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On the right 2018 INTEGRATED ANNUAL REPORT To get there, we have strived to Seventy-three do things right. This means working efficiently along our complete value chain with the maximum quality, in order to be successful and achieve our goals. we began a long journey, to become the number one baking company in the world. The road has been full of challenges and we now have the commitment to fulfill our Vision: Together with a team of professional leaders with the best talent and guiding the Company towards the right “In 2020 we transform the steps, we have achieved almost all of the objectives baking industry and expand on this journey, but we are not there yet. our global leadership to better serve more consumers”. We are on the right track to build a sustainable, highly productive and deeply humane company. (GRI 102-46) (GRI Table of 4 #1 baking Company 6 Letter to our shareholders 8 2018 highlights 12 Tracking down the right recipe 20 Environmental management in the value chain of the Company 36 On the right track with the environment 68 Our top brands 70 Local success to global expansion 72 Global market share 76 On the right track for continuous growth 80 Tracking our communities 98 Keeping track on progress 130 Record-breaking results in 2018 134 Performance review 138 Board and Management 140 Audit and Corporate Practices Committee Report 144 About this report 146 GRI Index 158 Consolidated Financial Statements 235 Stakeholder information We are the largest baking Company in the world1 and a relevant participant in snacks, generating Today we are US$15.0 billion2 in net sales in 2018. Our main product lines include fresh and frozen sliced bread, buns, cookies, snack cakes, English muffins, bagels, pre- packaged foods, tortillas, salty snacks, and confectionery products, among others in 32 countries throughout the Americas, Europe, Asia and Africa. Our shares trade on the Mexican Stock Exchange (BMV) under the ticker symbol BIMBO, and in the over-the-counter market in the United States with a Level 1 ADR, under the ticker symbol BMBOY. 1 Source: GlobalData as of 2017 2 Based on an average FX rate of Ps. 19.24/US$ in 2018 (GRI 102-2, 102-6, 102-7) 102-6, 102-2, (GRI products 4 GRUPO BIMBO 2018 Integrated Annual Report 5 transportation and energy costs. This was partially offset by a decline companies in the world. in volume in the private label category. In addition, sales in this region The safety of our associates will always be a top priority. While we did were benefited from excellent results in Canada, reflecting a positive not reach our goals this year, we will never stop reinforcing the nec- to our trend in the bread category. essary operational discipline, risk identification and elimination and leadership focus to prevent injuries. In Latin America, we experienced outstanding results in our Latin Cen- (GRI 102-14, 102-15, 102-32, 201:103-1, 103-2, 103-3) 103-2, 201:103-1, 102-32, 102-15, 102-14, (GRI shareholders tro Organization and in Chile, where we reached historic levels of sales At Grupo Bimbo, a major aspect of nourishing our world is our com- and strengthened our presence with the acquisition of Nutra Bien, a mitment to the planet. We remain firmly committed to the ten leading player in the sweet baked goods and special cookies catego- principles of the United Nations Global Compact, as well as to the 17 Dear Shareholders: ries. However, Brazil and Argentina continue to be challenged, the lat- Sustainable Development Goals of the United Nations Development ter caused by the macroeconomic situations in the country. Program. We became the first company in Mexico to produce Clean On behalf of the Board of Directors and the Management team, it is Energy Certificates for distributed generation. This initiative will con- a pleasure to report on a year in which we further In our Europe, Asia and Africa (EAA) region, we became the #2 player tribute to Mexico’s goal of using 50% of clean energy by 2050. We also expanded our in China after completing the acquisition of Mankattan, positioning us position, making significant progress toward signed an agreement with Invenergy, the largest independent renew- global leadership well within a market with extraordinary growth potential. In Iberia, we our 2020 Vision and enhancing our geographic, category and able energy generation company in the U.S., through which Grupo are realizing synergies in the Donuts integration, but at a slower rate channel Bimbo will become 75% renewable worldwide, with a reduction of diversification. than expected and in Spain, we are challenged to improve the trend in 440,000 tons of CO e per year. the sweet baked goods category. 2 We achieved of net sales, gross record-breaking levels Finally, profit, operating income, adjusted EBITDA and the number of We continued to . We 2019 begins with a bright outlook full of oppor- strengthen our financial structure in the market. Our industry remains highly fragmented, our points of sale reached, in the achieved our year-end commitment to deleverage to under three tunities increasing our penetration 4.5% global market share and low household penetration rates indi- global market by regularly visiting more than 3.3 million cus- times total debt to adjusted EBITDA, closing the year at 2.8 times. This cate the magnitude of our future growth potential. We also started the tomers. Our net income increased 25%, which translated into is attributable to the strong operating performance, the issuance of year with challenges, particularly the uncertainty, volatility and recent a 90 basis points improvement in the return on equity. $500 million dollars in perpetual notes and the prepayment of $123 political and macroeconomic changes in markets such as Mexico and million dollars of our debt. Our debt maintains a comfortable and Argentina. The increase in net sales of 7.8% was largely attributable to long-term maturity profile, with an average duration of 10.6 years, and the good performance in Mexico and North America, as we adjusted the currency mix to be more aligned with our cash flow well as the acquisitions of Bimbo QSR, Bays English Muf- generation. We will continue to focus on building a business that grows in a fins and Mankattan. sustainable way, boosting profitability, accelerating The 16.2% adjusted EBITDA increase was generated by good results at transformation and supporting our associates . Meanwhile, At the regions level, the good performance in Mexico the operating level, including higher productivity. Several factors we will proactively look for opportunities to invest in research and was a result of the excellent workof our associates, contributed to this result: the closure of four plants, the implementation development, improve the nutritional profile and innovation in our who achieved significant sales growth in all channels, cat- of the Voluntary Separation Program and the organizational restructur- product portfolio and automation throughout our supply chain, with egories and regions. We also introduced products such as ing initiatives in North America, and benefits from Zero Based Budgeting. a view to achieving our Vision to transform the baking industry and Bimbo Donuts, our leading sweet baked goods product in It is also important to highlight the capital investments of approximately expand our global leadership to better serve more consumers. Spain, leveraging our best products from around the world $750 million dollars intended mainly for increased capacity and auto- mation in manufacturing, logistics and distribution to lower costs. Thank you for your trust and continued support. to continue driving our leading brands. Our commitment to integrity is part of our DNA, and we are proud In North America, our sales increase was driven by to announce that for the third year in a row we received a recogni- strong growth in the sweet and salty snacks catego- Daniel Servitje ry in the United States, as well as higher prices ne- tion from the Ethisphere Institute for being one of the most ethical Chairman and CEO cessitated by inflation in our raw materials, labor, 2018 Integrated Annual Report 7 34 plants worldwide achieved zero 100% of the business units waste to landfills carried out their associates’ 2018 medical follow-ups Over 80% recycling (GRI 301-3, 302-1, 303-3, 306-2) 303-3, 306-2) 301-3, (GRI 302-1, in 134 plants worldwide Honored as one of the “World’s Most Ethical 91% reutilization of Reached record levels Became #2 player Companies” treated wastewater in net sales, gross profit, in China by The Ethisphere Institute in all our operations in Mexico operating income, and adjusted EBITDA st , Strengthened our We signed the RE-100 commitment 1 place in Merco’s ranking as the most responsible company in position in China with the to have 100% electric energy Mexico, since 2014, with a 10/10 score Increased market acquisition of Mankattan and from renewable sources in all for the third consecutive year penetration to more than 3.3 in Chile with Nutra Bien the Company by 2025 million points of sale served 176 Good Reached year-end target of being Neighbor projects below 3.0x total debt/Adj. EBITDA 100% of our polyethylene and polypropylene packaging in Mexico New Nutritional Double-digit uses a biodegradable* technology Guidelines growth in net launch majority income *According to ASTM6954-18 8 GRUPO BIMBO 2018 Integrated Annual Report 9 Tracking the RIGHT Sourcing Tracking down the (GRI 416: 103-1, 103-2, 103-3, FP5, 103-1, 416: 103-2, (GRI FP8) In the second semester of 2018, we launched the Grupo Bimbo NEW NUTRITIONAL GUIDELINES which have allowed us to evaluate our portfolio in a more demanding Health and Wellness manner in order to fulfill the needs of our consumers.

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