Thank you. Good morning and welcome to our second quarter 2026 conference call.

We're pleased to be here and thankful for the opportunity to share our results with you. With me today, as always, are Mr.

Raul Cavazos Morales, Gruma's CFO, and Rogelio Sanchez Martinez, Gruma's corporate finance VP. To start, we'll take a few minutes to share the fundamentals and results for the quarter, and then we'll open it up to any questions you may have.

During the second quarter, performance was very solid and promising in our tortilla business at subsidiaries outside of the US. In Asia and Oceania, we significantly benefited from the revamped activity in Malaysia, a strong performance in China with an improving operating leverage combined with greater retail concentration in Australia.

In Europe, our operation has exceeded our initial expectations with a wide acceptance of value-added products as we continue to grow our retail distribution footprint throughout the continent. However, in the US, our main subsidiary, the overall trend we've been seeing in the tortilla category continued, primarily spurred by price sensitivity and weak consumer sentiment.

This was mainly felt in the foodservice channel, which was the main driver of overall contractions during past quarters. We are estimating, however, that the volume run-off rate in this channel will stabilize by the third quarter so that we may see results on a more even comparative base once this happens.

Additionally, it will allow the market to see with more clarity the evolution in the retail market, which has remained considerably more resilient after the strategy were implemented. In the corn flour market in Mexico, the core operation remains as stable as always, although experiencing mild volatility from sales to the government during the period, while the solid footing in innovation has positioned Central America as our second-most profitable subsidiary.

With these fundamentals in place, volumes contracted by 1% due to factors in the foodservice channel in the US we just mentioned. However, sales increased by 3%, supported by net sales growth in Europe, Asia and Oceania, and Central America, in addition to the relative strengthening of the Mexican peso against the US dollar.

As a result, EBITDA contract 5%, also reflecting the effects of these dynamics. In our balance sheet, we increased our indebtedness levels up to 1.5 times in terms of net debt-to-EBITDA due to the seasonality of the summer harvest in Mexico.

Therefore, most of the additional debt incurred was in short-term debt, some of which will be paid off in the future with the cash we have available. Continuing with our debt profile, during the quarter, we refinanced a peso-denominated note in the amount of $250 million by extending and increasing the amount of existing revolver facilities.

The total of these two revolver facilities is of $425 million and will be maturing in 2031. In the US, we continue to navigate a challenging operating environment shaped by weak consumer sentiment and uncertainty in its broader economic outlook.

These conditions have affected our commercial channels in different ways and to varying degrees. In the foodservice channel, customers have returned, which is encouraging, but we've renewed contracts at lower volumes due to ongoing market uncertainty, which is closely linked to both consumer sentiment and current expected inflation levels, which is impacting household purchasing behavior.

As we communicated before and as I mentioned earlier, we expect this run-off rate to stabilize as we complete the cycle of anticipated client adjustments. Once this process is behind us, we believe year-over-year comparisons should become more balanced and easier to evaluate.

At the same time, this same price sensitivity consumer behavior has driven stronger demand for private label production, which has reshaped the competitive landscape since 2025 and the first half of this year. In response, we've been executing the strategy we outlined at the beginning of the year, designed specifically to address this more value-oriented market environment.

While we had a strong month during the quarter, volatility re-emerged in June, underscoring that the market has not yet fully normalized. That said, our strategy remains on track, and as we continue to execute, our objective is to build greater stability over the coming months.

As a matter of fact, we can already see this happening. On a sequential basis, net sales were flat while volumes grew by 1.3%, it's just a matter of keeping ourselves disciplined and on track with our current strategy.

Importantly, because most of the recent volume pressure has been concentrated in foodservice channel, we believe the third quarter will be a key transition period. As the execution of our strategy overlaps with the end of the expected run-off, we should begin to see the foundation for more positive results going forward.

The US operation closed the quarter with volumes contracting 3%, and sales also contracted by a similar amount, in line with volumes. EBITDA contracted by 15% in the second quarter, although higher freight and overall distribution costs had an impact in the quarter, the main driver for this change was the volume performance stemming from the foodservice channel.

In Mexico, as has historically been the case, the core operation remains stable with demand from both retail and industrial clients. We did experience some temporary volatility on the back of slower activity in the government programs, in addition to a change in mix relative to a year ago, which is gradually improving from what we saw in the first quarter of 2026.

As such, volumes remained flat in 2Q 2026, while sales contracted marginally. EBITDA and EBIT saw an improvement of 1%, and EBITDA margin rose to 10.9%, up 20 basis points from last year.

In Europe, we continue to expand distribution with retailers across the continent and with the sale of value-added products where we're seeing growing demand. As you already know, the corn milling business in the subsidiary is highly volatile given fluctuating demand and dynamics in this market that change quarter-over-quarter.

During the second quarter of the year, this business experienced lower volume than a year ago and thus hindered the solid performance at the tortilla business in this subsidiary. Therefore, volumes were flat during the quarter despite mid-single-digit growth for the tortilla business on the back of dynamics I mentioned.

Sales grew by 5%, which speaks to the rich mix that is being sold today and the efforts being carried out at the retail channel in the subsidiary. Moreover, the same mix spurred EBITDA growth of 17% year-over-year, reaching an EBITDA margin of 14.8%.

Central America also continues with excellent news, with the only constraint being capacity, as we've communicated previously. Currently, we're increasing utilization rates and are addressing this challenge with the construction of a new mill in Guatemala, which will help us with increasing demand we're seeing for Gruma's innovative and high-quality products.

We're also contemplating building a new mill for next year, assuming demand remains at its current high level. It is because of these products and our team's excellent commercial efforts that we've been able to expand efficiently across the entire region that this subsidiary serves, with volumes and sales rising 3% and 7%, respectively.

In turn, this yielded EBITDA growth of 12% and an EBITDA margin of 19%, positioning the subsidiary a strong profitability center for Gruma going forward. In Asia and Oceania, the operation also yielded great results.

Malaysia recovered from a year ago, and both Australia and China are operating at optimal levels. More specifically, Australia has successfully carried out more aggressive commercial efforts in retail space, while China's now benefiting from new facility in Foshan, which has improved our operational leverage there.

Volumes, therefore, grew by 4%, while sales expanded by 15%. The growth in sales, coupled with our disciplined approach on costs, allowed for a significant 47% rise in EBITDA, with the region delivering an EBITDA margin of 16.2%.

In light of these results and the current market environment, we believe it is appropriate to revisit the guidance we provided at the beginning of the year and adjust it accordingly. We now see a low single-digit volume and revenue decline at the US subsidiary.

Given the strategic actions we're taking to accelerate growth in standard and private label products in the United States, particularly in response to current economic conditions, we're also revising our EBITDA margin guidance downward by approximately 200 basis points. Therefore, our guidance for our consolidated results will also be adjusted proportionally to a fractional decline in revenue and volume, and an EBITDA margin contraction of approximately 160 basis points.

Given that our principal subsidiary continues to operate in an uncertain and rapidly evolving economic environment, we remain focused on adapting our commercial strategy in the US while executing it with discipline. Our priority is to support sustainable volume growth and further strengthen our competitive position.

We believe the actions we're taking today will make the business structurally stronger once the current economic cycle normalizes. Supported by the continued strong performance of our smaller subsidiaries, we're confident the company will be well-positioned to achieve new levels of financial performance over the long term.

With that, I'd like to open up the call for questions, please. Operator, can you help us with that, please?

Thank you.

Hi, everyone. Thank you so much for the space for questions.

Adolfo, maybe a follow-up and diving deeper on the US trends that you mentioned regarding the channels. Breaking down by channels, if you could provide just a bit more color on what you're seeing in terms of foodservice and retail, and perhaps if you're seeing any encouraging signs in foodservice already in June or in early July that make you think that things are stabilizing, or if it's more a matter of comps in the foodservice side.

How are you seeing retail competition and retail performance as well? Talking about, more specifically about retail, if you could break down as well, how is your private label portfolio performing versus your branded part of the portfolio, and how is your head or the company's head around the mix between the two in the retail segment?

That would be very helpful as well. Thank you.

Sure.

Thank you for your question, Henrique. The first part, in terms of the foodservice channel overall, the stabilization we're talking about is more an end of a cycle.

In other words, the comparative basis will be similar year-over-year. As I mentioned just a minute ago, it is everyone that we expected to come back after the adjustments we did has come back, but they've come back wanting contracts for lower volume amount.

That has been the case every quarter since this started happening. Now, if you remember, it all started with an inflation situation taking place almost a year and a half ago or almost two years ago, and that spiraled into what is happening today with everything that's going on in the world, where the consumer is just extremely anxious.

That's led them to ask for lower volumes, and that's where we're at. That's why we feel that during the third Q, we'll be able to have a more stable base.

That doesn't mean that it will be an inflection point of growth specifically for the foodservice channel in specific. In terms of retail, competitive landscape has slowed down.

We haven't seen competitors in the landscape as aggressive as they were before. Right now, it's just a matter of being subject to all these outside forces that are not in our control, which is just how the consumer is feeling relative to everything else that's happening around him.

We believe that the actions we're taking are as a response to this effect, and it is something that we're monitoring very closely. As I mentioned a minute ago also, we're pleased to see that on a sequential basis, that inflection point happened during the quarter.

We need to see if this is in fact a trend going forward and that will evolve into further improvement, but so far the strategy worked. We know that on a year-to-year comparison basis, we still have work to do, but the overall trends seem evolving positively.

We're very pleased with that, given the context where that we're operating under. In terms of private label portfolio, right now, it's growing probably at around 7%.

It is something that we've seen before. We've been accelerating growth in that space.

We've been seeing also a lot more restraint from the Hispanic community, as we've talked about also, in buying, or in being as proactive buying at retail spaces. That's also been a challenge for us.

I would say that that which encompasses standard tortilla overall has been the primarily factor behind what we're seeing in retail. In retail, right now probably we were acostumed to grow at around mid-single digits, even high single digits.

Right now, we're probably growing, we're flatish even in retail, while in foodservice that's where all the contractions are taking place. In foodservice, the contractions are in double digits.

That is what is overshadowing what's happening in retail, but in retail specific, that flat behavior that I was talking about earlier is more of a result of the standard tortilla aka Hispanic products not being sold as efficiently as it were before. That's the picture I can give you.

Again, in spite of everything that we're seeing in the economy in the US, I think the inflection point on a sequential basis is good news.

That's super clear, Adolfo. Thank you very much for the detailed answers.

No, thank you for the question.

Good morning and thanks for taking my question. Just staying on the topic a little bit, would also like to understand, to a degree, obviously with that and the margin guidance being a little bit more softer in the US business, can we talk about the cost side of the equation?

One obviously there's raw material cost, but then there's a second piece around just energy, transportation, etc. You've flagged the higher marketing and higher distribution expenses already in the second quarter.

As we look into the second half, first of all, how should we think about the raw material input cost outlook? Then second, beyond that, what are your expectations right now as it relates to these distribution costs that have gone up, but also the marketing costs?

How much makes sense spending versus not spending? What's the balance here, and how should we think about the go-forward trajectory on those three items?

Thank you. Oh,

thank you, Ben. I would say that overall the one challenge that every company, every sector will have is the inflation specifically related to oil derivatives overall.

Going forward, it is something that we have accounted for in the guidance, fortunately. Obviously, to a certain degree, if oil shoots up to $150 per barrel, obviously that's just not being contemplated at this point, but certainly margin is being contemplated with high fuel prices.

These prices are just surcharges over the freight rates that we normally pay. The variability that you will see during the second half and maybe going forward depending on how long this lasts, will be on the SG&A front.

We'll have to see how much inflation that creates. That would be there and also probably on the packaging front as well, in terms of within COGS.

Far, at least for the second half of the year, we'll have to see how the year ends with everything that's happened geopolitically, and how inflation behaves, in light of everything that's also taking place in terms of monetary policy in the US, but I would say that for the second half, those two items are the ones that were taking care of. Okay.

Perfect. Thank you very much.

Thank you.

Hi, everyone. Thank you so much for taking my question.

My question is related to the Mexico operations. The organic growth remained below your long-term algorithm despite the stable pricings.

I would like to ask if you could elaborate on whether demand weakened sequentially through the quarter, or if trends were more to stabilize in the end of the quarter, and the performances in different channels across Mexico, as you gave some color related to the US, and just adding to that related to Mexico is about pricing, and pricing has remained disciplined despite soft consumption. Do we still see room for pricing realization going forward?

What we should expect in revenue mix to become volume-driven? Thank you so much.

Sure, Renata. Thank you so much for your question.

In general terms, Mexico is stable. As we're trying to be in line with the traditional methods, there are no arbitrages in place.

However, we've been protecting the prices that we give out our products on over a substantial period of time, if I'm not mistaken, over the last 36 months or so. With everything that's taking place, we have adjusted prices slightly.

However, the effect of that price increase, you won't see that until the next quarter and going forward. You didn't see that this quarter.

It was just in line with the inflation that we're feeling at this point. We don't see maybe what you see in other companies or assets that you look, or that you report on and that you analyze, we haven't seen a pullback from the consumer.

What you're seeing there is just, one, the change in mix and lower government programs that are in place each year. Whether it's for humanitarian purposes or others, there are certain government programs in place each year that add a little bit of volatility on the volume side, and the mix also affects on this front.

We did have, as we announced a quarter ago relative to a year ago, we did have a slight change in mix in our industrial portion of the business. That mix has evolved positively, it's returning back to where it was, but on a comparative basis year-to-year is still changed.

We are estimating that by the third, even fourth quarter, we'll have the mix back in place and also we'll have a positive effect coming in from the price adjustments that we carried out.

Thank you so much. That's very helpful.

No,

thank you for your question, Renata.

Hi, good morning. Thank you for taking my question.

You gave a pretty good color on the foodservice business, and you pretty much answered my question, but just wanted to understand a bit more what's driving the weakness. Trying to get a sense is it mostly weaker consumer sentiment or if you are still seeing any impact from immigration issues affecting the Hispanic consumer?

Thank you.

It's really both. In foodservice, the Hispanic consumer effect is more in retail rather than foodservice.

It has some effect in foodservice obviously for the same reasons that it's taking place in retail, but it's more weighted on retail. In foodservice, what we're seeing is just too much inflation relative to the purchasing power of the average consumer.

The flow in all restaurants or QSRs in the US is not as it used to be, and whoever goes or whoever's part of this flow, will tell you that prices in the US are way higher than what they used to be. The regular people are just taking lunch boxes to work now instead of heading out for a quick lunch outside of the office.

For example, they're not dining out at the end of the day. They're heading back home or having something at home with friends and family.

The environment has changed the social dynamic from a maybe venue-oriented dynamic to an at-home dynamics when it comes to socializing with friends or families. That is something that we've been grappling with, not only us, but everybody else in the industry, just because overall flows are down, and that is obviously not good for anybody in the sector overall.

That is what took place or what is taking place in the foodservice channel.

Great. Thank you.

Thank you.

Hello, guys. Can you hear me?

Yep, we can hear you. How are you, Froylan?

All good, Adolfo. Thank you so much for taking my question.

Can you maybe help us make a simple bridge for the US margin contraction this quarter? I want to understand what were the biggest drivers, if it was mix, pricing, or it was more on the gross margin side?

Can you help us size the top two, three items in the contraction this quarter?

Sure, no problem. If you look at the gross margins themselves, there was an effect there, but it wasn't as drastic as an EBITDA margin or EBIT margin.

The overall effect of what's happening is you have two points of pressure. One is the volumes at the foodservice channel, which obviously drive down revenues proportionally.

Secondly, on the retail channel, you're producing more private label and more standard value-add products to have an answer to the sensitive consumer. In addition to that, we're also increasing shelf space in value-add and better-for-you products.

In retail, you have a dynamic where, yes, you're producing more private label overall, trying to offset that with more better-for-you and value-add products, but in the grand scheme of things, you will have more private label production to incentivize volume growth. That additional increase of private label in addition to the volumes that were lost in foodservice are the drivers behind both volume decline, obviously revenue decline, which is in line with volume decline, and also margin decline.

As you already know, private label has a substantial lower margin than other products in the market. That is the effect right there what you're seeing.

Everything that you're seeing margin-wise is just a reflection of the strategy that we're carrying out in order for us to cater to the sensitive consumer in the context that we're living under.

In that sense, Adolfo, how easy is to go back to the previous mix, talking about just retail? Because foodservice, I understand that it's more of a base reset, but on the retail side, if at some point the consumer comes back, is it really feasible to think that the private label penetration will go lower, you'll produce less in private label and go more to the higher-end product?

Or the stickiness of the consumer once it tastes that the private label is good, etc., stays there? How feasible is for us to understand how fast that could revert if the consumer comes back?

Without a question, the consumer will come back. The US is an economy that is driven by branded products relative to other economies like Europe, it's more a private label driven economy.

If you see that the market share in Europe of private label is around 31%, the private label market share in the US has always been between 12 and 13%. It's fluctuated that way depending on the economic cycle that you find yourself on.

For example, when was it, two years, three years ago, private label was as low as 11.9%. Right now, it's gone up to 12.9%.

It's never gone over 13%, historically speaking, but the main point here is that it is a brand-driven economy in the sense that as soon as people have the purchasing power again and the visibility in the economy to go and buy branded products, they will. The question is, when will that happen?

Unfortunately, for that, we do not have an answer. We know it's going to come back, but we don't know the exact timing.

That is why we're operating here very reactively based on what the consumer preferences are today. To answer your question broadly, yes, the mix will come back.

We'll still be innovating. We'll still be selling better-for-you products.

Better-for-you hasn't, in fact, not been affected by all these dynamics taking place. It slowed down, yes, but it's still at double-digit growth.

The ones that have been affected in the retail channel are standard products, and those are the ones that have been traded down to private label. It is something that is bound to change as soon as the consumer has the means to do so.

Right now, it's a situation where the consumer's no longer valuing quality, but rather pricing. Whenever the consumer feels more confident, whenever the sentiment changes, and whenever there is more visibility in terms of the future of the economy of the US and its future financial state, I would say, that's when things will change back to where they were three years ago.

Far, we're still under pressure.

Perfect. Thank you very much.

Thank you.

Thanks, operator. Adolfo, my questions were already answered.

You've just answered them in the last question, I'll skip this one. Thank you.

What? Maybe on the repurchases, I did notice that you accelerated repurchases a little bit this quarter.

Is that a pace that you hope to maintain throughout the rest of the year, or is it kind of a one-off because you saw lower prices?

No, I think that the valuation of the stock overall is in the very, very low range of what we're expecting. As long as that is attractive, that attractive valuation for us to repurchase, we will still repurchase it.

We have a very thorough program in place that will continue throughout the year and beyond. As long as liquidity is not compromised for funds to invest in our stock, we'll still have that in place.

Very clear, and thanks for all the color you gave on the last question. That answered the big doubts.

Thank you.

Thank you.

Thank you, Felipe. Take care.

Hi, Adolfo. Thanks for space for questions.

In the release, you mentioned at one point that to build a healthier operating structure, and I wonder if that means that there might be some cost savings in place in the US, just given the contraction of the business we've seen this year, if there's any plans on the SG&A front to sort of reduce the size of your platform. Thank you.

Oh,

hey, Alvaro. Thank you for your question.

No, it wasn't intended to mean that. What we mean by having a better structure is that if you look back at 2012, we've been more focused on price mix more than anything else.

Then we went into a period where costs started being the next thing of focus in parallel to price mix. We haven't really taken care of the volume equation in the business.

What we want to see going forward is a business that does have price mix with the innovation and these better-for-you tortillas that we are producing as part of the wellness trend taking place. In addition to that, we do want to have some volume growth as well in the low to mid-single digits.

If you were to ask me what that picture would look like, what we call a better structure, would be to have revenues grow by mid to high-single digits, volumes grow by low to mid-single digits, and have EBITDA grow by high-single digits. That would be the picture-perfect scenario for us, where the entire structure of our P&L really changes based on the strategy that we're trying to implement this year.

Great. Thank you.

Just to clarify the new guidance on the US, you mentioned a 200 basis point contraction in EBITDA margin for the US for this year. Is that right?

Yes. That is correct.

Yes.

All right. Awesome.

Great. Thank you very much.

Thank you, Alvaro. Take care.

Hi, Adolfo. Good morning.

I wanted to ask you about free cash flow generation and leverage. Could you maybe share with us your expectations for the second half of the year on working capital requirements, and maybe what leverage do you expect towards the end of the year?

Thanks.

Sure. Thank you for your question.

The business is really aside from the US economy and that context that we just talked about, the business is really doing great financially and operationally. We're still producing a very healthy level of the free cash flows.

The net debt-to-EBITDA ratio increased this quarter just because the seasonality of the summer harvest here in Mexico. That is bound to decrease, given that we already made the purchases that we needed.

Working capital will be decreasing over time. We also had some receivables increase more than we necessarily needed to have them increased by.

I think between the inventories and the receivables, those were the reasons why working capital increased so much, but going forward, that is bound to decrease as we take care of not only of the inventories, because the summer season will be over, but also as those receivables start materializing. In terms of the leverage ratio itself, that is bound to decrease.

As our upper range for that ratio is where it's at right now, 1.5, so as long as it's between 1.2 and 1.5, we feel very comfortable in that leverage range. It will eventually to answer your question, by the end of the year, it will probably be 1.3 maybe as we operate through the second half.

That is our expectation, but there's nothing to be anxious about in terms of leverage or free cash flow generation or any of that sort of financial analysis.

Excellent. That is very clear.

Thank you, Adolfo.

Thank you.

Hi, good morning. Thanks for the space for questions, Adolfo.

The first one is related to the US, and maybe if you can share your thoughts about pricing, given that costs are going up and consumer environment continues to be soft? My second question is related to the efficiencies that you highlighted in Mexico, in the press release, that favor EBITDA margin expansion despite top line weakness and the insurance gain from last year?

Also, if you can comment how sustainable are these efficiencies. Thank you.

Thank you for your question, Fer. In terms of pricing in the US and inflationary pressures is something that we're taking day-by-day really, as I mentioned.

We do feel the guidance incorporates that, as I also mentioned, in terms of those two variables, the packaging and the freights and the fuel surcharge in the freights. On that front, I think, we're covered.

We need to see how much inflation rises in the future. That's why I pointed out about monetary policy being a factor also.

That is just because we're selling food here, we want to be as conscious as we can with the consumer, obviously. When inflation starts hitting our P&L drastically, when we see a possibility of that, we'll always see the possibility to reach a fair agreement of price adjustments.

We'll have to wait and see really. I hate to answer it like that, but we'll have to wait and see how it behaves.

That's how we operate. In regards to your second question, since the third quarter of last year, we had some spikes in the corn prices because of the agreements that were reached with local farmers in Mexico.

It's gone down. We've been able to have fair pricing dynamics.

That being said, right now the corn price has increased, we need to set a pricing in place for our agreements for the next harvest. We're trying our best to maintain the good momentum that we have in the purchases that we make for corn.

We're constantly analyzing the corn market, and we're hoping that the price will decrease, but everything points out that the overall price of corn will keep increasing relative to all these news about weather issues around the world because of El Niño effect, though. As we're very active on that front and we're very proactive on that front, we'll try to get the best pricing possible, both here and in the US.

Okay. Thank you, Adolfo.

Thank you.

Thank you so much, everyone, for being here with us. We look forward to seeing you and meeting you again in future market events.

Take care, and have a great day.