Letter from the chair and CEO

We work every day to offer our customers products and services of the highest quality. Thanks to the dedication and commitment of more than 11 thousand employees throughout the country, we have become one of the leading food companies in Mexico with a solid position in the national and international market and backed by more than 40 years of experience.

In 2021, our financial results maintained their sound growth trend, and for the first time we surpassed the one- billion-dollar mark in sales, meeting a major milestone we had set for the year. Moreover, we recorded a significant 28.4% growth in operating income compared to the previous year, totaling $2,346 million pesos. EBITDA climbed 21.6% versus the previous year, totaling $2,855 million pesos, and net income totaled $1,458 million pesos, an outstanding 53.9% increase over 2020.

Our business model follows an approach of continuous process improvement, a feature that allows us to stay on top of global market trends in order to create cutting - edge, high-quality products, and to develop new market niches. With this in mind, over the past years we have grasped the need for and importance of continuing to grow in harmony with the environment and society.

Climate change is increasingly affecting the communities we work with, and we are aware that this issue should not only be tackled by governments, but it is the responsibility of innovative companies like Grupo Bafar to strive to make a positive change.

For this reason, in 2021 we stepped up our sustainability efforts and launched a project to draft a robust and well- founded ESG strategy. During the year, we identified our energy, water, and waste consumption and impacts, as well as those related to biodiversity. From this initial assessment, we will be able to manage our environmental performance appropriately and systematically. This report is a means for us to improve communication and strengthen our relationship with our stakeholders, as it provides transparency on the environmental impact of our operations.

In connection to our sustainability reporting, we also conducted a materiality assessment for the purpose of improving our operational efficiency and focusing our efforts and resources on the most relevant issues. From this study, we identified the strategic priorities that allowed us to develop our ESG strategy, which are: operational eco-efficiency (energy & water consumption and waste), GHG emissions and climate change, supply chain, corporate governance, and risk and crisis management.

It is vital to continue innovating constantly in our products, services, and procedures to drive efficiency and greater value creation for the company and society. In 2021, we carried out important innovation projects such as the launch of the Triple-lock Packaging for the Parma and Sabori brands, which helps maintain freshness for longer, and our new Zero Meat brand, through which we increased our share in the Plant Base market, aimed at our customers who seek to consume more food from plant-based sources.

Grupo Bafar’s value creation is driven by our employees. It is thanks to the efforts and dedication of each member of this great family that allow us to continue nurturing Mexico’s progress. For this reason, our commitment and priority are to strengthen our people by fostering their individual growth and ensuring a safe, healthy, and inclusive workplace. We provide them with the necessary tools for their growth within the organization through Bafar University and other core training programs.

Likewise, we promote equal rights and opportunities for all our employees, without distinction, fostering cultural diversity and safety in our work environment. To this end, Grupo Bafar is working on the development of a Diversity and Inclusion Policy. It is relevant to add that our employees also have at their disposal open communication channels such as Bafar Transparente through which they can report any issues related to our work environment.

On the social front, Grupo Bafar Foundation continues to contribute to a better quality of life for communities at risk, through the implementation of initiatives, projects and programs covering 5 strategic pillars: food, sports, education, values, health, and environmental care. In 2021, we reaffirmed our commitment to thousands of Mexican households through projects such as the Socio-Sports Schools, the “Women’s” Program, the Food Collection Center, Medical Clinics, the Devlyn Program, the “Juntos hacemos más” Volunteer Program, and internal support initiatives for our employees.

We are proud to have a renewed sustainability strategy that focuses on our environmental responsibility, our social engagement, and the growth of our employees in a safe workplace. Our strategy compels us to embrace the best practices using the United Nations Sustainable Development Goals as the basis for our sustainability objectives.

For all of the above, I thank our customers and employees for their support, and for inspiring us to be the best version of ourselves. We invite you to read this report to learn more about our ESG activities and performance during 2021.