Business Wire | Feb 3, 2021 05:15PM EST

Industrias Bachoco Announces Fourth Quarter 2020 Results and Full Year 2020 Results

Feb. 03, 2021

CELAYA, GUANAJUATO, Mexico--(BUSINESS WIRE)--Feb. 03, 2021--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 ("4Q20") and full year ("2020") ending on December 31st, 2020. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$").

HIGHLIGHTS 2020

* Net sales increased 21.1% in 4Q20 and increased 11.6% in year 2020 vs equivalent periods of 2019. * EBITDA margin was 13.4% for 4Q20 and 8.2% for the whole year. * Earnings per basic and diluted share totaled $1.22 for 4Q20 and $6.12 for the year.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "2020 was an historically challenging year. We faced unprecedent conditions that tested our capabilities for adapting fast to new market conditions while being efficient. Despite the uncertainty that brought this year, our solid financial structure and our operating discipline allowed us to end 2020 with positive results in terms of profitability while attending all our markets.

During the last quarter of 2020, we observed some adjustments in demand as a result of remaining lockdown conditions, in some sectors. However, we consider that the industry was as well in line with that reading, allowing a good balance between supply and demand which resulted in competitive prices for this time frame.

On the other hand, in the U.S., we kept observing challenging conditions that continued to negative affect commodity prices particularly on white meat and leg quarters.

As a result of the aforementioned conditions, we reported an increase in total sales of 21.1% in 4Q20 when compared to 4Q19. For the full year, we reached an increase of 11.6% vs 2019. This was a result of higher prices in our main business lines as well as more volume sold in our Others segment.

Regarding cost of sales, during 4Q20 we started to observe some of the negative effects of the increase in grain and soybean meal prices. However, efficiencies in our productive processes allowed us to partially offset some of that increase.

In terms of volume sold, our Others segment, particularly swine, reached an important increase for the quarter when compared to the same period of 2019 driven by the integration of SASA.

Our EBITDA was $2,451.3 million which is $1,940.2 million higher than the EBITDA of the same quarter of 2019. For the fourth quarter, our EBITDA margin was 13.4% and our earnings per basic and diluted share was $1.22.

For the full year of 2020, we continued delivering positive results. We increased total sales by 11.6%, with an EBITDA margin of 8.2% and earnings per share of $6.12.

Our financial structure remained solid and allowed us to keep with our growth plans even under the uncertain conditions observed in 2020. Our CAPEX for the year was $2,305.9 million which is 11.4% higher than the amount invested in 2019. This with a net cash position of $16,529.9 million.

Particularly under this difficult time that the world is facing, we continue to be very focused on safely serving our markets and customers as we are aware that we play an important role in the nourishment of our consumers as well as in the family's economy of our collaborators."

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 2020.

QUARTERLY RESULTS

NET SALES BY GEOGRAPHY

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Net Sales 18,328.6 15,134.6 3,193.9 21.1

Net sales in Mexico 13,780.5 10,908.1 2,872.4 26.3

Net sales in the U.S. 4,548.0 4,226.5 321.6 7.6

NET SALES BY SEGMENT

In millions of pesos

4Q20

4Q19

Change

$

$

$

%

Net Sales

18,328.6

15,134.6

3,193.9

21.1

Poultry

16,173.4

13,661.2

2,512.2

18.4

Other

2,155.2

1,473.4

681.8

46.3

NET VOLUME SOLD BY SEGMENT

NET SALES BY SEGMENT

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Net Sales 18,328.6 15,134.6 3,193.9 21.1

Poultry 16,173.4 13,661.2 2,512.2 18.4

Other 2,155.2 1,473.4 681.8 46.3

NET VOLUME SOLD BY SEGMENT

In tons Change

4Q20 4Q19 Volume %

Total sales volume: 585,064.0 575,274.6 9,789.3 1.7

Poultry 447,604.7 452,487.2 (4,882.6) (1.1)

Others 137,459.3 122,787.4 14,671.9 11.9

The Company's 4Q20 net sales totaled $18,328.6 million; $3,193.9 million or 21.1% more than $15,134.6 million reported in 4Q19. The increase is a result of higher prices in our main business lines and higher volume sold in Others.

In 4Q20, sales of our U.S. operations represented 24.8% of our total sales compared to 27.9% in 4Q19.

GROSS PROFIT

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Cost of sales 14,472.3 13,170.6 1,301.6 9.9

Gross profit 3,856.3 1,964.0 1,892.3 96.3

Gross margin 21.0% 13.0% - -

In 4Q20, cost of sales was $14,472.3 million; $1,301.6 million or 9.9% higher than $13,170.6 million reported in 4Q19. This increase was mainly due to higher unit cost in our main business lines as we start to observe some of the effects of the increase in prices of our main raw materials.

The Company?s gross profit in 4Q20 was $3,856.3 million, higher than the gross profit of $1,964.0 million in 4Q19, with a gross margin of 21.0% for 4Q20 vs 13.0% in 4Q19.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A")

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Total SG&A 1,617.8 1,701.7 (83.9) (4.9)

Total SG&A expenses in 4Q20 were $1,617.8 million; $83.9 million lower than the $1,701.7 million reported in 4Q19. Total SG&A expenses as a percentage of net sales represented 8.8% in 4Q20 and 11.2% in 4Q19.

OTHER INCOME (EXPENSE), NET

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Other income (expense), net (128.0) (74.4) (53.6) 72.1

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 4Q20, we recorded other expenses of $128.0 million, compared with other expenses of $74.4 million reported in 4Q19.

OPERATING INCOME

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Operating income 2,110.5 188.0 1,922.5 1,022.9

Operating margin 11.5% 1.2% - -

Operating income in 4Q20 totaled $2,110.5 million; $1,922.5 million higher than the Operating income of $188.0 million reported in 4Q19. This represents an operating margin of 11.5% for 4Q20, versus 1.2% operating margin in the same period of 2019. The increase in operating income is mainly attributed to higher prices in our main business lines, and higher volume sold in our Others segment.

NET FINANCIAL INCOME

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Net Financial Income (1,168.2) (192.0) (976.1) 508.4

Financial Income (1,105.1) (93.3) (1,011.8) 1,084.9

Financial Expense 63.1 98.8 (35.7) (36.2)

In 4Q20, the Company reported net financial loss $1,168.2 million, compared to a financial loss of $192 million reported in the same period of 2019. The result was mainly attributed to higher exchange rate loss due to the appreciation of the Mexican peso vs the U.S. dollar.

TAXES FOR THE PERIOD

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Total Taxes 222.0 (153.8) 375.9 (244.3)

Income tax 479.6 314.5 165.1 52.5

Deferred income tax (257.6) (468.3) 210.8 (45.0)

Total taxes for the 4Q20 were $222.0 million favorable, compared with negative total taxes of $153.8 million of the same period of 2019. This is attributed to higher operating income in 4Q20.

NET INCOME

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Net income 720.3 149.8 570.5 380.9

Net margin 3.9% 1.0% - -

Basic and diluted earnings per share^1 1.22 0.24 1.0 n/a

Basic and diluted earnings per ADR^2 14.61 2.91 11.7 n/a

Weighted average Shares outstanding^3 599,820 599,967 - -

^1 In pesos

^2 in pesos, one ADR equals to twelve shares

^3 In thousands of shares

The net income for 4Q20 was $720.3 million, representing $1.22 pesos of earnings per share, compared with a net income of $149.8 million, which represented a $0.24 pesos of earnings per share in 4Q19. This increase is mainly attributed to higher operating results. Net margin in 4Q20 was 3.9% compared to 1.0% reported in 4Q19.

EBITDA

In millions of pesos 4Q20 4Q19 Change

$ $ $ %

Net income 730.2 145.5 584.7 402.0

Income tax expense (benefit) 222.0 (153.8) 375.9 (244.3)

Result in associates (9.9) 4.3 (14.2) (330.8)

Net finance (income) expense 1,168.2 192.0 976.1 508.4

Depreciation and amortization 340.8 323.1 17.7 5.5

EBITDA 2,451.3 511.1 1,940.2 379.6

EBITDA Margin (%) 13.4% 3.4% - -

Net revenues 18,328.6 15,134.6 3,193.9 21.1

EBITDA in 4Q20 reached $2,451.3 million representing an EBITDA margin of 13.4%, compared to an EBITDA of $511.1 million in 4Q19, with an EBITDA margin of 3.4%.

ACCUMULATED RESULTS

NET SALES BY GEOGRAPHY

In millions of pesos 2020 2019 Change

$ $ $ %

Net Sales 68,791.3 61,655.2 7,136.0 11.6

Net sales in Mexico 49,302.4 44,723.5 4,578.9 10.2

Net sales in the U.S. 19,488.8 16,931.7 2,557.1 15.1

NET SALES BY SEGMENT

In millions of pesos

2020

2019

Change

$

$

$

%

Net Sales

68,791.3

61,655.2

7,136.0

11.6

Poultry

61,359.1

55,653.0

5,706.1

10.3

Other

7,432.1

6,002.2

1,429.9

23.8

NET VOLUME SOLD BY SEGMENT

NET SALES BY SEGMENT

In millions of pesos 2020 2019 Change

$ $ $ %

Net Sales 68,791.3 61,655.2 7,136.0 11.6

Poultry 61,359.1 55,653.0 5,706.1 10.3

Other 7,432.1 6,002.2 1,429.9 23.8

NET VOLUME SOLD BY SEGMENT

In metric tons Change

2020 2019 Volume %

Total sales volume: 2,296,229 2,254,819 41,410 1.84

Poultry 1,772,528 1,739,448 33,081 1.9

Others 523,700 515,371 8,329 1.62

In 2020, net sales totaled $68,791.3 million; $7,136.0 million or 11.6% more than the $61,655.2 million reported in the same period of 2019.

In 2020, sales of our U.S. operations represented 28.3% of our total sales, compared with 27.5% in 2019.

OPERATING RESULTS

In millions of pesos 2020 2019 Change

$ $ $ %

Cost of Sales 57,711.7 51,557.4 6,154.3 11.9

Gross Profit 11,079.6 10,097.9 981.7 9.7

Total SG&A 6,376.3 6,116.6 259.7 4.2

Other Income (expense) (439.2) (4.7) (434.5) 9,176.3

Operating Income 4,264.1 3,976.5 287.5 7.2

Net Financial Income 868.6 381.3 487.4 127.8

Income Tax 1,430.3 1,125.0 305.4 27.1

Net Income 3,702.4 3,232.8 469.5 14.5

In the 2020, the cost of sales totaled $57,711.7 million; $6,154.3 million or 11.9% higher than $51,557.4 million reported in the 2019.

As a result, we reached a gross profit of $11,079.6 million and a gross margin of 16.1% in 2020, when compare to $10,097.9 million of gross profit and a gross margin of 16.4% reached in the same period of 2019.

Total SG&A in 2020 were $6,376.3 million; $259.7 million or 4.2% higher than the $6,116.6 million reported in 2019. In 2020 total SG&A expenses as a percentage of net sales represented 9.3% in 2020 and 9.9% in 2019.

In 2020 we had other expenses of $439.2 million, compared with other expenses of $4.7 million reported in 2019. The main variance was related to COVID expenses during 2020.

The operating income in 2020 was $4,264.1 million, which represents an operating margin of 6.2%, an increase from an operating income of $3,976.5 million with an operating margin of 6.4% in 2019.

The net financial income in 2020 was $868.6 million higher when compared to a net financial income of $381.3 million in 2019.

Total taxes were $1,430.3 million as of December 31st, 2020. These taxes include $1,097.0 million of income tax and $333.3 million of deferred income taxes. This figure compares to total taxes of $1,125.0 million in 2019.

All the above resulted in a net income of $3,702.4 million or 5.4% of net margin in 2020, which represents $6.12 pesos of earnings per share; while in the 2019 the net income totaled $3,232.8 million, 5.2% of net margin and $5.37 pesos of net income per share.

EBITDA

In millions of pesos 2020 2019 Change

$ $ $ %

Net controlling interest profit 3,672.1 3,219.9 452.1 14.0

Income tax expense (benefit) 1,430.3 1,125.0 305.4 27.1

Result in associates 30.3 12.9 17.4 134.9

Net finance (income) expense (868.6) (381.3) (487.4) 127.8

Depreciation and amortization 1,382.4 1,286.4 95.9 7.5

EBITDA 5,646.4 5,263.0 383.5 7.3

EBITDA Margin (%) 8.2% 8.5% - -

Net revenues 68,791.3 61,655.2 7,136.0 11.6

EBITDA in 2020 reached $5,646.4 million, representing an EBITDA margin of 8.2%, compared to an EBITDA of $5,263.0 million in 2019, with an EBITDA margin of 8.5%.

BALANCE SHEET

BALANCE SHEET DATA

In millions of pesos Dec. 31, 2020 Dec. 31, 2019 Change

$ $ $ %

TOTAL ASSETS 58,011.2 55,702.5 2,308.7 4.1

Cash and cash equivalents 19,047.9 19,182.9 (135.0) (0.7)

Accounts receivable 4,342.3 3,880.8 461.5 11.9

TOTAL LIABILITIES 14,381.9 15,442.2 (1,060.3) (6.9)

Accounts payable 4,769.3 5,235.5 (466.2) (8.9)

Short-term debt 1,057.6 3,440.4 (2,382.8) (69.3)

Long-term debt 1,460.4 1,488.2 (27.8) (1.9)

TOTAL STOCKHOLDERS' EQUITY 43,629.3 40,260.3 3,369.0 8.4

Capital stock 1,174.3 1,174.3 (0.0) (0.0)

Cash and equivalents as of December 31st, 2020 totaled $19,047.9 million vs $19,182.9 million as of December 31st, 2019.

Total debt as of December 31st, 2020 was $2,518.0 million, compared to $4,928.6 million reported as of December 31st, 2019.

Net cash as of December 31st, 2020 was $16,529.9 million, compared to net cash of $14,254.3 million as of December 31st, 2019.



CAPITAL EXPENDITURES

In millions of pesos 2020 2019 Change

$ $ $ %

Capital Expenditures 2,305.9 2,069.3 236.6 11.4

Total CAPEX for 2020 was $2,305.9 million vs $2,069.3 million in 2019, mainly allocated toward organic growth and productivity projects across all of our facilities.

STOCK INFORMATION

As of December 31, 2020

Total Shares 600,000,000

Total free float 26.75%

Market cap (millions of pesos) $44,910

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 75.48 71.41 74.85 45.28 42.52 45.16

November 70.44 64.55 70.06 41.55 36.23 41.53

October 70.79 66.42 66.42 39.92 37.31 37.31

September 70.10 68.00 70.03 39.75 36.16 38.29

August 70.38 65.56 68.43 37.85 34.73 37.55

July 69.06 63.91 66.18 37.21 34.20 35.87

June 69.75 65.32 67.08 39.01 34.70 35.17

May 69.93 66.18 67.87 36.94 32.85 36.64

April 69.93 60.81 69.93 35.09 29.80 34.88

March 71.07 58.76 67.48 44.14 28.67 34.00

February 75.83 68.57 71.07 48.87 42.67 43.04

January 82.40 75.01 75.82 52.70 47.78 48.34

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 Miguel Tortolero matortolero@gbm.com.mx

INTERCAM Richard Horbach Martinez rhorbach@intercam.com.mx

INVEX Giselle Mojica gmojica@invex.com

JP MORGAN Ulises Argote ulises.argote@jpmorgan.com

SANTANDER Hector Maya L?pez hmmaya@santander.com.mx

APPENDICES

For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $19.95 per USD $1.0, which corresponds to the rate at the close of December 31st, 2020 according to Mexico's National Bank.

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

DERIVATIVES POSITION REPORT

CONSOLIDATED STATEMENT OF FINANCIAL POSITION-Unaudited- In U.S. December December Dollar 31, 31,In million pesos 2020 2020 2019*

TOTAL ASSETS $ 2,907.8 58,011.2 55,702.5

Total current assets 1,622.7 32,372.6 31,097.2

Cash and cash equivalents 954.8 19,047.9 19,182.9

Total accounts receivable 217.7 4,342.3 3,880.8

Inventories 386.1 7,703.6 6,753.4

Other current assets 64.1 1,278.8 1,280.1

Total non current assets 1,285.1 25,638.6 24,605.2

Net property, plant and equipment 978.3 19,516.8 18,556.6

Other non current Assets 306.9 6,121.8 6,048.6

TOTAL LIABILITIES $ 720.9 14,381.9 15,442.2

Total current liabilities 401.0 7,999.0 8,908.1

Notes payable to banks 53.0 1,057.6 3,440.4

Accounts payable 239.1 4,769.3 5,235.5

Other taxes payable and other accruals 108.9 2,172.2 232.2

Total long-term liabilities 319.9 6,382.9 6,534.0

Long-term debt 73.2 1,460.4 1,488.2

Other non current liabilities 45.0 897.7 1,141.3

Deferred income taxes 201.7 4,024.7 3,904.5

TOTAL STOCKHOLDERS' EQUITY $ 2,186.9 43,629.3 40,260.3

Capital stock 58.9 1,174.3 1,174.3

Commission in shares issued 20.7 413.4 414.5

Retained earnings 2,046.6 40,828.8 37,732.9

Others accounts 46.5 928.5 858.2

Non controlling interest 14.3 284.3 80.4

TOTAL LIABILITIES AND STOCKHOLDERS' $ 2,907.8 58,011.2 55,702.5EQUITY *AuditedCONSOLIDATED STATEMENT OF INCOMEFourth Quarter Results, ended December 31st:-Unaudited-U.S. DollarIn millions pesos2020

2020

2019*

Net sales$ 918.7

18,328.6

15,134.6

Cost of sales725.4

14,472.3

13,170.6

Gross profit193.3

3,856.3

1,964.0

SG&A81.1

1,617.8

1,701.7

Other income (expenses), net(6.4)

(128.0)

(74.4)

Operating income105.8

2,110.5

188.0

Net finance income(58.6)

(1,168.2)

-192.0

Income tax11.1

222.0

(153.8)

Net Income$ 36.1

720.3

149.8

Non-controlling interest- 0.50

-9.9

4.3

Net controlling interest profit36.60

730.2

145.5

Basic and diluted earnings per share0.06

1.22

0.24

Basic and diluted earnings per ADR0.73

14.6

2.91

Weighted average Shares outstanding1599,820

599,820

599,967

EBITDA Result$ 122.9

2,451.3

511.1

Gross margin21.0%

21.0%

13.0%

Operating margin11.5%

11.5%

1.2%

Net margin4.0%

3.9%

1.0%

EBITDA margin13.4%

13.4%

3.4%

1 In thousands* AuditedCONSOLIDATED STATEMENT OF INCOMEFourth Quarter Results, ended December 31st:-Unaudited- U.S. DollarIn millions pesos 2020 2020 2019*

Net sales $ 918.7 18,328.6 15,134.6

Cost of sales 725.4 14,472.3 13,170.6

Gross profit 193.3 3,856.3 1,964.0

SG&A 81.1 1,617.8 1,701.7

Other income (expenses), net (6.4) (128.0) (74.4)

Operating income 105.8 2,110.5 188.0

Net finance income (58.6) (1,168.2) -192.0

Income tax 11.1 222.0 (153.8)

Net Income $ 36.1 720.3 149.8

Non-controlling interest - 0.50 -9.9 4.3

Net controlling interest profit 36.60 730.2 145.5

Basic and diluted earnings per share 0.06 1.22 0.24

Basic and diluted earnings per ADR 0.73 14.6 2.91

Weighted average Shares outstanding^1 599,820 599,820 599,967

EBITDA Result $ 122.9 2,451.3 511.1

Gross margin 21.0% 21.0% 13.0%

Operating margin 11.5% 11.5% 1.2%

Net margin 4.0% 3.9% 1.0%

EBITDA margin 13.4% 13.4% 3.4%

1 In thousands* AuditedCONSOLIDATED STATEMENT OF INCOMEAnnual Results-Unaudited-U.S. DollarIn millions pesos2020

2020

2019*

Net sales$ 3,448.2

68,791.3

61,655.2

Cost of sales2,892.8

57,711.7

51,557.4

Gross profit555.4

11,079.6

10,097.9

Selling, general and administrative expenses319.6

6,376.3

6,116.6

Other income (expenses), net(22.0)

(439.2)

(4.7)

Operating income213.7

4,264.1

3,976.5

Net finance income43.5

868.6

381.3

Income tax71.7

1,430.3

1,125.0

Net income$ 185.6

3,702.4

3,232.8

Non-controlling interest1.5

30.30

12.9

Net controlling interest profit184.1

3,672.1

3,219.9

Basic and diluted earnings per share0.31

6.12

5.37

Basic and diluted earnings per ADR3.68

73.5

64.40

Weighted average Shares outstanding1599,818

599,818

599,972

EBITDA Result$ 283.0

5,646.4

5,263.0

Gross margin16.1%

16.1%

16.4%

Operating margin6.2%

6.2%

6.4%

Net margin5.3%

5.4%

5.2%

EBITDA margin8.2%

8.2%

8.5%

1 In thousands* AuditedCONSOLIDATED STATEMENT OF INCOMEAnnual Results-Unaudited- U.S. DollarIn millions pesos 2020 2020 2019*

Net sales $ 3,448.2 68,791.3 61,655.2

Cost of sales 2,892.8 57,711.7 51,557.4

Gross profit 555.4 11,079.6 10,097.9

Selling, general and administrative expenses 319.6 6,376.3 6,116.6

Other income (expenses), net (22.0) (439.2) (4.7)

Operating income 213.7 4,264.1 3,976.5

Net finance income 43.5 868.6 381.3

Income tax 71.7 1,430.3 1,125.0

Net income $ 185.6 3,702.4 3,232.8

Non-controlling interest 1.5 30.30 12.9

Net controlling interest profit 184.1 3,672.1 3,219.9

Basic and diluted earnings per share 0.31 6.12 5.37

Basic and diluted earnings per ADR 3.68 73.5 64.40

Weighted average Shares outstanding^1 599,818 599,818 599,972

EBITDA Result $ 283.0 5,646.4 5,263.0

Gross margin 16.1% 16.1% 16.4%

Operating margin 6.2% 6.2% 6.4%

Net margin 5.3% 5.4% 5.2%

EBITDA margin 8.2% 8.2% 8.5%

^1 In thousands* AuditedCONSOLIDATED STATEMENT OF CASH FLOWSIn million of pesos-Unaudited-U.S. DollarDecember 31,2020

2020

2019*

NET MAJORITY INCOME BEFORE INCOME TAX$ 257.3

5,132.7

4,357.8

ITEMS RELATING TO INVESTING ACTIVITIES:67.7

1,350.5

915.5

Depreciation and others87.3

1,741.4

1,589.2

Income (loss) on sale of plant and equipment0.5

9.9

(85.9)

Other Items(20.1)

(400.9)

(587.8)

NET CASH GENERATED FROM NET INCOME BEFORE TAXES325.0

6,483.2

5,273.3

CASH GENERATED OR USED IN THE OPERATION:(59.9)

(1,194.7)

(2,046.0)

Decrease (increase) in accounts receivable5.3

105.3

(637.2)

Decrease (increase) in inventories(43.7)

(871.7)

(133.6)

Increase (decrease) in accounts payable7.3

145.4

(157.4)

Other Items(28.8)

(573.7)

(1,117.9)

NET CASH FLOW FROM OPERATING ACTIVITIES265.1

5,288.4

3,227.3

NET CASH FLOW FROM INVESTING ACTIVITIES(90.2)

(1,798.9)

(938.6)

Acquisition of property, plant and equipment(115.6)

(2,305.9)

(2,199.6)

Proceeds from sales of property plant and equipment7.4

147.6

197.1

Other Items18.0

359.5

1,063.9

CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED

IN FINANCING ACTIVITIES

174.9

3,489.6

2,288.7

Net cash provided by financing activities:(171.0)

(3,412.3)

(1,575.8)

Proceeds from loans202.0

4,030.7

4,839.0

Principal payments on loans(322.0)

(6,423.5)

(4,808.2)

Dividends paid(39.7)

(791.7)

(840.0)

Other items(11.4)

(227.8)

(766.6)

Net increase (decrease) in cash and equivalents3.9

77.3

712.9

Cash and investments at the beginning of year$ 960.6

19,164.8

18,451.9

CASH AND INVESTMENTS AT END OF PERIOD$ 964.5

19,242.1

19,164.8

CONSOLIDATED STATEMENT OF CASH FLOWSIn million of pesos-Unaudited- U.S. December 31, Dollar 2020 2020 2019*

NET MAJORITY INCOME BEFORE INCOME TAX $ 257.3 5,132.7 4,357.8

ITEMS RELATING TO INVESTING ACTIVITIES: 67.7 1,350.5 915.5

Depreciation and others 87.3 1,741.4 1,589.2

Income (loss) on sale of plant and equipment 0.5 9.9 (85.9)

Other Items (20.1) (400.9) (587.8)

NET CASH GENERATED FROM NET INCOME BEFORE 325.0 6,483.2 5,273.3TAXESCASH GENERATED OR USED IN THE OPERATION: (59.9) (1,194.7) (2,046.0)

Decrease (increase) in accounts receivable 5.3 105.3 (637.2)

Decrease (increase) in inventories (43.7) (871.7) (133.6)

Increase (decrease) in accounts payable 7.3 145.4 (157.4)

Other Items (28.8) (573.7) (1,117.9)

NET CASH FLOW FROM OPERATING ACTIVITIES 265.1 5,288.4 3,227.3

NET CASH FLOW FROM INVESTING ACTIVITIES (90.2) (1,798.9) (938.6)

Acquisition of property, plant and equipment (115.6) (2,305.9) (2,199.6)

Proceeds from sales of property plant and 7.4 147.6 197.1equipmentOther Items 18.0 359.5 1,063.9

CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED 174.9 3,489.6 2,288.7IN FINANCING ACTIVITIES

Net cash provided by financing activities: (171.0) (3,412.3) (1,575.8)

Proceeds from loans 202.0 4,030.7 4,839.0

Principal payments on loans (322.0) (6,423.5) (4,808.2)

Dividends paid (39.7) (791.7) (840.0)

Other items (11.4) (227.8) (766.6)

Net increase (decrease) in cash and 3.9 77.3 712.9equivalents Cash and investments at the beginning of year $ 960.6 19,164.8 18,451.9

CASH AND INVESTMENTS AT END OF PERIOD $ 964.5 19,242.1 19,164.8

DERIVATIVES POSITION REPORT

Fourth Quarter 2020Thousands of Mexican Pesos, as of Decembre 31, 2020TYPE OF FINANCIAL

INSTRUMENT

OBJECTIVENOTIONALVALUE OF THE RELATED COMMODITYREASONABLE VALUEAMOUNTS DUE

BY YEAR

GUARANTIES

REQUIRED

4Q-20203Q-20204Q-20203Q-2020Forward Vanilla, KO Fwd and options

Hedge$ 379,506

$ 19.95

$ 22.11

$ -449,417

$ 14,904

100% in 2021The deals

consider the

possibility of

margin calls but

not another kind

of guarantee

Futures for corn and

soybean meal

Hedge$ 121,184

CORNCORN$ 14,342

$ 31,233

100% in 2021In USD per BushelIn USD per BushelmonthpricemonthpriceSep-20$ 3.883

Dec-20$ 3.790

Mar-21$ 4.840

Mar-21$ 3.883

May-21$ 3.935

Jul-21$ 3.973

Dec-21$ 3.915

SOYBEAN MEALSOYBEAN MEALIn USD per tonIn USD per tonmonthpricemonthpriceDec-20$ 342.8

Aug-21$ 406.9

Aug-21$ 331.3

Sep-21$ 302.6

Sep-21$ 326.1

Oct-21$ 366.4

Oct-21$ 319.9

Dec-21$ 365.3

Dec-21$ 320.1

Jan-21$ 342.1

Mar-21$ 429.4

Mar-21$ 338.5

May-21$ 423.4

May-21$ 334.6

Jul-21$ 419.5

Options of CornHedge$ 92,648

CORNCORN$ 14,055

$ 7,724

100% in 2021In USD per BushelIn USD per BushelmonthpricemonthpriceMar-21$ 4.840

Dec-20$ 3.790

May-21$ 4.833

Mar-21$ 3.883

Jul-21$ 4.803

Options of soybean

meal

Hedge$ 138,094

SOYBEAN MEALSOYBEAN MEAL$ 21,970

$ 9,834

100% in 2021In USD per tonIn USD per tonmonthpricemonthpriceJan-21$ 434.4

Jan-21$ 342.1

Mar-21$ 429.4

Mar-21$ 338.5

May-21$ 423.4

May-21$ 334.6

Jul-21$ 419.5

Jul-21$ 334.2

-The total financial instruments do not exceed 5% of total assets as of December 31, 2020.-The notional value represents the net position as of December 31, 2020 at the exchange rate of Ps. 19.95 per one dollar.-A negative value means an unfavorable effect for the Company.DERIVATIVES POSITION REPORT

Fourth Quarter 2020Thousands of Mexican Pesos, as ofDecembre 31, 2020TYPE OF VALUE OF THE RELATED AMOUNTS GUARANTIESFINANCIAL COMMODITY REASONABLE VALUE DUE OBJECTIVE NOTIONAL REQUIREDINSTRUMENT 4Q-2020 3Q-2020 4Q-2020 3Q-2020 BY YEAR

ForwardVanilla, $ $ $ $ $KO Hedge 379,506 19.95 22.11 -449,417 14,904 100% inFwd and 2021options

CORN CORN In USD per In USD per Bushel Bushel month price month price $ Sep-20 3.883

$ Dec-20 3.790

$ $ Mar-21 4.840 Mar-21 3.883

$ May-21 3.935

$ Jul-21 3.973

$ Dec-21 3.915

SOYBEAN MEAL SOYBEAN MEALFutures In USD per In USD perfor corn ton tonand $ month price month price $ 14,342 $ 100% in Hedge 121,184 $ 31,233 2021soybean Dec-20 342.8meal $ $ Aug-21 406.9 Aug-21 331.3 The deals

$ $ consider Sep-21 302.6 Sep-21 326.1 the

$ $ possibility Oct-21 366.4 Oct-21 319.9 of

$ $ margin Dec-21 365.3 Dec-21 320.1 calls but

$ not another Jan-21 342.1 kind

$ $ of Mar-21 429.4 Mar-21 338.5 guarantee

$ $ May-21 423.4 May-21 334.6

$ Jul-21 419.5

CORN CORN In USD per In USD per Bushel Bushel month price month price $ $Options of $ 92,648 Mar-21 4.840 Dec-20 3.790 $ 14,055 $ 7,724 100% inCorn Hedge 2021 $ $ May-21 4.833 Mar-21 3.883

$ Jul-21 4.803

SOYBEAN MEAL SOYBEAN MEAL In USD per In USD per ton ton month price month price $ $Options of Jan-21 434.4 Jan-21 342.1soybean $ Hedge 138,094 $ $ $ 21,970 $ 9,834 100% inmeal Mar-21 429.4 Mar-21 338.5 2021

$ $ May-21 423.4 May-21 334.6

$ $ Jul-21 419.5 Jul-21 334.2

-The total financial instruments do not exceed 5% oftotal assets as of December 31, 2020.-The notional value represents the net position as of December 31, 2020 at theexchange rate of Ps. 19.95 per one dollar.-A negative value means an unfavorableeffect for the Company.Fourth Quarter 2020Thousands of Mexican Pesos, as of December 31, 2020PROBABLE SCENARIOTYPE OF FINANCIAL

INSTRUMENT

REASONABLE

VALUE

VALUE OF THE RELATED COMMODITYEFFECT 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, KO Fwd and

options

-$ 449,417

$19.45

$ 20.45

$ 20.95

Direct-$ 608,770-$ 290,063-$ 130,709

-5%

5%

10%

-5%

5%

10%

Futures of Corn: (2)$ 14,342

$ 4.598

$ 5.082

$ 5.324

The effect will

materialize as the

inventory is consumed

$ 8,249

$ 20,434

$ 26,526

Futures of Soybean Meal: (2)$ 412.7

$ 456.1

$ 477.8

Options for Corn$ 14,055

$ 4.598

$ 5.082

$ 5.324

$ 11,353

$ 16,756

$ 19,457

Options of Soybean Meal$ 21,970

$ 412.7

$ 456.1

$ 477.8

$ 18,315

$ 25,624

$ 29,279

(1) The reference value is the exchange rate of Ps. $19.95 per USD as of December 31, 2020.(2) The reference values are; the future of corn for Mar 2021, $4.840 USD/bushel and the future of soybeanmeal for Jan 2021, $434.40USD/ton.'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.FourthQuarter 2020Thousands of Mexican PROBABLEPesos, as of December SCENARIO31, 2020TYPE OF VALUE OF THE EFFECT ONFINANCIAL REASONABLE RELATED COMMODITY THE EFFECT ON THE CASH FLOW^ Reference Value ^ (3)INSTRUMENT VALUE (1) INCOME -2.5% 2.5% 5.0% STATEMENT -2.5% 2.5% 5.0%

ForwardVanilla, KO $ $ -$Fwd and -$ 449,417 $19.45 20.45 20.95 Direct -$ -$ 130,709 608,770 290,063options

-5% 5% 10% -5% 5% 10%

Futures of $ $ $Corn: ^(2) 4.598 5.082 5.324 The effect $ $ 14,342 will $ 8,249 20,434 $ 26,526Futures of $ $ $Soybean 412.7 456.1 477.8 materializeMeal: ^(2) as theOptions for $ 14,055 $ $ $ $ $ $ 19,457Corn 4.598 5.082 5.324 inventory 11,353 16,756 is consumedOptions of $ 21,970 $ $ $ $ $ $ 29,279Soybean Meal 412.7 456.1 477.8 18,315 25,624

^(1) The reference value is the exchange rate of Ps.$19.95 per USD as of December 31, 2020.^(2) The reference values are; the future of corn for Mar 2021, $4.840 USD/bushel and the future of soybeanmeal for Jan 2021, $434.40USD/ton.'All the evaluations are performed according with the correspondingfuture, here only the first month futures are shown.^(3) The Company has credit lines with the majority of itscounterparts, so that the effect in cash flow is lower than the amountshown.-A negative value means anunfavorable effect for the Company.Fourth Quarter 2020Thousands of Mexican Pesos, as of December 31, 2020STRESS SCENARIOTYPE OF FINANCIAL

INSTRUMENT

REASONABLE

VALUE

VALUE OF THE RELATED COMMODITYEFFECT ON THE

INCOME

STATEMENT

EFFECT ON THE CASH FLOWReference Value-50%

-25%

25%

50%

-50%

-25%

25%

50%

Forward Vanilla, KO Fwd and options-$ 449,417$9.98

$14.96

$24.94

$29.93

Direct-$3,636,489-$2,042,953$1,043,436

$2,547,197

CONFERENCE CALL INFORMATIONThe Company will host its fourth quarter 2020 earnings call, on Thursday, February 4th, 2020. The earnings call will take place at 9:00 am Central Time (10:00 am 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=UtgoiLgDInnCqm

Confirmation Number: 50081022

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 28,000 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/20210203005636/en/

CONTACT: IR contact information: Maria Jaquez / Andrea Guerrero maria.jaquez@bachoco.net andrea.guerrero@bachoco.net T. +52(461)618 3555