Isabella Simonato: Good morning, Miguel and Fabio. I’d like to go back a little bit in our discussion to unprocessed foods in Brazil and how your margins are performing or have delivered over the course of the quarter. If you could please give us more detail breaking down by category, maybe in terms of how we could compare across the many industries that you work on in processed foods, considering also margining and the categories that work with larger volumes, how could we expect your performance moving forward? And you’ve also mentioned your prospects for Q4, but if you could add a bit more color in terms of demand and competition that would also help us a lot.
Miguel Gularte: Hi, Isabella. Before going straight into the analysis that you asked us to offer with regard to categories, I think it’s safe to say that the performance of our processed goods has to do with 2 main aspects. First of all, the commercial execution that we’ve delivered is something that we’ve pointed out recurrently. So this is something the company is very actively focusing on ensuring coverage and ensuring that the store plan is planned for and executed in an optimum way, which has allowed us to be better positioned in pricing terms even. And in our commercial strategy at large, ensuring our share on the shelf and why not also influencing customer decisions as well. Now the second aspect has to do with cost, and it couldn’t be any different.
We’ve just talked about the reduced costs per kilo. So that also affects our profitability. And also helps you to understand the second part of my answer when it comes to category. So I’ll give you an example of spreads in general. This is a category that benefited significantly from the increase in cost of soybean oil. So at present, we’re seeing a trend in the market for this category, which is one where the profitability exceeds the effort of recent years. So you have a price competition in the market that is only natural for the margarine categories. Now the sausages and franks where, I mean, prices have been more fragile because of our protein supply, that’s ultimately appealing for producers to make their products more elaborate.
So that affects the market, but we’ve been navigating that really well, and that’s a matter of our execution going back to the first part of the question. So as anticipated, we expect prices to go down in Q4. There’s also the layout of our commemorative products portfolio. So our competitive edge is likely to improve. We should work well in all our categories I mentioned to you, but frozen products is no different, for example.
Operator: Our next question comes from Thiago Duarte with BTG Pactual.
Thiago Duarte : I just wanted to go back to the point of the previous question where you mentioned the volumes and also clarify, just as I think Leonardo said, your increase in volume, so was a positive surprise. And it’s interesting, you no longer release your slaughter figures, but we still have access to your animal inventory figures and that has actually decreased versus Q2 and versus last year as well. So that gives us the impression that you had more product precisely because of the increased production yield and the execution of BRF. So first of all, I just wanted to confirm whether that increased volume comes from the increased production yield when we look at that result because animal inventory is actually going down.
And with that in mind, I’d like to hear from you what are the company’s plans moving forward when it comes to adding animal on the field. So increased housing of breeders and whether those increases will be connected to increased yields still? And my second question about BRF plus, I heard a few comments, I can’t remember if that was on the release were in Miguel’s presentation saying that many of the indicators that you were seeking are already doing equal as well as or even better than they did in 2019, considering what you planned for the plan the BRF plus at the beginning of the year. So I wanted to hear from Miguel when we look at the aggregate figures, how are we doing compared to where you were back in 2019? We wanted to understand, considering that point of reference, how close to that you are when it comes to profitability, service level.
You also mentioned the increased FIFO and so on and so forth. But if you could please quantify the gains that you still expect to have considering all of that. And lastly, if you could talk a little bit about your asset sales this week, you mentioned the cancellation of your pet food business sale. And so considering the nonsale of that asset, which was one of the most significant you plan to work with everything else that you have, is there anything relevant in terms of reference? What could we expect for your divestment?
Miguel Gularte: Thank you, Thiago. I will start by taking the second part of your question, and then Fabio can take the first part. On BRF plus, we met back in September, outlined a new project that we named BRF plus 2.0. That program will continue the ongoing improvement we’ve experienced since Q2 2022. In the 3 quarters that we’ve had so far in 2023 and which from now on, we’ll have opportunity to conclude in 2024 by Q4. Just to answer your question in a more well-rounded way, many of the indices that we had planned to reach in Q4, we’ve already reached in Q3 and those that we had as a benchmark in 2019 have already been exceeded. There are still a few challenges as we expected to have from the outset, which we now plan to address with BRFs 2.0. Many of those aspects such as production yield and so on and all of those operation indicators, both on the field and in manufacturing have already been exceeded in 2019.
Some of them have actually exceeded even BRF’s best times historically. What we expect to see now in 2024, we’re already comparing within the business units of our operation where we’re performing better to establish that performance isolated from the company’s contextual performance. And it’s important to point out that this will now be part of our budget in 2024. Once we deliver our 2024 budget, that will be cascaded down to the entire company affecting not only compensation but also the activities of all our collaborators and business units. So we are very confident that the continued improvement that we are working on still has a way to go and we should see progress in 2024. I will turn over to Fabio to add his comments to the answer. And if necessary, I can come back and close it.
Fabio Mariano: All right, Thiago, if I’m not mistaken, you asked 3 questions, right? BRF plus, and that’s what Miguel addressed was the second. The first one had to do with sales volumes. You mentioned slaughter levels. And what I could tell you about that is we are highly focused on what we call the use of our industrial operations. And this includes not only the industrialization lines or processing lines, but obviously, our slaughter lines as well and also our farming operations. And I think that these figures have to do with the energy we’ve devoted to reducing any idleness that we could call systemic from our operations. Now with regard to slaughter, we have maintained our slaughter shares, and this is true for chicken and pork.
I do not want to go into detail this sensitive information, but the company has made no structural adjustment so far. No structural adjustment has been made except for the end of operations in one of our plants, but one which was not that significant. So it was the only adjustment that we could call a structural one. This has no significant impact on what we should consider a biological factor that has been affecting our performance, and this is something that’s not expected to change in the near term. This is what I could tell you to that part of your question. And lastly, when it comes to divestment, if memory serves, I will first talk about our most recent announcement which we made yesterday that we will no longer be selling our Pet operation, and that was simply because we didn’t come to an offer that nor opinion was fairly priced.
This is an operation that we consider very significant. So, we are now devoting some of our energy to develop that part of the business, looking for synergies that we were once in some measure, been able to realize. We’ve made progress in the processed food segment. We are strengthening our relationship with veterinarians. This is a large market in Brazil. We’re talking about over EUR 40 billion in sales. Brazil has the third largest PET population in the world. Market growth projections, not for Brazil, but for the market is over 2 digits. So we have a lot to make sure that our operations progress in that sense as well. You also mentioned other sales. So I’d like to say that we no longer have anything significant except for a few assets that we’re still operating, these are nonoperative assets and our overall operation did not rely on that even because the contingent tax credits, there have been offers.
