Investor Presentaiton
October 12, 2021
MEXICO'S FUNDAMENTALS: REMITTANCES AS DRIVER OF HOME IMPROVEMENTS
As previously mentioned, remodeling accounts for 80% of ceramic tile volumes, while 57% of dwellings in Mexico have concrete or dirt floors. Hence, in a country with a high poverty index and where remittances
are a relevant source of income for many Mexican families, the latter represents a key variable of the average household disposable income. More importantly, remittances are independent of Mexico's economic
performance and are a USD-denominated income further boosted by the depreciation of the Mexican Peso in times of crisis. As such, the large economic benefit per capita of remittances should be regarded as a
key driver of growth for ceramic tiles demand.
GBM
Remittances have outpaced GDP growth and inflation in the past twenty years. Remittances have
increased by almost 11.2x in MXN and by around 4.5x in USD since the year 2000, which shows a
trend. Notably, Mexico is the third-largest recipient of remittances in the world and the number one
in Latin America.
The escalation appears even more dramatic when looking at how remittances per capita have
outpaced GDP per capita growth and inflation. This means that in the last two decades, Mexican
recipients of remittances have a greater disposable income and purchasing power.
Per capita 2000-2020 CAGR:
Remittances (MXN): 12.1%
GDP (current MXN): 5.6%
Remittances vs. Inflation and GDP Growth
-Index. All figures have 2000 as the base year.
1600
Remittances by the numbers
US$41 billion of remittances entered Mexico in 2020 (-4% of GDP).
~8.5% of Mexicans received remittances from relatives or friends abroad during the year
of the survey*.
According to the 2015 ENIF survey*, ~5% of remittance recipients use the proceeds to buy,
repair, remodel, or expand their house, among other purposes.
Industries in the United States that generate the most remittances. The economic activities that
generate the largest flows of remittances are construction and agriculture (43.5% of total), which
are considered essential to the economy under a COVID-19 lockdown scenario. More importantly,
the construction industry remains in a healthy state and could still get a boost from a federal
infrastructure plan.
US economic activity of Mexico's remittances
1400
1200
1000
800
600
400
200
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
INPC
*2015 National Survey of Financial Inclusion
Source: INEGI and Mexico's Central Bank
Remittances (MXN)
GDP (MXN)
2020
11.2x
2.2x
joi
Construction
19.0%
Agriculture
17.7%
Drivers
7.0%
Gardening
7.1%
Factories
6.4%
3.6x
Source: Center for Latin American Migration Studies (CEMLA)
Restaurants
6.4%
Operation of
Machinery
4.3%
Professional
Own Business
Other
3.2%
3.1%
19.0%
LAMOSA/CERAMIC: THE ROAD TO GROWTH IS PAVED WITH TILES. | 12View entire presentation