JBS - Q4 2025
March 26, 2026
Transcript
Operator (participant)
Good morning, and welcome to JBS fourth quarter and the year of 2025 results conference call. At this time, all participants are in listen-only mode. Later, we will conduct a questions and answers session, and instructions will be given at that time. As a reminder, this conference is being recorded. Any statements eventually made during this conference call in connection with the company business outlook, projections, operating and financial targets, and potential growth should be understood as merely forecasts based on the company's management expectations in relation to the future of JBS. Such expectations are highly dependent on the industry and market conditions and therefore are subject to change. Present with us today, Gilberto Tomazoni, Global CEO of JBS, Guilherme Cavalcanti, Global CFO of JBS, Wesley Batista Filho, CEO of JBS USA, and Christiane Assis, Investor Relations Director.
Now, I'll turn the conference over to Gilberto Tomazoni, Global CEO of JBS. Mr. Tomazoni, you may begin your presentation.
Gilberto Tomazoni (Global CEO)
Good morning, everyone. Thank you for joining us today. We closed 2025 with a consistent performance and a continued progress in building a stronger, more efficient company. In the fourth quarter, we recorded a revenue of $23 billion with an EBITDA margin of 17.5%. For the full year, revenue reached $86 billion, a company record with a consolidated EBITDA margin of 7.9%. This scale and the diversity of our multi-protein and multi-geography platform remain our greatest strength, allowing JBS to navigate industry cycles or any disruption while capturing a structural growth in protein demand. In both the fourth quarter and the full year, JBS delivered record sales with positive consolidated results, reflecting the resiliency of our global platform.
Net income total, $450 million in the quarter and $2 billion for the year, representing year-over-year growth of 15%, earnings per share of $1.89 for the year. Free cash flow was $990 million in the quarter and $400 million for the year. Return on equity reached 25% and return on investment capital was 70%. Our leverage ratio at the end of the fourth quarter was 2.39 times in line with our long-term target. We also maintain a very strong debt profile with leveraged debt maturity of approximately 15 years and average cost of the debt of around 5.7%. No significant maturity in the short term.
These strong results reflect our consistent performance in a year marked by a challenged environment in some global protein markets. In the United States, the cattle cycle remained under pressure with a limited supply and high costs. This is expected to continue in the coming quarters. Despite this environment in U.S. beef sector, our global results remain positive, reflecting the resilience of our diversifying platforms. Australia was one of the highlights of the year, with a strong EBITDA growth and margin expansion, as well as a top-line growth of 30% year-over-year in the fourth quarter. Our Australian business benefit from the current imbalance between global supply and demand of beef, combined with the strong execution and supported solid profitability and reinforce the role of region in balancing our global results.
In Brazil, the beef business operate with a historical margin range, supported by strong export and steady domestic demand. The fourth quarter was particularly strong, with the top-line sales growing 26% year-over-year. At the same time, livestock productivity continued to improve. The country recorded highest beef processing volume in its history at around 42 million heads. This reflected a total gain in production and reinforces Brazil's growing role in a global supply. In this context, Friboi delivered solid results with growth in both export and domestic sales. Volume increased in key international markets, including Mexico, Europe, and United States. While the business also strengthened its presence in Brazil, programs such as Friboi Mais continues to deepen clients' relationship and support growth in the domestic market.
At Seara, we continue to advance our strategy in strengthening brands and expanding high value-added products. In recent years, Seara has expanded its portfolio, entering new categories and strengthening connections with consumers. The business is now one of its strongest moments in brand perception, supported by innovation, execution, and more differentiated product mix. In the United States, our chicken business continued to benefit from the strong demand in both retail and food service. Pilgrim's delivered a volume growth above the industry average in segments such as case-ready and small birds. The big birds segment also improved performance through better yields, mix, and cost efficiency. Brand diversification continues to progress, and Just Bare surpasses $1 billion in retail sales, reflecting the strength of our brand strategy and the significant opportunity we see to capture further growth across our modern high-value prepared foods portfolio.
In U.S. pork business, performance remained stable, and the business closed the year with solid margins, supported by disciplined operation and balanced supply and demand. In 2025, we completed the dual listing process, a milestone in the company history, and became a NYSE-listed company to strengthen our capital market position. Since then, we have seen a clear improvement in how the market value the company. Our trading multiple expanded, reflecting greater visibility and investor confidence. Although we still trade at a discount to our global peers. Liquidity also has increased significantly, with average trading volume up approximately three times compared to the pre-listing levels. At the same time, our shareholder base has become more global and diversified. U.S.-based investors now represent nearly 70% of the company free float.
Overall, this change reinforce our position in global capital market and support the next phase of growth. Global protein consumption continues to grow, supported by demographic, health awareness, and demand for balanced diets. JBS is well-positioned to meet this demand across markets and channels. Our strategy remain clear. We will continue to strengthen our brand, expand our value-add product portfolio, and develop solutions that make protein more accessible and more convenient everyday life. Thank you again for joining us today. Now, I will turn the call over to Guilherme, who will walk through our financial results in more detail.
Guilherme Cavalcanti (Global CFO)
Thank you, Tomas. The operational and financial highlights of the fourth quarter and fiscal year of 2025. Net sales reached a record of $23 billion in the quarter and $86 billion in 2025. Adjusted EBITDA in IFRS totaling $1.7 billion, which represents a margin of 7.4% in the quarter and $6.8 billion in 2025 with a margin of 7.9%. Adjusted EBITDA in U.S. GAAP total $1.5 billion, which represents a margin of 6.5% in the quarter and $5.8 billion in 2025 with a margin of 6.7%.
Adjusted operating income was $1.1 billion with a margin of 4.7% in IFRS and 4.8% in U.S. GAAP in the fourth quarter. In 2025, adjusted operating income was $4.5 billion in IFRS with a margin of 5.2% and $4.4 billion in U.S. GAAP with a margin of 5.1%. Net income was $415 million in the quarter and an EPS of $0.39. For the year, net income was $2 billion and EPS of $1.89.
Excluding the non-recurring item, adjusted net income would be $500 million in earnings per share of $0.47 in the quarter, and for 2025, $2.2 billion with an earnings per share of $2.1. Finally, return on equity was 25% and return on invested capital was 17%. Free cash flow in fourth quarter 2025 reached $990 million compared to $960 million in the fourth quarter of 2024. The main positive drivers were related to the deferred livestock, particularly in U.S., and inventories reflecting strong revenue growth during the period. Despite an $850 million in working capital consumption in 2025, the cash conversion cycle remained resilient and in line with prior year levels.
For the full year, free cash flow totaled $400 million. When we visited free cash flow breakeven IFRS EBITDA exercise for 2025, the initial estimate EBITDA to a breakeven level was around $6 billion. However, considering the actual results, the EBITDA breakeven would be approximately $300 million lower. The main difference came from working capital, as mentioned earlier, mainly reflecting the deferred livestock effect and the decrease in inventories. On the other hand, CapEx came in about $100 million above estimates as we executed $1.1 billion in expansion CapEx during the period. We also saw a higher number of biological assets, largely driven by the increasing livestock volumes and prices, while the remaining items stayed broadly in line with our estimates.
Finally, the higher cash tax paid in 2025 were mainly related to the tax payments associated with the results of 2024. For 2026, and for the purpose of the EBITDA cash flow break-even exercise, we can assume a capital expenditures of $2.4 billion, of which $1.3 billion is for expansion and $1.1 billion is for maintenance, interest expenses of $1.15 billion, and leasing expenses of $500 million, and a consolidated effective tax rate of 25%. Just to highlight, it is still too early to estimate the variation in working capital and biological assets as there are many factors beyond our control, such as grain and livestock prices.
However, if you consider the same amount of working capital consumption in biological assets of 2025, EBITDA cash flow break even would be $5.7 billion in line with 2025 numbers mentioned above. On page 24, we present a historical free cash flow breakdown to help analysts' forecasts. Our leverage ended the year at 2.39 times, in line with our long-term target of keeping net debt to EBITDA between 2-3 times. In 2025, we also strengthened our balance sheet by extending our debt maturity profile, reaching an average debt term of approximately 15 years and an average cost of 5.7%. We have no significant debt maturities until 2031. The coupons of our debt are below Treasury until and including 2032 maturities.
32% of our gross debt maturing beyond 2052 and approximately 90% of the total debt is at fixed rates. It's worth mentioning that despite the 8% increase in net debt in the last three years, net financial expenses remained at $1.1 billion per year. Our $3.5 billion in revolving credit lines and $4.8 billion in available cash provide us the flexibility to continue executing our expansion CapEx, value creation products and shareholder returns while maintaining a healthy and robust balance sheet. For this reason, and given our strong cash position and leverage, we announced last night the payment of $1 per share in dividends to be paid in June 17. With that in mind, I would like to turn over to the operator for the question and answer session.
Operator (participant)
Thank you, ladies and gentlemen. If there are any questions, please use the raise hand button. Thank you. We have our first question from Lucas Ferreira with JPMorgan. Mr. Ferreira, you may go ahead.
Lucas Ferreira (Senior Equity Research Analyst)
Hi, guys. Hope you listen to me well. Thanks for your time to address the questions. I have two. The first one, if you can give us an update on the business environment for PPC, especially in the U.S. There were some renovation works at the Russellville plants. Wondering if those are completed, if operations are running fine, if this could be an issue at all for the quarter. As well as any update you see in the market regarding prices. Seems that we are in an environment of a bit more supply than the first quarter of last year. If you see how robust is the market and how balanced the market today. The second question is on the U.S. beef operations.
We saw pretty steep recovery in beef spreads over the last few weeks. To what you attribute this, obviously demand remains strong, but there have been some capacity rationalizations in the industry. Any updates on the Greeley situation will also be welcome, and with regards of how that impacts your business and how you see the market for U.S. beef right now. Thank you very much.
Guilherme Cavalcanti (Global CFO)
Hi, Lucas. Thank you for your question. I will start here to talk about an update in terms of Pilgrim's Pride, and after that, Wesley will give us the perspective of beef in the U.S. As you mentioned before, we completed the transformation of three plants of Pilgrim's Pride. Already completed it. One we transformed from a big bird to case-ready because we have a strong demand in the retail, and this strategy will support the retail growth of the demand of chicken. The other two plants, in reality, is not a transformation. It's adequate to produce the raw material for our prepared business. Before we sell, we sell the breast to the market.
Gilberto Tomazoni (Global CEO)
Because we are not able to deliver the appropriate goods that our prepared food needs. Now, we invest in machines, and we are not need to sell and buy, and we buy the raw material. Now we deliver direct to our prepared business. This, of course, we catch the margin of the third party. I think in the end, we are keep best quality and able to react quickly in case of the increase in demand. If I understood that is a second point that you mentioned about supply demand. I can say to you, the demand for chicken meat in U.S., it's not just in U.S., it's a global demand, is very high across all the chains.
If you take into consideration in the U.S. the chicken placement in the beginning of the year grew around 3%, and the price of chicken breast increased in the market. This show that a balance is supply and demand, because we increased 3% the placement of chicken, and the price of the breast increased. If you USDA forecast throughout this year is that will be 2% growth in chicken supply. If we grow 3% and the price market increase, we can anticipate if the forecast 2% will be a very good year for Pilgrim's in U.S. I think is this is two components.
The verticalization of our raw material production, we get more margins in prepared. In the growth of our prepared business in Pilgrim's, Just Bare is having a strong demand, and we are investing in new factories. We see that this year will be a good year for Pilgrim's.
Wesley Batista Filho (CEO)
Lucas, good morning. Fourth quarter was for us a pretty good quarter, given the market conditions on the beef side. It's common knowledge that given the market data the beginning here of the first quarter has been really tough, really difficult, very challenging. Probably the most challenging we've seen in this industry in a very long time. I don't know if there is any other time that we had such an actually a negative spread for January and February ever. It seems now that current data shows that March is showing that it's gonna be a little bit, you know, it's gonna become better, sharply better than where we were from January to February.
Let's see what comes out of that. One of the things that has happened in this scenario that we have very low cattle availability and very low processing volumes is that the market has become more volatile than we were used to in this market. You see big fluctuations in cutout, big fluctuations in cattle, more so than what we're used to. That's just a small volume. If the volume is a little bit higher, it has big impact and it has become a little bit more volatile.
When it comes to the strike and really, you know, it's very difficult to forecast how that, you know, a strike would go on. We have a very good deal in front of that local. We actually just did a national deal with 14 other unions in red meats, 14 other locals from the same union in red meats. It's, you know, it's a historic union company deal. We have a variable pension plan. That's the first time in forever that the industry has brought back a pension, something like that for people when they retire, for our team members. You know, we have a very good deal actually. Even, I think I would say it's probably one of the most innovative deals that we've had in a long time in this industry. Let's see. We hope this gets resolved as soon as possible.
Gilberto Tomazoni (Global CEO)
Thank you, guys. Thank you very much.
Operator (participant)
Thanks. We have, Mr. Gustavo Troyano from Itaú BBA, who would like to ask a question. Please go ahead, Mr. Troyano.
Gustavo Troyano (Analyst)
Hello, everyone. Thanks for taking my question. My first question is on Seara and related to chicken supply here in Brazil. We acknowledge that discussions on the supply side should always be on a relative basis to demand, which seems quite strong at this point. I just wanted to get your updated thoughts on the balance between chicken supply here in Brazil and what to expect going forward as we move into the second quarter of 2026, if you guys are expecting the chicken supply increase to outpace demand in a way that we could see some profitability compression going forward. That would be the first question.
The second one, still on U.S. and a follow-up to the first question actually is, would you say that the current balance between slaughtering capacity in the U.S. and demand, and cattle availability will imply some capacity adjustments going forward from other players or even from you guys? What could you say on further capacity adjustments going forward? Because cattle availability is restricted right now, so just wanted to get your updated thoughts on that as well. Thank you very much.
Gilberto Tomazoni (Global CEO)
Thank you, Gustavo. Talking about chicken in Brazil and Seara, and after that, Wes will complement the answer about beef in U.S. When you go for chicken in Brazil, the balance between supply and demand for chicken is still not very clear to us. In one hand, we have strong and growing international demand and new cases of avian influenza in several countries, a country that produce, that's a competitor of Brazil, and this could boost demand even further. The other end, we have 2%-3% increase in chick placement up to February. This is a reasonable limit for growth in Brazil. There is some news that chicken breeder stock has increased. In this scenario, it's difficult to predict the unfolding events if production of exceed market capacity.
In this case, the industry, the sector has many tools to manage this. For example, we can export more fertile eggs. We can reduce the average age of the breeding stock. We can reduce the weight of the birds, among others. That means so far the market is very balanced, and we see a strong demand in the international market. If, because if you look, the breeders can increase more the volume domestic market, each industry needs to take its own decisions. They have a lot of ways to manage this supply because chicken is not still in the farm. It's still placed. It is in the genetic. I can say I can talk to you about what on our side, how we are, what we are doing.
We are focused on strengthening our export leadership. It's what we have and enrich our value-added mix in domestic market. I think this is both strategies we have. We have ourselves well-positioned in international market and well-positioned domestic market, and we are adding value and to be more innovative in terms of the way that you present the product to the consumers.
Wesley Batista Filho (CEO)
Good morning, Gustavo. On the U.S. beef, you know, this question about capacity adjustments is very difficult for me to answer about, especially when it's something that's not related to our business directly, right? It'll be a comparison. It's very difficult for me to respond on that. It's clear that there is more capacity in the U.S. than there is cattle available. In the U.S. not too many years ago, four years ago, you know, had a capacity to process 33 million head and now we're gonna be below 27. Or we're around 27, sorry. You know, that in itself shows that, yeah, there is excess capacity. Having said that, it's very difficult for me to respond about something that's regarding other companies.
Gustavo Troyano (Analyst)
Thank you, guys. Very clear.
Operator (participant)
Here our next question comes from Lucas Mussi with Morgan Stanley. Mr. Mussi, you may go ahead.
Lucas Mussi (Analyst)
Hi, everyone. Thanks for taking my question. My first one is related to Brazil beef in Australia. If you could talk to us a bit about how you're thinking about the export environment in the context of Brazil and also Australia eventually reaching the limit of the export quota to China. How are you thinking about how volumes are gonna behave, perhaps in the second half of this year? What are you thinking about your options here, and potential impact to the business divisions? The second one for Guilherme. If you could share more details on derivative lines on your P&L that went a bit lower this quarter, that would be helpful.
I know that we're still a bit early to talk about concrete working capital expectations for this year, but if you had to evaluate looking at where commodity futures is today for grains, for livestock, you know, what would be your assessment on working capital potential as it stands today, for the year? You know, maybe a little bit below 2025, in line with 2025. If you have any on working capital. Thank you very much, guys.
Gilberto Tomazoni (Global CEO)
Thank you, Lucas, for your question. Let me to separate, I think in Australia and Brazil, there is a different scenario. Australia, we are not seeing any challenge in terms of the after the quota of in Australia to China because Australia has a strong market demand, has a very strong presence in Japan, in Korea, in all of the Asian markets, and in U.S. as well, and Europe. Australia is easy to manage the volume for each one of this market, that we are not really worried about this situation. In Brazil, may be more complicated, but our I will talk related to that.
Our Friboi team is very confident that they will be able to deliver in 2026 the results in line with last year. Why we are confident on that? Global demand for protein is high, especially for beef. China's quota, if you talk about, we are expecting to end by the mid-year, and in reality, we don't know how China will manage this volume of restriction. I believe that some countries will likely not be able to complete their quotas. We cannot speculate, but this is a fact.
Regardless this situation, Friboi has developed a new international market, new sales chain, in investing heavily in value-added and combined with customer service. An example of this strategy is the program of Friboi Mais, Friboi Plus. Now I think it's the last week at the supermarket convention in Rio de Janeiro, Nielsen, you know, Nielsen gave a presentation comparing a store with a regular butcher shop to one with Friboi Plus. The results showed that the store with the program has a higher revenue and 40% higher overall sales, not just the butcher area. The overall sales. That is a strong program to support the growth of our customers.
At the same time, retailers now face a challenge because they need to improve the quality of the sales in the stores. Because this shift in for more protein and this program and what GLP-1 and so on, that is booming the consumption of protein. They need to enhance the portfolio in the retail. Our program is, I think is fit perfect with this trend in the necessity of the supermarkets. The other point, I believe in the second half of the year, when the supply of feedlots can increase, this coinciding with the end of quota of China, which is largely, and we know that China is the largest pork sales channel. The price of cattle will likely be affected. I think this will be correlation. Because of that, we are so confident that we are able to deliver this year in results in line with last year.
Guilherme Cavalcanti (Global CFO)
Guilherme, on the derivatives line, what you saw there is any sort of derivatives that's not related to the operations. The recent volatility in currencies and other commodity prices made this number higher, despite we have a very limited VAR for those types of derivatives. Now on the working capital cycle side, well so far what can I say, it's only about the first. What we see in the first quarter. First quarter 2025, we have a slightly lower working capital consumption than the first quarter of 2024, despite the BRL 200 million higher impact of the deferred livestock.
Again, it's too early to say for the whole year, but if considering just the first quarter, we had a little lower consumption of working capital. Doesn't mean a lower cash consumption given that the operational side is likely worse.
Leonardo Alencar (Head of Agro, Alimentos & Bebidas)
Very clear, gentlemen. Thank you very much.
Operator (participant)
Thank you. Our next question comes from Thiago Duarte at BTG. Mr. Duarte, you may go ahead.
Thiago Duarte (Head of Equity Research Brazil)
Hi. Hello, everybody. Good morning. Yeah, two follow-up questions going back into U.S. beef and then Seara. Wesley mentioned, you know, the strong quarter, considering the circumstances that you had, but I'm still wondering what you believe justifies that performance. I mean, Q-over-Q margin rebound. It's not something that typically happens considering the seasonality in Q4 and even looking at the industry cutout spread. My question, you mentioned the volatility as being something that's even higher than usual, and maybe that has something to do with a particularly good quarter in Q4. If you could elaborate a little bit more on what you think justifies that in this quarter in particular. The follow-up question on Seara.
I think Tomazoni talked a lot about chicken demand and protein demand in general. My sense is that what really drove this very good margin at the Seara division in the quarter was really related to chicken, fresh chicken exports, as opposed to the domestic prepared food portfolio. My question is really if that understanding is accurate in terms of, again, chicken margin versus prepared food margins for Seara in the quarter. Thank you.
Wesley Batista Filho (CEO)
Sure. Good morning. You know, especially when the market has such a volatility in cattle prices and cutout values, you know, it's very possible, especially when you look at just the quarter, right? That you have a quarter that you position yourself really well, another one that you position yourself a little bit worse. You know, between quarters, you could have those, you know, just from a positioning perspective, you could either have a very good look really good or look a lot worse than you expect. You know, just given such intense volatility that's more than we're expecting.
I saw some reports, you know, maybe question a little bit about if there was any hedging or derivatives there. There was nothing significant from that perspective. I think it's just when markets are more volatile and, you know, you make positions selling product out front and all of that, sometimes you get good positions, sometimes it could get worse. You know, I think the best way to look at, you know, performance is look at overall longer term than just one quarter. One quarter could kind of be misleading, positive or negative, either way, in this sort of business, especially with the sort of volatility that we've been having on cutout and cattle prices. Yeah, that's my conclusion.
Gilberto Tomazoni (Global CEO)
Thiago, let me make some assessment about what you said. If you understood well, you ask for the margin of prepared foods in domestic market and versus export chicken, commodity chicken to international markets. If you take just into consideration the margin, yes, the margin of international chicken was higher than the margin of prepared foods in domestic market. But let's say that we improve the margin of the prepared food in domestic market. If you remember some quarters ago, I mentioned that we are advancing in a process to improve our price management in order to get the real value of the brand in domestic market. This is a continuous process.
We are now focused on taking advantage of the perception of the brand we have in the market, the penetration of the brand and the rebuy of the brand from the consumers. We are strengthening our process in order to get this brand. Because of that, we are continuously improving the margin in domestic market. Yes, you are right. If you compare this quarter, the margin of international market for chicken was higher than the margin of prepared in domestic market.
Wesley Batista Filho (CEO)
Thiago, just to complement something on this that I meant to say, and I forgot. You know, for sure this comparison quarter by quarter could create a little bit of that when it comes to positioning of how you sell forward and how you buy and all that. But having said that, we're very satisfied with the way we're operating. There is still opportunities for sure. There's things that we're working on. You know, when we compare our operations, just the things that, you know, and how we are running our plants, and how we are running our sales strategy, our procurement strategy, compared to few years ago, we think we've made a lot of progress and I think we're doing a lot better than we've been doing in the past.
Thiago Duarte (Head of Equity Research Brazil)
It's all very clear. Thank you.
Wesley Batista Filho (CEO)
All right.
Operator (participant)
Next, this is Isabella Simonato from Bank of America, would like to ask a question. Please go ahead, Mrs. Simonato.
Gilberto Tomazoni (Global CEO)
Cimanato.
Isabella Simonato (Analyst)
Hi. Good morning, everyone. Thank you for taking the questions. First, it's on the working capital for the quarter, right? You mentioned the deferred payment of livestock as well as inventories. Can you just give a little bit more details on the inventory performance and versus where you were expecting, right? When you mentioned in Q3 for the remainder of the year, what changed and how can that. If there is any factor to be postponed or translated into 2026 performance. Second, on Seara, you were mentioning, right, Tomazoni about the margins in Brazil. Can you comment how you're seeing Brazilian consumers behaving at the beginning of the year, if there is room to increase a little bit prices and if volumes have picked up?
We noticed that retailers were running with lower inventories at the end of 2025, and there was no significant change in behavior in the beginning of the year. Finally, if you could give us a brief overview of how your grain inventories are and how you're seeing feed costs for the remainder of the year. Thank you.
Guilherme Cavalcanti (Global CFO)
On the working capital cycle, Isabella, every fourth quarter is a quarter that we decrease inventories and we review them in the first quarter. The same happens to the livestock, which we postpone payments from one year to the other. Between 2024 and 2025 and 2026, we postponed this year $600 million in livestock. Last year, we had postponed $400 million. We had a $200 million better impact on the fourth quarter. That will be a $200 million worse impact in the first quarter that I mentioned in the previous question. In the inventory side, the same thing. We are seeing the same level of inventory rebuild that we saw in the last years.
Gilberto Tomazoni (Global CEO)
Isabella, thank you for your question. When you look for, you have two separate questions. One is, if I understood well, one is related to the behavior of the consumer in domestic market with CR. We see that the market start a little bit weak in the beginning of the year, in January, but they back. Now when we look for our sales, we are grow the sales compared to the last year. But with different mix. With the value-add mix growing much faster than the low the traditional and low value-added. Again, it's difficult to say what is value-added or not value-added is prepared. Say, look, I call the traditional, they are selling less than the innovation.
We have a huge growth in the innovation line with high protein products, air fry product design for air frying products, clean label products. This kind of innovation, they grow much faster than the other ones. On average, when you compare this year with last year, we are growing. Even some challenges and some different chains, but it's growing. It started very tough in the beginning and recovered. Now our sales are higher than last year for prepared. When you talk about the costs, I think you talk about grains, because there is a lot of conversation.
We have different view in terms of corn and soybean meal, with these two key elements for our feed. In the corn market, we see an upward trend. We should expect higher cost in 2026. Due to reducing the global stock and solid demand, increase the crude oil price that boosting ethanol margin as well the cost and availability of fertilizers. U.S. acreage at risk given the soybean ratio. The second crop in Brazil in phase of some climate risk. That we are, I think is, we expect higher cost for corn. In the soybean meal, we see prices stability. If you look for the crush margin, they are positive.
As the crush margins are positive, we resulting in abundant supply. In the other part, weak Chinese demand due to the tight pork margin in the market. I think for soybean meal, we need to monitor U.S. acreage issue and the biofuel policy. Anyway, our outlook remain bearish.
Isabella Simonato (Analyst)
Super clear. Thank you very much.
Operator (participant)
Thank you. Our next question comes from Henrique Brustolin with Bradesco BBI. You may go ahead, Mr. Brustolin.
Henrique Brustolin (Analyst)
Hello everyone. Thanks for taking my questions. I have two. The first on U.S. beef. Wesley, if you could comment about the Mexico cattle imports trades. They have been shut for a while now. Maybe this could be a discussion, the reopening could be a discussion amid the higher prices in the U.S. It'd be great to hear your thoughts in how relevant that could be in shaping the outlook for 2026. If we saw a reopening of the animal imports from Mexico to the U.S. That would be the first one. The second is a quick follow-up on Seara. Seara has been through a very big investment cycle over the past few years.
Would be great just to hear how those investments have already ramped up and what would you expect for volume growth into 2026 as probably you complete the ramp of some of those plans. Thank you very much.
Guilherme Cavalcanti (Global CFO)
Thank you. Good morning. On Mexico, it's difficult to tell when that's gonna reopen. I mean it's very meaningful. It's 1.2-1.5 million head per year. It's more than the size of a double shift plant, right? It's a big volume, and it's very important especially to the South of the U.S. I mean, the USDA is doing all it can. It's doing a good job in doing all we can to keep the disease outside of the U.S. They are, you know, working on the sterile flies and all of that. Mexico obviously is also trying to get this resolved as soon as possible.
For me to be able to tell you, like I hope that this would get resolved within the year, but I have no way to forecast and to even have an indicator of if that's gonna really happen anytime soon. It's really important. It's probably the most important short term change that could happen to this whole beef supply and demand equation. The most relevant in the short term for sure is this whole Mexico thing. It's very important, especially for the South of the U.S. Again, it's very difficult for me to tell you know, a forecast. I hope it opens this year or as soon as possible. Very difficult to forecast.
Gilberto Tomazoni (Global CEO)
If we hear about the investment of Seara, all of them will be completed this year. With them completed, the additional capacity will be around 10%-13%. I will say 10%-13% because depend on the mix. There's some mix that is less volume, high value, but depends on that. You can consider 10%-13% in terms of volume, capacity growth.
Henrique Brustolin (Analyst)
Very clear. Thank you very much.
Operator (participant)
Your next question comes from Ben Theurer with Barclays. You may go ahead, Mr. Theurer.
Benjamin Theurer (Managing Director)
Yeah, good morning, thanks for taking my question. Just following up real quick on the CapEx side. I think you said about BRL 1.4 billion for expansion. I mean, I know there's a lot that Pilgrim's Pride has part of that and share of it with their outlook in terms of CapEx. But could you remind us a little bit about some of the other projects you're currently talking and working around as it relates to capacity expansion, aside from what Tomazoni you just mentioned on Seara. That would be my first question. I have a quick follow-up as well.
Guilherme Cavalcanti (Global CFO)
Hi Ben. Basically the cap there is the Pilgrim's Pride expansion on the prepared food parts, on the rendering facilities, the pork sausage plant in Iowa. The ones that we announced. There's also the Oman project. We also announced that, a plant in Paraguay, Cactus, Texas, also on the beef side. Everything that we've been announcing, and of course all these CapEx expenditures are phased out throughout the years, and that's the portion for 2026.
Benjamin Theurer (Managing Director)
Okay, perfect. As you kind of like look for just general capital allocation, I mean, obviously you announced the $1 dividend per share and the very large CapEx program. We're seeing a bit more activity right now as it relates to M&A activity within food companies in general, but particularly between European and North American companies. Just wanted to get your latest as to your willingness or the opportunities you might be seeing on growth through M&A, which obviously has always been part of JBS's DNA to grow. Thank you.
Guilherme Cavalcanti (Global CFO)
We're always looking at opportunities throughout everywhere in the world. There's nothing that we are looking very keen at the moment. That's one of the reasons that we increased our organic growth because we are not seeing many opportunities on the acquisition front. I think that I would say there's nothing that we could say that we expect right now or anything in terms of M&A. That's why we increased expansion CapEx, and that's why we are returning capital to the shareholders. Given that our net interest expenses continue to be at the $1.1 billion level, we are very comfortable with this capital allocation.
Benjamin Theurer (Managing Director)
Perfect. Thank you.
Operator (participant)
Thank you. Our next question comes from Thiago Bortoluci with Goldman Sachs. Please go ahead, Mr. Bortoluci.
Thiago Bortoluci (Analyst)
Hey, guys. Good morning, everyone. Thank you very much for the questions, and congrats on the results. I have two follow-ups. The first one, this is on volumes, right? Gilberto Tomazoni, you have been very vocal on the solid momentum for global protein markets, and to be honest, when I look over the last few quarters, obviously a lot of debate on the margin cycles, but volumes and top line has been consistently surprising everyone to the upside. I think it might be a continuous source of upside going forward. It's difficult to break out for us your sales component between volume and pricing, but internally, from a volume perspective, would you please share with us what business units, segments, and destinations are the ones that are contributing the most with your growth? Which regions make you more excited with the opportunities for 2026?
Particularly if you could also comment on the opportunities in Africa. I know you announced a few things last year, just on a plate here, and then I can follow up with my second question. Thank you.
Gilberto Tomazoni (Global CEO)
Thiago, thank you for your question. If I understood well, if you talk about CR or takeover.
Thiago Bortoluci (Analyst)
Overall
Gilberto Tomazoni (Global CEO)
... about-
Thiago Bortoluci (Analyst)
Volumes overall.
Gilberto Tomazoni (Global CEO)
Overall, we see that the demand when you say all of the markets, not just because we try to simplify, but it's the reality. We have a strong demand in Europe. Friboi increase a lot of the sales of red meat in Europe as Seara increase the volumes in Europe. The demand in chicken in Seara in Europe mainly is driven by the summer seasonal influence in some countries. The demand for beef is because the beef production in Europe decrease. I think it's not just Brazil sell more in Europe and Australia sell more in Europe.
In Europe, in Australia, in the U.K. now they have a new agreement. We are expecting growth in demand for beef in Europe. The other part, we see demand in all of Asia. Take China out of this component of Asia, but all of Asia, the demand is low for chicken and for beef as well. We see the demand and the markets. That is not a new market. We open a lot of new markets, but in traditional market like Japan, like Korea, we increase the volume from the market. I believe this is the trend. It's not the trend because price. It's the trend because the demand increase and the local production decrease.
Decrease because of the cycles there or because of some disease in the market. We see Middle East. Now we are facing a war there, the flow of the product to the market didn't change. Far they changed the logistics of vessels there, the logistics of internal logistics. We need to change ports, and when you change ports, we need to use trucks to deliver the product to the customer. The flow is still there. The demand is there. Because of this, we are investing in the Middle East. New factory opened some months ago in Jeddah and the investment we have announced in Oman because the demand is strong. U.S. there is a strong demand for beef as well.
Australia, Brazil sell a lot the trimmers from U.S. When you say a lot, more than before. I would not say compared to the production in the market. Still compare what's previous for that. If you look, we are not seeing that one market is restriction. We see the demand for all of the markets. Even in Brazil, the demand in Brazil for protein is high. Look for what is the how Brazil have grown in terms of the number of herd processed in Brazil. It's amazing. What is this? This is because the global demand for protein. Because there is a reason we are talking before about that. There is a trend. It's not a trend.
It's a structural change in the demand of the market because of regulatory guidelines. In U.S., they change the guidelines. They need to add more protein to need to go to 1.1 grams per kilo to 1.6 to 2 grams per kilo. You can imagine how much we need to produce to fulfill this market. That there is a lot of the health habits for young generation, for old generation, there is a new medicine technology, this GLP-1. Combined all of this, the demand is very high. Very high. I don't know if I answered your question, Thiago.
Thiago Bortoluci (Analyst)
Perfectly, Tomazoni. This is very helpful. Thank you very much for this. On the second one, still talking about the conflict in the Middle East. Obviously this is an ongoing situation, but could you help us framing the impact so far in your freight expenses? By freight, I'm mentioning seaborne freight, but also truck freights in Brazil, and maybe a sensitivity of how this could impact your profitability if sustained going forward or how you plan to pass this along.
Gilberto Tomazoni (Global CEO)
Thiago, I think it's. I just mentioned before, the flow, the product will go to the market didn't change. Didn't change from Brazil, didn't change from Australia, any of the other markets, it didn't change. We keep supplying the market. We have what we saw, the growth, the cost. We have a contract with the agent, the marine agents. They put extra cost because of the risk to navigate in these regions. This is one, the cost. The second cost is the cost that we need to change the port. The destination of the product, some destination was changed from one port to the other port.
When we change the destination from the different port, we need to have the truck transportation because there is no closer to the customers, then we need to have this cost of transportation. But so far, all of this cost was borne by the market. We not see impact in our results.
Thiago Bortoluci (Analyst)
This is also true in Brazil, Tomazoni, with diesel prices?
Gilberto Tomazoni (Global CEO)
No. In Brazil, we see the increase of price of diesel and we see that increase in terms of the cost of freight. I talk about the Middle East, but when you look for Brazil, yes, you are right, increase the cost of the freight.
Thiago Bortoluci (Analyst)
Mm-hmm.
Gilberto Tomazoni (Global CEO)
I think if the crude oil keeps this price, and depends on how this development of this war, I believe that other costs will be increased. The cost of packaging and what depends on the oil will be increased as a raw material. I think this will be the impact. I think its fertilizer will be impacted, and could be. I mentioned before, when I talk about the cost of the corn, because the fertilizer will be higher, the availability of fertilizer, maybe the use of fertilizer will be reduced and then the productivity of the crop will be low. It. But it's. I believe it's too early to predict.
too early because we don't know how it will be the end of this war. I think this is the impact I saw in the short term, but it could be back if they end the war. I think it will be all back. I think this is the situation that we are, how we are looking and acting in this situation.
Thiago Bortoluci (Analyst)
Makes sense, Tomazoni. Thank you very much, and congrats on the year.
Operator (participant)
Thank you. Mr. Benjamin Mayhew from BMO Capital Markets would like to ask a question. Please go ahead, Mr. Mayhew.
Benjamin Mayhew (Analyst)
Hi. Can you hear me okay?
Operator (participant)
Yeah. Good morning.
Benjamin Mayhew (Analyst)
Hi. Good morning, guys. A lot has been covered already, but you know, I'd like to ask a high level question to begin. In looking at 2026 versus 2025, just across your global segments, where do you see pockets of improved market fundamentals and where do you see pockets of maybe, you know, not so strong fundamentals throughout the year? We'll start there.
Gilberto Tomazoni (Global CEO)
Ben, thank you for your question. Ben, I think it's a rule of improvement we see in all of our business units, because we have a methodology to that mapping the gaps is one of, like, the model that we work. All business unit need to understand, need to know very well where is the opportunity to improve. Then we call mapping the gaps. That. When you look, when you have the budget, we go there and see the gaps and we forecast in our budget some gap up in each one of the operations. It's not just for the business, but we got the business because we deployed each one of the process in subdivisions of the business.
That is, if you look for, it's a huge opportunity we have here. Because that new technology, new way to do the things, we are close the gap, we open a bigger gap, and this is the way that we are see or get the personal excellence. I think this is the mentality and the mindset for all of the business. If you go to its structure, we see that Brazil is one of that has a huge opportunity for growth in terms of meat. Beef in Brazil, I think is. If you compare Brazil in U.S., Brazil has more than double of the herds than U.S. More than double. And we produce just this year or last year, Brazil produced a little bit more meat than U.S.
means that if we are able to get the same productivity than U.S., we can double the production in Brazil of meat. We see Brazil in terms of red meat huge opportunity in the future for growth. Oh, but it's not that far ago. All of the protein produced in Brazil is very competitive because we are very competitive in terms of the cost of the grain. We are very competitive. We have a good quality management and I think it's Brazil is one. We see U.S. good opportunity. Chicken U.S. performs so well, and we see that demand in U.S. for chickens growth. Before U.S. export a lot of red meat like quarters.
Now, I think it's a huge chunk of the volume for red meat staying in the market because they start to appreciate the product made by red meats by red meat from chicken, say leg meats. This, I think, in the U.S. it's an opportunity for growth for chicken for pork demand. In the U.S., if you look at the results of our pork business, they are very consistent results for a long period of time, a well-managed business. We see that we can grow in pork business because the U.S. is very competitive to produce chicken and pork. Look, it's difficult for me because I'm booming in all of the market that we are present.
Australia, we see we are very excited with the pork business there. We are delivering great result there. Australia now imports pork meat. But Australia exports grain. When you export grain, the price of grain is international price. That does not make sense that you export grain, import meat. You can produce meat there. We are investing in our pork business, build farms and improving the operation, the productivity of the operation. We are so excited with the opportunity for Australia. Our salmon business, we have announced an investment to improve more than 50% our capacity of salmon in Tasmania. We see Europe. Europe, I think is opportunity for growing chicken, mainly in chicken and value-added.
Look, we are excited because we are in a segment, in a sector that is growing, the protein. We have global platforms that we can easily meet this demand. I think we are in a good situation and advantage to take the opportunity and transform this opportunity result to the company. I think it is. I don't know if I answered our question.
Benjamin Mayhew (Analyst)
Yeah, you did. I really appreciate all the detail. That's very helpful context. My second and last question would just be around the beef cycles. You know, just wondering if you're seeing a little bit more progress on U.S. heifer retention and wondering about that. Also curious about, you know, your thoughts on the durability of the Brazil cycle, and then of course, the Australian cycle. If you could just kind of summarize that quickly, that would be amazing. Thank you.
Gilberto Tomazoni (Global CEO)
Thank you, Ben. Yeah, we are seeing the herd rebuilding more actively in Canada. We're seeing that in the dairy business as well in the U.S., which also obviously impacts the overall supply. When we look at the USDA data, it shows that it's—I think we are retaining heifers, but it's relatively slower than we expected. But I think it's all the economics are there. Everything should be there for us to be doing that. Actually, I have information that's pretty interesting: the beef cow slaughter. You know, in 2025, for the full year, we processed 2.3 million head. In 2022, we processed 3.9 million head.
We're almost half of what the beef cow slaughter was in 2022. I think those things, that information is important, and it shows that, you know, if it wasn't for, you know, to keep more females for breeding, we wouldn't see such a sharp decrease in, you know, it's almost half of what it was in 2022, not too long ago. I think that there is some information that kind of makes us, you know, more optimistic, but obviously it's lower than we would wish. Related to Australia, we see we are in the middle of the cycle in Australia. back to Brazil.
Brazil, we see that the reduction of production in terms of the number of cows. The other side, you have a different force. The Brazilian, if you look at Brazilian compared to U.S. and compared to Brazilian, you don't need to compare to U.S., you can compare to the high-level productivity of Brazilian producers and the average of Brazil. The average of Brazil, they bring to harvest the beef at a four years age. The good producer or the modern farmers, they live two years to get the product finished, to get the cows finished. That means at the same time, we have a reduction in the age of the cows.
This combined with increase a lot of feedlot in Brazil. Before feedlot in Brazil was not well developed. Now you can see a lot of feedlots in Brazil. In the other part, we have a improvement in genetic, improvement nutrition. The Brazilian ethanol, corn ethanol industry now they deliver the good by-product from the ethanol that is DDGS. It is support a lot the growth of improvements in feed. We see that I think Brazil will be able to manage this situation and postpone the cycle, the cattle cycle that is normal cattle cycle.
Benjamin Mayhew (Analyst)
Got it. Thanks so much, guys.
Operator (participant)
Our next question comes from Heather Jones with Heather Jones. You may now go ahead, Mrs. Jones. If you're trying to speak, you might be on mute there, Mrs. Jones. Okay. For the moment, we'll move on to the next question on the list, which is, Leonardo Alencar from XP Investimentos. You may now go ahead, Mr. Alencar.
Leonardo Alencar (Head of Agro, Alimentos & Bebidas)
Hi, Tomazoni. Good morning, Jair Mazza. Thank you for taking my question. I wanted to go back to the U.S. beef situation. I understand you've mentioned many points on the supply side. I wanted to focus probably more on the demand side. If you can give first a view on the resilience of beef prices. We've been seeing some amazing beef prices in the beginning or even before the spring season. Just to understand if you feel this is feasible or even if it's possible for us to expect higher prices throughout the next few months. There was an interesting change in choice and select spread. I don't know if there's any signal on that point, if you could provide us with more information.
This discussion on the Product of USA label. Understand it's really new. If you have any early views on that, it would be interesting as well. On the second point, maybe more like an exercise here. I understand that we've been discussing value-added products and processed goods and that U.S. is the main focus for that. But you already have a lot of revenue on that channel. If we split that from the commodity business in U.S., would you say the performance even from the end of 2025, but even for 2026 may be better than the commodity business? Is this possible to do that exercise? That's it.
Gilberto Tomazoni (Global CEO)
Sorry, I was on mute. Good morning, Leonardo. Demand is it remains pretty strong for beef. You know, obviously supply is pretty short. Seems like beef continues to be very resilient. Seems like ground beef is especially ground beef, you know, we've always measured ground beef versus chicken breast versus pork loins, and it seems like, you know, the demand for beef in general just you know there is obviously a little bit of a substitution with other proteins, but the demand for beef still remains pretty strong. We see that going forward.
All this labor requirements and all that, you know, it's something that we're always, you know, whenever something changes we discuss with our retailers and see what, you know, what our customers and see what the impacts and costs on that are. It's not something that I'm super concerned right now.
Leonardo Alencar (Head of Agro, Alimentos & Bebidas)
Okay. The value-added products?
Gilberto Tomazoni (Global CEO)
Sorry. That value-added question was about which business unit? Sorry, I missed that.
Leonardo Alencar (Head of Agro, Alimentos & Bebidas)
Exactly not related to a business unit. If you could split or remove or suggest the value-added products and remove from the commodity business, would you say 2026 expected to be better or not?
Gilberto Tomazoni (Global CEO)
For that part of the business.
Leonardo Alencar (Head of Agro, Alimentos & Bebidas)
Very nice.
Gilberto Tomazoni (Global CEO)
Look, our focus is to increase value-added in brand. The focus is that investment. If you look for an investment we have done in the past, we prioritize the value-added products. Because we take the advantage of verticalization of the product. The second one is this higher-margin, more stable market. That value-added is one of our priorities.
Leonardo Alencar (Head of Agro, Alimentos & Bebidas)
Okay. Just one more follow-up here. On this split appeal that was being discussed in the U.S. government, I understand it's more noise than anything, but any comments here?
Wesley Batista Filho (CEO)
Seems like it doesn't have a lot of support. Right now it's not something that we're concerned about, Leonardo Alencar.
Leonardo Alencar (Head of Agro, Alimentos & Bebidas)
Okay. Okay, thank you.
Operator (participant)
Thank you, and we have, Mrs. Heather Jones back online. If you would like to go ahead with your question, Mrs. Jones.
Heather Jones (Analyst)
Are you able to hear me now?
Wesley Batista Filho (CEO)
Now, yes. Good morning.
Heather Jones (Analyst)
Hello?
Operator (participant)
Yes, we are hearing you.
Wesley Batista Filho (CEO)
We can hear you.
Operator (participant)
Seems we have some connection issues on Mrs. Jones' side, so we'll continue for now with next question from Guilherme Palhares with Santander. You may go ahead, Mr. Palhares.
Guilherme Palhares (Senior Equity Research Analyst)
Good morning, everyone. Thank you for taking my questions. Over the last couple of years, one of the main points here of the investment thesis of JBS has been a bit of the geographic diversification, right? You do report each of the businesses individually in terms of Australia, Brazil, the U.S. I just wonder if you could share a bit. I think U.S. is a good indication there. In terms of the supply to the market, how much of meat, beef meat in the U.S. is being sold through JBS? Do you know a bit, how much do you are selling today that it's coming from Brazil and Australia? You know, the point here is a bit of food security, right?
Having this geographic diversification, how much you can maintain supply even when the cycle conditions are not there. If you could give us some color there, I think it would be appreciated. The second question here, Tomazoni, over the last two years, you guys entered in a new protein, which is table eggs. Of course, you still have a minority stake, on the investment there, but I just want to hear a bit your thoughts going forward with this year behind you. What is your impression there and, how big is the opportunity there? Thank you.
Wesley Batista Filho (CEO)
You know, sure. It's very relevant to have, you know, access to import meat from Australia, from Brazil, especially in periods of time when there is a shortage of beef in the U.S. That does help and it's, I mean, and obviously the volumes that Brazil and Australia produce are significant. There isn't a supply problem when it comes to that. Having said that, the U.S. is a very competitive place in the world. Probably one of the most competitive places in the world. The American rancher are among the most capable in the world to produce beef and high quality beef, you know.
You know, obviously this shortage is a situational thing right now. The U.S. is a country that doesn't need to import in the long run. It doesn't need to depend on import. It doesn't need to have imports to be able to supply its own demand. It should be able to, in the long run, to be able to have its domestic production to supply its domestic market and actually be an important exporter of beef like it's always been. Obviously, in the short term, we have the situation that we're importing a little bit more beef than usual. And it's useful to have that when there is a shortage because the demand's still there.
The U.S. is a very productive place and doesn't need for beef. In the long run, it shouldn't depend on imports.
Gilberto Tomazoni (Global CEO)
Guilherme, related to table eggs, we enter in the segment because we see that the affordability of the protein is one of the more affordable protein in the market. Before to enter, we studied this category, and we are excited. The first movement we have done is to buy a company in the U.S. and we are building farms in Brazil. We are excited with the business. This is one of the business we want to grow.
Guilherme Palhares (Senior Equity Research Analyst)
Okay, Tomazoni. Just one follow-up there. You guys are also entering in the U.S., right? What is also out there that you want to do on table eggs that you think it is a relevant market that you can play and make a difference?
Guilherme Cavalcanti (Global CFO)
Look, we just buy these farms in U.S. and we are without the population of the chicks. Now we are populate our farms and we are excited with this. The thing is this, we are go the strategy with both Mantiqueira because Mantiqueira has the know-how and this accelerate all of our learns in the market.
Guilherme Palhares (Senior Equity Research Analyst)
Thank you.
Operator (participant)
Our next question comes from Pooran Sharma. You may go ahead. With Stephens, you may go ahead, Mr. Sharma.
Pooran Sharma (Managing Director of Equity Research)
Thanks. Can you hear me okay?
Operator (participant)
Yeah. Good morning.
Pooran Sharma (Managing Director of Equity Research)
Good morning. Appreciate the question here. A lot of good content covered. Maybe I could just focus on the first question, maybe just on your U.S. pork business. We've been hearing from U.S. hog producers that they expect disease impacts to be the same, if not worse than last year. Was just wondering if you can kind of share what you've been hearing regarding hog disease pressure in the U.S. and if you would expect that to weigh in on margins in FY 2026.
Guilherme Cavalcanti (Global CFO)
Yeah. It could be. The margin impact is not necessarily that it's, it depends on how and when it does impact. It doesn't necessarily mean that it's actually a negative impact. It could actually have a short term. Obviously, we're not expecting disease and we don't want disease, and we do everything we can not to have them. In the short term, you actually could have a higher, you know, given a shorter supply, you could actually have a better margin if that happens.
Pooran Sharma (Managing Director of Equity Research)
Appreciate the color there. My follow-up, maybe just wanted to further on some of the comments you made about the listing on the NYSE. You mentioned stock has seen some liquidity and valuation benefits, but that you're still expecting to get more. In the past you all have talked about index inclusions and the potential to get into some of those and the timing to get into some of those. As we're looking in FY 2026, was just wondering if you could maybe give us an update on what's out there in terms of inclusion on some of these passive indices.
Guilherme Cavalcanti (Global CFO)
Okay. On a multiple side, if you look at our enterprise value with the forward looking, we are trading higher than we used to trade before the listing. There was a multiple expansion already, but we still traded at a discount to our peers. One of the reason is also the index inclusion. There was a research that was sent yesterday from Stephens saying that according to what we released on our financial statements in terms of information of revenues and assets breakdown, we should be included in the Russell, which is next June. It could bring around 14 million shares demand from passive funds. It's out of our control.
We cannot guarantee that, but that's what is in the short term. On the longer term, at some point, most likely beginning next year, we'll start to make files of 10-Ks and 10-Qs instead of 6-K in order to be eligible to the S&P family. Then I think 2027. I think this year, Russell 3000 is the plan. Next year, the plan is be on the S&P family, first on the S&P MidCap 400, and once we reach it, twenty-two point seven billion dollars market cap, that's the threshold for the S&P 500. Although, again, it's not on our control. It's their committee decision for shares inclusion.
Also worth a mention that our average daily trading volume is three times higher what it used to be before the listing. The Brazilian investors fell to 10% of our free float, and the U.S. investment today is already 70% of our free float.
Pooran Sharma (Managing Director of Equity Research)
Great. Thank you for the color.
Operator (participant)
Our next question comes from Ricardo Boiati from Safra. You may go ahead, Mr. Boiati.
Ricardo Boiati (Senior Equity Research Analyst)
Hi. Good morning, everyone. Thanks for the opportunity here. My first question goes to Wesley. I wanted to circle back to the U.S. business. You in fact already answered part of my question here which related to the competitiveness of the U.S. ranchers, right? We are seeing very favorable conditions, right? For a faster herd rebuilding in the U.S. with the beef prices, the cattle prices. My question here would be exactly when you look from the ranchers' perspectives, right? We see some concerns that labor even succession plans could be an issue for the ranchers longer term. You expressed a very positive outlook for the U.S. beef industry, which is very good.
I would ask you to elaborate a little further on the drivers for the industry, especially from the ranchers perspective, right? Is there anything that could prevent a more robust business expansion for the ranchers, anything that could be a risk in the horizon. That would be the first question. The second one, just more broadly looking at the current market environment, the risk environment globally. Does this situation here of increased volatility could imply an even more conservative approach when it comes to the balance sheet of the company?
It's quite clear that the balance sheet is very strong, I mean, in terms of leverage, in terms of debt maturity, you already showed this in detail. The very short term, the current environment, does it imply an even greater conservativeness from your side, or nothing relevant so far? Thank you, guys.
Wesley Batista Filho (CEO)
Yeah, there is obviously issues that are all very relevant. Succession is always very relevant, and labor and all that. At the end of the day, I have a pretty simple view of this. It's the U.S. And obviously, like interest rates are relevant as well when it comes to herd rebuild, right? Because you have to carry more working capital and livestock and all of that. At the end of the day, I think it's pretty simple. The U.S. has the nature, has the culture. I mean, nature, I mean, like just the environment, right? Just the natural resources to have a thriving beef production. It has the culture to do it. It has the infrastructure like no other country. At the end of the day, we remain very optimistic about it in the medium long run.
Guilherme Cavalcanti (Global CFO)
In terms of balance sheet, I think it's worth mentioning that sometimes you should not look at the net debt absolute value itself, but not even the net debt to EBITDA. I think as I mentioned, in the last three years, we increased our net debt by 8%. However, financial expenses stayed the same. So through like good management exercises, we've been able to, despite increases in net debt, to keep the same level of interest expenses. So our capacity of debt repayment didn't change. So as long as we have this comfortable debt capacity repayment, we have no restrictions in terms of our return to shareholders or our growth, given that we have this comfort.
As I mentioned before, we don't have significant maturities in the next five years, which gives a lot of comfort that we don't need to go to the market at any interest rates. Our cash position is also; we ended the quarter with $4.8 billion, which is around $1 billion-$1.5 billion higher than what our minimum cash, given our cash conversion cycle. Again, we have a lot of cushion that currently we don't need to be restricted in any of our initiatives.
Ricardo Boiati (Senior Equity Research Analyst)
Okay. Super, super clear, Guilherme and Wesley. Thank you very much.
Operator (participant)
Our next question comes from Igor Guedes with Genial. You may go ahead, Mr. Guedes.
Igor Guedes (Equity Research Head)
Can you hear me?
Wesley Batista Filho (CEO)
Yeah. Good morning.
Igor Guedes (Equity Research Head)
Okay. Thank you. Good morning, everyone. Thank you for the opportunity. I would like to talk a little about Seara. Regarding the first part of the question, this quarter, we saw a resumption of shipments to China after several months of suspension due to avian flu last year. I'd like to understand how the resumption went for you guys. The resumption happened at around November, so it didn't cover the entire quarter. For Q1 2026, should we expect an even stronger quarter in terms of volume? Is this recovery gradual, or do you believe the full effect has already been captured in 4Q? The second part of the question, I'd like to understand from the perspective of breaking down the positive impacts.
We have volume growth as well as price improvements realized through premiums paid on certain chicken cuts destined for China, such as chicken feet. Given the increase in volume, there is also an effect of improved fixed cost dilution. My question is, if you could break it down a bit, what we saw in terms of margin improvements, what influenced it the most? Was it the increase in volume, the price improvement, or the fixed cost dilution? Thank you very much.
Guilherme Cavalcanti (Global CFO)
Igor, it's not a simple answer for you. If you talk about the volume to China when open, this help a lot in terms of profitability because we have the best market for chicken wings and for chicken feet is China. Then we increase in terms of feet, we don't produce, we're not in the market to deliver all of the production. We open the markets, they improve volume and improve price. About wings, they improved the price because the value of the wings in China is higher than the other markets.
means that we got part of the benefit because it was in November, I think it was October, November, and now we got the benefit in this first quarter is all of the benefit. When you talk about why is important the cost of dilutions of price, of course, the impact of the feed, it's a huge impact in terms of profitability, because these represent 60% of our cost of chicken goes to feed. Around 50%. This is huge. That is more than to increase the volume to compensate this. Of course, volume compensate, but not able to compensate all of this cost.
Igor Guedes (Equity Research Head)
Okay, thank you very much.
Operator (participant)
Our next question comes from Priya Ohri-Gupta with Barclays. You may go ahead, Mrs. Ohri-Gupta.
Priya Ohri-Gupta (Co-Head of US High Grade Research)
Great. Thank you for taking the question. I hope you can hear me. I know a lot of questions have been asked at this point. I would just like to ask two. First, around just the capital allocation. You've already announced the $1 dividend per share, that's gonna be paid in June. That works out, you know, roughly to what you've been indicating for some time now around the ability to consistently pay about $1 billion to shareholders. Is that sort of how we should think about the dividend for the entirety of the year, or is there room to potentially increase that with a second payment later in the year? Relatedly, how should we think about share repurchases, just given that you guys did do about $600 million in 2025? I'll ask my follow-up.
Guilherme Cavalcanti (Global CFO)
Hi, Priya. At this moment, we are sticking to what we will try to do as long as our leverage ratio allows to have $1 billion per year in dividends. I think $1 billion is what we plan to pay this year. Then it depends on how much excess cash or cash flow generations, then we can reevaluate a share repurchase again or not. That's it. That will depend on the cash generation in the next quarters.
Priya Ohri-Gupta (Co-Head of US High Grade Research)
Okay, great. Thank you. I know you were pretty clear just now about not having any maturities in the next five years or so, and so you don't have any real need to come to market. Some of your bonds do become callable later this year and into early next year. Is there a scope for you to think about addressing those or consider other liability management? Or is this the rate backdrop? Or would this rate backdrop not necessarily lend? Thanks.
Guilherme Cavalcanti (Global CFO)
Yeah. Now, the callable bonds they have a very low interest rate, so it's not worth it. The coupons are below Treasury. There's opportunities to decrease interest rates and extend maturities on the 34 and 33 maturities. Maybe liability management could be targeted on those two bonds, 33s and 34s, which has high coupons and higher than what we could be issued today at 30-year, for example.
Priya Ohri-Gupta (Co-Head of US High Grade Research)
Thank you.
Operator (participant)
Next we have Mr. John Baumgartner with Mizuho, who would like to ask a question. Go ahead, Mr. Baumgartner.
John Baumgartner (Managing Director of Equity Research)
Good morning. Thanks for the question. Two for me on North America. First on the value add side. I mean, traditionally there's been a focus on value add through M&A. More recently, you've gotten involved in CapEx to build the Italian meats business. I am curious alternatively. I know you had a relationship with Wendy's. You had done some test marketing of Wendy's burgers last summer. I'm curious what you sort of learned from that test market, and how you think about maybe licensing third-party brands to get those value-added brands in-house in lieu of making expensive acquisitions or even investing to build brands from scratch.
Guilherme Cavalcanti (Global CFO)
Morning. Look, we always look at every option. For us, greenfield has made more sense recently just because of valuations and the price of building some of these things. Actually some of these businesses that we did greenfields, it's better to do, you know, to have a new plant instead of buying, you know, old assets. That was very specific to those greenfield acquisitions or greenfield projects, sorry. You know, the project with Wendy's was very interesting. It worked out well and it's great partners, but you know, it's an option as well, but it's not, you know, we'll look at that too.
We've seen that it's not necessarily, as you mentioned, you know, expensive as in kind of prohibitive to build brands. Look at what we've done with Just Bare, right? It's we never had an earnings call or Pilgrim's Pride hasn't had an earnings call that they said that they were, you know, had invested. The results weren't
Gilberto Tomazoni (Global CEO)
For one reason had a negative impact because we were building brands, right? We build brands as we build the business, and it was sustainable in itself. Nowadays it's a $1 billion brand, so it's in revenue. I think it's possible to do those two things at the same time.
John Baumgartner (Managing Director of Equity Research)
Okay, thanks for that. A follow-up, also in North America. Guilherme, I think you mentioned there's really no imminent M&A on the horizon here, but I am curious on the egg industry. You're seeing where prices are for eggs, I'd imagine there's a fair amount of distressed profitability in the industry. I'm curious, looking at producer capitalization, that business specifically relative to beef, pork, other species where you've made acquisitions at the downtrend, you know, the down point in the cycle. How do you think about this profitability issue in eggs right now, maybe accelerating your ability to build out and maybe be opportunistic and acquire some assets in eggs? Thank you.
Gilberto Tomazoni (Global CEO)
Hi, John. Basically, it all depends on having the opportunity at the asset price. Sometimes it's not related to the current egg price. We're always looking at opportunities, so it's difficult to say. But that's our approach. It has to be an accretive acquisition.
John Baumgartner (Managing Director of Equity Research)
Thanks for your time.
Gilberto Tomazoni (Global CEO)
Yep.
Operator (participant)
Ladies and gentlemen, with there being no further questions, I would like to pass the floor to Mr. Gilberto Tomazoni.
Gilberto Tomazoni (Global CEO)
I would like to thank everyone for joining us today and all JBS team members for their dedication and commitment to deliver the results. Let me close with three key points. First, grow. We deliver record revenue of $86 billion and 13% growth for the three prior years, reflecting the strength and consistency of our global platform. Second, return. We continue to operate with a strong capital discipline, with return on equity at 25% and return on investment capital at 17%. Third, earnings per share. EPS reached $1.89, up 15% year-over-year, growing faster than net income and reinforce our focus on shareholder value. As we look ahead, we haven't changed our focus, execution, efficiency and disciplined capital allocation. That is what allowed us to deliver consistent results and build long-term value. Thank you.
Operator (participant)
This is the end of the conference call held by JBS. Thank you very much for your participation, and have a nice day.