Examen press release

Why the net sales increased reaching a record level?

• Volume performance

• Strong price/mix

• Strong price/mix and volume

Answer explanation

Net Sales reached a record level at Ps 398 706 million, an increase of 17 7 mainly

attributable to strong price/mix and volume across every region

Why the Net Majority Income increased?

• MEPPs

• Strong sales and MEPPs

• Sale of Ricolino, strong sales performance and MEPPs

Answer explanation

Net Majority Income increased more than two times and the margin expanded 710

basis points to 11 8 due to the strong sales performance, the extraordinary gain

related to MEPPs and the sale of Ricolino Excluding these effects, Net Majority

Income increased 21 4 and the margin expanded 20 basis points

Full year Gross Profit increased, while the margin contracted, why?

• Higer volume

• Increased price

• Higher raw material cost

Answer explanation

Full year Gross Profit increased 13.4% while the margin contracted 200 basis points to

51.5% mainly due to higher raw material costs

For the full year, Operating Income grew and the margin signicantly expanded. What were the main drivers?

• Strong sales, price/mix and MEPPs

• MEPPs, strong sales performance and efficiencies in the distribution network

• Strong sales performance and efficiencies in the distribution network

Answer explanation

Operating Income for the fourth quarter rose 150 1 and the margin significantly

expanded 11 9 pp, mainly due to a non cash benefit of US 734 million related to the

reversal of a MEPPS liability provision which had been carried to support a solution for the

largest 'critical and declining' MEPP, and is no longer needed as it is expected to receive

'Special Financial Assistance' pursuant to the American Rescue Plan Act of 2021 coupled

with the strong sales performance and efficiencies in the distribution network This was

partially offset by the higher cost of sales, a one time write off related to a prepayment to a

supplier and the weak results in China related to Covid lockdowns

For the full year, Operating Income grew 64 8 and the margin expanded 390 basis

points, mainly due a non cash benefit of US 934 million from the adjustment to the

MEPPs liability, the above mentioned strong sales performance and productivity savings

across every region despite the inflationary environment This was partially offset by the

abovementioned effects

Adjusted EBITDA reached a record level, while the margin contracted, what were the main drivers?

• Higher raw material costs and inflationary environment

• Higher raw material costs, inflationary environment and strong sales performance

• Higher raw material costs and strong sales performance

Answer explanation

Adjusted EBITDA, which does not include the effect of MEPPs, reached a record level

for a fourth quarter at Ps 14,639 million, an increase of 12.0% while the margin

contracted 40 basis points, to 13 4 mainly reflecting the higher raw material costs and

inflationary environment, which was partially offset by productivity savings

2022 Adjusted EBITDA reached a record level at Ps 53,455 million an increase of 12.8%

while the margin contracted 60 basis points, primarily attributable to the

abovementioned higher cost of sales, partially offset by the strong sales performance

globally

Average debt maturity was ​ (a)   years with an average cost of ​ ​ (b)   . Long- term Debt comprised ​ (c)   of the total; ​ (d)   of the debt was denominated in US dollars, ​ (e)   in Mexican pesos, 8% in Euros and 6% in Canadian dollars

• 14.1
• 6%
• 92%
• 45%
• 41%

Why the Debt decreased from MXN 93 billion to 84 billion?

Answer explanation

Total

Debt on December 31 2022 was Ps 84 billion,

compared to Ps 93 billion on December 31 2021 The

decrease was primarily due to the prepayment of debt

using the proceeds from Ricolino and the FX rate effect.

¿Qué son los MEPPs y por qué nos benefició?