Industrias Bachoco Announces Fourth Quarter and Full Year 2021 Results

Rhea-AI Summary

Industrias Bachoco reported a strong financial performance for 4Q21 and FY2021, with net sales increasing by 15.9% in 4Q and 18.8% for the year. Despite a challenging second half impacting profitability, EBITDA margins remained at 4.1% for the quarter and 9.0% for the year. The company faced rising costs, with a 27.8% increase in cost of sales compared to 4Q20. Net income fell to $648.2 million for the quarter, down 38.4% year-over-year. Bachoco's solid cash position of $20.7 billion supports ongoing growth plans, including the recent acquisition of RYC Alimentos.

Positive

• Net sales increased 15.9% in 4Q21 and 18.8% for the full year 2021.
• EBITDA margin for FY2021 was 9.0%, an improvement from 8.8% in 2020.
• Net cash increased by 13.6% to $18.7 billion, indicating strong liquidity.

Negative

• Gross profit decreased 28.4% in 4Q21 compared to 4Q20.
• Operating income fell 76.3% to $509.5 million in 4Q21.
• Cost of sales increased 27.8% in 4Q21, affecting profitability.

CELAYA, Mexico--(BUSINESS WIRE)-- Industrias Bachoco, S.A.B. de C.V., “Bachoco” or “the Company”, (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the fourth quarter (“4Q21”) and full year (“2021”) ending on December 31^st, 2021. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”).

HIGHLIGHTS 2021

• Net sales increased 15.9% in 4Q21 and increased 18.8% in year 2021 vs equivalent periods of 2020.
• EBITDA margin was 4.1% for 4Q21 and 9.0% for the whole year.
• Earnings per basic and diluted share totaled $1.08 for the quarter and $8.45 for the year.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: “2021 was a year more in line with seasonal behavior compared to 2020. Which means, a year with a very good first half vs a challenging second one, particularly in terms of profitability. In the overall, we consider that, a balanced supply and demand and our participation in all the main channels allowed us to optimize our sales mix and deliver improved results vs full year 2020.

Particularly for the 4Q21 we showed a recover in our volume sold, mainly in poultry, which reinforces our commitment with customers and market. More volume sold and better prices YOY allowed us to reach an increase in sales of 15.9% for the quarter and 18.8% for the full year.

On the other hand, regarding our cost of sales, challenges in commodity prices remained. This has had a negative effect in our operations both Mexico and the U.S. Just for the quarter, our combined cost of sales increased 27.8% vs 4Q20 and 18.1% vs full year 2020.

However, we managed to deliver positive results for the quarter and year-end. Our EBITDA was $881.7 million for 4Q21 and $7,359.9 million for 2021 with margins of 4.1% and 9.0% respectively.

Those results allowed us to remain with a solid financial position generating net cash of $18,783.1 million an increase of 13.6% compared to 2020. This strength allowed us not only to face the volatility and challenges of our industry but also to support our growth plans.

In this regard, after year-end, we announced the acquisition of RYC Alimentos which results will be consolidated in our 2022 financials. We look forward to start with the integration process of this operation in order to capture the synergies identified.”

EXECUTIVE SUMMARY

The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2021.

QUARTERLY RESULTS
NET SALES BY GEOGRAPHY
In millions of pesos		4Q21	4Q20	Change
		$	$	$	%
Net Sales		21,251.5	18,329.3	2,922.2	15.9
Net sales in Mexico		15,937.3	13,781.3	2,156.1	15.6
Net sales in the U.S.		5,314.2	4,548.0	766.1	16.8

NET SALES BY SEGMENT
In millions of pesos		4Q21	4Q20	Change
		$	$	$	%
Net Sales		21,251.5	18,329.3	2,922.2	15.9
Poultry		18,598.1	16,138.1	2,460.0	15.2
Other		2,653.4	2,191.2	462.2	21.1

NET VOLUME SOLD BY SEGMENT
In tons				Change
		4Q21	4Q20	Volume	%
Total sales volume:		605,925	585,064	20,860.8	3.6
Poultry		467,942	447,605	20,337.3	4.5
Others		137,983	137,459	523.5	0.4

The Company’s 4Q21 net sales totaled $21,251.5 million; $2,922.2 million or 15.9% more than $18,329.3 million reported in 4Q20. The increase is a result of higher volume sold in poultry as well as higher prices in our main business lines.

In 4Q21, sales of our U.S. operations represented 25.0% of our total sales compared to 24.8% in 4Q20.

GROSS PROFIT
In millions of pesos		4Q21	4Q20	Change
		$	$	$	%
Cost of sales		18,488.2	14,468.2	4,020.1	27.8
Gross profit		2,763.3	3,861.2	(1,097.9)	(28.4)
Gross margin		13.0%	21.1%	-	-

In 4Q21, cost of sales was $18,488.2 million; $4,020.1 million or 27.8% higher than $14,468.2 million reported in 4Q20. This increase was mainly due to higher unit cost in our main business lines as we continued observing year over year increases in prices of our main raw materials.

The Company´s gross profit in 4Q21 was $2,763.3 million, lower than the gross profit of $3,861.2 million in 4Q20, with a gross margin of 13.0% for 4Q21 vs 21.1% in 4Q20.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”)
In millions of pesos		4Q21	4Q20	Change
		$	$	$	%
Total SG&A		2,145.5	1,661.9	483.5	29.1

Total SG&A expenses in 4Q21 were $2,145.5 million; $483.5 million higher than the $1,661.9 million reported in 4Q20. Total SG&A expenses as a percentage of net sales represented 10.1% in 4Q21 and 9.1% in 4Q20.

OTHER INCOME (EXPENSE), NET
In millions of pesos		4Q21	4Q20	Change
		$	$	$	%
Other income (expense), net		(108.3)	(51.3)	(57.0)	111.0

This item mainly includes the sale of unused assets as well as hens and other by-products. We record such sales as expenses when the sale price is below the book value of those assets.

In 4Q21, we recorded other expenses of $108.3 million, compared with other expenses of $51.3 million reported in 4Q20.

OPERATING INCOME
In millions of pesos		4Q21	4Q20	Change
		$	$	$	%
Operating income		509.5	2,147.9	(1,638.4)	(76.3)
Operating margin		2.4%	11.7%	-	-

Operating income in 4Q21 totaled $509.5 million; $1,638.4 million lower than the Operating income of $2,147.9 million reported in 4Q20. This represents an operating margin of 2.4% for 4Q21, versus 11.7% operating margin in the same period of 2020. The decrease in operating income is mainly attributed to higher raw material costs.

NET FINANCIAL INCOME
In millions of pesos		4Q21	4Q20	Change
		$	$	$	%
Net Financial Income		149.6	(1,154.6)	1,304.2	(113.0)
Financial Income		211.5	(1,111.7)	1,323.1	(119.0)
Financial Expense		61.8	42.9	18.9	44.0

In 4Q21, the Company reported net financial income $149.6 million, compared to a financial loss of $1,154.6 million reported in the same period of 2020. Of the Financial Income, exchange rate valuation in 4Q21 was $32.4 million vs a negative $1,206.9 million obtained in 4Q20.

TAXES FOR THE PERIOD
In millions of pesos		4Q21	4Q20	Change
		$	$	$	%
Total Taxes		49.0	3.3	45.7	1,377.0
Income tax		486.4	679.1	(192.7)	(28.4)
Deferred income tax		(437.4)	(675.8)	238.4	(35.3)

Total taxes for the 4Q21 were $49.0 million, compared with total taxes of $3.3 million of the same period of 2020.

NET CONTROLLING INTEREST INCOME
In millions of pesos	4Q21	4Q20	Change
	$	$	$	%
Net income	610.2	990.0	(379.8)	(38.4)
Net margin	2.9%	5.4%	-	-
Non-Controlling Interest income	(38.0)	(3.8)	(34.2)	n/a
Net controlling interest income	648.2	993.8	(345.6)	(34.8)
Basic and diluted income per share1	1.08	1.66	(0.58)	n/a
Basic and diluted income per ADR2	12.97	19.88	(6.9)	n/a
Weighted average Shares outstanding3	599,624	599,820	-	-

1 In pesos

2 in pesos, one ADR equals to twelve shares

3 In thousands of shares

The net controlling interest income for 4Q21 was $648.2 million, representing $1.08 pesos of earnings per share, compared with a net controlling interest income of $993.8 million, which represented a $1.66 pesos of earnings per share in 4Q20. This decrease is mainly attributed to lower operating results.

EBITDA
In millions of pesos		4Q21	4Q20	Change
		$	$	$	%
Net controlling interest income		648.2	993.8	(345.6)	(34.8)
Income tax expense (benefit)		49.0	3.3	45.7	1,377.0
Result in associates		(38.0)	(3.8)	(34.2)	895.5
Net finance (income) expense		(149.6)	1,154.6	(1,304.2)	(113.0)
Depreciation and amortization		372.1	307.8	64.4	20.9
EBITDA		881.7	2,455.7	(1,574.0)	(64.1)
EBITDA Margin (%)		4.1%	13.4%	-	-
Net revenues		21,251.5	18,329.3	2,922.2	15.9

EBITDA in 4Q21 reached $881.7 million representing an EBITDA margin of 4.1%, compared to an EBITDA of $2,455.7 million in 4Q20, with an EBITDA margin of 13.4%.

ACCUMULATED RESULTS
NET SALES BY GEOGRAPHY
In millions of pesos		2021	2020	Change
		$	$	$	%
Net Sales		81,699.1	68,792.0	12,907.1	18.8
Net sales in Mexico		61,468.1	49,303.2	12,164.9	24.7
Net sales in the U.S.		20,231.0	19,488.8	742.2	3.8

NET SALES BY SEGMENT
In millions of pesos		2021	2020	Change
		$	$	$	%
Net Sales		81,699.1	68,792.0	12,907.1	18.8
Poultry		71,518.2	61,323.9	10,194.3	16.6
Other		10,180.9	7,468.1	2,712.8	36.3

NET VOLUME SOLD BY SEGMENT
In metric tons				Change
		2021	2020	Volume	%
Total sales volume:		2,318,049	2,296,229	21,820.8	1.0
Poultry		1,769,071	1,772,528	(3,457.1)	(0.2)
Others		548,978	523,700	25,277.9	4.8

In 2021, net sales totaled $81,699.1 million; $12,907.1 million or 18.8% more than the $68,792.0 million reported in the same period of 2020.

In 2021, sales of our U.S. operations represented 24.8% of our total sales, compared with 28.3% in 2020.

OPERATING RESULTS
In millions of pesos		2021	2020	Change
		$	$	$	%
Cost of Sales		68,147.9	57,707.6	10,440.3	18.1
Gross Profit		13,551.2	11,084.4	2,466.7	22.3
Total SG&A		7,302.9	6,420.4	882.5	13.7
Other Income (expense)		(352.6)	(362.5)	9.9	(2.7)
Operating Income		5,895.7	4,301.5	1,594.2	37.1
Net Financial Income		831.9	882.2	(50.3)	(5.7)
Income Tax		1,782.2	1,211.6	570.6	47.1
Net Income		4,945.3	3,972.1	973.2	24.5
Non-controlling interest		(123.8)	36.4	(160.2)	(439.9)
Net controlling interest Income		5,069.1	3,935.7	1,133.4	28.8

In the 2021, the cost of sales totaled $68,147.9 million; $10,440.3 million or 18.1% higher than $57,707.6 million reported in the 2020.

As a result, we reached a gross profit of $13,551.2 million and a gross margin of 16.6% in 2021, when compared to $11,084.4 million of gross profit and a gross margin of 16.1% reached in the same period of 2020.

Total SG&A in 2021 were $7,302.9 million; $882.5 million or 13.7% higher than the $6,420.4 million reported in 2020. In 2021 total SG&A expenses as a percentage of net sales represented 8.9% in 2021 and 9.3% in 2020.

In 2021 we had other expenses of $352.6 million, compared with other expenses of $362.5 million reported in 2020.

Operating income in 2021 was $5,895.7 million, which represents an operating margin of 7.2%, an increase from an operating income of $4,301.5 million with an operating margin of 6.3% in 2020.

Net financial income in 2021 was $831.9 million lower when compared to a net financial income of $882.2 million in 2020.

Total taxes were $1,782.2 million as of December 31^st, 2021. These include $1,540.4 million of income tax and $241.8 million of deferred income taxes. Those figures compare to an income tax of $1,296.5 million and deferred income taxes of $(84.9) million in 2020.

After Non-controlling interest, all the above resulted in a Net controlling interest income of $5,069.1 million or 6.2% margin in 2021, which represents $8.45 pesos of earnings per share; while in the 2020 the Net controlling interest income totaled $3,935.7 million, 5.7% margin and $6.56 pesos of income per share.

EBITDA
In millions of pesos		2021	2020	Change
		$	$	$	%
Net controlling interest profit		5,069.1	3,935.7	1,133.4	28.8
Income tax expense (benefit)		1,782.2	1,211.6	570.6	47.1
Result in associates		(123.8)	36.4	(160.2)	(439.9)
Net finance (income) expense		(831.9)	(882.2)	50.3	(5.7)
Depreciation and amortization		1,464.2	1,735.1	(271.0)	(15.6)
EBITDA		7,359.9	6,036.7	1,323.2	21.9
EBITDA Margin (%)		9.0%	8.8%	-	-
Net revenues		81,699.1	68,792.0	12,907.1	18.8

EBITDA in 2021 reached $7,359.9 million, representing an EBITDA margin of 9.0%, compared to an EBITDA of $6,036.7 million in 2020, with an EBITDA margin of 8.8%.

BALANCE SHEET
BALANCE SHEET DATA
In millions of pesos		Dec. 31, 2021	Dec. 31, 2020	Change
		$	$	$	%
TOTAL ASSETS		65,934.8	58,475.0	7,459.8	12.8
Cash and cash equivalents		20,707.1	19,242.4	1,464.7	7.6
Accounts receivable		5,252.5	4,366.7	885.8	20.3
TOTAL LIABILITIES		17,716.0	14,548.2	3,167.8	21.8
Accounts payable		8,565.1	5,834.0	2,731.1	46.8
Short-term debt		1,924.0	1,251.7	672.3	53.7
Long-term debt		-	1,460.4	(1,460.4)	(100.0)
TOTAL STOCKHOLDERS’ EQUITY		48,218.8	43,926.8	4,292.0	9.8
Capital stock		1,173.9	1,174.3	(0.4)	(0.0)

Cash and equivalents as of December 31^st, 2021, totaled $20,707.1 million vs $19,242.4 million as of December 31st, 2020.

Total debt as of December 31^st, 2021, was $1,924.0 million, compared to $2,712.1 million reported as of December 31^st, 2020.

Net cash as of December 31^st, 2021, was $18,783.1 million, compared to net cash of $16,530.3 million as of December 31^st, 2020.

CAPITAL EXPENDITURES
In millions of pesos		2021	2020	Change
		$	$	$	%
Capital Expenditures		3,500.0	2,752.3	747.7	27.2

Total CAPEX for 2021 was $3,500.0 million vs $2,752.3 million in 2020, mainly allocated toward organic growth and productivity projects across all our facilities.

STOCK INFORMATION
As of December 31, 2021
Total Shares		600,000,000
Total free float		26.75%
Market cap (millions of pesos)		$42,810
Source: Yahoo Finances

SHARE PRICE
	Mexican Stock Exchange				The New York Stock Exchange
	Ticker Symbol: Bachoco				Ticker Symbol: IBA
	In nominal pesos per Share				In U.S. Dollar per ADR
Month	High	Low	Close		High	Low	Close
December	72.74	68.29	71.35		42.54	39.46	42.54
November	73.10	70.95	71.17		42.43	39.84	39.84
October	75.53	71.72	73.02		44.36	41.70	42.45
September	77.07	73.02	75.98		47.11	43.82	44.20
August	73.90	70.47	73.45		44.24	42.17	43.75
July	78.00	72.86	72.86		47.00	43.89	43.89
June	77.89	73.93	75.27		47.60	43.93	46.32
May	77.50	74.92	76.52		46.76	44.55	46.40
April	75.39	68.04	74.73		45.47	39.73	44.47
March	69.42	67.16	68.04		40.45	38.30	39.95
February	71.99	68.02	69.42		43.19	39.67	39.67
January	73.60	69.22	69.28		44.66	41.14	41.14

ANALYST COVERAGE
Institution	Analyst name	E-mail
ACTINVER	Enrique Mendoza Farias	emendoza@actinver.com.mx
BBVA BANCOMER	Pablo Abraham Peregrina	pablo.abraham@bbva.com
GBM	Luis Rodrigo Willard Alonso	lrwillard@gbm.com
INTERCAM	Richard Horbach Martinez	rhorbach@intercam.com.mx
JP MORGAN	Ulises Argote	ulises.argote@jpmorgan.com
SANTANDER	Alanis Peña Alan	aalanis@santander.com.mx
BANK OF AMERICA	Fernando Olvera	folvera@bofa.com

APPENDICES

For reference, some figures have been translated into millions of U.S. dollars (“USD”) using an exchange rate of $20.51 per USD, which corresponds to the rate at the close of December 31^st, 2021 according to Mexico’s National Bank.

• Consolidated Statement of Financial Position
• Consolidated Statement of Income
• Consolidated Statement of Cash Flows
• Derivatives Position Report

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
-Unaudited-
		In U.S. Dollar			December 31,		December 31*,
In million pesos		2021			2021		2020*
TOTAL ASSETS		$	3,214.8		65,934.8		58,475.0
Total current assets			1,851.3		37,970.5		32,586.0
Cash and cash equivalents			1,009.6		20,707.1		19,242.4
Total accounts receivable			256.1		5,252.5		4,366.7
Inventories			445.9		9,145.6		7,701.0
Other current assets			139.7		2,865.3		1,275.9
Total non current assets			1,363.4		27,964.3		25,889.0
Net property, plant and equipment			1,061.0		21,762.0		19,733.8
Other non current Assets			302.4		6,202.3		6,155.2
TOTAL LIABILITIES		$	863.8		17,716.0		14,548.2
Total current liabilities			618.4		12,682.5		8,179.8
Notes payable to banks			93.8		1,924.0		1,251.7
Accounts payable			417.6		8,565.1		5,834.0
Other taxes payable and other accruals			106.9		2,193.3		1,094.1
Total long-term liabilities			245.4		5,033.5		6,368.4
Long-term debt			-		-		1,460.4
Other non current liabilities			58.9		1,207.8		1,033.0
Deferred income taxes			186.5		3,825.7		3,875.0
TOTAL STOCKHOLDERS' EQUITY		$	2,351.0		48,218.8		43,926.8
Capital stock			57.2		1,173.9		1,174.3
Commission in shares issued			20.2		414.1		413.4
Repurchased shares			-		-		-
Retained earnings			2,192.0		44,957.2		40,874.4
Others accounts			57.7		1,182.7		855.5
Non controlling interest			23.9		490.9		609.2
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	3,214.8		65,934.8		58,475.0
*Audited

CONSOLIDATED STATEMENT OF INCOME
Fourth Quarter Results, ended December 31st:
-Unaudited-
		U.S. Dollar
In millions pesos		2021				2021			2020*
Net sales		$	1,036.2			21,251.5			18,329.3
Cost of sales			901.4			18,488.2			14,468.2
Gross profit			134.7			2,763.3			3,861.2
SG&A			104.6			2,145.5			1,661.9
Other income (expenses), net			(5.3	)		(108.3	)		(51.3	)
Operating income			24.8			509.5			2,147.9
Net finance income			7.3			149.6			(1,154.6	)
Income tax			2.4			49.0			3.3
Net Income		$	29.7			610.2			990.0
Non-controlling interest			(1.85	)		(38.0	)		(3.8	)
Net controlling interest profit			31.60			648.2			993.8
Basic and diluted earnings per share			0.05			1.08			1.66
Basic and diluted earnings per ADR			0.63			12.97			19.88
Weighted average Shares outstanding1			599,624			599,624			599,820
EBITDA Result		$	43.0			881.7			2,455.7
Gross margin			13.0	%		13.0	%		21.1	%
Operating margin			2.4	%		2.4	%		11.7	%
Net margin			3.0	%		2.9	%		5.4	%
EBITDA margin			4.1	%		4.1	%		13.4	%
1 In thousands
* Audited

CONSOLIDATED STATEMENT OF INCOME
Annual Results
-Unaudited-
		U.S. Dollar
In millions pesos		2021				2021			2020*
Net sales		$	3,983.4			81,699.1			68,792.0
Cost of sales			3,322.7			68,147.9			57,707.6
Gross profit			660.7			13,551.2			11,084.4
Selling, general and administrative expenses			356.1			7,302.9			6,420.4
Other income (expenses), net			(17.2	)		(352.6	)		(362.5	)
Operating income			287.5			5,895.7			4,301.5
Net finance income			40.6			831.9			882.2
Income tax			86.9			1,782.2			1,211.6
Net income		$	241.1			4,945.3			3,972.1
Non-controlling interest			(6.04	)		(123.8	)		36.4
Net controlling interest profit			247.2			5,069.1			3,935.7
Basic and diluted earnings per share			0.41			8.45			6.56
Basic and diluted earnings per ADR			4.95			101.4			78.74
Weighted average Shares outstanding1			599,730			599,730			599,818
EBITDA Result		$	358.8			7,359.9			6,036.7
Gross margin			16.6	%		16.6	%		16.1	%
Operating margin			7.2	%		7.2	%		6.3	%
Net margin			6.2	%		6.1	%		5.8	%
EBITDA margin			9.0	%		9.0	%		8.8	%
1 In thousands
* Audited

CONSOLIDATED STATEMENT OF CASH FLOWS
In million of pesos
-Unaudited-
		U.S. Dollar				December 31,
		2021				2021			2020
NET MAJORITY INCOME BEFORE INCOME TAX		$	328.0			6,727.5			5,183.7
ITEMS RELATING TO INVESTING ACTIVITIES:			80.1			1,642.6			1,640.9
Depreciation and others			89.2			1,829.6			2,042.9
Income (loss) on sale of plant and equipment			6.1			125.1			13.0
Other Items			(15.2	)		(312.1	)		(414.9	)
NET CASH GENERATED FROM NET INCOME BEFORE TAXES			408.1			8,370.1			6,824.6
CASH GENERATED OR USED IN THE OPERATION:			(11.8	)		(243.0	)		(1,043.5	)
Decrease (increase) in accounts receivable			(19.4	)		(398.1	)		(322.8	)
Decrease (increase) in inventories			(89.0	)		(1,824.8	)		(638.4	)
Increase (decrease) in accounts payable			241.4			4,950.6			288.5
Other Items			(144.8	)		(2,970.7	)		(370.9	)
NET CASH FLOW FROM OPERATING ACTIVITIES			396.2			8,127.1			5,781.2
NET CASH FLOW FROM INVESTING ACTIVITIES			(129.9	)		(2,663.6	)		(1,606.8	)
Acquisition of property, plant and equipment			(170.7	)		(3,501.0	)		(2,346.4	)
Proceeds from sales of property plant and equipment			1.2			23.7			23.8
Other Items			39.7			813.7			715.8
CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES			266.4			5,463.5			4,174.4
Net cash provided by financing activities:			(195.0	)		(3,998.8	)		(4,096.8	)
Proceeds from loans			84.7			1,737.2			4,030.7
Principal payments on loans			(110.2	)		(2,261.2	)		(6,762.2	)
Dividends paid			(41.5	)		(851.6	)		(793.6	)
Other items			(127.9	)		(2,623.1	)		(571.7	)
Net increase (decrease) in cash and equivalents			71.4			1,464.7			77.6
Cash and investments at the beginning of year		$	938.2			19,242.4			19,164.8
CASH AND INVESTMENTS AT END OF PERIOD		$	1,009.6			20,707.1			19,242.4

DERIVATIVES POSITION REPORT
Fourth Quarter 2021
Thousands of Mexican Pesos, as of December 31, 2021
TYPE OF FINANCIAL INSTRUMENT	OBJECTIVE	NOTIONAL		VALUE OF THE RELATED COMMODITY								REASONABLE VALUE				AMOUNTS DUE BY YEAR	GUARANTIES REQUIRED
				4Q-2021				3Q-2021				4Q-2021		3Q-2021
Forward Vanilla	Hedge	$	11,238	$	20.51			$	20.64			$	-128	$	63,580	100% in 2022	The deals consider the possibility of margin calls but not another kind of guarantee
Futures for corn, soybean meal and soybean oil	Hedge	$	149,102	CORN				CORN				$	4,175	-$	3,890	100% in 2022
				In USD per Bushel				In USD per Bushel
				month		price		month		price
				Mar-22		$	5.933	Dec-21		$	5.368
				Sep-22		$	5.628	Mar-22		$	5.445
				SOYBEAN MEAL				SOYBEAN MEAL
				In USD per ton				In USD per ton
				month		price		month		price
								Dec-21		$	328.7
								Jan-22		$	331.0
				Mar-22		$	399.1	Mar-22		$	333.4
				May-22		$	397.1	May-22		$	337.1
				Jul-22		$	397.6	Jul-22		$	340.5
				Aug-22		$	394.6	Aug-22		$	341.4
				Sep-22		$	388.0	Sep-22		$	341.3
				Oct-22		$	380.2	Oct-22		$	339.1
				Dec-22		$	380.0	Dec-22		$	340.3
				SOYBEAN OIL
				In US cents per pound
				Month		Price
				Mar-22		$	56.53
Options of Corn	Hedge	$	1,825	CORN				CORN				$	340	$	23,350	100% in 2022
				In USD per Bushel				In USD per Bushel
				month		price		month		price
								Dec-21		$	5.368
				Mar-22		$	5.933	Mar-22		$	5.445
Options of soybean meal	Hedge	$	44,959	SOYBEAN MEAL				SOYBEAN MEAL				$	3,949	-$	21,390	100% in 2022
				In USD per ton				In USD per ton
				month		price		month		price
								Oct-21		$	343.1
								Dec-21		$	328.7
								Jan-22		$	331.0
				Mar-22		$	399.1	Mar-22		$	333.4
				May-22		$	397.1	May-22		$	337.1
-The total financial instruments do not exceed 5% of total assets as of December 31, 2021.
-The notional value represents the net position as of December 31, 2021 at the exchange rate of Ps.20.51 per one dollar.
-A negative value means an unfavorable effect for the Company.

Fourth Quarter 2021
Thousands of Mexican Pesos, as of December 31, 2021														PROBABLE SCENARIO
TYPE OF FINANCIAL INSTRUMENT	REASONABLE VALUE		VALUE OF THE RELATED COMMODITY						EFFECT ON THE INCOME STATEMENT	EFFECT ON THE CASH FLOW(3)
			Reference Value (1)
			-2.5%		2.5%		5.0%			-2.5%		2.5%		5.0%
Forward Vanilla	-$	128	$	20.00	$	21.02	$	21.54	Direct	-$	5,889	$	5,634	$	11,396
			-5%		5%		10%			-5%		5%		10%
Futures of Corn: (2)	$	4,175	$	5.636	$	6.229	$	6.526	The effect will materialize as the inventory is consumed	-$	3,280	$	11,630	$	19,085
Futures of Soybean Meal: (2)			$	379.1	$	419.1	$	439.0
Futures for Soy Oil (2)			$	53.7	$	59.4	$	62.2
Options for Corn	$	340	$	5.636	$	6.229	$	6.526		$	249	$	431	$	522
Options of Soybean Meal	$	3,949	$	379.1	$	419.1	$	439.0		$	1,701	$	6,197	$	8,445
(1) The reference value is the exchange rate of Ps. $20.51 per USD as of December 31, 2021.
(2) The reference values are; the future of corn for March 2022, $5.9325 USD/bushel, the future of soybeanmeal for March 2022, $399.10USD/ton and the future of soybean oil for March 2022, $56.53 usd cts / pound
'All the evaluations are performed according with the corresponding future, here only the first month futures are shown.
(3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown.
-A negative value means an unfavorable effect for the Company.

Fourth Quarter 2021
Thousands of Mexican Pesos, as of December 31, 2021										STRESS SCENARIO
TYPE OF FINANCIAL INSTRUMENT	REASONABLE VALUE	VALUE OF THE RELATED COMMODITY				EFFECT ON THE INCOME STATEMENT	EFFECT ON THE CASH FLOW
		Reference Value
		-50%	-25%	25%	50%		-50%	-25%	25%	50%
Forward Vanilla	-$128	$10.26	$15.38	$25.64	$30.77	Direct	-$115,362	-$57,745	$57,490	$115,107

CONFERENCE CALL INFORMATION

The Company will host its fourth quarter 2021 earnings call, on Friday, February 4^th, 2022. The earnings call will take place at 11:00 am Central Time (12:00 pm ET).

Toll free in the U.S.: 1 (888) 771-4371
Toll free in Mexico: 001 866 779 0965

A current list of available local and international free phone telephone numbers:
http://web.meetme.net/r.aspx?p=12&a=UfuOzYSxaaXZLN

Confirmation Number: 50274535

COMPANY DESCRIPTION

Industrias Bachoco is the leader in the Mexican poultry industry, and one of the largest poultry producers globally. The Company was founded in 1952, and became a public company in 1997, via a public offering of shares on the Mexican and The New York Stock Exchange. Bachoco is a vertically integrated company headquartered in Celaya, Guanajuato located in Central Mexico. Its main business lines are: chicken, eggs, balanced feed, swine, and turkey and beef value-added products. Bachoco owns and manages more than a thousand facilities, organized in nine production complexes and 80 distribution centers in Mexico, and a production complex in the United States. Currently the Company employs more than 29,000 people.

The Company is rated AAA (MEX), the highest rating awarded by Fitch Mexico, S.A. de C.V., and HR AAA which signals that the Company and the offering both have the highest credit quality by HR Ratings de Mexico S.A. de C.V.

DISCLAIMER

The document contains certain information that could be considered forward looking statements concerning anticipated future events and performance of the Company. The statements reflect management’s current beliefs based on information currently available and are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in our Annual Information Form, which could cause our actual results to differ materially from the forward-looking statements contained in this document. Those risks and uncertainties include risks associated with ownership in the poultry industry, competition for investments within the poultry industry, shareholder liability, governmental regulation, and environmental matters. As a result, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Industrias Bachoco, S.A.B. de C.V., undertakes no obligation to publicly update or revise any forward-looking statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220203005288/en/

IR contact information:

Maria Guadalupe Jaquez

maria.jaquez@bachoco.net

Andrea Guerrero

andrea.guerrero@bachoco.net

T. +52(461)618 3555

Source: Industrias Bachoco, S.A.B. de C.V.

FAQ

What were Bachoco's total net sales for 4Q21?

Bachoco's net sales for 4Q21 totaled $21,251.5 million.

How did Bachoco's earnings per share change in 4Q21?

Earnings per share for 4Q21 were $1.08, down from $1.66 in 4Q20.

What is the EBITDA margin for Bachoco in 4Q21?

The EBITDA margin for Bachoco in 4Q21 was 4.1%.

What challenges did Bachoco face in 2021?

Bachoco faced challenges with rising commodity prices, which increased the cost of sales.

What was the net income for Bachoco in 4Q21?

Bachoco reported a net income of $648.2 million for 4Q21.