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Investor Presentaiton

October 12, 2021 GBM MEXICO'S FUNDAMENTALS: UNDER-PENETRATED MORTGAGE MARKET Under-penetrated credit market. In our view, the under-penetrated status of Mexico's credit activity offers a huge opportunity for the ceramic tiles industry to keep growing, as an increased credit penetration (mortgage loans) should boost not only the demand for new housing but also remodeling. Despite the Mexican mortgage market has been steadily improving in the past decades, it is still below other LatAm economies. One could argue that higher costs and a wide unbanked population have been the issue in Mexico; however, as new players seeking to reach untapped markets enter the industry (Fintechs, etc.) and competition increases, we could see a higher credit penetration going forward. Chile provides a great example of a higher penetration (driven by increased competition), as its total loan portfolio (only banks) reaches -80% of GDP, way above Mexico's -23%. However, when adding up the entire financial system, i.e., including government agencies and other financial entities, Chile's total loans penetration rises to as much as -125%. We are not saying Mexico will move towards that level but rather arguing that with new players entering the market, the banked population should increase going forward, further boosting home development and remodeling. Total Loan and Mortgage Penetration in Mexico -Total loans and mortgages as % of GDP 23.0% 20.7% Penetration of Mortgage Loans in LatAm Countries -Mortgages as % of GDP 2.7% 2.1% 2010 3.7% 11.9% Loans for Home Remodeling in Mexico -Figures in MXN Billion 29.5 '10-'21e CAGR: 7.5% 18.9 21.9 13.3 الله 1.7 2.1 3.4% 5.5% 6.1% 17.1% 4.3% 7.4% 7.3% 2015 15.9% 12.1% 15.5% 4.3% 3.4% 2.7% 2.2% 1.8% 2020 2010 2015 2020 27.1% Mortgages as % of GDP Mexico Colombia Peru Chile 2000 2005 2010 2015 2020 2021e 2005 2000 Total Loans as % of GDP Mexico's under-penetrated status in terms of credit activity should be regarded as huge opportunity for further growth in housing demand and remodelings. Mexico is still behind some of its LatAm peers in terms of credit penetration and the entry of new players into the Mexican market would reduce this gap. Loans for home remodeling in the country have outpaced the growth of both the national GDP and the system's total loan book over the last decade. That said, in light of the country's housing deficit and growing population, lending activity is poised to keep expanding going forward. Source: World Bank, CNBV, SNIIV LAMOSA/CERAMIC: THE ROAD TO GROWTH IS PAVED WITH TILES. | 11
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