“Gruma is strong and growing. The Company announced its Q221 results today.”.

• Net sales and EBITDA in Q221 stood at MXN 22.450 billion and MXN 3.716 billion, respectively.
  
  
• The average exchange rate fell from MXN 23.19 in Q220 to MXN 19.91 in Q221.
  
  
• Net sales and EBITDA from operations outside of Mexico represented 74% and 76%, respectively, of the Company’s consolidated figures.
  
  
• In Q221, the Company invested USD 63 million primarily in its operations in the United States and Europe.
  
  
• Gruma had MXN 1.502 billion in debt in Q221, with a Net Debt EBITDA ratio of 1.4 times.
  
  

Mexico City, July 21, 2021. Gruma is strong and growing. The Company announced its Q221 results today.

The extraordinary increase in demand for food derived from the pandemic in the second quarter of 2020, as well as an unusually high average exchange rate of 23.19 pesos per dollar, generated historical results for Gruma in that year. Consequently, the relevant comparison period to evaluate the Company’s performance corresponds to Q221 vs. Q219, with strong growth trends in all relevant results indicators. The Company’s annual average of 8.1% EBITDA and 7.8% net sales growth are notable in the 2019-2021 period.

Gruma expects to continue maintaining growth trends comparable to pre-pandemic levels due to its business and innovation strategy for the food it produces worldwide and the growing demand for its products globally, primarily in the United States, the Company’s #1 market outside of Mexico.

On the other hand, it is important to note that, excluding the variations in the average exchange rate, which fell from MXN 23.19 per dollar in Q220 to MXN 19.91 in Q221, Gruma’s net sales and EBITDA grew 3.5% in the last year.

Q221 Financial Results compared to Q220 and Q219

Given the extraordinary nature of the second quarter of 2020, because of the effects caused by the pandemic, we present the Q221 results compared to the same period of 2020 and 2019.

At the end of the Q221, the Company’s Sales Volume remained stable at 1.057 billion metric tons compared to Q220, with a 3.6% growth over Q219.

The Company’s Net Sales stood at MXN 22.450 billion, 7% less compared to the same period of 2020, due to the greater strength of the peso against the dollar in the figures reported for operations outside of Mexico when measured in terms of Mexican pesos, and to changes in the sale of food with lower margins as companies begin to reopen in the United States and Europe. Net Sales were up 16.2%, compared to Q219.

Gruma continues to establish its position as a global company. In Q221, sales from operations outside of Mexico represented 74% of the Company’s total sales.

Gruma’s Cost of Sales as a percentage of net sales grew from 60.5% to 64.0% due to a higher cost of corn at GIMSA, which was partially offset by hedging positions.

Gruma reported MXN 8.079 billion in Gross Profit for Q221, 15% lower than Q220 and 11.2% higher than Q219. The gross margin stood at 36.0%.

The world’s leading producer of nixtamalized corn flour, tortillas and wraps reported MXN 2.805 billion of Operating Income in Q221, 8% lower than Q220 and 18.8% higher than Q219. The operating margin in Q221 stood at 12.5%.

The multinational’s EBITDA at the end of Q221 was MXN 3.716 billion, 8% below the EBITDA reported in Q220 and 16.9% above the EBITDA reported in Q219. The EBITDA margin in Q221 stood at 16.6%. EBITDA from operations outside of Mexico represented 76% of the Company’s consolidated figures.

Gruma reported MXN 1.532 billion in Net Income, 13% below the figure reported in the same quarter of 2020 and 20.7% above the figure reported in Q219. Majority Net Income stood at MXN 1.531 billion, 13% below the figure reported in Q220 and 20.7% above the figure reported in Q219.

Gruma’s debt at the end of the second quarter of the year stands at USD 1.502 billion, USD 38 million less than in March of this year. In terms of pesos, the debt was reduced by 6% to MXN 29.7 billion due to the strength of the Mexican peso against the U.S. dollar. The Net Debt EBITDA ratio is 1.4 times.

In Q221, Gruma’s capital investments amounted to USD 63 million (MXN 1.248 billion) and were used:

1) To build and increase the capacity of its new factory in Indiana, in the United States,

2) To expand the capacity of its tortilla plant in Spain,

3) For wastewater treatment systems at the Evansville, Indiana, and Edinburg, Texas corn flour plants in the USA, and.

4) To implement maintenance and technological updates across the Company.

It is important to note that, given the growing demand for products in the United States, the Company reopened its tortilla plant in Omaha, Nebraska, with an installed capacity to produce 11,000 tons of product per year. The plant was reopened to serve the retail segment in the region.

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