Sigma Foods, S.a.b. De C.v. · BMV:SIGMAF/A
Sigma Foods, S.a.b. De C.v — ALFA, S.A.B. de C.V. — Q4 2023 Earnings Presentation
26 slides from Sigma Foods, S.a.b. De C.v's earnings presentation, February 2024
Slide 1: 4Q23 Earnings Presentation
4Q23 Earnings Presentation February 2024 Confidential
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking information based on numerous variables and assumptions that are inherently uncertain. They involve judgments with respect to, among other things, future economic, competitive and financial market conditions and future business decisions, all of
Slide 3: Important note on changes to ALFA's Consolidated Financial Statements
Important note on changes to ALFA’s Consolidated Financial Statements ALFA’s shareholders approved to spin-off ALFA’s share ownership of Axtel into a new, listed entity called “Controladora Axtel” on July 12, 2022. The shares of “Controladora Axtel” were distributed to ALFA shareholders and began tr
Slide 4: 4Q23 / 2023 Highlights
4Q23 / 2023 Highlights • ALFA positioned for final phase of its transformation process • Completed Axtel spin-off and supported Subsidiaries in developing greater self-sufficiency • Reduced Dividends and suspended Share Buybacks in 2023 • Effective liability management to gain flexibility for requir
Slide 5: 2023 Revenues down 9% year-on-year as the decline in Alpek was partially offset by growth in Sigma
2023 Revenues down 9% year-on-year as the decline in Alpek was partially offset by growth in Sigma Revenues* Revenues* 2023 vs 2022 (US $ Million) (US $ Million) 18,085 -9% 16,388 2022 2023 Confidential *Axtel reported as discontinued operations 5
Slide 6: 4Q23 Revenues were down 13% year-on-year attributed mainly to lower Volume and prices in Alpek
4Q23 Revenues were down 13% year-on-year attributed mainly to lower Volume and prices in Alpek ALFA & Subs* Revenues Revenues 4Q23 vs 4Q22 Revenues 4Q23 vs 3Q23 (US $ Million) (US $ Million) (US $ Million) 4,452 4,221 4,198 4,085 3,885 4Q22 1Q23 2Q23 3Q23 4Q23 *Axtel reported as discontinued operati
Slide 7: 2023 Reported and Comparable EBITDA down 33% and 20% year-on-year
2023 Reported and Comparable EBITDA down 33% and 20% year-on-year, respectively, attributed to Alpek ALFA & Subs* Reported EBITDA Extraordinary Items Comparable EBITDA (US $ Million) (US $ Million) (US $ Million) 2023 vs 2022: -33% 2023 vs 2022 : -20% 2022 2023 ALPEK 60 (221)1 SIGMA - (12) TOTAL 60
Slide 8: 4Q23 EBITDA includes a negative impact of US $114 million from extraordinary items at Alpek
4Q23 EBITDA includes a negative impact of US $114 million from extraordinary items at Alpek; Comparable EBITDA down 8% year-on-year ALFA & Subs* Reported EBITDA Extraordinary Items Comparable EBITDA (US $ Million) (US $ Million) (US $ Million) EBITDA Margin 4Q23 vs 4Q22: -19% 4Q23 vs 4Q22: -8% 4Q23
Slide 9: Impairment charges 2023
Impairment charges 2023 Key operational initiatives Impairment charges from operational initiatives • Alpek • Alpek: US $633 million 1 2 3 US $756 M • Pause in construction of the integrated PTA-PET site in 1 Corpus Christi, U.S. • Sigma: US $123 million 4 2• Shutdown of PET plant in Cooper River, U
Slide 10: Net Debt/EBITDA of 3.5x at the close of 4Q23
Net Debt/EBITDA of 3.5x at the close of 4Q23; leverage impacted by lower EBITDA in Alpek ALFA & Subs* ALFA Net Debt Net Leverage Ratio Cash (US $ Million) (Net Debt/EBITDA) (US $ Million) 3.5 3.4 1,188 5,049 4,994 3.3 1,155 1,163 1,167 4,751 4,866 4,919 1,055 2.7 2.3 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q
Slide 11: ALFA's Net Debt increased 4% year-on-year
ALFA’s Net Debt increased 4% year-on-year, as a 14% increase in Sigma was offset by a 7% decrease in Alpek. Substantial NWC recovery driven by Alpek ALFA Consolidated Change in Net Debt Change in Net Debt 4Q22 vs 4Q23 (US $ Million) (US $ Million) +4% 2023 EBITDA 1,391 Net Working Capital (NWC) 458
Slide 12: Sustained corporate expense reduction since 2019
Sustained corporate expense reduction since 2019 Consolidated ALFA EBITDA minus Operating subsidiaries1 (US $ Million) 2019 2020 2021 2022* 2023* -14 -25 -42 -60 -71 -42% -80% 1 - Operating subsidiaries: Alpek, Sigma, Axtel and Newpek 12 Confidential *Axtel reported as discontinued operations in 202
Slide 13: Foreign ownership was 51.3% of total ALFA shares at the close of 4Q23
Foreign ownership was 51.3% of total ALFA shares at the close of 4Q23 ALFA Foreign Ownership (Millions of shares) 4,819 Total ALFA Shares 4Q23 Maximum Nafinsa Trust Threshold (75%) 2,538 2,499 2,472 2,490 2,470 52.7% 51.9% 51.3% 51.7% 51.3% 4Q22 1Q23 2Q23 3Q23 4Q23 Confidential 13
Slide 14: 4Q23 / 2023 Highlights (Sigma)
4Q23 / 2023 Highlights • Sigma Consolidated • Eleventh consecutive quarter of year-on-year Revenue growth • 4Q23 EBITDA up 37% year-on-year, boosted by Mexico and Europe • All-time high annual consolidated Volume, Revenues and EBITDA • Lowest annual Net Leverage ratio in 8 years (2.3x) • Sigma by Re
Slide 15: All-time high 2023 Revenues, up 15% year-on-year
All-time high 2023 Revenues, up 15% year-on-year Revenues Revenues 2023 vs 2022 (US $ Million) (US $ Million) 8,505 +15% 7,425 2022 2023 Confidential 15
Slide 16: Record fourth quarter Revenues, up 10% year-on-year
Record fourth quarter Revenues, up 10% year-on-year, supported by record fourth quarter Volume Revenues Revenues 4Q23 vs 4Q22 Revenues 4Q23 vs 3Q23 (US $ Million) (US $ Million) (US $ Million) 2,209 2,161 2,143 1,964 1,991 4Q22 1Q23 2Q23 3Q23 4Q23 Confidential 16
Slide 17: 2023 EBITDA was up 37% year-on-year, driven by growth in the Americas
2023 EBITDA was up 37% year-on-year, driven by growth in the Americas EBITDA EBITDA 2023 vs 2022 (US $ Million) (US $ Million) 893 +37% 652 2022 2023 Confidential 17
Slide 18: 4Q23 EBITDA up 37% year-on-year, driven by Mexico and Europe
4Q23 EBITDA up 37% year-on-year, driven by Mexico and Europe EBITDA EBITDA 4Q23 vs 4Q22 EBITDA 4Q23 vs 3Q23 (US $ Million) (US $ Million) (US $ Million) 255 229 217 192 167 4Q22 1Q23 2Q23 3Q23 4Q23 Confidential 18
Slide 19: 2023 EBITDA margin recovery reflects strong currency exchange rates
2023 EBITDA margin recovery reflects strong currency exchange rates and favorable raw material cost trends in the Americas EBITDA Margin (%) EBITDA Margin By Region (%) 2022 2023 15.5% 10.5% 12.4% 8.8% 11.6% 10.5% 8.9%8.7% 2.1% 1.6% 2022 2023 Mexico Europe U.S. Latam Confidential 19
Slide 20: Higher year-on-year Consolidated EBITDA Margin for all quarters during 2023
Higher year-on-year Consolidated EBITDA Margin for all quarters during 2023. Encouraging recovery in Europe EBITDA Margin (%) EBITDA Margin By Region (%) 20.0 18.0 16.0 14.0 14.5 11.4 11.5 10.6 12.0 9.9 9.6 10.1 9.4 9.2 8.5 10.0 8.1 8.0 9.1 6.0 4.5 4.0 2.0 0.0 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23
Slide 21: Net leverage ratio of 2.3 times at the close of 2023
Net leverage ratio of 2.3 times at the close of 2023; lowest level in eight years Net Debt Net Leverage Ratio Cash (US $ Million) (Net Debt/EBITDA) (US $ Million) 2,012 2,045 2,025 2.8 1,840 2.7 2.7 1,782 2.5 683 2.3 628 610 626 552 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q
Slide 22: Net Debt increased during 2023 mainly due to higher Capex
Net Debt increased during 2023 mainly due to higher Capex, as well as the impact of a strong Mexican peso on Taxes and currency forward contracts Change in Net Debt 2023 vs 2022 (US $ Million) • Net Debt increased by US $242 million when compared to 4Q22 • ~66% of 2023 Capex was maintenance-related
Slide 23: Pork Ham Price in U.S. and Europe
Pork Ham Price in U.S. and Europe Pork Ham Price in U.S. Pork Ham Price in Europe US $/lb €/kg 2021 2021 2022 2022 2023 4.0 2023 1.2 3.5 1.0 3.0 0.8 2.5 2.0 0.6 1.5 0.4 1.0 0.2 0.5 0.0 0.0 Feb. Apr. Jun. Aug. Oct. Dec. Feb. Apr. Jun. Aug. Oct. Dec. Confidential 23
Slide 24: 4Q23 Recent Developments
4Q23 Recent Developments 2024 Euro bond refinancing • Sigma paid its Euro Senior Notes due 2024 (February 2024) • The total outstanding principal amount of €600 million was paid at maturity with funds from four bilateral, long term bank loans • This transaction strengthens Sigma’s financial position
Slide 25: Alpek's 4Q23 results impacted by persistent industry headwinds
Alpek’s 4Q23 results impacted by persistent industry headwinds 4Q23 Highlights Paraxylene (North America vs Asia) North America Asia • Actively engaged in initiatives to reduce costs and maximize cash (US$/Ton) 1,837 flow 1,505 1,462 • 4Q23 Revenue and Comparable EBITDA down 31% and 38% year- 1,301
Slide 26: Contact
Contact Hernán F. Lozano V.P. of Investor Relations T. +52 (81) 8748-2521 iralfa@alfa.com.mx Confidential