Industrias Bachoco B de C : BACHOCO ANNOUNCES FIRST QUARTER 2021 RESULTS

BACHOCO ANNOUNCES FIRST QUARTER 2021 RESULTS

Celaya, Guanajuato, Mexico - April 29^th, 2021

Industrias Bachoco, S.A.B. de C.V., 'Bachoco' or 'the Company', (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the first quarter ('1Q21') ending March 31, 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 23.0% in 1Q21.

·	EBITDA margin was 15.1% in 1Q21 vs 6.0% in 1Q20.

·	Earnings per basic and diluted share were $3.50 in 1Q21 vs $3.61 in 1Q20.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, 'We continued observing a good balance between supply and demand which allowed us to achieve outstanding results in our first quarter of 2021, despite adjustments in sales volume, as a result of remaining COVID-19 confinement measures that had effects in some of the markets in which we compete.

Regarding our cost of sales, this quarter we observed the impact of higher raw materials prices in USD terms. Overall, our cost was 11.7% higher than the same quarter of 2020. However, the good balance between supply and demand previously mentioned, allowed us to translate some of that increase to our sales price while we keep doing efforts to also absorb part of that increase thru efficiencies in our processes as well.

Additionally, we have managed to keep our SG&A under control. For 1Q21 ours SG&A as percentage of sales was 8.5%, compared to the 10% recorded in the same period of 2020.

By keeping focus on the things we can control and by doing our best to manage external factors, we were able to achieve an EBITDA in 1Q21 of $2,913.4 million or 15.1% EBITDA margin. This compares to the $947.3 million and 6.0% margin reported for 1Q20.

We remain committed to our investors that we will keep a strong financial position while continuing to grow. As a result, we reported CAPEX of $555.7 million for the quarter which compares to the $292.7 million for the same period of 2020. This was achieved while generating a net cash position of $17,208.1 million by the end of 1Q21.

Unfortunately, the Covid-19 pandemic continues affecting not only México, but also economic conditions all around the world. Even if we did not observe material impacts in our operations or results during 1Q21, we are aware that conditions might change overnight. Therefore, we remain focused on reinforcing our internal capabilities, which will allow us to keep performing at our very best.'

Contact Information

[e-mail] / T. [phone]

Executive Summary

The 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 2020.

QUARTERLY RESULTS

NET SALES BY GEOGRAPHY
In millions of pesos		1Q21			1Q20			Change
		$			$			$			%
Net sales			19,357.6				15,738.4				3,619.2				23.0
Net sales in Mexico			14,629.4				11,067.6				3,561.8				32.2
Net sales in the U.S.			4,728.2				4,670.8				57.4				1.2

NET SALES BY SEGMENT
In millions of pesos		1Q21			1Q20			Change
		$			$			$			%
Net sales			19,357.6				15,738.4				3,619.2				23.0
Poultry			16,983.9				14,162.8				2,821.1				19.9
Other			2,373.8				1,575.6				798.1				50.7

NET VOLUME SOLD BY SEGMENT

In tons					Change
		1Q21			1Q20			Volume			%
Total sales volume:		558,082			588,018			(29,935.7)			(5.1)
Poultry			416,978				457,167				(40,189.3	)			(8.8	)
Others			141,104				130,851				10,253.6				7.8

In 1Q21, the Company's net sales totaled $19,357.6 million; $3,619.2 million or 23.0% more than $15,738.4 million reported in 1Q20. This was a result of better prices in our main business lines and higher volume sold in Others due to the integration of SASA.

In 1Q21, sales of our U.S. operations represented 24.4% of our total sales compared with 29.7% in 1Q20.

GROSS PROFIT
In millions of pesos		1Q21			1Q20			Change
		$			$			$			%
Cost of sales			15,139.6				13,557.3				1,582.3				11.7
Gross profit			4,218.0				2,181.1				2,036.9				93.4
Gross margin			21.8	%			13.9	%			-				-

The cost of sales totaled $15,139.6 million, representing $1,582.3 million or 11.7% higher than $13,557.3 million reported in the same period of 2020. This increase was mainly driven higher raw material prices in dollar and in peso terms when compared to the same period of 2020.

2

The Company's gross profit in 1Q21 was $4,218.0 million, with a gross margin of 21.8%. This result is higher when compared to a gross profit of $2,181.1 million and a gross margin of 13.9% reported in 1Q20.

Selling, general and administrative expenses ('SG&A')
In millions of pesos
		1Q21			1Q20			Change
		$			$			$			%
Total SG&A			1,637.3				1,572.7				64.6				4.1

Total SG&A expenses in 1Q21 were $1,637.3 million; $64.6 million or 4.1% more than the $1,572.7 million reported 1Q20. Total SG&A expenses, as a percentage of net sales, represent 8.5% in 1Q21 and 10.0% in 1Q20.

other income (expense), net
In millions of pesos		1Q21			1Q20			Change
		$			$			$			%
Other income (expense), net			(21.8	)			(4.5	)			(17.3	)			384.4

Other income or other expenses include the sale of byproducts and unused assets. We register such sales as expenses when the sales price is below the book value of those assets.

OPERATING INCOME
In millions of pesos		1Q21			1Q20			Change
		$			$			$			%
Operating income			2,559.0				604.0				1,955.0				323.7
Operating margin			13.2	%			3.8	%			-				-

Operating income in 1Q21 totaled $2,559.0 million with an operating margin of 13.2%; higher than the operating income of $604.0 million and 3.8% operating margin reported in 1Q20. The increase in operating income is mainly attributed to higher revenues in our main business lines.

NET FINANCIAL INCOME
In millions of pesos		1Q21			1Q20			Change
		$			$			$			%
Net Financial Income (Expense)			319.6				2,426.5				(2,106.9	)			(86.8	)
Financial Income			374.4				2,483.3				(2,108.9	)			(84.9	)
Financial Expense			54.8				56.8				(2.0	)			(3.5	)

In 1Q21, the Company reported net financial income of $319.6 million, compared to net financial income of $2,426.5 million reported in the same period of 2020. This lower financial income was a result of the depreciation of the Mexican peso of around 2% from 4Q20 to 1Q21 vs the depreciation of around 26% from 4Q19 to 1Q20.

TAXES FOR THE PERIOD
In millions of pesos		1Q21			1Q20			Change
		$			$			$			%
Total Taxes			803.9				860.3				(56.4	)			(6.6	)
Income tax			524.7				910.5				(385.8	)			(42.4	)
Deferred income tax			279.2				(50.2	)			329.4				(656.1	)

Total taxes for the 1Q21 were $803.9 million, compared to $860.3 million in the same period of 2020.

3

NET INCOME
In millions of pesos		1Q21			1Q20			Change
		$			$			$			%
Net income			2,074.6				2,170.2				(95.5	)			(4.4	)
Net margin			10.7	%			13.8	%			-				-
Non-Controlling Interest income			(25.8	)			3.5				(29.3	)			n/a
Net controlling interest income			2,100.4				2,166.6				(66.3	)			n/a
Basic and diluted income per share1			3.50				3.61				(0.1	)			n/a
Basic and diluted income per ADR2			42.02				43.34				(1.3	)			n/a
Weighted average Shares outstanding3			599,835				599,843				-				-

¹ In pesos

² in pesos, an ADR is equal to twelve shares

³ In thousands of shares

The net income for 1Q21 was $2,074.6 million, representing a basic and diluted income of $3.50 pesos per share. This result compares to a net income of $2,170.1 million, which represented $3.61 pesos of basic and diluted income per share in 1Q20. Net margin for the 1Q21 was 10.7% compared to 13.8% reported in 1Q20.

EBITDA
In millions of pesos		1Q21			1Q20			Change
		$			$			$			%
Net controlling interest income			2,100.4				2,166.6				(66.3	)			(3.1	)
Income tax expense (benefit)			803.9				860.3				(56.4	)			(6.6	)
Result in associates			(25.8	)			3.5				(29.3	)			(830.2	)
Net finance (income) expense			(319.6	)			(2,426.5	)			2,106.9				(86.8	)
Depreciation and amortization			354.5				343.3				11.1				3.2
EBITDA			2,913.4				947.3				1,966.1				207.6
EBITDA Margin (%)			15.1	%			6.0	%			-				-
Net sales			19,357.6				15,738.4				3,619.2				23.0

EBITDA in 1Q21 reached $2,913.4 million, representing an EBITDA margin of 15.1%, compared to an EBITDA of $947.3 million in 1Q20 with an EBITDA margin of 6.0%.

BALANCE SHEET DATA

BALANCE SHEET DATA
In millions of pesos		Mar 31, 2021			Dec. 31, 2020			Change
		$			$			$			%
TOTAL ASSETS			59,877.1				58,475.0				1,402.1				2.4
Cash and cash equivalents			19,791.7				19,242.4				549.3				2.9
Accounts receivable			4,655.5				4,366.7				288.8				6.6
TOTAL LIABILITIES			13,612.9				14,548.2				(935.3	)			(6.4	)
Accounts payable			4,217.4				5,834.0				(1,616.6	)			(27.7	)
Short-term debt			1,119.0				1,251.7				(132.8	)			(10.6	)
Long-term debt			1,464.7				1,460.4				4.3				0.3
TOTAL STOCKHOLDERS' EQUITY			46,264.3				43,926.8				2,337.5				5.3
Capital stock			1,174.2				1,174.3				(0.1	)			(0.0	)

Cash and equivalents as of March 31, 2021 totaled $19,791.7 million; $549.3 million or 2.9% higher than $19,242.4 million as of December 31, 2020.

Total debt as of March 31, 2021 totaled $2,582.6 million, compared to $2,712.1 million reported as of December 31, 2020.

Net cash as of March 31, 2021 was $17,209.1 million, compared to net cash of $16,530.2 million as of December 31, 2020.

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CAPEX

CAPITAL EXPENDITURES
In millions of pesos		2021			2020			Change
		$			$			$			%
Capital Expenditures			555.7				292.7				263.0				89.9

Total CAPEX for the 1Q21 was $555.7 million, which was mainly allocated toward organic growth and productivity projects across all our facilities.

STOCK INFORMATION

As of March 31, 2021
Total Shares			600,000,000
Total free float			26.75	%
Market cap (millions of pesos)		$	40,824

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
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
December			75.48				71.41				74.85				45.28				42.52				45.16
November			70.44				64.55				70.06				41.55				36.23				41.53
October			70.79				66.42				66.42				39.92				37.31				37.31

Source: Yahoo Finances

ANALYST COVERAGE

Institution		Analyst name		E-mail
ACTINVER		Enrique Mendoza Farias		[e-mail]
BBVA BANCOMER		Pablo Abraham Peregrina		[e-mail]
GBM		Miguel Tortolero		[e-mail]
INTERCAM		Richard Horbach Martinez		[e-mail]
JP MORGAN		Ulises Argote		[e-mail]
SANTANDER		Hector Maya López		[e-mail]

5

APPENDICES

For reference, some figures have been translated into millions of U.S. dollars ('USD') using an exchange rate of $20.42 per USD $1.0, which corresponds to the rate at the close of March 31, 2021, according to Mexico's National Bank.

·	Consolidated Statement of Financial Position

·	Consolidated Statement of Income

·	Consolidated Statement of Cash Flows

·	Derivatives Position Report

6

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

-Unaudited-

		In U.S. Dollar			March 31,			December 31,
In million pesos			2021				2021				2020*
TOTAL ASSETS		$	2,932.3				59,877.1				58,475.0
Total current assets			1,656.3				33,821.0				32,586.0
Cash and cash equivalents			969.2				19,791.7				19,242.4
Total accounts receivable			228.0				4,655.5				4,366.7
Inventories			404.7				8,264.9				7,701.0
Other current assets			54.3				1,108.8				1,275.9
Total non current assets			1,276.0				26,056.1				25,889.0
Net property, plant and equipment			979.0				19,991.8				19,733.8
Other non current Assets			297.0				6,064.3				6,155.2
TOTAL LIABILITIES		$	666.6				13,612.9				14,548.2
Total current liabilities			355.5				7,259.3				8,179.8
Notes payable to banks			54.8				1,119.0				1,251.7
Accounts payable			206.5				4,217.4				5,834.0
Other taxes payable and other accruals			94.2				1,922.9				1,094.1
Total long-term liabilities			311.1				6,353.6				6,368.4
Long-term debt			71.7				1,464.7				1,460.4
Other non current liabilities			48.7				993.8				1,033.0
Deferred income taxes			190.7				3,895.1				3,875.0
TOTAL STOCKHOLDERS' EQUITY		$	2,265.6				46,264.3				43,926.8
Capital stock			57.5				1,174.2				1,174.3
Commission in shares issued			20.2				413.3				413.4
Retained earnings			2,104.1				42,965.2				40,874.4
Others accounts			55.3				1,129.5				855.5
Non controlling interest			28.5				582.1				609.2
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,932.3				59,877.1				58,475.0

* Audited

7

CONSOLIDATED STATEMENT OF INCOME

First Quarter Results, ended March 31st:

-Unaudited-

		U.S. Dollar
In millions pesos		2021			2021			2020
Net sales		$	948.0				19,357.6				15,738.4
Cost of sales			741.4				15,139.6				13,557.3
Gross profit			206.6				4,218.0				2,181.1
SG&A			80.2				1,637.3				1,572.7
Other income (expenses), net			(1.1	)			(21.8	)			(4.5	)
Operating income			125.3				2,559.0				604.0
Net finance income			15.7				319.6				2,426.5
Income tax			39.4				803.9				860.3
Net Income		$	101.6				2,074.6				2,170.2
Non-controlling interest			(1.3	)			(25.8	)			3.5
Net controlling interest profit			102.9				2,100.4				2,166.6
Basic and diluted earnings per share			0.17				3.50				3.61
Basic and diluted earnings per ADR			2.06				42.02				43.34
Weighted average Shares outstanding1			599,835				599,835				599,843
EBITDA Result		$	142.7				2,913.4				947.3
Gross margin			21.8	%			21.8	%			13.9	%
Operating margin			13.2	%			13.2	%			3.8	%
Net margin			10.9	%			10.7	%			13.8	%
EBITDA margin			15.1	%			15.1	%			6.0	%

1 In thousands

8

CONSOLIDATED STATEMENT OF CASH FLOWS

In million of pesos

-Unaudited-

		U.S. Dollar			March 31,
		2021			2021			2020
NET MAJORITY INCOME BEFORE INCOME TAX		$	141.0				2,878.5				3,030.5
ITEMS RELATING TO INVESTING ACTIVITIES:			21.1				431.8				336.5
Depreciation and others			23.3				476.6				433.3
Income (loss) on sale of plant and equipment			0.5				11.1				14.1
Other Items			(2.7	)			(55.9	)			(110.9	)
NET CASH GENERATED FROM NET INCOME BEFORE TAXES			162.1				3,310.3				3,367.0
CASH GENERATED OR USED IN THE OPERATION:			(116.4	)			(2,376.9	)			(875.3	)
Decrease (increase) in accounts receivable			(6.8	)			(139.3	)			(564.8	)
Decrease (increase) in inventories			2.7				54.9				(899.0	)
Increase (decrease) in accounts payable			(2.8	)			(56.9	)			1,393.4
Other Items			(109.5	)			(2,235.7	)			(805.0	)
NET CASH FLOW FROM OPERATING ACTIVITIES			45.7				933.4				2,491.7
NET CASH FLOW FROM INVESTING ACTIVITIES			(14.6	)			(298.2	)			(216.9	)
Acquisition of property, plant and equipment			(27.2	)			(555.6	)			(292.7	)
Proceeds from sales of property plant and equipment			0.1				1.8				5.6
Other Items			12.5				255.7				70.2
CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES			31.1				635.2				2,274.9
Net cash provided by financing activities:			(4.2	)			(85.9	)			(605.8	)
Proceeds from loans			42.5				867.2				2,459.7
Principal payments on loans			(41.3	)			(844.2	)			(3,415.5	)
Other items			(5.3	)			(108.8	)			350.0
Net increase (decrease) in cash and equivalents			26.9				549.3				1,669.1
Cash and investments at the beginning of year		$	942.3				19,242.4				19,164.8
CASH AND INVESTMENTS AT END OF PERIOD		$	969.2				19,791.7				20,833.9

9

DERIVATIVES POSITION REPORT

First Quarter 2021

Thousands of Mexican Pesos, as of March 31, 2021

TYPE OF FINANCIAL INSTRUMENT	OBJECTIVE	NOTIONAL	VALUE OF THE RELATED COMMODITY	REASONABLE VALUE	AMOUNTS DUE BY YEAR	GUARANTIES REQUIRED
1Q-2021	4Q-2020	1Q-2021	4Q-2020
Forward Vanilla, KO Fwd and options	Hedge	$ 378,061	$ 20.42		$ 19.95		$-231,713	$-449,417	99% in 2021; 1% 2022	The deals consider the possibility of margin calls but not another kind of guarantee
Futures for corn and soybean meal	Hedge	$ 264,981	CORN	CORN	$ 12,899	$ 14,342	100% in 2021
In USD per Bushel	In USD per Bushel
month	price	month	price
May-21	$ 5.643
Jul-21	$ 5.475	Mar-21	$ 4.840
Sep-21	$ 4.960
Dec-21	$ 4.775
Oct-21	$ 399.6
SOYBEAN MEAL	SOYBEAN MEAL
In USD per ton	In USD per ton
month	price	month	price
May-21	$ 423.2	Aug-21	$ 406.9
Jul-21	$ 424.8	Sep-21	$ 302.6
Aug-21	$ 419.6	Oct-21	$ 366.4
Sep-21	$ 410.7	Dec-21	$ 365.3
Oct-21	$ 399.6
Dec-21	$ 397.5	Mar-21	$ 429.4
		May-21	$ 423.4
		Jul-21	$ 419.5
Options of Corn	Hedge	$ 545,125	CORN	CORN	$ 33,523	$ 14,055	99% in 2021 and 1% in 2022
In USD per Bushel	In USD per Bushel
month	price	month	price
May-21	$ 5.643
Jul-21	$ 5.475	Mar-21	$ 4.840
Sep-21	$ 4.960	May-21	$ 4.833
Dec-21	$ 4.775	Jul-21	$ 4.803
Mar-22	$ 4.194
Options of soybean meal	Hedge	$ 634,109	SOYBEAN MEAL	SOYBEAN MEAL	$ 36,364	$ 21,970	91% in 2021 and 9% in 2022
In USD per ton	In USD per ton
month	price	month	price
May-21	$ 423.2
Jul-21	$ 424.8
Aug-21	$ 419.6
Sep-21	$ 410.7
Oct-21	$ 399.6	Jan-21	$ 434.4
Dec-21	$ 397.5	Mar-21	$ 429.4
Jan-22	$ 394.2	May-21	$ 423.4
Mar-22	$ 383.9	Jul-21	$ 419.5

-The total financial instruments do not exceed 5% of total assets as of March 31, 2021.

-The notional value represents the net position as of March 31, 2021 at the exchange rate of Ps.20.42 per one dollar.

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

10

First Quarter 2021
Thousands of Mexican Pesos, as of March 31, 2021	PROBABLE 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, KO Fwd and options	-$ 231,713	$19.91	$ 20.93	$ 21.44	Direct	-$394,065	-$ 69,325	$ 119,506
		-5%	5%	10%		-5%	5%	10%
Futures of Corn: (2)	$ 12,899	$ 5.360	$ 5.925	$ 6.207	The effect will materialize as the inventory is consumed	-$ 350	$ 26,148	$ 39,397
Futures of Soybean Meal: (2)	$ 402.0	$ 444.4	$ 465.5
Options for Corn	$ 33,523	$ 5.360	$ 5.925	$ 6.207	$ 6,524	$ 60,523	$ 87,522
Options of Soybean Meal	$ 36,364	$ 402.0	$ 444.4	$ 465.5	$ 5,161	$ 66,773	$ 97,182

⁽¹⁾ The reference value is the exchange rate of Ps. $20.42 per USD as of March 31, 2021.

⁽²⁾ The reference values are; the future of corn for May 2021, $5.6425 USD/bushel and the future of soybeanmeal for May 2021, $423.20USD/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.

First Quarter 2021
Thousands of Mexican Pesos, as of March 31, 2021	STRESS 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, KO Fwd and options	-$231,713	$10.21	$15.32	$25.53	$30.63	Direct	-$3,479,097	-$1,855,396	$1,376,441	$3,007,800

11

CONFERENCE CALL INFORMATION

The Company will host its first quarter 2021 earnings call, on Friday, April 30th, 2021. The earnings call will take place at 11:00 am Central Time (12:00 pm ET).

To participate in the earnings call, please dial:

Toll free in the U.S.: 1 [phone]

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=UDnqvRcOZDNBup

Confirmation Number: 50123677

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.

IR contact information: Maria Guadalupe Jaquez [e-mail] Andrea Guerrero [e-mail] T. [phone]

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