BRF S.A.

Good morning, ladies and gentlemen.

Welcome to the BRF teleconference regarding the results of the third quarter 2022. This teleconference is being recorded and replay can have access in the site of the company. It is available for download in the ri.brf-global.com. All the participants are connected only as listeners now, and afterwards we'll have a Q&A session and more instructions will be provided. Before we continue, I would like to reinforce that this information they have as the basics, the expectations, beliefs, and assumptions of BRF, and the information available to the company. Such statements do not correspond to historical facts, and they are based on currently available competitive financial and economic data. According to the circumstances that can occur, they can change. We have Mr. Miguel Goulart, CEO, and Fabio Mariano, CFO. I would like to give the floor to Mr. Miguel Goulart, who will start the presentation. Please, Mr. Miguel. Good morning. I would like to open this results teleconference, the first in BRF. Thank you all of you that are connected today. I'm very excited to be in the BRF team and be able to contribute to such a relevant company in the food industry. We have iconic brands in its categories, excellent portfolio products, and an appropriate infrastructure. I would like to give the floor to Fabio Mariano, who will present the results 2022, third quarter, and I'll come back later. Good morning to all of you connected today. I will highlight the main financial results for the quarter. Starting with net revenues, we can see an evolution of 13% compared to the same period in the previous year. We have achieved more than R$14 billion. Right below, I will present to you, I just said EBITDA, 1.4 more or less billion reais, similar to the same quarter in 2021, and this is a margin in the EBITDA of around 10%. The net income was a loss of 137 million reais, half of what was reported in the same period in the previous year. Moving to the right, we have an operating cash flow above 1,300,000 reais, a little bit under previous year. However, we have a sequence being proven here from the beginning of 2022. So it is 40% above the previous quarter, even considering a very similar EBITDA. In the working capital, although we have some seasonal advancements in the festivity crops and the second crop, We have noticed a reduction in some of the main products. We have a reduction along the third trimester, the third quarter. And we have also worked with our suppliers. Moving to the net leverage, we have reached 3.26 times the EBITDA of the last 12 months. still under the influence of a common performance in the first quarter. And this indicator was also impacted by the real depreciation. We are putting our effort to have this cash flow generation as an engine for our net income so that the leverage will go back to appropriate levels. Finally, I would like to highlight that our independence days, they are still comfortable, our period. above eight years and in the next slide to the left we have the gross profit evolution we had around 18 percent and the um gross profit around um 2.600 million reais and to the right we can see the adjusted evolution a performance that has been already um highlighted In the following slides, I'd like to present the performance by business segments in the market. Starting in Brazil, we have a sequential evolution of EBITDA every quarter throughout 2022, but still below or lower than what our brands usually perform, our products and all the infrastructure that we have. I'd like to highlight in the Brazilian market some important evolution in the number of active customers that will allow us better competitiveness in the following quarters. We have also portfolio simplifications and also the item sales. So, to the customers, with improvement in the market, we have a decrease in the low profitability SKUs, improvements in market share and brand visibility initiatives. We had a significant improvement in our service levels in the secondary logistics. We had, as I said, improvements in the market share and brand visibility. mainly in margarines, cold cuts, and rich products. And also we'll have a fourth quarter with significant investments in media. I'd like to highlight the investment in the World Cup streaming. We have a lot of visibility for our brand. In the halal segment, the chart to the left, we can see the EBITDA and margins back to historical levels. as a result of a more normalized offer in the region. We have the impact of the price peaks that we had tested in the previous quarter. Turkey still challenged the macro and microeconomic scenario. We increase in exports and value-added products in order to maximize our results and protect also the operation from the Turkish lira influence. We have also the added value products. expanding its sales, we can see high levels in halal here in market share when we assess the levels of the last years and months. And also we have an increase of exports to the region. And I would like to close here with two highlights. First, the joint venture with PIS. an important movement with an ideal partner that will allow us through this alliance to develop the Arabic market and keep on consolidating our presence and leadership in the country. Also, the GAV investments cannot be different. They are being discussed jointly with the partners. And the business plan will be totally in compliance with the strategy to the region. Second, we have to do with the expansion of sales in added value products in the region. Also, during the World Cup, these added value items is about 21% of our portfolio in direct exports. in the chart to the left we see the stability of the margins at a very high level we have included a mix of products and the region and we have expanded our performance in chicken export to Africa and other regions. To the right, we see the higher prices to the portfolio that serves the region, especially a very positive trend to pork. We believe that the sanitary issue, the avian influenza for United States and Europe, this can impact positively the prices in this segment. We are prepared to capture opportunities both in the price variables and in other aspects. We also bring now the development in Asia. We here can see a better profitability. We have left the third quarter with this 12.5% in the EBITDA margin. We have reached 12.5% in the third quarter. We can see to the right, we have seen prices positively responding between quarters in the market as Japan, Korea, and China, both for chicken and pork, the last one with a relevant recovery throughout 2022. We have gained participation in the chicken exports to China and pork exports to Singapore. I end the presentation of the business segments in the next slides with the development of ingredients and pet food. We had 21% of EBITDA margin, equivalent to 143 million reais. We keep on capturing synergies in pet food. We have advanced also in the GTM plans, and we have expanded the portfolio to brand foods and BioFresh brands. In ingredients, we have an expansion of market alternatives and first sales to Thailand, and we are putting our effort to maximize the integration of our business and consequently our profitability. In the quarter, we had some highlights in sustainability. We can see in the next slide some conquers like the environmental seal by the Abu Dhabi Environment Agency, acknowledging our environmental practices in the Kizade plant, Also, we have been using satellite technology, tracking more than 95% of direct rain, and we are reaching our goal of 100% of traceability for grain suppliers in the Amazon and Cerrado biomes. We keep progressing our clean energy generation with the use of solar panels. in many companies integrated producers and brands also recognized for the third consecutive year with the code sealed by the GHG protocol program. Now we will present the information related to the capital structure of the company, To the left, you can see the evolution of the net debt and net leverage. We have the indicators that have been presented already in the beginning of this presentation. I would like to call your attention to those that are connected to two aspects. The disindexation of the gross debt, the strong currency, we have reached in dollars here, these figures, and these allowed us to change our indebtedness profile, eliminating the need to use intensively derivatives. we have this coverage of our exchange. And the second aspect is the amortization profile. We have amortizations, short-term amortizations, combined with a high liquidity position, equivalent to more than 12 billion reais, when we consider the cash flow condition and the revolving credit lines that have already been negotiated or promised. In the next slide, we show the free cash flow. This chart will highlight 1.3 billion and this investment flow of 1 billion and 600 million without financial activities we have an operating cash flow 355 free cash flow or 226 free cash flow if we include derivatives, and also the cash flow variation. The cash flow has been recovering sequentially every quarter, as we show in this chart, the smaller charts here. In this slide, in the final slide, we can see the evolution of the net debt. Besides the consumption here that we had, we had the negative impact of the exchange rate. And if we consider both results combined, half billion reais in the indicator. This was the variation. I thank you for the audience. And I'll give the floor to our CEO, Miguel, to the final remarks. Thank you. I'd like to close this teleconference on results. Talking about my first impressions in the more than 45 days in BRF, I found a company with professionals, very competent professionals in all levels, very well-developed indicators that will certainly allow us to take from the company the performance that the market expects and that it can deliver. We have an appropriate footprint. We have powerful brands. Brands in 95% of the Brazil households, very consistent. They will allow us to build in 2023 a very appropriate performance to our excellent potential. The time lapse, we can already see clearly the improvements happening. at our reach. We have the sense of emergency and consistency in execution using methodologies and indicators that are available, and together we'll build the performance that is expected. We need and we're going to advance in energy efficiency. We're going to improve the index in mortality, profitability, both in slaughtering and unboning, and constantly we will improve our factory index. We will improve our time worked without hampering or jeopardizing the costs. And certainly this will bring to BRF the performance and reliability that is expected. Our work together with the board and the other levels of the company We'll go through the fine-tuning of our performance and operational performance. We're building solid benchmarks, and we should, as always, keep on investing in capacity building and training of our collaborators. This is basic and critical to this high-labor business. geographic location of our grains purchase they are very competitive aspects that should be enforced so that we can have a more balanced supply chain that is flexible and dynamic we're going to improve our price system and inventory as well as flexibility to the to the domestic market and export so that in the perfect timing we can have quickly a more agile and flexible company We'll keep on diversifying our market, focusing on profitability, and we should never forget the improvement of our industrial park for the demands in the world. We have modern logistics. We are focusing the improvement of fleet, the improvement of the service level to customers, and we will work to better the facing and optimizing the energy costs. We will continue to improve services and commercial services. We will, in the brands, continue to invest in communication, looking for innovations and a better profitability profile. Environment is critical, and we're going to be very strict working in the short and long term and not jeopardizing the future. uh reasonable and we will have our incentive models to foster the execution of our tasks and improve our performance i would like to close the presentation with this conviction of more than 80 years of history we have this latent performance culture that will be consolidated with the delivery of these results. Agility, pragmatism, focus, and rationality. We are totally sure that it is possible, that we are able to deliver and fulfill our commitment. I would like to thank you all and... Reinforce our commitment with more than 89,000 collaborators, our controller, our shareholders, our board of directors, customers, and partners, and everywhere BRF is present. We'll continue to evolve with the company so that it is more and more competitive in the world.

Obrigado. Thank you.