Alfa SAB de CV

BMV:ALFAA

Earnings Call Analysis

Sigma achieves record EBITDA and optimistic growth outlook in Q3

Sigma reported an all-time high in consolidated EBITDA for the third consecutive quarter, marking its 14th consecutive year-on-year growth. The company's strong performance, driven by record volumes in Mexico and robust sales in the U.S. and Latin America, positions it well for future gains. Sigma has revised its 2024 EBITDA guidance to potentially add $50 million, now aiming for significant growth in plant-based proteins and e-commerce initiatives. The spin-off from ALFA is on track, enabling Sigma to become an independent entity and access the Mexican Stock Exchange, enhancing prospects for future investments.

Strong Performance and Growth Trajectory

Sigma reported exceptional results for the third quarter, achieving an all-time high in consolidated EBITDA for the third consecutive quarter, marking its 14th consecutive quarter of year-on-year growth. This growth is indicative of solid consumer preference across its product lines, leading to record-breaking volumes. The consistent performance across all regions not only reflects robust operational success but also highlights Sigma's market leadership, especially in Mexico, which recorded three consecutive quarters of record volume and EBITDA.

Uplift in Guidance and Strategic Focus

Looking ahead, Sigma's management is optimistic about its financial prospects. They are closely monitoring market conditions and anticipate an additional $50 million upside on their 2024 EBITDA guidance, thanks to better-than-expected progress in operational efficiency. The growth initiatives positioned by Sigma, such as Better Balance (a plant-based protein brand) and the B2C e-commerce platforms, are expected to pave the way for sustainable long-term revenue growth.

Regional Highlights Reflecting Diverse Strength

The company’s performance showcases robust achievements across different regions. In the U.S. and Latin America, record sales and volumes have led to significant margin expansion. Notably, mainstream and Hispanic brands within the U.S. contributed significantly to this success. Meanwhile, the European operations are making a steady recovery, resulting in the highest third-quarter EBITDA since 2021, illustrating Sigma's diverse and growing footprint.

Strategic Initiatives and Future Prospects

Beyond traditional growth metrics, Sigma is also focusing on innovative revenue streams. The launch of new brands targeting the Hispanic market in the U.S. and expanding its distribution through the Netport business are pivotal steps. Although these initiatives currently represent a small fraction of total revenues, they signify promising potential for significant scaling in the future.

Capital Structure Changes and Market Accessibility

A notable transformative process within Sigma is the forthcoming equity investment opportunity, allowing equity investors to invest directly in the business. This is part of an organizational change following the separation from ALFA, positioning Sigma as an independent entity on the Mexican Stock Exchange. This change not only clarifies the capital structure but also aligns its valuation with peer companies in the global food industry, enhancing accessibility for investors.

Operational Efficiencies and Cost Management

As Sigma navigates possibly volatile foreign exchange (FX) conditions, management forecasts potential costs related to FX that could impact margins in the upcoming quarter. However, they remain confident due to effective revenue management initiatives that could offset disruptions. The company has also hedged against some of these costs, reflecting a cautious yet proactive approach to financial management.

Conclusion: Positive Outlook Amid Strategic Shifts

In summary, Sigma's exceptional quarterly results, strategic initiatives for new revenue generation, and upcoming changes in capital structure underscore a positive outlook for the company. With robust growth indicators and a commitment to operational efficiency, Sigma is poised for significant value creation, making it an attractive proposition for current and prospective investors. The focus on innovation, alongside strong traditional metrics, sets the stage for sustainable long-term growth.

Earnings Call Transcript 2024-Q3

[Operator]

Good day, and welcome to ALFA's Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. As a reminder, today's conference is being recorded. Now I would like to turn the call over to Mr. Hernan Lozano, Vice President of Investor Relations. Mr. Lozano, you may begin.

[Hernan Lozano, executive]

Good day, everyone, and welcome to ALFA's Third Quarter 2024 Earnings Conference Call. Further details about our financial results can be found in our press release which was distributed yesterday afternoon together with a summarized presentation. Both are available on our website in the Investor Relations section.

Let me remind you that during this call, we will share forward-looking information and statements, which are based on variables and assumptions that are uncertain at this time. It is my pleasure to participate in today's call. Together with Alvaro Fernandez, ALFA's Chairman and CEO; Eduardo Escalante, ALFA's CFO; and Roberto Olivares, Sigma's CFO. I will now turn the call over to Alvaro.

[Álvaro Fernández Garza, executive]

Thank you, Hernan. Good day, everyone, and thank you for your joining us. I'm happy to be speaking with you today as we present the single business structure we have been envisioning since 2020, in which ALFA is Sigma's [ partner ]. Over the past few years, ALFA has effectively transformed its 50-year-old conglomerate structure into four separate business units with leading positions in their respective industries. This organization is providing our shareholders with full flexibility to balance their ownership stakes in Nemak, Axtel, Alpek and Sigma.

By having complete independence from one another, each of these four businesses has the opportunity to achieve a fair valuation based on its individual merits and potential. This is particularly important for Sigma to which the investment community will soon have direct access in the Mexican Stock Exchange. It is encouraging to see that Alpha's share price rising as we move closer to the final structure. This increase reflects a portion of the attractive value opportunity concentrated around our branded food business. A number of essential conditions had to be fulfilled for us to finally spin of Alpek, especially over the past year.

Fortunately, we received overwhelming support from all parties involved. We are raising $400 million in capital to reduce debt as we have obtained consents from more than 91% of Alfa's bondholders, both of which provided the necessary clarity to move forward. The capital increase was oversubscribed by more than 2.6x, offering shareholders a great opportunity to benefit from the upside of the transformation process to a subscription price of MXN 10.75.

Building on these key milestones just last week and Alpek shareholders approved our proposal to implement the last spin-off. We're pleased to have reached this stage platform transformation with a remarkable turnaround in our petrochemical business, which reported its highest quarterly comparable EBITDA since 2022. These results prompted Alpek to rates its full year guidance by 13% to $675 million, driven by improved reference margins and stable demand.

Alpek has the capabilities to extend its full track record as an independent entity, led by its experienced management team, the company has delivered growth and strong cash generation in every stage of the chemical cycle, supported by a highly competitive asset base. The timing is also right for Sigma to benefit from the simplification of ALFA's corporate structure. Sigma has been proactively enhancing its leadership position as it expands its core, integrates accretive acquisitions, improves profitability of its European operations and steps up its efforts to develop new sources of revenue with this rapid capital growth.

Sigma's diverse portfolio of leading brands across all its product categories, multi-channel distribution in 17 countries and consumer center innovation offer a unique opportunity in the resilient sectors. We anticipate that these factors will align our valuation multiple with our global food peers, highlighted by simplified Alpha Sigma structure. I will now turn the call over to Roberto to discuss Sigma's third quarter results.

[Roberto Olivares, executive]

Thank you, Eduardo (sic) [ Alvaro ], and good afternoon, everyone. Today, I am delighted to discuss our outstanding results, highlight key regional achievements, share our progress in our growth initiatives and unveil a pivotal new phase for Sigma. To begin with, our performance this quarter has been extraordinary, achieving an all-time high in consolidated EBITDA for the third consecutive quarter. It's also our 14th consecutive quarter of year-on-year growth reflecting solid consumer preference, leading to record-breaking volumes. This consistent growth across all regions exemplifies our robust operational success.

We are closely monitoring market conditions for our better-than-expected progress support an estimated $50 million further upside on our 2024 EBITDA guidance. Looking at the regional highlights. Mexico continues to demonstrate a strong trajectory with three consecutive quarters of record volume and EBITDA. Growth continues across all channels and categories, reinforcing our market leadership and deepening our connection with consumers. In the U.S. and Latin America, all-time high sales and volume have led to significant margin expansion.

This performance was driven by our mainstream and Hispanic brands in the U.S., and by robust results in Costa Rica and the Dominican Republic in Latin America. Europe, meanwhile, is steadily progressing towards recovery. supported by operational efficiencies that have delivered the highest third quarter EBITDA since 2021.

On the strategic front, we're actively making progress in developing new sources of revenue, aligned with our long-term goals. We have recorded substantial deals during quarterly revenue growth in various growth initiatives. These initiatives include Better Balance, our plant-based protein brand, Snack’In For You and our B2C e-commerce platforms.

We are also advancing in the pilot space of Netport, our distribution business that connects Mexico and Latin American companies with U.S. consumers. As part of this effort, we'll launch a new brand, Mucho Gusto, featuring heritage and novelty projects designed to meet the rapidly growing Hispanic cooking needs. While these are currently a small portion of our revenues, each initiative has promising potential to be scaled up over time and complement our core business, supporting sustainable long-term growth.

As we move forward, we are embarking on an exciting new chapter at Sigma. After supporting Alfa's transformation process through EBITDA expansion and contributing to the constant solicitation process by bringing bondholder closer to Sigma via guarantees, we have reached a pivotal moment. Equity investors will have the opportunity to invest directly in our business. This marks a significant milestone in our journey and opens new avenues for value creation.

To wrap up, we're encouraged by the progress made by the Sigma team and look forward to what lies ahead. We are committed to maintaining this momentum and are optimistic about the future. Thank you all for your ongoing support and trust in Sigma. I will now turn the call over to Eduardo for regional comments and closing remarks.

[Eduardo Alberto Castillo, executive]

Thank you, Roberto. Let me begin by discussing guidance. With respect to ALFA, following the spin-off approval and considering that Alpek is now reported as a discontinued operation, we will not longer be issuing a consolidated guidance. Reflecting strong third quarter results, Alpek's 2024 EBITDA guidance has been revised upward, and Sigma is optimistic about its full year estimates. Going forward, Sigma accounts for ALFA's consolidated results.

Next, let me discuss 2 accounting items. The first one is related to discontinued operation and its effect on ALFA's EBITDA.

While Alpek is reported as the discontinued operation, ALFA's EBITDA will reflect a temporary reclassification impact. This is mainly associated with services that ALFA provides to Alpek on an absolute basis. The net impact of discontinuing operations with Alpek will be disclosed as an extraordinary item for compatibility purposes, where the spinoff concludes at which time this effect is eliminated. As referenced, the accumulated net impact of $11 million explains the difference between ALFA's EBITDA and comparable EBITDA in 2024.

The second accounting item involves a change in methodology related to the ownership stakes of the holding entity in two seniors, including Alpek and Sigma. Pursuant to IFRS 27.9, as of August, we adopted the firm market value method for the holdings individual financial results, replacing the equity method user premiums. We opted to implement this change given that the firm market value method reflects a proportion of value among the subsidies that is aligned with current market conditions. The accumulated effect associated with this change in methodology, turn third quarter consolidated majority net income into a $2 million loss.

Next, I would like to make some further comments about the transformation process. We are paying down parental level of debt totaling $575 million with proceeds from the capital increase and cash dividends obtained from both Alpek and Sigma.

Share allocation notices related to the capital increase having distributed to custodians, and we expect to have the proceeds by November 4.

Investment grade credit ratings were appealed by Fitch, Moody's and Standard & Poor's for ALFA, Sigma and Alpek. Most recently, Standard of Poor's raised its our look to credit watch positive for ALFA and Sigma.

A brief overview of the Alpek spin-off. The structure and process that ALFA undertook for the spinoffs of Nemak 2020 and Axtel in 2022 will be the stain for Alpek. Shareholders approved the spin-off to be executed by forming a new entity called Controladora Alpek as the spun-off company. These new company shares will be listed on the Bolsa Mexicana de Valores.

Next, Alfa will transfer its entire share ownership of 82% in Alpek to Controladora Alpek. And finally, ALFA shareholders will receive 1 share of Controladora Alpek for each of their ALFA shares, while also maintaining the ALFA shares.

Let me discuss timing. This process formally kick off with the spin-off approval at ALFA's extraordinary shareholders meeting on October 24. Among other requirements, Controladora Alpek would need to complete a registration and listing approval process with the Mexican Banking and Securities Commission, the CNBV. Upon completion of this registration process, ALFA will issue a shared distribution notice to shareholders and distribute the new shares. ALFA will work with all relevant parties to complete the spin-off process as quickly as possible. We expect the process to be completed in 2025. This concludes my remarks. We are now available to take your questions.

[Hernan Lozano, executive]

We would like to begin the Q&A session with questions on ALFA. Alvaro, Eduardo and I will take questions on ALFA or corporate matters. As a reminder, Sigma and Alpek will be available to answer individual questions later in the Q&A session. Operator please instruct participants to queue for questions on ALFA.

[Operator]

[Operator Instructions] Our first question comes from Ricardo Alves of Morgan Stanley.

[Ricardo Alves, analyst]

I have two questions, one for Sigma, which I'm going to ask later. The other one, it's for ALFA. It's also related to Sigma, but the forum here seems to be the correct one to ask this question because it's related to capital allocation. There were news article published a couple of -- a few days ago, listing ALFA through the Sigma subsidiary among companies potentially interested in buying assets in the U.S.

I know there's probably not a lot that you can discuss around the press reports, but given the very important timing of investment narrative around ALFA today, the corporate simplification process, the capital increase, the spin-off that you just very well educated us again on the call right now. Given all of that, the news was kind of surprising to some investors. So I just wanted to take the opportunity to ask you to give us an update on your current views on capital allocation and priorities for the company, perhaps a good opportunity for you to be addressing potential divestment from non-core assets that you may have in mind. So just taking the opportunity of the news that was published to get your most recent update on capital allocation and priorities for the company.

[Eduardo Alberto Castillo, executive]

Sure, Ricardo. Thanks for the question. This is Eduardo. Regarding the published notes the recent one, we -- as you already mentioned, we have no comments on this manner. However, let me make a couple of points. First of all, we announced our focus on completing the Alpek spin-off and the capital increase. We are in the middle of those processes. So we are looking forward to finishing them as soon as possible. In addition to that, I think it's also important to point out that as we have shown during this process, we are firmly committed to investment grade, not only on ALFA but in each and every one of the companies, meaning Alpek and Sigma. So we will continue to be extremely careful in each step that we take regarding any potential future acquisition with this issue.

And specifically in the case of ALFA. The next steps in ALFA in addition to finalizing the processes that I just mentioned, really are housekeeping items, housekeeping items in terms of finalizing the cleanup the ALFA holding in order to continue focusing exclusively within ALFA to the operation of Sigma. And having said that, let me turn the call over to Roberto, if he wants to make any additional comments regarding the published outlook.

[Roberto Olivares, executive]

I think in line to what Eduardo mentioned, your comments on reactions on the news, we're happy to discuss any questions regarding the performance of Sigma during the quarter and particularly our involvement in ALFA's transformation process. Thank you for coming.

[Operator]

Our next question comes from Andres Cardona of Citi.

[Andres Cardona, analyst]

Let me ask you about the potential tax payment you will have to when the Alpek spin-off is completed. As far as I understand, the reference price was 0 as of October '24. So maybe you could already guide us about the size of this potential payment or clarify if I am misunderstanding the situation.

[Eduardo Alberto Castillo, executive]

Sure, Andres, this is Eduardo, and thanks for the question. You're right. The actual price at physically the spin-off is value is the last transaction of October '24. So that is what will be used. What we can disclose at this time is that we expect no fiscal impact regarding the spin-off of Alpek since we will be able to cover the impact using losses that we have accumulated at the holding company, in particular, the spin-off of Axtel as we have discussed in the past.

[Operator]

Our next question comes from Emilio Fuentes of GBM.

[Emilio Fuentes, analyst]

I have further questions on Sigma. But for now, I'm wondering what will happen to the holding structure post Alpek spin-off? And if you have any current plans on ALFA's other assets? What will happen to them? Or will they be transferred to Sigma?

[Eduardo Alberto Castillo, executive]

Thank you, this is Eduardo again. Let me talk a little bit about the way we see the holding company. We still have some services that are provided by personnel here in the holding company. Mainly related to issues of the holding company, accounting, reporting and this process, the actually restructuring process that we're going to. We plan to reduce those internal functions going forward as soon as possible. That's what I was referring to as housekeeping items going forward in my previous one of my previous comments.

We do provide very few services to the companies, including Sigma and all those services are provided today on a large length basis. They receive those services and we expect going forward to reduce them significantly and basically disappear then. As we continue doing, we have been doing the last few years since 2020, moving people from ALFA to the companies to each one of the companies in order for them to be fully complete in terms of having the functions, the areas in-house.

[José Pons, executive]

As I may add to that, the areas to have the four businesses Axtel, Alpek, Sigma and Nemak as fully independent companies. That was the idea. I guess the other big asset that we still have here is the land that we have here at the corporate offices, just to remind you, there's some -- this office is not only used by ALFA, it is used by some of the people here at the corporate offices by some of the companies and as Alvaro said, these are an arm's length basis, we charge rent for these offices, but they are free to move to any other place that they want. And this is just why the corporate offices or the land is -- we're in the active process of valuing it and deciding what we're going to do to it, we believe that there's the possibility to develop it more or to sell it as is.

But I would like to ask you not to concentrate around that. I think we have finally made the four companies independent and I think that's what is important. I guess, the right word is being used here is housekeeping aspects that we will do in the next few months to finalize every single detail. And have the companies be completely independent.

[Emilio Fuentes, analyst]

May I have a follow-up question regarding fiscal credits, will there be any remaining credit on the holding post spin-off?

[Eduardo Alberto Castillo, executive]

No, Emilio. The plan is to pay down debt at the holding company. And we -- taxes credit -- we do have some additional fiscal credits in the holding company, which we will see if there is a use for them going forward.

[Operator]

Our next question comes from Nicolas Riva of Bank of America.

[Nicolas Riva, analyst]

I have three questions. The first one is going back to an earlier question about the M&A -- the news really related to potential M&A of Sigma being potentially interested in Oscar Mayer in the meat business of Kraft. And you have addressed it to some extent.

In my case, again, I would be -- given that right now, both ALFA and Sigma are very focused on this spin-off of Alpek and as you said, keeping the investment grade ratings of both Sigma and ALFA, I would be surprised of ALFA and Sigma pursuing such a large M&A in the sense that the numbers, I think, referenced by Reuters in that article were $300 million annual in EBITDA, potentially 10x EBITDA for enterprise value, $3 billion. That definitely will have an implication in terms of ratings for both ALFA and Sigma. So again, any additional comment regarding this would be useful.

Second, I know Sigma is going to be guaranteeing the $500 million on the 2044 bonds of ALFA any additional debt that Sigma will be guaranteeing of ALFA besides the $500 million in the 2044s, that's my second question.

And then my third question, as you said, you are not providing financials for ALFA, considering Alpek discontinued operations, so we can see leverage excluding Alpek. The number that I have seen for the net debt is $2.8 billion. And from memory, I believe there was going to be the net debt of ALFA including debt repayment at the holding company level of about $500 million, now we are including $575 million. But anyway, I thought that $2.8 billion in net debt, excluding Alpek, was going to be reached only after repaying these $500 million in there at the holding company. So I wanted to ask about reconciling the figure provided before and now this figure because I would assume that you haven't included yet as of September, with that repayment on the holding company level using the proceeds from the capital increase and from the dividend from Alpek.

[Hernan Lozano, executive]

Nicolas, this is Hernan. Thank you for your question. Regarding the first item about the news, sorry, but we have no comment about that topic. So we'll move on to your other two questions. And for that, I'll ask Eduardo to jump in, please.

[Eduardo Alberto Castillo, executive]

Sure. And thanks, Nicolas, for bringing these topics. Regarding the guarantee, the way we look at that the debt that still remains -- that it will remain at the holding company after we paid down the $575 million coming from the capital increase and the dividends from Alpek and Sigma, we look at that debt together with the debt of Sigma as one entity. We see Sigma now together with ALFA as one entity with one bed, of which Sigma will be handling financially.

And regarding a expected leverage for the combined entity, and we do expect after we finish this pay down of debt to have the combined entity very close at the end of the year, very close to 2.5x, which is the target that we have set off to maintain for the company. It will, of course, depend on the performance and results of Sigma during the fourth quarter, but we are confident that we will move close very close to 2.5x.

[Nicolas Riva, analyst]

Okay. But one follow-up there. At the end of September with these numbers, you have not yet included the debt repayment of the $575 million at the holding company level. Is that correct?

[Eduardo Alberto Castillo, executive]

Correct. And the reason is very clear. We haven't received the $400 million capital injection, which we expect to have by November 4. We did include the dividends from Alpek and from Sigma that were paid before the end of the quarter.

[Nicolas Riva, analyst]

Okay. And just one more follow-up. Given that for now ALFA and Sigma are two separate entities, just to clarify, the debt from ALFA that is going to be guaranteed by Sigma is going to be $500 million on the 2044 bond of ALFA and what else?

[Eduardo Alberto Castillo, executive]

$200 million of bank debt.

[Operator]

Our next question comes from Andres Ortis of BTG Pactual.

[Andres Ortis, analyst]

Just a quick question on my side. Looking at the financial ATF next benefit on the ALFA level this quarter. I just want to understand why it what happened given the such strong results in the quarter. I don't understand it.

[Álvaro Fernández Garza, executive]

Andres, I'm sorry, but the question did not come through clearly. Could you please repeat it?

[Andres Ortis, analyst]

Sure. Looking at the financial of the ALFA level, I'm seeing a $97 million tax benefit or MXN 3.9 billion tax benefit. I just want to understand why it is provided this quarter?

[Álvaro Fernández Garza, executive]

No, the -- I believe it's about the -- the question is about the tax benefit.

[Andres Ortis, analyst]

You have income provision and an income tax provision that is positive. We continue...

[Álvaro Fernández Garza, executive]

I will try to answer the question as we understood it. As we understood is that there is a $97 million tax benefit that we show in the report. And you want to know where that is coming right?

[Andres Ortis, analyst]

Yes.

[Álvaro Fernández Garza, executive]

Okay. Let me address that. The -- when we spun-off Axtel, the tax shield that we obtained was -- is not reflected in the accounting statements in the results. It is only reflected on the fiscal front of the company. So what we did at this time was we included a portion of that tax shield that we estimated was going to be used for the spin-off of Alpek, in addition to -- but we already had coming from the regular operations of the holding company. So that's why you see that as a benefit, which will be used when the spin-off of Alpek is consummated -- is concluded.

[Operator]

There are no further questions at this time.

[Hernan Lozano, executive]

There are no further questions on the chat either. So in that case, we will then take questions on Sigma. Roberto Olivares, Sigma's CFO, will answer your questions. Operator, please prompt for questions on Sigma.

[Operator]

[Operator Instructions]. Our first question comes from Ricardo Alves of Morgan Stanley.

[Ricardo Alves, analyst]

Thank you very much for the follow-up. Mexico was strong, but the biggest beat versus our numbers, Roberto came on the U.S. side. I wanted to focus on that region. When we're looking at Nielsen or the data on the margin, the numbers seem even more impressive, we're still seeing 6%, 7% top line expansion.

Can you expand on the U.S. a little bit as we go into the fourth quarter? And not only what your expectations are to close out the year. Again, the numbers that we see are encouraging to us. I'm curious to hear your thoughts on that. But also, can you explain the competitive dynamic as well because on top of a good top line, we are also seeing Sigma gaining share in hot dogs, in cold cuts across the board, we see not only top line trends that are optimistic to us but also margin gains. So if you can expand on those two points, your relative positioning versus competitors? What is driving that? But also your overall expectations to close out the year, that would be helpful.

[Roberto Olivares, executive]

Yes, first, the U.S. has done -- the U.S. has done a fantastic job trying to capture volume and also profitability we have grown particularly in our mainstream and Hispanic business markets. I will say in both equally, but we have seen in the Hispanic business, very good dynamics that we expect to continue being present in the following years. We are operating on also capacity in most of our plants. And with some revenue management initiatives being able to sustain some of the margins. We have also worked out on efficiencies. I will say not only in the U.S. but also in Sigma overall, trying to optimize some of our SG&A and expenses across the company and particularly in the U.S. that can help. We do expect to continue having this trend in the following quarter and I would say year, we -- there's still some opportunity to grow. There's a third business that we have in the U.S., our European heritage business that has a lot of potential that we expect to help us continue gaining some margin.

[Ricardo Alves, analyst]

That's helpful, Roberto. So the top line strength on the margin on the recent data in October. Is that a fair assessment that things are just holding up well? Is that a fair assessment of your U.S. operation today?

[Roberto Olivares, executive]

Yes. That is correct. As you have mentioned, we have been, I would say, a lot through consistency, quality and innovation for products. As you mentioned, we have seen that we have gained some market share. We do expect to continue operating at that level.

[Operator]

Our next question comes from Juan Ponce of Bradesco. Go ahead.

[Juan Ponce, analyst]

And congrats on the very strong results. Regarding the growth business units, particularly the plant-based proteins and the direct-to-consumer e-commerce platforms, what's your expectation as we look out to 2025?

And specifically on this direct-to-consumer e-commerce platform, you mentioned in the report that it still represents a low single digit of consolidated sales, but I would like to know if you can give us some color on where you see this ratio going forward.

[Roberto Olivares, executive]

So regarding the e-commerce direct-to-consumer platform, it's a business that we launched back in 2020. And it has grown significantly, I would say, almost double-digit growth on a monthly basis since we launched it. We launched app -- sorry, as a website and an app and now we have some physical stores in Mexico to sell directly to consumers some products that goes to the [ green ] and particularly steaks and some other of our products. We also complement that business with another business that sells direct to home some of the products that we have in our portfolio. And we're expanding actually that business into the U.S. next year. We're already piloting some initiatives in some markets in the U.S. that we think we're going to be good environments to grow. We -- as you mentioned right now, the percentage of revenue coming from grow business units and particularly this initiative is low.

We do expect them to continue growing. We're exploring different, as you have seen, different new business models. I talked in my initial comments about the business that we have that is called Netport that is a business that distributes and sells third-party products from Mexican or Latin American heritage into the U.S. Hispanic market. We recently launched a new brand. They are particularly focused on Central American products, cheeses to be specific. We have covered almost all of the portfolio Mexican cheeses with our acquisitions through the and we're a relevant player in the Mexican Hispanic cheese market in the U.S. Now with this new business, we're trying to explore it the Latin America and particularly Central America Hispanic cheese market.

So all these initiatives are right now between a pilot and a scaling phase. and we do expect them to become more relevant in revenues and EBITDA in the following years.

[Operator]

Our next question comes from Emilio Fuentes of GBM.

[Emilio Fuentes, analyst]

I'm wondering if you could give us any further color on your margins, particularly in Mexico, have you seen any FX impact? Or do you expect any delay in this impact on inventories, if you haven't seen it yet? And another question, I'm wondering if you're still looking to divest non-core assets or brands in Sigma.

[Roberto Olivares, executive]

Your first question regarding the margin in Mexico, we do anticipate that in the fourth quarter, we see some, as you can see, FX volatility that could potentially impact the margin. In terms of raw materials, we don't see any major disruption. To be honest, we have already some inventory in place of the major raw materials that we use and in terms of FX again, we're doing some revenue management initiatives to offset the cost impact.

Just to be clear, I think during the third quarter, we also experienced some benefits regarding some FX derivatives that we have that impacted costs that we -- that were mainly during the third quarter, there's still some hedging for the fourth quarter or to be honest, just a couple of weeks. So we -- there's that positive impact in the third quarter in Mexico because of that.

And let me talk about your second question regarding the non-core asset monetization. We -- as we have talked in the past, we're looking into some opportunities particularly because of our initial responsibility to entertain some offers when there's someone interested in some of our assets that make sense for them, as we have discussed in the past, these are non-core and not significant for business.

[Operator]

There are no further questions at this time.

[Hernan Lozano, executive]

Okay. No further questions in the chat either. So in that case, let's move forward and take questions on Alpek. We have Jose Carlos Pons, Alpek's CFO. Operator, please prompt for questions on Alpek.

[Operator]

[Operator Instructions]. There being no further questions, I would like to return the call to management.

[Hernan Lozano, executive]

Thank you. So let me turn the call back to Alvaro for closing remarks.

[Álvaro Fernández Garza, executive]

Thank you, Hernan. This is an exciting inflection point for ALFA, finally leaving behind the conglomerate structure and clearing the way for independent business units that have full control to trade their individual features. Each business will continue working relentlessly to reach their fair value. This is particularly important for ALFA Sigma as a new branded food pure-play. We greatly appreciate all the support we have received from market participants. We are especially thankful to all the ALFA team members for their hard work throughout this amazing journey?

Thank you very much for your interest in ALFA. If you have additional questions, please feel free to reach out to us. Have a great day. We will now disconnect.

[Operator]

This concludes today's conference call. You may disconnect.