Gruma Sab De Cv Class B · BMV:GRUMA/B
Gruma Sab De Cv Class B — Investor Presentation (October 2021)
31 slides from Gruma Sab De Cv Class B's investor presentation, October 2021
Slide 1: Investor Presentation
® QPUILva 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 GRUMA USA • Corn flour Family: 48% • Tortillas, other Float: 52% • Snacks, other GIMSA • Corn flour 56 64 GRUM
Slide 4: Gruma's leading brands show strong awareness and consumer loyalty
GRUMA’S LEADING BRANDS SHOW STRONG AWARENESS AND CONSUMER LOYALTY REGIÓN MARCAS PRODUCTOS POSICIÓN TORTILLAS 1 UNITED STATES TORTILLAS 1 CORN FLOUR 2 CORN FLOUR 1 MEXICO TORTILLAS 1 CORN FLOUR 1 CENTRAL AMERICA TORTILLAS 1 TORTILLAS 2 EUROPE TORTILLAS 2 ASIA AND OCEANIA TORTILLAS 1 4
Slide 5: Gruma is leading 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 in-store displays enhance sales of value-added products
FREQUENT PRODUCT LAUNCHES AND COLORFUL IN-STORE DISPLAYS ENHANCE SALES OF VALUE-ADDED AND HIGHER-MARGIN PRODUCTS 6
Slide 7: Gruma has achieved consistent growth in net sales driven by U.S. operations
GRUMA HAS ACHIEVED CONSISTENT GROWTH IN NET SALES DRIVEN MAINLY BY THE U.S. OPERATIONS… GRUMA GRUMA Volume Net Sales and EBITDA (millions of pesos) (thousand metric tons) CAGR Net Sales: CAGR EBITDA: CAGR: ’17 – ’20: 9% ’17 – ’20: 11% ’17 – ’20: 2% 91,103 4,232 4,009 4,055 4,116 77,388 74,041 70,581
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/EBITDA (millions of US$) (times) 2661 3351 3221 1 1,097 1,154 1,151 1,157 1.8 1 1,030 1.5 1.5 1.5 1.6 1 769 775 1.1 1.0 Dec'15 Dec'16 Dec'17 Dec'18 Dec'19 Dec'20 Sep'21 Dec'15 Dec'16 Dec'17 Dec'18 Dec'19
Slide 9: Healthy debt maturity profile, 74% dollar-denominated
…WHILE THE COMPANY ENJOYS A HEALTHY DEBT MATURITY PROFILE, WHERE 74% OF DEBT IS DOLLAR-DENOMINATED, BACKED BY ITS U.S. OPERATIONS GRUMA Debt Maturity Profile1 As of September 30, 2021 (millions of US$) 1 The US$322 million related to leases are not included on the above debt figures. 9
Slide 10: Higher cash generation has enabled increased dividend payment
IMPROVEMENTS IN RESULTS, HIGHER CASH GENERATION AND HEALTHY FINANCIAL STRUCTURE HAS ENABLED GRUMA TO INCREASE ITS DIVIDEND PAYMENT… GRUMA Dividend Payments 2.5% (millions of pesos) 2.4 % 2.2% 1.7 % 1.9 % 2,280 1.0 % 0.8 % 1,951 2,047 1,848 1,852 0.8 % 865 649 692 2014 2015 2016 2017 2018 2019 2020 2
Slide 11: Share buybacks for the benefit of shareholders
…AND BUY BACK SHARES FOR THE BENEFIT OF ITS SHAREHOLDERS 05/18 – 04/19 04/19 – 04/20 04/20 – 04/21 04/21 – TO DATE1 - OUTSTANDING SHARES 432.7 421 405.5 394.2 (millions) - SHARES REPURCHASED 10.8 17.6 8.3 7.5 (millions) - AVERAGE PRICE $216.6 $189.8 $232.2 $221.86 (pesos) - TOTAL REPURCHASE US$118.6
Slide 12: Main Subsidiaries
MAIN SUBSIDIARIES
Slide 13: Gruma USA
GRUMA USA
Slide 14: Gruma USA is the largest subsidiary and leading corn flour and tortilla producer
GRUMA USA IS THE LARGEST SUBSIDIARY, AND THE LEADING CORN FLOUR AND TORTILLA PRODUCER IN THE UNITED STATES Net Sales 2020: US$2.5 billion GRUMA USA Fife, WA New Brighton, MN McMinnville, OR Mountain Top, PA Hayward, CA Omaha, NE Evansville, IN Tortilla Corn Flour Madera, CA Fresno, CA Pueblo, CO Ope
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/T
Slide 16: Sales volume growth lower due to SKU rationalization, improving profitability
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 Volume Net Sales and EBITDA (thousand metric tons) (millions of dollars) CAGR: CAGR Net Sales: CAGR EBITDA: ’17 – ’20: 3% ’17 – ’20: 6%
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 new plants and capacity expansions • Benefits from information technology projects 17
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 2020: US$1.2 billion1 Obregón • 18 plants, with total annual capacity of 2.4 million Río Bravo 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 AND SUPPORT FOR GRUMA USA Potential Corn Flour Market in Mexico 7.3 Million Metric Tons of Corn Flour1 US$4.2 billion2 Corn Flour Market in Mexico 2.5 Million Metric Tons of Corn F
Slide 21: GIMSA's sales growth reflects commercial initiatives
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: ’17 – ’20: 1% ’17 – ’20: 6% ’17 – ’20: 6% 23,168 21,585 2,064 2,099 19,601 20,508
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 2020: US$279 million1 GRUMA Europe Tortilla Operations Corn Milling Operations 70 % 30 % • 5 Plants in Europe • 3 Mills in Europe • England (2) • Italy • Russia (2) • Ukraine • Spain (2) • 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, gyros) • Wraps, burritos, tacos, quesadillas, nachos, etc. becoming mainstream foods • Popularity of Mexican food – The number of Mexican food r
Slide 26: Growth in retail tortilla business improved 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: ’17 – ’20: 3% ’17 – ’20: 1% ’17 – ’20: 24% 395
Slide 27: Improved profitability for Gruma Europe will result from
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 of around US$200 million • In Mexico, packaged tortilla business represents a huge potential market, where GRUMA has grown from US$
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 Adolfo Fritz +52 (81) 8399 3312 +52 (81) 8399 3324 rsanchezm@gruma.com afritz@gruma.com Investor Relations +52 (81) 8399 3349 ir@gruma.com www.gruma.com
GRUMA, S.A.B. de C.V. — Investor Presentation (October 2021) on 6ix