Investor Presentation 4Q13

Transcription

1 Investor Presentation 4Q13

2 Grupo Bimbo Global leader in baking and one of the largest packaged food players 2013 Sales: USD $13.8 Bn EBITDA: USD $1.4 Bn1 Presence in 19 countries +10,000 products and +100 brands Categories: packaged bread, salted snacks, confectionary, tortillas and packaged food Market Cap of USD $12.7 Bn figures as of December 31 st, Converted to USD using the average LTM rate of $ As of February 24, Converted to USD using an FX rate of $

3 Broad Asset Base 125,000 associates Control Group Float 76% 24% 144 plants +2.2 MM POS Mexico USA Central & South America Iberia Asia 1 +52,000 routes 1. Asia s results are included in Mexico 3

4 Globally Present, Locally Committed United States Leader nationwide #1 in premium brands #1 in English muffins #1 portfolio of Hispanic brands 1 Strong regional brands Portugal & Spain #1 in packaged baked goods Leading brands in sweet baked goods and snack categories 2013 Revenue Breakdown (US$13.8 Bn) 2 LatAm 12% Iberia 3% Mexico 39% U.S. 45% Mexico #1 in packaged baked goods #1 in pastry chain #2 in cookies and crackers #2 in salty snacks #2 in confectionary China 1 Pioneer in developing packaged baked goods in Beijing and Tianjing Source: Datamonitor 1. Source: Company Research pro forma figures as of December 2013, converted to US$ using the LTM average rate of $ Central & South America 1 #1 in packaged baked goods in 14 countries 2013 EBITDA Breakdown (US$1.4 Bn) 2 U.S. 33% LatAm 1% Iberia -1% Mexico 67% 4

5 Successful Growth Case Accelerated International Expansion Strict Reinvestment Strategic Focus 2011 Sustainable Growth 00s 2009 Solid Balance Sheet s 60s 70s 80s 90s Successful growth story through a combination of organic growth, strategic acquisitions combined with a conservative financial policy 5

6 Key Success Drivers Dedication to Bakery Industry Long Run Player in a Very Attractive and Non-Cyclical Industry Brand Equity Innovation & Deep Consumer Understanding Over the last decade GB shifted from a strong local player to a leader in the Americas Socially & Environmentally Responsible Responsible Financial Management Experienced Management Team and Strong Corporate Governance Exceptional & Unparalleled Distribution Network 6

7 Leading Player in an Attractive Non- Cyclical Industry Attractive industry Fundamentals Resilient Industry High consumption frequency Nondiscretionary products 13,786 LTM Revenues in US$MM 1 11,672 7,878 3,751 1,812 Key success drivers Innovation & product quality Strong franchise and brand equity Distribution, scale & diversification 74% 61% Packaged Bread Penetration 2 Competitive Dynamics Major players account for 12% of global mkt share Highly fragmented Local industry due to short shelf life United States 32% 23% 20% 10% 6% 3% 2% Canada Portugal Spain Mexico Colombia Venezuela Brazil Arge ntina 1.Bimbo figures as of December 31, 2013; Mondelez biscuit business, LTM figures as of December 31, 2013; Yamazaki excludes revenues from retail and confectionary segments, figures as of June 30, 2013; Flowers Foods LTM figures as of December 28, 2013; Weston Foods segment refers to the fresh and frozen baking company located in Canada and frozen baking and biscuit manufacturing in the U.S., LTM figures as of December 31, Datamonitor 2013, Industrial Bread & Rolls category in market volume; Packaged bread refers to the pre- packed bread produced at industrial facilities 7

8 Strong Brand Equity and Deep Consumer Understanding Taking innovative products around the world Leadership in core products and markets Deep consumer understanding 4 R&D Institutes 1. Source: Study conducted by MillwardBrown Optimor in September, 2013 Every meal, every occasion, every consumer group Products that have changed the industry s course BIMBO: one of the most valuable brands in Latin America 1 Broad portfolio Extraordinary Brand Awareness Keep up with evolving consumer trends 8 8

9 Exceptional Distribution Network and Manufacturing Facilities +52,000 routes Unique expertise in moving high volume products On of the largest fleets in the Americas Attuned distribution model for each channel Low cost increase manufacturing CAPEX Access to unmatched technological equipment 9 9

10 Seasoned Management Team, Sound Governance & Strong Corporate Identity Audit Committee (5 independent members) Daniel Servitje Chairman of the Board Compensation & Benefits Committee (5 members, 1 independent) Finance & Planning Committee (7 members, 1 independent) Seasoned Management Team Positioned the company as the market leader Proven track record of stability and growth Successfully integrated more than 30 acquisitions over the past 10 years Developed innovative ideas and best practices in manufacturing Guillermo Quiroz CFO Daniel Servitje CEO Gary Prince Deputy CEO of Grupo Bimbo Pablo Elizondo Assistant CEO of Grupo Bimbo Sound Governace Corporate Governance aligned with shareholders interests 40% of board members are independent 3 Corporate Committees Javier A. González President of Bimbo Raúl Argüelles Personnel and Public Relations Fred Penny President of Bimbo Bakeries USA (BBU) Guillermo Sanchez Operations Auditing Director Reynaldo Reyna Chief Information and Strategy 1. According to the Reputation Institute (September 26, 2011) One of the most respected companies in the World 1 Reputation built on a strong corporate identity and brand equity Key component is its wide ESR Program Complies with WHO s Global Strategy on Diet and Physical Activity & Health Identity, Corporate Culture & Citizenship 10

11 Strong Financial Performance Revenue Growth 1 EBITDA Growth 1 (US$ in millions) (US$ in millions) 13,786 13,164 10,733 8,619 9,273 7,375 EBITDA Margin ,173 1, ,183 1,070 1, * 2012* 2013* * 2012* 2013* Iberia Latin America U.S. Mexico 5 year CAGR in USD 1 : GB MX 11.9% 15.5% 13.6% 16.5% 13.2% 16.6% 11.0% 14.3% 8.1% 13.8% 9.8% 15.8% Mexico 3.1% USA 31.0% 1.Figures converted to USD using the 12M average FX rate for each year * 2011, 2012 & 2013 figures in IFRS Latam 10.9% U.S. 3.0% 11.5% 10.9% 9.8% LatAm 7.6% 7.0% 4.6% 1.7% Iberia -18.6% 6.4% -1.1% -8.7% 7.3% 0.7% -3.8% 11

12 Financial Stability EBIT % EBITDA % Gross % Commodities Commodities/ Integration Mexican Crisis US Recession World Financial Crisis.Figures for 2011, 2012 and 2013 registered according to IFRS IFRS 12

13 Responsible Financial Policies Flexible Capital Structure Rapid deleveraging: target <2x Investment grade ratings: Baa2/BBB/BBB (Moody s/fitch/s&p) Strict management of CAPEX & Working Capital Ordinary Dividends * 2012* 2013* (US$ in millions) Total Debt/EBITDA #REF! Net Debt/ EBITDA Conservative Dividend Policy 2 Dividend Yield Leverage Extraordinary Dividends Conservative Dividend Policy Responsible risk management 1.0% 0.9% 0.6% 0.7% 0.7% 0.5% 0.7% 0.5% 0.5% 0.4% 0.9% 1. Pro forma Weston Foods, Inc, acquisition 2. Figures converted to US$ using the FX of the day dividends were paid 13 * 2011, 2012 and 2013 in IFRS

14 Responsible Financial Management Jan 2012: US$800mm of 4.5% due 2022 under Reg-S Rule Average Life: 5.0 years Total Debt: US$2,945 mm Av. Financing Cost: 4.6% 145 Amortization Schedule Instrument Current undrawn committed facilities for US$2.0 Bn maturing in 2019 Amount (US$ millions) Feb 2012: Ps. 5 Bn of 6.83% local bonds, at 6.5 years Currency Average Life Bank Facilities 198 MXN-USD 0.5 years Bonds 2,747 MXN USD 5.3 years Local Bonds Bank Loan Syndicated Loan International Bonds Debt denominated in: USD 95% MXN 5% 39% 1,146 7% 198 Debt Structure 1 54% 1,600 2,945 By Coupon Float 5% Fix 95% Local Bonds Bank Facilities International Total Bonds 14 1.Figures as of December 31, Does not include debt at the subsidiary level. FX $

15 Building a Sustainable Future We understand there is no conflict in doing good and doing well WHO and SSA guidelines Trans fats removed from 99.5% of products 700 reformulated products Wind farm in Mexico Energy consumption down 11m kwh Water consumption down 230k m3 Recycling in 84% of plants in Mexico 72% of wastes are recycled 10K families supported by Fundar 65K indigenous people benefited 75K students benefited Limpiemos Mexico +127K associates in 19 countries Solid ethics Strong focus on development 15

16 Looking Ahead 16

17 Time to Improve Profitability Long Term Vision- Do It Right IT Leadership Growth EFICIENCY Think Big, Think Future Synergistic Transaction One time costs are necessary to capture synergies (US$200mm) 1. Cost 2. Revenue Manufacturing Distribution S&A Efficient operation with value creation to consumers Strong CF generation Industry Transformation The New BBU 17

18 Time to Invest Our Strong Cash Flow Generation Backs our Investment Plan Investments are clearly focused on productivity US synergies- reconfigure manufacturing print Streamline manufacturing capabilities LatAm- Build scale and market penetration Low- Cost Producer Next couple of years CAPEX around 1.3x depreciation (US$550 million) 18

19 Time to Deleverage Total Debt/ EBITDA 0.9x 1.1x 2.5x 1.9x 1.5x 1.2x 1.1x 0.7x 3.3x 1 2.3x 2.2x 3.1x 3.0x 2.3x * 2012* 2013* Weston West Weston East Sara Lee 1.Pro forma figures with Weston Foods acquisition * 2011, 2012 and 2013 in IFRS 19

20 Why Grupo Bimbo? 5 year return in USD 1 22% +144% 1 Long-term value creation Strongly positioned in local & International indexes +301% +139% Focused on our core business Cash flow stability Successful deleveraging and solid investment grade ratings Strong & continuous reinvestment Responsible Financial Management As of February 24,

21 Annex: Financial Results by Region & Recent Acquisitions 21

22 Grupo Bimbo - Quarterly Results Revenue Growth (MXN$ in millions) -0.1% 3.0% 44, % 43,318 43,274 43,515 41,449 41, % 176, , % 46,480 45,278 (MXN$ in millions) 7.8% 9.9% EBITDA 10.8% 10.7% 9.8% 7.1% 7.7% 8.6% 9.0% 8.1% 17,326 14,076 4,840 4,980 4,281 3,355 3,756 4,058 2,908 3,224 1Q 2Q 3Q 4Q 12M 1Q 2Q 3Q 4Q 12M Sales '12 Sales '13 EBITDA '12 EBITDA '13 EBITDA margin '12 EBITDA margin '13 Revenue growth across all regions in local currencies FX impact in Latam Lower cost in certain inputs in Mexico and Iberia Production efficiencies - waste reduction / synergies in the US Improvements in Latin America and Iberia operations Higher marketing expenses in Mexico and U.S. 22

23 Mexico- Quarterly Results 9,00 8,00 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0 Revenue Growth EBITDA (MXN$ in millions) 1.7% 4.1% 17,740 17,775 17,435 17, % 5.2% 18,966 18,698 17,769 18, % 73,178 70,491 (MXN$ in millions) 14.2% 11.7% 10.9% 11.3% 2,519 1,896 2,071 1, % 14.6% 3,058 2, % 18.3% 3,912 3, % 13.8% 11,560 9,735 1Q 2Q 3Q 4Q 12M Sales '12 Sales '13 1Q 2Q 3Q 4Q 12M EBITDA '12 EBITDA '13 EBITDA margin '12 EBITDA margin '13 Pricing initiatives Volume decline Lower raw materials Higher marketing expenses Low basis of comparison reclassification of the annual financial cost of pension plans to the interest line 23

24 United States- Quarterly Results 6,00 5,00 4,00 3,00 2,00 1,00 0 Revenue Growth (MXN$ in millions) 1.1% 79,767 78, % 2.4% 3.5% 2.0% 20,706 21,165 19,986 20,400 19,913 20,447 18,216 17,861 (MXN$ in millions) 7.0% 4.7% 1, EBITDA 8.2% 8.1% 7.0% 7.2% 6.4% 6.1% 1,483 1,636 1,648 1,274 1,432 1, % 6.4% 5,854 5,027 1Q 2Q 3Q 4Q 12M Sales '12 Sales '13 Growth in USD across all channels Increased market penetration in the sweet baked goods category California divestiture 1Q 2Q 3Q 4Q 12M EBITDA '12 EBITDA '13 EBITDA margin '12 EBITDA margin '13 Production efficiencies- waste reduction/ synergies Higher raw materials and marketing expenses Integration related expenses Low basis of comparison reclassification of the annual financial cost of pension plans to the interest line 24

25 Latin America- Quarterly Results Revenue Growth EBITDA (MXN$ in millions) -5.3% -3.5% -4.6% 5,493 5,203 5,544 5,347 5,596 5, % 6,043 5, % 22,676 21,822 (MXN$ in millions) 4.4% -1.2% % 2.8% 0.5% -1.1% % -7.6% 0.7% -1.1% 149 1Q 2Q 3Q 4Q 12M Sales '12 Sales ' Q 2Q 3Q Q 12M EBITDA '12 EBITDA '13 EBITDA margin '12 EBITDA margin '13 FX impact Positive sales growth (in local currencies) on still challenging consumption environment Operational improvements No extraordinary charges Higher raw materials 25

26 Iberia - Quarterly Results (MXN$ in millions) -3.5% 1,264 1, % Revenue Growth 1,269 1,399 1,145 1, % -6.9% 1,543 1,436 5,182 1Q 2Q 3Q 4Q 12M Sales '12 Sales '13 Good volume performance (mainly sweet baked goods) New product launches Challenging price environment 2.7% High basis of comparison implementation ERP 5,323 (MXN$ in millions) -6.2% -3.9% -8.2% -9.3% EBITDA -2.0% -6.8% Q 2Q 3Q 4Q 12M Lower raw materials More efficient cost structure -3.6% -3.8% -10.2% -8.7% -204 EBITDA '12 EBITDA '13 EBITDA margin '12 EBITDA margin '13 Integration process and restructuring business model 26

27 Recent Acquisitions Sara Lee North American Fresh Bakery - Earthgrains Acquired for an all-cash purchase price of US$709 million, which includes US$34 million in assumed liabilities Attractive acquisition, which will add scale, diversify the brand portfolio and complement the geographic footprint Identified synergies of US$200million to be achieved by 2014 Revenues: US$2,036 million ( a) Super Premium/ Variety Premium Sandwich/ White Regional/ Mass Specialty Ethnic Hispanic Implied transaction multiples (b) FV/LTM Revenues: 0.35x FV/LTM EBITDA: 9.1x FV/Synergized EBITDA: 3.1x (c) Sara Lee: 41 1 BBU: 34 a)ltm as of June 30, Figures are pre consent decree divestitures b) Multiples based on US$709mm enterprise value and LTM figures as of June 30, 2011; assumes no tax benefits and proceeds or impact from divestitures associated with the Consent Decree agreed with the DOJ c) Assuming US$150 million synergies by Includes plants to be divested 27

28 Upcoming Acquisition Canada Bread Purchase price: CAD$1,830 million Annual Revenues: CAD$1,439 million 1 Annual EBITDA: CAD$185 million 1 (12.9% margin) Implied transaction multiples FV 2 /LTM Revenues 1 : 1.2x FV 2 /LTM EBITDA 1 : 9.3x Canada Bread is one of the leading manufacturers and marketers of bakery products with presence in Canada, North America and the U.K. Leading brands, solid margins, accretive to EPS, diversify cash flows, frozen category opportunity Canada 16 Bakeries U.S.- 3 & Canada - 4 Frozen Bakeries Product Categories Competitive Position 3 Bread #2 Buns & Rolls #1 Breakfast #1 Tortillas #1 Fruit/ Sweet Bread 4 #1 Canada Brands Maritimes National Quebec Western Frozen (US & Canada): #1 pie shell category UK: #1 bagel brand U.K. 2 Bakeries 1 Figures after Grupo Bimbo s assessment of the earnings capacity of the business that was used for valuation purposes 2 Considers a cash balance of approximately CAN$100 mm 3 Nielsen Market Track (in Canadian dollars), latest 52 weeks as of 7/27/13 4 Includes licensed brands Sun-Maid and Cinnabon

29 Thank you 29

30 The information contained herein has been prepared by Grupo Bimbo, S.A.B. de C.V. (the Company") solely for use at investors presentations. The information herein is only a summary and does not purport to be complete. This material has been prepared solely for informational purposes and should not be construed as a solicitation or an offer to buy or sell any securities and should not be relied upon as advice to potential investors. No representation or warranty, either express or implied, is made as to the accuracy, reliability or completeness of the information presented herein. This material should not be regarded by recipients as a substitute for the exercise of their own judgment. Any opinion expressed herein is subject to change without notice, and the Company is under no obligation to update or keep current the information herein. The Company accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. This presentation includes forward-looking statements. Such forward-looking statements are based on current expectations and projections about future events and trends that may affect the Company s business and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors, including those relating to the operations and business of the Company. These and various other factors may adversely affect the estimates and assumptions on which these forward-looking statements are based, many of which are beyond our control. While the Company may elect to update forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if its estimates change. We undertake no obligation to update publicly or to revise this presentation because of new information, future events or other factors. Our independent public auditors have neither examined nor compiled this presentation and, accordingly, do not provide any assurance with respect to any statements. In light of the risks and uncertainties described above, the future events and circumstances discussed in this presentation might not occur and are not guarantees of future performance. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. 30