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 2021 Earnings Presentation
30 slides from Sigma Foods, S.a.b. De C.v's earnings presentation, Feb 15, 2022
Slide 1: 4Q21 Earnings Presentation
4Q21 Earnings Presentation February 15, 2022 Restricted Internal Use
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 (Page 1 of 2)
Important note on changes to ALFA’s Consolidated Financial Statements (Page 1 of 2) On August 17, 2020, ALFA’s shareholders approved to spin-off ALFA’s share ownership of Nemak into a new, listed entity: Controladora Nemak, S.A.B. de C.V. (“Controladora Nemak”). The shares of “Controladora Nemak” we
Slide 4: Important note on changes to ALFA's Consolidated Financial Statements (Page 2 of 2)
Important note on changes to ALFA’s Consolidated Financial Statements (Page 2 of 2) • The Consolidated Statement of Income presents Nemak´s net revenues and expenses as a single line item “Profit (loss) from discontinued operations” as follows: • 3Q20 accumulated figures for the three months ended S
Slide 5: 4Q21 Highlights
4Q21 Highlights • Record annual revenue of US $15.2 billion • Second highest annual EBITDA of US $2.0 billion • Revenue and EBITDA exceeded upwardly revised Guidance • Consistent progress on 3 key directives of ALFA’s Unlocking Value strategy: 1. Reducing Leverage: lowest leverage ratio since 2018 2
Slide 6: Sustained quarter-on-quarter revenue growth during 2021
Sustained quarter-on-quarter revenue growth during 2021, driven mainly by higher average consolidated prices at Alpek ALFA & Subs with Nemak as Discontinued Operations Revenues Revenues 4Q21 vs 4Q20 Revenues 4Q21 vs 3Q21 (US $ Million) (US $ Million) (US $ Million) 3,976 4,086 3,731 3,388 3,218 4Q20
Slide 7: Annual revenues up 23% versus 2020
Annual revenues up 23% versus 2020, driven primarily by higher average prices at Alpek and Sigma ALFA & Subs with Nemak as Discontinued Operations Revenues Revenues 2021 vs 2020 (US $ Million) (US $ Million) 15,181 +23% 12,325 2020 2021 Axtel & Others 7 Restricted Internal Use
Slide 8: Record quarterly Comparable EBITDA of US $534 million in 4Q21
Record quarterly Comparable EBITDA of US $534 million in 4Q21 ALFA & Subs with Nemak as Discontinued Operations Reported EBITDA Extraordinary Items Comparable EBITDA1 (US $ Million) (US $ Million) (US $ Million) EBITDA Margin 4Q21 vs 4Q20: 21% EBITDA Margin 4Q21 vs 4Q20: 47% 4Q21 vs 3Q21: 4% 4Q20 1Q
Slide 9: Annual Reported and Comparable EBITDA up 32% and 30%
Annual Reported and Comparable EBITDA up 32% and 30% year-on-year, respectively ALFA & Subs with Nemak as Discontinued Operations Reported EBITDA Extraordinary Items Comparable EBITDA1 (US $ Million) (US $ Million) (US $ Million) 2021 vs 2020: 32% 2021 vs 2020 : 30% 2020 2021 ALPEK Carry Fwd. (43) 1
Slide 10: Quarterly Reported and Comparable EBITDA with Nemak as Discontinued Operations
Quarterly Reported and Comparable EBITDA with Nemak as Discontinued Operations (US $ Million) Reported EBITDA 707 535 496 505 482 438 486 421 409 415 419 344 263 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 Comparable EBITDA 1 534 439 451 414 449 440 392 372 362 365 364 344 334 4
Slide 11: Selected non-recurring items 4Q21
Selected non-recurring items 4Q21 Income Statement - Selected Items Selected Non-Recurring Items (4Q21) (US $ Million) 1• Asset impairments: US $153 million 4Q21 • US $70 million – ramp down of Alpek´s Caprolactam operations in Mexico and Staple Total Revenues 4,086 Fiber operations in the U.S., and
Slide 12: Consistent improvement in Consolidated Net Leverage Ratio
Consistent improvement in Consolidated Net Leverage Ratio; reaching lowest level since 2018 ALFA & Subs with Nemak as Discontinued Operations ALFA Net Debt Net Leverage Ratio1 Cash (US $ Million) (Net Debt/EBITDA) (US $ Million) 1,628 1,478 1,507 4,864 4,811 4,875 3.1 1,396 4,699 4,677 2.9 1,345 2.6
Slide 13: ALFA's Consolidated Net Debt decreased US $22 million versus year-end 2020
ALFA’s Consolidated Net Debt decreased US $22 million versus year-end 2020 Change in Net Debt Change in Net Debt 2021 vs 2020 (US $ Million) (US $ Million) 2021 EBITDA 2,022 Net Working Capital (479) Capital Expenditures & Acquisitions (527) Net Financial Expenses (379) Taxes (282) Dividends (248) O
Slide 14: Earnings Presentation
Earnings Presentation Restricted Internal Use
Slide 15: 4Q21 Sigma Highlights
4Q21 Sigma Highlights • Record consolidated annual revenues and EBITDA, slightly above Guidance • Further progress in European profitability enhancement initiatives • Lowest net leverage ratio since 2012 (excluding one-time gains in 2015) • Double-digit EBITDA growth in Mexico and Europe; 9% in Lata
Slide 16: Sigma revenue growth driven by higher volume and prices
Sustained quarter on quarter revenue growth driven by higher volume and prices Revenues Revenues 4Q21 vs 4Q20 Revenues 4Q21 vs 3Q21 (US $ Million) (US $ Million) (US $ Million) 1,707 1,729 1,768 1,662 1,613 4Q20 1Q21 2Q21 3Q21 4Q21 16 Restricted Internal Use
Slide 17: Record annual revenues, up 7% year-on-year
Record annual revenues, up 7% year-on-year Revenues Revenues 2021 vs 2020 (US $ Million) (US $ Million) +7% 6,817 6,347 2020 2021 17 Restricted Internal Use
Slide 18: EBITDA growth versus 4Q20 driven by Mexico, Europe and Latam
EBITDA growth versus 4Q20 driven by Mexico (+14%), Europe (+24%) and Latam (+9%) EBITDA EBITDA 4Q21 vs 4Q20 EBITDA 4Q21 vs 3Q21 (US $ Million) (US $ Million) (US $ Million) 201 178 181 182 176 4Q20 1Q21 2Q21 3Q21 4Q21 18 Restricted Internal Use
Slide 19: Record annual EBITDA, up 8% year-on-year
Record annual EBITDA, up 8% year-on-year EBITDA EBITDA 2021 vs 2020 (US $ Million) (US $ Million) +8% 741 684 2020 2021 19 Restricted Internal Use
Slide 20: EBITDA Margin expansion versus 4Q20 in Europe, USA and LatAm
EBITDA Margin expansion versus 4Q20 in Europe, USA and LatAm EBITDA Margin (%) EBITDA Margin By Region (%) 15.0 15.2 14.6 13.9 13.7 13.1 12.4 11.2 11.4 11.0 11.0 10.7 10.7 10.7 10.8 10.2 10.5 9.5 9.1 9.0 8.5 6.8 6.6 5.4 4.9 4Q20 1Q21 2Q21 3Q21 4Q21 4Q20 1Q21 2Q21 3Q21 4Q21 Mexico Europe USA LatAm 20
Slide 21: EBITDA Margin expansion in Mexico, Europe and LatAm offset by USA
EBITDA Margin expansion in Mexico, Europe and LatAm was offset by contraction in USA EBITDA Margin (%) EBITDA Margin By Region (%) 2020 2021 15.7% 14.6% 10.8% 10.9% 13.8% 10.8% 10.0% 9.2% 6.5% 5.6% 2020 2021 Mexico Europe USA LatAm 21 Restricted Internal Use
Slide 22: Consistent quarterly decrease in Consolidated Net Leverage Ratio
Consistent quarterly decrease in Consolidated Net Leverage Ratio; reached lowest since 2012 Net Debt Net Leverage Ratio Cash (US $ Million) (Net Debt/EBITDA) (US $ Million) 1,756 1,781 1,728 2.6 2.6 820 831 820 1,692 1,691 814 2.4 2.4 749 2.3 4Q20 1Q21 2Q21 3Q21 4Q21 4Q20 1Q21 2Q21 3Q21 4Q21 4Q20 1Q
Slide 23: US Pork Ham prices posted lower levels after July/August spike
US Pork Ham prices posted lower levels after a spike in July/August; prices in Europe sustained downward trend Pork Ham Price in Europe Pork Ham Price in U.S. €/kg 2019 US $/lb 2019 2020 2020 2021 2021 1.2 3.5 3.0 1.0 2.5 0.8 2.0 0.6 1.5 0.4 1.0 0.5 0.2 0.0 0.0 Feb. Apr. Jun. Aug. Oct. Dec. Feb. Apr
Slide 24: Recent Developments
Recent Developments Key Highlights Foodservice Revenues - Continued Recovery (Base 100) • Europe Turnaround • Agreement to sale 6 facilities in Belgium and the Netherlands • Announce the sale of 2 facilities in France • Global Plant-Based brand • Available in 200+ points of sale across Europe, Mexic
Slide 25: Record annual revenue and EBITDA driven by high reference margins
Record annual revenue and EBITDA driven by high reference margins and strong volume Highlights Paraxylene vs Brent Crude Oil Price NA Px Contract Brent US$/Ton US$/Bbl Crude Oil (Brent) Px 80 1,400 1,165 1,077 1,069 1,200 955 937 1,064 • 4Q21 net leverage ratio of 1.1 times; down from 2.1 times 60 8
Slide 26: OCTAL Acquisition
OCTAL Acquisition Highlights & Rationale Octal Footprint • Major provider of PET sheet globally • High-value PET sheet business segment with strong Cincinnati, USA • 33 KTA Recycling growth prospects Riyadh, Saudi Arabia • 11 KTA Packaging • PET sheet – 100% recyclable Salalah Free Zone, Oman • 400
Slide 27: OCTAL Acquisition: Valuation & Financial Highlights
OCTAL Acquisition Valuation & Financial Highlights Sample PET Applications • Purchase price: US $620 million • Accretive transaction: US $135 million Octal EBITDA1 • 4.6x EV/EBITDA multiple2; below industry comparables • <1.6x estimated Alpek Leverage3 post-acquisition 1) Based on LTM EBITDA as of S
Slide 28: 2021 revenue and EBITDA down 3% and 5% versus 2020
2021 revenue and EBITDA down 3% and 5%, respectively, versus 2020 Highlights EBITDA EBITDA by Business Unit (US $ Million) (2021: US $187 million) Service Infrastructure • Continued conversations with potential buyers 57 51 • Results reflect lower Government segment sales, lower Enterprise segment 4
Slide 29: Foreign ownership was 51.2% of total ALFA shares at close of 4Q21
Foreign ownership was 51.2% of total ALFA shares at the close of 4Q21 ALFA Foreign Ownership (Millions of shares) 4,905 Total ALFA Shares 4Q21 3,679 Maximum Nafinsa Trust Threshold (75%) 2,467 2,420 2,513 50.3% 49.3% 51.2% 2Q21 3Q21 4Q21 29 Restricted Internal Use
Slide 30: Contact
Contact Hernán F. Lozano V.P. of Investor Relations T. +52 (81) 8748-2521 iralfa@alfa.com.mx Restricted Internal Use