Grupo LALA, S.A.B. de C.V.

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1 Grupo LALA, S.A.B. de C.V. Investor Relations Presentation August, 2017

2 DISCLAIMER This material does not constitute an offering document. This material was prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities. Any offering of securities will be made solely by means of an offering memorandum, which will contain detailed information about the Company and its business and financial results, as well as its financial statements. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. Securities Act of 1933, as amended. This presentation includes forward-looking statements or statements about events or circumstances which have not yet occurred. We have based these forward-looking statements largely on our current beliefs and expectations about future events and financial trends affecting our businesses and our future financial performance. These forward-looking statements are subject to risk, uncertainties and assumptions, including, among other things, general economic, political and business conditions, both in Mexico and in Latin America as a whole. The words believes, may, will, estimates, continues, anticipates, intends, expects, and similar words are intended to identify forward-looking statements. We undertake no obligations to update or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Therefore, our actual results could differ substantially from those anticipated in our forward-looking statements. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. We and our affiliates, agents, directors, employees and advisors accept 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 material does not give and should not be treated as giving investment advice. You should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any information in this material. 2

4 ABOUT US

5 WHO WE ARE LALA is a Mexican Company focused in the healthy and nutritious food industry with over 65 years of experience in the production, innovation and marketing of milk and dairy products under the highest quality standards. LALA operates 22 production plants and 160 distribution centers in Mexico, Central America and the United States, and is supported by more than 34,000 employees. LALA operates one of the largest chilled distribution networks in the region, with 7,000+ delivery routes. Our product portfolio includes over 600 SKUs under 56+ brands, which are available at more than 500,000 points-of-sale. MISSION Nourishing your life is our passion VISION To be the favorite dairy company in the Americas 5

6 OUR FOOTPRINT ,000 7,000 Mexico United States Guatemala Honduras El Salvador Nicaragua Costa Rica 34,

7 OUR PRODUCTS

8 MILK 60.5% 8 Milk: Pasteurized, UHT and functional milks, pasteurized and UHT dairy-based beverages, and powdered milk.

9 OTHER DAIRY PRODUCTS 34.0% 9 Other Dairy Products: Cream, butter, cream-based spreads, yoghurt, cheese, ice cream and desserts.

10 BEVERAGES AND OTHERS 5.5% 10 Beverages and Others: Beverages, juices, cold cuts and others.

11 Investing today to capture Mexico s future growth opportunities CONSUMPTION & DAIRY OUTLOOK

CONSUMER OUTLOOK Today s market trends and

beverages categories that have functional

across all generations are willing to pay a

role in this consumer trend Creating new

not enough marketing, processing technology

12 CONSUMER OUTLOOK Today s market trends and consumption are moving towards foods and beverages categories that have functional benefits More than half of the consumers across all generations are willing to pay a premium for products that provide health benefits The reinvention of dairy as a completely natural food plays an important role in this consumer trend Creating new products that appeal to the health trend is not enough marketing, processing technology and convenience are important factors to be consider 12

13 AMERICAS DAIRY MARKET TOTAL AMERICAS DAIRY MARKET VALUE IS ~US$160 BILLION World Dairy Market value is ~US$550 billion Americas Dairy Market it s projected to grow by ~US$16 billion in next 5 years 46% USA 24% Brazil 8% 9% México Canada 3% Central America (2) The U.S., Mexico and Central America represents 58.0% of total Americas Dairy Market 2% Others (1) 3% Colombia 1% Peru 2% Chile 2% Argentina Brazil México Source: Euromonitor, Company information. (1) Others includes: Ecuador, Bolivia, Uruguay, Venezuela and other South America Countries. (2) Central America includes: Costa Rica, Dominican Republic, Guatemala, Nicaragua and other Central America / Caribean countries. 13

14 Sustainable Growth Strategy LALA 2017 STRATEGIC PRIORITIES

15 PROTECT OUR BASE BUSINESS MEXICO 1st Investing in our Brands Accelerating Productivity Improvements Optimizing our Infrastructure 15

16 INVESTING IN OUR BRANDS 1st Nutri Leche Increasing product offering under the Nutri brand among emerging consumers

17 MEXICO TOP FIVE CONSUMER BRANDS PLACE BRAND PENETRATION (1) FREQUENCY (2) The Largest Healthy Food 99% 97% 99% 77% 85% Company in Mexico Classified among Mexico s top five consumer brands Source: Kantar Worldpanel 2017 (1) Penetration based on number of households that purchase a brand; (2) Frequency of purchase (# of times per year). 17

Deli Growing our product portfolio with the

18 OPTIMIZING OUR INFRASTRUCTURE 1st Creating synergies in our chilled distribution network in Mexico Nutri Deli Growing our product portfolio with the development of the cold cuts business under the Nutri Franchise 18

OPTIMIZING OUR INFRASTRUCTURE TO IMPROVE EFFICIENCIES

Example Reinforcing our Go-to-Market capabilities in

service level via handheld preselling system to better

fewer trucks Optimizing 11% of our distribution routes

19 OPTIMIZING OUR INFRASTRUCTURE TO IMPROVE EFFICIENCIES 1st Consolidating our Distribution Centers Mexico City Example Reinforcing our Go-to-Market capabilities in Mom & Pop channel April CEDIS (1) Adapting our service level via handheld preselling system to better meet customer needs Reaching the same customers with fewer trucks Optimizing 11% of our distribution routes January CEDIS & 1 Mega CEDIS Mega CEDIS 19

STRENGTHEN OUR PRODUCT PORTFOLIO VIA INNOVATION 2nd Driving consumption habits through innovation LALA 100 The most innovative product in the fresh milk category for the last 20 years Since the

20 STRENGTHEN OUR PRODUCT PORTFOLIO VIA INNOVATION 2nd Driving consumption habits through innovation LALA 100 The most innovative product in the fresh milk category for the last 20 years Since the introduction of LALA 100 in July of 2016, the fresh milk category has growth 18.3% in the Shel Service Stores channel, with 70% of the growth coming from LALA 100 *Considering the data reported by Nielsen in their Retail service for Self Services Stores for the Fresh Milk category (without milk formula). Growth comparing rolling year 2017 up to June vs the same period in 2016 in Total Mexico. 20

21 STRENGTHEN OUR PRODUCT PORTFOLIO VIA INNOVATION 2nd Growing our Other Dairy Products Category to enrich our sales mix LALA Delicias Introducing our first indulgent Yoghurt to strengthen our presence in premium categories Panela Style Cheese New packaging technology Non- lactose and Fat free presentations New Queso Fresco 21

22 STRENGTHEN OUR PRODUCT PORTFOLIO VIA INNOVATION 2nd Soy Vita is the fastest growing brand in the largest segment of the plant based dairy alternatives Soy Vita #2 in Almond segment with 30% of market share, growing +149% vs YA Soy Vita Market Share Plant based dairy alternatives category Almond 48% Category growing 16% vs YA Segment Growth vs YA +26% Source: Nielsen Scantrack April 2017 (value) Soy 35% Coconut 13% Others 4% 100% -11% +144% -1% 22

23 CONSOLIDATE & EXPAND CENTRAL AMERICA OPERATIONS 3rd Growing our footprint in Central America Nicaragua Strengthening our leadership through the integration of our businesses Guatemala & Costa Rica Increasing the production capacity with two new multicategory plants Product Portfolio Increasing our offer under the LALA Brand 23

24 CONSOLIDATE & EXPAND CENTRAL AMERICA OPERATIONS 3rd Increasing product offering under the LALA and Nutri Lety Brand Leveraging on our Regional Brands Accelerating Yoghurt Category Growth Expanding our Ice Cream Capacity 24

17 2Q 17 Net Sales $548 $840 $870 $815 EBITDA

is due to the appreciation of the Mexican

(1) EBITDA=Earnings Before Interest, Taxes,

25 TRACKING LALA U.S. 3rd BUSINESS EVOLUTION P&L 3Q 16 (2) 4Q 16 1Q 17 2Q 17 Net Sales $548 $840 $870 $815 EBITDA (1) (80) (146) (35) (30) EBITDA/Net Sales (14.6%) (17.4%) (4.0%) (3.6%) The decline in sales compared to 1Q 2017 is due to the appreciation of the Mexican peso (*) Company Data, in Mexican Pesos (mm). (1) EBITDA=Earnings Before Interest, Taxes, Depreciation and Amortization. (2) Figures include 2 months of consolidated results in 3Q 16 25

26 CONSOLIDATE & EXPAND U.S. OPERATIONS 3rd Building brands to grow the business 26

27 LALA U.S. PRODUCTION FACILITIES 3rd OMAHA, NEBRASKA FLORESVILLE, TEXAS SPRINGS, COLORADO Drinkable Yoghurt Spoonble Yoghurt Sour Cream ESL Milk ESL Milk Cultured ESL, Extended Shelf Life Milk 27

28 LALA U.S. YOGHURT MARKET 3rd U.S. YOGHURT CATEGORY OVERVIEW 11% Yoghurt Drinks While blended yoghurt is declining, drinkable is growing high double digit 89% Yoghurt (Blended) +$3.85B USD 17.0% 18.0% (4.0%) Drinkable yoghurt represents 11.0% of the total yoghurt category value in the U.S. Total Yoghurt Category Drinkable Yoghurt Lala Drinkable Yoghurt 28 Source: IRI Market Research, US MULO (MULti-Outlet) 26 Weeks Ending

29 LALA U.S. PRESENCE 3rd LALA U.S. is the Brand Leader in Adult Drinkable Yoghurts and the #2 in total Drinkables which includes kids June 2017 ACV: 63.7% 16,796 STORES Presence in Big Retailers with nationwide exposure Source: IRI, Market Research ; US MULO (MULti-Outlet) 26 Weeks Ending ACV: All Commodity Value; % of stores selling, 29

30 INITIATED FIRST STAGE OF EXPANSION FOR EXTENDED SHELF LIFE MILK 3rd Presence in 3,150 stores for the first stage of the expansion Jersey Cows less than 10% of milk supply Promised Land Brand Expansion Extra Creamy Promised Land Super Premium Milk 100% Jersey Cow Milk, naturally high in protein Extended Shelf Life supports national expansion 30

31 M&A AND STRATEGIC ALLIANCES 4th LALA HAS OPERATIONS IN 7 COUNTRIES REGION MARKET ADDING OPPORTUNITIES The Americas Dairy & Dairy alternatives Infrastructure, brands, value- added categories and talent Mexico United States Nicaragua Guatemala Costa Rica Honduras El Salvador Our Strategy Follows a Disciplined Process 31

32 KEY FINANCIAL INFORMATION

33 SALES CONTINUE GROWING QUARTER BY QUARTER SALES EVOLUTION 14,354 14,799 14,967 13,701 12,903 YoY Growth % 2Q-16 3Q-16 4Q-16 1Q-17 2Q % 12.5% 14.6% 18.3% 16% (1) 33 (*) Company Data, in Mexican Pesos. (mm). (1) 1Q 17 Growth is composed by: Organic Growth 9.7% and Inorganic Growth 6.3%.

34 2Q-2017 NET SALES GROWTH DRIVEN BY VALUE ADDED OTHER DAIRY PRODUCTS YEAR-ON-YEAR GROWTH 3M ended June 30 th 27.5% SALES BY SEGMENT Beverages and Others 11.7% 5.5% 2.7% Other Dairy Products Milk Milk Milk Fresh UHT Milk Formula Other Dairy Products Beverages and Others Other Dairy Beverages & Products Yoghurt Others Beverages Cream Juices 34.0% Cheese Cold Cuts Ice Cream Others Desserts Butter % (*) Company Data, in Mexican Pesos. (mm).

35 QUARTERLY CONSOLIDATED EBITDA REACHING SOLID MARGINS EBITDA MARGIN EVOLUTION 230 bps 1,888 1, bps 1, bps 1,725 2,096 Margin % Sales 2Q-16 3Q-16 4Q-16 1Q-17 2Q % 10.8% 11.2% 11.7% 14.0% Axis Title (*) Company Data, in Mexican Pesos (mm). EBITDA=Earnings Before Interest, Taxes, Depreciation and Amortization. 35

36 FINANCIAL RESULTS (P&L) 3 MONTHS ENDED JUNE 30 TH, 2017 Income Statement (1) 2Q-16 % 2Q-17 % Growth Net Sales $ 12, % $14, % 16.0% COGS 7, % 9, % 16.9% Gross Profit 5, % 5, % 14.6% Operating Expenses 3, % 4, % 18.3% Operating Income 1, % 1, % 5.9% EBITDA (2) 1, % 2, % 11.0% Net Financial Income % % (69.7)% Net Income 1, % 1, % 4.3% SALES BY TRADE CHANNELS 61.0% 39.0% (*) Company Information, in Mexican Pesos ( ). (1) EBITDA=Earnings Before Interest, Taxes, Depreciation and Amortization. (2) Net Income refers to consolidated Net Income. 36

37 STRONG FINANCIAL POSITION AS OF JUNE 30 th Financial Position Total Assets $ 36,483 $ 38,268 Cash 8,824 2,229 Non-Current Assets 17,652 23,929 Total Liabilities 9,855 10,614 Total Debt Shareholder Equity 26,628 27,655 Key Metrics (1) Net Debt / EBITDA (1.2)x (0.3)x EBITDA / Interest Paid 509.8x 214.3X Earnings Per Share $ 1.69 $ st Installment of 2016 cash dividend pesos per share paid on May 24 th, 2017 (*) Figures in Mexican Pesos ( ). (1) Last 12 Months ratios calculated in local currency 37

38 LALA B OVERVIEW AVERAGE DAILY LIQUIDITY 2017 US$3.6mm July 18 th, 2017 (LALA B) SHAREHOLDERS STRUCTURE 2,475,932,111 shares $ % Free Float 1.1% Others OWNERSHIP STRUCTURE 55.0% Control Trust 22.5% Underwriting Trust Source: Company Information. Ratios are calculated in local currency. 38

39 A total investment of +3,600mm MXN CAPEX INVESTMENTS 2017

40 NEW PASTEURIZATION PLANT, NORTH MEXICO Investment: +300mm MXN Opened on June 2017 Location: Cd. Obregon, Mexico Construction of a new state of the art pasteurization facility * All figures and dates are according to Company s estimations. 40

41 NEW COLD CUTS PLANT, CENTER MEXICO Investment: +900mm MXN Production beginning in Q Location: Hidalgo, Mexico Our First Cold Cuts Facility * All figures and dates are according to Company s estimations. 41

beginning in 2018 Location: Costa Rica & Guatemala *

42 PRODUCTION EXPANSION, CENTRAL AMERICA Muticategory Production Facilities Investment: +915mm MXN Production beginning in 2018 Location: Costa Rica & Guatemala * All figures and dates are according to Company s estimations. 42

Mexico Production capacity using Nano-Filtration Technology *

43 NANO FILTRATION - LALA 100 MILK, CENTRAL MEXICO Investment: +400mm MXN Production beginning in Q Location: Irapuato, Mexico Production capacity using Nano-Filtration Technology * All figures and dates are according to Company s estimations. 43

44 DISTRIBUTION CENTER & SUPPLY CHAIN CONSOLIDATION Investment: +300mm MXN Efficiencies & Productivity in our distribution centers 44 * All figures and dates are according to Company s estimations.

45 OTHER INVESTMENTS Investment: +760 mm MXN 30% increase in Sour Cream production capacity Water treatment plant in Veracruz Increase cooler space at point of sale Hand held equipment Digital Technology Transport * All figures and dates are according to Company s estimations. 45

CONTACT INFORMATION Investor Relations Mariana Rojo & Estefania Vazquez +52

com Stock Information Grupo LALA has been traded under the ticker LALA on

projections and forward-looking statements regarding the Company s financial

of its subsidiaries as well as with regards to the Company s related plans

46 CONTACT INFORMATION Investor Relations Mariana Rojo & Estefania Vazquez +52 (55) Stock Information Grupo LALA has been traded under the ticker LALA on the Bolsa Mexicana de Valores (BMV) since October 16 th, For more information: Forward-looking statements This document contains certain assumptions, projections and forward-looking statements regarding the Company s financial situation, operative results and information, Grupo LALA s business and that of its subsidiaries as well as with regards to the Company s related plans and objectives. This executive summary does not constitute a public securities offering on behalf of LALA and is intended to be used for informational purposes only. 46

Grupo LALA, S.A.B. de C.V.

Grupo LALA, S.A.B. de C.V. INVESTOR RELATIONS PRESENTATION December, 2016 1949 1980 1990 2000 2010 2015 ABOUT US WHO WE ARE LALA is a Mexican Company focused in the healthy and nutritious food industry