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1Q20 CORPORATE PRESENTATION 1 DISCLAIMER This presentation has been prepared by Grupo KUO, S.A.B. de C..V. (Kuo or the Company) and has not been independently verified. You agree to keep the contents of this presentation strictly


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SLIDE 1

CORPORATE

PRESENTATION

1Q20

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SLIDE 2

DISCLAIMER

This presentation has been prepared by Grupo KUO, S.A.B. de C..V. (“Kuo” or the “Company”) and has not been independently verified. You agree to keep the contents of this presentation strictly confidential. This presentation is highly confidential and contains proprietary and confidential information about KUO, its subsidiaries, its financial results and its operations. This presentation’s material is being presented solely for your information and may not be copied, reproduced or redistributed to any

  • ther person in any manner. At the request of KUO the recipient will promptly return all non-public material received from KUO (including this presentation) without retaining any copies
  • thereof. No securities may be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. KUO does not intend to register any of

its securities for offer or sale in the United States or elsewhere, or to conduct a public offering of securities in the United States or elsewhere. This presentation includes forward-looking statements. These statements relate to KUO's future prospects, developments and business strategies and are identified by the use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “goals,” “target,” “strategy” and similar terms and phrases, and may include references to assumptions. Forward-looking statements are based on KUO's current expectations and assumptions regarding its business, the economy and other future

  • conditions. KUO's actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially

from those in the forward-looking statements include those mentioned in the company’s filings with the Mexican Authorities and/or Regulators as well as the Offering Circular for the Company´s proposed offering of debt securities. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this presentation. Neither the Company nor any of its affiliates, advisers or representatives accept any responsibility whatsoever for any loss or damage arising from any information presented or contained in this presentation. The information presented or contained in this presentation is current as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. Neither the Company nor any of its affiliates, advisers or representatives make any undertaking to update any such information subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice. Certain data in this presentation was obtained from various external data sources, and the Company has not verified such data with independent sources. Accordingly, the Company makes no representations as to the accuracy or completeness of that data, and such data involves risks and uncertainties and is subject to change based on various factors. The use of registered trademarks, commercial trademarks and logos or photographic materials within this document are exclusively for illustrative purposes and are not meant to violate the rights of the creators and/or applicable intellectual property laws. This presentation does not constitute an offer or invitation to purchase or subscribe for any debt securities or other securities of the Company and neither any part of this presentation nor any information or statement contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any decision to purchase securities in any offering of securities of the Company should be made solely on the basis of the information contained in the Offering Circular which may be published or distributed in due course in connection with any offering of securities of the Company, if any. By participating in this presentation, you agree to be bound by the foregoing limitations.

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SLIDE 3

KUO AT A GLANCE LTM (MXN)

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$43,421 Revenue $5,319 EBITDA 12.2% EBITDA Margin 2.87x Net Debt/ EBITDA 53% Exports 28 Manufacturing Plants 70 Countries +25,000 Employees

REVENUE

% of total

EBITDA

% of total

60%

CONSUMER

PORK MEAT BRANDED FOOD*

29% 33%

CHEMICAL

SYNTHETIC RUBBER* POLYMERS

20% 7%

AUTOMOTIVE

TRANSMISSIONS AFTERMARKET

51%

29% US & CANADA 10% EUROPE 47% MEX 12% ASIA 2% OTHER

*JV 50% / 50% Note: FY figures LTM 1Q20, expressed in millions of Mexican pesos in Combined Pro forma IFRS, considering the proportional consolidation method.

REVENUE DISTRIBUTION

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SLIDE 4

RECENT DEVELOPMENTS

CONSUMER

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IMPACTS: COVID & OTHERS

➢ Typified as a “essential activity” ➢ Estimated Export Sales growth (China & Japan) ➢ Expected Higher prices and volume vs 2019 ➢ Recent incident on new processing plant (30% installed capacity loss) ➢ Lower domestic prices

ACTIONS

➢ Focus on export channel ➢ Deployment of home delivery capabilities of Maxicarne venues ➢ Increase shifts in Merida’s processing plant to absorb production loss ➢ Use local third parties processing facilities ➢ Continue with insurance process

PORK MEAT

IMPACTS: COVID & OTHERS

➢ Typified as a “essential activity” ➢ Strong demand on main categories in domestic market, boosted by COVID outbreak ➢ Strong Sales trend in March & April ➢ Divestiture of Tuna business ➢ Impact in food service channel in Fresherized Foods (avocado business) ➢ Temporary shutdown of Don Miguel facility

ACTIONS

➢ Ensure supply chain/ logistics ➢ Focus on production within higher turnover products ➢ Home office of administrative staff ➢ Resume of operations in Don Miguel facility

HERDEZ DEL FUERTE

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SLIDE 5

RECENT DEVELOPMENTS

CHEMICAL

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IMPACTS: COVID & OTHERS

➢ Several applications typified as “essential activity” ➢ New value-added applications under development ➢ Drop in oil prices pressures raw material prices (butadiene -31%) ➢ Shutdown of one facility in Spain given halt of operations

  • f Clients within tire industry

ACTIONS

➢ Increased demand for labels (food & beverages) and belts (hygienic) ➢ New contract with sandal producer (Alpargatas) ➢ Technical shutdowns of some facilities due to contraction in tire segment ➢ Manage contraction in butadiene price

SYNTHETIC RUBBER

IMPACTS: COVID & OTHERS

➢ Several applications typified as “essential activities” ➢ Current COVID-19 contingency relieves pressure on campaign against single use products ➢ New value-added applications under development ➢ Shutdown of some US client's operations ➢ Drop in oil prices pressures raw material prices (styrene

  • 11%)

ACTIONS

➢ Focus in development of new applications per COVID-19 ➢ Increased demand for single use applications in North America region ➢ Manage contraction in styrene price

POLYMERS

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SLIDE 6

RECENT DEVELOPMENTS

AUTOMOTIVE

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IMPACTS: COVID & OTHERS

➢ Shutdown of US facility for several weeks (March – May) ➢ Delay of OEMs sales per temporary operations shutdowns (March – May) ➢ GM has the commitment with customers to supply 2020 Corvette model ➢ Higher inventories

ACTIONS

➢ State of Michigan’s support on Wixom facility ➢ Resume operations on June, with expected gradual volume normalization starting in July ➢ Resume of GM, Ford & Fiat Chrysler operations

TRANSMISSIONS

IMPACTS: COVID & OTHERS

➢ Typified as “essential activity” ➢ Technical shutdowns during April & May

ACTIONS

➢ Enhance operations & inventories ➢ Resume operations in June, with expected volume normalization in following months

AFTERMARKET

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SLIDE 7

RECENT DEVELOPMENTS

FINANCIAL ACTIONS

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➢ Strict SG&A Control ➢ Canceled all salary increases and hiring freeze ➢ CAPEX to minimum maintenance level ➢ No dividend for 2020 ➢ Divestiture of Non-Strategic Assets (Tuna Business) ➢ US$80 MM withdrawal of committed credit facilities ➢ Available committed credit lines US$190 MM ➢ Increased cashflows/ dividends from JV’s ➢ Working Capital optimization ➢ No significant debt maturities until 2024 ➢ Obtained financial covenant waiver for credit facilities for 2020 (Gross leverage at 5.0x)

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SLIDE 8

ANNEXES

FINANCIAL HIGHLIGHTS 1Q20

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SLIDE 9

FINANCIAL HIGHLIGHTS 1Q20

(MILLION PESOS) 9

REVENUE EBITDA

10,016 11,209

1Q19 1Q20

11.9%

56.2% EXPORTS

7.4%

CONSUMER CHEMICAL AUTOMOTIVE 172 355 516

64 345 764 +48.2%

  • 2.9%
  • 62.9%

13.3% MGN 11.0% MGN 2.8% MGN 1Q20 1Q19 1Q20 1Q19 1Q20 1Q19 1,741 3,382 4,856

2,274 3,134 5,752 +18.4%

1Q20 1Q19

  • 7.3%

+30.6%

2019 2018 2019 2018

Note: Figures are expressed in millions of Mexican pesos in Combined Pro forma IFRS, considering the proportional consolidation method.

9.9%

1,029 1,105

10.3% 9.9%

6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00% 13.00% 500 600 700 800 900 1,000 1,100 1Q19 1Q20

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SLIDE 10

CONSUMER 1Q20

(MILLION PESOS)

10

REVENUES

+18.4% +48.2%

9.9%

OPERATING MARGIN

13.3%

EBITDA MARGIN

Note: Figures are expressed in millions of Mexican pesos in Combined Pro forma IFRS, considering the proportional consolidation method.

4,856 5,752 1Q19 1Q20 516 764 1Q19 1Q20

EBITDA

50%

OF CONSOLIDATED SALES

65%

OF CONSOLIDATED EBITDA
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SLIDE 11

CONSUMER 1Q20

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HIGHLIGHTS

PORK MEAT:

  • Continued Strong Exports (Japan & China)
  • Volume to China increased an average of 30% from January to March
  • Positive FX impact on prices
  • Lower domestic prices given higher imports
  • Growth in Maxicarne retail stores
  • Stability on raw material prices

HERDEZ DEL FUERTE:

  • Strong demand on tomato puree, vegetables, tuna, mushrooms and salsas

boosted by COVID-19 outbreak

  • Partial divestiture of Tuna business, 3 vessels
  • Strong salsas performance in Megamex
  • Fall in food service channel in US, (16% of Megamex sales)
  • Higher avocado costs (+31%)

Note: Figures are expressed in millions of Mexican pesos in Combined Pro forma IFRS, considering the proportional consolidation method.

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SLIDE 12

355 345 1Q19 1Q20 3,382 3,134 1Q19 1Q20

CHEMICAL 1Q20

(MILLONES DE PESOS)

12

REVENUE EBITDA

  • 7.3%
  • 2.9%

7.3%

OPERATING MARGIN

11.0%

EBITDA MARGIN

Note: Figures are expressed in millions of Mexican pesos in Combined Pro forma IFRS, considering the proportional consolidation method.

31%

OF CONSOLIDATED SALES

29%

OF CONSOLIDATED EBITDA
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SLIDE 13

CHEMICAL 1Q20

13

Note: Figures are expressed in millions of Mexican pesos in Combined Pro forma IFRS, considering the proportional consolidation method.

HIGLIGHTS

SYNTHETIC RUBBER:

  • China facilities have continued operations under new requirements
  • Lower butadiene price
  • Lower demand on tire segment

POLYMERS:

  • Demand increased in single use and medical applications
  • Lower pressure on campaign against single use/plastic products
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SLIDE 14

AUTOMOTIVE 1Q20

(MILLION PESOS)

14 172 64 1Q19 1Q20 1,741 2,274 1Q19 1Q20

REVENUE EBITDA

+30.6%

  • 62.9%
  • 8.6%

OPERATING MARGIN

2.8%

EBITDA MARGIN

Note: Figures are expressed in millions of Mexican pesos in Combined Pro forma IFRS, considering the proportional consolidation method.

19%

OF CONSOLIDATED SALES

6%

OF CONSOLIDATED EBITDA
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SLIDE 15

AUTOMOTIVE 1Q20

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Note: Figures are expressed in millions of Mexican pesos in Combined Pro forma IFRS, considering the proportional consolidation method.

HIGLIGHTS

TRANSMISSIONS:

  • Higher DCT sales to GM & Ford
  • Shutdown of GM, Ford & Fiat Chrysler facilities (March)
  • Shutdown of Wixom facility due to COVID-19 (March)
  • DCT Inventories increase

AFTERMARKET:

  • Strong demand, customers ahead of price increases related to FX volatility
  • Volume increase in brakes & other parts
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SLIDE 16

CAPITAL STRUCTURE

16 RATIOS* 1Q20 1Q19 Net Debt / EBITDA 2.87x 2.81x Total Debt / EBITDA 3.40x 3.44x Interest Coverage 4.49x 5.12x

* Calculated on US dollars, in compliance with credit agreement obligations Note: Figures are expressed in millions of Mexican pesos in Combined Pro forma IFRS, considering the proportional consolidation method.

DEBT PROFILE

(USD) 13,940 14,372 15,431 13,236 17,082 2.81x 2.78x 2.97x 2.76x 2.87x 0.00x 1.00x 2.00x 3.00x 4.00x 5.00x 6.00x 7.00x 5,000 10,000 15,000 20,000

1Q19 2Q19 3Q19 4Q19 1Q20

Net Debt Net Debt / EBITDA

DEBT EVOLUTION

(MXN)

31 54 25 21 258 28

  • 446

2020 2021 2022 2023 2024 2025 2026 2027

CURRENCY RATE TERM

81%

USD

13%

MXN

6% CNY 52% FIXED 48% VARIABLE 8% SHORT TERM 92% LONG TERM

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SLIDE 17

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INVESTOR RELATIONS

CONTACT

Antonia Gutiérrez

ir@kuo.com.mx antonia.gutierrez@kuo.com.mx +(52 55) 52.61.83.44 www.kuo.com.mx