INDUSTRIAL AND MANUFACTURING DIVISION

Grupo Condumex

The favorable performance of the automotive sector was not sufficient to offset the declines in Condumex’s Telecom, Construction and Energy, and Industrial Metals businesses. Consequently, the division’s sales fell by 6.4% to $25,852 million pesos in 2012.

The impact of the resumption of auto manufacturing at the domestic and global levels was reflected in Condumex’s Automotive business sales, which moved up 10.1% on higher volumes of automotive harnesses and cables.

With regard to the Telecommunications business, highlights included higher volumes in copper and coaxial cable, the latter resulting from increased residential demand for cable television service, as well as new cable operations for automotive antenna.

Despite these increases, fiber-optic cabling activities declined in both Mexico and Brazil compared to 2011 levels.

The mixed performance of the Construction and Energy sector reflected: i) the increase in turnkey projects as well as in energy cabling due to expansion of the export market to North, Central, and South America, and ii) the reduction in transformer sales resulting from a lower number of bids.

With respect to industrial metals, production at co-packing plants increased, which decreased the amount of revenue booked in this sector.

The segment’s operating income and EBITDA climbed to $2,062 and $2,402 million pesos, respectively, increases of 11.7% and 6.8%, compared to the 2011 figures. These results reflect costs and operating expense efficiencies in the production chain, primarily in the Automotive, Construction and Energy, and Industrial Metals sectors.

Grupo Condumex’s net income came to $1,705 million pesos in 2012, a 36.7% increase over the $1,247 million pesos recorded in 2011.

Capital investments on the year totaled $334 million pesos, which were allocated to the investment and industrial assets maintenance programs in Mexico and in South America.

Grupo Condumex’s Latincasa plant received the San Luis Potosí 2012 State Quality Award, granted by the Mexican Manufacturing Industry Chamber (Canacintra) in recognition of best practices in the areas of quality management, human resources, ongoing improvement, organizational administration, safety and hygiene, environmental management, and social responsibility.

Microm completed the successful delivery of the Pilot 1 MW Solar Photovoltaic Center to the Federal Electricity Commission (CFE) in Santa Rosalía, Baja California Sur, which operates at a 98% efficiency rate, higher than the contracted target rate, while Sitcom received an award from the Mexican Institute of Intelligent Buildings (IMEI) for its Museo Soumaya automation project. Additionally, IEM began manufacturing high-efficiency, low-consumption transformers, had its ISO9000 and 14000 certifications renewed, and was recognized for the second year by the Mexican Center for Philanthropy (CEMEFI) as a Socially Responsible Company.