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Such fundamental reorganization allows for each business to be valued based on its individual merits and potential. The recent rally in ALFA's share price reflects a portion of the significant valuation gap currently implied around Sigma.

Sigma and Alpek have been the two largest and most profitable businesses within ALFA's portfolio over the last two decades. Both have grown significantly in all metrics to become leaders in their respective industries. The final spin-off is also a decisive moment for each as their independence from one another is effectively formalized, unlocking a unique value opportunity amid the ongoing re-rating of ALFA as Sigma ("Alfa|SIGMA").

Pursuant to the process approved by our shareholders, ALFA will transfer all its Alpek shares, as well as certain assets, liabilities and capital to a new entity ("Controladora Alpek") which is being constituted as the spun-off company and will be listed on the on the Mexican Stock Exchange ("BMV"). The ALFA shareholders will receive one share of Controladora Alpek for each of their ALFA shares, in addition to retaining their share ownership in ALFA's equity. Completion of the Alpek spin-off is expected in 2025.

Broad support from all stakeholders throughout the process has been crucial. As a result, ALFA has a solid foundation for an orderly transition, based on key milestones achieved in previous stages, a clear path towards deleverage and significantly better-than-expected results at Sigma and Alpek.

We thank ALFA's shareholders for their firm support to implement a Capital Increase of Ps $7,952 million (approx. US $400 million), which is expected to conclude on November 4, 2024. These proceeds, combined with cash dividends from both business units, will allow us to pay down parent-level debt totaling US $575 million. This reduction in Net Debt is aligned with our steady-state leverage target ratio of 2.5 times Net Debt to EBITDA.

Similarly, we thank ALFA's bondholders for supporting our consent solicitation process. We successfully obtained consents from more than 91% of holders of our Senior Notes due 2044 to implement certain amendments that provided the necessary clarity to spin off Alpek. We also appreciate the opportunity to work closely with our credit rating agencies, all of which separately affirmed their Investment Grade ratings for ALFA, Sigma and Alpek.

It is encouraging to reach this stage of our transformation, with solid operating results from Sigma and Alpek, reflecting an outstanding growth trend in our food business and a remarkable turnaround in our petrochemical business.

During the third quarter 2024, Sigma delivered its 14^th consecutive quarter of top line growth and reported record-high quarterly EBITDA of US $281 million driven by all regions.

Sigma offers investors a growing core supported by a dedicated team of over 47,000 members centered around a shared passion for the consumer. The company has developed a diverse portfolio of leading brands in all its food categories, backed by efficient food production and multi-channel distribution capabilities in 17 countries as well as two innovation centers. Importantly, Sigma is actively exploring and developing new sources of revenue with disruptive growth potential to complement its core into the future.

Alpek reported year-over-year growth in 3Q24 Volume, Revenues and EBITDA. Moreover, Comparable EBITDA of US $218 million represents the highest level since 4Q22. Stable demand in both business segments, higher ocean freight costs which benefit some parts of its business and a slight improvement in reference margins contributed to the better-than-expected performance. As a result, Alpek revised its 2024 Comparable EBITDA guidance up 13% to US $675 million.

Alpek has been directly available to investors through its listing on the BMV since 2012. As a public entity, Alpek has demonstrated superb cash generation capabilities in every stage of the petrochemical industry cycle. The company has achieved market-leading positions across its portfolio with a highly specialized team of more than 5,000 members operating 33 production facilities in 9 countries. Alpek is fully capable of extending its solid track record independent from ALFA, led by its experienced management team and autonomous corporate governance.

The outlook is promising for the businesses to realize their fair value potential by following two independent paths. The remaining steps to complete the final spin-off are straightforward. We express our sincere recognition and gratitude for the hard work of all the ALFA team members throughout this transformation.

Best regards,

Álvaro Fernández

Important notes on changes to ALFA's
Consolidated Financial Statements

Controladora Alpek

ALFA's shareholders approved to spin-off ALFA's share ownership of Alpek into a new, listed entity called "Controladora Alpek" on October 24, 2024. In accordance with International Financial Reporting Standards (IFRS), Alpek meets the definition of a "Discontinued Operation" for purposes of ALFA's Consolidated Financial Statements. "Discontinued Operations" are the net results of an entity that is either being held for disposal or which has already been disposed of.

The changes in ALFA's Consolidated Financial Statements are as follows:

• The Consolidated Statement of Financial Position presents Alpek's assets as "Current assets from discontinued operations" and its liabilities as "Current liabilities from discontinued operations" at the close of 3Q24. Prior periods are not restated.

• The Consolidated Statement of Income presents Alpek's net revenues and expenses as a single line item "Profit (loss) from discontinued operations" as follows:

  • 3Q24: accumulated figures for the three months ended September 30, 2024

  • 2Q24: accumulated figures for the three months ended June 30, 2024

  • 3Q23: accumulated figures for the three months ended September 30, 2023

  • 2024: accumulated figures for the nine months ended September 30, 2024

  • 2023: accumulated figures for the nine months ended September 30, 2023

• The Change in Net Debt presents Alpek's net inflows and outflows as a single line item "Decrease (Increase) in Net Debt from discontinued operations" as follows:

  • 3Q24: accumulated figures for the three months ended September 30, 2024

  • 2Q24: accumulated figures for the three months ended June 30, 2024

  • 3Q23: accumulated figures for the three months ended September 30, 2023

  • 2024: accumulated figures for the nine months ended September 30, 2024

  • 2023: accumulated figures for the nine months ended September 30, 2023

• The Change in Net Debt also presents Alpek's Net Debt balance as "Net Debt from discontinued operations" at the close of 3Q24. Prior periods are not restated.

Controladora Axtel

ALFA's shareholders approved to spin-off ALFA's share ownership of Axtel into a new, listed entity called "Controladora Axtel" on July 12, 2022. The shares of "Controladora Axtel" were distributed to ALFA shareholders and began trading on the Mexican Stock Exchange on May 29, 2023. In accordance with International Financial Reporting Standards (IFRS), Axtel meets the definition of a "Discontinued Operation" for purposes of ALFA's Consolidated Financial Statements. "Discontinued Operations" are the net results of an entity that is either being held for disposal or which has already been disposed of.

The changes in ALFA's Consolidated Financial Statements are as follows:

• The Consolidated Statement of Financial Position no longer presents Axtel's assets as "Current assets from discontinued operations" nor its liabilities as "Current liabilities from discontinued operations" at the close of 3Q24.

• The Consolidated Statement of Income presents Axtel's net revenues and expenses as a single line item "Profit (loss) from discontinued operations" as follows:

  • 3Q24: no figures presented related to Axtel

  • 2Q24: no figures presented related to Axtel

  • 3Q23: no figures presented related to Axtel

  • 2024: no figures presented related to Axtel

  • 2023: accumulated figures for the four months and 29 days ended May 29, 2023

• The Change in Net Debt no longer presents Axtel's net inflows and outflows in "Net Debt from discontinued operations"

SELECTED FINANCIAL INFORMATION (US $ MILLION)

About ALFA

ALFA is comprised mainly of two businesses with global operations: Sigma, a leading multinational food company, focuses on the production, marketing, and distribution of quality foods through recognized brands in Mexico, Europe, the United States, and Latin America. Alpek is one of the world's top producers of Polyester (PTA, PET, PET sheet and rPET), and the leader in the Mexican market for Polypropylene (PP) and Expandable Polystyrene (EPS). ALFA's shareholders approved to spin-off ALFA's share ownership of Alpek into a new, listed entity called "Controladora Alpek" on October 24, 2024. In 2023, ALFA reported revenues of Ps $291,207 million (US $16.4 billion), and EBITDA of Ps $24,783 million (US $1.4 billion). ALFA's shares are quoted on the Mexican Stock Exchange and on Latibex, the market for Latin American shares of the Madrid Stock Exchange. For more information, please visit www.alfa.com.mx

Disclaimer

This document contains forward-looking information based on numerous variables, expectations and assumptions that are inherently uncertain. They involve judgments with respect to, among other things, future economic, competitive and financial market conditions and future business decisions, all of which are difficult or impossible to predict accurately. Accordingly, future results are likely to vary from those set forth in this document. You should not place undue reliance on forward-looking information. All forward-looking information is made as of the date of this document, based on information available to us as of such date, and we assume no obligation to update any forward-looking information. Copyright^© 2024 ALFA, S.A.B. de C.V. All rights reserved.

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SOURCE ALFA, S.A.B. de C.V.