I N V E S T O R S P R E S E N T A T I O N A P R I L 2020 F O R W A - - PowerPoint PPT Presentation

I N V E S T O R S P R E S E N T A T I O N A P R I L 2020

The information contained herein (the “Information”) has been prepared by Grupo Herdez, S.A.B. de C.V., its subsidiaries and/or affiliated companies (“Grupo Herdez”), and may contain forward- looking statements that reflect Grupo Herdez’s current expectations and views, which may vary materially due to various factors, risks and uncertainties. Therefore, Grupo Herdez and/or its officers, employees or agents, assume no responsibility or liability for any such variations in the Information. In particular, and notwithstanding the foregoing, no guarantee is given as to possible future variations of the Information. The Information has been provided solely for informational

• purposes. The issuance of this Information shall not be taken as any

form of commitment of Grupo Herdez to proceed with any transaction.

F O R W A R D - L O O K I N G S T A T E M E N T

All the information contained in this document is prepared in accordance with International Financial Reporting Standards (IFRS) as of March 31, 2020, unless otherwise stated.

I N V E S T M E N T C A S E

0 3

+100

Y E A R S OF E X P E R I E N C E B R A N D E D F O O D L E A D E R D I V E R S I F I E D P O R T F O L I O

P R O F I T A B L E G R O W T H S T R A T E G Y

S O U N D F I N A N C I A L S T R U C T U R E S O L I D C O R P O R A T E G O V E R N A N C E C O M M I T T E D T O S U S T A I N A B I L I T Y

S T R A T E G Y

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M A I N T A I N A N D F O R M S O C I E T I E S T H R O U G H T H E D E V E L O P M E N T O F I N T E L L I G E N C E I M P L E M E N T T E C H N O L O G I E S T H A T A C C E L E R A T E P R O C E S S E S P R O M O T E S U S T A I N A B L E M A N A G E M E N T P R I O R I T I Z I N G W A T E R C O N S E R V A T I O N A N D E F F I C I E N T U S E O F E N E R G Y S U P P O R T A N D G E N E R A T E G R O W T H T H R O U G H T H E D E V E L O P M E N T O F T A L E N T A N D I N V E S T M E N T I N I N F R A S T R U C T U R E R E S P O N S I B L E C O R P O R A T E C I T I Z E N S H I P

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C O R P O R A T E S T R U C T U R E

Grupo Herdez consolidates 100 percent of its Frozen division, Herdez Del Fuerte - Mexico, Barilla México and McCormick de México in its financial statements. The proportional stake of Herdez Del Fuerte in MegaMex is registered in “Equity Investment in Associated Companies.“

50%

McCormick de México since 1947

50%

Barilla México since 2002

50%

Herdez Del Fuerte since 2008

50%

MegaMex since 2009

100%

Frozen division Nutrisa 2013 Helados Nestlé 2015 Cielito Querido Café 2019 Moyo 2020

L E A D I N G B R A N D S

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O U R B R A N D S I N M E X I C O O U R B R A N D S I N T H E U S D I S T R I B U T I O N AG R E E M E N T S I N M E X I C O

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I N F R A S T R U C T U R E

14 P L A N T S M O R E T H A N 1 0 , 0 0 0 E M P L O Y E E S 25 D I S T R I B U T I O N C E N T E R S 6 7 , 0 0 0 + H E L A D O S N E S T L É P O S 3 T U N A V E S S E L S 6 0 0 + C I E L I T O , L A V A Z Z A , M O Y O A N D N U T R I S A S T O R E S

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NET SALES

CAGR 5 YEARS = 7.0% Preserves 6.6% Frozen 8.6% Exports 9.0% P R E S E R V E S F R O Z E N E X P O R T S

15,953

79%

Preserves

14%

Frozen

7%

Exports

S E G M E N T M I X

CON SOLI DATED FI GURES I N MI LLI ONS OF MEXI CAN P ESOS 14,431 15,953 16,455 17,562 18,069 2,592 2,882 2,985 3,229 3,229 1,158 1,230 1,531 1,630 1,663

18,181 20,065 20,971 22,420 22,962 2016 2017 2018 2019 12M1Q20

0 9 P R E S E R V E S F R O Z E N E X P O R T S E B I T D A M A R G I N

CAGR 5 years = 7.0% Preserves 4.8% Frozen 28.2% Exports 18.6%

11%

Frozen

84%

Preserves

5%

Exports

E B I T D A

CON SOLI DATED FI GURES I N MI LLI ONS OF MEXI CAN P ESOS

S E G M E N T M I X

2,634 2,888 3,016 3,142 3,378 103 277 332 506 469 79 130 169 169 195 15.5 16.4 16.8 17.0 17.6

2,816 3,295 3,517 3,818 4,042 2016 2017 2018 2019 12M1Q20

C O M M E R C I A L L E A D E R S H I P

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C O N S O L I D A T E D S A L E S M I X B Y C H A N N E L C O N S O L I D A T E D S A L E S M I X B Y C A T E G O R Y

CON SOLI DATED FI GURES IN MI LLI ON S OF MEXI CAN PESOS 34% 29% 10% 7% 6% 5% 3% 3% 3%

Super Markets Wholesalers Club stores Exports Nutrisa stores Foodservice DSD (traditional) Convenience Others

32% 13% 8% 8% 6% 7% 4% 3% 3% 2% 2% 2% 1% 1% 8%

Mayonnaise Frozen Pasta Tomato purée Vegetables Canned Tuna Mole Salsa Jams Ketchup Thea Tuna Mustard Food Packaging Others

P R E S E R V E S S N A P S H O T

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H O U S E H O L D P E N E T R A T I O N & R E D U C T I O N O F D I S T R I B U T I O N G A P S C O N S U M E R I N S I G H T S - B A S E D I N N O V A T I O N

C O N S O L I D A T E D F I G U R E S I N M I L L I O N S O F M E X I C A N P E S O S , I N C L U I D I N G S A L E S I N M E X I C O

H O L I S T I C C O M M U N I C A T I O N P R E M I U M V E R S I O N S G R O W T H D R I V E R S

37% 9% 9% 7% 10% 4% 4% 3% 3% 14%

Mayonnaise Pasta Tomato purée Vegetables Tuna Mole Salsa Jams Tea Others

P R E S E R V E S S A L E S M I X B Y C A T E G O R Y

P R E S E R V E S P E R F O R M A N C E

C O N S O L I D A T E D F I G U R E S I N M I L L I O N S O F M E X I C A N P E S O S

EBITDA MARGIN

CAGR 5 YEARS Net sales: 6.6% EBITDA: 4.8%

1 2

NET SALES

13,139 14,431 15,953 16,455 17,562 18,069

20.3% 18.3% 18.1% 18.3% 17.9% 18.7%

2015 2016 2017 2018 2019 12M1T20

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P R E S E R V E S M A R K E T L E A D E R S H I P

T E A M A Y O N N A I S E M O L E VEGETABLES T O M A T O P U R É E H O M E – S T Y L E S A L S A

70% 33% 81% 26% 70% 43% 32%

T H I RD P A RTY I NFORMATION I NC LUI DING M O DERN T R A DE A N D WH O L E SA L ES . F I G UR ES A S O F M A RCH 3 1 , 2 0 2 0

We are #1 or #2 in categories that represent 80%

• f our sales in

México

PASTA JAMS

45%

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P R O D U C T I N N O V A T I O N & M A R K E T I N G C A M P A I G N S N E W P R O D U C T S NEW CONSUMPTION OCCASIONS PREMIUM VERSIONS RESPONSIBLE CONSUMPTION HABITS

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F R O Z E N S N A P S H O T

F R O Z E N S A L E S M I X B Y C H A N N E L PORTFOLIO SEGMENTATION BY CHANNEL INCREASE STORE TRAFFIC & FREEZER PRODUCTIVITY SG&A CONTROL S T R E N G T H E N I N G OF SALES C H A N N E L S G R O W T H D R I V E R S

C O N S O L I D A T E D F I G U R E S I N M I L L I O N S O F M E X I C A N P E S O S , I N C L U I D I N G S A L E S I N M E X I C O 50% 20% 13% 11% 2% 2% 1%

Nutrisa stores DSD traditional Convenience Modern trade Wholesalers Foodservice Club stores

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FROZEN PERFORMANCE

CON SOLI DATED FI GURES IN MI LLI ONS OF MEXI CAN PESOS

CAGR 5 YEARS Net sales: 8.6% EBITDA: 28.2% NET SALES EBITDA MARGIN

2,139 2,592 2,882 2,985 3,229 3,229

6.3% 4.0% 9.6% 11.1% 15.7% 14.5%

2015 2016 2017 2018 2019 12M1Q20

Acquisition of Helados Nestlé

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PRODUCT INNOVATION LEVERAGE THROUGH THE POWER OF BRANDS RENEWED IMAGE NEW PRODUCTS

1 8

M E G A M E X S N A P S H O T

S A L S A S & S A U C E S D I S R U P T I O N A V O C A D O F O R A L L F O O D A W A Y F R O M H O M E

20 Goals USD $1B Net sales 14-16% EBITDA margin

G R O W M E G A M E X S H A R E I N C R E A S E H O U S E H O LD P E N E T R A T IO N A C C E L E R A TE P E N E T R A T IO N

Our Goal is to bring the spirit of Mexico to every table

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M E G A M E X P E R F O R M A N C E

CON SOLI DATED FI GURES IN MI LLI ON OF MEXI CAN PESOS

CAGR 5 YEARS Net sales: 9.1% EBITDA: 7.8% NET SALES EBITDA MARGIN

8,876 10,840 12,168 13,258 13,793 13,729

14.2% 16.3% 15.0% 18.3% 14.5% 13.4%

2015 2016 2017 2018 2019 12M1Q20

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M E G A M E X P O R T F O L I O

*THI RD P A RTY I NFORMA TI ON I NCLUI DI NG MODERN TRA DE

LEVERAGE ON THE ADOPTION OF GREEN SALSA AND STREET INSPIRED FOOD

M E G A M E X S A L E S M I X B Y C A T E G O R Y T O R T I L L A S M O L E H O M E - S T Y L E S A L S A G U A C A M O L E

76% 12% 33% 2%

INCREASE HOUSEHOLD PENETRATION 70% of US households buy avocados MARKET SHARE*

44% 21% 3% 2% 3% 0% 26%

Guacamole Sauce Tortillas Mole Peppers Tortilla Chips Others

2 1

S U S T A I N A B I L I T Y M O D E L

P E O P L E

We are focused on promoting inclusion, diversity and equal

• pportunities,

generating quality jobs.

C O M M U N I T Y

We are committed to food health, seeking to promote healthy habits.

P L A N E T

We are taking measures to ensure adequate resource management and a positive ecological balance.

2 2

TALENT DEVELOPMENT

W e p r o m o t e l a b o r e q u a l i t y t h r o u g h t h e i n s t a l a t i o n o f l a c t a t i o n r o o m s , c r e a t i n g s t r o n g e r b o n d s w i t h o u r e m p l o y e e s . R e c y c l e a r o u n d 7 5 % o f t h e w a s t e w e g e n e r a t e . 63% of all the energy consumed by our

• perations comes

from clean sources. T h r o u g t h t h e ¨ S a b e r N u t r i r ” p r o g r a m , w e f i g t h m a l n u t r i t i o n a n d f o o d i n s e c u r i t y w i t h t r a i n i n g a n d t h e i n s t a l l a t i o n o f p r o d u c t i v e p r o j e c t s . W e o b t a i n e d t h e M a r i n e S t e w a r s h i p C o u n c i l ( M S C ) . W e f i s h i n o n e o f t h e m o s t r e g u l a t e d a r e a s o f t h e w o r d , w i t h t h e m o s t r i g o r o u s s t a n d a r d s f o r m a r i n e c o n s e r v a t i o n . M o r e t a n 9 0 % o f o u r a g r i c u l t u r a l s u p p l i e r s c o m p l y w i t h t h e A g r o c h e m i c a l s M a n a g e m e n t P r o g r a m , t h u s r e d u c i n g o u r i m p a c t o n t h e e n v i r o m e n t .

2 3

D E B T S T R U C T U R E

CON SOLI DATED FI GURES IN MI LLI ON S OF MEXI CAN PESOS. THE DEBT MIX CON SI DERS HEDGES

R A T E S M I X H E R D E Z 13 H E R D E Z 17 BANK LOAN H E R D E Z 18 H E R D E Z 17-2 Financial Debt 100% in MXN 9,500 Average Cost 8.33% Net Debt / EBITDA 1.5 Net Debt / Shareholders Equity 0.3

250 250 250 250 250 250 250 250 1,000 1,000 2,000 2,000 1,500

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

BANK LOAN CL

53% 47%

Fixed Floated

2 4

R E T U R N S

ROE ROIC

ROE (RETURN ON EQUI TY) = MA JORI TY NET I NCOME / A NNUA L AVERAGE MA JORI TY SH A REH OLDER ´S EQUI TY ROIC (RETURN ON I NVESTED CAPITAL) = EBIT / (CON SOLI D ATED SH A REH OLDER ´S EQUI TY + TOTAL DEBT) (A N N UA L AVERAGE FROM LAST TWO YEA RS)

10.9% 12.2% 12.3% 11.7% 11.9% 2016 2017 2018 2019 12M1Q20 10.2% 13.7% 14.2% 12.4% 12.1% 2016 2017 2018 2019 12M1Q20

2 5

D I V I D E N D H I S T O R Y

CONSOLIDATED FIGURES IN MILLIONs OF MEXICAN PESOS EPS*: MAJORITY NET INCOME / ADJUSTED ANNUAL AVERAGE OUTSTANDING SHARES

Dividends Paid Dividend Yield 2.4% 2.0% 2.4% 2.2% 2.4% 2.7%

Outstanding Shares 432 M Shares in Treasury 40.8 M EPS* 12M1Q20 vs 12M1Q19 +3.1% Payout Ratio 44.3% Dividend Yield +2.7%

367 384 389 387 426 450 2014 2015 2016 2017 2018 2019

2 6

HERDEZ* single series 67% independent members Assignment of individual responsibilities for corporate governance, labor and environmental practices I N D E P E N D E N T 6 7 % Héctor Hernández-PonsTorres Chairman Enrique Hernández-PonsTorres Vice President Flora Hernández de Merino Board member Enrique Castillo Sánchez Mejorada José Roberto Danel Díaz Corporate Practices and Audit Committee Chairman Eduardo Ortiz Tirado Serrano Head of Labor Practices Luis Rebollar Corona Head of Environmental Practices

C O R P O R A T E G O V E R N A N C E

P R O P I E T A R Y Michael Bernhard Jost Anasofía Sánchez Juárez Cardoze

* Provisional Board Member pending approval from the Annual General Shareholders Meeting.

A P P E N D I X

2 8

We entered the apiculture business with the acquisition

• f Miel Carlota

1987 We created Fundación Herdez to contribute and disseminate new food possibilities in Mexico With the acquisition of Mole Doña María, we became the first company to produce mole

• n an industrial scale

OUR L E G A C Y

1910 1940 1960 1914 Compañía Comercial Herdez is established 1947 We created McCormick de México, entering the mayonnaise category 1962 We created our own line of products under the Herdez brand in the preserves segment 1970 The slogan “Con toda confianza… es Herdez” is born 1980 1990 We started exporting products and changed our name to Herdez We acquired Grupo Búfalo and Pescados de Chiapas, entering the canned tuna category 1991 We issued our IPO for Grupo Herdez on the Mexican Stock Exchange 1993 We entered the coffee category 2000 2008 Herdez Del Fuerte is created 2009 MegaMex, a subsidiary of Herdez Del Fuerte, begins operations in the US 2006 We signed a distribution agreement with Ocean Spray 2002 We created Barilla México and started producing and selling pasta in the Mexican market 2010 We created the Frozen segment with the acquisition of Nutrisa in 2013 and Helados Nestlé in 2015 2017 We started distributing for Frank’s and French’s MegaMex strengthens its portfolio with the acquisition of Don Miguel and Fresherized Foods in 2010 and 2011, respectively 2011 We partnered with Aires de Campo, the leading company in organic food in Mexico 2010 We signed a distribution agreement with Reynold’s 1989 We signed a distribution agreement with Kikkoman Acquisition of Cielito Querido Café and Moyo brand in 2019

P R E S E N C E I N 2 1 C O U N T R I E S

Mexico, United States, Aruba, Canada, Costa Rica, Cuba, Czech Republic, Dominican Republic, Ecuador, Germany, Guatemala, Honduras, Jamaica, New Zealand, Nicaragua, Portugal, Russia, Salvador, South Korea, Spain and Switzerland.

2 9

B R A N D P R E S E N C E

3 0

HÉCTOR H E R NÁND E Z -P O NS TORRES Propietary - Chairman ENRIQUE H E R NÁND E Z -P O NS TORRES Propietary - Vicepresident FLORA HERNÁNDEZ DE MERINO Propietary - Board Member

• Has

a law degree from Universidad Anahuac and an MBA from the National University of San Diego

• Experience in the sector since 1978
• Named Chairman in 2004
• Has held several positions in industry groups

including BASC, CONCAMIN and CANAINCA

• Bachelor´s degree in Business Administration and

a post- graduate degree in Marketing and Business Management

• Experience in the sector since 1971
• Chairman of Megamex

ENRIQUE CASTILLO SÁNCHEZ MEJORADA Independent JOSÉ ROBERTO DANEL DIAZ Independent EDUARDO ORTIZ TIRADO SERRANO Independent

• Bachelor´s degree in Business Administration
• Former Chairman of Maxcom Telecomunicaciones,

Non-executive Chairman

• f

Banco Nacional de México and Vice-Chairman and President

• f

the Banking Association of Mexico

• Board member of

Grupo Alfa, Southern Copper Corporation and Médica Sur

• Bachelor´s degree in Accounting and postgraduate

degree in Business Administration, Business Management and Corporate Governance

• Chairman
• f

the Corporate Governance Best Practices Committee, member of the Latin American Corporate Governance Institute and board member of public and private companies

• Held the highest positions in Finance in Grupo Vitro,

Grupo Desc and Industria Peñoles

• Director in Aerobal and Gridimex
• Held

positions as Corporate Vice-President and General Manager in SC Johnson for Mexico and Central America

• Board member of ENACTUS, Un mañana para la

comunidad and member of Fundación Xochitla

• Former

board member in CONAR, CEMEFI and advisory council for Great Place to Work Mexico

LUIS REBOLLAR CORONA Independent

• Bachelor´s degree in Chemical Engineer
• Board member in Grupo Gigante, Grupo Sánchez and

Corporación San Luis

• Held positions as

Chairman in Satélites Mexicanos and Sandvik de México

B O A R D O F D I R E C T O R S

ANASOFÍA SÁNCHEZ JUÁREZ CARDOZE Independent

• Bahelor´s degree in Marketing and a Master´s degree

in Communication, Advertising and New Media

• Held positions as Director of Business in Mexico and

Central America

• n

Facebook, Brand Solutions Manager for Google and Commercial Leader for YouTube Mexico.

• She currently serves as the CEO of Waze Mexico, and

as a professor at the Higher Institute for Internet Development (ISDI) in the Internet Business Master.

Michael Bernhard Jost Independent

• Graduated

in ¨Economics and Business Administration¨ from the University Of Bern

• He held the position of CFO in different entities of

Nestlé Group

• He served as a member of the Remuneration

Committee and the Compliance Committee at Nestlé Brazil and Nestlé Mexico.

W W W . G R U P O H E R D E Z . C O M . M X FOR MORE INFORM ATION

invrel@herdez.com