CORPORATE PRESENTATION - ALFA · CORPORATE PRESENTATION ... • Extensive consumer research ......

CORPORATE PRESENTATION

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 predict accurately.

Accordingly, results are likely to vary from those set forth in this presentation. Copyright © 2017 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.

CORPORATE PRESENTATIONS E P T E M B E R , 2 0 1 7


ALFA participates in Key areas of the economy

2016 Results Guidance 2017

Revenues (U.S. $ Billions) $15.8 $16.2

EBITDA (U.S. $ Billions) $2.3 $2.2

Capex (U.S. $ Millions) $1,491* $1,063

Net Debt/EBITDA 2.5 times 2.7 times

Interest Coverage 6.6 times 5.4 times

* Including acquisitions

SIGMA

Refrigerated Foods

ALPEK

Petrochemicals

NEMAK

Aluminum Auto Parts

AXTEL

IT + Telecom

NEWPEK

Hydrocarbons

2 ALFA


Breakdown by Business Group

Revenues 2016

U.S. $15.8Billion (%)

EBITDA 2016

U.S. $2.3Billion (%)

3 ALFA

Sigma

29%

Newpek

.3%Axtel

9%

Nemak

34%

Alpek

28%

Sigma

36%

Newpek

1%Axtel

5%

Nemak

27%

Alpek

31%


Ownership

100%

82%

75%

53%

100%

4

Public company since 2012.


Ford Motor Co. owns 5.4%.


ALFA


Global footprint

5

Production

Facilities in

28 countries

~65% of

sales outside

Mexico

More than

81,000

employees


Focused on long-term value creation

6

Revenues(U.S. $ Billion)

EBITDA(U.S. $ Billion)

ALFA


Refrigerated Foods

7


Multinational food company dedicated to bringing local

favorite foods to communities everywhere

2016

Revenues

U.S. $5.7billion

EBITDA

U.S. $663million in 2016

8 SIGMA


Region % Sales

Highly recognized branded foods in Mexico, U.S., Central &

South America and Europe

• Broad geographic footprint 69 production plants in 18 countries

• Offers quality food at a wide range of price points and across diverse

categories

9

U.S.

16%

Mexico

41%Europe

36%

LATAM

7%

SIGMA

Meats

58%Dairy

17%

Dry Meats

18%

Other Categories

7%

Mexico

United States

Dominican Rep.

El Salvador

Guatemala

Ecuador

Peru

Honduras

Nicaragua

Costa Rica

Portugal

Italy

Belgium

Germany

Netherlands

Spain

France

Romania


Diversified and strong brand portfolio in each market

PACKAGED MEATS DAIRY OTHER THIRD PARTY

MÉ

XIC

OE

UR

OP

AE

E.U

U.

LA

TA

M

10 SIGMA


Broad supply chain network

Reach, service, efficiency and knowledge

• Global processes

• Benchmarks

• Best practice implementation

• Production sharing capabilities

Safety & quality throughout the supply chain

• Sourcing development programs and

certifications

• In-store quality checks

• Customer development programs

• Certified facilities

11

68Production plants

204Distribution centers

+580,000Points of sale

SIGMA


Product & Process Innovation

Consumer-driven innovation

• Extensive consumer research

• Proprietary mathematical models

• Sigma Innovation System

State-of-the-Art Research & Development

center

• With +160 specialists

• Leadership in food process technology

R&D Alliances

• Research agreements with educational

and governmental institutions

• Open technology

12 SIGMA


Petrochemicals

13


One of the world’s largest integrated polyester groups

• 2016 Revenues of U.S. $4.8

billion

• 2016 EBITDA of U.S. $669

million

• Production facilities in key

geographic areas:

• North America: the

biggest market for

beverages

• Availability of low-cost

raw materials

• Logistics

14 ALPEK


Business Segments

Polyester chain

2016

Revenues U.S. $3.4 billion (71%)

EBITDA U.S. $349 million (52%)

Products

PTA

PET

Polyester fibers

Plastics & chemicals

2016

Revenues U.S. $1.4 billion (29%)

EBITDA U.S. $322 million (48%)

Products

PP

EPS

CPL

Fertilizers and other chemicals

15 ALPEK


Alpek´s products are widely used for food packaging and

consumer end-markets

Beverage Food Personal care Textiles

Sample end users by industry

Construction

3%Textiles

7%

Consumer

Goods

32%

Food and

Beverages

58%

Volume 2016

By end market(3,939 KTA)

Asia & others

1%Europe

3%Latam

14%

Mexico

37%

USA &

Canada

45%

Sales 2016

Geography

16 ALPEK


Alpek’s installed capacity amounts to 5.8 million tons

Installed Capacity Breakdown (Kta)

SITE PTA PET rPET FIBERS PP EPS CPL OTHER

Mexico

(2,950

Kta)

A Monterrey 160

B Altamira 1,000 640 165

C Salamanca 85

D Ocotlán 10

E Cosoleacaque 610 185

F Lerma 100

USA

(2,270

Kta)

G Cedar Creek 170 73

H Cooper River 170 150

I Columbia 640 725

J Pearl River 430

Canadá K Selenis 144

Argentina

(225

Kta)

L Zárate 190

M Pacheco 16

N General Lagos 19

Brasil O Guaratingueta 46

Chile

(27

Kta)

P Santiago 5

Q Puerto Montt 2

R Concon 20

Capacidad Total: 5,755 Kta 2,250 2,014 89 310 640 250 85 117

Mexico

United Sates

Argentina

Chile

Brazil

More than

5,200employees

23 Production

facilities

Corpus Christi

(2017)

PTA: 420 kta

PET: 500 kta

Source: Alpek estimates Kta: Thousand tons per year

(1) Includes industrial and specialty chemicals and recycled PET capacities

17 ALPEK


Alpek is investing in attractive organic projects to boost

profitability

Strategic Guidelines

• Capture natural gas,

ethane and propane

advantage in North

America

• Maximize operating

efficiency

• Selective capacity

expansion

• Lever IntegRex®

technology

Project Overview estimated figures and dates

Project

Capex

(US $M)

EBITDA

(US$M) Start-up

1. Cosoleacaque Cogeneration (85 MW) 140 30 4Q14

2. MEG Tolling Agreement 65 20 2Q16

3. Propylene Spheres 23 10 2Q17

4. PTA/PET Site (Corpus Christi) 400+ 100 2017

5. EPS Expansion Altamira 30 10 2017

6. Altamira Cogeneration (350 MW) 350 90 2018

Total ~ $1 B ~$260

U.S. $900 million invested up to Jun-17

Source: Alpek estimates

18 ALPEK


Aluminum auto parts

19


The leading lightweighting solutions provider for the auto

industry

• 2016 Revenues of U.S. $4.3

billion

• 2016 EBITDA of U.S. $798 million

• Global footprint, cost

competitiveness, R&D, skilled

labor force

• One out of every four new

vehicles sold worldwide has a

Nemak component

• Sole supplier in ~85% of sales

volume in 2016

20 NEMAK


Focused on complex aluminum components for the

automotive industry

Powertrain

• Heads

• Blocks

• Transmission

EV Components

• E-Drive housings

• Battery housings

Structural Components

• Longitudinal menbers

• Shock tower

• Cross menbers

21 NEMAK


Diversified customer base

• More than 60 customers worldwide

• Nemak supplies engine & transmission components for ~650 out of 1,300

vehicle platforms worldwide

22 NEMAK

http://www.opel.com/

http://www.opel.com/

http://img3.wikia.nocookie.net/__cb20100630205529/logopedia/images/b/b8/Maserati_logo.png

http://img3.wikia.nocookie.net/__cb20100630205529/logopedia/images/b/b8/Maserati_logo.png


Solid customer relationships; diversified revenue stream

North

America

58%

Europe

33%

Others

9%

North America

North America

Europe

Europe

Others

(including )

23%

18%

11%6%5%

5%3%

3%

3%

3%

17%

3%

2016

Volume distributionBu Customer

2016

Revenue distributionBy Region

23 NEMAK


Modern facilities with a global footprint near key customers

• Global footprint serving all major markets

• 36 manufacturing facilities strategically located close to customer sites

• North America (18), Europe (12), South America (3), Asia (3)

24

Canada

United States

Mexico

Brazil

Argentina

Spain

Germany

Hungary

Russia

Slovakia

Poland

Austria

Czech Republic

India

China

Turkey

NEMAK


Aluminum components expected to grow due to stricter

environmental standards

NA and EU LV Aluminum Content(Pounds per vehicle)

2012

324

2015e

350

301

2009

24

2018e

426

2021e

475

2025e

380

Structural

Components

Others

Heat Transfers

Wheels & Brakes

Transmissions

Engine Blocks

Cylinder Heads

Source: Ducker, Nemak

109

25 NEMAK


IT + Telecomm

26


IT and Communication services for the enterprise,

government and mass markets

Main Services

• Data centers

• Information security

• Managed networks

• Consultancy services

• Systems integration

• Cloud services

• Internet

• Pay-TV

27 AXTEL


Diversified revenue stream; focused on the enterprise

market

2016Revenues

U.S. $736million

EBITDA

U.S. $225Million in 2016

28 AXTEL

7%Wireless

13%FTTH

14%IT

66%Telecomm

Sales

Breakdown(By type of service)

14%Government

20%

Mass

market

66%Enterprise

By

Market Segment


Strategic evolution

• Start up local mass market «Fixed Wireless»

• Avantel acquisition (´06)

• Broad band mass market

• Vertical markets

• Cloud services

• App management

• Data center

• Enterprise strategy

• Value added services – Data IP

• Start up LD services

ALESTRA CONVERGENCE

• Unified communications

• Managed networks

• Security

• Large Scale Solutions

• Systems integration

• Data center

• IPTV (´13)

• Cloud services & managed IT

1997

1999

2000

2008

2011

2008

2011

• Value added services mass market– Wimax

• Enterprise integration Telco / IT

• FTH

2015 2015

TELECOMM MARKET OPENED

IP PROTOCOL, INTERNET BUBBLE

VOICE AND DATA NET CONVERGENCE LAN/WAN

TELECOM / IT CONVERGENCE

DATA CENTER CONVERGENCE

MEGER 2016

29 AXTEL


Infrastructure provides access to +90% of Mexican market

• 40,400 km of long-haul

fiber optics

• 23,100 km of long

distance

• 11,300 km of metro

rings

• 6,000 km of FTTH

network

• Six data centers

• 7,000 m2

• FTTH in major cities

30 AXTEL

- 53 cities with data services

- 39 cities with local services

- 10 cities with FTTH


Hydrocarbons

31


E&P operations in the U.S. and Mexico

Involvement in the E&P industry

began in 2006

• JV with Pioneer (8.6%)

• Development of Eagle Ford Shale

Operating mature fields in Mexico

since 2013

• Service contracts with Pemex

(CIEPs)

32 NEWPEK


Newpek fields

KS

TX

OK

CO

Eagle Ford

Current U.S. Operations

Talent

• Team of experience

people in the US.

• World-class partners (e.g.

Pioneer Natural

Resources)

Technology

•Fracking for horizontal drilling

in Eagle Ford – 632 wells in

operation

•Mature fields optimization

•World-class sub-surface

analysis capabilities

33

Successful transition to

operations

• Experienced transition to

operations

• Mineral rights on leases

over 220,000 acres

Net production

(mboed)EBITDA

(U.S. $ million)

NEWPEK


Activities in Mexico

• Service contracts in San Andrés and

Tierra Blanca fields

• Producing over 3.5 mboed on 128 wells

• Optimization of existing wells

• Development of new wells in

conventional formations

• Migrating existing CIEPs to new

Exploration and Production Contracts

(CEEs)

34 NEWPEK


Current oil price environment impacting Newpek

• Limited drilling at EFS

• Seismic analysis on other

areas in the U.S.

• Scaling down in Mexico

• Analyzing divestment of certain

assets in the U.S. and Peru

35 NEWPEK


Guidance ALFA 2017

(U.S. $Millions) Revenues EBITDA Capex

2016 2017e 2016 2017e 2016 2017e

ALFA 15,756 16,245 2,322 2,153 1,454 1,063

Sigma 5,698 5,893 663 671 328 227

Alpek 4,838 5,069 669 502 320 238

Nemak 4,257 4,382 798 750 541 395

Axtel 736 738 225 276 210 176

Newpek 107 55 9 7 25 24

Assumptions:

• Mx GDP growth: 1.4%

• USA GDP growth: 1.5%

• Avg. exchange rate Mx Peso to US$: $21.5

• Avg. exchange rate Euro to US$: $1.10

• Avg. oil price (Brent): US$55/barrel

12016 incorporates Axtel after merger date (February 15)

36 Note: Guidance as of July 27, 2017

CORPORATE PRESENTATION - ALFA · CORPORATE PRESENTATION ... • Extensive consumer research ......

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