ALFA reports 3Q19 EBITDA of US $548 million

MONTERREY, Mexico, Oct. 17, 2019 /PRNewswire/ -- ALFA, S.A.B. de C.V. (BMV: ALFAA) (ALFA), a leading holding company that manages a diversified portfolio of subsidiaries with global operations announced today its unaudited results for the third quarter of 2019 ("3Q19"). All figures have been prepared in accordance with International Financial Reporting Standards ("IFRS").

3Q19 Highlights

Message from ALFA's President

"ALFA's third quarter 2019 was marked by relevant value-enhancing events as well as accumulated consolidated EBITDA reaching US $1.661 billion, tracking in line with full-year guidance.

At the individual companies and driving total EBITDA results, Alpek and Sigma posted the highest quarterly EBITDA year-to-date. In particular, Sigma reported higher EBITDA year-over-year and quarter-on-quarter supported by efforts on multiple fronts to mitigate the impact of higher pork prices due to the African Swine Fever (ASF).

Nemak's results were in line with expectations which anticipated lower volume as in previous quarters, plus a seasonality effect associated with the usual production slowdown during summer. Ongoing operating efficiency efforts have allowed Nemak to sustain its EBITDA per equivalent unit despite the year-to-date decrease in volume.

Axtel continued to post better-than-expected results driven mainly by operating efficiencies. Beginning this quarter, Axtel's report will include a breakdown between "Service" and "Infrastructure" results as the Company transitions to operate under these two specialized business units.

Noteworthy events this quarter include, the payment of a second installment to complete ALFA's US $202 million dividend approved for 2019. This year´s record payout underscores our view of dollar-denominated cash dividends as a fundamental part of ALFA's value proposition to Shareholders. Over the last decade, dollar-denominated dividends have grown at a 16% compounded annual rate supported by our diversified portfolio of cash-generating businesses and financial discipline.

Additionally, this year we have cancelled US $165 million in shares and repurchased US $28 million through our buyback program. The aggregate benefit to shareholders from the dividends plus the share cancellation and buybacks totaled US $395 million by quarter end.

At the subsidiary level, a key 3Q19 event was Alpek's start of commercial operations at its Altamira cogeneration power plant. This was an important milestone in the ongoing process to finalize the sale of its two cogeneration power plants in Mexico.

Alpek also issued a 10-year, US $500 million bond in the international markets. The Company achieved the lowest coupon rate (4.25%) in its history and extended its average debt maturity to 4.9 years from 2.7 years. This underlines the importance for ALFA to continue supporting its subsidiaries' direct access to capital markets to minimize cost of capital.

Axtel delivered one of the main value-enhancing initiatives planned for 2019 with the signing of a strategic agreement with Equinix, Inc. for US $175 million to enhance its information technology (IT) and cloud solutions. Net proceeds from this transaction will be used to further strengthen Axtel's balance sheet and improve return on invested capital. Together with the sale of its Mass Market business, this is the third transaction completed by Axtel over the last twelve months for an aggregate amount of US $470 million.

For Sigma, succession was a key event this quarter. Rodrigo Fernández assumed his new position as President on August 1^st, replacing Mario Paez who retired after a very successful 45-year career at Sigma and ALFA. Like most of our top 125 executives, Rodrigo has a 20+ year career with us and has held various senior leadership positions at Sigma. I look forward to working closely with Rodrigo and his team to build upon Sigma's multinational operations and leading brands.

Additionally, Sigma created "Global Snacking", a new business unit that will work across geographies and together with central areas, leveraging the Company's innovation and commercial capabilities to boost its protein-based snack category.

Sigma has also been very active in terms of product innovation. Year-to-date, the Company has launched more than 200 new products that were developed through its innovation platform. This is a core capability that we are keen on enhancing further. Sigma's innovation platform has a pipeline of approximately 700 projects and its developments account for 11% of accumulated sales in 2019.

In sum, we are pleased with the progress of our business year-to-date. This was the second consecutive quarter that Consolidated Net Debt was down sequentially, and we anticipate this trend to continue supported by strong cash flow generation coupled with proceeds from the ongoing monetization of non-core assets. Moreover, ALFA, Alpek, Sigma, Nemak, and Axtel are all on track to achieve 2019 EBITDA guidance supported by in-line third quarter operating and financial results."

Álvaro Fernández

SELECTED FINANCIAL INFORMATION (US $ Millions)

About ALFA

ALFA is a holding company that manages a diversified portfolio of subsidiaries with global operations: Alpek, one of the world's largest producers of polyester (PTA, PET and fibers), and the leader in the Mexican market for polypropylene, expandable polystyrene (EPS) and caprolactam. Sigma, a leading multinational food company, focused on the production, marketing and distribution of quality foods through recognized brands in Mexico, Europe, United States and Latin America. Nemak, a leading provider of innovative lightweighting solutions for the global automotive industry, specializing in the development and manufacturing of aluminum components for powertrain, structural components and for electric vehicles. Axtel, a provider of Information Technology and Communication services for the enterprise and government segments in Mexico. Newpek, an oil and gas exploration and production company with operations in Mexico and the United States. In 2018, ALFA reported revenues of Ps. 366,432 million (US $19.1 billion), and EBITDA of Ps. 55,178 million (US $2.9 billion). ALFA's shares are quoted on the Mexican Stock Exchange and on Latibex, the market for Latin American shares of the Madrid Stock Exchange. For more information, please visit www.alfa.com.mx

Disclaimer

This release may contain forward-looking information based on numerous variables and assumptions that are inherently uncertain. They involve judgments with respect to, among other things, future economic, competitive and financial market conditions and future business decisions, all of which are difficult or impossible to predict accurately. Accordingly, results could vary from those set forth in this release. The report presents unaudited financial information. Figures are presented in Mexican Pesos or US Dollars, as indicated. Where applicable, Peso amounts were translated into US Dollars using the average exchange rate of the months during which the operations were recorded. Financial ratios are calculated in US Dollars. Due to the rounding up of figures, small differences may occur when calculating percent changes from one period to the other.

SOURCE ALFA, S.A.B. de C.V.

Related Links

http://www.alfa.com.mx