Gruma Sab De Cv Class B · BMV:GRUMA/B
Gruma Sab De Cv Class B — Investor Presentation (November 2019)
31 slides from Gruma Sab De Cv Class B's investor presentation, November 2019
Slide 1: Investor Presentation
Investor Presentation
Slide 2: Company Overview
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Slide 3: Gruma is the world's largest corn flour and tortilla producer
GRUMA IS THE WORLD’S LARGEST CORN FLOUR AND TORTILLA PRODUCER, WITH OPERATIONS IN THE UNITED STATES, MEXICO, CENTRAL AMERICA, EUROPE, ASIA AND OCEANIA Subsidiaries Products % Sales % EBITDA Family: 46% GRUMA USA • Corn flour • Tortillas, other Float: 54% GIMSA • Corn flour 56 62 GRUMA, S.A.B. de C.V
Slide 4: Gruma's leading brands show strong awareness and consumer loyalty
GRUMA’S LEADING BRANDS SHOW STRONG AWARENESS AND CONSUMER LOYALTY REGION BRANDS PRODUCTS POSITION CORN FLOUR 1 UNITED STATES TORTILLAS 1 TORTILLAS 2 MEXICO CORN FLOUR 1 CORN FLOUR 1 CENTRAL AMERICA TORTILLAS 1 TORTILLAS 2 EUROPE TORTILLAS 3 ASIA & OCEANIA TORTILLAS 1 4
Slide 5: Product innovation for health-oriented consumers
GRUMA IS LEADING IMPORTANT PRODUCT INNOVATION TO SATISFY THE GROWING MARKET OF HEALTH-ORIENTED CONSUMERS • Consumers replacing breads with wraps • Increased popularity of healthier snack options, such as gluten-free organic corn chips To satisfy these megatrends, GRUMA offers a line of healthier alt
Slide 6: Frequent product launches and colorful in-store displays
FREQUENT PRODUCT LAUNCHES AND COLORFUL IN-STORE DISPLAYS ENHANCE SALES OF VALUE-ADDED AND HIGHER-MARGIN PRODUCTS 6
Slide 7: Consistent growth in net sales, in line with EBITDA expansion
GRUMA HAS ACHIEVED CONSISTENT GROWTH IN NET SALES DRIVEN MAINLY BY THE U.S. OPERATIONS… GRUMA GRUMA Net Sales and EBITDA Volume (millions of pesos) (thousand metric tons) CAGR Net Sales: CAGR EBITDA: CAGR: ’15 – ’18: 8% ’15 – ’18: 9% ’15 – ’18: 2% 74,041 68,206 70,581 3,959 4,009 4,055 3,831 58,279
Slide 8: EBITDA generation has contributed to solid financial position
EBITDA GENERATION HAS CONTRIBUTED TO GRUMA’S SOLID FINANCIAL POSITION… GRUMA GRUMA Debt Net Debt/EBITDA2 (millions of US$) (times) 1,380 2171 1,030 1,097 1,163 1.8 1.5 1.5 769 775 1.1 1.0 DEC'15 DEC'16 DEC'17 DEC'18 SEP'19 DEC'15 DEC'16 DEC'17 DEC'18 SEP'19 1 Total leases as of September 30, 2019. 8
Slide 9: Healthy debt maturity profile
…WHILE THE COMPANY ENJOYS A HEALTHY DEBT MATURITY PROFILE, WHERE 57% OF DEBT IS DOLLAR-DENOMINATED, BACKED BY ITS U.S. OPERATIONS GRUMA Debt Maturity Profile 1 As of September 30, 2019 (millions of US$) 1 The US$217 million related to leases are not included on the above debt figures. 9
Slide 10: Increased dividend payment
IMPROVEMENTS IN RESULTS, HIGHER CASH GENERATION AND HEALTHY FINANCIAL STRUCTURE HAS ENABLED GRUMA TO INCREASE ITS DIVIDEND PAYMENT… GRUMA Dividend Payments (millions of pesos) 2.4 % 1.7 % 1.9 % 0.8 % 1,951 1.0 % 1,848 1,852 0.8 % 865 649 692 2014 2015 2016 2017 2018 2019 Total Dividend Payment ($) D
Slide 11: Share buybacks and cancellation
…AND BUY BACK SHARES, WHICH WILL BE CANCELLED, TAKING ADVANTAGE OF CURRENT VALUATION FOR THE BENEFIT OF OUR SHAREHOLDERS 05/18 – 04/19 04/19 – TO DATE1 - OUTSTANDING SHARES (millions) 432.7 421 - SHARES REPURCHASED (millions) 10.8 5.2 - AVERAGE PRICE (pesos) $216.6 $185.2 - TOTAL REPURCHASE US$119 U
Slide 12: Main Subsidiaries
co MAIN SUBSIDIARIES
Slide 13: Gruma USA
GRUMA USA
Slide 14: Gruma USA is the largest subsidiary and leading producer in the US
GRUMA USA IS THE LARGEST SUBSIDIARY, AND THE LEADING CORN FLOUR AND TORTILLA PRODUCER IN THE UNITED STATES Net Sales 2018: US$2.1 billion GRUMA USA Fife, WA New Brighton, MN McMinnville, OR * Mountain Top, PA Hayward, CA Omaha, NE Corn Flour Madera, CA Evansville, IN Tortilla Fresno, CA Pueblo, CO O
Slide 15: Growth potential for U.S. tortilla and corn flour industries
THERE IS GROWTH POTENTIAL FOR THE U.S. TORTILLA AND CORN FLOUR INDUSTRIES Growth Drivers Estimated U.S. Markets • Hispanic Population1 –18% of total U.S. population, out of which 63% are Mexican –Hispanic population increased 63% between 2000 and 2016, accounting for half of total U.S. Tortillas/Tor
Slide 16: Gruma USA sales volume, net sales and EBITDA
OVER THE PAST FEW YEARS, SALES VOLUME GROWTH HAS BEEN LOWER DUE TO SIGNIFICANT SKU RATIONALIZATION, WHICH HAS RESULTED IN IMPROVED PROFITABILITY GRUMA USA GRUMA USA Net Sales and EBITDA Volume (millions of dollars) (thousand metric tons) CAGR: CAGR Net Sales: CAGR EBITDA: ’15 – ’18: 1% ’15 – ’18: 2%
Slide 17: Gruma USA expects continued margin improvement
GRUMA USA EXPECTS CONTINUED MARGIN IMPROVEMENT BASED PRINCIPALLY ON: • Change of sales mix toward higher margin SKUs – Healthier alternatives – More value-added products – Smaller counts • Efficiencies arising from the new plant expected from 2019 and onwards • Benefits from information technology p
Slide 18: GIMSA
GIMSA
Slide 19: GIMSA is second largest subsidiary and corn flour leader in Mexico
GIMSA IS GRUMA’S SECOND LARGEST SUBSIDIARY AND THE LEADER OF THE CORN FLOUR INDUSTRY IN MEXICO Mexicali GIMSA Chihuahua • Net Sales 2018: US$1.0 billion1 Obregón • 18 plants, with total annual capacity of 2.4 Río Bravo million metric tons of corn flour Culiacán Nuevo León • GIMSA’s market share with
Slide 20: Corn flour used for only 34% of tortillas in Mexico
CORN FLOUR IS ONLY USED TO PRODUCE 34% OF THE TORTILLAS IN MEXICO, THUS THERE IS A GREAT POTENTIAL FOR LONG-TERM GROWTH Potential Corn Flour Market in Mexico 7.3 Million Metric Tons of Corn Flour1 US$4.4 billion2 Corn Flour Market in Mexico 2.5 Million Metric Tons of Corn Flour1 US$1.5 billion2 GIMS
Slide 21: GIMSA's sales growth and EBITDA
GIMSA’S SALES GROWTH MAINLY REFLECTS COMMERCIAL INITIATIVES AIMED AT STRENGTHENING CUSTOMER SERVICE… GIMSA GIMSA Volume Net Sales and EBITDA (thousand metric tons) (millions of pesos) CAGR: CAGR Net Sales: CAGR EBITDA: ’15 – ’18: 4% ’15 – ’18: 9% ’15 – ’18: 4% 20,508 2,064 19,601 1,965 2,039 17,866
Slide 22: Expectations for GIMSA's results
EXPECTATIONS FOR GIMSA’S RESULTS ARE BASED ON: • Stability of its operations arising from the defensive nature of its products, not impacted by economic or political matters • Sales volume growth coming mainly from the substitution of the traditional method 22
Slide 23: Gruma Europe
GRUMA EUROPE
Slide 24: Gruma Europe is third largest subsidiary, focused on tortillas
GRUMA EUROPE IS THE COMPANY’S THIRD LARGEST SUBSIDIARY, FOCUSED MAINLY ON THE TORTILLA BUSINESS Net Sales 2018: US$281 million1 GRUMA Europe Tortilla Corn Milling Operations Operations 77% 23% • 6 Plants in Europe • 3 Mills in Europe • England (2) • Italy • The Netherlands • Ukraine • Russia • Turke
Slide 25: Growth potential for the tortilla market in Europe
THERE IS GROWTH POTENTIAL FOR THE TORTILLA MARKET IN EUROPE Growth Drivers Estimated European Markets • Adoption of tortillas in non-Mexican dishes (wraps) • Wraps, burritos, tacos, quesadillas, nachos, etc. becoming mainstream foods • Popularity of Mexican food –The number of Mexican food restauran
Slide 26: Gruma Europe retail tortilla growth improves EBITDA margins
GROWTH IN GRUMA EUROPE’S RETAIL TORTILLA BUSINESS HAS IMPROVED ITS EBITDA MARGINS, A TREND THAT IS EXPECTED TO CONTINUE GRUMA EUROPE GRUMA EUROPE Volume Net Sales and EBITDA (thousand metric tons) (millions of dollars) CAGR: CAGR Net Sales: CAGR EBITDA: ’15 – ’18: (6)% ’15 – ’18: 0% ’15 – ’18: 7% 40
Slide 27: Improved profitability for Gruma Europe
IMPROVED PROFITABILITY FOR GRUMA EUROPE WILL RESULT FROM: • A better sales mix favoring the retail tortilla business, particularly with branded products, supported by enhanced marketing and distribution efforts • Production efficiencies at tortilla plants, coupled with packaging automation • Potenti
Slide 28: Additional Opportunities for Gruma
ADDITIONAL OPPORTUNITIES FOR GRUMA
Slide 29: Opportunities in other growing markets
ALONG WITH ITS THREE MAIN SUBSIDIARIES, GRUMA SEES OPPORTUNITIES IN OTHER GROWING MARKETS • Presence in Asia and Oceania with 3 tortilla production facilities and sales close to US$200 million, growing at a double-digit rate • In Mexico, packaged tortilla business represents a huge potential market,
Slide 30: Gruma's key considerations to create value
GRUMA’S KEY CONSIDERATIONS TO CREATE VALUE • Worldwide leader in an attractive & non-cyclical industry with staple products • Growing markets for its products in all regions • Global footprint with approximately 60% USD EBITDA generation • Margin improvements expected at Gruma USA, Europe and Asia-O
Slide 31: Contact Information
Contact Information Rogelio Sánchez Lilia Gómez +52 (81) 8399 3312 +52 (81) 8399 3324 rsanchezm@gruma.com lgomez@gruma.com Investor Relations +52 (81) 8399 3349 ir@gruma.com www.gruma.com
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