Marcos Molina – Chairman Martin Secco – Chief Executive Officer Eduardo Miron – Global Chief Financial Officer Tim Klein – Chief Executive Officer-National Beef

Isabella Simonato – Bank of America Teo Lasarte – Insight Autumn Graham – Schroders

Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to Marfrig Global Foods S.A. Conference Call to Present and Discuss its Results for the Second Quarter 2018. The audio for this conference is being broadcast simultaneously through the Internet in the website, www.marfrig.com.br/ir. In that address, you can also find the slide-show presentation available for download. [Operator Instructions] Before proceeding, let me mention that forward-looking statements are being made under the safe harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Marfrig’s management and on information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to the future events, and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Marfrig and could cause results to differ materially from those expressed in such forward-looking statements. Now I will turn the conference over to Mr. Marcos Molina, Marfrig Global Foods’ Chairman. Please Mr. Molina, you may now begin the conference.

[Foreign Language] Good morning, everyone. [Foreign Language] Before I pass to Martin, I’d like to congratulate everyone from Marfrig for the solid results in this quarter. [Foreign Language] It demonstrates and reinforce that our decision to focus in the beef process and diversify in the broad geographic standpoint with our production base in the North America was absolutely correct. [Foreign Language] Not just the decision, but the timing of catering in the sector in the U.S. was very positive, which in our view, the long-term perspective continues to be very favorable for the beef product. [Foreign Language] Our shifting in our strategy include the sale of Keystone. [Foreign Language] The same process continues to advance in new terms, and we will continue to keep you abreast of the evolution of this. [Foreign Language] It’s important to highlight that Keystone is an exceptional asset. [Foreign Language] Amidst this commodity crisis in the chicken business in the U.S., [Foreign Language] its business model has differentiated itself from the competition. [Foreign Language] I’d like to highlight [Foreign Language] that we will continue focusing our strategy, and we will – and that our commitment to the financial discipline and deleverage continues to be unnegotiable. [Foreign Language] The way we see is when the process – the sale process is finalized, Marfrig will be the sector company will be best to leverage in this sector. [Foreign Language] I will now pass the word to Martin Secco who will start the presentation of this quarter.

Thank you, Marcos. Good morning, everyone. Thank you for your interest in the company and for participating in yet another conference call of Marfrig Global Foods. In addition to presenting the results of the second quarter, we also give some comments about the transaction of the divested Keystone Foods. With me today are Eduardo Miron, our Global CFO; Tim Klein, CEO of National Beef and responsible for the North America operations; and Roberta Varella, our IRO. Please go to the Slide number 3. In April this year, we announced a shift in the company growth strategy to focus on beef. And with the decision, we launched two major projects. The first, which we already have discussed extensively with you, about the acquisition of our controlling interest in National Beef, which we conclude in June. And the second project is the sale of Keystone Foods. As we noticed on first half of July, we received the binding offer, which were analyzed during the month, and we are in the negotiation phase. I know you would like to receive more detail, but unfortunately, that is what I can share information with you at the moment. Regarding our operations, our exceptional operating results in the second quarter, which reflect our success – decision to expand geographically with a focus on beef product. Marfrig pro forma adjusted EBITDA in the quarter was BRL118 million, 87% higher year-over-year, driven mainly by the good scenario in the U.S. market. In the next slide, where we’ll provide a snapshot where Marfrig stand today. With the production platform concentrating in Americas and daily primary process capacity of 32,000 heads of cattle, Marfrig today is one of the global leader of beef supply. Our geographic diversification enables us to serve the largest and the most important beef consumers around the world. As you can see, the U.S. domestic market account for 62% of our revenue in the quarter. China, including Hong Kong, Japan, Europe combined, accounts for 17% of our revenues. And Marfrig have a strong presence in South America, one of the world’s main emerging region, which account 15% of our revenue in the second quarter. Now I give the presentation to Eduardo that continue the presentation regarding the results.

Good morning, everyone. We’d like to start with the Slide number 5. We – before we start commenting on the quarterly results, we’d like to provide some guidance on how the numbers were reported, how we are managing numbers in the following page. As you know, with the conclusion of the National Beef acquisition, we are presenting the key operating indicators on a pro forma basis. In other words, fully consolidated the company’s results for the second quarters of both 2018 and 2017. Continuous operation in this presentation refers to the figures as reported in our financial statement, which includes National Beef only as of June 2018, which is the month in which the acquisition was concluded. As these figures do not consider any results – and these results do not consider any results from Keystone Foods. And since the first quarter of this year, it has been classified as an available-for-sale asset. And lastly, although not material for the metrics, we reclassified Argentina’s business as a continued operation, given the sale process has already exceeded one year and to conform in ways the IFRS rules for assets held for sale. So moving to the next slide. Here is – we are going to talk about the revenue profile. So in addition to the beef production platform in South America, which in U.S., Beef Division before, there is – which is, as you know, the operations in Brazil, Uruguay, Chile and Argentina. Now after the recent strategic transaction, it also includes the beef operation in North America. So to facilitate understanding of this region’s dynamics, we are dividing our report into [Audio Dip] operations, which in the quarter, accounted for 71% and 29%, respectively, of Marfrig consolidated pro forma revenue. As you can see on the right of this chart, on the pie chart, we tried to leave out the brands, and you see, we have a very diversified number of brands that cover different lines of products and different programs of integration with farmers and customers. That makes a big difference in – this difference for us in terms of competition. Now moving to the next slide. We will now talk about the pro forma revenue for the second quarter. As you can see in the graph, the main – it shows – the main driver that led to the creating the revenue, which is volume, price and up change variation. In the second quarter of 2018, Marfrig’s net revenue was BRL9.9 billion, representing a growth of 21% year-over-year, with higher sales volume, which contributed to BRL1.3 billion to the revenue growth, offset by the lower average price, which had a negative effect of BRL478 million. The effects from the Brazilian real depreciation on the exports from Brazil when the translation of the revenues from our international operations had a positive effect of BRL929 million. In the case of North America, the higher sales volume is explained by the strong demand of beef protein at global level, combined with the higher supply of cattle. The U.S. industry harvest was around 6.6 million heads, that’s 4% compared to the second quarter of 2017. These factors offset the lower sales price, which follow market dynamics. In South America, for example, the strategy to reopen plants in Brazil – to start the growing demand of beef offset the lower primary processing volume in Uruguay. So we had a higher increase – an increase in Brazil and then a lower volume in Uruguay. In the Brazil operation, the contribution from the higher sales volume, around 53%, was partially offset by the lower average sales price compared to the second quarter of last year. In the domestic market, a higher supply of cattle and more intense competition among proteins was observed. In the case of the external markets, there was an increase in sales to countries that consume lower dairy products because the process of certifying our exports to more premium markets is still pending, is ongoing. Even in this challenging scenario, we posted growth of BRL58 million of revenue in our further processed products, which represents a growth of 12% versus 2017. It was pretty much driven by the sales of higher volumes to premium markets, such as United Kingdom and United States, which again, reinforces our positive – the positive market momentum of U.S. economy, which is what Marfrig believes. Moving now to Slide number 8. Here is the pro forma indicators for the second quarter. This slide presents the key operating indicators. And the first one is the higher cattle supply – as you see, the higher cattle supply, which support growth in the primary processing, up 21% compared to the second quarter of last year, combined with a strong demand supported by market expansion in comparison – in the comparison period. The margin gain is explained by higher margins in North America, reflecting the positive cattle cycle in the region and the continued good performance of the operations in the Southern Cone. These factors offset by the lower margin in the Brazil operation, which as you know, was affected by the lower average prices, pretty much given the higher cattle price in the second quarter of the year, affected by the exogenous industry dynamics in the – one year ago. In this context, Marfrig reported an adjusted EBITDA of BRL918 million, up 87% on the same period of last year. And again, this is a pro forma. We are comparing apples-to-apples, 2017 and 2018. So in both cases, we have the same complements. Moving on to the next slide, Slide number 9. Here, we are going to talk about our debt and leverage. This slide shows the indicators. But first, before we move to that, I should mention that the reporting days that includes. First of all, it includes the bridge loan for the National Beef acquisition and the pro forma adjusted EBITDA in the last 12 months of this operation. The last 12 months’ result in that of Keystone, which since the first quarter of this year, has been classified as available for sale. So we have National Beef and we have Keystone Foods in this specific slide and for this specific population. And again, we added the results of our operation in Argentina. So having said that, on June 30, Marfrig’s net debt stood at BRL16.3 billion, increasing BRL3.7 billion from the end of the first quarter. This increase is mainly explained by, first, the sharp appreciation of 17% of the Brazilian real against U.S. dollar in the comparison period. Two, by the adjustment of the debt of National Beef from $223 million to close to $400 million in the second quarter, which was due to an expected dividend distribution prior to the sale. It is worth mentioning, the long-term profile of our debt with only 30% of the maturity in the short term. Even highlighting that the cost of this debt has been reduced to 6.6% per annum. Another important reference to the debt is the cost indicators, is that it’s kind of fluid at this point, since that we have the bridge loan of the acquisition and it doesn’t necessarily include any positive impact of the inflow of Keystone sales. As a result, the company net debt stood at, in U.S. dollar terms, $4.2 billion, and in Brazilian real, net debt was BRL16 billion. As you can see in the table on the bottom of this slide, pro forma leverage, as measured by net debt adjusted EBITDA ratio of the last 12 months, closed the quarter at 4.2 times. It’s important to note that this result was affected by the average exchange rate and the exchange rate depreciation at the end of this period of around 7%. If we exclude this difference from the analysis, the leverage would be below 4 times. This increase in relation to the first quarter of 2018 is explained by the negative cash flow of the company in this quarter that we will discuss in the next slide. Moving now into the cash flow slide. The cash flow, shows our cash flow from the continued operations in the quarter. Again, just a reminder, it includes just one month of the result of National Beef and it does not include any cash flow from our Keystone operations. So Marfrig registered operating cash flow negative of BRL156 million, which is explained primarily by the inventory build and driven by basically the Brazil operation where the truck drivers’ strike had a negative effect of around BRL100 million. The second block, which is CapEx, excluding the amount of the acquisition, was BRL156 million, increasing on the prior quarter. So the increase is explained by – as we have the slide, we end up accelerating certain maintenance costs that we have to take advantage of those stoppage. And the number two, the [indiscernible] that was the start of the expenditures with modernization projects, such as the new panel in our [indiscernible] unit and other modernization in some of the plants. The third block, which is interest expenses, they came at BRL255 million, increasing BRL52 million from prior quarter. And the main factors were the, again, the sharp appreciation in U.S. dollar of 17% and the one-off increase in interest expenses due to the bridge loan for the acquisition that we have already mentioned when we talk about the debt. As a result, our free cash flow in the quarter stood at BRL568 million. So just like to go back and just to repeat, so in this case, we just had one month of the National Beef. And second, there is no cash flow from Keystone in it. So pretty much this cash is driven by the Brazilian operation where we had some events and the fluid situation on the debt for the acquisition of National Beef. With that, I conclude my – now I’d like to invite Martin to continue the call.

Thank you, Eduardo. On next slide, I will comment briefly on the step of our short-term strategy. At National Beef, we plan to move forward now in the second half of the year with our integration plan. As I already mentioned, the acquisition complements very nicely our other operation. In other words, we do not expect any type of change to the structure, so the integration will focus on identifying capturing opportunities on how we will move forward. For example, we are in the process of implementing two global committees, one will be food safety and another for sustainability and animal welfare, with the goal of guaranteed best practice in all our beef. Also in the issue of sustainability, a highlight of this quarter was the strategic partnership that Marfrig formed with Embrapa for the certification of carbon-neutral beef. The partnership represents yet another advance in the industry value chain and reinforce Marfrig commitment to sustainable production system. In terms of our commercial portfolio, we’ll continue working to expand our portfolio of higher-value products. In Brazil, we plan to start a construction of a new beef patty plant to serve the food service channel. For the investment of around BRL80 million, the plant will have annual production capacity for 20,000 tons, and we start expectation for April 2019. For our liability management, once the Keystone transaction is concluded, we will announce the next step in this process. And when this step are conclude, we will then focus on updating and restructuring the long-term strategic plan, which we’ll hope to share with you in the medium term at another Marfrig day event. Next slide of the presentation. Marfrig expects to conclude in a short period of time another phase of this strategic beginner plan, which will help its commitment of reducing its leverage and improve its capital structure. Today, with a business model, with a geographical diversified footprints in America and with access to our key consumer markets, Marfrig is consolidating its position in one of the world’s large beef produce. With an ample supply of cattle and driven by a strong demand in both the domestic and international market, the U.S. beef industry has delivered record results. In Brazil, the beef cattle cycle remain favorable, and the country is important as a platform for serving growing global demand is indisputable. Brazil, which is the world’s largest exporter, was recognized by the OEA, the World Organization of Animal Health, as free of foot and mouth disease with vaccination. With this certification, further expanding of possible of accessing our international market. And in this entire process, what was not changed and what will not change at the company is nonnegotiable financial discipline. Now we are concluding our presentation and we invite you to the Q&A session. Thank you very much.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Isabella Simonato, Bank of America. Ms. Isabella, your line is open.

Hello, do you hear me?

Yes.

Thank you, Martin, for the call. When you published the pro forma numbers, including U.S. and Brazil, is there a way you could disclose to us more or less your share of profitability you saw in both divisions in terms of EBITDA margin, so we can have a better understanding of how the impact with you and the main trends for both countries, that will be very helpful.

Isabella, hi. This is Eduardo. Yes, I don't know. We are in this transition phase where we are working still in what will be the best way for us to address this new platform according to the new business model that we are creating. So if you remember, so even when we had the deal number, we displayed the numbers between the Cone – the Southern Cone and Brazil. And now, I think we are just being consistent to the way we used to report. But I understand your point. I think we are trying – we will try to provide more direction so then you can work on your models. Certainly, the operations in the U.S., so they had a better performance than the operations in South America. So – but we certainly will try to address your point by providing information that can help with your model. So we are very active with it.

Great. Thank you. And regarding the Keystone sale, Martin, you mentioned that you cannot give a lot of disclosure right now. But I think there was an expectation that the sale could be concluded before the earnings. And also there were several articles mentioning Tyson Foods in exclusive talks with you guys. Is there any expectation in terms of timing that could be a little bit more precise than you're going to conclude the sale, or no?

I think you know the answer, right? So we absolutely cannot comment on rumors, and we cannot comment on anything related to a negotiation of, say, of a company and so forth. I think I will frustrate you in terms of providing more details. So – but I can tell you that one of the reasons why we are making or we are having this call out of U.S. is because we are very focused, and we believe that we are going to be able to move this process to the end soon.

Okay. Thank you very much.

Our next question comes from Thiago Duarte, BTG Pactual.

Hi, hello, everybody. I have a quick question. It's actually a follow-up. I just – if you could provide us the breakdown. When we will look at the $4.22 billion net debt at the end of the quarter, just a breakdown between the different divisions? If I'm not mistaken, you mentioned something about it in your initial remarks, but we couldn't get the figure. I'm particularly interested in how much of that is represented by National Beef's consolidated net debt at the end of June? That will be very helpful.

Yes, I think I quickly mentioned that we – the number of National Beef in terms of total debt was around BRL400 billion and it was pretty much part of the negotiation, a discussion we had in the past. So nothing has really changed it from there. So that's what I can provide. And you know that we have this bridge loan that is about BRL1 billion, which was utilized for the completion, right?

Yes. Okay. So and the second question is kind of related to the cash burn in the quarter. You mentioned the higher inventories that remain responsible for the working capital during the quarter. You also mentioned the impact for the truck driver strike in Brazil around BRL80 million to BRL100 million. So just wondering if you have any visibility on the reversal of at least a partial reversal of some of the working capital drain for the next two quarters, so it would be helpful to get some granularity on that? And particularly on the working capital investment related to the North American operation for National Beef, why would that – how much your sales or your slaughtering grew quarter-over-quarter? Or before and after you incorporate it, National Beef, just to see how much of that working capital drain you might see a reversal of that in the next two quarter? That will be helpful. Thank you.

Yes. Certainly, I will now provide you a model, right, in this call. So – but I – what I can absolutely tell you is that I will not define this as cash burn. I think we have specific examples of what happened this quarter. And I think we made a very intelligent decision to take advantage of the stoppage that we had in our plants to accelerate some of the maintenance that we had to do. So we try to do what was right to do and in spite of how to explain some negative cash provision of CapEx in this specific quarter. I think, we have to consider that we have this additional, as I mentioned in my presentation, we have the additional situation in terms of interest that we have this additional cost that we added to this. Specifically on the working capital, yes, I think we had this situation. We expect cash flow to improve. And I don't know if you got that completely, but in this cash flow, we just have one month of National Beef. So it's not a pro forma. So we are not putting all the cash flow from the business in this number. So that's one of the reason why we were a little bit careful before we start the presentation trying to demonstrate the basis at which the numbers were demonstrated. So – and again, that does not include any cash flow from Keystone Foods. So it is, as I mentioned before, is pretty much focused on the Brazil operation where we had a strike and we decided to make some additional investments in the CapEx, maintenance CapEx. And I think, still, we have to say, we are going to continue having some additional cost in the interest, as you may imagine.

Yes, that's helpful. And then one last question, just to give us your view on the Brazilian operation or the South American operation, you mentioned that margins in U.S. were higher than in South America, so that's how you resulted in the 9 percentage EBITDA margin. But it looks like, looking at the market, talking to some of your competitors, it looks like the spreads in the Brazilian beef industry are improving or have been improving over the course of the last few months, considering the currency, considering the cattle cycle. So just would be nice to hear your thoughts on where you see the profitability for the beef industry in Brazil going in the third quarter and the second half of the year. Thank you.

Our next question comes from Marcel Moraes, Santander [ph].

First, congratulations on the acquisition of National Beef. And I think Miron was discussing the very important aspect, which is the cash flow. And I understand that the exercise that we see in the presentation does not take into account National Beef, with the three months of National Beef. But you probably have made an exercise, considering what if National was incorporated in the full fourth quarter. And if you exclude the, let's say, the negative impacts from the truckers' strike, what do you think the cash flow would look like? So, including National Beef, the three months, and excluding this impact from the truckers' strike in the Brazilian business, how much better you think the cash flow would be? This will be my first question. Thank you.

Just a moment. We are connecting to speakers. The speakers are back, please proceed. Mr. Marcel, could you please repeat the question?

Okay. Good morning, everyone. Congratulations on the acquisition of National Beef. Has shared some thoughts about the cash flow and it was quite clear for me that it does not incorporate National Beef during the three months of the second quarter. But is it possible to give us an idea of how the cash flow or what will be cash flow in case you include National Beef for the full quarter? And if you exclude the negative impact from the trucker strike in the Brazil business, is it possible to do the exercise to give us an idea of how much money you have made in such circumstance? Thank you.

Yes. So first of all, sorry, for the technical issue that we had. So yes, you're right, so we had just one month, I think if we consider the overall results, I think we'll be more in a flat basis for the cash flow.

Right. And so – I mean, the flat that you mean you're comparing to the BRL156 million – not only the operating cash, we're talking about the free cash flow as a whole, so the BRL568 million?

Yes. Yes, that will be the whole free cash flow.

Thank you, Miron. An additional question, it's about the working capital needs for National Beef. What should we expect? I mean, is it – when you compare National Beef with the South American business, how do you compare the working capital needs? Of course, National Beef is much larger, but I'm not sure it's being struck or you need more working capital than South America. Can you give us some color on that?

Yes. Again, Marcel, I think the way we start the call saying we are in the middle of this transition. So I think we have to work a little bit more on the modeling the analysis in order to help you to prepare your figures. So while we're in, we are not expecting any major impact from National Beef. I think for this quarter, we had a small increase in the joint venture with National Beef, but there was something that was not total expected. But there was a small increase that is included in the number that you see in this one month that we have included in this cash flow. So nothing major, but we don't, for quarterly, we hope – we will have to provide a better perspective in terms of working capital for the beef, so to help you to prepare your model.

Sure. Thank you. And finally, with regards to the South American business. So you mentioned that profitability has gone down a little bit, and the question is, is it because of Uruguay or the Brazilian business is also – the margins are also going down in the Brazilian business?

Regarding the margin, we have a little bit down in Uruguay and for the reason that we have a very good and strong activity at the beginning of the year for a little bit withdrawn season. And we will use a little bit – the production for – in the second semester for the rest of the year. And as you know, it's a very, very small country that all these events make some significant movement in the volume of the activity. But we compensate, during the year, we are going to achieve the same volume that we have planned in our budget.

Thank you, Martin. But when you – just trying to understand, you've – in the second quarter, the reduction in the profitability in your South American business, if it was kind of fully explained by Uruguay or in Brazil, there was also some, let's say, pressure because of the truckers' strike or just to understand what we're going to see next. Is it something more structural or something very function related to the truckers' strike affecting Brazil. And it may not be the case, it may be only because Uruguay is not running as fast as in the past.

The other events that we have in the – affecting our result, as Eduardo commented before, and this event of all this striking in Brazil, we lose at least 10 days of operation in the whole Brazil because we – it’s more possible to collect the animal for slaughter. We have a very important problem on the export, also that was very difficult time to collect the containers in the port and later on to put the containers on the vessel. When you decide a little bit in the local market because we have problems on our CDs that we can share with the customers into the small vehicles. But of course, it was a huge granting in three months, we lose 10 of the operation can have important impact. All the operation is already working normally. We almost finished our problem with the export because later on, we couldn't have all the space that we need on the vessel because it was a national strike. Almost all products from Brazil are on the flow waiting for space. But we almost finished everything regarding the export sales.

That’s perfect. Thank you very much. Once again, congratulations on the acquisition of National Beef.

Our next question comes from Teo Lasarte, Insight.

Good afternoon. Just wondering if you could comment a little bit on the pro forma adjusted EBITDA that you presented. So the BRL918 million average for – in the second quarter, and you have BRL490 million, the second quarter of 2017, now looking at your results from last year, the beef operation had BRL238 million of EBITDA. So that seems to be a very small number for National Beef on this pro forma numbers. So can you comment – is there anything happened in Q2 2017 for National Beef, which resulted in very low earnings in this division?

Yes so I think, I mean, we are trying to be fully understand your question. Your question, I believe it's about the EBITDA is BRL490 million to another BRL490 million, correct, so the variation and then – and it's the participation of the different business and the National Beef is pretty small one year ago, correct?

Yes. I trying to understand why National Beef had such low earnings in Q2 2017?

Yes. So again, we won't go in this perspective, but I think, I mean, the bottom line of the situation is we have two main drivers. So one is the cash – is the cattle cycle, and then I think we are on different momentum in terms of beef in U.S. And I think that's why our decision to enter was timely and why we did the right thing. And the other thing you have to consider is you have the FX impact as well. So we have here – when you saw the brief that we provided for the sale, you see that the FX was important component over there, correct? So there is the additional component in those numbers. So in terms of National Beef, I think the main driver was the cash cycle during these two periods.

I know – just to complement the comment of Eduardo, we don't consider the National Beef result of last year was good. It was, what, very good. But this result was excellent. And for that, it's worth mention.

Okay. Because it seems by that National Beef in Q2 of 2017 had EBITDA of roughly BRL250 million, which is significantly below the EBITDA figure you gave for National Beef when you announced the acquisition. I think that's where I think we're all trying to understand why the EBITDA of National Beef is so low.

Yes. And sorry, we have to try in the last – so we can provide some color about the last – 2017 and the involvement in 2017 as well so I think it will be great to have input from Tim. Are you there?

Yes, I'm here. And to answer your question, first of all, the cattle cycle in the U.S. has continued to improve. So the dynamics in price for 2018 were better than they were in 2017 for the – for each quarter of the year. In addition to that, this year, June was a five-week month. Last year, June was a four-week month, so there's one extra week in this year's numbers.

Okay, understood. Just one follow-up question then. So the BRL490 million from 2017 that's using last year's exchange rate, whereas obviously, that's one Q2 2018 is using the current exchange rate, and that also had a big impact on the reported EBITDA, correct?

Yes.

Okay. Thank you.

Our next question comes from Autumn Graham from Schroders.

Hi, can you hear me. Right. This is Autumn Graham from Schroders. I have two questions. The net debt-to-EBITDA figure cited at 4.2 times, is it calculated in dollar terms or in BRL terms? So specifically, what FX rate are you using for the net debt figure and what FX rate are you using for the LTM EBITDA figure?

Yes, you are correct that we calculated this in real, right? So before, there is an impact of the FX. I think I tried to address this when I said that this has a negative effect of the difference of the fact that we are utilizing between EBITDA and the FX for the end of the month, which is what we need for the debt. One additional information that we made, we gave is – if we normalized the FX. We will have a leverage ratio below four times. And we also provided the use of credit, the P&L actually was BRL351 million, and for the balance sheet was BRL386 million.

Okay. So you're – okay. So you're using the average of the last quarter, but not of the last 12 months for the P&L figure?

Yes. Several averages for the quarter in the past.

Okay, that's helpful. And secondly, certainly, it's very welcome to see this commitment to financial discipline as the company kind of thinks about its long-term strategies. Is there a way to quantify what financial discipline means? And is there quantify it? Or what does that really mean for the company?

Yes. I think what we want – we have seen for and we have to go over this. The financial discipline is to have EBITDA leverage that is – I think factors. So our decisions, our strategic decisions, we grow 100% related to our belief that we have to have a lower average for the type of business that we are in. So our target is 2.5 times make our target for the end of the year. The additional about the financial discipline is related to our liability management process, and this includes making sure that we have financial – our health that will allow us to improve our terms and reduce our cost, our carried cost. And we believe that with the finalization of the second leg of the strategic move, which is the sale of Keystone will be ready to another round in our liability management that will provide benefits for our carried costs.

Okay. So yes, the commitment to 2.5 times is very strong at the end of this year. Is – can we be confident that, that will hold leverage target over the long term?

Sorry, I was on mute. So yes, our aspiration certainly, to be investment grade, so are going to continue working on this. We go step by step. I think our first practice here is to reduce [indiscernible] have better information.

Okay. Thank you.

This concludes today's question-and-answer session. I would like to invite Mr. Martin Secco to proceed with his closing statements. Go ahead, sir.

Thank you very much. We would like to invite, especially the attendance or who have question already, to follow us in the quarterly call because we are just on time to be in the other call. Thank you very much, and keep in touch.

Thank you. That does conclude Marfrig's conference call. Thank you very much for your participation, and have a nice day.