Henrique Brustolin

Henrique Brustolin asked about OXXO Mexico's opportunities for new consumption occasions, specifically breakfast, coffee, and daily replenishment. He inquired about the operational, assortment, pricing, and store execution changes needed, and the expected timeline for these initiatives to impact performance.

Answer

CEO José Antonio Fernández Garza-Lagüera explained that OXXO is simplifying food complexity, moving to automated coffee machines, and aiming to significantly increase coffee sales (currently 28 cups/store/day vs. 90-100 in other markets). He emphasized winning the narrative for OXXO's high-quality, affordable coffee and developing a filling, hot breakfast option, drawing lessons from successful food propositions in Colombia (25% revenue from food) and Brazil (almost 20%). He also stressed the need to be more competitive in daily replenishment and continue gaining share in impulse categories, expecting a strong 2026 if these initiatives succeed.

Henrique Brustolin asked about the operational, assortment, pricing, and store execution changes needed for OXXO Mexico to gain traction in new consumption occasions like breakfast, coffee, and daily replenishment, and the expected timing for these initiatives to reflect in performance.

Answer

CEO José Antonio Fernández Garza-Lagüera detailed efforts to simplify complexity in food offerings, moving towards automated coffee machines and aiming to significantly increase coffee sales per store (from 28 to over 100 cups/day, similar to Japan or Colombia). He emphasized winning the narrative for OXXO's high-quality, affordable coffee and developing a 'hero product' for hot breakfast options, citing success in Colombia and Brazil. He also mentioned the need to be more competitive in daily replenishment and continue gaining share in impulse categories.

Henrique Brustolin asked about Seara's expectations for year-end seasonal offerings in the Brazilian domestic market. He also questioned if the 7% growth in breeder flock placements in Brazil is a good proxy for future supply growth, considering bottlenecks. Finally, he asked if the softening of export prices was entirely due to volume redirection from Europe and China, or if there were signs of weakness in specific markets.

Answer

Gilberto Tomazoni (Global CEO, JBS) expressed confidence in strong demand for Seara's year-end seasonal products (e.g., Fiesta, Crystal market) in Brazil, with no observed constraints in the retail market for their portfolio. He explained that the 7% breeder flock growth is partly for replacing older breeders to improve productivity, and while more chicken volume is expected, demand will compensate. He confirmed that softening export prices were largely due to volume redirection, and with Europe and China reopening, average prices for Seara are expected to increase, especially for breast and wings, though the Middle East market for small birds remains challenging due to local production.

Henrique Brustolin asked about SEARA's expectations for year-end seasonal offerings in the Brazilian domestic market. He also questioned whether the 7% growth in breeder flock placements in Brazil is a good proxy for future supply growth, considering potential bottlenecks. Finally, he asked if the softening of export prices was solely due to volume redirection from Europe and China, or if there were signs of weakness in specific markets.

Answer

Gilberto Tomazoni, Global CEO of JBS, expressed confidence in SEARA's year-end seasonal offerings, noting strong demand from retail and no constraints in the overall portfolio. He explained that while breeder flock placements increased, it's partly to replace older stock and improve productivity, and that Brazil's chicken exports were flat in 2025 due to restrictions, but are expected to be strong in 2026. He confirmed that reopening Europe and China creates opportunities for price increases in premium products (breast, wings) and offal, reducing pressure on other markets, though small bird markets in the Middle East remain challenging.

Henrique Brustolin of Bradesco BBI asked for an explanation of the significant sequential margin deterioration in U.S. Beef and what factors, such as cattle supply or capacity adjustments, would be necessary to return the segment to breakeven profitability.

Answer

Wesley Batista Filho, CEO of JBS Foods USA, explained that the margin pressure was due to extreme price volatility and market positioning, not operational inefficiencies. He stated that while herd rebuilding is underway, which tightens short-term supply, JBS is comfortable with its current capacity and does not foresee adjustments on its end.

Henrique Brustolin asked for an assessment of the company's goal to sustain flat year-on-year margins, given H1 volatility, particularly for Brazil Beer. He also questioned if price relativity between premium and mainstream segments explained the latter's underperformance.

Answer

CEO Carlos Eduardo Klutzenschell Lisboa expressed increased confidence in achieving their goals, citing stronger brands, a more complete portfolio, and benefits from the digital ecosystem. He clarified that the core segment's underperformance was primarily due to its higher exposure to the on-premise channel, which was more affected by weather, and noted that price relativity gaps are already easing.

Henrique Brustolin asked for clarification on Brazil beer pricing performance in Q1, questioning how it should be interpreted for future quarters given easier comps and a mentioned mismatch in the pricing calendar.

Answer

Executive Carlos Eduardo Lisboa explained that while Q1 net revenue per hectoliter growth of 2.4% was solid, it was partially offset by a pricing calendar mismatch and lower carryover from the previous year. He emphasized that volume growth of 0.7% was a key achievement and that net revenue management, supported by a strong brand portfolio and the BEES digital platform, remains a crucial driver for the company's full-year margin expansion goals.

Henrique Brustolin of BTG Pactual inquired about the potential impact of Avian flu on exports, particularly concerning China's reaction and Brazil's regionalization protocols. He also asked about BRF's future growth strategy, covering both organic and inorganic opportunities.

Answer

CEO Miguel de Souza Gularte addressed the Avian flu concern, expressing confidence in Brazil's robust biosafety protocols and BRF's contingency plans, which include 187 new export permits and strategic inventories to ensure supply continuity. CFO Fabio Mendes Mariano discussed growth, highlighting the 16% Q1 revenue increase and noting that ongoing investments are expected to boost production capacity by an additional 3-5% upon maturity, complementing a strategy that also includes inorganic growth.

Henrique Brustolin inquired about the drivers of profitability in the domestic market, specifically the gross margin evolution, and sought clarification on why poultry production growth might be lagging housing growth.

Answer

CFO Fabio Mariano explained that while in-natura product profitability is rising, the margin gap to higher-value processed products, which constitute over 70% of domestic sales, remains significant. He suggested future EBITDA growth will be supported by both revenue and ongoing cost efficiencies from the BRF+ program. He clarified that the comment on production lagging housing was an interpretation of third-party data, implying average slaughter weight as a potential factor.

Henrique Brustolin requested a breakdown of the projected operational synergies from the merger, distinguishing between revenue and cost-saving components. He also asked about the shareholder withdrawal rights, particularly for BRF minority holders, and any scenarios that might limit the merger's benefits for them.

Answer

Miguel de Souza Gularte, CEO of BRF, detailed the BRL 805 million in annual synergies, breaking them down into commercial, logistics, supply, and SG&A categories. Fabio Mendes Mariano, an executive, explained that the withdrawal right for BRF shareholders is at a set market value and estimated the net cash impact would be manageable, resulting in a comfortable post-merger leverage of around 3x. Executive Marcos dos Santos added that key shareholders support the deal.

Henrique Brustolin of Bradesco followed up on South American volumes, asking if the growth from new feedlot cattle would be concentrated at year-end or more gradual. He also inquired about the working capital policy for supplier advances given the new verticalization strategy.

Answer

Rui Mendonca, an executive, explained that the current positive cattle cycle in Brazil provides flexibility, allowing the company to maintain growth levels in Q3 and Q4 regardless of the exact timing of feedlot cattle. Tang David, an executive, added that working capital for feedlots saw a BRL 230 million supplement in Q2 and should remain at that level going forward.

Inquired about the company's capital allocation strategy, specifically prospects for future M&A given its comfortable leverage. Also asked about the sustainability of the current positive chicken cycle and any risks of overproduction.

Answer

On M&A, the company is constantly looking for opportunities aligned with its strategy (growth in the US, Brazil, Europe; value-add) and financial discipline. Regarding the chicken cycle, demand remains strong while supply growth is constrained by genetic challenges in both the U.S. and Brazil. They do not see a risk of disruptive supply growth in the near term, which should support the cycle.

Henrique Brustolin of BTG Pactual questioned the trends within Chile's beer category, specifically the premium versus mainstream mix, and the volume outlook for the coming year. He also asked about the performance expectations for the International business, particularly in Argentina.

Answer

Felipe Dubernet, CFO, noted that heavy promotions in the premium beer segment by competitors meant there was no radical shift in the portfolio mix. For the International segment, he highlighted robust growth in Paraguay, Uruguay, and Bolivia. For Argentina, he believes consumption may have bottomed out as inflation eases, but the recovery timeline remains highly uncertain, making the first half of the year tougher than the second.

Henrique Brustolin questioned the trends within Chile's beer category, specifically the premium versus mainstream mix, and the volume outlook for the coming year. He also asked for the outlook on the International segment's performance, particularly in Argentina.

Answer

Felipe Dubernet, CFO, responded that heavy promotions in the premium beer segment by competitors masked any significant mix shift. For the future, he expects Chilean industry volumes to grow in line with GDP. For the International segment, he highlighted robust growth in Paraguay, Uruguay, and Bolivia. In Argentina, he believes consumption may have bottomed out as inflation eases, but the recovery's timing remains highly uncertain, with H1 expected to be tougher than H2.

Henrique Brustolin from BTG Pactual questioned the 23/24 yield guidance, asking how the company is factoring in El Niño risks. He also inquired about the land price market outlook and whether the company might pivot from a net seller to a net buyer of land.

Answer

CEO André Guillaumon explained that the yield guidance is conservative and based on historical farm-level data, which already incorporates recent weather-related downsides from farms like Chaparral. Regarding land prices, he sees a stabilization creating buying opportunities for the well-capitalized company. However, he stated the company will remain anti-cyclical, capitalizing on both sales in a liquid market and strategic purchases, rather than making a definitive pivot from selling to buying.

Henrique Brustolin from BTG Pactual asked how the company is incorporating the risks of El Niño into its '23-'24 productivity guidance and questioned the outlook for land prices, probing if the company might become a net buyer.

Answer

Chairman and CEO André Guillaumon clarified that the guidance is conservative and already incorporates historical downsides, such as the recent poor performance of the Chaparral Farm. Regarding the land market, he noted a stabilization in prices, which he views as an opportunity. While the company has been a net seller due to market conditions, he affirmed they are anticyclical and prepared to acquire land when favorable deals emerge.