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

Transcription

1 Presentation 1Q18

2 KCM today LTM 1Q 18 Sales: US$2.1bn (1) Market Cap of US$5.9bn (2) 10% 6% Diapers Bathroom Napkins Wet Wipes Tissue Feminine & Adult Care Bar & Liquid Soaps (3) 84% Consumer Products Professional Exports Strong brands Above average profitability Great growth potential Solid financial position Access to leading technology & brands Very efficient production facilities (1) LTM 1Q 18 average FX rate (2) As of April 18, (FX rate 18.05) (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 Pricing initiatives and drive volume Operational efficiencies and cost reduction initiatives Continued investing in product improvements and capacity expansion Strong brands 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 Retailers Wholesalers Multi-Channel Strategy Price Clubs Drugstores Concessionaires (away from home) Department Stores e-commerce Focus on core products - Increase penetration, frequency of use and product mix 4

5 $35, % Historical Financial Performance (Figures in Ps. million) IFRS KCM has distributed most of its earnings through dividends over more than 50 years 5

6 1Q18 Results 1Q 18 Results 1Q'18 1Q'17 CHANGE NET SALES $10,207 $9, % GROSS PROFIT 3,726 3, % OPERATING PROFIT 2,021 1, % NET INCOME 1,207 1, % EBITDA 2,436 2, % 1Q'18 1Q'17 CHANGE pp GROSS MARGIN OPERATING MARGIN NET MARGIN EBITDA MARGIN Sales Price/mix contribution of +5.2% Higher exports sales (new tissue machine more parent rolls for export) Consumption environment flat Profitability Higher prices in virgin fibers, domestic recycled fibers and oil derivatives Increase in SG&As : distribution costs as well as added advertising and promotions Benefit in imported recycled fibers & energy Cost reduction program (Ps. 250 million 1Q18) Sales (million pesos) EBITDA Margin 23.0% 21.0% 23.0% 23.9% 22.8% 37,766 9,606 9,197 9,432 10,207 2Q 17 3Q'17 4Q'17 1Q 18 LTM 1Q'18 6

7 Outlook 2018 Flat private consumption Strong brands Price increases & mix improvements Costs: Higher 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