Grupo Herdez reports third quarter 2017 results

Mexico City, Mexico, October 26, 2017 – Grupo Herdez, S.A.B. de C.V. (“Grupo Herdez” or the “Company”) (MSE: HERDEZ) today announced results for the third quarter ending September 30, 2017.

“Our performance in the third quarter remained positive despite the natural disasters that stroke our nation. The resiliency of our business model and our industry, together with the strategic measures and initiatives we are implementing, are allowing us to cope with the disruptions, while also prevailing during uncertain times. We remain confident about meeting our guidance for this year”,

Said Héctor Hernández-Pons Torres, Chairman and Chief Executive Officer

NET SALES

Net sales in the third quarter increased 6.0 percent compared to the same period of last year to MXN 4,816 million. Net sales in the Preserves division grew 7.2 percent, showing a slowdown when compared to the first six months of the year. This is explained by the
distribution disruptions as a consequence of Mexico’s earthquake and floods that affected several regions of the country.

Highlights from the quarter:

  • Consolidated net sales increased 6.0 percent to MXN 4,816 million.
  • Consolidated EBIT and EBITDA margins were 12.8 and 15.7 percent, respectively.
  • Majority net income reached MXN 172 million, with a margin of 3.6 percent.

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