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

Transcription

1 Mexico City, October 16 th, Grupo KUO, S.A.B. de C.V. (BMV: KUO) (Grupo KUO) reports its (unaudited) results for the third quarter of 2012 (3Q12). HIGHLIGHTS 3Q12 vs. 3Q11 Sales rose 2% reaching US $551 million. EBITDA increased 2% to US $54 million, with an EBITDA margin of 10%. Operating Profit grew 3% reaching US $37 million. A favorable Net Majority Result (Controlling Interest) of US $8 million was achieved. "Thanks to our diversification strategy, this quarter we delivered again solid results, driven KUO Consumer and KUO Automotive, despite pressure on margins in the chemical sector arising from the high volatility in raw material prices," said Juan Marco Gutiérrez Wanless, CEO of Grupo KUO, about this report. Grupo KUO, S.A.B. de C.V. and Subsidiaries Unaudited Consolidated Results (Millions of dollars) Third Quarter Variation Accumulated Variation Sales US $ % 1,687 1,600 5% Exports US $ % % Operating Profit US $ % % Operating Margin US 7% 7% 7% 6% EBITDA US $ % % EBITDA Margin US 10% 10% 10% 9% Controlling interest US $ 8-4 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 determining the EBITDA which is calculated considering KUO s credit agreements. The results for 3Q12 and 3Q11, and accrued as of 3Q12 and 3Q11, as well as the financial position statement for 3Q12 present the particleboard and laminated business, belonging the Consumer Sector, as a discontinued operation in accordance with IFRS 5 Assets held for sale and discontinued operations. The information and comparisons are presented either in millions of pesos or millions of dollars as indicated; consequently, the figures are obtained 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 the monthly average exchange rate. Export figures are determined on the basis of Actual Sales invoiced in US dollars.

2 SALES AND EXPORTS Sales (MM USD) Sales in 3Q12 reached US $551 million, recording a 2% rise against 3Q11, because of the increased sales volume of most businesses, the addition of sales from acquired businesses in the automotive and consumer sectors, offsetting the decline from lower prices in the chemical sector. Sales rose in KUO Automotive 26% and in KUO Consumer 9%. In pesos, sales recorded a 9% increase due to 35% higher sales in KUO Automotive and 17% higher sales in KUO Consumer. US $541 US $551 3Q11 3Q12 Accrued sales as of the third quarter of 2012 grew 5% in dollars against last year s accrued figure, due to higher sales 25% in KUO Automotive and 8% in KUO Consumer. In pesos, sales recorded a 16% increase due to higher sales 37% in KUO Automotive, 19% in KUO Consumer and 8% in KUO Chemical. US $1600 Sales (MM USD) US $1687 Accum Accum

3 In 3Q12 the contribution to consolidated sales in dollars of KUO Chemical was 49%, while KUO Consumer provided 32% and KUO Automotive, 19%. In pesos, percentages keep the same proportion. Sales 3Q12 49% 19% 32% KUO Consumer KUO Chemical KUO Automotive In the accrued figure as of September 2012 the contribution to consolidated sales in dollars of KUO Chemical was 51%, while KUO Consumer provided 31% and KUO Automotive, 18%. In pesos percentages keep the same proportion. Accum. Sales % 18% 31% KUO Consumer KUO Chemical KUO Automotive In the third quarter of 2012, total exports in dollars recorded a 2% increase when compared with 2011 s same quarter and reached US $262 million. The percentage of exports to total sales during this period was 48%. 3

4 OPERATING PROFIT AND EBITDA The operating profit and the EBITDA in terms of dollars in 3Q12 grew 3% and 2%, respectively, when compared with 3Q11, reaching US $37 million and US $54 million, also respectively. This is due to the abovementioned higher sales, offsetting the lower prices, mainly in the chemical sector, and to the lower administrative expenses 11%. In pesos, these items recorded increases of 11% and 8%, to reach $491 million and $705 million, respectively. EBITDA and Operating Profit (MM USD) US $53 US $54 US $36 US $37 3Q11 Operating Profit 3Q12 EBITDA EBITDA and Operating Profit (MM USD) The accrued operating profit and EBITDA in dollars, as of September 2012 recorded increases of 23% and 13%, respectively, when compared with last year s accrued figures, reaching US $112 million and US $161 million, also respectively. In pesos, these items recorded increases of 35% and 24%, to reach $1.484 billion and $2.134 billion, respectively. US $91 US $143 US $112 US $161 < Accum Accum Operating Profit EBITDA 4

5 It should be noted that in 3Q12 KUO Consumer provided 39% of the consolidated EBITDA in dollars while KUO Chemical contributed with 37% and KUO Automotive with 24%, as a result of the dynamic management of the portfolio focused on businesses with higher value creation for our shareholders. EBITDA 3Q12 37% 24% 39% KUO Consumer KUO Chemical KUO Automotive For the accrued figure as of September 2012, KUO Chemical provided 42% of the consolidated EBITDA in dollars and KUO Consumer 37%, while KUO Automotive contributed with 21%. The percentages in pesos keep the same proportion. Accum. EBITDA % 21% 37% KUO Consumer KUO Chemical KUO Automotive 5

6 FINANCIAL EXPENSES / INCOME During 3Q12, net financial income US $400 thousand was recorded mainly due to the appreciation of the peso against the dollar during the period, from to pesos per dollar, representing a net exchange gain from the conversion effect of US $12 million, partially offset the increase in interests and other net financial expenses of US $13 million resulting from a higher net debt derived from the acquisitions and investments carried out in the different businesses. In pesos, income of $4 million was recorded. As of 2012 s third quarter, accrued net financial expenses were US$ 29 million. In pesos this item reached $379 million. INCOME TAXES Income taxes in 3Q12 were US $25 million, comprised of US $10 million in current taxes and US $15 million of deferred taxes. In pesos, this item was $329 million. This is derived from the increase in the businesses profits and the aforementioned exchange rate gain, mainly. Accrued as of September 2012 income taxes were US $37 million. In pesos, this item was $487 million. NET MAJORITY RESULT (CONTROLLING INTEREST) In 3Q12, the Net Majority Result (Controlling Interest) was US $8 million, as a result of the profit from the operation and the exchange rate gain which were partially reduced income taxes and the effect of discontinued operations. In pesos, this item was $111 million. The Accrued Majority Net Result (Controlling Interest) as of the third quarter of 2012 was US $34 million, for the reasons previously noted. In pesos this item was $463 million. 6

7 INVESTMENT IN PRODUCTIVE ASSETS (CAPEX) Investment in productive assets amounted to approximately US $25 million in 3Q12 and was mainly comprised as follows: 1. Pork Meat SBU Investment to increase production capacity continues. This includes the expansion of the farms and of the food plant as well as the opening of new stores. 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. Construction work commenced in the emulsion rubber plant located in Nanjing, Jiangsu province, in China. This is part of the 50/50 partnership executed with Jiangsu GPRO Group Co. Ltd. (GPRO). 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 in the plants in Mexico is underway. Improvement and maintenance projects in several operations both domestically and abroad continue. 4. Dynasol SBU Investment for the 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 solution, whose characteristics will reduce the use of bromine in the retardants segment. Investment for the production of synthetic specialty rubber in solution, from a hydrogenation process. 5. Power Systems SBU Investments to develop two new transmissions and to develop the infrastructure for the production of transmission components for Volvo are made. Accrued investment in productive assets as of 3Q12 totaled US $70 million. These investments are expected to boost Grupo KUO s margins, installed capacity and the future results of all its Strategic Business Units. 7

8 DEBT Net Debt was US $396 million, only increasing US $9 million in spite of the investments carried out in working capital and fixed assets resulting from the businesses operations during 3Q12. Likewise, Total Debt was US $470 million, representing a 1% increase when compared to 2Q12. At 3Q12 closing, debt mix currency was 61% in dollars and 39% in pesos, while rate 47% was floating and 53% was fixed. The maturity profile at the quarter s end was 99% long-term and 1% short-term. The average cost of debt for the quarter was 8.2%, made up of 9.1% in dollars and 6.7% in pesos. The leverage ratio at the end of 3Q12 was 1.96x, the interest coverage ratio was 5.6x and the capitalization ratio was 0.42x. 1.7x Debt (MM USD) and Leverage Ratio Q11 4Q11 1Q12 2Q12 3Q12 Net Debt 2x Cash 2.1x* Leverage Ratio 1.9x* 1.9x* *This figure is calculated under IFRS. Ratios for previous quarters were calculated according to the Financial Reporting Standards in Mexico (NIF). Maturity Schedule* September 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) Third Quarter month Income per Share 1.32 *1.10 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 August 7 th, Grupo KUO announced that it had reached an agreement to sell the assets and brands of Rexcel, Panelart and Wilsonart, among others, to Maderas y Sintéticos de México, S.A. de C.V., a subsidiary of Masisa, S.A., a Chilean company with operations in Mexico and a leader in the production and marketing of wood boards for furniture and interior architecture. The transaction, which includes the laminated and resins plants in Lerma, Mexico State and the particleboard plants in Chihuahua, Chihuahua and Zitacuaro, Michoacan, amounts to US $54.25 million plus the operating working capital at the closing date. This transaction is subject to approval the Federal Competition Commission. The proceeds from this transaction will be used Grupo KUO to carry out investment projects that support growth of the current Strategic Business Units, as well as to strengthen its financial position. 10

11 RESULTS BY BUSINESS KUO Consumer Third Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps. 2,313 1,978 17% 6,761 5,676 19% Sales US $ % % Exports US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin US 8% 9% 8% 8% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 12% 11% 11% 11% EBITDA Margin US 12% 11% 11% 11% Note: As a result of the previously mentioned divestiture process in the Particleboard SBU, in the consumer sector, the results of this business are not included. 11

12 Branded Products Third Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps. 1, % 3,626 2,941 23% Sales US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin 12% 10% 11% 11% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 16% 14% 15% 15% EBITDA Margin US 16% 14% 15% 15% During 3Q12, sales of Branded Products in pesos recorded a 29% increase against 3Q11, reaching $1.254 billion, mainly due to higher sales in the United States, as a result of the integration of the Fresherized Foods operations. In the domestic market the increase is due to a good performance for the tuna, tomato puree and mole categories, and to the distribution of products under the Reynolds brand. Dollar sales for 3Q12 were US $95 million, representing a 20% increase when compared to the revenues of US $79 million reported in 3Q11. Accrued sales as of September 2012 in pesos, showed a 23% increase, from $2.941 billion to $3.626 billion. Accrued dollar sales rose 12% from US $245 million to US $274 million. In 3Q12 the operating profit and the EBITDA in pesos grew 45% and 44%, respectively, reaching $141 million and $196 million, against 3Q11 mainly due to higher sales and better margins, primarily in U.S. products, as well as to the integration of the aforementioned operations. In dollars, the operating profit and the EBITDA increased 38% and 36% to reach US $11 million and US $15 million, respectively. The accrued operating profit and EBITDA in pesos as of September 2012 recorded growths of 21% and 24% respectively, against In dollars, the accrued operating profit and EBITDA rose 11% to reach US $31 million and US $41 million, respectively. 12

13 Pork Meat Third Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps. 1,059 1,006 5% 3,135 2,735 15% Sales US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin US 5% 7% 5% 5% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 7% 9% 7% 7% EBITDA Margin US 8% 9% 7% 7% Peso sales in 3Q12 in the Pork Meat SBU posted a 5% increase from $1.006 billion in 3Q11 to $1.059 billion due to an increase in the average selling price in the domestic and export markets, coupled with a greater number of stores. In dollars, sales experienced a 2% decrease against 3Q11, from US $82 million to US $80 million in 3Q12, mainly because of the increase in the average exchange rate compared to 3Q11. Accrued sales in pesos as of September 2012 presented a 15% increase to $3.135 billion. Accrued sales in dollars showed a 4% increase over 2011 from US $228 million to US $237 million. In 3Q12 the operating profit and the EBITDA in pesos decreased 30% and 15%, reaching $49 million and $75 million, respectively, when compared to 3Q11. This is primarily due to the 28% increase in the price of soybean paste. In dollars, the operating profit decreased 33% and the EBITDA declined 14% when compared to 3Q11, reaching US $4 million and US $6 million, respectively. The accrued operating profit and EBITDA in pesos as of September 2012 rose 12% and 15% respectively, compared to the accrued figure of In dollars, the accrued operating profit remained unchanged at US $11 million while the accrued EBITDA recorded a 6% increase to reach US $17 million. The Pork Meat SBU continues to implement its sales channels diversification strategy, through an increased presence in the export markets. Moreover during 3Q12 9 new stores were opened, to reach a total of 186, reaffirming the company's strategy of focusing on high-value segments. 13

14 KUO Chemical Third Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps. 3,555 3,600-1% 11,363 10,479 8% Sales US $ % % Exports US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin US 6% 7% 6% 5% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 8% 9% 8% 7% EBITDA Margin US 7% 9% 8% 7% Note: Figures for the company Forestaciones Operativas de México S.A. de C.V. which formerly was part of the consumer sector are included in the Bioenergy SBU which is part of the chemical sector. Dollar sales for 3Q12 in KUO Chemical recorded an 8% decrease against 3Q11, recording US $270 million. This was mainly due to decrease of 16% in sales prices, primarily following the decline in the price of certain raw materials, particularly butadiene; which could not be offset the increased sales volume of approximately 8%. Sales in pesos in KUO Chemical totaled $3.555 billion in 3Q12, representing a 1% decline when compared to the revenues reported in 3Q11. 14

15 In dollars, accrued sales as of 3Q12 for KUO Chemical reached US $859 million, a 1% decrease when compared with accrued sales as of 3Q11. Accrued sales in pesos rose 8% when compared with last year s accrued figure, reaching $ billion. In dollars, the operating profit and the EBITDA in 3Q12 decreased 20% when compared with 3Q11, reaching US $16 million and US $20 million, respectively. This is mainly explained lower sales and the impact of the rapid decline in the cost of the main raw materials (butadiene -46%) in the inventories of the Dynasol and Elastomers SBUs. In pesos, the operating profit in 3Q12 fell 16%, as well as the EBITDA which recorded a 14% decline against 3Q11, to reach $203 million and $267 million, respectively. The accrued operating profit in dollars as of September 2012 grew 13% when compared with the 3Q11 accrued figure, while the accrued EBITDA presented a 3% increase over the same period. In pesos, the accrued operating profit grew 24%, while the accrued EBITDA increased 13%. 15

16 KUO Automotive Third Quarter Variation Accumulated Variation (Figures in Millions) Sales Ps. 1, % 4,097 2,981 37% Sales US $ % % Exports US $ % % Operating Profit Ps % % Operating Profit US $ % % Operating Margin US 8% 1% 6% 3% EBITDA Ps % % EBITDA US $ % % EBITDA Margin Ps. 13% 9% 11% 10% EBITDA Margin US 13% 10% 11% 10% KUO Automotive dollar sales reached US $102 million in 3Q12, a 26% increase against the US $81 million reported for last year s same quarter. This is mostly explained the incorporation of the aftermarket brake business under the FRITEC brand, coupled with an increase in exports and domestic sales, mainly in the engine line in pistons, aims, valves, gaskets and water pumps at the Aftermarket SBU. Likewise the Power Systems SBU reported a significant increase in sales due to an increased requirement for different components and transmissions, mainly for the TR4050 transmission. In 3Q12 sales in pesos were $1.344 billion, a 35% increase against 3Q11. Accrued sales in dollars as of September 2012 were US $309 million, 25% higher than the US $248 million accrued as of September Accrued sales in pesos as of September 2012 were $4.097 billion a 37% growth over last year s same period. 16

17 In 3Q12, the operating profit in dollars was US $8 million that is 700% over 3Q11, while the EBITDA increased 63%, reaching US $13 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 increases of 7 and 3 percentage points, respectively, when compared with 3Q11. In pesos, the operating profit reached $109 million in 3Q12, a 581% increase while the EBITDA grew 79%, reaching $168 million. The accrued operating profit as of September 2012 was US $18 million, up 125% against September The accrued EBITDA as of September 2012 was US $34 million, or 42% more than in In pesos, the accrued operating profit increased 158%, while the accrued EBITDA rose 57%. 17

18 3Q12 RESULTS CONFERENCE CALL Date: Tuesday, October 16 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, October 23 rd, 2012 at 11:59 p.m. (ET). Access numbers: (U.S.) (Internacional and Mexico) Access Code: CONTACTS Investor Relations Mariana Rojo +52 (55) Ext / Ext ir@kuo.com.mx Media Verónica Díez Francisco Galindo / Zimat Consultores +52 (55) (55) Ext Ext.2003 veronica.diez@kuo.com.mx fgalindo@zimat.com.mx ANALYSIS COVERAGE In accordance with the provisions from the regulation of the Mexican Stock Exchange (BMV) in article , fraction VIII, on Maintenance Requirements, we report that the Broker/Credit Institutions which provide analysis coverage of our securities are HSBC México S.A. (Juan Carlos Mateos / Iván Enriquez), Grupo Bursatil Mexicano S.A. de C.V. GBM (Lilian Jeanette Ochoa Guerra) and Casa de Bolsa Banorte-Ixe (Idalia Yanira Cespedes 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 18,000 employees. Its current business portfolio includes: KUO Aerospace, Aftermarket, 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 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 expectation 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 Third Quarter Variation Accumulated Variation Operating Profit (Ps.) % % Operating Profit (US $) % % Depreciation and Amortization (Ps.) % % Depreciation and Amortization (US $) % % EBITDA (Ps.) % % EBITDA (US $) % % KUO Chemical Third Quarter Variation Accumulated Variation Operating Profit (Ps.) % % Operating Profit (US $) % % Depreciation and Amortization (Ps.) % % Depreciation and Amortization (US $) 5 5 0% % EBITDA (Ps.) % % EBITDA (US $) % % KUO Automotive Third 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 September 30, 2012 and 2011 and December (Figures in millions of Mexican pesos) sep-12 sep-11 % dec-11 % Cash and Cash Equivalents % % Trade and Documents Receivable 5,167 5,272-2% 5,448-5% Inventories 3,956 4,199-6% 4,430-11% Assets Classified as held for sale % % Other Current Assets % % Discontinued Operations 73 0 N/A 0 N/A Current Assets 11,594 10,626 9% 10,807 7% Property, Plant and Equipment 9,019 9,063 0% 9,534-5% Other Non-Current Assets 3,394 3,202 6% 3,158 7% Discontinued Operations 41 0 N/A 0 N/A Total Assets 24,048 22,891 5% 23,499 2% Bank Loans and Current Portion of Long-Term Debt % % Suppliers 4,327 4,640-7% 4,410-2% Taxes Payable % 456-3% Liabilities Associated w ith Assets Classified as held for 95 0 N/A 0 N/A sale Other Current Liabilities 3,535 3,874-9% 3,787-7% Discontinued Operations 50 0 N/A 0 N/A Current Liabilities 8,513 9,185-7% 9,133-7% Long-Term Debt 6,009 4,706 28% 5,205 15% Employee Retirement Benefits % 732 5% Deferred Income Taxes Liabilities 1,043 1,011 3% % Other Non-Current Liabilities % % Discontinued Operations 60 0 N/A 0 N/A Total Liabilities 16,981 16,144 5% 16,379 4% 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 % % Financial Instruments % % Others -9 0 N/A 0 N/A Controlling Interest 6,498 6,252 4% 6,589-1% Non- Controlling Interest % 531 7% Stockholders' Equity 7,067 6,747 5% 7,120-1% Liabilities and Stockholders' Equity 24,048 22,891 5% 23,499 2% As of September 30 th 2012 the balances of the Particle Board SBU are presented as a discontinued operation and as an asset classified as held for sale. 21

22 Grupo KUO, S.A.B. de C.V. and Subsidiaries Statement of Financial Position As of September 30, 2012 and 2011 and December (Figures in millions of US dollars) sep-12 sep-11 % dec-11 % Cash and Cash Equivalents % % Trade and Documents Receivable % 394 2% Inventories % 320-4% Assets Classified as held for sale % 6 883% Other Current Assets % % Discontinued Operations 6 0 N/A 0 N/A Current Assets % % Property, Plant and Equipment % 688 1% Other Non-Current Assets % % Discontinued Operations 3 0 N/A 0 N/A Total Assets 1,862 1,716 9% 1,697 10% Bank Loans and Current Portion of Long-Term Debt % 35-86% Suppliers % 318 5% Taxes Payable % 33 3% Liabilities Associated With Assets Classified as Held for Sale 7 0 N/A 0 N/A Other Current Liabilities % 274 0% Discontinued Operations 4 0 N/A 0 N/A Current Liabilities % 660 0% Long-Term Debt % % Employee Retirement Benefits % 53 11% Deferred Income Taxes Liabilities % 58 40% Other Non-Current Liabilities % 36 28% Discontinued Operations 5 0 N/A 0 N/A Total Liabilities 1,315 1,210 9% 1,183 11% Capital Stock 1 1 0% 1 0% Paid-in Surplus % 207 5% Retained Earnings % 238 8% Net Income % 24 42% Foreign Currency Translation -6 5 N/A 7-186% Financial Instruments 0-3 N/A -1 N/A Others -1 0 N/A 0 N/A Controlling Interest % 476 6% Non- Controlling Interest % 38 16% Stockholders' Equity % 514 6% Liabilities and Stockholders' Equity 1,862 1,716 9% 1,697 10% As of September 30 th 2012 the balances of the Particle Board SBU are presented as a discontinued operation and as an asset classified as held for sale. 22

23 Grupo KUO, S.A.B. de C.V. and Subsidiaries Consolidated Income Statements Third Quarter of 2012 and 2011 (Figures in millions of Mexican pesos) Concept 3Q12 % 3Q11 % Var. Net Sales 7,255 6,636 9% Cost of Sales 5,798 80% 5,300 80% 9% Gross Profit 1,457 20% 1,336 20% 9% Selling and Distribution Expenses 622 9% 552 8% 13% Administrative Expenses 334 5% 342 5% -2% General Expenses % % 7% Profit Before Other Operating Expenses - Net 501 7% 442 7% 13% Other Operating Expenses (Income) - Net 10 0% -2 N/A N/A Operating Profit 491 7% 444 7% 11% Operating Cash Flow (EBITDA) % % 8% Financial (Income) Expenses - Net -4 N/A 525 8% N/A Profit (Loss) Before Income Taxes 495 7% -81 N/A N/A Income Taxes 329 5% -61 N/A N/A Profit (Loss) from Continuing Operations 166 2% -20 N/A N/A Discontinued Operations - Net -38 N/A -52 N/A N/A Consolidated Net Profit (Loss) 128 2% -72 N/A N/A Profit (Loss) Attributable to Non - Controlling Interests 17 0% -19 N/A N/A Profit (Loss) Attributable to Owners of Parent 111 2% -53 N/A N/A The results of the Particle Board SBU are presented as a discontinued operation 23

24 Grupo KUO, S.A.B. de C.V. and Subsidiaries Consolidated Income Statements Accumulated to September 30, 2012 and 2011 (Figures in millions of Mexican pesos) Concept Accum 12 % Accum 11 % Var. Net Sales 22,331 19,236 16% Cost of Sales 17,941 80% 15,485 81% 16% Gross Profit 4,390 20% 3,751 19% 17% Selling and Distribution Expenses 1,843 8% 1,643 9% 12% Administrative Expenses 1,048 5% 998 5% 5% General Expenses 2,891 13% 2,641 14% 9% Profit Before Other Operating Expenses - Net 1,499 7% 1,110 6% 35% Other Operating Expenses - Net 15 0% 14 0% 7% Operating Profit 1,484 7% 1,096 6% 35% Operating Cash Flow (EBITDA) 2,134 10% 1,716 9% 24% Financial Expenses - Net 379 2% 641 3% -41% Share of Loss of Associated Companies 0 N/A 31 0% N/A Profit Before Income Taxes 1,105 5% 424 2% 161% Income Taxes 487 2% 161 1% 202% Profit from Continuing Operations 618 3% 263 1% 135% Discontinued Operations - Net % % NA Consolidated Net Profit 517 2% 155 1% 234% Profit Attributable to Non - Controlling Interests 54 0% 3 0% 1700% Profit Attributable to Owners of Parent 463 2% 152 1% 205% The results of the Particle Board SBU are presented as a discontinued operation 24

25 Grupo KUO, S.A.B. de C.V. and Subsidiaries Consolidated Income Statements Third Quarter of 2012 and 2011 (Figures in millions of dollars) Concept 3Q12 % 3Q11 % Var. Net Sales % Cost of Sales % % 2% Gross Profit % % 2% Selling and Distribution Expenses 48 9% 45 8% 7% Administrative Expenses 25 5% 28 5% -11% General Expenses 73 13% 73 13% 0% Profit Before Other Operating Expenses - Net 38 7% 36 7% 6% Other Operating Expenses - Net 1 0% 0 N/A N/A Operating Profit 37 7% 36 7% 3% Operating Cash Flow (EBITDA) 54 10% 53 10% 2% Financial Expenses - Net 0 N/A 42 8% N/A Profit (Loss) Before Income Taxes 37 7% -6 N/A N/A Income Taxes 25 5% -5 N/A N/A Profit (Loss) from Continuing Operations 12 2% -1 N/A N/A Discontinued Operations - Net -3 1% -4 1% NA Consolidated Net Profit (Loss) 9 2% -5 N/A N/A Profit (Loss) Attributable to Non - Controlling Interests 1 0% -1 N/A N/A Profit (Loss) Attributable to Owners of Parent 8 1% -4 N/A N/A The results of the Particle Board SBU are presented as a discontinued operation 25

26 Grupo KUO, S.A.B. de C.V. and Subsidiaries Consolidated Income Statements Accumulated to September 30, 2012 and 2011 (Figures in millions of dollars) Concept Accum 12 % Accum 11 % Var. Net Sales 1,687 1,600 5% Cost of Sales 1,355 80% 1,288 81% 5% Gross Profit % % 6% Selling and Distribution Expenses 140 8% 137 9% 2% Administrative Expenses 79 5% 83 5% -5% General Expenses % % 0% Profit Before Other Operating Expenses - Net 113 7% 92 6% 23% Other Operating Expenses - Net 1 0% 1 0% 0% Operating Profit 112 7% 91 6% 23% Operating Cash Flow (EBITDA) % 143 9% 13% Financial Expenses - Net 29 2% 52 3% -44% Share of Loss of Associated Companies 0 N/A 2 0% N/A Profit Before Income Taxes 83 5% 37 2% 124% Income Taxes 37 2% 15 1% 147% Profit from Continuing Operations 46 3% 22 1% 109% Discontinued Operations - Net -8 0% -9 1% NA Consolidated Net Profit 38 2% 13 1% 192% Profit Attributable to Non - Controlling Interests 4 0% 0 N/A N/A Profit Attributable to Owners of Parent 34 2% 13 1% 162% The results of the Particle Board SBU are presented as a discontinued operation 26