Grupo Bimbo’s DayGrupo Bimbo’s DayJune 4, 2008June 4, 2008

Reynaldo ReynaReynaldo ReynaBBU PresidentBBU President

In 2003, BBU was suffering from major internal issues - fundamental changes were necessaryissues fundamental changes were necessary

Findings

• External factors profoundly reshaping our business Profitability

Enablers

People

Drivers

Customer Service

Findings

• Poor past business performance

• Room for improvement was

ProfitabilityProcesses

Technology

Profitability

Growthp

evident

• Costs reduction was a must, but not enough PERSONnot enough

• Sustainable growth, the real challenge TECHNOLOGY Growth

Customer Service

BBU began a journey for a t i bl fit bl b isustainable, profitable business

Three drivers f• Back to basics: people, accountability, focus, control, alignment and execution

• Improved business performance: costs reduction, processes improvements, sales execution• Revenue generation: gross profit, market strategy, market penetration, channel development

Two stages• Turn around: back to basics – short term – low hanging fruit - evident opportunities – “the must do”• Transformation: high impact – mid size implementation effort - big size & complex implementation

efforteffort

Back to Basics Business Revenue

Effort

Back to Basics Performance Generation

Turnaround TransformationSustainable, profitable growth

Time

The main goal is to reach hi h l thigher plateau

Profitable Ability to Reliable, timely Proactive,

10

12

Profitable Ability to overcome

external factors

Reliable, timely information

Proactive, continuous

improvement

OUR VISION

6

8

10

0

TODAY

2

4

6

2003

0

0

2

1 2 3 4 5 6 7 8 9 10 11 12 13

2003

Vulnerability External factors driving results

Lack of visibility Managingreactive modeg reactive mode

Between 2003 and 2007, BBU achieved this l ith $64 illi t d!

Net sales ($ Billions) Operating profit ($ Millions)

goal, with a $64 million turnaround!

Net sales ($ Billions)

1 462421

Operating profit ($ Millions)

1.36

1.46

+7.1%

21

10

1.23

1.15 -251.11

2003 2005 2006 20072004

-40

2005 20062003 2004 2007

Figures according to US GAAP

Improvements were across lti l di i

• Top line growth 7 1% CAGR 2003-2007

multiple dimensions

• Top line growth 7.1% CAGR 2003-2007• Double digit growth in top key accounts• Achieved bread market share leadership in 65% of the

markets we participate in

Top line improvements

• Reduced SKU count 57% over five years• Reduced returns by 8% while improving in-stock rate to 98.8%

W t d d 48% t d l fiReduced cost

and • Waste reduced 48% to record lows over five years• Admin costs have remained flat

and complexity

• 5-year record improvement of 45% in OSHA index• Record improvements in working capital and AR metrics

Other improvements

External pressures have now created a new challenge

Wheat Flour the single largest rawWheat

created a new challenge

Wheat Flour, the single largest raw material. Over the last 6 months, flour prices have risen by 50%.

Global supply vs demand

Wheat

• Global supply vs demand• Grain market volatility• Biofuel industryy

Crude Oil is the 2nd largest commodity impacting:

Crude Oilcommodity impacting:

• Packaging• Energy & fuel• Freight & distribution

Recent actions have focused on opportunities that can immediately improve BBU bottom linethat can immediately improve BBU bottom line

Action Description

Price increases • Increased prices across all major brands (excl. single serve snack cakes)

M k E d i i h l

Revenue enhancement Market

penetration• Expand presence in convenience channel • Capture Southern California opportunity

created by IBC exit

enhancement opportunities

Waste reduction • Plant level opportunities to reduce production, labor and energy wasteCost savings

Return management

• Actively manage for lower returns from accounts and distributors

Cost savings opportunities

Future initiatives will improve BBU’s long term profitability potentialBBU’s long term profitability potential

Profitability focusy• Drive profitability across all brands,

geographies and business segments• Rationalize less profitable businesses

Improve long-term cost position

O ti i f ll di t ib ti

Drive top line growth in key brands

L t b d iti t • Optimize full distribution network: plant to customer

E i t i

• Leverage strong brand equities to accelerate growth

• Focus on high margin categories, brands and SKUs • Ensure appropriate sourcing

measures taken given difficult commodity environment

brands and SKUs• Improve speed to market on

innovations