| Expenses by nature |
26 Expenses by nature
The Group’s policy is to present
expenses by function in the statement of income. Expenses by nature are disclosed below:
| | |
2025 | | |
2024 | | |
2023 | |
| Cost of sales | |
| | |
| | |
| |
| Cost of inventories, raw materials and production inputs | |
| (64,064,509 | ) | |
| (55,402,817 | ) | |
| (55,435,841 | ) |
| Salaries and benefits | |
| (8,785,199 | ) | |
| (8,260,103 | ) | |
| (7,641,355 | ) |
| Depreciation and amortization | |
| (2,035,194 | ) | |
| (1,931,401 | ) | |
| (1,873,776 | ) |
| | |
| (74,884,902 | ) | |
| (65,594,321 | ) | |
| (64,950,972 | ) |
| Selling | |
| | | |
| | | |
| | |
| Freight and selling expenses | |
| (3,883,770 | ) | |
| (3,637,983 | ) | |
| (3,848,089 | ) |
| Salaries and benefits | |
| (583,573 | ) | |
| (715,562 | ) | |
| (302,395 | ) |
| Depreciation and amortization | |
| (85,802 | ) | |
| (71,114 | ) | |
| (63,990 | ) |
| Advertising and marketing | |
| (365,470 | ) | |
| (319,018 | ) | |
| (313,736 | ) |
| Net impairment recovery (losses) | |
| 20,603 | | |
| (10,588 | ) | |
| (7,748 | ) |
| Commissions | |
| (90,715 | ) | |
| (73,019 | ) | |
| (58,376 | ) |
| | |
| (4,988,727 | ) | |
| (4,827,284 | ) | |
| (4,594,334 | ) |
| General and administrative | |
| | | |
| | | |
| | |
| Salaries and benefits | |
| (1,117,581 | ) | |
| (903,731 | ) | |
| (1,247,927 | ) |
| Fees, services purchased and general expenses (1) | |
| (684,091 | ) | |
| (911,428 | ) | |
| (735,386 | ) |
| Depreciation and amortization | |
| (187,524 | ) | |
| (187,035 | ) | |
| (211,095 | ) |
| DOJ - department of justice and Antitrust agreements | |
| (182,275 | ) | |
| (253,731 | ) | |
| (102,500 | ) |
| Donations and social programs (2) | |
| (15,805 | ) | |
| (22,467 | ) | |
| (18,166 | ) |
| | |
| (2,187,276 | ) | |
| (2,278,392 | ) | |
| (2,315,074 | ) |
| (1) | Includes additions, reversals and changes in estimates of legal
expenses. |
| (2) | Refers to donations made to Instituto J&F regarding improvements
on school’s building, the social program “Fazer o Bem Faz Bem” created by the Group to support actions for social transformation
where the Group is present and donations to the JBS Fund For The Amazon. |
For
the year ended December 31, 2025, the Group incurred expenses with internal research and development, in the amount of US$2,889
(US$1,185 and US$5,135 for the years ended December 31, 2024 and 2023). 26.1 - Other income and expenses
Other income: For the year ended December
31, 2025, the Group recognized other income in the amount of US$111,929 (US$84,525 and US$148,625 for the year ended December 31, 2024
and 2023), that mainly relates to results on sale of assets totaling US$47,227 (US$22,467 and US$19,617 for the year ended December 31,
2024 and 2023), insurance recovery totaling US$2,792 (US$50 and US$21,305 for the year ended December 31, 2024 and 2023), tax refund and
extemporaneous tax credit totaling US$14,842 (US$6,993 and US$48,825 for the year ended December 31, 2024 and 2023), rental income totaling
US$5,902, insurance claim recoveries totaling US$2,792, quota gain totaling US$1,502, and government grant income totaling US$2,093, among
other non-significant items, among other non-significant items.
Other expenses: For the year ended December
31, 2025, the Group has recorded other expenses amounting to US$75,529 (US$189,254 and US$122,228 for the year ended December 31, 2024
and 2023), that mainly related to PPC restructuring expenses totaling US$31,354 (US$93,388 and US$44,338 for the year ended December 31,
2024 and 2023), loss on the sale of assets totaling US$19,275 (US$16,859 and US$37,652 for the year ended December 31, 2024 and 2023),
among other non-significant items.
Restructuring
related expenses
In the year ended December 31, 2025 the
indirect subsidiary JBS USA recognized US$31,354 (US$96,616 for the year in 2024 and US$53,275 in 2023), in restructuring expenses related
to its subsidiary PPC.
In 2022, PPC began restructuring initiatives
in its European operations. Additional restructuring initiatives also commenced in 2023 and 2024. The purpose of the restructuring activities
is to integrate central operations and reallocate processing capacities between production facilities resulting in closures of some facilities
in the European operations.
The following table provides a summary
of PPC’s estimates of timelines and costs associated with these restructuring initiatives by major type of cost:
| | |
Pilgrim’s
Food Masters | | |
Pilgrim’s
Europe Central | | |
Total | |
| | |
| | |
| | |
| |
| Earliest implementation date | |
| 2024 | | |
| 2024 | | |
| | |
| Expected predominant completion date | |
| 2025 | | |
| 2025 | | |
| | |
| | |
| | | |
| | | |
| | |
| Costs incurred and expected to be incurred: | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Employee-related costs | |
| 19,413 | | |
| 53,350 | | |
| 72,763 | |
| Asset impairment costs | |
| 10,865 | | |
| 1,855 | | |
| 12,720 | |
| Contract termination costs | |
| 845 | | |
| 1,745 | | |
| 2,590 | |
| Other exit and disposal costs (1) | |
| 7,938 | | |
| 5,584 | | |
| 13,522 | |
| Total exit and disposal costs | |
| 39,061 | | |
| 62,534 | | |
| 101,595 | |
| | |
| | | |
| | | |
| | |
| Costs incurred since earliest implementation date: | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Employee-related costs | |
| 19,413 | | |
| 53,350 | | |
| 72,763 | |
| Asset impairment costs | |
| 10,865 | | |
| 1,855 | | |
| 12,720 | |
| Contract termination costs | |
| 845 | | |
| 1,745 | | |
| 2,590 | |
| Other exit and disposal costs (1) | |
| 7,938 | | |
| 5,584 | | |
| 13,522 | |
| Total exit and disposal costs | |
| 39,061 | | |
| 62,534 | | |
| 101,595 | |
| (1) | Comprised of other costs directly related to the restructuring
initiatives, including Moy Park flock depletion, the write-off of Pilgrim’s Pride Ltd. prepaid maintenance costs and Pilgrim’s
Food Masters consulting fees. |
During the year ended December 31, 2025,
PPC recognized the following expenses and paid the following cash related to each restructuring initiative:
| | |
2025 | |
| | |
Provisions | | |
Expenses | | |
Cash Outlays | |
| | |
| | |
| | |
| |
| Pilgrims Europe Central | |
| 8,152 | | |
| 29,839 | | |
| 24,591 | |
| Pilgrim’s Food Masters | |
| 727 | | |
| (1,672 | ) | |
| 4,676 | |
| Prior programs substantially complete | |
| — | | |
| 3,187 | | |
| 2,480 | |
| Total | |
| 8,879 | | |
| 31,354 | | |
| 31,747 | |
| | |
2024 | |
| | |
Provisions | | |
Expenses | | |
Cash Outlays | |
| | |
| | |
| | |
| |
| Pilgrims Europe Central | |
| 4,204 | | |
| 32,692 | | |
| 26,490 | |
| Pilgrim’s Food Masters | |
| 7,123 | | |
| 40,735 | | |
| 25,909 | |
| Pilgrim’s Pride Ltd. | |
| 571 | | |
| 20,066 | | |
| 4,678 | |
| Moy Park | |
| 1,784 | | |
| (105 | ) | |
| 869 | |
| Total | |
| 13,682 | | |
| 93,388 | | |
| 57,946 | |
The following table reconciles liabilities
and reserves associated with each restructuring initiative from December 31, 2024 to December 31, 2025 and from December 31, 2023 to December
31, 2024. Ending liability balances for employee termination benefits and other charges are reported in accrued payroll and social charges
in the Consolidated Statements of financial position. The ending reserve balance for inventory adjustments is reported in inventories,
net in the Consolidated Statements of financial position. The ending reserve balance for asset impairments is reported in property, plant
and equipment, net in the Consolidated Statements of financial position.
| |
|
Liability
reserve as of
December 31,
2024 |
|
|
Restructuring
charges incurred |
|
|
Cash payments
and disposals |
|
|
Currency
translation |
|
|
Liability
reserve as of
December 31,
2025 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Severance |
|
|
4,781 |
|
|
|
25,212 |
|
|
|
(25,355 |
) |
|
|
952 |
|
|
|
5,590 |
|
| Contract termination |
|
|
1,718 |
|
|
|
1,867 |
|
|
|
(3,587 |
) |
|
|
219 |
|
|
|
217 |
|
| Asset impairment |
|
|
91 |
|
|
|
55 |
|
|
|
(151 |
) |
|
|
5 |
|
|
|
— |
|
| Other |
|
|
7,092 |
|
|
|
4,220 |
|
|
|
(8,516 |
) |
|
|
276 |
|
|
|
3,072 |
|
| Total |
|
|
13,682 |
|
|
|
31,354 |
|
|
|
(37,609 |
) |
|
|
1,452 |
|
|
|
8,879 |
|
| | |
Liability
reserve as of
December 31,
2023 | | |
Restructuring
charges incurred | | |
Cash payments
and disposals | | |
Currency
translation | | |
Liability
reserve as of
December 31,
2024 | |
| | |
| | |
| | |
| | |
| | |
| |
| Severance | |
| 3,651 | | |
| 46,474 | | |
| (45,267 | ) | |
| (77 | ) | |
| 4,781 | |
| Contract termination | |
| 1,597 | | |
| 2,854 | | |
| (2,684 | ) | |
| (49 | ) | |
| 1,718 | |
| Asset impairment | |
| 359 | | |
| 29,392 | | |
| (29,655 | ) | |
| (5 | ) | |
| 91 | |
| Other | |
| 4,631 | | |
| 14,663 | | |
| (12,050 | ) | |
| (152 | ) | |
| 7,092 | |
| Total | |
| 10,238 | | |
| 93,383 | | |
| (89,656 | ) | |
| (283 | ) | |
| 13,682 | |
|