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 Fourth Quarter and Full Year 2022 Results By: Industrias Bachoco, S.A.B. de C.V. via Business Wire February 09, 2023 at 17:15 PM EST Industrias Bachoco, S.A.B. de C.V., “Bachoco” or “the Company”, (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the fourth quarter (“4Q22”) and full year (“2022”) ending on December 31st, 2022. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”). HIGHLIGHTS 2022 Net sales increased 11.2% in 4Q22 and increased 21.0% in year 2022 vs equivalent periods of 2021 respectively. EBITDA margin was 2.9% for 4Q22 and 10.0% for the whole year. Earnings per basic and diluted share totaled $0.13 for the quarter and $10.26 for the year. CEO COMMENTS Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: “It is known that the last quarter of the year is usually a challenging period, and 4Q22 was not the exception. We kept observing high raw material prices compared to 2021 which had a negative impact in our cost of sales. Even when we had been able to partially offset some of that increase thru pricing, seasonal conditions on our markets, lowered our margins to profitability levels below 4Q21 range. On the other hand, for 4Q22 our SG&A increased 12.1% vs 4Q21 showing the impacts of higher fuel, energy and labor costs. As a result, in 4Q22 we reported an operating income of $306.6 million, 38.7% lower than the $500.2 million achieved in the same period of 2021. With operating margins of 1.3% and 2.4% respectively. In terms of EBITDA margin this put us in a 2.9% for 4Q22 vs the 4.0% of 4Q21. For the full year of 2022, the balance was good. With a very strong first half of the year, we managed to achieve and EBITDA of $9,916.2 million (10.0% margin) which is 35.3% higher compared to the $7,328.2 million (9.0% margin) obtained in 2021. As mentioned before, increases on raw material prices raised our working capital and put pressure on our Free Cash Flow. However, our financial discipline allowed us to end 2022 still with a solid structure reporting a net cash position of $15,857.4 million vs the $16,530.3 million reported in 2021. Our CAPEX for 2022 were $4,666.2 million, a 34.1% increase vs 2021. Investments were oriented to our organic growth, and the integration of RYC Alimentos. We continue to be very focused on capturing efficiencies across all our processes and being close to better serve our customers as we know this is key for our growth." EXECUTIVE SUMMARY The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2021. QUARTERLY RESULTS NET SALES BY GEOGRAPHY In millions of pesos 4Q22 4Q21 Change $ $ $ % Net Sales 23,633.8 21,251.5 2,382.3 11.2 Net sales in Mexico 17,734.3 15,807.8 1,926.5 12.2 Net sales in the U.S. 5,899.5 5,443.8 455.7 8.4 NET SALES BY SEGMENT In millions of pesos 4Q22 4Q21 Change $ $ $ % Net Sales 23,633.8 21,251.5 2,382.3 11.2 Poultry 20,000.6 18,727.7 1,272.9 6.8 Other 3,633.2 2,523.8 1,109.4 44.0 NET VOLUME SOLD BY SEGMENT In tons Change 4Q22 4Q21 Volume % Total sales volume: 591,687 605,925 (14,238.0) (2.3) Poultry 452,003 467,942 (15,939.1) (3.4) Others 139,684 137,983 1,701.1 1.2 The Company’s 4Q22 net sales totaled $23,633.8 million; $2,382.3 million or 11.2% more than $21,251.5 million reported in 4Q21. The increase is a result of higher volume sold in Other and higher prices in our main business lines as part of our strategy for offsetting the increases on cost of sales. In 4Q22, sales of our U.S. operations represented 25.0% of our total sales compared to 25.6% in 4Q21. GROSS PROFIT In millions of pesos 4Q22 4Q21 Change $ $ $ % Cost of sales 21,089.3 18,670.6 2,418.7 13.0 Gross profit 2,544.5 2,580.9 (36.4) (1.4) Gross margin 10.8% 12.1% - - In 4Q22 , cost of sales was $21,089.3 million; $2,418.7 million or 13.0% higher than $18,670.6 million reported in 4Q21. This increase was mainly due to higher unit cost in our main business lines as we continued observing year over year increases in prices of our main raw materials. The Company´s gross profit in 4Q22 was $2,544.5 million, 1.4% lower than the gross profit of $2,580.9 million in 4Q21, with a gross margin of 10.8% for 4Q22 vs 12.1% in 4Q21. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) In millions of pesos 4Q22 4Q21 Change $ $ $ % Total SG&A 2,243.8 2,002.2 241.6 12.1 Total SG&A expenses in 4Q22 were $2,243.8 million; $241.6 million higher than the $2,002.2 million reported in 4Q21. Total SG&A expenses as a percentage of net sales represented 9.5% in 4Q22 and 9.4% in 4Q21. OTHER INCOME (EXPENSE), NET In millions of pesos 4Q22 4Q21 Change $ $ $ % Other income (expense), net 5.9 (78.5) 84.4 (107.5) 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. OPERATING INCOME In millions of pesos 4Q22 4Q21 Change $ $ $ % Operating income 306.6 500.2 (193.6) (38.7) Operating margin 1.3% 2.4% - - Operating income in 4Q22 totaled $306.6 million; $193.6 million lower than the Operating income of $500.2 million reported in 4Q21. This represents an operating margin of 1.3% for 4Q22, versus 2.4% operating margin in the same period of 2021. The decrease in operating income is mainly attributed to higher raw material costs and higher SG&A. NET FINANCIAL INCOME In millions of pesos 4Q22 4Q21 Change $ $ $ % Net Financial Income (359.3) 167.6 (526.9) (314.3) Financial Income 495.7 204.2 291.4 142.7 Financial Expense 855.0 36.6 818.4 2,235.4 In 4Q22, the Company reported net financial expenses of $359.3 million, compared to a net financial income of $167.6 million reported in the same period of 2021. From the $855.0 million of Financial Expenses, $465.5 million are a result of exchange rate valuation. TAXES FOR THE PERIOD In millions of pesos 4Q22 4Q21 Change $ $ $ % Total Taxes (110.7) 72.7 (183.4) (252.2) Income tax 498.3 736.6 (238.3) (32.4) Deferred income tax (609.0) (663.9) 54.9 (8.3) Total taxes for the 4Q22 were a credit of $110.7 million, compared with total taxes of $72.7 million charged for the same period of 2021. This was a result of lower income before taxes for the 4Q22. NET CONTROLLING INTEREST INCOME In millions of pesos 4Q22 4Q21 Change $ $ $ % Net income 58.0 595.1 (537.1) (90.3) Net margin 0.2% 2.8% - - Non-Controlling Interest income (21.5) (45.7) 24.2 n/a Net controlling interest income 79.5 640.8 (561.3) n/a Basic and diluted income per share1 0.13 1.07 (0.9) n/a Basic and diluted income per ADR2 1.59 12.82 (11.2) n/a Weighted average Shares outstanding3 599,380 599,624 - - 1 In pesos 2 in pesos, one ADR equals to twelve shares 3 In thousands of shares The net controlling interest income for 4Q22 was $79.5 million, representing $0.13 pesos of earnings per share, compared with a net controlling interest income of $640.8 million, which represented a $1.07 pesos of earnings per share in 4Q21. This decrease is mainly attributed to lower operating results and higher financial expenses. EBITDA In millions of pesos 4Q22 4Q21 Change $ $ $ % Net controlling interest income 79.5 640.8 (561.3) (87.6) Income tax expense (benefit) (110.7) 72.7 (183.4) (252.2) Result in associates (21.5) (45.7) 24.2 (53.0) Net finance (income) expense 359.3 (167.6) 526.9 (314.3) Depreciation and amortization 388.0 349.7 38.2 10.9 EBITDA 694.6 850.0 (155.4) (18.3) EBITDA Margin (%) 2.9% 4.0% - - Net revenues 23,633.8 21,251.5 2,382.3 11.2 EBITDA in 4Q22 reached $694.6 million representing an EBITDA margin of 2.9%, compared to an EBITDA of $850.0 million in 4Q21, with an EBITDA margin of 4.0%. ACCUMULATED RESULTS NET SALES BY GEOGRAPHY In millions of pesos 2022 2021 Change $ $ $ % Net Sales 98,890.7 81,699.1 17,191.6 21.0 Net sales in Mexico 73,653.2 61,338.5 12,314.8 20.1 Net sales in the U.S. 25,237.4 20,360.6 4,876.8 24.0 NET SALES BY SEGMENT In millions of pesos 2022 2021 Change $ $ $ % Net Sales 98,890.7 81,699.1 17,191.6 21.0 Poultry 84,373.5 71,647.7 12,725.7 17.8 Other 14,517.2 10,051.3 4,465.9 44.4 NET VOLUME SOLD BY SEGMENT In metric tons Change 2022 2021 Volume % Total sales volume: 2,358,390 2,318,049 40,340.1 1.7 Poultry 1,764,623 1,769,071 (4,448.7) (0.3) Others 593,767 548,978 44,788.8 8.2 In 2022, net sales totaled $98,890.7 million; $17,191.6 million or 21.0% more than the $81,699.1 million reported in the same period of 2021. In 2022, sales of our U.S. operations represented 25.5% of our total sales, compared with 24.9% in 2021. OPERATING RESULTS In millions of pesos 2022 2021 Change $ $ $ % Cost of Sales 82,038.0 68,356.7 13,681.3 20.0 Gross Profit 16,852.7 13,342.4 3,510.3 26.3 Total SG&A 8,480.4 7,133.3 1,347.2 18.9 Other Income (expense) 38.8 (322.8) 361.5 (112.0) Operating Income 8,411.0 5,886.4 2,524.6 42.9 Net Financial Income (320.7) 849.9 (1,170.5) (137.7) Income Tax 2,007.2 1,806.0 201.2 11.1 Net Income 6,083.1 4,930.3 1,152.8 23.4 Non-controlling interest (69.1) (131.5) 62.3 (47.4) Net controlling interest Income 6,152.2 5,061.7 1,090.5 21.5 In the 2022, the cost of sales totaled $82,038.0 million; $13,681.3 million or 20.0% higher than $68,356.7 million reported in the 2021. As a result, we reached a gross profit of $16,852.7 million and a gross margin of 17.0% in 2022, when compared to $13,342.4 million of gross profit and a gross margin of 16.3% reached in the same period of 2021. Total SG&A in 2022 were $8,480.4 million; $1,347.2 million or 18.9% higher than the $7,133.3 million reported in 2021. Total SG&A expenses as a percentage of net sales represented 8.6% in 2022 and 8.7% in 2021. In 2022 we had other income of $38.8 million, compared with other expenses of $322.8 million reported in 2021. Operating income in 2022 was $8,411.0 million, which represents an operating margin of 8.5%, an increase from an operating income of $5,886.4 million with an operating margin of 7.2% in 2021. We had Net financial expenses in 2022 of $320.7 million which compares to a Net financial income of $849.9 million in 2021. Total taxes were $2,007.2 million as of December 31st, 2022. These include $1,667.4 million of income tax and $339.9 million of deferred income taxes. Those figures compare to an income tax of $1,790.6 million and deferred income taxes of $15.4 million in 2021. After Non-controlling interest, all the above resulted in a Net controlling interest income of $6,152.2 million or 6.2% margin in 2022, which represents $10.26 pesos of earnings per share; while in the 2021 the Net controlling interest income totaled $5,061.7 million, 5.1% margin and $8.44 pesos of income per share. EBITDA In millions of pesos 2022 2021 Change $ $ $ % Net controlling interest profit 6,152.2 5,061.7 1,090.5 21.5 Income tax expense (benefit) 2,007.2 1,806.0 201.2 11.1 Result in associates (69.1) (131.5) 62.3 (47.4) Net finance (income) expense 320.7 (849.9) 1,170.5 (137.7) Depreciation and amortization 1,505.2 1,441.8 63.4 4.4 EBITDA 9,916.2 7,328.2 2,588.0 35.3 EBITDA Margin (%) 10.0% 9.0% - - Net revenues 98,890.7 81,699.1 17,191.6 21.0 EBITDA in 2022 reached $9,916.2 million, representing an EBITDA margin of 10.0%, compared to an EBITDA of $7,328.2 million in 2021, with an EBITDA margin of 9.0%. BALANCE SHEET BALANCE SHEET DATA In millions of pesos Dec. 31, 2022 Dec. 31, 2021 Change $ $ $ % TOTAL ASSETS 72,236.1 65,988.8 6,247.3 9.5 Cash and cash equivalents 20,049.5 20,777.0 (727.5) (3.5) Accounts receivable 5,860.8 5,108.5 752.4 14.7 TOTAL LIABILITIES 19,193.0 17,704.7 1,488.3 8.4 Accounts payable 6,841.2 10,200.7 (3,359.4) (32.9) Short-term debt 1,181.5 1,993.9 (812.4) (40.7) Long-term debt 3,010.5 - 3,010.5 - TOTAL STOCKHOLDERS’ EQUITY 53,043.0 48,284.1 4,759.0 9.9 Capital stock 1,174.4 1,174.4 (0.0) (0.0) Cash and equivalents as of December 31st, 2022, totaled $20,049.5 million vs $20,777.0 million as of December 31st, 2021. Total debt as of December 31st, 2022, was $4,192.0 million, compared to $1,993.9 million reported as of December 31st, 2021. Net cash as of December 31st, 2022, was $15,857.4 million, compared to net cash of $18,783.1 million as of December 31st, 2021. CAPITAL EXPENDITURES In millions of pesos 2022 2021 Change $ $ $ % Capital Expenditures 4,666.2 3,479.5 1,186.7 34.1 Total CAPEX for 2022 was $4,666.2 million vs $3,479.5 million in 2021, mainly allocated toward organic growth and productivity projects across all our facilities. STOCK INFORMATION As of December 31, 2022 Total Shares 600,000,000 Total free float 12.32% Market cap (millions of pesos) $50,706 Source: Yahoo Finances SHARE PRICE 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 December 84.51 81.66 84.51 51.03 48.97 50.99 November 86.31 80.84 82.64 53.44 49.17 51.11 October 81.40 77.77 80.91 49.06 46.25 49.06 September 80.00 76.81 77.86 48.13 45.78 46.03 August 79.98 75.34 79.97 48.05 43.97 47.33 July 76.56 69.97 76.56 45.18 40.56 45.18 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 ANALYST COVERAGE Institution Analyst name E-mail 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 $19.51 per USD, which corresponds to the rate at the close of December 31st, 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 December 31, December 31, In million pesos 2022 2022 2021* TOTAL ASSETS $ 3,702.5 72,236.1 65,988.8 Total current assets 2,047.9 39,955.0 37,845.6 Cash and cash equivalents 1,027.7 20,049.5 20,777.0 Total accounts receivable 300.4 5,860.8 5,108.5 Inventories 595.0 11,607.6 9,145.6 Other current assets 124.9 2,437.1 2,814.6 Total non current assets 1,654.6 32,280.5 28,143.2 Net property, plant and equipment 1,263.0 24,640.5 21,763.4 Other non current Assets 391.6 7,640.0 6,379.8 TOTAL LIABILITIES $ 983.8 19,193.0 17,704.7 Total current liabilities 541.2 10,558.4 12,835.3 Notes payable to banks 60.6 1,181.5 1,993.9 Accounts payable 350.7 6,841.2 10,200.7 Other taxes payable and other accruals 130.0 2,535.7 640.7 Total long-term liabilities 442.6 8,634.6 4,869.4 Long-term debt 154.3 3,010.5 - Other non current liabilities 50.1 976.5 1,027.9 Deferred income taxes 238.2 4,647.5 3,841.5 TOTAL STOCKHOLDERS' EQUITY $ 2,718.8 53,043.0 48,284.1 Capital stock 60.2 1,174.4 1,174.4 Commission in shares issued 21.2 414.1 414.1 Repurchased shares - - - Retained earnings 2,573.1 50,201.5 45,038.6 Others accounts 43.4 846.3 1,179.2 Non controlling interest 20.8 406.7 477.7 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,702.5 72,236.1 65,988.8 *Audited CONSOLIDATED STATEMENT OF INCOME Fourth Quarter Results, ended December 31st: -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021* Net sales $ 1,211.4 23,633.8 21,251.5 Cost of sales 1,080.9 21,089.3 18,670.6 Gross profit 130.4 2,544.5 2,580.9 SG&A 115.0 2,243.8 2,002.2 Other income (expenses), net 0.3 5.9 (78.5 ) Operating income 15.7 306.6 500.2 Net finance income (18.4 ) (359.3 ) 167.6 Income tax (5.7 ) (110.7 ) 72.7 Net Income $ 3.0 58.0 595.1 Non-controlling interest (1.10 ) (21.5 ) (45.7 ) Net controlling interest profit 4.07 79.5 640.8 Basic and diluted earnings per share 0.01 0.13 1.07 Basic and diluted earnings per ADR 0.08 1.59 12.82 Weighted average Shares outstanding1 599,380 599,380 599,624 EBITDA Result $ 35.6 694.6 850.0 Gross margin 10.8 % 10.8 % 12.1 % Operating margin 1.3 % 1.3 % 2.4 % Net margin 0.3 % 0.2 % 2.8 % EBITDA margin 2.9 % 2.9 % 4.0 % 1 In thousands * Audited CONSOLIDATED STATEMENT OF INCOME Annual Results -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021* Net sales $ 5,068.7 98,890.7 81,699.1 Cost of sales 4,204.9 82,038.0 68,356.7 Gross profit 863.8 16,852.7 13,342.4 Selling, general and administrative expenses 434.7 8,480.4 7,133.3 Other income (expenses), net 2.0 38.8 (322.8 ) Operating income 431.1 8,411.0 5,886.4 Net finance income (16.44 ) (320.7 ) 849.88 Income tax 102.9 2,007.2 1,806.0 Net income $ 311.8 6,083.1 4,930.3 Non-controlling interest (3.54 ) (69.1 ) (131.5 ) Net controlling interest profit 315.3 6,152.2 5,061.7 Basic and diluted earnings per share 0.53 10.26 8.44 Basic and diluted earnings per ADR 6.31 123.2 101.28 Weighted average Shares outstanding1 599,380 599,380 599,730 EBITDA Result $ 508.3 9,916.2 7,328.2 Gross margin 17.0 % 17.0 % 16.3 % Operating margin 8.5 % 8.5 % 7.2 % Net margin 6.2 % 6.2 % 6.0 % EBITDA margin 10.0 % 10.0 % 9.0 % 1 In thousands * Audited CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar December 31, 2022 2022 2021* NET MAJORITY INCOME BEFORE INCOME TAX $ 414.7 8,090.3 6,737.9 ITEMS RELATING TO INVESTING ACTIVITIES: 85.4 1,666.8 1,570.9 Depreciation and others 98.2 1,915.1 1,807.2 Income (loss) on sale of plant and equipment 3.5 69.1 95.3 Other Items (16.3 ) (317.4 ) (331.6 ) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 500.1 9,757.1 8,308.8 CASH GENERATED OR USED IN THE OPERATION: (202.6 ) (3,952.1 ) (120.1 ) Decrease (increase) in accounts receivable (36.1 ) (704.6 ) (811.6 ) Decrease (increase) in inventories (145.4 ) (2,836.0 ) (732.3 ) Increase (decrease) in accounts payable (127.6 ) (2,490.1 ) 3,988.3 Other Items 106.5 2,078.6 (2,564.5 ) NET CASH FLOW FROM OPERATING ACTIVITIES 297.5 5,805.0 8,188.7 NET CASH FLOW FROM INVESTING ACTIVITIES (215.9 ) (4,211.8 ) (2,382.7 ) Acquisition of property, plant and equipment (238.2 ) (4,647.7 ) (3,479.5 ) Proceeds from sales of property plant and equipment 4.3 83.3 29.8 Other Items 18.1 352.5 1,067.1 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 81.7 1,593.2 5,806.0 Net cash provided by financing activities: (115.4 ) (2,250.8 ) (4,341.3 ) Proceeds from loans 239.7 4,676.0 1,709.1 Principal payments on loans (127.0 ) (2,477.9 ) (2,267.3 ) Dividends paid (50.4 ) (983.0 ) (853.6 ) Other items (177.7 ) (3,466.0 ) (2,929.5 ) Net increase (decrease) in cash and equivalents (33.7 ) (657.7 ) 1,464.7 Cash and investments at the beginning of year $ 1,061.4 20,707.1 19,242.4 CASH AND INVESTMENTS AT END OF PERIOD $ 1,027.7 20,049.5 20,707.1 *Audited DERIVATIVES POSITION REPORT Fourth Quarter 2022 Thousands of Mexican Pesos, as of December 31, 2022 TYPE OF FINANCIALINSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUEBY YEAR GUARANTIESREQUIRED 4Q-2022 3Q-2022 4Q-2022 3Q-2022 Forward Vanilla y KO Fwd Hedge $ 190,950 $ 19.51 $ 20.13 $ -136,757 $ -48,982 95% in 2023and 5% in 2024 The deals considerthe possibility of margin callsbut not another kindof guarantee Futures for corn, soybean meal,soybean oil and natural gas Hedge $ 442,441 CORN CORN $ 16,178 $ 12,462 100% in 2023 In USD per Bushel In USD per Bushel month price month price Mar-23 $ 6.785 May-23 $ 6.780 Jul-23 $ 6.718 Sep-23 $ 6.270 Dec-23 $ 6.108 Dec-22 $ 6.775 SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price Mar-23 $ 471.0 May-23 $ 461.0 Jul-23 $ 454.3 Aug-23 $ 443.1 Sep-23 $ 428.2 Oct-23 $ 413.6 Dec-23 $ 411.6 Dec-22 $ 403.0 SOYBEAN OIL SOYBEAN OIL In US cents per pound In US cents per pound Month Price Month Price Mar-23 $ 64.07 May-23 $ 63.94 Jul-23 $ 63.56 Dec-22 $ 61.56 NATURAL GAS NATURAL GAS In USD/MM BTU In USD/MM BTU Month Price Month Price Nov-22 $ 6.77 Dec-22 $ 7.07 Jan-23 $ 7.25 Feb-23 $ 4.475 Feb-23 $ 6.94 Options of Corn Hedge $ 890,801 CORN CORN $ 25,296 $ 37,181 95% in 2023and 5% in 2024 In USD per Bushel In USD per Bushel month price month price Mar-23 $ 6.785 May-23 $ 6.780 Jul-23 $ 6.718 Sep-23 $ 6.270 Dec-23 $ 6.108 Dec-22 $ 6.775 Mar-24 $ 6.180 Mar-23 $ 6.840 Options of soybean meal Hedge $ 950,696 SOYBEAN MEAL SOYBEAN MEAL $ 109,976 $ 12,013 89% in 2023and 11% in 2024 In USD per ton In USD per ton month price month price Mar-23 $ 471.0 May-23 $ 461.0 Jul-23 $ 454.3 Aug-23 $ 443.1 Sep-23 $ 428.2 Oct-23 $ 413.6 Dec-22 $ 403.0 Dec-23 $ 411.6 Jan-23 $ 401.3 Jan-24 $ 408.8 Mar-23 $ 397.2 Mar-24 $ 402.9 May-23 $ 395.0 Options of Soybean oil Hedge -$ 3,750 SOYBEAN OIL $ - $ - 100% in 2023 In US cents per pound Mes Precio Feb-23 $ 64.07 -The total financial instruments do not exceed 5% of total assets as of December 31, 2022. -The notional value represents the net position as of December 31, 2022 at the exchange rate of Ps.19.51 per one dollar. -A negative value means an unfavorable effect for the Company. Fourth Quarter 2022 Thousands of Mexican Pesos, as of December 31, 2022 PROBABLE SCENARIO TYPE OF FINANCIALINSTRUMENT REASONABLEVALUE VALUE OF THE RELATED COMMODITY EFFECT ON THEINCOME 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 -$ 136,757 $ 19.02 $ 20.00 $ 20.48 Direct -$ 229,887 -$ 43,623 $ 49,506 -5 % 5 % 10 % -5 % 5 % 10 % Futures of Corn: (2) $ 16,178 $ 6.45 $ 7.12 $ 7.46 The effect willmaterialize as theinventory is consumed -$ 5,945 $ 38,301 $ 60,424 Futures of Soybean Meal: (2) $ 447.5 $ 494.6 $ 518.1 Futures for Soy Oil (2) $ 60.9 $ 67.3 $ 70.5 Futures for Natural Gas (2) $ 4.3 $ 4.7 $ 4.9 Options for Corn $ 25,296 $ 6.45 $ 7.12 $ 7.46 -$ 16,930 $ 67,521 $ 109,747 Options of Soybean Meal $ 109,976 $ 447.5 $ 494.6 $ 518.1 $ 62,438 $ 157,513 $ 205,050 Options of Soybean Oil $ - $ 60.87 $ 67.27 $ 70.48 $ 125 $ - $ - (1) The reference value is the exchange rate of Ps. $19.51 per USD as of December 31, 2022. (2) The reference values are: future of corn Mar 2023, $6.7850 USD/bushel, the future of soybean meal Mar 2023, $471.00 USD/ton, the future of soybean oil Mar 2023, $64.07 usd cts / pound and the future of natural gas Feb 2023, $4.48 usd/ MM BTU. 'All the evaluations are performed according with the corresponding future, here only the first month futures are shown. (3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. -A negative value means an unfavorable effect for the Company. Fourth Quarter 2022 Thousands of Mexican Pesos, as of December 31, 2022 STRESS SCENARIO TYPE OF FINANCIALINSTRUMENT REASONABLEVALUE VALUE OF THE RELATED COMMODITY EFFECT ON THEINCOME STATEMENT EFFECT ON THE CASH FLOW Reference Value -50 % -25 % 25 % 50 % -50 % -25 % 25 % 50 % Forward Vanilla y KO Fwd -$ 136,757 $ 9.75 $ 14.63 $ 24.39 $ 29.26 Direct -$ 1,999,432 -$ 1,068,092 $ 547,632 $ 1,228,504 CONFERENCE CALL INFORMATION The Company will host its fourth quarter 2022 earnings call, on Friday, February 10th, 2023. The earnings call will take place at 11:00 am Central Time (12:00 pm ET). Mexico (Main number): 55 4742 9168 Mexico (Altern number): 55 4742 9169 USA/ Canada: +1 (888) 207 2216 International: +1 (800) 750 9038 Access Code: 2603 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/20230209005511/en/Contacts IR contact information: maria.jaquez@bachoco.net 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 Fourth Quarter and Full Year 2022 Results By: Industrias Bachoco, S.A.B. de C.V. via Business Wire February 09, 2023 at 17:15 PM EST Industrias Bachoco, S.A.B. de C.V., “Bachoco” or “the Company”, (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the fourth quarter (“4Q22”) and full year (“2022”) ending on December 31st, 2022. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”). HIGHLIGHTS 2022 Net sales increased 11.2% in 4Q22 and increased 21.0% in year 2022 vs equivalent periods of 2021 respectively. EBITDA margin was 2.9% for 4Q22 and 10.0% for the whole year. Earnings per basic and diluted share totaled $0.13 for the quarter and $10.26 for the year. CEO COMMENTS Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: “It is known that the last quarter of the year is usually a challenging period, and 4Q22 was not the exception. We kept observing high raw material prices compared to 2021 which had a negative impact in our cost of sales. Even when we had been able to partially offset some of that increase thru pricing, seasonal conditions on our markets, lowered our margins to profitability levels below 4Q21 range. On the other hand, for 4Q22 our SG&A increased 12.1% vs 4Q21 showing the impacts of higher fuel, energy and labor costs. As a result, in 4Q22 we reported an operating income of $306.6 million, 38.7% lower than the $500.2 million achieved in the same period of 2021. With operating margins of 1.3% and 2.4% respectively. In terms of EBITDA margin this put us in a 2.9% for 4Q22 vs the 4.0% of 4Q21. For the full year of 2022, the balance was good. With a very strong first half of the year, we managed to achieve and EBITDA of $9,916.2 million (10.0% margin) which is 35.3% higher compared to the $7,328.2 million (9.0% margin) obtained in 2021. As mentioned before, increases on raw material prices raised our working capital and put pressure on our Free Cash Flow. However, our financial discipline allowed us to end 2022 still with a solid structure reporting a net cash position of $15,857.4 million vs the $16,530.3 million reported in 2021. Our CAPEX for 2022 were $4,666.2 million, a 34.1% increase vs 2021. Investments were oriented to our organic growth, and the integration of RYC Alimentos. We continue to be very focused on capturing efficiencies across all our processes and being close to better serve our customers as we know this is key for our growth." EXECUTIVE SUMMARY The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2021. QUARTERLY RESULTS NET SALES BY GEOGRAPHY In millions of pesos 4Q22 4Q21 Change $ $ $ % Net Sales 23,633.8 21,251.5 2,382.3 11.2 Net sales in Mexico 17,734.3 15,807.8 1,926.5 12.2 Net sales in the U.S. 5,899.5 5,443.8 455.7 8.4 NET SALES BY SEGMENT In millions of pesos 4Q22 4Q21 Change $ $ $ % Net Sales 23,633.8 21,251.5 2,382.3 11.2 Poultry 20,000.6 18,727.7 1,272.9 6.8 Other 3,633.2 2,523.8 1,109.4 44.0 NET VOLUME SOLD BY SEGMENT In tons Change 4Q22 4Q21 Volume % Total sales volume: 591,687 605,925 (14,238.0) (2.3) Poultry 452,003 467,942 (15,939.1) (3.4) Others 139,684 137,983 1,701.1 1.2 The Company’s 4Q22 net sales totaled $23,633.8 million; $2,382.3 million or 11.2% more than $21,251.5 million reported in 4Q21. The increase is a result of higher volume sold in Other and higher prices in our main business lines as part of our strategy for offsetting the increases on cost of sales. In 4Q22, sales of our U.S. operations represented 25.0% of our total sales compared to 25.6% in 4Q21. GROSS PROFIT In millions of pesos 4Q22 4Q21 Change $ $ $ % Cost of sales 21,089.3 18,670.6 2,418.7 13.0 Gross profit 2,544.5 2,580.9 (36.4) (1.4) Gross margin 10.8% 12.1% - - In 4Q22 , cost of sales was $21,089.3 million; $2,418.7 million or 13.0% higher than $18,670.6 million reported in 4Q21. This increase was mainly due to higher unit cost in our main business lines as we continued observing year over year increases in prices of our main raw materials. The Company´s gross profit in 4Q22 was $2,544.5 million, 1.4% lower than the gross profit of $2,580.9 million in 4Q21, with a gross margin of 10.8% for 4Q22 vs 12.1% in 4Q21. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) In millions of pesos 4Q22 4Q21 Change $ $ $ % Total SG&A 2,243.8 2,002.2 241.6 12.1 Total SG&A expenses in 4Q22 were $2,243.8 million; $241.6 million higher than the $2,002.2 million reported in 4Q21. Total SG&A expenses as a percentage of net sales represented 9.5% in 4Q22 and 9.4% in 4Q21. OTHER INCOME (EXPENSE), NET In millions of pesos 4Q22 4Q21 Change $ $ $ % Other income (expense), net 5.9 (78.5) 84.4 (107.5) 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. OPERATING INCOME In millions of pesos 4Q22 4Q21 Change $ $ $ % Operating income 306.6 500.2 (193.6) (38.7) Operating margin 1.3% 2.4% - - Operating income in 4Q22 totaled $306.6 million; $193.6 million lower than the Operating income of $500.2 million reported in 4Q21. This represents an operating margin of 1.3% for 4Q22, versus 2.4% operating margin in the same period of 2021. The decrease in operating income is mainly attributed to higher raw material costs and higher SG&A. NET FINANCIAL INCOME In millions of pesos 4Q22 4Q21 Change $ $ $ % Net Financial Income (359.3) 167.6 (526.9) (314.3) Financial Income 495.7 204.2 291.4 142.7 Financial Expense 855.0 36.6 818.4 2,235.4 In 4Q22, the Company reported net financial expenses of $359.3 million, compared to a net financial income of $167.6 million reported in the same period of 2021. From the $855.0 million of Financial Expenses, $465.5 million are a result of exchange rate valuation. TAXES FOR THE PERIOD In millions of pesos 4Q22 4Q21 Change $ $ $ % Total Taxes (110.7) 72.7 (183.4) (252.2) Income tax 498.3 736.6 (238.3) (32.4) Deferred income tax (609.0) (663.9) 54.9 (8.3) Total taxes for the 4Q22 were a credit of $110.7 million, compared with total taxes of $72.7 million charged for the same period of 2021. This was a result of lower income before taxes for the 4Q22. NET CONTROLLING INTEREST INCOME In millions of pesos 4Q22 4Q21 Change $ $ $ % Net income 58.0 595.1 (537.1) (90.3) Net margin 0.2% 2.8% - - Non-Controlling Interest income (21.5) (45.7) 24.2 n/a Net controlling interest income 79.5 640.8 (561.3) n/a Basic and diluted income per share1 0.13 1.07 (0.9) n/a Basic and diluted income per ADR2 1.59 12.82 (11.2) n/a Weighted average Shares outstanding3 599,380 599,624 - - 1 In pesos 2 in pesos, one ADR equals to twelve shares 3 In thousands of shares The net controlling interest income for 4Q22 was $79.5 million, representing $0.13 pesos of earnings per share, compared with a net controlling interest income of $640.8 million, which represented a $1.07 pesos of earnings per share in 4Q21. This decrease is mainly attributed to lower operating results and higher financial expenses. EBITDA In millions of pesos 4Q22 4Q21 Change $ $ $ % Net controlling interest income 79.5 640.8 (561.3) (87.6) Income tax expense (benefit) (110.7) 72.7 (183.4) (252.2) Result in associates (21.5) (45.7) 24.2 (53.0) Net finance (income) expense 359.3 (167.6) 526.9 (314.3) Depreciation and amortization 388.0 349.7 38.2 10.9 EBITDA 694.6 850.0 (155.4) (18.3) EBITDA Margin (%) 2.9% 4.0% - - Net revenues 23,633.8 21,251.5 2,382.3 11.2 EBITDA in 4Q22 reached $694.6 million representing an EBITDA margin of 2.9%, compared to an EBITDA of $850.0 million in 4Q21, with an EBITDA margin of 4.0%. ACCUMULATED RESULTS NET SALES BY GEOGRAPHY In millions of pesos 2022 2021 Change $ $ $ % Net Sales 98,890.7 81,699.1 17,191.6 21.0 Net sales in Mexico 73,653.2 61,338.5 12,314.8 20.1 Net sales in the U.S. 25,237.4 20,360.6 4,876.8 24.0 NET SALES BY SEGMENT In millions of pesos 2022 2021 Change $ $ $ % Net Sales 98,890.7 81,699.1 17,191.6 21.0 Poultry 84,373.5 71,647.7 12,725.7 17.8 Other 14,517.2 10,051.3 4,465.9 44.4 NET VOLUME SOLD BY SEGMENT In metric tons Change 2022 2021 Volume % Total sales volume: 2,358,390 2,318,049 40,340.1 1.7 Poultry 1,764,623 1,769,071 (4,448.7) (0.3) Others 593,767 548,978 44,788.8 8.2 In 2022, net sales totaled $98,890.7 million; $17,191.6 million or 21.0% more than the $81,699.1 million reported in the same period of 2021. In 2022, sales of our U.S. operations represented 25.5% of our total sales, compared with 24.9% in 2021. OPERATING RESULTS In millions of pesos 2022 2021 Change $ $ $ % Cost of Sales 82,038.0 68,356.7 13,681.3 20.0 Gross Profit 16,852.7 13,342.4 3,510.3 26.3 Total SG&A 8,480.4 7,133.3 1,347.2 18.9 Other Income (expense) 38.8 (322.8) 361.5 (112.0) Operating Income 8,411.0 5,886.4 2,524.6 42.9 Net Financial Income (320.7) 849.9 (1,170.5) (137.7) Income Tax 2,007.2 1,806.0 201.2 11.1 Net Income 6,083.1 4,930.3 1,152.8 23.4 Non-controlling interest (69.1) (131.5) 62.3 (47.4) Net controlling interest Income 6,152.2 5,061.7 1,090.5 21.5 In the 2022, the cost of sales totaled $82,038.0 million; $13,681.3 million or 20.0% higher than $68,356.7 million reported in the 2021. As a result, we reached a gross profit of $16,852.7 million and a gross margin of 17.0% in 2022, when compared to $13,342.4 million of gross profit and a gross margin of 16.3% reached in the same period of 2021. Total SG&A in 2022 were $8,480.4 million; $1,347.2 million or 18.9% higher than the $7,133.3 million reported in 2021. Total SG&A expenses as a percentage of net sales represented 8.6% in 2022 and 8.7% in 2021. In 2022 we had other income of $38.8 million, compared with other expenses of $322.8 million reported in 2021. Operating income in 2022 was $8,411.0 million, which represents an operating margin of 8.5%, an increase from an operating income of $5,886.4 million with an operating margin of 7.2% in 2021. We had Net financial expenses in 2022 of $320.7 million which compares to a Net financial income of $849.9 million in 2021. Total taxes were $2,007.2 million as of December 31st, 2022. These include $1,667.4 million of income tax and $339.9 million of deferred income taxes. Those figures compare to an income tax of $1,790.6 million and deferred income taxes of $15.4 million in 2021. After Non-controlling interest, all the above resulted in a Net controlling interest income of $6,152.2 million or 6.2% margin in 2022, which represents $10.26 pesos of earnings per share; while in the 2021 the Net controlling interest income totaled $5,061.7 million, 5.1% margin and $8.44 pesos of income per share. EBITDA In millions of pesos 2022 2021 Change $ $ $ % Net controlling interest profit 6,152.2 5,061.7 1,090.5 21.5 Income tax expense (benefit) 2,007.2 1,806.0 201.2 11.1 Result in associates (69.1) (131.5) 62.3 (47.4) Net finance (income) expense 320.7 (849.9) 1,170.5 (137.7) Depreciation and amortization 1,505.2 1,441.8 63.4 4.4 EBITDA 9,916.2 7,328.2 2,588.0 35.3 EBITDA Margin (%) 10.0% 9.0% - - Net revenues 98,890.7 81,699.1 17,191.6 21.0 EBITDA in 2022 reached $9,916.2 million, representing an EBITDA margin of 10.0%, compared to an EBITDA of $7,328.2 million in 2021, with an EBITDA margin of 9.0%. BALANCE SHEET BALANCE SHEET DATA In millions of pesos Dec. 31, 2022 Dec. 31, 2021 Change $ $ $ % TOTAL ASSETS 72,236.1 65,988.8 6,247.3 9.5 Cash and cash equivalents 20,049.5 20,777.0 (727.5) (3.5) Accounts receivable 5,860.8 5,108.5 752.4 14.7 TOTAL LIABILITIES 19,193.0 17,704.7 1,488.3 8.4 Accounts payable 6,841.2 10,200.7 (3,359.4) (32.9) Short-term debt 1,181.5 1,993.9 (812.4) (40.7) Long-term debt 3,010.5 - 3,010.5 - TOTAL STOCKHOLDERS’ EQUITY 53,043.0 48,284.1 4,759.0 9.9 Capital stock 1,174.4 1,174.4 (0.0) (0.0) Cash and equivalents as of December 31st, 2022, totaled $20,049.5 million vs $20,777.0 million as of December 31st, 2021. Total debt as of December 31st, 2022, was $4,192.0 million, compared to $1,993.9 million reported as of December 31st, 2021. Net cash as of December 31st, 2022, was $15,857.4 million, compared to net cash of $18,783.1 million as of December 31st, 2021. CAPITAL EXPENDITURES In millions of pesos 2022 2021 Change $ $ $ % Capital Expenditures 4,666.2 3,479.5 1,186.7 34.1 Total CAPEX for 2022 was $4,666.2 million vs $3,479.5 million in 2021, mainly allocated toward organic growth and productivity projects across all our facilities. STOCK INFORMATION As of December 31, 2022 Total Shares 600,000,000 Total free float 12.32% Market cap (millions of pesos) $50,706 Source: Yahoo Finances SHARE PRICE 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 December 84.51 81.66 84.51 51.03 48.97 50.99 November 86.31 80.84 82.64 53.44 49.17 51.11 October 81.40 77.77 80.91 49.06 46.25 49.06 September 80.00 76.81 77.86 48.13 45.78 46.03 August 79.98 75.34 79.97 48.05 43.97 47.33 July 76.56 69.97 76.56 45.18 40.56 45.18 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 ANALYST COVERAGE Institution Analyst name E-mail 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 $19.51 per USD, which corresponds to the rate at the close of December 31st, 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 December 31, December 31, In million pesos 2022 2022 2021* TOTAL ASSETS $ 3,702.5 72,236.1 65,988.8 Total current assets 2,047.9 39,955.0 37,845.6 Cash and cash equivalents 1,027.7 20,049.5 20,777.0 Total accounts receivable 300.4 5,860.8 5,108.5 Inventories 595.0 11,607.6 9,145.6 Other current assets 124.9 2,437.1 2,814.6 Total non current assets 1,654.6 32,280.5 28,143.2 Net property, plant and equipment 1,263.0 24,640.5 21,763.4 Other non current Assets 391.6 7,640.0 6,379.8 TOTAL LIABILITIES $ 983.8 19,193.0 17,704.7 Total current liabilities 541.2 10,558.4 12,835.3 Notes payable to banks 60.6 1,181.5 1,993.9 Accounts payable 350.7 6,841.2 10,200.7 Other taxes payable and other accruals 130.0 2,535.7 640.7 Total long-term liabilities 442.6 8,634.6 4,869.4 Long-term debt 154.3 3,010.5 - Other non current liabilities 50.1 976.5 1,027.9 Deferred income taxes 238.2 4,647.5 3,841.5 TOTAL STOCKHOLDERS' EQUITY $ 2,718.8 53,043.0 48,284.1 Capital stock 60.2 1,174.4 1,174.4 Commission in shares issued 21.2 414.1 414.1 Repurchased shares - - - Retained earnings 2,573.1 50,201.5 45,038.6 Others accounts 43.4 846.3 1,179.2 Non controlling interest 20.8 406.7 477.7 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,702.5 72,236.1 65,988.8 *Audited CONSOLIDATED STATEMENT OF INCOME Fourth Quarter Results, ended December 31st: -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021* Net sales $ 1,211.4 23,633.8 21,251.5 Cost of sales 1,080.9 21,089.3 18,670.6 Gross profit 130.4 2,544.5 2,580.9 SG&A 115.0 2,243.8 2,002.2 Other income (expenses), net 0.3 5.9 (78.5 ) Operating income 15.7 306.6 500.2 Net finance income (18.4 ) (359.3 ) 167.6 Income tax (5.7 ) (110.7 ) 72.7 Net Income $ 3.0 58.0 595.1 Non-controlling interest (1.10 ) (21.5 ) (45.7 ) Net controlling interest profit 4.07 79.5 640.8 Basic and diluted earnings per share 0.01 0.13 1.07 Basic and diluted earnings per ADR 0.08 1.59 12.82 Weighted average Shares outstanding1 599,380 599,380 599,624 EBITDA Result $ 35.6 694.6 850.0 Gross margin 10.8 % 10.8 % 12.1 % Operating margin 1.3 % 1.3 % 2.4 % Net margin 0.3 % 0.2 % 2.8 % EBITDA margin 2.9 % 2.9 % 4.0 % 1 In thousands * Audited CONSOLIDATED STATEMENT OF INCOME Annual Results -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021* Net sales $ 5,068.7 98,890.7 81,699.1 Cost of sales 4,204.9 82,038.0 68,356.7 Gross profit 863.8 16,852.7 13,342.4 Selling, general and administrative expenses 434.7 8,480.4 7,133.3 Other income (expenses), net 2.0 38.8 (322.8 ) Operating income 431.1 8,411.0 5,886.4 Net finance income (16.44 ) (320.7 ) 849.88 Income tax 102.9 2,007.2 1,806.0 Net income $ 311.8 6,083.1 4,930.3 Non-controlling interest (3.54 ) (69.1 ) (131.5 ) Net controlling interest profit 315.3 6,152.2 5,061.7 Basic and diluted earnings per share 0.53 10.26 8.44 Basic and diluted earnings per ADR 6.31 123.2 101.28 Weighted average Shares outstanding1 599,380 599,380 599,730 EBITDA Result $ 508.3 9,916.2 7,328.2 Gross margin 17.0 % 17.0 % 16.3 % Operating margin 8.5 % 8.5 % 7.2 % Net margin 6.2 % 6.2 % 6.0 % EBITDA margin 10.0 % 10.0 % 9.0 % 1 In thousands * Audited CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar December 31, 2022 2022 2021* NET MAJORITY INCOME BEFORE INCOME TAX $ 414.7 8,090.3 6,737.9 ITEMS RELATING TO INVESTING ACTIVITIES: 85.4 1,666.8 1,570.9 Depreciation and others 98.2 1,915.1 1,807.2 Income (loss) on sale of plant and equipment 3.5 69.1 95.3 Other Items (16.3 ) (317.4 ) (331.6 ) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 500.1 9,757.1 8,308.8 CASH GENERATED OR USED IN THE OPERATION: (202.6 ) (3,952.1 ) (120.1 ) Decrease (increase) in accounts receivable (36.1 ) (704.6 ) (811.6 ) Decrease (increase) in inventories (145.4 ) (2,836.0 ) (732.3 ) Increase (decrease) in accounts payable (127.6 ) (2,490.1 ) 3,988.3 Other Items 106.5 2,078.6 (2,564.5 ) NET CASH FLOW FROM OPERATING ACTIVITIES 297.5 5,805.0 8,188.7 NET CASH FLOW FROM INVESTING ACTIVITIES (215.9 ) (4,211.8 ) (2,382.7 ) Acquisition of property, plant and equipment (238.2 ) (4,647.7 ) (3,479.5 ) Proceeds from sales of property plant and equipment 4.3 83.3 29.8 Other Items 18.1 352.5 1,067.1 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 81.7 1,593.2 5,806.0 Net cash provided by financing activities: (115.4 ) (2,250.8 ) (4,341.3 ) Proceeds from loans 239.7 4,676.0 1,709.1 Principal payments on loans (127.0 ) (2,477.9 ) (2,267.3 ) Dividends paid (50.4 ) (983.0 ) (853.6 ) Other items (177.7 ) (3,466.0 ) (2,929.5 ) Net increase (decrease) in cash and equivalents (33.7 ) (657.7 ) 1,464.7 Cash and investments at the beginning of year $ 1,061.4 20,707.1 19,242.4 CASH AND INVESTMENTS AT END OF PERIOD $ 1,027.7 20,049.5 20,707.1 *Audited DERIVATIVES POSITION REPORT Fourth Quarter 2022 Thousands of Mexican Pesos, as of December 31, 2022 TYPE OF FINANCIALINSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUEBY YEAR GUARANTIESREQUIRED 4Q-2022 3Q-2022 4Q-2022 3Q-2022 Forward Vanilla y KO Fwd Hedge $ 190,950 $ 19.51 $ 20.13 $ -136,757 $ -48,982 95% in 2023and 5% in 2024 The deals considerthe possibility of margin callsbut not another kindof guarantee Futures for corn, soybean meal,soybean oil and natural gas Hedge $ 442,441 CORN CORN $ 16,178 $ 12,462 100% in 2023 In USD per Bushel In USD per Bushel month price month price Mar-23 $ 6.785 May-23 $ 6.780 Jul-23 $ 6.718 Sep-23 $ 6.270 Dec-23 $ 6.108 Dec-22 $ 6.775 SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price Mar-23 $ 471.0 May-23 $ 461.0 Jul-23 $ 454.3 Aug-23 $ 443.1 Sep-23 $ 428.2 Oct-23 $ 413.6 Dec-23 $ 411.6 Dec-22 $ 403.0 SOYBEAN OIL SOYBEAN OIL In US cents per pound In US cents per pound Month Price Month Price Mar-23 $ 64.07 May-23 $ 63.94 Jul-23 $ 63.56 Dec-22 $ 61.56 NATURAL GAS NATURAL GAS In USD/MM BTU In USD/MM BTU Month Price Month Price Nov-22 $ 6.77 Dec-22 $ 7.07 Jan-23 $ 7.25 Feb-23 $ 4.475 Feb-23 $ 6.94 Options of Corn Hedge $ 890,801 CORN CORN $ 25,296 $ 37,181 95% in 2023and 5% in 2024 In USD per Bushel In USD per Bushel month price month price Mar-23 $ 6.785 May-23 $ 6.780 Jul-23 $ 6.718 Sep-23 $ 6.270 Dec-23 $ 6.108 Dec-22 $ 6.775 Mar-24 $ 6.180 Mar-23 $ 6.840 Options of soybean meal Hedge $ 950,696 SOYBEAN MEAL SOYBEAN MEAL $ 109,976 $ 12,013 89% in 2023and 11% in 2024 In USD per ton In USD per ton month price month price Mar-23 $ 471.0 May-23 $ 461.0 Jul-23 $ 454.3 Aug-23 $ 443.1 Sep-23 $ 428.2 Oct-23 $ 413.6 Dec-22 $ 403.0 Dec-23 $ 411.6 Jan-23 $ 401.3 Jan-24 $ 408.8 Mar-23 $ 397.2 Mar-24 $ 402.9 May-23 $ 395.0 Options of Soybean oil Hedge -$ 3,750 SOYBEAN OIL $ - $ - 100% in 2023 In US cents per pound Mes Precio Feb-23 $ 64.07 -The total financial instruments do not exceed 5% of total assets as of December 31, 2022. -The notional value represents the net position as of December 31, 2022 at the exchange rate of Ps.19.51 per one dollar. -A negative value means an unfavorable effect for the Company. Fourth Quarter 2022 Thousands of Mexican Pesos, as of December 31, 2022 PROBABLE SCENARIO TYPE OF FINANCIALINSTRUMENT REASONABLEVALUE VALUE OF THE RELATED COMMODITY EFFECT ON THEINCOME 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 -$ 136,757 $ 19.02 $ 20.00 $ 20.48 Direct -$ 229,887 -$ 43,623 $ 49,506 -5 % 5 % 10 % -5 % 5 % 10 % Futures of Corn: (2) $ 16,178 $ 6.45 $ 7.12 $ 7.46 The effect willmaterialize as theinventory is consumed -$ 5,945 $ 38,301 $ 60,424 Futures of Soybean Meal: (2) $ 447.5 $ 494.6 $ 518.1 Futures for Soy Oil (2) $ 60.9 $ 67.3 $ 70.5 Futures for Natural Gas (2) $ 4.3 $ 4.7 $ 4.9 Options for Corn $ 25,296 $ 6.45 $ 7.12 $ 7.46 -$ 16,930 $ 67,521 $ 109,747 Options of Soybean Meal $ 109,976 $ 447.5 $ 494.6 $ 518.1 $ 62,438 $ 157,513 $ 205,050 Options of Soybean Oil $ - $ 60.87 $ 67.27 $ 70.48 $ 125 $ - $ - (1) The reference value is the exchange rate of Ps. $19.51 per USD as of December 31, 2022. (2) The reference values are: future of corn Mar 2023, $6.7850 USD/bushel, the future of soybean meal Mar 2023, $471.00 USD/ton, the future of soybean oil Mar 2023, $64.07 usd cts / pound and the future of natural gas Feb 2023, $4.48 usd/ MM BTU. 'All the evaluations are performed according with the corresponding future, here only the first month futures are shown. (3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. -A negative value means an unfavorable effect for the Company. Fourth Quarter 2022 Thousands of Mexican Pesos, as of December 31, 2022 STRESS SCENARIO TYPE OF FINANCIALINSTRUMENT REASONABLEVALUE VALUE OF THE RELATED COMMODITY EFFECT ON THEINCOME STATEMENT EFFECT ON THE CASH FLOW Reference Value -50 % -25 % 25 % 50 % -50 % -25 % 25 % 50 % Forward Vanilla y KO Fwd -$ 136,757 $ 9.75 $ 14.63 $ 24.39 $ 29.26 Direct -$ 1,999,432 -$ 1,068,092 $ 547,632 $ 1,228,504 CONFERENCE CALL INFORMATION The Company will host its fourth quarter 2022 earnings call, on Friday, February 10th, 2023. The earnings call will take place at 11:00 am Central Time (12:00 pm ET). Mexico (Main number): 55 4742 9168 Mexico (Altern number): 55 4742 9169 USA/ Canada: +1 (888) 207 2216 International: +1 (800) 750 9038 Access Code: 2603 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/20230209005511/en/Contacts IR contact information: maria.jaquez@bachoco.net 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 fourth quarter (“4Q22”) and full year (“2022”) ending on December 31st, 2022. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”). HIGHLIGHTS 2022 Net sales increased 11.2% in 4Q22 and increased 21.0% in year 2022 vs equivalent periods of 2021 respectively. EBITDA margin was 2.9% for 4Q22 and 10.0% for the whole year. Earnings per basic and diluted share totaled $0.13 for the quarter and $10.26 for the year. CEO COMMENTS Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: “It is known that the last quarter of the year is usually a challenging period, and 4Q22 was not the exception. We kept observing high raw material prices compared to 2021 which had a negative impact in our cost of sales. Even when we had been able to partially offset some of that increase thru pricing, seasonal conditions on our markets, lowered our margins to profitability levels below 4Q21 range. On the other hand, for 4Q22 our SG&A increased 12.1% vs 4Q21 showing the impacts of higher fuel, energy and labor costs. As a result, in 4Q22 we reported an operating income of $306.6 million, 38.7% lower than the $500.2 million achieved in the same period of 2021. With operating margins of 1.3% and 2.4% respectively. In terms of EBITDA margin this put us in a 2.9% for 4Q22 vs the 4.0% of 4Q21. For the full year of 2022, the balance was good. With a very strong first half of the year, we managed to achieve and EBITDA of $9,916.2 million (10.0% margin) which is 35.3% higher compared to the $7,328.2 million (9.0% margin) obtained in 2021. As mentioned before, increases on raw material prices raised our working capital and put pressure on our Free Cash Flow. However, our financial discipline allowed us to end 2022 still with a solid structure reporting a net cash position of $15,857.4 million vs the $16,530.3 million reported in 2021. Our CAPEX for 2022 were $4,666.2 million, a 34.1% increase vs 2021. Investments were oriented to our organic growth, and the integration of RYC Alimentos. We continue to be very focused on capturing efficiencies across all our processes and being close to better serve our customers as we know this is key for our growth." EXECUTIVE SUMMARY The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2021. QUARTERLY RESULTS NET SALES BY GEOGRAPHY In millions of pesos 4Q22 4Q21 Change $ $ $ % Net Sales 23,633.8 21,251.5 2,382.3 11.2 Net sales in Mexico 17,734.3 15,807.8 1,926.5 12.2 Net sales in the U.S. 5,899.5 5,443.8 455.7 8.4 NET SALES BY SEGMENT In millions of pesos 4Q22 4Q21 Change $ $ $ % Net Sales 23,633.8 21,251.5 2,382.3 11.2 Poultry 20,000.6 18,727.7 1,272.9 6.8 Other 3,633.2 2,523.8 1,109.4 44.0 NET VOLUME SOLD BY SEGMENT In tons Change 4Q22 4Q21 Volume % Total sales volume: 591,687 605,925 (14,238.0) (2.3) Poultry 452,003 467,942 (15,939.1) (3.4) Others 139,684 137,983 1,701.1 1.2 The Company’s 4Q22 net sales totaled $23,633.8 million; $2,382.3 million or 11.2% more than $21,251.5 million reported in 4Q21. The increase is a result of higher volume sold in Other and higher prices in our main business lines as part of our strategy for offsetting the increases on cost of sales. In 4Q22, sales of our U.S. operations represented 25.0% of our total sales compared to 25.6% in 4Q21. GROSS PROFIT In millions of pesos 4Q22 4Q21 Change $ $ $ % Cost of sales 21,089.3 18,670.6 2,418.7 13.0 Gross profit 2,544.5 2,580.9 (36.4) (1.4) Gross margin 10.8% 12.1% - - In 4Q22 , cost of sales was $21,089.3 million; $2,418.7 million or 13.0% higher than $18,670.6 million reported in 4Q21. This increase was mainly due to higher unit cost in our main business lines as we continued observing year over year increases in prices of our main raw materials. The Company´s gross profit in 4Q22 was $2,544.5 million, 1.4% lower than the gross profit of $2,580.9 million in 4Q21, with a gross margin of 10.8% for 4Q22 vs 12.1% in 4Q21. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) In millions of pesos 4Q22 4Q21 Change $ $ $ % Total SG&A 2,243.8 2,002.2 241.6 12.1 Total SG&A expenses in 4Q22 were $2,243.8 million; $241.6 million higher than the $2,002.2 million reported in 4Q21. Total SG&A expenses as a percentage of net sales represented 9.5% in 4Q22 and 9.4% in 4Q21. OTHER INCOME (EXPENSE), NET In millions of pesos 4Q22 4Q21 Change $ $ $ % Other income (expense), net 5.9 (78.5) 84.4 (107.5) 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. OPERATING INCOME In millions of pesos 4Q22 4Q21 Change $ $ $ % Operating income 306.6 500.2 (193.6) (38.7) Operating margin 1.3% 2.4% - - Operating income in 4Q22 totaled $306.6 million; $193.6 million lower than the Operating income of $500.2 million reported in 4Q21. This represents an operating margin of 1.3% for 4Q22, versus 2.4% operating margin in the same period of 2021. The decrease in operating income is mainly attributed to higher raw material costs and higher SG&A. NET FINANCIAL INCOME In millions of pesos 4Q22 4Q21 Change $ $ $ % Net Financial Income (359.3) 167.6 (526.9) (314.3) Financial Income 495.7 204.2 291.4 142.7 Financial Expense 855.0 36.6 818.4 2,235.4 In 4Q22, the Company reported net financial expenses of $359.3 million, compared to a net financial income of $167.6 million reported in the same period of 2021. From the $855.0 million of Financial Expenses, $465.5 million are a result of exchange rate valuation. TAXES FOR THE PERIOD In millions of pesos 4Q22 4Q21 Change $ $ $ % Total Taxes (110.7) 72.7 (183.4) (252.2) Income tax 498.3 736.6 (238.3) (32.4) Deferred income tax (609.0) (663.9) 54.9 (8.3) Total taxes for the 4Q22 were a credit of $110.7 million, compared with total taxes of $72.7 million charged for the same period of 2021. This was a result of lower income before taxes for the 4Q22. NET CONTROLLING INTEREST INCOME In millions of pesos 4Q22 4Q21 Change $ $ $ % Net income 58.0 595.1 (537.1) (90.3) Net margin 0.2% 2.8% - - Non-Controlling Interest income (21.5) (45.7) 24.2 n/a Net controlling interest income 79.5 640.8 (561.3) n/a Basic and diluted income per share1 0.13 1.07 (0.9) n/a Basic and diluted income per ADR2 1.59 12.82 (11.2) n/a Weighted average Shares outstanding3 599,380 599,624 - - 1 In pesos 2 in pesos, one ADR equals to twelve shares 3 In thousands of shares The net controlling interest income for 4Q22 was $79.5 million, representing $0.13 pesos of earnings per share, compared with a net controlling interest income of $640.8 million, which represented a $1.07 pesos of earnings per share in 4Q21. This decrease is mainly attributed to lower operating results and higher financial expenses. EBITDA In millions of pesos 4Q22 4Q21 Change $ $ $ % Net controlling interest income 79.5 640.8 (561.3) (87.6) Income tax expense (benefit) (110.7) 72.7 (183.4) (252.2) Result in associates (21.5) (45.7) 24.2 (53.0) Net finance (income) expense 359.3 (167.6) 526.9 (314.3) Depreciation and amortization 388.0 349.7 38.2 10.9 EBITDA 694.6 850.0 (155.4) (18.3) EBITDA Margin (%) 2.9% 4.0% - - Net revenues 23,633.8 21,251.5 2,382.3 11.2 EBITDA in 4Q22 reached $694.6 million representing an EBITDA margin of 2.9%, compared to an EBITDA of $850.0 million in 4Q21, with an EBITDA margin of 4.0%. ACCUMULATED RESULTS NET SALES BY GEOGRAPHY In millions of pesos 2022 2021 Change $ $ $ % Net Sales 98,890.7 81,699.1 17,191.6 21.0 Net sales in Mexico 73,653.2 61,338.5 12,314.8 20.1 Net sales in the U.S. 25,237.4 20,360.6 4,876.8 24.0 NET SALES BY SEGMENT In millions of pesos 2022 2021 Change $ $ $ % Net Sales 98,890.7 81,699.1 17,191.6 21.0 Poultry 84,373.5 71,647.7 12,725.7 17.8 Other 14,517.2 10,051.3 4,465.9 44.4 NET VOLUME SOLD BY SEGMENT In metric tons Change 2022 2021 Volume % Total sales volume: 2,358,390 2,318,049 40,340.1 1.7 Poultry 1,764,623 1,769,071 (4,448.7) (0.3) Others 593,767 548,978 44,788.8 8.2 In 2022, net sales totaled $98,890.7 million; $17,191.6 million or 21.0% more than the $81,699.1 million reported in the same period of 2021. In 2022, sales of our U.S. operations represented 25.5% of our total sales, compared with 24.9% in 2021. OPERATING RESULTS In millions of pesos 2022 2021 Change $ $ $ % Cost of Sales 82,038.0 68,356.7 13,681.3 20.0 Gross Profit 16,852.7 13,342.4 3,510.3 26.3 Total SG&A 8,480.4 7,133.3 1,347.2 18.9 Other Income (expense) 38.8 (322.8) 361.5 (112.0) Operating Income 8,411.0 5,886.4 2,524.6 42.9 Net Financial Income (320.7) 849.9 (1,170.5) (137.7) Income Tax 2,007.2 1,806.0 201.2 11.1 Net Income 6,083.1 4,930.3 1,152.8 23.4 Non-controlling interest (69.1) (131.5) 62.3 (47.4) Net controlling interest Income 6,152.2 5,061.7 1,090.5 21.5 In the 2022, the cost of sales totaled $82,038.0 million; $13,681.3 million or 20.0% higher than $68,356.7 million reported in the 2021. As a result, we reached a gross profit of $16,852.7 million and a gross margin of 17.0% in 2022, when compared to $13,342.4 million of gross profit and a gross margin of 16.3% reached in the same period of 2021. Total SG&A in 2022 were $8,480.4 million; $1,347.2 million or 18.9% higher than the $7,133.3 million reported in 2021. Total SG&A expenses as a percentage of net sales represented 8.6% in 2022 and 8.7% in 2021. In 2022 we had other income of $38.8 million, compared with other expenses of $322.8 million reported in 2021. Operating income in 2022 was $8,411.0 million, which represents an operating margin of 8.5%, an increase from an operating income of $5,886.4 million with an operating margin of 7.2% in 2021. We had Net financial expenses in 2022 of $320.7 million which compares to a Net financial income of $849.9 million in 2021. Total taxes were $2,007.2 million as of December 31st, 2022. These include $1,667.4 million of income tax and $339.9 million of deferred income taxes. Those figures compare to an income tax of $1,790.6 million and deferred income taxes of $15.4 million in 2021. After Non-controlling interest, all the above resulted in a Net controlling interest income of $6,152.2 million or 6.2% margin in 2022, which represents $10.26 pesos of earnings per share; while in the 2021 the Net controlling interest income totaled $5,061.7 million, 5.1% margin and $8.44 pesos of income per share. EBITDA In millions of pesos 2022 2021 Change $ $ $ % Net controlling interest profit 6,152.2 5,061.7 1,090.5 21.5 Income tax expense (benefit) 2,007.2 1,806.0 201.2 11.1 Result in associates (69.1) (131.5) 62.3 (47.4) Net finance (income) expense 320.7 (849.9) 1,170.5 (137.7) Depreciation and amortization 1,505.2 1,441.8 63.4 4.4 EBITDA 9,916.2 7,328.2 2,588.0 35.3 EBITDA Margin (%) 10.0% 9.0% - - Net revenues 98,890.7 81,699.1 17,191.6 21.0 EBITDA in 2022 reached $9,916.2 million, representing an EBITDA margin of 10.0%, compared to an EBITDA of $7,328.2 million in 2021, with an EBITDA margin of 9.0%. BALANCE SHEET BALANCE SHEET DATA In millions of pesos Dec. 31, 2022 Dec. 31, 2021 Change $ $ $ % TOTAL ASSETS 72,236.1 65,988.8 6,247.3 9.5 Cash and cash equivalents 20,049.5 20,777.0 (727.5) (3.5) Accounts receivable 5,860.8 5,108.5 752.4 14.7 TOTAL LIABILITIES 19,193.0 17,704.7 1,488.3 8.4 Accounts payable 6,841.2 10,200.7 (3,359.4) (32.9) Short-term debt 1,181.5 1,993.9 (812.4) (40.7) Long-term debt 3,010.5 - 3,010.5 - TOTAL STOCKHOLDERS’ EQUITY 53,043.0 48,284.1 4,759.0 9.9 Capital stock 1,174.4 1,174.4 (0.0) (0.0) Cash and equivalents as of December 31st, 2022, totaled $20,049.5 million vs $20,777.0 million as of December 31st, 2021. Total debt as of December 31st, 2022, was $4,192.0 million, compared to $1,993.9 million reported as of December 31st, 2021. Net cash as of December 31st, 2022, was $15,857.4 million, compared to net cash of $18,783.1 million as of December 31st, 2021. CAPITAL EXPENDITURES In millions of pesos 2022 2021 Change $ $ $ % Capital Expenditures 4,666.2 3,479.5 1,186.7 34.1 Total CAPEX for 2022 was $4,666.2 million vs $3,479.5 million in 2021, mainly allocated toward organic growth and productivity projects across all our facilities. STOCK INFORMATION As of December 31, 2022 Total Shares 600,000,000 Total free float 12.32% Market cap (millions of pesos) $50,706 Source: Yahoo Finances SHARE PRICE 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 December 84.51 81.66 84.51 51.03 48.97 50.99 November 86.31 80.84 82.64 53.44 49.17 51.11 October 81.40 77.77 80.91 49.06 46.25 49.06 September 80.00 76.81 77.86 48.13 45.78 46.03 August 79.98 75.34 79.97 48.05 43.97 47.33 July 76.56 69.97 76.56 45.18 40.56 45.18 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 ANALYST COVERAGE Institution Analyst name E-mail 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 $19.51 per USD, which corresponds to the rate at the close of December 31st, 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 December 31, December 31, In million pesos 2022 2022 2021* TOTAL ASSETS $ 3,702.5 72,236.1 65,988.8 Total current assets 2,047.9 39,955.0 37,845.6 Cash and cash equivalents 1,027.7 20,049.5 20,777.0 Total accounts receivable 300.4 5,860.8 5,108.5 Inventories 595.0 11,607.6 9,145.6 Other current assets 124.9 2,437.1 2,814.6 Total non current assets 1,654.6 32,280.5 28,143.2 Net property, plant and equipment 1,263.0 24,640.5 21,763.4 Other non current Assets 391.6 7,640.0 6,379.8 TOTAL LIABILITIES $ 983.8 19,193.0 17,704.7 Total current liabilities 541.2 10,558.4 12,835.3 Notes payable to banks 60.6 1,181.5 1,993.9 Accounts payable 350.7 6,841.2 10,200.7 Other taxes payable and other accruals 130.0 2,535.7 640.7 Total long-term liabilities 442.6 8,634.6 4,869.4 Long-term debt 154.3 3,010.5 - Other non current liabilities 50.1 976.5 1,027.9 Deferred income taxes 238.2 4,647.5 3,841.5 TOTAL STOCKHOLDERS' EQUITY $ 2,718.8 53,043.0 48,284.1 Capital stock 60.2 1,174.4 1,174.4 Commission in shares issued 21.2 414.1 414.1 Repurchased shares - - - Retained earnings 2,573.1 50,201.5 45,038.6 Others accounts 43.4 846.3 1,179.2 Non controlling interest 20.8 406.7 477.7 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,702.5 72,236.1 65,988.8 *Audited CONSOLIDATED STATEMENT OF INCOME Fourth Quarter Results, ended December 31st: -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021* Net sales $ 1,211.4 23,633.8 21,251.5 Cost of sales 1,080.9 21,089.3 18,670.6 Gross profit 130.4 2,544.5 2,580.9 SG&A 115.0 2,243.8 2,002.2 Other income (expenses), net 0.3 5.9 (78.5 ) Operating income 15.7 306.6 500.2 Net finance income (18.4 ) (359.3 ) 167.6 Income tax (5.7 ) (110.7 ) 72.7 Net Income $ 3.0 58.0 595.1 Non-controlling interest (1.10 ) (21.5 ) (45.7 ) Net controlling interest profit 4.07 79.5 640.8 Basic and diluted earnings per share 0.01 0.13 1.07 Basic and diluted earnings per ADR 0.08 1.59 12.82 Weighted average Shares outstanding1 599,380 599,380 599,624 EBITDA Result $ 35.6 694.6 850.0 Gross margin 10.8 % 10.8 % 12.1 % Operating margin 1.3 % 1.3 % 2.4 % Net margin 0.3 % 0.2 % 2.8 % EBITDA margin 2.9 % 2.9 % 4.0 % 1 In thousands * Audited CONSOLIDATED STATEMENT OF INCOME Annual Results -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021* Net sales $ 5,068.7 98,890.7 81,699.1 Cost of sales 4,204.9 82,038.0 68,356.7 Gross profit 863.8 16,852.7 13,342.4 Selling, general and administrative expenses 434.7 8,480.4 7,133.3 Other income (expenses), net 2.0 38.8 (322.8 ) Operating income 431.1 8,411.0 5,886.4 Net finance income (16.44 ) (320.7 ) 849.88 Income tax 102.9 2,007.2 1,806.0 Net income $ 311.8 6,083.1 4,930.3 Non-controlling interest (3.54 ) (69.1 ) (131.5 ) Net controlling interest profit 315.3 6,152.2 5,061.7 Basic and diluted earnings per share 0.53 10.26 8.44 Basic and diluted earnings per ADR 6.31 123.2 101.28 Weighted average Shares outstanding1 599,380 599,380 599,730 EBITDA Result $ 508.3 9,916.2 7,328.2 Gross margin 17.0 % 17.0 % 16.3 % Operating margin 8.5 % 8.5 % 7.2 % Net margin 6.2 % 6.2 % 6.0 % EBITDA margin 10.0 % 10.0 % 9.0 % 1 In thousands * Audited CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar December 31, 2022 2022 2021* NET MAJORITY INCOME BEFORE INCOME TAX $ 414.7 8,090.3 6,737.9 ITEMS RELATING TO INVESTING ACTIVITIES: 85.4 1,666.8 1,570.9 Depreciation and others 98.2 1,915.1 1,807.2 Income (loss) on sale of plant and equipment 3.5 69.1 95.3 Other Items (16.3 ) (317.4 ) (331.6 ) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 500.1 9,757.1 8,308.8 CASH GENERATED OR USED IN THE OPERATION: (202.6 ) (3,952.1 ) (120.1 ) Decrease (increase) in accounts receivable (36.1 ) (704.6 ) (811.6 ) Decrease (increase) in inventories (145.4 ) (2,836.0 ) (732.3 ) Increase (decrease) in accounts payable (127.6 ) (2,490.1 ) 3,988.3 Other Items 106.5 2,078.6 (2,564.5 ) NET CASH FLOW FROM OPERATING ACTIVITIES 297.5 5,805.0 8,188.7 NET CASH FLOW FROM INVESTING ACTIVITIES (215.9 ) (4,211.8 ) (2,382.7 ) Acquisition of property, plant and equipment (238.2 ) (4,647.7 ) (3,479.5 ) Proceeds from sales of property plant and equipment 4.3 83.3 29.8 Other Items 18.1 352.5 1,067.1 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 81.7 1,593.2 5,806.0 Net cash provided by financing activities: (115.4 ) (2,250.8 ) (4,341.3 ) Proceeds from loans 239.7 4,676.0 1,709.1 Principal payments on loans (127.0 ) (2,477.9 ) (2,267.3 ) Dividends paid (50.4 ) (983.0 ) (853.6 ) Other items (177.7 ) (3,466.0 ) (2,929.5 ) Net increase (decrease) in cash and equivalents (33.7 ) (657.7 ) 1,464.7 Cash and investments at the beginning of year $ 1,061.4 20,707.1 19,242.4 CASH AND INVESTMENTS AT END OF PERIOD $ 1,027.7 20,049.5 20,707.1 *Audited DERIVATIVES POSITION REPORT Fourth Quarter 2022 Thousands of Mexican Pesos, as of December 31, 2022 TYPE OF FINANCIALINSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUEBY YEAR GUARANTIESREQUIRED 4Q-2022 3Q-2022 4Q-2022 3Q-2022 Forward Vanilla y KO Fwd Hedge $ 190,950 $ 19.51 $ 20.13 $ -136,757 $ -48,982 95% in 2023and 5% in 2024 The deals considerthe possibility of margin callsbut not another kindof guarantee Futures for corn, soybean meal,soybean oil and natural gas Hedge $ 442,441 CORN CORN $ 16,178 $ 12,462 100% in 2023 In USD per Bushel In USD per Bushel month price month price Mar-23 $ 6.785 May-23 $ 6.780 Jul-23 $ 6.718 Sep-23 $ 6.270 Dec-23 $ 6.108 Dec-22 $ 6.775 SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price Mar-23 $ 471.0 May-23 $ 461.0 Jul-23 $ 454.3 Aug-23 $ 443.1 Sep-23 $ 428.2 Oct-23 $ 413.6 Dec-23 $ 411.6 Dec-22 $ 403.0 SOYBEAN OIL SOYBEAN OIL In US cents per pound In US cents per pound Month Price Month Price Mar-23 $ 64.07 May-23 $ 63.94 Jul-23 $ 63.56 Dec-22 $ 61.56 NATURAL GAS NATURAL GAS In USD/MM BTU In USD/MM BTU Month Price Month Price Nov-22 $ 6.77 Dec-22 $ 7.07 Jan-23 $ 7.25 Feb-23 $ 4.475 Feb-23 $ 6.94 Options of Corn Hedge $ 890,801 CORN CORN $ 25,296 $ 37,181 95% in 2023and 5% in 2024 In USD per Bushel In USD per Bushel month price month price Mar-23 $ 6.785 May-23 $ 6.780 Jul-23 $ 6.718 Sep-23 $ 6.270 Dec-23 $ 6.108 Dec-22 $ 6.775 Mar-24 $ 6.180 Mar-23 $ 6.840 Options of soybean meal Hedge $ 950,696 SOYBEAN MEAL SOYBEAN MEAL $ 109,976 $ 12,013 89% in 2023and 11% in 2024 In USD per ton In USD per ton month price month price Mar-23 $ 471.0 May-23 $ 461.0 Jul-23 $ 454.3 Aug-23 $ 443.1 Sep-23 $ 428.2 Oct-23 $ 413.6 Dec-22 $ 403.0 Dec-23 $ 411.6 Jan-23 $ 401.3 Jan-24 $ 408.8 Mar-23 $ 397.2 Mar-24 $ 402.9 May-23 $ 395.0 Options of Soybean oil Hedge -$ 3,750 SOYBEAN OIL $ - $ - 100% in 2023 In US cents per pound Mes Precio Feb-23 $ 64.07 -The total financial instruments do not exceed 5% of total assets as of December 31, 2022. -The notional value represents the net position as of December 31, 2022 at the exchange rate of Ps.19.51 per one dollar. -A negative value means an unfavorable effect for the Company. Fourth Quarter 2022 Thousands of Mexican Pesos, as of December 31, 2022 PROBABLE SCENARIO TYPE OF FINANCIALINSTRUMENT REASONABLEVALUE VALUE OF THE RELATED COMMODITY EFFECT ON THEINCOME 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 -$ 136,757 $ 19.02 $ 20.00 $ 20.48 Direct -$ 229,887 -$ 43,623 $ 49,506 -5 % 5 % 10 % -5 % 5 % 10 % Futures of Corn: (2) $ 16,178 $ 6.45 $ 7.12 $ 7.46 The effect willmaterialize as theinventory is consumed -$ 5,945 $ 38,301 $ 60,424 Futures of Soybean Meal: (2) $ 447.5 $ 494.6 $ 518.1 Futures for Soy Oil (2) $ 60.9 $ 67.3 $ 70.5 Futures for Natural Gas (2) $ 4.3 $ 4.7 $ 4.9 Options for Corn $ 25,296 $ 6.45 $ 7.12 $ 7.46 -$ 16,930 $ 67,521 $ 109,747 Options of Soybean Meal $ 109,976 $ 447.5 $ 494.6 $ 518.1 $ 62,438 $ 157,513 $ 205,050 Options of Soybean Oil $ - $ 60.87 $ 67.27 $ 70.48 $ 125 $ - $ - (1) The reference value is the exchange rate of Ps. $19.51 per USD as of December 31, 2022. (2) The reference values are: future of corn Mar 2023, $6.7850 USD/bushel, the future of soybean meal Mar 2023, $471.00 USD/ton, the future of soybean oil Mar 2023, $64.07 usd cts / pound and the future of natural gas Feb 2023, $4.48 usd/ MM BTU. 'All the evaluations are performed according with the corresponding future, here only the first month futures are shown. (3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. -A negative value means an unfavorable effect for the Company. Fourth Quarter 2022 Thousands of Mexican Pesos, as of December 31, 2022 STRESS SCENARIO TYPE OF FINANCIALINSTRUMENT REASONABLEVALUE VALUE OF THE RELATED COMMODITY EFFECT ON THEINCOME STATEMENT EFFECT ON THE CASH FLOW Reference Value -50 % -25 % 25 % 50 % -50 % -25 % 25 % 50 % Forward Vanilla y KO Fwd -$ 136,757 $ 9.75 $ 14.63 $ 24.39 $ 29.26 Direct -$ 1,999,432 -$ 1,068,092 $ 547,632 $ 1,228,504 CONFERENCE CALL INFORMATION The Company will host its fourth quarter 2022 earnings call, on Friday, February 10th, 2023. The earnings call will take place at 11:00 am Central Time (12:00 pm ET). Mexico (Main number): 55 4742 9168 Mexico (Altern number): 55 4742 9169 USA/ Canada: +1 (888) 207 2216 International: +1 (800) 750 9038 Access Code: 2603 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. 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