corporate - alfamarket 16 • 2014 revenues of u.s. $5,359 million • more than 1.4 million...

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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 © 2015 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 PRESENTATION Update: August 3 rd , 2015

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Page 1: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

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 © 2015 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

PRESENTATION

Update: August 3rd, 2015

Page 2: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Established in

1974 — Roots go back to XIX century

2

2014 Results

Revenues (U.S. $ Billions) $17.2

EBITDA (U.S. $ Billions) $2.0

Capex (U.S. $ Millions) $1,426*

Net Debt/EBITDA 2.5 times

Interest Coverage 6.0 times

* Including acquisitions

Page 3: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

ALFA participates

in key areas of the economy

3

434

636

714

170 120 21%

34%

31%

8% 6%

6.5

5.4

4.6

0.4 0.2

38%

27%

32%

2% 1%

REVENUES 2014 (U.S. $ 17.2 BillIon)

EBITDA 2014 (U.S. $ 2.0 Billion)

NEWPEK Hydrocarbons

NEMAK Aluminum Auto Parts

ALESTRA IT + Telecom

ALPEK Petrochemicals

BREAKDOWN BY BUSINESS GROUP

SIGMA Refrigerated Foods

Page 4: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Ownership

4

1: Alpek is a public company since April 2012. Market float is 18% 2: Nemak is a public company since July 2015. Ford Motor Co. owns 5.4% of Nemak and market float is 19.3%.

82%1 75%2

100% 100% 100%

Page 5: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Global footprint

5 5

Production facilities in 25 countries

~65% of sales outside Mexico

More than 70,000 employees

Page 6: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Focused on long-term value creation

6

0.6 0.8 0.8

1.0 1.0 1.1 1.3

1.7 1.9 1.9 2.0

04 05 06 07 08 09 10 11 12 13 14

5.1 6.2

6.9

9.6 10.6

8.5

10.8

14.7 15.2 15.9 17.2

04 05 06 07 08 09 10 11 12 13 14

EBITDA (U.S. $ Billions)

Revenues (U.S. $ Billions)

Page 7: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

7

Page 8: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

One of the world’s largest integrated

polyester groups

8

• 2014 Revenues of

U.S. $6,470 million

• Production facilities in key geographic areas:

– North America: the biggest market for beverages

– Availability of low-cost raw materials

– Logistics

Cedar Creek, N.C. Cooper River, S.C. Columbia, S.C. Pearl River, MS

Monterrey, N.L. Altamira, Tamps. Salamanca, Gto. Ocotlan, Jalisco

Lerma, Edo. Mexico Cosoleacaque, Ver.

Pacheco, Arg. General Lagos, Arg. Zarate, Arg.

Guaratingueta, Bra.

Santiago, Chile Puerto Montt, Chile

Page 9: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

PP

EPS

Business Segments

Polyester Chain

Plastics and Chemicals

PTA

PET

Polyester Fibers

CPL

Fertilizers and others chemicals

PRODUCTS SAMPLE OF END-USES

9

2014 Revenues

U.S. $4,752 Million

(73%)

2014 EBITDA

U.S. $270 Million

(63%)

2014 Revenues

U.S. $1,719 Million

(27%)

2014 EBITDA

U.S. $159 Million

(37%)

Page 10: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Enhancing

competitiveness MAIN INVESTMENT PROJECTS

U.S. $100-300

million

U.S. $50-100

million

FEASIBILITY ANALYSIS

INVESTMENT COMPLETION

Integrated MEG plant (US$1 billion)

Cogen Altamira (US$250 million)

PTA/PET site in Texas

(US$350 million)

1

3 2

Amount of investment within parenthesis; estimated annual savings in blue area

10

Strategic Guidelines

• Capture natural gas, ethane and propane advantage in North America

• Maximize operating efficiency

• Pursue Integrex licensing / JV

Page 11: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

11 11

Page 12: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

The largest producer

of aluminum cylinder heads and engine blocks in the world

• 2014 Revenues of U.S. $4,645 million

• One out of every four new

vehicles sold worldwide has a Nemak component

• Public company since July 2015

12

Page 13: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

A portfolio of 50

customers, supplying

more than 650

different platforms

13

Page 14: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Aluminum structural components

penetration

14

NA and EU LV Aluminum Content (Pounds Per Vehicle)

52 53 54 55 55 57

51 55 60 65 71 79

45 47 49 51 53 57 55 58 61 64 67 71 31 33 34

35 37 39

43 46

50 54

58 64

33 43

57

85

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 research

109

Page 15: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

15

Page 16: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

A leading player in the refrigerated food market

16

• 2014 Revenues of U.S.

$5,359 million

• More than 1.4 million tons/yr, or 4,000+ per

day

• Presence in Mexico, the U.S. Central & South America and Europe

• Acquired the remaining shares of Campofrio from WH Group.

Presence in

18 countries

Page 17: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Creating an

enhanced global platform

17

55%

17%

19%

9%

Chilled Processed Meats Dairy Dry Meats Other

41%

15%

39%

5%

18 countries (Americas & Western Europe) Geographic footprint

Product portfolio Dry & Cooked Processed Meats, Dairy, Yogurt, Ready meals, Others

Positioning Leadership in Mexico, US value segment & Western

Europe

Revenue 2014

Geography

Segment 55%

17%

19%

9%

Mexico U.S. Europe Other

Page 18: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

One of the most efficient distribution

networks in Mexico

• 136 distribution

centers; 3,900 delivery routes

• +4,000 refrigerated

vehicles

• Reaching more than

450,000 POS

18

Page 19: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

19

Page 20: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Strategic

evolution

20

ALESTRATELECOM • Mass Market • LD Services

• Enterprise market • Value added services • Internet bubble

• IP as standard • Telecom / Informatics • WAN / LAN • Data Centers • Managed Services • Security Operation

Center

• Vertical Markets • Cloud services • Management

applications (ERP,CRM) • Fixed/Mobile

applications

ALESTRAIP

ALESTRACONVERGENCE

ALESTRACLOUD&MOBILE

• Managed applications

• Governance and compliance in IT

• Business Process Outsourcing

• Integral operation of critical mission

ALESTRAIT

Page 21: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Leader in the value-added IT + Telecom

services for enterprises in Mexico

21

• 2014e Revenues of

U.S. $415 million

• Value Added Services (VAS) for the enterprise market

• IT Managed Services Security, Data Centers, Cloud Services, VPNs, Internet

Enterprise LD MN & IT Enterprise

Data, internet and local

Sales breakdown By type of service

50 %

Consumer & Intl 5%

14% 31%

Residential International

Enterprise

By Market Segment

95%

2% 3%

Page 22: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Infrastructure provides

access to +90% of

Mexican market

22

• 20,520 kms. of long-haul fiber optics, plus 3,500 kms. of metro rings in 16 cities

• 50 cities with Data & IT services

• Acquisition of G-TEL to reinforce coverage NW and SE regions

• New Data Center in Queretaro

Alestra´s Network

Corporate headquarters

International Border Crossing Data Centers

Page 23: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

23

Page 24: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Newpek: U.S.

Operations began in 2006

Value drivers

Newpek fields

KS

TX

OK

CO

Current U.S. Operations

Eagle Ford

EBITDA (US$ mm)

Net Production (mboed)

3 14 7 8 30

66 91

116

'07 '08 '09 '10 '11 '12 '13 14

0.3 0.9 1.1 1 2.7

4.7 6.4

8.2

'07 '08 '09 '10 '11 '12 '13 '14

Talent • Team of 28 experienced people in the US • World-class partners (e.g. Pioneer Natural Resources)

Technology • Fracking for horizontal drilling in Eagle Ford • Mature fields optimization • World-class sub-surface analysis capabilities Successful transition to operations • Experienced in exploration and operations through past

acquisitions • Developing over 400,000 acres

Page 25: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

E&P • JV 50/50 with MPG (Grupo ACS) • Producing over 5.5 mboed • Optimization of existing wells (workovers) • Development of new wells in conventional formations • Migrating existing CIEPs to the new Exploration and Production

Contracts (CEEs)

Services • JV 50/50 with Petrofac • Services: Onshore / offshore drilling, workovers, well testing,

O&M and equipment rentals

Activities in Mexico began in 2013

Current operations Focus

Services

Operation (CIEPs)

Page 26: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Prepared to capture energy reform opportunities in Mexico

Alfa’s Energy History

Areas of Interest Attractive Opportunities

Exploration and Production of Hydrocarbons (E&P)

Midstream / Downstream

Power

1

2

3

23.0 mmmboe of 2P reserves 112.8 mmmboe of prospective resource Expected 5.4% CAGR in O&G services by 2020

Open competition in transportation and distribution of natural gas

Liberalization of basic petrochemicals

111 GWeq by 2027 Expected 4.6% CAGR in large, mid-sized and

commercial industry growing 2.3 GWeq per year Edge for those with clean, competitive generation

E&P Midstream / Downstream Power

Newpek, LLC established in

2006 to explore and exploit

unconventional resources

Alpek as leading petrochemical

company in North America

Experience in energy markets

Long history of implementing

cogeneration projects, including a

97 MW plant during 2014

Page 27: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

E&P investment

opportunities

Overview of current E&P investment map Focus

Strategy: to continue to successfully growing through low-cost exploration and production in competitive new blocks

Possibility to partner with existing operators as CIEP and COPF contracts migrate to new exploration and exploitation contracts

Liberalization of the midstream / downstream sectors with open private participation across all segments

Liberalization of power generation and investment in distribution and transmission

Increased demand of E&P services from increased production

49,536 mmboe prospective

9,118 km2 Unconventional /

Chicontepec

21,772 mmboe prospective

5,657 km2 Onshore / shallow water / extra-

heavy oil

US$50bn over 4 years as originally

projected Investment opportunities

1,557 mmboe Farm-out projects

Alfa’s areas of interest

Round 0 (PEMEX) Migration CIEPs & COPFs Round 1 farm-outs

Round 1 exploration Round 1 exploitation

Burgos & Sabinas

Deep water Perdido

Golden Lane- Ébano-

Chicontepec

Deep water Han & Holok

Extra-heavy oil

Shallow waters

Unconventional

Farm-outs

U.S.

Mexico

Page 28: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Round 1 focus: Migration of Contracts, Bids and Farm Outs

The first opportunity for investors to participate in the Mexican O&G industry

Migration

Bids and Farm-outs

2,208 / 2,252

NA / 71,963

2P / Prospective (mmboe)

Production sharing License Ty

pes

3 to 5-year exploration

20 to 30-year exploitation Len

gth

Prequalification

Award variables

Bonus (license)

Adjustment mechanism Co

nsi

der

atio

ns

Blocks

Characteristics of contracts

22 fields (CIEP & COPF)

88 exploration

57 production

10 farm-outs

Announcement of bid

Database opening

Type of fields

Dec 2014

Feb 2015

TBD 2015

Jan 2015

Feb 2015

TBD 2015

Shallow water Exploration

Shallow water Production

Onshore Chicontepec

Unconventional Deep-water

Round 1 Calendar

May 2015

May 2015

Page 29: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

Newpek: Key

competitive strengths

Experience in exploring and developing conventional and unconventional formations in the US and

Mexico

Strong presence in the Eagle Ford Shale formation

Partnerships with established upstream players in the US and Mexico

Highly qualified technical team to identify quality prospects

Integrated energy services company to support oil & gas field development (onshore and offshore)

Page 30: CORPORATE - ALFAmarket 16 • 2014 Revenues of U.S. $5,359 million • More than 1.4 million tons/yr, or 4,000+ per day • Presence in Mexico, the U.S. Central & South America and

ALFA: Guidance 2015

30 30

Alfa

Alpek

Nemak

Sigma

Alestra

Newpek

Revenues

2014 2015e % Ch

17,200 16,660 (3)

6,471 4,950 (24)

4,622 4,730 2

5,359 6,330 18

415 415 0

170 110 (35)

EBITDA

2014 2015e % Ch

2,040 2,228 9

434 585 35

714 745 4

636 758 19

170 160 (6)

116 60 (48)

Capex

2014* 2015e

1,426 1,280

320 400

393 435

387 250

106 115

133 80

* Including acquisitions

Note: Guidance as of July 22, 2015.

(U.S. $ Millions)