Investor Relations Presentation» Grupo LALA, S.A.B. de C.V. May, 2016
INVESTMENT HIGHLIGHTS» Scale and Leadership in Branded Healthy Foods» Second Most Recognized Consumer Brand in Mexico» Two Megabrands» Refrigerated Distribution Network» Innovation and Value Added Products» Sustainable Growth Strategy 3
1» ABOUT US
» 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 19 production plants and 166 distribution centers in Mexico and Central America, and is supported by more than 33,000 employees. LALA operates one of the largest chilled distribution networks in the region, with 6,500+ delivery routes. Our product portfolio includes over 600 SKUs under 25 brands, which are available at more than 550,000 points-of-sale. Mission: Nourishing your life, is our passion Vision: To be the favorite dairy company in the Americas 4
»THE LARGEST HEALTHY FOOD COMPANY IN MEXICO More than 600 SKU s Over 25 brands More than 33,000 employees SALES BY TRADE CHANNEL* SALES BY SEGMENT* Beverages & Others 6.3% Traditional Trade 42.0% Modern Trade 58.0 % Other Dairy Products 28.6% US$2,948mm (1) Milk 65.1% *Last Twelve Months as of March 2016. 1. LTM as of March 2016, assuming an average LTM FX rate of 16.64 MXN/USD 5
»THE LARGEST HEALTHY FOOD COMPANY IN MEXICO 19 Production Plants Over 550,000 Points of Sale More than 6,500 Delivery Routes 166 Distribution Centers PRODUCTION AND DISTRIBUTION LALA IN FIGURES LTM (MARCH, 2016) LALA has the largest chillied distribution network in Mexico.» US $2,948 MM Net Revenues 1» US $424 MM EBITDA 1» US $248 MM Net Income 1 1. LTM as of March 2016, assuming an average LTM FX rate of 16.64 MXN/USD 6
» OUR PRESENCE Presence in 6 countries Mexico, Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica 19 Productions Plants 166 Distribution Centers +550,000 Points of Sale +33,000 Employees +7,000 units for distribution +6,500 Distribution Routes The key factors that have kept us on a path of sustained growth for more than six decades includes the proven experience, effort and commitment of our people as well as the prestige and brand recognition that we have built over time, which has lead consumers to trust in us and our products. 7
» OUR HISTORY 1949 1950 1960 1970 1980 Torreon Milk Producers Credit Union (Unión de Crédito de Productores de Leche de Torreón) established. Construction of our first pasteurized milk plant, in La Laguna, Torreón. LALA switches from glass to carton containers. The Company continues its expansion throughout Mexico. Construction of the carton containers plant, acquisition of the Acapulco Pasteurized Facility and fusion with Nazas Pasteurized Factory. Expansion to other dairy categories, also the introduction of ultra-high temperature (UTH) process to produce products with an extended shelf life. 8
» OUR HISTORY 1990 2000 2010 2013 2014 2015-2016 Corporate and identity rebranding, including a new logo, image, advertising theme and marketing strategy. LALA also begins manufacturing plastic containers. Acquisition of Nutri Leche and other regional brands. Expansion into Central America with also introducing new product categories. Continued of product and brand portfolio expansion, consolidating our leadership position in the dairy market. Grupo LALA established its Center for R&D On October 16, 2013, LALA raised 14,055 million pesos through its Initial Public Offering in the Mexican Stock Exchange. The IPO offering price was $27.50 pesos per share. Eskimo Acquisition; Company that operates in the icecream and dairy industry, with presence in Nicaragua, Honduras, Costa Rica and El Salvador. 2015 LALA new company logo. 2016 Acquisition of Productos Lácteos La Perfecta S.A. a dairy company in Nicaragua. New corporate Mission and Vision. 9
2» OUR PRODUCTS
» MILK The images represents some of the main products for each category. 11
» CHEESE The images represents some of the main products for each category. 12
» YOGHURTS The images represents some of the main products for each category. 13
» JUICE AND FLAVORED BEVERAGES The images represents some of the main products for each category. 14
» DESSERTS The images represents some of the main products for each category. 15
» CREAM & SPREADS The images represents some of the main products for each category. 16
» FROZEN The images represents some of the main products for each category. 17
4» COMSUMPTION & DAIRY OUTLOOK
» GROWTH POTENTIAL ATTRACTIVE POPULATION PYRAMID GROWING MIDDLE CLASS 1 MALE 100+ 95 99 90 94 85 89 80 84 75 79 70 74 65 69 60 64 55 59 50 54 45 49 40 44 35 39 30 34 25 29 20 24 15 19 10 14 5 9 0 4 FEMALE Over 60% of total population is below 30 years old Denotes middle class D/E D+ C C+ AB 7.0% 8.0% 14.0% Middle 17.0% 17.0% class 30.0% 35.0% 25.0% +69.0mm people 5% 4% 3% 2% 1% 0% 0% 1% 2% 3% 4% 5% 26.0% 20.0% Population (%) Age group Population (%) 2010 2025E Source: EIU, INEGI, AMAI, CONEVAL, Banco de Mexico, Euromonitor, Economist, Bain Analysis, UN World population prospects; 1) Classes are defined by the following monthly family income: AB>MX$98,500,C+ MX$40,600-$98,499, C MX$13,500 40,599, D+ MX$7,880 $13,499, D MX$3,130-$7,879 and E <MX$3,129 19
» GROWTH POTENTIAL MILK CONSUMPTION (lts per capita) CHEESE CONSUMPTION (kg per capita) 273 257 198 194 Latam avg. 129.0 139 138 125 121 53 23.7 Latam avg. 5.4 14.5 13.9 12.3 4.7 2.2 0.7 Western Europe Eastern Europe YOGHURT CONSUMPTION (kg per capita) FRUIT/VEGETABLE JUICE CONSUMPTION (lts per capita) 26.9 19.0 18.6 Latam avg. 10.6 11.9 7.3 6.6 5.0 63.3 22.2 Latam avg. 5.7 7.8 5.9 3.3 Source: BMI Food & Drink Report 2013; Note: Milk consumption per capita avg. considers Argentina, Brazil, Chile, Colombia, Peru and Mexico; Yoghurt consumption Latam avg. considers Peru, Chile, Mexico and Argentina; Cheese consumption Latam avg. considers Peru, Chile, Mexico and Brazil ; Fruit/vegetable juice consumption Latam avg. considers Peru, Brazil and Mexico 20
» AMERICAS DAIRY MARKET Total Americas Dairy Market Value is ~US$160 billion» World Dairy Market value is ~US$550 billion, the Americas represent 1/3rd of the value. 8% 3% 3% 1% 2% 2% 2% USA Brazil Mexico Canada» The USA and Brazil represents 70% of total Americas Dairy Market. 9% 46% Central America (1) Colombia» Americas Dairy Market it s projected to grow by ~US16 billion in next 5 years. 24% Argentina Chile Peru (1) Central America includes: Costa Rica, Dominican Republic, Guatemala, Nicaragua and other Central America / Caribean countries. (2) Others includes: Ecuador, Bolivia, Uruguay, Venezuela and other South America Countries. Others (2) Source: Euromonitor, Company information. 21
5» MEGABRANDS
» THE LARGEST HEALTHY FOOD COMPANY IN MEXICO 2 MEGA BRANDS Classified among Mexico s top five consumer brands. 23
» MEXICO TOP FIVE CONSUMER BRANDS 99% 98% 99% 75% 89% 85 39 37 27 20 Source: Kantar Worldpanel 2015 1. Penetration based on number of households that purchase a brand; 2. Frecuency of purchase (# of times per year) 24
6» SUSTAINABLE GROWTH STRATEGY
» OUR PROJECTS We believe that by adding some of these categories into our business model, we achieve:» Operation Leverage» Economies of Scale» Efficiencies & Strategies» Higher Profitability» Leadership 26
7» KEY FINANCIAL INFORMATION
» FINANCIAL HIGHLIGHTS (LTM as of March 2016) Income Statement (1) Growth 2015-LTM % 2016-LTM % Net Sales 7.8% $ 45,516 100.0% $ 49,061 100.0% Gross Profit 14.5% 16,843 37.0% 19,287 39.3% Operating Income 22.2% 4,773 10.5% 5,832 11.9% EBITDA (2) 21.5% 5,808 12.8% 7,059 14.4% Net Income 26.3% 3,264 7.2% 4,121 8.4% Financial Position (1) Growth MAR-15 MAR-16 Total Assets 14.0% $ 31,412 $35,809 Cash 12.2% 8,097 9,083 Total Liabilities 23.0% 8,429 10,366 Shareholders Equity 10.7% 22,983 25,443 1. Company Data, in Mexican Pesos. 2. EBITDA=Earnings Before Interest, Taxes, Depreciation and Amortization 28
» SUSTAINABLE GROWTH NET SALES (MXNbn) EBITDA (MXNbn) 48.2 6.8 32.7 3.9 2008 2015 2008 2015 Source: Company Data Note: Prior to 2011, financials are under Mexican FRS; By 2011 financials are under IFRS. This may affect comparability. 29
» KEY FINANCIAL STATISTICS NET SALES (MXN$mm) EBITDA (MXN$mm) NET INCOME (MXN$mm) Margin Margin Margin 100.0% 100.0% 100.0% 100.0% 11.8% 12.2% 12.2% 14.1% 5.7% 6.5% 6.9% 8.2% 40,345 43,156 44,993 48,183 4,764 5,279 5,471 6,810 2,308 2,821 3,116 3,953 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 Margin Margin Margin 100.0% 100.0% 14.1% 15.1% 8.1% 8.9% 12,509 1,889 1,111 11,630 1,641 944 1Q-15 1Q-16 1Q-15 1Q-16 1Q-15 1Q-16 Source: Company Information 30
» STRONG FINANCIAL POSITION $8,097 CAPITAL STRUCTURE Net Debt / EBITDA 1Q-15 1Q-16 (1.4)x (1.3)x EBITDA / Interest Paid 774.2x 377.5x $9,083 1Q-15 1Q 16 $73 $87 EARNINGS PER SHARE $1.30 $1.65 1Q-15 1Q-16 Total Debt (MXN$mm) Cash (MXN$mm) SHAREHOLDERS EQUITY 22,983 25,443 Source: Company Information Ratios are calculated in local currency Figures in Mexican Pesos ( 000) 31
07-05-15 02-06-15 28-06-15 24-07-15 19-08-15 14-09-15 10-10-15 05-11-15 01-12-15 27-12-15 22-01-16 17-02-16 14-03-16 09-04-16 05-05-16» LALA B OVERVIEW STOCK INFO MAY 06, 2016 $46.00 Stock Price AVERAGE DAILY LIQUIDITY 2016 US $6.0mm 2,475.9 mm Share Outstanding 22.0% Free Float 47.50 14.9x EV/EBITDA 25 EV/EBITDA 45.50 43.50 20 20.6x 41.50 39.50 37.50 35.50 33.50 31.50 15 10 5 14.9x 13.2x 10.2x 12.9x 13.8X 6.1x Avg. 13.1x 0 Source: Company Information, Bolsa Mexicana de Valores, Analyst Research. 32
» 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. 33
8» APENDIX
» SHAREHOLDERS STRUCTURE 2,475,932,111 shares Float [22.0%] Others [0.6%] OWNERSHIP STRUCTURE Underwriting [23.0%] Control Trust [55.0%] 35
» OUR SUPPLIERS 36
» OUR DISTRIBUTION FLEET 37
» OUR PRODUCTION FACILITIES 38
» OUR TEAM 39
» OUR R&D CENTER 40
CONTACT INFORMATION Investor Relations Enrique González +52 (55) 9177 5900 investor.relations@grupolala.com Stock Information LALA B Series shares have been listed on the Bolsa Mexicana de Valores (BMV) since October 16, 2013 under the ticker symbol LALA B. 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 summery does not constitute a public securities offering on behalf of LALA and is intended to be used for informational purposes only. For more information: www.grupolala.com
http://www.grupolala.com/en1_inversionistas?id=1