KCM today. Solid financial position. Market leader. Access to leading technology & brands. Above average profitability. Strong growth potential

Transcription

1 Presentation 3Q17

2 KCM today LTM 3Q 17 Sales: US$2.0bn (1) Market Cap of US$5.6bn (2) 10% 4% Diapers Bathroom Napkins Wet Wipes Tissue Feminine & Adult Care Bar & Liquid Soaps (3) 86% Consumer Products Professional Exports Market leader Above average profitability Strong growth potential Solid financial position Access to leading technology & brands Very efficient production facilities (1) LTM 3Q 17 average FX rate (2) As of October 17, (FX rate 18.78) (3) Includes 4e 2

3 KCM is Well Positioned to Continue Delivering Industry-Leading Results Despite notable headwinds on the last couple of years The successful implementation of our corporate strategy Allows us to continue delivering results and positions us to outperform going forward. MXN depreciation Higher raw material prices Weak consumption environment Invested in pricing to maintain our market position and grow volume Operational efficiencies and cost reduction initiatives Continued investing in product improvements and capacity expansion Leading position Company related Multi-brand; Multi-tier & Multi-channel strategy Extensive product portfolio Efficient production facilities Innovative product solutions Efficient manufacturing and logistics processes Above average profitability levels Robust FCF generation Solid cash balances Challenging competitive environment Product innovation Macro and industry related Nondurable Consumer products industry resiliency Gradual recovery of the Mexican economy 3

4 Business Model Operating and administrative cost-reduction initiatives (rate of savings ~4% of COGS) Continued focus on production capacity and investments in production facilities and equipment Efficient supply chain management Efficient Operations and State-of-the-Art Production Facilities Multi-Brand and Multi-Tier Strategies Wide reach across customer segments through a sophisticated multi-brand and multi-price-point strategy Covering economy / value / premium / super premium Innovation across the broad product portfolio Development of new products and categories Constant investment in production technology Partnership with KCC Focus on core competencies and key geographic markets Focus on high potential categories Opportunistic approach to acquisitions Innovation and Product Improvement Continued Volume and Market Share Growth Multi-Channel Strategy Focus on core products Retailers Wholesalers Price Clubs Drugstores Concessionaires (away from home) Medical Facilities Department Stores - Increase penetration, frequency of use and product mix 4

5 $35, % Historical Financial Performance (Figures in Ps. million) IFRS KCM has increased it s dividends in real terms over more than 50 years 5

6 3Q17 Results 3Q 17 Results 3Q'17 3Q'16 CHANGE NET SALES $9,197 $8, % GROSS PROFIT 3,205 3,345 (4.2)% OPERATING PROFIT 1,566 1,939 (19.2)% NET INCOME 854 1,206 (29.2)% EBITDA 1,934 2,351 (17.8)% 3Q'17 3Q'16 CHANGE pp GROSS MARGIN (3.6) OPERATING MARGIN (5.2) NET MARGIN (4.5) EBITDA MARGIN (6.0) Sales Good growth (volume +1.6% price/mix +3.9%) Double digit growth in professional Low exports sales growth (Less tissue rolls exported) Profitability Higher prices for most raw materials and energy Increase in SG&As : distribution and consolidation of 4e Cost reduction program (Ps. 300 million 3Q17) Sales (million pesos) EBITDA Margin 25.0% 23.8% 23.0% 21.0% 23.2% 37,715 9,381 9,531 9,606 9,197 4Q 16 1Q'17 2Q'17 3Q 17 LTM 3Q'17 6

7 Outlook 2017 Private consumption slowing down Strong brands & position Price increases & mix improvements Costs: Higher / stable raw material prices and FX uncertainty Strong cost reduction program Product innovations and improvements Continue to explore new high potential categories 7

8 Notice to Recipient The information contained in this presentation is confidential and has been prepared solely for informational purposes. This presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities of Company. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors and undue reliance should not be placed on these forward-looking statements. We cannot ensure that actual results will not be materially different from those expressed or implied by these forward-looking statements. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. 8