O C T O B E R 2 0 1 9 F O R W A R D - L O O K I N G S T A T E M E - - PowerPoint PPT Presentation

I N V E S T O R S P R E S E N T A T I O N O C T O B E R 2 0 1 9

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 September 30, 2019, 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

0 4 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 A R E 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 E X E R C I S E A 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

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

15 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 24 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 6 T U N A V E S S E L S 4 8 0 + N U T R I S A S T O R E S

13,139 14,431 15,953 16,455 17,508 2,139 2,592 2,882 2,985 3,182 1,079 1,158 1,230 1,531 1,600

16,356 18,181 20,065 20,971 22,291 2015 2016 2017 2018 12M3Q19 0 8

NET SALES

CAGR 5 YEARS = 9.3% Preserves 7.5% Frozen 22.2% Exports 10.9% P R E S E R V E S FR OZ EN EXPOR T S

15,953

79%

Preserves

14%

Frozen

7%

Exports

S E G M E N T M I X

C ONS OL I D AT ED FI GURES I N M I L L I ON P ES OS

2,668 2,634 2,888 3,016 3,161 136 103 277 332 466 83 79 130 169 169 17.7 15.5 16.4 16.8 17.0

2,887 2,816 3,295 3,517 3,796

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0 30.0

2015 2016 2017 2018 12M3Q19 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 = 9.5% Preserves 7.2% Frozen 31.8% Exports 20.8%

12%

Frozen

83%

Preserves

5%

Exports

E B I T D A

C ONS OL I D AT ED FI GURES I N M I L L I ON P ES OS

S E G M E N T M I X

32% 17% 8% 7% 5% 5% 4% 3% 2% 2% 2% 1% 1% 1% 9%

Mayonnaise Frozen Pasta Tomato purée Vegetables Canned Tuna Mole Salsa Jams Ketchup Tea Mustard Food Packaging Tuna Others 31% 30% 8% 7% 7% 5% 5% 4% 3% Super Markets Wholesalers Club stores Exports Nutrisa stores Foodservice DSD (traditional) Convenience Others

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

C ONS OL I D ATED FIGURES IN M ILLION PESOS

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

1 1

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

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 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

40% 10% 10% 6% 6% 5% 5% 3% 2% 15%

Mayonnaise Pasta Tomato purée Vegetables Mole Salsa Tuna Jams Tea Others

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 P E S O S

EBITDA MARGIN

CAGR 5 YEARS Net sales: 7.5% EBITDA: 7.2%

1 2

NET SALES

12,197 13,139 14,431 15,953 16,455 17,508 18.3% 20.3% 18.3% 18.1% 18.3% 18.1%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000

2014 2015 2016 2017 2018 12M3Q19

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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

72% 29% 83% 30% 74% 44% 47%

TH I R D PAR TY I N F OR M ATI ON C ON S I D E RI N G M OD E RN TRAD E AN D WH OL E S AL E R S F I G UR E S AS OF S E PTE M BE R 3 0 , 2 0 1 9

We are #1 o #2 in categories that represent 87%

• f our sales in

México

PASTA JAMS

49%

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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 P R O D U C T CO-CREATION NEW CONSUMPTION OCCASIONS PREMIUM VERSIONS RESPONSIBLE CONSUMPTION HABITS

39% 29% 17% 12% 1% 1% 1% Nutrisa stores DSD traditional Convenience Modern trade Wholesalers Club stores Foodservice 1 5

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

C ONS OL I D ATED FIGURES IN M ILLION PESOS CONSIDERING SALES IN M EXICO

POR T FOLIO SEGM ENT ATION B Y CHANNEL INCR EASE ST OR E T R AFFIC & FR EEZ ER PR OD UCTIVITY SG&A CONT R OL 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

1,166 2,139 2,592 2,882 2,985 3,182 10.0% 6.3% 4.0% 9.6% 11.1% 14.6%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 500 1,000 1,500 2,000 2,500 3,000 3,500

2014 2015 2016 2017 2018 12M3Q19 1 6

FROZEN PERFORMANCE

C ONS OL I D ATED FIGURES IN M ILLION PESOS

CAGR 5 YEARS Net sales: 22.2% EBITDA: 31.8% Acquisition of Helados Nestlé NET SALES EBITDA MARGIN

1 8

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

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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

2020 Goals USD $1B Net sales 14-16% EBITDA margin

GR OW M EGAM EX SHAR E INCR EASE HOUSEHOLD PENET R AT ION ACCELER AT E PENET R AT ION

To bring the spirit of Mexico to every table

7,689 8,876 10,840 12,168 13,258 14,273 13.7% 14.2% 16.3% 15.0% 18.3% 13.6%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 2,000 4,000 6,000 8,000 10,000 12,000 14,000

2014 2015 2016 2017 2018 12M3Q19 2 0

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

C ONS OL I D ATED FIGURES IN M ILLION PESOS

CAGR 5 YEARS Net sales: 13.2% EBITDA: 13.1% NET SALES EBITDA MARGIN

2 1

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

*T HI RD P ART Y I NFORM AT I ON C ONS I D ERI NG M OD ERN T RAD E

L EV ERAGE ON TH E AD OPTION 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

75% 13% 38% 2%

I NC REASE HOUSEHOLD PENETRATION 51% of U. S. hous eholds buy avocados MARKET SHARE*

43% 27% 9% 4% 3% 2% 2% 10%

Salsas Guacamole Tortillas Mole Peppers Tortilla Chips Dips Others

2 2

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

17% of all the energy consumed by our operations comes from the cogeneration project. More tan 90% of our agricultural suppliers comply with the Agrochemicals Management Program, thus reducing our impact

• n the environment.

Through the Saber Nutrir program, we fight malnutrition and food insecurity with training and the installation of productive projects. We promote labor equality through the installation of nursing rooms, creating stronger bonds with our employees.

2 3

TALENT D EV ELOPMENT

N U R S I N G R O O M S V A R I A B L E C O M P E N S A T I O N B A S E D O N B U D G E T R E A C H FLEXIBLE WORKING TIME H E A L T H Y E A T I N G & P H Y S I C A L E X E R C I S E P R O G R A M S S T O C K P L A N F O R E X E C U T I V E S I N C L U S I O N O F P E O P L E W I T H D I S A B I L I T I E S

2 4

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

C ONS OL I D ATED FIGURES IN M ILLION PESOS THE DEBT MIX C ONS I D ERS HEDGES

R A T E S M I X HER D EZ 14 HER D EZ 13 HER D EZ 17 BANK LOAN HER D EZ 18 HER D EZ 17-2 Financial Debt 100% in MXN 6,630 Average Cost 8.5% Net Debt / EBITDA 1.2 Net Debt / Shareholders Equity 0.25

200 430 1,000 1,000 2,000 2,000

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

2019 2020 2021 2022 2023 2024 2025 2026 2027 75% 25% Fixed Floated

9.9% 10.9% 12.2% 12.3% 12.3%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

2015 2016 2017 2018 12M3Q19 6.0% 10.2% 13.7% 14.2% 13.7%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

2015 2016 2017 2018 12M3Q19 2 5

R E T U R N S

ROE ROIC

ROE (RET URN ON EQUITY ) = M AJORI T Y NET INCOM E / ANNUAL AVERAGE M AJORI T Y S HAR EH OL D ER ´ S EQUITY ROIC (RET URN ON I NVES T ED CAPITAL) = EBIT / (C ONS OL I D ATED S HAREH OL D ER ´ S EQUITY + TOTAL DEBT) (AN N UAL AVERAGE FROM LAST TWO YEARS )

2 5

S H A R E H O L D E R S ‘ S T R U C T U R E

SOURCE: BLOOMBERG AS OF SEPTEMBER 30. EXCLUDES HECHOS CON AMOR STAKE

2 5

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

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

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

Outstanding Shares 432 M Shares in Treasury 26.1 M EPS* 12M3Q19 vs 12MQT18 (2.7%) Payout Ratio 40.1% Dividend Yield +2.7%

367 384 389 387 426 436

200 250 300 350 400 450

2014 2015 2016 2017 2018 12M3Q19

2 8

HERDEZ* single series 67% independent members Assignment of individual responsibilities on 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 Vicepresident 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 on approval on the Annual General Shareholders Meeting.

A P P E N D I X

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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 made the IPO of Grupo Herdez in 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 the 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 the distribution of 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 the distribution agreement with Reynold’s 1989 We signed a distribution agreement with Kikkoman

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.

3 1

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

3 2

HÉCTOR HERNÁNDEZ -PONS TORRES Propietary - Chairman ENRIQUE HERNÁNDEZ -PONS 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 R EB OLLAR 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.

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