Grupo KUO, S.A.B. de C.V. and Subsidiaries

Transcription

1 Mexico City, July 17 th, Grupo KUO, S.A.B. de C.V. (BMV: KUO) (Grupo KUO) reports its (unaudited) results for the second quarter of 2012 (2Q12). HIGHLIGHTS 2Q12 vs. 2Q11 Sales were over US $550 million for the second successive quarter. EBITDA increased by 22% to stand at US $56 million, with an EBITDA margin of 10%. Operating Profit grew 43% reaching US $40 million. The Net Majority Result (Controlling Interest) was a positive US $66 thousand, in spite of the negative effect of the period s exchange rate result. We have preserved the efficiency of our processes and a focus on higher value added products, which is reflected in having achieved an EBITDA margin of 10% during the quarter, stated Juan Marco Gutierrez, CEO of Grupo KUO, about this report. Grupo KUO, S.A.B. de C.V. and Subsidiaries Unaudited Consolidated Results (Millions of dollars) Second Quarter Variation Accumulated Variation Sales US $ % 1,173 1,098 7% Exports US $ % % Operating Profit US $ % % Operating Margin US 7% 5% 6% 5% EBITDA US $ % % EBITDA Margin US 10% 8% 9% 8% Controlling interest US $ 0 4 N/A % Explanatory note: The latest annual consolidated financial statements of the Company which were prepared under the Mexican Financial Reporting Standards ("NIF") are as of December 31, Accordingly, for comparability purposes, the consolidated financial statements as of December 31, 2011 and for the year then ended have been restated in accordance with the requirements of the International Financial Reporting Standards ( IFRS ), except for the determination of EBITDA which is calculated considering KUO s credit agreements. The information and comparisons are presented either in millions of pesos or millions of dollars as indicated; consequently, the figures are obtained by rounding out the decimals to the nearest whole number, therefore percentage variations are calculated with rounded numbers. The dollar figures are calculated on the basis of dividing current pesos of each month by the monthly average exchange rate. Export figures are determined on the basis of Actual Sales invoiced in US dollars.

2 SALES AND EXPORTS Sales in 2Q12 reached US $559 million, mainly due to lower sales in KUO Chemical and KUO Consumer by 13% and 1%, respectively which were partially offset by a 24% increase in KUO Automotive. In pesos, sales recorded a 12% increase due to 44% higher sales in KUO Automotive, 14% in KUO Consumer and 1% in KUO Chemical. US $576 Sales (MM USD) US $559 2Q11 2Q12 Accrued sales as of the 2Q12 grew 7% in dollars against last year s accrued figure, due to 24% higher sales in KUO Automotive, 6% in KUO Consumer and 2% in KUO Chemical. In pesos, sales recorded a 19% increase due to 39% higher sales in KUO Automotive, 18% in KUO Consumer and 14% in KUO Chemical. US $1098 Sales (MM USD) US $1173 Accum Accum

3 Sales 2Q12 In 2Q12 the contribution to consolidated sales in dollars of KUO Chemical was 47%, while KUO Consumer provided 34% and KUO Automotive, 19%. In pesos percentages keep the same proportion. 47% 19% 34% KUO Consumer KUO Chemical KUO Automotive In the accrued figure as of June 2012 the contribution to consolidated sales in dollars of KUO Chemical was 49%, while KUO Consumer provided 33% and KUO Automotive, 18%. In pesos percentages keep the same proportion. Accum. Sales % 18% 33% KUO Consumer KUO Chemical KUO Automotive In the second quarter of 2012, total exports in dollars recorded a 5% decline when compared with 2011 s same quarter and reached US $274 million. The percentage of exports to total sales during this period was 49%. 3

4 OPERATING PROFIT AND EBITDA The operating profit and the EBITDA in 2Q12 grew by 43% and 22% in dollars, respectively, when compared with 2Q11, reaching US $40 million and US $56 million, also respectively. In pesos, these items recorded increases of 63% and 42%, to reach $533 million and $760 million, respectively. This is mainly due to the efficiency in business processes and a focus on higher margin products. EBITDA and Operating Profit (MM USD) US $56 US $46 US $40 US $28 2Q11 Operating Profit 2Q12 EBITDA The accrued operating profit and the EBITDA in dollars, recorded increases of 36% and 20%, respectively, when compared with last year s accrued figures, reaching US $72 million and US $107 million, also respectively. In pesos, these items recorded increases of 53% and 34%, to reach $960 million and $1.419 billion, respectively. US $53 EBITDA and Operating profit (MM USD) US $89 US $72 US $107 Accum Accum Operating Profit EBITDA 4

5 It should be noted that in 2Q12 KUO Chemical provided 41% of the consolidated EBITDA in dollars and KUO Consumer 36%, while KUO Automotive contributed with 23% as a result of the dynamic management of the portfolio focused on businesses with higher value creation for our shareholders. 36% EBITDA 2Q12 41% 23% KUO Consumer KUO Chemical KUO Automotive For the accrued figure as of June 2012, KUO Chemical provided 45% of the consolidated EBITDA in dollars and KUO Consumer 35%, while KUO Automotive contributed with 20%. The percentages in pesos keep the same proportion. Accum. EBITDA % 20% 35% KUO Consumer KUO Chemical KUO Automotive 5

6 FINANCIAL EXPENSES / INCOME During 2Q12 net financial expenses by US $32 million were recorded mainly due to the depreciation of the peso against the dollar during the period, from to pesos per dollar, representing a net exchange loss by the conversion effect of US $17 million and due to the interests and other net financial expenses by US $15 million resulting from a higher net debt but with a better financing cost. In peso terms, this item was $421 million. Accrued net financial expenses for the year were US$ 30 million. In pesos this item reached $392 million. INCOME TAX Income tax in 2Q12 was US $6 million, comprised of US $7 million in current tax and US -$ 1 million of deferred tax. In pesos, this item was $79 million. The accrued income tax as of the second quarter of 2012 was US $14 million. In pesos, this item was $179 million. NET MAJORITY RESULT (CONTROLLING INTEREST) In 2Q12, the Net Majority Result (Controlling Interest) was US $66 thousand, as a result of the profit from the operation which was mainly reduced by the abovementioned exchange effect, bank interests and generated taxes. In pesos, this item was $13 million. The Accrued Net Majority Result (Controlling Interest) as of the second quarter of 2012 was US $25 million, for the reasons previously noted. In pesos this item was $352 million. 6

7 INVESTMENT IN PRODUCTIVE ASSETS (CAPEX) Investment in productive assets amounted to approximately US $21 million in 2Q12, mainly comprised as follows: 1. Pork Meat SBU Investment to grow production capacity continues. This includes the expansion of the farms and of the food plant. 2. Elastomers SBU Investment to develop specialty synthetic rubber, used in the production of green tires which are efficient in fuel use, continued. The project to optimize the installed production capacity of carbon black continues. 3. Herdez Del Fuerte JV The machinery modernization project to increase productivity of the Santa Rosa tomato paste plant continues. Additionally, a project that will increase the processing capacity of avocado plants in Mexico is underway. Improvement and maintenance projects in several operations both domestically and abroad continue. 4. Dynasol SBU Investment for revamping the sea terminal in Santander, Spain. Design engineering of a synthetic rubber manufacturing facility in the province of Liaoning, China continues through the 50/50 joint venture with China's Shanxi Northern Xing'an Chemical Industry Co. Ltd. ("SNXCI"). Investment for the production of specialty synthetic rubber in solution, whose characteristics will reduce the use of bromine in the retardants segment. Investment for the production of specialty synthetic rubber in solution, from a hydrogenation process. 5. Power Systems SBU Investments to develop two new platforms, TR3160 and TR6070, and to develop the infrastructure for the production of transmission components for Volvo were made. Accrued investment in productive assets as of 2Q12 totaled US $45 million. These investments are expected to improve Grupo KUO s margins, installed capacity and the future results of all its Strategic Business Units. 7

8 DEBT Net Debt decreased by US $17 million, reaching US $387 million. This decline was mainly carried out through internal cash generation from operating activities, despite of the required demand for working capital due to seasonality in some businesses. Likewise, Total Debt was US $467 million, representing a 3% increase compared to 1Q12. On June 22, 2012 KUO announced the placement of Senior Notes (Certificados Bursátiles) for $ 700 million pesos with a 7 years maturity and a floating interest rate of TIIE plus 220 basis points. With this placement the debt maturity is extended from 4.5 years to 4.8 years and debt mix by currency is improved from 76% to 63% in dollars and from 24% to 37% in pesos. Additionally, a pre-approved line of credit with Bancomext was debited for an additional amount of approximately US $18.7 million which were used to prepay the outstanding balance of the syndicated revolving credit and for working capital requirements. At the close of 2Q12 debt mix by rate is 46% floating and 54% fixed. The maturity profile at quarter s end was long-term 98% and short-term 2%. The average cost of debt for the quarter was 7.8%. The leverage ratio at the end of 2Q12 is 1.96x, the interest coverage ratio is 5.7x and the capitalization ratio is 0.42x. *This figure is calculated under IFRS. Ratios for previous quarters were calculated according to the Financial Reporting Standards in Mexico (NIF). Maturity Schedule* June 30, 2012 (MM USD) *This Maturity Profile does not include the US $2 million benefit of the use of the Amortized Cost Method according to IFRS. 8

9 Value per Share (MXN) Second Quarter month Income per Share 0.96 * 1.09 Book Value per Share Market Value per "B" Series Share Dividend per Share *This figure is calculated under Financial Reporting Standards in Mexico (NIF), effective January 1, 2012 IFRS were adopted. Outstanding Shares Total Outstanding Shares "A" Shares 233,221, % "B" Shares 223,144, % Total 456,366, % 9

10 SUMMARY OF QUARTER S HIGHLIGHTS June 5, It was reported that Standard & Poor's reaffirmed Grupo KUO s ratings as follows: o Global Scale BB. o National Scale mxa o US $250 million Senior Notes due 2017 at BB. o $700 million Senior Notes (Certificados Bursátiles) due 2015 at mxa. o $700 million Senior Notes (Certificados Bursátiles) due 2019 at mxa. The ratings outlook is stable. June 22, The placement of Senior Notes (Certificados Bursátiles) for $700 million pesos, which are part of a program of up to $ 2,000 million pesos, was announced. The Notes have a 7 year-maturity, pay a floating interest rate of TIIE plus 220 basis points and are rated A(mex) by Fitch Mexico and mxa by Standard & Poor's. IXE Casa de Bolsa S.A. de C.V., Grupo Financiero Banorte acted as underwriter of the transaction, while Banco Invex will be the issue s trustee. June 28, Ground breaking ceremony of a Nitrile Butadiene Rubber manufacturing plant in Nanjing, Jiangsu Province, China, begins through the 50/50 Joint Venture with the Chinese company Jiangsu GPRO Group Co. Ltd. (GPRO). June 28, A cash reimbursement to shareholders, agreed at the Annual General Ordinary and Extraordinary Shareholders Meetings of Grupo KUO, S.A.B. de C.V. ("KUO") of April 23, 2012 was carried out by an amount of $118,655, (One hundred and eighteen million six hundred fifty-five thousand one hundred and ninety-eight pesos 48/100), to deliver $ 0.26 pesos (twenty-six peso cents) to each of the outstanding shares. This reimbursement took place against delivery of coupon #4 of the outstanding securities representing KUO s equity. 10

11 RESULTS BY BUSINESS KUO Consumer Second Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps. 2,563 2,243 14% 5,156 4,357 18% Sales US $ % % Exports US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin 7% 7% 6% 7% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 10% 10% 10% 9% EBITDA Margin US $ 10% 10% 10% 10% 11

12 BRANDED PRODUCTS Branded Products Second Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps. 1,565 1,324 18% 3,079 2,629 17% Sales US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin 7% 9% 8% 8% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 11% 12% 11% 12% EBITDA Margin US $ 10% 12% 11% 12% During 2Q12 sales of Branded Products in pesos rose by 18% against 2Q11, reaching $1.565 billion. This was the result of a 21% increase in sales of the Herdez Del Fuerte JV (50% Joint Venture with Grupo Herdez, S.A.B. de C.V.), mainly due to higher sales in MegaMex as a result of the integration of the Fresherized Foods operations. Additionally, the increase is due to a good performance in the domestic market for the Herdez MR, Embasa MR and Doña María MR brands and the distribution of products under the Reynolds brand. This was combined with a 9% increase in export sales to the United States of the laminated agglomerates business in the Particle Board SBU. Dollar sales for 2Q12 were US $115 million, representing a 2% increase when compared to the revenues of US $113 million reported in 2Q11. Accrued sales as of June 2012 in pesos, showed a 17% increase, from $2.629 billion to $3.079 billion. Accrued dollar sales rose by 5% from US $221 million to US $232 million. In 2Q12, the operating profit in pesos declined by 2%, reaching $113 million, mainly due to the increase in costs of some raw materials. The EBITDA in pesos increased by 8%, reaching $165 million, against 2Q11 due to the integration of the abovementioned operations in the Herdez Del Fuerte JV. In dollars, operating profit and EBITDA decreased by 20% and 8% to reach US $8 million and US $12 million, respectively, mainly due to the exchange rate. Accrued operating profit and EBITDA in pesos as of June 2012 rose by 9% and 13% respectively, against In dollars the accrued operating profit and EBITDA remained at the same levels. 12

13 PORK MEAT SBU Pork Meat Second Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps % 2,076 1,729 20% Sales US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin 7% 5% 4% 3% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 10% 8% 7% 6% EBITDA Margin US $ 9% 8% 7% 6% Peso sales in 2Q12 in the Pork Meat SBU showed a 9% increase from $918 million in 2Q11 to $998 million due to higher volumes and prices in the domestic and export markets, mainly to Japan. In dollars, sales experienced a 5% decrease against 2Q11, from US $78 million to US $74 million in 2Q12. Accrued sales in pesos as of June 2012 presented a 20% increase to $2.076 billion. Accrued sales in dollars showed an 8% increase over 2011 from US $145 million to US $157 million. In 2Q12 the operating profit and EBITDA in pesos rose by 39% and 38%, reaching $71 million and $98 million respectively when compared to 2Q11. This is primarily due to the abovementioned increase in sales as a result of a good volume placement both domestically and abroad, to a better selling price and production efficiencies, which offset the 8% increase in the price of soybean. In dollars, the operating profit increased 25% and EBITDA rose 17% when compared to 2Q11, reaching US $5 million and US $7 million, respectively, mainly due to the exchange rate. The accrued operating profit and EBITDA in pesos as of June 2012 rose by 60% and 40% respectively, compared to the accumulated In dollars, accrued operating profit and EBITDA recorded increases of 40% and 22% to reach US $7 million and US $11 million, respectively. The Pork Meat SBU continues to implement its sales channels diversification strategy, through an increased presence in the export markets. Moreover during 2Q12 4 new stores were opened, to reach a total of 177, which confirms the company's strategy of focusing on high-value segments. 13

14 KUO Chemical Second Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps. 3,558 3,517 1% 7,615 6,706 14% Sales US $ % % Exports US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin 6% 4% 6% 5% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 8% 6% 8% 7% EBITDA Margin US $ 8% 6% 8% 7% Dollar sales for 2Q12 in KUO Chemical recorded a 13% decrease against 2Q11, recording US $ 262 million. This was mainly due to lower sales volumes in all SBUs of approximately 10% and a decrease of 2% in sales prices, mainly attributable to a deferral in purchases by customers due to the expectation of lower price in the coming months for some raw materials, coupled with a decrease in the export market, particularly resulting because of the economic uncertainty in Europe, which could not be offset by higher market volume in the domestic tire market in the Elastomers SBU. Sales in pesos totaled $3.558 billion in KUO Chemical in 2Q12, representing a 1% increase when compared to the revenues reported in 2Q11. In dollars, accrued sales as of 2Q12 for KUO Chemical reached US $574 million, a 2% increase when compared with 2Q11. Accrued sales in pesos rose by 14% compared with last year s accrued figure, reaching $7.615 billion. 14

15 In dollars, operating profit increased 42% in 2Q12 when compared with 2Q11, while EBITDA showed a 16% increase in the same comparison, reaching US $17 million and US $22 million, respectively. This is mainly due to a better sales mix, the low cost of styrene and acrylonitrile, lower expenses due to savings and the exchange rate effect, events which partly offset the average increase in the prices of raw materials such as 2% for butadiene and 10% for conversion oil, with respect to prices in 2Q11. The operating margin and EBITDA margin showed a 2% increase when compared with 2Q11. In pesos, the operating profit in 2Q12 increased by 65%, while EBITDA increased by 35% against 2Q11, to reach $233 million and $297 million, respectively. The accrued operating profit in dollars as of 2Q12 increased 38% when compared with the 2Q11 accrued figure and accrued EBITDA presented a 21% increase over the same period. In pesos, accrued operating profit grew 55%, while accrued EBITDA increased by 31%. 15

16 KUO Automotive Second Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps. 1,449 1,007 44% 2,753 1,983 39% Sales US $ % % Exports US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin 7% 5% 5% 4% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 12% 10% 10% 10% EBITDA Margin US $ 11% 10% 10% 10% KUO Automotive dollar sales reached US $107 million in 2Q12, a 24% increase against the US $86 million reported for last year s same quarter. This is mostly explained by the incorporation of aftermarket brake business under the FRITEC brand, coupled with an increase in exports and domestic sales, mainly in the engine gaskets, pistons, valves and aims lines at the Aftermarket SBU. Likewise the Power Systems SBU reported a significant increase in sales due to an increased requirement for transmission components and for the TR6060 transmission. In 2Q12 sales in pesos were $1.449 billion, a 44% increase against 2Q11. Accrued sales in dollars as of June 2012 were US $207 million, 24% up from the US $167 million accrued as of June Accrued sales in pesos as of June 2012 were $2.753 billion a 39% growth over last year s same period. 16

17 In 2Q12, the operating profit in dollars was US $7 million that is 75% over 2Q11, while EBITDA increased 33%, reaching US $12 million. This was due to the positive performance of the Aftermarket SBU as a result of the incorporation of FRITEC, and to the increased sales recorded in the Power Systems SBU. The operating and EBITDA margins showed a 2% and 1% increase, respectively, when compared with 2Q11. In pesos, operating profit reached $97 million in 2Q12, a 94% increase while EBITDA grew by 60%, reaching $168 million. The accrued operating profit as of June 2012 was US $10 million, up 43% against June The accrued EBITDA as of June 2012 was US $21 million, or 31% more than in In pesos, the accrued operating profit increased by 72%, while the accrued EBITDA rose by 46%. 17

18 2Q12 RESULTS CONFERENCE CALL Date: Tuesday, July 17 th, 2012 Time: Access Numbers: 2:30 p.m. New York, 1:30 p.m. Mexico City (U.S.) (International and Mexico) Access Code: Playback: Until Tuesday, July 24 th, 2012 at 11:59 p.m. (ET). Access Number: (800) (U.S.) (404) (International and Mexico) Access Code: CONTACTS Investor Relations Mariana Rojo +52 (55) Ext / Ext ir@kuo.com.mx Media Relations Verónica Díez Francisco Galindo / Zimat Consultores +52 (55) (55) Ext Ext.2003 veronica.diez@kuo.com.mx fgalindo@zimat.com.mx COVERAGE ANALYSIS In accordance with the provisions from the regulation of the Mexican Stock Exchange (BMV) in article , fraction VIII, on Maintenance Requirements, we inform that the Institutions that give Coverage Analysis to our stocks are HSBC México, S.A. (Juan Carlos Mateos / Iván Enríquez), Grupo Bursátil Mexicano, S.A. de C.V. GBM (Lilian Jeanette Ochoa Guerra) and Casa de Bolsa Banorte-IXE (Idalia Yanira Céspedes Jaen / Miguel Angel Aguayo). 18

19 ABOUT GRUPO KUO Grupo KUO s is a leading industrial conglomerate in Mexico, with annual sales amounting to approximately US $2.1 billion, exports to more than 70 countries and more than 17,000 employees. Its current business portfolio includes: KUO Aerospace, Aftermarket, Particle Board, Bioenergy, Dynasol (solution rubber), Elastomers, Herdez Del Fuerte (brand processed foods), Macro-M, Plastics, Pork Meat and Power Systems. This press release contains forward-looking statements that reflect the current opinions of Grupo KUO s management regarding future events. The words or phrases predict, believe, expect, tend to, may, have the intention of and should and similar expressions generally indicate comments about expectations. These comments are subject to risks, uncertainties and changing circumstances. Final results may be materially different from current expectations because of various factors, which include but are not limited to global and local changes in politics, the economy, competition and market and regulatory factors, cyclical trends in the automotive and chemical sectors, as well as other factors that are highlighted under the heading "Risk Factors" in the annual report submitted by Grupo KUO to the Mexican National Banking and Securities Commission (CNBV). Grupo KUO has no obligation whatsoever to update these comments on expectations. Any comment on expectations is valid only on the date on which it is made. 19

20 BUSINESSES (Figures in millions of pesos and millions of dollars) (1) KUO Consumer Second Quarter Variation Accumulated Variation Operating Profit (Ps.) % % Operating Profit (US $) % % Depreciation and Amortization (Ps.) % % Depreciation and Amortization (US $) % % EBITDA (Ps.) % % EBITDA (US $) % % KUO Chemical Second Quarter Variation Accumulated Variation Operating Profit (Ps.) % % Operating Profit (US $) % % Depreciation and Amortization (Ps.) % % Depreciation and Amortization (US $) % % EBITDA (Ps.) % % EBITDA (US $) % % KUO Automotive Second Quarter Variation Accumulated Variation Operating Profit (Ps.) % % Operating Profit (US $) % % Depreciation and Amortization (Ps.) % % Depreciation and Amortization (US $) % % EBITDA (Ps.) % % EBITDA (US $) % % 1 Refer to the explanatory note at the beginning of the release 20

21 Grupo KUO, S.A.B. de C.V. and Subsidiaries Statement of Financial Position As of June 30, 2012 and 2011 and December (Figures in millions of Mexican pesos) jun-12 jun-11 % dec-11 % Cash and Cash Equivalents 1, % % Trade and Documents Receivable 5,856 5,074 15% 5,448 7% Inventories 4,276 3,376 27% 4,430-3% Other Current Assets % % Current Assets 11,863 9,758 22% 10,807 10% Property, Plant and Equipment 9,677 8,378 16% 9,534 1% Other Non-Current Assets 3,372 2,346 44% 3,158 7% Total Assets 24,912 20,482 22% 23,499 6% Bank Loans and Current Portion of Long-Term Debt % % Suppliers 4,707 4,432 6% 4,410 7% Taxes Payable % % Other Current Liabilities 3,868 2,932 32% 3,787 2% Current Liabilities 9,348 7,826 19% 9,133 2% Long-Term Debt 6,147 4,348 41% 5,205 18% Employee Retirement Benefits % 732 9% Deferred Income Taxes Liabilities 673 1,139-41% % Other Non-Current Liabilities % % Total Liabilities 17,580 14,280 23% 16,379 7% Capital Stock % 19-5% Paid-in Surplus 2,798 2,870-3% 2,870-3% Retained Earnings 3,187 2,942 8% 2,942 8% Net Income % % Foreign Currency Translation N/A % Financial Instruments % % Controlling Interest 6,727 5,793 16% 6,589 2% Non- Controlling Interest % % Stockholders' Equity 7,332 6,202 18% 7,120 3% Liabilities and Stockholders' Equity 24,912 20,482 22% 23,499 6% 21

22 Grupo KUO, S.A.B. de C.V. and Subsidiaries Statement of Financial Position As of June 30, 2012 and 2011 and December (Figures in millions of US dollars) jun-12 jun-11 % dec-11 % Cash and Cash Equivalents % % Trade and Documents Receivable % 393 9% Inventories % 320-2% Other Current Assets % 32 44% Current Assets % % Property, Plant and Equipment % 688 3% Other Non-Current Assets % 229 8% Total Assets 1,823 1,730 5% 1,697 7% Bank Loans and Current Portion of Long-Term Debt % 35-66% Suppliers % 318 8% Taxes Payable % 33 36% Other Current Liabilities % 274 1% Current Liabilities % 660 3% Long-Term Debt % % Employee Retirement Benefits % 53 9% Deferred Income Taxes Liabilities % 58-16% Other Non-Current Liabilities % 36 25% Total Liabilities 1,286 1,206 7% 1,183 9% Capital Stock % 1 0% Paid-in Surplus % 207-1% Retained Earnings % 238 8% Net Income % 24 4% Foreign Currency Translation 4-7 N/A 7-43% Financial Instruments 0-3 N/A -1 N/A Controlling Interest % 476 4% Non- Controlling Interest % 38 16% Stockholders' Equity % 514 4% Liabilities and Stockholders' Equity 1,823 1,730 5% 1,697 7% 22

23 Grupo KUO, S.A.B. de C.V. and Subsidiaries Consolidated Income Statements Second Quarter of 2012 and 2011 (Figures in millions of Mexican pesos) Concept 2Q12 % 2Q11 % Var. Net Sales 7,583 6,759 12% Cost of Sales 6,053 80% 5,491 81% 10% Gross Profit 1,530 20% 1,268 19% 21% Selling and Distribution Expenses 622 8% 588 9% 6% Administrative Expenses 368 5% 345 5% 7% General Expenses % % 6% Profit Before Other Operating Expenses - Net 540 7% 335 5% 61% Other Operating Expenses - Net 7 0% 7 0% 0% Operating Profit 533 7% 328 5% 63% Financial Expenses - Net 421 6% 116 2% 263% Share of Loss of Associated Companies 0 N/A 31 0% N/A Profit Before Income Taxes 112 1% 181 3% -38% Income Taxes 79 1% 115 2% -31% Profit from Continuing Operations 33 0% 66 1% -50% Discontinued Operations - Net 0 N/A 1 0% N/A Consolidated Net Profit 33 0% 65 1% -49% Profit Attributable to Non - Controlling Interests 20 0% 17 0% 18% Profit Attributable to Owners of Parent 13 0% 48 1% -73% Operating Cash Flow (EBITDA) % 535 8% 42% 23

24 Grupo KUO, S.A.B. de C.V. and Subsidiaries Consolidated Income Statements Second Quarter of 2012 and 2011 (Figures in millions of dollars) Concept 2Q12 % 2Q11 % Var. Net Sales % Cost of Sales % % -5% Gross Profit % % 5% Selling and Distribution Expenses 46 8% 50 9% -8% Administrative Expenses 27 5% 29 5% -7% General Expenses 73 13% 79 14% -8% Profit Before Other Operating Expenses - Net 40 7% 29 5% 38% Other Operating Expenses - Net 0 N/A 1 0% N/A Operating Profit 40 7% 28 5% 43% Financial Expenses - Net 32 6% 10 2% 220% Share of Loss of Associated Companies 0 N/A 3 1% N/A Profit Before Income Taxes 8 1% 15 3% -47% Income Taxes 6 1% 10 2% -40% Profit from Continuing Operations 2 0% 5 1% -60% Discontinued Operations - Net 0 N/A 0 N/A N/A Consolidated Net Profit 2 0% 5 1% -60% Profit Attributable to Non - Controlling Interests 2 0% 1 0% 100% Profit Attributable to Owners of Parent 0 N/A 4 1% N/A Operating Cash Flow (EBITDA) 56 10% 46 8% 22% 24

25 Grupo KUO, S.A.B. de C.V. and Subsidiaries Consolidated Income Statements Accumulated to June 30, 2012 and 2011 (Figures in millions of Mexican pesos) Concept Accum 12 % Accum 11 % Var. Net Sales 15,560 13,062 19% Cost of Sales 12,595 81% 10,590 81% 19% Gross Profit 2,965 19% 2,472 19% 20% Selling and Distribution Expenses 1,266 8% 1,133 9% 12% Administrative Expenses 734 5% 693 5% 6% General Expenses 2,000 13% 1,826 14% 10% Profit Before Other Operating Expenses - Net 965 6% 646 5% 49% Other Operating Expenses - Net 5 0% 19 0% -74% Operating Profit 960 6% 627 5% 53% Financial Expenses - Net 392 3% 138 1% 184% Share of Loss of Associated Companies 0 N/A 31 0% N/A Profit Before Income Taxes 568 4% 458 4% 24% Income Taxes 179 1% 230 2% -22% Profit from Continuing Operations 389 3% 228 2% 71% Discontinued Operations - Net 0 N/A 2 0% N/A Consolidated Net Profit 389 3% 226 2% 72% Profit Attributable to Non - Controlling Interests 37 0% 21 0% 76% Profit Attributable to Owners of Parent 352 2% 205 2% 72% Operating Cash Flow (EBITDA) 1,419 9% 1,060 8% 34% 25

26 Grupo KUO, S.A.B. de C.V. and Subsidiaries Consolidated Income Statements Accumulated to June 30, 2012 and 2011 (Figures in millions of dollars) Concept Accum 12 % Accum 11 % Var. Net Sales 1,173 1,098 7% Cost of Sales % % 7% Gross Profit % % 8% Selling and Distribution Expenses 96 8% 95 9% 1% Administrative Expenses 55 5% 58 5% -5% General Expenses % % -1% Profit Before Other Operating Expenses - Net 72 6% 54 5% 33% Other Operating Expenses - Net 0 N/A 1 0% N/A Operating Profit 72 6% 53 5% 36% Financial Expenses - Net 30 3% 12 1% 150% Share of Loss of Associated Companies 0 N/A 3 0% N/A Profit Before Income Taxes 42 4% 38 3% 11% Income Taxes 14 1% 19 2% -26% Profit from Continuing Operations 28 2% 19 2% 47% Discontinued Operations - Net 0 N/A 0 N/A N/A Consolidated Net Profit 28 2% 19 2% 47% Profit Attributable to Non - Controlling Interests 3 0% 2 0% 50% Profit Attributable to Owners of Parent 25 2% 17 2% 47% Operating Cash Flow (EBITDA) 107 9% 89 8% 20% 26