Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Industrias Bachoco Announces Third Quarter 2022 Results By: Industrias Bachoco, S.A.B. de C.V. via Business Wire October 24, 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 third quarter (“3Q22”) and nine months (“9M22”) ended on September 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 20.9% in 3Q22 and increased 24.5% in 9M22 EBITDA margin was 6.2% for 3Q22 and 12.3% for the 9M22 SG&A as percentage of net sales was 8.6% and 8.3% for 3Q22 and 9M22 respectively. CEO COMMENTS Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, “According to the seasonality of our industry, the third quarter usually shows adjustments on margins vs the first half of the year. In that regard, 3Q22 behaved as so. We observed a decline in prices both in México and the U.S. markets when compared to the first half of 2022. While kept facing the impacts of the increases in cost of sales as a result of higher raw material prices both in USD and Mexican peso terms. Increases in cost of sales represented 20.3% compared to 3Q22 and 22.7% when compared to the 9M21. Net sales on the other hand showed increases of 20.9% and 24.5% respectively, which is closely following the trend of our input costs. The combination mentioned above, and the integration of revenue from RYC Alimentos that we have seen since the beginning of 2022, led us to an EBITDA of $1,525.8 million and a margin of 6.2% for the 3Q22 compared to the $1,127.4 million and margin of 5.6% of the same period of 2021. For the nine months of 2022, the EBITDA margin was 12.3%, also higher when compared to 10.7% EBITDA margin of the same period of 2021. Under a landscape of volatile macroeconomic conditions, we had been able to keep our SG&A under control as a percentage of sales, reporting 8.6% for the quarter which compares to the 8.9% of 3Q21. As a result, our operating income for 3Q22 was $1,131.2 million which represents a 4.6% margin; this compares to the $738.4 million and 3.7% margin achieved in 3Q21. The accumulated results of the CAPEX of the nine months of 2022 were $2,954.9 million compared to $2,251.1 million for the same period of 2021. Remaining with a healthy financial for the Company as we reached a net cash level of $16,413.5 million, which will allow us to continue to support our growth plans.” 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 3Q22 3Q21 Change $ $ $ % Net Sales 24,457.8 20,229.0 4,228.8 20.9 Net sales in Mexico 17,982.7 14,963.8 3,019.0 20.2 Net sales in the U.S. 6,475.0 5,265.2 1,209.8 23.0 NET SALES BY SEGMENT In millions of pesos 3Q22 3Q21 Change $ $ $ $ Net Sales 24,457.8 20,229.0 4,228.8 20.9 Poultry 20,890.8 17,765.7 3,125.1 17.6 Other 3,567.0 2,463.3 1,103.7 44.8 NET VOLUME SOLD BY SEGMENT In tons Change 3Q22 3Q21 Volume % Total sales volume: 578,421 570,381 8,039.4 1.4 Poultry 433,861 442,665 (8,804.1) (2.0) Others 144,560 127,716 16,843.4 13.2 The Company’s 3Q22 net sales totaled $24,457.8 million; $4,228.8 million or 20.9% more than the $20,229.0 million reported in 3Q21. The increase was mainly a result of higher volume sold in Others and higher prices across the main business lines vs same period of 2021. In 3Q22, sales of our U.S. operations represented 26.5% of our total sales compared to a 26.0% in the same period of 2021. GROSS PROFIT In millions of pesos 3Q22 3Q21 Change $ $ $ % Cost of sales 21,189.7 17,619.0 3,570.7 20.3 Gross profit 3,268.1 2,610.0 658.1 25.2 Gross margin 13.4% 12.9% - - In 3Q22, cost of sales was $21,189.7 million; $3,570.7 million or 20.3% higher than the $17,619.0 million reported in 3Q21. 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 3Q22 was $3,268.1 million, higher than the gross profit of $2,610.0 million in 3Q21, with a gross margin of 13.4% for 3Q22 vs 12.9% in 3Q21. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) In millions of pesos 3Q22 3Q21 Change $ $ $ % Total SG&A 2,114.2 1,790.9 323.3 18.1 Total SG&A expenses in 3Q22 were $2,114.2 million; $323.3 million higher than the $1,790.9 million reported in 3Q21. Total SG&A expenses as a percentage of net sales were 8.6% in 3Q22 and 8.9% in 3Q21. OTHER INCOME (EXPENSE), NET In millions of pesos 3Q22 3Q21 Change $ $ $ % Other income (expense), net (22.6) (80.7) 58.1 (72.0) 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 3Q22, we recorded other expenses of $22.6 million, compared with other expenses of $80.7 million reported in 3Q21. OPERATING INCOME In millions of pesos 3Q22 3Q21 Change $ $ $ % Operating income 1,131.2 738.4 392.8 53.2 Operating margin 4.6% 3.7% - - Operating income in 3Q22 totaled $1,131.2 million; $392.8 million higher than the $738.4 million reported in 3Q21. This represents an operating margin of 4.6% for 3Q22, higher when compared to the same period of 2021. NET FINANCIAL INCOME In millions of pesos 3Q22 3Q21 Change $ $ $ % Net Financial Income 116.5 459.6 (343.1) (74.7) Financial Income 275.4 527.5 (252.1) (47.8) Financial Expense 158.9 67.9 91.0 134.0 In 3Q22, the Company reported net financial income of $116.5 million, compared to the net financial income of $459.6 million reported in the same period of 2021. TAXES FOR THE PERIOD In millions of pesos 3Q22 3Q21 Change $ $ $ % Total Taxes 285.3 380.6 (95.3) (25.0) Income tax 169.8 (275.3) 445.1 (161.7) Deferred income tax 115.5 655.9 (540.4) (82.4) As a result of a higher operating income, Total taxes for the 3Q22 were $285.3 million compared with total taxes of $380.6 million in the same period of 2021. NET controlling interest INCOME In millions of pesos 3Q22 3Q21 Change $ $ $ % Net income 962.4 817.4 145.0 17.7 Net margin 3.9% 4.0% - - Non-Controlling Interest income (9.7) (26.4) 24.3 n/a Net controlling interest income 972.1 843.8 128.3 n/a Basic and diluted income per share1 1.62 1.41 0.2 n/a Basic and diluted income per ADR2 19.46 16.88 2.6 n/a Weighted average Shares outstanding3 599,380 599,734 - - 1 In pesos 2 in pesos, one ADR equals to twelve shares 3 In thousands of shares For the 3Q22 we had Net controlling interest income of $972.1 million, representing a basic and diluted income per share of $1.62 compared with a Net controlling interest income of $843.8 million, and $1.41 pesos of income per share in 3Q21. This increase was attributed to higher operating results. EBITDA In millions of pesos 3Q22 3Q21 Change $ $ $ % Net controlling interest income 972.1 843.8 128.3 15.2 Income tax expense (benefit) 285.3 380.6 (95.3) (25.0) Result in associates (9.7) (26.4) 16.7 (63.3) Net finance (income) expense (116.5) (459.6) 343.1 (74.7) Depreciation and amortization 394.6 389.0 5.6 1.5 EBITDA 1,525.8 1,127.4 398.5 35.3 EBITDA Margin (%) 6.2% 5.6% - - Net revenues 24,457.8 20,229.0 4,228.8 20.9 EBITDA in 3Q22 reached $1,525.8 million, representing an EBITDA margin of 6.2%, compared to an EBITDA of $1,127.4 million in 3Q21, with an EBITDA margin of 5.6%. ACCUMULATED RESULTS NET SALES BY GEOGRAPHY In millions of pesos 9M22 9M21 Change $ $ $ % Net Sales 75,256.9 60,447.5 14,809.3 24.5 Net sales in Mexico 55,918.9 45,530.7 10,388.2 22.8 Net sales in the U.S. 19,337.9 14,916.8 4,421.1 29.6 NET SALES BY SEGMENT In millions of pesos 9M22 9M21 Change $ $ $ % Net Sales 75,256.9 60,447.5 14,809.3 24.5 Poultry 64,372.9 52,920.0 11,452.9 21.6 Other 10,884.0 7,527.5 3,356.4 44.6 NET VOLUME SOLD BY SEGMENT In metric tons Change 9M22 9M21 Volume % Total sales volume: 1,753,821 1,712,125 41,695.8 2.4 Poultry 1,313,071 1,301,129 11,941.3 0.9 Others 440,750 410,995 29,754.5 7.2 During the nine months of 2022, net sales totaled $75,256.9 million; $14,809.3 million or 24.5% more than $60,447.5 million reported in the same period of 2021. The increase in sales is mainly attributable to higher volume sold in Others as part of the integration of RYC Alimentos, as well as higher prices in our main business lines when compared to the accumulated results of the nine months of 2021. In 9M22, sales of our U.S. operations represented 25.7% of our total sales, compared with 24.7% in 9M21. OPERATING RESULTS 9M22 9M21 Change $ $ $ % Cost of Sales 60,948.7 49,659.7 11,289.0 22.7 Gross Profit 14,308.2 10,787.9 3,520.3 32.6 Total SG&A 6,236.7 5,157.4 1,079.2 20.9 Other Income (expense) 32.9 (244.3) 277.2 (113.5) Operating Income 8,104.4 5,386.1 2,718.2 50.5 Net Financial Income 38.6 682.2 (643.6) (94.3) Income Tax 2,117.9 1,733.3 384.7 22.2 Net Income 6,025.1 4,335.1 1,690.0 39.0 Non-controlling interest (47.6) (85.8) 38.1 (44.5) Net controlling interest Income 6,072.7 4,420.9 1,651.8 37.4 In 9M22, the cost of sales totaled $60,948.7 million; $11,289.0 million or 22.7% higher than the $49,659.7 million reported in 9M21. As a result, we reached a gross profit of $14,308.2 million and a gross margin of 19.0% in 9M22, when compared to $10,787.9 million of gross profit and margin of 17.8% reached in the same period of 2021. Total SG&A in 9M22 were $6,236.7 million; $1,079.2 million or 20.9% more than the $5,157.4 million reported in 9M21. In 9M22 total SG&A as a percentage of net sales represented 8.3% compared with 8.5% in 9M21. In 9M22 we had other income of $32.9 million, compared with other expenses of $244.3 million reported in 9M21. Operating income in 9M22 was $8,104.4 million, which represents an operating margin of 10.8%, an increase compared to the operating income of $5,386.1 million and the operating margin of 8.9% in 9M21. Net financial income in 9M22 was $38.6 million, compared to a net financial income of $682.2 million in 9M21. Total taxes were $2,117.9 million as of September 30, 2022. These taxes include $1,169.1 million of income tax and $948.9 million of deferred income taxes. These figures compare to total taxes of $1,733.3 million in 9M21. All the above resulted in a Net controlling interest income of $6,072.7 million in 9M22, which represents $10.13 pesos of earnings per share, while in the 9M21 the Net controlling interest income totaled $4,420.9 million and $7.37 pesos of earnings per share. EBITDA In millions of pesos 9M22 9M21 Change $ $ $ % Net controlling interest profit 6,072.7 4,420.9 1,651.8 37.4 Income tax expense (benefit) 2,117.9 1,733.3 384.7 22.2 Result in associates (47.6) (85.8) 38.1 (44.5) Net finance (income) expense (38.6) (682.2) 643.6 (94.3) Depreciation and amortization 1,150.9 1,092.1 58.9 5.4 EBITDA 9,255.3 6,478.2 2,777.1 42.9 EBITDA Margin (%) 12.3% 10.7% - - Net revenues 75,256.9 60,447.5 14,809.3 24.5 EBITDA in 9M22 reached $9,255.3 million, representing an EBITDA margin of 12.3%, compared to an EBITDA of $6,478.2 million in 9M21, with a margin of 10.7%. BALANCE SHEET BALANCE SHEET DATA In millions of pesos Sept. 30, 2022 Dec. 31st, 2021 Change $ $ $ % TOTAL ASSETS 72,044.1 65,988.8 6,055.3 9.2 Cash and cash equivalents 20,391.7 20,777.0 (385.3) (1.9) Accounts receivable 5,815.2 5,108.5 706.8 13.8 TOTAL LIABILITIES 18,862.3 17,704.7 1,157.6 6.5 Accounts payable 6,008.8 10,200.7 (4,191.9) (41.1) Short-term debt 981.7 1,993.9 (1,012.2) (50.8) Long-term debt 2,996.5 - 2,996.5 N/A TOTAL STOCKHOLDERS’ EQUITY 53,181.8 48,284.1 4,897.8 10.1 Capital stock 1,174.4 1,174.4 - - Cash and equivalents as of September 30, 2022 totaled $20,391.7 million vs $20,777.0 million as of December 31, 2021. Total debt as of September 30, 2022 was $3,978.2 million, compared to $ 1,993.9 million reported as of December 31, 2021. Net cash as of September 30, 2022 was $ 16,413.5 million, compared to net cash of $ 18,783.1 million as of December 31, 2021. CAPITAL EXPENDITURES In millions of pesos 9M22 9M21 Change $ $ $ % Capital Expenditures 2,954.9 2,251.1 703.8 31.3 Total CAPEX for the 9M22 was $2,954.9 million and $2,251.1 million in 9M21, mainly allocated toward organic growth and productivity projects across all of our facilities. STOCK INFORMATION As of September 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 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 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 $20.13 per USD $1.0, which corresponds to the rate at the close of September 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 September 30, December 31, In million pesos 2022 2022 2021* TOTAL ASSETS $ 3,578.9 72,044.1 65,988.8 Total current assets 2,036.1 40,987.2 37,845.6 Cash and cash equivalents 1,013.0 20,391.7 20,777.0 Total accounts receivable 288.9 5,815.2 5,108.5 Inventories 636.1 12,805.3 9,145.6 Other current assets 98.1 1,975.1 2,814.6 Total non current assets 1,542.8 31,056.3 28,143.2 Net property, plant and equipment 1,164.1 23,433.8 21,763.4 Other non current Assets 378.7 7,622.5 6,379.8 TOTAL LIABILITIES $ 937.0 18,862.3 17,704.7 Total current liabilities 478.5 9,632.2 12,835.3 Notes payable to banks 48.8 981.7 1,993.9 Accounts payable 298.5 6,008.8 10,200.7 Other taxes payable and other accruals 131.2 2,641.7 640.7 Total long-term liabilities 458.5 9,230.0 4,869.4 Long-term debt 148.9 2,996.5 - Other non current liabilities 50.4 1,013.7 1,027.9 Deferred income taxes 259.3 5,219.9 3,841.5 TOTAL STOCKHOLDERS' EQUITY $ 2,641.9 53,181.8 48,284.1 Capital stock 58.3 1,174.4 1,174.4 Commission in shares issued 20.6 414.1 414.1 Retained earnings 2,492.8 50,179.4 45,038.6 Others accounts 48.9 983.8 1,179.2 Non controlling interest 21.4 430.1 477.7 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,578.9 72,044.1 65,988.8 *Audited CONSOLIDATED STATEMENT OF INCOME Third Quarter Results, ended September 30th: -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 1,215.0 24,457.8 20,229.0 Cost of sales 1,052.6 21,189.7 17,619.0 Gross profit 162.3 3,268.1 2,610.0 SG&A 105.0 2,114.2 1,790.9 Other income (expenses), net (1.1 ) (22.6 ) (80.7 ) Operating income 56.2 1,131.2 738.4 Net finance income 5.8 116.5 459.6 Income tax 14.2 285.3 380.6 Net Income $ 47.8 962.4 817.4 Non-controlling interest (0.48 ) (9.7 ) (26.4 ) Net controlling interest profit 48.29 972.1 843.8 Basic and diluted earnings per share 0.08 1.62 1.41 Basic and diluted earnings per ADR 0.97 19.46 16.88 Weighted average Shares outstanding1 599,380 599,380 599,734 EBITDA Result $ 75.8 1,525.8 1,127.4 Gross margin 13.4 % 13.4 % 12.9 % Operating margin 4.6 % 4.6 % 3.7 % Net margin 4.0 % 3.9 % 4.0 % EBITDA margin 6.2 % 6.2 % 5.6 % 1 In thousands CONSOLIDATED STATEMENT OF INCOME Accumulated results, for the nine months ended September 30. -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 3,738.5 75,256.9 60,447.5 Cost of sales 3,027.8 60,948.7 49,659.7 Gross profit 710.8 14,308.2 10,787.9 Selling, general and administrative expenses 309.8 6,236.7 5,157.4 Other income (expenses), net 1.6 32.9 (244.3 ) Operating income 402.6 8,104.4 5,386.1 Net finance income 1.92 38.6 682.24 Income tax 105.2 2,117.9 1,733.3 Net income $ 299.3 6,025.1 4,335.1 Non-controlling interest (2.37 ) (47.6 ) (85.8 ) Net controlling interest profit 301.7 6,072.7 4,420.9 Basic and diluted earnings per share 0.50 10.13 7.37 Basic and diluted earnings per ADR 6.04 121.6 88.45 Weighted average Shares outstanding1 599,380 599,380 599,766 EBITDA Result $ 459.8 9,255.3 6,478.2 Gross margin 19.0 % 19.0 % 17.8 % Operating margin 10.8 % 10.8 % 8.9 % Net margin 8.1 % 8.0 % 7.2 % EBITDA margin 12.3 % 12.3 % 10.7 % 1 In thousands CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar September 30, 2022 2022 2021 NET MAJORITY INCOME BEFORE INCOME TAX $ 404.5 8,143.0 6,068.4 ITEMS RELATING TO INVESTING ACTIVITIES: 66.7 1,342.8 1,226.7 Depreciation and others 74.4 1,498.6 1,358.3 Income (loss) on sale of plant and equipment 2.7 55.3 63.3 Other Items (10.5 ) (211.2 ) (194.9 ) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 471.2 9,485.8 7,295.1 CASH GENERATED OR USED IN THE OPERATION: (250.0 ) (5,031.9 ) (1,166.0 ) Decrease (increase) in accounts receivable (22.1 ) (443.9 ) (239.0 ) Decrease (increase) in inventories (195.7 ) (3,938.8 ) (1,487.0 ) Increase (decrease) in accounts payable (136.2 ) (2,740.9 ) 1,791.9 Other Items 103.9 2,091.7 (1,231.9 ) NET CASH FLOW FROM OPERATING ACTIVITIES 221.3 4,453.9 6,129.1 NET CASH FLOW FROM INVESTING ACTIVITIES (162.7 ) (3,275.3 ) (1,629.1 ) Acquisition of property, plant and equipment (146.8 ) (2,954.9 ) (2,251.1 ) Proceeds from sales of property plant and equipment 3.1 61.8 17.1 Other Items (19.0 ) (382.1 ) 604.9 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 58.6 1,178.6 4,500.0 Net cash provided by financing activities: (74.2 ) (1,494.0 ) (3,654.4 ) Proceeds from loans 195.2 3,930.0 1,237.2 Principal payments on loans (96.7 ) (1,945.7 ) (1,903.8 ) Dividends paid (48.8 ) (983.0 ) (851.6 ) Other items (124.0 ) (2,495.3 ) (2,136.1 ) Net increase (decrease) in cash and equivalents (15.7 ) (315.4 ) 845.6 Cash and investments at the beginning of year $ 1,028.7 20,707.1 19,242.4 CASH AND INVESTMENTS AT END OF PERIOD $ 1,013.0 20,391.7 20,088.0 Third Quarter 2022 Thousands of Mexican Pesos, as of September 30, 2022 TYPE OF FINANCIAL INSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE BY YEAR GUARANTIES REQUIRED 3Q-2022 2Q-2022 3Q-2022 2Q-2022 Forward Vanilla y KO Fwd Hedge $ 150,699 $ 20.13 $ 20.14 $ -48,982 $ -80,565 69% in 2022 and 31% in 2023 The deals consider the possibility of margin calls but not another kind of guarantee Futures for corn, soybean meal, soybean oil and natural gas Hedge $ 511,252 CORN CORN $ 12,462 $ 24,903 98% in 2022 and 2% in 2023 In USD per Bushel In USD per Bushel month price month price Sep-22 $ 6.288 Dec-22 $ 6.775 Dec-22 $ 6.198 SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price Aug-22 $ 435.5 Sep-22 $ 416.1 Oct-22 $ 405.7 Dec-22 $ 403.0 Dec-22 $ 406.7 SOYBEAN OIL SOYBEAN OIL In US cents per pound In US cents per pound Month Price Month Price Aug-22 $ 67.01 Dec-22 $ 61.56 Sep-22 $ 65.68 NATURAL GAS In USD/MM BTU Month Price Nov-22 $ 6.766 Dec-22 $ 7.065 Jan-23 $ 7.247 Feb-23 $ 6.937 Options of Corn Hedge $ 314,868 CORN CORN $ 37,181 $ 27,649 83% in 2022 and 17% in 2023 In USD per Bushel In USD per Bushel month price month price Sep-22 $ 6.288 Dec-22 $ 6.775 Dec-22 $ 6.198 Mar-23 $ 6.840 Mar-23 $ 6.263 Options of soybean meal Hedge $ 439,720 SOYBEAN MEAL SOYBEAN MEAL $ 12,013 $ 34,539 57% in 2022 and 43% in 2023 In USD per ton In USD per ton month price month price Aug-22 $ 435.5 Sep-22 $ 416.1 Oct-22 $ 405.7 Dec-22 $ 403.0 Dec-22 $ 406.7 Jan-23 $ 401.3 Jan-23 $ 405.9 Mar-23 $ 397.2 Mar-23 $ 401.3 May-23 $ 395.0 May-23 $ 398.3 -The total financial instruments do not exceed 5% of total assets as of September 30, 2022. -The notional value represents the net position as of September 30, 2022 at the exchange rate of Ps.20.13 per one dollar. -A negative value means an unfavorable effect for the Company. Third Quarter 2022 Thousands of Mexican Pesos, as of September 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 -$ 48,982 $19.63 $ 20.63 $ 21.14 Direct -$124,810 $ 26,845 $ 57,145 -5% 5% 10% -5% 5% 10% Futures of Corn: (2) $ 12,462 $ 6.436 $ 7.114 $ 7.453 The effect will materialize as the inventory is consumed -$ 13,101 $ 38,024 $ 63,587 Futures of Soybean Meal: (2) $ 382.9 $ 423.2 $ 443.3 Futures for Soy Oil (2) $ 58.5 $ 64.6 $ 67.7 Futures for Natural Gas (2) $ 6.4 $ 7.1 $ 7.4 Options for Corn $ 37,181 $ 6.436 $ 7.114 $ 7.453 $ 21,438 $ 52,925 $ 68,668 Options of Soybean Meal $ 12,013 $ 382.9 $ 423.2 $ 443.3 -$ 9,973 $ 33,999 $ 55,985 (1) The reference value is the exchange rate of Ps. $20.13 per USD as of September 30, 2022. (2) The reference values are: future of corn Dec 2022, $6.7750 USD/bushel, the future of soybeanmeal Dec 2022, $403.00 USD/ton, the future of soybean oil Dec 2022, $61.56 usd cts / pound and the future of natural gas Nov 2022, $6.77usd/ 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. Third Quarter 2022 Thousands of Mexican Pesos, as of September 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 -$48,982 $10.07 $15.10 $25.16 $30.20 Direct -$1,565,538 -$807,260 $484,940 $1,034,577 CONFERENCE CALL INFORMATION The Company will host its second quarter 2022 earnings call on Tuesday October 25th, 2022. The earnings call will take place at 8:30 am Central Time (9:30 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=C2665A6D-28B4-4A5B-95C3-99B542C27989&LangLocaleID=1033 Confirmation Number: 36258927# 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/20221024005780/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 Third Quarter 2022 Results By: Industrias Bachoco, S.A.B. de C.V. via Business Wire October 24, 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 third quarter (“3Q22”) and nine months (“9M22”) ended on September 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 20.9% in 3Q22 and increased 24.5% in 9M22 EBITDA margin was 6.2% for 3Q22 and 12.3% for the 9M22 SG&A as percentage of net sales was 8.6% and 8.3% for 3Q22 and 9M22 respectively. CEO COMMENTS Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, “According to the seasonality of our industry, the third quarter usually shows adjustments on margins vs the first half of the year. In that regard, 3Q22 behaved as so. We observed a decline in prices both in México and the U.S. markets when compared to the first half of 2022. While kept facing the impacts of the increases in cost of sales as a result of higher raw material prices both in USD and Mexican peso terms. Increases in cost of sales represented 20.3% compared to 3Q22 and 22.7% when compared to the 9M21. Net sales on the other hand showed increases of 20.9% and 24.5% respectively, which is closely following the trend of our input costs. The combination mentioned above, and the integration of revenue from RYC Alimentos that we have seen since the beginning of 2022, led us to an EBITDA of $1,525.8 million and a margin of 6.2% for the 3Q22 compared to the $1,127.4 million and margin of 5.6% of the same period of 2021. For the nine months of 2022, the EBITDA margin was 12.3%, also higher when compared to 10.7% EBITDA margin of the same period of 2021. Under a landscape of volatile macroeconomic conditions, we had been able to keep our SG&A under control as a percentage of sales, reporting 8.6% for the quarter which compares to the 8.9% of 3Q21. As a result, our operating income for 3Q22 was $1,131.2 million which represents a 4.6% margin; this compares to the $738.4 million and 3.7% margin achieved in 3Q21. The accumulated results of the CAPEX of the nine months of 2022 were $2,954.9 million compared to $2,251.1 million for the same period of 2021. Remaining with a healthy financial for the Company as we reached a net cash level of $16,413.5 million, which will allow us to continue to support our growth plans.” 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 3Q22 3Q21 Change $ $ $ % Net Sales 24,457.8 20,229.0 4,228.8 20.9 Net sales in Mexico 17,982.7 14,963.8 3,019.0 20.2 Net sales in the U.S. 6,475.0 5,265.2 1,209.8 23.0 NET SALES BY SEGMENT In millions of pesos 3Q22 3Q21 Change $ $ $ $ Net Sales 24,457.8 20,229.0 4,228.8 20.9 Poultry 20,890.8 17,765.7 3,125.1 17.6 Other 3,567.0 2,463.3 1,103.7 44.8 NET VOLUME SOLD BY SEGMENT In tons Change 3Q22 3Q21 Volume % Total sales volume: 578,421 570,381 8,039.4 1.4 Poultry 433,861 442,665 (8,804.1) (2.0) Others 144,560 127,716 16,843.4 13.2 The Company’s 3Q22 net sales totaled $24,457.8 million; $4,228.8 million or 20.9% more than the $20,229.0 million reported in 3Q21. The increase was mainly a result of higher volume sold in Others and higher prices across the main business lines vs same period of 2021. In 3Q22, sales of our U.S. operations represented 26.5% of our total sales compared to a 26.0% in the same period of 2021. GROSS PROFIT In millions of pesos 3Q22 3Q21 Change $ $ $ % Cost of sales 21,189.7 17,619.0 3,570.7 20.3 Gross profit 3,268.1 2,610.0 658.1 25.2 Gross margin 13.4% 12.9% - - In 3Q22, cost of sales was $21,189.7 million; $3,570.7 million or 20.3% higher than the $17,619.0 million reported in 3Q21. 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 3Q22 was $3,268.1 million, higher than the gross profit of $2,610.0 million in 3Q21, with a gross margin of 13.4% for 3Q22 vs 12.9% in 3Q21. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) In millions of pesos 3Q22 3Q21 Change $ $ $ % Total SG&A 2,114.2 1,790.9 323.3 18.1 Total SG&A expenses in 3Q22 were $2,114.2 million; $323.3 million higher than the $1,790.9 million reported in 3Q21. Total SG&A expenses as a percentage of net sales were 8.6% in 3Q22 and 8.9% in 3Q21. OTHER INCOME (EXPENSE), NET In millions of pesos 3Q22 3Q21 Change $ $ $ % Other income (expense), net (22.6) (80.7) 58.1 (72.0) 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 3Q22, we recorded other expenses of $22.6 million, compared with other expenses of $80.7 million reported in 3Q21. OPERATING INCOME In millions of pesos 3Q22 3Q21 Change $ $ $ % Operating income 1,131.2 738.4 392.8 53.2 Operating margin 4.6% 3.7% - - Operating income in 3Q22 totaled $1,131.2 million; $392.8 million higher than the $738.4 million reported in 3Q21. This represents an operating margin of 4.6% for 3Q22, higher when compared to the same period of 2021. NET FINANCIAL INCOME In millions of pesos 3Q22 3Q21 Change $ $ $ % Net Financial Income 116.5 459.6 (343.1) (74.7) Financial Income 275.4 527.5 (252.1) (47.8) Financial Expense 158.9 67.9 91.0 134.0 In 3Q22, the Company reported net financial income of $116.5 million, compared to the net financial income of $459.6 million reported in the same period of 2021. TAXES FOR THE PERIOD In millions of pesos 3Q22 3Q21 Change $ $ $ % Total Taxes 285.3 380.6 (95.3) (25.0) Income tax 169.8 (275.3) 445.1 (161.7) Deferred income tax 115.5 655.9 (540.4) (82.4) As a result of a higher operating income, Total taxes for the 3Q22 were $285.3 million compared with total taxes of $380.6 million in the same period of 2021. NET controlling interest INCOME In millions of pesos 3Q22 3Q21 Change $ $ $ % Net income 962.4 817.4 145.0 17.7 Net margin 3.9% 4.0% - - Non-Controlling Interest income (9.7) (26.4) 24.3 n/a Net controlling interest income 972.1 843.8 128.3 n/a Basic and diluted income per share1 1.62 1.41 0.2 n/a Basic and diluted income per ADR2 19.46 16.88 2.6 n/a Weighted average Shares outstanding3 599,380 599,734 - - 1 In pesos 2 in pesos, one ADR equals to twelve shares 3 In thousands of shares For the 3Q22 we had Net controlling interest income of $972.1 million, representing a basic and diluted income per share of $1.62 compared with a Net controlling interest income of $843.8 million, and $1.41 pesos of income per share in 3Q21. This increase was attributed to higher operating results. EBITDA In millions of pesos 3Q22 3Q21 Change $ $ $ % Net controlling interest income 972.1 843.8 128.3 15.2 Income tax expense (benefit) 285.3 380.6 (95.3) (25.0) Result in associates (9.7) (26.4) 16.7 (63.3) Net finance (income) expense (116.5) (459.6) 343.1 (74.7) Depreciation and amortization 394.6 389.0 5.6 1.5 EBITDA 1,525.8 1,127.4 398.5 35.3 EBITDA Margin (%) 6.2% 5.6% - - Net revenues 24,457.8 20,229.0 4,228.8 20.9 EBITDA in 3Q22 reached $1,525.8 million, representing an EBITDA margin of 6.2%, compared to an EBITDA of $1,127.4 million in 3Q21, with an EBITDA margin of 5.6%. ACCUMULATED RESULTS NET SALES BY GEOGRAPHY In millions of pesos 9M22 9M21 Change $ $ $ % Net Sales 75,256.9 60,447.5 14,809.3 24.5 Net sales in Mexico 55,918.9 45,530.7 10,388.2 22.8 Net sales in the U.S. 19,337.9 14,916.8 4,421.1 29.6 NET SALES BY SEGMENT In millions of pesos 9M22 9M21 Change $ $ $ % Net Sales 75,256.9 60,447.5 14,809.3 24.5 Poultry 64,372.9 52,920.0 11,452.9 21.6 Other 10,884.0 7,527.5 3,356.4 44.6 NET VOLUME SOLD BY SEGMENT In metric tons Change 9M22 9M21 Volume % Total sales volume: 1,753,821 1,712,125 41,695.8 2.4 Poultry 1,313,071 1,301,129 11,941.3 0.9 Others 440,750 410,995 29,754.5 7.2 During the nine months of 2022, net sales totaled $75,256.9 million; $14,809.3 million or 24.5% more than $60,447.5 million reported in the same period of 2021. The increase in sales is mainly attributable to higher volume sold in Others as part of the integration of RYC Alimentos, as well as higher prices in our main business lines when compared to the accumulated results of the nine months of 2021. In 9M22, sales of our U.S. operations represented 25.7% of our total sales, compared with 24.7% in 9M21. OPERATING RESULTS 9M22 9M21 Change $ $ $ % Cost of Sales 60,948.7 49,659.7 11,289.0 22.7 Gross Profit 14,308.2 10,787.9 3,520.3 32.6 Total SG&A 6,236.7 5,157.4 1,079.2 20.9 Other Income (expense) 32.9 (244.3) 277.2 (113.5) Operating Income 8,104.4 5,386.1 2,718.2 50.5 Net Financial Income 38.6 682.2 (643.6) (94.3) Income Tax 2,117.9 1,733.3 384.7 22.2 Net Income 6,025.1 4,335.1 1,690.0 39.0 Non-controlling interest (47.6) (85.8) 38.1 (44.5) Net controlling interest Income 6,072.7 4,420.9 1,651.8 37.4 In 9M22, the cost of sales totaled $60,948.7 million; $11,289.0 million or 22.7% higher than the $49,659.7 million reported in 9M21. As a result, we reached a gross profit of $14,308.2 million and a gross margin of 19.0% in 9M22, when compared to $10,787.9 million of gross profit and margin of 17.8% reached in the same period of 2021. Total SG&A in 9M22 were $6,236.7 million; $1,079.2 million or 20.9% more than the $5,157.4 million reported in 9M21. In 9M22 total SG&A as a percentage of net sales represented 8.3% compared with 8.5% in 9M21. In 9M22 we had other income of $32.9 million, compared with other expenses of $244.3 million reported in 9M21. Operating income in 9M22 was $8,104.4 million, which represents an operating margin of 10.8%, an increase compared to the operating income of $5,386.1 million and the operating margin of 8.9% in 9M21. Net financial income in 9M22 was $38.6 million, compared to a net financial income of $682.2 million in 9M21. Total taxes were $2,117.9 million as of September 30, 2022. These taxes include $1,169.1 million of income tax and $948.9 million of deferred income taxes. These figures compare to total taxes of $1,733.3 million in 9M21. All the above resulted in a Net controlling interest income of $6,072.7 million in 9M22, which represents $10.13 pesos of earnings per share, while in the 9M21 the Net controlling interest income totaled $4,420.9 million and $7.37 pesos of earnings per share. EBITDA In millions of pesos 9M22 9M21 Change $ $ $ % Net controlling interest profit 6,072.7 4,420.9 1,651.8 37.4 Income tax expense (benefit) 2,117.9 1,733.3 384.7 22.2 Result in associates (47.6) (85.8) 38.1 (44.5) Net finance (income) expense (38.6) (682.2) 643.6 (94.3) Depreciation and amortization 1,150.9 1,092.1 58.9 5.4 EBITDA 9,255.3 6,478.2 2,777.1 42.9 EBITDA Margin (%) 12.3% 10.7% - - Net revenues 75,256.9 60,447.5 14,809.3 24.5 EBITDA in 9M22 reached $9,255.3 million, representing an EBITDA margin of 12.3%, compared to an EBITDA of $6,478.2 million in 9M21, with a margin of 10.7%. BALANCE SHEET BALANCE SHEET DATA In millions of pesos Sept. 30, 2022 Dec. 31st, 2021 Change $ $ $ % TOTAL ASSETS 72,044.1 65,988.8 6,055.3 9.2 Cash and cash equivalents 20,391.7 20,777.0 (385.3) (1.9) Accounts receivable 5,815.2 5,108.5 706.8 13.8 TOTAL LIABILITIES 18,862.3 17,704.7 1,157.6 6.5 Accounts payable 6,008.8 10,200.7 (4,191.9) (41.1) Short-term debt 981.7 1,993.9 (1,012.2) (50.8) Long-term debt 2,996.5 - 2,996.5 N/A TOTAL STOCKHOLDERS’ EQUITY 53,181.8 48,284.1 4,897.8 10.1 Capital stock 1,174.4 1,174.4 - - Cash and equivalents as of September 30, 2022 totaled $20,391.7 million vs $20,777.0 million as of December 31, 2021. Total debt as of September 30, 2022 was $3,978.2 million, compared to $ 1,993.9 million reported as of December 31, 2021. Net cash as of September 30, 2022 was $ 16,413.5 million, compared to net cash of $ 18,783.1 million as of December 31, 2021. CAPITAL EXPENDITURES In millions of pesos 9M22 9M21 Change $ $ $ % Capital Expenditures 2,954.9 2,251.1 703.8 31.3 Total CAPEX for the 9M22 was $2,954.9 million and $2,251.1 million in 9M21, mainly allocated toward organic growth and productivity projects across all of our facilities. STOCK INFORMATION As of September 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 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 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 $20.13 per USD $1.0, which corresponds to the rate at the close of September 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 September 30, December 31, In million pesos 2022 2022 2021* TOTAL ASSETS $ 3,578.9 72,044.1 65,988.8 Total current assets 2,036.1 40,987.2 37,845.6 Cash and cash equivalents 1,013.0 20,391.7 20,777.0 Total accounts receivable 288.9 5,815.2 5,108.5 Inventories 636.1 12,805.3 9,145.6 Other current assets 98.1 1,975.1 2,814.6 Total non current assets 1,542.8 31,056.3 28,143.2 Net property, plant and equipment 1,164.1 23,433.8 21,763.4 Other non current Assets 378.7 7,622.5 6,379.8 TOTAL LIABILITIES $ 937.0 18,862.3 17,704.7 Total current liabilities 478.5 9,632.2 12,835.3 Notes payable to banks 48.8 981.7 1,993.9 Accounts payable 298.5 6,008.8 10,200.7 Other taxes payable and other accruals 131.2 2,641.7 640.7 Total long-term liabilities 458.5 9,230.0 4,869.4 Long-term debt 148.9 2,996.5 - Other non current liabilities 50.4 1,013.7 1,027.9 Deferred income taxes 259.3 5,219.9 3,841.5 TOTAL STOCKHOLDERS' EQUITY $ 2,641.9 53,181.8 48,284.1 Capital stock 58.3 1,174.4 1,174.4 Commission in shares issued 20.6 414.1 414.1 Retained earnings 2,492.8 50,179.4 45,038.6 Others accounts 48.9 983.8 1,179.2 Non controlling interest 21.4 430.1 477.7 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,578.9 72,044.1 65,988.8 *Audited CONSOLIDATED STATEMENT OF INCOME Third Quarter Results, ended September 30th: -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 1,215.0 24,457.8 20,229.0 Cost of sales 1,052.6 21,189.7 17,619.0 Gross profit 162.3 3,268.1 2,610.0 SG&A 105.0 2,114.2 1,790.9 Other income (expenses), net (1.1 ) (22.6 ) (80.7 ) Operating income 56.2 1,131.2 738.4 Net finance income 5.8 116.5 459.6 Income tax 14.2 285.3 380.6 Net Income $ 47.8 962.4 817.4 Non-controlling interest (0.48 ) (9.7 ) (26.4 ) Net controlling interest profit 48.29 972.1 843.8 Basic and diluted earnings per share 0.08 1.62 1.41 Basic and diluted earnings per ADR 0.97 19.46 16.88 Weighted average Shares outstanding1 599,380 599,380 599,734 EBITDA Result $ 75.8 1,525.8 1,127.4 Gross margin 13.4 % 13.4 % 12.9 % Operating margin 4.6 % 4.6 % 3.7 % Net margin 4.0 % 3.9 % 4.0 % EBITDA margin 6.2 % 6.2 % 5.6 % 1 In thousands CONSOLIDATED STATEMENT OF INCOME Accumulated results, for the nine months ended September 30. -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 3,738.5 75,256.9 60,447.5 Cost of sales 3,027.8 60,948.7 49,659.7 Gross profit 710.8 14,308.2 10,787.9 Selling, general and administrative expenses 309.8 6,236.7 5,157.4 Other income (expenses), net 1.6 32.9 (244.3 ) Operating income 402.6 8,104.4 5,386.1 Net finance income 1.92 38.6 682.24 Income tax 105.2 2,117.9 1,733.3 Net income $ 299.3 6,025.1 4,335.1 Non-controlling interest (2.37 ) (47.6 ) (85.8 ) Net controlling interest profit 301.7 6,072.7 4,420.9 Basic and diluted earnings per share 0.50 10.13 7.37 Basic and diluted earnings per ADR 6.04 121.6 88.45 Weighted average Shares outstanding1 599,380 599,380 599,766 EBITDA Result $ 459.8 9,255.3 6,478.2 Gross margin 19.0 % 19.0 % 17.8 % Operating margin 10.8 % 10.8 % 8.9 % Net margin 8.1 % 8.0 % 7.2 % EBITDA margin 12.3 % 12.3 % 10.7 % 1 In thousands CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar September 30, 2022 2022 2021 NET MAJORITY INCOME BEFORE INCOME TAX $ 404.5 8,143.0 6,068.4 ITEMS RELATING TO INVESTING ACTIVITIES: 66.7 1,342.8 1,226.7 Depreciation and others 74.4 1,498.6 1,358.3 Income (loss) on sale of plant and equipment 2.7 55.3 63.3 Other Items (10.5 ) (211.2 ) (194.9 ) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 471.2 9,485.8 7,295.1 CASH GENERATED OR USED IN THE OPERATION: (250.0 ) (5,031.9 ) (1,166.0 ) Decrease (increase) in accounts receivable (22.1 ) (443.9 ) (239.0 ) Decrease (increase) in inventories (195.7 ) (3,938.8 ) (1,487.0 ) Increase (decrease) in accounts payable (136.2 ) (2,740.9 ) 1,791.9 Other Items 103.9 2,091.7 (1,231.9 ) NET CASH FLOW FROM OPERATING ACTIVITIES 221.3 4,453.9 6,129.1 NET CASH FLOW FROM INVESTING ACTIVITIES (162.7 ) (3,275.3 ) (1,629.1 ) Acquisition of property, plant and equipment (146.8 ) (2,954.9 ) (2,251.1 ) Proceeds from sales of property plant and equipment 3.1 61.8 17.1 Other Items (19.0 ) (382.1 ) 604.9 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 58.6 1,178.6 4,500.0 Net cash provided by financing activities: (74.2 ) (1,494.0 ) (3,654.4 ) Proceeds from loans 195.2 3,930.0 1,237.2 Principal payments on loans (96.7 ) (1,945.7 ) (1,903.8 ) Dividends paid (48.8 ) (983.0 ) (851.6 ) Other items (124.0 ) (2,495.3 ) (2,136.1 ) Net increase (decrease) in cash and equivalents (15.7 ) (315.4 ) 845.6 Cash and investments at the beginning of year $ 1,028.7 20,707.1 19,242.4 CASH AND INVESTMENTS AT END OF PERIOD $ 1,013.0 20,391.7 20,088.0 Third Quarter 2022 Thousands of Mexican Pesos, as of September 30, 2022 TYPE OF FINANCIAL INSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE BY YEAR GUARANTIES REQUIRED 3Q-2022 2Q-2022 3Q-2022 2Q-2022 Forward Vanilla y KO Fwd Hedge $ 150,699 $ 20.13 $ 20.14 $ -48,982 $ -80,565 69% in 2022 and 31% in 2023 The deals consider the possibility of margin calls but not another kind of guarantee Futures for corn, soybean meal, soybean oil and natural gas Hedge $ 511,252 CORN CORN $ 12,462 $ 24,903 98% in 2022 and 2% in 2023 In USD per Bushel In USD per Bushel month price month price Sep-22 $ 6.288 Dec-22 $ 6.775 Dec-22 $ 6.198 SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price Aug-22 $ 435.5 Sep-22 $ 416.1 Oct-22 $ 405.7 Dec-22 $ 403.0 Dec-22 $ 406.7 SOYBEAN OIL SOYBEAN OIL In US cents per pound In US cents per pound Month Price Month Price Aug-22 $ 67.01 Dec-22 $ 61.56 Sep-22 $ 65.68 NATURAL GAS In USD/MM BTU Month Price Nov-22 $ 6.766 Dec-22 $ 7.065 Jan-23 $ 7.247 Feb-23 $ 6.937 Options of Corn Hedge $ 314,868 CORN CORN $ 37,181 $ 27,649 83% in 2022 and 17% in 2023 In USD per Bushel In USD per Bushel month price month price Sep-22 $ 6.288 Dec-22 $ 6.775 Dec-22 $ 6.198 Mar-23 $ 6.840 Mar-23 $ 6.263 Options of soybean meal Hedge $ 439,720 SOYBEAN MEAL SOYBEAN MEAL $ 12,013 $ 34,539 57% in 2022 and 43% in 2023 In USD per ton In USD per ton month price month price Aug-22 $ 435.5 Sep-22 $ 416.1 Oct-22 $ 405.7 Dec-22 $ 403.0 Dec-22 $ 406.7 Jan-23 $ 401.3 Jan-23 $ 405.9 Mar-23 $ 397.2 Mar-23 $ 401.3 May-23 $ 395.0 May-23 $ 398.3 -The total financial instruments do not exceed 5% of total assets as of September 30, 2022. -The notional value represents the net position as of September 30, 2022 at the exchange rate of Ps.20.13 per one dollar. -A negative value means an unfavorable effect for the Company. Third Quarter 2022 Thousands of Mexican Pesos, as of September 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 -$ 48,982 $19.63 $ 20.63 $ 21.14 Direct -$124,810 $ 26,845 $ 57,145 -5% 5% 10% -5% 5% 10% Futures of Corn: (2) $ 12,462 $ 6.436 $ 7.114 $ 7.453 The effect will materialize as the inventory is consumed -$ 13,101 $ 38,024 $ 63,587 Futures of Soybean Meal: (2) $ 382.9 $ 423.2 $ 443.3 Futures for Soy Oil (2) $ 58.5 $ 64.6 $ 67.7 Futures for Natural Gas (2) $ 6.4 $ 7.1 $ 7.4 Options for Corn $ 37,181 $ 6.436 $ 7.114 $ 7.453 $ 21,438 $ 52,925 $ 68,668 Options of Soybean Meal $ 12,013 $ 382.9 $ 423.2 $ 443.3 -$ 9,973 $ 33,999 $ 55,985 (1) The reference value is the exchange rate of Ps. $20.13 per USD as of September 30, 2022. (2) The reference values are: future of corn Dec 2022, $6.7750 USD/bushel, the future of soybeanmeal Dec 2022, $403.00 USD/ton, the future of soybean oil Dec 2022, $61.56 usd cts / pound and the future of natural gas Nov 2022, $6.77usd/ 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. Third Quarter 2022 Thousands of Mexican Pesos, as of September 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 -$48,982 $10.07 $15.10 $25.16 $30.20 Direct -$1,565,538 -$807,260 $484,940 $1,034,577 CONFERENCE CALL INFORMATION The Company will host its second quarter 2022 earnings call on Tuesday October 25th, 2022. The earnings call will take place at 8:30 am Central Time (9:30 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=C2665A6D-28B4-4A5B-95C3-99B542C27989&LangLocaleID=1033 Confirmation Number: 36258927# 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/20221024005780/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 third quarter (“3Q22”) and nine months (“9M22”) ended on September 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 20.9% in 3Q22 and increased 24.5% in 9M22 EBITDA margin was 6.2% for 3Q22 and 12.3% for the 9M22 SG&A as percentage of net sales was 8.6% and 8.3% for 3Q22 and 9M22 respectively. CEO COMMENTS Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, “According to the seasonality of our industry, the third quarter usually shows adjustments on margins vs the first half of the year. In that regard, 3Q22 behaved as so. We observed a decline in prices both in México and the U.S. markets when compared to the first half of 2022. While kept facing the impacts of the increases in cost of sales as a result of higher raw material prices both in USD and Mexican peso terms. Increases in cost of sales represented 20.3% compared to 3Q22 and 22.7% when compared to the 9M21. Net sales on the other hand showed increases of 20.9% and 24.5% respectively, which is closely following the trend of our input costs. The combination mentioned above, and the integration of revenue from RYC Alimentos that we have seen since the beginning of 2022, led us to an EBITDA of $1,525.8 million and a margin of 6.2% for the 3Q22 compared to the $1,127.4 million and margin of 5.6% of the same period of 2021. For the nine months of 2022, the EBITDA margin was 12.3%, also higher when compared to 10.7% EBITDA margin of the same period of 2021. Under a landscape of volatile macroeconomic conditions, we had been able to keep our SG&A under control as a percentage of sales, reporting 8.6% for the quarter which compares to the 8.9% of 3Q21. As a result, our operating income for 3Q22 was $1,131.2 million which represents a 4.6% margin; this compares to the $738.4 million and 3.7% margin achieved in 3Q21. The accumulated results of the CAPEX of the nine months of 2022 were $2,954.9 million compared to $2,251.1 million for the same period of 2021. Remaining with a healthy financial for the Company as we reached a net cash level of $16,413.5 million, which will allow us to continue to support our growth plans.” 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 3Q22 3Q21 Change $ $ $ % Net Sales 24,457.8 20,229.0 4,228.8 20.9 Net sales in Mexico 17,982.7 14,963.8 3,019.0 20.2 Net sales in the U.S. 6,475.0 5,265.2 1,209.8 23.0 NET SALES BY SEGMENT In millions of pesos 3Q22 3Q21 Change $ $ $ $ Net Sales 24,457.8 20,229.0 4,228.8 20.9 Poultry 20,890.8 17,765.7 3,125.1 17.6 Other 3,567.0 2,463.3 1,103.7 44.8 NET VOLUME SOLD BY SEGMENT In tons Change 3Q22 3Q21 Volume % Total sales volume: 578,421 570,381 8,039.4 1.4 Poultry 433,861 442,665 (8,804.1) (2.0) Others 144,560 127,716 16,843.4 13.2 The Company’s 3Q22 net sales totaled $24,457.8 million; $4,228.8 million or 20.9% more than the $20,229.0 million reported in 3Q21. The increase was mainly a result of higher volume sold in Others and higher prices across the main business lines vs same period of 2021. In 3Q22, sales of our U.S. operations represented 26.5% of our total sales compared to a 26.0% in the same period of 2021. GROSS PROFIT In millions of pesos 3Q22 3Q21 Change $ $ $ % Cost of sales 21,189.7 17,619.0 3,570.7 20.3 Gross profit 3,268.1 2,610.0 658.1 25.2 Gross margin 13.4% 12.9% - - In 3Q22, cost of sales was $21,189.7 million; $3,570.7 million or 20.3% higher than the $17,619.0 million reported in 3Q21. 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 3Q22 was $3,268.1 million, higher than the gross profit of $2,610.0 million in 3Q21, with a gross margin of 13.4% for 3Q22 vs 12.9% in 3Q21. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”) In millions of pesos 3Q22 3Q21 Change $ $ $ % Total SG&A 2,114.2 1,790.9 323.3 18.1 Total SG&A expenses in 3Q22 were $2,114.2 million; $323.3 million higher than the $1,790.9 million reported in 3Q21. Total SG&A expenses as a percentage of net sales were 8.6% in 3Q22 and 8.9% in 3Q21. OTHER INCOME (EXPENSE), NET In millions of pesos 3Q22 3Q21 Change $ $ $ % Other income (expense), net (22.6) (80.7) 58.1 (72.0) 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 3Q22, we recorded other expenses of $22.6 million, compared with other expenses of $80.7 million reported in 3Q21. OPERATING INCOME In millions of pesos 3Q22 3Q21 Change $ $ $ % Operating income 1,131.2 738.4 392.8 53.2 Operating margin 4.6% 3.7% - - Operating income in 3Q22 totaled $1,131.2 million; $392.8 million higher than the $738.4 million reported in 3Q21. This represents an operating margin of 4.6% for 3Q22, higher when compared to the same period of 2021. NET FINANCIAL INCOME In millions of pesos 3Q22 3Q21 Change $ $ $ % Net Financial Income 116.5 459.6 (343.1) (74.7) Financial Income 275.4 527.5 (252.1) (47.8) Financial Expense 158.9 67.9 91.0 134.0 In 3Q22, the Company reported net financial income of $116.5 million, compared to the net financial income of $459.6 million reported in the same period of 2021. TAXES FOR THE PERIOD In millions of pesos 3Q22 3Q21 Change $ $ $ % Total Taxes 285.3 380.6 (95.3) (25.0) Income tax 169.8 (275.3) 445.1 (161.7) Deferred income tax 115.5 655.9 (540.4) (82.4) As a result of a higher operating income, Total taxes for the 3Q22 were $285.3 million compared with total taxes of $380.6 million in the same period of 2021. NET controlling interest INCOME In millions of pesos 3Q22 3Q21 Change $ $ $ % Net income 962.4 817.4 145.0 17.7 Net margin 3.9% 4.0% - - Non-Controlling Interest income (9.7) (26.4) 24.3 n/a Net controlling interest income 972.1 843.8 128.3 n/a Basic and diluted income per share1 1.62 1.41 0.2 n/a Basic and diluted income per ADR2 19.46 16.88 2.6 n/a Weighted average Shares outstanding3 599,380 599,734 - - 1 In pesos 2 in pesos, one ADR equals to twelve shares 3 In thousands of shares For the 3Q22 we had Net controlling interest income of $972.1 million, representing a basic and diluted income per share of $1.62 compared with a Net controlling interest income of $843.8 million, and $1.41 pesos of income per share in 3Q21. This increase was attributed to higher operating results. EBITDA In millions of pesos 3Q22 3Q21 Change $ $ $ % Net controlling interest income 972.1 843.8 128.3 15.2 Income tax expense (benefit) 285.3 380.6 (95.3) (25.0) Result in associates (9.7) (26.4) 16.7 (63.3) Net finance (income) expense (116.5) (459.6) 343.1 (74.7) Depreciation and amortization 394.6 389.0 5.6 1.5 EBITDA 1,525.8 1,127.4 398.5 35.3 EBITDA Margin (%) 6.2% 5.6% - - Net revenues 24,457.8 20,229.0 4,228.8 20.9 EBITDA in 3Q22 reached $1,525.8 million, representing an EBITDA margin of 6.2%, compared to an EBITDA of $1,127.4 million in 3Q21, with an EBITDA margin of 5.6%. ACCUMULATED RESULTS NET SALES BY GEOGRAPHY In millions of pesos 9M22 9M21 Change $ $ $ % Net Sales 75,256.9 60,447.5 14,809.3 24.5 Net sales in Mexico 55,918.9 45,530.7 10,388.2 22.8 Net sales in the U.S. 19,337.9 14,916.8 4,421.1 29.6 NET SALES BY SEGMENT In millions of pesos 9M22 9M21 Change $ $ $ % Net Sales 75,256.9 60,447.5 14,809.3 24.5 Poultry 64,372.9 52,920.0 11,452.9 21.6 Other 10,884.0 7,527.5 3,356.4 44.6 NET VOLUME SOLD BY SEGMENT In metric tons Change 9M22 9M21 Volume % Total sales volume: 1,753,821 1,712,125 41,695.8 2.4 Poultry 1,313,071 1,301,129 11,941.3 0.9 Others 440,750 410,995 29,754.5 7.2 During the nine months of 2022, net sales totaled $75,256.9 million; $14,809.3 million or 24.5% more than $60,447.5 million reported in the same period of 2021. The increase in sales is mainly attributable to higher volume sold in Others as part of the integration of RYC Alimentos, as well as higher prices in our main business lines when compared to the accumulated results of the nine months of 2021. In 9M22, sales of our U.S. operations represented 25.7% of our total sales, compared with 24.7% in 9M21. OPERATING RESULTS 9M22 9M21 Change $ $ $ % Cost of Sales 60,948.7 49,659.7 11,289.0 22.7 Gross Profit 14,308.2 10,787.9 3,520.3 32.6 Total SG&A 6,236.7 5,157.4 1,079.2 20.9 Other Income (expense) 32.9 (244.3) 277.2 (113.5) Operating Income 8,104.4 5,386.1 2,718.2 50.5 Net Financial Income 38.6 682.2 (643.6) (94.3) Income Tax 2,117.9 1,733.3 384.7 22.2 Net Income 6,025.1 4,335.1 1,690.0 39.0 Non-controlling interest (47.6) (85.8) 38.1 (44.5) Net controlling interest Income 6,072.7 4,420.9 1,651.8 37.4 In 9M22, the cost of sales totaled $60,948.7 million; $11,289.0 million or 22.7% higher than the $49,659.7 million reported in 9M21. As a result, we reached a gross profit of $14,308.2 million and a gross margin of 19.0% in 9M22, when compared to $10,787.9 million of gross profit and margin of 17.8% reached in the same period of 2021. Total SG&A in 9M22 were $6,236.7 million; $1,079.2 million or 20.9% more than the $5,157.4 million reported in 9M21. In 9M22 total SG&A as a percentage of net sales represented 8.3% compared with 8.5% in 9M21. In 9M22 we had other income of $32.9 million, compared with other expenses of $244.3 million reported in 9M21. Operating income in 9M22 was $8,104.4 million, which represents an operating margin of 10.8%, an increase compared to the operating income of $5,386.1 million and the operating margin of 8.9% in 9M21. Net financial income in 9M22 was $38.6 million, compared to a net financial income of $682.2 million in 9M21. Total taxes were $2,117.9 million as of September 30, 2022. These taxes include $1,169.1 million of income tax and $948.9 million of deferred income taxes. These figures compare to total taxes of $1,733.3 million in 9M21. All the above resulted in a Net controlling interest income of $6,072.7 million in 9M22, which represents $10.13 pesos of earnings per share, while in the 9M21 the Net controlling interest income totaled $4,420.9 million and $7.37 pesos of earnings per share. EBITDA In millions of pesos 9M22 9M21 Change $ $ $ % Net controlling interest profit 6,072.7 4,420.9 1,651.8 37.4 Income tax expense (benefit) 2,117.9 1,733.3 384.7 22.2 Result in associates (47.6) (85.8) 38.1 (44.5) Net finance (income) expense (38.6) (682.2) 643.6 (94.3) Depreciation and amortization 1,150.9 1,092.1 58.9 5.4 EBITDA 9,255.3 6,478.2 2,777.1 42.9 EBITDA Margin (%) 12.3% 10.7% - - Net revenues 75,256.9 60,447.5 14,809.3 24.5 EBITDA in 9M22 reached $9,255.3 million, representing an EBITDA margin of 12.3%, compared to an EBITDA of $6,478.2 million in 9M21, with a margin of 10.7%. BALANCE SHEET BALANCE SHEET DATA In millions of pesos Sept. 30, 2022 Dec. 31st, 2021 Change $ $ $ % TOTAL ASSETS 72,044.1 65,988.8 6,055.3 9.2 Cash and cash equivalents 20,391.7 20,777.0 (385.3) (1.9) Accounts receivable 5,815.2 5,108.5 706.8 13.8 TOTAL LIABILITIES 18,862.3 17,704.7 1,157.6 6.5 Accounts payable 6,008.8 10,200.7 (4,191.9) (41.1) Short-term debt 981.7 1,993.9 (1,012.2) (50.8) Long-term debt 2,996.5 - 2,996.5 N/A TOTAL STOCKHOLDERS’ EQUITY 53,181.8 48,284.1 4,897.8 10.1 Capital stock 1,174.4 1,174.4 - - Cash and equivalents as of September 30, 2022 totaled $20,391.7 million vs $20,777.0 million as of December 31, 2021. Total debt as of September 30, 2022 was $3,978.2 million, compared to $ 1,993.9 million reported as of December 31, 2021. Net cash as of September 30, 2022 was $ 16,413.5 million, compared to net cash of $ 18,783.1 million as of December 31, 2021. CAPITAL EXPENDITURES In millions of pesos 9M22 9M21 Change $ $ $ % Capital Expenditures 2,954.9 2,251.1 703.8 31.3 Total CAPEX for the 9M22 was $2,954.9 million and $2,251.1 million in 9M21, mainly allocated toward organic growth and productivity projects across all of our facilities. STOCK INFORMATION As of September 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 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 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 $20.13 per USD $1.0, which corresponds to the rate at the close of September 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 September 30, December 31, In million pesos 2022 2022 2021* TOTAL ASSETS $ 3,578.9 72,044.1 65,988.8 Total current assets 2,036.1 40,987.2 37,845.6 Cash and cash equivalents 1,013.0 20,391.7 20,777.0 Total accounts receivable 288.9 5,815.2 5,108.5 Inventories 636.1 12,805.3 9,145.6 Other current assets 98.1 1,975.1 2,814.6 Total non current assets 1,542.8 31,056.3 28,143.2 Net property, plant and equipment 1,164.1 23,433.8 21,763.4 Other non current Assets 378.7 7,622.5 6,379.8 TOTAL LIABILITIES $ 937.0 18,862.3 17,704.7 Total current liabilities 478.5 9,632.2 12,835.3 Notes payable to banks 48.8 981.7 1,993.9 Accounts payable 298.5 6,008.8 10,200.7 Other taxes payable and other accruals 131.2 2,641.7 640.7 Total long-term liabilities 458.5 9,230.0 4,869.4 Long-term debt 148.9 2,996.5 - Other non current liabilities 50.4 1,013.7 1,027.9 Deferred income taxes 259.3 5,219.9 3,841.5 TOTAL STOCKHOLDERS' EQUITY $ 2,641.9 53,181.8 48,284.1 Capital stock 58.3 1,174.4 1,174.4 Commission in shares issued 20.6 414.1 414.1 Retained earnings 2,492.8 50,179.4 45,038.6 Others accounts 48.9 983.8 1,179.2 Non controlling interest 21.4 430.1 477.7 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,578.9 72,044.1 65,988.8 *Audited CONSOLIDATED STATEMENT OF INCOME Third Quarter Results, ended September 30th: -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 1,215.0 24,457.8 20,229.0 Cost of sales 1,052.6 21,189.7 17,619.0 Gross profit 162.3 3,268.1 2,610.0 SG&A 105.0 2,114.2 1,790.9 Other income (expenses), net (1.1 ) (22.6 ) (80.7 ) Operating income 56.2 1,131.2 738.4 Net finance income 5.8 116.5 459.6 Income tax 14.2 285.3 380.6 Net Income $ 47.8 962.4 817.4 Non-controlling interest (0.48 ) (9.7 ) (26.4 ) Net controlling interest profit 48.29 972.1 843.8 Basic and diluted earnings per share 0.08 1.62 1.41 Basic and diluted earnings per ADR 0.97 19.46 16.88 Weighted average Shares outstanding1 599,380 599,380 599,734 EBITDA Result $ 75.8 1,525.8 1,127.4 Gross margin 13.4 % 13.4 % 12.9 % Operating margin 4.6 % 4.6 % 3.7 % Net margin 4.0 % 3.9 % 4.0 % EBITDA margin 6.2 % 6.2 % 5.6 % 1 In thousands CONSOLIDATED STATEMENT OF INCOME Accumulated results, for the nine months ended September 30. -Unaudited- U.S. Dollar In millions pesos 2022 2022 2021 Net sales $ 3,738.5 75,256.9 60,447.5 Cost of sales 3,027.8 60,948.7 49,659.7 Gross profit 710.8 14,308.2 10,787.9 Selling, general and administrative expenses 309.8 6,236.7 5,157.4 Other income (expenses), net 1.6 32.9 (244.3 ) Operating income 402.6 8,104.4 5,386.1 Net finance income 1.92 38.6 682.24 Income tax 105.2 2,117.9 1,733.3 Net income $ 299.3 6,025.1 4,335.1 Non-controlling interest (2.37 ) (47.6 ) (85.8 ) Net controlling interest profit 301.7 6,072.7 4,420.9 Basic and diluted earnings per share 0.50 10.13 7.37 Basic and diluted earnings per ADR 6.04 121.6 88.45 Weighted average Shares outstanding1 599,380 599,380 599,766 EBITDA Result $ 459.8 9,255.3 6,478.2 Gross margin 19.0 % 19.0 % 17.8 % Operating margin 10.8 % 10.8 % 8.9 % Net margin 8.1 % 8.0 % 7.2 % EBITDA margin 12.3 % 12.3 % 10.7 % 1 In thousands CONSOLIDATED STATEMENT OF CASH FLOWS In million of pesos -Unaudited- U.S. Dollar September 30, 2022 2022 2021 NET MAJORITY INCOME BEFORE INCOME TAX $ 404.5 8,143.0 6,068.4 ITEMS RELATING TO INVESTING ACTIVITIES: 66.7 1,342.8 1,226.7 Depreciation and others 74.4 1,498.6 1,358.3 Income (loss) on sale of plant and equipment 2.7 55.3 63.3 Other Items (10.5 ) (211.2 ) (194.9 ) NET CASH GENERATED FROM NET INCOME BEFORE TAXES 471.2 9,485.8 7,295.1 CASH GENERATED OR USED IN THE OPERATION: (250.0 ) (5,031.9 ) (1,166.0 ) Decrease (increase) in accounts receivable (22.1 ) (443.9 ) (239.0 ) Decrease (increase) in inventories (195.7 ) (3,938.8 ) (1,487.0 ) Increase (decrease) in accounts payable (136.2 ) (2,740.9 ) 1,791.9 Other Items 103.9 2,091.7 (1,231.9 ) NET CASH FLOW FROM OPERATING ACTIVITIES 221.3 4,453.9 6,129.1 NET CASH FLOW FROM INVESTING ACTIVITIES (162.7 ) (3,275.3 ) (1,629.1 ) Acquisition of property, plant and equipment (146.8 ) (2,954.9 ) (2,251.1 ) Proceeds from sales of property plant and equipment 3.1 61.8 17.1 Other Items (19.0 ) (382.1 ) 604.9 CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES 58.6 1,178.6 4,500.0 Net cash provided by financing activities: (74.2 ) (1,494.0 ) (3,654.4 ) Proceeds from loans 195.2 3,930.0 1,237.2 Principal payments on loans (96.7 ) (1,945.7 ) (1,903.8 ) Dividends paid (48.8 ) (983.0 ) (851.6 ) Other items (124.0 ) (2,495.3 ) (2,136.1 ) Net increase (decrease) in cash and equivalents (15.7 ) (315.4 ) 845.6 Cash and investments at the beginning of year $ 1,028.7 20,707.1 19,242.4 CASH AND INVESTMENTS AT END OF PERIOD $ 1,013.0 20,391.7 20,088.0 Third Quarter 2022 Thousands of Mexican Pesos, as of September 30, 2022 TYPE OF FINANCIAL INSTRUMENT OBJECTIVE NOTIONAL VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS DUE BY YEAR GUARANTIES REQUIRED 3Q-2022 2Q-2022 3Q-2022 2Q-2022 Forward Vanilla y KO Fwd Hedge $ 150,699 $ 20.13 $ 20.14 $ -48,982 $ -80,565 69% in 2022 and 31% in 2023 The deals consider the possibility of margin calls but not another kind of guarantee Futures for corn, soybean meal, soybean oil and natural gas Hedge $ 511,252 CORN CORN $ 12,462 $ 24,903 98% in 2022 and 2% in 2023 In USD per Bushel In USD per Bushel month price month price Sep-22 $ 6.288 Dec-22 $ 6.775 Dec-22 $ 6.198 SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price Aug-22 $ 435.5 Sep-22 $ 416.1 Oct-22 $ 405.7 Dec-22 $ 403.0 Dec-22 $ 406.7 SOYBEAN OIL SOYBEAN OIL In US cents per pound In US cents per pound Month Price Month Price Aug-22 $ 67.01 Dec-22 $ 61.56 Sep-22 $ 65.68 NATURAL GAS In USD/MM BTU Month Price Nov-22 $ 6.766 Dec-22 $ 7.065 Jan-23 $ 7.247 Feb-23 $ 6.937 Options of Corn Hedge $ 314,868 CORN CORN $ 37,181 $ 27,649 83% in 2022 and 17% in 2023 In USD per Bushel In USD per Bushel month price month price Sep-22 $ 6.288 Dec-22 $ 6.775 Dec-22 $ 6.198 Mar-23 $ 6.840 Mar-23 $ 6.263 Options of soybean meal Hedge $ 439,720 SOYBEAN MEAL SOYBEAN MEAL $ 12,013 $ 34,539 57% in 2022 and 43% in 2023 In USD per ton In USD per ton month price month price Aug-22 $ 435.5 Sep-22 $ 416.1 Oct-22 $ 405.7 Dec-22 $ 403.0 Dec-22 $ 406.7 Jan-23 $ 401.3 Jan-23 $ 405.9 Mar-23 $ 397.2 Mar-23 $ 401.3 May-23 $ 395.0 May-23 $ 398.3 -The total financial instruments do not exceed 5% of total assets as of September 30, 2022. -The notional value represents the net position as of September 30, 2022 at the exchange rate of Ps.20.13 per one dollar. -A negative value means an unfavorable effect for the Company. Third Quarter 2022 Thousands of Mexican Pesos, as of September 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 -$ 48,982 $19.63 $ 20.63 $ 21.14 Direct -$124,810 $ 26,845 $ 57,145 -5% 5% 10% -5% 5% 10% Futures of Corn: (2) $ 12,462 $ 6.436 $ 7.114 $ 7.453 The effect will materialize as the inventory is consumed -$ 13,101 $ 38,024 $ 63,587 Futures of Soybean Meal: (2) $ 382.9 $ 423.2 $ 443.3 Futures for Soy Oil (2) $ 58.5 $ 64.6 $ 67.7 Futures for Natural Gas (2) $ 6.4 $ 7.1 $ 7.4 Options for Corn $ 37,181 $ 6.436 $ 7.114 $ 7.453 $ 21,438 $ 52,925 $ 68,668 Options of Soybean Meal $ 12,013 $ 382.9 $ 423.2 $ 443.3 -$ 9,973 $ 33,999 $ 55,985 (1) The reference value is the exchange rate of Ps. $20.13 per USD as of September 30, 2022. (2) The reference values are: future of corn Dec 2022, $6.7750 USD/bushel, the future of soybeanmeal Dec 2022, $403.00 USD/ton, the future of soybean oil Dec 2022, $61.56 usd cts / pound and the future of natural gas Nov 2022, $6.77usd/ 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. Third Quarter 2022 Thousands of Mexican Pesos, as of September 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 -$48,982 $10.07 $15.10 $25.16 $30.20 Direct -$1,565,538 -$807,260 $484,940 $1,034,577 CONFERENCE CALL INFORMATION The Company will host its second quarter 2022 earnings call on Tuesday October 25th, 2022. The earnings call will take place at 8:30 am Central Time (9:30 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=C2665A6D-28B4-4A5B-95C3-99B542C27989&LangLocaleID=1033 Confirmation Number: 36258927# 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/20221024005780/en/
Maria Guadalupe Jaquez maria.jaquez@bachoco.net Andrea Guerrero andrea.guerrero@bachoco.net T. +52(461)618 3555