Resilience & Focus Investors Presentation June 2018 All the - PowerPoint PPT Presentation

Resilience & Focus Investors Presentation June 2018

All the information contained in this document is prepared in accordance with International Financial Reporting Standards (IFRS) as of June 30, 2018, unless otherwise stated. Forward-Looking Statement The information herein contained (“Information”) has been prepared by Grupo Herdez, S.A.B. de C.V., its associates, subsidiaries and/or affiliated companies (“Grupo Herdez”) and may contain forward-looking statements that reflect Grupo Herdez current expectations and views which could differ materially due to different factors, risks and uncertainties. Therefore, Grupo Herdez and/or its respective officers, employees or agents, assume no responsibility or liability for any discrepancy in the Information. In particular, but without prejudice to the generality of the foregoing, no warranty is given as to the accuracy of the statements or the future variation of the Information or any other written or oral Information issued by Grupo Herdez. The Information has been delivered for informative purposes only. The issuance of this information shall not be taken as any form of commitment on the part of Grupo Herdez to proceed with any transaction. 2

In Investment Case +100 Years of experience Branded food leader Diversified portfolio Profitable growth strategy Sound financial Solid corporate Committed to structure governance sustainability 3

Str trategy 4

Infrastructure In 7 477 15 tuna Nutrisa plants vessels stores 56,000 22 More than Helados Nestlé distribution 9,500 POS centers employees 5

Corporate Str tructure Grupo Herdez consolidates 100% of the Frozen division, Herdez Del Fuerte, Barilla México y McCormick de México. The proportional part of Herdez Del Fuerte in MegaMex is registered in “ Equity Investment in Associates “. 6

Corporate Governance Héctor Hernández-Pons Torres Chairman • HERDEZ* single series Enrique Hernández-Pons Torres PROPIETARY Vicepresident • Robust governance structure from subisidiaries Flora Hernández de Merino Board member • 67% independent members • Assignment of individual responsibilities on Carlos Autrey Maza corporate governance, labor and environmental Enrique Castillo Sánchez Mejorada practices José Roberto Danel Diaz INDEPENDENT Eduarto Ortíz Tirado Serrano 67% Luis Rebollar Corona José Manuel Rincón Gallardo 7

Sustainability Model A w a r d s & C e r t i f i c a t i o n s 8

Leading Brands Our brands in Mexico Our brands in United States Distribution agreements in Mexico 9

Commercial Leadership Sales mix by channel Sales mix by category Mushrooms, 1% Convenience Juice, 1% Others DSD (traditional) 4% Food Packaging, 1% 8% 5% Thea, 2% Foodservice Jams, 2% 6% Catsup, 2% Retail Mayonnaise Presence in Nutrisa stores 35% 35% Salsa, 3% ALL 7% Canned vegetables 4% Club stores Canned tuna 8% the sales channels in Mexico 4% Mole 4% Tomato puree 8% Wholesalers Frozen 35% Pasta 16% 8% Consolidated figures in million pesos 10

Segments Preserves Frozen Exports 79% of net sales 14% of net sales 7% of net sales C A T E G O R I E S C A T E G O R I E S C A T E G O R I E S Canned tuna • Soft drinks Mexican food • • Mayonnaise • Healthy snacks Mayonnaise • • Mole • Frozen yogurt Tea • • Tomato puree • Popsicles • Pasta • Food supplements • Vegetables • MegaMex is registered in “ Equity Investment in Associates ” and includes categories like guacamole, salsas and vegetables. 11

Market Share in in Mexico 29% 8% Canned tuna Pasta We are #1 or #2 Mayonnaise Tomato purée 71% 73% in categories that represents Jams 40% Salsa the 78% of 43% our sales 84% 27% Mole Vegetables 12

Segments Preserves Growth Drivers More Regional consumption penetration occasions Health & Integrated Wellness communication 13

Frozen Growth Drivers Club stores 1% Others Sales mix Increase store traffic Retail 2% 8% optimization & freezer Convenience 13% Nutrisa stores SALES MIX 46% by channel Strenghening of SG&A management new sales DSD (traditional) 30% channels Consolidated figures in million pesos 14

MegaMex Growth Drivers Accelerate brand Expansion of sales Increase sales by 2020 Goals growth channels innovation USD $1B Net sales 14-16% EBITDA margin Improve gross margins Reduce general Reduce production through efficient expenses as a costs portfolio management proportion of net sales 15

Net Sales CAGR 4years = 9.1% Preerves 6.9% 20,300 20,065 Frozen 25.6% 1,446 1,230 18,181 Exports 10.9% Exports 7% 16,357 1,158 2,882 2,901 Frozen 1,079 2,592 14,318 14% 15,953 15,953 2,139 955 SEGMENT 14,431 1,166 13,139 MIX 12,197 Preserves 79% 2014 2015 2016 2017 12M2Q18 Preserves Frozen Exports Consolidated figures in million pesos 16

EBITDA CAGR 4years = 8.6% Preserves 6.6% Frozen 27.0% Exports 25.9% 3,355 3,295 Exports 5% 166 130 Frozen 2,887 2,816 277 305 9% 83 79 2,888 2,884 136 103 2,415 2,668 2,634 SEGMENT 66 117 MIX 2,232 17.7 16.9 Preserves 16.4 16.5 86% 15.5 2014 2015 2016 2017 12M2Q18 Preserves Frozen Exports EBITDA Margin Consolidated figures in million pesos 17

Profitability 41.4 39.9 39.5 39.3 39.0 17.7 16.9 16.4 16.5 15.5 14.0 14.8 13.9 13.0 12.4 11.6 10.8 10.5 8.8 7.9 5.6 5.4 5.2 2.4 3.9 2014 2015 2016 2017 12M2Q18 Gross Margin EBIT EBITDA Net Income Majority Net Income 18

Returns 14.9% 13.7% 12.2% 11.9% 10.9% 10.2% 2016 2017 12M2Q18 ROE ROIC 21 ROE (Return over Equity) = Majority Net Income / Annual Average Majority Shareholder ´ s Equity ROIC (Return over Invested Capital) = EBIT / (Consolidated Shareholder ´ s Equity + Total Debt) (annual average from last two years)

Stock Performance P A R T O F T H E I N D E X E S Comercial • Consumo Frecuente • IMC30 • IPC CompMX • IPC SmallCap • IPC Sustentable • Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Transforma • Δ% Herdez Δ% IPC Δ% Consumo Frecuente 432 EPS 49% million MXN 2.61 float outstanding June 2018 shares 20

Debt Str tructure Flotante 29% MIX Fija RATES 71% Financial Debt 7,030 2,000 2,000 Average Cost 8.5% 1,000 1,000 1 200 Net DEBT/EBITDA 1.6 430 200 200 Net Debt/ 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Shareholders Equity 0.31 Scotiabank Herdez 14 HSBC LC Herdez 18 Herdez 17-2 Herdez 13 Herdez 17 Consolidated figures in million pesos 21 The debt mix considers hedge derivates

Guid idance 2018 2018 EBITDA Margin Net Sales 5-7% 15.5-16.5% growth Majority Net CAPEX Income $633 millions 4-5% 22

For more information: Andrea Amozurrutia Tel.+52 (55) 5201 5636 aac@herdez.com Grecia Domínguez Tel.+52 (55) 5201 5602 gdominguezl@herdez.com Fernando Acevedo Tel.+52 (55) 5201 5655 ext. 1052 lfacevedom@herdez.com invrel@herdez.com www.grupoherdez.com.mx 23