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4Q19 Corporate Presentation

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Page 1: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 Corporate Presentation

Page 2: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

Sigma as part of ALFA

8 out of 10Mexican Corporates use Axtel’s IT and Telecom

services

#1 in the production ofPTA, PET and EPSin the Americas

1 out every 4 new carssold in the world contains

at least one Nemak product

11 Sigma brandssell more than

US $100 Million a year each

706 production wellsoperated by Newpek

in U.S. and Mexico

Petrochemicals Food ProductsAluminum Autoparts IT + Telecom Oil & Gas

37% of Total Revenues 1

31% Total EBITDA 1

(1) FY 2019 in USD2

Page 3: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

A leading global company

Sales distribution by region

Europe

36%

LatAm

7%

Net Sales 2019

US $6.5 Billion

EBITDA 2019

US $703 Million

USA

15%USA

16%

Operations in 18 countries

Mexico

41%

Page 4: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

We bring communities everywherefavorite foods to love

+640,000 Points of Sale

+45,000 Employees

70 Manufacturing Facilities

210 Distribution Centers

Cooked Meats60% of Net Sales

Other Categories5% of Net Sales

Dairy19% of Net Sales

Dry Meats16% of Net Sales

4

Page 5: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

By category

Net sales breakdown

By geography

A unique story of transformationNet sales(US$ M)

EBITDA(US$ M)

Facilities EmployeesCountries

$6,463 $703

$882 $125 8 ~12,500

70 ~45,00018

Europe Mexico

US LatAm

4

National leadership

2000

201941%

36%

16%

7%

$2,618 $288 34 ~29,0009

International expansion

2010 76%

15%9%

Global player

74%

25%

60%16%

19%

5%

63%

32%

5%

Cooked Meats Dairy

Dry Meats Other categoriesWe have increased Net Sales 7.3x and EBITDA 5.6x since 2000

98%

5

Page 6: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

Diverse portfolio of leading brands across categories

11 brands with net sales > US $100 M in 2019

6

Packaged Meats Dairy

Other Categories Third Party

Page 7: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

Research and Development

Consumer research

+260,000 contacts per year

Proprietary mathematical models

R + D

2 research centers

6 pilot plants

+200 specialists

+40 patents

7

Page 8: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

Sigma Innovation System

Iterative innovation process based onDesign Thinking

Fail early, often and cheap, while limiting failure

+270 new products launched this year

+740 projects in the innovation pipeline

11% of 2019 accumulated sales come from innovation

products

8

Innovation Process

Page 9: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

Innovation platforms

HeritageConvenienceIndulgenceTrust &

SustainabilityHealth & Nutrition

These are some of the innovations we launched in 4Q19:

9

Page 10: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

Innovation growth avenues

Snacking

New business unit working across geographies

Higher demand of protein-based snacks

3% of 2019 Net Sales

Alternative Proteins

New sources of protein to cover current flexitarian trends

+40 existing products across geographies

+25 new products in the global innovation pipeline

10

Page 11: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

Sustainability

11

Technology+90,000 tons

of CO2 avoided

75 work sites operating withcleaner energy

+3,000 tons of food donated through

food banks

10% of water consumption

decreasedin the US

FReSH Projectmember

+480 products with improved

nutritional profiles

Sustainability Report 2018

Page 12: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

Roberto OlivaresCFOMBA Duke

Gregorio de HaeneCTOMBA ITESM

Luis IturraldeCHROMBA ITESM

Central functions

Business units

Years in the company

Proven top management with an average of 24 years of experience across business areas

Eugenio CaballeroCEO MexicoMBA Harvard

Ricardo DoehnerCEO EuropeMBA Michigan

Warren PanicoCEO USAMBA Columbia Pacific University

Sergio RamosCEO Latin AmericaMBA University of Texas at Austin

Armando de la PeñaCEO FoodserviceExecutive Programs

Alejandro SuárezCIOMaster in Operations George Washington

CEO

Rodrigo FernándezPresident & CEOMBA Wharton

21

Experienced management team

12

17 23 22 31 18

12 37 26 28

Page 13: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 Financial Results

Page 14: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

525

639 716 663 676 684

703

2013 2014 2015 2016 2017 2018 2019

Financial Results

Net Sales EBITDA

3,820

5,359

5,9015,698

6,0546,336 6,463

2013 2014 2015 2016 2017 2018 2019

876Non-recurring gains

14

US $M

Page 15: Sigma as part of ALFA · 4Q19 CORPORATE PRESENTATION Sigma as part of ALFA 8 out of 10 Mexican Corporates use Axtel’s IT and Telecom services #1 in the production of PTA, PET and

4Q19 CORPORATE PRESENTATION

+7%

Financial Results

Net Sales EBITDA

4Q18 4Q19

4Q19 Highlights

• Solid results in Mexico and the US due tohigher average prices

• Europe continued to be impacted byhigher raw material costs associated toASF

• Pork prices increased 50% year-on-yearin both the Americas and Europe

• Sigma launched Tastech, its first global acceleration program

1,7061,596

42%41%

37%37%

14%14%

7%8%

4Q18 4Q19

176174

50%48%

24%29%

19%15%

7%8%

10.9% 10.3%EBITDA Margin

15

US $M

+1%