Benjamin Theurer

Benjamin Theurer asked about the status of contracting pricing for Texture and Healthful Solutions (THS) in 2026, the drivers behind it, and expectations for price mix, especially given past negative trends. He also inquired about the company's capital allocation priorities for 2026, specifically regarding share repurchases versus M&A, given strong cash flow and CapEx plans.

Answer

Jim Zallie, President and CEO, explained that THS contracting in the US for 2026 resulted in slightly lower pricing, covering raw material changes but not fully offsetting anticipated manufacturing cost inflation, leading to expected flat gross margins. Jim Gray, EVP and CFO, specified manufacturing cost inflation at 2.5% due to energy and labor. For capital allocation, Jim Zallie confirmed a share repurchase commitment of at least $100 million for 2026, emphasizing flexibility for strategic M&A opportunities. Jim Gray detailed CapEx plans of $400-$440 million, including $80-$100 million for growth projects and about $40 million for cost savings and infrastructure improvements, such as the Indianapolis cogeneration unit.

Benjamin Theurer questioned the Texture and Healthful Solutions (THS) segment's contracting pricing for 2026, including any off-cycle mechanisms and drivers like tapioca, and how these factors shape current expectations. He also asked about Ingredion's capital allocation priorities for 2026, specifically regarding share repurchases versus M&A, given strong cash flow and CapEx plans.

Answer

James P. Zallie, President and CEO, stated that U.S. THS contracting for 2026 resulted in slightly lower pricing, covering raw material changes, but anticipated manufacturing cost inflation would keep gross margins flat. James D. Gray, EVP and CFO, specified a 2.5% manufacturing cost inflation for energy and labor. For capital allocation, James P. Zallie confirmed a share repurchase commitment of at least $100 million for 2026, emphasizing flexibility for strategic M&A. James D. Gray detailed CapEx plans of $400-$440 million, including $80-$100 million for growth and $40 million for cost savings and infrastructure projects like the Indianapolis cogeneration unit.

Benjamin Theurer of Barclays Corporate & Investment Bank asked for a bridge to the second-half sales outlook for Texture and Healthful Solutions and inquired about volume trends and order books in the Latin America segment amid macroeconomic weakness.

Answer

EVP & CFO Jim Gray explained that the Texture and Healthful Solutions sales outlook is supported by a reversal of price/mix headwinds and continued strong demand for higher-value clean label products. President & CEO Jim Zallie addressed the LATAM segment, acknowledging macro pressures in Brazil and Mexico but noted that some customer weakness was described as idiosyncratic and weather-related, expressing confidence in their team's ability to navigate the environment.

Benjamin Theurer asked about the expected cadence and risks for the LATAM business in the first half of 2025, focusing on currency headwinds and potential consumer softness. He also questioned the capital expenditure outlook beyond 2025, after the Indianapolis project is completed.

Answer

EVP and CFO Jim Gray clarified the full-year LATAM sales guidance is flat, accounting for currency headwinds. He noted that in Brazil, local prices adjust to global corn values, while in Mexico, a weaker peso is generally an upside due to dollar-denominated reporting. Regarding CapEx, Gray emphasized the Indianapolis project is a one-time step-up and that spending should return to historical levels focused on reliability and high-return organic growth projects post-2026.

Benjamin Theurer from Barclays asked about the drivers behind the strong volume growth but negative price/mix in the Texture & Healthful Solutions segment, and also inquired about the company's plans for its excess cash flow.

Answer

President and CEO James Zallie explained that strong volume is due to strategic positioning in growing food categories and lapping softer prior-year demand. EVP and CFO Jim Gray clarified that the negative price/mix reflects the pass-through of lower corn costs, while profitability is driven by higher-value solutions. Regarding capital allocation, Gray reiterated a disciplined approach prioritizing organic investments, dividends, and share repurchases, noting the current cash surplus from working capital is temporary.

Benjamin Theurer inquired about Tyson Foods' strong chicken guidance for fiscal year 2026, seeking assumptions for both the high and low ends of the projected $1.25 billion to $1.5 billion adjusted operating income range. He also asked about the drivers behind the softer-than-expected Q4 performance in Prepared Foods, including input costs and pork/beef pricing, and the outlook for 2026.

Answer

CEO Donnie King explained that the 2026 chicken outlook assumes operating conditions similar to 2025, with USDA projecting a 1% increase in production and stable grain costs. He emphasized execution improvements in yield, capacity, labor utilization, and live performance, noting strong branded fresh and frozen value-added chicken volume growth. COO Devin Cole addressed Prepared Foods, attributing the Q4 softness to rapid commodity cost increases and pricing lags, despite overall strong FY25 performance driven by distribution growth, operational optimization, and innovation. He expects stabilization of raw materials and continued volume/market share growth in 2026.

Benjamin Theurer from Barclays questioned the progress of investments in the Chicken segment and their impact on performance, given the solid results. He also asked for a reconciliation of the lowered CapEx guidance against the narrowed free cash flow guidance.

Answer

President & CEO Donnie King stated the Chicken business is running efficiently, with the $100 million investment wrapping up in Q4. Group President Devin Cole confirmed the investments are driving volume, with value-added chicken growing 8.8%. CFO Curt Calaway explained that the lower free cash flow range is primarily due to working capital investments related to top-line growth and higher cattle costs, while the CapEx run-rate was already tracking toward the low end of the prior range.

Benjamin Theurer from Barclays asked about the beef cattle cycle, specifically regarding supply, costs, and signs of heifer retention. He also questioned what drove the significant improvement in the International business and its future potential.

Answer

Group President Brady Stewart stated that while cattle supply is tight, record weights are partially offsetting lower headcounts. He noted signs that the industry is at or near the bottom of the liquidation cycle, with heifer retention starting. For the International segment, Group President Devin Cole attributed the record performance to strong execution of strategy, improved operational fundamentals, and a solid commercial growth plan.

Benjamin Theurer from Barclays asked for Tyson's perspective on the recent USDA cattle report, the outlook for herd retention, and the expected cadence of performance across the four main segments for the remainder of the fiscal year.

Answer

Brady Stewart, Group President of Beef and Pork, explained that leading indicators like improved pasture conditions and record cattle prices suggest the industry is at the bottom of the cattle cycle, with a rebuild expected in the future. CFO Curt Calaway clarified that while most segments will follow typical seasonality, Prepared Foods is expected to have a more balanced performance between the first and second half due to the timing of efficiency initiatives.

Benjamin Theurer of Barclays inquired about the key drivers behind the fiscal 2025 outlook and the sources of confidence for growth. He also asked for potential upside in the Chicken segment, given its significant outperformance in fiscal 2024.

Answer

CEO Donnie King attributed confidence to the multi-protein strategy, with Chicken and Prepared Foods expected to drive 10% AOI growth at the midpoint in FY25. He outlined five strategic enablers, including operational excellence and disciplined capital allocation. Wes Morris, Group President of Poultry, added that the Chicken business is fundamentally stronger due to over $500 million in operational improvements, a revamped go-to-market strategy, and a strong innovation pipeline, making the FY25 guidance robust.

Benjamin Theurer asked about the company's mid-cycle EBITDA projections, specifically the bull versus bear case for the $2.5 billion mark, how feed costs might evolve towards 2030, and a follow-up on pricing premiums for blue ammonia.

Answer

Greg Cameron (EVP and CFO) explained that the $2.5 billion mid-cycle projection assumed a $3.50 Henry Hub gas strip and $3.85 urea price, noting current conditions are below Henry Hub but above on urea. W. Anthony Will (CEO and President) added that current conditions are well above mid-cycle, leading to full-year results above projections. Chris Bohn (EVP and COO) emphasized that the $3 billion growth target is based on identified, in-motion projects. Bert Frost (EVP of Sales, Market Development, and Supply Chain) stated the premium for blue ammonia is $20-$25 per ton, with potential for growth.

Benjamin Theurer asked about CF Industries' mid-cycle EBITDA projections, current market conditions relative to the $2.5 billion mid-cycle mark, and the expected evolution of feed costs towards 2030. He also inquired about the specific price premium achieved for blue ammonia sales in Europe.

Answer

Greg Cameron (EVP and CFO) clarified that the $2.5 billion mid-cycle projection assumed $3.50 Henry Hub gas and $3.85 urea, noting current conditions are more favorable. W. Anthony Will (CEO and President) confirmed that current results are well above mid-cycle. Christopher Bohn (EVP and COO) added that the growth towards $3 billion is already underway. Bert Frost (EVP of Sales, Market Development, and Supply Chain) stated that the premium for blue ammonia is $20-$25 per ton, which W. Anthony Will (CEO and President) highlighted as an unexpected additional benefit to the project's economics.

Benjamin Theurer of Barclays asked about the sequential decline in ammonia margins from Q1 to Q2 despite lower natural gas prices, and the outlook for the second half of the year.

Answer

EVP & CFO Greg Cameron and EVP & COO Christopher Bohn explained that margins were impacted by unplanned outages and higher distribution costs to move product to meet customer needs. For the second half, they noted Q3 is a heavier turnaround period, which will lower production, while Q4 has a solid agricultural order book with positive pricing and demand.

Benjamin Theurer of Barclays asked for commentary on China's new urea export window and the potential for a European embargo on Russian natural gas.

Answer

CEO Tony Will noted that the expected 3-4 million tons of urea from China is consistent with their outlook and needed by a tight global market. Regarding Russian gas, he stated that CF is following the European plan to wean off it by 2027, viewing it as a European policy matter with little U.S. influence.

Benjamin Theurer of Barclays asked for details on the strong performance of the ammonia segment, its demand outlook for Q4, and the potential sales volume for ammonia.

Answer

EVP Bert Frost attributed the strength to CF's flexibility in shifting production to the highest-margin products, which included significant exports. He anticipates Q4 ammonia volumes will be higher than Q3, weather permitting, for the fall application season. He noted that annual ammonia sales are typically in the 3.5 to 4 million ton range.

Benjamin Theurer asked about OXXO Mexico's same-store sales performance, specifically digging deeper into traffic dynamics, sequential improvement from July through September into October, and expectations for Q4 and next year, considering easier comparisons.

Answer

José Antonio Fernández Garza-Laguera, CEO of Fomento Económico Mexicano, expressed optimism about reversing trends and better traffic performance, despite not being fully satisfied. He highlighted market share gains in key categories like beer, soft drinks, snacks, and tobacco, driven by affordability initiatives, multi-return packages, and growth in coffee and food items. He also noted the positive impact of services like cash withdrawals and fintech partnerships, anticipating easier comps and a boost from the World Cup next year.

Benjamin Theurer from Barclays inquired about OXXO Mexico's same-store sales performance, focusing on traffic dynamics, sequential improvements from July through October, and expectations for the fourth quarter and the upcoming year.

Answer

José Antonio Fernández Garza-Laguera, CEO of Fomento Económico Mexicano, expressed optimism about reversing trends in OXXO Mexico, noting better traffic performance compared to the first half, despite easy comps and adverse weather. He highlighted market share gains in key categories like beer, soft drinks, snacks, and tobacco, driven by affordability initiatives, multi-return packages, and growth in coffee and food items. He also mentioned increasing services and double-digit growth in cash withdrawals.

Benjamin Theurer from Barclays asked about the key missing elements needed to leverage the Spin and Spin Premia platforms to drive a traffic recovery at OXXO stores in Mexico, and whether loyalty members exhibit better traffic patterns.

Answer

Juan Carlos Guillermety, CEO of Spin, explained that the company is in the early stages of leveraging data for retail media and monetizing financial services. Juan Fonseca, Director of IR, highlighted that nearly 46% of OXXO sales are now identified through the Premia program, a figure that is rapidly increasing. CFO Martín Yániz confirmed that Premia members are typically heavy users, which demonstrates the program's effectiveness in driving loyalty and engagement.

Benjamin Theurer asked about the key missing elements needed to leverage Spin and Spin Premia to boost customer traffic and drive a recovery at OXXO stores in Mexico.

Answer

Juan Carlos Guillermety, CEO of Spin, discussed leveraging data for retail media and the early stages of financial services monetization. Director of IR Juan Fonseca highlighted the rapid growth in OXXO sales identified through the Premia program, now approaching 50%. CFO Martín Yániz confirmed that Premia users are typically heavy users, which drives loyalty and engagement.

Benjamin Theurer asked for more detail on the initiatives within FEMSA's control at OXXO Mexico aimed at achieving cost savings and translating gross margin expansion into operating income growth.

Answer

Jose Antonio Fernández, CEO of the Proximity and Health Division, detailed several initiatives, including expanding financial services partnerships, segmenting the value proposition, and more than doubling the retail media digital screen network. He also highlighted the profitable, low-CapEx 'OXXO Nichos' format and opportunities for overhead reduction by centralizing administrative processes. CFO Martin Arias Yaniz noted that selling expense growth was contained despite minimum wage hikes, and Juan Fonseca added that front-loading store openings also impacted operating leverage.

Benjamin Theurer from Barclays questioned the perceived shift to a more muted M&A strategy and asked for high-level commentary on same-store sales dynamics, specifically traffic versus ticket, for the European business.

Answer

CFO Martin Arias Yaniz asserted that FEMSA's M&A strategy has not changed, emphasizing that the focus has consistently been on core businesses and disciplined, smaller deals rather than large-scale acquisitions. Regarding Europe, he and another executive explained that consolidated same-store sales data is not provided because the Valora business comprises multiple distinct models (B2B, retail, foodservice), making a single metric misleading. However, CEO Jose Antonio Fernández highlighted the successful fresh food initiative in Swiss stores as a key positive project.

Benjamin Theurer of UBS inquired about the sustainability of OXXO's strong gross margin performance and the specific contribution from digital initiatives like Spin by OXXO and the Premia loyalty program.

Answer

CFO Martin Arias Yaniz explained that the gross margin strength is primarily driven by traditional retail fundamentals, such as commercial income from suppliers and growth in high-margin financial services, rather than the full monetization of digital platforms, which is still developing. Executive Juan Fonseca added that this includes both physical in-store marketing efforts and the early stages of digital promotions, alongside continued growth in traditional services like bill payments.

Benjamin Theurer asked why transaction growth in Mexico and Central America has been weaker than volume growth in recent quarters and what strategies Coca-Cola FEMSA plans to implement to boost transactions next year. He also inquired about the company's pricing strategy for the upcoming excise tax, specifically if they plan to anticipate some price increases in Q4 2025.

Answer

CEO Ian Craig explained that weaker transaction growth is a natural result of consumers shifting to multi-serve returnables for a lower price per liter during challenging economic times. The company's strategy focuses on 'magic price points' with specific multi-serve refillable packs (e.g., 1.25L glass at MXN 20, 3L PET at MXN 33-34) to maintain household penetration and volume. Regarding pricing for the excise tax, the base plan is to pass through the tax starting January 2026, with preparations for modern trade, rather than anticipating price increases in Q4 2025.

Benjamin Theurer of Barclays asked for more detail on the company's digital initiatives, such as Juntos+ and Premia Juntos Plus, seeking examples of how they have improved customer relationships, inventory management, and what the growth expectations are for user adoption.

Answer

CEO Ian Marcel Craig García explained that Juntos+ active users drive approximately 2% incremental revenue and that the Juntos+ Advisor tool in Brazil has improved sales force efficiency by 4 percentage points. CFO Gerardo Celaya added that the 'Premia' loyalty program quadrupled its user base to 1.1 million in 2024 and aims for 1.3 million in 2025, highlighting its high redemption rate as a key competitive advantage.

Benjamin Theurer of Barclays asked what changed so significantly in the last three months to cause a downward revision to the outlook, and also asked for new Interim CEO Jeff Ettinger's strategic view on the company's greatest opportunities.

Answer

President John Ghingo explained that while Turkey pricing and T&M initiatives met expectations, an unforeseen steep run-up in commodity costs, softer-than-expected foodservice traffic, and lagging profit recovery in the Planters business drove the miss. Interim CEO Jeffrey Ettinger expressed confidence in Hormel's portfolio, highlighting leadership in various protein categories and global brands, and stated that the top priority is to deliver both top-line and bottom-line growth.

Benjamin Theurer asked for details on the Planters brand recovery, specifically regarding regaining shelf space and its expected growth contribution in the second half. He also asked about the outlook for interest and investment income.

Answer

CEO Jim Snee confirmed the Planters recovery is on track. EVP of Retail John Ghingo added that Q2 performance exceeded expectations and that he anticipates year-over-year consumption will turn positive in late Q3, driven by advertising, promotions, and innovation. Regarding investment income, CFO Jacinth Smiley stated the company does not forecast it due to market unpredictability.

Benjamin Theurer inquired about the underlying growth trends in the Retail segment, asking how the company's outperforming categories are expected to contribute to the 2026 targets and the role of the T&M initiative. He also asked about the cadence of advertising investments for the year, noting they were flat in Q1 despite guidance for an increase.

Answer

EVP John Ghingo highlighted the resilience of the retail portfolio, citing strong growth across different brands like premium Applegate, value-oriented SPAM, and innovative Hormel Black Label Bacon. He noted flagship brands grew over 3% in consumption. CEO James Snee added that the T&M initiative supports this growth by enabling innovation and improving production efficiency. Regarding advertising, Snee confirmed a temporary pullback on Planters but reiterated the plan for a sequential ramp-up and a full-year double-digit increase in marketing spend.

Benjamin Theurer of UBS Group AG inquired about the updated fiscal guidance, asking for clarity on the top-line range and why a lower sales forecast did not negatively impact the earnings per share outlook. He also asked about the volume momentum in the Foodservice segment for the fourth quarter.

Answer

CEO James Snee explained that the top-line guidance was lowered due to headwinds in Turkey, contract manufacturing, and the Planters production disruption. However, EPS guidance was maintained because these declines are in low-margin or negative-margin businesses. Profitability is being supported by strength in the core retail brands, a rebound in the International segment, and benefits from the 'transform and modernize' initiative. For Foodservice, Snee confirmed expectations for solid, broad-based volume and sales growth, noting the segment is on track for a record year.

Benjamin Theurer from Barclays inquired about the specific drivers behind the strong top-line and margin expansion in the Australian business segment during the quarter and sought confirmation that the free cash flow breakeven analysis is based on IFRS EBITDA.

Answer

Global CEO Gilberto Tomazoni attributed the strong Australian results to increased volumes and prices, primarily within the beef business, noting that other areas were stable except for a minor dip in salmon. Global CFO Guilherme Cavalcanti confirmed that the free cash flow discussion was indeed based on IFRS EBITDA.

Benjamin Theurer of Barclays asked about consumer behavior, specifically the shift within Smithfield's brand portfolio towards private label, and the profit dynamics between the strong Hog Production segment and the Fresh Pork segment.

Answer

Steven France, President of Packaged Meats, acknowledged the industry-wide growth in private label but positioned it as a competitive advantage for Smithfield as a key supplier. Shane Smith, President and CEO, expressed confidence in the Hog Production outlook, citing favorable market dynamics like pork's price point versus beef and chicken, as well as internal operational improvements.

Benjamin Theurer of Barclays asked about consumer behavior, specifically the shift within Smithfield's brand portfolio towards private label, and the relationship between strong hog production profits and the fresh pork segment's performance.

Answer

Steven France, President of Packaged Meats, acknowledged a cautious consumer but noted Smithfield's volume share grew 60 basis points in Q2. He explained that while private label demand is rising, Smithfield's ability to produce for this segment is a key competitive advantage. Shane Smith, President and CEO, added that favorable industry dynamics and internal efficiencies in hog production support the company's raised outlook for that segment.

Benjamin Theurer of Barclays asked for a breakdown of the factors that led to better-than-expected Q1 results, contrasting with the more cautious tone on the previous call. He also inquired about the capital expenditure and strategic initiatives aimed at growing the company's market position in packaged lunch meats.

Answer

CFO Mark Hall explained that the initial Q1 caution stemmed from a later Easter holiday, higher raw material costs, and consumer trade-down, but the company's diverse portfolio of branded and private label products performed well. Hall also noted that about half of the $400-$500 million annual CapEx is dedicated to ROI projects, with a significant portion allocated to Packaged Meats. President of Packaged Meats Steven France added that the company is seeing success by focusing on the 'lunch daypart,' growing share in bulk deli, packaged lunch meat, and portable meals, with the Smithfield Prime Fresh brand being a key growth driver.

Benjamin Theurer of Barclays asked for a breakdown of what drove the better-than-expected Q1 results compared to the cautious outlook provided previously. He also inquired about the company's growth initiatives and capital expenditure plans for the packaged lunch meat category.

Answer

CFO Mark Hall attributed the prior caution to a later Easter holiday, higher raw material costs, and general consumer trade-down, noting the company's brand portfolio is a strength in this environment. Regarding lunch meat, Hall stated that about half of the $400-$500 million annual CapEx is for ROI projects, with a skew towards Packaged Meats. Steve France, President of Packaged Meats, added that the company is gaining share in lunch meat through a targeted approach, with its Prime Fresh brand being the fastest-growing in its space.

Benjamin Theurer requested more specific examples of volume drivers for Fresh Pork and Packaged Meats for the year. He also asked if Smithfield has observed any changes in customer behavior, such as purchasing hesitancy or a shift to spot buying, due to global trade and tariff uncertainty.

Answer

President of Packaged Meats, Steve France, detailed volume drivers including mix optimization (converting hams to lunch meat), a strong brand portfolio, innovation, and operational efficiencies. On trade, President of Fresh Pork, Donovan Owens, acknowledged minimal disruption but emphasized the company's dynamic risk management and contingency planning. President and CEO Shane Smith added that Smithfield's flexibility, with multiple sales channels and operations in Mexico, helps mitigate global trade impacts.

Benjamin Theurer of Barclays asked about capital allocation, observing strong free cash flow but what appeared to be a slowdown in share repurchases, and sought clarity on the balance between buybacks, dividends, and investments.

Answer

President & CEO Ken Seitz clarified there has been no slowdown, with repurchases continuing at a ~$45 million per month rate. EVP & CFO Mark Thompson added that the strategy is consistent: prioritize sustaining capital, fund a narrow set of growth projects, and execute ratable share buybacks through the cycle. He noted the dividend's absolute cash outlay is stable, with per-share growth driven by a lower share count.

Benjamin Theurer asked about Nutrien's confidence in achieving its full-year phosphate volume guidance after a soft Q1, and whether high prices were causing any demand destruction.

Answer

President and CEO Kenneth Seitz stated there is no challenge on the demand side for phosphate, as strong demand is what's driving the high price environment. He explained that Q1 production was impacted by weather and other challenges, but planned turnarounds at the White Springs and Aurora sites in Q2 are expected to improve reliability for the second half. He expressed confidence that the company will operate within its full-year guidance range, viewing it as a 'story of two halves.'

Benjamin Theurer asked for a quantification of the potential disruption from a Canadian rail strike that was factored into the company's potash sales volume guidance.

Answer

Mark Thompson, incoming CFO, explained that the guidance embeds a potential impact of 'a few days to a maximum of a week.' He clarified that if such a strike occurs, volumes would likely trend towards the lower end of the guidance range. Conversely, if no interruption happens, volumes would trend toward the midpoint or upper end.

Benjamin Theurer from Barclays asked about Beyond Meat's strategy to achieve positive adjusted EBITDA, questioning the balance between driving top-line growth and implementing SG&A cuts. He also inquired about the company's cash balance, working capital needs, and comfort level with its liquidity in light of future debt maturities.

Answer

Founder, President, and CEO Ethan Brown explained the top-line strategy involves stabilizing U.S. retail by improving product discoverability with consolidated brand blocks, addressing price gaps, and expanding the brand's focus beyond animal protein replication with new products like Beyond Ground. CFO and Treasurer Lubi Kutua, along with Ethan Brown, clarified that Q2 cash consumption was inflated by approximately $19 million in non-routine payments, such as a class action settlement, and that the underlying cash burn is a key focus for reduction through aggressive cost management and margin expansion.

Benjamin Theurer asked about potential initiatives to stabilize declining U.S. volumes and for more specific details on the new $100 million financing agreement, including interest expenses and maturities.

Answer

CEO Ethan Brown explained that volume stabilization efforts focus on two areas: regaining distribution lost during retailers' shift from refrigerated to frozen sections, and combating consumer misperceptions with new marketing like the 'Real People, Real Results' campaign. CFO Lubi Kutua detailed the financing as a delayed draw facility with a ~4.75-year initial term, accruing 12% payable-in-kind interest. Both executives emphasized that the primary goal is achieving their EBITDA positive target by managing expenses and margins, not just chasing top-line growth.

Benjamin Theurer of Barclays asked about consumer perception and price elasticity in U.S. retail, and sought clarification on the flat top-line guidance, specifically questioning the impact of suspending operations in China.

Answer

CEO Ethan Brown explained that favorable price elasticity in U.S. retail, where revenue grew 5.7% while volume fell only 4.5%, was due to a successful strategy of offering a clean, simple product that consumers will pay more for. He added that the conservative revenue guidance is intentionally designed to keep the team focused on the primary goal of achieving EBITDA positivity, rather than pursuing near-term revenue that could conflict with margin optimization.

Benjamin Theurer asked for a reconciliation between the company's reported U.S. retail volumes and weaker third-party data, and questioned if the international foodservice volume decline was a one-time issue.

Answer

CEO Ethan Brown attributed the retail data discrepancy to a lag between sell-in (shipments) and sell-out (consumption data) due to distribution changes, expecting a true-up in Q4. Regarding international foodservice, he explained the decline was driven by challenges in a specific market and an inventory loading/timing issue with a large QSR partner from Q2 promotions.

Benjamin Theurer of Barclays asked for an outlook on the Nutrition segment for the second half of the year, specifically quantifying the cost impact from the Decatur East plant outage and projecting a potential normalized earnings run rate for the business.

Answer

CEO Juan Luciano stated that the Nutrition segment's recovery is ongoing, led by strong performance in Flavors. He quantified the headwind from the Decatur East plant outage at $20-25 million per quarter, which is expected to be resolved heading into 2026. While declining to provide a specific 2026 run rate, Luciano confirmed that roughly $100 million in annualized costs from the plant issue should be eliminated, setting the segment up for continued growth.

Benjamin Theurer of Barclays asked for an outlook on the Nutrition segment for the second half of the year, specifically requesting the quantifiable cost impact from the Decatur East plant outage and the expected future earnings run rate for the business.

Answer

CEO Juan Luciano explained that the Nutrition segment's recovery is being led by strong growth in Flavors and Biotics. He quantified the headwind from the Decatur East plant outage at $20-$25 million per quarter, which he expects to be resolved heading into 2026, implying a potential annual benefit of around $100 million. He noted that while it's too early to provide a specific 2026 run rate, the removal of this cost headwind will be a significant factor.

Benjamin Theurer asked for a reconciliation of the Ag Services & Oilseeds guidance, questioning how the segment could achieve results 'below to similar' to 2024 given the projected 50% profit decline in Q1 and lower crush margin assumptions for the full year.

Answer

CEO Juan Luciano cited several factors for the expected second-half recovery: significant manufacturing improvements and self-help initiatives, growth in destination marketing, strong meal demand, and the absence of last year's negative take-or-pay contracts. CFO Monish Patolawala added that a strong forward curve for crush margins in the second half supports this outlook, contingent on biofuel policy clarification.

Benjamin Theurer asked for more detail on the sensitivities within the wide implied guidance range for the fourth quarter, seeking to understand the key risks and opportunities that could push results to the low or high end.

Answer

Chair and CEO Juan Luciano provided a segment-by-segment breakdown, noting strong volumes but lower margins in Ag Services, margin compression in Crush, and steady performance in Carb Solutions. EVP and CFO Monish Patolawala added two key variables for the quarter: an assumption of $135 million in reinsurance proceeds and an expectation of low single-digit negative organic revenue growth for the Nutrition segment.

Benjamin Theurer inquired about the capital expenditure timeline for the new $400 million Georgia plant and whether it would require new slaughter capacity. He also asked about the risk of chicken oversupply due to rising production and bird weights.

Answer

CFO Matthew Galvanoni detailed the CapEx cadence, with the bulk of the $400M spend occurring in 2026 for a 2027 opening. President & Global CEO Fabio Sandri explained the plant will support the growing 'Just BARE' brand and will be supplied by their internal NAE production, though the business operates independently and can source externally. Sandri also addressed supply, noting that while production is up, it's in line with strong retail and foodservice demand, supported by favorable comparisons to other proteins.

Benjamin Theurer inquired about the timing of the company's capital expenditures, asking why Q1 spending was low despite a high full-year target, and also questioned the current market dynamics regarding potential consumer softness or trade-downs within the chicken category.

Answer

CFO Matt Galvanoni explained that the Q1 CapEx was lower due to timing related to site selection and permitting for large projects, but reaffirmed the $750 million full-year target. CEO Fabio Sandri addressed market dynamics, noting a consumer shift from foodservice to retail due to inflation, which is driving strong demand for chicken in both channels as it remains an affordable protein option.

Benjamin Theurer asked about the market dynamics driving strong Q4 and early Q1 cutout values, particularly for big bird chicken. He also questioned the CapEx guidance of $450-$500 million, which seems low given the company's strong cash position, and inquired about other capital return plans.

Answer

CEO Fabio Sandri attributed the strong demand to chicken's relative affordability and increased menu penetration in QSRs, which offset typical Q4 seasonality. He noted that flat production in the big bird category against this strong demand sustained prices. CFO Matthew Galvanoni acknowledged the strong cash position, explaining the current CapEx guidance is for sustaining projects, and hinted that larger organic growth opportunities and overall capital allocation philosophy would be detailed at the upcoming Investor Day.

Benjamin Theurer asked about the key drivers of Europe's strong margin performance and its sustainability, and also inquired about U.S. market dynamics, specifically why chicken prices remained stable in Q4 and the demand outlook for retail versus foodservice.

Answer

President and CEO Fabio Sandri attributed Europe's strength to a combination of rising consumer confidence, successful branded products, foodservice recovery, and restructuring benefits. For the U.S., Sandri explained that strong retail demand is offsetting foodservice traffic weakness, with chicken gaining penetration in both channels, thus supporting prices. CFO Matthew Galvanoni added that Europe's margins are approaching their target levels.

Benjamin Theurer of Barclays asked if the second-half outlook had materially changed, excluding the corn milling divestiture, and inquired about the drivers of softness in the Refined and Specialty Oils (RSO) business.

Answer

CFO John Neppl confirmed the full-year guidance holds but expects a weaker Q3 and stronger Q4, with stronger processing results being offset by challenges in Merchandising and softness in specialty oils. CEO Greg Heckman explained that the RSO segment was impacted by lower energy demand due to biofuel policy uncertainty and customers shifting to spot purchasing amid tariff concerns.

Benjamin Theurer asked about the expected incremental earnings contribution from growth CapEx projects scheduled to come online through 2026 and inquired about the likely cadence of the remaining share repurchases.

Answer

CFO John Neppl projected that the ongoing growth projects are expected to add approximately $2.50 to the EPS baseline, raising it from $8.50 to $11 by the end of 2026, assuming a mid-cycle environment. Regarding buybacks, he reiterated the plan to complete the remaining $800 million opportunistically within 18 months of the Viterra close, without specifying a more detailed timeline.

Benjamin Theurer asked for clarification on the financial impact of the sugar JV disposal and requested an update on the remaining regulatory approvals for the Viterra transaction. He also inquired about a recent legal development in Argentina.

Answer

CFO John Neppl clarified that the sugar JV's Q3 results were due to underperformance, while the Q4 impact reflects lost earnings post-sale. CEO Greg Heckman provided an update on Viterra approvals, noting progress in the EU, Canada, and China, and reiterated that no issues are expected to be material to the deal's economics. He stated that a recent legal appeal in Argentina was an expected part of the process and has no consequences for the post-close approval.

Benjamin Theurer from Barclays Corporate & Investment Bank inquired about the increased savings targets for Project Cutting Edge, seeking details on the source of the additional $50 million for 2025 and the confidence in achieving the $400 million run-rate savings by 2027.

Answer

CEO Jaime Muguiro explained that the additional savings primarily stem from organizational transformation and overhead headcount reductions. He expressed high confidence in the $400 million target for 2027, stating it is based on recurring initiatives like personnel reductions ($200 million) and procurement efficiencies ($150 million), not speculative negotiations.

Benjamin Theurer from Barclays asked for an update on the U.S. market, inquiring about demand trends across infrastructure, industrial, and housing, and whether activity improved in April.

Answer

CEO Jaime Dominguez, former head of U.S. operations, confirmed a slow Q1 due to weather but noted that daily sales have increased sequentially each month since January. He described infrastructure spending as robust, with a solid ready-mix backlog from industrial and commercial projects like data centers. The primary weakness remains in the residential sector due to high mortgage rates.

Benjamin Theurer of Barclays asked for clarification on CEMEX's capital allocation priorities for 2025, questioning the balance between strategic CapEx, M&A, dividends, and share buybacks, and also inquired about a one-off item in the U.K.

Answer

CFO Maher Al-Haffar and CEO Fernando Olivieri explained that the focus is on enhancing free cash flow, with 2025 being a peak year for strategic CapEx before shifting towards small-to-medium M&A. They noted growth investments offer high returns (30%+ IRRs) and that reducing leverage and interest expense remains a priority. Shareholder returns will follow as financial health improves. Executive Lucy Rodriguez clarified the U.K. one-off was a ~$10 million gain from a resolved legal case.

Benjamin Theurer asked for clarification on the moving parts of the EBITDA guidance, specifically questioning the drivers behind the improved energy cost outlook and the potential for further upside.

Answer

Executive Maher Al-Haffar attributed the improved energy cost guidance to several factors. These include a drop in commodity prices for fuels like petcoke and coal, a strategic shift towards cheaper and lower-carbon fuels like natural gas, increased use of alternative fuels, and a reduction in the clinker factor. He noted that while electricity costs were slightly up in the first half, better comps are expected in the second half, supporting the company's confidence in the revised guidance.

Asked about the upcoming dual listing vote, the outlook for the U.S. Beef business amid rising cattle prices and trade tariffs, the drivers behind Australia's strong performance, and confirmation of the full-year CapEx forecast.

Answer

The company is encouraging shareholders to vote on the dual listing but has no visibility on the outcome. 2025 will be challenging for U.S. Beef, with tariff issues impacting margins by 1-1.5 ppt in Q2, mainly on hides. However, diversification is expected to stabilize overall margins. Australia's performance was strong due to better operating conditions and increased herd size, with future growth expected in pork. The $2 billion CapEx forecast for the year was confirmed.

Benjamin Theurer from Barclays asked about FMC's long-term strategy for alternative sourcing to mitigate potential ongoing tariff headwinds beyond 2025.

Answer

CFO Andrew Sandifer detailed that FMC has built a flexible supply chain with multiple, registered raw material sources globally, including the UK, Mexico, and India, not just China. While 2025 costs are largely locked in, the long-term strategy involves optimizing this global sourcing network and, if tariffs become certain and persistent, passing on the costs via pricing, as has been done in the past.

Benjamin Theurer from Barclays asked for insight into the medium-term financial cadence, seeking to understand how FMC will bridge the gap from the weak 2025 outlook to its stronger 2027 targets.

Answer

CEO Pierre Brondeau clarified that the three-year plan is not back-end loaded. He expects a significant step-up in performance starting in 2026, following the 'correction year' of 2025. By 2026, FMC anticipates benefiting from both a recovery in its core business and the accelerating growth of its new products and newly established routes to market, leading to more even growth across the period.

Benjamin Theurer followed up on the Fertilizantes business, asking for clarity on the normalized SG&A run rate excluding FX impacts and the expected timing for recovering the $30 million insurance claim related to the AgroGalaxy default.

Answer

Luciano Pires, EVP and CFO, advised analysts to use the Brazilian real costs from the performance data sheet as a ceiling for modeling purposes. He also expressed confidence that the insurance claim related to AgroGalaxy would be recovered within the current year, though he could not specify the exact quarter.

Benjamin Theurer requested an update on the Brazilian market, asking for insights into current farmer activity, fertilizer buying behavior, and overall transaction dynamics amid mixed signals from the region.

Answer

Jenny Wang, EVP of Commercial, acknowledged the challenges but highlighted recent improvements. She noted that local corn and soybean prices are trading at a premium, supported by a devalued Real and new bioethanol demand. This has improved farmer economics and sentiment. As of the previous week, farmer selling of future crops and purchasing of fertilizers for the next safrinha season were ahead of last year's pace, indicating a positive shift in activity.

Benjamin Theurer from Barclays asked for an update on signs of heifer retention in the U.S. cattle industry and questioned if M&A is a current capital allocation priority for Marfrig, given its improved leverage.

Answer

Executive Timothy Klein observed a slowdown in cow liquidation, which he sees as a precursor to heifer retention beginning in 2025. Executive Tang David stated that the company's priority for capital allocation is debt reduction to lower financial costs and improve leverage, suggesting M&A is not a primary focus.

Benjamin Theurer asked about the North American market, specifically how recent wet weather could positively impact pasture conditions and potentially accelerate heifer retention for herd rebuilding. He also requested an update on commercial synergies with BRF in South America and their expected role in improving margins.

Answer

Timothy Klein, CEO of North America, confirmed that improved grass conditions are leading to lower cow slaughter and early signs of heifer retention, which is positive for future herd rebuilding. Rui Mendonca, an executive for South America, detailed that synergies with BRF are being realized across commercial, logistics, and administrative functions. He emphasized that a significant number of new market certifications are creating opportunities to develop specific, higher-value products.

Benjamin Theurer asked about the store count reduction initiative, its impact on competitive dynamics and guidance for fiscal 2025 and 2026. He also followed up on how geopolitical factors, such as U.S. tariffs and FX rates, could impact Brazilian farmer sentiment.

Answer

CEO Ruy Cunha clarified that the revised guidance stems from product delivery delays, not the store optimization. He explained the plan to consolidate approximately 70 stores is to enhance profitability and reduce fixed costs without majorly impacting market reach. Regarding geopolitics, Cunha stated that while cautious, potential U.S. tariff changes could be positive for Brazilian farmers, similar to 2018, by potentially boosting soy prices and export opportunities.

Benjamin Theurer inquired about the store count reduction initiative, asking about its relation to competitive dynamics and its impact on guidance for fiscal 2025 and 2026. He also asked for commentary on how geopolitical factors, such as potential U.S. tariffs and the BRL exchange rate, could affect Brazilian farmer sentiment.

Answer

CEO Ruy Cunha clarified that the revised guidance was driven by inventory supply issues, not the store optimization plan. He detailed the initiative to consolidate approximately 70 stores to reduce fixed costs, with benefits expected in the second half of the fiscal year. Regarding geopolitics, Cunha stated the overall mood for Brazilian farmers is positive, as a weaker BRL and potential U.S. trade policy shifts could create favorable export conditions and commodity pricing, though he remained cautious.

Benjamin Theurer asked about recent trends in farmer profitability and any resulting changes in their purchasing behavior. He also questioned if a major competitor's bankruptcy has altered the sentiment or credit policies of Lavoro's suppliers.

Answer

CEO Ruy Cunha explained that while farmers are still delaying purchasing decisions, their concern over input availability is accelerating store visits. He noted that the input-to-grain price exchange ratio has become more favorable for farmers. Regarding suppliers, Cunha stated that a conservative credit approach was already in place across the industry due to prior farmer profitability issues and that this sentiment will likely improve as the market recovers.

Benjamin Theurer from Barclays asked for an update on farmer profitability and any resulting changes in farmer behavior, and also questioned how the bankruptcy of a large competitor has affected sentiment and credit lines from suppliers.

Answer

CEO Ruy Cunha explained that while farmers are delaying purchasing decisions, their concern over input availability is accelerating store visits. He noted a positive trend in the exchange ratio, with fewer bags of corn required to buy inputs. Regarding suppliers, Cunha stated that a conservative credit environment was already in place across the industry before the competitor's issues and that credit availability should improve as farmer profitability recovers.

Inquired about the second-half outlook for the Crop Care business, specifically what is factored into the guidance, and asked for expectations for the Latin American business, considering the impacts of El Nino and other weather patterns.

Answer

The executive expects Crop Care to accelerate in the second half, driven by specialty fertilizers and adjuvants, which will partially offset a decline in the higher-margin biologicals business. For Latin America, a stronger second half is anticipated, contingent on climate normalization, with the segment showing better margin resilience than the Brazil retail business.