Grupo Mexico Annual Report 2021

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FY2021 Annual Report · Grupo Mexico

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WE INVEST IN
A SUSTAINABLE
FUTURE

DISCIPLINE . INVESTMENT . WORK

ANNUAL REPORT 2021

INFORME ANUAL 2021TABLE OF CONTENTS

LETTER TO SHAREHOLDERS

GRUPO MÉXICO RESULTS

MINING DIVISION

TRANSPORTATION DIVISION

INFRASTRUCTURE DIVISION

FUNDACIÓN GRUPO MÉXICO

120

BOARD OF DIRECTORS AND MANAGEMENT TEAM

ANNUAL REPORT 2021GMX . LETTER TO SHAREHOLDERS

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.

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

ANNUAL REPORT 2021GMX . GRUPO MÉXICO RESULTS

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.

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

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

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

(8)

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)

(13)

(5)

(11)

(7)

(6)

Mining Division

$ 8,566,209 $ 12,087,854

41%

3,089,974

2,903,735

Transportation Division (loads)

$ 2,111,837 $ 2,480,759

1,753,069

1,908,423

Infrastructure Division

231,160 $

208,124

(10)

Total Sales

$ 10,909,207 $ 14,776,738

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

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

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

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

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

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.

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%

USD

65%

27%

22%

50%

MXN

28%

73%

78%

40%

Soles

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

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)

(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)

(1)

(2)

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)

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

116

(52)

(31)

(4)

(7)

Staff employed

31,596

30,263

29,169

29,707

Annual Inflation

México

United States

Perú

Average Exchange Rate

México (pesos / dollar)

Perú (soles / dollar)

19.24

3.28

19.26

3.34

21.50

3.50

20.28

3.88

133

600

200

(6)

Expressed according to the Generally Accepted Accounting Principles in the USA

* In all the report tons are metric and ounces are troy.

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

Open pit mine Silver Bell, Arizona.

ANNUAL REPORT 2021Arizona

Sonora

Baja
California

New Mexico

Chihuahua

Texas

USA

MÉXICO

PACIFIC OCEAN

GULF OF MÉXICO

Zacatecas

S.L. Potosí

Michoacán

CDMX

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

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

Ilo
PLANT

I Catanave

COPPER PROJECT

J Michiquillay

GOLD AND COPPER PROJECT

ECUADOR

PERÚ

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

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

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%

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

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.

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

• 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

• Provides increased alloy hardness and

corrosion resistance.

• Low melting point, malleability

and high strength.

• Thermal and electrical conductivity.

• Good conductor of heat and electricity.

ANNUAL REPORT 2021

Sonora
02

Baja
California

PROJECTS
IN MÉXICO 2021

Zacatecas

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

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

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

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

Ilo
METALLURGICAL COMPLEX

06 05
06 05

43
43

ANNUAL REPORT 2021

Zaragoza

Barcelona

Madrid

Los Frailes
MINE

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

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

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.

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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

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.

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.

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

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

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

2,000

1,500

1,000

500

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

CREWS
(MONTHLY AVERAGE)

-16.3%

12,028

10,065

15,000

12,000

9,000

6,000

3,000

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

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

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

Miami

Fort Lauderdale

Titusville

Fort Pierce

Fort Lauderdale

Miami

West Palm Beach

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.

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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

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

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.

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)

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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.

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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

September 2023

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.

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.

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ANNUAL REPORT 2021ANNUAL REPORT 2021

GMX . INFRASTRUCTURE DIVISION

Sonora

Nuevo León

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

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”

Tren Maya

PACIFIC OCEAN

Aguascalientes

Guanajuato

GULF OF MÉXICO

Jalisco

Veracruz

14 15 16

Tabasco

Oaxaca

Campeche

Quintana
Roo

INFRASTRUCTURE

SYMBOLOGY

Combined Cycle Plant

Wind Farm

Highways

México Drilling Company

Fuel Storage Terminal

Maya Train

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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.

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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.

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

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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

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.

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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.

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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

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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.

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.

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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

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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

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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