NOVEMBER 2010
I. COMPANY OVERVIEW
GRUMA IS THE WORLD S LARGEST CORN FLOUR AND TORTILLA PRODUCER, WITH OPERATIONS IN THE UNITED STATES, MEXICO, VENEZUELA, CENTRAL AMERICA, EUROPE, ASIA, AND OCEANIA... RGB & FAMILY: 52% ADM: 23% FLOAT: 25% GRUMA, S.A.B. DE C.V. BMV: GRUMAB NYSE: GMK 100 0% 00% MAIN OPERATIONS GRUMA CORPORATION (USA, EUROPE) AZTECA (80% owned) MISSION (100% owned) EUROPE (100% owned) GRUMA MÉXICO GIMSA (83% owned) MOLINERA DE MÉXICO (60% owned) PRODUCTS CORN FLOUR TORTILLAS AND CHIPS CORN FLOUR WHEAT FLOUR % SALES % EBITDA 46 50 32 38 LTM SEP 10 (DOLLARS IN MILLIONS) 1 SALES: 3,774 EBITDA 2 : 346 GRUMA OWNERSHIP 100% 100% GRUMA VENEZUELA MONACA (73% owned) DEMASECA (57% owned) OTHER OTHER CENTROAMERICA ASIA-OCEANIA PRODISA TECHNOLOGY CORN FLOUR WHEAT FLOUR OTHER PRODUCTS 8 14 (5) 17... AND IT OWNS AN 8.8% 8% STAKE IN GRUPO FINANCIERO BANORTE, WHICH HAS A MARKET VALUE OF AROUND US$750 MILLION 3 1 CONVENIENCE TRANSLATION AT AN EXCHANGE RATE OF PS.12.60/DOLLAR. 2 EBITDA = OPERATING INCOME + DEPRECIATION AND AMORTIZATION AFFECTING OPERATING INCOME.
II. MAIN SUBSIDIARIES
GRUMA CORPORATION
GRUMA CORPORATION IS A WHOLLY OWNED SUBSIDIARY OF GRUMA, RESPONSIBLE FOR OPERATIONS IN THE UNITED STATES AND EUROPE NET SALES LTM SEPTEMBER 2010: US$1.7 BILLION 1 GRUMA CORPORATION GRUMA CORPORATION AZTECA MILLING MISSION FOODS CORN FLOUR TORTILLA OPERATIONS OPERATIONS 40% VOLUME 60% VOLUME 6 MILLS IN THE U.S. 1 MILL IN ITALY 1 MILL IN UKRAINE APPROXIMATELY 920,000 TONNES PER YEAR TORTILLA CORN FLOUR CHIP CORN FLOUR 16 PLANTS ACROSS THE U.S. 3 PLANTS IN EUROPE ENGLAND (2) THE NETHERLANDS APPROXIMATELY 1.2 MILLION TONNES PER YEAR CORN FLOUR TORTILLAS WHEAT FLOUR TORTILLAS CORN CHIPS OTHER RELATED PRODUCTS 6 1 FIGURES IN NOMINAL TERMS AND UNDER US GAAP.
GRUMA CORPORATION HAS A PRESENCE IN MOST OF THE UNITED STATES THROUGH STRATEGICALLY LOCATED PLANTS. Fife, WA McMinnville, OR New Brighton, MN Mountain Top, PA Hayward, CA Madera, CA Fresno,CA Panorama City, CA Los Angeles, CA Rancho Cucamonga, CA Tempe, AZ CORN FLOUR MILLS (6) TORTILLA PLANTS (16) Pueblo, CO Amarillo, TX Plainview, TX Dallas, TX Houston, TX San Antonio, TX Evansville, IN Henderson,KY Goldsboro, NC Jefferson, GA Edinburg, TX 7
IN THE UNITED STATES THERE IS STILL GROWTH POTENTIAL FOR THE TORTILLA AND CORN FLOUR INDUSTRIES AS THERE ARE SEVERAL DRIVERS COMMANDING THIS GROWTH GROWTH DRIVERS HISPANIC POPULATION GROWTH 15% OF TOTAL U.S. POPULATION MEXICANS AND CENTRAL AMERICANS ACCOUNT FOR 76%, GROWING AT 5% ANNUALLY INCREASING POPULARITY OF MEXICAN FOOD NON-HISPANICS ACCOUNT FOR THE MAJORITY OF MEXICAN FOODSERVICE PURCHASES THE NUMBER OF MEXICAN FOOD RESTAURANTS CONTINUES TO GROW MORE RESTAURANTS ARE INCLUDING ITEMS WITH TORTILLAS AND CHIPS IN THEIR MENUS TORTILLAS ARE BECOMING A MAINSTREAM FOOD (E.G., WRAPS, BURRITOS, ETC) PRODUCT INNOVATION (E.G., CARB-BALANCE BALANCE TORTILLAS, MULTIGRAIN TORTILLAS, ETC) ESTIMATED U.S. TORTILLA AND CORN FLOUR MARKETS TORTILLAS / TORTILLA CHIPS US$5 BILLION CORN FLOUR 1 US$600 MILLION 8 1 INCLUDES TRADITIONAL METHOD.
GRUMA CORPORATION HAS EXPERIENCED DYNAMIC GROWTH DESPITE GENERAL ECONOMIC CONDITIONS U.S. ANNUAL GROWTH RATE 1 GRUMA CORPORATION NET SALES 2 (US$ IN MILLIONS) CAGR: 00 LTM SEP 10: 8% 6% 4% 2% 0% -2% -4% -6% $1,750 $1,500 $1,250 $1,000 $750 $500 $250-8% '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 LTM SEP 10 $0 9 1 SOURCE: BUREAU OF ECONOMIC ANALYSIS 2 FIGURES IN NOMINAL TERMS AND UNDER US GAAP.
... AND, ON AVERAGE, ITS CASH GENERATION HAS INCREASED AT SIMILAR RATES GRUMA CORPORATION EBITDA 1 (US$ IN MILLIONS) 16% CAGR: 00 LTM SEP 10: 8% $250 14% $200 12% 10% $150 8% 6% $100 4% 2% $50 0% '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 LTM SEP 10 $0 10 1 FIGURES IN NOMINAL TERMS AND UNDER US GAAP.
GIMSA AND GRUMA VENEZUELA
GIMSA AND VENEZUELA ARE GRUMA S SECOND AND THIRD LARGEST SUBSIDIARIES GIMSA NET SALES LTM SEP 10: US$919 MILLION 1 17 CORN FLOUR PRODUCTION PLANTS WITH TOTAL ANNUAL CAPACITY OF 2.8 MILLION TONNES GIMSA GIMSA HOLDS A MARKET SHARE OF APPROXIMATELY 75% GRUMA VENEZUELA NET SALES LTM SEP 10: US$513 MILLION 1 17 PLANTS WITH A CAPACITY OF 909,000 TONNES (6 CORN FLOUR MILLS, 5 WHEAT FLOUR MILLS, 3 RICE PLANTS, 1 PASTA PLANT, 1 OAT PLANT, 1 SPICE PLANT) GRUMA VENEZUELA MARKET SHARE: CORN FLOUR: 14% WHEAT FLOUR: 26% 12 1 CONVENIENCE TRANSLATION AT AN EXCHANGE RATE OF Ps.12.60/DOLLAR.
GIMSA CONTINUES TO GROW AT A STABLE RATE AND IMPROVE ITS CASH GENERATION GIMSA NET SALES (PESOS IN MILLIONS) CAGR 06 LTM SEP 10: 12% GIMSA EBITDA (PESOS IN MILLIONS) CAGR 06 LTM SEP 10: 7% 7,666 9,012 9,142 10,348 11,583 1,145 1,034 1,622 1,561 1,492 2006 2007 2008 2009 LTM SEP'10 2006 2007 2008 2009 LTM SEP'10 EBITDA MARGIN (%) 14.9 11.5 17.77 15.11 12.9 13
IN GRUMA VENEZUELA, RESULTS SHOW AN UPWARD TREND DUE TO PRICE INCREASES REFLECTING THE RISE IN RAW-MATERIAL PRICES, HIGHER SALES VOLUMES, AND BETTER ABSORPTION OF COSTS, HOWEVER, THE BOLIVAR DEVALUATION HAS AFFECTED THE RESULTS DURING 2010 GRUMA VENEZUELA NET SALES (PESOS IN MILLIONS) CAGR 06 LTM SEP 10: 15% GRUMA VENEZUELA EBITDA (PESOS IN MILLIONS) CAGR 06 LTM SEP 10: 34% 3,874 3862 3,862 8,727 9,025 6,470 246 149 975 1,125 735 2006 2007 2008 2009 LTM SEP'10 2006 2007 2008 2009 LTM SEP'10 EBITDA MARGIN (%) 6.4 3.9 11.2 12.5 11.4 14
NEW MARKETS
GRUMA HAS IMPORTANT MID-TERM GROWTH OPPORTUNITIES IN EUROPE, ASIA AND OCEANIA THE ESTIMATED TORTILLA MARKET SIZES ARE: US$850 MILLION FOR EUROPE US$500 MILLION FOR ASIA AND OCEANIA MAIN GROWTH DRIVERS: FAST-FOOD RESTAURANT CHAINS ARE OPENING THE MARKET FOR TORTILLAS AND CHIPS TORTILLAS CAN BE USED AS A SUBSTITUTE FOR SIMILAR FLAT BREADS (PITA BREAD, CHAPATTI, NAAN) CONSUMERS ARE ADOPTING WRAPS IN THEIR EATING HABITS, AND THE CONSUMPTION OF CORN CHIPS IS VERY POPULAR IN CHINA, THE TREND TOWARD EATING OUT MEANS THAT YOUNG PEOPLE ARE TRYING NEW TYPES OF FOOD 16
IV. FINANCIAL STRUCTURE
GRUMA S DEBT TOTALS APPROXIMATELY US$1.7 BILLION, AND MOST OF THE MATURITIES WILL BE BETWEEN 2013 AND 2016 DEBT AMORTIZATION SCHEDULE (US$ IN MILLIONS) 300.0 168.66 157.5 191.2 194.5 176.8 176.7 36.4 51.7 53.4 40.1 17.2 46.2 18.8 17.8 7.7 4Q10 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 AND BEYOND REVOLVING DEBT 18
MAJOR CREDIT FACILITIES US$300 MILLION PERPETUAL BOND AT 7.75% 75% FIXED RATE US$170 MILLION 5-YEAR CREDIT FACILITY (60% USD AND 40% MXN) AT LIBOR/TIIE + 2.875%, +50 BP FROM OCTOBER 2012 THROUGH SEPTEMBER 2013 (3.375%), +50 BP FROM OCTOBER 2013 THROUGH OCTOBER 2014 (3.875%), WITH EQUAL QUARTERLY PAYMENTS ON THE PRINCIPAL BANCOMEXT Ps.3.367 BILLION 10 YEAR CREDIT FACILITY AT TIIE + 6.21% WITH PRINCIPAL PAYMENT AS FOLLOWS: 2012 10% 2014 10% 2016 10% 2019 20% 2013 20% 2015 10% 2017 20% US$643 MILLION 7.5-YEAR CREDIT FACILITY AT LIBOR +2.875% UNTIL JULY 2012, +50 BP FROM JULY 2012 UNTIL JULY 2013 (3.375%), +50 BP FROM JULY 2013 UNTIL JULY 2014 (3.875%), AND +100 BP FOR EACH OF THE FOLLOWING YEARS UNTIL JULY 2017 (ENDING AT 6.875%), WITH SEMIANNUAL ESCALATING PRINCIPAL PAYMENTS STARTING ON JULY 21 ST, 2010 COLLATERAL PACKAGE FOR ALL THESE CREDIT FACILITIES, EXCLUDING BANCOMEXT TRUSTS CONSISTING OF GRUMA S OWNERSHIP OF GRUPO INDUSTRIAL MASECA, GRUMA CORPORATION, AND MOLINERA DE MÉXICO 19
FINANCIAL COVENANTS FINANCIAL COVENANTS 1 2010 2011 2012 2013 2014 2015 2016 2017 DEBT / EBITDA < 5.60 5.00 4.50 4.00 3.60 3.00 2.50 2.50 EBITDA / INT. EXP > 2.50 2.75 2.75 2.75 2.75 2.75 2.75 2.75 ACTUAL 2 SEP 10 SEP 10 EXCLUDING VENEZUELA 1 DEBT / EBITDA 4.47 5.13 EBITDA / INT. EXPENSE 3.18 2.99 20 1 ACCORDING TO THE CREDIT AGREEMENTS, CONSOLIDATED FINANCIAL COVENANTS DO NOT CONSIDER THE GRUMA VENEZUELA OPERATIONS. 2 LAST TWELVE MONTHS
IR CONTACT: ROGELIO SANCHEZ TEL: (52 81) 8399-3312 rsanchezm@gruma.com IR CONTACT: LILIA GOMEZ TEL: (52 81) 8399-3324 lgomez@gruma.com