Business Wire | Jul 26, 2021 05:15PM EDT

Industrias Bachoco Announces Second Quarter 2021 Results

Jul. 26, 2021

CELAYA, Mexico & GUANAJUATO, Mexico--(BUSINESS WIRE)--Jul. 26, 2021--Industrias Bachoco, S.A.B. de C.V., "Bachoco" or "the Company", (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the second quarter ("2Q21") and first half ("1H21") 2021 ended on June 30, 2021. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$"), except earnings per share.

HIGHLIGHTS- 2021 vs. 2020

* Net sales increased 27% in 2Q21 and increased 25% in 1H21 * EBITDA margin was 11.7% for 2Q21 and 13.3% for the 1H21 * SG&A as percentage of net sales was 8.3% and 8.4% for 2Q21 and 1H21 respectively.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, "During this quarter, we continued to observe a good balance between supply and demand. Even though costs were higher, our focus on efficiencies drove us to achieve good results in our second quarter of 2021.

We reached an increase in total sales of 27% for 2Q21 when compared to the same period of 2020. This led us to a gross margin of 19.0% for 2Q21 compared to the 11.3% of 2Q20.

Regarding our cost of sales, raw material prices continued to be high in USD terms. This meant an increase in our total cost of sales of 16% when compared to the same quarter of 2020. However, our efforts and focus towards efficiencies in our processes permitted us to offset part of this increase.

In terms of expenses, we kept our SG&A under control as a percentage of sales, we reported 8.3% for the quarter and 8.4% for the first half of 2021, which is lower compared to the 9.5% and 9.8% for the respective periods of 2020.

As a result, our operating profit for the quarter was $2,088.8 million, which is significantly higher than 2Q20 where we saw most of the negative impacts of COVID-19.

We reported an EBITDA of $2,437.4 million in 2Q21, which is higher than the $437.6 million reported in 2Q20. The EBITDA margins for each of those two periods were 11.7% and 2.7%, respectively. For the first half of the year, our EBITDA margin was 13.3%, compared to 4.3% EBITDA margin of the same period of 2020.

CAPEX for the quarter was $1,307.5 million compared to $992.4 million for the same period of 2020. This was achieved while ending with a net cash position of $19,490.6 million by the end of 2Q21.

To our commitment of continually adding value to our shareholders, in 2Q21 we reported earnings per share of $2.46 and for the first half of 2021 we reported earnings per share of $5.96.

We will remain focused on efficiencies across all of our processes which will allow us to supply our markets and customers as best as we can and as we have done through the years."

Executive SummaryThe following financial information is expressed in millions of nominal pesos, except for amounts per share and per ADR, with comparative figures for the same periods of 2021.

QUARTERLY RESULTS

NET SALES BY GEOGRAPHY

In millions of pesos 2Q21 2Q20 Change

$ $ $ %

Net Sales 20,860.9 16,431.9 4,429.0 27.0

Net sales in Mexico 15,937.6 11,339.9 4,597.6 40.5

Net sales in the U.S. 4,923.4 5,092.0 (168.6) (3.3)

NET SALES BY SEGMENT

In millions of pesos

2Q21

2Q20

Change

$

$

$

$

Net Sales

20,860.9

16,431.9

4,429.0

27.0

Poultry

18,170.5

14,796.3

3,374.1

22.8

Other

2,690.5

1,635.6

1,054.9

64.5

NET SALES BY SEGMENT

In millions of pesos 2Q21 2Q20 Change

$ $ $ $

Net Sales 20,860.9 16,431.9 4,429.0 27.0

Poultry 18,170.5 14,796.3 3,374.1 22.8

Other 2,690.5 1,635.6 1,054.9 64.5

NET VOLUME SOLD BY SEGMENT

In tons

Change

2Q21

2Q20

Volume

%

Total sales volume:

583,661

554,677

28,984.5

5.2

Poultry

441,486

433,484

8,002.1

1.8

Others

142,175

121,192

20,982.4

17.3

The Company's 2Q21 net sales totaled $20,860.9 million; $4,429.0 million or 27.0% more than the $16,431.9 million reported in 2Q20. The increase was mainly a result of higher prices and higher volume sold in our main business lines.

In 2Q21, sales of our U.S. operations represented 23.6% of our total sales compared to a 31.0% in the same period of 2020. The decrease was mainly a result of a lower exchange rate in 2Q21 vs the same period of 2020.

NET VOLUME SOLD BY SEGMENT

In tons Change

2Q21 2Q20 Volume %

Total sales volume: 583,661 554,677 28,984.5 5.2

Poultry 441,486 433,484 8,002.1 1.8

Others 142,175 121,192 20,982.4 17.3

The Company's 2Q21 net sales totaled $20,860.9 million; $4,429.0 million or 27.0% more than the $16,431.9 million reported in 2Q20. The increase was mainly a result of higher prices and higher volume sold in our main business lines.

In 2Q21, sales of our U.S. operations represented 23.6% of our total sales compared to a 31.0% in the same period of 2020. The decrease was mainly a result of a lower exchange rate in 2Q21 vs the same period of 2020.

GROSS PROFIT

In millions of pesos 2Q21 2Q20 Change

$ $ $ %

Cost of sales 16,901.1 14,574.5 2,326.6 16.0

Gross profit 3,959.8 1,857.4 2,102.5 113.2

Gross margin 19.0% 11.3% - -

In 2Q21, cost of sales was $16,901.1 million; $2,326.6 million or 16.0% higher than the $14,574.5 million reported in 2Q20. This increase was due to higher unit cost in our main business lines as a result of higher raw material prices in USD terms.

The Company's gross profit in 2Q21 was $3,959.8 million, higher than the gross profit of $1,857.4 million in 2Q20, with a gross margin of 19.0% for 2Q21 vs 11.3% in 2Q20. The result of this quarter compares to a difficult 2Q20, when mobility restrictions due to COVID-19 negatively affected some of the markets that we serve, which resulted in oversupply conditions throughout the industry.

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

In millions of pesos 2Q21 2Q20 Change

$ $ $ %

Total SG&A 1,729.2 1,567.0 162.2 10.4

Total SG&A expenses in 2Q21 were $1,729.2 million; $162.2 million higher than the $1,567.0 million reported in 2Q20. Total SG&A expenses as a percentage of net sales were 8.3% in 2Q21 and 9.5% in 2Q20.

OTHER INCOME (EXPENSE), NET

In millions of pesos 2Q21 2Q20 Change

$ $ $ %

Other income (expense), net (141.8) (207.5) 65.7 (31.7)

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 2Q21, we recorded other expenses of $141.8 million, compared with other expenses of $207.5 million reported in 2Q20.

OPERATING INCOME

In millions of pesos 2Q21 2Q20 Change

$ $ $ %

Operating income 2,088.8 82.8 2,005.9 2,421.5

Operating margin 10.0% 0.5% - -

Operating income in 2Q21 totaled $2,088.8 million; $2,005.9 million higher than the $82.8 million reported in 2Q20. This represents an operating margin of 10.0% for 2Q21, higher when compared to the same period of 2020. The increase in operating income is mainly attributed to efficiencies in our processes and better market conditions compared to 2Q20, which is allowing us to pass to our sales price the increases observed in raw materials costs.

NET FINANCIAL INCOME

In millions of pesos 2Q21 2Q20 Change

$ $ $ %

Net Financial Income (97.0) (122.3) 25.3 (20.7)

Financial Income 2.1 (42.3) 44.4 (105.0)

Financial Expense 99.1 80.0 19.1 23.8

In 2Q21, the Company reported net financial expenses of $97.0 million, compared to the net financial expenses of $122.3 million reported in the same period of 2020.

TAXES FOR THE PERIOD

In millions of pesos 2Q21 2Q20 Change

$ $ $ %

Total Taxes 548.7 (11.2) 559.9 (4,986.2)

Income tax 804.5 (407.6) 1,212.1 (297.4)

Deferred income tax (255.9) 396.4 (652.3) (164.5)

As a result of a higher operating income, Total taxes for the 2Q21 were $548.7 million compared with total taxes of $(11.2) million in the same period of 2020.

NET INCOME

In millions of pesos 2Q21 2Q20 Change

$ $ $ %

Net income 1,443.2 (28.2) 1,471.4 (5,214.7)

Net margin 6.9% (0.2)% - -

Basic and diluted earnings per share^1 2.46 (0.06) 2.5 n/a

Basic and diluted earnings per ADR^2 29.55 (0.70) 30.2 n/a

Weighted average Shares outstanding^3 599,743 599,787 - -

^1 In pesos

^2 in pesos, one ADR equals to twelve shares

^3 In thousands of shares

For the 2Q21 we had Net income of $1,443.2 million, representing a basic and diluted income per share of $2.46 compared with a negative net income of $28.2 million, which compares with $(0.06) pesos of net income per share in 2Q20. This increase was attributed to higher operating results. Net margin in 2Q21 was a positive 6.9% compared to a negative 0.2% reported in 2Q20.

EBITDA

In millions of pesos 2Q21 2Q20 Change

$ $ $ %

Net income 1,476.8 (34.8) 1,511.6 (4,343.0)

Income tax expense (benefit) 548.7 (11.2) 559.9 (4,986.2)

Result in associates (33.6) 6.6 (40.2) (610.2)

Net finance (income) expense 97.0 122.3 (25.3) (20.7)

Depreciation and amortization 348.6 354.8 (6.2) (1.7)

EBITDA 2,437.4 437.6 1,999.8 457.0

EBITDA Margin (%) 11.7% 2.7% - -

Net revenues 20,860.9 16,431.9 4,429.0 27.0

EBITDA in 2Q21 reached $2,437.4 million, representing an EBITDA margin of 11.7%, compared to an EBITDA of $437.6 million in 2Q20, with an EBITDA margin of 2.7%.

ACCUMULATED RESULTS

NET SALES BY GEOGRAPHY

In millions of pesos 1H21 1H20 Change

$ $ $ %

Net Sales 40,218.6 32,170.3 8,048.2 25.0

Net sales in Mexico 30,566.9 22,407.5 8,159.4 36.4

Net sales in the U.S. 9,651.6 9,762.8 (111.2) (1.1)

NET SALES BY SEGMENT

In millions of pesos

1H21

1H20

Change

$

$

$

%

Net Sales

40,218.6

32,170.3

8,048.2

25.0

Poultry

35,154.3

28,959.1

6,195.2

21.4

Other

5,064.2

3,211.2

1,853.0

57.7

NET SALES BY SEGMENT

In millions of pesos 1H21 1H20 Change

$ $ $ %

Net Sales 40,218.6 32,170.3 8,048.2 25.0

Poultry 35,154.3 28,959.1 6,195.2 21.4

Other 5,064.2 3,211.2 1,853.0 57.7

NET VOLUME SOLD BY SEGMENT

In metric tons

Change

1H21

1H20

Volume

%

Total sales volume:

1,141,743

1,142,694

(951.2)

(0.1)

Poultry

858,464

890,651

(32,187.3)

(3.6)

Others

283,279

252,043

31,236.0

12.4

During the first half of 2021, net sales totaled $40,218.6 million; $8,048.2 million or 25.0% more than $32,170.3 million reported in the same period of 2020. The increase in sales is mainly attributable to higher prices of our main business lines when compared to the first half of 2020.

In 1H21, sales of our U.S. operations represented 24.0% of our total sales, compared with 30.3% in 1H20. The decrease was mainly a result of the appreciation of the Mexican peso in the first half of 2021.

NET VOLUME SOLD BY SEGMENT

In metric tons Change

1H21 1H20 Volume %

Total sales volume: 1,141,743 1,142,694 (951.2) (0.1)

Poultry 858,464 890,651 (32,187.3) (3.6)

Others 283,279 252,043 31,236.0 12.4

During the first half of 2021, net sales totaled $40,218.6 million; $8,048.2 million or 25.0% more than $32,170.3 million reported in the same period of 2020. The increase in sales is mainly attributable to higher prices of our main business lines when compared to the first half of 2020.

In 1H21, sales of our U.S. operations represented 24.0% of our total sales, compared with 30.3% in 1H20. The decrease was mainly a result of the appreciation of the Mexican peso in the first half of 2021.

OPERATING RESULTS

In millions of pesos 1H21 1H20 Change

$ $ $ %

Cost of Sales 32,040.7 28,131.8 3,908.9 13.9

Gross Profit 8,177.9 4,038.5 4,139.4 102.5

Total SG&A 3,366.5 3,139.7 226.8 7.2

Other Income (expense) (163.6) (212.0) 48.4 (22.8)

Operating Income 4,647.7 686.8 3,960.9 576.7

Net Financial Income 222.6 2,304.2 (2,081.6) (90.3)

Income Tax 1,352.6 849.1 503.5 59.3

Net Income 3,517.8 2,141.9 1,375.8 64.2

In 1H21, the cost of sales totaled $32,040.7 million; $3,908.9 million or 13.9% higher than the $28,131.8 million reported in 1H20.

As a result, we reached a gross profit of $8,177.9 million and a gross margin of 20.3% in 1H21, when compared to $4,038.5 million of gross profit and margin of 12.6% reached in the same period of 2020.

Total SG&A expenses in 1H21 were $3,366.5 million; $226.8 million or 7.2% more than the $3,139.7 million reported in 1H20. In 1H21 total SG&A expenses as a percentage of net sales represented 8.4% compared with 9.8% in 1H20.

In 1H21 we had other expenses of $163.6 million, compared with other expenses of $212 million reported in 1H20.

Operating income in 1H21 was $4,647.7 million, which represents an operating margin of 11.6%, an increase compared to the operating income of $686.8 million and the operating margin of 2.1% in 1H20.

Net financial income in 1H21 was $222.6 million, lower when compared to a net financial income of $2,304.2 million in 1H20, mainly as a result of the Mexican peso appreciation year over year.

Total taxes were $1,352.6 million as of June 30, 2021. These taxes include $1,329.3 million of income tax and $23.3 million of deferred income taxes. This figure compares to total taxes of $849.1 million in 1H20.

All the above resulted in a net income of $3,517.8 million or 8.7% of net margin in the 1H21, which represents $5.96 pesos of earnings per share; while in the 1H20 the net income totaled $2,141.9 million, 6.7% of net margin and $3.55 pesos of net income per share.

EBITDA

In millions of pesos 1H21 1H20 Change

$ $ $ %

Net controlling interest profit 3,577.2 2,131.8 1,445.3 67.8

Income tax expense (benefit) 1,352.6 849.1 503.5 59.3

Result in associates (59.4) 10.1 (69.5) (686.9)

Net finance (income) expense (222.6) (2,304.2) 2,081.6 (90.3)

Depreciation and amortization 703.1 698.1 5.0 0.7

EBITDA 5,350.8 1,384.9 3,965.9 286.4

EBITDA Margin (%) 13.3% 4.3% - -

Net revenues 40,218.6 32,170.3 8,048.2 25.0

EBITDA in 1H21 reached $5,350.8 million, representing an EBITDA margin of 13.3%, compared to an EBITDA of $1,384.9 million in 1H20, with a margin of 4.3%.

BALANCE SHEET

BALANCE SHEET DATA

In millions of pesos June 30, 2021 Dec. 31, 2020 Change

$ $ $ %

TOTAL ASSETS 61,676.1 58,475.0 3,201.1 5.5

Cash and cash equivalents 21,461.0 19,242.4 2,218.5 11.5

Accounts receivable 4,249.9 4,366.7 (116.8) (2.7)

TOTAL LIABILITIES 14,578.9 14,548.2 30.7 0.2

Accounts payable 5,593.5 5,834.0 (240.5) (4.1)

Short-term debt 497.5 1,251.7 (754.2) (60.3)

Long-term debt 1,472.8 1,460.4 12.4 0.8

TOTAL STOCKHOLDERS' EQUITY 47,097.2 43,926.8 3,170.4 7.2

Capital stock 1,174.2 1,174.3 (0.1) (0.0)

Cash and equivalents as of June 30, 2021 totaled $21,461.0 million vs $19,242.4 million as of December 31, 2020.

Total debt as of June 30, 2021 was $1,970.3 million, compared to $2,712.1 million reported as of December 31, 2020, mainly as a result of payments made in our short-term bank debt.

Net cash as of June 30, 2021 was $19,460.6 million, compared to net cash of $16,530.3 million as of December 31, 2020.

CAPITAL EXPENDITURES

In millions of pesos 1H21 1H20 Change

$ $ $ %

Capital Expenditures 1,307.5 992.4 315.1 31.7

Total CAPEX for the 1H21 was $1,307.5 million and $992.4 million in 1H20, mainly allocated toward organic growth and productivity projects across all of our facilities.

STOCK INFORMATION

As of June 30, 2021

Total Shares 600,000,000

Total free float 26.75%

Market cap (millions of pesos) $45,162

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

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

Source: Yahoo Finances

ANALYST COVERAGE

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

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

Source: Yahoo Finances

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 Hector Maya L?pez hmmaya@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 $19.95 per USD $1.0, which corresponds to the rate at the close of June 30, 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 INCOMESecond Quarter Results, ended June 30th:-Unaudited- U.S. Dollar

In millions pesos 2021 2021 2020

Net sales $ 1,045.7 20,860.9 16,431.9

Cost of sales 847.2 16,901.1 14,574.5

Gross profit 198.5 3,959.8 1,857.4

SG&A 86.7 1,729.2 1,567.0

Other income (expenses), net (7.1 ) (141.8 ) (207.5 )

Operating income 104.7 2,088.8 82.8

Net finance income (4.9 ) (97.0 ) (122.3 )

Income tax 27.5 548.7 (11.2 )

Net Income $ 72.3 1,443.2 (28.2 )

Non-controlling interest (1.69 ) (33.6 ) 6.6

Net controlling interest profit 74.02 1,476.8 (34.8 )

Basic and diluted earnings per share 0.12 2.46 (0.06 )

Basic and diluted earnings per ADR 1.48 29.55 (0.70 )

Weighted average Shares outstanding^1 599,743 599,743 599,787

EBITDA Result $ 122.2 2,437.4 437.6

Gross margin 19.0 % 19.0 % 11.3 %

Operating margin 10.0 % 10.0 % 0.5 %

Net margin 7.1 % 6.9 % -0.2 %

EBITDA margin 11.7 % 11.7 % 2.7 %

^1 In thousandsCONSOLIDATED STATEMENT OF INCOMEAccumulated results, for the six months ended June 30.-Unaudited-U.S. Dollar

In millions pesos2021

2021

2020

Net sales$

2,016.0

40,218.6

32,170.3

Cost of sales1,606.0

32,040.7

28,131.8

Gross profit409.9

8,177.9

4,038.5

Selling, general and administrative expenses168.7

3,366.5

3,139.7

Other income (expenses), net(8.2

)

(163.6

)

(212.0

)

Operating income233.0

4,647.7

686.8

Net finance income11.2

222.6

2,304.2

Income tax67.8

1,352.6

849.1

Net income$

176.3

3,517.8

2,141.9

Non-controlling interest(2.98

)

(59.4

)

10.1

Net controlling interest profit179.3

3,577.2

2,131.8

Basic and diluted earnings per share0.30

5.96

3.55

Basic and diluted earnings per ADR3.59

71.6

42.65

Weighted average Shares outstanding1599,790

599,790

599,815

EBITDA Result$

268.2

5,350.8

1,384.9

Gross margin20.3

%

20.3

%

12.6

%

Operating margin11.6

%

11.6

%

2.1

%

Net margin8.9

%

8.7

%

6.7

%

EBITDA margin13.3

%

13.3

%

4.3

%

1 In thousandsCONSOLIDATED STATEMENT OF INCOMEAccumulated results, for the six months ended June 30.-Unaudited- U.S. Dollar

In millions pesos 2021 2021 2020

Net sales $ 2,016.0 40,218.6 32,170.3

Cost of sales 1,606.0 32,040.7 28,131.8

Gross profit 409.9 8,177.9 4,038.5

Selling, general and administrative 168.7 3,366.5 3,139.7 expensesOther income (expenses), net (8.2 ) (163.6 ) (212.0 )

Operating income 233.0 4,647.7 686.8

Net finance income 11.2 222.6 2,304.2

Income tax 67.8 1,352.6 849.1

Net income $ 176.3 3,517.8 2,141.9

Non-controlling interest (2.98 ) (59.4 ) 10.1

Net controlling interest profit 179.3 3,577.2 2,131.8

Basic and diluted earnings per share 0.30 5.96 3.55

Basic and diluted earnings per ADR 3.59 71.6 42.65

Weighted average Shares outstanding^1 599,790 599,790 599,815

EBITDA Result $ 268.2 5,350.8 1,384.9

Gross margin 20.3 % 20.3 % 12.6 %

Operating margin 11.6 % 11.6 % 2.1 %

Net margin 8.9 % 8.7 % 6.7 %

EBITDA margin 13.3 % 13.3 % 4.3 %

^1 In thousandsCONSOLIDATED STATEMENT OF FINANCIAL POSITION-Unaudited-In U.S. Dollar

June 30,

December 31,

In million pesos2021

2021

2020*

TOTAL ASSETS$

3,091.5

61,676.1

58,475.0

Total current assets1,768.6

35,284.5

32,586.0

Cash and cash equivalents1,075.7

21,461.0

19,242.4

Total accounts receivable213.0

4,249.9

4,366.7

Inventories399.9

7,977.9

7,701.0

Other current assets80.0

1,595.8

1,275.9

Total non current assets1,322.9

26,391.6

25,889.0

Net property, plant and equipment1,018.3

20,314.8

19,733.8

Other non current Assets304.6

6,076.8

6,155.2

TOTAL LIABILITIES$

730.8

14,578.9

14,548.2

Total current liabilities427.7

8,532.2

8,179.8

Notes payable to banks24.9

497.5

1,251.7

Accounts payable280.4

5,593.5

5,834.0

Other taxes payable and other accruals122.4

2,441.2

1,094.1

Total long-term liabilities303.1

6,046.7

6,368.4

Long-term debt73.8

1,472.8

1,460.4

Other non current liabilities48.2

962.0

1,033.0

Deferred income taxes181.0

3,611.9

3,875.0

TOTAL STOCKHOLDERS' EQUITY$

2,360.8

47,097.2

43,926.8

Capital stock58.9

1,174.2

1,174.3

Commission in shares issued20.7

413.3

413.4

Retained earnings2,206.4

44,018.1

40,874.4

Others accounts47.6

948.8

855.5

Non controlling interest27.2

542.8

609.2

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$

3,091.5

61,676.1

58,475.0

*AuditedCONSOLIDATED STATEMENT OF FINANCIAL POSITION-Unaudited- In U.S. June 30, December Dollar 31,

In million pesos 2021 2021 2020*

TOTAL ASSETS $ 3,091.5 61,676.1 58,475.0

Total current assets 1,768.6 35,284.5 32,586.0

Cash and cash equivalents 1,075.7 21,461.0 19,242.4

Total accounts receivable 213.0 4,249.9 4,366.7

Inventories 399.9 7,977.9 7,701.0

Other current assets 80.0 1,595.8 1,275.9

Total non current assets 1,322.9 26,391.6 25,889.0

Net property, plant and equipment 1,018.3 20,314.8 19,733.8

Other non current Assets 304.6 6,076.8 6,155.2

TOTAL LIABILITIES $ 730.8 14,578.9 14,548.2

Total current liabilities 427.7 8,532.2 8,179.8

Notes payable to banks 24.9 497.5 1,251.7

Accounts payable 280.4 5,593.5 5,834.0

Other taxes payable and other accruals 122.4 2,441.2 1,094.1

Total long-term liabilities 303.1 6,046.7 6,368.4

Long-term debt 73.8 1,472.8 1,460.4

Other non current liabilities 48.2 962.0 1,033.0

Deferred income taxes 181.0 3,611.9 3,875.0

TOTAL STOCKHOLDERS' EQUITY $ 2,360.8 47,097.2 43,926.8

Capital stock 58.9 1,174.2 1,174.3

Commission in shares issued 20.7 413.3 413.4

Retained earnings 2,206.4 44,018.1 40,874.4

Others accounts 47.6 948.8 855.5

Non controlling interest 27.2 542.8 609.2

TOTAL LIABILITIES AND STOCKHOLDERS' $ 3,091.5 61,676.1 58,475.0EQUITY *AuditedCONSOLIDATED STATEMENT OF CASH FLOWSIn million of pesos-Unaudited-U.S. Dollar

June 30,

2021

2021

2020

NET MAJORITY INCOME BEFORE INCOME TAX$

244.1

4,870.4

2,666.5

ITEMS RELATING TO INVESTING ACTIVITIES:41.2

821.6

269.4

Depreciation and others45.7

911.5

639.3

Income (loss) on sale of plant and equipment2.2

43.3

(23.1

)

Other Items(6.7

)

(133.2

)

(346.7

)

NET CASH GENERATED FROM NET INCOME BEFORE TAXES285.3

5,691.9

2,935.9

CASH GENERATED OR USED IN THE OPERATION:14.3

284.7

(1,977.9

)

Decrease (increase) in accounts receivable(3.5

)

(70.5

)

(1,426.1

)

Decrease (increase) in inventories(15.5

)

(310.0

)

395.7

Increase (decrease) in accounts payable93.0

1,855.0

(1,961.8

)

Other Items(59.6

)

(1,189.9

)

1,014.3

NET CASH FLOW FROM OPERATING ACTIVITIES299.6

5,976.7

958.0

NET CASH FLOW FROM INVESTING ACTIVITIES(44.2

)

(882.8

)

(188.6

)

Acquisition of property, plant and equipment(65.5

)

(1,306.2

)

(824.6

)

Proceeds from sales of property plant and equipment0.1

1.8

37.3

Other Items21.1

421.6

598.7

CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES255.3

5,093.9

769.4

Net cash provided by financing activities:(144.1

)

(2,875.3

)

(706.5

)

Proceeds from loans62.0

1,237.2

3,478.6

Principal payments on loans(95.9

)

(1,912.3

)

(3,424.2

)

Dividends paid(21.3

)

(425.8

)

(420.0

)

Other items(88.9

)

(1,774.4

)

(340.9

)

Net increase (decrease) in cash and equivalents111.2

2,218.5

62.9

Cash and investments at the beginning of year$

964.5

19,242.4

19,164.8

CASH AND INVESTMENTS AT END OF PERIOD$

1,075.7

21,461.0

19,227.7

DERIVATIVES POSITION REPORT

CONSOLIDATED STATEMENT OF CASH FLOWSIn million of pesos-Unaudited- U.S. Dollar June 30,

2021 2021 2020

NET MAJORITY INCOME BEFORE INCOME TAX $ 244.1 4,870.4 2,666.5

ITEMS RELATING TO INVESTING ACTIVITIES: 41.2 821.6 269.4

Depreciation and others 45.7 911.5 639.3

Income (loss) on sale of plant and 2.2 43.3 (23.1 )equipmentOther Items (6.7 ) (133.2 ) (346.7 )

NET CASH GENERATED FROM NET INCOME 285.3 5,691.9 2,935.9 BEFORE TAXESCASH GENERATED OR USED IN THE OPERATION: 14.3 284.7 (1,977.9 )

Decrease (increase) in accounts (3.5 ) (70.5 ) (1,426.1 )receivableDecrease (increase) in inventories (15.5 ) (310.0 ) 395.7

Increase (decrease) in accounts payable 93.0 1,855.0 (1,961.8 )

Other Items (59.6 ) (1,189.9 ) 1,014.3

NET CASH FLOW FROM OPERATING ACTIVITIES 299.6 5,976.7 958.0

NET CASH FLOW FROM INVESTING ACTIVITIES (44.2 ) (882.8 ) (188.6 )

Acquisition of property, plant and (65.5 ) (1,306.2 ) (824.6 )equipmentProceeds from sales of property plant 0.1 1.8 37.3 and equipmentOther Items 21.1 421.6 598.7

CASH FLOW SURPLUS (REQUIREMENTS OF) TO 255.3 5,093.9 769.4 BE USED IN FINANCING ACTIVITIES Net cash provided by financing (144.1 ) (2,875.3 ) (706.5 )activities:Proceeds from loans 62.0 1,237.2 3,478.6

Principal payments on loans (95.9 ) (1,912.3 ) (3,424.2 )

Dividends paid (21.3 ) (425.8 ) (420.0 )

Other items (88.9 ) (1,774.4 ) (340.9 )

Net increase (decrease) in cash and 111.2 2,218.5 62.9 equivalents Cash and investments at the beginning of $ 964.5 19,242.4 19,164.8 yearCASH AND INVESTMENTS AT END OF PERIOD $ 1,075.7 21,461.0 19,227.7

DERIVATIVES POSITION REPORT

Second Quarter 2021Thousands of Mexican Pesos, as of June 30, 2021 TYPE OF VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTSFINANCIAL OBJECTIVE NOTIONAL DUE GUARANTIESINSTRUMENT 2Q-2021 1Q-2021 2Q-2021 1Q-2021 BY YEAR REQUIRED

Forward $ 248,431 $ 19.95 $ 20.42 $ -237,421 $ -231,713 96% inVanilla, Hedge 2021;and KO Fwd 4% 2022 CORN CORN In USD per In USD per Bushel Bushel month price month price May-21 $ 5.643

Jul-21 $ 7.200 Jul-21 $ 5.475

Sep-21 $ 5.993 Sep-21 $ 4.960

Dec-21 $ 5.885 Dec-21 $ 4.775

SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per tonFutures month price month pricefor corn Aug-21 $ 377.5 86% inand Hedge $ 201,788 $ 12,244 $ 12,899 2021soybean Sep-21 $ 379.0 May-21 $ 423.2 and 14%meal in 2022 Oct-21 $ 378.8 Jul-21 $ 424.8

Dec-21 $ 381.7 Aug-21 $ 419.6

Jan-22 $ 380.1 Sep-21 $ 410.7

Mar-22 $ 374.1 Oct-21 $ 399.6 The deals May-22 $ 371.8 Dec-21 $ 397.5 consider the Jul-22 $ 373.7 possibility of Aug-22 $ 369.6 margin calls but Sep-22 $ 369.6 not another kind CORN CORN of In USD per In USD per guarantee Bushel Bushel month price month price Jul-21 $ 7.200 May-21 $ 5.643 99% inOptions of Hedge $ 594,632 Sep-21 $ 5.993 Jul-21 $ 5.475 $ 88,823 $ 33,523 2021Corn and 1% Dec-21 $ 5.885 Sep-21 $ 4.960 in 2022

Mar-22 $ 5.955 Dec-21 $ 4.775

Mar-22 $ 4.194

SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price Aug-21 $ 377.5 May-21 $ 423.2

Sep-21 $ 379.0 Jul-21 $ 424.8

Oct-21 $ 378.8 Aug-21 $ 419.6 80% inOptions of $ 484,302 $ 3,603 $ 36,364 2021soybean Hedge Dec-21 $ 381.7 Sep-21 $ 410.7 and 20%meal in 2022 Jan-22 $ 380.1 Oct-21 $ 399.6

Mar-22 $ 374.1 Dec-21 $ 397.5

May-22 $ 371.8 Jan-22 $ 394.2

Mar-22 $ 383.9

-The total financial instruments do not exceed 5% of total assets as of June30, 2021.-The notional value represents the net position as of June 30, 2021 at theexchange rate of Ps.19.95 per one dollar.-A negative value means an unfavorable effect for the Company.Second Quarter 2021Thousands of Mexican Pesos, as of June 30, 2021PROBABLE SCENARIO

TYPE OF FINANCIALINSTRUMENTREASONABLEVALUEVALUE OF THE RELATED COMMODITYEFFECT ON THEINCOME STATEMENTEFFECT ON THE CASH FLOW(3)Reference Value(1)-2.5%

2.5%

5.0%

-2.5%

2.5%

5.0%

Forward Vanilla, and KO Fwd-$

237,421

$

19.45

$

20.45

$

20.94

Direct-$

361,308

-$

113,534

-$

478

-5%

5%

10%

-5%

5%

10%

Futures of Corn: (2)$

12,244

$

6.840

$

7.560

$

7.920

The effect willmaterialize as theinventory is consumed$

1,851

$

22,637

$

33,030

Futures of Soybean Meal: (2)$

358.6

$

396.4

$

415.3

Options for Corn$

88,823

$

6.840

$

7.560

$

7.920

$

68,536

$

109,110

$

129,397

Options of Soybean Meal$

3,603

$

358.6

$

396.4

$

415.3

-$

20,613

$

27,818

$

52,033

SecondQuarter2021Thousands of Mexican PROBABLE SCENARIOPesos, as of June 30,2021 VALUE OF THE RELATED EFFECT ONTYPE OF REASONABLE COMMODITY THE EFFECT ON THE CASH FLOW^(3)FINANCIAL VALUE Reference Value^(1) INCOMEINSTRUMENT -2.5% 2.5% 5.0% STATEMENT -2.5% 2.5% 5.0%

Forward -$ 237,421 $ 19.45 $ 20.45 $ 20.94 -$ 361,308 -$ 113,534 -$ 478Vanilla, Directand KO Fwd -5% 5% 10% -5% 5% 10%

Futures of $ 6.840 $ 7.560 $ 7.920Corn: ^(2) $ 12,244 $ 1,851 $ 22,637 $ 33,030Futures of $ 358.6 $ 396.4 $ 415.3 The effectSoybean willMeal: ^(2) materializeOptions $ 88,823 $ 6.840 $ 7.560 $ 7.920 as the $ 68,536 $ 109,110 $ 129,397for Corn inventoryOptions of $ 3,603 $ 358.6 $ 396.4 $ 415.3 is consumed -$ 20,613 $ 27,818 $ 52,033SoybeanMeal(1)

The reference value is the exchange rate of Ps. $19.95 per USD as of June 30, 2021.(2)

The reference values are; the future of corn for July 2021, $7.2000 USD/bushel and the future of soybean meal for August 2021, $377.50USD/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.^(1) The reference value is the exchange rate of Ps. $19.95 per USD as of June 30, 2021.^(2) The reference values are; the future of corn for July 2021, $7.2000 USD/ bushel and the future of soybean meal for August 2021, $377.50USD/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.Second Quarter 2021Thousands of Mexican Pesos, as of June 30, 2021STRESS SCENARIO

TYPE OF FINANCIALINSTRUMENTREASONABLEVALUEVALUE OF THE RELATED COMMODITYEFFECT ON THEINCOME STATEMENTEFFECT ON THE CASH FLOWReference Value-50%

-25%

25%

50%

-50%

-25%

25%

50%

Forward Vanilla and KO Fwd-$

237,421

$

9.97

$

14.96

$

24.93

$

29.92

Direct-$

2,715,148

-$

1,476,285

$

787,856

$

1,789,187

CONFERENCE CALL INFORMATION

The Company will host its second quarter 2021 earnings call on Tuesday, July 27th, 2021. The earnings call will take place at 9:00 am Central Time (10:00 am ET).

To participate in the earnings call, please dial:

Toll free in the U.S.: 1 (888) 771-4371 Toll free in Mexico: 001 866 779 0965 Toll Local Mexico: 52 55 6722 5257 Toll in the Brazil: 0800 761 0710

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

Confirmation Number: 50196779

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 Business Unit in the United States of America. 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/20210726005631/en/

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