Sigma Foods, S.a.b. De C.v. · BMV:SIGMAF/A
Sigma Foods, S.a.b. De C.v — Sigma Alimentos — Q1 2023 Earnings Presentation
65 slides from Sigma Foods, S.a.b. De C.v's earnings presentation, April 2023
Slide 1: Corporate Presentation 1Q23
Corporate Presentation 1Q23
Slide 2: Content
Content 01 Sigma at Glance 02 Into the Future 03 Financial Performance 04 ESG
Slide 3: Sigma as part of ALFA
Sigma as part of ALFA Petrochemicals #1 in the production of PTA, PET and EPS in the Americas 49% of Alfa Revenues ¹ 51% of Alfa EBITDA ¹ IT + Telecom Food Products 11 Portfolio brands sell more than US $100 Million a year, each 8 out of 10 Mexican Corporates use Axtel’s IT (1) LTM in USD; ALFA and
Slide 4: Investment Highlights
Investment Highlights • Diverse portfolio of leading brands across categories and consumer segments • Proprietary R&D platform to drive Product Innovation and generate consumer knowledge • Extensive supply chain and distribution network with access to 710K+ points of sales • Balanced Culture: result
Slide 5: Multinational Presence, Local Favorites
Multinational Presence, Local Favorites 18 100+ 710K+ 1.7M US $7.7B 23y Countries Brands Points of Sale Tons of Food / Year Net Sales LTM Average Mgmt. Team Experience Bringing communities everywhere, favorite foods to love.
Slide 6: Revenues and EBITDA LTM by region and category
U.S. 18% Europe 29% Mexico 46% Cooked & Fresh Meats 56% Dairy 23% LatAm 7% Revenues LTM US $7.7B EBITDA LTM US $682M *Revenues LTM distribution by region and Category Dry Meats 14% Other 7%
Slide 7: Leading brands across markets, categories and consumer segments
Leading brands across markets, categories and consumer segments 100+ Brands 11 Brands with Net Sales over US $100M. * Yoplait is licensed by third party
Slide 8: Leading brands across categories and consumer segments
Leading brands across categories and consumer segments Our broad portfolio helps us capture demand and top line growth across different market segments Cheese, Creams Packaged Meats Fresh Meat Yogurt Others & Spreads Premium High * Middle Value Low-cost 11% of our revenues come from licensed brands*
Slide 9: Multiple channels to reach consumers
Multiple channels to reach consumers Modern Traditional Foodservice E-commerce
Slide 10: A unique story of transformation: Growth + Profitability
A unique story of transformation: Growth + Profitability Net sales breakdown Net Sales Countries Facilities Employees By geography By category (US$ B) Europe Mexico Cooked Meats Dairy U.S. Latam Dry Meats Other National Leadership 25% 2000 $0.8 4 8 12,500+ 98% 74% International Expansion 5% 9% 15% 3
Slide 11: Extensive supply chain and distribution network
Extensive supply chain and distribution network 64a Manufacturing Facilities 179b Distribution Centers 710K+ Points of Sale 25a 22a 6 11a Mexico 118b Europe 13 USA 16b LATAM 32b 391K+ 62k+ 164K+ 95K+ a – Transferred production lines among plants in Spain during 4Q22; Changed manufacturing facilities
Slide 12: Consumer centric innovation supported by proprietary R&D platform
Consumer centric innovation supported by proprietary R&D platform Consumer Research 180,000+ Contacts / year Proprietary Mathematical Models Iterative innovation process based on Design Thinking 1,800+ New Product Launches in the last 36 months 9% of Revenue comes from innovations Research and Devel
Slide 13: Diverse Workforce
Diverse Workforce 62% 18% 7% 13% 60+ 45,000+ Nationalities Employees 60% 40%
Slide 14: M&A Track Record
M&A Track Record 2019 2023 • 31 successful M&A transactions since 1997. 2016 • Experienced, dedicated team with strong track 2017 2014 record. 2015 2012 • Significant value creation through synergies 2013 and post-merger integration process. 2009 • Financial discipline and accelerated 2007 2010 dele
Slide 15: Experienced Management Team
Experienced Management Team Proven top management with an average of 23 years of experience across business areas CEO Rodrigo Fernández Sigma CEO MBA Wharton 24 Business Units Eugenio Caballero Ricardo Doehner Jesús Lobo Sergio Ramos Gerardo Carcoba CEO Mexico CEO Europe CEO USA CEO Latin America CE
Slide 16: Advisory Board
Advisory Board Member Background Member Type María Teresa Arnal* Entrepreneur; 25+ years of experience in tech (Google, Twitter & Microsoft) Diego Calderón Proprietary Independent María Eugenia Casar* Former Assistant Executive Director - The World Food Program, UN 23% Juan Enriquez* Chairman and CE
Slide 17: Content
Content 01 Sigma at Glance 02 Into the Future 03 Financial Performance 04 ESG
Slide 18: Into the Future
Into the Future Mid-to-high single-digit EBITDA target organic growth, boosted by M&A opportunities Going forward, we are focusing on 3 pillars: Growing the core New sources of revenue Consumer Insights, Execution High Potential Opportunities Global and Optimization New Categories and Business Model
Slide 19: Grow the Core
Grow the Core Through the years we have developed a successful business that we continue to strengthen through: • Deep consumer knowledge, innovation, and brand equity to exceed changing consumers’ needs. • Execution with excellence and efficiency to deliver a winning value proposition. • Margin Exp
Slide 20: Margin Expansion in Europe
Margin Expansion in Europe Footprint Optimization Strategic Initiatives International Business Unit (IBU) • Increase capacity utilization • Adjacent categories and white-spaces • Focus on high-margin markets • Restructure end-to-end supply chain • New channels • Tailored products as a winning propos
Slide 21: New Sources of Revenue: High Potential Opportunities
New Sources of Revenue: High Potential Opportunities Cross-fertilization to attend high-value- opportunities identified in each region: • Chorizos, Spreads, etc. • Lunch Meats, Sausages, Foodservice, etc. • Traditional Channel, Foodservice, etc. • Ready Meals, Dry Sausages, Fresh Meat
Slide 22: New Sources of Revenue: Growth Business Unit
New Sources of Revenue: Growth Business Unit What is Growth BU? Independent BU focused on building new categories and business models. Autonomous to ensure flexibility, and with access to Sigma´s capabilities. • Cross-functional global team + local champions • Rapid iteration; low-cost experiments •
Slide 23: Growth BU | Initiatives
Growth BU | Initiatives Global Categories New Business Models Entrepreneurial Ecosystem Smart Manufacturing Future Foods Power Connections Green Tech
Slide 24: Our Strategy
Our Strategy Strengthening the organization through enablers Innovation Anticipating consumer’s wants The way we and needs Entrepreneurship Impeccable Management think Focus on the essential, foster early Generate, vet, pilot & scale new discussions and solve for root causes business models Agile Es
Slide 25: Content
Content 01 Sigma at Glance 02 Into the Future 03 Financial Performance 04 ESG
Slide 26: 1Q23 Highlights
1Q23 Highlights US $ Millions Revenue EBITDA Record quarterly Revenue up 16% year-on-year, supported by growth across all regions +16% +19% Sigma All-time high 1Q EBITDA, up 19% vs. 1Q22, driven by solid results in 1,991 192 the Americas 7% 6% 1,711 161 Growth in 1Q23 Revenue and EBITDA driven
Slide 27: Quarterly Volume
35 Quarterly Volume Volume Volume 1Q23 vs 1Q22 Volume 1Q23 vs 4Q22 (K Tons) (K Tons) (K Tons) +6% -10% 0% 0% +1% -8% +2% -3% 445 423 432 424 439 432 427 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Slide 28: Quarterly Revenues
36 Quarterly Revenues Revenues Revenues 1Q23 vs 1Q22 Revenues 1Q23 vs 4Q22 (US $ Million) (US $ Million) (US $ Million) +26% +9% +6% +14% +5% -3% +1% -2% 1,991 1,870 1,879 1,964 1,729 1,768 1,711 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Slide 29: Quarterly EBITDA
37 Quarterly EBITDA EBITDA EBITDA 1Q23 vs 1Q22 EBITDA 1Q23 vs 4Q22 (US $ Million) (US $ Million) (US $ Million) +32% -12% 0% +6% +27% -35% +8% -7% 201 192 176 172 161 167 151 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Slide 30: Quarterly EBITDA Margins
38 Quarterly EBTIDA Margins EBITDA Margins (%) EBITDA Margins (%) 14.6 15.0 15.2 13.7 13.6 13.1 13.0 13.2 12.4 12.0 11.0 11.0 12.7 11.2 10.8 10.5 9.1 9.5 10.59.5 11.2 11.4 8.8 10.7 9.0 8.0 10.2 8.5 9.3 9.4 9.2 9.6 8.7 8.5 6.6 7.8 8.1 5.4 4.9 2.0 2.3 2.5 1.6 1.6 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q2
Slide 31: Change in Net Debt
39 Change in Net Debt Change in Net Debt 1Q23 vs 4Q22 (US $ Million) * 4Q22 EBITDA NWC CAPEX Net Financial Taxes Dividends Other 1Q23 Expenses Sources * Sigma made the decision to voluntarily abandon the optional tax regime; payment of the income tax was made during 1Q23 for the years 2019 to 2021.
Slide 32: Change in Net Debt
40 Change in Net Debt Change in Net Debt 1Q23 vs 1Q22 (US $ Million) * 1Q22 EBITDA NWC CAPEX Net Financial Taxes Dividends Other 1Q23 Expenses Sources * Sigma made the decision to voluntarily abandon the optional tax regime; payment of the income tax was made during 1Q23 for the years 2019 to 2021.
Slide 33: Capital Expenditures (Capex)
41 Capital Expenditures (Capex) Capex México Mexico Europa Europe 67% 63% 68% 75% 71% 82% 76% 86% 78% 83% 33% 37% 32% 25% 18% 22% 24% 29% 14% 17% 75% 72% 72% 76% 78% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 EE.UU. U.S. Latam 22% 25% 28% 28% 24% 54% 89% 78% 85% 85% 67% 83% 67% 75% 100% 2019
Slide 34: Financial Results
Financial Results US $ Million Volume Revenue EBITDA (K Tons) (US $ Million) (US $ Million) 160 741 1,720 1,701 1,743 703 684 1,754 7,704 1,678 1,756 1,705 1,740 663 676 684 682 1,668 7,425 639 716 652 1,445 6,463 6,817 525 6,336 5,901 6,054 6,347 1,304 470 1,142 5,359 5,698 1,105 395 897 3,820 3,44
Slide 35: Cost and Expense Structure LTM
Cost and Expense Structure LTM Costs of Goods Sold (COGS) Selling, General and Administrative Expenses (SG&A) (US $ Million) (US $ Million) 8% 1% 2% Meat and Dairy Raw Materials 5% 21% Dry Ingredients 7% Selling Direct Labor Trade Products Administrative 7% 58% Packaging General 12% Energy (Fuel, el
Slide 36: Leverage Ratios
Leverage Ratios Net Debt Net Debt / EBITDA** Gross Debt / EBITDA** 1,936 1,859 1,994 2.9x 3.8x 1,756 1,691 1,782 1,840 2.7x 2.8x 2.6x 2.7x 2.7x 3.8x 3.6x 3.6x 3.8x 3.4x 3.6x 2.3x 2017 2018 2019 2020 2021 2022 1Q23 2017 2018 2019 2020 2021 2022 1Q23 2017 2018 2019 2020 2021 2022 1Q23 * S&P Ratings´ m
Slide 37: Debt Profile
Debt Profile Average life:2.9years Average rate: 4.99 % (including CCS) Debt Maturity Schedule (US $Million) Debt Mix Cash Mix 1,000 (Including CCS) *220 8% 28% 28% 628 652 54% 500 64% 18% 193 Cash 2023 2024 2025 2026 2027 2028 MXN USD EUR OTHER *US $220 million MXN-USD Cross Currency Swap (CCS) agr
Slide 38: Outstanding Bonds
Outstanding Bonds 120 115 110 105 2024 100 95 2026 90 2028 85 80 Aug/21 Aug/22 Mar/21 Mar/22 Mar/23 Apr/21 Jul/21 Oct/21 Apr/22 Jul/22 Oct/22 Jun/21 Jun/22 Dec/20 Dec/21 Dec/22 Jan/21 Jan/22 Jan/23 Feb/21 Sep/21 Feb/22 Sep/22 Feb/23 Nov/21 Nov/22 May/21 May/22 Amount Bond Rate YTM Maturity Date (US
Slide 39: Dividends
Dividends Paid Dividends (US $ Million) 155 150 151 152 Amount Quarter 120 (US $ Million) 1Q23 0 17 18 19 20 21 22 1Q23 In 2020 no dividends were paid. The graph shows the approved amounts for each year.
Slide 40: Income Statement
Income Statement (Thousands of pesos) (Thousands of U.S. Dollars) I Quarter 23 I Quarter 22 I Quarter 23 I Quarter 22 Revenue 37,217,416 35,128,256 1,991,052 1,711,333 Cost of sales (26,851,663) (25,672,360) (1,436,381) (1,250,660) Gross profit 10,365,753 9,455,896 554,671 460,673 Selling expenses (
Slide 41: Balance Sheet
Balance Sheet (Thousands of pesos) (Thousands of U.S. Dollars) (Thousands of pesos) (Thousands of U.S. Dollars) Mar '23 Mar '22 Mar '23 (1) Mar '22 (2) Mar '23 Mar '22 Mar '23 (1) Mar '22 (2) LIABILITIES AND STOCKHOLDERS' EQUITY ASSETS CURRENT LIABILITIES: CURRENT ASSETS: Current Debt 11,801,700 0 6
Slide 42: Cash Flow
(Thousands of (Thousands of U.S. pesos) Dollars) Cash Flow I Quarter 23 I Quarter 22 I Quarter 23 I Quarter 22 CASH FLOW FROM OPERATING ACTIVITIES Profit before income tax 1,264,281 1,660,375 67,595 80,860 Depreciation and amortization 961,382 1,033,543 51,400 50,359 Impairment of fixed assets and i
Slide 43: 2023 Guidance
2023 Guidance US $ Million Revenues $8,100 EBITDA $705 Capex $280 Public Information
Slide 44: 2023 Guidance
2023 Guidance Revenues EBITDA CAPEX +9% +8% +12% 8,100 280 705* 7,425 652 250 2022 2023G 2022 2023G 2022 2023G *Includes a US $6 Million increase in Growth Business Unit Opex
Slide 45: Meat Raw materials – Pork and Poultry
- 2020 Meat Raw materials – Pork and Poultry - 2021 - 2022 - 2023 U.S. Europe USD / Lb Eur / kg Pork Ham Chicken MSC Turkey Brst Pork Ham 1.2 0.8 8 3.80 1 0.6 6 3.30 0.8 0.6 0.4 4 2.80 0.4 0.2 2 2.30 0.2 0 0 0 1.80 J A J O J A J O J A J O J A J A J O J A J O J A J O J A J A J O J A J O J A J O J A J
Slide 46: Meat Raw Materials – Dairy
Meat Raw Materials – Dairy U.S. USD / Lb Milk Class III Block Cheddar Cheese 30 3 25 2.5 20 2 15 1.5 10 1 5 0.5 0 0 J A J O J A J O J A J O J A J A J O J A J O J A J O J A NFDM 2 1.5 - 2020 1 - 2021 0.5 - 2022 0 - 2023 J A J O J A J O J A J O J A Sources: U.S. - USDA; See Appendix A for additional i
Slide 47: European energy utility price reference
European energy utility price reference Dutch TTF 400 €/MWh 350 300 Dutch TTF (Title Transfer Facility), is a virtual trading point for natural gas 250 in Netherlands and is the primary gas pricing hub for the European 200 market 150 100 50 0 J F M A M J J A S O N D 2020 2021 2022 2023 Sources: IC
Slide 48: Exchange rates
Exchange rates U.S. Dollar – MXN Peso U.S. Dollar - Euro 25 1.25 23 1.2 1.15 21 1.1 19 1.05 17 1 15 0.95 J F M A M J2 M2 J J J3 A A2 S O N D E F M A M2 M J2 J J3 J A2 A S O N D 2021 2020 2022 2023 2021 2020 2022 2023
Slide 49: Content
Content 01 Sigma at Glance 02 Into the Future 03 Financial Performance 04 ESG
Slide 50: Sigma’s ESG journey
Sigma’s ESG journey 1st materiality Updated the analysis and GRI materiality Report analysis Aligned to the the 2025 Signed the SBTi Sustainability Commitment Commitments, Letter <2015 2016 2018 2019 2020 2021 2022 2025 Company-wide Established the • Sustainability report Sustainability Strategy, Su
Slide 51: Sustainability Strategy: 4 pillars of Actions
Sustainability Strategy 4 pillars of Actions Aligned with the UN Sustainable Development Goals 260+ employees involved Wellbeing Health & Nutrition Shared Value Enviromental We commit to establishing conditions We promote healthy lifestyles through our We create economic and social value We focus on
Slide 52: 2025 Sustainability Commitments
2025 Sustainability Commitments Focus Performance Indicator SGDG 2025 2021 Progress Goal Results Health & Nutrition Sustainable Innovation Double the sales of products launched under the Health and Wellbeing Portfolio (compared to 2019). 2x 2.4x 100% Percentage of our plants with GFSI certification
Slide 53: Sustainability Actions
Sustainability ESG Actions United Nations Supply Chain Carbon Emission Aligned with the Signed commitment Global Compact Program Reduction Program United Nation SDGs letter and submitted target proposal Public Information
Slide 54: ESG Ratings
N WCDP oO SUSTAINALYTICS “a DISCLOSURE INSIGHT LZ 2022 A- B B Medium Industry Avg.
Slide 55: Four transformational topics
Four transformational topics Evolve our direct sources & Execute the global water consumption of energy towards stewardship strategy to ensure a decarbonization. proper use of the resource. ESG performance Engage with the value chain to Promote a circular economy to ensure sustainability compliance
Slide 56: Appendix A: Key raw material price references
Appendix A: Key raw material price references This appendix provides a detailed explanation on how to obtain key raw material price references from public sources. This is not intended as an exhaustive list of the company´s raw materials nor is it a direct representation of the company´s actual cost
Slide 57: USA – USDA PM Ham, 23-27# Trmd Sel Ham
USA – USDA PM Ham, 23-27# Trmd Sel Ham 7 2 3 8 4 5 1 9 6 10 Pop − up 12 11
Slide 58: USA – USDA Pork Trimmings - 42% Trim Combo, FOB Plant
USA – USDA Pork Trimmings - 42% Trim Combo, FOB Plant 7 2 3 4 8 5 9 1 6 10 Pop − up 11 12
Slide 59: USA – USDA Chicken - MSC, 15-20% Fat, Fresh
USA – USDA Chicken - MSC, 15-20% Fat, Fresh
Slide 60: USA – USDA Turkey - MST, Some skin, under 20% fat, Fresh
USA – USDA Turkey - MST, Some skin, under 20% fat, Fresh 2 3 4 1
Slide 61: USA – USDA Turkey - Breast, Young Tom, Boneless & Skinless, Fresh
USA – USDA Turkey - Breast, Young Tom, Boneless & Skinless, Fresh 2 3 4 1
Slide 62: USA – USDA Turkey - Thigh Meat, Boneless & Skinless, Fresh
USA – USDA Turkey - Thigh Meat, Boneless & Skinless, Fresh 2 3 1 4
Slide 63: USA – USDA Dairy - CME, Milk Class III
USA – USDA Dairy - CME, Milk Class III 2 1
Slide 64: USA – USDA Dairy - Block Cheddar Cheese 40lb
USA – USDA Dairy - Block Cheddar Cheese 40lb 1 2
Slide 65: www.sigma-alimentos.com
www.sigma-alimentos.com CORPORATE PRESENTATION Public Information Contact: investorrelations@sigma-alimentos.com