Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Industrias Bachoco Announces Second Quarter 2022 Results By: Industrias Bachoco, S.A.B. de C.V. via Business Wire July 27, 2022 at 17:15 PM EDT Industrias Bachoco, S.A.B. de C.V., “Bachoco” or “the Company”, (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the second quarter (“2Q22”) and first half (“1H22”) 2022 ended on June 30, 2022. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”), except earnings per share. HIGHLIGHTS- 2022 vs. 2021 Net sales increased 26.7% in 2Q22 and increased 26.3% in 1H22 EBITDA margin was 15.9% for 2Q22 and 15.2% for the 1H22 SG&A as percentage of net sales was 8.0% and 8.1% for 2Q22 and 1H22 respectively. CEO COMMENTS Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, “Seasonally, the second quarter is one of the strongest of the year and this 2Q22 performed that way. Even when we kept observing important increases in raw material costs like corn and soybean meal, the good balance between supply and demand and our participation in all main channels, in poultry, allowed us to capture better prices and offset the negative impacts due to higher costs. We reached an increase in total sales of 26.7% for 2Q22 when compared to the same period of 2021. Part of that increase was related to an 8.3% higher volume sold in our Others segment as we integrated sales from RYC Alimentos in this business line. Our cost of sales in 2Q22 increased 21.4% vs 2Q21. Most of that increase was related to higher raw material costs, as aforementioned, which had a negative impact both in our Mexican and U.S. operations. In terms of expenses, we kept our SG&A under control as a percentage of sales, we reported 8.0% for the quarter which compares to the 8.3% of 2Q21. As a result, our operating income for 2Q22 was $3,831.0 million which represents a 14.5% margin; this compares to the $2,088.8 million and 10.0% margin achieved in 2Q21. We reported an EBITDA of $4,212.5 million in 2Q22 and 15.9% margin, which compares to the $2,437.4 million and 11.7% obtained in the same period of 2021. CAPEX for the first half of 2022 was $1,908.5 million compared to $1,307.5 million for the same period of 2021. This was achieved while ending with a net cash position of $17,904.5 million by the end of 2Q22.” Executive Summary The following financial information is expressed in millions of nominal pesos, except for amounts per share and per ADR, with comparative figures for the same periods of 2021. QUARTERLY RESULTS NET SALES BY GEOGRAPHY In millions of pesos 2Q22 2Q21 Change $ $ $ % Net Sales 26,432.1 20,860.9 5,571.1 26.7 Net sales in Mexico 19,839.8 15,937.6 3,902.2 24.5 Net sales in the U.S. 6,592.3 4,923.4 1,668.9 33.9 NET SALES BY SEGMENT In millions of pesos 2Q22 2Q21 Change $ $ $ $ Net Sales 26,432.1 20,860.9 5,571.1 26.7 Poultry 22,605.9 18,170.5 4,435.5 24.4 Other 3,826.1 2,690.5 1,135.7 42.2 NET VOLUME SOLD BY SEGMENT In tons Change 2Q22 2Q21 Volume % Total sales volume: 591,738 583,661 8,077.2 1.4 Poultry 437,723 441,486 (3,763.4) (0.9) Others 154,015 142,175 11,840.6 8.3 The Company’s 2Q22 net sales totaled $26,432.1 million; $5,571.1 million or 26.7% more than the $20,860.9 million reported in 2Q21. The increase was mainly a result of higher volume sold in Others and higher price across our main business lines. In 2Q22, sales of our U.S. operations represented 24.9% of our total sales compared to a 23.6% in the same period of 2021. GROSS PROFIT In millions of pesos 2Q22 2Q21 Change $ $ $ % Cost of sales 20,518.5 16,901.1 3,617.4 21.4 Gross profit 5,913.6 3,959.8 1,953.8 49.3 Gross margin 22.4% 19.0% - - In 2Q22, cost of sales was $20,518.5 million; $3,617.4 million or 21.4% higher than the $16,901.1 million reported in 2Q21. This increase was due to higher unit cost in our main business lines as a result of higher raw material prices in USD terms. The Company´s gross profit in 2Q22 was $5,913.6 million, higher than the gross profit of $3,959.8 million in 2Q21, with a gross margin of 22.4% for 2Q22 vs 19.0% in 2Q21. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) In millions of pesos 2Q22 2Q21 Change $ $ $ % Total SG&A 2,123.3 1,729.2 394.1 22.8 Total SG&A expenses in 2Q22 were $2,123.3 million; $394.1 million higher than the $1,729.2 million reported in 2Q21. Total SG&A expenses as a percentage of net sales were 8.0% in 2Q22 and 8.3% in 2Q21. OTHER INCOME (EXPENSE), NET In millions of pesos 2Q22 2Q21 Change $ $ $ % Other income (expense), net 40.7 (141.8) 182.5 (128.7) This item mainly includes the sale of unused assets as well as hens and other by-products. We record such sales as expenses when the sale price is below the book value of those assets. In 2Q22, we recorded other income of $40.7 million, compared with other expenses of $141.8 million reported in 2Q21. OPERATING INCOME In millions of pesos 2Q22 2Q21 Change $ $ $ % Operating income 3,831.0 2,088.8 1,742.2 83.4 Operating margin 14.5% 10.0% - - Operating income in 2Q22 totaled $3,831.0 million; $1,742.2 million higher than the $2,088.8 million reported in 2Q21. This represents an operating margin of 14.5% for 2Q22, higher when compared to the same period of 2021. NET FINANCIAL INCOME In millions of pesos 2Q22 2Q21 Change $ $ $ % Net Financial Income 157.9 (97.0) 254.8 (262.8) Financial Income 333.6 2.1 331.5 15,578.6 Financial Expense 175.8 99.1 76.7 77.4 In 2Q22, the Company reported net financial income of $157.9 million, compared to the net financial expenses of $97.0 million reported in the same period of 2021. TAXES FOR THE PERIOD In millions of pesos 2Q22 2Q21 Change $ $ $ % Total Taxes 1,054.1 548.7 505.5 92.1 Income tax 394.7 804.5 (409.8) (50.9) Deferred income tax 659.4 (255.9) 915.3 (357.7) As a result of a higher operating income, Total taxes for the 2Q22 were $1,054.1 million compared with total taxes of $548.7 million in the same period of 2021. NET controlling interest INCOME In millions of pesos 2Q22 2Q21 Change $ $ $ % Net income 2,934.7 1,443.2 1,491.6 103.4 Net margin 11.1% 6.9% - - Non-Controlling Interest income (9.3) (33.6) 24.3 n/a Net controlling interest income 2,944.1 1,476.8 1,467.3 n/a Basic and diluted income per share1 4.91 2.46 2.4 n/a Basic and diluted income per ADR2 58.94 29.55 29.4 n/a Weighted average Shares outstanding3 599,380 599,743 - - 1 In pesos 2 in pesos, one ADR equals to twelve shares 3 In thousands of shares For the 2Q22 we had Net controlling interest income of $2,944.1 million, representing a basic and diluted income per share of $4.91 compared with a Net controlling interest income of $1,476.8 million, and $2.46 pesos of income per share in 2Q21. This increase was attributed to higher operating results. EBITDA In millions of pesos 2Q22 2Q21 Change $ $ $ % Net controlling interest income 2,944.1 1,476.8 1,467.3 99.4 Income tax expense (benefit) 1,054.1 548.7 505.5 92.1 Result in associates (9.3) (33.6) 24.3 (72.2) Net finance (income) expense (157.9) 97.0 (254.8) (262.8) Depreciation and amortization 381.5 348.6 32.9 9.4 EBITDA 4,212.5 2,437.4 1,775.1 72.8 EBITDA Margin (%) 15.9% 11.7% - - Net revenues 26,432.1 20,860.9 5,571.1 26.7 EBITDA in 2Q22 reached $4,212.5 million, representing an EBITDA margin of 15.9%, compared to an EBITDA of $2,437.4 million in 2Q21, with an EBITDA margin of 11.7%. ACCUMULATED RESULTS NET SALES BY GEOGRAPHY In millions of pesos 1H22 1H21 Change $ $ $ % Net Sales 50,799.1 40,218.6 10,580.5 26.3 Net sales in Mexico 37,936.2 30,566.9 7,369.3 24.1 Net sales in the U.S. 12,862.9 9,651.6 3,211.3 33.3 NET SALES BY SEGMENT In millions of pesos 1H22 1H21 Change $ $ $ % Net Sales 50,799.1 40,218.6 10,580.5 26.3 Poultry 43,482.1 35,154.3 8,327.8 23.7 Other 7,316.9 5,064.2 2,252.7 44.5 NET VOLUME SOLD BY SEGMENT In metric tons Change 1H22 1H21 Volume % Total sales volume: 1,175,400 1,141,743 33,656.4 2.9 Poultry 879,210 858,464 20,745.4 2.4 Others 296,190 283,279 12,911.1 4.6 During the first half of 2022, net sales totaled $50,799.1 million; $10,580.5 million or 26.3% more than $40,218.6 million reported in the same period of 2021. The increase in sales is mainly attributable to higher prices of our main business lines when compared to the first half of 2021. In 1H22, sales of our U.S. operations represented 25.3% of our total sales, compared with 24.0% in 1H21. OPERATING RESULTS In millions of pesos 1H22 1H21 Change $ $ $ % Cost of Sales 39,759.0 32,040.7 7,718.3 24.1 Gross Profit 11,040.1 8,177.9 2,862.2 35.0 Total SG&A 4,122.4 3,366.5 755.9 22.5 Other Income (expense) 55.5 (163.6) 219.1 (133.9) Operating Income 6,973.2 4,647.7 2,325.4 50.0 Net Financial Income (77.9) 222.6 (300.5) (135.0) Income Tax 1,832.6 1,352.6 480.0 35.5 Net controlling interest income 5,100.7 3,577.2 1,523.5 42.6 In 1H22, the cost of sales totaled $39,759.0 million; $7,718.3 million or 24.1% higher than the $32,040.7 million reported in 1H21. As a result, we reached a gross profit of $11,040.0 million and a gross margin of 21.7% in 1H22, when compared to $8,177.9 million of gross profit and margin of 20.3% reached in the same period of 2021. Total SG&A expenses in 1H22 were $4,122.4 million; $755.9 million or 22.5% more than the $3,366.5 million reported in 1H21. In 1H22 total SG&A expenses as a percentage of net sales represented 8.1% compared with 8.4% in 1H21. In 1H22 we had other income of $55.5 million, compared with other expenses of $163.6 million reported in 1H21. Operating income in 1H22 was $6,973.2 million, which represents an operating margin of 13.7%, an increase compared to the operating income of $4,647.7 million and the operating margin of 11.6% in 1H21. Net financial expenses in 1H22 was $77.9 million, compared to a net financial income of $222.6 million in 1H21. Total taxes were $ 1,832.6 million as of June 30, 2022. These taxes include $999.3 million of income tax and $833.3 million of deferred income taxes. These figures compare to total taxes of $1,352.6 million in 1H21. All the above resulted in a Net controlling interest income of $5,100.7 million or 10.0% of margin in the 1H22, which represents $8.51 pesos of earnings per share; while in the 1H21 the Net controlling interest income totaled $ 3,577.2 million, 8.9% of margin and $5.96 pesos of earnings per share. EBITDA In millions of pesos 1H22 1H21 Change $ $ $ % Net controlling interest profit 5,100.7 3,577.2 1,523.5 42.6 Income tax expense (benefit) 1,832.6 1,352.6 480.0 35.5 Result in associates (37.9) (59.4) 21.4 (36.1) Net finance (income) expense 77.9 (222.6) 300.5 (135.0) Depreciation and amortization 756.3 703.1 53.2 7.6 EBITDA 7,729.5 5,350.8 2,378.7 44.5 EBITDA Margin (%) 15.2% 13.3% - - Net revenues 50,799.1 40,218.6 10,580.5 26.3 EBITDA in 1H22 reached $7,729.5 million, representing an EBITDA margin of 15.2%, compared to an EBITDA of $5,350.8 million in 1H21, with a margin of 13.3%. BALANCE SHEET BALANCE SHEET DATA In millions of pesos June 30, 2022 Dec. 31st, 2021 Change $ $ $ % TOTAL ASSETS 70,429.6 65,988.8 4,440.8 6.7 Cash and cash equivalents 20,479.8 20,777.0 (297.1) (1.4) Accounts receivable 5,048.4 5,108.5 (60.0) (1.2) TOTAL LIABILITIES 18,193.6 17,704.7 488.9 2.8 Accounts payable 6,460.3 10,200.7 (3,740.3) (36.7) Short-term debt 2,575.3 1,993.9 581.4 29.2 Long-term debt - - - - TOTAL STOCKHOLDERS’ EQUITY 52,236.0 48,284.1 3,951.9 8.2 Capital stock 1,173.9 1,174.4 (0.5) (0.0) Cash and equivalents as of June 30, 2022 totaled $20,479.8 million vs $20,777.0 million as of December 31, 2021. Total debt as of June 30, 2022 was $2,575.3 million, compared to $ 1,993.9 million reported as of December 31, 2021. Net cash as of June 30, 2022 was $ 17,904.5 million, compared to net cash of $ 18,783.1 million as of December 31, 2021. CAPITAL EXPENDITURES In millions of pesos 1H22 1H21 Change $ $ $ % Capital Expenditures 1,908.8 1,307.5 601.3 46.0 Total CAPEX for the 1H22 was $1,908.8 million and $1,307.5 million in 1H21, mainly allocated toward organic growth and productivity projects across all of our facilities. STOCK INFORMATION As of June 30, 2022 Total Shares 600,000,000 Total free float 26.75% Market cap (millions of pesos) $43,458 SHARE PRICE Mexican Stock Exchange The New York Stock Exchange Ticker Symbol: Bachoco Ticker Symbol: IBA In nominal pesos per Share In U.S. Dollar per ADR Month High Low Close High Low Close June 76.90 68.56 72.43 47.25 39.70 43.35 May 78.17 76.03 76.27 47.09 44.75 46.86 April 77.83 74.96 77.83 46.64 44.42 45.78 March 69.42 67.16 68.04 40.45 38.30 39.95 February 71.99 68.02 69.42 43.19 39.67 39.67 January 73.60 69.22 69.28 44.66 41.14 41.14 Source: Yahoo Finances ANALYST COVERAGE Institution Analyst name E-mail BANK OF AMERICA Fernando Olvera folvera@bofa.com BBVA BANCOMER Pablo Abraham Peregrina pablo.abraham@bbva.com GBM Luis Rodrigo Willard Alonso lrwillard@gbm.com INTERCAM Richard Horbach Martinez rhorbach@intercam.com.mx JP MORGAN Ulises Argote ulises.argote@jpmorgan.com SANTANDER Alan Alanis Peña aalanis@santander.com.mx APPENDICES For reference, some figures have been translated into millions of U.S. dollars (“USD”) using an exchange rate of $20.14 per USD $1.0, which corresponds to the rate at the close of June 30, 2022, according to Mexico’s National Bank. Consolidated Statement of Financial Position Consolidated Statement of Income Consolidated Statement of Cash Flows Derivatives Position Report CONSOLIDATED STATEMENT OF FINANCIAL POSITION -Unaudited- In U.S. Dollar June 30, December 31, In million pesos 2022 2022 2021* TOTAL ASSETS $ 3,497.0 70,429.6 65,988.8 Total current assets 2,001.3 40,305.4 37,845.6 Cash and cash equivalents 1,016.9 20,479.8 20,777.0 Total accounts receivable 250.7 5,048.4 5,108.5 Inventories 653.3 13,156.5 9,145.6 Other current assets 80.5 1,620.6 2,814.6 Total non current assets 1,495.7 30,124.2 28,143.2 Net property, plant and equipment 1,132.9 22,816.9 21,763.4 Other non current Assets 362.8 7,307.3 6,379.8 TOTAL LIABILITIES $ 903.4 18,193.6 17,704.7 Total current liabilities 593.3 11,948.6 12,835.3 Notes payable to banks 127.9 2,575.3 1,993.9 Accounts payable 320.8 6,460.3 10,200.7 Other taxes payable and other accruals 144.6 2,912.9 640.7 Total long-term liabilities 310.1 6,245.0 4,869.4 Long-term debt - - - Other non current liabilities 56.4 1,135.1 1,027.9 Deferred income taxes 253.7 5,109.9 3,841.5 TOTAL STOCKHOLDERS' EQUITY $ 2,593.6 52,236.0 48,284.1 Capital stock 58.3 1,173.9 1,174.4 Commission in shares issued 20.6 414.1 414.1 Retained earnings 2,443.3 49,207.3 45,038.6 Others accounts 49.7 1,000.9 1,179.2 Non controlling interest 21.8 439.8 477.7 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,497.0 70,429.6 65,988.8 *Audited CONSOLIDATED STATEMENT OF INCOME Second Quarter Results, ended June 30th: -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 1,312.4 26,432.1 20,860.9 Cost of sales 1,018.8 20,518.5 16,901.1 Gross profit 293.6 5,913.6 3,959.8 SG&A 105.4 2,123.3 1,729.2 Other income (expenses), net 2.0 40.7 (141.8 ) Operating income 190.2 3,831.0 2,088.8 Net finance income 7.8 157.9 (97.0 ) Income tax 52.3 1,054.1 548.7 Net Income $ 145.7 2,934.7 1,443.2 Non-controlling interest (0.46 ) (9.3 ) (33.6 ) Net controlling interest profit 146.18 2,944.1 1,476.8 Basic and diluted earnings per share 0.24 4.91 2.46 Basic and diluted earnings per ADR 2.93 58.94 29.55 Weighted average Shares outstanding1 599,380 599,380 599,743 EBITDA Result $ 209.2 4,212.5 2,437.4 Gross margin 22.4 % 22.4 % 19.0 % Operating margin 14.5 % 14.5 % 10.0 % Net margin 11.1 % 11.1 % 6.9 % EBITDA margin 15.9 % 15.9 % 11.7 % 1 In thousands CONSOLIDATED STATEMENT OF INCOME Accumulated results, for the six months ended June 30. -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 2,522.3 50,799.1 40,218.6 Cost of sales 1,974.1 39,759.0 32,040.7 Gross profit 548.2 11,040.1 8,177.9 Selling, general and administrative expenses 204.7 4,122.4 3,366.5 Other income (expenses), net 2.8 55.5 (163.6 ) Operating income 346.2 6,973.2 4,647.7 Net finance income (3.87 ) (77.9 ) 222.64 Income tax 91.0 1,832.6 1,352.6 Net income $ 251.4 5,062.7 3,517.8 Non-controlling interest (1.88 ) (37.9 ) (59.4 ) Net controlling interest profit 253.3 5,100.7 3,577.2 Basic and diluted earnings per share 0.42 8.51 5.96 Basic and diluted earnings per ADR 5.07 102.1 71.57 Weighted average Shares outstanding1 599,380 599,380 599,790 EBITDA Result $ 383.8 7,729.5 5,350.8 Gross margin 21.7 % 21.7 % 20.3 % Operating margin 13.7 % 13.7 % 11.6 % Net margin 10.0 % 10.0 % 8.7 % EBITDA margin 15.2 % 15.2 % 13.3 % 1 In thousands CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar June 30, 2022 2022 2021 NET MAJORITY INCOME BEFORE INCOME TAX $ 342.4 6,895.3 4,870.4 ITEMS RELATING TO INVESTING ACTIVITIES: 45.7 919.6 821.6 Depreciation and others 50.5 1,016.7 911.5 Income (loss) on sale of plant and equipment 1.2 23.2 43.3 Other Items (6.0 ) (120.3 ) (133.2 ) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 388.0 7,814.9 5,691.9 CASH GENERATED OR USED IN THE OPERATION: (195.2 ) (3,932.2 ) 284.7 Decrease (increase) in accounts receivable (12.5 ) (251.1 ) (70.5 ) Decrease (increase) in inventories (206.8 ) (4,165.5 ) (310.0 ) Increase (decrease) in accounts payable (99.0 ) (1,993.0 ) 1,855.0 Other Items 123.0 2,477.5 (1,189.9 ) NET CASH FLOW FROM OPERATING ACTIVITIES 192.8 3,882.7 5,976.7 NET CASH FLOW FROM INVESTING ACTIVITIES (124.5 ) (2,508.4 ) (882.8 ) Acquisition of property, plant and equipment (94.8 ) (1,908.9 ) (1,306.2 ) Proceeds from sales of property plant and equipment 2.7 53.5 1.8 Other Items (32.4 ) (653.1 ) 421.6 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 68.2 1,374.2 5,093.9 Net cash provided by financing activities: (79.5 ) (1,601.5 ) (2,875.3 ) Proceeds from loans 28.3 570.0 1,237.2 Principal payments on loans 0.6 11.4 (1,912.3 ) Dividends paid (21.1 ) (425.8 ) (425.8 ) Other items (87.2 ) (1,757.1 ) (1,774.4 ) Net increase (decrease) in cash and equivalents (11.3 ) (227.3 ) 2,218.5 Cash and investments at the beginning of year $ 1,028.2 20,707.1 19,242.4 CASH AND INVESTMENTS AT END OF PERIOD $ 1,016.9 20,479.8 21,461.0 DERIVATIVES POSITION REPORT Second Quarter 2022 Thousands of Mexican Pesos, as of June 30, 2022 TYPE OF FINANCIAL INSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE BY YEAR GUARANTIES REQUIRED 2Q-2022 1Q-2022 2Q-2022 1Q-2022 Forward Vanilla y KO Fwd Hedge $ 224,433 $ 20.14 $ 19.89 $ -80,565 $ -157,022 90% in 2022 and 10% in 2023 The deals consider the possibility of margin calls but not another kind of guarantee Futures for corn, soybean meal and soybean oil Hedge $ 566,793 CORN CORN $ 24,903 $ 66,687 100% in 2022 In USD per Bushel In USD per Bushel month price month price May-22 $ 7.488 Jul-22 $ 7.330 Sep-22 $ 6.288 Sep-22 $ 6.963 Dec-22 $ 6.198 Dec-22 $ 6.838 SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price May-22 $ 467.5 Jul-22 $ 459.4 Aug-22 $ 435.5 Aug-22 $ 447.9 Sep-22 $ 416.1 Sep-22 $ 432.2 Oct-22 $ 405.7 Oct-22 $ 414.5 Dec-22 $ 406.7 Dec-22 $ 411.5 SOYBEAN OIL SOYBEAN OIL In US cents per pound In US cents per pound month price month price Aug-22 $ 67.01 May-22 $ 69.94 Sep-22 $ 65.68 Options of Corn Hedge $ 620,897 CORN CORN $ 27,649 $ 138,102 92% in 2022 and 8% in 2023 In USD per Bushel In USD per Bushel month price month price May-22 $ 7.488 Jul-22 $ 7.330 Sep-22 $ 6.288 Sep-22 $ 6.963 Dec-22 $ 6.198 Dec-22 $ 6.838 Mar-23 $ 6.263 Mar-23 $ 6.845 Options of soybean meal Hedge $ 878,302 SOYBEAN MEAL SOYBEAN MEAL $ 34,539 $ 66,894 78% in 2022 and 22% in 2023 In USD per ton In USD per ton month price month price May-22 $ 467.5 Aug-22 $ 435.5 Jul-22 $ 459.4 Sep-22 $ 416.1 Aug-22 $ 447.9 Oct-22 $ 405.7 Sep-22 $ 432.2 Dec-22 $ 406.7 Oct-22 $ 414.5 Jan-23 $ 405.9 Dec-22 $ 411.5 Mar-23 $ 401.3 Jan-23 $ 406.1 May-23 $ 398.3 Mar-23 $ 394.8 Options of Soybean oil Hedge $ 63,655 SOYBEAN OIL SOYBEAN OIL -$ 973 $ 521 100% in 2022 In US cents per pound In US cents per pound month price month price Aug-22 $ 67.01 Sep-22 $ 65.68 May-22 $ 69.94 -The total financial instruments do not exceed 5% of total assets as of June 30, 2022. -The notional value represents the net position as of June 30, 2022 at the exchange rate of Ps.20.14 per one dollar. -A negative value means an unfavorable effect for the Company. Second Quarter 2022 Thousands of Mexican Pesos, as of June 30, 2022 PROBABLE SCENARIO TYPE OF FINANCIAL INSTRUMENT REASONABLE VALUE VALUE OF THE RELATED COMMODITY EFFECT ON THE INCOME STATEMENT EFFECT ON THE CASH FLOW(3) Reference Value (1) -2.5% 2.5% 5.0% -2.5% 2.5% 5.0% Forward Vanilla y KO Fwd -$ 80,565 $ 19.64 $ 20.64 $ 21.15 Direct -$193,539 $ 32,409 $ 94,048 -5% 5% 10% -5% 5% 10% Futures of Corn: (2) $ 24,903 $ 5.974 $ 6.602 $ 6.917 The effect will materialize as the inventory is consumed -$ 3,437 $ 53,243 $ 81,582 Futures of Soybean Meal: (2) $ 413.7 $ 457.3 $ 479.1 Futures for Soy Oil (2) $ 63.7 $ 70.4 $ 73.7 Options for Corn $ 27,649 $ 5.974 $ 6.602 $ 6.917 -$ 3,396 $ 58,694 $ 89,738 Options of Soybean Meal $ 34,539 $ 413.7 $ 457.3 $ 479.1 -$ 3,718 $ 74,727 $ 114,914 Options of soybean Oil -$ 973 $ 63.66 $ 70.36 $ 73.71 -$ 1,374 -$ 573 -$ 172 (1) The reference value is the exchange rate of Ps. $20.14 per USD as of June 30, 2022. (2) The reference values are: future of corn Sep 2022, $6.2880 USD/bushel, the future of soybeanmeal Aug 2022, $435.50 USD/ton and the future of soybean oil Aug 2022, $67.01 usd cts / pound 'All the evaluations are performed according with the corresponding future, here only the first month futures are shown. (3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. -A negative value means an unfavorable effect for the Company. Second Quarter 2022 Thousands of Mexican Pesos, as of June 30, 2022 STRESS SCENARIO TYPE OF FINANCIAL INSTRUMENT REASONABLE VALUE VALUE OF THE RELATED COMMODITY EFFECT ON THE INCOME STATEMENT EFFECT ON THE CASH FLOW Reference Value -50% -25% 25% 50% -50% -25% 25% 50% Forward Vanilla y KO Fwd -$80,565 $10.07 $15.11 $25.18 $30.21 Direct -$2,340,042 -$1,210,303 $737,767 $1,579,072 CONFERENCE CALL INFORMATION The Company will host its second quarter 2022 earnings call on Thursday, July 28th, 2022. The earnings call will take place at 10:00 am Central Time (11:00 am ET). To participate in the earnings call, please dial: Toll free in the U.S.: 866 374 5140 Toll free in Mexico: 1 866 779 1760 Toll Local Mexico: 52 55 6722 5258 Toll in the Brazil: 800 761 0711 To access the event online: https://onlinexperiences.com/Launch/QReg/ShowUUID=A1D63B38-F85B-4377-8636-68C0716DB2D4&LangLocaleID=1033 Confirmation Number: 68053969# COMPANY DESCRIPTION Industrias Bachoco is the leader in the Mexican poultry industry, and one of the largest poultry producers globally. The Company was founded in 1952, and became a public company in 1997, via a public offering of shares on the Mexican and The New York Stock Exchange. Bachoco is a vertically integrated company headquartered in Celaya, Guanajuato located in Central Mexico. Its main business lines are: chicken, eggs, balanced feed, swine, and turkey and beef value-added products. Bachoco owns and manages more than a thousand facilities, organized in nine production complexes and 80 distribution centers in Mexico, and a production complex in the United States. Currently the Company employs more than 32,000 people. The Company is rated AAA (MEX), the highest rating awarded by Fitch Mexico, S.A. de C.V., and HR AAA which signals that the Company and the offering both have the highest credit quality by HR Ratings de Mexico S.A. de C.V. DISCLAIMER The document contains certain information that could be considered forward looking statements concerning anticipated future events and performance of the Company. The statements reflect management’s current beliefs based on information currently available and are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in our Annual Information Form, which could cause our actual results to differ materially from the forward-looking statements contained in this document. Those risks and uncertainties include risks associated with ownership in the poultry industry, competition for investments within the poultry industry, shareholder liability, governmental regulation, and environmental matters. As a result, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Industrias Bachoco, S.A.B. de C.V., undertakes no obligation to publicly update or revise any forward-looking statement. View source version on businesswire.com: https://www.businesswire.com/news/home/20220727005721/en/Contacts Maria Guadalupe Jaquez maria.jaquez@bachoco.net Andrea Guerrero andrea.guerrero@bachoco.net T. +52(461)618 3555 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Industrias Bachoco Announces Second Quarter 2022 Results By: Industrias Bachoco, S.A.B. de C.V. via Business Wire July 27, 2022 at 17:15 PM EDT Industrias Bachoco, S.A.B. de C.V., “Bachoco” or “the Company”, (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the second quarter (“2Q22”) and first half (“1H22”) 2022 ended on June 30, 2022. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”), except earnings per share. HIGHLIGHTS- 2022 vs. 2021 Net sales increased 26.7% in 2Q22 and increased 26.3% in 1H22 EBITDA margin was 15.9% for 2Q22 and 15.2% for the 1H22 SG&A as percentage of net sales was 8.0% and 8.1% for 2Q22 and 1H22 respectively. CEO COMMENTS Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, “Seasonally, the second quarter is one of the strongest of the year and this 2Q22 performed that way. Even when we kept observing important increases in raw material costs like corn and soybean meal, the good balance between supply and demand and our participation in all main channels, in poultry, allowed us to capture better prices and offset the negative impacts due to higher costs. We reached an increase in total sales of 26.7% for 2Q22 when compared to the same period of 2021. Part of that increase was related to an 8.3% higher volume sold in our Others segment as we integrated sales from RYC Alimentos in this business line. Our cost of sales in 2Q22 increased 21.4% vs 2Q21. Most of that increase was related to higher raw material costs, as aforementioned, which had a negative impact both in our Mexican and U.S. operations. In terms of expenses, we kept our SG&A under control as a percentage of sales, we reported 8.0% for the quarter which compares to the 8.3% of 2Q21. As a result, our operating income for 2Q22 was $3,831.0 million which represents a 14.5% margin; this compares to the $2,088.8 million and 10.0% margin achieved in 2Q21. We reported an EBITDA of $4,212.5 million in 2Q22 and 15.9% margin, which compares to the $2,437.4 million and 11.7% obtained in the same period of 2021. CAPEX for the first half of 2022 was $1,908.5 million compared to $1,307.5 million for the same period of 2021. This was achieved while ending with a net cash position of $17,904.5 million by the end of 2Q22.” Executive Summary The following financial information is expressed in millions of nominal pesos, except for amounts per share and per ADR, with comparative figures for the same periods of 2021. QUARTERLY RESULTS NET SALES BY GEOGRAPHY In millions of pesos 2Q22 2Q21 Change $ $ $ % Net Sales 26,432.1 20,860.9 5,571.1 26.7 Net sales in Mexico 19,839.8 15,937.6 3,902.2 24.5 Net sales in the U.S. 6,592.3 4,923.4 1,668.9 33.9 NET SALES BY SEGMENT In millions of pesos 2Q22 2Q21 Change $ $ $ $ Net Sales 26,432.1 20,860.9 5,571.1 26.7 Poultry 22,605.9 18,170.5 4,435.5 24.4 Other 3,826.1 2,690.5 1,135.7 42.2 NET VOLUME SOLD BY SEGMENT In tons Change 2Q22 2Q21 Volume % Total sales volume: 591,738 583,661 8,077.2 1.4 Poultry 437,723 441,486 (3,763.4) (0.9) Others 154,015 142,175 11,840.6 8.3 The Company’s 2Q22 net sales totaled $26,432.1 million; $5,571.1 million or 26.7% more than the $20,860.9 million reported in 2Q21. The increase was mainly a result of higher volume sold in Others and higher price across our main business lines. In 2Q22, sales of our U.S. operations represented 24.9% of our total sales compared to a 23.6% in the same period of 2021. GROSS PROFIT In millions of pesos 2Q22 2Q21 Change $ $ $ % Cost of sales 20,518.5 16,901.1 3,617.4 21.4 Gross profit 5,913.6 3,959.8 1,953.8 49.3 Gross margin 22.4% 19.0% - - In 2Q22, cost of sales was $20,518.5 million; $3,617.4 million or 21.4% higher than the $16,901.1 million reported in 2Q21. This increase was due to higher unit cost in our main business lines as a result of higher raw material prices in USD terms. The Company´s gross profit in 2Q22 was $5,913.6 million, higher than the gross profit of $3,959.8 million in 2Q21, with a gross margin of 22.4% for 2Q22 vs 19.0% in 2Q21. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) In millions of pesos 2Q22 2Q21 Change $ $ $ % Total SG&A 2,123.3 1,729.2 394.1 22.8 Total SG&A expenses in 2Q22 were $2,123.3 million; $394.1 million higher than the $1,729.2 million reported in 2Q21. Total SG&A expenses as a percentage of net sales were 8.0% in 2Q22 and 8.3% in 2Q21. OTHER INCOME (EXPENSE), NET In millions of pesos 2Q22 2Q21 Change $ $ $ % Other income (expense), net 40.7 (141.8) 182.5 (128.7) This item mainly includes the sale of unused assets as well as hens and other by-products. We record such sales as expenses when the sale price is below the book value of those assets. In 2Q22, we recorded other income of $40.7 million, compared with other expenses of $141.8 million reported in 2Q21. OPERATING INCOME In millions of pesos 2Q22 2Q21 Change $ $ $ % Operating income 3,831.0 2,088.8 1,742.2 83.4 Operating margin 14.5% 10.0% - - Operating income in 2Q22 totaled $3,831.0 million; $1,742.2 million higher than the $2,088.8 million reported in 2Q21. This represents an operating margin of 14.5% for 2Q22, higher when compared to the same period of 2021. NET FINANCIAL INCOME In millions of pesos 2Q22 2Q21 Change $ $ $ % Net Financial Income 157.9 (97.0) 254.8 (262.8) Financial Income 333.6 2.1 331.5 15,578.6 Financial Expense 175.8 99.1 76.7 77.4 In 2Q22, the Company reported net financial income of $157.9 million, compared to the net financial expenses of $97.0 million reported in the same period of 2021. TAXES FOR THE PERIOD In millions of pesos 2Q22 2Q21 Change $ $ $ % Total Taxes 1,054.1 548.7 505.5 92.1 Income tax 394.7 804.5 (409.8) (50.9) Deferred income tax 659.4 (255.9) 915.3 (357.7) As a result of a higher operating income, Total taxes for the 2Q22 were $1,054.1 million compared with total taxes of $548.7 million in the same period of 2021. NET controlling interest INCOME In millions of pesos 2Q22 2Q21 Change $ $ $ % Net income 2,934.7 1,443.2 1,491.6 103.4 Net margin 11.1% 6.9% - - Non-Controlling Interest income (9.3) (33.6) 24.3 n/a Net controlling interest income 2,944.1 1,476.8 1,467.3 n/a Basic and diluted income per share1 4.91 2.46 2.4 n/a Basic and diluted income per ADR2 58.94 29.55 29.4 n/a Weighted average Shares outstanding3 599,380 599,743 - - 1 In pesos 2 in pesos, one ADR equals to twelve shares 3 In thousands of shares For the 2Q22 we had Net controlling interest income of $2,944.1 million, representing a basic and diluted income per share of $4.91 compared with a Net controlling interest income of $1,476.8 million, and $2.46 pesos of income per share in 2Q21. This increase was attributed to higher operating results. EBITDA In millions of pesos 2Q22 2Q21 Change $ $ $ % Net controlling interest income 2,944.1 1,476.8 1,467.3 99.4 Income tax expense (benefit) 1,054.1 548.7 505.5 92.1 Result in associates (9.3) (33.6) 24.3 (72.2) Net finance (income) expense (157.9) 97.0 (254.8) (262.8) Depreciation and amortization 381.5 348.6 32.9 9.4 EBITDA 4,212.5 2,437.4 1,775.1 72.8 EBITDA Margin (%) 15.9% 11.7% - - Net revenues 26,432.1 20,860.9 5,571.1 26.7 EBITDA in 2Q22 reached $4,212.5 million, representing an EBITDA margin of 15.9%, compared to an EBITDA of $2,437.4 million in 2Q21, with an EBITDA margin of 11.7%. ACCUMULATED RESULTS NET SALES BY GEOGRAPHY In millions of pesos 1H22 1H21 Change $ $ $ % Net Sales 50,799.1 40,218.6 10,580.5 26.3 Net sales in Mexico 37,936.2 30,566.9 7,369.3 24.1 Net sales in the U.S. 12,862.9 9,651.6 3,211.3 33.3 NET SALES BY SEGMENT In millions of pesos 1H22 1H21 Change $ $ $ % Net Sales 50,799.1 40,218.6 10,580.5 26.3 Poultry 43,482.1 35,154.3 8,327.8 23.7 Other 7,316.9 5,064.2 2,252.7 44.5 NET VOLUME SOLD BY SEGMENT In metric tons Change 1H22 1H21 Volume % Total sales volume: 1,175,400 1,141,743 33,656.4 2.9 Poultry 879,210 858,464 20,745.4 2.4 Others 296,190 283,279 12,911.1 4.6 During the first half of 2022, net sales totaled $50,799.1 million; $10,580.5 million or 26.3% more than $40,218.6 million reported in the same period of 2021. The increase in sales is mainly attributable to higher prices of our main business lines when compared to the first half of 2021. In 1H22, sales of our U.S. operations represented 25.3% of our total sales, compared with 24.0% in 1H21. OPERATING RESULTS In millions of pesos 1H22 1H21 Change $ $ $ % Cost of Sales 39,759.0 32,040.7 7,718.3 24.1 Gross Profit 11,040.1 8,177.9 2,862.2 35.0 Total SG&A 4,122.4 3,366.5 755.9 22.5 Other Income (expense) 55.5 (163.6) 219.1 (133.9) Operating Income 6,973.2 4,647.7 2,325.4 50.0 Net Financial Income (77.9) 222.6 (300.5) (135.0) Income Tax 1,832.6 1,352.6 480.0 35.5 Net controlling interest income 5,100.7 3,577.2 1,523.5 42.6 In 1H22, the cost of sales totaled $39,759.0 million; $7,718.3 million or 24.1% higher than the $32,040.7 million reported in 1H21. As a result, we reached a gross profit of $11,040.0 million and a gross margin of 21.7% in 1H22, when compared to $8,177.9 million of gross profit and margin of 20.3% reached in the same period of 2021. Total SG&A expenses in 1H22 were $4,122.4 million; $755.9 million or 22.5% more than the $3,366.5 million reported in 1H21. In 1H22 total SG&A expenses as a percentage of net sales represented 8.1% compared with 8.4% in 1H21. In 1H22 we had other income of $55.5 million, compared with other expenses of $163.6 million reported in 1H21. Operating income in 1H22 was $6,973.2 million, which represents an operating margin of 13.7%, an increase compared to the operating income of $4,647.7 million and the operating margin of 11.6% in 1H21. Net financial expenses in 1H22 was $77.9 million, compared to a net financial income of $222.6 million in 1H21. Total taxes were $ 1,832.6 million as of June 30, 2022. These taxes include $999.3 million of income tax and $833.3 million of deferred income taxes. These figures compare to total taxes of $1,352.6 million in 1H21. All the above resulted in a Net controlling interest income of $5,100.7 million or 10.0% of margin in the 1H22, which represents $8.51 pesos of earnings per share; while in the 1H21 the Net controlling interest income totaled $ 3,577.2 million, 8.9% of margin and $5.96 pesos of earnings per share. EBITDA In millions of pesos 1H22 1H21 Change $ $ $ % Net controlling interest profit 5,100.7 3,577.2 1,523.5 42.6 Income tax expense (benefit) 1,832.6 1,352.6 480.0 35.5 Result in associates (37.9) (59.4) 21.4 (36.1) Net finance (income) expense 77.9 (222.6) 300.5 (135.0) Depreciation and amortization 756.3 703.1 53.2 7.6 EBITDA 7,729.5 5,350.8 2,378.7 44.5 EBITDA Margin (%) 15.2% 13.3% - - Net revenues 50,799.1 40,218.6 10,580.5 26.3 EBITDA in 1H22 reached $7,729.5 million, representing an EBITDA margin of 15.2%, compared to an EBITDA of $5,350.8 million in 1H21, with a margin of 13.3%. BALANCE SHEET BALANCE SHEET DATA In millions of pesos June 30, 2022 Dec. 31st, 2021 Change $ $ $ % TOTAL ASSETS 70,429.6 65,988.8 4,440.8 6.7 Cash and cash equivalents 20,479.8 20,777.0 (297.1) (1.4) Accounts receivable 5,048.4 5,108.5 (60.0) (1.2) TOTAL LIABILITIES 18,193.6 17,704.7 488.9 2.8 Accounts payable 6,460.3 10,200.7 (3,740.3) (36.7) Short-term debt 2,575.3 1,993.9 581.4 29.2 Long-term debt - - - - TOTAL STOCKHOLDERS’ EQUITY 52,236.0 48,284.1 3,951.9 8.2 Capital stock 1,173.9 1,174.4 (0.5) (0.0) Cash and equivalents as of June 30, 2022 totaled $20,479.8 million vs $20,777.0 million as of December 31, 2021. Total debt as of June 30, 2022 was $2,575.3 million, compared to $ 1,993.9 million reported as of December 31, 2021. Net cash as of June 30, 2022 was $ 17,904.5 million, compared to net cash of $ 18,783.1 million as of December 31, 2021. CAPITAL EXPENDITURES In millions of pesos 1H22 1H21 Change $ $ $ % Capital Expenditures 1,908.8 1,307.5 601.3 46.0 Total CAPEX for the 1H22 was $1,908.8 million and $1,307.5 million in 1H21, mainly allocated toward organic growth and productivity projects across all of our facilities. STOCK INFORMATION As of June 30, 2022 Total Shares 600,000,000 Total free float 26.75% Market cap (millions of pesos) $43,458 SHARE PRICE Mexican Stock Exchange The New York Stock Exchange Ticker Symbol: Bachoco Ticker Symbol: IBA In nominal pesos per Share In U.S. Dollar per ADR Month High Low Close High Low Close June 76.90 68.56 72.43 47.25 39.70 43.35 May 78.17 76.03 76.27 47.09 44.75 46.86 April 77.83 74.96 77.83 46.64 44.42 45.78 March 69.42 67.16 68.04 40.45 38.30 39.95 February 71.99 68.02 69.42 43.19 39.67 39.67 January 73.60 69.22 69.28 44.66 41.14 41.14 Source: Yahoo Finances ANALYST COVERAGE Institution Analyst name E-mail BANK OF AMERICA Fernando Olvera folvera@bofa.com BBVA BANCOMER Pablo Abraham Peregrina pablo.abraham@bbva.com GBM Luis Rodrigo Willard Alonso lrwillard@gbm.com INTERCAM Richard Horbach Martinez rhorbach@intercam.com.mx JP MORGAN Ulises Argote ulises.argote@jpmorgan.com SANTANDER Alan Alanis Peña aalanis@santander.com.mx APPENDICES For reference, some figures have been translated into millions of U.S. dollars (“USD”) using an exchange rate of $20.14 per USD $1.0, which corresponds to the rate at the close of June 30, 2022, according to Mexico’s National Bank. Consolidated Statement of Financial Position Consolidated Statement of Income Consolidated Statement of Cash Flows Derivatives Position Report CONSOLIDATED STATEMENT OF FINANCIAL POSITION -Unaudited- In U.S. Dollar June 30, December 31, In million pesos 2022 2022 2021* TOTAL ASSETS $ 3,497.0 70,429.6 65,988.8 Total current assets 2,001.3 40,305.4 37,845.6 Cash and cash equivalents 1,016.9 20,479.8 20,777.0 Total accounts receivable 250.7 5,048.4 5,108.5 Inventories 653.3 13,156.5 9,145.6 Other current assets 80.5 1,620.6 2,814.6 Total non current assets 1,495.7 30,124.2 28,143.2 Net property, plant and equipment 1,132.9 22,816.9 21,763.4 Other non current Assets 362.8 7,307.3 6,379.8 TOTAL LIABILITIES $ 903.4 18,193.6 17,704.7 Total current liabilities 593.3 11,948.6 12,835.3 Notes payable to banks 127.9 2,575.3 1,993.9 Accounts payable 320.8 6,460.3 10,200.7 Other taxes payable and other accruals 144.6 2,912.9 640.7 Total long-term liabilities 310.1 6,245.0 4,869.4 Long-term debt - - - Other non current liabilities 56.4 1,135.1 1,027.9 Deferred income taxes 253.7 5,109.9 3,841.5 TOTAL STOCKHOLDERS' EQUITY $ 2,593.6 52,236.0 48,284.1 Capital stock 58.3 1,173.9 1,174.4 Commission in shares issued 20.6 414.1 414.1 Retained earnings 2,443.3 49,207.3 45,038.6 Others accounts 49.7 1,000.9 1,179.2 Non controlling interest 21.8 439.8 477.7 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,497.0 70,429.6 65,988.8 *Audited CONSOLIDATED STATEMENT OF INCOME Second Quarter Results, ended June 30th: -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 1,312.4 26,432.1 20,860.9 Cost of sales 1,018.8 20,518.5 16,901.1 Gross profit 293.6 5,913.6 3,959.8 SG&A 105.4 2,123.3 1,729.2 Other income (expenses), net 2.0 40.7 (141.8 ) Operating income 190.2 3,831.0 2,088.8 Net finance income 7.8 157.9 (97.0 ) Income tax 52.3 1,054.1 548.7 Net Income $ 145.7 2,934.7 1,443.2 Non-controlling interest (0.46 ) (9.3 ) (33.6 ) Net controlling interest profit 146.18 2,944.1 1,476.8 Basic and diluted earnings per share 0.24 4.91 2.46 Basic and diluted earnings per ADR 2.93 58.94 29.55 Weighted average Shares outstanding1 599,380 599,380 599,743 EBITDA Result $ 209.2 4,212.5 2,437.4 Gross margin 22.4 % 22.4 % 19.0 % Operating margin 14.5 % 14.5 % 10.0 % Net margin 11.1 % 11.1 % 6.9 % EBITDA margin 15.9 % 15.9 % 11.7 % 1 In thousands CONSOLIDATED STATEMENT OF INCOME Accumulated results, for the six months ended June 30. -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 2,522.3 50,799.1 40,218.6 Cost of sales 1,974.1 39,759.0 32,040.7 Gross profit 548.2 11,040.1 8,177.9 Selling, general and administrative expenses 204.7 4,122.4 3,366.5 Other income (expenses), net 2.8 55.5 (163.6 ) Operating income 346.2 6,973.2 4,647.7 Net finance income (3.87 ) (77.9 ) 222.64 Income tax 91.0 1,832.6 1,352.6 Net income $ 251.4 5,062.7 3,517.8 Non-controlling interest (1.88 ) (37.9 ) (59.4 ) Net controlling interest profit 253.3 5,100.7 3,577.2 Basic and diluted earnings per share 0.42 8.51 5.96 Basic and diluted earnings per ADR 5.07 102.1 71.57 Weighted average Shares outstanding1 599,380 599,380 599,790 EBITDA Result $ 383.8 7,729.5 5,350.8 Gross margin 21.7 % 21.7 % 20.3 % Operating margin 13.7 % 13.7 % 11.6 % Net margin 10.0 % 10.0 % 8.7 % EBITDA margin 15.2 % 15.2 % 13.3 % 1 In thousands CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar June 30, 2022 2022 2021 NET MAJORITY INCOME BEFORE INCOME TAX $ 342.4 6,895.3 4,870.4 ITEMS RELATING TO INVESTING ACTIVITIES: 45.7 919.6 821.6 Depreciation and others 50.5 1,016.7 911.5 Income (loss) on sale of plant and equipment 1.2 23.2 43.3 Other Items (6.0 ) (120.3 ) (133.2 ) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 388.0 7,814.9 5,691.9 CASH GENERATED OR USED IN THE OPERATION: (195.2 ) (3,932.2 ) 284.7 Decrease (increase) in accounts receivable (12.5 ) (251.1 ) (70.5 ) Decrease (increase) in inventories (206.8 ) (4,165.5 ) (310.0 ) Increase (decrease) in accounts payable (99.0 ) (1,993.0 ) 1,855.0 Other Items 123.0 2,477.5 (1,189.9 ) NET CASH FLOW FROM OPERATING ACTIVITIES 192.8 3,882.7 5,976.7 NET CASH FLOW FROM INVESTING ACTIVITIES (124.5 ) (2,508.4 ) (882.8 ) Acquisition of property, plant and equipment (94.8 ) (1,908.9 ) (1,306.2 ) Proceeds from sales of property plant and equipment 2.7 53.5 1.8 Other Items (32.4 ) (653.1 ) 421.6 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 68.2 1,374.2 5,093.9 Net cash provided by financing activities: (79.5 ) (1,601.5 ) (2,875.3 ) Proceeds from loans 28.3 570.0 1,237.2 Principal payments on loans 0.6 11.4 (1,912.3 ) Dividends paid (21.1 ) (425.8 ) (425.8 ) Other items (87.2 ) (1,757.1 ) (1,774.4 ) Net increase (decrease) in cash and equivalents (11.3 ) (227.3 ) 2,218.5 Cash and investments at the beginning of year $ 1,028.2 20,707.1 19,242.4 CASH AND INVESTMENTS AT END OF PERIOD $ 1,016.9 20,479.8 21,461.0 DERIVATIVES POSITION REPORT Second Quarter 2022 Thousands of Mexican Pesos, as of June 30, 2022 TYPE OF FINANCIAL INSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE BY YEAR GUARANTIES REQUIRED 2Q-2022 1Q-2022 2Q-2022 1Q-2022 Forward Vanilla y KO Fwd Hedge $ 224,433 $ 20.14 $ 19.89 $ -80,565 $ -157,022 90% in 2022 and 10% in 2023 The deals consider the possibility of margin calls but not another kind of guarantee Futures for corn, soybean meal and soybean oil Hedge $ 566,793 CORN CORN $ 24,903 $ 66,687 100% in 2022 In USD per Bushel In USD per Bushel month price month price May-22 $ 7.488 Jul-22 $ 7.330 Sep-22 $ 6.288 Sep-22 $ 6.963 Dec-22 $ 6.198 Dec-22 $ 6.838 SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price May-22 $ 467.5 Jul-22 $ 459.4 Aug-22 $ 435.5 Aug-22 $ 447.9 Sep-22 $ 416.1 Sep-22 $ 432.2 Oct-22 $ 405.7 Oct-22 $ 414.5 Dec-22 $ 406.7 Dec-22 $ 411.5 SOYBEAN OIL SOYBEAN OIL In US cents per pound In US cents per pound month price month price Aug-22 $ 67.01 May-22 $ 69.94 Sep-22 $ 65.68 Options of Corn Hedge $ 620,897 CORN CORN $ 27,649 $ 138,102 92% in 2022 and 8% in 2023 In USD per Bushel In USD per Bushel month price month price May-22 $ 7.488 Jul-22 $ 7.330 Sep-22 $ 6.288 Sep-22 $ 6.963 Dec-22 $ 6.198 Dec-22 $ 6.838 Mar-23 $ 6.263 Mar-23 $ 6.845 Options of soybean meal Hedge $ 878,302 SOYBEAN MEAL SOYBEAN MEAL $ 34,539 $ 66,894 78% in 2022 and 22% in 2023 In USD per ton In USD per ton month price month price May-22 $ 467.5 Aug-22 $ 435.5 Jul-22 $ 459.4 Sep-22 $ 416.1 Aug-22 $ 447.9 Oct-22 $ 405.7 Sep-22 $ 432.2 Dec-22 $ 406.7 Oct-22 $ 414.5 Jan-23 $ 405.9 Dec-22 $ 411.5 Mar-23 $ 401.3 Jan-23 $ 406.1 May-23 $ 398.3 Mar-23 $ 394.8 Options of Soybean oil Hedge $ 63,655 SOYBEAN OIL SOYBEAN OIL -$ 973 $ 521 100% in 2022 In US cents per pound In US cents per pound month price month price Aug-22 $ 67.01 Sep-22 $ 65.68 May-22 $ 69.94 -The total financial instruments do not exceed 5% of total assets as of June 30, 2022. -The notional value represents the net position as of June 30, 2022 at the exchange rate of Ps.20.14 per one dollar. -A negative value means an unfavorable effect for the Company. Second Quarter 2022 Thousands of Mexican Pesos, as of June 30, 2022 PROBABLE SCENARIO TYPE OF FINANCIAL INSTRUMENT REASONABLE VALUE VALUE OF THE RELATED COMMODITY EFFECT ON THE INCOME STATEMENT EFFECT ON THE CASH FLOW(3) Reference Value (1) -2.5% 2.5% 5.0% -2.5% 2.5% 5.0% Forward Vanilla y KO Fwd -$ 80,565 $ 19.64 $ 20.64 $ 21.15 Direct -$193,539 $ 32,409 $ 94,048 -5% 5% 10% -5% 5% 10% Futures of Corn: (2) $ 24,903 $ 5.974 $ 6.602 $ 6.917 The effect will materialize as the inventory is consumed -$ 3,437 $ 53,243 $ 81,582 Futures of Soybean Meal: (2) $ 413.7 $ 457.3 $ 479.1 Futures for Soy Oil (2) $ 63.7 $ 70.4 $ 73.7 Options for Corn $ 27,649 $ 5.974 $ 6.602 $ 6.917 -$ 3,396 $ 58,694 $ 89,738 Options of Soybean Meal $ 34,539 $ 413.7 $ 457.3 $ 479.1 -$ 3,718 $ 74,727 $ 114,914 Options of soybean Oil -$ 973 $ 63.66 $ 70.36 $ 73.71 -$ 1,374 -$ 573 -$ 172 (1) The reference value is the exchange rate of Ps. $20.14 per USD as of June 30, 2022. (2) The reference values are: future of corn Sep 2022, $6.2880 USD/bushel, the future of soybeanmeal Aug 2022, $435.50 USD/ton and the future of soybean oil Aug 2022, $67.01 usd cts / pound 'All the evaluations are performed according with the corresponding future, here only the first month futures are shown. (3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. -A negative value means an unfavorable effect for the Company. Second Quarter 2022 Thousands of Mexican Pesos, as of June 30, 2022 STRESS SCENARIO TYPE OF FINANCIAL INSTRUMENT REASONABLE VALUE VALUE OF THE RELATED COMMODITY EFFECT ON THE INCOME STATEMENT EFFECT ON THE CASH FLOW Reference Value -50% -25% 25% 50% -50% -25% 25% 50% Forward Vanilla y KO Fwd -$80,565 $10.07 $15.11 $25.18 $30.21 Direct -$2,340,042 -$1,210,303 $737,767 $1,579,072 CONFERENCE CALL INFORMATION The Company will host its second quarter 2022 earnings call on Thursday, July 28th, 2022. The earnings call will take place at 10:00 am Central Time (11:00 am ET). To participate in the earnings call, please dial: Toll free in the U.S.: 866 374 5140 Toll free in Mexico: 1 866 779 1760 Toll Local Mexico: 52 55 6722 5258 Toll in the Brazil: 800 761 0711 To access the event online: https://onlinexperiences.com/Launch/QReg/ShowUUID=A1D63B38-F85B-4377-8636-68C0716DB2D4&LangLocaleID=1033 Confirmation Number: 68053969# COMPANY DESCRIPTION Industrias Bachoco is the leader in the Mexican poultry industry, and one of the largest poultry producers globally. The Company was founded in 1952, and became a public company in 1997, via a public offering of shares on the Mexican and The New York Stock Exchange. Bachoco is a vertically integrated company headquartered in Celaya, Guanajuato located in Central Mexico. Its main business lines are: chicken, eggs, balanced feed, swine, and turkey and beef value-added products. Bachoco owns and manages more than a thousand facilities, organized in nine production complexes and 80 distribution centers in Mexico, and a production complex in the United States. Currently the Company employs more than 32,000 people. The Company is rated AAA (MEX), the highest rating awarded by Fitch Mexico, S.A. de C.V., and HR AAA which signals that the Company and the offering both have the highest credit quality by HR Ratings de Mexico S.A. de C.V. DISCLAIMER The document contains certain information that could be considered forward looking statements concerning anticipated future events and performance of the Company. The statements reflect management’s current beliefs based on information currently available and are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in our Annual Information Form, which could cause our actual results to differ materially from the forward-looking statements contained in this document. Those risks and uncertainties include risks associated with ownership in the poultry industry, competition for investments within the poultry industry, shareholder liability, governmental regulation, and environmental matters. As a result, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Industrias Bachoco, S.A.B. de C.V., undertakes no obligation to publicly update or revise any forward-looking statement. View source version on businesswire.com: https://www.businesswire.com/news/home/20220727005721/en/Contacts Maria Guadalupe Jaquez maria.jaquez@bachoco.net Andrea Guerrero andrea.guerrero@bachoco.net T. +52(461)618 3555
Industrias Bachoco, S.A.B. de C.V., “Bachoco” or “the Company”, (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the second quarter (“2Q22”) and first half (“1H22”) 2022 ended on June 30, 2022. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”), except earnings per share. HIGHLIGHTS- 2022 vs. 2021 Net sales increased 26.7% in 2Q22 and increased 26.3% in 1H22 EBITDA margin was 15.9% for 2Q22 and 15.2% for the 1H22 SG&A as percentage of net sales was 8.0% and 8.1% for 2Q22 and 1H22 respectively. CEO COMMENTS Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, “Seasonally, the second quarter is one of the strongest of the year and this 2Q22 performed that way. Even when we kept observing important increases in raw material costs like corn and soybean meal, the good balance between supply and demand and our participation in all main channels, in poultry, allowed us to capture better prices and offset the negative impacts due to higher costs. We reached an increase in total sales of 26.7% for 2Q22 when compared to the same period of 2021. Part of that increase was related to an 8.3% higher volume sold in our Others segment as we integrated sales from RYC Alimentos in this business line. Our cost of sales in 2Q22 increased 21.4% vs 2Q21. Most of that increase was related to higher raw material costs, as aforementioned, which had a negative impact both in our Mexican and U.S. operations. In terms of expenses, we kept our SG&A under control as a percentage of sales, we reported 8.0% for the quarter which compares to the 8.3% of 2Q21. As a result, our operating income for 2Q22 was $3,831.0 million which represents a 14.5% margin; this compares to the $2,088.8 million and 10.0% margin achieved in 2Q21. We reported an EBITDA of $4,212.5 million in 2Q22 and 15.9% margin, which compares to the $2,437.4 million and 11.7% obtained in the same period of 2021. CAPEX for the first half of 2022 was $1,908.5 million compared to $1,307.5 million for the same period of 2021. This was achieved while ending with a net cash position of $17,904.5 million by the end of 2Q22.” Executive Summary The following financial information is expressed in millions of nominal pesos, except for amounts per share and per ADR, with comparative figures for the same periods of 2021. QUARTERLY RESULTS NET SALES BY GEOGRAPHY In millions of pesos 2Q22 2Q21 Change $ $ $ % Net Sales 26,432.1 20,860.9 5,571.1 26.7 Net sales in Mexico 19,839.8 15,937.6 3,902.2 24.5 Net sales in the U.S. 6,592.3 4,923.4 1,668.9 33.9 NET SALES BY SEGMENT In millions of pesos 2Q22 2Q21 Change $ $ $ $ Net Sales 26,432.1 20,860.9 5,571.1 26.7 Poultry 22,605.9 18,170.5 4,435.5 24.4 Other 3,826.1 2,690.5 1,135.7 42.2 NET VOLUME SOLD BY SEGMENT In tons Change 2Q22 2Q21 Volume % Total sales volume: 591,738 583,661 8,077.2 1.4 Poultry 437,723 441,486 (3,763.4) (0.9) Others 154,015 142,175 11,840.6 8.3 The Company’s 2Q22 net sales totaled $26,432.1 million; $5,571.1 million or 26.7% more than the $20,860.9 million reported in 2Q21. The increase was mainly a result of higher volume sold in Others and higher price across our main business lines. In 2Q22, sales of our U.S. operations represented 24.9% of our total sales compared to a 23.6% in the same period of 2021. GROSS PROFIT In millions of pesos 2Q22 2Q21 Change $ $ $ % Cost of sales 20,518.5 16,901.1 3,617.4 21.4 Gross profit 5,913.6 3,959.8 1,953.8 49.3 Gross margin 22.4% 19.0% - - In 2Q22, cost of sales was $20,518.5 million; $3,617.4 million or 21.4% higher than the $16,901.1 million reported in 2Q21. This increase was due to higher unit cost in our main business lines as a result of higher raw material prices in USD terms. The Company´s gross profit in 2Q22 was $5,913.6 million, higher than the gross profit of $3,959.8 million in 2Q21, with a gross margin of 22.4% for 2Q22 vs 19.0% in 2Q21. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) In millions of pesos 2Q22 2Q21 Change $ $ $ % Total SG&A 2,123.3 1,729.2 394.1 22.8 Total SG&A expenses in 2Q22 were $2,123.3 million; $394.1 million higher than the $1,729.2 million reported in 2Q21. Total SG&A expenses as a percentage of net sales were 8.0% in 2Q22 and 8.3% in 2Q21. OTHER INCOME (EXPENSE), NET In millions of pesos 2Q22 2Q21 Change $ $ $ % Other income (expense), net 40.7 (141.8) 182.5 (128.7) This item mainly includes the sale of unused assets as well as hens and other by-products. We record such sales as expenses when the sale price is below the book value of those assets. In 2Q22, we recorded other income of $40.7 million, compared with other expenses of $141.8 million reported in 2Q21. OPERATING INCOME In millions of pesos 2Q22 2Q21 Change $ $ $ % Operating income 3,831.0 2,088.8 1,742.2 83.4 Operating margin 14.5% 10.0% - - Operating income in 2Q22 totaled $3,831.0 million; $1,742.2 million higher than the $2,088.8 million reported in 2Q21. This represents an operating margin of 14.5% for 2Q22, higher when compared to the same period of 2021. NET FINANCIAL INCOME In millions of pesos 2Q22 2Q21 Change $ $ $ % Net Financial Income 157.9 (97.0) 254.8 (262.8) Financial Income 333.6 2.1 331.5 15,578.6 Financial Expense 175.8 99.1 76.7 77.4 In 2Q22, the Company reported net financial income of $157.9 million, compared to the net financial expenses of $97.0 million reported in the same period of 2021. TAXES FOR THE PERIOD In millions of pesos 2Q22 2Q21 Change $ $ $ % Total Taxes 1,054.1 548.7 505.5 92.1 Income tax 394.7 804.5 (409.8) (50.9) Deferred income tax 659.4 (255.9) 915.3 (357.7) As a result of a higher operating income, Total taxes for the 2Q22 were $1,054.1 million compared with total taxes of $548.7 million in the same period of 2021. NET controlling interest INCOME In millions of pesos 2Q22 2Q21 Change $ $ $ % Net income 2,934.7 1,443.2 1,491.6 103.4 Net margin 11.1% 6.9% - - Non-Controlling Interest income (9.3) (33.6) 24.3 n/a Net controlling interest income 2,944.1 1,476.8 1,467.3 n/a Basic and diluted income per share1 4.91 2.46 2.4 n/a Basic and diluted income per ADR2 58.94 29.55 29.4 n/a Weighted average Shares outstanding3 599,380 599,743 - - 1 In pesos 2 in pesos, one ADR equals to twelve shares 3 In thousands of shares For the 2Q22 we had Net controlling interest income of $2,944.1 million, representing a basic and diluted income per share of $4.91 compared with a Net controlling interest income of $1,476.8 million, and $2.46 pesos of income per share in 2Q21. This increase was attributed to higher operating results. EBITDA In millions of pesos 2Q22 2Q21 Change $ $ $ % Net controlling interest income 2,944.1 1,476.8 1,467.3 99.4 Income tax expense (benefit) 1,054.1 548.7 505.5 92.1 Result in associates (9.3) (33.6) 24.3 (72.2) Net finance (income) expense (157.9) 97.0 (254.8) (262.8) Depreciation and amortization 381.5 348.6 32.9 9.4 EBITDA 4,212.5 2,437.4 1,775.1 72.8 EBITDA Margin (%) 15.9% 11.7% - - Net revenues 26,432.1 20,860.9 5,571.1 26.7 EBITDA in 2Q22 reached $4,212.5 million, representing an EBITDA margin of 15.9%, compared to an EBITDA of $2,437.4 million in 2Q21, with an EBITDA margin of 11.7%. ACCUMULATED RESULTS NET SALES BY GEOGRAPHY In millions of pesos 1H22 1H21 Change $ $ $ % Net Sales 50,799.1 40,218.6 10,580.5 26.3 Net sales in Mexico 37,936.2 30,566.9 7,369.3 24.1 Net sales in the U.S. 12,862.9 9,651.6 3,211.3 33.3 NET SALES BY SEGMENT In millions of pesos 1H22 1H21 Change $ $ $ % Net Sales 50,799.1 40,218.6 10,580.5 26.3 Poultry 43,482.1 35,154.3 8,327.8 23.7 Other 7,316.9 5,064.2 2,252.7 44.5 NET VOLUME SOLD BY SEGMENT In metric tons Change 1H22 1H21 Volume % Total sales volume: 1,175,400 1,141,743 33,656.4 2.9 Poultry 879,210 858,464 20,745.4 2.4 Others 296,190 283,279 12,911.1 4.6 During the first half of 2022, net sales totaled $50,799.1 million; $10,580.5 million or 26.3% more than $40,218.6 million reported in the same period of 2021. The increase in sales is mainly attributable to higher prices of our main business lines when compared to the first half of 2021. In 1H22, sales of our U.S. operations represented 25.3% of our total sales, compared with 24.0% in 1H21. OPERATING RESULTS In millions of pesos 1H22 1H21 Change $ $ $ % Cost of Sales 39,759.0 32,040.7 7,718.3 24.1 Gross Profit 11,040.1 8,177.9 2,862.2 35.0 Total SG&A 4,122.4 3,366.5 755.9 22.5 Other Income (expense) 55.5 (163.6) 219.1 (133.9) Operating Income 6,973.2 4,647.7 2,325.4 50.0 Net Financial Income (77.9) 222.6 (300.5) (135.0) Income Tax 1,832.6 1,352.6 480.0 35.5 Net controlling interest income 5,100.7 3,577.2 1,523.5 42.6 In 1H22, the cost of sales totaled $39,759.0 million; $7,718.3 million or 24.1% higher than the $32,040.7 million reported in 1H21. As a result, we reached a gross profit of $11,040.0 million and a gross margin of 21.7% in 1H22, when compared to $8,177.9 million of gross profit and margin of 20.3% reached in the same period of 2021. Total SG&A expenses in 1H22 were $4,122.4 million; $755.9 million or 22.5% more than the $3,366.5 million reported in 1H21. In 1H22 total SG&A expenses as a percentage of net sales represented 8.1% compared with 8.4% in 1H21. In 1H22 we had other income of $55.5 million, compared with other expenses of $163.6 million reported in 1H21. Operating income in 1H22 was $6,973.2 million, which represents an operating margin of 13.7%, an increase compared to the operating income of $4,647.7 million and the operating margin of 11.6% in 1H21. Net financial expenses in 1H22 was $77.9 million, compared to a net financial income of $222.6 million in 1H21. Total taxes were $ 1,832.6 million as of June 30, 2022. These taxes include $999.3 million of income tax and $833.3 million of deferred income taxes. These figures compare to total taxes of $1,352.6 million in 1H21. All the above resulted in a Net controlling interest income of $5,100.7 million or 10.0% of margin in the 1H22, which represents $8.51 pesos of earnings per share; while in the 1H21 the Net controlling interest income totaled $ 3,577.2 million, 8.9% of margin and $5.96 pesos of earnings per share. EBITDA In millions of pesos 1H22 1H21 Change $ $ $ % Net controlling interest profit 5,100.7 3,577.2 1,523.5 42.6 Income tax expense (benefit) 1,832.6 1,352.6 480.0 35.5 Result in associates (37.9) (59.4) 21.4 (36.1) Net finance (income) expense 77.9 (222.6) 300.5 (135.0) Depreciation and amortization 756.3 703.1 53.2 7.6 EBITDA 7,729.5 5,350.8 2,378.7 44.5 EBITDA Margin (%) 15.2% 13.3% - - Net revenues 50,799.1 40,218.6 10,580.5 26.3 EBITDA in 1H22 reached $7,729.5 million, representing an EBITDA margin of 15.2%, compared to an EBITDA of $5,350.8 million in 1H21, with a margin of 13.3%. BALANCE SHEET BALANCE SHEET DATA In millions of pesos June 30, 2022 Dec. 31st, 2021 Change $ $ $ % TOTAL ASSETS 70,429.6 65,988.8 4,440.8 6.7 Cash and cash equivalents 20,479.8 20,777.0 (297.1) (1.4) Accounts receivable 5,048.4 5,108.5 (60.0) (1.2) TOTAL LIABILITIES 18,193.6 17,704.7 488.9 2.8 Accounts payable 6,460.3 10,200.7 (3,740.3) (36.7) Short-term debt 2,575.3 1,993.9 581.4 29.2 Long-term debt - - - - TOTAL STOCKHOLDERS’ EQUITY 52,236.0 48,284.1 3,951.9 8.2 Capital stock 1,173.9 1,174.4 (0.5) (0.0) Cash and equivalents as of June 30, 2022 totaled $20,479.8 million vs $20,777.0 million as of December 31, 2021. Total debt as of June 30, 2022 was $2,575.3 million, compared to $ 1,993.9 million reported as of December 31, 2021. Net cash as of June 30, 2022 was $ 17,904.5 million, compared to net cash of $ 18,783.1 million as of December 31, 2021. CAPITAL EXPENDITURES In millions of pesos 1H22 1H21 Change $ $ $ % Capital Expenditures 1,908.8 1,307.5 601.3 46.0 Total CAPEX for the 1H22 was $1,908.8 million and $1,307.5 million in 1H21, mainly allocated toward organic growth and productivity projects across all of our facilities. STOCK INFORMATION As of June 30, 2022 Total Shares 600,000,000 Total free float 26.75% Market cap (millions of pesos) $43,458 SHARE PRICE Mexican Stock Exchange The New York Stock Exchange Ticker Symbol: Bachoco Ticker Symbol: IBA In nominal pesos per Share In U.S. Dollar per ADR Month High Low Close High Low Close June 76.90 68.56 72.43 47.25 39.70 43.35 May 78.17 76.03 76.27 47.09 44.75 46.86 April 77.83 74.96 77.83 46.64 44.42 45.78 March 69.42 67.16 68.04 40.45 38.30 39.95 February 71.99 68.02 69.42 43.19 39.67 39.67 January 73.60 69.22 69.28 44.66 41.14 41.14 Source: Yahoo Finances ANALYST COVERAGE Institution Analyst name E-mail BANK OF AMERICA Fernando Olvera folvera@bofa.com BBVA BANCOMER Pablo Abraham Peregrina pablo.abraham@bbva.com GBM Luis Rodrigo Willard Alonso lrwillard@gbm.com INTERCAM Richard Horbach Martinez rhorbach@intercam.com.mx JP MORGAN Ulises Argote ulises.argote@jpmorgan.com SANTANDER Alan Alanis Peña aalanis@santander.com.mx APPENDICES For reference, some figures have been translated into millions of U.S. dollars (“USD”) using an exchange rate of $20.14 per USD $1.0, which corresponds to the rate at the close of June 30, 2022, according to Mexico’s National Bank. Consolidated Statement of Financial Position Consolidated Statement of Income Consolidated Statement of Cash Flows Derivatives Position Report CONSOLIDATED STATEMENT OF FINANCIAL POSITION -Unaudited- In U.S. Dollar June 30, December 31, In million pesos 2022 2022 2021* TOTAL ASSETS $ 3,497.0 70,429.6 65,988.8 Total current assets 2,001.3 40,305.4 37,845.6 Cash and cash equivalents 1,016.9 20,479.8 20,777.0 Total accounts receivable 250.7 5,048.4 5,108.5 Inventories 653.3 13,156.5 9,145.6 Other current assets 80.5 1,620.6 2,814.6 Total non current assets 1,495.7 30,124.2 28,143.2 Net property, plant and equipment 1,132.9 22,816.9 21,763.4 Other non current Assets 362.8 7,307.3 6,379.8 TOTAL LIABILITIES $ 903.4 18,193.6 17,704.7 Total current liabilities 593.3 11,948.6 12,835.3 Notes payable to banks 127.9 2,575.3 1,993.9 Accounts payable 320.8 6,460.3 10,200.7 Other taxes payable and other accruals 144.6 2,912.9 640.7 Total long-term liabilities 310.1 6,245.0 4,869.4 Long-term debt - - - Other non current liabilities 56.4 1,135.1 1,027.9 Deferred income taxes 253.7 5,109.9 3,841.5 TOTAL STOCKHOLDERS' EQUITY $ 2,593.6 52,236.0 48,284.1 Capital stock 58.3 1,173.9 1,174.4 Commission in shares issued 20.6 414.1 414.1 Retained earnings 2,443.3 49,207.3 45,038.6 Others accounts 49.7 1,000.9 1,179.2 Non controlling interest 21.8 439.8 477.7 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,497.0 70,429.6 65,988.8 *Audited CONSOLIDATED STATEMENT OF INCOME Second Quarter Results, ended June 30th: -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 1,312.4 26,432.1 20,860.9 Cost of sales 1,018.8 20,518.5 16,901.1 Gross profit 293.6 5,913.6 3,959.8 SG&A 105.4 2,123.3 1,729.2 Other income (expenses), net 2.0 40.7 (141.8 ) Operating income 190.2 3,831.0 2,088.8 Net finance income 7.8 157.9 (97.0 ) Income tax 52.3 1,054.1 548.7 Net Income $ 145.7 2,934.7 1,443.2 Non-controlling interest (0.46 ) (9.3 ) (33.6 ) Net controlling interest profit 146.18 2,944.1 1,476.8 Basic and diluted earnings per share 0.24 4.91 2.46 Basic and diluted earnings per ADR 2.93 58.94 29.55 Weighted average Shares outstanding1 599,380 599,380 599,743 EBITDA Result $ 209.2 4,212.5 2,437.4 Gross margin 22.4 % 22.4 % 19.0 % Operating margin 14.5 % 14.5 % 10.0 % Net margin 11.1 % 11.1 % 6.9 % EBITDA margin 15.9 % 15.9 % 11.7 % 1 In thousands CONSOLIDATED STATEMENT OF INCOME Accumulated results, for the six months ended June 30. -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 2,522.3 50,799.1 40,218.6 Cost of sales 1,974.1 39,759.0 32,040.7 Gross profit 548.2 11,040.1 8,177.9 Selling, general and administrative expenses 204.7 4,122.4 3,366.5 Other income (expenses), net 2.8 55.5 (163.6 ) Operating income 346.2 6,973.2 4,647.7 Net finance income (3.87 ) (77.9 ) 222.64 Income tax 91.0 1,832.6 1,352.6 Net income $ 251.4 5,062.7 3,517.8 Non-controlling interest (1.88 ) (37.9 ) (59.4 ) Net controlling interest profit 253.3 5,100.7 3,577.2 Basic and diluted earnings per share 0.42 8.51 5.96 Basic and diluted earnings per ADR 5.07 102.1 71.57 Weighted average Shares outstanding1 599,380 599,380 599,790 EBITDA Result $ 383.8 7,729.5 5,350.8 Gross margin 21.7 % 21.7 % 20.3 % Operating margin 13.7 % 13.7 % 11.6 % Net margin 10.0 % 10.0 % 8.7 % EBITDA margin 15.2 % 15.2 % 13.3 % 1 In thousands CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar June 30, 2022 2022 2021 NET MAJORITY INCOME BEFORE INCOME TAX $ 342.4 6,895.3 4,870.4 ITEMS RELATING TO INVESTING ACTIVITIES: 45.7 919.6 821.6 Depreciation and others 50.5 1,016.7 911.5 Income (loss) on sale of plant and equipment 1.2 23.2 43.3 Other Items (6.0 ) (120.3 ) (133.2 ) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 388.0 7,814.9 5,691.9 CASH GENERATED OR USED IN THE OPERATION: (195.2 ) (3,932.2 ) 284.7 Decrease (increase) in accounts receivable (12.5 ) (251.1 ) (70.5 ) Decrease (increase) in inventories (206.8 ) (4,165.5 ) (310.0 ) Increase (decrease) in accounts payable (99.0 ) (1,993.0 ) 1,855.0 Other Items 123.0 2,477.5 (1,189.9 ) NET CASH FLOW FROM OPERATING ACTIVITIES 192.8 3,882.7 5,976.7 NET CASH FLOW FROM INVESTING ACTIVITIES (124.5 ) (2,508.4 ) (882.8 ) Acquisition of property, plant and equipment (94.8 ) (1,908.9 ) (1,306.2 ) Proceeds from sales of property plant and equipment 2.7 53.5 1.8 Other Items (32.4 ) (653.1 ) 421.6 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 68.2 1,374.2 5,093.9 Net cash provided by financing activities: (79.5 ) (1,601.5 ) (2,875.3 ) Proceeds from loans 28.3 570.0 1,237.2 Principal payments on loans 0.6 11.4 (1,912.3 ) Dividends paid (21.1 ) (425.8 ) (425.8 ) Other items (87.2 ) (1,757.1 ) (1,774.4 ) Net increase (decrease) in cash and equivalents (11.3 ) (227.3 ) 2,218.5 Cash and investments at the beginning of year $ 1,028.2 20,707.1 19,242.4 CASH AND INVESTMENTS AT END OF PERIOD $ 1,016.9 20,479.8 21,461.0 DERIVATIVES POSITION REPORT Second Quarter 2022 Thousands of Mexican Pesos, as of June 30, 2022 TYPE OF FINANCIAL INSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE BY YEAR GUARANTIES REQUIRED 2Q-2022 1Q-2022 2Q-2022 1Q-2022 Forward Vanilla y KO Fwd Hedge $ 224,433 $ 20.14 $ 19.89 $ -80,565 $ -157,022 90% in 2022 and 10% in 2023 The deals consider the possibility of margin calls but not another kind of guarantee Futures for corn, soybean meal and soybean oil Hedge $ 566,793 CORN CORN $ 24,903 $ 66,687 100% in 2022 In USD per Bushel In USD per Bushel month price month price May-22 $ 7.488 Jul-22 $ 7.330 Sep-22 $ 6.288 Sep-22 $ 6.963 Dec-22 $ 6.198 Dec-22 $ 6.838 SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price May-22 $ 467.5 Jul-22 $ 459.4 Aug-22 $ 435.5 Aug-22 $ 447.9 Sep-22 $ 416.1 Sep-22 $ 432.2 Oct-22 $ 405.7 Oct-22 $ 414.5 Dec-22 $ 406.7 Dec-22 $ 411.5 SOYBEAN OIL SOYBEAN OIL In US cents per pound In US cents per pound month price month price Aug-22 $ 67.01 May-22 $ 69.94 Sep-22 $ 65.68 Options of Corn Hedge $ 620,897 CORN CORN $ 27,649 $ 138,102 92% in 2022 and 8% in 2023 In USD per Bushel In USD per Bushel month price month price May-22 $ 7.488 Jul-22 $ 7.330 Sep-22 $ 6.288 Sep-22 $ 6.963 Dec-22 $ 6.198 Dec-22 $ 6.838 Mar-23 $ 6.263 Mar-23 $ 6.845 Options of soybean meal Hedge $ 878,302 SOYBEAN MEAL SOYBEAN MEAL $ 34,539 $ 66,894 78% in 2022 and 22% in 2023 In USD per ton In USD per ton month price month price May-22 $ 467.5 Aug-22 $ 435.5 Jul-22 $ 459.4 Sep-22 $ 416.1 Aug-22 $ 447.9 Oct-22 $ 405.7 Sep-22 $ 432.2 Dec-22 $ 406.7 Oct-22 $ 414.5 Jan-23 $ 405.9 Dec-22 $ 411.5 Mar-23 $ 401.3 Jan-23 $ 406.1 May-23 $ 398.3 Mar-23 $ 394.8 Options of Soybean oil Hedge $ 63,655 SOYBEAN OIL SOYBEAN OIL -$ 973 $ 521 100% in 2022 In US cents per pound In US cents per pound month price month price Aug-22 $ 67.01 Sep-22 $ 65.68 May-22 $ 69.94 -The total financial instruments do not exceed 5% of total assets as of June 30, 2022. -The notional value represents the net position as of June 30, 2022 at the exchange rate of Ps.20.14 per one dollar. -A negative value means an unfavorable effect for the Company. Second Quarter 2022 Thousands of Mexican Pesos, as of June 30, 2022 PROBABLE SCENARIO TYPE OF FINANCIAL INSTRUMENT REASONABLE VALUE VALUE OF THE RELATED COMMODITY EFFECT ON THE INCOME STATEMENT EFFECT ON THE CASH FLOW(3) Reference Value (1) -2.5% 2.5% 5.0% -2.5% 2.5% 5.0% Forward Vanilla y KO Fwd -$ 80,565 $ 19.64 $ 20.64 $ 21.15 Direct -$193,539 $ 32,409 $ 94,048 -5% 5% 10% -5% 5% 10% Futures of Corn: (2) $ 24,903 $ 5.974 $ 6.602 $ 6.917 The effect will materialize as the inventory is consumed -$ 3,437 $ 53,243 $ 81,582 Futures of Soybean Meal: (2) $ 413.7 $ 457.3 $ 479.1 Futures for Soy Oil (2) $ 63.7 $ 70.4 $ 73.7 Options for Corn $ 27,649 $ 5.974 $ 6.602 $ 6.917 -$ 3,396 $ 58,694 $ 89,738 Options of Soybean Meal $ 34,539 $ 413.7 $ 457.3 $ 479.1 -$ 3,718 $ 74,727 $ 114,914 Options of soybean Oil -$ 973 $ 63.66 $ 70.36 $ 73.71 -$ 1,374 -$ 573 -$ 172 (1) The reference value is the exchange rate of Ps. $20.14 per USD as of June 30, 2022. (2) The reference values are: future of corn Sep 2022, $6.2880 USD/bushel, the future of soybeanmeal Aug 2022, $435.50 USD/ton and the future of soybean oil Aug 2022, $67.01 usd cts / pound 'All the evaluations are performed according with the corresponding future, here only the first month futures are shown. (3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. -A negative value means an unfavorable effect for the Company. Second Quarter 2022 Thousands of Mexican Pesos, as of June 30, 2022 STRESS SCENARIO TYPE OF FINANCIAL INSTRUMENT REASONABLE VALUE VALUE OF THE RELATED COMMODITY EFFECT ON THE INCOME STATEMENT EFFECT ON THE CASH FLOW Reference Value -50% -25% 25% 50% -50% -25% 25% 50% Forward Vanilla y KO Fwd -$80,565 $10.07 $15.11 $25.18 $30.21 Direct -$2,340,042 -$1,210,303 $737,767 $1,579,072 CONFERENCE CALL INFORMATION The Company will host its second quarter 2022 earnings call on Thursday, July 28th, 2022. The earnings call will take place at 10:00 am Central Time (11:00 am ET). To participate in the earnings call, please dial: Toll free in the U.S.: 866 374 5140 Toll free in Mexico: 1 866 779 1760 Toll Local Mexico: 52 55 6722 5258 Toll in the Brazil: 800 761 0711 To access the event online: https://onlinexperiences.com/Launch/QReg/ShowUUID=A1D63B38-F85B-4377-8636-68C0716DB2D4&LangLocaleID=1033 Confirmation Number: 68053969# COMPANY DESCRIPTION Industrias Bachoco is the leader in the Mexican poultry industry, and one of the largest poultry producers globally. The Company was founded in 1952, and became a public company in 1997, via a public offering of shares on the Mexican and The New York Stock Exchange. Bachoco is a vertically integrated company headquartered in Celaya, Guanajuato located in Central Mexico. Its main business lines are: chicken, eggs, balanced feed, swine, and turkey and beef value-added products. Bachoco owns and manages more than a thousand facilities, organized in nine production complexes and 80 distribution centers in Mexico, and a production complex in the United States. Currently the Company employs more than 32,000 people. The Company is rated AAA (MEX), the highest rating awarded by Fitch Mexico, S.A. de C.V., and HR AAA which signals that the Company and the offering both have the highest credit quality by HR Ratings de Mexico S.A. de C.V. DISCLAIMER The document contains certain information that could be considered forward looking statements concerning anticipated future events and performance of the Company. The statements reflect management’s current beliefs based on information currently available and are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in our Annual Information Form, which could cause our actual results to differ materially from the forward-looking statements contained in this document. Those risks and uncertainties include risks associated with ownership in the poultry industry, competition for investments within the poultry industry, shareholder liability, governmental regulation, and environmental matters. As a result, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Industrias Bachoco, S.A.B. de C.V., undertakes no obligation to publicly update or revise any forward-looking statement. View source version on businesswire.com: https://www.businesswire.com/news/home/20220727005721/en/
Maria Guadalupe Jaquez maria.jaquez@bachoco.net Andrea Guerrero andrea.guerrero@bachoco.net T. +52(461)618 3555
