Executive Summary / Key Takeaways

• JBS N.V. is strategically expanding its global protein platform, marked by a recent dual listing on the NYSE and significant investments in high-margin prepared foods, aiming for long-term value creation through diversification and operational excellence.
• The company delivered record net sales of $21 billion in Q2 2025, showcasing resilience despite macroeconomic pressures, with poultry operations (Pilgrim's , Seara) achieving strong profitability, while U.S. beef and pork faced cyclical and trade-related challenges.
• JBS is actively enhancing its financial flexibility, having refinanced $3.5 billion in debt to extend maturities and initiated a $400 million share repurchase program, alongside a consistent annual dividend target of $1 billion.
• Strategic investments in modern prepared foods facilities are projected to significantly boost capacity (25-30% U.S. volume increase) and yield higher double-digit margins (around 15%) with a 20% ROI, underscoring a shift towards value-added products.
• While U.S. beef faces a cyclical bottom through early 2026, and Seara contends with temporary avian flu export restrictions, JBS's global diversification and operational agility are proving effective in mitigating these impacts and positioning the company for a gradual recovery and sustained growth.

The Global Protein Landscape: JBS's Strategic Foundation

JBS N.V., founded in 1953 in Sao Paulo, Brazil, has evolved into a formidable global protein and food company, offering a comprehensive portfolio spanning beef, poultry, pork, plant-based products, and even leather. The company's overarching strategy is anchored in operational excellence, broad diversification across geographies and protein types, continuous innovation, a focus on value-added products, and the cultivation of strong brands. This foundational approach positions JBS to capitalize on the persistent global demand for protein, a trend driven by increasing populations and evolving consumer preferences for healthy and affordable food options.

The global protein industry is characterized by its cyclical nature, influenced by livestock availability, feed costs, and geopolitical trade dynamics. JBS's historical journey, marked by strategic acquisitions and organic growth, has consistently aimed to build a resilient platform capable of mitigating these inherent volatilities. A pivotal moment in this trajectory was the completion of its dual listing on the New York Stock Exchange in June 2025, a strategic milestone designed to enhance global visibility, broaden its investor base, and reinforce its standing as a world leader in food production.

Operational Innovation and Strategic Expansion: Building the Future

JBS's competitive edge is not solely derived from its scale but also from its commitment to operational innovation and strategic investments in advanced processing capabilities. While not a singular "core technology" in the traditional sense, JBS differentiates itself through state-of-the-art facilities, robust biosecurity protocols, and continuous process improvements that enhance efficiency, product quality, and yield. For instance, the company's biosecurity measures in Brazil proved robust during the avian influenza outbreak, ensuring that only one isolated case was confirmed in a commercial farm, minimizing widespread disruption.

The company is making substantial investments to modernize and expand its prepared foods portfolio, a key area for value creation. In the first half of 2025 alone, JBS committed significant capital in the United States, including $135 million for a new fresh sausage facility in Iowa, $200 million for upgrading beef plants in Texas and Colorado, and $400 million for a new Pilgrim's prepared foods facility in Georgia. A further $100 million investment in August 2025 will transform an Iowa facility into the largest ready-to-eat bacon and sausage plant in its U.S. operations by mid-2026. These projects are expected to increase JBS's total U.S. prepared foods volumes by an average of 25% to 30%, with the new chicken plant in Walker County, Georgia, almost doubling capacity and pork sausage capacity rising by approximately 20%. Management anticipates these categories to yield higher double-digit margins, around 15%, with an expected Return on Investment (ROI) of approximately 20%. This focus on modern, efficient plants is a testament to JBS's strategy of meeting growing consumer demand for convenient, value-added products.

Further diversifying its platform, JBS acquired a 50% stake in Mantiqueira, a Brazilian egg business. This move represents a "new wave of growth" for JBS, with the ambition to become a global leader in the egg category, mirroring its success in other proteins. This investment capitalizes on the positive market trends for eggs, driven by their affordability and perceived health benefits.

Competitive Positioning: A Global Contender

JBS operates in a highly competitive global arena, facing off against industry giants like Tyson Foods , Pilgrim's Pride , BRF S.A. , and WH Group . JBS's strength lies in its unparalleled geographic and protein diversification, which acts as a powerful hedge against regional market downturns or species-specific challenges. For example, its global platform allows for production redirection, significantly mitigating the impact of recent U.S. tariffs on Brazilian beef.

Compared to Tyson Foods (TSN), JBS matches in scale and global reach, particularly in beef and poultry. However, JBS's broader product line, including leather and biodiesel, offers a more comprehensive revenue base. While Tyson often exhibits strong brand loyalty and consistent cash flow, JBS's integrated operations and international expansion provide adaptability in volatile markets. Against Pilgrim's Pride , a leading poultry specialist, JBS's multi-protein portfolio provides greater resilience, though Pilgrim's often demonstrates stronger, more specialized poultry margins. BRF S.A. (BRFS), another Brazilian powerhouse, shares a similar Latin American base, but JBS's global diversification provides a broader market positioning. WH Group (WHGLY), with its pork-centric focus, competes directly in pork processing, where JBS's multi-protein approach offers a distinct advantage in bundled solutions.

JBS's competitive advantages, or "moats," are primarily its extensive vertical integration and vast global distribution networks. Vertical integration provides enhanced control over supply chains, leading to potential cost efficiencies and reliable product delivery, which helps counter competitors' brand strength. Its global networks ensure access to diverse markets, fostering recurring revenue streams and enabling quicker adaptation to regional demand shifts. However, JBS remains vulnerable to commodity price fluctuations and regulatory pressures, which can impact costs and market access. The high capital requirements and complex regulatory landscape of the protein industry act as significant barriers to entry, helping JBS maintain its established market position.

Financial Performance: Resilience in a Dynamic Market

JBS demonstrated remarkable resilience in the second quarter of 2025, achieving record net sales of $21 billion, a 9% increase year-over-year. Adjusted EBITDA reached $1.8 billion, translating to an 8.4% margin. The company reported a net profit of $528 million, with earnings per share of $0.48. Return on equity stood at 25.7%, and return on invested capital at 17%.

Performance across segments was mixed, highlighting the value of JBS's diversification. Pilgrim's Pride (PPC), the poultry operation, was a standout, achieving its highest EBITDA in history at $687 million, driven by lower grain costs and robust U.S. demand. Seara, JBS's Brazilian poultry and prepared foods business, delivered consistent results with an 18.1% EBITDA margin, despite a temporary 5% EBITDA impact in June from an avian influenza outbreak that led to temporary export market closures in Europe and China. JBS Brazil's Friboi segment saw net revenue increase by 20% year-over-year, reaching a 6.4% EBITDA margin, fueled by strong domestic and export demand. JBS Australia also delivered a strong performance, with 20% revenue growth and a 12.7% EBITDA margin, benefiting from a favorable livestock cycle.

Conversely, the U.S. beef business faced significant pressure from an unfavorable cattle cycle, characterized by record-high live cattle prices and a narrowed spread between livestock costs and beef prices. The U.S. pork business also experienced short-term disruptions due to trade restrictions, including a 100+% tariff on products destined for China, which necessitated product reshuffling. These factors contributed to a $1.1 billion difference in free cash flow compared to Q2 2024, primarily due to higher capital expenditures, a $242 million increase in U.S. finished goods inventories, a $250 million negative cash impact from livestock hedging, and increased legal settlements and tax payments.

Capital Structure and Outlook: A Clear Path Forward

JBS maintains a robust financial position, ending Q2 2025 with net leverage at 2.27x, well within its long-term targets, and stable interest coverage at 7.7x. The company proactively refinanced $3.5 billion in debt, extending its average maturity from 11 to 15 years at a modest 25 basis point increase in average cost. With $3 billion in available cash and $3.4 billion in revolving credit lines, JBS possesses ample liquidity.

Management's outlook for the coming quarters reflects a confident yet pragmatic approach. Capital expenditures are projected at $2 billion for both 2025 and 2026, encompassing ongoing expansion projects. Working capital is expected to consume $900 million in 2025, largely due to inventory and hedging impacts, but will normalize to $250 million in 2026. Legal settlements are estimated at $300 million in 2025, with an assumption of $0 in 2026. The company anticipates ending 2025 with leverage below 2.5x and interest coverage consistent with 2024 levels.

Looking ahead, JBS expects an "immediate recovery" in U.S. pork margins as of Q3 2025, with trade restrictions largely resolved. The U.S. beef cycle is projected to hit its "bottom side" this year and early next year, with gradual improvement anticipated from late 2027 or early 2028. Brazil's beef operations are expected to continue delivering strong results, benefiting from a transforming livestock sector. The chicken business globally is viewed "very positive" for the year, driven by strong demand outpacing supply. Australia's operations are forecast to achieve "two-digit" margins in the coming quarters.

JBS remains committed to shareholder returns, maintaining a mindset of paying approximately $1 billion in annual dividends. The recently announced $400 million share repurchasing program underscores management's belief that the company's shares are undervalued relative to global peers, representing an efficient use of excess cash when M&A opportunities are not immediately available.

Conclusion

JBS N.V. stands as a powerful, diversified force in the global protein industry, strategically positioned for long-term value creation. Its recent dual listing on the NYSE, coupled with substantial investments in high-margin prepared foods and new protein categories like eggs, signals a clear trajectory towards enhanced growth and profitability. While cyclical pressures in U.S. beef and temporary trade disruptions in pork and Brazilian chicken present near-term challenges, JBS's expansive global platform and operational agility have proven effective in mitigating these impacts.

The company's commitment to financial discipline, evidenced by its debt refinancing and share repurchase program, reinforces its robust capital structure. With a clear strategic roadmap focused on operational excellence, diversification, and innovation, JBS is well-equipped to capitalize on evolving global protein demand. The ongoing investments in advanced processing capabilities and value-added products are critical differentiators, enhancing its competitive moat and driving future margin expansion. For discerning investors, JBS offers a compelling narrative of resilience, strategic growth, and disciplined capital allocation in a fundamental global industry.