Gruma B de C : Quarterly financial report

GRUMA, S.A.B. de C.V.

Consolidated

Ticker:

GRUMA

Quarter:

1

Year:

2022

Quarterly Financial Information

[105000] Management commentary................................................................................................................................. 2

[110000] General information about financial statements ........................................................................................... 18

[210000] Statement of financial position, current/non-current ..................................................................................... 20

[310000] Statement of comprehensive income, profit or loss, by function of expense ........................................... 22

[410000] Statement of comprehensive income, OCI components presented net of tax ......................................... 23

[520000] Statement of cash flows, indirect method ...................................................................................................... 25

[610000] Statement of changes in equity - Accumulated Current .............................................................................. 27

[610000] Statement of changes in equity - Accumulated Previous ............................................................................ 30

[700000] Informative data about the Statement of financial position ......................................................................... 33

[700002] Informative data about the Income statement ............................................................................................... 34

[700003] Informative data - Income statement for 12 months ..................................................................................... 35

[800001] Breakdown of credits ........................................................................................................................................ 36

[800003] Annex - Monetary foreign currency position .................................................................................................. 38

[800005] Annex - Distribution of income by product ..................................................................................................... 39

[800007] Annex - Financial derivate instruments .......................................................................................................... 40

[800100] Notes - Subclassifications of assets, liabilities and equities ....................................................................... 51

[800200] Notes - Analysis of income and expense ....................................................................................................... 55

[800500] Notes - List of notes .......................................................................................................................................... 56

[800600] Notes - List of accounting policies .................................................................................................................. 59

[813000] Notes - Interim financial reporting ................................................................................................................... 77

Footnotes ............................................................................................................................................................................ 87

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GRUMA, S.A.B. de C.V.

Consolidated

Ticker:

GRUMA

Quarter:Year:

2022

[105000] Management commentary

Management commentary [text block]

FIRST QUARTER 2022 RESULTS

Continuing with the trends we saw during the final months of 2021; the new year began with very promising fundamentals that we expect to drive growth in our business over the course of 2022. To shield profitability during the year, price increases are continuously being analyzed relative to the unprecedented inflation levels facing the commodity and labor markets. In the U.S. our volumes remain healthy, our tortilla business continues to thrive through its "Better for You" product line, and our corn flour operations reached record levels in sales. In Mexico, demand for corn flour keeps ramping up while the strong momentum in retail tortilla in Europe is ongoing, a trend we have seen since the first quarter of last year."

HIGHLIGHTS

Disclosure of nature of business [text block]

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GRUMA, S.A.B. de C.V.

Consolidated

Ticker:

GRUMA

Quarter:Year:

2022

GRUMA, S.A.B. de C.V., is one of the world's leading tortilla and corn flour producers. With leading brands in most of its markets, GRUMA has operations in the United States, Mexico, Central America, Europe, Asia and Oceania.

Disclosure of management's objectives and its strategies for meeting those objectives [text block]

Our strategy is to focus on our core business-corn flour and tortilla-as well as to expand our product portfolio towards the flatbreads category in general. We will continue taking advantage of the increasing popularity of Mexican food and, more importantly, tortillas, in the U.S., European, Asian and Oceanian markets. We will also continue taking advantage of the adoption of tortillas by the consumers of several regions of the world for the preparation of different recipes other than Mexican food. Our strategy includes the following key elements:

Expand in the Tortilla Market in the United States: We believe that the size and growth of the tortilla market in this country still offer us significant opportunities for expansion, mainly in the retail channel, looking to continuously innovate our products with emphasis on healthy alternatives based on the preferences of our customers.

Enter and Expand in the Tortilla, Flatbread Markets and Flavored Corn Chips in Europe, Asia and Oceania: We believe that markets in other continents such as Europe, Asia and Oceania offer us significant opportunities. We believe our current operations will enable us to better serve our customers in those regions, with fresher products and respond more quickly to their needs.

Gradually Enter the Flat Bread and Flavored Corn Chips Markets in the United States and Mexico.

Maintain MISSION® and GUERRERO® Tortilla Brands as the First and Second National Brands in the United States and Position our Mission Brand in Other Regions of the World: We intend to achieve this by increasing our efforts at building brand name recognition, and by expanding and having presence in more supermarket chains.

Encourage Transition from the Traditional Cooked-Corn Method to the Corn Flour Method as Well as New Uses for Corn Flour: GRUMA introduced the corn flour method for the production of tortilla and other corn-based products to the market. We believe that there is still much growth potential and that the transition from the Traditional Method to the corn flour method of making tortillas and other corn-based products, is the primary opportunity for increased corn flour sales, particularly in Mexico. We continue working in expanding the use of corn flour in the manufacture of different types of products.

Invest in our Core Business and Focus on Optimizing Operational Matters: We intend to focus our capital expenditure program on our core business to enable us to meet future demand, consolidate our leading position in the industry and continue generating returns to the shareholders above our cost of capital.

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GRUMA, S.A.B. de C.V.

Consolidated

Ticker:

GRUMA

Quarter:Year:

2022

Disclosure of entity's most significant resources, risks and relationships [text block]

Our financial condition and results of operations may be influenced by some of the following factors:

•  level of demand for tortillas and corn flour;

•  increase or decrease in the Hispanic population in the United States;

•  increases in Mexican food consumption by the non-Hispanic population in the United States; and use of tortillas in non-Mexican cuisine in the United States, Europe, Asia and Oceania;

•  costs and availability of corn and wheat flour;

•  costs of energy and other related products;

•  acquisitions, plant expansions and divestitures;

•  effects of government initiatives and policies;

•  effects from variations of interest rates and exchange rates;

•  volatility in corn and wheat prices and energetics costs;

•  competition from tortilla manufacturers, especially in the United States;

•  competition in the corn flour business; and

•  general economic conditions in the countries where we operate and worldwide.

Disclosure of results of operations and prospects [text block]

FIRST QUARTER 2022 RESULTS

Continuing with the trends we saw during the final months of 2021; the new year began with very promising fundamentals that we expect to drive growth in our business over the course of 2022. To shield profitability during the year, price increases are continuously being analyzed relative to the unprecedented inflation levels facing the commodity and labor markets. In the U.S. our volumes remain healthy, our tortilla business continues to thrive through its "Better for You" product line, and our corn flour operations reached record levels in sales. In Mexico, demand for corn flour keeps ramping up while the strong momentum in retail tortilla in Europe is ongoing, a trend we have seen since the first quarter of last year."

HIGHLIGHTS

4 of 87

GRUMA, S.A.B. de C.V.

Consolidated

Ticker:

GRUMA

Quarter:Year:

2022

CONSOLIDATED RESULTS OF OPERATIONS 1Q22 versus 1Q21

Sales volume increased 3% to 1,043 thousand metric tons compared to 1Q21 driven mainly by the U.S. division.

Net sales increased 17% to US$1.3 billion due to (1) the implementation of price increases in all divisions during 2021 and 1Q22; and (2) higher sales volume in the U.S., Europe, and Asia and Oceania divisions. Sales from non-Mexican operations represented 75% of consolidated figures.

Cost of sales ("COGS") increased 20% to US$825.1 million due to higher overall inflation on raw materials in all divisions, as well as higher labor costs mainly in the U.S. As a percentage of net sales, it rose to 65.3% from 63.8% mainly due to these cost dynamics.

Selling, general and administrative expenses ("SG&A") increased 14% to US$318.7 million due to higher distribution costs impacting the U.S., Europe, and Asia and Oceania divisions. As a percentage of net sales, SG&A decreased 60 basis points to 25.2%.

Other expense, net, was US$3.7 million compared to a gain of US$13.7 million last year. The US$17.4 million change resulted mostly from extraordinary income in 1Q21 related to an insurance claim recovery in Europe.

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