Outlook 2016 June, 2016

Transcription

1 Outlook 2016 June, 2016 This presentation contains forward-looking information based on numerous variables and assumptions that are inherently uncertain. They involve judgments with respect to, among other things, future economic, competitive and financial market conditions and future business decisions, all of which are difficult or impossible to forecast accurately. Accordingly, results are likely to vary from those set forth in this presentation. Copyright 2016 ALFA, S.A.B. de C.V. All rights reserved. Reproduction and distribution is forbidden without the prior written consent of ALFA, S.A.B. de C.V.

2 ALFA 1Q16 FINANCIAL RESULTS ALFA reported solid 1Q16 results despite economic headwinds (i.e. exchange rate & oil prices) EBITDA up 10% y-o-y to U.S. $580 million. Key factors explaining the increase were:» Better product margins at Alpek» Higher per-unit profitability at Nemak» Stable performance at Sigma» Consolidation of Axtel Capex of U.S. $321 million, mainly at Nemak and Sigma Strong financial condition:» Net Debt to EBITDA of 2.5x» Interest Coverage of 7.5x Recent Events:» Completes merger of Axtel on February 15, 2016» Approves cash dividend of U.S. $170 million» Declines to participate in Pacific Exploration and Production restructuring process EBITDA (U.S. $ Millions) Q15 2Q15 3Q15 4Q15 1Q16 Extraordinary items 2

3 SIGMA REFRIGERATED FOODS 36% AND 28% OF ALFA S REVENUES AND EBITDA IN 1Q16 1Q16 Results and Outlook for Q16 EBITDA of U.S. $163 million, flat y-o-y» Campofrio EBITDA at highest level since 1Q11 despite new plant not on stream yet Flat volumes in Mx market; recovery in Europe Prices in dollars of key raw materials expected to remain low. Mx selling prices increased to offset the strong dollar Construction of new plant in Spain progressing opening expected by year-end New 10-yr U.S. $1 billion bond issue to prepay shorter maturity debt 3

4 ALPEK PETROCHEMICALS 31% AND 28% OF ALFA S REVENUES AND EBITDA IN 1Q16 1Q16 Results and Outlook for Q16 EBITDA of U.S. $171 million, up 25% y-o-y reflecting strong PTA and polypropylene margins, plus cost savings from Coso cogeneration plant Volatile oil and feedstock prices may continue but expected to be offset by:» Sustained margin improvements in PTA, PP and EPS» Additional cost savings from strategic projects (Cogen, MEG tolling agreement, etc.) Investment projects moving forward:» Tolling agreement with Huntsman» M&G Corpus Christi project advancing as planned; Plant to come on stream by end 2017» Altamira Cogen Project underway capacity 350 MWs. Capex of U.S. $350 million» New capacity at Altamira EPS plant ready by 4Q17 4

5 NEMAK HI-TECH ALUMINUM AUTOPARTS 28% AND 36% OF ALFA S REVENUES AND EBITDA IN 1Q16 1Q16 Results and Outlook for Q16 EBITDA up 6% y-o-y to U.S. $209 million. EBITDA per unit at a record high of U.S. $16.20 Strong performance expected to continue: overall sales volume of 52.0 million units in 2016, 3% above 2015 growth in all regions, except Brazil 2016 a transition year: major launches expected for 2017/18 from contracts won in past years Expanding structural components product line:» Seven programs worth U.S. $200 million/yr for premium European OEMs» A new, U.S. $125 million HPDC plant in Mexico to become operational in 2016 ramp up 1Q17» A new U.S. $55 million HPDC plant in Slovakia for structural parts ready towards end of

6 AXTEL* IT & TELECOMM 4% AND 8% OF ALFA S REVENUES AND EBITDA IN 1Q16 1Q16 Results and Outlook for Q16 EBITDA up 36% y-o-y to U.S. $48 million due to Alestra/Axtel merger» Axtel remains public; ALFA owns 51% and fully consolidates the business guidance: Revenues and EBITDA of U.S. $857 million and U.S. $305 million Opex synergies expected at U.S. $50-60 million per year in two years time. Capex synergies at U.S. $20 million per year Axtel Bonds retired: annual savings in interest expenses of U.S. $35 million *New entity formed by merging Alestra and old Axtel 6

7 NEWPEK HYDROCARBONS 1% AND 0% OF ALFA S REVENUES AND EBITDA IN 1Q16 1Q16 Results and Outlook for Q16 EBITDA slightly negative as realized oil prices continued to slide Drilling at Eagle Ford Shale suspended until oil prices improve» 625 wells in operations Projects in other U.S. areas also on hold Operations in Mexico scaled back: less wells in production today» From 150 to 68 wells Migration of CIEP contracts into production-sharing agreements moving slowly Mx Government expected to resume auction process towards year-end 7

8 ALFA Outlook General overview Healthy Financial Condition» Low Debt maturities in 2016: U.S. $265 million» Strong financial ratios (consolidated basis): Net Debt to EBITDA of 2.4x Interest Coverage of 7.3x Capital Expenditures of U.S. $1.4 billion in 2016» Majority of funds to be utilized by Nemak, Sigma and Alpek» Projects include: Two new plants at Nemak New processed meats plant in Spain at Sigma New co-gen facility at Alpek 8

9 ALFA - GENERAL OVERVIEW ALFA expects EBITDA of $2.4 billion in 2016» 6% above normalized 2015 level Macroeconomic factors impacting 2016 results:» Oil prices put pressure on Alpek and Newpek» Mx peso exch. rate may affect Nemak positively; and Sigma s Mx ops and Axtel negatively» 2016 Guidance assumptions include (average for the year): Oil price: U.S. $38 per barrel (Brent) USD-MxPs exch rate: $18/1 Euro-USD exch rate: $1.07/1 EBITDA (U.S. $ Millions) 2,040 1,854 1,915 1,623 2,420 2, , E* * *Extraordinary items 9

10 ALFA GUIDANCE 2016 ALFA 2016 Guidance (U.S. $ Millions) REVENUES EBITDA CAPEX e % 2015 Ext. Items Adj e % e ND/ EBITDA ALFA 16,315 16, , ,210 2, ,606 1, x Sigma 5,901 5, (4) x Alpek 5,284 4,800 (9) x Nemak 4,482 4, x Axtel x Newpek (36) (75) EBITDA has been normalized to account for one-time items 2 Including acquisitions figures include Alestra only; 2016 incorporates Axtel after merger date (Feb 15). Assumptions: Mx GDP growth: +2.4% USA GDP growth: +2.5% Avg. exchange rate Mx Peso to US$: $18.0 Avg. exchange rate Euro to US$: $1.07 Avg. oil price (Brent): U.S. $38/barrel Guidance as of April 15, 2016, revised to include the effect of the Alestra-Axtel merger beginning Feb. 15,