to be less than 3.50:1.00, which shall be tested at the end of each fiscal quarter of PPC (the “PPC Financial Maintenance Covenant”).
After the end of any fiscal quarter, PPC may give notice that they will not be in compliance with the PPC Financial Maintenance Covenant and instead may elect to cause the borrowers and each subsidiary guarantor to provide security interests in the collateral that secured PPC’s prior secured credit facility (the “PPC Collateral Cure”). From and after the date of the PPC Collateral Cure, the PPC Financial Maintenance Covenant will no longer be in effect and availability under the PPC Revolving Credit Facility will be limited and subject to collateral coverage utilizing a 75% advance rate on U.S. receivables and a 50% advance rate on U.S. inventory, subject to certain exceptions.
For more information about these covenants and the PPC Revolving Credit Facility, see Exhibit 10.4 to the Form F-4. We are currently in compliance with the covenants under the PPC Revolving Credit Facility.
As of March 31, 2025, PPC had outstanding letters of credit and available borrowings under the revolving credit commitment of US$24.2 million and US$825.8 million, respectively. There were no outstanding borrowings as of March 31, 2025.
Agribusiness CreditReceivable Certificates (Certificados de Recebíveis do Agronegócio)
JBS S.A.
From October 2019 through May 2024, JBS S.A. issued several series of non-convertible unsecured debentures through private placements in Brazil, with maturities ranging from 2024 until 2044. These debentures are denominated in Brazilian reais and bear interest at various rates, with an annual average interest rate of 6.90% as of March 31, 2025. A larger part of these debentures have their principal amount adjusted according to the Brazilian inflation – IPCA (Índice Nacional de Preços ao Consumidor Amplo). These debentures underlie the securitization of agribusiness receivables in Brazil through the issuance of agribusiness receivables certificates (Certificados de Recebíveis do Agronegócio) (“CRAs”). The net proceeds from the issuances of these debentures have been used primarily to acquire cattle, natural products and other inputs necessary for the processing or industrialization of bovine cattle, including the slaughter, preparation of by-products, and the manufacturing of meat products from the primary slaughter process mentioned above, as well as the sale of the resulting products and by-products of such process, including exportation, intermediation, storage, and transportation of the products, by-products, and derivatives. As of March 31, 2025, the outstanding aggregate principal amount of the CRAs was US$1,169.9 million.
Seara
From October 2024 through March 2025, several series of CRAs representing rural financial product notes (Cédulas de Produto Rural Financeiras – CPR-Financeiras) issued by Seara and guaranteed by JBS S.A. were issued, with maturities ranging from 2029 until 2055. These rural financial product notes are denominated in Brazilian reais and bear interest at various rates, with an annual average interest rate of 6.9% as of March 31, 2025. Seara used the net proceeds from the issuances of the rural financial product notes primarily to acquire raw
29
materials, namely corn in natura, in the ordinary course of its business. As of March 31, 2025, the outstanding aggregate principal amount of the CRAs was US$383.7 million. The agreements governing these CRAs contain customary covenants and events of default; however, they do not include any financial covenants.
On May 9, 2025, Seara filed with the CVM a new prospectus for an issuance of CRAs to qualified investors in Brazil an aggregate principal amount between R$800.0 million and R$1,000.0 million, in three series maturing in 2035, 2045 and 2055. These CRAs will represent rural financial product notes (Cédulas de Produto RuralFinanceiras—CPR-Financeiras) to be issued by Seara and guaranteed by JBS S.A. Seara plans to use the net proceeds from the issuances of the rural financial product notes primarily to acquire raw materials, namely cornin natura, in the ordinary course of its business. The book-building process, which will determine the final principal amounts and interest rates for each series is scheduled to be concluded on June 4, 2025.
Other Debt
For more information about our consolidated indebtedness, including our other, lower value debt instruments and facilities, see “—Contractual Obligations” below, note 15 to JBS S.A.’s unaudited interim financial statements, which are included in the Form 6-K, and note 15 to JBS S.A.’s audited financial statements, which are included in the Prospectus.
Contractual Obligations
The following table summarizes our significant loans and financings, including estimated interest thereon, payables related to purchases of assets, finance lease obligations, operating lease obligations and other purchase obligations as of the dates indicated that have an impact on our liquidity.
| As of March 31, 2025 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Contractual obligations | Less than 1 year | Between<br>1 and 3<br>years | Between<br>4 and 5<br>years | More<br>than 5<br>years | Total | ||||
| (in millions of US) | |||||||||
| Trade accounts payable and supply chain finance | — | — | — | 5,844.0 | |||||
| Loans and financing | 2,017.3 | 2,019.9 | 15,093.2 | 19,925.4 | |||||
| Estimated interest on loans and financings (1) | 2,812.0 | 1,846.5 | 9,003.8 | 14,154.9 | |||||
| Derivatives liabilities (assets) | 100.3 | — | — | 384.5 | |||||
| Payment of leases | 542.6 | 233.4 | 622.4 | 1,745.8 | |||||
| Other liabilities | 14.7 | — | — | 58.8 |
All values are in US Dollars.
| (1) | Includes interest on all loans and financing outstanding. Payments are estimated for variable rate and variable<br>term debt based on effective interest rates as of March 31, 2025. Payments in foreign currencies are estimated using the March 31, 2025 exchange rate. |
|---|
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risks arising from our normal business activities. These market risks, which are beyond our control, primarily involve the possibility that changes in interest rates, inflation, exchange rates and commodity prices will adversely affect the value of our financial assets and liabilities or future cash flows and earnings.
Our risk management strategy is designed to mitigate the financial impact derived from our exposure to market risks, and accordingly, we have used and may continue to use interest rate, exchange rates and commodity derivative instruments, cash and receivables to mitigate these market risks. Our hedging activities are governed by a financial risk management department, which follows corporate governance standards and guidelines for our company that are established by our risk management committee and approved by our board of directors.
For more information about our risk management, see note 26 to JBS S.A.’s unaudited interim financial statements, which are included in the Form 6-K, and note 27 to JBS S.A.’s audited financial statements, which are included in the Prospectus.
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Research and Development, Patents and Licenses, Etc.
Our global innovation teams collaborate to share trends, solutions, and technological advancements, leveraging collective expertise to drive category growth. With a diverse product portfolio, JBS aims to deliver high-quality offerings tailored to evolving customer needs and consumer preferences. Investments in cultivated protein are central to our strategic vision. In 2021, we entered the cultured protein market with the acquisition of BioTech Foods in Spain. Additionally, the upcoming JBS Biotech Innovation Centre in Santa Catarina will be Brazil’s largest research facility dedicated to food biotechnology. Our expansion into plant-based proteins is exemplified by Seara’s Incrível and the acquisition of Vivera Topholding BV, which produces and sells plant-based protein products in Europe.
Initiatives such as Seara’s Innovation Hub and Friboi’s Meat Technology and Study Center (Cetec) reflect our commitment to product quality and innovation. Through in-depth analysis of the entire production chain and continuous research, we adapt to shifting consumer expectations. In partnership with Colorado State University, we established the JBS Global Food Innovation Center, advancing food safety, meat sciences, and animal welfare practices. Furthermore, JBS USA makes significant investments in technology and innovation to uphold world-class quality standards, exemplified by the transition to zero-trim beef products. Meanwhile, Pilgrim’s Europe integrates advanced technologies, including Internet of Things (IoT) devices, to enhance operational efficiencies and predictive maintenance.
Trend Information
The following list sets forth, in our view, the most important trends, uncertainties and events that are reasonably likely to continue to have a material effect on our revenues, income from operations, profitability, liquidity and capital resources, or that may cause reported financial information to be not necessarily indicative of future operating results or financial condition:
| • | global economic conditions; |
|---|---|
| • | Brazilian economic environment; |
| --- | --- |
| • | effect of level of indebtedness and interest rates; |
| --- | --- |
| • | effect of the levels of sales of fresh and processed products in the domestic market on our results of<br>operations; |
| --- | --- |
| • | effect of the levels of exports of fresh and processed products on our results of operations;<br> |
| --- | --- |
| • | fluctuations in domestic market prices of fresh and processed products can significantly affect our operating<br>revenues; |
| --- | --- |
| • | effects of fluctuations in export prices of fresh and processed products on operating revenues;<br> |
| --- | --- |
| • | effects of the variation of prices for the purchase of raw materials on our costs of goods sold; and<br> |
| --- | --- |
| • | effects of fluctuations in currency exchange rates. |
| --- | --- |
For more information, see “—Principal Factors Affecting our Financial Condition and Results of Operations” above.
Critical Accounting Estimates
The presentation of our financial condition and results of operation in accordance with IFRS – Accounting Standards and the disclosures related to judgements and estimates can be found in note 2.6 to JBS S.A.’s audited financial statements, which are included in the Prospectus.
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Recent Accounting Pronouncements
Certain new and amended accounting standards and interpretations have been adopted by JBS S.A. and are described in note 2.1 to JBS S.A.’s unaudited interim financial statements, which are included in the Form 6-K, and note 2.5 to JBS S.A.’s audited financial statements, which are included in the Prospectus.
Reconciliation of Adjusted EBITDA
We have disclosed Adjusted EBITDA in this MD&A, which is a non-GAAP financial measure. Adjusted EBITDA is used as a measure of our segments performance by our management and should not be considered as a measure of financial performance in accordance with IFRS – Accounting Standards. You should rely on non-GAAP financial measures in a supplemental manner only in making your investment decision. There is no standard definition of non-GAAP financial measures, and JBS S.A.’s definitions may not be comparable to those used by other companies.
Adjusted EBITDA is calculated by making the following adjustments to net income, as further described below: exclusion of net finance expenses; exclusion of current and deferred income taxes; exclusion of depreciation and amortization expenses; exclusion of share of profit of equity-accounted investees, net of tax; exclusion of antitrust agreements expenses; exclusion of donations and social programs expenses; exclusion of J&F Leniency expenses refund; exclusion of impairment of assets; exclusion of restructuring expenses; exclusion of tax payments and installments; exclusion of Rio Grande do Sul losses; exclusion of extemporaneous litigation expenses; exclusion of reversal of tax credits; and exclusion of certain other operating income (expense), net.
The use of Adjusted EBITDA instead of net income has limitations as an analytical tool, including the following:
| • | Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs;<br> |
|---|---|
| • | Adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest or<br>principal payments, on debt; |
| --- | --- |
| • | Adjusted EBITDA does not reflect income tax expense or the cash requirements to pay taxes; |
| --- | --- |
| • | Although depreciation and amortization are non-cash charges, the assets<br>being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; |
| --- | --- |
| • | Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or<br>contractual commitments; and |
| --- | --- |
| • | Adjusted EBITDA includes adjustments that represent cash expenses or that represent non-cash charges that may relate to future cash expenses, and some of these expenses are of a type that are expected to be incurred in the future, although the amount of any such future charge cannot be predicted.<br> |
| --- | --- |
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Adjusted EBITDA is reconciled to net income (loss) as follows:
| For the three-month period endedMarch 31, | For the year ended December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | 2023 | 2022 | ||||||||||
| (in millions of US) | ||||||||||||||
| Net income (loss) | 364.9 | 1,967.6 | (131.7 | ) | 3,143.5 | |||||||||
| Income tax and social contribution taxes – current and deferred | 2.8 | 743.4 | (128.0 | ) | 410.0 | |||||||||
| Net finance expense | 348.7 | 1,669.8 | 1,353.4 | 1,241.7 | ||||||||||
| Depreciation and amortization expenses | 544.5 | 2,189.5 | 2,149.1 | 1,907.9 | ||||||||||
| Share of profit of equity-accounted investees, net of tax | ) | 6.5 | (2.9 | ) | (9.5 | ) | (11.8 | ) | ||||||
| Antitrust agreements expenses (a) | 4.7 | 253.7 | 102.5 | 101.4 | ||||||||||
| Donations and social programs expenses (b) | 9.8 | 22.5 | 18.2 | 23.9 | ||||||||||
| J&F Leniency expenses refund (c) | — | — | — | (93,8 | ) | |||||||||
| Impairment of assets (d) | — | — | 26.3 | 17.4 | ||||||||||
| Restructuring expenses (e) | 16.0 | 95.6 | 52.2 | — | ||||||||||
| Tax payments and installments (f) | — | 81.8 | — | — | ||||||||||
| Rio Grande do Sul losses (g) | — | 19.3 | — | — | ||||||||||
| Extemporaneous litigation expenses (h) | — | 61.0 | — | — | ||||||||||
| Reversal of tax credits (i) | — | 58.7 | — | — | ||||||||||
| Other operating income (expense), net (j) | 0.0 | 32.0 | 25.5 | (18.3 | ) | |||||||||
| Adjusted EBITDA | **** | **** | 1,298.0 | **** | **** | 7,191.9 | **** | **** | 3,457.9 | **** | **** | 6,722.0 | **** | |
| Adjusted EBITDA by segment: | ||||||||||||||
| Brazil | 129.9 | 965.0 | 469.3 | 468.9 | ||||||||||
| Seara | 240.7 | 1,538.6 | 364.5 | 896.7 | ||||||||||
| Beef North America | ) | (9.8 | ) | 247.3 | 114.2 | 2,081.7 | ||||||||
| Pork USA | 313.3 | 1,071.2 | 526.9 | 756.3 | ||||||||||
| Pilgrim’s Pride | 500.6 | 2,703.4 | 1,536.0 | 2,084.6 | ||||||||||
| Australia | 124.0 | 664.3 | 454.7 | 443.9 | ||||||||||
| Others | 0.0 | 3.5 | (5.2 | ) | (7.9 | ) | ||||||||
| Total reportable segments | **** | **** | 1,298.7 | **** | **** | 7,193.2 | **** | **** | 3,460.4 | **** | **** | 6,724.2 | **** | |
| Eliminations (k) | (0.7 | ) | (1.3 | ) | (2.6 | ) | (2.2 | ) | ||||||
| Adjusted EBITDA | **** | **** | 1,298.0 | **** | **** | 7,191.9 | **** | **** | 3,457.9 | **** | **** | 6,722.0 | **** |
All values are in US Dollars.
| (a) | Refers to antitrust agreements entered into by JBS USA and its subsidiaries. For more information, see<br>“Information about JBS S.A.—Legal Proceedings” in the Prospectus. |
|---|---|
| (b) | Refers to donations made to (i) the Instituto J&F for improvements to the school’s building, and<br>(ii) the JBS Fund for The Amazon, a fund established by JBS S.A. to finance and support innovative, long-term initiatives that build on JBS S.A.’s legacy of conservation and sustainable development in the Amazon biome.<br> |
| --- | --- |
| (c) | Refers to the amount that J&F agreed to pay to JBS S.A. in connection with the settlement agreement between<br>the parties to Arbitration Proceeding No. 186/21, net of PIS/COFINS social contribution tax. For more information, see “Related Party Transactions—J&F Settlement Agreement” in the Prospectus. |
| --- | --- |
| (d) | Refers to the impairment of assets related to Planterra’s plant on December 31, 2023.<br> |
| --- | --- |
| (e) | Refers to multiple restructuring initiatives, primarily those in our indirect subsidiary PPC, which are<br>registered as other expenses, as well as other non-significant restructuring projects that are registered as general and administrative expenses. |
| --- | --- |
| (f) | Refers to the special program for payment of tax processes with exemption from fines and reduction of interest.<br> |
| --- | --- |
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| (g) | Refers to the loss incurred as a result of the floods that occurred in the Brazilian State of Rio Grande do Sul.<br> |
|---|---|
| (h) | Refers to extemporaneous litigation arising from debts of companies acquired by the JBS Group and recognizes<br>these settlement expenses within general and administrative. |
| --- | --- |
| (i) | Refers to the reversal of ICMS credits on sales operations disallowed in the Brazilian State of Santa Catarina.<br> |
| --- | --- |
| (j) | Refers to various adjustments, mainly outside of Brazil, such as expenses related to acquisitions and insurance<br>indemnities, among others. |
| --- | --- |
| (k) | Includes intercompany and intersegment transactions. |
| --- | --- |
Cautionary Statement Regarding Forward-Looking Statements
This MD&A includes statements reflecting assumptions, expectations, intentions or beliefs about future events that are intended as “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. All statements included in this MD&A, other than statements of historical fact, that address activities, events or developments that we or our management expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements represent our reasonable judgment on the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “project,” “forecast,” “plan,” “may,” “will,” “should,” “could,” “expect” and other words of similar meaning. In particular, these include, but are not limited to, statements of our current views and estimates of future economic circumstances, industry conditions in domestic and international markets and our performance and financial results.
Among the factors that may cause actual results and events to differ from the anticipated results and expectations expressed in such forward-looking statements are the following:
| • | the risk of outbreak of animal diseases, more stringent trade barriers in key export markets and increased<br>regulation of food safety and security; |
|---|---|
| • | product contamination or recall concerns; |
| --- | --- |
| • | fluctuations in the prices of live cattle, hogs, chicken, corn and soymeal; |
| --- | --- |
| • | fluctuations in the selling prices of beef, pork and chicken products; |
| --- | --- |
| • | developments in, or changes to, the laws, regulations and governmental policies governing our business and<br>products or failure to comply with them, including environmental and sanitary liabilities; |
| --- | --- |
| • | currency exchange rate fluctuations, trade barriers, exchange controls, political risk and other risks associated<br>with export and foreign operations; |
| --- | --- |
| • | changes in international trade regulations; |
| --- | --- |
| • | our strategic direction and future operation; |
| --- | --- |
| • | deterioration of economic conditions globally and more specifically in the principal markets in which we operate;<br> |
| --- | --- |
| • | our ability to implement our business plan, including our ability to arrange financing when required and on<br>reasonable terms and the implementation of our financing strategy and capital expenditure plan; |
| --- | --- |
| • | the successful integration or implementation of mergers and acquisitions, joint ventures, strategic alliances or<br>divestiture plans; |
| --- | --- |
| • | the competitive nature of the industry in which we operate and the consolidation of our customers;<br> |
| --- | --- |
| • | customer demands and preferences; |
| --- | --- |
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| • | our level of indebtedness; |
|---|---|
| • | adverse weather conditions in our areas of operations; |
| --- | --- |
| • | continued access to a stable workforce and favorable labor relations with employees; |
| --- | --- |
| • | our dependence on key members of our management; |
| --- | --- |
| • | the interests of our ultimate controlling shareholders; |
| --- | --- |
| • | reputational risk in connection with U.S. and Brazilian civil and criminal actions and investigations involving<br>our ultimate controlling shareholders, and the outcome of these actions; |
| --- | --- |
| • | economic instability in Brazil and a resulting reduction in market confidence in the Brazilian economy;<br> |
| --- | --- |
| • | political crises in Brazil; |
| --- | --- |
| • | the declaration or payment of dividends or interest attributable to shareholders’ equity;<br> |
| --- | --- |
| • | the ongoing war between Russia and Ukraine and the Israel-Hamas conflict, including higher prices for<br>commodities, such as food products, ingredients and energy products, increasing inflation in some countries, and disrupted trade and supply chains as a result of disruptions caused by these conflicts; |
| --- | --- |
| • | unfavorable outcomes in legal and regulatory proceedings and government investigations that we are, or may<br>become, a party to; |
| --- | --- |
| • | the risk factors discussed under the heading “Risk Factors” in the Prospectus;<br> |
| --- | --- |
| • | other factors or trends affecting our financial condition, liquidity or results of operations; and<br> |
| --- | --- |
| • | other statements contained in this MD&A regarding matters that are not historical facts.<br> |
| --- | --- |
In addition, there may be other factors and uncertainties, many of which are beyond our control, that could cause our actual results and events to be materially different from the results referenced in the forward-looking statements. Many of these factors will be important in determining our actual future results. Consequently, any or all of our forward-looking statements may turn out to be inaccurate.
We caution investors not to place undue reliance on any forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
All forward-looking statements contained in this MD&A are qualified in their entirety by this cautionary statement.
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EX-99.3
Exhibit 99.3
NOTE ABOUT THIS DOCUMENT:
This document includes an English translation of the articles of association of JBS N.V. (the “Company”) that are expected to be effective at the time the Class A common shares of the Company are listed on the New York Stock Exchange. A prior version of the post-listing articles of association of the Company has been filed as Exhibit 3.2 to the Registration Statement on Form F-4 for JBS B.V., effective as of April 22, 2025 (Registration File No. 333-273211). Changes have been proposed to the articles of association of the Company to address comments by the Brazilian Securities Commission (Comissão de Valores Mobiliários) (“CVM”) in connection with their review of the Company’s application for registration as a foreign issuer in order to have Brazilian Depositary Receipts—Level II of the Company admitted to trading on B3 S.A. – Brasil, Bolsa, Balcão. Such changes include:
| • | Article 8. Pre-emptive rights |
|---|---|
| • | To limit the ability of the Company’s board of directors to limit or restrict pre-emptive rights to certain<br>enumerated circumstances only. |
| --- | --- |
| • | Article 16. Depositary receipts |
| --- | --- |
| • | To clarify that the reference to depositary receipts in this article is to Dutch law governed depositary receipts<br>only, thereby ensuring that the issuance of Brazilian Depositary Receipts is not inadvertently prohibited. |
| --- | --- |
| • | Article 25. General meeting |
| --- | --- |
| • | To shorten the deadline after the end of the Company’s financial year when the Company’s annual<br>shareholders’ meeting shall be held, from six months to four months. |
| --- | --- |
| • | Article 32. Financial year and annual accounts |
| --- | --- |
| • | To specify that the board of directors shall prepare the Company’s annual accounts within four months after<br>the end of the Company’s financial year. |
| --- | --- |
NOTE ABOUT TRANSLATION:
This document is an English translation of a deed (to be) executed in the Dutch language. In preparing this document, an attempt has been made to translate as literally as possible without jeopardising the overall continuity of the text. The definitions in article 1.1 of this document are listed in the English alphabetical order which may differ from the Dutch alphabetical order. Inevitably, however, differences may occur in translation and if they do, the Dutch text will govern by law. In this translation, Dutch legal concepts are expressed in English terms and not in their original Dutch terms. The concepts concerned may not be identical to concepts described by the English terms as such terms may be understood under the laws of other jurisdictions.
ARTICLES OF ASSOCIATION
CHAPTER I – DEFINITIONS AND INTERPRETATION
| 1 | Definitions |
|---|---|
| 1.1 | In these articles of association the following words shall have the following meanings: |
| --- | --- |
Annual Accounts: the Company’s annual accounts as referred to in Section 2:361 DCC;
Auditor: an auditor as referred to in Section 2:393 DCC, or an organization in which such auditors work together;
BDR: a Brazilian depositary receipt issued by the depositary, representing one (1) Class A Common Share;
BDR Record Date: the • day of • two thousand twenty-five (being the first day of trading of the BDRs on the B3 S.A. – Brasil, Bolsa, Balcão);
1
Board: the Company’s board of directors;
Board Regulations: the written rules and regulations adopted by the Board as referred to in article 21.4;
Broker: the brokerage firm, bank, broker-dealer or other similar organization at which a person’s beneficial interest in one or more Class A Common Shares is held;
Business Day: any day (other than a Saturday, Sunday or a public holiday) on which banks are open for business in New York, New York, United States of America and in the Netherlands;
Chairman: the Non-Executive Director appointed as Chairman;
Class A Common Share: an ordinary class A share in the Company’s share capital;
Class A Conversion Period: the period starting on the • day of • two thousand twenty-five (being the first day the Class A Common Shares are admitted to listing and trading on the New York Stock Exchange) and ending on the thirty-first day of December two-thousand twenty-six;
Class AConversion Request: shall have the meaning given thereto in article 6C;
Class B Common Share: an ordinary class B share in the Company’s share capital;
Class B Conversion Request: shall have the meaning given thereto in article 6A;
Company: the Company to which these articles of association pertain;
Conversion Date: (i) if the Company is a party to the deed whereby the transfer of one or more Class B Common Share(s) that qualifies as a Conversion Event are transferred, the date of such deed, or (ii) if the Company is not a party to the deed whereby the transfer of one or more Class B Common Share(s) that qualifies as a Conversion Event are transferred, the date of service of notice of such deed, a true copy of such deed or an extract of such deed to the Company, in accordance with Article 12.1;
Conversion Event means the occurrence of any transfer of a Class B Common Share upon the enforcement of a security interest (including, but not limited to, a right of pledge) over such Class B Common Share;
Conversion Share: a conversion share in the Company’s share capital;
Conversion Share Allocation: has the meaning given thereto in article 34.9 paragraph (a);
Convertible Class A Common Shares: Convertible Class A Common Shares ADS or Convertible Class A Common Shares BDRs, as applicable;
Convertible Class A Common Shares ADS: the number of Class A Common Shares which an Eligible Shareholder ADS is entitled to receive from the JBS S.A. ADS Depositary Bank in connection with the Transaction;
Convertible Class A Common Shares BDR: the number of BDRs to which an Eligible Shareholder BDR is entitled at ten hours Brazilian time (10:00 BRT) on the BDR Record Date (thereby disregarding any fractional BDRs);
DCC: the Dutch Civil Code;
2
Director: an Executive Director or a Non-Executive Director;
Eligible Shareholder: an Eligible Shareholder ADS or an Eligible Shareholder BDR, as applicable;
Eligible Shareholder ADS: a JBS S.A. ADS Holder who is entitled to receive Class A Common Shares in connection with the Transaction;
Eligible Shareholder BDR: a person who is entitled to one or more BDRs at ten hours Brazilian Time (10:00 BRT) on the BDR Record Date, thereby disregarding any fractional BDRs;
Executive Director: a member of the Board appointed as executive director;
FIP: Fundo de Investimento em Participações Multiestratégia Formosa—Investimento no Exterior, an investment fund under the laws of Brazil, registered with the Brazilian National Taxpayers Registry (Cadastro Nacional de Pessoas Jur í dicas) under number 26.845.679/0001-03;
Free Float Percentage: the number of Class A Common Shares held by Non-Controlling Shareholders on the thirty-first day of December two thousand twenty-six divided by the total number of Shares outstanding on such date, multiplied by one hundred percent (100%);
General Meeting: the corporate body of the Company consisting of Shareholders and all other Persons with Meeting Right or a meeting of Shareholders and other Persons with Meeting Right, as the case may be;
Group Company: a group company of the Company as referred to in Section 2:24b DCC;
in writing: by letter, by telecopier, by e-mail, or by a legible and reproducible message otherwise electronically sent, provided that the identity of the sender can be sufficiently established;
J&F: J&F Investimentos S.A., a corporation (sociedade por a ç õ es) under the laws of Brazil, registered with the commercial register of São Paulo (Junta Comercial do Estado de S ã o Paulo) under number 35300340825;
JBS S.A.: JBS S.A., a corporation (sociedade por ações) under the laws of Brazil, registered with the commercial register of São Paulo under number 35300330587;
JBS S.A. ADS Holder: a holder of JBS S.A. American depositary shares;
JBS S.A. ADS Depositary Bank: The Bank of New York Mellon;
Last Conversion Quarter: the period starting on the first day of October two thousand twenty-six and ending on the thirty-first day of December two thousand twenty-six;
LuxCo: J&F Investments Luxembourg S.à r.l., a limited liability company (soci é t é à responsabilit é limit é e) under the laws of the Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Soci é t é s, Luxembourg) under number B276177;
LuxCo Class A Conversion Request: shall have the meaning given thereto in article 6D;
Management Report: the Company’s management report as referred to in Section 2:391 DCC;
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Meeting Right: the right, either in person or by proxy authorized in writing, to attend and address the General Meeting;
Minimum Free Float Percentage: twenty percent (20%);
Non-Controlling Shareholder: each Shareholder with the exception of (i) LuxCo or its legal successor(s), (ii) J&F or its legal successor(s), (iii) FIP or its legal successor(s) and (iv) any wholly owned subsidiary of J&F and/or FIP (whether held jointly or individually by them);
Non-Executive Director: a member of the Board appointed as non-executive director;
Persons with Meeting Right: Shareholders, holders of a usufruct with Meeting Right and holders of a right of pledge with Meeting Right;
Persons with Voting Rights: Shareholders with voting rights, holders of a usufruct with voting rights and holders of a right of pledge with voting rights in the General Meeting;
RecordDate: the twenty-eighth day prior to the date of a General Meeting, or such other day as prescribed by law;
Share: a share in the Company’s share capital, unless the contrary is expressed this shall include each Class A Common Share, each Class B Common Share and each Conversion Share;
Shareholder: a holder of one or more Shares;
Subsidiary: a subsidiary of the Company as referred to in Section 2:24a DCC;
Transaction: the transaction comprising, inter alia, the direct or indirect acquisition of shares in the capital of JBS S.A. by the Company as well as the first admission to listing and trading of the Class A Common Shares on the New York Stock Exchange;
Transferor: shall have the meaning given thereto in article 6B; and
Vice-Chairman: the Director appointed as Vice-Chairman.
| 2 | Construction |
|---|---|
| 2.1 | References to articles shall be deemed to refer to articles of these articles of association, unless the<br>contrary is apparent. |
| --- | --- |
| 2.2 | Any reference to a gender includes all genders. |
| --- | --- |
CHAPTER II – NAME, CORPORATE SEAT AND OBJECTS
| 3 | Name and corporate seat |
|---|---|
| 3.1 | The Company’s name is JBS N.V.^^<br> |
| --- | --- |
| 3.2 | The corporate seat of the Company is in Amsterdam, the Netherlands. |
| --- | --- |
| 4 | Objects |
| --- | --- |
The objects of the Company are:
| (a) | to incorporate, to participate in any way whatsoever in, to manage, to supervise businesses and companies;<br> |
|---|---|
| (b) | to finance businesses and companies; |
| --- | --- |
| (c) | to borrow, to lend and to raise funds, including the issue of bonds, promissory notes or other securities or<br>evidence of indebtedness, as well as to enter into agreements in connection with aforementioned activities; |
| --- | --- |
| (d) | to render advice and services to businesses and companies with which the Company forms a group and to third<br>parties; |
| --- | --- |
| (e) | to grant guarantees, to bind the Company and to pledge its assets for obligations of the Company, Group<br>Companies and/or third parties; |
| --- | --- |
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| (f) | to acquire, alienate, manage and exploit registered property and items of property in general;<br> |
|---|---|
| (g) | to trade in currencies, securities and items of property in general; |
| --- | --- |
| (h) | to develop and trade in patents, trade marks, licenses, know-how and<br>other intellectual and industrial property rights; |
| --- | --- |
| (i) | to perform any and all activities of an industrial, financial or commercial nature, |
| --- | --- |
and to do all that is connected therewith or may be conducive thereto, all to be interpreted in the broadest sense.
CHAPTER III – SHARE CAPITAL
| 5 | Authorized capital, share premium reserve |
|---|---|
| 5.1 | The authorized capital of the Company equals one hundred fifty-two<br>million seven hundred thousand euro and ninety eurocent (EUR 152,700,000.90). |
| --- | --- |
| 5.2 | The authorized capital of the Company is divided into three billion four hundred seventy million<br>(3,470,000,000) Class A Common Shares, with a nominal value of one eurocent (EUR 0.01) each, one billion one hundred eighty million (1,180,000,000) Class B Common Shares, with a nominal value of ten eurocent (EUR 0.10) each, and ten<br>(10) Conversion Shares, with a nominal value of nine eurocent (EUR 0.09) each. |
| --- | --- |
| 5.3 | Upon the conversion of one or more Class B Common Shares into Class A Common Shares and Conversion<br>Shares referred to in article 6, the authorized capital shall decrease with the number of Class B Common Shares so converted and shall increase with the number of Class A Common Shares and Conversion Shares into which such Class B<br>Common Shares were converted. |
| --- | --- |
| 5.4 | Upon the conversion of one or more Class A Common Shares into Class B Common Shares referred to in<br>article 6, the authorized capital shall decrease with the number of Class A Common Shares so converted and shall increase with the number of Class B Common Shares into which such Class A Common Shares were converted.<br> |
| --- | --- |
| 5.5 | Within eight days after a conversion of one or more Shares in accordance with article 6, the Board shall<br>(i) file a notification thereof with the Dutch trade register, which notification must at least include the authorized capital following the conversion, and (ii) register the conversion in the register of Shareholders as referred to in<br>article 13. |
| --- | --- |
| 5.6 | No share certificates shall be issued. |
| --- | --- |
| 5.7 | The Company shall maintain a general share premium reserve for the benefit of the Shareholders. The Company<br>shall maintain a separate dividend reserve for each class of Shares, for the exclusive benefit of the holders of Shares of the applicable class. |
| --- | --- |
| 6 | Conversion of Shares |
| --- | --- |
| 6.1 | Each Class B Common Share can be converted into one (1) Class A Common Share and one<br>(1) Conversion Share, subject to the provisions of this article 6. |
| --- | --- |
| 6.2 | Each Class A Common Share can be converted into one (1) Class B Common Share, subject to the<br>provisions of this article 6. |
| --- | --- |
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| 6A | Voluntary conversion of Class B Common Shares |
|---|---|
| 6A.1 | Each holder of one or more Class B Common Shares may request the conversion of all or part of his<br>Class B Common Shares into Class A Common Shares and Conversion Shares in the ratio set out in article 6.1 by means of a written request addressed to the Board (Class B Conversion Request). The Class B Conversion Request<br>must: |
| --- | --- |
| (a) | indicate the number of Class B Common Shares to which the Class B Conversion Request pertains;<br> |
| --- | --- |
| (b) | include a release in advance of the encumbrance that may vest on any Conversion Shares resulting from the<br>conversion of Class B Common Shares in accordance with this article 6A, if (part of) the Class B Common Shares to which the Class B Conversion Request pertains are encumbered with any usufruct, right of pledge, attachment or other<br>encumbrance; and |
| --- | --- |
| (c) | provide for an irrevocable and unconditional power of attorney from the requesting Shareholder to the Company,<br>with full power of substitution and governed by Dutch law, to perform the acts described in article 6A.2 paragraph (b) on behalf of such Shareholder. |
| --- | --- |
| 6A.2 | Subject to article 6A.3: |
| --- | --- |
| (a) | upon receipt of a Class B Conversion Request satisfactory to the Board, the Board shall, as soon as<br>reasonably possible, resolve to convert the number of Class B Common Shares to which the Class B Conversion Request pertains into Class A Common Shares and Conversion Shares in the ratio set out in article 6.1; and<br> |
| --- | --- |
| (b) | promptly following such conversion, the requesting Shareholder shall be obliged to offer and transfer the<br>Conversion Shares to the Company for no consideration and the Company shall accept such Conversion Shares. |
| --- | --- |
| 6A.3 | To the extent the Company would not be permitted under applicable law to acquire Conversion Shares in<br>accordance with article 6A.2 paragraph (b), the Board shall, as soon as reasonably possible, convene a General Meeting in accordance with article 26, at which meeting it shall be proposed to the General Meeting to cancel such number of Shares (held<br>in treasury) to allow again for the acquisition of Conversion Shares as referred to in article 6A.2 paragraph (b). |
| --- | --- |
| 6B | Mandatory conversion of Class B Common Shares |
| --- | --- |
| 6B.1 | A Class B Common Share shall automatically convert into one (1) Class A Common Share and one<br>(1) Conversion Share upon the occurrence of a Conversion Event in respect of such Class B Common Share, subject to the provisions of this article 6B and with effect as of the Conversion Date. |
| --- | --- |
| 6B.2 | If at any time a Conversion Share is held by anyone other than the Company following a Conversion Event, such<br>holder of Conversion Shares (Transferor) shall be obliged to offer and transfer such Conversion Shares to the Company unencumbered (without any usufruct, right of pledge, attachment or other encumbrance and without depositary receipts issued<br>for such Conversion Shares) and for no consideration. If and for as long as the Transferor fails to offer and transfer the relevant Conversion Shares to the Company, the voting rights (both in the General Meeting and in class meetings), Meeting<br>Right and rights to receive distributions attached to the relevant Conversion Shares are suspended. |
| --- | --- |
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| 6B.3 | If the Transferor fails to offer and transfer the relevant Conversion Shares to the Company within thirty<br>(30) days after the Conversion Date, the Company is irrevocably empowered and authorized to offer and transfer the relevant Conversion Shares to the Company until such transaction occurs. The Company shall immediately notify the Transferor upon<br>proceeding with the offer and transfer of Conversion Shares to the Company in accordance with this article 6B.3. |
|---|---|
| 6B.4 | The Board may, from time to time, establish such policies and procedures relating to the general administration<br>of the share capital structure as it may deem necessary or advisable, and may request that holders of Class B Common Shares furnish affidavits or other proof to the Board as it deems necessary to verify the legal and beneficial ownership of<br>Class B Common Shares, and to confirm that a Conversion Event has not occurred. |
| --- | --- |
| 6B.5 | To the extent the Company would not be permitted under applicable law to acquire Conversion Shares in<br>accordance with article 6B.2 or article 6B.3, as applicable, the Board shall convene a General Meeting in accordance with article 26, at which meeting it shall be proposed to the General Meeting to cancel such number of Shares (held in treasury) to<br>allow again for the acquisition of Conversion Shares as referred to in article 6B.2 or article 6B.3, as applicable. |
| --- | --- |
| 6C | Conversion of Class A Common Shares Eligible Shareholder |
| --- | --- |
| 6C.1 | During the Class A Conversion Period, each Eligible Shareholder may request the conversion of all or part<br>of his Class A Common Shares into Class B Common Shares in the ratio set out in article 6.2 by means of a written request addressed to the Board (Class A Conversion Request). The Class A Conversion Request must:<br> |
| --- | --- |
| (a) | indicate the number of Class A Common Shares to which the Class A Conversion Request pertains,<br>provided the maximum number of Class A Common Shares in respect of which an Eligible Shareholder may request conversion during the Class A Conversion Period in accordance with this article 6C equals (i) for any Class A Conversion<br>Requests submitted between the • day of • two thousand twenty-five and the thirtieth day of September two thousand twenty-six: fifty-five percent (55%) in total of the number of such Eligible<br>Shareholder’s Convertible Class A Common Shares and (ii) for any Class A Conversion Requests submitted during the Last Conversion Quarter: the number of such Eligible Shareholder’s Convertible Class A Common Shares<br>minus the number of Class A Common Shares already converted pursuant to this article 6C; |
| --- | --- |
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| (b) | for any Class A Common Shares to which the Class A Conversion Request pertains not registered in the<br>name of the Eligible Shareholder in the register of Shareholders as referred to in article 13, include a confirmation from the Eligible Shareholder’s Broker that such Eligible Shareholder holds a beneficial interest in such number of<br>Class A Common Shares; |
|---|---|
| (c) | in the event the Eligible Shareholder is an Eligible Shareholder ADS, include proof satisfactory to the Board<br>confirming (i) that such Eligible Shareholder qualifies as an Eligible Shareholder ADS and (ii) the number of Class A Common Shares that such Eligible Shareholder received from the JBS S.A. ADS Depositary Bank in connection with the<br>Transaction; |
| --- | --- |
| (d) | in the event the Eligible Shareholder is an Eligible Shareholder BDR, include a document issued by the<br>depositary of the BDRs, confirming (i) that such Eligible Shareholder qualifies as an Eligible Shareholder BDR and (ii) the number of BDRs to which such Eligible Shareholder was entitled at ten hours Brazilian time (10:00 BRT) on the BDR<br>Record Date; and |
| --- | --- |
| (e) | include an undertaking by the Eligible Shareholder to not transfer the Class A Common Shares to which the<br>Class A Conversion Request pertains from the date on which the Class A Conversion Request is provided to the Board until (and including) the day on which the Class A Common Shares to which the Class A Conversion Request pertains<br>are converted into Class B Common Shares in accordance with article 6C.2 or article 6C.3, as the case may be. |
| --- | --- |
| 6C.2 | Ultimately on the fifteenth (15^th^) Business Day following<br>the end of each calendar quarter (with the exception of the Last Conversion Quarter), the Board will resolve (i) to convert the aggregate number of Class A Common Shares in respect of which the Board has, during the foregoing calendar<br>quarter, received (a) Class A Conversion Request(s) satisfactory to the Board into Class B Common Shares in the ratio set out in article 6.2 and (ii) to pay up the difference between the aggregate nominal value of the<br>Class A Common Shares to which the Class A Conversion Request(s) pertain(s) and the aggregate nominal value of the Class B Common Shares into which the Class A Common Shares are converted at the charge of the general share<br>premium reserve maintained by the Company. |
| --- | --- |
| 6C.3 | Ultimately on the fifteenth (15^th^) Business Day following<br>the end of the Last Conversion Quarter, the Board will resolve (i) to convert the aggregate number of Class A Common Shares in respect of which the Board has, during the Last Conversion Quarter, received (a) Class A Conversion<br>Request(s) satisfactory to the Board into Class B Common Shares in the ratio set out in article 6.2, with due observance of article 6C.4, and (ii) to pay up the difference between the aggregate nominal value of the Class A Common<br>Shares to which the Class A Conversion Request(s) pertain(s), with due observance of article 6C.4, and the aggregate nominal value of the Class B Common Shares into which the Class A Common Shares are converted at the charge of the<br>general share premium reserve maintained by the Company. |
| --- | --- |
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| 6C.4 | If the aggregate number of Class A Common Shares in respect of which (a) Class A Conversion<br>Request(s) satisfactory to the Board has or have been received during the Class A Conversion Period would, if all Class A Common Shares to which such Class A Conversion Request(s) pertain(s) are converted into Class B Common<br>Shares in the ratio set out in article 6.2, cause the Free Float Percentage to fall below the Minimum Free Float Percentage, the number of Class A Common Shares pertaining to each Class A Conversion Request received during the Last<br>Conversion Quarter shall be reduced on a pro rata basis so that the aggregate number of Class A Common Shares converted into Class B Common Shares in accordance with this article 6C does not result in the Free Float Percentage falling<br>below the Minimum Free Float Percentage. |
|---|---|
| 6D | Conversion of Class A Common Shares LuxCo |
| --- | --- |
| 6D.1 | During the Class A Conversion Period, LuxCo may request the conversion of all or part of its Class A<br>Common Shares into Class B Common Shares in the ratio set out in article 6.2 by means of a written request addressed to the Board (LuxCo Class A Conversion Request). The LuxCo Class A Conversion<br>Request must: |
| --- | --- |
| (a) | indicate the number of Class A Common Shares to which the LuxCo Class A Conversion Request pertains,<br>provided that the maximum number of Class A Common Shares in respect of which LuxCo may request conversion during the Class A Conversion Period in accordance with this article 6D equals the number of Class A Common Shares held by<br>LuxCo at ten hours Brazilian Time (10:00 BRT) on the BDR Record Date; and |
| --- | --- |
| (b) | include an undertaking by LuxCo to not transfer the Class A Common Shares to which the LuxCo Class A<br>Conversion Request pertains from the date on which the LuxCo Class A Conversion Request is provided to the Board until (and including) the day on which the Class A Common Shares to which the LuxCo Class A Conversion Request pertains<br>are converted into Class B Common Shares in accordance with article 6D.2. |
| --- | --- |
| 6D.2 | Ultimately on the fifteenth (15^th^) Business Day following<br>receipt of a LuxCo Class A Conversion Request, provided such LuxCo Class A Conversion Request is satisfactory to the Board, the Board will resolve (i) to convert the aggregate number of Class A Common Shares in respect of which<br>the Board has received such LuxCo Class A Conversion Request into Class B Common Shares in the ratio set out in article 6.2, and (ii) to pay up the difference between the aggregate nominal value of the Class A Common Shares to<br>which the LuxCo Class A Conversion Request pertains, and the aggregate nominal value of the Class B Common Shares into which the Class A Common Shares are converted at the charge of the general share premium reserve maintained by the<br>Company. |
| --- | --- |
| 7 | Issuance of Shares |
| --- | --- |
| 7.1 | Shares shall be issued pursuant to a resolution of the Board if the Board has been designated thereto by the<br>General Meeting for a specific period and with due observance of applicable statutory provisions. Such designation by the General Meeting must state the number of Shares that may be issued. |
| --- | --- |
9
The designation may be extended by specific consecutive periods with due observance of applicable statutory provisions. Unless otherwise stipulated at its grant, the designation may not be withdrawn.
| 7.2 | If and insofar as the Board is not designated by the General Meeting, Shares shall be issued pursuant to a<br>resolution of the General Meeting. The General Meeting shall, in addition to the Board, remain authorized to issue Shares if such is specifically stipulated in the resolution authorizing the Board to issue Shares as described in article 7.1.<br> |
|---|---|
| 7.3 | The articles 7.1 and 7.2 shall apply by analogy to the granting of rights to subscribe for Shares, but shall<br>not apply to an issue of Shares to a person exercising a previously granted right to subscribe for Shares. |
| --- | --- |
| 7.4 | If the resolution of the General Meeting to issue Shares or to designate the authority to issue Shares to the<br>Board as referred to in article 7.1 is detrimental to the rights of holders of a specific class of Shares, the validity of such resolution of the General Meeting requires a prior or simultaneous approval by the group of holders of such class of<br>Shares. |
| --- | --- |
| 8 | Pre-emptive rights |
| --- | --- |
| 8.1 | Each Shareholder shall have a pre-emptive right on any issuance of<br>Class A Common Shares and Class B Common Shares in proportion to the aggregate amount of its Class A Common Shares and Class B Common Shares. No pre-emptive rights shall apply in respect of<br>any issuance of Conversion Shares. |
| --- | --- |
| 8.2 | This pre-emptive right on any issuance of Class A Common Shares<br>and Class B Common Shares does not apply to: |
| --- | --- |
| (a) | Shares issued to employees of the Company or a Group Company; |
| --- | --- |
| (b) | Shares that are issued against payment other than in cash; and |
| --- | --- |
| (c) | Shares issued to a person exercising a previously granted right to subscribe for Shares. |
| --- | --- |
| 8.3 | With due observance of article 8.4, pre-emptive rights may be limited<br>or excluded by a resolution of the Board if the Board has been designated thereto by the General Meeting for a specific period and with due observance of applicable statutory provisions, and the Board has also been designated to issue Shares in<br>accordance with article 7.1. The designation may be extended by specific consecutive periods with due observance of applicable statutory provisions. Unless otherwise stipulated at its grant, the designation may not be withdrawn.<br> |
| --- | --- |
| 8.4 | The designation to limit or exclude pre-emptive rights granted to the<br>Board in accordance with article 8.3 shall be limited such that the Board may only resolve to exclude pre-emptive rights in respect of: |
| --- | --- |
| (a) | any granting of rights to subscribe for Shares pursuant to stock-based compensation plans of the Company;<br> |
| --- | --- |
| (b) | any issuance of Shares to be offered for sale on a public stock exchange; and |
| --- | --- |
| (c) | any issuance of Shares to facilitate a share exchange as part of a public tender offer. |
| --- | --- |
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| 8.5 | When adopting a resolution to issue Shares, the General Meeting or the Board shall determine how and during<br>which period these pre-emptive rights may be exercised, subject to Section 2:96a DCC. |
|---|---|
| 8.6 | Article 8 shall apply by analogy to the granting of rights to subscribe for Shares. |
| --- | --- |
| 9 | Payment on Shares |
| --- | --- |
| 9.1 | Shares may only be issued against payment in full of the amount at which such Shares are issued and with due<br>observance of the provisions of the Sections 2:80, 2:80a and 2:80b DCC. |
| --- | --- |
| 9.2 | Payment on Shares must be made in cash if no alternative contribution has been agreed. Payment other than in<br>cash must be made in accordance with the provisions of Section 2:94b DCC. Payment in a currency other than euro may only be made with the consent of the Company and with due observance of the provisions of Section 2:93a DCC.<br> |
| --- | --- |
| 9.3 | Shares issued to (i) current or former employees of the Company or a Group Company, (ii) current or<br>former Directors under an equity compensation plan of the Company and (iii) holders of a right to subscribe for Shares granted in accordance with article 7.3 may be paid-up at the expense of the reserves<br>of the Company, notwithstanding the provisions of article 34. |
| --- | --- |
| 9.4 | The Board may perform legal acts as referred to in Section 2:94 DCC without the prior approval of the<br>General Meeting. |
| --- | --- |
CHAPTER IV – OWN SHARES AND CAPITAL REDUCTION
| 10 | Share repurchase and disposal of shares |
|---|---|
| 10.1 | The Company may repurchase fully paid-up Shares: |
| --- | --- |
| (a) | for no consideration; or |
| --- | --- |
| (b) | against consideration if and insofar as the Board has been authorized thereto by the General Meeting for a<br>specific period and with due observance of applicable statutory provisions. The General Meeting shall determine in its authorization how many Shares the Company may repurchase, in what manner and at what price range. |
| --- | --- |
| 10.2 | The authorization by the General Meeting is not required if the Company repurchases fully paid-up Shares for the purpose of transferring these Shares to employees of the Company or a Group Company under any applicable equity compensation plan, provided that those Shares are quoted on an official list of<br>a stock exchange. |
| --- | --- |
| 10.3 | Any disposal of Shares by the Company shall require a resolution of the Board. Such resolution shall also<br>stipulate any conditions of the disposal. |
| --- | --- |
| 11 | Capital reduction |
| --- | --- |
| 11.1 | The General Meeting may resolve to reduce the Company’s issued capital by (i) reducing the nominal<br>value of Shares through amendment of these articles of association or (ii) cancelling Shares held by the Company itself. |
| --- | --- |
| 11.2 | A resolution of the General Meeting to reduce the Company’s issued capital, shall require a majority of at<br>least two-thirds of the votes cast if less than half of the issued capital of the Company is represented at the General Meeting. |
| --- | --- |
| 11.3 | If the resolution of the General Meeting to reduce the Company’s issued capital by reducing the nominal<br>value of Shares through amendment of these articles of association, as referred to above, is detrimental to the rights of holders of a specific class of Shares, the validity of such resolution of the General Meeting requires a prior or simultaneous<br>approval by the group of holders of such class of Shares. |
| --- | --- |
11
CHAPTER V – TRANSFER OF SHARES
| 12 | Transfer of shares |
|---|---|
| 12.1 | The transfer of Shares shall require a deed executed for that purpose and, save in the event the Company itself<br>is a party to such legal act, written acknowledgement by the Company of the transfer. Service of notice of such deed to the Company or of a true copy or extract of such deed will be the equivalent of such acknowledgement. |
| --- | --- |
| 12.2 | Article 12.1 shall apply mutatis mutandis to the creation of a right of pledge or usufruct on a Share,<br>provided that a right of pledge may also be created without acknowledgement by or service of notice upon the Company, in which case Section 3:239 DCC applies and the acknowledgement by or service of notice upon the Company shall replace the<br>announcement as referred to in Section 3:239(3) DCC. |
| --- | --- |
| 12.3 | If and as long as one or more Class A Common Shares are admitted to trading on the New York Stock<br>Exchange, or if it may reasonably be expected that one or more Class A Common Shares shall shortly be admitted to trading on the New York Stock Exchange, the Board may resolve that the laws of the State of New York, United States of America,<br>shall apply to the property law aspects of the Class A Common Shares, as a result of which the articles 12.1 and 12.2 shall not apply to the Class A Common Shares. Such resolution and the revocation thereof shall be made available for<br>inspection on the Company’s website and at the Dutch trade register. |
| --- | --- |
The property law aspects of the Class A Common Shares (including the legal rules on ownership, legal title and transfer) in book-entry form, as included in the part of the register of shareholders kept by the relevant transfer agent, shall be governed by the laws of the State of New York, United States of America, in accordance with the applicable law on International Private laws as referred to in Title 10 of Book 10 DCC (Boek 10 Internationaal privaatrecht), especially Section 10:141 DCC.
CHAPTER VI – SHAREHOLDERS’ REGISTER AND LIMITED RIGHTS TO SHARES
| 13 | Shareholders’ register |
|---|---|
| 13.1 | The Board must keep a shareholders’ register; the Board may appoint a registrar to keep the register on<br>its behalf. The register must be regularly updated. The shareholders’ register may be kept in several copies and in several places. Part of the register may be kept outside the Netherlands to comply with applicable local law or pursuant to<br>stock exchange rules. |
| --- | --- |
| 13.2 | Each Shareholder’s name, address and further information as required by law or considered appropriate by<br>the Board are recorded in the shareholders’ register. Shareholders shall provide the Board with the necessary particulars in a timely fashion. Any consequences of not, or incorrectly, notifying such particulars will be the responsibility of the<br>Shareholder concerned. |
| --- | --- |
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| 13.3 | If a Shareholder so requests, the Board shall provide the Shareholder, free of charge, with written evidence of<br>the information in the shareholders’ register concerning the Shares registered in the Shareholder’s name. |
|---|---|
| 13.4 | The articles 13.2 and 13.3 shall apply by analogy to holders of a usufruct or right of pledge on one or more<br>Shares, with the exception of a holder of a right of pledge created without acknowledgement by or service of notice upon the Company. |
| --- | --- |
| 14 | Right of pledge on Shares |
| --- | --- |
| 14.1 | Class A Common Shares and Class B Common Shares can be pledged. Conversion Shares cannot be pledged.<br> |
| --- | --- |
| 14.2 | Subject to article 12.3 (if applicable), if a Class A Common Share is encumbered with a right of pledge,<br>the voting rights attached to that Class A Common Share shall vest in the Shareholder, unless at the creation of the right of pledge the voting rights were granted to the pledgee. A pledgee with voting rights shall have Meeting Right.<br> |
| --- | --- |
| 14.3 | If a Class B Common Share is encumbered with a right of pledge, the voting rights attached to that<br>Class B Common Share may not be granted to the pledgee. |
| --- | --- |
| 14.4 | A Shareholder who as a result of a right of pledge does not have voting rights, shall have Meeting Right. A<br>pledgee without voting rights shall not have Meeting Right. |
| --- | --- |
| 15 | Usufruct on Shares |
| --- | --- |
| 15.1 | Subject to article 12.3 (if applicable), if a usufruct is created on a Class A Common Share, the voting<br>rights attached to that Class A Common Share shall vest in the Shareholder, unless at the creation of the usufruct the voting rights were granted to the usufructuary. A usufructuary with voting rights shall have Meeting Right.<br> |
| --- | --- |
| 15.2 | If a usufruct is created on a Class B Common Share or a Conversion Share, the voting rights attached to<br>that Share may not be granted to the usufructuary. |
| --- | --- |
| 15.3 | A Shareholder who as a result of a usufruct does not have voting rights, shall have Meeting Right. A<br>usufructuary without voting rights shall not have Meeting Right. |
| --- | --- |
| 16 | Depositary receipts |
| --- | --- |
The Company shall not cooperate with the issuance of Dutch law governed depositary receipts for Shares.
CHAPTER VII – MANAGEMENT AND SUPERVISION
| 17 | Board: composition, appointment, suspension and dismissal |
|---|---|
| 17.1 | The Company shall be managed by the Board. The Board shall consist of a minimum of seven (7) and a maximum<br>of eleven (11) Directors, of which a minimum of one (1) and a maximum of four (4) Executive Directors and a minimum of three (3) and a maximum of ten (10) Non-Executive Directors. The<br>number of Executive Directors and the number of Non-Executive Directors shall be determined by the Board. Only individuals may be Directors. |
| --- | --- |
| 17.2 | The Executive Directors and Non-Executive Directors shall be appointed<br>as such by the General Meeting at the nomination of the Board. A nomination by the Board shall state whether a person is nominated for appointment as Executive Director or Non-Executive Director.<br> |
| --- | --- |
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| 17.3 | A Director shall be appointed for a term of approximately one (1) year, which term of office shall lapse<br>immediately after the close of the annual General Meeting held in the year after his appointment. A Director may be reappointed with due observance of the preceding sentence. A Non-Executive Director may be in<br>office for a period not exceeding twelve (12) years, which period may or may not be interrupted, unless at the proposal of the Board the General Meeting resolves otherwise. |
|---|---|
| 17.4 | The General Meeting may at all times suspend or dismiss any Director. The Board may at all times suspend an<br>Executive Director. |
| --- | --- |
| 17.5 | A suspension may be extended one or more times but may not last longer than three (3) months in aggregate.<br>If at the end of that period, no decision has been taken on termination of the suspension or on dismissal, the suspension shall end. A suspension can be terminated by the General Meeting at any time. |
| --- | --- |
| 18 | Board: vacancy or inability |
| --- | --- |
| 18.1 | If the seat of an Executive Director is vacant or upon the inability of an Executive Director, the remaining<br>Executive Directors shall temporarily be entrusted with the executive management of the Company, provided that the Board may provide for a temporary replacement. If the seats of all Executive Directors are vacant or upon the inability of all<br>Executive Directors, the executive management of the Company shall temporarily be entrusted to the Non-Executive Directors, provided that the Board may provide for one or more temporary replacements.<br> |
| --- | --- |
| 18.2 | If the seat of a Non-Executive Director is vacant or upon inability of<br>a Non-Executive Director, the remaining Non-Executive Directors shall temporarily be entrusted with the performance of the duties and the exercise of the authorities of<br>that Non-Executive Director, provided that the Board may provide for a temporary replacement. If the seats of all Non-Executive Directors are vacant or upon inability of<br>all Non-Executive Directors, the General Meeting shall be authorized to temporarily entrust the performance of the duties and the exercise of the authorities of the<br>Non-Executive Directors to one or more other individuals. |
| --- | --- |
| 18.3 | A Director shall in any event be unable to act within the meaning of the articles 18.1 and 18.2:<br> |
| --- | --- |
| (a) | during the period for which the Director has claimed inability in writing; |
| --- | --- |
| (b) | during the Director’s suspension; or |
| --- | --- |
| (c) | during periods when the Company has not been able to contact the Director (including as a result of illness),<br>provided that such period lasted longer than five (5) consecutive days (or such other period as reasonably determined by the Board). |
| --- | --- |
| 19 | Board: Chairman, Vice-Chairman, Global CEO, Lead Independent Director and other titles |
| --- | --- |
| 19.1 | At the nomination of the Board a Non-Executive Director shall be<br>appointed by the General Meeting as Chairman. |
| --- | --- |
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| 19.2 | The Board may appoint a Director as Vice-Chairman. If the Chairman is absent or unable to act, the<br>Vice-Chairman, or, if the Vice-Chairman is an Executive Director, a Non-Executive Director designated by the Board, is entrusted with the duties of the Chairman. |
|---|---|
| 19.3 | The Board may also grant other titles to Directors, such as, in case of an Executive Director, Global Chief<br>Executive Officer (Global CEO), and/or in case of a Non-Executive Director, Lead Independent Director. The Board may at any time revoke any such title granted to a Director. |
| --- | --- |
| 20 | Board: remuneration |
| --- | --- |
| 20.1 | The Company has a policy in respect of the remuneration of Executive Directors and Non-Executive Directors. The remuneration policy is adopted by the General Meeting at the proposal of the Board. |
| --- | --- |
| 20.2 | The remuneration of the Executive Directors shall be determined by the Board with observance of the<br>remuneration policy adopted by the General Meeting. The Executive Directors shall not participate in the deliberations and decision-making regarding the determination of the remuneration of the Executive Directors. |
| --- | --- |
| 20.3 | The remuneration of the Non-Executive Directors shall be determined by<br>the Board with observance of the remuneration policy adopted by the General Meeting. |
| --- | --- |
| 20.4 | A proposal with respect to remuneration schemes in the form of Shares or rights to subscribe for Shares shall<br>be submitted by the Board to the General Meeting for its approval. Such proposal shall state at least the maximum number of Shares or rights to subscribe for Shares that may be granted to Directors and the criteria for making or amending such<br>grants. |
| --- | --- |
| 21 | Board: tasks and duties |
| --- | --- |
| 21.1 | The Board shall be entrusted with the management of the Company and shall for such purpose have all the powers<br>within the limits of the law that are not granted by these articles of association to others. In the performance of their tasks, the Directors shall be guided by the interests of the Company and the enterprise connected with it.<br> |
| --- | --- |
| 21.2 | The Executive Directors are primarily responsible for all day-to-day operations of the Company. The Non-Executive Directors supervise (i) the Executive Directors’ policy and performance of duties and (ii) the<br>Company’s general affairs and its business, and render advice and direction to the Executive Directors. The Executive Directors shall timely provide the Non-Executive Directors with the information they<br>need to carry out their duties. |
| --- | --- |
| 21.3 | The Directors furthermore perform any duties allocated to them under or pursuant to the law or these articles<br>of association. |
| --- | --- |
| 21.4 | With due observance of these articles of association, the Board shall adopt Board Regulations dealing with its<br>internal organization, the manner in which decisions are taken, any quorum requirements, the composition, duties and organization of committees and any other matters concerning the Board, the Executive Directors, the<br>Non-Executive Directors and committees established by the Board. |
| --- | --- |
15
| 21.5 | The Board may allocate its duties and powers among the Directors pursuant to the Board Regulations or otherwise<br>in writing, provided that the following duties and powers may not be allocated to the Executive Directors: |
|---|---|
| (a) | supervising the performance of the Executive Directors; |
| --- | --- |
| (b) | making a nomination for the appointment of Directors pursuant to article 17.2; |
| --- | --- |
| (c) | determining an Executive Director’s remuneration pursuant to article 20.2; and |
| --- | --- |
| (d) | instructing an auditor pursuant to article 33.1. |
| --- | --- |
| 21.6 | Without prejudice to any other provisions of these articles of association, the Board shall require the<br>approval of the General Meeting for resolutions regarding a significant change in the identity or nature of the Company or the enterprise connected with it, including in any event: |
| --- | --- |
| (a) | the transfer of the business enterprise, or practically the entire business enterprise, to a third party;<br> |
| --- | --- |
| (b) | concluding or cancelling any long-lasting cooperation of the Company or a Subsidiary with any other legal<br>person or company or as a fully-liable general partner in a partnership, provided that such cooperation or cancellation thereof is of material significance to the Company; and |
| --- | --- |
| (c) | acquiring or disposing of a participating interest in the share capital of a company with a value of at least one-third of the Company’s assets, as shown in the consolidated balance sheet with explanatory notes thereto according to the last adopted Annual Accounts, by the Company or a Subsidiary. |
| --- | --- |
| 22 | Board: decision-making |
| --- | --- |
| 22.1 | Resolutions of the Board shall be adopted by a simple majority of the votes cast, unless the Board Regulations<br>provide for a qualified majority. Each Director shall have one vote. If there is a tie vote, the proposal shall be rejected. |
| --- | --- |
| 22.2 | At a meeting of the Board, a Director may only be represented by another Director holding a proxy in writing.<br> |
| --- | --- |
| 22.3 | Meetings of the Board may be held by means of an assembly of Directors in person or by telephone, video<br>conference or any other means of electronic communication, provided that all Directors participating in such meeting are able to communicate with each other simultaneously. Participation in a meeting held in any of the foregoing ways shall<br>constitute presence at such meeting. |
| --- | --- |
| 22.4 | A document stating that one or more resolutions have been adopted by the Board and signed by the Chairman or by<br>the chairperson and secretary of the particular meeting constitutes valid proof of those resolutions. |
| --- | --- |
| 22.5 | The Board may also adopt resolutions outside of a meeting, provided that such resolutions are recorded in<br>writing or otherwise and that none of the Directors entitled to vote objects to this manner of decision-making. |
| --- | --- |
| 22.6 | A Director shall not participate in deliberations and the decision-making process in the event of a direct or<br>indirect personal conflict of interest between that Director and the Company and the enterprise connected with it. If the Board is unable to adopt a resolution as a result of all Directors being unable to participate in the deliberations and<br>decision-making process due to such a conflict of interest, the decision shall nevertheless be taken by the Board, but the Board shall record in writing the reasons for the resolution. |
| --- | --- |
16
| 22.7 | The Board may determine pursuant to the Board Regulations or otherwise in writing that one or more Directors<br>can lawfully adopt resolutions concerning matters belonging to their duties within the meaning of Section 2:129a(3) DCC. |
|---|---|
| 23 | Board: indemnification |
| --- | --- |
| 23.1 | The Company shall indemnify each current or former Director in any anticipated or pending action, suit,<br>proceeding or investigation for any claim against that Director that such Director may derive from exercising his respective duties as a Director for any and all: |
| --- | --- |
| (a) | costs and expenses, including but not limited to substantiated attorneys’ fees, reasonably incurred in<br>relation to that Director’s defences in the relevant action, suit, proceeding or investigation or a settlement thereof; |
| --- | --- |
| (b) | liabilities, losses, damages, fines, penalties and other claims and/or financial effects of judgements against<br>that Director, excluding any reputational damages and (other) immaterial damages; and |
| --- | --- |
| (c) | payments by that Director and/or any other financial effects resulting from a settlement of such action, suit,<br>proceeding or investigation, excluding any reputational damages and (other) immaterial damages, subject to prior written approval of such settlement by the Company (such approval not to be unreasonably withheld), |
| --- | --- |
provided he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company or out of his mandate, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
| 23.2 | Any indemnification by the Company referred to in article 23.1 shall be made only upon a determination by the<br>Board that indemnification of the Director is proper under the circumstances because he had met the applicable standard of conduct set forth in article 23.1. |
|---|---|
| 23.3 | Indemnified amounts referred to in article 23.1 under (a) until (c) inclusive may be paid by the Company<br>in advance of the final disposition of the relevant anticipated or pending action, suit or proceeding against that Director, upon a resolution of the Board with respect to the specific case. |
| --- | --- |
| 23.4 | A Director, current or former, shall not be entitled to any indemnification as mentioned in this article 23, if<br>and to the extent: |
| --- | --- |
| (a) | Dutch law would not permit such indemnification; |
| --- | --- |
| (b) | a competent court, a judicial tribunal or, in case of an arbitration, an arbitrator or arbitral panel has<br>established by final judgement that is not open to challenge or appeal, that the acts or omissions of the current or former Director can be considered intentional, fraudulent, grossly negligent, willfully reckless or seriously culpable, unless this<br>would in the given circumstances be unacceptable according to the standards of reasonableness and fairness; |
| --- | --- |
17
| (c) | the costs or the decrease in assets of the current or former Director are/is covered by an insurance and the<br>insurer started payment of the costs or the decrease in assets; or |
|---|---|
| (d) | the Company and/or a Group Company brought the procedure in question up before the relevant court, judicial<br>tribunal or, in case of an arbitration, arbitrator or arbitral panel, |
| --- | --- |
in which event he shall immediately repay any amount paid to him (in advance, as the case may be) by the Company under this article 23.
| 24 | Representation |
|---|---|
| 24.1 | The Company shall be represented by the Board. The Company shall also be represented by the Director with the<br>title of Global Chief Executive Officer acting solely or two Executive Directors acting jointly. If there is only one Executive Director in office, such Executive Director shall be authorized to represent the Company. |
| --- | --- |
| 24.2 | The Board may appoint officers with general or limited power to represent the Company. Each officer shall be<br>competent to represent the Company, subject to the restrictions imposed on him. The Board shall determine each officer’s title. Such officers may be registered with the Dutch trade register, indicating the scope of their power to represent the<br>Company. |
| --- | --- |
CHAPTER VIII – GENERAL MEETING AND CLASS MEETINGS
| 25 | General Meeting |
|---|---|
| 25.1 | General Meetings can be held in Amsterdam or Haarlemmermeer (including Schiphol Airport).<br> |
| --- | --- |
| 25.2 | The annual General Meeting shall be held each year within four months after the end of the Company’s<br>financial year. |
| --- | --- |
| 25.3 | Other General Meetings shall be held as often as the Board or the Chairman deems necessary.<br> |
| --- | --- |
| 26 | General Meeting: convocation |
| --- | --- |
| 26.1 | General Meetings are convened by the Board or the Chairman. |
| --- | --- |
| 26.2 | One or more Shareholders and/or other Persons with Meeting Right who individually or jointly represent at least<br>the part of the Company’s issued capital prescribed by law for this purpose, may request the Board in writing to convene a General Meeting setting out in detail the matters to be discussed. If the Board has not taken the steps necessary to<br>ensure that the General Meeting could be held within the relevant statutory period after the request, the requesting Shareholders and/or other Persons with Meeting Right may at their request be authorized by the preliminary relief judge of the<br>district court to convene a General Meeting. |
| --- | --- |
| 27 | General Meeting: notice and agenda |
| --- | --- |
| 27.1 | The notice of a General Meeting shall be given by the Board by means of an announcement with due observance of<br>the statutory notice period and in accordance with the law. |
| --- | --- |
| 27.2 | The notice of a General Meeting shall state the items to be dealt with, the items to be discussed and which<br>items to be voted on, the place and time of the meeting, the procedure for participating at the meeting whether or not by written proxy-holder, the address of the website of the Company and, if applicable, the procedure for participating at the<br>meeting and exercising one’s right to vote by electronic means of communication as referred to in article 28.4, with due observance of the relevant provisions of the law. |
| --- | --- |
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| 27.3 | The notice of a General Meeting shall also state the Record Date and the manner in which the Persons with<br>Meeting Right may procure their registration and exercise their rights. |
|---|---|
| 27.4 | A subject for discussion which has been requested in writing by one or more Shareholders and/or other Persons<br>with Meeting Right who individually or jointly represent at least the part of the Company’s issued capital prescribed by law for this purpose, shall be included in the notice of the General Meeting or shall be notified in the same manner as the<br>other subjects for discussion, provided the Company has received the request (including the reasons for such request) not later than sixty (60) days before the day of the meeting. Such written requests must comply with the conditions stipulated<br>by the Board as posted on the Company’s website. |
| --- | --- |
| 28 | General Meeting: admittance |
| --- | --- |
| 28.1 | Those Persons with Meeting Right and those Persons with Voting Rights who are listed on the Record Date for a<br>General Meeting as such in a register designated for that purpose by the Board, are deemed Persons with Meeting Right or Persons with Voting Rights, respectively, for that General Meeting, regardless of who is entitled to the Shares at the date of<br>the General Meeting. |
| --- | --- |
| 28.2 | In order for a person to be able to exercise Meeting Right and the right to vote in a General Meeting, that<br>person must notify the Company in writing of his intention to do so no later than on the date and in the manner mentioned in the notice convening the General Meeting. |
| --- | --- |
| 28.3 | The Board may determine in the notice of a General Meeting that any vote cast prior to the meeting by means of<br>electronic communication or by means of a letter, shall be deemed to be a vote cast in the meeting. Such a vote may not be cast prior to the Record Date for the General Meeting. |
| --- | --- |
| 28.4 | The Board may determine that each Person with Meeting Right has the right, in person or represented by a<br>written proxy, to take part in, address and, to the extent applicable, to vote at the General Meeting by means of electronic communication, provided that such person can be identified via the same electronic means and is able to directly observe the<br>proceedings and, to the extent applicable, to vote at the meeting. The Board may attach conditions to the use of the electronic communication, provided that these conditions are reasonable and necessary for the identification of the Person with<br>Meeting Right and for the reliability and security of the communication. The conditions must be included in the notice of a General Meeting and be published on the Company’s website. |
| --- | --- |
| 28.5 | The Directors are authorized to attend the General Meeting and shall, as such, have an advisory vote at the<br>General Meeting. |
| --- | --- |
| 28.6 | The chairperson of the General Meeting decides on all matters relating to admission to the General Meeting. The<br>chairperson of the General Meeting may admit third parties to the General Meeting. |
| --- | --- |
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| 28.7 | The Company may direct that any person, before being admitted to a General Meeting, identifies himself by means<br>of a valid passport or other means of identification and/or should be submitted to such security arrangements as the Company may consider to be appropriate under the given circumstances. |
|---|---|
| 28.8 | The General Meeting may be conducted in Dutch or English as determined by the chairperson of the General<br>Meeting. |
| --- | --- |
| 29 | General Meeting: chairperson, secretary and minutes |
| --- | --- |
| 29.1 | The General Meeting shall be presided over by the Chairman or, in his absence, the Vice-Chairman, provided that<br>the Vice-Chairman is a Non-Executive Director. If the Vice-Chairman is also absent, if the Vice-Chairman is an Executive Director or if no Director has been appointed as Vice-Chairman, the Board shall<br>designate a Non-Executive Director to deputize for the Chairman in his absence. If (i) the Chairman is not present at the meeting, (ii) the Vice-Chairman is not present at the meeting and/or an<br>Executive Director and (iii) no other Director has been designated by the Board to preside over the General Meeting, the General Meeting itself shall appoint a chairperson. |
| --- | --- |
| 29.2 | The chairperson of the General Meeting shall appoint a secretary of the General Meeting. |
| --- | --- |
| 29.3 | Minutes of the proceedings at a General Meeting shall be kept by the secretary, unless a notarial record of the<br>General Meeting is prepared at the request of the Board. The minutes shall be adopted by the chairperson and the secretary of the General Meeting and shall be signed by them as evidence thereof. A document stating that one or more resolutions have<br>been adopted by the General Meeting and signed by the chairperson and secretary of the particular meeting constitutes valid proof of those resolutions. |
| --- | --- |
| 30 | General Meeting: decision-making |
| --- | --- |
| 30.1 | Each Class A Common Share confers the right to cast one (1) vote at the General Meeting and each<br>Class B Common Share confers the right to cast ten (10) votes at the General Meeting. If and to the extent voting rights are not suspended, each Conversion Share confers the right to cast nine (9) votes at the General Meeting.<br> |
| --- | --- |
| 30.2 | To the extent the law or these articles of association do not require a qualified majority, all resolutions of<br>the General Meeting shall be adopted by a simple majority of the votes cast. |
| --- | --- |
| 30.3 | The chairperson of the General Meeting shall decide on the method of voting. |
| --- | --- |
| 30.4 | Abstentions, blank votes and invalid votes shall not be counted as votes. |
| --- | --- |
| 30.5 | The ruling by the chairperson of the General Meeting on the outcome of a vote shall be decisive.<br> |
| --- | --- |
| 30.6 | All disputes concerning voting for which neither the law nor these articles of association provide a solution<br>are decided by the chairperson of the General Meeting. |
| --- | --- |
| 30.7 | No votes may be cast at the General Meeting for a Share held by the Company or a Subsidiary, nor for any Share<br>for which the Company or a Subsidiary holds the depositary receipts. The Company or a Subsidiary may not cast a vote in respect of a Share on which it holds a right of pledge or a usufruct. However, holders of a right of pledge or a usufruct on<br>Shares held by the Company or a Subsidiary are not excluded from voting, if the right of pledge or the usufruct was created before the Share belonged to the Company or a Subsidiary. |
| --- | --- |
20
| 30.8 | When determining how many votes are cast by Shareholders, how many Shareholders are present or represented, or<br>which part of the Company’s issued capital is represented at the General Meeting, no account shall be taken of Shares for which, pursuant to the law or these articles of association, no vote can be cast. |
|---|---|
| 31 | Class meetings |
| --- | --- |
| 31.1 | The provisions of these articles of association with respect to General Meetings, save for article 25.2, shall<br>apply mutatis mutandis to a meeting of holders of Class A Common Shares and other persons entitled to attend such meeting. |
| --- | --- |
| 31.2 | The provisions of these articles of association with respect to General Meetings, save for article 25.2 and<br>article 28.5, shall apply mutatis mutandis to a meeting of holders of Class B Common Shares or a meeting of holders of Conversion Shares (as applicable) and other persons entitled to attend such meeting, provided that the applicable<br>meeting shall appoint its own chairman, and furthermore provided that for as long as Class B Common Shares or Conversion Shares (as applicable) are not admitted to listing and trading on a stock exchange with the cooperation of the Company:<br> |
| --- | --- |
| (a) | notice of a meeting as referred to in this article shall be given no later than on the fifteenth day before the<br>date of the meeting and the convocation notice shall be sent to the addresses as included in the shareholders’ register; |
| --- | --- |
| (b) | resolutions may be adopted in writing without holding a meeting as referred to in this article, provided such<br>resolutions are adopted by the unanimous vote of all holders of Class B Common Shares entitled to vote or Conversion Shares entitled to vote (as applicable); and |
| --- | --- |
| (c) | valid resolutions may be adopted if the formalities for convening and holding of meetings as referred to in<br>this article have not been complied with, if adopted by unanimous vote in a meeting at which all issued and outstanding Class B Common Shares or Conversion Shares (as applicable) are represented. |
| --- | --- |
CHAPTER IX – FINANCIAL YEAR, ANNUAL ACCOUNTS AND AUDITOR
| 32 | Financial year and annual accounts |
|---|---|
| 32.1 | The Company’s financial year shall be the calendar year. |
| --- | --- |
| 32.2 | Annually, within four months after the end of the Company’s financial year, the Board shall prepare the<br>Annual Accounts. The Annual Accounts must be accompanied by an auditor’s statement as referred to in article 33.3, the Management Report, and the additional information to the extent that this information is required. |
| --- | --- |
| 32.3 | The Annual Accounts shall be signed by the Directors; if one or more of their signatures is lacking, this shall<br>be stated, giving the reasons therefor. |
| --- | --- |
| 32.4 | The Annual Accounts shall be adopted by the General Meeting. |
| --- | --- |
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| 33 | Auditor |
|---|---|
| 33.1 | The General Meeting shall instruct an Auditor to audit the Annual Accounts. If the General Meeting fails to<br>issue the instructions to an Auditor, the Board shall be authorized to do so. The Executive Directors shall not participate in the deliberations and decision-making regarding instructing an Auditor to audit the Annual Accounts.<br> |
| --- | --- |
| 33.2 | The instructions issued to the Auditor may only be revoked by the General Meeting and, if the Board issued the<br>instructions, by the Board, for valid reasons and in accordance with Section 2:393(2) DCC. |
| --- | --- |
| 33.3 | The Auditor shall report the findings of the audit to the Board and present the results of the audit in a<br>statement on the true and fair view provided by the Annual Accounts. |
| --- | --- |
CHAPTER X – RESULT AND DISTRIBUTIONS
| 34 | Profits and distributions |
|---|---|
| 34.1 | Distribution of profits shall be made after adoption of the Annual Accounts from which it appears that the same<br>is permitted. |
| --- | --- |
| 34.2 | Distributions may be made only to the extent the Company’s equity exceeds the sum of its paid up and<br>called up part of its issued capital and the reserves which must be maintained pursuant to the law. |
| --- | --- |
| 34.3 | The Board may determine which part of the profits shall be reserved, with due observance of the Company’s<br>policy on reserves and dividends. The Company may have a policy on reserves and dividends to be determined and amended by the Board. |
| --- | --- |
| 34.4 | The General Meeting may resolve to distribute any part of the profits remaining after reservation in accordance<br>with article 34.3. If the General Meeting does not resolve to distribute these profits in whole or in part, such profits (or any profits remaining after distribution) shall also be reserved. |
| --- | --- |
| 34.5 | The Board may resolve to make distributions from the share premium reserve or other distributable reserves<br>maintained by the Company. |
| --- | --- |
| 34.6 | The Board may resolve to make interim distributions on Shares, provided that an interim statement of assets and<br>liabilities drawn up in accordance with the statutory requirements shows that the requirement of article 34.2 has been fulfilled, and with observance of (other) applicable statutory provisions. |
| --- | --- |
| 34.7 | The Board may resolve that a distribution on Shares shall not be paid in whole or in part in cash but in kind<br>or in the form of Shares, or decide that Shareholders shall be given the option to receive the distribution in cash or in kind and/or in the form of Shares (and with due observance of articles 7 and 8), and may determine the conditions under which<br>such option can be given to the Shareholders. |
| --- | --- |
| 34.8 | In calculating the amount of any distribution on Shares, Shares held by the Company shall be disregarded,<br>unless such Shares are encumbered with a usufruct or right of pledge. |
| --- | --- |
22
| 34.9 | Any and all distributions of profit on the Class A Common Shares and Class B Common Shares shall be<br>made in such a way that on each Class A Common Share and each Class B Common Share an equal amount or value will be distributed, provided that and with observance of the following order of priority: |
|---|---|
| (a) | in the event of the General Meeting resolving to distribute any part of the profits in accordance with article<br>34.4, for each issued and outstanding Conversion Share an amount equal to one percent (1%) of the nominal value of such Conversion Share shall first be added to the dividend reserve maintained for the holders of Conversion Shares (ConversionShare Allocation); and |
| --- | --- |
| (b) | following the Conversion Share Allocation, no further distribution shall be made on Conversion Shares, nor<br>shall any profit be added to the dividend reserve maintained for the holders of Conversion Shares, in respect of such financial year. |
| --- | --- |
| 35 | Notices and payments |
| --- | --- |
| 35.1 | The date on which dividends and other distributions shall be made payable shall be announced in accordance with<br>the law and published on the Company’s website. |
| --- | --- |
| 35.2 | Distributions shall be payable on the date determined by the Board. |
| --- | --- |
| 35.3 | The persons entitled to a distribution shall be the relevant Shareholders, holders of a usufruct on Shares and<br>holders of a right of pledge on Shares, at a date to be determined by the Board for that purpose. This date shall not be earlier than the date on which the distribution was announced. |
| --- | --- |
| 35.4 | Distributions which have not been claimed upon the expiry of five (5) years and one (1) day after the<br>date when they became payable will be forfeited to the Company and will be carried to the reserves. |
| --- | --- |
| 35.5 | The Board may determine that distributions on Shares will be made payable either in euro or in another<br>currency. |
| --- | --- |
CHAPTER XI – AMENDMENT OF THE ARTICLES OF ASSOCIATION, DISSOLUTION AND LIQUIDATION
| 36 | Amendment of the articles of association |
|---|---|
| 36.1 | The General Meeting may resolve to amend these articles of association at the proposal of the Board.<br> |
| --- | --- |
| 36.2 | If a proposal to amend these articles of association is to be submitted to the General Meeting, the notice of<br>such meeting must state so and a copy of the proposal, including the verbatim text thereof, shall be deposited and kept available at the Company’s office for inspection by, and must be made available free of charge to, Shareholders and other<br>Persons with Meeting Right, until the conclusion of the meeting. An amendment of these articles of association shall be laid down in a notarial deed. |
| --- | --- |
| 37 | Dissolution and liquidation |
| --- | --- |
| 37.1 | The General Meeting may resolve to dissolve the Company at the proposal of the Board. |
| --- | --- |
| 37.2 | If the Company is dissolved pursuant to a resolution of the General Meeting, the Directors shall become<br>liquidators of the dissolved Company’s property. The General Meeting may decide to appoint other persons as liquidators. |
| --- | --- |
| 37.3 | During liquidation, to the extent possible these articles of association shall continue to apply.<br> |
| --- | --- |
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| 37.4 | The balance remaining after payment of the debts of the dissolved Company shall be transferred pro rata<br>in proportion to the number of Class A Common Shares and Class B Common Shares held by each Shareholder. |
|---|---|
| 38 | Federal forum provision |
| --- | --- |
Unless the Board consents in writing to the selection of an alternative forum for the resolution of a specific complaint, the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the United States Securities Act of 1933, as amended, or the United States Securities Exchange Act of 1934, as amended, to the fullest extent permitted by applicable law, shall be the federal district courts of the United States of America.
| 39 | Transitional provision I |
|---|
Until such time as of which at least three (3) Non-Executive Directors are registered with the trade register of the Dutch Chamber of Commerce, Article 17.1 of these articles of association shall read as follows:
| “17.1 | The Company shall be managed by the Board. The Board shall consist of a minimum of two (2) and a maximum<br>of eleven (11) Directors, of which a minimum of one (1) and a maximum of four (4) Executive Directors and a minimum of one (1) and a maximum of ten (10) Non-Executive Directors. The<br>number of Executive Directors and the number of Non-Executive Directors shall be determined by the Board. Only individuals may be Directors.”. |
|---|---|
| 40 | Transitional provision II |
| --- | --- |
As of the first day of January two thousand twenty-seven, Article 1 of these articles of association shall be amended and read as follows:
| “1 | Definitions |
|---|---|
| 1.1 | In these articles of association the following words shall have the following meanings: |
| --- | --- |
Annual Accounts: the Company’s annual accounts as referred to in Section 2:361 DCC;
Auditor: an auditor as referred to in Section 2:393 DCC, or an organization in which such auditors work together;
Board: the Company’s board of directors;
Board Regulations: the written rules and regulations adopted by the Board as referred to in article 21.4;
Chairman: the Non-Executive Director appointed as Chairman;
Class A Common Share: an ordinary class A share in the Company’s share capital;
Class B Common Share: an ordinary class B share in the Company’s share capital;
Company: the Company to which these articles of association pertain;
Conversion Date: (i) if the Company is a party to the deed whereby the transfer of one or more Class B Common Share(s) that qualifies as a Conversion Event are transferred, the date of such deed, or (ii) if the Company is not a party to the deed whereby the transfer of one or more Class B Common Share(s) that qualifies as a Conversion Event are transferred, the date of service of notice of such deed, a true copy of such deed or an extract of such deed to the Company, in accordance with Article 12.1;
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Conversion Event: the occurrence of any transfer of a Class B Common Share upon the enforcement of a security interest (including, but not limited to, a right of pledge) over such Class B Common Share;
Conversion Request: shall have the meaning given thereto in article 6A;
Conversion Share: a conversion share in the Company’s share capital;
Conversion Share Allocation: has the meaning given thereto in article 34.9 paragraph (a);
DCC: the Dutch Civil Code;
Director: an Executive Director or a Non-Executive Director;
Executive Director: a member of the Board appointed as executive director;
General Meeting: the corporate body of the Company consisting of Shareholders and all other Persons with Meeting Right or a meeting of Shareholders and other Persons with Meeting Right, as the case may be;
Group Company: a group company of the Company as referred to in Section 2:24b DCC;
in writing: by letter, by telecopier, by e-mail, or by a legible and reproducible message otherwise electronically sent, provided that the identity of the sender can be sufficiently established;
Management Report: the Company’s management report as referred to in Section 2:391 DCC;
Meeting Right: the right, either in person or by proxy authorized in writing, to attend and address the General Meeting;
Non-Executive Director: a member of the Board appointed as non-executive director;
Persons with Meeting Right: Shareholders, holders of a usufruct with Meeting Right and holders of a right of pledge with Meeting Right;
Persons with Voting Rights: Shareholders with voting rights, holders of a usufruct with voting rights and holders of a right of pledge with voting rights in the General Meeting;
RecordDate: the twenty-eighth day prior to the date of a General Meeting, or such other day as prescribed by law;
Share: a share in the Company’s share capital, unless the contrary is expressed this shall include each Class A Common Share, each Class B Common Share and each Conversion Share;
Shareholder: a holder of one or more Shares;
Subsidiary: a subsidiary of the Company as referred to in Section 2:24a DCC;
Transferor: shall have the meaning given thereto in article 6B; and
Vice-Chairman: the Director appointed as Vice-Chairman.”.
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| 41 | Transitional provision III |
|---|
As of the first day of January two thousand twenty-seven, Article 5 paragraph 4 of these articles of association shall be deleted and the paragraphs 5 through 7 (old) of Article 5 shall be renumbered paragraphs 4 through 6 (new). At the same time, Article 5 paragraph 4 (new) shall be amended and read as follows:
| “5.4 | Within eight days after a conversion of one or more Class B Common Shares into Class A Common Shares<br>and Conversion Shares referred to in article 6, the Board shall (i) file a notification thereof with the Dutch trade register, which notification must at least include the authorized capital following the conversion, and (ii) register the<br>conversion in the register of Shareholders as referred to in article 13.”. |
|---|---|
| 42 | Transitional provision IV |
| --- | --- |
As of the first day of January two thousand twenty-seven, Article 6 of these articles of association shall be amended and read as follows:
| “6 | Conversion of Shares |
|---|
Each Class B Common Share can be converted into one (1) Class A Common Share and one (1) Conversion Share, subject to the provisions of this article 6. Class A Common Shares and Conversion Shares cannot be converted into other classes of Shares.
| 6A | Voluntary conversion of Class B Common Shares |
|---|---|
| 6A.1 | Each holder of one or more Class B Common Shares may request the conversion of all or part of his<br>Class B Common Shares into Class A Common Shares and Conversion Shares in the ratio set out in article 6 by means of a written request addressed to the Board (Conversion Request). The Conversion Request must: |
| --- | --- |
| (a) | indicate the number of Class B Common Shares to which the Conversion Request pertains;<br> |
| --- | --- |
| (b) | include a release in advance of the encumbrance that may vest on any Conversion Shares resulting from the<br>conversion of Class B Common Shares in accordance with this article 6A, if (part of) the Class B Common Shares to which the Conversion Request pertains are encumbered with any usufruct, right of pledge, attachment or other encumbrance; and<br> |
| --- | --- |
| (c) | provide for an irrevocable and unconditional power of attorney from the requesting Shareholder to the Company,<br>with full power of substitution and governed by Dutch law, to perform the acts described in article 6A.2 paragraph (b) on behalf of such Shareholder. |
| --- | --- |
| 6A.2 | Subject to article 6A.3: |
| --- | --- |
| (a) | upon receipt of a Conversion Request satisfactory to the Board, the Board shall, as soon as reasonably<br>possible, resolve to convert the number of Class B Common Shares to which the Conversion Request pertains into Class A Common Shares and Conversion Shares in the ratio set out in article 6; and |
| --- | --- |
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| (b) | promptly following such conversion, the requesting Shareholder shall be obliged to offer and transfer the<br>Conversion Shares to the Company for no consideration and the Company shall accept such Conversion Shares. |
|---|---|
| 6A.3 | To the extent the Company would not be permitted under applicable law to acquire Conversion Shares in<br>accordance with article 6A.2 paragraph (b), the Board shall, as soon as reasonably possible, convene a General Meeting in accordance with article 26, at which meeting it shall be proposed to the General Meeting to cancel such number of Shares (held<br>in treasury) to allow again for the acquisition of Conversion Shares as referred to in article 6A.2 paragraph (b). |
| --- | --- |
| 6B | Mandatory conversion of Class B Common Shares |
| --- | --- |
| 6B.1 | A Class B Common Share shall automatically convert into one (1) Class A Common Share and one<br>(1) Conversion Share upon the occurrence of a Conversion Event in respect of such Class B Common Share, subject to the provisions of this article 6B and with effect as of the Conversion Date. |
| --- | --- |
| 6B.2 | If at any time a Conversion Share is held by anyone other than the Company following a Conversion Event, such<br>holder of Conversion Shares (Transferor) shall be obliged to offer and transfer such Conversion Shares to the Company unencumbered (without any usufruct, right of pledge, attachment or other encumbrance and without depositary receipts issued<br>for such Conversion Shares) and for no consideration. If and for as long as the Transferor fails to offer and transfer the relevant Conversion Shares to the Company, the voting rights (both in the General Meeting and in class meetings), Meeting<br>Right and rights to receive distributions attached to the relevant Conversion Shares are suspended. |
| --- | --- |
| 6B.3 | If the Transferor fails to offer and transfer the relevant Conversion Shares to the Company within thirty<br>(30) days after the Conversion Date, the Company is irrevocably empowered and authorized to offer and transfer the relevant Conversion Shares to the Company until such transaction occurs. The Company shall immediately notify the Transferor upon<br>proceeding with the offer and transfer of Conversion Shares to the Company in accordance with this article 6B.3. |
| --- | --- |
| 6B.4 | The Board may, from time to time, establish such policies and procedures relating to the general administration<br>of the share capital structure as it may deem necessary or advisable, and may request that holders of Class B Common Shares furnish affidavits or other proof to the Board as it deems necessary to verify the legal and beneficial ownership of<br>Class B Common Shares, and to confirm that a Conversion Event has not occurred. |
| --- | --- |
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| 6B.5 | To the extent the Company would not be permitted under applicable law to acquire Conversion Shares in<br>accordance with article 6B.2 or article 6B.3, as applicable, the Board shall convene a General Meeting in accordance with article 26, at which meeting it shall be proposed to the General Meeting to cancel such number of Shares (held in treasury) to<br>allow again for the acquisition of Conversion Shares as referred to in article 6B.2 or article 6B.3, as applicable.”. |
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