Sigma Foods, S.a.b. De C.v. · BMV:SIGMAF/A
Sigma Foods, S.a.b. De C.v — Sigma Alimentos — Q3 2023 Earnings Presentation
64 slides from Sigma Foods, S.a.b. De C.v's earnings presentation, October 2023
Slide 1: Corporate Presentation 3Q23
Corporate Presentation 3Q23
Slide 2: Content
Content 01 Sigma at Glance 02 Into the Future 03 Financial Performance 04 ESG Public Information
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 51% of Alfa Revenues ¹ 59% of Alfa EBITDA ¹ Food Products 11 Portfolio brands sell more than US $100 Million a year, each (1) YTD in USD; ALFA and Subsidiaries
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 680K+ points of sales • Balanced Culture: result
Slide 5: Multinational Presence, Local Favorites
Multinational Presence, Local Favorites 17 100+ 680K+ 1.7M US $8.3B 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 28% Mexico 47% Cooked & Fresh Meats 56% Dairy 24% LatAm 7% Revenues LTM US $8.3B EBITDA LTM US $831M *Revenues LTM distribution by region and Category Dry Meats 14% Other 6%
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 $100M. * Yoplait is licensed by third party
Slide 8: Leading brands across categories and consumer segments
Leading brands across categories and consumer segments Our broad portfolio helps us capture demand and top line growth across different market segments Cheese, Creams Packaged Meats Fresh Meat Yogurt Others & Spreads Premium High * Middle Value Low-cost 12% of our revenues come from licensed brands*
Slide 9: Multiple channels to reach consumers
Multiple channels to reach consumers Modern Traditional Foodservice E-commerce
Slide 10: A unique story of transformation: Growth + Profitability
A unique story of transformation: Growth + Profitability Net sales breakdown Net Sales Countries Facilities Employees By geography By category (US$ 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 64 Manufacturing Facilities 179 Distribution Centers 680K+ Points of Sale 24 20 8 12 119 13 16 31 Mexico 375K+ Europe 53k+ USA 164K+ LATAM 95K+ 6,000+ 990+ 100+ 880+
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 63% 16% 8% 13% 60+ 46,000+ Nationalities Employees 59% 41%
Slide 14: M&A Track Record
M&A Track Record • 31 successful M&A transactions since 1997. • Experienced, dedicated team with strong track record. 2014 • Significant value creation through synergies and post- merger integration process. 2012 • Financial discipline and accelerated 2013 2009 deleveraging capacity. 2010 2007 2008
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 Public Information
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 Public Information
Slide 26: 3Q23 Highlights
3Q23 Highlights US $ Millions Record quarterly consolidated Volume and Revenues. Tenth consecutive quarter of year-on-year Revenue growth Revenue EBITDA Record quarterly EBITDA, up 68% year-on-year, boosted by double-digit growth in Sigma +18% +68% all regions 2,209 255 Sustained improvement o
Slide 27: Quarterly Volume
Quarterly Volume Volume Volume 3Q23 vs 3Q22 Volume 3Q23 vs 2Q23 (K Tons) (K Tons) (K Tons) +10% -11% +8% +2% +3% -1% +1% 3% 445 448 456 424 439 432 427 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 33
Slide 28: Quarterly Revenues
Quarterly Revenues Revenues Revenues 3Q23 vs 3Q22 Revenues 3Q23 vs 2Q23 (US $ Million) (US $ Million) (US $ Million) 2,143 2,209 +26% +9% +14% +9% +5% -1% +4% +1% 1,964 1,991 1,870 1,879 1,711 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 34
Slide 29: Quarterly EBITDA
Quarterly EBITDA EBITDA EBITDA 3Q23 vs 3Q22 EBITDA 3Q23 vs 2Q23 (US $ Million) (US $ Million) (US $ Million) +77% +52% +61% +16% +13% -224% -16% +5% 255 * 217 192 172 167 161 151 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 35 *Includes the non-recurring expense of a major restructure in the region (US $12 M)
Slide 30: Quarterly EBITDA Margins
Quarterly EBTIDA Margins EBITDA Margins (%) EBITDA Margins (%) 17.4 16.2 13.6 13.6 13.0 13.2 12.7 12.4 11.2 11.0 10.5 12.0 9.5 11.2 11.5 7.8 9.6 10.1 9.3 8.8 9.4 9.2 8.7 8.5 8.0 8.2 8.1 8.5 2.3 2.2 2.0 2.5 1.6 0.2* 1.6 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Mexico Euro
Slide 31: Change in Net Debt
Change in Net Debt Change in Net Debt 3Q23 vs 2Q23 (US $ Million) 2Q23 EBITDA NWC CAPEX Net Financial Taxes Dividends Other 3Q23 Expenses Sources 37
Slide 32: Change in Net Debt
Change in Net Debt Change in Net Debt 3Q23 vs 3Q22 (US $ Million) * 3Q22 EBITDA NWC CAPEX Net Financial Taxes Dividends Other 3Q23 Expenses Sources 38 * Sigma made the decision to voluntarily abandon the optional tax regime; payment of the income tax was made during 2Q23 for the year 2022.
Slide 33: Capital Expenditures (Capex)
Capital Expenditures (Capex) Capex México Mexico Europa Europe 67% 63% 68% 75% 70% 76% 82% 86% 78% 89% 69% 33% 37% 32% 25% 30% 18% 14% 22% 24% 11% 75% 72% 72% 78% 2019 2020 2021 2022 9M23 2019 2020 2021 2022 9M23 EE.UU. U.S. Latam Latam 31% 22% 25% 28% 28% 49% 54% 89% 78% 85% 85% 67% 83% 84% 100% 20
Slide 34: Financial Results
Financial Results US $ Million Volume Revenue EBITDA (K Tons) (US $ Million) (US $ Million) 831 8,307 160 1,763 741 1,720 1,754 1,701 7,425 703 684 652 1,678 1,756 1,705 1,740 663 676 684 1,668 6,463 6,817 639 716 1,445 6,336 5,901 6,054 6,347 525 1,304 5,698 470 5,359 1,142 1,105 3,820 395 897 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% 7% 2% Meat and Dairy Raw Materials 5% Dry Ingredients 8% Direct Labor 21% Selling Trade Products Administrative 8% 57% Packaging General Energy (Fuel, electr
Slide 36: Leverage Ratios
Leverage Ratios Net Debt Net Debt / EBITDA** Gross Debt / EBITDA** 1,936 1,859 1,994 2,045 3.8x 3.8x 3.8x 1,756 1,691 1,782 3.6x 3.6x 3.4x 2.9x 2.7x 2.8x 3.1x 2.6x 2.7x 2.5x 2.3x 2017 2018 2019 2020 2021 2022 3Q23 2017 2018 2019 2020 2021 2022 3Q23 2017 2018 2019 2020 2021 2022 3Q23 S&P Ratings´ met
Slide 37: Debt Profile
Debt Profile Average life: 2.4 years Average rate: 5.74 % (including CCS) Debt Maturity Schedule (US $Million) Debt Mix Cash Mix (Including CCS) 10% 480 26% 19% 37% 552 44% 635 520 * 500 30% 34% 199 75 1 1 1 1 Cash 2023 2024 2025 2026 2027 2028 MXN USD EUR OTHER *US $520 million MXN-USD Cross Curren
Slide 38: Outstanding Bonds
Outstanding Bonds 120 110 100 90 2024 80 70 2026 60 2028 50 40 Aug/21 Aug/22 Aug/23 Oct/21 Mar/22 Mar/23 Apr/21 Jul/21 Apr/22 Jul/22 Oct/22 Apr/23 Jul/23 Jun/21 Jun/22 Jun/23 Dec/21 Dec/22 Sep/21 Jan/22 Sep/22 Jan/23 Feb/22 Feb/23 Sep/23 Nov/21 Nov/22 May/21 May/22 May/23 Amount Bond Rate YTM Maturi
Slide 39: Dividends
Dividends Paid Dividends (US $ Million) 155 150 151 152 Amount Quarter 120 (US $ Million) 1Q23 0 75 2Q23 75 3Q23 0 17 18 19 20 21 22 23 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) III Quarter 23 III Quarter 22 III Quarter 23 III Quarter 22 Revenue 37,675,657 38,025,114 2,208,903 1,878,911 Cost of sales (26,071,510) (28,642,644) (1,528,628) (1,415,354) Gross profit 11,604,147 9,382,470 680,275 463,557 Selling ex
Slide 41: Balance Sheet
Balance Sheet (Thousands of pesos) (Thousands of U.S. Dollars) LIABILITIES AND STOCKHOLDERS' EQUITY Sep '23 Sep '22 Sep '23 (1) Sep '22 (2) CURRENT LIABILITIES: Current debt 11,190,120 0 635,099 0 ASSETS Accrued interest payable 579,600 611,777 32,895 30,128 CURRENT ASSETS: Financial Leases 392,943
Slide 42: Cash Flow
Cash Flow (Thousands of pesos) (Thousands of U.S. Dollars) III Quarter 23 III Quarter 22 III Quarter 23 III Quarter 22 CASH FLOW FROM OPERATING ACTIVITIES Profit before income tax (38,636) 1,586,239 (3,303) 78,281 Depreciation and amortization 914,837 1,013,042 53,631 50,059 Impairment of fixed asse
Slide 43: Guidance
Guidance US $ Millions Revised 2Q23 Original 2023 Revenues $8,600 $8,100 EBITDA $880 $705 Capex* $240 $280 *These figures do not include recent acquisitions
Slide 44: 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 3.50 8 1.2 1 0.6 3.00 6 0.8 0.4 4 2.50 0.6 0.4 0.2 2.00 2 0.2 0 0 0 1.50 J F M A M J J A S O N D J F M A M J J A S O N D Pork Trimmings - 42% Turkey MST Turkey
Slide 45: Meat Raw Materials – Dairy
Meat Raw Materials – Dairy U.S. USD / Lb Milk Class III Block Cheddar 28 2.8 23 2.3 18 1.8 13 1.3 8 0.8 J F M A M J J A S O N D J F M A M J J A S O N D NFDM 2 - 2020 1.5 - 2021 1 - 2022 0.5 - 2023 J F M A M J J A S O N D Sources: U.S. - USDA; See Appendix A for additional information regarding U.S.
Slide 46: 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 47: 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 J3J A2A S O N D E F M A M J2 M2 J J A2 J3 A S O N D 2021 2020 2022 2023 2021 2020 2022 2023
Slide 48: Content
Content 01 Sigma at Glance 02 Into the Future 03 Financial Performance 04 ESG Public Information
Slide 49: Sigma's ESG journey
Sigma’s ESG journey 1st materiality Updated the analysis and GRI materiality Report analysis Aligned to the 2025 SBTi Targets Sustainability Approved Commitments <2015 2016 2018 2019 2020 2021 2022 2025 Company-wide Established the • Sustainability report Sustainability Strategy, Sustainability revi
Slide 50: 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 51: 2025 Sustainability Commitments
2025 Sustainability Commitments * Amid challenges brought about by COVID-19, additional hygiene measures have increased water consumption per ton produced, resulting in atypical water consumption levels **Suppliers that comply with criteria from both of the evaluations carried out. Source: Sigma - 2
Slide 52: Sustainability Actions
Sustainability ESG Actions United Nations Supply Chain Carbon Emission Aligned with the Global Compact Program Reduction Program United Nation SDGs SBTi Targets Approved Public Information
Slide 53: ESG Ratings
N WCDP oO SUSTAINALYTICS “a DISCLOSURE INSIGHT LZ 2022 A- B B Medium Industry Avg.
Slide 54: 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 55: 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 56: USA – USDA PM Ham, 23-27# Trmd Sel Ham
USA – USDA PM Ham, 23-27# Trmd Sel Ham https://mymarketnews.ams.usda.gov/filerepo/reports 1 5 Pop − up Type in 6 2 Ctrl + F, type in 23 − 27 3 7 4
Slide 57: USA – USDA Pork Trimmings - 42% Trim Combo, FOB Plant
USA – USDA Pork Trimmings - 42% Trim Combo, FOB Plant https://mymarketnews.ams.usda.gov/filerepo/reports 1 5 Pop − up Type in 6 2 Ctrl + F, type in 𝑇𝑟𝑖𝑚 𝐶𝑜𝑚𝑏𝑜 3 7 4
Slide 58: USA – USDA Chicken - MSC, 15-20% Fat, Fresh
USA – USDA Chicken - MSC, 15-20% Fat, Fresh https://mymarketnews.ams.usda.gov/filerepo/reports 1 5 Pop − up Type in Type in 6 2 Ctrl + F, type in MSC, 15 3 7 4
Slide 59: USA – USDA Turkey - MST, Some skin, under 20% fat, Fresh
USA – USDA Turkey - MST, Some skin, under 20% fat, Fresh https://mymarketnews.ams.usda.gov/filerepo/reports 1 5 Pop − up Typeinin Type 6 2 Ctrl + F, type in 15 − 20 3 7 4
Slide 60: USA – USDA Turkey - Breast, Young Tom, Boneless & Skinless
USA – USDA Turkey - Breast, Young Tom, Boneless & Skinless, Fresh https://mymarketnews.ams.usda.gov/filerepo/reports 1 5 Pop − up Typeinin Type 6 2 Ctrl + F, type in 𝐵𝑜𝑛𝑒𝑙𝑒𝑠𝑠 3 7 4
Slide 61: USA – USDA Turkey - Thigh Meat, Boneless & Skinless
USA – USDA Turkey - Thigh Meat, Boneless & Skinless, Fresh https://mymarketnews.ams.usda.gov/filerepo/reports 1 5 Pop − up Typeinin Type 6 2 Ctrl + F, type in 𝐵𝑜𝑛𝑒𝑙𝑒𝑠𝑠 3 7 4
Slide 62: USA – USDA Dairy - CME, Milk Class III
USA – USDA Dairy - CME, Milk Class III https://mpr.datamart.ams.usda.gov/ 1 Pop − up 7 2 3 4 8 6 5
Slide 63: USA – USDA Dairy - Block Cheddar Cheese 40lb
USA – USDA Dairy - Block Cheddar Cheese 40lb https://mpr.datamart.ams.usda.gov/ 1 Pop − up 7 2 3 8 4 6 5
Slide 64: www.sigma-alimentos.com
Public Information www.sigma-alimentos.com Contact: investorrelations@sigma-alimentos.com