Earning Date, Transcript Summary & Report

Q1 Revenue Increase: Net revenues for Q1 2025 were reported at $4.5 billion, a 2.3% increase from the same quarter last year.

Adjusted EBITDA Surge: Adjusted EBITDA reached $533 million, reflecting a 62% increase compared to Q1 2024, with an adjusted EBITDA margin of 12%.

Sales and EBITDA Growth: Sales and adjusted EBITDA in the U.S. increased compared to the prior year, driven by elevated commodity values and improved production efficiencies.

Prepared Foods Growth: Prepared foods grew over 20% compared to the prior year, supported by increased distribution across retail and food services.

Branded Sales Growth: Sales of core branded offerings rose, further diversifying the portfolio, with branded sales in Mexico increasing by 11%.

Sustainable Retail Partnerships: The company secured long-term arrangements with selected retail partners, driven by sustainability and animal welfare practices.

Profitability Improvement in Europe: In Europe, profitability improved due to business integration and manufacturing optimization, with adjusted EBITDA in Q1 at $99.5 million compared to $81.5 million in Q1 2024.

Strong Balance Sheet Resilience: The company maintained a strong balance sheet with over $1.6 billion in total cash and available credit, even after a $1.5 billion special dividend.

Capacity Expansion Investments: Investments in capacity expansion for fresh and prepared foods in Mexico are on schedule, with completion anticipated in the first half of 2026.

Broiler Production Challenges: USDA indicated increased mortality and reduced hatchability challenges in broiler production, impacting overall supply.

Profitability Pressure in Mexico: Despite a 2.3% increase in net revenues, the adjusted EBITDA margin in Mexico decreased from 9.2% to 8.4% year-over-year, indicating profitability pressure.

Increased Operational Costs: Legal settlement and defense costs increased SG&A expenses, contributing to higher operational costs.

Restructuring Charges Impact: The company incurred $16.6 million in restructuring charges during the quarter, indicating ongoing operational challenges and costs associated with integration efforts.

Avian Influenza Outbreak Risks: The potential for high pet avian influenza outbreaks remains a concern, which could disrupt production and exports.

Commodity Market Volatility: Increased demand pressure in the live commodity market in Mexico during March affected profitability, highlighting volatility in the market.