Business Wire | Oct 25, 2021 08:30AM EDT

Industrias Bachoco Announces Third Quarter 2021 Results

Oct. 25, 2021

CELAYA, Mexico & GUANAJUATO, Mexico--(BUSINESS WIRE)--Oct. 25, 2021--Industrias Bachoco, S.A.B. de C.V., "Bachoco" or "the Company", (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the third quarter ("3Q21") and first nine months of 2021 ("9M21") ended on September 30th, 2021. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$").

HIGHLIGHTS 2021

* Net sales increased 10.6% in 3Q21 and 19.8% in 9M21. * SG&A expenses as a percentage of net sales were 8.9% in 3Q21 and 8.5% in 9M21. * EBITDA margin was 5.6% for 3Q21 and 10.7% for the 9M21 * Earnings per basic and diluted share were $1.41 for 3Q21 and $7.37 for 9M21.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "This was a typical third quarter for the Company, in terms of seasonality, with chicken prices at their weakest as compared to the first half of the year.

In Mxico, we observed lower demand which negatively affected our prices. Unlike the U.S., where main commodity prices remained strong for most of the quarter.

In terms of cost of sales, prices of corn and soybean meal remained high when compared to previous years, fully impacting our cost in Mxico and the U.S. As a result, our cost of sales was 16.6% higher than reported in 3Q20.

The behavior in pricing and the increase in cost led us to an EBITDA of $1,127.4 million and a margin of 5.6% for the 3Q21 compared to the $1,828.2 million and margin of 10.0% of the same period of 2020. On the other hand, for the nine months of the year 2021, the EBITDA margin was 10.7%, higher when compared to 6.4% EBITDA margin of the same period of 2020.

Despite the challenging conditions of this quarter, the Company remained in a healthy financial condition as we reached a net cash level of $18,269.7 million, which will allow us to continue to support our growth plans."

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 3Q21 3Q20 Change

$ $ $ %

Net Sales 20,229.0 18,292.4 1,936.6 10.6

Net sales in Mexico 14,963.8 13,114.4 1,849.4 14.1

Net sales in the U.S. 5,265.2 5,178.0 87.2 1.7

NET SALES BY SEGMENT

In millions of pesos

3Q21

3Q20

Change

$

$

$

%

Net Sales

20,229.0

18,292.4

1,936.6

10.6

Poultry

17,765.7

16,226.6

1,539.1

9.5

Other

2,463.3

2,065.7

397.6

19.2

NET SALES BY SEGMENT

In millions of pesos 3Q21 3Q20 Change

$ $ $ %

Net Sales 20,229.0 18,292.4 1,936.6 10.6

Poultry 17,765.7 16,226.6 1,539.1 9.5

Other 2,463.3 2,065.7 397.6 19.2

NET VOLUME SOLD BY SEGMENT

In tonsChange

3Q21

3Q20

Volume

%

Total sales volume:

570,381

568,470

1,911.2

0.3

Poultry

442,665

434,272

8,392.9

1.9

Others

127,716

134,198

(6,481.7)

(4.8)

The Company's 3Q21 net sales totaled $20,229.0 million; $1,936.6 million or 10.6% higher than the $18,292.4 million reported in 3Q20. The increase is a result of better prices in all our business lines.

In 3Q21, sales of our U.S. operations represented 26.0% and compared to 28.3% in the 3Q20.

NET VOLUME SOLD BY SEGMENT

In tons Change

3Q21 3Q20 Volume %

Total sales volume: 570,381 568,470 1,911.2 0.3

Poultry 442,665 434,272 8,392.9 1.9

Others 127,716 134,198 (6,481.7) (4.8)

The Company's 3Q21 net sales totaled $20,229.0 million; $1,936.6 million or 10.6% higher than the $18,292.4 million reported in 3Q20. The increase is a result of better prices in all our business lines.

In 3Q21, sales of our U.S. operations represented 26.0% and compared to 28.3% in the 3Q20.

GROSS PROFIT

In millions of pesos 3Q21 3Q20 Change

$ $ $ %

Cost of sales 17,619.0 15,107.6 2,511.4 16.6

Gross profit 2,610.0 3,184.7 (574.8) (18.0)

Gross margin 12.9% 17.4% - -

In 3Q21, cost of sales was $17,619.0 million; $2,511.4 million or 16.6% higher than the $15,107.6 million reported in 3Q20. This increase was mainly attributed to higher unit cost in our main business lines mainly as a result of higher raw material costs in peso terms.

The Company?s gross profit in 3Q21 was $2,610.0 million, lower than the gross profit of $3,184.7 million in 3Q20, with a gross margin of 12.9% for 3Q21 vs 17.4% in 3Q20.

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

In millions of pesos 3Q21 3Q20 Change

$ $ $ %

Total SG&A 1,790.9 1,600.8 190.1 11.9

Total SG&A expenses in 3Q21 were $1,790.9 million; $190.1 million higher than the $1,600.8 million reported in 3Q20. Total SG&A expenses as a percentage of net sales represented 8.9%, slightly higher than the 8.8% in 3Q20.

OTHER INCOME (EXPENSE), NET

In millions of pesos 3Q21 3Q20 Change

$ $ $ %

Other income (expense), net (80.7) (99.2) 18.5 (18.7)

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 3Q21, we recorded other expenses of $80.7 million, compared with other expenses of $99.2 million reported in 3Q20.

OPERATING INCOME

In millions of pesos 3Q21 3Q20 Change

$ $ $ %

Operating income 738.4 1,484.8 (746.4) (50.3)

Operating margin 3.7% 8.1% - -

Operating income in 3Q21 totaled $738.4 million; $746.4 million lower than the Operating income of $1,484.8 million reported in 3Q20. This represents an Operating margin of 3.7% for 3Q21, versus an Operating margin of 8.1% in the same period of 2020. The decrease in Operating income is mainly attributed to higher cost of sales as a result of higher raw material costs both in USD and peso terms.

NET FINANCIAL INCOME

In millions of pesos 3Q21 3Q20 Change

$ $ $ %

Net Financial Income 459.6 (267.5) 727.1 (271.8)

Financial Income 527.5 (212.9) 740.4 (347.8)

Financial Expense 67.9 54.6 13.4 24.5

In 3Q21, the Company reported net financial income of $459.6 million, compared to a net financial expense of $267.5 million reported in the same period of 2020. The increase is mainly attributed to higher exchange rate gains.

TAXES FOR THE PERIOD

In millions of pesos 3Q21 3Q20 Change

$ $ $ %

Total Taxes 380.6 359.2 21.5 6.0

Income tax (275.3) 114.5 (389.7) (340.5)

Deferred income tax 655.9 244.7 411.2 168.0

Total taxes for the 3Q21 were $380.6 million, which is higher when compared with total taxes of the same period of 2020.

NET CONTROLLING INTEREST INCOME

In millions of pesos 3Q21 3Q20 Change

$ $ $ %

Net income 817.4 858.1 (40.8) (4.7)

Net margin 4.0% 4.7% - -

Non-Controlling Interest income (26.4) 30.1 (56.5) n/a

Net controlling interest income 843.8 828.0 15.8 1.9

Basic and diluted income per share^1 1.41 1.38 0.03 n/a

Basic and diluted income per ADR^2 16.88 16.56 0.3 n/a

Weighted average Shares outstanding^3 599,734 599,823 - -

^1 In pesos

^2 in pesos, one ADR equals to twelve shares

^3 In thousands of shares

Net controlling interest income for 3Q21 was $843.8 million, representing a basic and diluted income per share of $1.41 pesos, compared with a net controlling interest income of $828.0 million, which represented a $1.38 pesos of income per share in 3Q20.

EBITDA

In millions of pesos 3Q21 3Q20 Change

$ $ $ %

Net controlling interest income 843.8 828.0 15.8 1.9

Income tax expense (benefit) 380.6 359.2 21.5 6.0

Result in associates (26.4) 30.1 (56.5) (187.7)

Net finance (income) expense (459.6) 267.5 (727.1) (271.8)

Depreciation and amortization 389.0 343.4 45.5 13.3

EBITDA 1,127.4 1,828.2 (700.8) (38.3)

EBITDA Margin (%) 5.6% 10.0% - -

Net revenues 20,229.0 18,292.4 1,936.6 10.6

EBITDA in 3Q21 reached $1,127.4 million representing an EBITDA margin of 5.6%, compared to an EBITDA of $1,828.2 million in 3Q20, with an EBITDA margin of 10.0%.

ACCUMULATED RESULTS

NET SALES BY GEOGRAPHY

In millions of pesos 9M21 9M20 Change

$ $ $ %

Net Sales 60,447.5 50,462.7 9,984.9 19.8

Net sales in Mexico 45,530.7 35,521.9 10,008.8 28.2

Net sales in the U.S. 14,916.8 14,940.8 (23.9) (0.2)

NET SALES BY SEGMENT

In millions of pesos

9M21

9M20

Change

$

$

$

%

Net Sales

60,447.5

50,462.7

9,984.9

19.8

Poultry

52,920.0

45,185.7

7,734.3

17.1

Other

7,527.5

5,277.0

2,250.6

42.6

NET SALES BY SEGMENT

In millions of pesos 9M21 9M20 Change

$ $ $ %

Net Sales 60,447.5 50,462.7 9,984.9 19.8

Poultry 52,920.0 45,185.7 7,734.3 17.1

Other 7,527.5 5,277.0 2,250.6 42.6

NET VOLUME SOLD BY SEGMENT

In metric tons

Change

9M21

9M20

Volume

%

Total sales volume:

1,712,125

1,711,165

960.0

0.1

Poultry

1,301,129

1,324,924

(23,794.4)

(1.8)

Others

410,995

386,241

24,754.3

6.4

During the 9M21, net sales totaled $60,447.5 million; $9,984.9 million or 19.8% more than the $50,462.7 million reported in the same period of 2020.

In 9M21, sales of our U.S. operations represented 24.7% of our total sales, compared with 29.6% in 9M20.

NET VOLUME SOLD BY SEGMENT

In metric tons Change

9M21 9M20 Volume %

Total sales volume: 1,712,125 1,711,165 960.0 0.1

Poultry 1,301,129 1,324,924 (23,794.4) (1.8)

Others 410,995 386,241 24,754.3 6.4

During the 9M21, net sales totaled $60,447.5 million; $9,984.9 million or 19.8% more than the $50,462.7 million reported in the same period of 2020.

In 9M21, sales of our U.S. operations represented 24.7% of our total sales, compared with 29.6% in 9M20.

OPERATING RESULTS

9M21 9M20 Change

$ $ $ %

Cost of Sales 49,659.7 43,239.4 6,420.3 14.8

Gross Profit 10,787.9 7,223.3 3,564.6 49.3

Total SG&A 5,157.4 4,740.5 416.9 8.8

Other Income (expense) (244.3) (311.2) 66.9 (21.5)

Operating Income 5,386.1 2,171.5 3,214.6 148.0

Net Financial Income 682.2 2,036.8 (1,354.5) (66.5)

Income Tax 1,733.3 1,208.3 525.0 43.4

Net Income 4,335.1 3,000.0 1,335.1 44.5

Non-controlling interest (85.8) 40.2 (126.0) (313.2)

Net controlling interest Income 4,420.9 2,959.8 1,461.1 49.4

In the 9M21, the cost of sales totaled $49,659.7 million; $6,420.3 million or 14.8% higher than $43,239.4 million reported in the 9M20.

As a result, we reached a gross profit of $10,787.9 million and a gross margin of 17.8% in 9M21, when compared to $7,223.3 million of gross profit and a gross margin of 14.3% reached in the same period of 2020.

Total SG&A expenses in 9M21 were $5,157.4 million; $416.9 million or 8.8% more than the $4,740.5 million reported in 9M20. In 9M21 total SG&A expenses as a percentage of net sales represented 8.5% lower when compared to the 9.4% on 9M20.

In 9M21 we had other expenses of $244.3 million, compared with other expenses of $311.2 million reported in 9M20.

The operating income in 9M21 was $5,386.1 million, which represents an operating margin of 8.9%, an increase from an operating income of $2,171.5 million and an operating margin of 4.3% in 9M20.

The net financial income in 9M21 was $682.2 million lower when compared to the net financial income of $2,036.8 million in 9M20.

Total taxes were $1,733.3 million as of September 30th, 2021. These taxes include $1,054.0 million of income tax and $679.2 million of deferred income taxes. This figure compares to total taxes of $1,208.3 million in 9M20; the increase was mainly attributed to a higher income before taxes.

All the above resulted in a net controlling interest income of $4,420.9 million in the 9M21, which represents $7.37 pesos of earnings per share; while in the 9M20 the net controlling interest income totaled $2,959.8 million, and $4.93 pesos of earnings per share.

EBITDA

In millions of pesos 9M21 9M20 Change

$ $ $ %

Net controlling interest profit 4,420.9 2,959.8 1,461.1 49.4

Income tax expense (benefit) 1,733.3 1,208.3 525.0 43.4

Result in associates (85.8) 40.2 (126.0) (313.2)

Net finance (income) expense (682.2) (2,036.8) 1,354.5 (66.5)

Depreciation and amortization 1,092.1 1,041.6 50.5 4.8

EBITDA 6,478.2 3,213.1 3,265.1 101.6

EBITDA Margin (%) 10.7% 6.4% - -

Net revenues 60,447.5 50,462.7 9,984.9 19.8

EBITDA in 9M21 reached $6,478.2 million, representing an EBITDA margin of 10.7%, compared to EBITDA of $3,213.1 million in 9M20, with an EBITDA margin of 6.4%.

BALANCE SHEET

BALANCE SHEET DATA

In millions of pesos Sep 30, 2021 Dec. 31^st, 2020 Change

$ $ $ %

TOTAL ASSETS 63,262.3 58,475.0 4,787.3 8.2

Cash and cash equivalents 20,088.0 19,242.4 845.6 4.4

Accounts receivable 4,743.4 4,366.7 376.7 8.6

TOTAL LIABILITIES 15,601.5 14,548.2 1,053.3 7.2

Accounts payable 6,503.2 5,834.0 669.3 11.5

Short-term debt 1,818.3 1,251.7 566.6 45.3

Long-term debt - 1,460.4 (1,460.4) (100.0)

TOTAL STOCKHOLDERS' EQUITY 47,660.8 43,926.8 3,734.0 8.5

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

Cash and equivalents as of September 30th, 2021 totaled $20,088.0 million vs $19,242.4 million as of December 31, 2020.

Total debt as of September 30th, 2021 was $1,818.3 million, compared to $2,712.1 million reported as of December 31, 2020.

Net cash as of September 30th, 2021 was $18,269.7 million, compared to net cash of $16,530.3 million as of December 31, 2020.

CAPITAL EXPENDITURES

In millions of pesos 9M21 9M20 Change

$ $ $ %

Capital Expenditures 2,251.1 1,570.1 681.0 43.4

Total CAPEX for the 9M21 was $2,251.1 million vs $1,570.1 million in 9M20, mainly allocated toward organic growth and productivity projects across all of our facilities.

STOCK INFORMATION

As of September 30, 2021

Total Shares 600,000,000

Total free float 26.75%

Market cap (millions of pesos) $45,588

Source: Yahoo Finances

SHARE PRICE

Mexican Stock Exchange

The New York Stock Exchange

Ticker Symbol: Bachoco

Ticker Symbol: IBA

In nominal pesos per Share

In U.S. Dollar per ADR

Month

High

Low

Close

High

Low

Close

Sep-21

77.07

73.02

75.98

47.11

43.82

44.20

Aug-21

73.90

70.47

73.45

44.24

42.17

43.75

Jul-21

78.00

72.86

72.86

47.00

43.89

43.89

Jun-21

77.89

73.93

75.27

47.60

43.93

46.32

May-21

77.50

74.92

76.52

46.76

44.55

46.40

Apr-21

75.39

68.04

74.73

45.47

39.73

44.47

Mar-21

69.42

67.16

68.04

40.45

38.30

39.95

Feb-21

71.99

68.02

69.42

43.19

39.67

39.67

Jan-21

73.60

69.22

69.28

44.66

41.14

41.14

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

Sep-21 77.07 73.02 75.98 47.11 43.82 44.20

Aug-21 73.90 70.47 73.45 44.24 42.17 43.75

Jul-21 78.00 72.86 72.86 47.00 43.89 43.89

Jun-21 77.89 73.93 75.27 47.60 43.93 46.32

May-21 77.50 74.92 76.52 46.76 44.55 46.40

Apr-21 75.39 68.04 74.73 45.47 39.73 44.47

Mar-21 69.42 67.16 68.04 40.45 38.30 39.95

Feb-21 71.99 68.02 69.42 43.19 39.67 39.67

Jan-21 73.60 69.22 69.28 44.66 41.14 41.14

ANALYST COVERAGE

Institution

Analyst name

E-mail

ACTINVER

Enrique Mendoza Farias

emendoza@actinver.com.mx

BBVA BANCOMER

Pablo Abraham Peregrina

pablo.abraham@bbva.com

GBM

Luis Rodrigo Willard Alonso

lrwillard@gbm.com

INTERCAM

Richard Horbach Martinez

rhorbach@intercam.com.mx

JP MORGAN

Ulises Argote

ulises.argote@jpmorgan.com

SANTANDER

Alanis Pe?a Alan

aalanis@santander.com.mx

BANK OF AMERICA

Fernando Olvera

folvera@bofa.com

APPENDICES

For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $20.64 per USD $1.0, which corresponds to the rate at the close of September 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

ANALYST COVERAGE

Institution Analyst name E-mail

ACTINVER Enrique Mendoza Farias emendoza@actinver.com.mx

BBVA BANCOMER Pablo Abraham Peregrina pablo.abraham@bbva.com

GBM Luis Rodrigo Willard Alonso lrwillard@gbm.com

INTERCAM Richard Horbach Martinez rhorbach@intercam.com.mx

JP MORGAN Ulises Argote ulises.argote@jpmorgan.com

SANTANDER Alanis Pe?a Alan aalanis@santander.com.mx

BANK OF AMERICA Fernando Olvera folvera@bofa.com

APPENDICES

For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $20.64 per USD $1.0, which corresponds to the rate at the close of September 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 FINANCIAL POSITION-Unaudited- In U.S. September December Dollar 30, 31,

In million pesos 2021 2021 2020*

TOTAL ASSETS $ 3,065.0 63,262.3 58,475.0

Total current assets 1,750.8 36,137.1 32,586.0

Cash and cash equivalents 973.3 20,088.0 19,242.4

Total accounts receivable 229.8 4,743.4 4,366.7

Inventories 427.1 8,814.6 7,701.0

Other current assets 120.7 2,491.1 1,275.9

Total non current assets 1,314.2 27,125.2 25,889.0

Net property, plant and equipment 1,015.3 20,956.4 19,733.8

Other non current Assets 298.9 6,168.8 6,155.2

TOTAL LIABILITIES $ 755.9 15,601.5 14,548.2

Total current liabilities 503.3 10,388.9 8,179.8

Notes payable to banks 88.1 1,818.3 1,251.7

Accounts payable 315.1 6,503.2 5,834.0

Other taxes payable and other accruals 100.2 2,067.4 1,094.1

Total long-term liabilities 252.5 5,212.6 6,368.4

Long-term debt - - 1,460.4

Other non current liabilities 44.7 922.6 1,033.0

Deferred income taxes 207.8 4,290.0 3,875.0

TOTAL STOCKHOLDERS' EQUITY $ 2,309.1 47,660.8 43,926.8

Capital stock 56.9 1,174.2 1,174.3

Commission in shares issued 20.0 413.3 413.4

Retained earnings 2,148.5 44,345.6 40,874.4

Others accounts 58.7 1,211.4 855.5

Non controlling interest 25.0 516.4 609.2

TOTAL LIABILITIES AND STOCKHOLDERS' $ 3,065.0 63,262.3 58,475.0EQUITY *AuditedCONSOLIDATED STATEMENT OF INCOMEThird Quarter Results, ended September 30th:-Unaudited-U.S. Dollar

In millions pesos2021

2021

2020

Net sales$

980.1

20,229.0

18,292.4

Cost of sales853.6

17,619.0

15,107.6

Gross profit126.5

2,610.0

3,184.7

SG&A86.8

1,790.9

1,600.8

Other income (expenses), net(3.9

)

(80.7

)

(99.2

)

Operating income35.8

738.4

1,484.8

Net finance income22.3

459.6

(267.5

)

Income tax18.4

380.6

359.2

Net Income$

39.6

817.4

858.1

Non-controlling interest(1.28

)

(26.4

)

30.1

Net controlling interest profit40.88

843.8

828.0

Basic and diluted earnings per share0.07

1.41

1.38

Basic and diluted earnings per ADR0.82

16.88

16.56

Weighted average Shares outstanding1599,734

599,734

599,823

EBITDA Result$

54.6

1,127.4

1,828.2

Gross margin12.9

%

12.9

%

17.4

%

Operating margin3.7

%

3.7

%

8.1

%

Net margin4.2

%

4.0

%

4.7

%

EBITDA margin5.6

%

5.6

%

10.0

%

1 In thousandsCONSOLIDATED STATEMENT OF INCOMEThird Quarter Results, ended September 30th:-Unaudited- U.S. Dollar

In millions pesos 2021 2021 2020

Net sales $ 980.1 20,229.0 18,292.4

Cost of sales 853.6 17,619.0 15,107.6

Gross profit 126.5 2,610.0 3,184.7

SG&A 86.8 1,790.9 1,600.8

Other income (expenses), net (3.9 ) (80.7 ) (99.2 )

Operating income 35.8 738.4 1,484.8

Net finance income 22.3 459.6 (267.5 )

Income tax 18.4 380.6 359.2

Net Income $ 39.6 817.4 858.1

Non-controlling interest (1.28 ) (26.4 ) 30.1

Net controlling interest profit 40.88 843.8 828.0

Basic and diluted earnings per share 0.07 1.41 1.38

Basic and diluted earnings per ADR 0.82 16.88 16.56

Weighted average Shares outstanding1 599,734 599,734 599,823

EBITDA Result $ 54.6 1,127.4 1,828.2

Gross margin 12.9 % 12.9 % 17.4 %

Operating margin 3.7 % 3.7 % 8.1 %

Net margin 4.2 % 4.0 % 4.7 %

EBITDA margin 5.6 % 5.6 % 10.0 %

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

In millions pesos2021

2021

2020

Net sales$

2,928.7

60,447.5

50,462.7

Cost of sales2,406.0

49,659.7

43,239.4

Gross profit522.7

10,787.9

7,223.3

Selling, general and administrative expenses249.9

5,157.4

4,740.5

Other income (expenses), net(11.8

)

(244.3

)

(311.2

)

Operating income261.0

5,386.1

2,171.5

Net finance income33.1

682.2

2,036.8

Income tax84.0

1,733.3

1,208.3

Net income$

210.0

4,335.1

3,000.0

Non-controlling interest(4.16

)

(85.8

)

40.2

Net controlling interest profit214.2

4,420.9

2,959.8

Basic and diluted earnings per share0.36

7.37

4.93

Basic and diluted earnings per ADR4.29

88.5

59.21

Weighted average Shares outstanding1599,766

599,766

599,818

EBITDA Result$

313.9

6,478.2

3,213.1

Gross margin17.8

%

17.8

%

14.3

%

Operating margin8.9

%

8.9

%

4.3

%

Net margin7.3

%

7.2

%

5.9

%

EBITDA margin10.7

%

10.7

%

6.4

%

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

In millions pesos 2021 2021 2020

Net sales $ 2,928.7 60,447.5 50,462.7

Cost of sales 2,406.0 49,659.7 43,239.4

Gross profit 522.7 10,787.9 7,223.3

Selling, general and administrative expenses 249.9 5,157.4 4,740.5

Other income (expenses), net (11.8 ) (244.3 ) (311.2 )

Operating income 261.0 5,386.1 2,171.5

Net finance income 33.1 682.2 2,036.8

Income tax 84.0 1,733.3 1,208.3

Net income $ 210.0 4,335.1 3,000.0

Non-controlling interest (4.16 ) (85.8 ) 40.2

Net controlling interest profit 214.2 4,420.9 2,959.8

Basic and diluted earnings per share 0.36 7.37 4.93

Basic and diluted earnings per ADR 4.29 88.5 59.21

Weighted average Shares outstanding1 599,766 599,766 599,818

EBITDA Result $ 313.9 6,478.2 3,213.1

Gross margin 17.8 % 17.8 % 14.3 %

Operating margin 8.9 % 8.9 % 4.3 %

Net margin 7.3 % 7.2 % 5.9 %

EBITDA margin 10.7 % 10.7 % 6.4 %

1 In thousandsCONSOLIDATED STATEMENT OF CASH FLOWSIn million of pesos-Unaudited-U.S. DollarSeptember 30,

2021

2021

2020

NET MAJORITY INCOME BEFORE INCOME TAX$

294.0

6,068.4

4,208.3

ITEMS RELATING TO INVESTING ACTIVITIES:59.4

1,226.7

975.5

Depreciation and others65.8

1,358.3

1,312.0

Income (loss) on sale of plant and equipment3.1

63.3

25.8

Other Items(9.4

)

(194.9

)

(362.4

)

NET CASH GENERATED FROM NET INCOME BEFORE TAXES353.4

7,295.1

5,183.9

CASH GENERATED OR USED IN THE OPERATION:(56.5

)

(1,166.0

)

(1,779.4

)

Decrease (increase) in accounts receivable(11.6

)

(239.0

)

(829.4

)

Decrease (increase) in inventories(72.0

)

(1,487.0

)

(1,300.9

)

Increase (decrease) in accounts payable86.8

1,791.9

1,036.1

Other Items(59.7

)

(1,231.9

)

(685.2

)

NET CASH FLOW FROM OPERATING ACTIVITIES297.0

6,129.1

3,404.4

NET CASH FLOW FROM INVESTING ACTIVITIES(78.9

)

(1,629.1

)

(1,270.8

)

Acquisition of property, plant and equipment(109.1

)

(2,251.1

)

(1,570.1

)

Proceeds from sales of property plant and equipment0.8

17.1

118.7

Other Items29.3

604.9

180.6

CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES218.0

4,500.0

2,133.6

Net cash provided by financing activities:(177.1

)

(3,654.4

)

(3,098.0

)

Proceeds from loans59.9

1,237.2

3,313.9

Principal payments on loans(92.2

)

(1,903.8

)

(6,033.9

)

Dividends paid(41.3

)

(851.6

)

(791.7

)

Other items(103.5

)

(2,136.1

)

413.8

Net increase (decrease) in cash and equivalents41.0

845.6

(964.4

)

Cash and investments at the beginning of year$

932.3

19,242.4

19,164.8

CASH AND INVESTMENTS AT END OF PERIOD$

973.3

20,088.0

18,200.4

DERIVATIVES POSITION REPORT

CONSOLIDATED STATEMENT OF CASH FLOWSIn million of pesos-Unaudited- U.S. September 30, Dollar 2021 2021 2020

NET MAJORITY INCOME BEFORE INCOME TAX $ 294.0 6,068.4 4,208.3

ITEMS RELATING TO INVESTING ACTIVITIES: 59.4 1,226.7 975.5

Depreciation and others 65.8 1,358.3 1,312.0

Income (loss) on sale of plant and equipment 3.1 63.3 25.8

Other Items (9.4 ) (194.9 ) (362.4 )

NET CASH GENERATED FROM NET INCOME BEFORE 353.4 7,295.1 5,183.9 TAXESCASH GENERATED OR USED IN THE OPERATION: (56.5 ) (1,166.0 ) (1,779.4 )

Decrease (increase) in accounts receivable (11.6 ) (239.0 ) (829.4 )

Decrease (increase) in inventories (72.0 ) (1,487.0 ) (1,300.9 )

Increase (decrease) in accounts payable 86.8 1,791.9 1,036.1

Other Items (59.7 ) (1,231.9 ) (685.2 )

NET CASH FLOW FROM OPERATING ACTIVITIES 297.0 6,129.1 3,404.4

NET CASH FLOW FROM INVESTING ACTIVITIES (78.9 ) (1,629.1 ) (1,270.8 )

Acquisition of property, plant and equipment (109.1 ) (2,251.1 ) (1,570.1 )

Proceeds from sales of property plant and 0.8 17.1 118.7 equipmentOther Items 29.3 604.9 180.6

CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED 218.0 4,500.0 2,133.6 IN FINANCING ACTIVITIES Net cash provided by financing activities: (177.1 ) (3,654.4 ) (3,098.0 )

Proceeds from loans 59.9 1,237.2 3,313.9

Principal payments on loans (92.2 ) (1,903.8 ) (6,033.9 )

Dividends paid (41.3 ) (851.6 ) (791.7 )

Other items (103.5 ) (2,136.1 ) 413.8

Net increase (decrease) in cash and 41.0 845.6 (964.4 )equivalents Cash and investments at the beginning of year $ 932.3 19,242.4 19,164.8

CASH AND INVESTMENTS AT END OF PERIOD $ 973.3 20,088.0 18,200.4

DERIVATIVES POSITION REPORT

Third Quarter 2021Thousands of Mexican Pesos, as ofSeptember 30, 2021TYPE OF VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTSFINANCIAL OBJECTIVE NOTIONAL DUE BY GUARANTIESINSTRUMENT 3Q-2021 2Q-2021 3Q-2021 2Q-2021 YEAR REQUIRED

Forward 91% inVanilla, $130,725 $ 20.64 $ 19.95 $63,580 $-237,421 2021; Hedgeand KO Fwd 9% 2022

CORN CORN In USD per In USD per Bushel Bushel month price month price Dec-21 $ 5.368 Jul-21 $ 7.200

Mar-22 $ 5.445 Sep-21 $ 5.993

Dec-21 $ 5.885

SOYBEAN MEAL SOYBEAN MEAL In USD per ton In USD per ton month price month price 44% inFutures Dec-21 $ 328.7 Aug-21 $ 377.5 2021for cornand $63,826 Jan-22 $ 331.0 Sep-21 $ 379.0 -$ $12,244 and 56% Hedge 3,890 insoybean Mar-22 $ 333.4 Oct-21 $ 378.8meal 2022 May-22 $ 337.1 Dec-21 $ 381.7

Jul-22 $ 340.5 Jan-22 $ 380.1 The deals

Aug-22 $ 341.4 Mar-22 $ 374.1 consider the Sep-22 $ 341.3 May-22 $ 371.8 possibility Oct-22 $ 339.1 Jul-22 $ 373.7 of

Dec-22 $ 340.3 Aug-22 $ 369.6 margin calls but Sep-22 $ 369.6 not another CORN CORN kind In USD per In USD per Bushel Bushel of month price month price guarantee Jul-21 $ 7.200 95% inOptions of 2021Corn Hedge $152,988 Sep-21 $ 5.993 $23,350 $88,823 and 5% Dec-21 $ 5.885 in 2022

Dec-21 $ 5.368 Mar-22 $ 5.955

Mar-22 $ 5.445

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

Sep-21 $ 379.0 59% inOptions of 2021soybean Oct-21 $ 343.1 Oct-21 $ 378.8 -$ Hedge $210,800 21,390 $3,603 and 41%meal Dec-21 $ 328.7 Dec-21 $ 381.7 in

Jan-22 $ 331.0 Jan-22 $ 380.1 2022

Mar-22 $ 333.4 Mar-22 $ 374.1

May-22 $ 337.1 May-22 $ 371.8

-The total financial instruments do not exceed 5% of total assets as ofSeptember 30, 2021.-The notional value represents the net position as of September 30, 2021 at theexchange rate of Ps.20.64 per one dollar.-A negative value means an unfavorable effect for the Company.Third Quarter 2021Thousands of Mexican Pesos, as of September 30, 2021PROBABLE 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, and KO Fwd$

63,580

$

20.12

$

21.16

$

21.67

Direct-$

6,254

$

122,273

$

189,766

-5%

5%

10%

-5%

5%

10%

Futures of Corn: (2)-$

3,890

$

5.099

$

5.636

$

5.904

The effect will

materialize as the

inventory is consumed

-$

7,081

-$

699

$

2,493

Futures of Soybean Meal: (2)$

325.9

$

360.3

$

377.4

Options for Corn$

23,350

$

5.099

$

5.636

$

5.904

$

15,700

$

30,999

$

38,648

Options of Soybean Meal-$

21,390

$

325.9

$

360.3

$

377.4

-$

33,681

-$

9,434

$

2,522

ThirdQuarter2021Thousands of Mexican Pesos, as of PROBABLE SCENARIOSeptember 30, 2021 VALUE OF THE RELATEDTYPE OF COMMODITY EFFECT ON EFFECT ON THE CASH FLOW^(3)FINANCIAL REASONABLE THEINSTRUMENT VALUE Reference Value ^(1) INCOME STATEMENT -2.5% 2.5% 5.0% -2.5% 2.5% 5.0%

Forward $ 63,580 $ 20.12 $ 21.16 $ 21.67 -$ 6,254 $ 122,273 $ 189,766Vanilla, Directand KO Fwd -5% 5% 10% -5% 5% 10%

Futures of $ 5.099 $ 5.636 $ 5.904 The effectCorn: ^(2) -$ 3,890 will -$ 7,081 -$ 699 $ 2,493Futures of $ 325.9 $ 360.3 $ 377.4Soybean materializeMeal: ^(2) as theOptions $ 23,350 $ 5.099 $ 5.636 $ 5.904 $ 15,700 $ 30,999 $ 38,648for Corn inventoryOptions of -$ 21,390 $ 325.9 $ 360.3 $ 377.4 is consumed -$ 33,681 -$ 9,434 $ 2,522SoybeanMeal(1) The reference value is the exchange rate of Ps. $20.64 per USD as of September 30, 2021.(2) The reference values are; the future of corn for September 2021, $5.3675 USD/bushel and the future of soybeanmeal for October 2021, $343.10USD/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. $20.64 per USD as ofSeptember 30, 2021.^(2) The reference values are; the future of corn for September 2021, $5.3675USD/bushel and the future of soybeanmeal for October 2021, $343.10USD/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, sothat the effect in cash flow is lower than the amount shown.-A negative value means an unfavorable effect for the Company.Third Quarter 2021Thousands of Mexican Pesos, as of September 30, 2021STRESS 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 and KO Fwd$

63,580

$

10.32

$

15.48

$

25.80

$

30.96

Direct-$1,333,173-$634,798$

602,090

$

1,171,086

CONFERENCE CALL INFORMATION

The Company will host its third quarter 2021 earnings call, on Monday, October 25th, 2021. The earnings call will take place at 3:00 pm Central Time (4:00 pm ET).

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

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

Confirmation Number: 50236531

COMPANY DESCRIPTION

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

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

DISCLAIMER

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20211025005227/en/

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