PRESENTATION CORPORATE - Alfa
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Update: August 3rd, 2015
CORPORATE
PRESENTATION
This presentation contains forward-looking information based on numerous variables and assumptions that are inherently uncertain.
They involve judgments with respect to, among other things, future economic, competitive and financial market conditions and future
business decisions, all of which are difficult or impossible to predict accurately. Accordingly, results are likely to vary from those set
forth in this presentation. Copyright © 2015 ALFA, S.A.B. de C.V. All rights reserved. Reproduction and distribution is forbidden without
the prior written consent of ALFA, S.A.B. de C.V.
2014 Results
Established in Revenues (U.S. $ Billions) $17.2
1974 EBITDA (U.S. $ Billions) $2.0
Capex (U.S. $ Millions) $1,426*
— Roots go back Net Debt/EBITDA 2.5 times
to XIX century Interest Coverage 6.0 times
* Including acquisitions
2
ALFA participates
in key areas
of the economy
BREAKDOWN BY BUSINESS GROUP
REVENUES 2014 EBITDA 2014
(U.S. $ 17.2 BillIon) (U.S. $ 2.0 Billion)
2% 1% 6%
8%
0.4 0.2 120 21%
27% 170
434
4.6 6.5
38% 636
34%
714
5.4
32% 31%
ALPEK SIGMA NEMAK ALESTRA NEWPEK
Petrochemicals Refrigerated Foods Aluminum Auto Parts IT + Telecom Hydrocarbons
3
Ownership
82% 1
75% 2
100% 100% 100%
1: Alpek is a public company since April 2012. Market float is 18%
2: Nemak is a public company since July 2015. Ford Motor Co. owns 5.4% of Nemak and market float is 19.3%.
4
Production facilities in 25 countries
Global
footprint
~65% of sales outside Mexico
More than 70,000 employees
5
Focused
on long-term
value creation
Revenues EBITDA
(U.S. $ Billions) (U.S. $ Billions)
15.917.2
14.7 15.2
10.6 10.8
9.6 1.9 1.9 2.0
8.5 1.7
6.9 1.3
6.2
5.1 1.0 1.0 1.1
0.8 0.8
0.6
04 05 06 07 08 09 10 11 12 13 14 04 05 06 07 08 09 10 11 12 13 14
6
7
One of the world’s Cedar Creek, N.C.
Cooper River, S.C.
Columbia, S.C.
largest integrated Pearl River, MS
polyester groups
Monterrey, N.L.
Altamira, Tamps.
Salamanca, Gto.
• 2014 Revenues of Ocotlan, Jalisco
Lerma, Edo. Mexico
U.S. $6,470 million Cosoleacaque, Ver.
• Production facilities in key
geographic areas: Guaratingueta, Bra.
– North America: the biggest
market for beverages
– Availability of low-cost raw
materials
Pacheco, Arg.
– Logistics Santiago, Chile
Puerto Montt, Chile
General Lagos, Arg.
Zarate, Arg.
8
Business PRODUCTS SAMPLE OF END-USES
Segments PTA
PET
Polyester
Polyester Chain Fibers
2014 Revenues 2014 EBITDA PP
U.S. $ 4,752 Million U.S. $270 Million
(73%) (63%)
EPS
Plastics and Chemicals
CPL
2014 Revenues 2014 EBITDA
Fertilizers
1,719 Million
U.S. $ U.S. $ 159 Million and others
(27%) (37%) chemicals 9
Enhancing
competitiveness
MAIN INVESTMENT PROJECTS
COMPLETION
FEASIBILITY INVESTMENT
ANALYSIS
Strategic Guidelines U.S. 1 Integrated MEG plant
$100-300 (US$1 billion)
• Capture natural gas, ethane million
and propane advantage in
3 2
North America U.S. $50-
100 Cogen Altamira PTA/PET site
• Maximize operating efficiency million (US$250 million) in Texas
(US$350 million)
• Pursue Integrex licensing / JV Amount of investment within parenthesis; estimated annual savings in blue area
1011
• 2014 Revenues of U.S. $4,645 million
The largest producer
of aluminum cylinder • One out of every four new
vehicles sold worldwide has a Nemak
heads and engine blocks
component
in the world
• Public company since July 2015
12A portfolio of 50
customers, supplying
more than 650
different platforms
13structural
Aluminum
components
penetration
NA and EU LV Aluminum Content 475
(Pounds Per Vehicle)
426
Structural
380 109 Components
350 85
324 57
64 Others
301 43 58
33 54
24 50 39 Heat Transfers
46 37
43 35
33 34 71
31 Wheels & Brakes
64 67
58 61
55 57
53 Transmissions
49 51
45 47
65 71 79 Engine Blocks
51 55 60
52 53 54 55 55 57 Cylinder Heads
2009 2012 2015e 2018e 2021e 2025e
14
Source: Ducker, Nemak research15
A leading player
in the refrigerated food
market
Presence in
18 countries
• 2014 Revenues of U.S.
$5,359 million
• More than 1.4 million
tons/yr, or 4,000+ per
day
• Presence in Mexico, the U.S.
Central & South America and
Europe
• Acquired the remaining shares
of Campofrio from WH Group.
16Creating an
enhanced global
platform
Leadership in Mexico, US value segment & Western
Positioning Europe
18 countries
Geographic footprint (Americas & Western Europe)
Dry & Cooked Processed Meats, Dairy, Yogurt,
Product portfolio
Ready meals, Others
5%
39% 41%
Geography
15%
Revenue Mexico U.S. Europe Other
2014
9% 9%
19%
55% 19%
Segment 55%
17% 17%
Chilled Processed Meats Dairy Dry Meats Other 17One of the most
efficient distribution
networks in Mexico
• 136 distribution
centers; 3,900
delivery routes
• +4,000 refrigerated
vehicles
• Reaching more than
450,000 POS
1819
Strategic
evolution
ALESTRAIT
• Managed
applications
• Governance and
compliance in IT
ALESTRACLOUD&MOBILE • Business Process
Outsourcing
• Vertical Markets
• Integral operation of
• Cloud services
critical mission
• Management
applications (ERP,CRM)
• Fixed/Mobile
ALESTRACONVERGENCE applications
• IP as standard
• Telecom / Informatics
• WAN / LAN
ALESTRAIP • Data Centers
• Managed Services
• Enterprise market • Security Operation
• Value added services Center
ALESTRATELECOM • Internet bubble
• Mass Market
• LD Services
20Leader in the value- Sales breakdown
added IT + Telecom By type of service
5%
Consumer & Intl
services for enterprises
in Mexico 31%
% 14%
MN & IT Enterprise LD
Enterprise
• 2014e Revenues of 50 %
Data, internet
U.S. $415 million and local
• Value Added Services (VAS) By Market Segment
for the enterprise market 3% 2%
International
Residential
• IT Managed Services
Security, Data Centers,
Cloud Services, VPNs, 95%
Enterprise
Internet
21Infrastructure provides Alestra´s Network
access to +90% of
Mexican market
• 20,520 kms. of long-haul fiber
optics, plus 3,500 kms. of
metro rings in 16 cities
• 50 cities with Data & IT
services
• Acquisition of G-TEL to
reinforce coverage NW and
SE regions
Corporate headquarters
International Border Crossing
• New Data Center in Data Centers
Queretaro
2223
Value drivers
Talent
Newpek: U.S. •
•
Team of 28 experienced people in the US
World-class partners (e.g. Pioneer Natural Resources)
Operations began in Technology
•
2006 •
Fracking for horizontal drilling in Eagle Ford
Mature fields optimization
• World-class sub-surface analysis capabilities
Successful transition to operations
• Experienced in exploration and operations through past
acquisitions
• Developing over 400,000 acres
Current U.S. Operations Net Production (mboed)
8.2
6.4
4.7
2.7
0.9 1.1 1
0.3
'07 '08 '09 '10 '11 '12 '13 '14
CO KS
OK
EBITDA (US$ mm)
TX 116
91
Newpek fields 66
Eagle Ford 30
3 14 7 8
'07 '08 '09 '10 '11 '12 '13 14Activities in Mexico
began in 2013
Current operations Focus
E&P
Services • JV 50/50 with MPG (Grupo ACS)
• Producing over 5.5 mboed
Operation (CIEPs) • Optimization of existing wells (workovers)
• Development of new wells in conventional formations
• Migrating existing CIEPs to the new Exploration and Production
Contracts (CEEs)
Services
• JV 50/50 with Petrofac
• Services: Onshore / offshore drilling, workovers, well testing,
O&M and equipment rentalsPrepared to capture energy reform opportunities
in Mexico
Areas of Interest Attractive Opportunities
1 23.0 mmmboe of 2P reserves
Exploration and Production of Hydrocarbons
(E&P) 112.8 mmmboe of prospective resource
Expected 5.4% CAGR in O&G services by 2020
2 Open competition in transportation and distribution
Midstream / Downstream of natural gas
Liberalization of basic petrochemicals
111 GWeq by 2027
3 Expected 4.6% CAGR in large, mid-sized and
Power commercial industry growing 2.3 GWeq per year
Edge for those with clean, competitive generation
Alfa’s Energy History
E&P Midstream / Downstream Power
Newpek, LLC established in Alpek as leading petrochemical Long history of implementing
2006 to explore and exploit company in North America cogeneration projects, including a
unconventional resources 97 MW plant during 2014
Experience in energy marketsE&P investment
opportunities
Overview of current E&P investment map Focus
Unconventional / 49,536 mmboe prospective
Chicontepec 9,118 km2
Onshore / shallow water / extra- 21,772 mmboe prospective
heavy oil 5,657 km2
U.S.
Burgos & Mexico Farm-out projects 1,557 mmboe
Sabinas
Deep water
Unconventional Perdido
US$50bn over 4 years as originally
Golden Lane- Investment opportunities
Ébano- projected
Chicontepec
Deep water Extra-heavy oil
Han & Holok Shallow waters
Possibility to partner with existing operators as CIEP and COPF contracts
migrate to new exploration and exploitation contracts
Liberalization of the midstream / downstream sectors with open private
participation across all segments
Farm-outs
Liberalization of power generation and investment in distribution and
transmission
Round 0 (PEMEX) Migration CIEPs & COPFs Round 1 farm-outs
Increased demand of E&P services from increased production
Round 1 exploration Round 1 exploitation Alfa’s areas of interest
Strategy: to continue to successfully growing through low-cost exploration and production in competitive new blocksRound 1 focus:
Migration of Contracts, The first opportunity for investors to participate in the
Mexican O&G industry
Bids and Farm Outs Blocks 2P / Prospective Characteristics of
(mmboe) contracts
Types
Production sharing
License
22 fields (CIEP &
Migration 2,208 / 2,252 3 to 5-year exploration
Length
COPF)
20 to 30-year exploitation
Prequalification
Considerations
Award variables
88 exploration
Bids and Farm- NA / 71,963
Bonus (license)
57 production
outs 10 farm-outs
Adjustment mechanism
Round 1 Calendar
Shallow water Shallow water Chicontepec
Type of fields Exploration Production
Onshore
Unconventional
Deep-water
Announcement of bid Dec Feb May TBD
2014 2015 2015 2015
Jan Feb May TBD
Database opening
2015 2015 2015 2015Newpek: Key competitive strengths Experience in exploring and developing conventional and unconventional formations in the US and Mexico Strong presence in the Eagle Ford Shale formation Partnerships with established upstream players in the US and Mexico Highly qualified technical team to identify quality prospects Integrated energy services company to support oil & gas field development (onshore and offshore)
ALFA:
Guidance 2015
(U.S. $ Millions)
Revenues EBITDA Capex
2014 2015e % Ch 2014 2015e % Ch 2014* 2015e
Alfa 17,200 16,660 (3) 2,040 2,228 9 1,426 1,280
Alpek 6,471 4,950 (24) 434 585 35 320 400
Nemak 4,622 4,730 2 714 745 4 393 435
Sigma 5,359 6,330 18 636 758 19 387 250
Alestra 415 415 0 170 160 (6) 106 115
Newpek 170 110 (35) 116 60 (48) 133 80
* Including acquisitions
Note: Guidance as of July 22, 2015.
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