BRF SA Q4 FY2023 earnings call

• Financial Indicators: Q4 2023 net revenue was BRL14.4 billion, EBITDA BRL1.9 billion (13% margin), free cash flow BRL613 million (largest quarterly cash generation in 3 years), inventories reduced, financial cycle 5.8 days (3 days shorter than prior year), and leverage at 2x EBITDA (lowest in 7 years). - Operational Efficiency: BRF Plus program contributed BRL525 million in Q4, with feed conversion, animal mortality, factory yields improved, and COGS reduced. - Market Performance: Brazil had 15.6% EBITDA margin, international EBITDA margin double-digit, 66 plant licenses in 2023, and Sadia's leadership in GCC Halal market.

Brazil: EBITDA margin was 15.6% aided by the holiday campaign, with processed products performing consistently despite the consumer environment. Fresh cuts prices recovered, and the celebratory portfolio was strong with 72% market share in turkeys and 60% in special poultry like Chester. International Market: EBITDA margin returned to double digits with price recovery, cost reductions from BRF Plus program, and market share growth in chicken and poultry exports. Also, saw growth in the Halal market in Gulf countries and secured 66 plant licenses in 2023. Ingredients and Pets: Ingredients business had an EBITDA margin of 11.7%, and the Pet business increased share in Super Premium Natural category with exports, while Ingredients focused on value-added items.

• Q4 2023 EBITDA margin almost twice that of Q4 2022. - BRF Plus 2.0 is underway, and the company is optimistic about 2024 performance with improved efficiency and market conditions.

• Macro-economic environment, industry factors, and currency fluctuations may lead to results differing from forward-looking statements.

Q: About cost reduction and export prospects.

A: Miguel and Fabio discussed cost reduction from BRF Plus and export licenses, with expectations of positive results in 2024.

Q: About cash flow and finished goods inventory.

A: Miguel and Fabio talked about cash flow breakeven calculations and inventory reduction, noting finished goods inventories are optimized with marginal gains possible.

Q: About inventory efficiency and product profitability.

A: Miguel and Fabio discussed inventory efficiency being maintainable without disruption and the main profitability contributor being the commemorative portfolio and unprocessed food recovery.

Q: About capital allocation and market opportunities.

A: Fabio and Miguel talked about capital allocation focusing on growth and market opportunities in Asia, including Japan and China.

Q: About volume and cost in 2024.

A: Miguel and Fabio discussed volume growth potential with new licenses and cost stability due to BRF Plus and stable raw material prices.

Q: About volume in domestic market and SG&A.

A: Miguel discussed domestic market volume growth potential and SG&A expenses, expecting freight cost reductions and stable sales structures.

Q: About BRF Plus 2.0.

A: Miguel talked about BRF Plus 2.0 as a cultural shift for continuous improvement across all areas of the company.

Q: About prices and grains.

A: Fabio discussed price dynamics in Brazil and international markets, expecting better price rounds in 2024 due to favorable grain cost projections.

Q: About capital allocation and working capital.

A: Fabio talked about working capital returning to normal and debt management focusing on reducing financial burden through liability exchange or replacement