PR Newswire | Oct 28, 2020 09:02AM EDT

10/28 08:00 CDT

Industrias Bachoco Announces Third Quarter 2020 Results CELAYA, Mexico, Oct. 28, 2020

CELAYA, Mexico, Oct. 28, 2020 /PRNewswire/ -- 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 ("3Q20") and first nine months of 2020 ("9M20") ended on September 30th, 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 19.5% in 3Q20 and 8.5% in 9M20. * SG&A expenses as a percentage of net sales were 8.8% in 3Q20 and 9.4% in 9M20. * EBITDA margin was 10.0% for 3Q20 and 6.4% for the 9M20 * Earnings per basic and diluted share were $1.38 for 3Q20 and $4.93 for 9M20.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "As economic activities started reactivating, after lockdown measures during the previous quarter, we observed the demand improving, which resulted in a better balance between supply and demand, mainly in Mexico. This allowed us to observe unseasonal good prices for the 3Q20.

The balance between supply and demand, and our strong and diversified participation in the Mexican market, allowed us to reach an increase in total sales of 19.5% for the quarter versus the same period of 2019.

In terms of cost, the depreciation of the Mexican peso vs the U.S dollar, year over year, still had a negative impact during 3Q20 regarding our raw materials value. As a result, our cost of sales increased 18.9% vs the same quarter of 2019.

On the other hand, we managed to keep our SG&A under control. As a percentage of sales, it represented 8.8% over sales vs the 9.8% reported in 3Q19.

Also, during this quarter, we integrated Sonora Agropecuaria to our financial results. Which is a swine processor and distributor with participation in the export market as well.

As a result of the conditions mentioned above, our operating profit for the quarter was $1,484.8 million which is 25.6% higher than the $1,181.8 million reported in 3Q20. In terms of EBITDA, we reported $1,828.2 million in 3Q20 which is 21.4% higher than the $1,505.8 million reported in 3Q19, that is 10.0% and 9.8% of EBITDA margin for each period respectively.

Our quarterly results, combined with our strong financial structure, allowed us to continue with our social responsibility initiatives.

Now more than ever, we are committed with the recovery of the families in need. To do so, we extended our donation program Apoyo de Coraznin coordination with public and private institutions. During the 3Q20 we donated more than 296,000 kilos of chicken which benefited more than 1.2 million people across Mexico. We look forward to keep with this program through the remaining of the year".

EXECUTIVE SUMMARYThe 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 2019.

QUARTERLY RESULTS

NET SALES BY GEOGRAPHY

In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Net Sales 18,292.4 15,312.9 2,979.5 19.5

Net sales in Mexico 13,114.4 10,981.4 2,133.0 19.4

Net sales in the U.S. 5,178.0 4,331.5 846.5 19.5

NET SALES BY SEGMENT

In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Net Sales 18,292.4 15,312.9 2,979.5 19.5

Poultry 16,226.6 13,879.8 2,346.8 16.9

Other 2,065.7 1,433.1 632.6 44.1

NET VOLUME SOLD BY SEGMENT

In tons Change

3Q20 3Q19 Volume %

Total sales volume: 568,470 550,640 17,830.7 3.2

Poultry 434,272 424,645 9,627.1 2.3

Others 134,198 125,994 8,203.5 6.5

The Company's 3Q20 net sales totaled $18,292.4 million; $2,979.5 million or 19.5% higher than the $15,312.9 million reported in 3Q19. The increase is a result of better prices in all our main business lines.

In 3Q20, sales of our U.S. operations represented 28.3% of our total sales which is the same level of 3Q19.

GROSS PROFIT

In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Cost of sales 15,107.6 12,706.5 2,401.1 18.9

Gross profit 3,184.7 2,606.4 578.4 22.2

Gross margin 17.4% 17.0% - -

In 3Q20, cost of sales was $15,107.6 million; $2,401.1 million or 18.9% higher than the $12,706.5 million reported in 3Q19. 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 3Q20 was $3,184.7 million, higher than the gross profit of $2,606.4 million in 3Q19, with a gross margin of 17.4% for 3Q20 vs 17.0% in 3Q19.

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



In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Total SG&A 1,600.8 1,497.6 103.2 6.9

Total SG&A expenses in 3Q20 were $1,600.8 million; $103.2 million higher than the $1,497.6 million reported in 3Q19. Total SG&A expenses as a percentage of net sales represented 8.8% in 3Q20 and 9.8% in 3Q19.

OTHER INCOME (EXPENSE), NET

In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Other income (expense), net (99.2) 73.0 (172.2) (235.8)

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 3Q20, we recorded other expenses of $99.2 million, compared with other income of $73.0 million reported in 3Q19.

OPERATING INCOME

In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Operating income 1,484.8 1,181.8 303.0 25.6

Operating margin 8.1% 7.7% - -

Operating income in 3Q20 totaled $1,484.8 million; $303.0 million higher than the Operating income of $1,181.8 million reported in 3Q19. This represents an operating margin of 8.1% for 3Q20, versus an operating margin of 7.7% in the same period of 2019. The increase in operating income is mainly attributed to higher prices and higher volume sold. This last one, mainly in other segment as a result of the consolidation of Sonora Agropecuaria.

NET FINANCIAL INCOME

In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Net Financial Income (267.5) 405.7 (673.2) (165.9)

Financial Income (212.9) 486.7 (699.6) (143.7)

Financial Expense 54.6 81.0 (26.4) (32.6)

In 3Q20, the Company reported net financial expenses of $267.5 million, compared to a net financial income of $405.7 million reported in the same period of 2019. The decrease is mainly attributed to lower exchange rate gains due to the appreciation of the Mexican peso when compared to the 2Q20.

TAXES FOR THE PERIOD

In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Total Taxes 359.2 474.4 (115.2) (24.3)

Income tax 114.5 48.2 66.2 137.3

Deferred income tax 244.7 426.1 (181.4) (42.6)

Total taxes for the 3Q20 were $359.2 million, which is lower when compared with total taxes of the same period of 2019 as a result of lower income before taxes.

NET INCOME

In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Net income 858.1 1,113.1 (255.0) (22.9)

Net margin 4.7% 7.3% - -

Basic and diluted earnings per share^1 1.38 1.85 (0.5) n/a

Basic and diluted earnings per ADR^2 16.56 22.23 (5.7) n/a

Weighted average Shares outstanding^3 599,823 600,000 - -

^1 In pesos^2 in pesos, one ADR equals to twelve shares^3 In thousands of shares

The net income for 3Q20 was $858.1 million, representing a basic and diluted income per share of $1.38 pesos, compared with a net income of $1,113.1 million, which represented a $1.85 pesos of net income per share in 3Q19. This decrease is mainly attributed to lower net income. Net margin in 3Q20 was 4.7% compared to a margin of 7.3% reported in 3Q19.

EBITDA

In millions of pesos 3Q20 3Q19 Change

$ $ $ %

Net income 828.0 1,111.3 (283.4) (25.5)

Income tax expense (benefit) 359.2 474.4 (115.2) (24.3)

Result in associates 30.1 1.8 28.4 1,611.4

Net finance (income) expense 267.5 (405.7) 673.2 (165.9)

Depreciation and amortization 343.4 324.0 19.4 6.0

EBITDA 1,828.2 1,505.8 322.4 21.4

EBITDA Margin (%) 10.0% 9.8% - -

Net revenues 18,292.4 15,312.9 2,979.5 19.5

EBITDA in 3Q20 reached $1,828.2 million representing an EBITDA margin of 10.0%, compared to an EBITDA of $1,505.8 million in 3Q19, with an EBITDA margin of 9.8%.

ACCUMULATED RESULTS

NET SALES BY GEOGRAPHY

In millions of pesos 9M20 9M19 Change

$ $ $ %

Net Sales 50,462.7 46,520.6 3,942.1 8.5

Net sales in Mexico 35,521.9 33,815.4 1,706.5 5.0

Net sales in the U.S. 14,940.8 12,705.2 2,235.5 17.6

NET SALES BY SEGMENT

In millions of pesos 9M20 9M19 Change

$ $ $ %

Net Sales 50,462.7 46,520.6 3,942.1 8.5

Poultry 45,185.7 41,991.8 3,193.9 7.6

Other 5,277.0 4,528.8 748.2 16.5

NET VOLUME SOLD BY SEGMENT

In metric tons Change

9M20 9M19 Volume %

Total sales volume: 1,711,165 1,679,544 31,621 1.88

Poultry 1,324,924 1,286,960 37,963 2.95

Others 386,241 392,584 (6,343) (1.62)

During the 9M20, net sales totaled $50,462.7 million; $3,942.1 million or 8.5% more than the $46,520.6 million reported in the same period of 2019.

In 9M20, sales of our U.S. operations represented 29.6% of our total sales, compared with 27.3% in 9M19.

OPERATING RESULTS

In millions of pesos 9M20 9M19 Change

$ $ $ %

Cost of Sales 43,239.4 38,386.7 4,852.7 12.6

Gross Profit 7,223.3 8,133.9 (910.6) (11.2)

Total SG&A 4,740.5 4,522.8 217.7 4.8

Other Income (expense) (311.2) 69.6 (380.9) (546.9)

Operating Income 2,171.5 3,680.7 (1,509.1) (41.0)

Net Financial Income 2,036.8 573.3 1,463.5 255.3

Income Tax 1,208.3 1,246.4 (38.2) (3.1)

Net Income 3,000.0 3,007.5 (7.5) (0.2)

In the 9M20, the cost of sales totaled $43,239.4 million; $4,852.7 million or 12.6% higher than $38,386.7 million reported in the 9M19.

As a result, we reached a gross profit of $7,223.3 million and a gross margin of 14.3% in 9M20, when compared to $8,133.9 million of gross profit and a gross margin of 17.5% reached in the same period of 2019.

Total SG&A expenses in 9M20 were $4,740.5 million; $217.7 million or 4.8% more than the $4,522.8 million reported in 9M19. In 9M20 total SG&A expenses as a percentage of net sales represented 9.4%, slightly lower when compared to the 9.7% on 9M19.

In 9M20 we had other expenses of $311.2 million, compared with other income of $69.6 million reported in 9M19.

The operating income in 9M20 was $2,171.5 million, which represents an operating margin of 4.3%, a decrease from an operating income of $3,680.7 million and an operating margin of 7.9% in 9M19.

The net financial income in 9M20 was $2,036.8 million, higher when compared to a net financial income of $573.3 million in 9M19.

Total taxes were $1,208.3 million as of September 30th, 2020. These taxes include $617.4 million of income tax and $590.9 million of deferred income taxes. This figure compares to total taxes of $1,246.4 million in 9M19; the increase was mainly attributed to a lower income before taxes.

All the above resulted in a net income of $3.000.00 million or 5.9% of net margin in the 9M20, which represents $4.93 pesos of earnings per share; while in the 9M19 the net income totaled $3,007.5 million, 6.5% of net margin and $5.00 pesos of net income per share.

EBITDA

In millions of pesos 9M20 9M19 Change

$ $ $ %

Net controlling interest profit 2,959.8 2,998.9 (39.1) (1.3)

Income tax expense (benefit) 1,208.3 1,246.4 (38.2) (3.1)

Result in associates 40.2 8.6 31.6 368.5

Net finance (income) expense (2,036.8) (573.3) (1,463.5) 255.3

Depreciation and amortization 1,041.6 963.3 78.2 8.1

EBITDA 3,213.1 4,644.0 (1,430.9) (30.8)

EBITDA Margin (%) 6.4% 10.0% - -

Net revenues 50,462.7 46,520.6 3,942.1 8.5

EBITDA in 9M20 reached $3,213.1 million, representing an EBITDA margin of 6.4%, compared to EBITDA of $4,644.0 million in 9M19, with an EBITDA margin of 10.0%.

BALANCE SHEET



BALANCE SHEET DATA

In millions of pesos Sep 30, 2020 Dec. 31^st, 2019 Change

$ $ $ %

TOTAL ASSETS 58,051.2 55,702.5 2,348.7 4.2

Cash and cash equivalents 18,240.2 19,182.9 (942.7) (4.9)

Accounts receivable 4,824.3 3,880.8 943.5 24.3

TOTAL LIABILITIES 14,439.3 15,442.2 (1,002.8) (6.5)

Accounts payable 4,624.1 5,235.5 (611.4) (11.7)

Short-term debt 1,070.8 3,440.4 (2,369.6) (68.9)

Long-term debt 1,473.4 1,488.2 (14.8) (1.0)

TOTAL STOCKHOLDERS' EQUITY 43,611.9 40,260.3 3,351.5 8.3

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

Cash and equivalents as of September 30th, 2020 totaled $18,240.2 million vs $19,182.9 million as of December 31, 2019.

Total debt as of September 30th, 2020 was $2,544.2 million, compared to $4,928.6 million reported as of December 31, 2019.

Net cash as of September 30th, 2020 was $15,696.0 million, compared to net cash of $14,254.3 million as of December 31, 2019.



CAPITAL EXPENDITURES

In millions of pesos 9M20 9M19 Change

$ $ $ %

Capital Expenditures 1,570.1 1,301.2 268.9 20.7

Total CAPEX for the 9M20 was $1,570.1 million vs $1,301.2 million in 9M19, mainly allocated toward organic growth and productivity projects across all of our facilities.

STOCK INFORMATION

As of September 30, 2020

Total Shares 600,000,000

Total free float 26.75%

Market cap (millions of pesos) $42,018

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

Sep-20 70.10 68.00 70.03 39.7536.16 38.29

Aug-20 70.38 65.56 68.43 37.8534.73 37.55

Jul-20 69.06 63.91 66.18 37.2134.20 35.87

Jun-20 69.75 65.32 67.08 39.0134.70 35.17

May-20 69.93 66.18 67.87 36.9432.85 36.64

Apr-20 69.93 60.81 69.93 35.0929.80 34.88

Mar-20 71.07 58.76 67.48 44.1428.67 34.00

Feb-20 75.83 68.57 71.07 48.8742.67 43.04

Jan-20 82.40 75.01 75.82 52.7047.78 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 $22.11 per USD $1.0, which corresponds to the rate at the close of September 30, 2020, according to Mexico's National Bank.

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

-Unaudited-

In U.S. Dollar September December 30, 31,

In million pesos 2020 2020 2019*

TOTAL ASSETS $ 58,051.2 55,702.5 2,625.6

Total current assets 1,451.3 32,088.4 31,097.2

Cash and cash equivalents 825.0 18,240.2 19,182.9

Total accounts receivable 218.2 4,824.3 3,880.8

Inventories 357.6 7,905.5 6,753.4

Other current assets 50.6 1,118.3 1,280.1

Total non current assets 1,174.3 25,962.8 24,605.2

Net property, plant and equipment 877.9 19,409.8 18,556.6

Other non current Assets 296.4 6,553.0 6,048.6

TOTAL LIABILITIES $ 14,439.3 15,442.2 653.1

Total current liabilities 324.2 7,169.0 8,908.1

Notes payable to banks 48.4 1,070.8 3,440.4

Accounts payable 209.1 4,624.1 5,235.5

Other taxes payable and other 66.7 1,474.1 232.2accruals

Total long-term liabilities 328.8 7,270.3 6,534.0

Long-term debt 66.6 1,473.4 1,488.2

Other non current liabilities 50.4 1,115.0 1,141.3

Deferred income taxes 211.8 4,681.9 3,904.5

TOTAL STOCKHOLDERS' EQUITY $ 43,611.9 40,260.3 1,972.5

Capital stock 53.1 1,174.3 1,174.3

Commission in shares issued 18.7 414.5 414.5

Retained earnings 1,812.3 40,070.0 37,732.9

Others accounts 75.0 1,658.8 858.2

Non controlling interest 13.3 294.3 80.4

TOTAL LIABILITIES AND STOCKHOLDERS' $ 58,051.2 55,702.5EQUITY 2,625.6

*Audited

CONSOLIDATED STATEMENT OF INCOME

Third Quarter Results, ended September 30th:

-Unaudited-

U.S. Dollar

In millions pesos 2020 2020 2019

Net sales $ 827.3 18,292.4 15,312.9

Cost of sales 683.3 15,107.6 12,706.5

Gross profit 144.0 3,184.7 2,606.4

SG&A 72.4 1,600.8 1,497.6

Other income (expenses), net (4.5) (99.2) 73.0

Operating income 67.2 1,484.8 1,181.8

Net finance income (12.1) (267.5) 405.7

Income tax 16.2 359.2 474.4

Net Income $ 38.8 858.1 1,113.1

Non-controlling interest 1.36 30.1 1.8

Net controlling interest profit 37.45 828.0 1,111.3

Basic and diluted earnings per share 0.06 1.38 1.85

Basic and diluted earnings per ADR 0.75 16.6 22.23

Weighted average Shares outstanding1 599,823 599,823 600,000

EBITDA Result $ 82.7 1,828.2 1,505.8

Gross margin 17.4% 17.4% 17.0%

Operating margin 8.1% 8.1% 7.7%

Net margin 4.5% 4.7% 7.3%

EBITDA margin 10.0% 10.0% 9.8%

1 In thousands

CONSOLIDATED STATEMENT OF INCOME

Accumulated results, for the six months ended September 30.

-Unaudited-

U.S. Dollar

In millions pesos 2020 2020 2019

Net sales $ 2,282.3 50,462.7 46,520.6

Cost of sales 1,955.6 43,239.4 38,386.7

Gross profit 326.7 7,223.3 8,133.9

Selling, general and administrative expenses 214.4 4,740.5 4,522.8

Other income (expenses), net (14.1) (311.2) 69.6

Operating income 98.2 2,171.5 3,680.7

Net finance income 92.1 2,036.8 573.3

Income tax 54.6 1,208.3 1,246.4

Net income $ 135.7 3,000.0 3,007.5

Non-controlling interest 1.8 40.24 8.6

Net controlling interest profit 133.9 2,959.8 2,998.9

Basic and diluted earnings per share 0.22 4.93 5.00

Basic and diluted earnings per ADR 2.68 59.2 59.98

Weighted average Shares outstanding1 599,818 599,818 599,973

EBITDA Result $ 145.3 3,213.1 4,644.0

Gross margin 14.3% 14.3% 17.5%

Operating margin 4.3% 4.3% 7.9%

Net margin 5.9% 5.9% 6.5%

EBITDA margin 6.4% 6.4% 10.0%

1 In thousands

CONSOLIDATED STATEMENT OF CASH FLOWS

In million of pesos

-Unaudited-

U.S. Dollar September 30,

2020 2020 2019

NET MAJORITY INCOME BEFORE INCOME $ 190.3 4,208.3 4,254.0TAX

ITEMS RELATING TO INVESTING 44.1 975.5 343.8ACTIVITIES:

Depreciation and others 59.3 1,312.0 963.3

Income (loss) on sale of 1.2 25.8 (99.1)plant and equipment

Other Items (16.4) (362.4) (520.4)

NET CASH GENERATED FROM NET INCOME 234.5 5,183.9 4,597.8BEFORE TAXES

CASH GENERATED OR USED IN THE (80.5) (1,779.4) (3,238.9)OPERATION:

Decrease (increase) in accounts (37.5) (829.4) 489.6receivable

Decrease (increase) in (58.8) (1,300.9) (398.1)inventories

Increase (decrease) in accounts 46.9 1,036.1 (2,199.0)payable

Other Items (31.0) (685.2) (1,131.5)

NET CASH FLOW FROM OPERATING 154.0 3,404.4 1,358.9ACTIVITIES

NET CASH FLOW FROM INVESTING (57.5) (1,270.8) (583.1)ACTIVITIES

Acquisition of property, (71.0) (1,570.1) (1,301.2)plant and equipment

Proceeds from sales of 5.4 118.7 186.9property plant and equipment

Other Items 8.2 180.6 531.2

CASH FLOW SURPLUS (REQUIREMENTSOF) TO BE USED IN FINANCING 96.5 2,133.6 775.7ACTIVITIES

Net cash provided by financing (140.1) (3,098.0) (992.1)activities:

Proceeds from loans 149.9 3,313.9 4,859.0

Principal payments on loans (272.9) (6,033.9) (4,858.6)

Dividends paid (35.8) (791.7) (840.0)

Other items 18.7 413.8 (152.5)

Net increase (decrease) in cash (43.6) (964.4) (216.3)and equivalents

Cash and investments at the $ 866.8 19,164.8 18,451.9beginning of year

CASH AND INVESTMENTS AT END OF $ 823.2 18,200.4 18,235.6PERIOD

DERIVATIVES POSITION REPORT

Third Quarter 2020

Thousands of Mexican Pesos, as of September 30,2020

TYPE OF VALUE OF THE RELATED COMMODITY REASONABLE VALUE AMOUNTS GUARANTIESFINANCIAL OBJECTIVE NOTIONAL DUE BY REQUIREDINSTRUMENT 3Q-2020 2Q-2020 3Q-2020 2Q-2020 YEAR

Forward 89% inVanilla Hedge $ 48,890 $ 22.11 $ 22.96 $ 14,904 $ 25,897 2021and KO Fwd and 11% in 2021

CORN CORN

In USD per Bushel In USD per Bushel

month price month price

Sep-20 $ 3.883 Sep-20 $ 3.415

Dec-20 $ 3.790 Dec-20 $ 3.505

Mar-21 $ 3.883 Mar-21 $ 3.613

May-21 $ 3.935 May-21 $ 3.675

Jul-21 $ 3.973 Jul-21 $ 3.728

Sep-21 $ 3.668

Dec-21 $ 3.915 Dec-21 $ 3.730

Futuresfor corn 67% inand Hedge $ 264,862 SOYBEAN MEAL SOYBEAN MEAL $ 31,233 $ 2,944 2020soybean and 33%meal In USD per ton In USD per ton in 2021

month price month price

Dec-20 $ 342.8 Aug-20 $ 289.1

Aug-21 $ 331.3 Sep-20 $ 291.4

Sep-21 $ 326.1 Oct-20 $ 292.9

Oct-21 $ 319.9 Dec-20 $ 295.9 The deals consider Dec-21 $ 320.1 Jan-21 $ 296.3 the possibility Jan-21 $ 342.1 Mar-21 $ 295.3 of margin calls but Mar-21 $ 338.5 May-21 $ 294.5 not another kind of May-21 $ 334.6 Aug-21 $ 297.3 guarantee

Sep-21 $ 297.2

Oct-21 $ 296.1

CORN CORN

In USD per Bushel In USD per Bushel

month price month price 46% inOptions of Hedge $ 81,090 Sep-20 $ 3.415 $ 7,724 $ 4,496 2020Corn and 54% Dec-20 $ 3.790 Dec-20 $ 3.505 in 2021

Mar-21 $ 3.883 Mar-21 $ 3.613

May-21 $ 3.675

SOYBEAN MEAL SOYBEAN MEAL

In USD per ton In USD per ton

month price month price

Ago-20 $ 289.1

Sep-20 $ 291.4Options of $ 100% insoybean Hedge 82,169 Oct-20 $ 292.9 $ 9,834 $ 1,571 2021meal Dec-20 $ 295.9

Jan-21 $ 342.1 Jan-21 $ 296.3

Mar-21 $ 338.5 Mar-21 $ 295.3

May-21 $ 334.6 May-21 $ 294.5

Jul-21 $ 334.2 Jul-21 $ 296.5

-The total financial instruments do not exceed 5% of total assets as ofSeptember 30, 2020.

-The notional value represents the net position as of September 30, 2020 at theexchange rate of Ps. 22.11 per one dollar.

-A negative value means an unfavorable effect for the Company.

Third Quarter 2020

Thousands of Mexican Pesos, as of September 30, 2020 PROBABLE SCENARIO

VALUE OF THE RELATED COMMODITY EFFECT ON EFFECT ON THE CASH FLOW^(3)TYPE OF FINANCIAL INSTRUMENT REASONABLE VALUE Reference Value ^(1) THE INCOME STATEMENT -2.5% 2.5% 5.0% -2.5% 2.5% 5.0%

Forward Vanilla and KO Fwd $ 14,904 $21.55 $ 22.66 $ 23.21 Direct -$ 27,018 $ 20,110 $ 40,220

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

Futures of Corn: ^(2) $ 3.601 $ 3.980 $ 4.169 The effect $ 24,389 will $ 13,982 $ 34,796 $ 45,203Futures of Soybean Meal: ^(2) $ 325.7 $ 359.9 $ 377.1 materialize as theOptions for Corn $ $ 3.601 $ 3.980 $ 4.169 inventory $ 4,453 $ 14,652 $ 19,751 9,552 is consumed Options of Soybean Meal $ 14,988 $ 325.7 $ 359.9 $ 377.1 $ 8,947 $ 21,029 $ 27,070

^(1)The reference value is the exchange rate of Ps. $22.11 per USD as ofSeptember 30, 2020.

^(2)The reference values are; the future of corn for Dec 2020, $3.7900 USD/bushel and the future of soybeanmeal also for Dec 2020, $342.80USD/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 thatthe effect in cash flow is lower than the amount shown.

-A negative value means an unfavorable effect for the Company.

Third Quarter 2020

Thousands of Mexican Pesos, as of September 30, 2020 STRESS SCENARIO

VALUE OF THE RELATED COMMODITY EFFECT ON EFFECT ON THE CASH FLOWTYPE OF FINANCIAL REASONABLE VALUE THEINSTRUMENT Reference Value INCOME STATEMENT -50% -25% 25% 50% -50% -25% 25% 50%

Forward Vanilla and KO Fwd $ 14,904 $11.05 $16.58 $27.63 $33.16 Direct -$540,357 -$270,178 $157,973 $315,947

CONFERENCE CALL INFORMATION

The Company will host its third quarter 2020 earnings call, on Thursday, October 29th 2020. The earnings call will take place at 9:00 am Central Time (11:00 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=ULauaiMkmstPAu

Confirmation Number: 49969766

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.

IR contact information: maria.jaquez@bachoco.netandrea.guerrero@bachoco.netT. +52(461)618 3555

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SOURCE Industrias Bachoco, S.A.B. de C.V.