Industrias Bachoco Announces Fourth Quarter and Full Year 2022 Results

Rhea-AI Summary

Industrias Bachoco (NYSE: IBA) reported its unaudited financial results for 4Q22 and full year 2022. Net sales for 4Q22 rose by 11.2% to $23,633.8 million, and full-year sales increased by 21.0% to $98,890.7 million. However, the company faced challenges, with 4Q22 EBITDA margin decreasing to 2.9% from 4.0% in 4Q21. Despite a strong first half, rising raw material costs and increased SG&A expenses led to a significant drop in operating income by 38.7% compared to the previous year. Net income for the quarter fell to $58 million, down 90.3% year-over-year, resulting in an earnings per share of $0.13.

Positive

• Net sales increased 11.2% in 4Q22 and 21.0% for full year 2022.
• EBITDA for full year 2022 reached $9,916.2 million, up 35.3% from 2021.

Negative

• Operating income decreased by 38.7% to $306.6 million in 4Q22.
• Net income for 4Q22 was $58 million, a 90.3% decline from the previous year.

CELAYA, Mexico & GUANAJUATO, 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 (“4Q22”) and full year (“2022”) ending on December 31^st, 2022. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”) and are presented in nominal million Mexican Pesos (“$”).

HIGHLIGHTS 2022

• Net sales increased 11.2% in 4Q22 and increased 21.0% in year 2022 vs equivalent periods of 2021 respectively.
• EBITDA margin was 2.9% for 4Q22 and 10.0% for the whole year.
• Earnings per basic and diluted share totaled $0.13 for the quarter and $10.26 for the year.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: “It is known that the last quarter of the year is usually a challenging period, and 4Q22 was not the exception.

We kept observing high raw material prices compared to 2021 which had a negative impact in our cost of sales. Even when we had been able to partially offset some of that increase thru pricing, seasonal conditions on our markets, lowered our margins to profitability levels below 4Q21 range.

On the other hand, for 4Q22 our SG&A increased 12.1% vs 4Q21 showing the impacts of higher fuel, energy and labor costs.

As a result, in 4Q22 we reported an operating income of $306.6 million, 38.7% lower than the $500.2 million achieved in the same period of 2021. With operating margins of 1.3% and 2.4% respectively. In terms of EBITDA margin this put us in a 2.9% for 4Q22 vs the 4.0% of 4Q21.

For the full year of 2022, the balance was good. With a very strong first half of the year, we managed to achieve and EBITDA of $9,916.2 million (10.0% margin) which is 35.3% higher compared to the $7,328.2 million (9.0% margin) obtained in 2021.

As mentioned before, increases on raw material prices raised our working capital and put pressure on our Free Cash Flow. However, our financial discipline allowed us to end 2022 still with a solid structure reporting a net cash position of $15,857.4 million vs the $16,530.3 million reported in 2021.

Our CAPEX for 2022 were $4,666.2 million, a 34.1% increase vs 2021. Investments were oriented to our organic growth, and the integration of RYC Alimentos.

We continue to be very focused on capturing efficiencies across all our processes and being close to better serve our customers as we know this is key for our growth."

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		4Q22	4Q21	Change
		$	$	$	%
Net Sales		23,633.8	21,251.5	2,382.3	11.2
Net sales in Mexico		17,734.3	15,807.8	1,926.5	12.2
Net sales in the U.S.		5,899.5	5,443.8	455.7	8.4

NET SALES BY SEGMENT
In millions of pesos		4Q22	4Q21	Change
		$	$	$	%
Net Sales		23,633.8	21,251.5	2,382.3	11.2
Poultry		20,000.6	18,727.7	1,272.9	6.8
Other		3,633.2	2,523.8	1,109.4	44.0

NET VOLUME SOLD BY SEGMENT
In tons				Change
		4Q22	4Q21	Volume	%
Total sales volume:		591,687	605,925	(14,238.0)	(2.3)
Poultry		452,003	467,942	(15,939.1)	(3.4)
Others		139,684	137,983	1,701.1	1.2

The Company’s 4Q22 net sales totaled $23,633.8 million; $2,382.3 million or 11.2% more than $21,251.5 million reported in 4Q21. The increase is a result of higher volume sold in Other and higher prices in our main business lines as part of our strategy for offsetting the increases on cost of sales.

In 4Q22, sales of our U.S. operations represented 25.0% of our total sales compared to 25.6% in 4Q21.

GROSS PROFIT
In millions of pesos		4Q22	4Q21	Change
		$	$	$	%
Cost of sales		21,089.3	18,670.6	2,418.7	13.0
Gross profit		2,544.5	2,580.9	(36.4)	(1.4)
Gross margin		10.8%	12.1%	-	-

In 4Q22 , cost of sales was $21,089.3 million; $2,418.7 million or 13.0% higher than $18,670.6 million reported in 4Q21. 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 4Q22 was $2,544.5 million, 1.4% lower than the gross profit of $2,580.9 million in 4Q21, with a gross margin of 10.8% for 4Q22 vs 12.1% in 4Q21.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (“SG&A”)
In millions of pesos		4Q22	4Q21	Change
		$	$	$	%
Total SG&A		2,243.8	2,002.2	241.6	12.1

Total SG&A expenses in 4Q22 were $2,243.8 million; $241.6 million higher than the $2,002.2 million reported in 4Q21. Total SG&A expenses as a percentage of net sales represented 9.5% in 4Q22 and 9.4% in 4Q21.

OTHER INCOME (EXPENSE), NET
In millions of pesos		4Q22	4Q21	Change
		$	$	$	%
Other income (expense), net		5.9	(78.5)	84.4	(107.5)

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.

OPERATING INCOME
In millions of pesos		4Q22	4Q21	Change
		$	$	$	%
Operating income		306.6	500.2	(193.6)	(38.7)
Operating margin		1.3%	2.4%	-	-

Operating income in 4Q22 totaled $306.6 million; $193.6 million lower than the Operating income of $500.2 million reported in 4Q21. This represents an operating margin of 1.3% for 4Q22, versus 2.4% operating margin in the same period of 2021. The decrease in operating income is mainly attributed to higher raw material costs and higher SG&A.

NET FINANCIAL INCOME
In millions of pesos		4Q22	4Q21	Change
		$	$	$	%
Net Financial Income		(359.3)	167.6	(526.9)	(314.3)
Financial Income		495.7	204.2	291.4	142.7
Financial Expense		855.0	36.6	818.4	2,235.4

In 4Q22, the Company reported net financial expenses of $359.3 million, compared to a net financial income of $167.6 million reported in the same period of 2021. From the $855.0 million of Financial Expenses, $465.5 million are a result of exchange rate valuation.

TAXES FOR THE PERIOD
In millions of pesos		4Q22	4Q21	Change
		$	$	$	%
Total Taxes		(110.7)	72.7	(183.4)	(252.2)
Income tax		498.3	736.6	(238.3)	(32.4)
Deferred income tax		(609.0)	(663.9)	54.9	(8.3)

Total taxes for the 4Q22 were a credit of $110.7 million, compared with total taxes of $72.7 million charged for the same period of 2021. This was a result of lower income before taxes for the 4Q22.

NET CONTROLLING INTEREST INCOME
In millions of pesos		4Q22	4Q21	Change
		$	$	$	%
Net income		58.0	595.1	(537.1)	(90.3)
Net margin		0.2%	2.8%	-	-
Non-Controlling Interest income		(21.5)	(45.7)	24.2	n/a
Net controlling interest income		79.5	640.8	(561.3)	n/a
Basic and diluted income per share1		0.13	1.07	(0.9)	n/a
Basic and diluted income per ADR2		1.59	12.82	(11.2)	n/a
Weighted average Shares outstanding3		599,380	599,624	-	-
1 In pesos
2 in pesos, one ADR equals to twelve shares
3 In thousands of shares

The net controlling interest income for 4Q22 was $79.5 million, representing $0.13 pesos of earnings per share, compared with a net controlling interest income of $640.8 million, which represented a $1.07 pesos of earnings per share in 4Q21. This decrease is mainly attributed to lower operating results and higher financial expenses.

EBITDA
In millions of pesos		4Q22	4Q21	Change
		$	$	$	%
Net controlling interest income		79.5	640.8	(561.3)	(87.6)
Income tax expense (benefit)		(110.7)	72.7	(183.4)	(252.2)
Result in associates		(21.5)	(45.7)	24.2	(53.0)
Net finance (income) expense		359.3	(167.6)	526.9	(314.3)
Depreciation and amortization		388.0	349.7	38.2	10.9
EBITDA		694.6	850.0	(155.4)	(18.3)
EBITDA Margin (%)		2.9%	4.0%	-	-
Net revenues		23,633.8	21,251.5	2,382.3	11.2

EBITDA in 4Q22 reached $694.6 million representing an EBITDA margin of 2.9%, compared to an EBITDA of $850.0 million in 4Q21, with an EBITDA margin of 4.0%.

ACCUMULATED RESULTS

NET SALES BY GEOGRAPHY
In millions of pesos		2022	2021	Change
		$	$	$	%
Net Sales		98,890.7	81,699.1	17,191.6	21.0
Net sales in Mexico		73,653.2	61,338.5	12,314.8	20.1
Net sales in the U.S.		25,237.4	20,360.6	4,876.8	24.0

NET SALES BY SEGMENT
In millions of pesos		2022	2021	Change
		$	$	$	%
Net Sales		98,890.7	81,699.1	17,191.6	21.0
Poultry		84,373.5	71,647.7	12,725.7	17.8
Other		14,517.2	10,051.3	4,465.9	44.4

NET VOLUME SOLD BY SEGMENT
In metric tons				Change
		2022	2021	Volume	%
Total sales volume:		2,358,390	2,318,049	40,340.1	1.7
Poultry		1,764,623	1,769,071	(4,448.7)	(0.3)
Others		593,767	548,978	44,788.8	8.2

In 2022, net sales totaled $98,890.7 million; $17,191.6 million or 21.0% more than the $81,699.1 million reported in the same period of 2021.

In 2022, sales of our U.S. operations represented 25.5% of our total sales, compared with 24.9% in 2021.

OPERATING RESULTS
In millions of pesos		2022	2021	Change
		$	$	$	%
Cost of Sales		82,038.0	68,356.7	13,681.3	20.0
Gross Profit		16,852.7	13,342.4	3,510.3	26.3
Total SG&A		8,480.4	7,133.3	1,347.2	18.9
Other Income (expense)		38.8	(322.8)	361.5	(112.0)
Operating Income		8,411.0	5,886.4	2,524.6	42.9
Net Financial Income		(320.7)	849.9	(1,170.5)	(137.7)
Income Tax		2,007.2	1,806.0	201.2	11.1
Net Income		6,083.1	4,930.3	1,152.8	23.4
Non-controlling interest		(69.1)	(131.5)	62.3	(47.4)
Net controlling interest Income		6,152.2	5,061.7	1,090.5	21.5

In the 2022, the cost of sales totaled $82,038.0 million; $13,681.3 million or 20.0% higher than $68,356.7 million reported in the 2021.

As a result, we reached a gross profit of $16,852.7 million and a gross margin of 17.0% in 2022, when compared to $13,342.4 million of gross profit and a gross margin of 16.3% reached in the same period of 2021.

Total SG&A in 2022 were $8,480.4 million; $1,347.2 million or 18.9% higher than the $7,133.3 million reported in 2021. Total SG&A expenses as a percentage of net sales represented 8.6% in 2022 and 8.7% in 2021.

In 2022 we had other income of $38.8 million, compared with other expenses of $322.8 million reported in 2021.

Operating income in 2022 was $8,411.0 million, which represents an operating margin of 8.5%, an increase from an operating income of $5,886.4 million with an operating margin of 7.2% in 2021.

We had Net financial expenses in 2022 of $320.7 million which compares to a Net financial income of $849.9 million in 2021.

Total taxes were $2,007.2 million as of December 31^st, 2022. These include $1,667.4 million of income tax and $339.9 million of deferred income taxes. Those figures compare to an income tax of $1,790.6 million and deferred income taxes of $15.4 million in 2021.

After Non-controlling interest, all the above resulted in a Net controlling interest income of $6,152.2 million or 6.2% margin in 2022, which represents $10.26 pesos of earnings per share; while in the 2021 the Net controlling interest income totaled $5,061.7 million, 5.1% margin and $8.44 pesos of income per share.

EBITDA
In millions of pesos		2022	2021	Change
		$	$	$	%
Net controlling interest profit		6,152.2	5,061.7	1,090.5	21.5
Income tax expense (benefit)		2,007.2	1,806.0	201.2	11.1
Result in associates		(69.1)	(131.5)	62.3	(47.4)
Net finance (income) expense		320.7	(849.9)	1,170.5	(137.7)
Depreciation and amortization		1,505.2	1,441.8	63.4	4.4
EBITDA		9,916.2	7,328.2	2,588.0	35.3
EBITDA Margin (%)		10.0%	9.0%	-	-
Net revenues		98,890.7	81,699.1	17,191.6	21.0

EBITDA in 2022 reached $9,916.2 million, representing an EBITDA margin of 10.0%, compared to an EBITDA of $7,328.2 million in 2021, with an EBITDA margin of 9.0%.

BALANCE SHEET

BALANCE SHEET DATA
In millions of pesos		Dec. 31, 2022	Dec. 31, 2021	Change
		$	$	$	%
TOTAL ASSETS		72,236.1	65,988.8	6,247.3	9.5
Cash and cash equivalents		20,049.5	20,777.0	(727.5)	(3.5)
Accounts receivable		5,860.8	5,108.5	752.4	14.7
TOTAL LIABILITIES		19,193.0	17,704.7	1,488.3	8.4
Accounts payable		6,841.2	10,200.7	(3,359.4)	(32.9)
Short-term debt		1,181.5	1,993.9	(812.4)	(40.7)
Long-term debt		3,010.5	-	3,010.5	-
TOTAL STOCKHOLDERS’ EQUITY		53,043.0	48,284.1	4,759.0	9.9
Capital stock		1,174.4	1,174.4	(0.0)	(0.0)

Cash and equivalents as of December 31^st, 2022, totaled $20,049.5 million vs $20,777.0 million as of December 31st, 2021.

Total debt as of December 31^st, 2022, was $4,192.0 million, compared to $1,993.9 million reported as of December 31^st, 2021.

Net cash as of December 31^st, 2022, was $15,857.4 million, compared to net cash of $18,783.1 million as of December 31^st, 2021.

CAPITAL EXPENDITURES
In millions of pesos		2022	2021	Change
		$	$	$	%
Capital Expenditures		4,666.2	3,479.5	1,186.7	34.1

Total CAPEX for 2022 was $4,666.2 million vs $3,479.5 million in 2021, mainly allocated toward organic growth and productivity projects across all our facilities.

STOCK INFORMATION
As of December 31, 2022
Total Shares		600,000,000
Total free float		12.32%
Market cap (millions of pesos)		$50,706
Source: Yahoo Finances

SHARE PRICE

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	84.51	81.66	84.51		51.03	48.97	50.99
November	86.31	80.84	82.64		53.44	49.17	51.11
October	81.40	77.77	80.91		49.06	46.25	49.06
September	80.00	76.81	77.86		48.13	45.78	46.03
August	79.98	75.34	79.97		48.05	43.97	47.33
July	76.56	69.97	76.56		45.18	40.56	45.18
June	76.90	68.56	72.43		47.25	39.70	43.35
May	78.17	76.03	76.27		47.09	44.75	46.86
April	77.83	74.96	77.83		46.64	44.42	45.78
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
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	Alan Alanis Peña	aalanis@santander.com.mx

APPENDICES

For reference, some figures have been translated into millions of U.S. dollars (“USD”) using an exchange rate of $19.51 per USD, which corresponds to the rate at the close of December 31^st, 2022 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		2022				2022			2021*
TOTAL ASSETS		$	3,702.5			72,236.1			65,988.8
Total current assets			2,047.9			39,955.0			37,845.6
Cash and cash equivalents			1,027.7			20,049.5			20,777.0
Total accounts receivable			300.4			5,860.8			5,108.5
Inventories			595.0			11,607.6			9,145.6
Other current assets			124.9			2,437.1			2,814.6
Total non current assets			1,654.6			32,280.5			28,143.2
Net property, plant and equipment			1,263.0			24,640.5			21,763.4
Other non current Assets			391.6			7,640.0			6,379.8
TOTAL LIABILITIES		$	983.8			19,193.0			17,704.7
Total current liabilities			541.2			10,558.4			12,835.3
Notes payable to banks			60.6			1,181.5			1,993.9
Accounts payable			350.7			6,841.2			10,200.7
Other taxes payable and other accruals			130.0			2,535.7			640.7
Total long-term liabilities			442.6			8,634.6			4,869.4
Long-term debt			154.3			3,010.5			-
Other non current liabilities			50.1			976.5			1,027.9
Deferred income taxes			238.2			4,647.5			3,841.5
TOTAL STOCKHOLDERS' EQUITY		$	2,718.8			53,043.0			48,284.1
Capital stock			60.2			1,174.4			1,174.4
Commission in shares issued			21.2			414.1			414.1
Repurchased shares			-			-			-
Retained earnings			2,573.1			50,201.5			45,038.6
Others accounts			43.4			846.3			1,179.2
Non controlling interest			20.8			406.7			477.7
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	3,702.5			72,236.1			65,988.8
*Audited

CONSOLIDATED STATEMENT OF INCOME
Fourth Quarter Results, ended December 31st:
-Unaudited-
		U.S. Dollar
In millions pesos		2022				2022			2021*
Net sales		$	1,211.4			23,633.8			21,251.5
Cost of sales			1,080.9			21,089.3			18,670.6
Gross profit			130.4			2,544.5			2,580.9
SG&A			115.0			2,243.8			2,002.2
Other income (expenses), net			0.3			5.9			(78.5	)
Operating income			15.7			306.6			500.2
Net finance income			(18.4	)		(359.3	)		167.6
Income tax			(5.7	)		(110.7	)		72.7
Net Income		$	3.0			58.0			595.1
Non-controlling interest			(1.10	)		(21.5	)		(45.7	)
Net controlling interest profit			4.07			79.5			640.8
Basic and diluted earnings per share			0.01			0.13			1.07
Basic and diluted earnings per ADR			0.08			1.59			12.82
Weighted average Shares outstanding1			599,380			599,380			599,624
EBITDA Result		$	35.6			694.6			850.0
Gross margin			10.8	%		10.8	%		12.1	%
Operating margin			1.3	%		1.3	%		2.4	%
Net margin			0.3	%		0.2	%		2.8	%
EBITDA margin			2.9	%		2.9	%		4.0	%
1 In thousands
* Audited
CONSOLIDATED STATEMENT OF INCOME
Annual Results
-Unaudited-
		U.S. Dollar
In millions pesos		2022				2022			2021*
Net sales		$	5,068.7			98,890.7			81,699.1
Cost of sales			4,204.9			82,038.0			68,356.7
Gross profit			863.8			16,852.7			13,342.4
Selling, general and administrative expenses			434.7			8,480.4			7,133.3
Other income (expenses), net			2.0			38.8			(322.8	)
Operating income			431.1			8,411.0			5,886.4
Net finance income			(16.44	)		(320.7	)		849.88
Income tax			102.9			2,007.2			1,806.0
Net income		$	311.8			6,083.1			4,930.3
Non-controlling interest			(3.54	)		(69.1	)		(131.5	)
Net controlling interest profit			315.3			6,152.2			5,061.7
Basic and diluted earnings per share			0.53			10.26			8.44
Basic and diluted earnings per ADR			6.31			123.2			101.28
Weighted average Shares outstanding1			599,380			599,380			599,730
EBITDA Result		$	508.3			9,916.2			7,328.2
Gross margin			17.0	%		17.0	%		16.3	%
Operating margin			8.5	%		8.5	%		7.2	%
Net margin			6.2	%		6.2	%		6.0	%
EBITDA margin			10.0	%		10.0	%		9.0	%
1 In thousands
* Audited

CONSOLIDATED STATEMENT OF CASH FLOWS
In million of pesos
-Unaudited-
		U.S. Dollar				December 31,
		2022				2022			2021*
NET MAJORITY INCOME BEFORE INCOME TAX		$	414.7			8,090.3			6,737.9
ITEMS RELATING TO INVESTING ACTIVITIES:			85.4			1,666.8			1,570.9
Depreciation and others			98.2			1,915.1			1,807.2
Income (loss) on sale of plant and equipment			3.5			69.1			95.3
Other Items			(16.3	)		(317.4	)		(331.6	)
NET CASH GENERATED FROM NET INCOME BEFORE TAXES			500.1			9,757.1			8,308.8
CASH GENERATED OR USED IN THE OPERATION:			(202.6	)		(3,952.1	)		(120.1	)
Decrease (increase) in accounts receivable			(36.1	)		(704.6	)		(811.6	)
Decrease (increase) in inventories			(145.4	)		(2,836.0	)		(732.3	)
Increase (decrease) in accounts payable			(127.6	)		(2,490.1	)		3,988.3
Other Items			106.5			2,078.6			(2,564.5	)
NET CASH FLOW FROM OPERATING ACTIVITIES			297.5			5,805.0			8,188.7
NET CASH FLOW FROM INVESTING ACTIVITIES			(215.9	)		(4,211.8	)		(2,382.7	)
Acquisition of property, plant and equipment			(238.2	)		(4,647.7	)		(3,479.5	)
Proceeds from sales of property plant and equipment			4.3			83.3			29.8
Other Items			18.1			352.5			1,067.1
CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES			81.7			1,593.2			5,806.0
Net cash provided by financing activities:			(115.4	)		(2,250.8	)		(4,341.3	)
Proceeds from loans			239.7			4,676.0			1,709.1
Principal payments on loans			(127.0	)		(2,477.9	)		(2,267.3	)
Dividends paid			(50.4	)		(983.0	)		(853.6	)
Other items			(177.7	)		(3,466.0	)		(2,929.5	)
Net increase (decrease) in cash and equivalents			(33.7	)		(657.7	)		1,464.7
Cash and investments at the beginning of year		$	1,061.4			20,707.1			19,242.4
CASH AND INVESTMENTS AT END OF PERIOD		$	1,027.7			20,049.5			20,707.1
*Audited

DERIVATIVES POSITION REPORT

Fourth Quarter 2022
Thousands of Mexican Pesos, as of December 31, 2022
TYPE OF FINANCIAL INSTRUMENT	OBJECTIVE	NOTIONAL		VALUE OF THE RELATED COMMODITY								REASONABLE VALUE				AMOUNTS DUE BY YEAR	GUARANTIES REQUIRED
				4Q-2022				3Q-2022				4Q-2022		3Q-2022
Forward Vanilla y KO Fwd	Hedge	$	190,950	$	19.51			$	20.13			$	-136,757	$	-48,982	95% in 2023 and 5% in 2024	The deals consider the possibility of margin calls but not another kind of guarantee
Futures for corn, soybean meal, soybean oil and natural gas	Hedge	$	442,441	CORN				CORN				$	16,178	$	12,462	100% in 2023
				In USD per Bushel				In USD per Bushel
				month		price		month		price
				Mar-23		$	6.785
				May-23		$	6.780
				Jul-23		$	6.718
				Sep-23		$	6.270
				Dec-23		$	6.108	Dec-22		$	6.775
				SOYBEAN MEAL				SOYBEAN MEAL
				In USD per ton				In USD per ton
				month		price		month		price
				Mar-23		$	471.0
				May-23		$	461.0
				Jul-23		$	454.3
				Aug-23		$	443.1
				Sep-23		$	428.2
				Oct-23		$	413.6
				Dec-23		$	411.6	Dec-22		$	403.0
				SOYBEAN OIL				SOYBEAN OIL
				In US cents per pound				In US cents per pound
				Month		Price		Month		Price
				Mar-23		$	64.07
				May-23		$	63.94
				Jul-23		$	63.56	Dec-22		$	61.56
				NATURAL GAS				NATURAL GAS
				In USD/MM BTU				In USD/MM BTU
				Month		Price		Month		Price
								Nov-22		$	6.77
								Dec-22		$	7.07
								Jan-23		$	7.25
				Feb-23		$	4.475	Feb-23		$	6.94
Options of Corn	Hedge	$	890,801	CORN				CORN				$	25,296	$	37,181	95% in 2023 and 5% in 2024
				In USD per Bushel				In USD per Bushel
				month		price		month		price
				Mar-23		$	6.785
				May-23		$	6.780
				Jul-23		$	6.718
				Sep-23		$	6.270
				Dec-23		$	6.108	Dec-22		$	6.775
				Mar-24		$	6.180	Mar-23		$	6.840
Options of soybean meal	Hedge	$	950,696	SOYBEAN MEAL				SOYBEAN MEAL				$	109,976	$	12,013	89% in 2023 and 11% in 2024
				In USD per ton				In USD per ton
				month		price		month		price
				Mar-23		$	471.0
				May-23		$	461.0
				Jul-23		$	454.3
				Aug-23		$	443.1
				Sep-23		$	428.2
				Oct-23		$	413.6	Dec-22		$	403.0
				Dec-23		$	411.6	Jan-23		$	401.3
				Jan-24		$	408.8	Mar-23		$	397.2
				Mar-24		$	402.9	May-23		$	395.0
Options of Soybean oil	Hedge	-$	3,750	SOYBEAN OIL								$	-	$	-	100% in 2023
				In US cents per pound
				Mes		Precio
				Feb-23		$	64.07
-The total financial instruments do not exceed 5% of total assets as of December 31, 2022.
-The notional value represents the net position as of December 31, 2022 at the exchange rate of Ps.19.51 per one dollar.
-A negative value means an unfavorable effect for the Company.

Fourth Quarter 2022
Thousands of Mexican Pesos, as of December 31, 2022														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 y KO Fwd	-$	136,757		$	19.02		$	20.00		$	20.48		Direct	-$	229,887		-$	43,623		$	49,506
					-5	%		5	%		10	%			-5	%		5	%		10	%
Futures of Corn: (2)	$	16,178		$	6.45		$	7.12		$	7.46		The effect will materialize as the inventory is consumed	-$	5,945		$	38,301		$	60,424
Futures of Soybean Meal: (2)				$	447.5		$	494.6		$	518.1
Futures for Soy Oil (2)				$	60.9		$	67.3		$	70.5
Futures for Natural Gas (2)				$	4.3		$	4.7		$	4.9
Options for Corn	$	25,296		$	6.45		$	7.12		$	7.46			-$	16,930		$	67,521		$	109,747
Options of Soybean Meal	$	109,976		$	447.5		$	494.6		$	518.1			$	62,438		$	157,513		$	205,050
Options of Soybean Oil	$	-		$	60.87		$	67.27		$	70.48			$	125		$	-		$	-
(1) The reference value is the exchange rate of Ps. $19.51 per USD as of December 31, 2022.
(2) The reference values are: future of corn Mar 2023, $6.7850 USD/bushel, the future of soybean meal Mar 2023, $471.00 USD/ton, the future of soybean oil Mar 2023, $64.07 usd cts / pound and the future of natural gas Feb 2023, $4.48 usd/ MM BTU.
'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 2022
Thousands of Mexican Pesos, as of December 31, 2022																	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 y KO Fwd	-$	136,757		$	9.75		$	14.63		$	24.39		$	29.26		Direct	-$	1,999,432		-$	1,068,092		$	547,632		$	1,228,504

CONFERENCE CALL INFORMATION

The Company will host its fourth quarter 2022 earnings call, on Friday, February 10^th, 2023. The earnings call will take place at 11:00 am Central Time (12:00 pm ET).

Mexico (Main number):						55 4742 9168
Mexico (Altern number):						55 4742 9169
USA/ Canada:						+1 (888) 207 2216
International:						+1 (800) 750 9038
Access Code: 2603

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 32,000 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/20230209005511/en/

IR contact information:

maria.jaquez@bachoco.net

andrea.guerrero@bachoco.net

T. +52(461)618 3555

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

FAQ

What were the net sales figures for Industrias Bachoco in 4Q22?

Industrias Bachoco reported net sales of $23,633.8 million for 4Q22, an increase of 11.2% compared to 4Q21.

How did the EBITDA margin change for IBA in 4Q22?

The EBITDA margin for IBA in 4Q22 was 2.9%, down from 4.0% in the same quarter of the previous year.

What was the net income for IBA in 4Q22?

The net income for IBA in 4Q22 was $58 million, a decrease of 90.3% year-over-year.

How much did IBA's operating income drop in 4Q22?

Operating income for IBA fell by 38.7% to $306.6 million in 4Q22.

What was the earnings per share for IBA in 4Q22?

Earnings per share for IBA in 4Q22 were $0.13.