BRF S.A.

Good morning, everyone. I'd like to say welcome to all of you so we can see the results of the third quarter from 2024. This call is being recorded and you can watch it in the website. BRF at Global and also you can download this presentation. Right now, all the participants are only as listeners and as soon as this presentation finishes, we are going to start the Q&A where further instructions will be given. I would like to also highlight that here we are only going to talk about the available information for the company. These declarations might involve risks and uncertainties, having in the idea that we might face that in further events that might happen or not. Investors, journalists, they should take into account that issues related to macroeconomic issues might have the change to results that are presented here. Here we have Miguel, CEO, and Fabio Mariano, CFO. I would like to give the floor to Miguel, who is going to start the presentation. Please, Miguel, go ahead. Good morning. Everyone, I'd like to thank everyone for attending our third quarter 2024 result conference call. BRFF today reports one of the best quarters in the company's history. With continuous operational progress in all aspects, the company showed consistent performance in all the markets in which it operates. We recorded significant growth in the company's profitability in yet another consecutive quarter, with a margin of 19.1% and an all-time record for the period, and an EBITDA of around 3 billion reais. We also saw growth in revenue up to 12.1% compared to the same period in 2023. In Brazil, I would like to highlight the increase in volume reflecting improvements in commercial execution and investments in our brands. This scenario contributed to market gains in the main categories. In processed products, we achieved a 40% share, a gain of 1 percentage point compared to the second quarter. In the international segment, we also recorded a positive performance, driven by a continuation of our market diversification strategy, in addition to increasing sales of value-added products as well as the recovery of prices in poor cuts. The figures presented reflect the actions implemented over the last few years and confirm the regularity of our gains and competitiveness. B-ARFA Plus 2.0, incorporated into the company's culture, continues to deliver positive results in operational indicators, strengthening our business profile. I'd like to invite our CFO Fabio Mariano to present the detailed results and then I'll come back to you with more final comments on the announcement. Good morning to everyone connected. I highlight the main financial indicators for the third quarter of 2024, starting with the net revenue, which reached 15.5, 12% higher than in the same period in 2023. We reported 3 billion reais for IPTA, which gives a margin over 19% in the period, the best result of a quarter in our history. Free cash flow performance was 1.8 billion reais. In working capital, the financial cycle converged to one day, the lowest level on record. And in this slide with leverage, we reached 0.7 times IPCA in the last 12 months. It was the BRF's lowest leverage. Page 4, we show on the left, shows the historical evolution of growth profit with a profitability of 27.7. We report a gross profit of 4.3 billion reais. On the right, we can also see the EBITDA margins showing a continuous improvement in operation results. In the next slides, we are going to show the performance by market and segmentation. Starting with Brazil, we continue progressing. We achieved 16.6 EBITDA margin in annual growth, especially for the processed categories that showed great market share. The next page, number 6, we emphasize our journey in continuous progress and commercial execution, reflecting a greater number of points of sale reserved, boosting volumes and contributing substantially to the performance of the domestic market. We also remain focused on leading innovations that meet the needs of our consumers. We celebrated 90 years of Perdigon, promoting new campaigns and sponsorships that increasingly strengthen the preferences for our award-winning and admired brands. The next slide I will show about the international market. We observed the segmentation evolution, sustaining healthy margins as a result of good export price levels, recovery of pork cutlet margins, and new markets were enabled as well as good performance in Turkey and the GCC. IPTA reached 22.2. The accuracy of our pricing system has allowed us greater agility and responsiveness to boost our results in this segment. On the next slide, the process, we launch a new project expanding the value-added portfolio in the region. In Turkey, we also had good contributions with a good growth from sales of processed products, which now account for 25% of turnover. On the right, I present the highlights of the direct export segmentation. We expanded our business with 13 new permits for various markets, helping to maximize prices. There are already 70 new export permits for 2024.

I'll end the presentation of the business segments on the next slide with the performance of ingredients as well as PET. This segment reported EBITDA margin of 13.3%. We've also registered a greater share of value-added items on ingredients as well as an increase in volumes in PET and other sales. Also in PET, we would highlight an increased participation of the super-prime and natural category, new commercial export agreements, and progress in logistics and distribution indicators. In ingredients, we started operating in the heparin segment, expanding the line of drugs and maintaining our focus on expanding and diversifying markets. Next, I will share the progress of our efficiency program, which Miguel will be quantifying figures shortly. I will present the comparisons with the same period last year, bars colored in dark gray. The comparison with 2022 can also be seen in the material. In the agricultural sector, the feed conversion of poultry and pigs fell by 2.2 and 0.5%, respectively. Chicken mortality fell by 0.2 percentage points and pig mortality by 0.6. The matching rate remained stable. In industry, we increased poultry and pork production yields by 2.2 and 2.9 percentage points, respectively. logistics we have reduced returns and raised service levels in brazil significantly on page 12 we consolidate the following sustainability highlights certification of brfs slaughter plants in turkey in brazil our units have been certified winning the gold seal of brazilian ghg protocol program the 15th year We also see the recognition of transference and publication of greenhouse emissions inventory, the launching through the Institute PRF through the Spanish language initiation program for Lucas do Rio Verde. Finally, the completion of the first education of our part of education program benefiting more than 4,000 students and teachers in six municipalities. We can now present on page 14 the information related to the company's capital structure. The chart on the left shows the decline in the net debt and leverage, which was highlighted at the beginning of the conference. On the right, we can see the debt profile, which remains diversified and long in a fairly comfortable liquidity position. On the next slide, we show the free cash flow. The graph shows us an operating cash flow of almost 3.4 billion reais, the best operating cash flow in history. an investment flow of 769 million and a financial flow of 609 million, resulting in a free cash flow of 1.8 billion reais. You can also notice on the smaller graph the evolution of cash generation over the last few quarters, eliminating exchange rate effects so that the significant evolution of cash inflows over their last period is even more evident. On the final slide, We can analyze the decline in the net debt between the quarters. We reported net debt of 6.9 billion reais, the lowest one since 2015. The reduction in loans will continue to contribute to lower interest rates in the coming quarters. I would like to thank the audience and then I'll give the floor to our CEO, Miguel Gillard, for his closing remarks. Thank you so much, Fabio. To end our presentation, presentation, I would like to highlight that we presented a net profit of 1.1 billion reais, the best leverage of our history with cash flow generation of 1.9 billion reais, results that were enhanced by operational advancements that also allowed us to reduce the net debt of 34% in comparison to the same quarter of 2023. The BRF Plus 2.0 consolidating the culture of the company is still registering positive results with an additional grasp of 330 million reais, with operational indicators totalizing 1.1 billion reais per year. The liquidity of this quarter shows that BRF is much more prepared for the challenges that the market shows us. In Brazil, besides the growth of added value products, I also like to highlight the anticipation of the beginning of the campaign of Come Celebrate It. This is determining to establish our leadership and ensure time and again the presence of the Christmas supper of the Brazilian consumers. In the international market, we registered another quarter with expressive numbers, advancing our diversification strategy in the markets. We have already accomplished in 2024 17 new registrations for exportations. I would like to highlight a very important step for the consolidation of our presence and leadership in the Middle East with an announcement of an investment in one of the main chicken producers in Saudi Arabia. We would also like to communicate the definition of Saadia as a global brand for the expansion of our beef segment. We would also like to highlight remarks on the safety of our personnel that BRF is a reference. We are consolidating our high performance culture. Our discipline is reflected in all work fronts of the company we would like to thank almost the almost 100 000 employees that have been contributing for our results i would like to end by thanking the strategical direction and our continuous support of our chairman marco marini as well as the administrative board as well as our shareholders as well as the permanent partnerships of our producers customers suppliers and communities where we are present. Together, we will continue building a BRF much stronger and sustainable. Thank you. Now we will start our Q&A session for investors as well as analysts. If you want to ask a question, please click on the button, raise a hand. If your question is answered, you can just leave it on the line and click on the same button. Wait until we collect the questions. Our first question comes from Lucas Ferreira. Your microphone is open. Hi, everybody. My first question regarding the domestic market of process and Natura, I mean, how do you see the customer's demand as well as price for the next quarters once we are seeing that the Food inflation is going up. When it comes to beef, this is also a reality. Do you think this could also be a reality for processed foods? Have you been seeing something in that sense? The second question is about this announcement that you've made, if I'm not mistaken, it was at Cial, in terms of the Cedia brand using this for beef, mar-free. What are your expectations in terms of customers' acceptance? How do you see synergy? In that sense, I wonder if this is something that could be expanded to other geographies as well. Thank you. Good morning. Lucas, answering your question, Fabio, please, if you could complement. We are seeing rather stable demand. And evidently, if you have a stable demand, we will have the possibility of keep improving our price because chicken is an extremely competitive protein. Chicken's price is present in all geographies, and it's a very resilient price. And this is not different in Brazil. Another important aspect, if we take a look at the demand, if we shift this into the imports goods market, we will see an exchange rate that is favorable, that facilitates our operations. When it comes to all the operations that we had here in our quarter, the 13th, we can try to predict a rather favorable scenario in that sense. In the Brazilian market, this is also happening. And in terms of BRF, in the last semester, we have been investing in added value products. And this is even more evident because we have been seeing a growth in processed goods, as Fabio can compliment right now. Thank you. Good morning, Lucas. Indeed, when we think of the demand, and Miguel has already highlighted it, this is very solid and stable. It's also a result of a greater consumption. We see our business, our processed goods, very much related not only to the income of our consumers, but also the reliability index of our consumers as well and we we've even though these are not ideal parameters we have been seeing improvements this helps us understand this increase in volumes that we've been seeing in uh this last two right two quarters the expansion of volumes and processed as well that allowed us to see uh benefits in terms of market participation. We've reached 40% in terms of the average market participation. And it's also important to highlight that this gain in terms of participation is related to all the subcategories. So we gain participation in butters and frozen goods. Another aspect that you mentioned about the Saadia brand, we are very excited. This is another initiative connected to Marfree, among many others that are happening concerning the two companies. And a brand such as Saadia, with the capillarity that it has, the commercial strength, as well as the reputation that it has, when it comes to a multi-protein portfolio with commercial synergy, strategical alignment, allows us to have very good perspectives for next year. Thank you so much. Our next question comes from Bruno Tomazetto from Itaú PBA. Please, Bruno Tomazetto, your microphone is open. You need to be in the Portuguese channel. Hi, everybody, can you hear me? Yes. Good morning. Dulce is by my side here. So when it comes to the international market, you mentioned about this gain of relevance of processed goods. You mentioned 25% of participation in Turkey. My question is more like, can you try to help us in terms of the perspective, how does that mix has been improved in different geographies, and in terms of what you expected in the beginning, what you're seeing now, what can we still approach in terms of that mix, and how much of the opportunity would that represent in terms of incremental gain of international margin? A second question, it's more about the cash generation. I know that you've been delivering great results. I believe that you mentioned this very well in a few. And we have been debating a little bit more about capital allocation and consequently could provide us with an opportunity to accelerate the expansion agenda of the company concerning the news that we've been having about Saudi Arabia. And we have been seeing a sequence, this leverage movement of the last years that could bring about some change in terms of this pre-given cash generation for next year. My question is much more for us to have in perspective about all that. So we have less financial expenses. How can you put all of that into perspective for next year in terms of this breakeven cash generation? How does that change from now on? Bruno, I'll answer your question, then Fabio is going to compliment. Of course, we see a very favorable scenario once we have the competitiveness of the chicken protein present compared to the other proteins. enhancement of the market scope. This protein can be exceeded in different features, mainly price assets. You have different possibilities like a mix. This was connected to all the investments that were made as well as the strategical directions of the company working with added value products, supporting brands that are extremely strong and contain the consumer's preference. So the perspectives are very good. When You take a look at the BRF Plus program. It's a program that is present on the culture of the company. So this performance is not a performance that happens only in the different sectors of the company in Brazil. You also see this process happening in the different geographies. Now we've seen, we were actually traveling with our operations team. We saw the operations in Turkey as well as the Middle East. And we find, and it's a great satisfaction for us to see this. Our chairman, Mark, was with us, as well as other directors. And we see this seek of continuous improvement, this seek for the ideal performance. This is present in all geographies of BRF. And if you have a company that is performing well in the market that is showing signs of resilience in a balanced scenario in all aspect when it comes to offer and demand the perspectives are very good for a year for guidance just analyzing the scenario as a whole good morning i believe that you are correct when it comes to mentioning the progress in process in the international market you mentioned the participation of process in the turkey's portfolio But when it comes to the Gulf region and all the distributions, this portfolio has been progressing as well in terms of magnitude, in terms of the whole revenue or total revenue. It's part of our strategic orientation of BRF to increase this portfolio internationally speaking. Now making a connection to the second question. I believe that the opportunities of keep growing in process are going to be connected to investments without a shadow of a doubt. Part of the dedication of this capital allocation is going to be connected to the growth of our capacity. We will prioritize projects. We will have the opportunity to grow this added value product. In some categories, we have some more conviction in terms of sustainable demand. In some cases, we see some repressed demands to be met. So I believe that you could expect for next year an investment, a growth investment that is much higher compared to the pace of the investments that were made in the last two years. Today we have a pipeline, a project pipeline of one billion for evaluation. I'm not saying that all projects are going to be approved as well as executed, but we have conviction that most part of these projects are going to meet the requirements of economic viability. So besides the announcements that we made last night in terms of compensation to the shareholders, on capital, new rebuying program, good part of this reallocation, capital reallocation is going to be connected to the sustainable growth of the company in the next years. It was very clear. Thank you all.

our next question comes from leonardo from chispy please you have the mic good morning miguel good morning fabio first of all congratulations on the quarter i would like maybe to get into two main points maybe a little bit about what is still behind in newcastle but thinking Maybe giving a little bit more color, if you could talk a little bit more about the international market, Asia, all these other countries. Maybe it was something, a piece of information that you said in the presentation about the... the pig price of the pork meat. So if you could just get into more depth about the regions of the exportations that we can wait and if there's any kind of cash, some kind of restrictions in Newcastle, if they drop. And another aspect, I think you have the graphs, we see the margins recovery that it's been going well, been doing pretty well. And now you have a more share of processed. The margin is much healthier. So probably we shouldn't expect 2025 to have the number of revisions that we had to do in 2024. So I would like to see maybe your point of view, maybe talking about the seasonality. What is the 2025 forecast? How it will be designed? Because maybe this... the process to market might need to have less volatility. So I'd like you to highlight this point. Thank you. Leonardo, I'll start by referring to Newcastle. Even though the OMS, the animal OMS, had reclassified Brazil as a free country, still Rio Grande do Sul still has a closed market, both in Mexico and also in China. And even in the case of Middle East, KSA, Only on the October 31st, it was the exportations from the state was made available. So there's a lot of hard work from the Agriculture Ministry and the International Affairs Ministry. So this market... can be opened in case of a BRF. We have almost our 20% of our poultry productions is in Rio Grande do Sul. We hope that if we go into accordance over the reclamation, we hope that this flow goes back to normal. When you see the market as a whole, think about exports, but not taking the internal market for granted. We see all these openings of new leases. They might be about plants or geography. They had a pretty relevant impact on BRF. If you get the previous two years, if you take this last two years, we have more than 2.2 billion reais that were invested in these new geographies. This is really relevant. And if we analyze all the market growth that we experienced in Brazil, we've been working very hard with our teams with our brands and now our difference different areas in the company of course in order to be able to offer to offer this product offer and get the market opportunities we need to have a team an active team resilient that is committed and so that they can make these opportunities come true. So we are well satisfied with our performance, with the team's performance, and I would say even more with all the geographies. We are very pleased. About the exports, the second part of your question, Fabio will answer you. Good morning, Leo. Just another complementation about the export part, and then I will redirect again to the Brazil question. So when we go to each one of the geographies, we don't see any profitability highlight. So it's the same. They say that the margins, they are very similar. What we have been capturing of profitability in Halal or profitability in Asia and what we've been capturing towards profitability in Africa and America. All the regions, they are obeying the myths. but with margins, pretty similar margins, if we assess them all. It's important to highlight that an important data, which is when we add the enablers from 2024 and 2024, We could profit more than $1 billion with this new leases. This is a relevant data because it highlights this quality of feature that Miguel said. We get more options and this maximizes the company's result through prices. Marginally speaking, you talked about pork, but in comparing the quarters, it was superior to other markets. Talking a little bit about Brazil, it's important to remember that more than 70% of what we sell in Brazil, they are processed products that have this guideline towards consumption. and when we get to the clients where the consumers they choose they choose to buy our products so There's a lot of associations with income standards. We are pretty optimistic to see this macroeconomic data that will have improvements ahead. We are going through our theories that think about this stronger quarter because of the celebrations at the end of the year. Because, for example, for Christmas, we are going to commercialize some Christmas kits. And now we have more than half of our campaigns, they have been sold. And we have already received many requests. And it's one of the best results of the company and also retail results. From up to this date, it's better than our expectations were. So we've commercialized some part of the campaign, of course. The November, December, they are the strongest, the stronger months. But everything leads us to think that we are going to have a pretty strong campaign. And this shows that the strong mess of the domestic market, these products, they give a good price per kilo. And seeing from in nature products, in nature's data, it's around 30% of what we sell in Brazil. we should remember that we don't see any piece of information that would show some sort of unbalance in supply and demand that would affect the prices. So we understand that for in nature in Brazil and in nature internationally speaking, we might have stable prices in high standards. This goes to poultry and pork.