Message from the CEO 1T22: trajectory of growth based on operational excellence and global platform

We have ended the first quarter of 2022 with very significant results. We posted strong numbers, which give us immense satisfaction. And it’s not by chance. Last year, we reinforced our strategic pillars in order to JBS to create value in a sustainable manner for all our stakeholders: a strategy that focuses on sustainability and strengthens the expansion of our global multiprotein operations – where our focus is always on strong brands and adding value.

With sustainability as JBS’ core business strategy, we made decisions not only because they are profitable, but, above all, because they are sustainable and in line with our commitment to becoming Net Zero by 2040.

In Brazil, we announced the launch of No Carbon, a pioneer in the leasing of 100% electric trucks, supporting JBS logistics nationwide. We also increased our circular economy efforts through Campo Forte, a new business line specializing in the manufacture of organic fertilizer, converting our industrial plant process waste into raw material. We expanded production at JBS Biodiesel, with a new facility located in Brazil’s southern region, focused on soybean oil and recovered cooking oil to create fuel.

In the quarter, we announced an investment of US$ 700,000 to support the construction of the University of Nebraska Feedlot Innovation Center. The complex will be an important research hub for developing new technologies to reduce emissions in feedlot settings. We will also invest US$ 230,000 to support the Colorado State University AgNext program, which will work on solutions for carbon sequestration in grazing land ecosystems.

In the first three months of this year, despite the backdrop of global inflation affecting all sectors, each of them with their own peculiarity, our platform, diversified by country and protein type, has once again shown itself to be a strategic resource for navigating challenging times.

We increased our Net Income to R$ 5.1 billion, with Net Revenue of R$ 90.1 billion and Adjusted EBITDA of R$ 10.1 billion. In dollars, leverage fell from 1.67x to 1.53x. In Brazilian reais, this decline was even more significant, from 1.76x to 1.36x in the period. We increased our investments to expand our business, with R$ 2.2 billion in Capex and R$ 1.1 billion in the completion of acquisitions. As for shareholder return, in 1Q22, the Company repurchased R$1.8 billion in JBS shares. Our financial results with steady growth generated the highest return on equity in the period: 52.1% ROE. As for ROIC (return on invested capital), the 26% increase represented the best performance in the last five years.

The stability of the beef and pork businesses in North America, the strong performance by Pilgrim’s Pride, the business improvements in Australia, the advances in building brands in Brazil and the emphasis on managing what was under our control, and with our capacity for innovation and our relentless pursuit of operational excellence, were all key to posting very strong numbers during the quarter. Concerning the same period last year, we had double-digit revenue growth in all business units. We also made advances in the EBITDA margin in practically all areas. We are working at Seara to recover margins at historic double-digit levels.

We believe that no company can operate independently from the world around it. That’s why we are contributing to the social and economic development of the regions where we operate.

In North America, as part of the Hometown Strong program, JBS USA and Pilgrim’s are building Better Futures - the largest free community college tuition program in rural America for our team members and their dependents. By the close of the first quarter, more than 2,800 people had signed up for the initiative. The quarter was also marked by the JBS Canada announcement of its Homebuyer Dream Fund, providing US$ 1.7 million for affordable housing for the families of JBS team members in Brooks, Alberta.

Our diversified platform by region and by protein type, the excellence with which we operate our business, our focus on having the best people, culture of ownership and simple operational structure serve as competitive advantages that continue to differentiate us from the competition. In the last decade, we have improved our ability to innovate, offer products with high added value and build brands. Aligned to the diversified platform, this ability to operate with excellence in the world of commodities and, at the same time, know how to do business in the value added and branded product environment, puts JBS in an unparalleled competitive position to continue its trajectory of growth and increase its operating margin.

Gilberto Tomazoni, Global CEO JBS