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Last updated on April 19, 2014 at 1:20 EDT

Industrias Bachoco Announces Third Quarter Results

October 24, 2013

CELAYA, Mexico, Oct. 24, 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 third quarter (“3Q13″) and first nine months of 2013(“9M13″) ended September 30, 2013. All figures have been prepared in accordance with International Financial Reporting Standard (“IFRS”), and are presented in nominal million Mexican Pesos (“Pesos” or “Ps.”).

HIGHLIGHTS- 2013 vs 2012

    --  Net sales decreased 4.7% in 3Q13
    --  EBITDA margin was 6.0% for 3Q13 and 11.4% for 9M13
    --  Earnings per basic and diluted share totaled Ps. 0.59 or Ps. 7.07 per
        ADR for in 3Q13.

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated, “This was a typical third quarter for the Company, in terms of seasonality, with chicken prices at their weakest.

Nevertheless, we continued to post positive results and margins in all of our main business lines, with chicken volumes fully recovering by the end of the third quarter as we had anticipated.

As a result, we estimate that our chicken market share has been recovered, thanks to the confidence of our clients in our company and the excellent job of our sales force.

Additionally, we faced a tough basis of comparison due to strong results posted in the third quarter of 2012, which was atypically strong, in terms of seasonality for the poultry industry.

Lastly, our CAPEX were entirely financed with internal resources and our balance sheet remains solid, with strong cash levels.”



EXECUTIVE SUMMARY

The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2012.


                                         QUARTER         ACCUMULATED
                                         -------         -----------

    In millions of pesos 3Q13    3Q12              Var.                  2013     2012 Var.
    -------------------- ----    ----              ----                  ----     ---- ----

    Net sales            9,437.0 9,901.0           -4.7%             29,972.4 28,642.7   4.6%

    Net sales Mexico     7,296.8 7,758.4           -5.9%             23,527.8 22,721.6   3.5%

    Net sales in the
     U.S.                2,140.2 2,142.6           -0.1%              6,444.6  5,921.1   8.8%

    Cost of sales        8,155.5 8,342.6           -2.2%             24,705.3 24,222.7   2.0%

    Gross profit         1,281.5 1,558.4          -17.8%              5,267.1  4,420.0  19.2%

    SG&A                   827.5   839.9           -1.5%              2,448.8  2,498.5  -2.0%

    Other income
     (expense)             -80.9    63.7         -227.0%                 31.7     17.4  82.0%

    Operating Income       373.1   782.2          -52.3%              2,850.0  1,938.9  47.0%

    Net profit             353.5   627.5          -43.7%              2,363.2  1,604.9  47.2%

    Weighted average
     Shares              600,000 599,749                              599,991  598,647
    ----------------     ------- -------                              -------  -------

NET SALES

The Company’s 3Q13 net sales totaled Ps. 9,437.0 million, 4.7% below the Ps. 9,901.0 million reported in 3Q12. This mainly resulted from lower chicken prices in the Mexican market and a drop in chicken volume compared to 3Q12. This was partially offset by an increase in egg sales, while the rest of the Company’s business lines had mixed results.

In 3Q13, sales of our U.S. operations represented 23.0%% of total sales, compared with 22.0% in 3Q12.

Total sales for the 9M13 increased 4.6% when compared with the same period of 2012.

GROSS PROFIT

Cost of sales totaled Ps. 8,155.5 million, 2.2% lower than Ps. 8,342.6 million reported in the same period of 2012, mainly due to lower volume sold and steady unit costs of sales.

This resulted in gross profit of Ps. 1,281.5 million and a gross margin of 13.6% in 3Q13, compared to a gross profit of Ps. 1,558.4 million, and a gross margin of 15.7% in 3Q12.

Meanwhile, gross profit for 9M13 was Ps. 5,267.1, 17.6% higher than Ps. 4,420.0 million reached in the same period of 2012. Gross margin was 17.6% and 15.4% in the same periods of 2013 and 2012, respectively.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

In 3Q13, total selling, general and administrative expenses reached Ps. 827.5 million, compared to Ps. 839.9 million reported in 3Q12; this represented 8.8% and 8.5% over the total sales respectively, as a result of strict expense controls.

OTHER INCOME (EXPENSE), NET

The “other income (expense)”line includes mainly the selling of unused assets as well as the selling of hens and other by-products. We record such sales as expenses when the sale price is lower than the book value of those assets.

In 3Q13, the amount was an expense of Ps. 80.9 million, compared with other income of Ps. 63.7 million reported in 3Q12, mainly attributed to gain in sales of several unused assets and E-1 effect.

During the first nine months of 2013, the Company recorded other income of Ps. 31.7 million compared to other income of Ps. 17.4 million recorded in the 9M12.

OPERATING INCOME

Operating income in 3Q13 totaled Ps.373.1 million, which represents an operating margin of 4.0%, compared with Ps.782.2 million of income and 7.9% margin reported in 3Q12; the decrease in the operating income is mainly attributed to a lower gross profit.

In 9M13, operating income was Ps. 2,871.5 million, representing an operating margin of 9.6%, compared with Ps. 1,912.4 million of income and a 6.7% margin reported in the same period of 2012, which reflects a strong performance of the Company in 9M13.

NET FINANCING INCOME

In the third quarter of 2013, the Company reported net financing income of Ps. 60.8 million, compared to Ps. 19.9 million in net finance income reported in 3Q12. The change is mainly attributed to higher interest income and exchange rate gains.

Net finance income for the 9M13 totaled Ps. 111.6 million, compared with income of 113.0 million in 9M12.

TAXES

Industrias Bachoco and all of its subsidiaries file separate income tax returns. Total taxes in 3Q13 were Ps. 80.0 million and Ps. 595.1 for 9M13.

NET INCOME

Net income in 3Q13 was Ps. 353.5 million, representing Ps. 0.59 per share or Ps. 7.07 per ADR, compared with a net income of Ps. 627.5 million, which represents Ps. 1.05 per share or Ps. 12.56 per ADR reported in 3Q12.

Net income for 9M13 totaled Ps. 2,363.2 million, or Ps. 3.94 per share or Ps. 47.26 per ADR, compared to net income of Ps. 1,604.9 million or Ps. 2.68 per share or Ps. 32.17 per ADR.

EBITDA

EBITDA in 3Q13 reached Ps. 561.8 million, representing an EBITDA margin of 6.0%, compared to EBITDA of Ps. 1,018.7 million in 3Q12 with an EBITDA margin of 10.3%.

Meanwhile EBITDA for the first 9M13 totaled Ps. 3,407.0 million, or 11.4% of margin, compared with EBITDA of Ps. 2,669.0 million or 9.3% EBITDA margin in the same period of 2012.

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


    EBITDA

                                     THIRD QUARTER                 FIRST NINE MONTHS

                                     As of Sept 30,                  As of Sept 30,
                                     --------------                  --------------

    In million pesos                                2013     2012                        2013      2012
    ----------------                                ----     ----                        ----      ----

    Net income                                     353.5    627.5                     2,363.2   1,604.9

      Income tax expense (benefit)                  80.0    172.4                       595.1     443.0

      Share of results in associates                 0.4      2.2                         3.4       4.1

    Net finance (income) expense                   (60.8)   (19.9)                     (111.6)   (113.0)

      Depreciation and amortization                188.7    236.6                       557.0     730.1

    EBITDA RESULT                                  561.8  1,018.7                     3,407.0   2,669.0

    EBITDA margin                                    6.0%    10.3%                       11.4%      9.3%

      Other expense (income) net                    80.9    (63.7)                      (31.7)    (17.4)

    Adjusted EBITDA result                         642.7    955.1                     3,375.3   2,651.7

    Adjusted EBITDA Margin                           6.8%     9.6%                       11.3%      9.3%

    Net revenues                                 9,437.0  9,901.0                    29,972.4  28,642.7
    ------------                                 -------  -------                    --------  --------

BALANCE SHEET data

Cash and equivalents as of September 30, 2013, totaled Ps. 7,801.0 million compared to Ps. 5,138.1 million reported as of December 31, 2012.

As of September 30, 2013, total debt was Ps. 2,331.0 million compared to Ps. 2,741.2 million reported as of December 31, 2012.

Net debt was negative Ps. 5,470.0 million as of September 30, 2013, compared with a negative net debt of Ps. 2,396.9 million as of December 31, 2012.

CAPITAL EXPENDITURES

Total CAPEX in 3Q13 was Ps. 86.3 million and Ps. 419.4 million for 9M13. CAPEX was mainly allocated toward productivity projects and maintenance.

ANALYST COVERAGE


    INSTITUTION   ANALYST         CONTACT INFO
    -----------   -------         ------------

    GBM           Miguel Mayorga  mmayorga@gbm.com.mx

    BBVA Bancomer Fernando Olvera fernando.olvera@bbva.com

    Actinver      Toe Matsumura   tmatsumura@actinver.com.mx

                  Eduardo Fonseca efonseca@actinver.com.mx
    ---           --------------- ------------------------

STOCK INFORMATION


                                      As of September 30, 2013
                                      ------------------------

    Total Shares                                   600,000,000

    Total free float                                     17.25%

    Total shares in treasury                                 0

    Market cap (millions)                                  Ps.  25,800
    --------------------                                   ---  ------

                                 BMV                      NYSE

          Ticker Symbol      Bachoco                       IBA
          -------------      -------                       ---

    Closing price                Ps.                     43.00     USD $39.47

    Maximum closing price in
     2013                      45.13                     43.08

    Minimum closing price in
     2013                      28.80                     26.23

    Stock price yield in
     2013                       42.7%                     41.4%
    --------------------        ----                      ----

APPENDICES

For reference, some figures have been translated into millions of U.S. dollars (“USD”) using an exchange rate of Ps. 13.1225 per US$1, which corresponds to the rate at the close of September 30, 2013, according to Mexico’s National Bank.

    --  Consolidated Statement of Financial Position
    --  Consolidated Statement of Income
    --  Consolidated Statement of Cash Flows
    --  Derivatives Position Report


     Consolidated
     Statement
     of
     Financial
     Position

    -
     Unaudited-

                    As of Sept 30,                       As of Dec 31,
                    --------------                       -------------

    In million
     pesos               Pesos          U.S. Dollar                        2012
    ----------           -----          -----------                        ----

    TOTAL
     ASSETS                    29,045.7          2,208.8               28,090.1

    Total
     current
     assets                    14,844.3          1,128.8               14,089.3

       Cash and
        cash
        equivalents             7,801.0            593.2                5,138.1

       Total
        accounts
        receivable              2,032.7            154.6                2,385.3

       Inventories              4,663.1            354.6                6,259.6

       Other
        current
        assets                    347.6             26.4                  306.3

    Net
     property,
     plant and
     equipment                 11,864.5            902.2               11,949.5

    Other
     Assets                     2,336.8            177.7                2,051.2

    TOTAL
     LIABILITIES                7,918.0            602.1                9,001.4

    Total
     current
     liabilities                3,951.8            300.5                4,820.9

       Notes
        payable
        to banks                  817.7             62.2                1,206.1

       Accounts
        payable                 2,330.3            177.2                2,925.9

       Other
        taxes
        payable
        and other
        accruals                  803.8             61.1                  688.9

    Total
     long-
     term
     liabilities                3,966.1            301.6                4,180.4

       Long-term
        debt                    1,513.2            115.1                1,535.1

       Other  non
        current
        liabilities               130.8              9.9                  100.1

       Deferred
        income
        taxes                   2,322.1            176.6                2,545.3

    TOTAL
     STOCKHOLDERS'
     EQUITY                    21,127.7          1,603.6               19,088.7

    Capital
     stock                      1,174.4             89.3                1,174.4

    Commission
     in shares
     issued                       399.6             30.4                  399.6

     Repurchased
     shares                        99.6              7.6                   99.5

    Retained
     earnings                  18,345.8          1,395.1               16,405.2

    Others
     accounts                   1,068.1             81.2                  973.3

    Non
     controlling
     interest                      40.1              3.0                   36.7

    TOTAL
     LIABILITIES
     AND
     STOCKHOLDERS'
     EQUITY                    29,045.7          2,208.8               28,090.1
    --------------             --------          -------               --------



    Consolidated Statement of Income

    THIRD QUARTER RESULTS

    -Unaudited-                                     As of Sept 30,
                                                    --------------

                                                                                                           U.S. Dollar (1)

    In millions pesos                                               2013      2012  Var.                              2013
    -----------------                                               ----      ----  ----                              ----

    Net revenues                                                 9,437.0   9,901.0         -4.7%                     717.6

    Cost of sales                                                8,155.5   8,342.6         -2.2%                     620.2

    Gross profit                                                 1,281.5   1,558.4        -17.8%                      97.5

    Selling, general and administrative expenses                   827.5     839.9         -1.5%                      62.9

    Other income (expenses), net                                   (80.9)     63.7       -227.0%                      (6.2)

    Operating income                                               373.1     782.2        -52.3%                      28.4

    Net finance income                                              60.8      19.9        205.6%                       4.6

    Income tax                                                      80.0     172.4        -53.6%                       6.1

    Non-controlling interest                                        (0.4)     (2.2)       -84.1%                      (0.0)

    Net controlling interest profit                                353.5     627.5        -43.7%                      26.9

    Basic and diluted earnings per share                            0.59      1.05        -43.7%                       0.6

    Basic and diluted earnings per ADR                              7.07     12.56        -43.7%                       7.1

    Weighted average Shares outstanding (thousands)              600,000   599,749          0.0%                   600,000

    EBITDA Result                                                  561.8   1,018.7        -44.8%                      42.7

    EBITDA margin                                                    6.0%     10.3%                                    6.0%

    Gross margin                                                    13.6%     15.7%                                   13.6%

    Operating margin                                                 4.0%      7.9%                                    4.0%

    Net margin                                                       3.7%      6.3%                                    3.7%
    ----------                                                       ---       ---                                     ---

    FIRST NINE MONTHS OF 2013

    -Unaudited-                                     As of Sept 30,
                                                    --------------

                                                                                                 U.S. Dollar (1)

    In millions pesos                                               2013      2012  Var.                              2013
    -----------------                                               ----      ----  ----                              ----

    Net revenues                                                29,972.4  28,642.7          4.6%                   2,279.3

    Cost of sales                                               24,705.3  24,222.7          2.0%                   1,878.7

    Gross profit                                                 5,267.1   4,420.0         19.2%                     400.5

    Selling, general and administrative expenses                 2,448.8   2,498.5         -2.0%                     186.2

    Other income (expenses), net                                    31.7      17.4         82.0%                       2.4

    Operating income                                             2,850.0   1,938.9         47.0%                     216.7

    Net finance income                                             111.6     113.0         -1.2%                       8.5

    Income tax                                                     595.1     443.0         34.3%                      45.3

    Non-controlling interest                                        (3.4)     (4.1)       -16.0%                      (0.3)

    Net controlling interestprofit                               2,363.2   1,604.9         47.2%                     179.7

    Basic and diluted earnings per share                            3.94      2.68         46.9%                       3.9

    Basic and diluted earnings per ADR                             47.26     32.17         46.9%                      47.3

    Weighted average Shares outstanding (thousands)              599,991   598,647                                 599,991

    EBITDA Result                                                3,407.0   2,669.0         27.6%                     259.1

    EBITDA margin                                                   11.4%      9.3%                                   11.4%

    Gross margin                                                    17.6%     15.4%                                   17.6%

    Operating margin                                                 9.5%      6.8%                                    9.5%

    Net margin                                                       7.9%      5.6%                                    7.9%
    ----------                                                       ---       ---                                     ---


    Consolidated
     Statement of Cash
     Flows

    -Unaudited-

                               As of Sept 30,
                               --------------

                                                              U.S. Dollar

    In million of pesos                       2013      2012         2013
    -------------------                       ----      ----         ----

    NET MAJORITY INCOME
     BEFORE INCOME TAX                     2,958.3   2,047.9        225.0

    ITEMS THAT DO NOT
     REQUIRE CASH:                               -         -            -

    ITEMS RELATING TO
     INVESTING
     ACTIVITIES:                             715.5     793.1         54.4

          Depreciation and
           others                            557.0     730.1         42.4

          Income (loss) on
           sale of plant and
           equipment                         158.5      63.0         12.1

          Other Items                            -         -            -

    ITEMS RELATING TO
     FINANCING
     ACTIVITIES:                              96.6      55.1          7.3

          Interest income
           (expense)                          96.6      55.1          7.3

          Other Items                            -         -            -

    NET CASH GENERATED
     FROM NET INCOME
     BEFORE TAXES                          3,770.4   2,896.1        286.7

    CASH GENERATED OR
     USED IN THE
     OPERATION:                            1,361.1  (1,192.5)       103.5

       Decrease (increase)
        in accounts
        receivable                           244.3      22.3         18.6

       Decrease (increase)
        in inventories                     1,490.4  (1,233.7)       113.3

       Decrease (increase)
        in accounts payable                 (595.5)   (151.5)       (45.3)

       Decrease (increase)
        in other
        liabilities                          221.9     170.4         16.9

    NET CASH FLOW FROM
     OPERATING
     ACTIVITIES                            5,131.4   1,703.6        390.2

    NET CASH FLOW FROM
     INVESTING
     ACTIVITIES                             (427.1)   (483.4)       (32.5)

          Acquisition of
           property, plant and
           equipment                        (419.4)   (664.6)       (31.9)

          Proceeds from sales
           of property plant
           and equipment                      49.2      19.5          3.7

          Other Items                        (56.9)    161.7         (4.3)

    CASH FLOW SURPLUS
     (REQUIREMENTS OF)
     TO BE USED IN                                                      -

    FINANCING ACTIVITIES                   4,704.3   1,220.2        357.7

    Net cash provided by
     financing
     activities:                            (701.8)   (614.3)       (53.4)

       Proceeds from loans                   592.0     854.2         45.0

       Principal payments
        on loans                          (1,001.3) (1,485.0)       (76.1)

       Dividends paid                            -         -            -

       Other items                          (292.5)     16.6        (22.2)

    Net increase
     (decrease) in cash
     and equivalents                       2,662.9   1,489.6        202.5

    Cash and investments
     at the beginning of
     year                                  5,138.1   3,036.4        390.7

    CASH AND INVESTMENTS
     AT END OF PERIOD                      7,801.0   4,526.0        593.2
    --------------------                   -------   -------        -----


    FINANCIAL INSTRUMENTS

    Third Quarter 2013

    Thousands of Mexican Pesos, as of September 30, 2013

                                                Type of Financial                                                       Objective                                                                              Reasonable Value         Amounts Due By Year
                                                   Instrument
                                                   ----------

                                                    Notional                                                  Value of the Related Commodity         Guaranties Required
                                                                                                              ------------------------------

                                                                                                                         3Q-2013                           2Q-2013               3Q-2013                 2Q-2013
                                                                                                                         -------                           -------               -------                 -------

    Forwards and Knock out                                                                                        Hedge and negotiation                                  $2,794                  $13.15                       $12.98                    $195                      $649                             The deals consider the possibility of margin calls
                                                                                                                                                                                                                                                                                                                   but not another kind of guarantee
    forwards.
    ---------

    Futures for corn,                                                                                                     Hedge                                        $220,332           Month                     Price                      Month                    Price                           -$ 8,009                                             -$ 4,384                45.8% in 2013 and 54.2% in
                                                                                                                                                                                                                                                                                                                                                                                                2014
    Soybean meal and soy
    oil.

                                                      Corn                                                                 Corn
                                                      ----                                                                 ----

                                                in USD per bushel                                                   in USD per bushel
                                                -----------------                                                   -----------------

    DEC-2013                                                                                                                         $4.4150  JUL-2013                                          $6.7925

    MARCH-2014                                                                                                                       $4.5450  SEP-2013                                          $5.4725

    MAY-2014                                                                                                                         $4.6225

    JUL-2014                                                                                                                         $4.6900

    SEP-2014                                                                                                                         $4.7375

    DEC-2014                                                                                                                         $4.8100

                                                  Soybean Meal                                                         Soybean Meal
                                                  ------------                                                         ------------

                                                 In USD per ton                                                       In USD per ton
                                                 --------------                                                       --------------

    DEC-2013                                                                                                                         $405.40  AUG-2013                                          $434.90

    JAN-2014                                                                                                                         $403.30  SEP-2013                                          $400.70

    MARCH-2014                                                                                                                       $394.50

    MAY-2014                                                                                                                         $385.40

    JUL-2014                                                                                                                         $382.20

    AUG-2014                                                                                                                         $376.90

    SEP-2014                                                                                                                         $365.60

    OCT-2014                                                                                                                         $348.40

    DEC-2014                                                                                                                         $345.40

                                                     Soy Oil
                                                     -------

                                              En US cents per pound
                                              ---------------------

    DEC-2013                                                                                                                          $41.10

    JAN-2014                                                                                                                          $41.40

    MARCH-2014                                                                                                                        $41.71

    Options for corn                                                                                              Hedge and negotiation                                    $773           Month                     Price                      Month                    Price                               $773                                            -$    139                                                   2013
                                                                                                                                                                           ----           -----                     -----                      -----

                                                      Corn                                                                 Corn
                                                      ----                                                                 ----

                                                in USD per bushel                                                   in USD per bushel
                                                -----------------                                                   -----------------

    DEC-2013                                                                                                                         $4.4150  SEP-2013                                          $5.4725

Notes:

    --  As of September 30, 2013, total financial instruments do not exceed 5%
        of total assets.
    --  A negative value means an unfavorable effect for the Company.

    --  The notional value represents the net position as of September 30, 2013,
        at the exchange rate of Ps. 13.15 per one dollar.

    Third Quarter 2013

    Thousands of Mexican Pesos, as of September 30, 2013                                                                                                                                                                                                                                                                       PROBABLE SCENARIO

    Type of Financial Instrument                                                                         Reasonable Value                    Value of the Related Commodity   Effect on the Income Statement
    ----------------------------                                                                                                                                                ------------------------------

                                     As of September                                                     Reference Value                       Effect on the Cash Flow(3)
                                         30, 2013

                                                                                                                                      -2.5%                              2.5%                            5.0%                            -2.5%                             2.5%                              5.0%
                                                                                                                                      ----                               ---                             ---                             ----                              ---                               ---

    Forwards and Knock out forwards. (1)                                                                                              $195                            $12.82                          $13.48                           $13.81               Direct                                          $125                          $265                            $335

                                                                                                                                                                          -5%                              5%                              10%                                                                -5%                            5%                             10%
                                                                                                                                                                         ---                             ---                              ---                                                                ---                           ---                             ---

    Futures of corn: (2)                                                                                          -$                 8,009                            $4.194                          $4.636                           $4.857   The effect will materialize as
                                                                                                                                                                                                                                                   the inventory is consumed                        -$    19,025                        $3,008                         $14,025
                                                                                                                  ------------------------                                                                                                     ------------------------------                       ------------                        ------                         -------

    Futures of soybean meal: (2)                                                                                                   $385.13                           $425.67                         $445.94

    Futures for Soy oil (2)                                                                                                         $39.05                            $43.16                          $45.21

    Options for corn  (2)                                                                                                             $773                                                                                                                      -$         446                            $1,282                          $672
    --------------------                                                                                                              ----                                                                                                                      --------------                            ------                          ----

Notes:

    --  A negative value means an unfavorable effect for the Company.
    --  Corn and soybean meal are presented in US dollars per bushel and per
        short-tones respectively. In the case of soy oil is presented in US
        cents per pound.
    --  Even when table set above shows corn, soybean meal and soy oil prices
        for contracts of December, the effect on the cash flow corresponds to
        the total positions effects.

(1) The reference value is the exchange rate: $13.15 pesos per one dollar, as of Sept. 30, 2013.

(2) The reference value is the futures of corn for December 2013, $4.4150 USD/bushel and, soybean meal for December 2013, $405.4 USD/ton. For soy oil the reference value is $41.10 US cents per pound, for December 2013.

(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.


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

    Third Quarter 2013

    Thousands of Mexican Pesos, as of September 30, 2013                                                                                                                                                                                                      STRESS SCENARIO

                                                                                                         Reasonable Value                         Value of the Related Commodity                          Effect on the                        Effect on the Cash Flow(1)
                                                                                                                                                                                                          Income Statement
                                                                                                                                                                                                          ----------------

                                    Type of Instrument                                               As of September 30, 2013                           Reference Value
                                                                                                                                                        ---------------

                                                                                                                                                 -50%      -25%        25%        50%                                              -50%        -25%       25%              50%
                                                                                                                                                 ---       ---        ---        ---                                               ---         ---       ---              ---

    Forwards  and Knock Out Forwards                                                                                                  $195     $6.58     $9.86     $16.44     $19.73                        Direct                         -$2,350     -$953             $894                                           $1,593
    --------------------------------                                                                                                  ----     -----     -----     ------     ------                       ------                          -------     -----             ----                                           ------

(1) The reference value is the exchange rate: $13.15 pesos per one dollar as of September 30, 2013.

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.

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


Source: PR Newswire