Grupo Mexico Annual Report 2021

Plain-text annual report

WE INVEST IN A SUSTAINABLE FUTURE DISCIPLINE . INVESTMENT . WORK ANNUAL REPORT 2021 4 INFORME ANUAL 2021TABLE OF CONTENTS 05 LETTER TO SHAREHOLDERS 09 GRUPO MÉXICO RESULTS 22 MINING DIVISION 52 TRANSPORTATION DIVISION 70 INFRASTRUCTURE DIVISION 88 FUNDACIÓN GRUPO MÉXICO 120 BOARD OF DIRECTORS AND MANAGEMENT TEAM 2 ANNUAL REPORT 2021GMX . LETTER TO SHAREHOLDERS 01 LETTER TO SHAREHOLDERS COVID-19 pandemic, now in its second year, imposed additional challenges to social, productive and economic life around the world. But even in this scenario, our divisions attained important achievements that allowed us to reaffirm our commitment and long term vision in the countries where Grupo México operates. Our intense investment plan sustained for more than ten years despite the risks involved allowed us to achieve remarkable results. In 2021 alone, our investments totaled US$1.36 billion, 22% more than the previous year. Sales, EBITDA and net income levels broke records due to excellent performances, especially in the Mining and Transportation Divisions. We have overcome the significant challenges of the sectors in which we participate. The industries where we participate require large capital investments to carry out long-term projects. But we know that the returns on those strong investments, in economic and social terms, are worth it both for our investors and for the communities where we operate. Grupo México’s stock appreciated 6% in Mexican pesos and 3% in dollars. We reached a market capitalization of close to 40 billion dollars, still far from the value of the sum of its parts, but its gradually been recognized by the market. In our Transportation Division cargo volume grew 10% compared to 2020, taking us to levels above those recorded before the COVID-19 pandemic. In 2021, we also increased the length of our trains by 4.3%, reaching an average of 6.3 thousand tons of cargo per train. 4 55 Thickeners at Toquepala mine, Tacna. ANNUAL REPORT 2021Environmentally friendly ore warehouses and conveyor belts. The Infrastructure Division surpassed its accumulated sales of 2020 by 5.7%, and its Engineering Services business unit stood out with record sales and EBITDA growth of 19% and 8%, respectively. These results are closely linked to equally important achievements in an essential area of our business model: sustainability. For the fifth consecutive year, Grupo México is part of the Dow Jones Sustainability Index, with scores 79% higher than the average for the Mining and Metals industry in the Corporate Sustainability Assessment. Furthermore we obtained a B grade in the CDP Climate assessment, which is a two-level improvement over the previous year and in México we have begun our incorporation to The Copper Mark to certify our responsible copper production. Our emphasis on continuous improvement and operational efficiency is materialized every day in the perseverance and dedication of our 30,000 employees. GMX . CARTA A LOS ACCIONISTAS In 2021, we multiplied our efforts to ensure safe work environments and implement health care measures. Our Mining Division in México, Perú and the United States, made possible that 92% of its personnel received the COVID-19 vaccine. In the Transport and Infrastructure Divisions, the vaccinated employees reached 98% and 95%, respectively. We continued to partner with governments in vaccination logistics in the communities where we operate in México and Perú. We also maintained the operation of our medical and psychological hotline, and the health committees in each of our operating units, to support the authorities at different levels of government in dealing with the pandemic. At Grupo México we see challenges as new opportunities, and we overcome them with enthusiasm, discipline, and hard work. We contribute to build a better and more sustainable future for all. GERMÁN LARREA MOTA VELASCO Sincerely, 6 6 7 ANNUAL REPORT 2021GMX . GRUPO MÉXICO RESULTS 02 GRUPO MÉXICO RESULTS RESULTS ANALYSIS In 2021, a challenging year for Grupo México, we maintained a solid balance sheet with solid cash flow generation and low leverage, net debt to EBITDA of 0.3x, and a very convenient debt maturity schedule. Our financial strength allowed us to be well-positioned to face the global economic environment. Despite the risks, we remained committed to significant investment and expansion programs and analyzing of potential market opportunities. Committed to the countries in which we operate, in 2021 we invested US$1.36 billion, an increase of 22% compared to 2020 RELEVANT CONSOLIDATED FIGURES FOR GRUPO MÉXICO Accumulated sales in 2021 reached US$14.77 billion, a record in Grupo México’s history. In the Mining Division, sales were US$12.08 billion in 2021, a record for the Division, 41.1% higher than in 2020. The investments made, as well as a favorable copper price environment in the year (+51.4%), and higher prices for all our by-products: molybdenum (+82.4%), zinc (32.0%), silver (+22.1%), and gold (+1.7%) offset a drop-in production because, in 2021 and 2022, the optimized mining plan resulted in mining in areas with lower ore grades, which will increase in the following years. 8 9 Cargo trucks in Cananea, Sonora. ANNUAL REPORT 2021GMX . RESULTADOS GRUPO MÉXICO Automotive Train crossing the Metlac Bridge, Sumidero, Veracruz. 75-meter-long wind turbine blades of the Fenicias wind farm in Nuevo León. In the Transportation Division, sales for the year totaled US$2.52 billion, 16.9% higher than in 2020, mainly due to higher volumes transported (+10.2%) during the year. As a result of the intense investment plan of the last ten years, in 2021, Grupo México achieved record sales and cumulative EBITDA of US$8.93 billion, 66.6% above the previous year. • The Mining Division achieved a record EBITDA of US$7.58 billion in 2021, 82.6% higher than in 2020. • The Transportation Division achieved EBITDA of US$1.12 billion in 2021, a yearly increase of 18.9 percent. • In the Infrastructure Division, EBITDA was US$227 million in 2021, 14.9% lower compared to 2020, mainly due to the adjustment of quotas in PEMSA and the phasing out of projects in Constructora. We reached a record EBITDA of US$8.93 billion GRUPO MÉXICO THOUSAND DOLLARS Fourth Quarter Variation January - December Variation 2020 2021 Absolute % 2020 2021 Absolute % Sales Sales costs $ 3,216,954 $ 3,776,282 $ 559,328 17.4 $ 10,909,181 $ 14,776,718 $ 3,867,537 35.5 $ 1,473,569 $ 1,460,925 $ (12,643) (0.9) $ 5,297,736 $ 5,563,981 $ 266,245 5.0 Operating profit $ 1,314,842 $ 1,840,201 $ 525,360 40.0 $ 3,958,016 $ 7,466,589 $ 3,508,574 88.6 EBITDA $ 1,734,915 $ 2,195,336 $ 460,422 26.5 $ 5,362,988 $ 8,932,617 $ 3,569,629 66.6 Margin EBITDA (%) 53.9% 58.1% 49.2% 60.5% Net Profit $ 1,077,033 $ 951,124 $ (125,909) (11.7) $ 2,118,435 $ 3,705,873 $ 1,587,438 74.9 Profit Margin (%) 33.5% 25.2% 19.4% 25.1% Investments / CAPEX $ 402,597 $ 343,609 $ (58,988) (14.7) $ 1,114,692 $ 1,361,907 $ 247,215 22.2 Employees 29,169 29,707 538 1.8 29,169 29,707 538 1.8 10 10 11 ANNUAL REPORT 2021 SALES Product Copper Silver Molybdenum Zinc Sulfuric Acid Gold (ounces) Lead Others Thousands USD Volume in Tons 2020 2021 Var. % 2020 2021 Var. % $ 7,094,322 $ 9,979,352 460,290 $ 494,982 41 8 510,311 $ 1,053,077 106 249,344 $ 289,522 127,694 $ 144,482 83,117 $ 76,181 31,261 $ 37,598 9,871 $ 12,661 16 13 (8) 20 28 $ $ $ $ $ $ $ 1,133,951 1,058,348 21,085 30,259 104,752 20,115 30,319 91,570 1,732,859 1,642,942 47,734 19,335 42,428 18,014 (7) (5) 0 (13) (5) (11) (7) (6) 9 Mining Division $ 8,566,209 $ 12,087,854 41% 3,089,974 2,903,735 Transportation Division (loads) $ 2,111,837 $ 2,480,759 17 1,753,069 1,908,423 Infrastructure Division $ 231,160 $ 208,124 (10) Total Sales $ 10,909,207 $ 14,776,738 35 GMX . GRUPO MÉXICO RESULTS 14,777 TOTAL SALES MILLIONS OF DOLLARS 10,495 10,681 10,909 2018 2019 2020 2021 15,000 12,000 9,000 6,000 3,000 0 EBITDA MILLION DOLLARS DIVISION Mining Transportation Infrastructure 2020 2021 Var. % $ 4,155 $ 7,587 $ $ 944 267 $ 1,123 $ 227 83% 19% (15%) 67% Consolidated $ 5,363 $ 8,933 SHARE OF CONTINENTS AND COUNTRIES IN SALES 84.9% Mining 12.6% Transportation 2.5% Infrastructure EBITDA by DIVISION US $14,777 MILLIONS 30% México 24% USA 22% Europe 15% Asia 10% Latin America 12 13 ANNUAL REPORT 2021INFORME ANUAL 2021 GMX . GRUPO MÉXICO RESULTS GMXT’s rail operations control center in Guadalajara, Jalisco. CAPITAL EXPENDITURES In 2021 we invested US$1.36 billion, 22.2% more than in 2020. Our investment program for 2022 is approximately US$2,274 million in different projects that will promote economic growth, create jobs and prompt the well-being of the countries where we operate. In the Mining Division, we are investing US$935 million this year: • US$558 million in México • US$335 million in Perú • US$42 million in the United States In the Transportation Division, we invested US$329 million in 2021, mainly to improve infrastructure to increase our capacity and operating efficiency and gain access to new markets with high potential. In the Infrastructure Division, the investments made were US$99 million in 2021 for the construction of the new Fenicias Wind Farm in the north of the country and in the fuel terminals and highways (Salamanca-León and the Silao bypass) CONSOLIDATED DEBT In Grupo México we maintain a solid balance sheet with a low leverage and net debt to EBITDA ratio of 0.3x. Eighty-one percent of the contracted debt is dollar-denominated and 19% is peso-denominated. Ninety-six percent of the debt is a fixed rate. In addition, Grupo México has a maturity schedule with payments below US$1 million per year until 2035. As of December 31, 2021, Grupo México’s total consolidated debt was US$8.78 billion, with a balance in cash, cash equivalents and restricted cash of US$6.41 billion, which is equivalent to a net debt of US$2.36 billion. Grupo México has strong cash flow generation as a result of its investment plan and sustained long-term growth 1,600 1,400 1,200 1,000 800 600 400 200 0 GRUPO MÉXICO MATURITIES AS OF DECEMBER 31, 2021 1,500 1,200 1,111 1,016 1,000 720 702 506 133 149 347 182 42 56 60 64 15 17 17 18 19 19 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 0 3 0 2 1 3 0 2 2 3 0 2 3 3 0 2 4 3 0 2 5 3 0 2 6 3 0 2 7 3 0 2 8 3 0 2 9 3 0 2 0 4 0 2 1 4 0 2 2 4 0 2 3 4 0 2 4 4 0 2 5 4 0 2 6 4 0 2 8 1 0 2 7 4 0 2 8 4 0 2 9 4 0 2 0 5 0 2 MINING DIVISION TRANSPORTATION DIVISION INFRASTRUCTURE DIVISION 14 15 GMX . RESULTADOS GRUPO MÉXICO GRUPO MÉXICO STOCK PERFORMANCE AND DIVIDEND PAYMENTS Financially, as a result of a record year, we prioritized increasing returns to our shareholders through dividend payments, which positioned us as one of the most attractive dividend stocks in the copper industry worldwide and on the Mexican Stock Exchange. This year our average dividend yield remained around 7%. We prioritized increasing returns to our shareholders through dividend payments, which are the most attractive in the copper industry Our financial strength and high cash flow generation in a favorable copper price environment and our characteristic operating efficiency made GMEXICO’s stock post a net return of 10.7% in dollar terms and 13.8% in pesos. The share price increased 6% during 2021 in MXN and 3% in USD. GMEXICO SHARE PRICE JANUARY - DECEMBER 2021 89.29 88.71 2021 Feb Mar Abr May Jun Jul Ago Sep Oct Nov Dic Drilling machine for blasting in Cananea, Sonora. 16 17 ANNUAL REPORT 2021GMX . GRUPO MÉXICO RESULTS NATURAL HEDGING IN DOLLARS Even though 2021 was a year of high volatility in the currency market, we are in a privileged position to face exchange rate fluctuations. Ninety-two percent of our revenues are dollarized as they come from commodities. In contrast, the operations in México and Perú, only 50% of the costs are in dollars. As a result, our company has a natural hedge in dollars with a positive impact on results in the event of a dollar appreciation. DIVISION Mining Transportation Infrastructure Weighted total Sales Sales costs USD 100% 57% 69% 92% MXN 43% 31% 8% USD 65% 27% 22% 50% MXN 28% 73% 78% 40% Soles 7% 10% CREDIT PROFILE The raters highlighted Grupo México’s position as a leader in the global copper industry, due to a highly competitive cost of production, a proven track record of executing growth projects, and the benefit of its business diversification, including its significant presence in the Transport and Infrastructure industries. The credit rating agencies Fitch and S&P confirmed Grupo México’s credit rating at BBB+, with a stable outlook They also highlighted the Group’s solid leverage levels, strong capital structure and comfortable maturity profile that ensure the preservation of the Group’s liquidity. They also mentioned GMXT’s strong cash flow generation and its leadership as the operator of railroads with the broadest coverage and market share in México. Double stowage containers in which we transport finished products. ANNUAL DIVIDEND YIELD 2019 2020 2021 6.6% 5.2% 7.2% 18 18 19 ANNUAL REPORT 2021ANNUAL REPORT 2021 KEY DATA Volume Sold * Copper (tons) Zinc (tons) Silver (thousands of ounces) Gold (ounces) Molibden (tons) Average Price (USD) Copper (COMEX) Zinc (LME) Silver (COMEX) Gold (LF) Molibden (MW DEALER OXIDE) Transportation Division Statistics Net ton kms Cargo Balance (millions of USD) Current assets Fixed assets Total assets Bank liability Total liability Total stockholders' equity Results (millions of USD) Total sales Cost of sales Taxes EBITDA Net profit (pound) (pound) (ounce) (ounce) (pound) (million tons) (thousands of units) GMX . GRUPO MÉXICO RESULTS 2018 2019 2020 2021 Real % variation 2021/2020 2018 2019 2020 2021 Real % variation 2021/2020 1,001,388 1,094,252 1,133,951 1,058,348 106,483 103,668 104,752 19,477 55,938 22,055 20,739 49,163 26,849 21,085 47,734 30,259 2.93 1.33 2.72 1.16 2.80 1.03 15.65 16.16 20,62 91,570 20,115 42,428 30,319 4.24 1.36 25.18 1,269.14 1,392.17 1,769.59 1,799.58 11.94 11.35 8.69 15.85 64,809 65,444 62,823 69,252 1,962 1,888 1,753 1,908 4,789 17,146 25,805 8,384 12,196 13,609 5,908 7,375 17,084 27,566 17,100 28,608 9,377 8,952 13,320 14,246 13,364 15,244 10,312 16,970 30,359 8,782 13,584 16,775 10,495 10,681 10,909 14,777 5,419 983 4,889 1,147 5,514 1,268 5,945 1,766 5,298 1,370 5,363 2,118 5,565 2,453 8,933 3,706 (7) (13) (5) (11) 0 51 32 22 2 82 10 9 40 (1) 6 (2) 2 10 35 5 79 67 75 Cash Flow (millions of USD) Generated by the operation Dividends paid Taxes paid Applied to financial activities Used in investments Cash flow after investing and financing activities Financial Ratios Operating margin EBITDA margin Current assets to current liabilities Total liabilities to total assets Debt / total stockholders' equity + debt EBITDA / Interests (times) (times) 3,008 2,714 (1,352) (1,591) 1,716 (186) (1,686) (290) 1,843 777 (1,125) 1,011 34% 47% 2.6 47% 38% 9.85 33% 46% 2.6 48% 40% 8.96 3,761 (1,328) 1,589 (476) (1,115) 1,127 37% 49% 3.3 47% 37% 9.75 5,627 (2,872) 2,964 (228) (1,362) 1,165 51% 60% 2.2 45% 34% 16.24 50 116 87 (52) 22 3 37 23 (31) (4) (7) 67 Staff employed 31,596 30,263 29,169 29,707 2 Annual Inflation México United States Perú Average Exchange Rate México (pesos / dollar) Perú (soles / dollar) 5% 2% 2% 3% 2% 2% 3% 1% 2% 7% 7% 6% 19.24 3.28 19.26 3.34 21.50 3.50 20.28 3.88 133 600 200 (6) 11 Expressed according to the Generally Accepted Accounting Principles in the USA * In all the report tons are metric and ounces are troy. 20 21 03 MINING DIVISION WE HAVE THE LARGEST COPPER MINERAL R E S E R V E S A N D R E S O U R C E S IN THE WORLD 400-ton ore truck in Cananea, Sonora. GMX . MINING DIVISION AMERICAS MINING CORPORATION (AMC) THOUSANDS OF DOLLARS January - December Variation 2020 2021 Absolute Sales Cost of sales Operating profit EBITDA $ $ $ $ 8,566,209 $ 12,087,854 4,323,481 $ 4,455,369 3,173,980 $ 6,506,597 4,155,136 $ 7,587,212 $ $ $ $ 3,521,646 131,888 % 41.1 3.1 3,332,617 105.0 3,432,076 82.6 EBITDA Margin (%) 48.5% 62.8% Net Profit Profit margin (%) Investments / CAPEX $ 2,030,178 $ 3,676,297 $ 1,646,119 81.1 23.7% 30.4% $ 627,951 $ 934,600 $ 306,649 48.8 We have 14 mines, three metallurgical complexes, and exploration projects in México, Perú, the United States, Spain, Chile, Ecuador and Argentina Grupo México’s Mining Division is represented by its subsidiary AMC, whose main subsidiaries are Southern Copper Corporation (SCC) in México and Perú, ASARCO in the United States and Minera Los Frailes in Spain. • Leader in copper mining • Copper producer with the highest organic growth • Largest copper reserves and mineral resources in the world • Lowest production costs globally • Best portfolio of growth projects with diversified assets 24 25 Open pit mine Silver Bell, Arizona. ANNUAL REPORT 2021Arizona 1 2 4 3 6 9 14 8 Sonora 15 10 11 12 7 16 Baja California 5 New Mexico Chihuahua 13 19 17 18 Texas USA MÉXICO PACIFIC OCEAN GULF OF MÉXICO 21 20 Zacatecas 22 23 S.L. Potosí Michoacán 24 25 CDMX 26 Guerrero 10 Metallurgical Complex 19 Santa Bárbara PLANT POLYMETALLIC UNDERGROUND MINE 11 La Caridad MINE 12 Pilares COPPER PROJECT 13 Santa Eulalia 20 Chalchihuites UNDERGROUND POLYMETALLIC MINE PROJECT 21 San Martín UNDERGROUND POLYMETALLIC MINE 22 Charcas UNDERGROUND POLYMETALLIC MINE UNDERGROUND POLYMETALLIC MINE 14 Buenavista Zinc ZINC PROJECT 15 Hermosillo Offices CORPORATE OFFICES 07 El Arco 16 Guaymas Terminal COPPER PROJECT PLANT 08 Lime Plant PLANT 17 Chihuahua Offices CORPORATE OFFICES 09 Buenavista del Cobre 18 Central Workshop MINE PLANT 23 Electrolytic Zinc Refinery PLANT 24 Angangueo UNDERGROUND POLYMETALLIC MINE PROJECT 25 México Offices CORPORATE OFFICES 26 Taxco UNDERGROUND POLYMETALLIC MINE MINING 01 Ray MINE 02 Hayden PLANT 03 Mission MINE 04 Silver Bell MINE AND PLANT 05 Amarillo PLANT 06 El Pilar COPPER PROJECT SPAIN Los Frailes POLYMETALLIC A Chaucha COPPER PROJECT B Tantahuatay GOLD MINE C Lima Offices CORPORATE OFFICES D Los Chancas COPPER PROJECT E Tía María COPPER PROJECT F Cuajone COPPER MINE G Toquepala COPPER MINE H Ilo PLANT I Catanave COPPER PROJECT J Michiquillay GOLD AND COPPER PROJECT ECUADOR PERÚ A B J C D E F H G I CHILE 26 26 27 27 ANNUAL REPORT 2021 GMX . MINING DIVISION COPPER PRODUCTION THOUSANDS OF TONS 1,002.1 1,119.2 1,128.9 1,084.8 822.4 930.2 947.1 919.4 179.7 189.1 181.8 165.4 2018 2019 2020 2021 SX/EW CONCENTRATORS 1,200 1,000 800 600 400 200 0 For four consecutive years, our production has exceeded one million tons of copper Inside Charcas Mine, San Luis Potosí. Throughout the years, we have continuously and consistently invested in different projects due to our financial strength and a significant portfolio of organic growth projects. In 2021, we invested US$935 million: • US$558 million in México • US$335 million in Perú • US$42 million in the United States 28 28 29 ANNUAL REPORT 2021PRODUCTS In 2021, the average price of copper was US$4.24/lb, 51% higher than the average for 2020. Production in 2021 had a slight decrease of 3.9% compared to the previous year, reaching 1,084,806 tons, because copper grades in ore were inferior, but in future years our mining plans project higher productions. We estimate that, by 2024 and in subsequent years, we will produce more than 1,300,000 tons with the entry into operation of our growth projects in México: Pilares, El Pilar, Buenavista Zinc, and in Perú: Tía María. In 2021 copper sales represented 82.6% of AMC’s total revenue and 67.5% of Grupo México’s total revenue LEADERSHIP IN OPERATING COST AND CASH-COST Due to our cost and efficiency policy, we managed to reduce the net cash cost to a record level of US$0.86. With this, we reaffirm the best price of the copper industry worldwide and our ability to maintain efficiency despite adverse circumstances. Sales of the Mining Division were US$12.08 billion, 41% higher compared to 2020. EBITDA was US$7.58 billion with a margin of 62.8% 30 31 Ball mills for ore grinding process. ANNUAL REPORT 2021ANNUAL REPORT 2021 GMX . MINING DIVISION COPPER’S CONTRIBUTION TO THE CIRCULAR ECONOMY PRODUCTS AND BY-PRODUCTS Sustainability and climate change pose challenges for everyone. In recent years we have taken significant steps to promote economic development based on responsible use of natural resources. We have products and systems that consciously use natural resources to generate the least waste. Copper is an essential element in this transformation. This infographic shows how copper supports the circular economy. COPPER Infrastructure Urbanization Mobility needs CHALLENGES Globalization Copper Energy offer Copper is 100% recyclable so it does not transform into waste helping to preserve the environment RETURN CIRCULAR ECONOMY MAKE Copper is a naturally occurring mineral resource in the earth´scrust The copper industry is present in different links of the production chains, which makes it an essential element USE The unsurpassed qualities of thermal and electrical conduction of copper allow significant savings in the amounts of CO2 that are released into the atmosphere. CO2 Copper is the third most used metal in the world. It has chemical and physical properties such as high electrical conductivity and corrosion resistance, as well as excellent malleability and ductility, which makes it an optimal material for industries such as those related to electric and wind power, electric cars, telecommunications, computers, cell phones, construction, transportation, industrial machinery and infrastructure, among others. It is also an important material for non-electrical uses such as plumbing and ceiling covering. In alloy with tin, it forms bronze and other consumer products. In addition, it is used in the manufacture of fungicides and various chemical products. The COVID-19 pandemic has drawn strong attention to the antibacterial properties of copper. Today we known that copper surfaces provide efficient and long-lasting protection against viruses and bacteria. In 2021 we were the mining company that produced more copper in México and Perú as well as the third in the United States 32 33 GMX . MINING DIVISION SMART MINES We use state-of-the-art tools because we know that smart mines will allow our mining operation to be increasingly efficient and safe, as well as friendlier to the environment and to the communities in which we operate. ALTERNATIVE AND RENEWABLE ENERGY SOURCES At some of our mines, we have adopted the use of renewable energy sources as a way to reduce our carbon footprint, and we plan to use them widely in the near future. AUTOMATION We have incorporated the use of automated technologies that allow us to have more efficient and secure operations. HIGH-ACCURACY GPS Seeking to achieve greater efficiency and safety in our operations, we incorporated high-precision GPS. DRONE TECHNOLOGY The use of drones, which offer images in real-time, has allowed us to monitor our mining operations permanently. This monitoring makes it possible to provide a much more efficient and expeditious maintenance. 34 35 Team members at Buenavista del Cobre, Sonora. ANNUAL REPORT 2021We are the 2nd molybdenum producer worldwide MOLYBDENUM Industry • Manufacture of stainless and special steels. Catalyst in the oil and gas industry • Materials for the aeronautical industry, fertilizers, dyes, enamels, reagents and lubricants. ZINC Industry • Industrial use and products, but mainly in galvanization. • In the manufacture of die castings, as well as in bronzes. • Base to obtain zinc oxide used in the manufacture of tires, paints, and cattle feed, among others. GMX . MINING DIVISION SILVER Industry GOLD Industry • Manufacture of electrical, medical, electronic and photographic products. • To a lesser extent in alloys of welding, jewelry, minting, silverware and catalysts. • Jewelry and industrial use. • Manufacture of electronic products such as phones, cell phones, televisions, GPSs and computers. Average price in 2021 Average price in 2021 • US$15.85 / lb • US$1.36 / lb Average price in 2021 • US$25.18 / oz Average price in 2021 • US$1,799.58 / oz Production 67 million pounds Production 204 million pounds Production 20 million ounces Production 60 million ounces Properties Properties Properties Properties • Provides increased alloy hardness and corrosion resistance. • Low melting point, malleability and high strength. • Thermal and electrical conductivity. • Good conductor of heat and electricity. 36 37 ANNUAL REPORT 2021 ANNUAL REPORT 2021 03 01 Sonora 02 Baja California 04 PROJECTS IN MÉXICO 2021 05 Zacatecas 06 Michoacán 01 Buenavista Zinc ZINC PROYECT 04 El Arco GOLD AND COPPER PROYECT 02 Pilares 05 Chalchihuites COPPER PROYECT POLYMETALLIC UNDERGROUND MINE PROJECT 03 El Pilar 06 Angangueo COPPER PROYECT POLYMETALLIC UNDERGROUND MINE PROJECT 38 Pilares Field, La Caridad, Sonora. PROJECTS SUMMARY PROJECT INVESTMENT Million dollars PROGRESS OPERATION START DATE JOBS CAPACITY YEARS OF MINE LIFE • One of the world’s largest undeveloped copper deposits • Completed environmental El Arco $8,893 baseline study and technical Buenavista Zinc $413 information required to submit environmental impact statements • Engineering completed • Equipment purchases are 96% complete • Construction work in progress • The project has all the necessary permits • Basic engineering is completed • Part of the clearing works are finished and the rest are in 2028 6,600 190,000 tons of copper 100,000 ounces of gold Q3 2023 1,960 98,000 tons of zinc El Pilar $310 progress Q4 2023 2,300 • The bidding process for the elaboration of the detailed engineering is underway • Construction of the 25-meter-wide road for mining trucks has been Pilares $159 completed Q1 2022 1,200 • It is expected to start operations in the second half of 2022 Total $9,775 35,000 tons of copper 38,000 tons of copper 40 15 15 10 39 California Baja California Silver Bell Mission Ray Hayden Arizona New Mexico El Pilar Buenavista La Caridad Pilares Esqueda El Arco Underwater connection Sonora – Baja California Guaymas Sonora Chihuahua Electricity transmission line Sinaloa Baja California Sur Power transmission line Mine Smelter and refinery Maritime terminal Combined cycle power plant Amarillo Texas • Percentage of national copper production GMX . MINING DIVISION Between 2020 and 2027 Grupo México plans to invest US$8,893 million in Sonora and Baja California NORTHERN COPPER CIRCUIT, BAJA CALIFORNIA AND SONORA Benefits: • Total jobs • Annual sales • Additional annual taxes • Refined copper production • Zinc equivalent production • Gold production 42,721 US$8.83 billion US$1.58 billion 874 thousand tons per year 185 thousand tons per year 100 thousand ounces per year 89% We are currently working on several projects in México, Perú, the United States and Spain, with an investment of more than US$23.24 billion PROJECTS IN THE UNITED STATES ASARCO, ARIZONA Ray Construction of the aqueduct to carry water from Hayden was completed. • Expansion of tailings dam in progress. • Rehabilitation of the copper electrolytic plant. Hayden • Construction of the rockfill to reinforce and stabilize to the AB-BC tailings storage dams near the Gila River is in progress. • We are in the process of constructing a plant to process and recover stored slag. We reiterate our commitment to ensuring a long-term sustainable operation that generates greater value for our shareholders, our employees, and the Arizona and Texas economies through competitive jobs and direct involvement with local communities. 40 40 41 41 ANNUAL REPORT 2021 GMX . MINING DIVISION We are working in different projects in Perú totaling an investment of US$9,262 million Primary crusher in Cuajone, Moquegua. PROJECTS IN PERÚ PROJECT INVESTMENT Million dollars PROGRESS OPERATION START DATE JOBS CAPACITY YEARS MINE LIFE Michiquillay $3,130 Developing 2029 Los Chancas $2,811 Environmental evaluations 2027 Tía María $1,514 Authorization process 2025 Total Investment $7,455 9,000 8,000 6,000 269,000 copper tons eq. 545 million tons 120,000 copper tons 40 20 21 03 03 04 04 02 02 01 01 01 Tía María COPPER PROJECT 02 Los Chancas COPPER PROJECT 03 Michiquillay GOLD AND COPPER PROJECT 04 Tantahuatay GOLD MINE 05 Cuajone COPPER MINE 06 Toquepala COPPER MINE 07 Ilo METALLURGICAL COMPLEX 06 05 06 05 07 07 42 43 43 ANNUAL REPORT 2021 Zaragoza Barcelona Madrid 01 Los Frailes MINE 01 Sevilla PROJECTS IN SPAIN • Los Frailes Mine • Location: Municipality of Aznalcóllar, Province of Seville, Andalucía. • Project progress: - Feasibility study completed with attractive results. - We continue with the project’s technical progress, including the development of detailed engineering. - Working on initiatives to optimize production processes and improve energy efficiency with renewable technologies. - Continued monitoring and management of environmental elements. A new geohydrological model was prepared and validated by the competent water authorities. - We obtained the declaration of Project of Superior Public Interest by the Regional Government of Andalucía, which ratifies the relevance, the alignment and positive impact at the project’s socio-economic and environmental level. - We continue managing the process of environmental assessments and obtaining permits to start construction. - Once in operation, it will produce approximately 125 thousand tons per year of total zinc equivalent for more than 20 years of initial mine life. Aerial view of the municipality of Aznalcóllar, Seville. Grupo México has the largest portfolio of projects for organic growth EXPLORATIONS In addition to exploration and drilling programs at existing mines, we are looking for deposits in other locations. Some of our most important exploration projects are: 44 44 45 ANNUAL REPORT 2021MÉXICO CHALCHIHUITES, ZACATECAS • Skarn type deposit. • Drilling programs carried out between 1980 and 2014 identified 12.6 million tons of ore with an average silver content of 110 grams per ton, 2.66% zinc, 0.37% lead and 0.67% copper. Primary crusher, La Caridad, Sonora. BELLA UNIÓN (LA CARIDAD), SONORA • A breccia-type satellite deposit with copper and molybdenum mineralization is located less than one kilometer from the southern limit of La Caridad pit. • Between 2016 and 2020, we carried out a 75-thousand-meter drilling program to define the geometry of the deposit. • In 2022, metallurgical testing of cronos ore body will continue, with a complex mix of • 61 million tons of copper sulfides grading 0.67% copper and 69 million tons of sulfides and zinc oxides, with the possibility of silver recovery. leachable ore grading 0.20% copper have been identified. • A 5-thousand-meter drilling program is planned for 2022, in the southeast part of the • With this discovery, La Caridad mine will have grades above 0.50% copper in project, in Virgen Morena, which is likely to host epithermal veins. future years. 46 46 47 ANNUAL REPORT 2021PERÚ LOS CHANCAS, APURÍMAC • Porphyry copper and molybdenum deposit located in the department of Apurímac in southern Perú. • 545 million tons of mineralized rock with a copper content of 0.59%, 0.04% molybdenum and 0.039 grams of gold per ton. • 181 million tons of leached mineralized rock with 0.357% copper. MICHIQUILLAY, CAJAMARCA • Porphyry copper deposit in the district of La Encañada, province and department of Cajamarca, in northern Perú. • In 2021, the Peruvian Ministry of Energy and Mines approved the semi-detailed Environmental Impact Study for the project, this will allow us to start a 5-thousand-meter drilling program aimed at verifying and updating the estimated mineralized resources. • The company signed a Social Agreement with the communities in the area of direct influence of the project, such as the CC Michiquillay and CC La Encañada, where social programs will be developed. CHAPARRA, SOUTH OF PERÚ • By 2022, we plan to carry out a 4-thousand-meter-diamong drilling program corresponding to a system with evidence of porphyry copper mineralization. Additionally, we will carry out a 5-thousand-meter drilling program for the exploration of prospective areas with copper mineralization mainly in southern Perú. Quebalix on leaching grounds in Toquepala, Tacna. CHILE MONTONERO PROJECT (EL SALADO) • Located in the Atacama Region of northern Chile, this is a copper and gold project. • The project’s pre-feasibility study is scheduled to be completed by the first quarter of 2022. OTHER PROSPECTS By 2022 we plan to continue with the 2-thousand-meter-diamong drilling program at the Taruca prospect and to carry out a 2-thousand-meter-diamong drilling program at the Chapalele prospect, both located in the Antofagasta region in northern Chile. 48 49 49 ANNUAL REPORT 2021ANNUAL REPORT 2021 ECUADOR COPPER ROUTE PROJECT • Located west of the city of Cuenca and south of Guayaquil. The mineralization is characteristic of a porphyry copper and molybdenum system explored since 2014. • In 2021, the entire drilling program aimed at evaluating the resource was completed, totaling 121 thousand meters; information with which the project’s feasibility study was initiated. • The feasibility study is expected to be completed at the beginning of the second quarter of 2022. ARGENTINA CAÑADÓN DEL MORO PROJECT Solvent extraction trains of the ESDE plant at Buenavista del Cobre, Sonora. • Located in the Province of Río Negro. Low sulfuration epithermal deposit, with veins that ESPERANZA PROJECT accumulate a total of 7.6 km. • To date, drilling has defined an epithermal silver deposit with a potential of economic interest with grades over 9.4 Onz/Ag. • By 2022, we expect to increase the resource estimate and define project’s viability. • Located in the Province of Río Negro, 63 km northwest of Los Menucos town. • Philonian-hydrothermal Qz-Au deposit stockwork and hydrothermal breccias, with thicknesses ranging from 6 to 60 m as maximum widths. • For 2022, a 3-thousand-meter-diamong drilling program is scheduled in the prospect to determine the dimension of the deposit considering the high values in the drill intersects. 50 50 51 ANNUAL REPORT 2021420% MORE LOADS TRANSPORTED SINCE 1998 OUR COVERAGE INCLUDES 24 STATES IN MEXICO, 86% OF THE COUNTRY, AND THE STATES OF FLORIDA AND TEXAS IN THE USA. 04 TRANSPORTATION DIVISION One train moves the same as 300 trucks and emits 3.5 times fewer tons of CO2 than automotive transport with conventional locomotives and 5.6 times less with LNG locomotives. GRUPO MÉXICO TRANSPORTES (GMXT) THOUSANDS OF DOLLARS Transported Vol (Million Tons/Km) 62,823 69,252 6,428 January - December Variation 2020 2021 Absolute Loads transported Sales Cost of sales Operating income EBITDA EBITDA Margin (%) Net Income Profit Margin (%) Investments / CAPEX % 10.2 8.9 16.9 17.1 27.3 18.9 1,753,069 1,908,423 155,354 $ 2,158,312 $ 2,523,111 $ 364,799 $ 1,119,200 $ 1,310,381 $ 191,181 $ $ 605,341 $ 770,559 $ 165,218 944,211 $ 1,122,660 $ 178,449 43.7% 44.5% $ 274,745 $ 369,391 $ 94,646 34.4 12.7% 14.6% $ 268,979 $ 329,136 $ 60,157 22.4 We are one of the eight trunk railroads in North America The Transport Division of Grupo México is represented by its subsidiary GMéxico Transportes, S.A.B. de C.V. (GMXT). At GMXT we provide logistics solutions for safe, efficient, reliable and sustainable land freight transport, which contributes to strengthening connectivity and competitiveness in the markets in which we participate. GMXT’s main subsidiaries are: • Ferromex • Ferrosur • Florida East Coast • Texas Pacific • Intermodal México We are the leading land freight transport company in México, with the broadest coverage and connectivity. We have a railroad network of more than 11,136 kilometers of track in 24 states of México, and in the states of Texas and Florida in the USA. Train in Tequila, Jalisco. 54 55 ANNUAL REPORT 2021ANNUAL REPORT 2021 GMX . TRANSPORT DIVISION Cd. Obregón Chihuahua Piedras Negras Guaymas Railferry Coatzacoalcos-Mobile UP Calexico Mexicali UP Nogales Nogales Hermosillo TEXAS BNSF / UP / KCS Ft. Worth BNSF / FWWR San Angelo J.C.T UP/ BNSF El Paso Cd. Juárez Ojinaga Presidio UP/ BNSF Eagle Pass Cd. Frontera Monterrey Paredón R. Arizpe Altamira Tampico Veracruz Celaya CDMX Topolobampo Culiacán La Paz Mazatlán PACIFIC OCEAN Silao Guadalajara Manzanillo GMXT NETWORK SYMBOLOGY Ferromex Ferrosur Florida East Coast Texas Pacífic Fort Worth & Western Right of Way Intermodal Terminals Automotive Terminals Ports Connection with other railroads ALABAMA BNSF / CN / CSX / NS Mobile FLORIDA CSX / NS Jacksonville Titusville (Orlando) Fort Pierce West Palm Beach Fort Lauderdale Miami GULF OF MÉXICO Railferry project Coatzacoalcos – South Florida Coatzacoalcos Our railroad connects with the United States through five border crossings, and serves four ports in the Pacific and four others in the Gulf of México 56 56 57 57 ANNUAL REPORT 2021GMX . TRANSPORT DIVISION MARKET SHARE TONS – KM 35% GMXT 65% Others 1999 2020 8.8% Train 91.2% Truck 65% GMXT 35% Others 26.4% Train 73.6% Truck 239 MMTKN´S 6.6% 362 MMTKN´S 17.1% Source: Anuario Estadístico Ferroviario 2020 Our track has been rebuilt to move trains of greater weight, three times the length and five times the speed OUR SALES WERE US$2.52 BILLION OUR EBITDA WAS US$1.12 BILLION, WITH A MARGIN OF 44.5% WE MOVED 1,908,423 LOADS WE TRANSPORTED 69,252 MILLION TONS-KM Tank trucks at the railway terminal. Our network is supported by: • 10,591 highly trained employees • 811 locomotives • More than 30,070 rail cars Since we started operating the railway in 1998, by investing in our railway network to make it more resistant, modern and efficient, we have almost tripled our cargo capacity and tons to kilometers transported. Since its privatization, the railway industry in México has evolved and become more dynamic: • Tractive force Increased more than 163% • Transported volume quadrupled • Increase in the market share of ground freight, growth from 18.8% to 26.4% • Sustained growth in foreign trade rail traffic • Expansion of the capacity of the tracks in the main corridors, to support 130-ton cars, following the AAR (Association of American Railroads) standard 58 58 59 ANNUAL REPORT 2021GMX . TRANSPORT DIVISION OPERATING METRICS SPEED OF TRAINS (KM / HR) +16.1% TIME CARS SPEND IN YARDS (HOURS) -4.5% 30.13 28.78 31.21 36.24 40 35 30 25 20 15 0 35 30 25 20 15 10 0 2016 2021 2019 2021 SPEED OF CARS (KM / DAY) -0.9% TRAIN LENGTH (METERS) +25.2% 1,547 1,937 286.0 283.4 300 250 200 150 100 20 0 2,000 1,500 1,000 500 0 2019 2021 2016 2021 +19.7% 6,394 GROSS TONS PER TRAIN (TONS) 5,341 7,000 6,000 5,000 4,000 3,000 2,000 0 CREWS (MONTHLY AVERAGE) -16.3% 12,028 10,065 15,000 12,000 9,000 6,000 3,000 0 2017 2021 2018 2021 Florida East Coast Train, St. Agustine, Florida. In 2021 we continued with the reengineering of our processes through the Service Master Plan, adhering to our new operating principles. This has allowed us to improve operating and financial metrics, freeing track capacity and increasing efficiency in the management of transport resources. Five principles govern this plan: 1. Increase train length 2. Improve the flow and speed of the network 3. Shorten time in terminals 4. Maximize locomotive utilization 5. Balance the flow of northbound and southbound trains 60 60 61 ANNUAL REPORT 2021California Mexicali Arizona New Mexico Hermosillo Cd. Obregón Chihuahua Los Mochis Culiacán La Paz Texas Monterrey Altamira Silao Guadalajara CDMX Veracruz Coatzacoalcos Manzanillo INTERMODAL SERVICES SERVICE IN 50´ CONTAINERS DOMESTIC ROUTES CROSS BORDER ROUTES SYMBOLOGY Coatzacoalcos CDMX CDMX Silao Guadalajara Coatzacoalcos Culiacán Cd. Obregón Hermosillo CDMX Guadalajara Culiacán La Paz Cd. Obregón Hermosillo Mexicali Mexicali Monterrey Silao Chihuahua Hermosillo Chicago Los Ángeles Chicago Memphis Chicago Detroit Chicago Detroit Domestic Cross Border Maritime FEC Intermodal Terminal SERVICE IN 40´ AND 20´ CONTAINERS MARITIME ROUTES FEC ROUTES Manzanillo Altamira Veracruz CDMX Guadalajara Silao Monterrey Monterrey CDMX Guadalajara TILH Jacksonville Jacksonville Jacksonville Jacksonville Jacksonville Miami Fort Lauderdale Titusville Fort Pierce Fort Lauderdale Miami West Palm Beach Titusville Titusville GMX . TRANSPORT DIVISION Florida Jacksonville Titusville Fort Pierce West Palm Beach Fort Lauderdale Miami In 2021 we expanded our intermodal services (IMEX) coverage to Florida to serve the Miami, Fort Lauderdale and Jacksonville terminals INDUSTRIES SERVED We provide logistics solutions to all types of industries. Our business portfolio is divided into nine subsegments: agricultural, intermodal, metals, minerals, automotive, chemical, energy, industrial and cement. AGRICULTURAL We supply grain to the livestock, poultry and swine industries, and mills, oil mills and breweries. We also transport corn syrup, starch and sugar, among other products. INTERMODAL We transport around 16 million tons of goods in 350 thousand containers of domestic and international cargo in México and 460 thousand containers in Florida. METALS AND MINERALS We provide direct service to mines to transport raw materials in bulk, as well as to manufacturers to move finished products, serving diverse markets such as the automotive and construction industries. AUTOMOTIVE Our network serves 12 of the leading automotive plants in México, with the movement of finished vehicles and auto parts representing 80% of the market. We have a 60% share of México’s automotive cargo exports. 62 62 63 ANNUAL REPORT 2021 ANNUAL REPORT 2021 GMX . TRANSPORT DIVISION CHEMICALS REVENUE DIVERSIFICATION BY SEGMENT We provide services to the inorganic chemicals, synthetic resins, fertilizers and petrochemical industries, among others. ENERGY We serve the markets of hydrocarbons, metallurgical coke, diesel, gasoline, asphalt, and LP gas, among others; to supply the main markets of the country: Valle de México, Jalisco, Nuevo León, Chihuahua and others. We also transport LP gas from the US and Canada through unit trains to satisfy domestic and industrial demand in the states of Coahuila, Chihuahua, Sinaloa and Sonora. INDUSTRIALS It is our most diverse business segment. It serves markets such as brewing, the paper industry, household appliances, machinery, and new railroad cars, among others. US$2,523 MILLION 28% Agricultural 14% Intermodal 12% Minerals 9% Automotive 8% Chemicals 8% Energy 7% 5% Metals 5% Cement 4% Others Industrials CEMENT In 2021, we invested US$329 million, mainly to improve rail infrastructure, increase We transport bulk and packaged product, servicing major cement plants in México our capacity and operational efficiency and to access new high-potential markets. and Florida. OUR INVESTMENTS More than 1.9 million loads are transported annually In recent years, our investments have focused on: • Track replacement and rehabilitation • Construction and rehabilitation of sidings, yards and terminals • Upgrading telecommunications equipment • Acquisition of haulage equipment • Introduction of new operating technologies 64 64 65 ANNUAL REPORT 2021Locomotive simulators as a training tool for our employees. In 2021, we carried out 285 safety tours at Ferromex; through these visits we detected and corrected risk conditions. SUSTAINABLE VISION OCCUPATIONAL HEALTH AND SAFETY Our goal is to move more with less, and thus contribute to the global objectives of reducing We are governed by three guiding principles: safety, service and productivity. emissions and making the best use of resources. For this reason, we have begun converting locomotives to use less polluting fuel. Together with equipment replacement and traffic Operational safety is a premise that prevails at all levels of our organization, intending to operate optimization, these measures are key actions to reduce GMXT’s carbon footprint. with zero accidents. In terms of service, we work to improve our customer service daily, seeking to be more productive and maximize the efficiency of each process. The use of technology is fundamental to making our processes more efficient. The new locomotives have a state-of-the-art intelligent system to optimize their performance and We are permanently committed to focusing resources and efforts on creating safe work fuel management while making transfers safer. environments for our 10,591 employees. As part of this strategy, we have Safety and Health Committees at different levels of the organization, to guarantee the improvement of processes We have also formed a working group to explore new technologies to make locomotives in all work areas. more environmentally friendly, such as the use of electric batteries. 66 66 67 We continue to advance in the technological transition process on several fronts. We are about to complete the implementation of the Transport Management System (TMS), which will optimize internal operations ANNUAL REPORT 2021We are committed to focusing resources and efforts to generate safe work environments for our 10,591 employees • More than 431 employees were trained in risk management and first aid. • In 2021, we trained 3,681 employees in occupational health and safety, reaching more than 20,270 man-hours. • We operate 37 medical care units distributed throughout the country, which have 25 general practitioners and 140 nurses. In terms of safety, during 2021 investments were made to incorporate technology that maintains the safe operation of trains, level crossings were rehabilitated and the signaling and installation of electronic barriers was maintained at the crossings with the highest incidence of accidents to stop vehicles and pedestrians from crossing before the train passes. Locomotive 4819 in the Pensil Tunnel, Atoyac, Veracruz. 68 69 ANNUAL REPORT 202105 INFRASTRUCTURE DIVISION WE DEVELOP INFRASTRUCTURE TO STRENGTHEN M É X I C O Construction of the largest lime plant in Latin America in Agua Prieta, Sonora. GMX . INFRASTRUCTURE DIVISION MÉXICO PROYECTOS Y DESARROLLOS (MPD) THOUSANDS OF DOLLARS Sales Cost of sales Operating income EBITDA EBITDA Margin (%) Net Income Profit margin (%) January - December Variation 2020 2021 Absolute $ 527,638 $ 557,772 $ 249,288 $ 316,312 $ 138,717 $ 86,743 $ 266,579 $ 226,744 $ $ $ $ 30,134 67,024 (51,973) (39,834) % 5.7 26.9 (37.5) (14.9) 50.5% 40.7% $ 40,058 $ 17,282 $ (22,776) (56.9) 7.6% 3.1% Our Infrastructure Division is represented by the subsidiary México Proyectos y Desarrollos, S. A. de C.V. (MPD) and has seven lines of business: 1. Oil and gas - Controladora de Infraestructura Petrolera México, S.A. de C.V. (CIPM) 2. Energy - Controladora de Infraestructura Energética México, S.A. de C.V. (CIEM) a. Combined cycle plant La Caridad, Sonora - México Generadora de Energía, S.A. de C.V. (MGE) b. El Retiro Wind Farm, Juchitán, Oaxaca - Eólica el Retiro, S.A. de C.V. (ERSA) c. Fenicias Wind Farm, Nuevo León - Parque Eólico de Fenicias S. de R.L. de C.V. 3. Construction - México Compañía Constructora, S.A. de C.V. (MCC) 4. Highways a. Salamanca - León Highway - Concesionaria de Infraestructura del Bajío, S.A. de C.V. (CIBSA) b. Bypass Silao - Concesionaria Autopista Silao, S.A. de C.V. (CAS) 5. Engineering - Grupo México Servicios de Ingeniería, S. A. de C.V. (GMSI) 6. Fuels - Grupo México Controladora de Combustibles, S.A. de C.V. (GMCC) Fuel transfer and storage terminals in: a. Cadereyta, Nuevo León b. Monterrey, Nuevo León (project in progress) c. Guadalajara, Jalisco (project in progress) d. Aguascalientes, Aguascalientes (project in progress) 72 73 73 7. Tren Maya - Section 5 South - Desarrollo del Sureste Playa del Carmen-Tulum, S.A. de C.V. Deposit at the Tailings Dam with 80% water recovery, Buenavista del Cobre, Sonora. ANNUAL REPORT 2021ANNUAL REPORT 2021 GMX . INFRASTRUCTURE DIVISION In 2021, sales in the Infrastructure Division grew 6%, driven by improved results in the Energy, Highways and Engineering businesses. We obtained cumulative sales of US$558 million and EBITDA of US$227 million. We have developed multiple strategies that have allowed us to position ourselves as a very competitive company, an example of this is the creation of a compliance system that aims to lay the foundations for the ethical behavior of our employees, promoting values and integrity throughout the company’s value chain, thus preventing risks such as We made investments worth US$99 million in 2021, mainly in: corruption or money laundering. • US$63 million: construction of the new Fenicias wind farm in the northern part of the country (total investment US$250 million), which is expected to start operations during the second quarter of 2022. • US$9 million: Fuel Terminals projects. • Rest: operating CAPEX in the different lines of business of the Division. In 2022 we will invest US$95 million In addition, we are considering investments of US$95 million for 2022 • US$12 million: for closing the Fenicias Wind Farm transaction. • US$16 million: for Fuel Terminals projects, mainly in the USA. • US$10 million: for various highway projects (Salamanca-León and the Silao bypass). • US$9 million: for the acquisition of building equipment for new projects (Construction of the Tailings Dam, 3rd stage). • Rest: operating CAPEX for the different business lines of the division. 74 74 In recognition of our social and environmental commitment, all of our business lines obtained or maintained the Socially Responsible Company distinction issued by Centro Mexicano para la Filantropía (CEMEFI). Seeking to generate well-being in the communities surrounding our operations, in 2021, we carried out 480 on-site activities benefiting more than 6,000 people through our community centers located in Oaxaca, Guanajuato, Campeche and Nuevo León. These activities are focused on improving health, education, the environment, and sports. 89% of our purchases were made from local and national suppliers of goods and services OIL AND GAS OFFSHORE DRILLING • Six in operation with an average efficiency of 98.5% • Revenues: US$140 million • EBITDA: US$59 million RIG Campeche Tabasco Chihuahua Zacatecas Veracruz (modular) Tamaulipas (modular) 2021 PRODUCTIVITY CONTRACT TERM 98.4% 93.8% 99.4% 99.7% 99.6% 99.4% August 2022 October 2022 December 2022 December 2022 December 2022 September 2023 75 Veracruz Rig, México. CEMENTATION AND LAND DRILLING Sales: US$6.5 million (30% higher than in 2020) In 2021, we adhered to the highest standards of environmental compliance with Mexican law by maintaining the Clean Industry certificates issued by Procuraduría Federal de Protección al Ambiente (PROFEPA) for our operating offshore platforms. Additionally, we participated in reforestation actions in the area known as Playa Norte, as well as Laguna de Términos, both in Ciudad del Carmen, Campeche. With these actions, we contributed to the protection of RAMSAR zones at a global level. We also obtained the Socially Responsible Company distinction granted by Centro Mexicano para la Filantropía and ALIARSE, which certifies the company before its employees, investors, customers, authorities and society, as an organization publicly committed to social responsibility. We have international environmental (ISO 14001) and occupational health and safety (ISO 45001) certifications Modular Rig Veracruz, México. 76 77 ANNUAL REPORT 2021Combined cycle plant La Caridad, Nacozari de García, Sonora. Eolic Park El Retiro with a capacity of 74MW in Juchitán, Oaxaca. ENERGY • Sales: US$307 million (33% higher than in 2020) • EBITDA: US$115 million • Production: In 2021 we had a 33% increase in production due to the rise in the price of the gas molecule and the sale of 97GWh from the El Retiro Wind Farm Power Bank LA CARIDAD COMBINED CYCLE PLANT • Sales: US$290 million (34% more than in 2020) • EBITDA: US$106 million • Production: 3,254 GWh For the second consecutive year, La Caridad power plant obtained Great Place to Work® global certification. This firm is responsible for evaluating the work environment for employees towards the company’s performance. La Caridad plant has achieved a record of eight years (+3,000 days) without disabling accidents, and we have been recognized as a Safe Company (PASST level 3) by Secretaría del Trabajo y Previsión Social (STPS). In terms of the environment, we have the national Clean Industry certification (PROFEPA). EL RETIRO WIND FARM • Sales: US$16 million (14% higher vs. 2020) • EBITDA: US$10 million, with a margin of 64% • Production: 168,380 MWh In environmental terms, since 2019 we have achieved the Clean Industry certification, becoming the first wind farm in Istmo de Tehuantepec to receive this certification and for the fifth consecutive year we have successfully passed the Equator Principles audit, which includes environmental issues and evaluates the interaction with our neighboring communities, seeking the promotion and protection of human rights. For the second consecutive year, we achieved the goal of Zero Accidents for both our internal personnel and contractors, maintaining our accident rate at 0%. FENICIAS WIND FARM The construction of this renewable project with a production capacity of 168MW, located in Nuevo León, is 100% completed and has concluded its testing stage. This wind farm will supply electricity to IMMSA’s mining and metallurgical operations. At the end of 2021, US$240 million had been invested, representing 94.7% of the total project cost, and the commercial operation date is planned for the second quarter of 2022. 78 78 79 ANNUAL REPORT 2021ANNUAL REPORT 2021 GMX . INFRASTRUCTURE DIVISION 01 Sonora 04 06 05 Nuevo León 01 La Caridad Combined Cycle Plant NACOZARI, SONORA 10 Onshore Drilling Base POZA RICA, VERACRUZ 02 Guadalajara Fuel Terminal PROJECT UNDER DEVELOPMENT 03 Aguascalientes Fuel Terminal PROJECT UNDER DEVELOPMENT 04 Cadereyta Fuel Terminal NUEVO LEÓN 05 Monterrey Fuel Terminal PROJECT UNDER DEVELOPMENT 06 Fenicias Wind Farm NUEVO LEÓN 07 El Retiro Wind Farm JUCHITÁN, OAXACA 11 Offshore Drilling Base CIUDAD DEL CARMEN, CAMPECHE 12 Platform “Tamaulipas” 13 Platform “Veracruz” 14 Platform “Sonora” 15 Platform “Tabasco” 16 Platform “Zacatecas” 08 Salamanca-León Highway 17 Platform “Campeche” 09 Silao Bypass 18 Platform “Chihuahua” 19 Tren Maya PACIFIC OCEAN 03 Aguascalientes 09 08 Guanajuato 10 GULF OF MÉXICO 02 Jalisco 13 12 Veracruz 14 15 16 Tabasco Oaxaca 07 19 18 17 11 Campeche Quintana Roo INFRASTRUCTURE SYMBOLOGY Combined Cycle Plant Wind Farm Highways México Drilling Company Fuel Storage Terminal Maya Train 80 80 81 81 ANNUAL REPORT 2021GMX . INFRASTRUCTURE DIVISION CONSTRUCTION • Sales: US$54 million • EBITDA: US$10 million MAJOR CONSTRUCTION PROJECTS • We completed work for Ferromex on the Celaya, Guanajuato Railroad Beltway. • In March 2021, we completed work on the haul road from Mineral de Pilares to La Caridad, Sonora. • At Buenavista del Cobre mine, we completed the construction of stage 1 phase 2 and stage 2 of the Curtain of the New Tailings Deposit in April 2021, and since August 2021 we have been working on stage 3 of the same project, which will be completed in March 2026. In September, construction began on Lime Plant, that will be the largest in Latin America. It is expected to be completed in 2022. • In July 2021, in Altamira, Tamaulipas, we began construction of the Fuel Storage Terminal for OTM and Valero, which is 28% complete and is scheduled for completion in July 2023. • In September 2021, we finished the construction of the over height of the curtain of the Tailings Dam No. 7 of the Mining Metallurgical Complex, La Caridad Sonora. • With Operadora de Infraestructura del Bajío, we performed maintenance work on both sections of Salamanca-León highway. We have maintained the certification of our integral management system since 2007. In 2019, we carried out the recertification of the system valid until 2022 in Quality (ISO 9001:2015), Environmental (ISO 14001:2015) and Occupational Health and Safety (ISO 45001:2018). During 2021, the company obtained the Socially Responsible Company distinction, issued by Centro Mexicano para la Filantropía (CEMEFI). In 2021, the results of the occupational disabling risk accident rate continued to improve, obtaining a result of 0.29, which is well below the average published by OSHA (5.4) and represents a 6% improvement in our performance. 82 82 83 Construction of the Fuel Storage Terminal in Altamira, Tamaulipas. ANNUAL REPORT 2021GMX . DIVISIÓN INFRAESTRUCTURA GMX . INFRASTRUCTURE DIVISION Salamanca - León highway toll booth, México. HIGHWAYS • Sales: US$42 million (22% higher vs. 2020) • EBITDA: US$25 million (18% vs. el 2020) We have two highway concessions: 1) Salamanca-León Highway: During 2021, the weighted daily capacity was 11,959 vehicles, 20% higher than in 2020 and with an equivalent daily capacity by vehicle type of 19,430 units. 2) Silao Bypass: In 2021, the daily traffic flow was 2,335 vehicles, 48% higher than in 2020 and with an equivalent daily traffic flow per vehicle type of 2,650 units. To ensure compliance with applicable requirements and the continuous improvement of our operations, we incorporated the ISO 39001:2012 Road Safety Systems standard into our Integrated Management System, intending to raising awareness among workers to minimize the risk of traffic accidents, injury and fatality rates. In the area of occupational safety, we increased employee awareness by 58% through safety talks on the highway, thereby promoting a culture of safety and accident prevention. Concerning health, safety and the environment, we adhere to Mexican national regulations and international best practices, and we obtained the Socially Responsible Company distinction, issued by the Centro Mexicano para la Filantropía (CEMEFI). As part of our strategy to fight climate change, we installed photovoltaic systems that supply 85% of the energy consumption at the Mendoza and Puerto Interior toll booths, achieving energy savings of 13% at both booths. We installed more than 800 solar panels to supply renewable energy to our booths and services ENGINEERING • Sales: US$30 million (19% higher vs. 2020) • EBITDA: US$8 million (8% higher vs. 2020) We had a historic production volume. For the second consecutive year, we obtained the Great Place to Work® global certification, which evaluates the work environment for employees towards the company’s performance. 84 85 ANNUAL REPORT 2021GMX . INFRASTRUCTURE DIVISION TREN MAYA The consortium formed by Grupo México Infraestructura and Acciona is in charge of the development of the executive project, the construction of the railway and its maintenance for a period of four years of Section 5 South (Playa del Carmen to Tulum) with a length of 67.6 km. During the first quarter of 2022, the Federal Government adjusted the original route so as not to affect Highway 307. Activities have been carried out to rescue flora and fauna, as well as environmental, topography, geotechnical and geophysical studies. We continue with the collection of rails delivered by FONATUR, and with the collection of sleepers acquired by the consortium. The project presents an ambitious challenge in social and environmental matters, having as its main characteristic the existence of an underground ecosystem, which is being taken care of by a wide group of experts in the subject, under strict protocols of protection to all the species of flora and fauna. Furthermore, we promote the preservation of the Mayan Fuels Terminal in Cadereyta, Nuevo León. FUELS Fuel transfer terminal in Cadereyta, Nuevo León • Sales: US$2 million • EBITDA: 32% margin • Operation: More than 524,100 liters per day of fuel transfer (3,300 barrels or 4.8 tank culture in the communities near the project and, as part of our sustainability policies, we trucks of gasoline, diesel and MTBE). have encouraged local employment. Our operations adhere to Sistema de Administración de Seguridad Industrial, Seguridad Operativa y Protección al Medio Ambiente (SASISOPA) monitored by Agencia de Seguridad, Energía y Ambiente (ASEA). This guarantees the protection of our personnel and care for the environment. More than 524,100 liters per day of fuel transfer, equivalent to 7% of Monterrey’s total demand We promote local employment, hiring 46% of total personnel from the area 86 8787 ANNUAL REPORT 202106 FUNDACIÓN GRUPO MÉXICO WE HAVE PROVIDED MORE THAN 1.5 MILLION FREE MEDICAL EXAMINATIONS TO MORE THAN 240 COMMUNITIES IN MÉXICO Dr. Vagón, el Tren de la Salud, at Viaducto Ferroviario Manzanillo, Colima. GMX . FUNDACIÓN GRUPO MÉXICO FUNDACIÓN GRUPO MÉXICO Is a business foundation whose mission is to develop innovative and sustainable programs that contribute to the strengthening of communities and Civil Society Organizations. We work in four areas with a direct impact on the development and welfare of México: • Health • Environment • Support to Institutions • Education and Culture In 2021, Fundación Grupo México was recognized by several national and international awards for its good practices, programs, and social actions in favor of society, such as: • First place in the “Microcortos para cambiar el mundo” competition, organized by the Fundación Icloby Spain, participating with the Cineminuto del Dr. Vagón 2019 • Recognition in the “XII Premios Corresponsables en México”, considering La Red de Asociaciones y Fundaciones Empresariales, as one of the best sustainable initiatives among 17 Spanish-speaking countries • Editorial Xocoyo with its Ahuacatl and Cacahuate editions, participated in the Gourmand Awards and Hallbars Sustainability Research Institute at the Alfred Nobel House Museum in Sweden, among the best 600 gastronomy books from 50 countries that were exhibited 90 91 Aerial view of Vagón Verde. ANNUAL REPORT 2021Dr. Vagón, El Tren de la Salud in Atoyac, Veracruz. Free doctor´s appointment onboard Doctor Vagón. HEALTH DR. VAGÓN, EL TREN DE LA SALUD This year Dr. Vagón completed its seven year of operations. Due to the pandemic, the train did not provide service during the first months of the year. Back in service only in the last quarter of the year, it obtained remarkable results: • Three communities in 6 states of México: CDMX, Hidalgo, Estado de México, Guanajuato, Jalisco and Michoacán. • Patients: 22,940 • Comprehensive medical services: 137,877 • Medications: 14,412 • Hearing aids: 254 and one bone headband • Eyeglasses: 3,304 • Rehabilitation materials: 1,389 pieces • Laboratory tests: 61,591 • Laboratory studies: 8,145 • SARS CoV-2 antigen tests: 3,860 • Mastographies: 2,399, finding 41 suspected breast cancer cases by radiological diagnosis, equivalent to 1.7% of incidence. • Family Planning: 142 IUD’s, 38 vasectomies; representing 1,040 Couple-Years of Protection (CYP)2. • 88 Health Education Workshops were organized and held with more than 2,000 attendees. MEDICINES BY ILLNESSES 19.47 % Chronic – Degenerative 54.21 % Generales 19.84 % Infectious 6.48 % Dermatological All services, medicines, studies and devices are free of charge 2 CYP: The estimated protection provided by family planning services during a one-year period, based on the volume of all contraceptive methods offered free of charge. 92 92 9393 ANNUAL REPORT 2021GMX . FUNDACIÓN GRUPO MÉXICO Doctor´s appointment on board Dr. Vagón, El Tren de la Salud. Yamilet recovering after cochlear implant surgery. We have traveled 9,662 kilometers with El Tren de la Salud ESCUCHAR SIN FRONTERAS In the 800 DRVAGON hotline (3782466), managed by experts, these are the most recurrent topics: • COVID-19 • Emotional conditions • Bereavement • Relationship with family • Self-care • Relationship with partner We thank and acknowledge the great work done by our allies: Fundación Farmacias del Ahorro, Fundación MVS Radio, Audiotech, FUCAM, Laboratorios LAPI, Essilor and Grupo QP360, thus reaffirming our commitment to the health of all Mexicans. In 2021, through Escuchar Sin Fronteras program, we supported children up to 24 months of age, with severe and profound hypoacusis (hearing loss), to obtain a bilateral cochlear implant. Once the implants are placed, the children are provided with Auditory Verbal Therapy (AVT) and calibration of the external processor to reach spoken language and achieve a better insertion into society. This is the result of the effort of a multidisciplinary team of the highest professional level and excellent human quality. The members of this team are: • 3 otolaryngologist surgeons • 3 audiologists • 1 pediatrician • 1 cardiologist • 4 anaesthesiologists • 2 ophthalmologists • 1 geneticist • 1 psychologist • More than ten therapists specializing in AVT Since the program began, we have placed implants in ten children; we plan to donate 80 implants during 2022 After surgery the children will continue with their AVT programming and the corresponding audiological studies. We are incredibly grateful for the invaluable support of our allies: Laboratorios LAPI, Fundación ABC, Cochlear, Aurea Lab and Doctores Especialistas. 94 94 95 95 ANNUAL REPORT 2021 The bags used for growing plants in our nurseries are compostable. Forestry nursery facilities in San Luis Potosí. ENVIRONMENT MEXICANOS SEMBRANDO The objective of this program is to contribute to mitigate the effects of climate change and Year after year, we invest in the infrastructure of our nurseries and this one was no exception: maintain the stability of ecosystems through forest restoration: • It operates seven nurseries in the country, located in Sonora, Coahuila, Zacatecas and San Luis Potosí • Annual production capacity of more than 6 million trees • Production of 102 different plant species Thanks to high-tech irrigation systems, shade nets, and greenhouses (automatic ventilation walls, solar screens, and misting mechanisms), 70% of the water needed for its production is saved. • A 300 m2 fully technified greenhouse was built at the San Martín, Zacatecas nursery • The construction of a greenhouse on a 1,056 m2 surface and a new one-hectare shade house began at the San Luis Potosí Forest Nursery • Work began on designing a new nursery in Juchitán, Oaxaca 96 97 97 ANNUAL REPORT 2021In 2021: • We donated more than 2.95 million trees in 24 states of México through our allies • We reforested 2,955 hectares In collaboration with our partner Pronatura México A.C., we donated more than 29,000 plants and trees to the program “Reto Verde de la Ciudad de México” of the Department of the Environment benefiting six municipalities. In 2021, the 10th annual Reforestation Day was held in the Sierra Patlachique State Park, planting 2,500 plants of native species of the park on more than two hectares, with the support of more than 200 volunteers. With this, we contribute to the preservation of the soil and the conservation of environmental services such as infiltration of rainwater into the subsoil, carbon sequestration and soil retention. With the new projects we will have a production capacity of more than seven million trees per year Participation of volunteers in the tenth annual reforestation day. 98 99 ANNUAL REPORT 2021GMX . FUNDACIÓN GRUPO MÉXICO SUPPORT TO INSTITUTIONS Within the Institutional Support area, we have two programs: Conciencia Cinemex and La Red de Asociaciones y Fundaciones Empresariales, which aim to provide tools to Civil Society Organizations (CSOs) to strengthen the social work they do to achieve a more significant impact. SOCIAL PITCHERS We created a new formula to strengthen CSOs and obtain strategic donations through a pitching contest. Social leaders present to donors a high-impact project to solve social problems seeking to add allies and resources. In this first edition, with the support of Alboa and Cinemex as hosts of the event, we had the participation of various experts in the social sector, such as Disruptivo TV, Tecnológico de Monterrey and Empresability. • 20 organizations trained and three finalists presented their projects • Creative and innovative social content through a reality show type contest program • 14 partners, including five donors, three evaluation specialists and four expert mentors from the social sector • 15 offers of support in the form of cash donations, in-kind products, digital strategies, productions, fundraising options and a slot for Cineminuto Social in Cinemex in 2022 Benefited organizations: Fundación Nexum Médica, A.C. from Chihuahua, Desértica Soluciones Endovasculares, A.C. from Baja California, Fundación Humanista de Ayuda a Discapacitados, I.A.P. (FHADI) from México City. Event of Vagón Verde program to raise awareness among children and young peo- ple about the importance of preserving the environment. VAGÓN VERDE This year, Celaya, in Guanajuato, entered Vagón Verde program, receiving 8,000 plants of 11 plant species to reforest different municipalities and raise awareness among children and young people of the importance of protecting the environment, and carry out reforestation and recycling activities. This is achieved by exchanging recyclable material for plants of the forest and ornamental species endemic to the region. 100 100 101 ANNUAL REPORT 2021INFORME ANUAL 2021 GMX . FUNDACIÓN GRUPO MÉXICO Convocatoria Cineminuto Social. CONCIENCIA CINEMEX Conciencia Cinemex creates spaces for CSO to promote their causes and find fundraising options and in-kind donations through five programs: Premier a Beneficio, Cineminuto Social, Carrera Cinemex, Palomitas con Causa and Campaña en Marquesinas. At the same time, we reach diverse communities with family-friendly movies on board of Cine Vagón. BENEFIT PREMIERS In alliance with several movie distributors, we donate movie screenings before their premiere. Each benefited CSO organizes a ticket sale and raises funds that Fundación Grupo México doubles. • 15 premiers in on-site and online modalities • 1,443,564 raised and duplicated by Fundación Grupo México for 15 different CSO • More than 364,000 beneficiaries CINEMINUTO SOCIAL This year, we launched the following calls for entries: 1. Cineminutos con Valor: We invite young university students to submit their ideas for a cineminuto based on universal values. The winner gets support to continue with his/ her studies and the opportunity to produce a Cineminuto with the help of professionals and exhibit it in Cine Vagón during 2022. 2. AMCI Cineminuto Social for CSO: Students of the Film and Television Arts and Business Degree of Asociación Mexicana de Cineastas Independientes (AMCI), supported organizations to produce the winner’s cineminuto free of charge to be screened in Cinemex complexes nationwide. 3 CALLS 21 ORGANIZATIONS BENEFITED 3 STUDENTS BENEFITED 102 102 103103 ANNUAL REPORT 2021GMX . FUNDACIÓN GRUPO MÉXICO CAMPAÑA EN MARQUESINAS (MARQUEE CAMPAIGN) In 2021, we reinforced Campaña en Marquesinas beyond the movie theatre to take advantage of digital spaces in social networks and thus have a greater impact with the posters of the participating organizations. We designed customized strategies with investment in networks segmented according to their objectives. 15 CAMPAIGNS 7 ORGANIZATIONS BENEFITED 346,872 PEOPLE REACHED 30 WEEKS SCHEDULED 104 105 ANNUAL REPORT 2021We distributed our classic popcorn at Cine Vagón function. Red de asociaciones. CINE VAGÓN In October, we resumed Cine Vagón functions and brought the magic of cinema to the communities served by Dr. Vagón, El Tren de la Salud. Our movie screenings are completed with popcorn and beverage combos; we also gave the children in the audience toys and promotional items of characters and movies. RED DE ASOCIACIONES Y FUNDACIONES EMPRESARIALES CSO receives free training, forums, workshops, networking spaces, conferences and seminars within this network of associations. • 5,000 Civil Society Organizations in México, Latin America and Europe • During three routes, 47 screenings were held and more than one thousand families • 353 allies (4,127 attendees) enjoyed our selection of movies • 5,450 promotional items delivered DONATIONS We supported various institutions that benefit children in vulnerable situations with Cinemex promotional items such as glasses, popcorn dispensers and toys with the characters of the most popular movies. 21 DELIVERIES 17 BENEFITED ORGANIZATIONS 173,454 PROMOTIONAL MATERIALS Every month, 60 new CSO joined La Red, mainly from México, Colombia, Ecuador, Perú and the United States. In 2021, we increased the number of strategic allies by 21%: • 176 Corporate Foundations and SRC • 120 Social agencies and law firms • 20 Academic Institutions • 32 Alliances with Government and International Organizations 106 107 ANNUAL REPORT 20212021 ANNUAL REPORT THE RED ACHIEVEMENTS 2021 161 COURSES IN VARIOUS FORMATS: DIPLOMA COURSES, SEMINARS AND WORKSHOPS 120 CONSULTANTS AND SPECIALISTS PARTICIPATED IN THE TRAINING PROCESS 633 CONSULTANCIES ON HOW TO BE PART OF THE RED AND LEGAL ADVISORIES 56,000 VISITS TO OUR PLATFORM: REDASOCIACIONES.COM AND +40,000 VISITS TO OUR SOCIAL NETWORKS DESIGN OF A MANUAL OF GOOD PRACTICES IN ALLIANCE WITH THE MEXICAN NETWORK FOR INTERNATIONAL COOPERATION MOBILIZE IN-KIND DONATIONS WITH A VALUE OF +$2,000,000 PESOS THROUGH THE CAMPAIGN “SI PUEDES DONA, SI NECESITAS TOMA” (IF YOU CAN DONATE, IF YOU NEED, TAKE) In 2021 the Red achieved Expo Red Hidalgo, México. 481 HOURS OF ONLINE CONTENT +22 MIL PERSONAS CAPACITADAS PROVENIENTES DE +22 thousand people from organizations, collectives, SRC and foundations were trained ORGANIZACIONES, COLECTIVOS, ESR Y FUNDACIONES We promote inclusive and accessible training for all by developing our activities with Interpretación de Lengua de Señas Mexicanas (ILSM). 108 108 109 ANNUAL REPORT 2021GMX . FUNDACIÓN GRUPO MÉXICO EDUCATION AND CULTURE EDUCATION, HEALTH AND LIFE MATERIALS With the objective of reinforcing the educational knowledge provided in primary and secondary schools in México, in 2016, we created the series of Educational Materials for Health and Life, focusing on addictions, nutrition, sexuality, mental health and violence. These materials are distributed free of charge online through the website www.educacionsaludyvida.org, to offer a space for consultation for teachers and parents. In 2021 we added to our website the digital E-Learning Platform Educa y Aprende, where parents, teachers and school psychology teams can find materials and courses in which, through case studies and evaluations of the topics in the collection, they can learn in an easy, intuitive and accessible way. We added three new contents to the Collection: Culture of Legality, Cybersecurity and Inclusive Education, with México Unido Contra la Delincuencia, the United Nations Office on Drugs and Crime and the Human Rights Commission of México City as allies. Expo Red Hidalgo, México. Relevant actions 2021: Expo Red de Asociaciones 2021, virtual edition State Governments • We donated 110 printed Educational Materials to CSOs, Educational Institutions and • It was held in collaboration with Conciencia Cinemex program and was the first year to have an Ibero-American agenda with more than 50 speakers from 13 countries • Objective: to present new and innovative resource mobilization strategies and the importance of institutional positioning through digital marketing • 2,000 people from 17 countries • 58 global alliances from various sectors: Universities, SRC, Business Foundations, Consultancies, Social Agencies and Government • Developed 17 educational capsules addressing specific issues related to the collection’s themes • We participate in the International Congress for the Prevention of Addictions, “Creamos un Mejor Futuro para Niñas, Niños y Adolescentes”, coordinated by Planet Youth and the Government of the State of Guanajuato 110 111 ANNUAL REPORT 2021NOPAL Cover of the book “Nopal” National Call for the Xocoyo Awards Delivery of toys on Children’s Day to Antes de Partir Foundation XOCOYO COLLECTION CORPORATE VOLUNTEERING The 2021 edition was dedicated to nopal for its relevance in Mexican cuisine and traditions. The book “Nopal, entre pencas, tunas y flores” will represent México in the Single Subject category at the Gourmand World Cookbook Awards 2022. The resources obtained by the sale of this book will be donated to Centro de Cirugía Especial de México, an institution providing free surgeries to correct malformations to extremely vulnerable children from all over the country, to help reintegrate them into society and improve their quality of life. NATIONAL CALL FOR XOCOYO AWARDS Committed to the search for young Mexican talent for the promotion of their work, in 2021 we participated in the organization of the First National Xocoyo Call, which invited students and graduates of the Gastronomy degree to join by creating recipes in a three course menu and drink in which the main ingredient was amaranth, the main ingredient of the next book. The winners will participate in the next book of the Xocoyo Collection with their recipes. The participation of society in volunteering activities allows the creation of more resilient and robust communities. We seek to involve Grupo México’s employees in activities that provide human and professional experience, new friendships, development of new skills and, above all, encourage commitment to various social causes. Supporting children and teenagers with cancer In collaboration with Antes de Partir, A.C. we develop activities to benefit children and teenagers with cancer in palliative care, as well as their families in activities such as: 1. Children’s Day Grupo México employees participated in the collection of toys for Children’s Day. 112 113 ANNUAL REPORT 2021 On the occasion of Mother’s Day to patients of Antes de Partir A.C. Foundation. Vacations with a Social Purpose Creel, Chihuahua. 2. Mother’s Day Soap Class We gave the mothers of patients lodged by Antes de Partir, A.C. a virtual class where they were taught the technique to make handmade soaps to create a network of entrepreneurship through which they can contribute economically to household expenses. VACATIONS WITH A SOCIAL PURPOSE Grupo México employees use five days of their vacations to participate in experiences that allow them to interact with various social causes, while at the same time benefiting low income people through their volunteer work. In November 2021, two events were held simultaneously: 3. Collection of food supplements and diapers During August, the company’s employees were invited to donate food supplements Creel, Chihuahua and diapers. Through these three initiatives, 195 collaborators participated and 555 supplies were collected, benefiting 160 children and teenagers In collaboration with Habitat para la Humanidad México, A. C. 25 employees built houses and installed water collection systems to benefit two families living in Sierra Tarahumara. Xochimilco, CDMX Together with TECHO, A.C., 23 employees built two houses and installed water collection systems in the community of La Conchita, Xochimilco, and CDMX. 114 115 ANNUAL REPORT 2021GMX . FUNDACIÓN GRUPO MÉXICO FUNDACIÓN GRUPO MÉXICO CORPORATE VOLUNTEERING PLATFORM Every December 5th, the International Volunteer Day is celebrated, so on that day the Corporate Volunteer Platform of Fundación Grupo México, https://fundaciongm.fonselp. org/ was officially launched. Its purpose is to promote and invite the company’s employees to be part of the social volunteer initiatives presented by Civil Society Organizations (CSOs), Foundations and Universities for the benefit of the social sector, focusing on the areas of Health, Education, Culture and Environment. This digital tool makes social causes visible and invites collaborators to join in to benefit Mexican society. During the launching of the platform • 759 collaborators registered • 187 volunteers signed up for ten different initiatives in three Mexican states We are grateful for the participation of each of Grupo México’s employees; furthermore, we would like to recognize those volunteers who have been constant in their commitment to helping vulnerable communities, hand by hand with Fundación Grupo México: • Juan José Carrillo Corona, Grupo México Minería • Jorge Humberto Mendoza Aguirre, Grupo México Minería • Leopoldo Peña Ramírez, Grupo México Infraestructura • Sergio Silva Polanco, Grupo México Transportes 116 117 Fundación Grupo México Volunteers with the benefited Tarahumara family. ANNUAL REPORT 2021GMX . FUNDACIÓN GRUPO MÉXICO EFICINE Through Grupo México Companies, we financially support projects related to the film industry. In 2021, we supported the production of four films: 1. Firma Aquí 2. Latido 3. Hombres Íntegros 4. Lupe In 2021 we supported four productions: 1. Emilia y su Globo Rojo 2. La Hora de Todos 3. Odio que los abrazos no duren más de cuatro horas 4. Virginia, La Muerte de la Polilla This year, Grupo México began to participate in EFIARTES, to support and finance theater projects 118 118 119 ANNUAL REPORT 2021GRUPO MÉXICO BOARD OF DIRECTORS MANAGEMENT TEAM GMX . MANAGEMENT TEAM GERMÁN LARREA MOTA VELASCO CLAUDIO X. GONZÁLEZ LAPORTE CHAIRMAN Board Member (proprietary, independent) Board Member (proprietary, patrimonial) XAVIER GARCÍA DE QUEVEDO TOPETE VICE-CHAIRMAN Board Member (proprietary, patrimonial) OSCAR GONZÁLEZ ROCHA Board Member (proprietary, patrimonial) ALFREDO CASAR PÉREZ Board Member (proprietary, patrimonial) LUIS CASTELAZO MORALES Board Member (proprietary, patrimonial) PRUDENCIO LÓPEZ MARTÍNEZ † Board Member (proprietary, independent) ANTONIO MADERO BRACHO Board Member (proprietary, independent) CARLOS PRIETO SIERRA Board Member (proprietary, independent) CARLOS ROJAS MOTA VELASCO Board Member (proprietary, independent) FERNANDO RUIZ SAHAGÚN Board Member (proprietary, independent) FERNANDO LÓPEZ GUERRA LARREA Board Member (proprietary, patrimonial) ROLANDO VEGA SAÉNZ Board Member (proprietary, independent) EMILIO CARRILLO GAMBOA Board Member (proprietary, independent) LILLIE HERNÁNDEZ MINOR Secretary ANTONIO DEL VALLE RUIZ Board Member (proprietary, independent) GERMÁN LARREA MOTA VELASCO Chief Executive Officer and Chairman of the Board of Directors XAVIER GARCÍA DE QUEVEDO TOPETE Executive Vice President LOURDES ARANDA BEZAURY Director of Communications and Institutional Relations MARLENE FINNY DE LA TORRE Director of Administration and Finance LILLIE HERNÁNDEZ MINOR General Counsel JUAN CARLOS JAQUES GARCÉS Audit Director MIGUEL VALDÉS NEAVES Administration and Control Director 120 121 121 ANNUAL REPORT 2021ANNUAL REPORT 2021 GMX . MANAGEMENT TEAM MINING DIVISION AMERICAS MINING CORPORATION MANAGEMENT TEAM GERMÁN LARREA MOTA VELASCO Chairman of the Board of Directors JORGE JÁUREGUI MORALES Human Resources Director OSCAR GONZÁLEZ ROCHA Chief Executive Officer JORGE LAZALDE PSIHAS Legal and Institutional Relations Director XAVIER GARCÍA DE QUEVEDO TOPETE FRANCISCO LÓPEZ GUERRA LARREA Executive Vice President Sustainability Director LEONARDO CONTRERAS LERDO DE TEJADA VIDAL MUHECH DIP Administration and Finance Director Steering Committee Director DANIEL CHÁVEZ CARREÓN Operations Director JOSÉ RAMÓN GONZÁLEZ GARCÍA Information Technology Director FRANCISCO DOMENECH FERNÁNDEZ RAFAEL RÍOS GARCÍA Commercial Director Security Director OSCAR GONZÁLEZ BARRÓN Administration and Control Director ERNESTO RÍOS PATRÓN Engineering and Construction Director MAURICIO IBÁÑEZ CAMPOS Legal and Corporate Governance Director RAQUEL TOBAR SÁIZ New Business and Finance Director PAOLA HERNÁNDEZ VILLALVAZO MARTIN UGARTECHE CROSBY Compliance Director Procurement Director SOUTHERN PERU RAÚL JACOB RUISANCHEZ Administration and Finance Director Southern Peru JORGE MEZA VIVEROS Operations Director Southern Peru ASARCO LEONARDO CONTRERAS LERDO DE TEJADA Chief Executive Officer ASARCO INDUSTRIAL MINERA MÉXICO LEONARDO CONTRERAS LERDO DE TEJADA Chief Executive Officer Industrial Minera México 122 122 123 ANNUAL REPORT 2021GMX . MANAGEMENT TEAM MINING DIVISION SOUTHERN COPPER CORPORATION INFRASTRUCTURE DIVISION MÉXICO PROYECTOS Y DESARROLLOS (MPD) BOARD OF DIRECTORS MANAGEMENT TEAM GERMÁN LARREA MOTA VELASCO ENRIQUE CASTILLO SÁNCHEZ MEJORADA GERMÁN LARREA MOTA VELASCO JAVIER GÓMEZ AGUILAR Chairman of the Board of Directors Board Member (proprietary, independent) Chairman of the Board of Directors Legal General Director OSCAR GONZÁLEZ ROCHA LUIS MIGUEL PALOMINO BONILLA XAVIER GARCÍA DE QUEVEDO TOPETE JOSÉ JAIME GONZÁLEZ ACOSTA Board Member (proprietary, patrimonial) Proprietary Board Member (proprietary, independent) Chief Executive Officer Director of Petroleum Operations Executive Chairman XAVIER GARCÍA DE QUEVEDO TOPETE Board Member (proprietary, independent) General Director Engineering General Director GILBERTO PEREZALONSO CIFUENTES FRANCISCO ZINSER GONZÁLEZ HÉCTOR RAÚL HUERTA AVENDAÑO Board Member (proprietary, patrimonial) LEONARDO CONTRERAS LERDO DE TEJADA CARLOS RUÍZ SACRISTÁN Board Member (proprietary, independent) JORGE AGÜERO NAVARRO JULIO FRANCISCO LARREA MENA Tren Maya General Director General Director of Constructora México Board Member (proprietary, patrimonial) JORGE LAZALDE PSIHAS RICARDO ARCE CASTELLANOS JOSÉ OLAYA HERNÁNDEZ VICENTE ARIZTEGUI ANDREVE Board Member (proprietary, independent) Secretary Petroleum, Engineering and Construction General Director Highways General Director GUSTAVO ORTEGA GÓMEZ MARIO FERNANDO CHÁVEZ GALAS Energy General Director Administration and Finance General Director 124 125 ANNUAL REPORT 2021ANNUAL REPORT 2021 GMX . MANAGEMENT TEAM TRANSPORTATION DIVISION GRUPO MÉXICO TRANSPORTES MANAGEMENT TEAM BOARD OF DIRECTORS GERMÁN LARREA MOTA VELASCO Chairman of the Board of Directors ALFREDO CASAR PÉREZ Chairman FERNANDO LÓPEZ GUERRA LARREA General Director ISAAC FRANKLIN UNKIND Administration and Finance General Director HUGO RAFAEL GÓMEZ DÍAZ General Director of Operations JORGE MANUEL MÁRQUEZ ABREU General Commercial Director ALBERTO VERGARA PERRILLIAT Planning and Projects General Director GERMÁN LARREA MOTA VELASCO ARTURO ELÍAS AYUB Chairman of the Board of Directors Board Member (proprietary, independent) XAVIER GARCÍA DE QUEVEDO TOPETE ROBERTO SLIM SEADE Board Member (proprietary) Board Member (proprietary, independent) ALFREDO CASAR PÉREZ Board Member (related) JAIME CORREDOR ESNAOLA Board Member (independent) ISAAC FRANKLIN UNKIND Board Member (related) EDUARDO JOAQUÍN GALLÁSTEGUI ARMELLA Board Member (independent) FERNANDO LÓPEZ GUERRA LARREA CARLOS NORIEGA ARIAS Board Member (related) Board Member (independent) HUGO RAFAEL GÓMEZ DÍAZ CHRISTIAN LIPPERT HELGUERA Board Member (related) Secretary 126 126 127 ANNUAL REPORT 2021 ANNUAL REPORT 2021 FUNDACIÓN GRUPO MÉXICO MANAGEMENT TEAM GERMÁN LARREA MOTA VELASCO SUPPORT TO INSTITUTIONS JESSICA PONS FERNÁNDEZ Manager of the Red de Asociaciones y Fundaciones Empresariales LUCERO VALLEJO DURÁN Manager Conciencia Cinemex ENVIRONMENT JESSICA PONS FERNÁNDEZ Manager EDUCATION AND CULTURE BEATRIZ CRISPÍN GÁMEZ Manager Chairman of the Board of Directors JESSICA PONS FERNÁNDEZ Deputy General Manager HEALTH KARLA DÍAZ CASTRO Administrative Manager Dr. Vagón, El Tren de la Salud AURA PATIÑO LONA Operations Manager Dr. Vagón, El Tren de la Salud DR. RICARDO REYES DÍAZ Medical Manager Dr. Vagón, El Tren de la Salud 128 ANNUAL REPORT 2021gmexico.mx GRUPO MÉXICO S.A.B. DE C.V. EDIFICIO PARQUE REFORMA CAMPOS ELÍSEOS 400 LOMAS DE CHAPULTEPEC 11000 CIUDAD DE MÉXICO 52 (55) 1103 5000

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