In the third quarter of 2024, JBS S.A. (JBSAY), a global leader in the protein industry, reported record net revenues of $19.9 billion, marking a significant increase from the previous year. The company's EBITDA rose to $2.2 billion, reflecting a consolidated margin of 10.8%, a nearly 5% increase from the third quarter of 2023. The robust financial performance was attributed to strong demand across its diverse product portfolio, with notable increases in poultry and pork sales. JBS announced a dividend of $0.17 per share, totaling approximately $382 million, signifying confidence in its financial stability and commitment to shareholder returns.
Key Takeaways
- JBS S.A. achieved a record net revenue of $19.9 billion in Q3 2024.
- EBITDA stood at $2.2 billion, with a consolidated margin of 10.8%.
- Dividend announced at $0.17 per share, totaling about $382 million.
- Poultry and pork segments saw robust demand, with Seara reaching a record margin of 21%.
- Net debt reduced by $1 billion, and leverage decreased to 2.15x.
- Company guidance for 2024 projects net revenue of $77 billion and adjusted EBITDA of $6.9-$7.1 billion.
- JBS USA and JBS Australia reported revenue growth and strong margins despite challenges.
Company Outlook
- JBS projects a net revenue of $77 billion for 2024.
- Adjusted EBITDA guidance set between $6.9 billion and $7.1 billion.
- Focus on operational excellence, innovation, and multi-protein business model to sustain growth.
- Management aims for a net debt to EBITDA ratio between 2 and 3 times for a potential ratings upgrade.
- Anticipates significant cattle supply increase in the second half of 2025 due to herd rebuild.
Bearish Highlights
- Rising livestock prices, particularly a 25% rise in Australian cattle prices.
- Brazilian beef market's future results could be impacted by cattle pricing.
- Potential impacts from tariffs or trade wars, although management remains optimistic.
Bullish Highlights
- Strong demand for poultry and pork, with record margins reported by Seara and U.S. pork business.
- JBS USA pork net revenue increased by 1%, driven by strong seasonal demand and lower grain costs.
- JBS Australia's revenue increased by 5% in Q3 2024, focusing on customer partnerships and operational excellence.
Misses
- No specific misses were mentioned in the summary provided.
Q&A Highlights
- Management addressed concerns about potential impacts from tariffs or trade wars, noting resilience during previous disruptions.
- Confirmed the U.S.'s competitive position as a protein producer with no immediate regulatory concerns.
- Discussed ongoing efforts to improve U.S. beef margins, targeting an additional 1.5% to 2% enhancement.
JBS S.A. continues to demonstrate its ability to navigate market challenges and capitalize on its diversified protein portfolio. The company's strong financial results and strategic focus on operational efficiency, product innovation, and market expansion underscore its resilience and potential for sustained growth. With a disciplined approach to capital allocation and a clear vision for the future, JBS S.A. remains committed to delivering value to its shareholders and maintaining its position as a global industry leader.
InvestingPro Insights
JBS S.A.'s strong financial performance in Q3 2024 is further supported by recent data from InvestingPro. The company's market capitalization stands at $13.43 billion, reflecting its significant presence in the Food Products industry. JBS's revenue growth of 12.56% in the most recent quarter aligns with the record net revenues reported in the article, demonstrating continued momentum.
InvestingPro Tips highlight JBS's financial strength and shareholder value. The company "pays a significant dividend to shareholders," with a current dividend yield of 5.83%. This aligns with the recently announced dividend of $0.17 per share mentioned in the article. Additionally, JBS "has maintained dividend payments for 12 consecutive years," underscoring its commitment to consistent shareholder returns.
Another InvestingPro Tip notes that JBS's "net income is expected to grow this year," which corresponds with the company's positive outlook and guidance for 2024. The projected net revenue of $77 billion and adjusted EBITDA of $6.9-$7.1 billion suggest continued growth and profitability.
The company's P/E ratio of 18.3 (adjusted for the last twelve months) indicates a reasonable valuation considering its growth prospects. Moreover, JBS has shown a "high return over the last year," with a one-year price total return of 50.87%, reflecting investor confidence in the company's performance and strategy.
For investors seeking more comprehensive analysis, InvestingPro offers 13 additional tips for JBS S.A., providing deeper insights into the company's financial health and market position.
Full transcript - JBS SA (OTC:JBSAY) Q3 2024:
Operator: Good morning, and welcome to JBS S.A. and JBS USA Third Quarter of 2024 Results Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference is being recorded. 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 expectation highly depend on market conditions, on Brazil's overall economic performance and on industry and international market behavior and therefore, are subject to change. Are present with us today Gilberto Tomazoni, Global CEO of JBS; Guilherme Cavalcanti, Chief Global CFO of JBS; Wesley Batista Filho, CEO of JBS USA; and Christiane Assis, Investor Relations Director. Now, I will turn the conference over to Gilberto Tomazoni, Global CEO of JBS. Mr. Tomazoni, you may begin your presentation.
Gilberto Tomazoni: Good morning, everyone. Thank you very much for your participation in our results teleconference. The third quarter results for 2024 reaffirm our positive outlook for the year, highlighting once again the strength of the JBS Global multi-protein platform, the quality of our team and our focus on operational excellence. Net revenue was a record US$19.9 billion. During this period, EBITDA reached US$2.2 billion with a consolidated margin of 10.8%, marking a nearly 5% increase compared to the same quarter in 2023. The results present this quarter allow us to announce that the company will distribute dividends on January 15, 2025, of approximately US$0.17 per share, totaling around US$382 million. Last October, approximately US$815 million in dividends were distributed. Our poultry and pork operation in Brazil and United States performance above expectation, especially Seara, which closed the quarter with a record-breaking 21% margin. A strong global demand, favorable grain cost and our agility and manage product and market mix, alongside our focus on high-value products, brand and innovation, complement the results of already implemented operational improvements and efficiency, productivity and commercial enhancements. PPC reported a solid 16.9% margin this quarter, driven by robust demand, primarily in Europe, U.S. and Mexico. Operational improvements portfolio diversification and value-add products and brands are also contribute of these results, along with partnership key customers aimed at delivering value to consumers. The business performance also reflects a focus on quality, service and innovation. Our U.S. pork business posted a 12.1% margin, driven by higher sales both in U.S. and international, along with impressive growth in value-added products and strong grain and across agricultural performance metrics. I would like to emphasize once more that JBS multi-geography, multi-protein and platform is unmatched in this resilience amid market challenge. While U.S. operations are still feeling the effects of cattle cycle, JBS Brazil posted one of the best performance with 11.6% margin driven by the beef segment. Beyond of our high export volume, prebuy results reflect the pursuit of operational excellence, the increase in domestic demand, the opened a new market and the improvement in the product mix with a focus on value-added products, branded and customer service. Australia continues to capture the benefit of cattle cycle with a 9.8% margin in the third quarter despite rising livestock prices. The outlook of the business remained favorable in the coming quarters. We are focused and grow food by diversification, innovation, value-added products and strong branding. Recently, we announced an investment to expand Huon aquaculture salmon production in Australia. In Jeddah, Saudi Arabia, we are finishing a new Seara facility that will be quadruple value-added chicken product capacity in the region. I would like to emphasize that our Q performance -- Q3 performance underscore the stretch of our financial management as leverage dropped to 2.15x in U.S. dollar. Net debt was reduced by USD 1 billion, increasing to USD 13.7 billion. And net profit came 693 million. With our global footprint, the expertise of our team, ongoing innovation and commitment and operational excellence, JBS is primed to continue delivering value to our customers, consumers and stakeholders alike. With the emphasize -- I want to emphasize that our robustness on this quarter is not an outline. As we consider the accumulative results on the last 6 years, JBS had generated an average annual return to share earnings of approximately 20% in U.S. dollar and a free cash flow of USD 14.4 billion before expansion in CapEx, delivering both growth and value. During this period, USD 7.7 billion was invested in organic growth and M&A and USD 6.5 billion was distributed in dividends and share buybacks. Thank you again for your participation in these results calls. And now, I will pass the floor to Guilherme, who will detail our numbers. Guilherme, please?
Guilherme Cavalcanti: Thank you, Tomazoni. Let's now move to the operational and financial highlights to the quarter of 2024. Starting on Slide 12, please. Net revenue of the third quarter was a record, totaling $20 billion. Adjusted EBITDA totaled $2.2 billion and represents a margin of 10.8% in the quarter. Net profit was $693 million in the quarter. And excluding non-recurring items, adjusted net income would be $730 million. Considering another quarter of strong results, I would like to highlight that last night, we released the new assumptions of the company's guidance for the year of 2024. Therefore, our new numbers consider a net revenue of $77 billion and adjusted EBITDA between $6.9 billion and $7.1 billion, which implies an EBITDA margin between 9% and 9.3% for the year. Moving on to the next slide. Operational cash flow in the quarter was $1.9 billion. Free cash flow for the quarter was $1 billion, an increase of 65% year-on-year. Year-to-date, free cash flow generation was $1.4 billion. This strong generation is explained by the improvement in the results of all our business units, except for JBS beef North America, which is facing a challenging moment in the cattle cycle. CapEx in the quarter was approximately $321 million, 60% of it was maintenance CapEx. The total amount is 15% lower than the third quarter 2023 and is in line with our estimate for the year of $1.3 billion. Moving to the slide 15. Net debt at the end of the third quarter of 2024 was $13.7 billion, a $1 billion reduction compared to the previous quarter, reflecting the strong free cash flow generation in the period. During the quarter, we carried out two important movements for the company. The first of this is the repurchase of $722 million of local debentures agribusiness receivable certificates issued by the company. In addition to reducing gross debt, this repurchase excludes all remaining financial covenants of the company's debts. Therefore, currently, 100% of JBS debt does not have financial covenants. The second was the first issue of Seara's local debentures, CRAs in October in the amount of $276 million in three tranches of 5, 10 and 20 years with a 10 and 20-year issues having the lowest spread over the treasury – over the NTNB, which is the Brazilian treasury yield. Leveraging dollars came down in just one quarter from 2.77 times, ending in the third quarter at 2.15 times. The reduction happened due to the expansion of EBITDA and the reduction of the debt due to the cash generation. For the year-end, merely as an exercise, without considering a leverage guidance, if we consider the third quarter 2024 net debt of $13.7 billion and simply divided by the average EBITDA of our guidance of $7 billion, our leverage would reach below 2 times by year-end. Over the past six years, we have maintained a balanced approach to growth and returns to shareholders with $4.5 billion in organic growth CapEx, $3.3 billion in acquisitions, $4.1 billion in dividends and $2.8 billion in share buybacks. It's important to mention that this entire amount was funded by the company's free cash flow generation. The strong free cash flow generation despite our largest business in terms of net revenue, the JBS Beef North America, is still facing a challenging scenario, shows the robustness of our unique platform. We are optimistic that our geographic and multi-protein diversification will continue to provide growth and returns for our shareholders. In October, we paid an interim dividends in the amount of $812 million, equivalent to $0.37 per share. We also announced last night an additional payment of dividends in the amount of $382 million, equivalent to $0.17 per share, considering an FX of BRL 5.81 per dollar. These dividends will be paid in January 15, 2025. Considering the two distributions, which totaled $1.2 billion, the dividend yield as of today is approximately 8.5%. Additionally, we reopened our share buyback program, which can buy up to 113 million shares. I will now briefly go through the business units. Starting with Seara on Slide 16. Net revenue growth was 5% year-on-year, while profitability grew by a significant 15.5 percentage points, reaching 21% EBITDA margin. These numbers are the result of a better commercial and operational execution, strong global demand and the expansion of our value-added portfolio. Seara continues with its strategy of winning consumer preference through product quality, innovation, execution and the strengthening of the brand, achieving growth in penetration and repurchase rates. Moving now to Slide 17. JBS Brazil recorded net revenue, 10% higher than the third quarter 2023, driven by higher volume sold, mainly in the international markets. This result is attributed to the strong global demand in addition to the favorable livestock cycle for the period, resulting in greater availability of animals for slaughter. Therefore, the EBITDA margin reached 11.6%, an increase of 8.2 percentage points in the annual comparison. Moving to Slide 18 and now -- from now on speaking in US GAAP. JBS Beef North America net revenue grew 6% year-on-year as a result of the strong demand for beef in the period. Profitability continues to be pressured by the challenging cattle cycle, which has kept the price of live cattle at high levels. On July 19, we have JBS Australia. In the quarter, revenue growth of 13% year-over-year is the result of both higher volumes sold and prices. The improvement in profitability in the annual comparison reflects the increasing operational efficiencies, and despite the favorable livestock cycle, the price of Australian cattle, our main business grew 25% in the yearly compare. Turning now to JBS USA. Pork net revenue for the quarter grew 1% compared to the third quarter in 2023. The domestic market increase in revenue is a result of higher sales volumes driven by strong seasonal demand. Pork consumption is also being favored by the average price of beef, which remains at high levels. The quarter's profitability was positively impacted by lower grain costs, ongoing efforts to expand the value-added portfolio and consistent commercial and operation logistic execution. JBS Australia, as highlighted on July 21, recorded an increase in net revenue of 5% in the third quarter 2024 compared to the third quarter 2023. Throughout the quarter, company continue to focus on operational excellence, portfolio diversification and strengthening partnerships with key customers aiming to add even more value to the customer. The focus on quality, improving the level of services and innovation is reflecting in the strong results of quarter. At this time, I would like to open up for our question-and-answer session.
Operator: Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Priya Ohri-Gupta with Barclays (LON:BARC). Please go ahead.
Priya Ohri-Gupta: Hello and thank you so much for the questions. First of all, Guilherme, well, first of all, congratulations on those solid quarter. On the call earlier this morning, I think you talked a little bit about where you hope to manage your net leverage on an ongoing basis within that two times to three times target and how you think about that with regards to maybe requesting a ratings upgrade. Could you just remind us sort of what your ultimate ratings target is for the company, what you hope to achieve maybe over the mid-term? Where we should see leverage migrate to over the next year and what the key drivers will be? And how we should think about sort of timing of upgrades within that? That's my first question, and then I have a follow-up. Thank you.
Guilherme Cavalcanti: Thank you, Priya. Yes, our policy states that we should be between two and three times net debt, EBITDA, which is a level that we think we can keep investment grade. Given our free cash flow generation, we've been able to stay in this range despite we invest in organic growth, acquisitions and also dividends. So this year, as I mentioned in my speech, we may end up below two times net debt to EBITDA. So I think if we maintain around two times, I think we can start being considered for upgrade. Just bear in mind that we still have one notch downgrade for governance, which we are working, and we expect at some point this one notch down for governance is taken out, and then we would go to BBB flat. And the pace of ratings, the upgrade, it will depend mainly on opportunistic acquisitions that we never know if you do up here or not. So these -- the timing can be -- maybe delayed depending on acquisition or not. Our target, I think -- again, our target is to be between two and three times, preferably between -- to be between two and 2.5 times. I think it can be at 2.5 times, again going -- growing the company and returning capital to shareholders. And I think the target -- I think at the levels of BBB flat. For example, we maximize the firm value from an equity perspective. But the BBB+, it's an interesting target to be pursued because then you can access program of commercial paper at much lower levels and much deeper. We intend to start our first commercial paper program this year, maybe still, better for seeing smaller amounts just to be testing the market. And as we can -- as we have ratings upgrade in the future, we might be getting a deeper access of this market. It's also worth mentioning that as we grow, as the company grows, it's easier to continue to return money shareholders and grow and keeping the leverage given the size of the company. For example, what I mean is that six years ago, again, we almost doubled our EBITDA that we had six years ago, and we have the same level of net debt. So that's -- so as we are growing, increasing our EBITDA, I think naturally, on the long-term, you should be going on a path of ratings upgrade given the size. What I mean is that I work in companies before that sometimes you get to a size of EBITDA, that's even difficult for you to find targets or expand an amount of money that would put you or leverage too high. For example, today, this year, our guidance is that we have $7 billion of EBITDA for this year. That's our guidance, the midpoint of our guidance. So we need to increase our leveraging one time, I need to spend $7 billion without bringing any EBITDA to the denominator. So that's what I mean by the size of the company helping on the ratings upgrade. And that's, in fact, is one of the metrics of one of the rating agencies is size. It's clear?
Priya Ohri-Gupta: Yes. That's very helpful. So mechanically, your net leverage did improve because of the higher cash balance. Should we expect gross debt to come down in the fourth quarter? And then secondly, just given the higher use of working capital this year, as we think about cash flow generation in fourth quarter versus fourth quarter of 2023, should we still expect cash flow from operations to be higher, which has been the trend this year or more in line?
Guilherme Cavalcanti: Thank you, Priya. So, basically, if you look on our press release on Page 7, we already do a pro forma where we show that we used our cash balance sheet to pay dividends, and we also made an issuance of a local debenture. We still have excess cash, but this is because we have -- we took the opportunity also to issue local debentures and having -- being opportunistic in market. But we still could have a potential to decrease more -- we paid less -- in the last quarter, we paid $700 million -- $722 million of local debenture, and we issued only $261 million. So, that's part -- in the sense, we already reduced the gross debt. The thing is with that, we would be paying, that will be efficient. If you look at our bonds, they are trading very efficiently at good rates. But then -- let's see what is the continuing trend of our cash generation and to see if there's an opportunity to continue to pay gross debt, which could be a possibility. For the fourth quarter, I mentioned in the beginning of the year that our EBITDA of breakeven, which means what is the EBITDA that would be -- have zero free cash flow was $3.5 billion, which was comprised of $1.1 billion of net interest expenses, $1.3 billion of capital expenditures, $500 million of leasing, and $650 million of working capital consumption because of the biological assets, which is basically feeding the breeders. This calculation proved valid. So, if you get our guidance for EBITDA midpoint of $7 billion, and we decrease for $3.5 billion, which would be our breakeven EBITDA and take out 25%, which is our average effective tax rate, we would reach around $2.6 billion of free cash flow for this year, which makes sense given the fourth quarter is generally a quarter of strong free cash flow. This number could vary depending on -- I can unwind some balance sheet leverage that I did last year when our leverage was higher. So, to keep leverage under control. So, I may use part of this cash also to unwind some leverage -- some vendor finance, for example, which will mean lower interest expenses for next year.
Priya Ohri-Gupta: Okay, that's helpful. And then my final question would just be around how you're thinking about the listing process in the U.S. and any updates you could give us there? thank you.
Guilherme Cavalcanti: So, basically, Priya, as you know, we are currently in a process of exchange offer of the bonds of the $2.5 billion bonds we issued in 2023. So, we need to finalize this process, which is expected to finalize by the end of November. Once we finalize this exchange offer, then we resume the filings for the equity for the listing. So I would say, then we will start -- restart the process of back and forth with the SEC of the listing. It's worth mentioning that our 20-F, it's already approved by SEC and the exchange offer also the F-4 of the exchange of the debt was approved. So now we resume the process of getting the approval, the registration for also the F-4, which is the exchange of the shares.
Priya Ohri-Gupta: Thank you.
Guilherme Cavalcanti: Thank you, Priya.
Operator: Our next question comes from Ryan Levine [ph] with Barclays.
Unidentified Analyst: This is Ryan filling in for Ben today. Congrats on the results. So two quick ones. Starting with Brazil Beef. About the recent increase -- the significant increase of Brazilian cattle pricing, how do you see that impacting your results into the fourth quarter in 2025, especially in context of the export market? And then second, very quickly with US beef, do you think there's any room for margin and profitability improvement even before a turnaround in the cattle cycle, which I think you talked about this morning could potentially be in the second half of 2025.
Gilberto Tomazoni: Ryan, about -- I'll answer about beef in Brazil, and then I will ask Wesley to answer about beef in US. In Beef in Brazil, the main driver of the result was the price of cattle. The price of dropped and this increased the margin. Of course, JBS take this advantage because of very well positioned in terms of brand and distribution. But the main driver was the price of the cattles. We see now the price of the cattle, they dropped too much and now they go up too much. I see some time -- some opportunity for correction. But if you make the assumptions, we see that the margin of Friboi for the future will be back to the historical results.
Wesley Batista Filho: Hey, Brian, so on US beef, internally, we see between a 1.5% and 2% improvement. We've improved a lot in the last year. This would take us to a more operational excellence level. We are right now performing according to historical, but there is still another 1.5% to 2% space to improve regardless of market. And when I meant on the earlier call about second half of 2025, what I meant there is where I see -- where I thought that -- I think that herd rebuild is going to really start picking up, not when we're going to see more supply of cattle.
Unidentified Analyst: Okay. Perfect. Thanks for the color and congrats on the results again.
Operator: Our next question comes from Ben Mayhew with BMO. Please go ahead.
Ben Mayhew: Hey, guys. Thanks for the question and congratulations on the strong result. I guess I'll start with the implied fourth quarter guidance. I know you just touched on the Brazil beef business. But just if you could walk us through briefly the -- kind of what you're expecting by segment in the fourth quarter? I'll start there.
Guilherme Cavalcanti: We don't break our guidance by segment and also by quarter.
Ben Mayhew: Okay. That's fair. So in terms of the US pork business, you guys have been outperforming consistently the industry. And I'm just wondering if you can talk us through how you're doing that and how that momentum might keep up into 2025? Thanks.
Wesley Batista Filho: Yeah, Ben. Good morning. US pork -- our US pork division has been outperforming the market for a while here now, and they've been performing pretty well. There isn't one thing, but there is a few things that really help us get there. Our plans -- our assets are really good. We have, out of our 5 pork facilities in the US, four of them are large double-shift plants that are very well invested, and they're just very, very efficient. But that's not only that. This is a team that has been operating very well on the buy, make and sell of the business very well for a long time. So honestly, we do see this -- at least our performance, obviously, it's difficult to talk about comparison to market. But our performance, we see this business continuing to have solid performance like we've seen into next year. We do not see a reason -- for any reason for that to change. The other thing too that's relevant we have inside of this business, you have the prepared foods part of our business, which operates in the mid-double-digit levels, mid- to low double digits level. So not too high above the average of what we have here, but it brings that average a little bit higher. And that business has also been performing really well. We have two new plants that are pretty much done with their ramping up. And it's a business that also has -- especially in the next last couple of years, really, really improved performance and now bringing the average of this segment -- the average EBITDA of this business higher. But the bulk of this is not -- the bulk of the performance and the bulk of the performance of pork division is the pork business. This prepared foods is -- will be secondary as to why they've been performing so well versus market.
Ben Mayhew: Thanks. And if I could just squeeze in one more. The Seara result in Q3 was stellar. How do you think about the sustainability of these margin levels? And what are some of the key drivers that you're seeing in the business that are allowing it to perform at such a high level? And I'll leave it there. Thank you.
Gilberto Tomazoni: Ben, we are -- if you look for the page, let's see the number of the page.
Guilherme Cavalcanti: Page 5 of the presentation.
Gilberto Tomazoni: Page 5 from the presentation. We have year-by-year, the volatility of our -- by our business units and the average of our margin. We -- you can see that we are constantly increase our margin in terms of average because we are keep investing in value-added and brands. When you say value-added, it's not just value added based on processed product. No, it's for -- its rocket that is marinade or different package or more practices to the consumer, so on, that -- and brand. We start to invest in Seara brand in Brazil. Then we buy business U.S. We buy business in Europe. We buy business in Australia. And we are keeping investing in value-added and brand. And then, you will see the trend. Last year was an outliner because of -- we are just -- after the pandemic, and that was discontinued in terms of supply and demand. But then we are back. You can see this year, we are back on that. And the trend, you can see, we are keep investing on that. And the trend for us is to grow margins. And it is graphic. It's proved that we are able to do that. And this is our focus.
Operator: Our next question comes from Carla Casella, JPMorgan (NYSE:JPM). Please go ahead.
Carla Casella: Okay. Can you hear me now?
Gilberto Tomazoni: Yeah, we can hear you.
Guilherme Cavalcanti: Yes, we can hear you, Carla.
Carla Casella: Great. Sorry about that. Just one follow-up on the U.S. listing question, if you do list in U.S., how does that change the way you think about dividends and capital allocation? Or does it?
Guilherme Cavalcanti: Hi. Carla. It has slightly changed, because when we listed in Brazil, the corporate law in Brazil requires that you pay 25% minimum dividends on your net profit. So basically, the corporate law gives you a dividend policy. When we move to a U.S. listing, of course, U.S., you don't have any mandatory dividends. So generally, companies builds and we state some dividend policy in their political internal policies or so to the market. So then, for example, when you are an Electricity Company or Telecommunications, you can to see a lot of progressive dividends, things like that. We are in a cyclical business. So generally, when you are in a cyclical business, is not prudent to promise progressive dividends or anything like that. But you can have some guidance in terms cash of cash flow generation, something linkage to the free cash flow generation and try to keep the dividends as more stable as possible. So for example, Tyson had around $600 million to $700 million of dividends per year, mostly constant for the last seven years. Hormel has around $500 million in dividends in the last seven years. ADM has around $800 million to $900 million. Bunge (NYSE:BG) has around $400 million. So you try to keep some dividends, try to make it as constant as possible. So you have a minimum dividend yield for pension funds to allocate because some -- the special funds, they need some cash to pay their clients. So that's more or less. So generally, moving to the US listing, I will not have these minimum payout ratio that the Brazilian corporate law requires. And then I will put something in capital allocation linked to the free cash flow. I would say, practically speaking, if you look at the last six years, we generated $14 billion of cash – free flow before expansion CapEx. How we use the money? We spent $4.5 billion in expansion CapEx, $3.3 billion in M&A, $3.8 billion in dividends, not including the next one, and $2.8 billion in share repurchase. So it was a balanced approach of our free cash flow between return or short-term to shareholders and growth. So again, if you look at our guidance and if you think that we could -- with the $7 billion EBITDA, we could be generating $2.5 billion free cash flow, we could -- that's half and half with historically, that's more or less we could be doing going forward. But of course, this will depend on opportunistic acquisitions and allocation. But in the long-term, we have -- we intend to have this balanced approach between -- and being able to deliver growth and value for our shareholders.
Carla Casella: That's super helpful. I love all the detail. Just a quick question with the change in the US regime here. If we see a tariff or trade wars, can you just give us some color how that impacted the business back in 2018, 2019 when there was a little bit more trade disruption?
Wesley Batista Filho: Carla, the business continued to perform pretty well. And obviously, that might create some short-term disruption. But the US is -- if not the most, among the most competitive protein producers in the world. So look, obviously, we're watching and seeing what's the effect of any change in regulation in commerce between countries, but at this point, we're not super concerned about what's going to -- if that's going to create a huge disruption in our export flow, at least not for now.
Carla Casella: Okay. That's great. And then just one last one. It's kind of a follow-up. I was going to ask about margins. A lot of your businesses are operating at kind of record margins, and it's very helpful. You say in Seara and on pork. Can just turn to beef as well on the US beef side. You seem to be narrowing kind of the gap to Marfrig. And are there structural changes in that where you think ultimately you could have better margins than them over time? Or how should we think about the beef margins in North America and the structural improvements you've made, the cost cuts you've made?
Wesley Batista Filho: Yes. Well, we are performing now, Carla, very, very much in line with what our history is, and is in our history versus peers, it's public, so we either perform far better than peers for a long time. So we -- obviously, we're -- that's what we shoot for. We're trying to do the best job we can here. And yes, potentially, obviously, it's difficult to say, right, because it doesn't depend only on our numbers, but we are -- we've improved a lot of our business. There is still things to improve in performance. But performance is close to history. And there is still another 1.5%, 2% that I mentioned now would take the business to excellent. It wouldn't be just to be at the history. We're already there. And we're working hard to get there as soon as we can.
Carla Casella: Okay. That's great. And that's the 1 out of 2 that's all excluding cycle improvement?
Wesley Batista Filho: That's 100% dependent on us regardless of the market.
Carla Casella: Okay. Great. Thank you, so much.
Wesley Batista Filho: Thank you.
Operator: Ladies and gentlemen, there have been no further questions. Now, I would like to pass the floor to Mr. Gilberto Tomazoni for his final remarks. Please go ahead.
Gilberto Tomazoni: I want to thank everyone again for being here. I also want to emphasize that having a global platform is not enough. You must operate it well. I extend my gratitude to all our 270,000 team members. And finally, I want to reiterate that the strength of this result is not outline. Over the past 6 years, JBS generated an average annual return to the shareholders of approximately 20% in US dollar. Thank you.
Operator: This is the end of the conference call held by JBS. Thank you very much for your participation, and have a nice day.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.