Sigma Foods, S.A.B. de C.V.

Thank you, Laura. Good afternoon, everyone, and welcome to ALFA's first quarter 2021 earnings conference call.

Additional details about our quarterly results can be found in our press release which was distributed yesterday afternoon, together with a summarized presentation. Both are available on our website in the Investor Relations section.

During this call, we will share forward-looking information and statements, which are based on variables and assumptions that are uncertain at this time. These uncertainties include, but are not limited to, ongoing risks related to the impact of COVID-19.

Eduardo Escalante, ALFA's CFO; Carlos Jiménez, ALFA's General Counsel; Roberto Olivares, Sigma's CFO; and representatives from each ALFA company will participate in today's call. Before moving into our discussion on results, let me make a brief comment about Newpek, which has become a significantly smaller part of ALFA following our decision to exit the US oil and gas business.

As a result, during the first quarter, Newpek was included in ALFA's consolidated results, but not shown as a separate line item. Additional information on this business can be found in the tables section of our earnings release, and we will continue to provide updates as needed.

José Javier Alvaro, Vice President of Planning and Finance; and Rodolfo Gamboa will continue to be available during ALFA's conference calls to answer any questions you may have. Additionally, there will no longer be representatives from Nemak during our calls as this business became fully independent from ALFA in December 2020.

We're more than happy to continue connecting investors directly with Nemak's management team upon request. I will now turn the call over to Eduardo.

Thank you, Hernán. Good afternoon, everyone.

I hope you and your loved ones are remaining safe and healthy. We're delighted to see the positive momentum from the second half of 2020 continuing into the new year with strong first quarter results.

Our businesses have acted effectively last year and are now benefiting from the sustained global economic recovery. We were able to deliver the second-highest quarterly EBITDA figure in our history, boosted by outstanding performance at Alpek and high single-digit growth from Sigma.

Before getting into the details of the quarter, I want to provide an update on the. As you're aware, the Trust limit in 2020 for the first time ever due to an accelerated growth in the participation of foreign shareholders.

Over the past several months, we believe the held back our stock price by waiting on foreign investor participation. Hence, it has been our top priority to resolve this matter as soon as possible by increasing the Trust limit.

We are happy to inform you that the foreign investment directorship of the Mexican Ministry of Economy issued the required approval to expand the maximum threshold of the Nafinsa Trust from 50% to 75% of ALFA's total shares. We are optimistic that we can move quickly to implement the 75% limit shortly.

The approval we receive is, arguably, the most important part of the process. And we have the required shareholder approval to reflect the new limit in ALFA's bylaws.

Next steps include certain authorizations from the Mexican Banking and Securities Commission, as well as an amendment to the Trust. An update on this matter will be provided as soon as new limit is enacted.

As a reminder, it is important to note that this does not change the number of ALFA's shares outstanding. Now, back to a quick overview of first quarter results, net sales were $3.4 billion, up year-over-year and quarter-on-quarter, driven by strong performance at Alpek.

Sigma faced tough comps due to last year's pantry loading. And lower ratings at Axtel were primarily due to government segment sales.

EBITDA of $535 million was a record first quarter and the second highest quarterly figure in our history. This includes $121 million in extraordinary gains at Alpek resulting from the rise in oil and feedstock price.

On a comparable basis, EBITDA was $440 million, up 20% versus 1Q 2020, driven by 38% and 7% growth at Alpek and Sigma, respectively. Moving on to the main drivers of the good performance in the quarter, on the macro front, our business has benefited from certain key variables that were better than expected as economies worldwide continue to recover, mainly globally our currency.

Alpek's results exceeded expectations through a combination of solid volume growth, higher reference polyester margins, temporary benefits to polypropylene margins and the company's commercialization of natural gas to third parties amid supply shortages caused by the polar vortex in the US Gulf Coast. Axtel's first quarter EBITDA is in line with its full year guidance as cost optimization initiatives partially offset lower service unit sales.

In particular, the government segment is lagging due to its low pipeline of contract renewals and digital transformation projects with federal government entities. To compensate for this, Axtel is emphasizing opportunities with the state and local governments.

By contrast, Axtel Networks, the infrastructure unit benefited from sales growth driven by a strong increase in third-party revenues in line with the company's positive expectations for the year. I will now turn the call over to Roberto Olivares, Sigma's CFO, to discuss the company's first quarter results and progress on the strategic initiatives in more detail.

Please, Roberto.

Thank you, Eduardo. Good afternoon, everyone.

I hope you and your families are safe and healthy. I am pleased to provide an update on the business and comment on our solid operational and financial results.

During the first quarter, we achieved a strong performance in most regions, calling attention to our highest first quarter EBITDA margin since 2016 despite a high pre-pandemic base for January and February. In addition to a pantry loading effect during March 2020, first quarter consolidated revenues were $1.6 billion, down 1% year-on-year, and EBITDA reached $181 million, a 7% improvement year-on-year, driven by strong results in Europe, Latin America, and Mexico.

It is important to mention that Europe increased its EBITDA by 51% year-on-year, leading to a 220 basis point margin expansion when compared with the same quarter last year. As there are bumpy beginnings on the year on our foodservice channel, we saw a steeper recovery towards the end of the quarter with a 21% increase in revenues year-over-year for the month of March.

Excluding foodservice results, first quarter revenues in local currencies were flat, while EBITDA increased 7% year-on-year. Both first quarter revenues and EBITDA are in line with our guidance.

At Sigma, growing our core business is a key priority and a fundamental piece to achieve our target of mid-to-high-single-digit organic growth rate. That is why we continue improving our insights generation capabilities to anticipate consumer wants and needs, turning every bite into a delightful experience.

Our efforts are also focused on increasing profitability particularly in Europe where we are working to increase the region's EBITDA margin to double digit by 2025. We're implementing a comprehensive plan that includes revenue-driven and cost saving initiatives, portfolio optimization and leveraging the company's scale.

Our goals are ambitious and require allocating resources efficiently. This year we began implementing a project to reset our cost basis, taking a bottom-up budgeting approach and ensuring it is kept lean in the long term.

This is not a one-time effort but rather a change in mindset, embedded in a new set of roles, responsibilities and processes that will allow us to channel funds to our growth initiatives. Our ambition requires also to improve the way we think, work and interact.

Therefore, we're working on a continuous process to build conscious, aligned, and integrated teams focusing on the essential, finding the right talent for the right place and attain greater speed and flexibility when facing challenges. These efforts will set the basis for future growth and will allow us to reach our full potential.

We continue to take firm steps towards executing our growth initiatives increasing our participation in the entrepreneurial ecosystem through Tastech, growing in E-commerce, exploring new business models, and innovating in Snacking and Plant-Based. Consolidating these efforts, we established the role of Chief Growth Officer to lead the team of over 40 members with entrepreneurial and skills.

Tastech by Sigma, our acceleration program aimed at startups, launched its second generation call-out. So far, more than 250 startups from 23 different contexts have applied, more than double in those of the first generation.

During this quarter, we formalize a minority investment in the first generation Tastech participant that combines biotech and machine learning to develop plant-based clean label products. In addition, we also made a limited partnership investment in a food technology venture capital fund focused on plant-based proteins and cellular agriculture.

This investment will contribute to expanding our network and deal flow, increase our collaboration with entrepreneurial ecosystem, and complement our expertise in the industry. We continue advancing an initiative to comply with our 2025 sustainability commitments.

This quarter, we signed a power purchase agreement to ensure 100% clean energy at our facilities in Peru. With this, more than 60% of our energy at Sigma comes from cleaner sources.

Sigma also joined the CDP Supply Chain member program. This will allow us to measure the extent of our carbon footprint and find the best solution to address it.

In preparation to ALFA's Unlocking Value strategy, we continue adopting best practices such as a greater disclosure in our financial reporting and an increased presence within investment community. A year ago, we could hardly foresee the challenges we will face and how fast we will be able to adapt as a company.

Today, we're closer and more focused than ever. Let's keep our guard up and continue pushing forward.

I will now turn the call back to Eduardo for additional comments and closing remarks. Thank you.

Thank you, Roberto. Next, let me touch on three items related to ALFA.

Our revised 2021 guidance, a brief update on our Unlocking Value strategy and ESG, we are very pleased to start of the year on a strong note. 2021 EBITDA guidance was raised to reflect a more positive view on certain key variables and better-than-expected first quarter performance at Alpek.

On a consolidated basis, EBITDA guidance was revised up 13% to $1.4 billion to $1.6 billion. This revision was driven by a 30% rise in Alpek's EBITDA guidance, increasing from $561 million to $750 million, supported mainly by higher reference polyester margins and a $63 per barrel Brent crude oil price environment.

Now, a brief note on our Unlocking Value strategy, we reaffirm our commitment with shareholders at our Annual Meeting to continue ALFA's transformation. Our priorities for 2021 gradual and orderly we began last year based on three key implementation directives: one, debt reduction; two, focus on core businesses; and three, enhancing business independence.

Reducing debt is fundamental to ensure an orderly transformational process and unlock ALFA's full value potential. Our goal is to reach a 2.5 times net debt-to-EBITDA ratio through strategic initiatives and cash flow generation.

We are committed to using the proceeds from the potential sale of Axtel's business units or other strategic alternatives to reduce debt. Axtel is actively engage with potential buyers who have shown interest for its infrastructure business unit.

We will continue providing updates on the sale process in a timely manner. In addition to these strategic initiatives that could accelerate deleveraging, we are improving our overall financial position organically.

Our net debt-to-EBITDA was 2.9 times at the end of the quarter, resulting from better than expected EBITDA. This was the first time since the beginning of the pandemic that this metrics is below 3 times, supported by Alpek at 1.6 times and Sigma at 2.6 times.

Focus on core businesses is the second key directive by supporting growth and business-enhancing initiatives at Sigma, Alpek and Axtel. We strive to continue boosting underlying value to ALFA's transformational process.

Each of these businesses has its own set of strategic priorities such as reaching the full potential of European operations for Sigma; pursuing ESG trading projects at Alpek, like the recently announced JV, to develop a carbon capture facility in Mexico; and driving efficiencies to the Axtel digital project. The third directive is to enhance business independence.

We are moving towards achieving our subsidiary shared service independence from ALFA. A joint analysis between ALFA and its businesses is underway to review shared services and the best path forward to ensure an effective transition.

In addition to the progress we are making in executing on this transformational initiative, our capital allocation strategy includes a balanced approach to continue taking actions to return value to our shareholders on multiple fronts. We have a long track record of returning cash to our shareholders through dividend payments.

This year, we have paid cash dividends of $25 million and $98 million in January and April respectively. Shareholders also benefited from the cancellation of all ALFA shares held at treasury, equivalent to 2.9% of total shares.

Lastly, our share repurchase program has been another means to provide value to shareholders who approve a maximum amount of $280 million for buybacks this year. A final comment on the ESG front, ALFA's 2020 Sustainability Report is now available as part of a recently published annual report.

We invite everyone to read it and learn more about how ESG is embedded in the way ALFA and its subsidiaries do business. Among other detailed information included in the 2020 report, ALFA achieved several improvements in ESG ratings.

For example, ALFA increased its S&P Global CSA rating from 23 to 32, above average for conglomerates. Also, ALFA's rating in the CDP assessment increased from D to C, higher than the region average and in line with the industry.

We have knowledge that there is much to be done as we are still in the early stages. ALFA and its businesses are committed to continue building up on their progress from ESG to benefit all our stakeholders.

This concludes my remarks. We greatly appreciate everyone's interest in our company.

And now, we're now available to take your questions. Please, Hernán.

Thank you. We would like to begin the Q&A session with questions on ALFA.

Eduardo, Carlos and I will take questions on ALFA or corporate matters. Laura, please instruct participants who queued for questions on ALFA.

Hi. Good day, everyone, and then thanks for taking my questions and congratulations on the numbers.

I guess my question is to the obvious one. What can you say with regards to sort of the timing shape and progress on the Axtel sale?

And also, what could be the plan B if Axtel is worth less than you would hope or it just takes longer to sell? I mean, I'm thinking are you considering a sale of a stake in Alpek or what's the status on any potential process with regards to the campus?

Thanks a lot.

Thank you, Nikolaj. Thanks for the question and for your comments.

It is difficult to pinpoint a timing for the Axtel sale at this time. Again, as we discussed in the report and on the earlier Axtel conference, we are engaged – actively engaged in negotiations in particular to sell the infrastructure business unit.

Hopefully, we'll be able to sell it, but there is really not a defined timeline in order to do so. What I can tell you is, in addition to the monetization of Axtel, we are also actively engaged in looking at other strategic alternatives to monetize other assets at the corporate level as well as the subsidiary levels.

We are evaluating multiple alternatives. We are not ready to discuss any particular one of them.

But we are certainly looking over alternatives in order to be able to reduce debt and move along with the Unlocking Value of strategy.

Got it. Thank you very much.

You're welcome.

Hi, Eduardo and team. Thanks for taking my question.

So it's related also on the Axtel sale. So can we understand from the wording that you used in the press release that for now the base case is that Axtel will be able to monetize the infrastructure assets and not services at this point or can you elaborate anything on the scenario?

Thanks.

Sure, Vanessa, and thanks for the question. We experience during the first phase of the sale process last year, the formal process we conducted last year, we experienced a significant interest on the infrastructure unit.

We also had interest on the whole company as well as the services company. But we received a non-binding offers last year that were more and in the range of the value that we're paying this large infrastructure, the infrastructure business unit.

So, this year, we decided to engage in one negotiation with interested parties mainly for the infrastructure business unit. We continue interested in the future also finding an investor for these services business unit.

What I would say, we are today primarily focused on the infrastructure business unit.

Excellent. Thank you.

And regarding other assets, Eduardo, is that related to the update that you gave regarding real estate? The transactions in the real estate portfolio that you mentioned on the press release?

That is one of the options and we are certainly have been looking at that alternative, as well as some other alternatives at the subsidiary level. We are looking at the whole portfolio of ALFA in order to find opportunities to monetize some assets to reduce debt.

Excellent. Thank you.

You're welcome.

Hi, good afternoon and thank you for the call. Now that the Nemak's is fully done including the payment of taxes, can you comment on what the ultimate cash tax bill was?

And looking forward, whether that could give you an idea if you could provide some color on potential tax implications down the line with the eventual spin-off of Alpek or the divestment of Axtel? Thank you.

Give us one second, Gilberto, please. This is Hernán.

Good morning.

Sure. Thank you.

Thanks. Thanks, Gilberto.

What we can tell you is in the quarter, we recognized taxes for $159 million in terms of cash flow. That, of course, includes a tax payment that we have to do for the spin-off of Nemak.

As we discussed in our end-of-the-year numbers, we reviewed some previous tax losses that we had in ALFA to partially compensate that amount and that's where those payments come from. We did not and will not disclose the specific amount, a chance for the Nemak spin-off.

But you can see the whole amount again from – in our report. Regarding Alpek, it is really too early to tell what the tax implication is going to be when we do the spin-off.

It really depends on the share prices at the time. So, we will wait and see, and see what happens with the fiscal situation and tax implications both for Alpek as well as for the rest of ALFA.

We have not – today, we have not a specific plan of timing for that spin-off since again we are engaging in looking at a strategic ways to reduce the debt. That's what I can comment regarding the taxes for Alpek.

Okay. Clear.

Thank you. And on the Nafinsa Trust issue, do you have a rough estimate of timing for the rest of the approvals that are necessary to increase the threshold?

Gilberto, this is Carlos Jiménez. How are you?

The timing, it's quite difficult for us to predict taking into consideration that the first milestone which is FISA, Foreign Investment Commission Authorization took us a long time to get it. We don't feel comfortable in estimating the time that is going to be needed, but be sure that we are going to be doing our best to do it on a timely basis and to be ready with that amendment to the Nafinsa Trust becoming effective as soon as possible.

Okay. Great.

Thank you, Carlos. Just a follow up.

It seems that you are pretty confident that this first approval was the – let's say the most challenging one because you mentioned previously that it was becoming a political issue. Does this mean that this have been – that political consideration has been dealt with and now it's just a kind of a bureaucratic thing that we have to wait for?

That's the way we see it. And the next challenge, it's the CNBV, but it's mostly an administrative proceeding.

And as you probably know, CNBV process are taking longer than they used to take.

Yes. Okay.

Great.

And with Nafinsa, we don't expect to have any difficulties in amending the trust. It's just a matter of getting whatever is needed from CNBV.

Understood. Thanks, again.

Thank you, Laura. Before we move on, we have a question from our webcast participants related to ALFA.

So the question is, from Juan Ponce and Rodolfo Ramos, at Bradescom related to the outsourcing bill and asking if we could talk about the impact on ALFA from the outsourcing bill, Eduardo?

Sure. Sure.

And thanks for the question. As you're aware, the Ministry of Labor in Mexico issued a reform including a ban on outsourcing.

What we can comment is the impact on ALFA really varies across the businesses. We have some businesses that are more intensive on head count versus others.

But something that is very significant is that it is strongly applicable to the Mexican workforce. And let me remind everyone that ALFA has over 60% of revenues outside of Mexico.

So, regarding the Mexican side of the business, we are still looking and analyzing the impact in detail. But what I can tell you is that the initial estimations suggest a low-single digit impact as a percentage of consolidated EBITDA.

So, we hope that answers your question, Juan and Rodolfo, and we'd be happy to follow up if needed. And with that, we can close the Q&A section of ALFA and we can now take questions on Sigma.

Roberto Olivares, Sigma's CFO, will answer your questions. Laura, could you please prompt for questions on Sigma?

Thank you very much. And thanks for the additional details on sort of your growth prospects in Sigma.

The new role of Growth Officer, can you share with us what is – what's really the mandate of this new role and what's the percentage of the sales that will fall into this portfolio? Thanks a lot.

Hi, Nikolaj. Thank you for your question.

Sure. So, the new appointed Chief Growth Officer will work specifically in one of our main pillars in the strategy which is new – how to create new sources of revenue.

So, he will have under his – or overseeing the Snacking business, the Plant-Based business, anything related to new business model. So, these are the things that are related to maybe leveraging some of our capabilities in distribution in marketing, et cetera.

And also in everything that is related to the entrepreneurial ecosystem, so Tastech and everything that we're doing on that side. And right now, the Snacking and Plant-Based is close to 3.5% of sales.

We're definitely, I mean, growing that business and growing at a very high rate, but still it has a low base as of right now.

Was that just the Snacking part, or is that the total part that this person would be managing? The 3.5%, was that just Snack and then plus Plant-Based and plus new distribution, or do that – sorry, I just didn't understand that.

Don't worry. So, that will be total and most will come from Snacking.

Plant-Based and E-commerce and all the other vendors are still in a very early stage. They're growing, but they're at very early stage.

And it's across all regions?

That is correct.

Perfect. Thank you very much.

Thank you, Nikolaj.

Hello, guys. Thanks for taking my question.

My question is regarding Sigma Mexico. So, improvement in margin was very significant in year-over-year basis, even though we have higher commodity prices as you highlighted in your press release.

I don't know if we can rely on that similar expansion in margins for the rest of the year. Was this above your expectations for cost control success?

And how can we explain the – this margin improvement in the context of higher commodity prices and really not that much pricing activity?

Sure. Thank you.

Thank you, Alejandro. So, let me just say that since last year, we have been working in almost all geographies, but particularly in Mexico in cost and expense saving initiatives, both in our retail and in our Foodservice channel.

What we benefit from these things – from those products that we did since last year, also tapping into a revenue management strategies, we were able to maintain margins, even raw material prices has been going up. You know that we have the capabilities to do some reformulation.

We have some inventory in place that we could use, some contracts that were at fixed prices, so we benefited from those particularly. I mean, going on the rest of the year, we think that particularly we expect the Foodservice channel to recover significantly in the second half of the year.

We have seen more mobility and volume of Foodservices trying to pick up and that also could benefit margin in the later – in the rest of the year.

Right. So you do expect that similar margin expansion for the rest of the year than relative to what you saw in the first quarter?

Yeah. We will expect to be somewhere around those lines.

Right. Congratulations and thanks for the answers .

Thank you, Alejandro.

Hi, Roberto. Good morning.

Thank you for taking my questions. I have three.

The first one is, if you could tell us why you're expecting to pay in dividends for the full year to ALFA as we saw that you paid a $50 million dividend in this quarter. The second one would be, if you could take us through the strategies you are implementing in order to take the Campofrio of the European region to that double-digit EBITDA margins and why you are optimistic that finally you are going to achieve that?.

And the third one is in terms of strategic alternatives or divestments, what can Sigma do? Perhaps the sales on Latam businesses or maybe I don't know, I'm thinking, you might have some land bank in Europe from some sites that you closed during the past two to three years.

If you can give us some color on that? Thank you.

Thank you, Alejandro. So let me go by order.

First one is related to dividends. Yes, we did paid $50 million in the first quarter.

We are expected to pay something similar to what we have paid in the previous years. We usually pay between $120 million, $150 million of dividends to ALFA.

That is what we are expecting to pay during the year. Related to our plan in Europe specifically.

So, we're – I mean, we're aiming to achieve an improvement in the first year implemented some initiatives that have incremental benefits even during 2021. But most of them will reflect its benefits gradually over the next couple of years.

We are working on both portfolio optimization. We're increasing our capacity utilization in certain plants.

Concentrate production in and certain facilities that are more efficient to do so. We're exploring and maintaining some white spaces in high potential opportunities.

We're also leveraging on the company's scale to improve savings. And there are certain another ones that we're working that are more relevant changes that could materialize maybe this year, maybe the next one.

And we will discuss them as they come. And lastly, your third question about potential divestments.

I think what I can tell you that we're – I mean, we don't have anything – any process that we have opened right now. We do have a fiduciary responsibility that if someone approaches in this particular business, whatever business it is, it makes more sense in their hands and they're willing to pay us more than it's worth for us, we will definitely look at that opportunity.

Roberto, if I can go back to the second one regarding margins in Europe. How should we think about this region?

If I see, historically, you have been very good at the operation in Mexico in terms of margins. You have maintained a very, I would say, I don't know if it's 13 or 15 over the last 10 years, 15 years.

But since you acquired Campofrio, margins in Europe have been very volatile. Should we think about this region that is going to be more volatile versus the others because of your input costs in that place?

Or this is just the impacts from the fire on the ASF in the last two, three years?

Okay. So I will say, Alejandro, it's a little bit of both.

In general, market dynamics in Europe are different than those in Mexico. We have a different competitive environment.

As you mentioned, input cost is different. Our mix is different.

We use more pork in Europe versus other regions. Also, in general, the industry is different.

And the other one very punctual to what you mentioned, we also have impacts related to the fire, et cetera. But neither – I mean, nevertheless, we now have a very, let's say, punctual plan on how to turn around Europe.

We know that this is – I will say it's what we're lagging the most. We understand our capabilities there, and we're aiming to achieve those -- that target with a very detailed plan on what to do now.

Going forward, I think we should – it should be more stable. And this is our top priority for the company.

Thank you, Roberto, and congratulations to the ALFA team on the results.

Thank you, Alejandro.

Thank you, Laura. Before moving on to the rest of the businesses, we have one question, one additional question for Sigma, Roberto, coming from our webcast.

And they're asking, f you could talk a little bit about the outsourcing -- the possible effect of the outsourcing bill in Sigma's Mexico operations. This question comes from Federico Galassi at PAAMCO.

Okay. Thank you, Hernán.

Thank you, Federico, for your question. So – I mean, similar to what Eduardo mentioned for the general question for ALFA, we understand that there are still some moving pieces especially on the application of the legislation.

But even in the worst case scenario, we do not expect any impact on our guidance this year because of this bill.

Thank you very much, Roberto. We can now move forward and take questions on Alpek, Axtel and Newpek.

From Alpek, we have José Carlos Pons, CFO; from Axtel we have Eduardo Escalante, Interim CEO; and Eduardo de los Santos, CFO available to answer any additional questions. And from Newpek we have Jose Javier Alvaro, VP of Planning and Finance at the oil and gas business.

Laura, could you please prompt for questions on Alpek, Axtel, or Newpek? Operator: [indiscernible]

Thank you, Laura. While we wait for questions on those businesses, we have a follow-up coming through the webcast from Sylvia Bigio with Itaú and her question is, based on your conversations with MSCI and post the full resolution of the Nafinsa Trust.

What is the process and timing for re-inclusion into the indices?

Thank you, Sylvia for the question. As we discuss, today, all our efforts are focused on increasing the limit.

We plan to engage MSCI in anticipation of enacting the new limit. According to MSCI's and discussions we have had with third-party specialists, we expect it to be able to return to the index as soon as the next rebalancing is -- after the new limit is enacted.

Let me mention a key dates for index reviews going forward for MSCI? They have the semiannual index review in May of this year.

And then they have the quarterly index review on August of this year. So I think it really will depend on how we're able to move forward with these issues, but certainly we think we'll be able to return to the index after the new limit is enacted.

Thank you, Eduardo. Laura, do we have any additional questions for Alpek, Axtel and Newpek?

Hi, Hernán. This one is for Newpek.

Although it's – I understand it's really small for you guys now. But how should we think about the value of this asset in the current oil price environment?

I'm looking at your balance sheet and stockholders' equity of almost $300 million. I remember when you sold the EFS, the Eagle Ford's stake, you didn't receive any proceeds.

How should we look at this? You have a net cash position in the Mexico business.

Is this worth book value or at least half of that? Help us on that, please.

Thanks, Alejandro. This is Eduardo.

As you mentioned, we still have some assets in Newpek. We have a very small operation that remains in the US.

We also have some assets in Peru as well as in Mexico. I really don't have any number to give you regarding the value.

We are trying to divest the assets independently in each one of the regions. And we will maximize the value.

But really, we have no direction to give you at this time.

Thank you, Eduardo.

Thank you, Laura. We actually have a follow-up question on Sigma for Roberto.

This is coming from. How much are you expecting new products will bring to sales for 2021?

This is a question for you, Roberto.

Thank you, Alejandra. So, new products – so, we have our innovation represent close to 10% of our sales.

That will be almost $650 million. That is products that were produced or were designed and produced in the last three years.

And if you're more talking, if I understand – I mean, if you're talking more about our growth initiatives and the nuances of revenue, that will be again close to $250 million that that will be mainly Snacking.

Great. Thank you, Roberto.

Thank you.

Laura, do we have any additional questions?

Well, thank you very much for your interest in ALFA. If you have any additional questions, please feel free to reach out to us.

We would be pleased to assist you. We also extend our best wishes to you and your families to stay safe and healthy.

Thank you very much for joining us today. Have a great day.