Industrias Bachoco SAB de CV (IBA) 2022 Q4 法說會逐字稿

Good morning. My name is (inaudible), and I will be your conference operator for today. I would like to welcome you to the fourth quarter 2022 Industrias Bachoco Earnings Conference Call.

早安.我叫（聽不清楚），今天我將擔任你們的電話會議主持人。歡迎大家參加 Industrias Bachoco 2022 年第四季業績電話會議。

(Operator Instructions)

（操作員指示）

I will now turn the call over to Maria Jaquez of Investor Relations for Industrias Bachoco Please, go ahead.

現在我將把電話轉給 Industrias Bachoco 投資者關係部的 Maria Jaquez，請繼續。

Thank you. Good morning, and welcome to Bachoco's Fourth Quarter 2022 Conference Call. We released our financials yesterday as our market closed. If you need a copy of the release, please visit our website or request from our Investor Relations department.

謝謝。早上好，歡迎參加 Bachoco 2022 年第四季電話會議。我們昨天在股市收盤時發布了財務報告。如果您需要新聞稿的副本，請造訪我們的網站或向我們的投資者關係部門索取。

This morning's call contains certain information that could be considered forward-looking statements regarding anticipated future events and performance. These 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 the describe in our annual report or 20-F, which could make our current results differ materially from the forward-looking statements discussed in this call.

今天早上的電話會議包含某些信息，可能被視為關於預期未來事件和業績的前瞻性陳述。這些陳述反映了管理層基於當前可用資訊的當前信念，並非對未來業績的保證，且基於我們的估計和假設，這些估計和假設受風險和不確定性的影響，包括我們年度報告或20-F中描述的風險和不確定性，這些風險和不確定性可能導致我們當前的結果與本次電話會議中討論的前瞻性陳述存在重大差異。

Except as required by applicable law, industrial undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Lastly, unless otherwise indicated, the amounts mentioned in this conference will be figures of 2022, which compared to figures for the same period in Mexican pesos. As a reference, the exchange rate as of December 31, 2022, was MXN 19.51 per U.S. dollar.

除適用法律要求外，工業集團不承擔公開更新或修改任何前瞻性聲明的義務，無論其是否因新資訊、未來事件或其他原因而產生。最後，除非另有說明，本次會議中提及的金額均為2022年的數據，並與同期墨西哥比索的數據進行比較。作為參考，截至2022年12月31日的匯率為1美元兌19.51墨西哥比索。

Here with me are our CEO, Mr. Rodolfo Ramos; and our CFO, Mr. Daniel Salazar.. Now I will give the call to Mr. Ramos.

和我一起的還有我們的執行長 Rodolfo Ramos 先生和我們的財務長 Daniel Salazar 先生。現在我將把電話交給 Ramos 先生。

Thank you, Maria, and good morning, everyone. 2022 was the year with the many macroeconomic challenges. Even when GDP is expected to show growth versus 2021 for both Mexico and United States. High inflation rates kept putting to test our operational capabilities. 2022, according to the (inaudible) data, inflation rate in Mexico was 17.82%, the United States (inaudible) an inflation rate of 6.5% of that geography, both within the high range over the last 5 years for their respective regions.

謝謝瑪麗亞，大家早安。 2022年是宏觀經濟面臨許多挑戰的一年。即使墨西哥和美國的GDP預計將在2021年成長，高通膨率也不斷考驗著我們的營運能力。根據（聽不清楚）數據，2022年墨西哥的通膨率為17.82%，美國（聽不清楚）的通膨率為6.5%，這兩個地區的通膨率在過去五年中都處於各自地區的高位。

On the other hand, for most part of 2022, prices for grain and soybean meal showed increases between 15% and 20% range versus 2021. The exchange rate of the Mexican peso versus the U.S. dollar was fairly stable during 2022, showing an appreciation of 5% for the year-end and 1% for the average of 2022. Under these conditions, our focus during 2022 was towards improvement on our sales mix, operational efficiencies and growth.

另一方面，2022 年大部分時間，穀物和豆粕價格較 2021 年上漲 15% 至 20%。 2022 年墨西哥比索兌美元匯率相當穩定，年底升值 5%，2022 年平均升值 1%。在這種情況下，我們在 2022 年的重點是改善銷售組合、營運效率和成長。

Regarding our Mexican operation, 2022 followed his typical seasonality, a very strong first half followed by a challenging second one, in this case, particularly driven by a high loan material costs. As mentioned before, it was key to follow very close to our markets and consumers needs to achieve an optimal sales mix, which ultimately allow us to transfer to our prices, some of those increases observed on the cost side that we were not able to offset by operational efficiencies.

就我們墨西哥業務而言，2022年延續了其典型的季節性特徵：上半年業績強勁，下半年則充滿挑戰，這主要源於高昂的貸款材料成本。如前所述，密切關注市場和消費者需求至關重要，以實現最佳的銷售組合，最終使我們能夠將部分成本方面的成長（這些成長我們無法透過營運效率的提升來抵銷）轉化為價格。

In this same geography, in 2022, we integrated (inaudible) to the Bachoco family. This allow us to increase our presence on the value-added segment, while diversifying our product portfolio at the same time. Even when we continue with the integration process and capturing identified synergies, we are confident that we are on the right path.

在同一地區，我們於2022年將（聽不清楚）業務整合到Bachoco家族。這不僅增強了我們在增值領域的影響力，也豐富了我們的產品組合。即使我們仍在繼續整合，並努力實現已確定的協同效應，我們也堅信我們正走在正確的道路上。

Regarding to our U.S. operation, 2022 was a year of getting the right people for our operations and keeping them on board. Consequently, that allow us to increase the productivity in our facilities and getting into the right markets, leading us to capitalize the benefits of high poultry prices observed during the majority of 2022. All of the above allow us to reach an increase of 21% in total sales versus 2021, which, at the same time, offset the increase of 20% in our cost of sales.

就我們美國業務而言，2022年是我們為業務招募合適人才並留任的一年。這使我們能夠提高工廠的生產力並進入合適的市場，從而充分利用2022年大部分時間禽肉價格高企帶來的優勢。所有這些因素使我們的總銷售額較2021年成長了21%，同時也抵銷了銷售成本20%的成長。

As a result, in 2022, we reached an EBITDA of $9,916.1 million, 35.3% higher than the results achieved in 2021 with a margin of (inaudible) versus 9%, respectively. Like we mentioned on yesterday released our working capital increased mainly as a results of the impact of high raw material costs due to rates the value of our inventory. However, our balance sheet remains strong and maintain a net cash position that will enable us to continue supporting our growth plans.

因此，2022年，我們的息稅折舊攤提前利潤（EBITDA）達到99.161億美元，較2021年增加35.3%，利潤率分別為（聽不清楚）和9%。正如我們昨天發布的新聞稿中所提到的，我們的營運資本增加主要是由於原物料成本高企（庫存價值上漲）的影響。然而，我們的資產負債表依然強勁，並保持淨現金狀況，這將使我們能夠繼續支持我們的成長計劃。

With that, I would like to ask our CFO, Mr. Daniel Salazar to discuss our financial results for the quarter and year-end. Thank you.

接下來，我想請我們的財務長丹尼爾·薩拉查先生討論一下我們本季和年末的財務表現。謝謝。

Thank you, Rodolfo, and good morning, everyone. As a result of the conditions as also mentioned before, our company's fourth quarter 2022 net sales increased 11.2% in the quarter as compared with 2021. This increase is mainly a result of more volumes sold on other segments and higher prices on our main business lines. This led us to an increase in sales of 21% for 2022 as compared with 2021. Sales of our U.S. operation represented a 25.5% of total sales, a slight increase from the 24.9% is represented in 2021.

謝謝Rodolfo，大家早安。如同先前所提到的，由於各種因素的影響，我們公司2022年第四季的淨銷售額較2021年成長了11.2%。這一成長主要得益於其他業務部門的銷售增加以及主營業務線的價格上漲。這使得我們2022年的銷售額較2021年成長了21%。美國業務的銷售額佔總銷售額的25.5%，略高於2021年的24.9%。

The cost of sales in the fourth quarter was MXN 21,089.3 million and MXN 2,078 million for the year-end This represents an increase of 13% for the quarter and 20% for the year. This increase is mainly attributed to higher raw material costs when compared to the same period of 2021. Gross profit for the quarter was MXN 2,544.5 million with a gross margin of 10.8%. For the full year, we reached a gross profit of MXN 16,852.7 million with margin of 17%. This amounted to 26.3% higher than the gross profit reached in 2021.

第四季銷售成本為210.893億墨西哥比索，年末為20.78億墨西哥比索。本季成長13%，全年成長20%。成長主要歸因於與2021年同期相比原物料成本的上漲。本季毛利為25.445億墨西哥比索，毛利率為10.8%。全年毛利為168.527億墨西哥比索，毛利率為17%。這比2021年的毛利高出26.3%。

Total SG&A &A for the fourth quarter of 2022 was MXN 2,243.8 million and MXN 8,480.4 million for the year, representing a 9.5% and 8.6% of total sales, respectively. This amounts represent an increase of 12.1% for the quarter and 18.9% for the year versus the respective period 2021. Even when increases on SG&A (inaudible) related to a high inflation rate of (inaudible) both Mexico and the U.S., we think we still have room to improve in this segment. As a result, our operating income for the fourth quarter of 2022 totaled MXN 306.6 million with an operating margin of 1.3%. The operating income for the year was MXn 8,411 million with an operating margin of 8.5%. The EBITDA margin for the fourth quarter was 2.9% and 10% for 2022 versus 4% and 9% on equivalent period of 2021.

2022 年第四季的銷售、一般及行政費用總額為 22.438 億墨西哥比索，全年為 84.804 億墨西哥比索，分別佔總銷售額的 9.5% 和 8.6%。與 2021 年同期相比，這一數字分別成長了 12.1% 和 18.9%。即使銷售、一般及行政費用的增加（聽不清楚）與墨西哥和美國的高通膨率（聽不清楚）有關，我們認為我們在這一領域仍有改進空間。因此，我們 2022 年第四季的營業收入總計 3.066 億墨西哥比索，營業利益率為 1.3%。全年營業收入為 84.11 億墨西哥比索，營業利益率為 8.5%。 2022 年第四季的 EBITDA 利潤率為 2.9% 和 10%，而 2021 年同期分別為 4% 和 9%。

For fourth quarter of 2022, we reported a financial expense of MXN 359.3 million compared to the net financial income of MXN 167.6 million reported in the fourth quarter of '21. The net financial expenses for the full year were MXN 320.7 million that compares with a financial income of MXN 849.9 million for the same period 2021. What drove the 2022 results for both the quarter and the year-end was the negative result of exchange currency valuation as Mexican peso appreciated versus the U.S. dollar.

2022年第四季度，我們報告的財務支出為3.593億墨西哥比索，而2021年第四季報告的淨財務收入為1.676億墨西哥比索。全年淨財務支出為3.207億墨西哥比索，而2021年同期的財務收入為8.499億墨西哥比索。 2022年本季和年末業績不佳的原因是墨西哥比索兌美元升值，導致匯率估值出現負面波動。

Our total taxes for the quarter were positive at MXN 110.7 million, mainly as a result of lower income before taxes in the period versus equivalent of 2021. For full year of 2022, our total taxes were MXN 2,007.2 million, 11.1% higher than the MXN 1,806 million reported in 2021. All the above led us (inaudible) controlling interest income of MXN 79.6 million for the quarter with a margin of 0.3%. This income 37.6% lower than the MXN 648 million in the same quarter of 2021.

本季我們的稅費總額為1.107億墨西哥比索，為正值，主要原因是本季稅前收入低於2021年同期。 2022年全年，我們的稅費總額為20.072億墨西哥比索，比2021年報告的18.06億墨西哥比索高出11.1%。以上所有因素使我們本季的控股權收益（聽不清楚）達到7,960萬墨西哥比索，利潤率為0.3%。該收益比2021年同期的6.48億墨西哥比索低37.6%。

For the full year of 2022, net controlling interest income MXN 6.152 million with a net margin of 6.2%, which is 21.5% above the MXN 4,061.7 million reported in the 2021. Pointing to our balance sheet, we have a healthy financial structure with an increase in total assets of 9.5% when compared to the year-end of 2021. Our net cash was MXN 16,867.4 million at the end of the year, which is 15.6% lower when compared with 2021 year-end. Our CapEx was MXN 4,656.2 million (inaudible) MXN 56.7 million above the previous year and this was to support our organic growth and maintain our facilities in high level of productivity. Also, we included clear property, plant and equipment for (inaudible) acquisition.

2022 年全年，淨控制權益收入為 615.2 萬墨西哥比索，淨利潤率為 6.2%，比 2021 年報告的 40.617 億墨西哥比索高出 21.5%。從我們的資產負債表來看，我們的財務結構穩健，與 2021 年底相比，總資產成長了 9.5%。截至年底，我們的淨現金為 168.674 億墨西哥比索，比 2021 年底下降 15.6%。我們的資本支出為 46.562 億墨西哥比索（聽不清楚），比上一年增加 5,670 萬墨西哥比索，這用於支持我們的有機增長並保持我們設施的高生產力。此外，我們還包括了用於（聽不清楚）收購的清晰物業、廠房和設備。

This concludes our financial remarks. With that, I will turn the call back to Rodolfo for final comments.

我們的財務評論到此結束。接下來，我將把電話轉回給Rodolfo，請他發表最後的評論。

Thank you, Daniel. Looking into the 2023. Starting 2023 in Mexico, we are saving a rather rebalance between supply and demand, which is translating into the better prices when compared to the last part of 2022. On the other hand, commodity project prices in the United States are showing important decreases when compared to the beginning of 2022 before and due to our commodity market exposure, we expect some pressure in our margins for that business unit.

謝謝，丹尼爾。展望2023年。從2023年開始，墨西哥的供需關係正在重新平衡，這意味著與2022年下半年相比，價格會更好。另一方面，美國大宗商品項目的價格與2022年初相比出現了顯著下降，由於我們在大宗商品市場的敞口，我們預計該業務部門的利潤率將面臨一些壓力。

According to the (inaudible) January reported inflation rate in Mexico remains high about 7% range. As mentioned at the beginning of this call, capturing efficiencies through all our processes was remain crucial to be competitive under a challenging macro conditions and economic conditions. Despite economic uncertainty, we continue committed with our growth plans. At the end of 2022, we shared with you our plans to acquire (inaudible), a very integrated pork producer and exporter with operation in Sonora, Mexico. In that regard, we are following the (inaudible) approval process with (inaudible). We look forward to concluding the transaction and the start with integration process.

根據（聽不清楚）1月的報告，墨西哥的通貨膨脹率仍高達7%左右。如本次電話會議開頭所述，在充滿挑戰的宏觀經濟情勢下，提升所有流程的效率對於維持競爭力仍然至關重要。儘管經濟存在不確定性，我們仍將繼續致力於我們的成長計劃。 2022年底，我們與大家分享了收購（聽不清楚）的計劃，這是一家高度一體化的豬肉生產商和出口商，業務遍及墨西哥索諾拉州。目前，我們正在與（聽不清楚）進行（聽不清楚）審批程序。我們期待交易的完成，並啟動整合流程。

With that, we will now take your questions.

現在我們將回答大家的提問。

(Operator Instructions)

（操作員指示）

The first question comes from the line of Luis Willard from GBM.

第一個問題來自 GBM 的 Luis Willard。

So this one is about working capital dynamics. On a yearly basis, we saw a large cash outflow of investment in inventories. And if we look into the details of your release, it's mainly due to a buildup in finished goods. So the first question is, should we read this as a move to try and balance supply and demand or what behind that was the large increase on a yearly basis on inventories? And the same happens with suppliers, suppliers on a yearly basis anyone versus there's a large outflow there. So if you can comment a bit more on those dynamics, that would be helpful?

所以這個問題是關於營運資本動態的。按年來看，我們看到庫存投資出現大量現金流出。如果我們仔細研究您發布的信息，就會發現這主要是由於成品庫存的增加。所以第一個問題是，我們應該將此解讀為試圖平衡供需的舉措，還是庫存逐年大幅增加的背後原因？供應商的情況也一樣，任何供應商每年都會出現大量現金流出。所以，如果您能就這些動態再多說幾句，會不會很有幫助？

Well, the increase in inventories, what do you forgot the value of the of the raw materials and our final products, but also a little oversupplier that causes some increase in our inventories. And in the case of supplier is the same question. Remember that in the last part of December, our -- we used to stop payments to our suppliers in the last 2 weeks. But in this particular year-end, we increased our liability for that reason.

嗯，庫存增加，你忘了原材料和最終產品的價值，還有一點供應過剩，導致庫存增加。供應商的情況也一樣。記得在12月底，我們過去常常在最後兩週停止向供應商付款。但在今年年底，我們因為這個原因增加了負債。

All right. So we should see -- I mean, perhaps picking of a more normalized environment in 2023, probably we should see the reverse going on?

好的。所以我們應該要看到──我的意思是，也許在2023年選擇一個更正常化的環境，我們或許應該看到相反的情況發生？

Yes. It depends, of course, in the level of the prices of the inflation that will be reflected in our inventories. But we are managing our inventories in trying to reduce this level. So you are right, we could expect a reversal situation by this year.

是的。當然，這取決於通貨膨脹的價格水平，這將反映在我們的庫存中。但我們正在管理庫存，試圖降低這一水準。所以你說得對，我們預計今年情況可能會逆轉。

The next question comes from the line of Juan Ponce from Bradesco BBI.

下一個問題來自 Bradesco BBI 的 Juan Ponce。

It has to do with labor cost pressure and you kind of talked about it in the commentary that it had an impact in the fourth quarter. But my question is more on 2023. How do you see the impact of these minimum wage hikes, 20% this year, the doubling of vacation base the gradual increase of employer pension contribution? And there's a lot of headwinds on this front. And just wanted to get your sense on how you are seeing this dynamic play out this year in 2023? And if you still see room to offset this potential pressure with either price increases or more efficiency?

這與勞動力成本壓力有關，您在評論中提到了它在第四季度產生了影響。但我的問題更多是關於2023年。您如何看待這些措施的影響？例如今年最低工資上漲20%，休假基數翻倍，以及雇主退休金繳款逐漸增加。這方面存在著許多阻力。您覺得2023年這些動態會如何發展？您是否認為仍有空間透過提價或提高效率來抵消這些潛在壓力？

Well, the impact of the increases in the minimum wage here in Mexico for Bachoco. At least this year in 2022 was I think a half of them or the total impact around half of the total impact because also the minimum salary here in Bachoco is 2.5x the minimum wage. So the impact is not a 100% of the impact.

嗯，墨西哥最低工資上調對巴喬科的影響。至少在2022年，我認為上調的影響佔了一半，或者說，總影響大約佔了總影響的一半，因為巴喬科的最低工資是最低工資的2.5倍。所以影響並非100%。

And in terms of the pressure, I think with the balance in supply and demand, we were going to be able to translate those increases to the market. In terms of the cost of the raw material, I think we are seeing the peak of those raw materials. Nobody knows that to happen because it depends on the weather market and the situation the new crop in the state. And in a few weeks, we are going to start with the weather market in the state. So the volatility in the raw material prices is so high.

就壓力而言，我認為在供需平衡的情況下，我們能夠將這些上漲轉化為市場需求。就原材料成本而言，我認為我們正在經歷原材料價格的峰值。沒有人知道什麼時候會發生這種情況，因為這取決於天氣市場和該州新作物的情況。幾週後，我們將開始關注該州的天氣市場。因此，原物料價格波動非常大。

But up to now, we were able to translate those cost increase in the commodities to our sales price. And I think 2023 is going to be normalized year in terms of the results.

但到目前為止，我們能夠將商品成本的上漲轉化為銷售價格。我認為2023年將是業績恢復正常的一年。

Okay. And if I may ask a second question on CapEx, particularly, what are your expectations? If you can comment a little bit on CapEx this year and a specific focus on productivity projects?

好的。請問第二個問題，關於資本支出，您的預期是什麼？您能否簡單談談今年的資本支出，以及對生產力項目的特別關注？

Well, I tend to say that we will maintain our current level of investment talking about the current maintaining and growth -- organic growth activities. But remember that we are facing the transaction of the (inaudible) acquisition that would represent probably an increase, a significant increase in our regular CapEx activities.

嗯，我傾向於說，我們會維持目前的投資水平，談論當前的維持和成長——有機成長活動。但請記住，我們正面臨（聽不清楚）收購交易，這可能會大幅增加我們的常規資本支出。

But behind that, I would say that we will maintain the same level around $150 million per year.

但除此之外，我想說我們將保持每年約 1.5 億美元的相同水準。

The next question comes from the line of Fernando Berera from Compass Group.

下一個問題來自 Compass Group 的 Fernando Berera。

I have a question related to volumes. There is a contraction versus first quarter '21. Is it due to pricing? Or what is the key factor here?

我有一個關於銷量的問題。與2021年第一季相比，銷量有所下降。這是因為定價嗎？還是關鍵因素是什麼？

Well, the main factor for this quarter was we will release our event in the north part of the country than reduce our supply of (inaudible). So we used a little bit our place. And that's the reason for the reduction in this particular quarter. But on the other hand, we reduced that amount acquiring aging out of the country. So the balance was a little bit negative, but that was the main reason of this reduction. But in the year-end, we were positive. We had expansion in volume in the all the lines.

本季的主要因素是，我們將在該國北部地區舉辦活動，從而減少（聽不清楚）的供應。因此，我們佔用了一點場地。這就是本季供應減少的原因。但另一方面，我們減少了從國外採購的量。因此，餘額略有下降，但這是減少的主要原因。不過，到年底，我們的業績是正面的。我們所有產品線的產量都有成長。

(Operator Instructions)

（操作員指示）

That was the last question. This concludes the question-and-answer session for today. I will now turn the call over to Mr. Rodolfo Ramos CEO of Industrias Bachoco, for final comments. Please, go ahead.

這是最後一個問題。今天的問答環節到此結束。現在，我將把發言權交給 Industrias Bachoco 執行長 Rodolfo Ramos 先生，請他發表最後評論。請發言。

Thank you, everyone, for joining us this morning. If you have any further questions, please contact our Investor Relations area, who will be glad to assist you. Thank you very much.

感謝各位今天上午的參與。如果您還有其他問題，請聯絡我們的投資者關係部門，我們將竭誠為您服務。非常感謝！

Industrias Bachoco, we'd like to thank you for participating in today's conference call. You may now please disconnect.

Industrias Bachoco，感謝您參加今天的電話會議。現在請您斷開連線。