May, 2018 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 2018 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.
ALFA 1Q18 FINANCIAL RESULTS ALFA reported 14% top line growth due to higher sales at all business units EBITDA was US $629 million, up 19% y-o-y. Key factors explaining the result were: Higher volumes and prices in Alpek resulted in better margins on both of its business segments Solid performance of Mexican operations at Sigma; contribution from acquisitions in Peru and Romania Nemak s increased sales and operational efficiencies, as well as positive Fx benefited EBITDA Solid performance at Axtel; growth coming from Enterprise & Government segments Capex of US $185 million Financial condition: Net Debt to EBITDA of 3.2x Interest Coverage of 4.8x EBITDA (US $ Millions) 629 528 522 513 568 30 34 48 113 534 599 474 400 1Q17 2Q17 3Q17 4Q17 1Q18 Extraordinary items M&G impairment 2
Sigma REFRIGERATED FOODS 1Q18 FINANCIAL RESULTS 4% volume growth Revenues benefited by higher average prices, as well as favorable Fx EBITDA (US $ Millions) 1Q18 EBITDA of US $162 million, up 20% y-o-y Growth in Mexican and U.S. operations, higher prices and stable raw materials In Europe, results benefitting from Caroli acquisition 135 167 179 195 162 Latam, growth mostly reflecting the acquisition of Supemsa More favorable Fx environment in Europe and Mexico Issued a US $500 million bond and entered into a cross currency swap for another US $500 million from two previous bonds 1Q17 2Q17 3Q17 4Q17 1Q18 3
Volume growth across all regions SIGMA 34% AND 26% OF ALFA S REVENUES AND EBITDA IN 1Q18 Raw material prices expected to remain at current levels Price increases equal to inflation Closely following FX trends volatility due to presidential elections in Mexico New plant in Campofrio operating at higher capacity, expected to improve margins throughout the year Continue to look for strategic acquisitions EBITDA 2018e: US $715 million 4
ALPEK - PETROCHEMICALS 1Q18 FINANCIAL RESULTS Revenues grew 19% on a 3% volume increase due to solid performance in Polyester and 15% increase in prices 1Q18 EBITDA of US $181 million was up 15% y-o-y Including a US $16 million inventory gain and US $5 million legal expense 29% on a comparable basis supported by recovery of PET margins and better oil price environment Higher-than-expected polypropylene margins; better volumes in EPS EBITDA (US $ Millions) 158 26 132 82 13 116 141 170 113 125 69 3 1Q17 2Q17 3Q17 4Q17 1Q18 3 181 11 Extraordinary items M&G impairment 5
Positive outlook based on PET margin recovery and continuous M&G Mexico plant operations M&G restructuring process: ALPEK 34% AND 29% OF ALFA S REVENUES AND EBITDA IN 1Q18 Creation of CC Polymers, a JV between Alpek, Indorama and Far Eastern to acquire Corpus Christi project for US $1,169 million. Closing subject to approval by regulator. Alpek has taken a leading role in supporting operations for M&G Mexico while looking for a permanent solution Acquisition in Brazil completed for US $435 million, adjusted for net working capital and inflation Cogen plants sale: continuing negotiations; process delayed by changes in power rates regulation in Mexico EBITDA 2017e: US $569 million 6
Nemak HI-TECH ALUMINUM AUTOPARTS 1Q18 FINANCIAL RESULTS Revenues increased 10% vs 1Q17 driven by higher aluminum prices and appreciation of the EUR against USD Better output in NA as new high volume programs compensate for lower customer production; volume in Europe reflecting transition from diesel to gasoline; Rest of World region stable as South America continues to recover 1Q18 EBITDA up 4% y-o-y to US $197million; EBITDA per unit of US $15.0 Higher EBITDA due to favorable currency effects, a less adverse impact from metal price lag and operational efficiencies Won Structural/EV program in China with a battery manufacturer worth US $50 million; bringing total in this segment to US $370 million. Won new business in the quarter for ~US $110 million in annual revenues EBITDA (US $ Millions) 190 206 197 18 153 166 188 1Q17 2Q17 3Q17 4Q17 1Q18 Extraordinary items 7
NEMAK 27% AND 31% OF ALFA S REVENUES AND EBITDA IN 1Q18 Volume to reach 50.4 million units in 2018 vs 49.9 in 2017 Transitional year Stable volumes in NA and Europe, positive in RoW Adapting capacity in Europe due to shift from diesel to gasoline programs Reinforcing structural components and electric vehicle organization Aluminum prices expected to remain high and volatile EBITDA 2017e: US $700 million 8
Axtel IT & TELECOMM 1Q18 FINANCIAL RESULTS Revenues increased 2% y-o-y driven by growth in Enterprise and Government segments as well as mass market Growth in Enterprise segment driven by data, managed networks and IT services Refocusing Government segment towards recurrent contract-based services EBITDA (US $ Millions) 58 81 17 74 77 9 18 74 6 EBITDA increased 27%, mainly due to US $6 million gain from the final tranche sale of transmission towers 64 65 59 68 Excluding gain, EBITDA was up 5% Entered into hedging transactions to fix a portion of its USD denominated Capex. Looking to refinance its dollar-denominated long term loan in pesos. 1Q17 2Q17 3Q17 4Q17 1Q18 Extraordinary items 9
Positive outlook for Enterprise segment based on strong project pipeline from customers AXTEL 4% AND 12% OF ALFA S REVENUES AND EBITDA IN 1Q18 Cautious in Government segment due to uncertainty from election year less project-based revenues Completed transmission tower sale in 1Q18 Separating mass market business analyzing divestiture Wimax shutdown by August Capex of US $174 million Red Compartida project start up Supplying metropolitan links, fiber capacity, collocation and data center services Investments should translate in revenues in excess of US $14 million in 2018 EBITDA 2017e: US $277million 10
NEWPEK - HYDROCARBONS 1Q18 FINANCIAL RESULTS Eagle Ford Shale total wells in production at 648 Production of 5.7 MBOEPD 13% higher y-o-y reflecting the strong production of the wells EBITDA (US $ Millions) Revenues were US $33 million in 1Q18 the result of higher prices and production volume 1Q18 EBITDA US $16 million, benefited from a US $13 million gain from the sale of selected EFS acreage In Mexico: Production of 3.7 MBOEPD from service contracts with PEMEX, similar to 1Q17 1 3 1-2 16 13 1Q17 2Q17 3Q17 4Q17 1Q18 Extraordinary items 11
NEWPEK 1% AND 2% OF ALFA S REVENUES AND EBITDA IN 1Q18 Together with its partners, divesting Eagle Ford Shale assets Data rooms opened at the end of 1Q18 Migration of CIEP contracts into production-sharing agreements moving slowly Mx Government moving ahead with new rounds of auctions will analyze participation on a case by case basis EBITDA 2017e: US $3 million 12
ALFA GENERAL OVERVIEW ALFA expects consolidated revenue growth of 4% to US $17.4 billion EBITDA of $2.2 billion in 2018, up 8% from 2017 Up 2%, excluding M&G related impairment of US $113 million in 2017 EBITDA (U.S. $ Millions) 2,420 2,322 210 2,131 2,170 2,040 1,854 1,915 2,210 2,018 Capital Expenditures of U.S. $958 million in 2018 All business units investing to strengthen their competitive positions Healthy Financial Condition No significant debt maturities until 2022 Hedging some USD denominated debt at the subs to help mitigate Fx risk 12 13 14 15 16 17 18E Extraordinary Items M&G impairment 13
ALFA GUIDANCE 2018 Assumptions: Mx GDP growth: 2.3% USA GDP growth: 2.4% Eurozone GDP Growth: 2.2% Avg. exchange rate Mx Peso to USD: $19.25 Avg. exchange rate Euro to USD: $1.20 Avg. oil price (Brent): US $57/barrel ALFA 2018 GUIDANCE (US $ MILLIONS) REVENUES EBITDA CAPEX 2017 2018e 2017 2018e 2017 2018e ALFA 16,804 17,413 2,018 2,170 1,101 958 Sigma 6,054 6,500 676 715 276 204 Alpek 5,231 5,413 384 569 236 167 Nemak 4,481 4,490 715 700 431 384 Axtel 822 816 290 277 121 174 Newpek 107 73 3 3 34 25 *Guidance as of February 13, 2018 14