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Grupo Mexico Maturities As of March 31St, 2017

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Grupo Mexico Maturities As of March 31St, 2017 RESULTS FIRST QUARTER RESULTS 2017 FirstGRUPO Quarter MÉXICO 2017 Relevant figures in US dollars1 Contact: Marlene Finny Mexico City, May 3, 2017. (55) 1103-5344 Grupo México, S.A.B. de C.V. (“Grupo México” “GMéxico” - [email protected] BMV: GMEXICOB). www.gmexico.com Revenues in 1Q17 totaled US$2.3 billion, 18% higher than 1Q16 mainly due to higher copper prices +25%. In the Transportation Division, volumes decreased 3% compared to 1Q16 so revenues dropped 6%. The Infrastructure Division´s revenues decreased 2% to US$149 million due to lower rates In the Mining Division, we consolidated ourselves again as the Company with the lowest cash cost worldwide. In 1Q17, the copper cash-cost per pound reached US$1.07, an improvement of 3% when compared with 1Q16. Copper sales volumes reached 257,278 tons in 1Q17, a 3% increase compared to 1Q16, copper production reached 247,015 tons during the quarter. EBITDA for 1Q17 totaled US$978 million, 34% greater than 1Q16. The Mining Division reached US$769 million, translating into 53% growth vs. 1Q16. The Transportation Division reached US$171 million, a 2% drop vs. 1Q16. The Infrastructure Division achieved US$64 million in EBITDA. Cost of sales in 1Q17 reached US$1.2 billion, 11% more than in 1Q16. In the Mining Division, costs increased 14% due to higher input prices. In the Transportation Division, it decreased 1% thanks to greater operational efficiencies. In the Infrastructure Division, it dropped 3%. The consolidated net profit in the quarter reached US$42 million, a 4% growth when compared to 1Q16. Capital investments were US$299 million for 1Q17, 14% higher than in 1Q16, in line with our growth program aiming to produce more than 1.4 million tons of copper by 2021. During 1Q17, Grupo México announced that through its Transportation Division, it entered into an agreement with Florida East Coast Railway Holdings Corp to acquire 100% of the shares of FEC in a cash transaction for a total amount of US$ 2.1 billion, including debt . FEC is a unique and irreplaceable asset with 565 km of owned tracks that offers and is the rail service provider to South Florida’s ports: Miami, Everglades and Palm Beach. On April 28, 2017, the Management Board declared the payment of a cash dividend of P$0.30 per share outstanding, to be made in a single installment as of June 1st, 2017. First Quarter Variance (Thousand US Dollars) 2016 2017 US$000 % Sales 1,920,578 2,263,399 342,821 17.8 Cost of Sales 1,082,308 1,205,241 122,933 11.4 Operating Income 541,449 769,000 227,551 42.0 EBITDA 728,270 976,707 248,437 34.1 EBITDA Margin (%) 37.9% 43.2% Net Income 406,895 423,337 16,442 4.0 Profit Margin (%) 21.2% 18.7% Investments / Capex 260,809 299,196 38,387 14.7 Employees 30,170 29,917 (253) (0.8) 1All figures are in dollars ("US$"), United States currency, under US GAAP, unless otherwise stated. 1Q17 www.gmexico.com Page 1 WorldReginfo - 3a99c495-53e1-4d20-9806-13ded3a5e27f FIRST QUARTER RESULTS 2017 GRUPO MÉXICO Highlights by Division Mining Division Illegal stoppage in our Peruvian Operations.- In April, the unified labor union of SPCC workers and one of Toquepala’s unions began a stoppage, which was declared illegal by the Peruvian government. Even though the Company has always been in full compliance with the three-year labor agreements signed last year, these unions demanded a review of certain health and profit sharing benefits. During the stoppage, the Company deployed its emergency plan to maintain production with the use of temporary contractors. The illegal stoppage concluded on April 22 with only 1,418 tons of copper decrease of production and currently all our workforce have returned and operations are fully normalized. Projects in Mexico We have concluded our $3.5 billion investment program in Mexico and all of the projects of this program will be in full operation in 2017 including the Quebalix IV project. Crushing, Conveying and Spreading System for Leachable Ore (Quebalix IV), which has been completed on time at an estimated cost of $327 million which is $117 million below our budget of $444 million. This project will reduce processing time as well as mining and hauling costs increasing production by improving SX-EW copper recovery. The installed conveyor system is operating steadily. Projects in Peru We are currently working on five copper projects in Peru with a total capital investment for these projects of $ 2,900 million out of which $1,206 million have been invested. Toquepala Expansion Project, Tacna.- This $1.2 billion project includes a new-state-of-the-art concentrator which will increase annual copper production by 100k MT to 217k MT in 2018 and 260k MT in 2019, and will also increase annual molybdenum production by 3,100 tons. Through March 31, 2017, we have invested $623.4 million in the project. The project has reached 58% progress and is expected to be completed by the 2Q18. Toquepala High Pressure Grinding Roll (HPGR) system.- The main objective of this project is to ensure that our existing concentrator will operate at its maximum milling capacity of 60,000 tons per day, even with an increase of the ore material hardness index. Additionally, recoveries will be improved and production enhanced with improved ore crushing. The budget for this project is $40 million and we have invested $27.6 million as of March 31, 2017. This project is expected to be completed by the 1Q18. Cuajone´s Heavy Mineral Management Optimizing Project, Moquegua.- The project consists of installing a primary crusher at the Cuajone mine pit with a conveyor system for moving the ore to the concentrator. The project aims to optimize the hauling process by replacing rail haulage, thereby reducing operating and maintenance costs as well as the environmental impact of the Cuajone mine. The crusher will have a processing capacity of 43.8 million tons per year. The main components, including the crusher and the 7 kilometer overland conveyor belt, have been acquired and assembled. As of March 31, 2017, we have invested $175.1million in this project out of the approved capital budget of $215.5 million. The project has reached 91% progress and is expected to be completed in the 3Q17. The Cuajone tailing thickeners project will replace two of the three existing thickeners with a new hi-rate thickener. The purpose is to streamline the concentrator flotation process and improve water recovery efficiency, increasing the tailings solids content from 54% to 61%, thereby reducing fresh water consumption and replacing it with recovered water. As of March 31, 2017, we have completed the engineering and procurement process and continued the excavation and civil works. As of March of 2017, we have invested $16.0 million in this project out of the approved capital budget of $30 million. The project has reached 74% progress and we expect it to be completed in the 2Q17. Tia Maria: We have completed all engineering and have successfully obtained the environmental impact assessment. We are currently working to obtain the construction license for this 120k MT of copper per year SX-EW Greenfield project with a total capital budget of $1,400 million. 1Q17 www.gmexico.com Page 2 WorldReginfo - 3a99c495-53e1-4d20-9806-13ded3a5e27f FIRST QUARTER RESULTS 2017 GRUPO MÉXICO Transportation Division FEC Acquisition.- Grupo México announced that, through its Transportation Division, GMéxico Transportes S.A. de C.V. (“GMXT”), it has entered an agreement with Florida East Coast Railway Holdings Corp (“FEC”) under which GMXT will acquire 100% of the stocks of FEC in a cash transaction for a total of US$2.1 billion, including debt. The transaction will be financed with US$350 million of GMXT’s own capital, and US$1.75 billion in debt with different maturities. Thus, GMXT will maintain a solid balance sheet with a ratio of 1.76x net debt to pro- forma EBITDA 2016. GMXT’s leverage capacity will be profited from, as it currently has a net cash position of US$115 million. FEC is a unique and irreplaceable asset with 565 km of owned track that offers railway services along the east coast of Florida and supplies South Florida’s ports: Miami, Everglades, and Palm Beach. With this transaction, Grupo Mexico hopes to achieve greater commercial development by enhancing the relations of both companies. Likewise, it expects to achieve synergies and best practices on both sides, such as adapting locomotives to function with natural gas instead of diesel, which would result in a significant reduction of operating costs. The FEC acquisition is an important strategic addition for GMXT in its transportation service offer in North America. This transaction generates greater strength for GMXT regarding geographic presence and the service we will be able to offer our clients, and it will significantly improve the scope and reach of our services. The transaction is subject to various closing conditions, including the receipt of applicable government authorizations. Infrastructure Division Good Traffic on the Salamanca-Leon Highway.- During 1Q17, the highway reported revenues of $148 million pesos and a weighted average daily traffic (ADT) of more than 11,000 vehicles; the equivalent traffic translates into more than 16,000 vehicles. Vehicle traffic surpasses the flow agreed with the Ministry of Communications and Transportation (SCT in Spanish). New Record Energy Generation.- In 1Q17, we increased our power generation by 2% compared to 4Q16 and 0.3% compared to 1Q16, by generating 846,502 MW-hr.
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