Resilience & Focus Investors Presentation June 2018 All the - - PowerPoint PPT Presentation

Resilience & Focus

Investors Presentation June 2018

All the information contained in this document is prepared in accordance with International Financial Reporting Standards (IFRS) as of June 30, 2018, 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 reflect Grupo Herdez current expectations and views which could differ materially due to different factors, risks and uncertainties. Therefore, Grupo Herdez and/or its 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.

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In Investment Case

Years of experience Branded food leader Diversified portfolio Profitable growth strategy Sound financial structure Solid corporate governance Committed to sustainability

+100

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Str trategy

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In Infrastructure

15 plants 477 Nutrisa stores 7 tuna vessels 22 distribution centers More than 9,500 employees 56,000 Helados Nestlé POS

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Corporate Str tructure

Grupo Herdez consolidates 100% of the Frozen division, Herdez Del Fuerte, Barilla México y McCormick de México. The proportional part of Herdez Del Fuerte in MegaMex is registered in “Equity Investment in Associates“.

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• HERDEZ* single series
• Robust governance structure from subisidiaries
• 67% independent members
• Assignment of individual responsibilities on

corporate governance, labor and environmental practices

Corporate Governance

Héctor Hernández-Pons Torres Chairman Enrique Hernández-Pons Torres Vicepresident Flora Hernández de Merino Board member

PROPIETARY INDEPENDENT 67%

Carlos Autrey Maza Enrique Castillo Sánchez Mejorada José Roberto Danel Diaz Eduarto Ortíz Tirado Serrano Luis Rebollar Corona José Manuel Rincón Gallardo

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Sustainability Model

A w a r d s & C e r t i f i c a t i o n s

Leading Brands

Our brands in Mexico Our brands in United States Distribution agreements in Mexico

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Mayonnaise 35% Frozen 16% Pasta 8% Tomato puree 8% Mole 4% Canned tuna 4% Canned vegetables 4% Salsa, 3% Catsup, 2% Jams, 2% Thea, 2% Food Packaging, 1% Juice, 1% Mushrooms, 1% Others 8%

Commercial Leadership

Retail 35% Wholesalers 35% Club stores 8% Nutrisa stores 7% Foodservice 6% DSD (traditional) 5% Convenience 4%

Sales mix by channel

Consolidated figures in million pesos

ALL

Presence in the sales channels in Mexico

Sales mix by category

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Segments

Preserves

79% of net sales C A T E G O R I E S

• Canned tuna
• Mayonnaise
• Mole
• Tomato puree
• Pasta
• Vegetables

C A T E G O R I E S

• Soft drinks
• Healthy snacks
• Frozen yogurt
• Popsicles
• Food supplements

C A T E G O R I E S

• Mexican food
• Mayonnaise
• Tea

MegaMex is registered in “Equity Investment in Associates” and includes categories like guacamole, salsas and vegetables.

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Frozen

14% of net sales

Exports

7% of net sales

Market Share in in Mexico

We are #1 or #2 in categories that represents the 78% of

• ur sales

Canned tuna Mayonnaise Jams Mole Pasta Tomato purée Salsa Vegetables 73% 71% 29% 8% 84% 27% 40% 43%

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Segments

Integrated communication More consumption

• ccasions

Regional penetration Health & Wellness

Preserves Growth Drivers

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Frozen Growth Drivers

Nutrisa stores 46% DSD (traditional) 30% Convenience 13% Retail 8% Others 2% Club stores 1%

Strenghening of new sales channels Increase store traffic & freezer Sales mix

• ptimization

SG&A management

SALES MIX by channel

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Consolidated figures in million pesos

2020 Goals

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

Reduce general expenses as a proportion of net sales

MegaMex Growth Drivers

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Improve gross margins through efficient portfolio management Reduce production costs Increase sales by innovation Accelerate brand growth Expansion of sales channels

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Net Sales

12,197 13,139 14,431 15,953 15,953 1,166 2,139 2,592 2,882 2,901 955 1,079 1,158 1,230 1,446

2014 2015 2016 2017 12M2Q18 Preserves Frozen Exports

Preserves 79% Frozen 14% Exports 7%

CAGR 4years = 9.1%

Preerves 6.9% Frozen 25.6% Exports 10.9%

14,318 16,357 18,181 20,065 20,300 SEGMENT MIX

Consolidated figures in million pesos

2,232 2,668 2,634 2,888 2,884

117 136

103

277 305

66 83 79 130 166 16.9 17.7 15.5 16.4 16.5

2014 2015 2016 2017 12M2Q18 Preserves Frozen Exports EBITDA Margin

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EBITDA

Preserves 86% Frozen 9% Exports 5%

SEGMENT MIX CAGR 4years = 8.6%

Preserves 6.6% Frozen 27.0% Exports 25.9%

2,415 2,887 2,816 3,295 3,355

Consolidated figures in million pesos

Profitability

39.0 41.4 39.9 39.3 39.5 14.8 12.4 13.0 13.9 14.0 16.9 17.7 15.5 16.4 16.5 10.5 7.9 8.8 10.8 11.6 5.4 2.4 3.9 5.2 5.6

2014 2015 2016 2017 12M2Q18

Gross Margin EBIT EBITDA Net Income Majority Net Income

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ROE (Return over Equity) = Majority Net Income / Annual Average Majority Shareholder´s Equity ROIC (Return over Invested Capital) = EBIT / (Consolidated Shareholder´s Equity + Total Debt) (annual average from last two years)

Returns

10.2% 13.7% 14.9% 10.9% 12.2% 11.9%

2016 2017 12M2Q18 ROE ROIC

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Stock Performance

P A R T O F T H E I N D E X E S

• Comercial
• Consumo Frecuente
• IMC30
• IPC CompMX
• IPC SmallCap
• IPC Sustentable
• Transforma

June 2018

EPS

MXN 2.61

49%

float

432

million

• utstanding

shares

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Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Δ% Herdez Δ% IPC Δ% Consumo Frecuente

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Debt Str tructure

Financial Debt 7,030 Average Cost 8.5% Net DEBT/EBITDA 1.6 Net Debt/ Shareholders Equity 0.31

Fija 71% Flotante 29%

MIX RATES

Consolidated figures in million pesos The debt mix considers hedge derivates 200 200 200 430

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

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Scotiabank Herdez 14 HSBC LC Herdez 18 Herdez 17-2 Herdez 13 Herdez 17

Guid idance 2018 2018

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Net Sales 5-7% growth EBITDA Margin 15.5-16.5% CAPEX $633 millions Majority Net Income 4-5%

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For more information:

Andrea Amozurrutia Tel.+52 (55) 5201 5636 aac@herdez.com Grecia Domínguez Tel.+52 (55) 5201 5602 gdominguezl@herdez.com Fernando Acevedo Tel.+52 (55) 5201 5655 ext. 1052 lfacevedom@herdez.com invrel@herdez.com

www.grupoherdez.com.mx