BRF SA Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Financial Results: Net revenue reached BRL15.5 billion (+16% y-o-y), EBITDA BRL2.8 billion (best first quarter ever, +30% y-o-y), net profit BRL1.2 billion (double y-o-y). Free cash flow ~BRL1.3 billion. Lowest leverage in history at 0.54 times EBITDA.
• BRF+ Program: Delivered BRL305 million in efficiency gains during the quarter.
• Commercial Execution: Greater numerical distribution, new points of sale, adherence to suggested prices, and lower FIFO discount.
• Sustainability: Consecutive participation in ESG carbon efficiency index portfolios, excellent position in animal welfare rankings. Celebrated 13 years of BRF Institute with over 40,000 volunteers in 70 cities.
• Capital Structure: Decline in net debt and leverage, diversified and long debt profile, comfortable liquidity.

Segment Performance

• Brazil: Achieved an EBITDA margin of 17.1% with volume growth, especially in process categories and fresh cuts contributing to domestic market margins. Launched new items in the frozen food category like Meu menu from Perdigao and Hot Bowls from Sadia.
• International: EBITDA margin exceeded 19% in the quarter, driven by geographical diversification and new export permits. Announced construction of a new process products plant in Saudi Arabia. In Turkey, focused on increasing processed product sales. Direct export segment expanded with 12 new permits in 2025, totaling 187 since 2022; completed acquisition of a processed food plant in China.
• Ingredients and PET: Ingredients segment diversified products and markets. PET improved process with SAP implementation, enhancing controls and management.

Guidance

• Expected additional growth of 3%-5% from matured investments in processed product lines.
• Continued focus on volume growth, both organic and inorganic, with ongoing strategic acquisitions (e.g., processed food plant in China) and expansions (e.g., new plant in Saudi Arabia).

Risks

• Avian Flu: Regionalization and trade restrictions affecting market access and pricing, as seen with China closing markets due to Avian flu.

Question and Answer

Q: Henrique Brustolin asked about Avian flu regionalization agreements and growth opportunities.

A: Miguel discussed Avian flu regionalization processes and BRF's contingency plans; Fabio talked about growth through volume and investments.

Q: Leonardo Alencar asked about domestic demand and export market scenarios.

A: Miguel discussed balanced supply-demand, pricing capacity, and stable exports despite some market reversals.

Q: Guilherme Palhares asked about Saudi Arabia deals and efficiency.

A: Miguel talked about Saudi Arabia acquisitions and plant expansions; Fabio discussed ongoing efficiency efforts and potential 3%-5% growth from matured investments.