JBS S A : Earnings Releases 1Q23

JBS ENDS 1Q23 WITH

NET REVENUE OF R$87 BILLION AND

EBITDA OF R$2.2 BILLION

São Paulo, May 11, 2023 - JBS S.A. (B3: JBSS3; OTCQX: JBSAY), announces today its 1Q23 results. The comments made herein are in Brazilian Reais, in accordance with international accounting standards (IFRS), unless otherwise specified.

1Q23 HIGHLIGHTS

JBS (JBSS3)

Price on 05.11.2023 R$17.30

Market Cap. on 05.11.2023 R$38.4 Billion

Total Shares: 2,218,116,370

Conference Call JBS S.A. & JBS USA

Friday 05.12.2022

Portuguese

9h BRT | 08h EST

English

11h BRT | 10h EST

Dial-in

Brazil:

[phone] [phone]

International:

[phone]

[phone]

IR Contacts

Guilherme Cavalcanti Christiane Assis Pedro Bueno Felipe Brindo

Vitor Figueira Isadora Gouveia [e-mail]

CONSOLIDATED

• Net revenue: R$86.7 bn (-4.6% y/y)
• Adjusted EBITDA: R$2.2 bn (-78.6% y/y)
• Adjusted EBITDA Margin: 2.5% (-8.6 p.p. y/y)
• Net Loss: R$1.5 bn (-128% y/y)

OPERATIONAL AND FINANCIAL HIGHLIGHTS IN IFRS

JBS BEEF NORTH AMERICA

Net revenue: R$27.4 bn (-5.6% y/y)

Adjusted EBITDA: R$116 mn (-97.2% y/y)

Adjusted EBITDA Margin: 0.4% (-13.7 p.p. y/y)

JBS AUSTRALIA

Net revenue: R$7.2 bn (-2.3% y/y)

Adjusted EBITDA: -R$18 mn (-104% y/y)

Adjusted EBITDA Margin: -0.2%(-6.2 p.p. y/y)

JBS USA Pork

Net revenue: R$9.4 bn (-5.6% y/y)

Adjusted EBITDA: R$232 mn (-81.2% y/y)

Adjusted EBITDA Margin: 2.5% (-9.9 p.p. y/y)

PPC

Net revenue: R$21.6 bn (-2.5% y/y)

Adjusted EBITDA: R$1.4 bn (-56.5% y/y)

Adjusted EBITDA Margin: 6.5% (-8.0 p.p. y/y)

SEARA

Net revenue: R$10.3 bn (+8.9% y/y)

Adjusted EBITDA: R$147 mn (-76.1% y/y)

Adjusted EBITDA Margin: 1.4% (-5.1 p.p. y/y)

JBS BRASIL

Net revenue: R$12.2 bn (-14.9% y/y)

Adjusted EBITDA: R$297 mn (-32.3% y/y)

Adjusted EBITDA Margin: 2.4% (-0.6 p.p. y/y)

• Seara began its operation at a new chicken breaded plant in Rolândia (PR). This is Seara´s most automated plant and one of the most modern at JBS. The objective of this investment is to give a new meaning to the breaded category, expanding Seara´s portfolio of products and serving all consumption occasions.
• JBS USA Pork began operation of its first Italian specialty meats plant in North America in January 2023, located in the city of Columbia, Missouri, which is aligned with the Company´s strategy of adding value to its portfolio of products.
• JBS was once again chosen to be part of B3's Carbon Efficient Index (ICO2) portfolio, yet another recognition of the Company's commitment to the best sustainable practices.

MESSAGE FROM THE CEO

We started 2023 facing many challenges, but our globally diversified platform continues to be a fortress. Operational management measures and a significant improvement in the outlook are already pointing to a more positive performance in line with our potential.

As we pointed out last quarter, this period faced high input costs, persistent inflation, and supply and demand imbalances, in addition to being a traditionally weaker period for the global protein industry. All necessary actions to reduce the impact of these circumstances have been taken.

Beyond market conditions, two businesses were particularly impacted this quarter: Beef USA and Seara. In the United States, we faced high cattle prices and a compression of margins. Additionally, commercial and industrial performance fell below our expectations, which are issues that have already been addressed.

In Seara, we faced challenges of falling prices in exports, high grain costs, and low productivity in agriculture, which impacted costs and volume. We have taken measures to reverse productivity in the field, and the cost of grain is already showing more favorable results.

The increase in our leverage was already expected due to the normalization of margins. Therefore, the company prepared for this scenario by extending the average term and reducing the cost of debt, improving liquidity through the increase in revolving credit lines, and aligning bond clauses with those of the latest issuances when the company was already Investment Grade. We do not have any significant maturities until 2027. In addition, we have already identified the potential to release US$ 1.2 billion in working capital.

The upcoming quarters in the US market are historically stronger with the grilling season approaching, when the consumption of protein and value-added products is heightened. Global logistics conditions are also improving, with a reduction in container costs boding well for Asian exports. A significant decrease in cornmeal prices is ongoing in important producer markets, which has positive impacts on our poultry and pork facilities globally.

In Australia, the cattle cycle is starting to show favorable signs, with continued improvement in supply expected throughout 2023. In Brazil, the resumption of China exports, new export authorizations in the US, Canada, the Philippines, and Mexico, as well as strengthened domestic supplier relationship programs, provide the Brazilian business beef with a very strong outlook in the months ahead.

Our diversification strategy has been complemented in recent years by our investments in value-added products and strong brands in the countries where we operate, providing a more resilient portfolio. Over the past few years, we have made several investments that will begin to bear good fruit. This includes the recent opening of a new Italian specialties facility in Columbia, Missouri, in the United States, and the new breaded products factory in Rolândia, Paraná, Brazil.

All these factors are already leading to a gradual recovery of margins in our businesses.

In the last 12 years, during which we already had a global platform, this is the first quarter that we have faced adversities in almost all countries where we operate. This makes us believe more than ever that our team members and our geographical and protein diversification are our greatest strengths, especially during challenging times.

Gilberto Tomazoni, Global CEO JBS

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1Q23 CONSOLIDATED HIGHLIGHTS

90,867NET REVENUE

86,684R$86.7Bn

1Q221Q23

ADJUSTED EBITDA

R$2.2Bn

11.1%

10,0852.5%

2,162

1Q221Q23

NET LOSS

-R$1.5Bn

5,142

1Q23

1Q22

-1,453

1Q221Q23

FREE CASH FLOW

-R$6.1Bn

-2,750

-6,117

Note: graphs in millions

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1Q23 CONSOLIDATED RESULTS

CONSOLIDATED NET REVENUE

	1Q23	4Q22	∆%	1Q22	∆%	LTM 1Q23
R$ Million	R$	% NR	R$	% NR	1Q23 vs 4Q22	R$	% NR	1Q23 vs 1Q22	R$	% NR
Net Revenue	86,683.7	100.0%	92,865.5	100.0%	-6.7%	90,866.6	100.0%	-4.6%	370,668.8	100.0%
Cost of Goods Sold	(79,069.6)	-91.2%	(82,177.6)	-88.5%	-3.8%	(74,500.9)	-82.0%	6.1%	(319,942.2)	-86.3%
Gross Profit	7,614.2	8.8%	10,687.9	11.5%	-28.8%	16,365.6	18.0%	-53.5%	50,726.6	13.7%
Selling Expenses	(5,775.3)	-6.7%	(6,311.9)	-6.8%	-8.5%	(5,754.2)	-6.3%	0.4%	(24,205.6)	-6.5%
General and Adm. Expenses	(2,670.8)	-3.1%	(2,803.6)	-3.0%	-4.7%	(3,176.1)	-3.5%	-15.9%	(11,324.2)	-3.1%
Net Financial Income (expense)	(1,554.1)	-1.8%	(2,133.8)	-2.3%	-27.2%	(210.1)	-0.2%	639.8%	(7,696.4)	-2.1%
Equity in earnings of subsidiaries	14.4	0.0%	9.7	0.0%	48.9%	15.2	0.0%	-4.9%	59.8	0.0%
Other Income (expense)	222.8	0.3%	904.7	1.0%	-75.4%	(27.3)	0.0%	-	1,361.7	0.4%
Profit (loss) before taxes	(2,148.9)	-2.5%	353.0	0.4%	-	7,213.1	7.9%	-	8,921.9	2.4%
Income and social contribution taxes	719.4	0.8%	1,861.4	2.0%	-61.4%	(1,774.3)	-2.0%	-	411.1	0.1%
Minority interest	(23.1)	0.0%	135.3	0.1%	-	(296.5)	-0.3%	-92.2%	(470.0)	-0.1%
Net Income (Loss)	(1,452.6)	-1.7%	2,349.7	2.5%	-	5,142.3	5.7%	-	8,863.0	2.4%
Adjusted EBITDA	2,162.4	2.5%	4,574.5	4.9%	-52.7%	10,084.8	11.1%	-78.6%	26,646.0	7.2%
Earnings per Share	n.m.		1.06		-	2.29		-	4.00

NET REVENUE

In 1Q23, JBS recorded consolidated net revenue of R$86.7 billion, which represents a decrease of 4.6% compared to 1Q22.

For the period, approximately 77% of JBS global sales were made in the domestic markets in which the Company operates and 23% through exports.

In the last 12 months, net revenue reached R$370.7 billion (US$71.9 billion).

ADJUSTED EBITDA

In 1Q23, JBS adjusted EBITDA was R$2.2 billion, a decrease of 78.6%, compared to a very strong EBITDA disclosed in 1Q22, combined with production costs which remained high during the quarter and an oversupply of protein, mainly in chicken and hogs during the period. Adjusted EBITDA margin was 2.5% in the quarter.

In the last 12 months, adjusted EBITDA reached R$26.6 billion (US$5.2 billion), with an adjusted EBITDA margin of 7.2%.

R$ Million	1Q23	4Q22	∆%	1Q22	∆%		LTM 1Q23
Net income for the period (including minority interest)	(1,429.5)	2,214.4	-	5,438.8	-		9,332.9
Financial income (expense), net	1,554.1	2,133.8	-27.2%	210.1	639.8%		7,696.4
Current and deferred income taxes	(719.4)	(1,861.4)	-61.4%	1,774.3	-		(411.1)
Depreciation and amortization	2,592.8	2,625.0	-1.2%	2,436.1	6.4%		10,010.6
Equity in subsidiaries	(14.4)	(9.7)	48.9%	(15.2)	-4.9%		(59.8)
(=) EBITDA	1,983.6	5,102.1	-61.1%	9,844.1	-79.8%		26,569.1
Other income / expenses	42.7	(72.3)	-	95.7	-55.4%		(60.5)
Indenização seguro PPC	(99.1)	0.0	-	0.0	-		(99.1)
Reestruturação PPC Europa	41.7	0.0	-	0.0	-		41.7
Impairment ativos Planterra	108.2	0.0	-	0.0	-		108.2
Net indemnity J&F*	0.0	(492.9)	-	0.0	-		(492.9)
Antitrust Agreements	71.2	24.7	187.8%	88.8	-19.8%		498.8
Fund for the Amazon	0.0	0.0	-	3.0	-		2.5
Donations and social projects	14.2	12.9	9.9%	53.3	-73.4%	78.3
(=) Adjusted EBITDA	2,162.4	4,574.5	-52.7%	10,084.8	-78.6%		26,646.0

* Value Net of PIS/COFINS

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1Q23 CONSOLIDATED RESULTS

NET FINANCIAL RESULTS

In 1Q23, the net debt financial expense was R$1.4 billion, which corresponds to US$263 million.

R$ Million	1Q23	4Q22	∆%	1Q22	∆%	LTM 1T23
Exchange rate variation	280.2	(117.8)	-	2,651.9	-89.4%	(165.1)
Fair value adjustments on derivatives	(76.5)	(385.6)	-80.2%	(1,210.2)	-93.7%	(663.7)
Interest expense¹	(2,052.6)	(1,910.8)	7.4%	(1,580.2)	29.9%	(7,402.9)
Interest income¹	351.3	344.8	1.9%	262.5	33.8%	1,476.5
Taxes, contribution, fees and others	(56.4)	(64.3)	-12.2%	(334.1)	-83.1%	(941.2)
Finance income (expense)	(1,554.1)	(2,133.8)	-27.2%	(210.1)	639.8%	(7,696.4)
Interest expenses fromloans and financings	(1,457.9)	(1,315.2)	10.8%	(1,074.3)	35.7%	(5,080.0)
Interest income from investments	90.7	90.9	-0.1%	71.4	27.1%	372.6
Net debt financial expense¹	(1,367.2)	(1,224.4)	11.7%	(1,003.0)	36.3%	(4,707.3)

¹Includes the interest expenses from loans and financings which are included in the interest expense and interest income lines.

NET INCOME

In 1Q23, JBS recorded a net loss of R$1.5 billion.

CASH FLOW FROM OPERATING ACTIVITIES AND FREE CASH FLOW

In 1Q23, cash flow from operating activities was negative by R$3 billion, explained by the challenging scenario in the period. Free cash flow, after adding property, plant and equipment, interest paid and received, was negative by R$6 billion.

It is worth mentioning that the first quarter of the year has, seasonally, the characteristic of consuming cash, due to the concentration of payments from cattle and hog suppliers, and restocking of inventories, mainly in grains.

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES

In 1Q23, the total amount of cash flow from JBS investment activities was R$1.6 billion, with the main investment being the addition of fixed assets (CAPEX) in the amount of R$1.7 billion in the quarter.

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