68 slides from Sigma Foods, S.a.b. De C.v's earnings presentation, 2023
Slide 1: Corporate Presentation 4Q22
Corporate Presentation 4Q22
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 44% of Alfa Revenues ¹ 48% 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 and Telecom services (1)
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 670K+ points of sales • Balanced Culture: result
Slide 5: Multinational Presence, Local Favorites
Multinational Presence, Local Favorites 18 100+ 670K+ 1.7M US $7.4B 23y Countries Brands Points of Sale Tons of Food / Year Net Sales LTM 4Q22 Average Mgmt. Team Experience Bringing communities everywhere, favorite foods to love.
Slide 6: Revenues and EBITDA LTM 4Q22 by region and category
U.S. 19% Europe 29% Mexico 45% Cooked & Fresh Meats 57% Dairy 21% LatAm 7% Revenues LTM 4Q22 US $7.4B EBITDA LTM 4Q22 US $652M *Revenues LTM distribution by region and Category Dry Meats 15% 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 $100M. * Yoplait is licensed by third party
Slide 8: Leading brands across categories and consumer segments
Leading brands across categories and consumer segments Our broad portfolio helps us capture demand and top line growth across different market segments Cheese, Creams Packaged Meats Fresh Meat Yogurt Others & Spreads Premium High * Middle Value Low-cost 10% of our revenues come from licensed brands*
Slide 9: Multiple channels to reach consumers
Multiple channels to reach consumers Modern Traditional Foodservice E-commerce
Slide 10: A unique story of transformation: Growth + Profitability
A unique story of transformation: Growth + Profitability Net sales breakdown Net Sales Countries Facilities Employees By geography By category (US$ 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 183b Distribution Centers 670K+ Points of Sale 25a 22a 6 11a Mexico 112b Europe 18 USA 17b LATAM 36b 350K+ 62k+ 164K+ 98K+ 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 208,000+ Contacts / year Proprietary Mathematical Models Iterative innovation process based on Design Thinking 1,700+ 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+ 44,000+ Nationalities Employees 60% 40%
Slide 14: M&A Track Record
M&A Track Record • 30 successful M&A transactions since 1997. 2019 • Experienced, dedicated team with strong track 2016 record. 2014 2017 2015 2012 • Significant value creation through synergies and 2013 post-merger integration process. 2009 2010 2007 • Financial discipline and accelerated deleverag
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* Latin America Business Director - Stripe Diego Calderón Proprietary Independent María Eugenia Casar* Former Assistant Executive Director - The World Food Program, UN 23% Juan Enriquez* Chairman and CEO - Biotechonomy, LLC Álvaro Fernán
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 • 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 proposition
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: 4Q22 Highlights
4Q22 Highlights US $ Millions Record quarterly and annual Revenue driven by double-digit growth in Revenue EBITDA Mexico, the U.S. and Latam Sigma 4Q22 EBITDA down 17% year-on-year primarily impacted by lower results +11% -17% in European operations 1,964 201 Quarterly Revenue up 21% year-on-y
Slide 27: Financial Results
Financial Results US $ million Revenue EBITDA Revenue EBITDA +11% -17% +9% -12% 201 741 1,964 7,425 1,768 7% 6,817 6% 652 7% 7% 16% 167 7% 18% 7% 7% 17% 19% 8% 17% 18% 22% 26% 23% 20% 29% 7% 8% 29% 33% 34% 51% 61% 56% 63% 46% 45% 42% 41% 4Q21 4Q22 4Q21 4Q22 2021 2022 2021 2022 EBITDA Margin 11.4% 8.
Slide 28: Quarterly Volume
34 Quarterly Volume Volume Volume 4Q22 vs 4Q21 Volume 4Q22 vs 3Q22 (K Tons) (K Tons) (K Tons) +3% -9% +6% 0% +1% -4% -5% +2% 445 423 432 424 439 432 Explained by operational adjustments in Fresh Meats as a response to market conditions 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22
Slide 29: Quarterly Revenues
35 Quarterly Revenues Revenues Revenues 4Q22 vs 4Q21 Revenues 4Q22 vs 3Q22 (US $ Million) (US $ Million) (US $ Million) +21% -3% +13% +14% +7% +5% -3% +7% 1,870 1,879 1,964 1,729 1,768 1,711 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22
Slide 30: Quarterly EBITDA
36 Quarterly EBITDA EBITDA EBITDA 4Q22 vs 4Q21 EBITDA 4Q22 vs 3Q22 (US $ Million) (US $ Million) (US $ Million) -1% -73% +17% +1% -3% +61% +39% +25% 201 176 172 161 167 151 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22
Slide 31: Quarterly EBITDA Margins
37 Quarterly EBTIDA Margins EBITDA Margins (%) EBITDA Margins (%) 14.6 15.0 15.2 13.7 13.2 13.1 13.0 12.4 11.0 11.0 12.7 11.2 10.8 10.5 9.1 9.5 10.5 9.5 11.2 11.4 9.0 10.7 10.2 8.0 8.5 8.7 9.3 9.4 9.2 8.5 6.6 7.8 8.1 5.4 4.9 2.0 2.3 2.5 1.6 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q21 2Q21 3Q21 4Q21
Slide 32: Change in Net Debt
38 Change in Net Debt Change in Net Debt 4Q22 vs 3Q22 (US $ Million) 3Q22 EBITDA NWC CAPEX Net Financial Taxes Dividends Other 4Q22 Expenses Sources
Slide 33: Change in Net Debt
39 Change in Net Debt Change in Net Debt 4Q22 vs 4Q21 (US $ Million) 4Q21 EBITDA NWC CAPEX Net Financial Taxes Dividends Other 4Q22 Expenses Sources
Slide 34: Capital Expenditures (Capex)
40 Capital Expenditures (Capex) Capex Mexico Europe 67% 63% 68% 75% 82% 76% 86% 78% 33% 37% 32% 25% 18% 22% 24% 14% 72% 78% 75% 72% 2019 2020 2021 2022 2019 2020 2021 2022 U.S. Latam 22% 25% 28% 28% 54% 89% 78% 85% 85% 67% 83% 100% 2019 2020 2021 2022 46% 33% 11% 22% 15% 15% 17% Strategic Maintenanc
Slide 35: Financial Results
Financial Results US $ Million Volume Revenue EBITDA (K Tons) (US $ Million) (US $ Million) 7,425 160 741 1,720 1,754 1,701 6,463 6,817 703 684 652 1,678 1,756 1,705 1,740 6,336 6,347 663 676 684 1,668 5,901 6,054 639 716 5,698 1,445 5,359 525 1,304 470 1,142 3,820 1,105 3,443 395 897 3,308 308 2,61
Slide 36: Annual Volume
43 Annual Volume Volume Volume 2022 vs 2021 (K Tons) (K Tons) 1,754 1740 +5% -4% +4% +5% 1704 1701 Explained by operational adjustments in Fresh Meats as a response to market conditions 2019 2020 2021 2022
Slide 37: Annual Revenues
44 Annual Revenues Revenues Revenues 2022 vs 2021 (US $ Million) (US $ Million) +18% -6% +15% +15% 7425 6,463 6817 6347 2019 2020 2021 2022
Slide 38: Annual EBITDA
45 Annual EBITDA EBITDA EBITDA 2022 vs 2021 (US $ Million) (US $ Million) 0% -70% ++12% +2% 703 741 684 652 2019 2020 2021 2022
Slide 39: 2022 Cost and Expense Structure
2022 Cost and Expense Structure 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% Direct Labor Selling 8% Trade Products Administrative 58% Packaging General 12% Energy (Fuel, e
Slide 40: Leverage Ratios
Leverage Ratios Net Debt Net Debt / EBITDA** Gross Debt / EBITDA** 1,936 1,859 1,994 2.9x 2.8x 2.7x 3.8x 3.8x 3.8x 1,756 1,691 1,782 2.7x 2.6x 3.6x 3.6x 3.4x 2.3x 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 * S&P Ratings´ methodology sets a cap at the pa
Slide 41: Debt Profile
Debt Profile Average life: 3.1 years Average rate: 4.86 % (including CCS) Debt Maturity Schedule (US $Million) Debt Mix Cash Mix 1,000 (Including CCS) *220 8% 683 28% 28% 640 55% 500 64% 17% 181 Cash 2022 2023 2024 2025 2026 2027 2028 MXN USD EUR OTHER *US $220 million MXN-USD Cross Currency Swap (C
Slide 42: Outstanding Bonds
Outstanding Bonds 120 115 110 105 2024 100 95 2026 90 2028 85 80 Amount Bond Rate YTM Maturity Date (US $ M) 2024 €640 2.625% 4.918% Feb - 2024 BBB- * BBB Baa3 2026 $1,000 4.125% 5.755% May - 2026 Outlook: Outlook: Outlook: Positive Stable Stable 2028 $500 4.875% 5.923% Mar - 2028 *Credit Rating cap
Slide 43: Dividends
Dividends Paid Dividends (US $ Million) 155 150 151 152 Amount Quarter 120 (US $ Million) 1Q22 $76 2Q22 0 3Q22 0 4Q22 $75 17 18 19 20 21 22 In 2020 no dividends were paid. The graph shows the approved amounts for each year.
Slide 44: Income Statement
Income Statement (Thousands of pesos) (Thousands of U.S. Dollars) IV Quarter 22 IV Quarter 21 IV Quarter 22 IV Quarter 21 Revenue 38,674,499 36,682,109 1,964,030 1,767,652 Cost of sales (28,936,099) (26,594,411) (1,469,311) (1,281,694) Gross profit 9,738,400 10,087,698 494,719 485,958 Selling expens
Slide 45: Balance Sheet
Balance Sheet (Thousands of U.S. (Thousands of pesos) Dollars) (Thousands of pesos) (Thousands of U.S. Dollars) Dec '22 Dec '21 Dec '22 (1) Dec '21 (2) Dec '22 Dec '21 Dec '22 (1) Dec '21 (2) ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents 1
Slide 46: Cash Flow
(Thousands of (Thousands of U.S. pesos) Dollars) IV Quarter IV Quarter IV Quarter IV Quarter Cash Flow CASH FLOW FROM OPERATING ACTIVITIES 22 21 22 21 Profit before income tax 346,677 654,762 17,683 32,048 Depreciation and amortization 1,009,775 1,192,713 51,281 57,492 Impairment of fixed assets and
Slide 47: 2023 Guidance
2023 Guidance US $ Million Revenues $8,100 EBITDA $705 Capex $280 • Confidential
Slide 48: 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 49: 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 Breast Pork Ham 1.5 0.8 8 3.30 0.6 6 2.80 1 0.4 4 0.5 2.30 0.2 2 0 0 0 1.80 J A J O J A J O J A J O J J A J O J A J O J A J O J J A J O J A J O J A J O J J A J O J A J O J A J
Slide 50: Meat Raw Materials – Dairy
Meat Raw Materials – Dairy U.S. USD / Lb Milk Class III Block Cheddar Cheese 3 30 20 2 10 1 0 0 J A J O J A J O J A J O J J A J O J A J O J A J O J NFDM 2 1.5 - 2020 1 - 2021 0.5 - 2022 0 J A J O J A J O J A J O Sources: U.S. - USDA; See Appendix A for additional information regarding U.S. raw mater
Slide 51: 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 52: 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 J F M A M2 M J2 J J3 J A2 A S O N D 2021 2020 2022 2021 2020 2022
Slide 53: Content
Content 01 Sigma at Glance 02 Into the Future 03 Financial Performance 04 ESG
Slide 54: Sigma´s ESG journey
⁻ Signed the SBT Commitment Letter ⁻ Well-Below 2°C objectives in validation process Sigma´s ESG journey 2022 2025 ⁻ Initiative to increase ESG communication ⁻ ESG Ratings improvement roadmap 2021 ⁻ Sustainability report reviewed by GRI Joined: ⁻ United Nations Global Compact ⁻ CDP Supply Chain Prog
Slide 55: 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 56: Sustainability Community
Sustainability Community 260+ employees involved Chief Research, Innovation, and Central Sustainability Team ESG Champions Business Units Sustainability Officer • Lead and authorize Strategic • Develop the Sustainability Strategy. • Topic-specific experts for each • Execute ESG roadmaps locally guid
Slide 57: 2025 Sustainability Commitments
2025 Sustainability Commitments Sources: Sigma - 2021 Sutainability Report
Slide 58: Sustainability Actions
Sustainability ESG Actions United Nations Responsible Sourcing Supply Chain Carbon Emission Aligned with the Signed commitment Improved to “Medium Global Compact Assessment Program Program Reduction Program United Nation SDGs letter and submitted Risk” from “High Risk” target proposal Confidential P
Slide 59: 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 60: 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 61: 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 62: USA – USDA Chicken - MSC, 15-20% Fat, Fresh
USA – USDA Chicken - MSC, 15-20% Fat, Fresh
Slide 63: 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 64: USA – USDA Turkey - Breast, Young Tom, Boneless & Skinless, Fresh
USA – USDA Turkey - Breast, Young Tom, Boneless & Skinless, Fresh 2 3 4 1
Slide 65: USA – USDA Turkey - Thigh Meat, Boneless & Skinless, Fresh
USA – USDA Turkey - Thigh Meat, Boneless & Skinless, Fresh 2 3 1 4
Slide 66: USA – USDA Dairy - CME, Milk Class III
USA – USDA Dairy - CME, Milk Class III 2 1
Slide 67: USA – USDA Dairy - Block Cheddar Cheese 40lb
USA – USDA Dairy - Block Cheddar Cheese 40lb 1 2
Slide 68: www.sigma-alimentos.com
www.sigma-alimentos.com CORPORATE PRESENTATION Contact: investorrelations@sigma-alimentos.com