Grupo Herdez reports first quarter 2015 results

Mexico City, Mexico, April 23, 2015 – Grupo Herdez, S.A.B. de C.V. (“Grupo Herdez” or the “Company”) (MSE: HERDEZ, OTC: GUZBY), today announced results for the first quarter ended March 31, 2015. As of March 1, 2015, Grupo Herdez financial statements
include Helados Nestlé’s results, which are integrated in the new Frozen division along with those of Nutrisa.

“The first three months of the year showed strong continued momentum, with across the board growth in Mexico core. We continue to be cautiously optimistic about the rest of the year,”

said Héctor Hernández-Pons Torres, Chairman and Chief Executive Officer.

Highlights from the quarter:

  • Consolidated net sales rose 14.4% primarily due to strong results in Mexico core.
  • EBIT and EBITDA margins were 16.6% and 18.8%, respectively.
  • Consolidated net income increased 37.8% to Ps. 436 million.
  • Nutrisa ended the quarter with 433 stores.

Net Sales

Net sales in the first three months of the year rose 14.4% from the year ago period, to Ps. 3,719 million. Approximately 3 percentage points of this growth is attributable to the incorporation of Helados Nestlé as of March 1, 2015.

In Mexico core, net sales grew 16.4%, extending strong performance seen since the second half of last year resulting from the Company’s efforts to boost volume performance, as well as the positive calendar effect. The best performing categories were canned vegetables, jam, mayonnaise, mole, tea and tuna. Export sales declined 8.8% when compared to the same period of last year as a result of sluggish sales at MegaMex as well as inventory adjustments. The 14.8% growth in the Frozen division reflects the incorporation of Helados Nestlé as of March 1, 2015, while sales at Nutrisa continue to be impacted by the product rationalization process begun in April of 2014.

2020

  • 2020: We launched the first edition of Semillero Nutrisa. Together with Nutrisa and the Victoria147 business academy for women, we invited women entrepreneurs to participate in a training program to improve the management of their businesses and have the potential to become part of our supply chain.

We established our first technological alliance with Google, which will allow us to accelerate the digital transformation of Grupo Herdez through the use of Google Cloud Platform tools such as BigQuery ML, Looker, among others.

Through the Herdez® brand and Aires de Campo® we joined the “Sowing a New Normality” initiative, promoted by the civil society organizations Ríos Tarango and Ectágono, which aims to increase the vegetation cover of the environmentally valuable area Barranca de Tarango.

  • 2021: We developed the Group’s second proprietary e-commerce platform, with the Nutrisa® online store.

We updated the apps through which we manage the loyalty programs of our retail brands, Cielito Querido Café® and Nutrisa®, improving our customers’ in-store experience.

During the year, 15 formulas had their nutritional profile strengthened by reducing some critical added nutrients (sugars, sodium and saturated fats).

  • 2022: We expanded our capabilities into new categories through the acquisition of Interdeli and Deli, Dips & Snacks. Integrating brands such as Libanius, Flaveur, Liguria and Señor Cactus into our portfolio.

We Issued the first sustainability bond through which we
committed to a 25% reduction in our water consumption.

Together with our partner McCormick & Company, Inc. we
brought the most iconic Mexican cuisine to the tables of the United Kingdom
through meal kits, sauces and condiments under the Herdez® brand.
  In less than a year, we obtained a 5.5% shelf
share in the Tesco supermarket chain.

We consolidated the integration of Chilim Balam® into retail brands, a leading brand in the snack segment