PR Newswire | Feb 9, 2021 10:31AM EST

December 31, 2020

02/09 09:30 CST

Grupo Simec Announces Results Of Operations For The Twelve-Month Period Ended December 31, 2020 GUADALAJARA, Mexico, Feb. 9, 2021

GUADALAJARA, Mexico, Feb. 9, 2021 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations for the twelve-month period ended December 31, 2020 and December 31, 2019.

Twelve-Month Period Ended December 31, 2020 compared to Twelve-Month Period Ended December 31, 2019

Net SalesNet sales increased 5% by the combination of higher shipments of finished steel products and a higher average sales price by 1% compared the same period of 2019, the sales increased from Ps. 34,171 million in the twelve-month period ended December 31, 2019 to Ps. 35,957 million in the same period of 2020. Shipments of finished steel products increased 4% to 2 million 441 thousand tons in the twelve-month period ended December 31, 2020 compared to 2 million 349 thousand tons in the same period of 2019. Total sales outside of Mexico on the twelve-month period ended December 31, 2020 increased 7% to Ps. 17,871 million compared with Ps. 16,736 million in the same period of 2019. Total sales in Mexico increased 4% from Ps. 17,435 million in the twelve-month period ended December 31, 2019 to Ps. 18,086 million in the same period of 2020. The increase of 5% in sales is due to a higher average sales price and higher volume of shipments.

Cost of SalesCost of sales decreased 3% from Ps. 30,067 million in the twelve-month period ended December 31, 2019 to Ps. 29,236 million in the same period of 2020. Cost of sales as a percentage of net sales represented, 81% for 2020 and 2019 88%. The average cost of finished steel produced in the twelve-month period ended December 31, 2020 compared to the same period of 2019 decreased 6% due to higher costs of some supplies at year end.

Gross ProfitGross profit of the Company in the twelve-month period ended December 31, 2020 was of Ps. 6,721 million compared to Ps. 4,104 million in the same period of 2019. Gross profit as a percentage of net sales represented 19% and 12% for the 2020 and 2019 periods respectively.

Operating ExpensesSelling, general and administrative expenses increased 11% from Ps. 1,637 million in the twelve-month period ended December 31, 2019 to Ps. 1,814 million in the same period of 2020. Selling, general and administrative expenses as a percentage of net sales represented 5% for both periods.

Other Expenses (Income) netThe company recorded other net expenses of Ps. 137 million in the twelve-month period ended December 31, 2019 compared to other net income of Ps. 555 million in the same period of 2020.

Operating IncomeOperating income increased 134% from Ps. 2,330 million for the twelve-month period ended December 31, 2019 to Ps. 5,462 million in the same period of 2020. Operating income as a percentage of net sales represented 15% and 7% for the 2020 and 2019 periods respectively.

EBITDAThe EBITDA of the Company increased 96% from Ps. 3,439 million in the twelve-month prior ended December 31, of 2019, generating a net loss of Ps. 1,636, less minority stake of Ps. 4, plus income taxes of Ps. 3,276, plus comprehensive financial cost of Ps. 694, plus depreciation of Ps. 1,109 to Ps. 6,729 million in the same period of 2020 as a result a net income of Ps. 4,180, less minority stake of Ps. 2, plus income taxes of Ps. 1,335, less comprehensive financial cost of Ps. 51, plus depreciation of 1,267.

Consolidated Twelve-month period ended December 31, Million

2020 2019

Net income (loss)attributable to Vale's 4,180 (1,636)stockholders

Loss attributable to (2) (4)noncontrolling interests

Net income (loss) 4,178 (1,640)

Depreciation, depletion and 1,267 1,109amortization

Income taxes 1,335 3,276

Financial results income (loss) (51) 694

EBITDA 6,729 3,439

Items to reconciled adjustedEBITDA

Equity results and otherresults in associates and joint 0 0ventures

Dividends received andinterest from associates and 0 0joint ventures (i)

Impairment and disposal of 0 0non-current assets

Adjusted EBITDA 6,729 3,439

Comprehensive Financial CostComprehensive financial cost in the twelve-month period ended December 31, 2020 represented a net income of Ps. 51 million compared with a net expense of Ps. 694 million in the same period of 2019. The net interest was an income of Ps. 59 million in 2020 compared with a net income of Ps. 91 million in the twelve-month period ended December 31, 2019. As a result, we registered a net exchange loss of Ps. 8 million in the twelve-month period ended December 31, 2020 compared with a net exchange loss of Ps. 785 million in the same period of 2019, reflecting a 5.63% increase in the value of the peso versus the dollar in the twelve-month period ended December 31, 2020 compared to December 31, 2019.

Income TaxesThe Company have recorded an expense net tax of Ps. 1,335 million in the twelve-month period ended December 31, 2020 (including the income of deferred tax of Ps. 22 million) compared with a net expense tax of Ps. 3,276 million in the same period of 2019 (including the tax deferred expense of Ps. 202 million).

Net Income (loss) (After Minority Interest)As a result of the foregoing, net income increased by 356% from Ps. 1,636 million net loss in the twelve-month period ended December 31, 2019 to Ps. 4,180 million a result net income in the same period of 2020.

Liquidity and Capital ResourcesAs of December 31, 2020, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, Ps. 6.0 million (accrued interest on December 31, 2020 was U.S. $640,393 or Ps. 12.8 million). As of December 31, 2019, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, Ps. 5.7 million (accrued interest on December 31, 2019 was U.S. $676,758, or Ps. 12.8 million).

Comparative fourth quarter 2020 vs third quarter 2020

Net SalesNet sales increased from Ps. 9,643 million in the third quarter of 2020 to Ps. 10,218 million for the fourth quarter of 2020. Sales in tons decreased from 676 thousand ton in the third quarter of 2020 to 602 thousand ton in the fourth quarter of the same period, a decrease of 11%. Total sales outside of Mexico for the fourth quarter of 2020 increased 1% from Ps. 4,824 million in the third quarter to Ps. 4,878 million in the four quarter of 2020. Sales in Mexico increased to Ps. 5,340 million in the fourth quarter of 2020 compared Ps. 4,819 million in the third quarter of 2020 and increase of 11%. Prices of finished products sold in the fourth quarter of 2020 increased 19% compared with the third quarter of the same period.

Cost of SalesCost of sales increased to Ps. 8,381 million in the fourth quarter of 2020 compared to Ps. 7,682 million for the third quarter of 2020. With respect to sales, in the fourth quarter of 2020, the cost of sales represented 82% in the fourth quarter of 2020, compared to 80% in the third quarter of the same period. The average cost of sales by ton increased 23% in the fourth quarter of 2020 versus the third quarter of 2020.

Gross ProfitGross profit of the Company for the fourth quarter of 2020 decreased 6% to Ps. 1,837 million compared to Ps. 1,961 million in the third quarter of 2020. The gross profit as a percentage of net sales for the third and fourth quarter of 2020 was of 20% and 18% respectively.

Operating ExpensesSelling, general and administrative expenses increased 11% to Ps. 498 million in the fourth quarter of 2020 compared to Ps. 449 million for the third quarter of 2020. Selling, general and administrative expenses as a percentage of net sales for the third and fourth quarter of 2020 were of 5% for both periods

Other Expenses (Income) netThe company recorded other net income of Ps. 339 million in the fourth quarter of 2020 compared to other net income of Ps. 56 million for the third quarter of 2020.

Operating (Loss) IncomeOperating income was of Ps. 1,678 million in the fourth quarter of 2020 compared to an operating income of Ps. 1,568 million in the third quarter of 2020. The operating income as a percentage of net sales represented 16% for both periods.

EBITDA The EBITDA was Ps. 1,891 million in the third quarter of 2020 as a result a net income of Ps. 1,003, less minority stake of Ps. 1 million, plus income taxes of Ps. 352, plus comprehensive financial cost of Ps. 214, plus depreciation of Ps. 323 compared to Ps. 1,987 million for the fourth quarter of 2020, as a result a net income of Ps. 717, plus minority stake of Ps. 2 million, plus income taxes of Ps. 31, plus comprehensive financial cost of Ps. 928, plus depreciation of Ps. 309.

Consolidated Comparative fourth quarter vs third quarter 2020 Million

4Q 2020 3Q 2020

Net income (loss)attributable to Vale's 717 1,003stockholders

Loss attributable to 2 (1)noncontrolling interests

Net income (loss) 719 1,002

Depreciation, depletion and 309 323amortization

Income taxes 31 352

Financial results income 928 214(loss)

EBITDA 1,987 1,891

Items to reconciled adjustedEBITDA

Equity results and otherresults in associates and 0 0jointventures

Dividends received andinterest from associates and 0 0joint ventures (i)

Impairment and disposal of 0 0non-current assets

Adjusted EBITDA 1,987 1,891

Comprehensive Financial Income (Cost) Comprehensive financial cost for the fourth quarter for 2020 was a net expense of Ps. 928 million compared with a net expense of Ps. 214 million for the third quarter of 2020. The net interest income the fourth quarter was Ps. 20 million compared with a net expense of Ps. 6 million in the third quarter of 2020. At same time we registered an exchange net loss of Ps. 208 million in the third quarter of 2020 compared with an exchange net loss of Ps. 948 million in the fourth quarter of 2020.

Income TaxesIncome Taxes for the third quarter of 2020 had an expense net tax of Ps. 352 million (including an expenses tax deferred for Ps. 18 million) compared to an expense of Ps. 31 million for the fourth quarter of 2020, (including an income tax deferred of Ps. 37 million).

Net Income (loss)As a result of the foregoing, the Company had a net income of Ps. 717 million in the fourth quarter of 2020 compared to Ps. 1,003 million of net income in the third quarter of 2020.

Comparative fourth quarter 2020 vs fourth quarter 2019

Net SalesNet sales increased 40% from Ps. 7,315 million for the fourth quarter of 2019 to Ps. 10,218 million for the fourth quarter of 2020. Sales in tons of finished steel in the fourth quarter of 2019 were 570 thousand tons versus to 602 thousand tons in the fourth quarter of 2020. Total sales outside of Mexico increased 39% from Ps. 3,497 million for the fourth quarter of 2019 to Ps. 4,878 million in the fourth quarter of 2020. Sales in Mexico increased 40% from Ps. 3,818 million in the fourth quarter of 2019 to Ps. 5,340 million in the fourth quarter of 2020. The average sales prices of finished products sold in the fourth quarter of 2020 increased 32%, compared to the same period of 2019.

Cost of SalesCost of sales increased 23% from Ps. 6,835 million in the fourth quarter of 2019 compared to Ps. 8,381 million for the fourth quarter of 2020. With respect to sales, the cost of sales represented 82% during the fourth quarter of 2020 and 93% during the fourth quarter of 2019. The average cost of steel products increased 16% in the fourth quarter of 2020 versus the fourth quarter of 2019.

Gross ProfitGross profit for the fourth quarter of 2020 increased 283% from Ps. 480 million in the fourth quarter of 2019 compared to Ps. 1,837 million in the fourth quarter of 2020. The gross profit as a percentage of net sales represented 7% for the fourth quarter of 2019 compared to 18% of the fourth quarter of 2020.

Operating ExpensesSelling, general and administrative expenses decreased 6% from Ps. 530 million in the fourth quarter of 2019 compared to Ps. 498 million for the fourth quarter of 2020. Selling, general and administrative expenses as a percentage of net sales represented 7% for the fourth quarter of 2019 and 5% for the fourth quarter of 2020.

Other Expenses (Income) netThe company recorded other expenses net of Ps. 298 million in the fourth quarter of 2019 compared with other income net of Ps. 339 million for the fourth quarter of 2020.

Operating (Loss) IncomeOperating income was of Ps. 1,678 million in the fourth quarter of 2020 compared to an operating loss of Ps. 348 million in the fourth quarter of 2019. The operating income as a percentage of net sales in the fourth quarter of 2020 was 16%, compared to an operating loss of -5% in the fourth quarter of 2019.

EBITDAThe EBITDA was Ps. -42 million in the fourth quarter of 2019 as a result a net loss of Ps. 3,229, plus minority stake of Ps. 124, plus income taxes of Ps. 2,970, less comprehensive financial cost of Ps. 213, plus depreciation of Ps. 306 compared to a profit of Ps 1,987 million in the fourth quarter of 2020 as a result a net income of Ps. 717, plus minority stake of Ps. 2 million, plus income taxes of Ps. 31, plus comprehensive financial cost of Ps. 928, plus depreciation of Ps. 309.

Consolidated Comparative fourth quarter vs fourth quarter Million

2020 2019

Net income (loss)attributable to Vale's 717 (3,229)stockholders

Loss attributable to 2 124noncontrolling interests

Net income (loss) 719 (3,105)

Depreciation, depletion and 309 306amortization

Income taxes 31 2,970

Financial results income 928 (213)(loss)

EBITDA 1,987 (42)

Items to reconciled adjustedEBITDA

Equity results and otherresults in associates and joint 0 0ventures

Dividends received andinterest from associates and 0 0joint ventures (i)

Impairment and disposal of 0 0non-current assets

Adjusted EBITDA 1,987 (42)

Comprehensive Financial Income (Cost) Comprehensive financial cost for the fourth quarter of 2020 was a net expense of Ps. 928 million compared with a net income of Ps 213 million in the fourth quarter of 2019. Net interest income was of Ps. 20 million in the fourth quarter of 2020 compared with a net interest expense of Ps. 40 million in the fourth quarter of 2019. At same time we registered a net exchange loss of Ps. 948 million in the fourth quarter of 2020 compared with an exchange income of Ps. 253 million in the fourth quarter of 2019.

Income TaxesThe Company recorded an expense net taxes for the fourth quarter of 2020 of Ps. 31 million (including an income of deferred tax of Ps. 37 million), compared to an expense taxes of Ps. 2,970 million for the fourth quarter of 2019, (including an income tax deferred of Ps. 128 million).

Net Income (loss)As a result of the foregoing, the Company recorded a net income of Ps. 717 million in the fourth quarter of 2020 compared to Ps. 3,229 million of net loss in the fourth quarter of 2019.

Year(million of pesos) Jan - Dec '20 Jan - Dec '19 20 vs '19

Sales 35,957 34,171 5%

Cost of Sales 29,236 30,067 (3%)

Gross Profit 6,721 4,104 64%

Selling, General and Administrative Expense 1,814 1,637 11%

Other Income (Expenses), net 555 (137) 505%

Operating Profit 5,462 2,330 134%

EBITDA 6,729 3,439 96%

Net income 4,180 (1,636) 356%

Sales Outside Mexico 17,871 16,736 7%

Sales in Mexico 18,086 17,435 4%

Total Sales (Tons) 2,441 2,349 4%

Cost by ton 11,977 12,800 (6%)

Quarter

(million of pesos) 4Q'20 3Q '20 4Q '19 4Q?20vs 4Q?20 vs 3Q?20 4Q '19

Sales 10,218 9,643 7,315 6% 40%

Cost of Sales 8,381 7,682 6,835 9% 23%

Gross Profit 1,837 1,961 480 (6%) 283%

Selling, General and Adm. Expenses 498 449 530 11% (6%)

Other Income (Expenses), net 339 56 (298) 505% 214%

Operating Profit 1,678 1.568 (348) 7% 582%

EBITDA 1,987 1,891 (42) 5% 4831%

Net Income 717 1,003 (3,229) (29%) 122%

Sales Outside Mexico 4,878 4,824 3,497 1% 39%

Sales in Mexico 5,340 4,819 3,818 11% 40%

Total Sales (Tons) 602 676 570 (11%) 6%

Cost per Ton 13,922 11,364 11,991 23% 16%

Thousands Average Thousands Average of Millions Price of Millions Price Tons of per Ton Tons of per TonProduct Pesos Pesos Jan-Dec Jan-Dec Jan-Dec Jan - Dec Jan- Dec Jan-Dec 2020 2020 2019 2019 2020 2019

Special Profiles 791 13,593 17,185 851 15,384 18,078

Commercial Profiles 1,650 22,364 13,554 1,498 18,787 12,541

Total Tons 2,441 35,957 14,730 2,349 34,171 14,547

Average Thousands Millions Average Average Thousands Millions Price of Tons of Price Thousands Millions Price of Tons of Pesos per Ton Pesos per Ton of Tons of per TonProduct Oct-Dec Jul-Sep Jul-Sep Oct-Dec Pesos Oct-Dec Oct-Dec 2020 2020 Oct-Dec Jul-Sep Oct-Dec 2020 2020 2019 2019 2019 2020 2020

Special Profiles 220 3,898 17,718 215 3,551 16,516 191 3,042 15,927

Commercial Profiles 382 6,320 16,545 461 6,092 13,215 379 4,273 11,274

Total Tons 602 10,218 16,973 676 9,643 14,265 570 7,315 12,833

Any forward-looking information contained herein is inherently subject to various risks, uncertainties and assumptions which, if incorrect, may cause actual results to vary materially from those anticipated, expected or estimated. The company assumes no obligation to update any forward-looking informationcontained herein.

Contact : Jose Luis Tinajero Mario Moreno Cortez Grupo Simec, S.A.B. de C.V. Calzada Lzaro Crdenas 601 44440 Guadalajara, Jalisco, Mxico 52 55 1165 1025 52 33 3770 6734

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SOURCE Grupo Simec, S.A.B. de C.V.