Industrias Bachoco Announces Fourth Quarter and Full Year 2012 Results

    Industrias Bachoco Announces Fourth Quarter and Full Year 2012 Results

REPEAT to include ticker symbols: (NYSE: IBA; BMV: Bachoco)

PR Newswire

CELAYA, Mexico, Feb. 7, 2013

CELAYA, Mexico, Feb. 7, 2013 /PRNewswire/ -- Industrias Bachoco S.A.B. de
C.V., "Bachoco" or "the Company" (NYSE: IBA; BMV: Bachoco), announced today
its unaudited results for the fourth quarter ("4Q12") and full year 2012
("Y12") ended December 31, 2012. All figures have been prepared in accordance
with International Financial Reporting Standard ("IFRS"), and are presented in
nominal million Mexican Pesos ("Peso" or "Ps.").

HIGHLIGHTS (comparison with the same periods in 2011)

  oNet sales increased 25.0% and 41.8% in 4Q12 and Y12 respectively, mainly
    as a result of the integration of the Company's new operation in the
    United States.
  oEBITDA margin was 8.5% in 4Q12 and 8.7% in Y12.
  oEarnings per share totaled Ps. 0.92 in 4Q12, and Ps. 3.60 in Y12 compared
    to a negative result Ps. 0.04 in 4Q11 and earnings of Ps. 0.28 in 2011.

CEO COMMENTS

"Supply and demand remained balanced across our main product lines, with sound
prices during most part of the quarter, helped by the holiday season at the
end of this period, which fostered consumption mainly of chicken products.

Fourth quarter results concluded a positive year for the Company in terms of
operating and financial results, a recovery from results reported in 2011,
which was one of the most difficult years in the Company's history.

It has been one year since Bachoco entered the United States market through
the acquisition of OK Industries. We continue to integrate OK Industries into
the Company's operations, in line with Bachoco's overall strategy.

In addition, it is important to highlight that Bachoco had a solid financial
structure throughout 2012, reporting negative net debt on the Balance Sheet,
which we consider one of Bachoco's primary strengths."

EXECUTIVE SUMMARY

The following financial information is expressed in millions of nominal Pesos
with comparative figures for the same periods in 2011.

                 QUARTERLY                 YEAR
In millions of   4Q11   4Q12      2011            2012
pesos
Net sales       Ps.        Ps. 10,705.3  Ps.         Ps. 39,348.1
                8,564.3                        27,740.6
Net sales       7,191.1       8,007.3          26,364.9        31,228.9
Mexico
Net sales in    1,373.2       2,698.0          1,373.2         8,119,1
the U.S.
Cost of sales   Ps.        Ps.          Ps.        Ps.33,357.7
                7,887.1       9,135.0         24,754.7
Gross profit    677.2         1,570.3          2,985.9         5,990.4
Total expenses  851.1         872.6            2,951.9         3,371.1
Net income      -26.9         554.2            165.2           2,159.1
(loss)

NET SALES

Net sales increased 25.0% during 4Q12 and, 41.8% during Y12, mainly as a
result of the integration of the Company's new operation in the United States,
which was acquired in November 2011.

Quarterly Sales (4Q12 vs. 4Q11)

Net sales in 4Q12 totaled Ps. 10,705.3 million, higher than the Ps. 8,564.3
million in net sales reported the same period in 2011. The increase was due to
increases across all main business lines, with balanced and stable demand and
supply.

Annual Sales (Y12 vs. Y11)

Net Sales in Y12 totaled Ps. 39,348.1, 41.8% more than Ps. 27,740.6 million in
net sales in Y11, mainly as a result of 45.6% increase in chicken sales, due
to the integration of OK Industries sales to Bachoco.

OPERATING RESULTS

Gross profit in 4Q12 was Ps. 1,570.4 million resulting in a gross margin of
14.7%, compared to a gross profit of Ps. 677.2 million with a gross margin of
7.9% in 4Q11. Meanwhile, the gross margin totaled 15.2% in 2012, compared to
10.8% in 2011.

As a result of strict control of operating expenses, Bachoco reported
improvements in 2012; in 4Q12, total expenses represented 8.2% of total sales
compared to 9.9% of total sales in 4Q11. For 2012, total expenses represented
8.6% of total sales compared to 10.6% reported in 2011.

                            QUARTERLY           YEAR
In million of pesos         4Q11   4Q12   Var.   2011           2012    Var.
Financial income (expense)  Ps.   Ps.   16.1%  Ps.177.8 Ps.    -10.3%
net                         40.0 46.5                       159.5
 Financial income        88.5   86.0   -2.8%  280.8          293.3   4.5%
 Financial expense        48.4   39.5   -18.4% 102.9          133.8   30.0%

The Company reported comprehensive financial income of Ps. 46.5 million for
4Q12, and Ps. 159.5 million for 2012. This was mainly due to interest earned
on the Company's cash position, which remained strong throughout the year.

Total taxes for 4Q12 were Ps. 140.4 million and Ps. 583.5 million for 2012.

                            QUARTERLY             YEAR
In million of pesos         4Q11       4Q12       2011       2012
Total tax expense (benefit) -Ps. 84.7 Ps. 140.4 Ps. 632.3 Ps. 583.5

Net income was Ps. 554.2 million in 4Q12 (Ps. 0.92 per share), compared to a
net loss of Ps. 26.9 million (-Ps. 0.04 per share) reported in 4Q11.
Meanwhile, net income for 2012 was Ps. 2,159.1 million (Ps. 3.60 per share),
compared to net income of Ps. 165.2 million (Ps. 0.28 per share) reported in
2011.

Adjusted EBITDA

Adjusted EBITDA in 4Q12 reached Ps. 911.2 million, representing a margin of
8.5%, compared to adjusted EBITDA of Ps. 79.0 million in 4Q11. Adjusted EBITDA
margin in 2012 was 8.7%, compared to 2.9% in 2011.

The following chart shows reconciliation of adjusted EBITDA and adjusted
EBITDA margin to consolidated net income.

                                   Fourth Quarter          Full Year
In million of pesos as of December 2011         2012       2011       2012
31:
Net income (loss)                  -$    27 $   554 $   165 $ 2,159
 Income tax expense (benefit)     (85)         140        632        583
 Share of results in associates   1            3          2          7
 Comprehensive financial (income) (40)         (46)       (178)      (160)
expense, net
 Depreciation and amortization    253          214        778        815
EBITDA RESULT                      102          864        1,400      3,404
EBITDA margin                      1.2%         8.1%       5.05%      8.65%
 Other expense (income) net       (23)         47         (588)      29
Adjusted EBITDA result             79           911        812        3,434
Adjusted EBITDA margin             0.9%         8.5%       2.9%       8.7%
Net revenues                       8,564        10,705     27,741     39,348

BALANCE SHEET

Cash and equivalents as of December 31, 2012 totaled Ps. 5,138.1 million
compared to Ps. 3,036.4 million reported as of December 31, 2011, while net
debt was a negative Ps. 2,396.8 million.

As of December 31, 2012, total debt was Ps. 2,741.2 million pesos compared to
Ps. 1,837.4 million reported as of December 31, 2011. The Company's debt is
broken down as follows:

^

In millions of pesos    As of Dec 31, 2011    As of Dec 31, 2012        Var.
Short term debt         Ps.        Ps.            -16.9%
                        1,453.0               1,207.1
Long term debt          384.4                 34.1                      -91.1%
Long term debt (Bond    0.0                   1,500.0                   100.0%
issue)
Total debt              1,837.4               2,741.2                   49.2%
Net debt^2              -1,199.0              -2,396.8                  99.9%
^2 Net debts equal to: total debt minus total cash and equivalents.

CAPITAL EXPENDITURES

Total CAPEX as of December 31, 2012 was Ps. 835.9 million, mainly allocated
toward productivity projects and maintenance.

STOCK INFORMATION

As of December 31, 2012
Total Shares                                     600,000,000
Total free float                                 17.25%
Total shares in treasury (as of December 31,     0
2012)
Total shares in treasury (as of February 07,     0
2012)
Market cap (millions)                            Ps. 18,078
STOCK                                            BMV          NYSE
Ticker Symbol                                    Bachoco      IBA
Closing price as of December 31, 2012            Ps. 30.13  USD$ 27.92
Maximums closing price within the 52 weeks       Ps. 30.13   USD$ 27.97 
Minimums closing price within the last 52 weeks  Ps. 20.59  USD$ 18.86
Pricing yield in 2012                            35.1%        46.4%

APPENDICES TO FOLLOW

For reference, some figures have been translated in millions of U.S. dollars
("USD") using an exchange rate of $12.87, that corresponds to the close of
December 31, 2012, according to Mexico's National Bank.

1. Consolidated Statement of Financial Position

 -Unaudited-
                               As of Dec 31,   As of Dec 31,   U.S. Dollar
 In million of pesos           2011            2012            As of Dec 31,
                                                               2012
 ASSETS
 Cash and cash equivalents     $     3,036 $     5,138 $     
                                                               399
 Total accounts receivable     2,333           2,387           185
 Inventories                   4,780           6,258           486
 Other current assets          712             306             24
 Total current assets          10,860          14,089          1,095
 Net property, plant and       11,755          11,509          894
 equipment
 Other non current assets      1,869           2,051           159
 TOTAL ASSETS                  $    24,484  $    27,649  $     2,148
 LIABILITIES
 Notes payable to banks        1,453           1,207           94
 Accounts payable              2,411           2,926           227
 Other taxes payable and other 606             668             52
 accruals
 Total current liabilities     4,470           4,801           373
 Long-term debt               384.4           1,534           119
 Other non current            69              68              5
 liabilities
 Deferred income taxes         2,522           2,521           196
 Total long-term liabilities   2,976           4,123           320
 TOTAL LIABILITIES             $     7,446 $     8,925 $     
                                                               693
 STOCKHOLDERS' EQUITY
 Capital stock                 1,393           1,393           108
 Commission in shares issued   459             459             36
 Repurchased shares            93              104             8
 Retained earnings             13,975          15,835          1,230
 Others accounts               1,059           875             68
 Total majority stockholder's  16,978          18,665          1,450
 equity
 Minority interest             60              60              5
 TOTAL STOCKHOLDERS' EQUITY    $    17,038  $    18,724  $     1,455
 TOTAL LIABILITIES AND         $    24,485  $    27,649  $     2,148
 STOCKHOLDERS' EQUITY

2. Consolidated Statement of Income

 -Unaudited-
                                          U.S.                         U.S.
                         Fourth Quarter   Dollar    Full Year          Dollar
                                          ^(1)                         ^(1)
 In million of pesos as  2011    2012     2012      2011     2012      2012
 of December 31:
 Net sales               $ 8,564 $ 10,705 $       $ 27,741 $ 39,348 $  
                                          831.8                       3,057
 Cost of sales           7,887   9,135    $       24,755   33,358    2,592
                                          709.8
 Gross profit            677     1,570    $       2,986    5,990     465
                                          122.0
 total expenses          851     873      $      2,952    3,371     262
                                          67.8
 Operating income        (174)   698      $      34       2,619     204
                                          54.2
 Other income (expense)  23      (47)     -$     588      (29)      (2)
 net                                       3.6
 Comprehensive financing 40      46       $      178      160       12
 (cost) income                              3.6
 Share of results in     (1)     (3)      -$     (2)      (7)       (1)
 associates                                0.2
 Income before income    (112)   695      $      798      2,743     213
 tax, asset tax                           54.0
 Total income taxes      (85)    140      $      632      583       12
                                          10.9
 Net income              (27)    554      $      165      2,159     201
                                          43.1
  Net controlling      3       3        $      5        10        201
 interest income                            0.3
  Non-controlling      (30)    551      $      160      2,149     (188)
 interest income                          42.8
 Net income per share    (0.04)  0.92     $      0.28     3.60      0.33
 (EPS)                                      0.1
 Total Shares            600     600      $       600      600       600
 outstanding (million)                    600.0
 EBITDA Result           $    $       $      $     $ 3,433.9 $   
                         79      911.2      71   812                 267
 EBITDA margin           0.9%    8.5%               2.9%     8.7%
 Gross margin            7.9%    14.7%              10.8%    15.2%
 Operating margin        -2.0%   6.5%               0.1%     6.7%
 Net margin              -0.3%   5.2%               0.6%     5.5%

3. Consolidated Statement of Cash Flows

 -Unaudited-
                                                                U.S. Dollar
                                    As of Dec 31, As of Dec 31, As of Dec 31,
 In million of pesos                2011          2012          2012 ^(1)
 NET MAJORITY INCOME BEFORE INCOME  798           2,743         213
 TAX
 ITEMS THAT DO NOT REQUIRE CASH:    -             -             -
 ITEMS RELATING TO INVESTING        781           728           57
 ACTIVITIES:
  Depreciation and others      778           815           63
  Income (loss) on sale of     5             115           9
 plant and equipment
  Other Items                  (3)           (202)         (16)
 ITEMS RELATING TO FINANCING        255           90            7
 ACTIVITIES:
  Interest income (expense)    58            90            7
  Other Items                  197           -             -
 NET CASH GENERATED FROM NET INCOME 1,834         3,560         277
 BEFORE TAXES
 CASH GENERATED OR USED IN THE      (1,593)       (1,738)       (135)
 OPERATION:
  Decrease (increase) in accounts -             (168)         (13)
 receivable
  Decrease (increase) in          (1,696)       (1,576)       (122)
 inventories
  Decrease (increase) in accounts 594           515           40
 payable
  Decrease (increase) in other    (491)         (509)         (40)
 liabilities
 NET CASH FLOW FROM OPERATING       241           1,822         142
 ACTIVITIES
 INVESTING ACTIVITIES
 NET CASH FLOW FROM INVESTING       (854)         (549)         (43)
 ACTIVITIES
  Acquisition of property,     (662)         (836)         (65)
 plant and equipment
  Proceeds from sales of       (84)          30            2
 property plant and equipment
  Other Items                  (108)         257           20
 CASH FLOW SURPLUS (REQUIREMENTS
 OF) TO BE USED IN
 FINANCING ACTIVITIES               (612)         1,273         99
 Net cash provided by financing     919           626           49
 activities:
  Proceeds from loans             1,995         2,939         228
  Principal payments on loans     (777)         (2,046)       (159)
  Dividends paid                  (300)         (300)         (23)
  Other items                     2             33            3
 NET INCREASE (DECREASE) IN CASH    (1,141)       2,102         163
 AND EQUIVALENTS
 CASH AND INVESTMENTS AT THE        4,177         3,036         236
 BEGINNING OF YEAR
 CASH AND INVESTMENTS AT END OF     3,036         5,138         399
 PERIOD

4. Derivatives Financial Position

Thousands of Mexican Pesos, as of December 31,
2012
Type of                Notional Value of the Related Commodity    Reasonable      Amounts Guaranties
Financial  Objective                                              Value           Due     Required
Instrument                      4Q-2012          3Q-2012          4Q-2012 3Q-2012 By Year
None       Hedge and   $     $0.00            $12.86           $    $  
           negotiation    -                                      -   2,458
                                Month    Price   Month    Price
                                Corn             Corn
                                in USD per       in USD per
                                bushel           bushel
                                MAR-2013 $6.9825 DEC-2012 $7.5625
Futures                         MAY-2013 $7.0030 MAR-2013 $7.5950
for corn                        JUL-2013 $6.9725 MAY-2013 $7.5650
and        Hedge       $       SEP-2013 $6.2125 JUL-2013 $7.4900 $    $      2013
Soybean                143,761                  SEP-2013 $6.5900  273   15,892
meal.                           Soybean Meal     Soybean Meal
                                In USD per ton   In USD per ton                           The deals
                                MAR-2013 $419.40 DEC-2012 $486.90                         consider
                                MAY-2013 $411.80 JAN-2013 $483.90                         the
                                JUL-2013 $407.30 MAR-2013 $468.40                         possibility
                                                 MAY-2013 $447.00                         of margin
                                                 JUL-2013 $435.40                         calls but
                                Month    Price                                            not another
                                Corn                                                      kind of
                                in USD per                                                guarantee
                                bushel
Options                         MAR-2013 $6.9825
for corn   Hedge and   -$    MAY-2013 $7.0030                  -$    $   
and        negotiation 1,648    JUL-2013 $6.9725                  1,648     -   2013
Soybean                         SEP-2013 $6.2125
meal                            Soybean Meal
                                In USD per ton
                                MAR-2013 $419.40
                                MAY-2013 $411.80
                                JUL-2013 $407.30
SWAP,                  $       TIIE to 4.8475% TIIE to 4.8075% $    $   
interest   Hedge       151,910 28 days          28 days           151    490   2013
rate.

Notes:
-The total financial instruments not exceed 5% of total assets as of December
31, 2012.
- A negative value means an unfavorable effect for the Company.
- The notional value represents the net position as of December 31, 2012 at
the exchange rate of Ps.12.8704 per USD.

                                                                 
Thousands of Mexican Pesos, as of
December 31, 2012                                                PROBABLE
                                                                 SCENARIO
            Reasonable Value of the Related
Type of     Value      Commodity               Effect on
Financial   As of                              the Income  Effect on the Cash
Instrument  December   Reference Value         Statement   Flow^(3)
            31, 2012
                       -2.5%   2.5%    5.0%                -2.5% 2.5%  5.0%
            $      $    $    $                $   $   $  
None                -    -    -  Direct       -   -   -
             -
                       -5%     5%      10%                 -5%   5%    10%
Futures of             $    $    $   
corn: ^(2)  $      6.633   7.332   7.681   The effect -$   $    $
Futures of        $     $     $     will        6,929 7,474 14,675
soybean     273       398.43  440.37  461.34  materialize
meal: ^(2)                                     as the
Options for -$                             inventory         -$ 
corn and                                    is consumed -$        $ 
soybean     1,648                                         2,990 305  1,038
meal ^(2)
                       -2%     -1%     1%                  -2%   -1%   1%
SWAP        $                                          -$   -$   $  
interest          2.8475% 3.8475% 5.8475% Direct               642
rate^(4)    151                                           832  340

Notes:
- A negative value means an unfavorable effect for the Company.
- Corn and soybean meal are presented in US dollars per bushel in the case of
corn and per short-tones in the case of soybean meal
- Even when table set above shows corn and soybean prices for contracts of
March 2013, the effect on the cash flow corresponds to the total positions
effects.

1.The reference value is the exchange rate of Ps. $12.8704 per USD as of
    December 31, 2012
2.The reference value is the Futures of corn for March 2013, $6.9825
    USD/bushel and Soybean meal for March 2013, $419.400 USD/ton.
3.The Company has credit lines with the majority of its counterparts, so
    that the effect in cash flow is lower than the amount shown.
4.The reference value is the 28 days TIIE rate of 4.7550%, as of Dec 31,
    2012

ANALYST COVERAGE

INSTITUTION                      ANALYST              CONTACT INFO
GBM- Grupo Bursatil Mexicano,    Miguel Mayorga Tena  mmayorga@gbm.com.mx
Casa de Bolsa
BBVA Research – Food & Beverage  Fernando Olvera
Analyst                          Espinosa de los      fernando.olvera@bbva.com
                                 Monteros
Actinver, Casa de Bolsa          Eduardo Fonseca Fons efonseca@actinver.com.mx

COMPANY DESCRIPTION

Industrias Bachoco is the leader in the Mexican poultry industry, and one of
the largest poultry producers globally.

The Company was founded in 1952, and became a public company in 1997, via a
public offering of shares on the Mexican and The New York Stock Exchange.
Bachoco is a vertically integrated company headquartered in Celaya, Guanajuato
located in Central Mexico. Its main business lines are: chicken, eggs,
balanced feed, swine, and turkey and beef value-added products. Bachoco owns
and manages more than a thousand facilities, organized in nine production
complexes and 64 distribution centers in Mexico, and a production complex in
the United States. Currently the Company employs more than 25,000 people. In
2012, the Company reported net sales of Ps. 39.3 billion.

The Company is rated AA (MEX), representing high credit quality by Fitch
Mexico, S.A. de C.V., and HR AA+ which signals that the Company and the
offering both have high credit quality by HR Ratings de Mexico S.A. de C.V.

DISCLAIMER

The document contains certain information that could be considered forward
looking statements concerning anticipated future events and performance of the
Company. The statements reflect management's current beliefs based on
information currently available and are not guarantees of future performance
and are based on our estimates and assumptions that are subject to risks and
uncertainties, including those described in our Annual Information Form, which
could cause our actual results to differ materially from the forward-looking
statements contained in this document. Those risks and uncertainties include
risks associated with ownership in the poultry industry, competition for
investments within the poultry industry, shareholder liability, governmental
regulation, and environmental matters. As a result, there can be no assurance
that actual results will be consistent with these forward-looking statements.
Except as required by applicable law, Industrias Bachoco, S.A.B. de C.V.
undertakes no obligation to publicly update or revise any forward-looking
statement.

Media Contact: IR Contacts, Daniel Salazar, CFO, and Claudia Cabrera, IRO,
+011-52-461-618-3555, inversionistas@bachoco.net, both of Industrias Bachoco

SOURCE Industrias Bachoco S.A.B. de C.V.
 
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