CONTENTS Letter to shareholders Analysis and discussion of results WE WORK THE WEALTH OF THE EARTH Mining Division WE ARE THE POWER THAT MOVES MEXICO Transportation Division 6 12 30 64 WE ARE THE EXPERIENCE AND INNOVATION OF THE FUTURE Infrastructure Division 88 WE ARE THE REFLECTION OF OUR HARDWORKING COMMUNITY Grupo México Foundation 108 DIRECTORY Board of Directors and Management Team 132 Letter to shareholders 2019 was a year full of changes and challenges we overcame successfully. We are satisfied to have achieved the goals we set for ourselves and that we continue to strengthen the leadership of our Mining, Transportation and Infrastructure Divisions for the benefit of our clients, users, partners and the communities that we live in and we transit through. We are proud to be the second-largest company in capital value and the fourth-largest company in Mexico in terms of market capitalization and trading. We also have one of the highest dividend yield ratios with an average of 6.6%. This is due to the strength and continuity of our operations, which has allowed us to increase our share of the different business segments in each Division. We have achieved cumulative sales of USD$10,681 million, a record figure in our history, reflecting our experience, ability to adapt, and best adopted practices. These sales are 1.8% higher than 2018 sales and 2.8% higher than 4Q19 sales. EBITDA for 2019 was USD$4,948 million, 1.2% higher than the previous period. We have a low level of leverage, with a net debt-to-EBITA ratio of 1.4x. Our financial position has allowed us to make capital investments in Mexico and Peru amounting to USD$1,126 million over the year. For over ten years we have been the public company paying the second-largest amount of taxes in Mexico. In Peru, our company carries out the most “works for taxes”, a scheme aimed at expediting the delivery of public services. Over 84 years we have developed a human capital distinguished for its high level of training, professionalism and excellence. 9 1 0 2 T R O P E R L A U N N A 5 // Aerial view of the Silver Bell Mine in Arizona, United States. 9 1 0 2 T R O P E R L A U N N A 4 Our 30,263 employees enjoy economic and labor stability. In the case of Mexico, they receive the highest level of statutory employee profit-sharing (PTUs) in the entire country. Since 2010 we have seen a growth in sales of 32% and an increase in EBITDA of 24%. In ten years we increased copper production by 63%, we raised the tons/ kilometer of goods transported by our railroads by 26%, and we generated 17% more sources of employment throughout the Group. A reflection of the confidence we generated in the markets was the successful issue of a bond by our Mining Division. This was an instrument for USD$1 billion, with a term of 30 years, with a rate of 4.5%. Demand for these securities outnumbered supply 4.6 times. Using these resources, in 2020 we will finance our mining and metallurgical projects Buenavista Zinc, El Pilar and Pilares. In the Transportation Division, we carried out a debt issue through Stock Certificates for USD$402.1 million (issued in Mexican pesos). It was structured in two sections, at 10 years with a fixed rate and at 4 years with a variable rate, achieving 8.17% and 8.34%, respectively. Thanks to these resources we refinanced two loans, thereby improving our cost of capital and lengthening our maturities. These certificates met a demand 2.2 times higher than the amount issued. Likewise, we invested USD$343 million in improving efficiencies in our railroad operations. This Division continues with its growth trend, reaching an EBITDA of USD$1,096 million, 8.2% above 2018. 6 We also recorded very good results in the different business units of the Infrastructure Division. We achieved an EBITDA of USD$272 million and accumulated net sales of USD$580 million. An investment program of USD$1.04 billion was approved for the construction of fuel storage terminals that will increase self-sufficiency and energy security in Mexico. We will begin with one terminal in Monterrey and one more in Guadalajara with an investment of USD$180 million, which will increase the storage capacity of these cities by 7 and 15 days, respectively. In line with our commitment to sustainable development, in 2019 we invested in two wind farms with an installed capacity of 164 MW and 200 MW respectively. As a result, we will increase our wind power generation capacity 5.2 times, creating savings in our operations and reducing our CO2 emissions. At Grupo México, success has a meaning that goes beyond operational performance. We give priority to creating value in the locations where we work in and intensify our efforts to work more effectively, with greater impact in the social, economic and environmental spheres. Sustainable development is one of the priorities of our business model. Every year we invest an average of USD$60 million in projects for society, occupational health and safety. Through programs and investment in community infrastructure, we seek to generate well-being for our employees, for their families and for the communities in which we are present. 9 1 0 2 T R O P E R L A U N N A 7 ANNUAL REPORT 2019 Through Grupo México Foundation we implement social, educational, environmental, cultural and healthcare programs. The hospital we built in Juchitán, Oaxaca which provides medical attention to the Istmo de Tehuantepec inhabitants, is an example. The property was handed over ahead of schedule to the Federal Government to con- tribute to the fight against the COVID-19 pandemic. At Grupo México we will continue working to consolidate our position in the markets in which we have a presence. Our shareholders can be certain they are part of the strength of the largest mining company in Mexico, the fourth-largest copper producer in the world and a diversified and integrated company across its value chain. 9 1 0 2 T R O P E R L A U N N A 8 Germán Larrea Mota Velasco Ferromex locomotive. // 9 ANNUAL REPORT 2019 EBITDA 2019 USD$4.94 BILLION With a margin of 46.3% Analysis of results During 2019, at Grupo México we maintained a solid balance sheet with a low level of leverage, a net debt to EBITDA of 1.4x and a regular payment schedule. Our financial strength ensured us a good position to face the difficult economic environment while maintaining our commitment to continue with a significant expansion program. Combined cycle power generation plant, La Caridad, Sonora, Mexico. // We remain committed to ensuring sustained growth, striving to increase our productivity and controlling costs to continually generate greater value. Key consolidated figures for Grupo México Accumulated sales for 2019 reached USD$10.68 billion, a record figure in the history of our company, an increase of 1.8% compared to 2018. In our Mining Division our sales reached USD$7.96 billion, 1% higher than in 2018, due to the growth in the production of Copper (+12%), Molybdenum (+22%) and Zinc (+4%); this offset the significant fall in global metal prices: Copper (-6.9%), Zinc (-12.8%) and Molybdenum (-4.9%). The Transportation Division increased its sales in 4.8%, reaching USD$2.47 billion. • Grupo México’s EBITDA was USD$4.94 billion, 1.2% higher than the previous year. • The Mining Division achieved an EBITDA of USD$3.56 billion, in line with that of the previous year. • The Transportation Division obtained an EBITDA of USD$1.09 billion, increasing 8.2% compared to 2018. • Despite the loss of income in the Energy and Construction businesses of the Infrastructure Division, we secured an EBITDA of USD$272 million. The Group’s consolidated net profit was USD$1.76 billion during 2019, 54% high- er than 2018, due to a capital gain in treasury shares in Triple A companies of USD$426 million. 9 1 0 2 T R O P E R L A U N N A 12 // We reforested the La Boquera forest in Huixquilucan, State of Mexico. 13 ANNUAL REPORT 2019 Grupo México (Thousands of USD) January - December Variation 2019 2018 Thousands of USD Sales Cost of Sales 10,680,649 10,494,796 185,853 5,514,115 5,418,724 95,391 Operating income 3,479,725 3,590,328 (110,603) EBITDA 4,948,234 4,888,914 59,320 % 1.8 1.8 (3.1) 1.2 EBITDA margin (%) 46.3% 46.6% Net profit 1,766,249 1,147,005 619,244 54.0 Profit margin (%) Investments / Capex Employees 16.5% 10.9% 1,125,878 1,686,280 (560,402) (33.2) 30,263 31,596 (1,306) (4.1) Product Volume in Tons Thousands of USD$ 2018 2019 Var % 2018 2019 Var % Division Mining Copper Silver (thousands of ounces) Molybdenum Zinc Sulfuric acid Gold (ounces) Lead Others 1,001,388 1,094,252 19,477 22,055 20,739 26,849 106,483 103,668 1,990,185 1,832,662 55,938 22,983 49,163 21,020 9 6 22 (3) (8) (12) (9) $ 6,481,696 $ 6,522,655 299,042 318,760 509,864 549,369 1 7 8 329,923 277,779 (16) 119,731 169,239 41 70,348 67,521 (4) 52,380 41,670 (20) 20,905 18,614 (11) Transportation Division 1,962,215 1,887,766 (4)* 2,317,001 2,427,201 5 Infrastructure Division Total sales * Loaded cars (thousands of units) 293,906 287,840 (2) $10,494,796 $10,680,649 2 9 1 0 2 T R O P E R L A U N N A 14 Total Sales (Millions of USD) 1 8 6 0 1 , 5 9 4 0 1 , 6 8 7 9 , 3 7 1 , 8 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 2016 2017 2018 2019 Share by Region and Country in Sales* 7% Latin America 16% Asia 19% Europe * Includes all three divisions and is over total consolidated sales. 36% Mexico 22% United States 9 1 0 2 T R O P E R L A U N N A 15 Capital investments During 2019 we invested USD$1,126 million in the three Divisions. After completing In the Mining Division we invested USD$758 million this year for the conclusion our expansion programs at Buenavista del Cobre, Sonora and Toquepala, Peru for of the expansion projects in Cananea, Sonora and Toquepala, Peru, as well as other USD$3.5 billion and USD$1.3 billion respectively, we have embarked on our next projects to achieve greater operational efficiency. stage of growth with the Buenavista Zinc, Pilares and El Pilar projects in Sonora. Aerial view of Buenavista del Cobre, Sonora, Mexico. // We have invested more than USD$8.5 billion in the last five years. In the Transportation Division we allocated USD$343 million to investment projects, mainly efficiency and expansion projects, to further enhance the quality of our service. In the Infrastructure Division we made investments worth USD$135 million in the Fenicias wind farm in Nuevo León and in the Salamanca-León highway and the Silao Bypass, Guanajuato.* 9 1 0 2 T R O P E R L A U N N A 16 * The Infrastructure CAPEX includes the CAPEX of the highway and the Fenicias Wind Farm. 17 ANNUAL REPORT 2019 Consolidated debt Grupo México’s share performance As of December 31, 2019, Grupo México’s total consolidated debt was USD$9,377, Grupo México has become an increasingly competitive company in the industries with a balance of cash, cash equivalents and restricted cash of USD$2,543 million, where it participates in. This year we worked to secure the sustained growth that equivalent to a net debt of USD$6,834 million. has always characterized us, striving to increase our productivity and control costs, in order to generate greater value for our shareholders. 81% of the contracted debt is denominated in USD dollars and 19% in Mexican pesos; 96% of it is at a fixed rate. Issues in capital markets carried out during 2019 During 2019, our share performed very well on the Mexican Stock Exchange (BMV), have improved the payment schedule and the debt rate. with 20% of increase in price approximately. Maturities Grupo México as of December 31, 2019 Grupo México Share Price January - December 2019 0 0 5 , 1 0 0 2 1 1 1 1 , 1 , 6 1 0 , 1 0 0 0 , 1 3 9 5 9 0 5 3 4 5 8 6 7 6 7 3 1 7 1 6 4 1 0 3 1 5 0 1 7 4 6 5 0 6 4 6 5 1 6 1 7 1 8 1 9 1 9 1 65.00 60.00 55.00 51.89 50.00 45.00 D 40.00 35.00 41.01 D D 42.42 + 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2019 Feb Mar Abr May Jun Jul Ago Sep Oct Nov Dic Mining Division Transportation Division Infrastructure Division 1,700 1,500 1.300 1,100 900 700 500 300 100 -100 9 1 0 2 T R O P E R L A U N N A 18 9 1 0 2 T R O P E R L A U N N A 19 // Mineral processing plants in La Caridad, Sonora, Mexico. Dividend payment for 7 quarters MXN$0.80 20 Payment of dividends per share We have maintained the dividend payment of MXN$0.80 per share for seven quarters, this dividend implies an annualized dividend yield of 6.56%, one of the highest in the BMV. 6.0% 6.8% 7.1% 5.7% 7.4% 6.7% 6.4% . 0 8 0 $ . 0 8 0 $ . 0 8 0 $ . 0 8 0 $ . 0 8 0 $ . 0 8 0 $ . 0 8 0 $ 4.5% 0 6 0 $ . 3.1% . 0 5 0 $ 2.7% 0 4 0 $ . 2.3% 2.0% . 0 3 0 $ . 0 3 0 $ 1T 2T 3T 4T 1T 2T 3T 4T 1T 2T 3T 4T 2017 Dividend Yield 2018 2019 9 1 0 2 T R O P E R L A U N N A 21 ANNUAL REPORT 2019 // Chepe Express, Chihuahua, Mexico. 89% of our income is in US dollars and only 47% of our costs are in that currency. 9 1 0 2 T R O P E R L A U N N A 22 Natural dollar hedge Despite of the fact that 2019 was a year of high volatility in the foreign exchange market, in Grupo México we are in a privileged position to deal with exchange rate fluctuations. Our income is highly dollarized thanks to being from commodities (metals and energy); likewise a large part of the freight we handle is international. As a result, our company has a natural dollar hedge, with a positive impact on results due to the current appreciation of the US dollar. Sales Cost of sales USD MXN USD MXN Soles Mining Division Transportation Division Infrastructure Division Weighted Total 100% 42% 59% 89% - 58% 41% 11% 67% 30% 35% 47% 33% 70% 65% 44% 11% 9% 9 1 0 2 T R O P E R L A U N N A 23 // Combined cycle power generation plant, La Caridad, Sonora, Mexico. Credit profile Rating agencies highlighted Grupo México’s position as one of the largest copper producers worldwide, with low costs, integrated operations and long-term reserves. They also noted its sustained growth profile and strategic synergies within its three Divisions, with a solid balance. They emphasized the cash flow generation of the Transportation Division, which mitigates the Mining Division’s exposure to cyclical prices in the copper industry. In turn, they highlighted the generation of operating cash flow, which allows us to meet our investment needs and transfer value to our shareholders. 9 1 0 2 T R O P E R L A U N N A 24 During 2019, the risk rating agencies Fitch and S&P confirmed the Group’s credit rating at BBB+, with a stable outlook. 25 ANNUAL REPORT 2019 Grupo México, S.A.B. de C.V. Outstanding data 2016 2017 2018 2019 Real. Var. % 2019/2018 2016 2017 2018 2019 Real Var. % 2019/2018 Volume Sold* Cash Flow (millions of USD) Copper Zinc Silver Gold (tons) (tons) 1,032,347 1,024,952 1,001,388 1,094,252 105,415 107,572 106,483 103,668 (thousands of ounces) 17,255 16,843 19,477 20,739 (ounces) 165,587 54,223 55,938 49,163 Molybdenum (tons) 21,731 21,358 22,055 26,849 Average Price (USD) Copper (COMEX) (pound) Zinc (LME) (ounce) Silver (COMEX) (ounce) 2.20 0.95 17.10 2.80 1.31 17.03 2.93 1.33 15.65 2.72 1.16 16.16 Oro (LF) (ounce) 1,248.34 1,257.13 1,269.14 1,392.17 9 (3)* 6 (12)* (22)* (7)* (13)* 3 10 Molybdenum (MW DEALER OXIDE) (pound) 6.42 8.21 11.94 11.35 (5)* Transportation Division Statistics Net ton kilometers (millions of tons) 54,445 59,078 64,809 65,444 Loaded cars (thousands of units) 1,423.8 1,729.8 1,962.2 1,887.8 Balance (millions of USD) Current Assets Fixed Assets Total Assets Banking Liabilities Total Liabilities 4,104 4,859 13,922 16,786 4,789 17,146 21,945 25,745 25,805 7,332 10,147 8,550 12,185 8,384 12,196 Total Shareholder Capital 11,798 13,560 13,609 5,908 16,950 27,566 9,377 13,320 14,246 Balance (millions of USD) Total sales Cost of Sales Taxes Incurred EBITDA Net profit 8,173 4,601 883 3,366 1,102 9,786 5,010 1,591 4,531 1,522 10,495 10,681 5,149 983 4,889 1,147 5,514 1,271 4,948 1,766 1 (4)* 23 (1)* 7 12 9 5 2 2 29 1 54 Expressed in accordance with Generally Accepted Accounting Principles in the USA * Throughout this report, tons are metric and ounces are troy. ** Referred to 7,785,000,000 shares. 9 1 0 2 T R O P E R L A U N N A 26 Generated by Operations 1,762 2,821 3,008 2,613 (12)* Dividends Paid Taxes Paid Applied in Financial Activities Used in Investments Flow after investments and financial activities Data per share ** (292)* (673)* (1,352)* (1,591)* 879 (212)* 1,239 1,669 1,716 (186)* 1,843 878 18 7 572 (1,590)* (1,500)* (1,686)* (1,126)* (33)* 198 422 (290)* 1,056 464 Total Shares in Circulation (Thousands) 7,785,000 7,785,000 7,785,000 7,785,000 EBITDA per Share Flow per Share Earnings per Share Value in books Financial ratios Operating margin EBITDA margin Current Assets to Current Liabilities (times) Total Liabilities to Total Assets Debt / Total Shareholder Capital + Debt EBITDA / Interest (times) 0.43 0.23 0.14 1.32 28% 41% 2.8 46% 38% 7.37 0.58 0.36 0.20 1.49 34% 46% 2.0 47% 39% 8.91 0.63 0.45 0.15 1.48 34% 47% 2.6 47% 38% 9.85 0.64 0.34 0.23 1.54 33% 46% 2.6 48% 40% 8.96 Employees 30,657 30,477 31,596 30,263 Annual inflation Mexico United States Peru 3% 2% 3% Exchange Rate at the End of Each Year Mexico (Mexican pesos / US dollar) Peru (soles / US dollar) Average exchange rate Mexico (Mexican pesos / US dollar) Peru (soles / US dollar) 20.66 3.40 18.66 3.38 7% 2% 2% 19.74 3.25 18.93 3.26 5% 2% 2% 19.68 3.37 19.24 3.28 3% 2% 2% 18.85 3.36 19.26 3.34 – 1 26 54 4 (3)* (1)* 3 2 4 (9)* (4)* (40)* – – (4)* (0)* 0 2 9 1 0 2 T R O P E R L A U N N A 27 WE WORK THE WEALTH OF THE EARTH // Open pit mine in La Caridad, Sonora, Mexico. Mining Division January - December Variation 2019 2018 USD thousand % Sales Cost of Sales 7,965,608 7,883,888 81,720 4,278,189 4,173,165 105,024 Operating income 2,610,338 2,747,996 (137,658) EBITDA 3,567,126 3,559,308 7,818 1.0 2.5 (5.0) 0.2 EBITDA margin (%) 44.8% 45.1% Net profit 1,355,681 915,247 440,434 48.1 Profit margin (%) 17.0% 11.6% Investments / Capex 757,695 1,264,588 (506,893) (40.1) Thousands of US dollars 9 1 0 2 T R O P E R L A U N N A 3030 Buenavista del Cobre Mine, Cananea, Sonora, Mexico. // OVER 1,100,000 TONS OF COPPER Produced in 2019 Grupo México’s Mining Division is represented by its subsidiary AMC, whose main subsidiaries are Southern Copper Corporation (SCC) in Mexico and Peru, ASARCO in the United States and Minera los Frailes in Spain. We are the copper producer with the highest level of organic growth. • Leader in copper mining • Largest copper reserves in the world • Lowest production costs globally • Best portfolio of growth projects with diversified assets Over the years, we have continuously and consistently invested to increase and streamline our operations while maintaining a sound financial structure and a significant portfolio of organic growth projects. 9 1 0 2 T R O P E R L A U N N A 33 6 Texas 5 Arizona 1 2 3 4 New Mexico Baja California 8 7 Sonora 9 10 11 12 13 15 16 17 Chihuahua 14 18 19 20 22 21 Zacatecas 23 24 S.L. Potosí Gulf of Mexico Pacific Ocean Michoacán 25 26 CDMX 27 Guerrero 1 2 3 4 5 6 7 8 9 Ray Mine and plant 10 Buenavista del Cobre Mine and plant 19 Central Workshop Plant Hayden Plant Mission Mine Tucson Offices Corporate Offices Silver Bell Mine and plant Amarillo Plant 11 Metallurgical Complex Plant 20 Santa Bárbara Underground polymetallic mine 12 La Caridad Mine and plant Metallurgical Complex 21 Chalchihuites Future underground mine project 13 Pilares Future copper project 22 San Martín Underground polymetallic mine 14 Santa Eulalia Underground polymetallic mine 23 Charcas Underground polymetallic mine 15 Buenavista Zinc Mine Future project 24 Zinc Electrolytic Refinery Plant El Pilar Future copper and plant project 16 Hermosillo Offices Corporate Offices 25 Angangueo Future underground mine project El Arco Future project Lime Plant Mine and plant Key 17 Guaymas Terminal Plant 18 Chihuahua Offices Corporate Offices 26 Mexico Offices Corporate Offices 7 27 Taxco Underground polymetallic mine Mines Plants Office Mine + Plant Future mining projects *ESDE (Electrodepositioning copper cathode plant) Mining Division - Grupo México Geographic Location Spain Minera Los Frailes Future project Andalusia It comprises 14 mines, three metallurgical complexes, as well as exploration projects in Mexico, Peru, the United States, Spain, Chile, Ecuador and Argentina. 1 2 3 4 5 6 7 8 9 Chaucha Future copper project Tantahuatay Gold mine Lima Offices Corporate Offices Los Chancas Future copper project Tía María Future ESDE copper project Cuajone Copper mine Toquepala ESDE copper mine and plant Ilo Metallurgical plant complex Catanave Future project Ecuador 1 2 Peru 3 4 5 6 7 8 9 Chile Argentina Products During 2019, the average price of copper was USD$ 2.72/ lb, 7.17% lower than the 2018 average (USD$2.93/lb). We achieved an increase in our production of 11.69% with respect to the previous year, reaching 1,119,246 tons. This was mainly due to the expansion of the second concentrator in Toquepala, Peru. In 2019, copper sales represented 82% of AMC’s total revenues and 61% of Grupo México’s total revenues. We estimate that by 2024 we will produce more than 1,400,000 tons with the entry into operation of our growth projects in Mexico: Pilares, El Pilar and Buenavista Zinc, and in Peru: Tía María. In 2019, we reopened the San Martín mine in Zacatecas, Mexico, which had been on strike for more than eight years. Once it was opened, it produced 1,335 tons of copper, 5,837 tons of zinc and 1.2 million ounces of silver. 36 Toqepala Concentrator Expansion, Peru. // COPPER Use • Industries related to electrical power, telecommunications, construction, transportation, industrial machinery, medical equipment, infrastructure, automotive industry, computers and cell phones. • As a bactericide, it is used in drinking water and air conditioning pipes. • Alloyed with tin it forms bronze, for the manufacture of consumer products. • Manufacture of fungicides and other chemical products. Properties: Bactericidal, electrical conductivity, o corrosion resistance and excellent malleability and ductility. Average price 2019: USD$2.72/lb Increase in production vs 2018: 11.69% 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 Copper Production Thousands of tons . 0 0 3 8 8 . 1 1 8 . 4 2 2 8 . 2 0 3 9 . 4 4 2 2 . 9 8 9 1 . 7 9 7 1 1 . 9 8 1 2016 2017 2018 2019 Concentrators ESDES 9 1 0 2 T R O P E R L A U N N A 37 ANNUAL REPORT 2019 MOLYBDENUM Use • Manufacture of stainless and special steels. Catalyst in the oil and gas industry, as well as in the aviation industry. • Materials for the aeronautical industry. Fertilizers, dyes, enamels, reagents and lubricants. Properties: Provides greater hardness to alloys and resistance to corrosion. Average price 2019: USD$11.35/lb Increase in production vs 2018: 22.3% ZINC Use • Industrial applications and products, galvanizing mostly. • Manufacture of pressure molded parts, as well as bronzes. • Base for obtaining zinc oxide, used in the manufacture of tires, paints, and livestock feed, among other products. Properties: Low melting point, malleability and excellent resistance. Average price 2019: USD$1.16/lb Increase in production vs 2018: 4.4% 9 1 0 2 T R O P E R L A U N N A 38 Buenavista del Cobre mining trucks, Cananea, Sonora, Mexico. // 39 ANNUAL REPORT 2019 // Silver bars. // Gold bars extracted from La Caridad, Sonora, Mexico. Precious metals GOLD Use • Jewelry and industrial applications. • Manufacture of electronic products such as telephones, cell phones, global positioning system (GPS) units, televisions and computers, etc. Properties: Good conductor of heat and electricity. Average price 2019: USD$1,392.17/oz Increase in production vs 2018: -2.1% 9 1 0 2 T R O P E R L A U N N A 40 SILVER Use • Manufacture of electrical, medical, electronic and photographic products. • To a lesser extent in welding alloys, jewelry, minting of coins, silverware and catalysts. Properties: Thermal and electrical conductivity. Average price 2019: USD$16.16/oz Increase in production vs 2018: 16.5% 41 ANNUAL REPORT 2019 Leadership in Operating Cost and CASH-COST We are the mining company with the lowest cash cost worldwide, with USD$1.07 per pound of copper after by-products. We completed the expansion of the second concentrator in Toquepala in Peru, adding 100,000 tons of copper per year to reach a total production of 258,000 tons per year in this mining unit. This represented an investment of USD$1.3 billion. Sales by the Mining Division in 2019 were USD$7.96 billion and EBITDA was USD$3.56 billion, equivalent to 45% of sales. Sales of the Mining Division in 2019 in billions of USD $7.96 9 1 0 2 T R O P E R L A U N N A 43 // Concentrator, Toquepala, Peru. 9 1 0 2 T R O P E R L A U N N A 42 Financing In September 2019, Minera México SA de CV issued a debt bond for USD$1 billion at a fixed interest rate. This debt matures in 2050 at an annual rate of 4.5%. During the placement campaign, 154 purchase orders for USD$3.7 billion were received, a level of demand 4.6 times the offer. The funds from the issue will provide the company with additional liquidity to finance three expansion programs in Sonora, Mexico: • Zinc Project in Buenavista (Investment of USD$413 million) • Pilares Project (USD$159 million investment) • El Pilar Project (USD$130 million investment) These projects, along with other investments in Mexico, will increase copper produc- tion at our Mexican operations by 16%, and zinc production by 93%. 9 1 0 2 T R O P E R L A U N N A 44 Cuajone Mine, Moquegua, Peru. // 45 ANNUAL REPORT 2019 Construction of Concentrator II in Buenavista del Cobre, Sonora, Mexico. // Mining Production Summary * Copper Distribution 2019 Tons 2016 2017 2018 2019 Zinc Distribution 2019 Tons 2016 2017 2018 2019 Concentrates 3,341,903 3,285,846 3,361,435 3,358,672 Concentrates 139,697 129,230 135,322 Content in concentrates 830,047 811,771 822,395 930,156 Content in concentrates 73,984 68,665 70,778 146,661 73,922 Content ESDES (Cathodic) 224,366 198,859 179,666 189,090 Refineries 106,093 104,402 107,536 104,977 Total Mine Content Foundry Content Refineries 1,054,413 1,010,630 1,002,061 1,119,246 716,541 742,620 722,071 683,698 625,924 643,122 630,390 582,736 Refined (Refineries + ESDES) 850,290 841,981 810,056 771,826 Refined turned into wire rod 295,800 269,834 266,180 244,070 Refined turned into sheeting 11,202 12,431 7,790 6,050 * Figures expressed in metric tons except where indicated. Lead Distribution 2019 Tons Concentrates Content in concentrates 2016 2017 2018 2019 40,737 24,385 33,581 20,246 39,077 22,081 43,843 22,567 9 1 0 2 T R O P E R L A U N N A 47 9 1 0 2 T R O P E R L A U N N A 46 // Buenavista del Cobre, Sonora, Mexico. Gold Distribution 2019 Tons 2016 2017 2018 2019 Contained in Concentrates (ounces) 68,651 Refineries (ounces) 164,864 66,863 50,835 70,196 49,731 68,698 45,690 Silver Distribution 2019 Tons 2016 2017 2018 2019 Contained in Concentrates (ounces) 17,855,211 17,657,006 18,303,215 21,315,505 Refineries (ounces) 15,195,756 13,688,184 13,582,751 12,587,711 9 1 0 2 T R O P E R L A U N N A 48 Molybdenum Distribution 2019 Tons 2016 2017 2018 2019 Content in concentrates 21,736 21,328 21,985 26,886 Other products Distribution 2019 Tons Coal Coke Sulfuric acid Cadmium Lime 2016 2017 2018 2019 194,285 132,688 108,605 52,661 71,701 45,383 – – 2,691,371 2,717,210 2,716,985 2,612,097 664 608 632 609 271,560 275,683 254,596 274,056 9 1 0 2 T R O P E R L A U N N A 49 Projects started in Mexico in 2019 PROJECT INVESTMENT* PROJECT PROGRESS EXPECTED RESULTS · Environmental permits granted. · Basic engineering completed, working on detailed engineering. Basic engineering completed, working on detailed engineering. · Environmental permits granted. · Road construction for mining trucks started. · Construction of pilot plant completed. · Environmental permits granted. · This will double the Group’s zinc production capacity to 160,000 tons. · 490 direct and 1,470 indirect jobs. · It will significantly improve the total mineral grade (combining the expected 16% of Pilares with the 84% of La Caridad). · Copper oxide mineralization with possible reserves of 325 million tons with an average copper grade of 0.287%. Buenavista Zinc $413 Pilares $159 El Pilar $310 *Millions of USD 9 1 0 2 T R O P E R L A U N N A 50 Pilares, Sonora, Mexico. // Baja California Projects planned for 2020-2027 El Pilar Buenavista del Zinc Buenavista del Cobre La Caridad Esqueda El Arco Pilares Guaymas Conexión submarina Sonora Baja California North copper circuit Baja California and Sonora Between 2020 And 2027 Grupo México plans to invest in Sonora and Baja California a total of USD$8,893 million. Benefits: · Total jobs · Annual sales · Annual additional taxes · Refined copper production · Percentage of national copper production · Zinc production 42,721 USD$7,142 million USD$1,235 million 874,000 tons per year 89% 80,000 tons per year Power line Mine Smelter and refinery Maritime terminal Combined cycle power generation plant 52 Projects in the United States Asarco, Arizona Asarco reached a production of 125,400 tons of copper, 6% more than in 2018, and the cost of production fell by 9% compared to the previous year. Due to the unionized workers’ strike, the Hayden unit in Arizona and Amarillo unit in Texas were temporarily closed. The rest of the units in Arizona - Mission, Silver Bell and Ray - are operating at full capacity due to the decision of some workers to continue working, as well as new hirings. We reiterate our commitment to guarantee a long-term sustainable operation in the US that generates greater value for our shareholders, our partners, and the economy of Arizona and Texas through competitive jobs and direct participation with local communities. Aerial view of Ray mine, Arizona, United States. // BajaCaliforniaSonoraSinaloaChihuahuaBajaCaliforniaSurANNUAL REPORT 2019 Projects in Peru 1 2 3 4 5 6 7 8 Tía María Project Los Chancas Project Michiquillay Gold mine Lima Corporate Offices Tantahuatay Gold mine Cuajone Mine Toquepala Mine Ilo Metallurgical Complex Key Peru 5 3 4 2 1 6 7 Gold mine and project Corporate Offices Mines and metallurgical complexes 8 We are currently working on several copper projects in Peru, with an investment of more than USD$7.33 billion. 9 1 0 2 T R O P E R L A U N N A 54 View of the pit in the Toquepala mine, Peru. // PROJECT INVESTMENT* PROJECT PROGRESS RESULTS Tía María $1,400 Awaiting authorization Los Chancas $2,800 Environmental assessments 120,000 tons per year of ESDE metallic copper 100,000 tons of copper per year Michiquillay $3,138 In process of planning Total $7,338 *Millions of USD 9 1 0 2 T R O P E R L A U N N A 55 Projects in Spain Explorations Location: Aznalcóllar Municipality, Seville province, Andalusia Project progress: • The pre-feasibility study was concluded with a positive result so the feasibility study began. • Detailed engineering was undertaken. • Work was carried out in the second exploration campaign to evaluate a second mineral body (Cuchichón Body) discovered 600 meters south of the Los Frailes body, which could contain mineral resources of around 5.5 Mt of mineral. In addition to exploration and drilling programs at existing mines, we are working to locate deposits in other locations. Some of our most important exploration projects are: MEXICO Chalchihuites Bella Unión (La Caridad) • Skarn-type deposit in Zacatecas near the San • Gap-type satellite deposit with copper and Martín mining unit, which restarted operations molybdenum mineralization located less than in 2019. a kilometer from the southern limit of the La • Drilling programs carried out between 1980 and Caridad pit. 2014 identified 12.6 million tons of ore with an • In 2016 and 2017, we carried out a 28,217 • The environmental evaluations were prepared, and are currently being average silver content of 110 grams per ton, meter drilling program to define the geometry of Zaragoza Madrid Barcelona processed. Aznalcóllar Seville 56 2.66% zinc, 0.37% lead and 0.67% copper. the deposit. In these years, we identified 36.2 • The results to date indicate that the mineralization million tons of mineralized material with an consists of a complex mixture of oxides and average of 0.44% copper content and 0.05% sulfides of silver, lead and zinc that requires molybdenum. In May 2018, we completed the additional metallurgical research. drilling of this project, adding 46,400 meters • In 2017 and 2018 we carried out a further distributed over 113 test holes. 21,000 meters of drilling to continue with the • In 2019 the final reserves estimate was made metallurgical research. In total 48 test holes and in 2020, the mining plan will continue. were drilled. • In 2019, we analyzed 5,000 meters of core samples from the drilling program and carried out a 498-kilometer study of aerial hyperspectral imaging to survey the geology of the entire Chalchihuites mining district. • In 2020 we will continue with the metallurgical research. 9 1 0 2 T R O P E R L A U N N A 57 ANNUAL REPORT 2019 PERU Los Chancas, Apurímac Other prospects • Copper and molybdenum porphyry deposit • In 2019, on the South Coast, we concluded a located in the Apurímac department in southern 13,000-meter drilling program, exploring different Peru. geochemical and geophysical anomalies present • 545 million tons of mineralized rock with a in the project. The results obtained indicate a copper content of 0.59%, 0.04% molybdenum Iron-Copper system with mainly disseminated and 0.039 grams of gold per ton. iron mineralization and low copper content. • 181 million tons of leached rock mineralized with • By 2020, we plan to carry out a 10,000 meter 0.357% copper. drilling program at various prospects that have evidence of copper porphyry located mainly on Michiquillay, Cajamarca the southern coast of Peru. • Copper porphyry deposit located in the La Encañada district, province and department of Cajamarca, in northern Peru. • In 2019 we developed social programs in the communities in the area where the project is located and we started the Semi-Detailed Environmental Impact Study. This environmental instrument will allow us to begin a drilling program in late 2020 to verify and update the estimated mineral resources. 9 1 0 2 T R O P E R L A U N N A 58 // Aerial view of Michiquillay, Cajamarca, Peru. 59 ANNUAL REPORT 2019 CHILE Baquedano Project ECUADOR Copper Route Project ARGENTINA Caldera Project Other prospects • It is located in the Region and province of • Located west of the city of Cuenca and south of • Located in the Province of Río Negro formed by • In 2020, we will carry out exploration campaigns Antofagasta, the prospect is of the porphyry Guayaquil. The mineralization is characteristic of the areas Cerro la Mina, Tanque Negro and Cerro of 3,500 meters in the La Hoyada prospect (Cu) type of copper and in the Atacama desert. a copper and molybdenum porphyry system that Abanico. The first two correspond to a Gold-Silver and 1,500 meters in the Esperanza prospect has been explored since 2014. (Au-Ag) epithermal system and the latter to a (Au-Ag) located in the provinces of Catamarca High Voltage and Transit • To date 79,900 meters of diamond drilling has porphyry type system, in 2019 2,530 meters and Río Negro respectively. • Located in the province of Antofagasta and been completed. were drilled. Tocopilla, Antofagasta Region. • In October 2019, the infill drilling program aimed • Detailed geological mapping work is scheduled • With evidences of porphyry copper type at reclassifying existing mineral resources was for 2020 in order to design a diamond drilling mineralization, 2,613 and 2,003 meters restarted, with plans to continue it during 2020, program in the different areas. respectively of diamond drilling were carried out, carrying out 55,000 meters, and commencing determining in both cases that the mineralization the feasibility study in the last quarter. Cañadón del Moro Project was limited to thin veins with anomalous copper mineralization of up to 0.3%, which in terms of volume do not meet the objectives set. Other prospects • Exploration campaigns are scheduled for 2020 that include diamond drilling in the recognized strip of Cretaceous Porphyry Copper-Gold (Cu-Au) which presents good economic potential, with plans to drill 3 test holes with a total of 5,000 meters of diamond drilling. 9 1 0 2 T R O P E R L A U N N A 60 • Low sulphidation epithermal deposit, with veins of kilometer lengths amounting to a total of 7.6 km. Located in the Province of Río Negro. • To date we have completed 4,944 meters of diamond drilling, identifying an epithermal silver deposit with a potential economic interest with grades of 9.4 Oz/Ag. • In 2020 we will continue with the 2,000-meter diamond drill program aimed at exploring prospective and potential ore. 9 1 0 2 T R O P E R L A U N N A 61 WE ARE THE FORCE THAT MOVES MEXICO // AC locomotive, Hidalgo, Mexico. Transportation Division Grupo México Transportes (GMXT) Thousands of USD January - December Variation 2019 2018 thousands of USD Vol. Transported (Million tons / km) 65,444 64,809 635 Railcars moved Sales Cost of Sales Operating income EBITDA 1,887,766 1,962,214 (74,448) 2,473,004 2,360,317 112,687 1,326,497 1,356,712 (30,215) 693,063 638,729 54,334 1,096,148 1,013,161 82,987 % 1.0 (3.8) 4.8 (2.2) 8.5 8.2 EBITDA margin (%) 44.3% 42.9% Net profit 312,450 362,346 (49,896) (13.8) Profit margin (%) Investments / Capex 12.6% 15.4% 342,663 372,365 (29,702) (8.0) 9 1 0 2 T R O P E R L A U N N A 6464 Ferromex locomotive and tank trucks. // OVER 11,000 KILOMETERS OF RAIL TRACK We are the leading company in rail freight transport with the greatest level of coverage and connectivity Grupo México’s Transportation Division is represented by its subsidiary GMéxico Transportes, SAB de CV (GMXT). GMXT provides logistics and land freight transportation solutions in a safe, efficient, reliable and sustainable way, which contributes to strengthening connectivity and competitivity of the markets in which we operate. GMXT’s main subsidiaries are: • Ferrocarril Mexicano, S. A. de C. V. (Ferromex) • Ferrosur, S. A. de C. V. (Ferrosur) • Florida East Coast (FEC) • Texas Pacifico Transportation, LTD. (TXPF) • Intermodal México, S. A. de C. V. (IMEX) We have 11,136 kilometers of tracks in 24 states of Mexico, as well as in Florida and Texas in the United States. Our Class 1 Railroad connects with five border crossings with the United States, and we provide services to nine ports in the Pacific Ocean and four more in the Gulf of Mexico. Coverage in 24 states of Mexico, together they accumulate 86% of the GDP. 9 1 0 2 T R O P E R L A U N N A 67 UP Mexicali Pascualitos UP Nogales BNSF /UP El Paso Cd. Juárez Benjamín Hill Hermosillo Guaymas BNSF / UP / KSC Ft. Worth Dallas Comanche Coleman San Angelo J.C.T. BNSF / FWWR Ft. Stockton Alpine San Angelo Texas Ojinaga Presidio Chihuahua Piedras Negras BNSP / UP Eagle Pass Topolobampo Sufragio Cd. Frontera Culiacán Torreón Paredón R. Arizpe Monterrey Cd. Victoria Mazatlán Zacatecas Aguascalientes Tepic Train ferry Altamira Tampico CSX / NS BNSF / CN / CSX / NS Pensacola Jacksonville Alabama Titusville Florida Orlando Cañaveral Tampa West Palm Beach Palm Beach Everglades Miami Transportation Division - Grupo México Geographic Location Integration into the US and Canadian rail system with 8 exchange points. Silao Celaya Guadalajara Pénjamo Irapuato Colima Ajuno Mexico City Veracruz Coatzacoalcos Manzanillo Puebla Sánchez Key Salina Cruz Ferromex Ferrosur Texas Pacífico Florida East Coast Rights of Way Access to the European and Asian markets through 13 ports where we operate. Our network is operated by more than 11,000 highly skilled employees. Since we began operating the railroad in 1998, we have increased our cargo transportation capacity by 440%. We have become a modern and efficient railroad network. The railroad industry in Mexico has shown substantial improvements since privatization: • Reconstruction of more than 85% of the rail network. • Increase by more than 160% in haulage power. • Volume transported doubled. • Sustained growth in foreign trade rail traffic. Rail market share in Mexico 18.8% 25.2% 81.2% 1999 GMXT market share in the railroad industry 74.8% 2017 GMXT 35% GMXT 63% TFM 65% KSCM 37% 1999 2017 * GMXT: Grupo México Transportes / TFM: Transportación Ferroviaria Mexicana / KSCM: Kansas City Southern Mexico 9 1 0 2 T R O P E R L A U N N A 70 // Grain train, Sumidero, Hidalgo, Mexico. 9 9 1 1 0 0 2 2 T T R R O O P P E E R R L L A A U U N N N N A A 71 71 // Tank cars, Torreón, Coahuila. The railroad sector is essential to the economic activity of the countries where we are present, since it is a crucial part of the development of productive chains in the industrial sector, transporting a large proportion of vital goods and supplies. In 2019 our sales were USD$2.473 million, 4.8% more than in 2018, driven by the industrial, agricultural and automotive segments; we transported 65,444 million ton-kilometers and 1,887,766 cars. We achieved a record EBITDA of USD$1,096 million with a margin of 44.3%, mainly due to the implementation of operating efficiencies. In the last quarter of 2018 we started re-engineering our Master Service Plan, in line with principles of precise Railroad Operation, thanks to which we have managed to improve the use of assets, free up capacity on the tracks and increase efficiencies. This program is governed by six principles: 9 1 0 2 T R O P E R L A U N N A 72 1. Increase train length 2. Increase the capacity of the railroad network 3. Increase the speed of trains 4. Reduce time spent in yards 5. Maximize the use of locomotives 6. Balance trains in both directions We move more than 1.9 million railcars each year. Operational metrics Train speed (km/hr) Time spent by railcars in yards (hours) Railcar speed* (km/day) +7.2% 38.22 35.66 -2.6% 27.3 28.1 +3.0% 324.9 334.6 2018 2019 2018 2019 2018 2019 Train length (Kilometres) Tons per train Annual crews +3.3% 1.813 1.755 +2.6% 6,031 5,879 144,340 -9.3% 130,984 2018 2019 2018 2019 2018 2019 * Kilometers traveled per day. 9 1 0 2 T R O P E R L A U N N A 73 Industries served At GMXT we develop logistics solutions for the ground transportation of basic supplies and finished goods. We serve all kinds of industries, which is why our business portfolio is divided into nine subsegments: agricultural, intermodal, metals, minerals, automotive, chemical, energy, industrial, and cement. Agricultural We supply basic grains to the livestock, poultry and pig industries, as well as raw materials for mills, oil companies, and breweries. Additionally, we transport corn syrup, starch and sugar, among other products. Intermodal We transport consumer products for the domestic and international market. We have intermodal terminals in Guadalajara, Monterrey, Hermosillo, Chihuahua and Ciudad Obregón. We serve the Valley of Mexico, Manzanillo, Veracruz, Altamira, Coatzacoalcos and provide cross-border services via Piedras Negras, Ciudad Juárez and Nogales. Our distribution network in Mexico is supported by Intermodal México, a company that operates our terminals and provides integrated door-to-door services. In Florida (FEC) we have terminals in Jacksonville, Titusville, Fort Pierce, Fort Lauderdale and Miami, a service that is complemented by the trucking company Raven Transport. 9 1 0 2 T R O P E R L A U N N A 75 // Containers, Puerto Manzanillo, Colima, Mexico. 9 1 0 2 T R O P E R L A U N N A 74 In the Intermodal segment, we transport around 7.2 million products annually in 739,000 containers Metals and minerals We provide direct service to mines to transport raw materials in bulk, as well as to manufacturers to transport finished products, serving various markets including most notably the automotive and construction industries. Automotive Our network serves 12 of the largest automotive plants in Mexico, which represent 80% of the market. We have automotive terminals in Guadalajara, Monterrey, Hermosillo and serve the ports of Veracruz, Mazatlán, Altamira and the cross-border market via Piedras Negras, Ciudad Juárez, and Nogales. We have a 60% share in Mexico’s automotive cargo exports. In Florida (FEC) we have terminals in Jacksonville, Titusville and Miami (Central Florida). Chemicals We provide services to the inorganic chemical, synthetic resin, fertilizer and petrochemical industries, among others. Energy We serve the markets for hydrocarbons, coke, diesel, gasoline, asphalt, LP gas, among others, which offer significant growth potential given the new import routes of refined products (diesel / gasoline) from the US to supply the country’s main markets in: Valley of Mexico, Jalisco, Nuevo León, Chihuahua and others. This is also the case with the import of LP gas from the US and Canada through block trains to satisfy domestic and industrial demand in the states of Coahuila, Chihuahua, Sinaloa and Sonora. Industrial This is our most diverse business segment with markets such as breweries, the paper industry, white goods, machinery, new rail cars, milk, cleaning products, and more. This segment refers to finished products. Cement We transport the product in bulk and packaged, serving the main cement companies in Mexico and Florida. 9 1 0 2 T R O P E R L A U N N A 76 Automotive Terminal, Puebla, Mexico. // Diversification of income by products and services Cement 4.5% Others 6.3% Metals 4.7% Energy 7.2% Chemicals 7.5% Industrial 7.7% Automotive 10.2% Agricultural 26.5% Intermodal 13.9% Minerals 11.5% 9 1 0 2 T R O P E R L A U N N A 77 California Mexicali Baja California Arizona New Mexico Misisipi Alabama Georgia Texas Luisiana Monterrey Nuevo León Silao Guanajuato Guadalajara Jalisco Mexico City Coatzacoalcos Veracruz Chihuahua Chihuahua Hermosillo Sonora Cd. Obregón Sonora Los Mochis Sinaloa Culiacán Sinaloa La Paz Baja California Sur Intermodal Services Geographic Location Access to the United States and Canada markets through 5 border points Key Domestic Cross border Maritime FEC Intermodal Terminals Service in 53’ containers Cross Border Routes Monterrey Silao Chihuahua Hermosillo Chicago Los Angeles Chicago Memphis Chicago Detroit Chicago Detroit Domestic Routes Florida West Palm Beach Fort Lauderdale Miami Coatzacoalcos CDMX CDMX Silao Guadalajara Coatzacoalcos Culiacán Cd. Obregón Hermosillo CDMX Guadalajara Culiacán La Paz Cd. Obregón Hermosillo Mexicali Mexicali Service in 40’ and 20’ containers Maritime routes FEC routes Manzanillo Altamira Veracruz Jacksonville Jacksonville Jacksonville Jacksonville Jacksonville Miami Fort Lauderdale CDMX Guadalajara Silao Monterrey Monterrey CDMX Guadalajara Silao Titusville Fort Pierce Fort Lauderdale Miami West Palm Beach Titusville Titusville We invested 14% of our income in 2019. // Bulk Hoppers, Culiacán, Sinaloa, Mexico. Our investment Safety and occupational health In 2019, we invested more than USD$343 million mainly to improve infrastructure, both to increase our capacity and operational efficiency, and to gain access to new high-potential markets. Sustainable vision We have set ourselves the goal of moving more with less. For this reason, we commenced a shift to locomotives that use less-polluting fuels. We also replaced equipment with higher efficiency and environmentally friendly models, and we worked on optimizing our traffic flows to progressively reduce our carbon footprint. Using technology, we are making our processes more efficient. We operate with state-of-the-art systems in the intelligent handling of our locomotives, which allows, among other things, better fuel management and greater journey security. 9 1 0 2 T R O P E R L A U N N A 80 In the Transportation Division we have three guiding principles: safety, service and productivity. Operational safety is a principle that prevails across our organization aimed at achieving a zero accident operation. Our principle of service leads us to provide a better service to our clients every day and to exceed their expectations. This conviction is directly linked to the objective of being more productive, maximizing the efficiency with which we carry out each process while protecting the safety of our partners. We make an ongoing commitment to focus resources and efforts to create safe working environments for our 11,251 employees. As part of this strategy we have set up Health and Safety Committees at different levels of the organization, bodies that ensure improvements to all working areas. 11% of our staff have direct participation in these committees through their representatives, who represent 100% of our partners. Taking these measures together, we succeeded in reducing personnel accidents by 7% compared to the previous year. 81 ANNUAL REPORT 2019 We are one of the eight Class 1 Railroads in North America. // Grain train, Manzanillo, Colima, Mexico. We have a program aimed at promoting joint responsibility in work safety, called Zero Tolerance, which consists of work teams that compete to have the best results in terms of low workplace accidents. During 2019, 9,350 employees were trained in occupational health and safety issues, amounting to more than 62,500 working hours. We have 34 medical care units distributed throughout Mexico, which have 20 doctors and 111 nurses. As part of our ongoing urban-rail coexistence program, in 2019 we invested USD$5.4 million in the level crossing signaling program to make our operations safer. We support municipalities in their responsibilities, by signaling horizontally and vertically with electronic barriers to avoid vehicles and pedestrians crossing before trains pass through, on crossings with the highest number of accidents. 9 1 0 2 T R O P E R L A U N N A 82 With the signaling program introduced during 2019 we succeeded in reducing accidents at level crossings by 23%. 9 1 0 2 T R O P E R L A U N N A 83 // Round house, Patio Guadalajara, Jalisco, Mexico. We have 823 locomotives and more than 26,300 rail cars. 84 9 1 0 2 T R O P E R L A U N N A 85 ANNUAL REPORT 2019 WE ARE THE EXPERIENCE AND INNOVATION OF THE FUTURE // “Tamaulipas” platform, Mexico. Infrastructure Division Mexico Projects and Developments (MPD) Thousands of USD January - December Variation 2019 2018 Thousands of USD % Sales Cost of Sales 579,782 626,163 (46,381) 293,671 335,741 (42,070) Operating income 151,404 160,696 EBITDA 272,389 277,091 (9,291) (4,702) (7.4) (12.5) (5.8) (1.7) EBITDA margin (%) Income before Taxes Taxes Incurred Deferred tax Net profit 47.0% 91,519 44.3% 99,194 46,604 48,938 (7,675) (2,333) (7.7) (4.8) 249 1,639 (1,390) (84.8) 44,666 48,594 (3,929) (8.1) Profit margin (%) 7.7% 7.8% 9 1 0 2 T R O P E R L A U N N A 88 Combined cycle power generation plant, La Caridad, Sonora, México. // 1 Sonora Infrastructure Division - Grupo México Infrastructure Division 6 3 Nuevo León 1 2 3 Combined Cycle Plants Nacozari, Sonora Guadalajara Fuel Terminal Project in development Monterrey Fuel Terminal Project in development 10 “Tamaulipas” platform, 11 “Veracruz” platform 12 “Sonora” platform 4 León-Salamanca Highway 13 “Tabasco” platform 5 Silao Bypass 14 “Zacatecas” platform 15 “Campeche” platform 16 “Chihuahua” platform 6 7 8 9 Fenicias Wind Farm Project in development El Retiro Wind Farm Juchitán, Oaxaca Onshore Drilling Base Poza Rica, Veracruz Offshore Drilling Base Ciudad del Carmen, Campeche Pacific Ocean Guanajuato 5 4 8 2 Jalisco Gulf of Mexico Key Energy Highway Drilling Rig Mexico Fuel Terminal 10 13 12 11 Tabasco Veracruz 7 Oaxaca 16 15 14 9 Campeche SALES USD$580 MILLION Infrastructure Division during 2019 The Infrastructure Division is represented by its subsidiary México Proyectos y Desarrollos, S. A de CV (MPD), whose main subsidiaries are: • México Compañía Constructora, SA de CV (MCC): Participates in engineering and construction activities for infrastructure works. • Grupo México Servicios de Ingeniería, SA de CV (GMSI): Develops engineering projects, supervises construction activities. • Controladora de Infraestructura Petrolera México, SA de CV (CIPM): offers drilling services for oil and gas exploration and extraction, as well as related value-added services such as foundations engineering and directional drilling. • Controladora de Infraestructura Energética México, SA de CV (CIEM): Generates energy through two combined cycle plants and two wind farms (one in operation and the other under construction). • Concesionaria de Infraestructura del Bajío, SA de CV (CIBSA): operates and maintains a highway concession linking Salamanca and León, in Mexico. • Concesionaria Autopista Silao, SA de CV (CAS): operates and maintains the Silao Bypass highway concession. • Grupo México Controladora de Combustibles, SA de CV (GMCC): develops fuel transfer and storage terminals. The EBITDA for the Division was USD$272 million. 9 1 0 2 T R O P E R L A U N N A 93 In 2019, the Infrastructure Division made investments of USD$135 million. The sales of the Infrastructure Division were USD$580 million in 2019, 7% less than in 2018, mainly due to the reduction in the price of the gas used to generate electrical energy. EBITDA was USD$272 million, which was due in part to the growth in our number of oil platforms (from five to six teams) in operation and to the increase in efficiency practically across all our business units. In 2019, the Infrastructure Division invested USD$135 million, of which: • USD$50 million was earmarked for the acquisition of the new Fenicias wind farm in the north of the country (total investment USD$250 million), which is expected to start operating by the first quarter of 2021. • USD$60 million were allocated to our highway projects (Salamanca-León and Silao Bypass). “Tabasco” platform, Mexico. // Oil and gas CONTROLADORA DE INFRAESTRUCTURA PETROLERA MÉXICO, SA DE CV (CIPM) In 2019, Controladora de Infraestructura Petrolera México had revenues of USD$174 • USD$3 million of initial investment will launch the project of our fuel storage million and an EBITDA of USD$88 million, which represents an increase of 25% and terminals. The remainder of this investment accounts for the CAPEX for the 29% compared to the previous year. division’s different business lines. Additionally, in 2020, USD$412 million will be invested; USD$193 million for the Marine drilling new Fenicias wind farm, USD$71 for our highway projects, USD$95 million in fuel The year closed with six operating platforms (Campeche, Tabasco, Chihuahua, storage terminal projects at different strategic points in Mexico, and the remainder Zacatecas, Veracruz and Tamaulipas platforms). The Zacatecas platform restarted as operational CAPEX for the division’s different business lines. activities in April 2019 after having been suspended since November 2016. 9 1 0 2 T R O P E R L A U N N A 94 9 1 0 2 T R O P E R L A U N N A 95 Operational efficiency of platforms in 2019 99% The weighted operating efficiency of the platforms during 2019 was 99%. • Campeche platform had a productivity of 98.9%. It has a contract in place until August 2021. • Tabasco platform had a productivity of 99.2%. It has a contract in place until October 2022. • Chihuahua platform had a productivity of 98.1%. It has a contract in place until November 2020. • Zacatecas platform restarted operations on April 7, 2019 and had a productivity of 99.1%. It has a contract in place until May 2020. • Veracruz modular platform had a productivity of 99.6%, the best operating performance of all our platforms. It has a contract in place until July 2021. • Tamaulipas modular platform had a productivity of 98.6%. It has a contract in place until May 2024. Onshore Drilling During 2019, a land drilling contract was obtained for geothermal wells in the San Pedro Dome, located in Nayarit, with a private company that generates electricity using steam generated from the boreholes. 1. A further extension to its contract with PEMEX is being sought. 2. Work is being done on an extension, which would take the team until at least 2021. 9 1 0 2 T R O P E R L A U N N A 96 Energy CONTROLADORA DE INFRAESTRUCTURA ENERGÉTICA MÉXICO, S. A. DE C. V. (CIEM) During 2019, CIEM recorded a drop in its production due to lower consumption by our customers and low sales prices in the Wholesale Electricity Market (MEM). CIEM net sales in 2019 were USD$226 million and EBITDA was USD$117 million, which represents a decrease of 13% and 6% respectively over the previous year. Grupo México Energía is building the new Fenicias wind farm in the state of Nuevo León, which will have a capacity of 168MW to supply electrical energy to our mining and metallurgical operations at IMMSA. MEXICO, ENERGY GENERATOR We are The generating plant decreased sales by 13% and production by 8%, building the new which is equivalent to a decrease of 282 GWh vs 2018, for a total Fenicias wind farm production of 3,450 GWh in 2019. This is a result of the fall in the price in the state of Nuevo León, with a capacity of 168MW, to supply our operations. of gas. Wholesale Electricity Market and from CFE. The foregoing represented USD$209 million in total sales and an EBITDA of USD$108 million. 97 ANNUAL REPORT 2019 El Retiro Wind Farm The wind farm generated 161,181 MWh and sold USD$16.8 million, 10% lower in both metrics compared to the previous year. EBITDA was USD$9.1 million, a 28% decrease from 2018. The decrease in sales and EBITDA was mainly due to lower wind resources (-8%). The EBITDA margin in US dollars was impacted by a strengthening in the exchange rate for 2019 vs. 2018. In August 2019, the El Retiro Wind Farm became the first private park to receive the Clean Industry certificate by PROFEPA, reaffirming our commitment to meet the highest environmental standards in all our operations. The wind farm generated 161,181 MWh* and had an income of USD$16.8 million. *MWh: megawatt-hour // Turbine in the Juchitán Wind Farm, Oaxaca, Mexico. 9 1 0 2 T R O P E R L A U N N A 99 Construction MÉXICO COMPAÑÍA CONSTRUCTORA, SA DE CV (MCC) In 2019, MCC recorded revenues of USD$128 million and an EBITDA of USD$32 million. Revenues were generated by works contracted during the year with the Ministry of Communications and Transportation, Buenavista del Cobre, Mexicana de Cobre and Ferromex. Principal works • For the railroad industry, the following works were • We continue with the building work at Juchitán completed. Reconfiguration of tracks in the Patio Specialty Hospital, Oaxaca (92% complete), Monterrey, Construction of the Monterrey, Nuevo under development thanks to an agreement León railroad bypass and the MF San Juan-Lobos between the Ministry of Health, the Oaxaca State Line. In addition, the company continues to work Government and the Grupo México Foundation. on the Celaya Rail Bypass in Guanajuato. Quality, Occupational Safety and Environmental • With Minera México, the construction of the Management new tailings deposit for Buenavista del Cobre in Cananea, Sonora, continues and is 90% • Since 2007 has MCC maintained the certification complete. In Nacozari, Sonora, we continue to of its comprehensive management system with work on raising the curtain of the tailings dam validity until 2019: Quality ISO 9001: 2015, number 7, currently at 93% completion and it is Environmental ISO 14001: 2015, Safety and expected to conclude in May 2020. Health at Work OHSAS 18001: 2007. In 2019, the comprehensive system recertification was • In 2019, the first stage of construction of the carried out with validity until 2021 in Quality ISO Silao Bypass in the state of Guanajuato was 9001: 2015, Environmental ISO 14001: 2015 completed. The second stage of this bypass, and the certification of the Safety and Health at with a length of 6.2 km, is expected to be built Work system is being carried out under the new in 2020. ISO 45001: 2018 standard. 9 1 0 2 T R O P E R L A U N N A 100 // Aerial view of the bypass in Celaya, Guanajuato, Mexico. 101 ANNUAL REPORT 2019 // Silao Bypass, Guanajuato, Mexico. Freeways Grupo México Autopistas We comply with legal and regulatory matters related to Potential 2020 projects In 2019, Grupo México Autopistas had revenues of Additionally, Operadora de Infraestructura del Bajío, occupational health and safety performance, are in full USD$43 million, 7.1% more than in 2018. S.A. DE C.V. (a subsidiary of Grupo México), an entity legal compliance, and can emphasize the following: • Construction of the Zinc Concentrator Plant. registered with the SCT and certified by ISO 9001- • Construction of Crushing Areas for the Lime Currently, Grupo México operates two highway 2015, manages and operates the concessions. • During 2019, our operations had an average • Construction of fuel storage terminals in Plant in Agua Prieta, Sonora. concessions: monthly workforce of 1,862 direct employees Monterrey and Guadalajara. 1) Salamanca-León Highway: Federal concession and more than 390 subcontractors, giving a total • Construction of the Southern Bypass of the City granted to the Concesionaria de Infraestructura of 4,739,000 hours worked during the year. of Pachuca, Hidalgo. • Construction of the Mayan Train. • The result of the occupational accident rate index was 0.5, with zero fatalities, the above being below the indicators stipulated by the OSHA agency (USA) and the Mexican Chamber of the Construction Industry. (CMIC). • The environmental and quality performance audited and certified by third parties is optimal and complies with all the resolutions and specifications of the company’s construction projects. 102 del Bajío, SA de CV to build, operate, protect, and maintain the 81.6 km highway in the state of Guanajuato for 30 years, until 2041. Its two sections are now in operation. During 2019 the daily capacity was 13,206 vehicles, surpassing the 2018 figure by 3.7% and representing an equivalent daily capacity by vehicle type of 20,811 units. 2) Silao Bypass: State concession granted to the Concesionaria de Infraestructura del Bajío, SA de CV to build, operate, protect and maintain the 17.4 km highway in the state of Guanajuato for the next 30 years, until 2049. Section 2, of 11.6 km, began operations in September 2019 and Section I is scheduled to begin construction during 2020. Revenue of USD$43 million, which represented an increase of 7.1% compared to 2018. 9 1 0 2 T R O P E R L A U N N A 103 ANNUAL REPORT 2019 Sales during 2019 reached USD$18 million, exceeding those of 2018 by 5%. Cadereyta Transfer Terminal Nuevo León Escobedo Intermodal Terminal Nuevo León Monterrey Engineering GRUPO MÉXICO SERVICIOS DE INGENIERÍA, SA DE CV (GMSI) Fuels GRUPO MÉXICO CONTROLADORA DE COMBUSTIBLES, SA DE CV (GMCC) Sales during 2019 amounted to USD$18 million, exceeding 2018 by 5%; The Cadereyta Transfer Terminal in Nuevo León entered operation in June 2019 improvements were secured in all business lines (engineering personnel and registered operations of more than 1 million liters transferred per day (6,300 management and construction supervision) with a 17% higher EBITDA compared barrels or 10 gasoline and diesel tank trucks) equivalent to 10% of the total demand to the previous year, resulting in the highest level of production in the history of in Monterrey. Its annual income was USD$1.1 million, with an EBITDA margin of 44%. the company. Likewise, there was a growth in the workforce of 26% reaching 471 employees at the end of 2019. EBITDA result 17% higher 104 GMCC is currently developing two fuel storage terminals (Monterrey and Guadalajara) that have signed contracts for 10 years and 100% of the assigned capacity. GMCC will carry out construction during 2020 and part of 2021, expected to enter operation in 4Q2021 and 2Q2022 respectively. These terminals are the first phase of a wider plan aimed at constructing and operating other terminals through key axes to complete the logistics chain of fuel importers and marketers. 9 1 0 2 T R O P E R L A U N N A 105 ANNUAL REPORT 2019 WE ARE THE REFLECTION OF OUR TIRELESS COMMUNITY // Tree Planting Day. Dr. Vagón 1.4 MILLION MEDICAL CONSULTATIONS Totally free Grupo México Foundation Grupo México Foundation (FGM) is a non-profit organization whose objective is to promote the well-being of Mexico through health and social development programs, as well as strategic alliances with other civil society organizations (CSOs) in the country. Grupo México Foundation guides its actions based on four axes: · Health · Environment · Support for Institutions · Education and Culture // High school - La Caridad Educational Center, Sonora, Mexico Health As part the health care promotion strategic axis, the Grupo México Foundation, in association with Grupo México Transportes, operates the “Dr. Vagón” program, the Health Train. “Dr. Railcar,” The Health Train In 2019, “Dr. Railcar” celebrated five years in operation. Since its inception, this initiative has provided more than 1.4 million free comprehensive medical services to more than 360,000 patients in 226 communities in 22 states of the Mexican Republic. “Dr. Vagón” has traveled more than 82,000 kilometers to provide free health services to those who need it most. Strategic allies and results of “Dr. Railcar” 2019 The work carried out by “Dr. Railcar” in 2019 was the result of teamwork with our strategic allies, allowing us to provide specialized care, make use of more and better equipment, donate drugs, medical and rehabilitation equipment, and carry out studies, among many other things. For this reason, we would like to acknowledge the excellence and professionalism of our allies: Essilior, FUCAM, Audiotech Foundation, Farmacias del Ahorro Foundation, MVS Radio Foundation, LAPI and Takeda. 9 1 0 2 T R O P E R L A U N N A 110 “Dr. Vagón,” the Health Train in Sonora, Mexico. // We thank all our strategic allies that make this project possible. 9 1 0 2 T R O P E R L A U N N A 111 18 States visited 107,943 Free medication 456,028 Medical services 217 Communities served 1,900 Hearing aids 111,268 Patients 8,016 Patients seen at the Integrated Diabetic Patient Clinic 16,376 Pairs of glasses 748 IUD's 235 Vasectomies 40,859 Radiological screenings 9,265 Mammographies 64,103 Laboratory tests, desk studies and specialized consultations for the timely treatment of diabetic nephropathy, diabetic retinopathy, among others. 2,205 Psychological counseling sessions 113 // “Dr. Railcar,” the Health Train in Veracruz, Mexico. Since 2014, year by year, the number of medical consultations has increased 30%. 9 1 0 2 T R O P E R L A U N N A 112 ANNUAL REPORT 2019 Environment Mexicanos Sembrando The “Mexicanos Sembrando” is a program of Grupo México Foundation that aims to contribute to the reforestation of the country, restore its ecosystems and mitigate the effects of climate change. During 2019 we donated 2.1 million trees to municipalities in 25 states of Mexico. The main species we plant grow in urban areas and are fast growing, such as White Cedar, Ash, Trueno, Palm and Jacaranda. In addition, we plant species that are used for the reforestation of previously forested areas such as: Acchi de cochi oak, white oak, Apache pine, Madroño, Táscal or Táscate, Huata, Huizache, Pirul, African Karee and Trueno or Troeno. Grupo México Foundation’s nurseries are the largest of the private sector and have a high-tech irrigation system, greenhouses, and shade netting with the capacity to produce 5 million trees annually. They grow more than 200 indigenous species from different regions of Mexico, which help to stabilize ecosystems. 9 1 0 2 T R O P E R L A U N N A 114 // Nursery and greenhouse for reforestation. 115 ANNUAL REPORT 2019 In 2019 we reforested 2,166 hectares which is equivalent to 3,033 soccer fields. 23 hectares reforested on the 9th Tree Planting Day 24thousand pines planted 2,246 volunteers participated in our ninth Fundación Grupo México Tree Planting Day including employees of Grupo México, allies of Cinemex and Grupo México Foundation. 24,000 pine trees were planted on the 23-hectare “La Boquera” site in the municipality of Huixquilucan, State of Mexico. Several of our allies joined us in this activity: Nutriwell, Grisi, Coca Cola, ManPower Group, Bio Rad, Estafeta, CMR, LAPI, Hogan Lovells, Sura, KPMG, Posadas and Fundación CIE. Vagón Verde Since 2015, in coordination with Grupo México Transportes, we have transported and donated trees to the communities through which the railroad passes. The main objective is to support the reforestation actions of the Mexicanos Sembrando program and create awareness among children about caring for the environment, as well as to encourage recycling activities. In 2019, we donated 416,000 trees of 24 different species to 19 municipalities in Mexico. Vagón Verde. // 9 1 0 2 T R O P E R L A U N N A 116 // Tree Planting Day. 117 ANNUAL REPORT 2019 Support for Institutions Network of Business Associations and Foundations The Network of Business Associations and Foundations (La Red, or the Network) is a site of institutional convergence and liaison that fosters a culture of collaboration among civil society organizations for the development of skills and best practices. In order to achieve this we organize trainings, forums, workshops, networking spaces, lectures and seminars that allow us to share ideas and knowledge that strengthens the structure of the participating organizations and institutions. We have 232 allies among Business Foundations, Socially Responsible Companies, Social Agencies, Universities, Government Bodies and more than 4,000 Civil Society Organizations (CSOs). • 135 Business foundations • 68 Social agencies and legal advisers • 11 Academic organizations • 18 International and governmental organizations The activities of the Network include training for its members and affiliates. During 2019 we organized 131 on-site workshops, representing 646 hours of training on a range of issues that allow these organizations to advance their projects and consolidate themselves, to the benefit of their goals. 9 1 0 2 T R O P E R L A U N N A 118 Face-to-face training for CSOs registered in The Network. // The distribution of issues in these training sessions during 2019 was: • Fundraising and management 22% • Institutional development and project management 20% • Legal issues 15% • Human resources development 12% • Communication and social marketing 10% • Financial and fiscal 8% • Volunteers 3% • Other items 10% 119 ANNUAL REPORT 2019 During 2019, the Network trained, on average, 472 people each month. Network of Associations Expo At the Network we work closely with the Centro Mexicano Pro Bono and Appleseed The Network of Business Associations and Foundations of Grupo México Foundation México in training for lawyers and legal firms specialized in social development issues. organize the Network of Associations Expo event with the aim of creating a space for liaison and face-to-face meetings between CSOs in Mexico and to strengthen Thanks to the digital platform “The Network”, we have a presence in many countries contacts. In 2019 around 400 people from more than 200 CSOs attended with including: Argentina, Brazil, El Salvador, Chile, Colombia, Costa Rica, Ecuador, the participation of experts and leaders in social issues presenting the main Guatemala, Peru, Venezuela, Spain and the United States. trends and programs that contribute to the strengthening and better operation of Mexican CSOs. The Network has provided 199 legal advice sessions to Civil Society Organizations. EnREDados Podcast In 2019, we developed the EnREDados podcast as a communication tool that allows us to disseminate the work, experiences and actions of the leaders and representatives of the Network’s allies, in addition to giving space to experts on social and sustainable issues. 9 1 0 2 T R O P E R L A U N N A 120 9 1 0 2 T R O P E R L A U N N A 121 Education and Culture We have three key programs that allow us to influence the intellectual and emotional development of children and young people in Mexico. These are the educational workshops and volunteer programs of Grupo México and the publishing projects of the FGM. Education, professional development and teaching materials workshops Since 2016 we have worked together with government agencies to promote education and development for girls, boys and young people through educational materials on health with information and teaching resources. The material is accessible to all people who wish to consult it through the platform educacionsaludyvida.org. During 2019, the platform received more than 46,000 visits and materials were downloaded 11,120 times. Through this platform and jointly with our allies we also provide psychological and legal advice in online discussion forums. In collaboration with the NEMI AC Foundation, we coordinated the delivery of 500 workshops for 56,000 students in 61 high schools and 27 colleges in: Angangueo, Michoacán; Ciudad del Carmen, Campeche; Charcas, San Luis Potosí; Guerrero Negro, Baja California Sur; Nacozari, Esqueda, Cananea and Guaymas, Sonora; Santa Bárbara and Santa Eulalia, Chihuahua; Sombrerete, Zacatecas. The workshops addressed topics such as addictions, intelligent communication, sexual education, entrepreneurship, financial education, violence, and nutrition. 9 1 0 2 T R O P E R L A U N N A 123 9 1 0 2 T R O P E R L A U N N A 122 // Booklet I eat, enjoy and nourish myself Volunteer Day The participation of civil society in volunteering activities creates resilient communities and builds social cohesion and trust. The Volunteer Day was held for the seventh consecutive year, with collaborators from the three divisions of Grupo México and Cinemex together with their families, bringing together their efforts and intention to benefit the communities where we have a presence. The solidarity of this great team was reflected in the rejuvenation of schools, public spaces, homes, retirement homes and community dining rooms, by exterior and interior painting, rehabilitation of recreational areas, afforestation of green areas, as well as spending time with the beneficiaries of these activities. 1,223 employees from Grupo México and Cinemex took part, along with their families, friends and staff from the beneficiary institutions, added up to a total of over 10,000 volunteers in Mexico, Peru and the United States. In total, 52 institutions from 27 communities in 14 states of Mexico, 2 in the United States and 3 departments of Peru were benefited. Vacations with Meaning // Book cover “Pumpkin, Fruit of the Mexican Garden,” edited by GM Foundation. Grupo México Foundation Publishing For 10 years we have edited and published a book each year on the ingredients and essential products of Mexican cuisine, in order to preserve this UNESCO intangible heritage of humanity. In 2019 the book was dedicated to beans and their significance in Mexican cuisine and traditions. The book “Beans, Roots and History” is a finalist Grupo México Foundation offers the staff of Grupo México’s corporate offices the in the Gourmand World Cook Awards in the Single Theme category. opportunity to contribute to the development of the communities where the company is present through volunteer actions called “Vacations with Meaning”. In 2019 the In 2019 we supported, through the Fiscal Stimulus to Cinema (EFICINE) program, communities visited by this initiative were Tacná, Ilabaya, Miramar and Ilo, benefiting the film project La Novia de América, from the production company Grupo 354 people. Guanábana Cine. 9 1 0 2 T R O P E R L A U N N A 125 9 1 0 2 T R O P E R L A U N N A 124 Cinemex Awareness Program As part of the strategic axis of Support for Institutions and in collaboration with Cinemex, the following Cinemex Awareness programs are in successful operation: Beneficiary Premier Every year in cinemas belonging to Cinemex, Grupo México Foundation donates premiers, in which each beneficiary CSO carries out a ticket sale and raises funds that are also matched by Grupo México Foundation. During 2019 we held 33 premieres, raising more than MXN$1.5 million in benefit of 28 organizations. Social Mini-Film (“Cineminuto”) In 2019, with 14 mini-films, the organizations had the opportunity to publicize their work in a minute-long film, before film screenings at Cinemex complexes, achieving greater visibility for the benefit of their causes. 9 1 0 2 T R O P E R L A U N N A 126 The Mini-Films helped to publicize the work of 14 civil society organizations in 270 Cinemex complexes in Mexico. Institutions benefited in 2019 with the Social Mini-Film FUCAM A.C. Fundación Nemi A.C. Congregación Mariana Trinitaria A.C. Care for women with breast cancer Support for the promotion of Civil Society Organizations Support for communities living in extreme poverty Fundación del Empresariado Chihuahuense, A.C. Education for children and youth in the Sierra Tarahumara Mexican Red Cross National collection 2019 Autismo A.B.P. Fundación Fraternidad sin Fronteras I.A.P. Alumbra, una luz contra el abuso sexual infantil Colegio el Girasol, A.C. Fundación Gentera A.C. Promote early detection and care of autism Care for people abandoned by their families and by society Prevention of sexual violence against children Quality education for children from low-income families Integration of low-income people into formal education Convivencia sin Violencia A.C. Dpie, Pasos en Acción Prevention of violence and education about its consequences Labor inclusion and donation of prostheses to amputees Visión Mundial de México A.C. Care for children in poverty Juguetón A.C. Nationwide donations of toys 127 ANNUAL REPORT 2019 Cinemex Race Since 2009 we have held the Cinemex Race to raise funds for various civil organizations. In 2019 the race celebrated its 10th anniversary. The money raised in this edition was a million Mexican pesos that we gave to Fraternidad sin Fronteras I.A.P Foundation, which cares for people with mental disabilities who suffer from family and social neglect. Social Marketing Campaigns In Cinemex’s snack kiosks, the Grupo México Foundation offers an exclusive combo to support organizations. A percentage of the profit of every combo is collected over 8 weeks and the amount raised is donated to various causes. In 2019 we donated MXN$1.8 million. Organizations benefited: • Desarrollo Integral de la Juventud Oaxaqueña A.C. • Fraternidad sin Fronteras I.A.P. • Alzheimer Mexico IAP Marquee campaign During 2019, 2,700 posters were exhibited on the marquee of 270 cinema complexes over 48 weeks throughout Mexico, for the benefit of various Civil Organizations. 9 1 0 2 T R O P E R L A U N N A 129 // Starting gun of the 10th Cinemex Race. 9 1 0 2 T R O P E R L A U N N A 128 We gave a million of Mexican pesos to Fundación Fraternidad sin Fronteras I.A.P. 1 million GRUPO MÉXICO BOARD OF DIRECTORS Germán Larrea Mota Velasco President Patrimonial Advisor Claudio X. González Laporte Independent Director Xavier García de Quevedo Prudencio López Martínez Executive Vice President Patrimonial Advisor Oscar González Rocha Executive Vice President Patrimonial Advisor Alfredo Casar Pérez Patrimonial Advisor Luis Castelazo Morales Patrimonial Advisor Fernando López Guerra Larrea Patrimonial Advisor Emilio Carrillo Gamboa Patrimonial Advisor Independent Secretary Independent Director Antonio Madero Bracho Independent Director Carlos Prieto Sierra Independent Director Carlos Rojas Mota Velasco Independent Director Fernando Ruiz Sahagún Independent Director Antonio del Valle Ruiz Independent Director Rolando Vega Saénz Independent Director 9 1 0 2 T R O P E R L A U N N A 131 BOARD Germán Larrea Mota Velasco CEO Xavier García de Quevedo Executive Vice-President MINING DIVISION AMERICAS MINING CORPORATION BOARD Germán Larrea Mota Velasco Jorge Jáuregui Morales President of the Board Director of Human Resources Oscar González Rocha Jorge Lazalde Psihas CEO Counsel Lourdes Aranda Bezaury Director of Communication and Institutional Relations Xavier García de Quevedo Executive Vice-President Francisco López Guerra Larrea Director of Sustainability Marlene Finny de la Torre Administration and Finance Director Lillie Hernández Minor Counsel Juan Carlos Jaques Garcés Audit Director Miguel Valdés Neaves Director of Administration and Control 9 1 0 2 T R O P E R L A U N N A 132 Vidal Muhech Dip Director of the Board Daniel Chávez Carreón Director of Operations Ernesto Ríos Patrón Director of Engineering and Construction Raquel Tobar Sáinz Director of New Business and Finance Leonardo Contreras Lerdo de Tejada René Verde Guzmán Director of Marketing, General Director ASARCO Oscar González Barrón Administration and Finance Director Information Technology Director Rafael Ríos García Security Director Raúl Jacob Ruisanchez Mauricio Ibañez Campos Administration and Finance Director Southern Peru Legal and Corporate Governance Director Jorge Meza Viveros Operations Director Southern Peru 133 ANNUAL REPORT 2019 SOUTHERN COPPER CORPORATION BOARD OF DIRECTORS TRANSPORTATION DIVISION GRUPO MÉXICO TRANSPORTES MANAGEMENT TEAM Germán Larrea Mota Velasco Luis Miguel Palomino Bonilla President of the Board Independent Director Germán Larrea Mota Velasco Patrimonial Advisor Carlos Noriega Arias Patrimonial Advisor Oscar González Rocha Executive Vice-President Patrimonial Advisor Xavier García de Quevedo Executive Vice-President Patrimonial Advisor Alfredo Casar Pérez Patrimonial Advisor Vicente Ariztegui Andreve Independent Director Enrique Castillo Sánchez Mejorada Independent Director Rafael Mac Gregor Anciola Independent Director 134 Gilberto Perezalonso Cifuentes Independent Director Xavier García de Quevedo Lorenzo Reyes Retana Padilla Patrimonial Advisor Patrimonial Advisor Carlos Ruíz Sacristán Independent Director Jorge Lazalde Psihas Secretary Roberto Slim Seade Patrimonial Advisor Christian Lippert Helguera Secretary Alfredo Casar Pérez Patrimonial Advisor Jaime Corredor Esnaola Patrimonial Advisor Arturo Elías Ayub Patrimonial Advisor Eduardo Joaquín Gallástegui Armella Patrimonial Advisor Hugo Rafael Gómez Díaz Patrimonial Advisor Fernando López Guerra Larrea Patrimonial Advisor 9 1 0 2 T R O P E R L A U N N A 135 ANNUAL REPORT 2019 GRUPO MÉXICO TRANSPORTES MANAGEMENT TEAM Germán Larrea Mota Velasco President of the Board Alfredo Casar Pérez CEO Fernando López Guerra Larrea Managing Director Isaac Franklin Unkind Administration and Finance Director Hugo Rafael Gómez Díaz Director of Operations Lorenzo Reyes Retana Padilla Corporate Projects Director Jorge Márquez Abreu Commercial Director Nathan Aspund CEO Florida East Coast (FEC) 9 1 0 2 T R O P E R L A U N N A 136 INFRASTRUCTURE DIVISION MEXICO PROJECTS AND DEVELOPMENTS Germán Larrea Mota Velasco Ricardo Arce Castellanos President of the Board Oil and Gas, Engineering and Construction Director Xavier García de Quevedo Javier Gómez Aguilar CEO Counsel Francisco Zinser González Héctor Raúl Huerta Avendaño Managing Director Engineering Services Director Mario Fernando Chávez Galas Julio Francisco Larrea Mena Administration and Finance Director Construction Director Mexico Jorge Agüero Navarro Highway Director Gustavo Ortega Gómez Energy Director 137 ANNUAL REPORT 2019 GRUPO MÉXICO FOUNDATION Germán Larrea Mota Velasco President Jessica Pons Fernández Deputy Director General Network of Associations and Environment Health Karla Díaz Castro Administrative Manager, “Dr. Railcar,” The Health Train Dr. Ricardo Reyes Díaz Medical Manager, “Dr. Railcar,” The Health Train Aura Patiño Lona Operational Manager, “Dr. Railcar,” The Health Train Institutional Support Lucero Vallejo Durán Manager, Cinemex Awareness Program Education and Culture Beatriz Crispín Gámez Manager, Education and Culture 9 1 0 2 T R O P E R L A U N N A 138
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