October 2015
All the information contained in this document is prepared accordance with International Financial Reporting Standards (IFRS) as of June 30, 2015, unless otherwise stated. Forward-Looking Statement The information herein contained (“Information”) has been prepared by Grupo Herdez, S.A.B. de C.V., its associates, subsidiaries and/or affiliated companies (“Grupo Herdez”) and may contain forward-looking statements that reflects Grupo Herdez current expectations and views which could differ materially due to different factors, risks and uncertainties. Therefore, Grupo Herdez and/or it´s respective officers, employees or agents, assume no responsibility or liability for any discrepancy in the Information. In particular, but without prejudice to the generality of the foregoing, no warranty is given as to the accuracy of the statements or the future variation of the Information or any other written or oral Information issued by Grupo Herdez. The Information has been delivered for informative purposes only. The issuance of this Information shall not be taken as any form of commitment on the part of Grupo Herdez to proceed with any transaction. [ 2 ]
network categories products [ 3 ]
Improved Investment for the future execution Top line Increase Development of performance Shareholders’ above GDP & new growth Value population paths EBITDA growth margin within long-term sustainable range [ 4 ]
Communit munity Ethics Engag agement ment & Transparency Qualit ality of Life Environ ironment nt [ 5 ]
distribution tuna plants centers vessels >Mexico ico >United States es + >Canada countries employees >Central America & the Caribeean >Spain >UK [ 6 ]
Strong Corporate Governance % % % % Frozen Division Herdez Del Fuerte Barilla Mexico McCormick Mexico Nutrisa since 2013 Since 2008 Since 2002 Since 1947 Helados Nestlé since 2015 % MegaMex Since 2009 Grupo Herdez consolidates in its financial statements 100% of the Frozen División, Herdez Del Fuerte, Barilla Mexico and [ 7 ] McCormick Mexico. While its proportional stake in MegaMex is registered in the Equity Investment in Associates.
[ 8 ]
[ 9 ]
Convenience Traditional 3% 4% # Food Service + 5% sales supplier of Nutrisa employees groceries Stores 8% Retail + 38% Club Stores Nutrisa Presence in 8% stores % of the aisles Wholesalers 34% + Helados Nestlé POS [ 10 ]
In value 85% 72% 64% 32% 28% 15% Ice Tomato Mole Mayonnaise Pasta Tuna fish Cream* Puree Source: Company data with third party information [ 11 ] *As of November 2014, includes Helados Nestlé & Nutrisa sales in retail
Market opportunity % % Grupo Grupo Herdez Herdez % Grupo Grupo Herdez Herdez 92% 23% 67% Competitor Competitor Competitor % % Grupo Grupo Herdez Herdez 90% 96% Competitor Competitor 6 [ 12 ]
[ 13 ]
In value 74% 41% 9% 4% 2% Frozen Mole Guacamole Salsa Tortillas food [ 14 ] Source: Company data with third party information
Channel el Expan ansi sion on Retail Portfoli lio o Rationa onali lizati zation Foodservice C-store Club Mix Optimi mizati ation Emerging / Alternative Cost Improv ovem emen ent Brand Build lding ng Innova vation SKU Producti tivity Thought ht Leadershi rship Expens ense Managem ement nt M&A $ - % [ 15 ]
Food Service • Assortment Club 6% Stores • Space allocation 13% Convenience • Flow 19% Retail • Adjacency 62% • Productivity • Aisle partnership • Total store • Destination [ 16 ]
Major restructuring completed in 2014 + stores which leaded to gross margin expansion % of net sales %, - % in 7 states 1,000 900 800 in frozen 700 600 500 yogurt 400 300 + products 200 100 - 2009 2010 2011 2012 2013 2014 Frozen Commercial [ 17 ]
#2 player in the category Nestlé brand, strong positioning in Nutrition, Health & Wellness, and Trust Leader in Kids segment & Innovation Wide product portfolio of strong brands addressing all consumers and price points Reaches 49,000+ POS nationwide [ 18 ] 3
the size of the combined business - % of total sales to represent . times current in the next 5 years Reduce structural cost Development Enhance of alternative Store opening profitability Increase channels aceleration average ticket Increase distribution [ 19 ] 7
Consistent Increase earnings Financial Shareholders´ & Flexibility Value FCF [ 20 ] 7 FCF: Cash Flow from Operations minus CAPEX and M&A
2.5x 14,319 3.3x 13.4x 5,706 1,421 710 424 53 Net Sales FCF CAPEX 2004 2014 Consolidated figures in million pesos [ 21 ] FCF: Cash Flow from Operations minus CAPEX and M&A
CAGR 3Y Mexico Core 4.5% 2.5x Frozen* 43.0% 15,414 Exports 7.7% 14,319 957 13,180 955 1,601 12,042 839 1,166 783 767 12,856 12,197 11,558 11,275 2012 2013 2014 12M 2Q15 Mexico Core Frozen Exports Consolidated figures in million pesos [ 22 ] *Frozen: 2 years CAGR
CAGR 3Y 2.5x Mexico Core 12.7% Frozen* 24.5% Exports 7.9% 2,798 69 2,415 172 66 2,050 117 1,843 63 55 111 2,557 2,232 1,876 1,788 2012 2013 2014 12M 2Q15 Mexico Core Frozen Exports Consolidated figures in million pesos [ 23 ] *Frozen: 2 years CAGR
2.5x 3,842 2,160 2,990 1,060 469 574 792 447 239 298 308 229 200 176 2012 2013 2014 2015e Maintenance Growth Mergers & Acquisitions [ 24 ] Consolidated figures in million pesos
783 2,000 3.3x 1,000 600 219 150 150 100 100 100 200 200 200 200 200 2015 2016 2017 2018 2019 2020 2021 2022 2023 HERDEZ 14 Bank loan MXN HERDEZ 10 Bank loan USD HERDEZ 13-2 HERDEZ 13 [ 25 ] Consolidated figures expressed in million pesos
18.5% 17.7% 14.2% 14.2% 13.7% 12.9% 12.4% 13.2% 11.7% 11.5% 13.4x 11.2% 10.6% 2012 2013 2014 12M 2Q15 ROE Adj. ROE ROIC Adjusted ROE for the elimination of the reasonable value of Herdez Del Fuerte as a result of the application of IFRS 10 & IFRS 3 ROE (Return on Equity)= Majority Net Income/ Average Majority Shareholders´ Equity [ 26 ] ROIC (Return on Invested Capital)= Operatign Income/ (Shareholders´ Equity + Debt) Average
* Net Debt/EBITDA Float Fix 49% 51% 1.7 12M 2Q15 3.3x * 2014 1.4 USD 16% 2.0 2013 MXN 84% [ 27 ] *Debt mix considers derivative instruments
3.3x 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net Income Share Price Grupo Herdez performance is consistent with long-term strategy delivering proftibable growth to shareholders [ 28 ]
EBIT Net Sales 2Q15 2Q15 602 3,946 + % + % 2Q14 3,318 2Q14 447 Margin 2Q15 15.3% % 2Q14 13.5% % EBITDA Consolidated Net Income 2Q15 713 2Q15 405 + % + % 2Q14 525 2Q14 330 Margin 2Q15 18.1% % 2Q14 15.8% 8% Margin 2Q15 10.3% 2Q14 10.0% [ 29 ]
Andrea Amozurrutia Planeación Financiera y PH +52 (55) 5201 5636 Relación con Inversionistas aac@herdez.com Tel.+52 (55) 5201 5636 aac@herdez.com Grecia Domínguez Gerente Relación con Inversionistas PH +52 (55) 5201 5602 y Sustentabilidad gdominguezl@herdez.com Tel.+52 (55) 5201 5602 gdominguezl@herdez.com invrel@herdez.com
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