Pilgrim's Pride Corporation

Good morning, and welcome to the first quarter of 2025 Pilgrims Pride Earnings Conference Call and Webcast. All participants will be in listen-only mode. Should you need assistance, please see to a conference specialist for pressing the star key followed by zero. At the company's request, this call is being recorded. Please note that slides referenced during today's call are available for download from the Investors section of the company's website at www.pilgrims.com. After today's presentation, there will be a question and answer session. I would now like to turn the conference over to Andrew Radjeski, Head of Strategy, Investor Relations, and Sustainability for Pilgrims Provide.

Andrew Radjeski Good morning, and thank you for joining us today as we review our operating and financial results for the first quarter ended on March 30, 2025. Yesterday afternoon, we issued a press release providing an overview of our financial performance for the quarter. including a reconciliation of any non-GAAP measures we may discuss. A copy of the release is available on our website at ir.pilgrims.com, along with slides for reference. These items have also been filed as Form 8Ks and are available online at sec.gov. Bobby Osandre, President and Chief Executive Officer, and Matt Galvinoni, Chief Financial Officer, will present on today's call. Before we begin our prepared remarks, I would like to remind everyone of our safe harbor disclaimer. Today's call may contain certain forward-looking statements that represent our outlook and current expectations as of the day of the release. Other additional factors not anticipated by management may cause actual results to differ materially from those projected in these forward-looking statements. Further information concerning these factors have been provided in yesterday's press release, our 410 and our regular filings with the SEC. I would now like to turn the call over to Fabio Sandri.

Thank you, Andy. Good morning, everyone, and thank you for joining us today. For the first quarter of 2025, we reported net revenues of $4.5 billion, a 2.3% increase over the same quarter last year. Our adjusted EBITDA was $533 million, up 62% versus Q1 of 2024. Our adjusted EBITDA margin was 12% compared to 8.5% last year. Our performance reflects our discipline execution of our strategies, emphasis on our teams, and our focus on what we can control throughout our business. In the U.S., sales and adjusted EBITDA increased compared to prior year. Big Bird captured benefits from elevated commodity values and improvements in production efficiencies, whereas Case Ready grew given strong demand in retail and expanded key customer partnerships. Small board improved with QSR growth and operational excellence efforts. Diversification efforts to prepare accelerated through portfolio expansion across retail and food service. Improved in Europe last year through sustained benefits from business integration, mix enhancements, and network optimization. Opportunities to scale profitable growth further developed giving multiple awards from key customers and launch of robust innovation. Sales of core branded offerings also rose, further diversifying our portfolio. Mexico continued to drive our strategies as sales to key customers increased double digits, and sales of our branded portfolio and prepare continues to grow. To support this growth and diversify our geography in Mexico, our efforts to expand capacity in fresh and prepared foods remain on schedule. Turning to supply in the U.S., USDA indicated ready-to-cook production for the U.S. chicken that grew 1.1% compared to the first quarter of 2024, as increased average live weights offset declines in head count. Similar to 2024, increased mortality and reduced hatchability challenged our broiler production. To offset these impacts and provide production growth, hatchery utilization remained at record highs. Considering continued growth in sets and placements, the USDA currently projects growth of 1.7% for 2025, reflecting a response to the supportive demand environment that chicken has experienced through all recent quarters. As for overall protein availability, the USDA anticipates 1.6% growth due to expected growth of chicken along pork production increases. Regarding demand, The cost of eating out increased more rapidly than eating at home. As such, retail propelled further growth for chicken. Within the fresh aisle, boneless skinless breast, the anchor of the fresh category, realized substantial growth in demand, even with less promotional activity, giving its record price spreads to other proteins. The remainder of the fresh category in chicken also experienced momentum for 2025. producing strong growth across almost all major meat groups. Boneless thighs have experienced record double-digit growth based on availability and consumer acceptance. Not only has fresh chicken grown materially, both deli and frozen departments have also added demand at a sustainable rate. In exports, winter weather port disruptions in January Concerns over potential port strike and increased domestic demand for dark meat products reduced the volumes throughout the quarter and compared to prior year. However, these dynamics enable further momentum in pricing during the early stages of the second quarter and may be further amplified by strong domestic demand for boneless dark meat. U.S. inventories are slightly below the five-year average, potentially adding more support to domestic and international pricing, thereby limiting export volume. While the potential of a high path avian influenza outbreak still exists, the first quarter of 2025 was relatively muted compared to the second half of 2024. As such, several markets released their temporary county and state level bans. Assuming typical seasonality, the second quarter may experience an increase in high path AI activity. Nonetheless, Our geographic diversity of production locations across U.S. will continue to provide the flexibility to transition production for export if outbreaks occur. As for China, the relationship with the U.S. is currently in transition, and it appears both countries are positioning themselves for a broader negotiation in the future. While China is an important global agriculture importer, the potential impact may be limited as exports of U.S. chicken products, notably the paws, have significantly declined since 2023, given the high pet AI bans. To date, other trading partners around the world continue to navigate tariffs, enabling strong demand. This is partially attributed to the attractive value of chicken compared to more expensive proteins, along with disease and supply issues in other chicken-producing countries. Turning to feed, Corn prices experienced volatility throughout the quarter. In January, a strong rally emerged, giving reductions in the final U.S. corn and soy yields. However, this gain subsided by the end of the quarter, as South America realized greater than expected production. Moving forward, more corn supply is anticipated, as the March USDA prospective plantings report indicated additional acreage for the 2025 growing season. As for soybean meal, Prices fell during the first quarter as South America realized record high production given favorable weather. Increased soybean processing capacity across the globe also drove further soybean meal production, resulting in ample supply. In wheat, global stocks may contract for the nearly completed crop year. However, strong crops in Australia and Argentina should limit the likelihood of a significant price increase in the short term. Major wheat-producing regions, including the EU, Ukraine, and Russia, are primed for higher crops in the upcoming year. The UK also anticipates higher production in 2025. Given these anticipated increases, along with a substantial build in U.S. supplies, wheat pricing is expected to decline. Moving forward, U.S. weather will be the primary driver of corn and soybean meal prices. Trade disruption due to tariffs disputes would also be important, with the soybean complex more exposed to tariffs changes compared to the corn market. In the U.S., consumers are still aware and concerned about high inflation and higher prices. Within retail, grocery buyers' behaviors indicate a growing habit of purchasing less per trip while shopping more frequently, signifying a stretched household budget. In food service, declines in traffic suggest a reduction in dining out occasions among customers, which enable their spending to go farther in other areas. Given the affordability of chicken and our strategies, our team was well positioned to continue to unlock value for the consumer. As such, our team maintained their focus on driving differentiation through quality and service for our key customers. In Big Bird, we focus on operational excellence to upgrade mix enhance yields, and maximize throughput. These efforts were further amplified by improvements in live operations. Based on our progress and attractive market fundamentals, profitability in Big Bird grew considerably. Small Bird also improved profitability compared to the prior year, giving lower grain costs and operation efficiencies, especially at our expanded operation in Athens. Despite strong volumes in QSR and Delhi throughout the quarter, Prices for whole birds and deli were lower compared to last year, unlocking value for key customers and consumers. Equally important, we are launching a variety of innovations to further strengthen our competitive advantage. Keys Ready experienced strong retail demand throughout the quarter. As such, we work closely in partnership with key customers to ensure increasing availability. Considering the traction of our higher attribute offerings in the marketplace, along with improvements in production efficiencies, we experienced an improvement year over year. Repair foods grew over 20% compared to prior year from increased distribution across retail and food service. Diversification through brands played a critical role as sales of Just Bear and Pilgrim collectively rose over 50%. Commerce continued to be a key enabler for branded growth as sales rose over 35% compared to last year. As such, we will continue to accelerate our growth through our relationship with leading online suppliers, traditionally tailors and food service providers. In Europe, profitability improved compared to last year through business integration, mix enhancements and manufacturing optimizations. During the quarter, the consumer environment remained attractive as wage growth exceeded inflation. In grocery, poultry, pork, and chill meals category grew, benefiting our portfolio. While food service experienced a decline in visits, our demand increased. We continued to cultivate growth through partnership with key customers. As such, we secured long-term arrangements with selected retail partners, many of which were driven by our differentiated sustainability and animal welfare practices. We further amplify our growth through innovation as we launch over 80 new products through March. Diversification through key brands continued to gain traction as both sales and volume grew compared to last year. Frigerators continued to grow ahead of category averages and recently became one of the top 100 brands in the UK market. Richmond also realized similar success, where rollover increased distribution through new accounts. Moving forward, we will continue to invest in promotional activities and media efforts to increase brand awareness among consumers. In Mexico, overall profitability remained steady year over year, but with significant volatility throughout the quarter. The increase in exchange rate between the peso and dollars impacted our costs, and we experienced demand pressure in the live commodity market during the month of March. Nonetheless, we drove profitability growth through our strategies. As such, sales to key customers in retail increased by 11%. Diversification efforts through branded and value-added offerings also accelerated. In fresh, our branded portfolio grew by 15% compared to last year. In prepared, net sales rose 9%. Both pigments and just bear brands continue to gain distribution and market share, and the sales of a la mesa, our tacos and typical Mexican food, have grown nearly 50%. establishing a new record sales for the quarter. We also continue to invest and evaluate opportunities to further drive profitable growth. In US, our growth in prepared foods is exceeding our current capacity, and we are committed to expand our production both in our existing plants and through a green field. In fresh, we're also growing faster than the category, especially with our differentiated offerings to key customers. We are always looking for opportunities to unlock additional processing within the existing locations, and we also committed to convert one of our commodity plants to differentiated tray pack for a key customer. We continue to evaluate alternatives to expand our protein conversion capacity and add value to our products. To that end, we are assessing multiple sites and refining our analysis to assess best alternatives, just as we did with our new plant in Douglas, Georgia. In Mexico, our investments in capacity expansion for FRESH in Veracruz and Merida remains on schedule, and we anticipate completion in the first half of 2026. Based on those investments, we can further enhance our buyer security and supply chain capabilities, strengthening our relationship with key customers. Similarly, our investments in PREPARE are proceeding as planned, with our new line expected to be operational at the end of Q4. further enabling branded growth. In sustainability, we continue to drive operational efficiency throughout our supply chain to reduce our greenhouse emissions footprint. Equally important, third-party reports have demonstrated that they've decreased our scope one and two emissions intensity below target levels. Moving forward, we'll continue to explore alternatives to enhance our climate resiliency throughout our values chain. With that, I would like to ask our CFO, Matt Galvanone, to discuss our financial results.