EQUITY RESEARCH | DAILY EDGE

Friday, November 12, 2021, Intraday Flash

Nutresa ANALYST TEAM

LATAM FOOD AND BEVERAGES
Link to ScotiaView

Hostile Take-over Offer for Nutresa – Unlikely Moonshot but Felipe Ucros | Analyst
212-225-5098
Great for Minorities Scotia Capital (USA) Inc.
Juan Jose Guzman, MSc | Associate
511-211-6851
Our Take: Positive. Grupo Gilinski launched a hostile take-over bid (OPA) for control Scotia Sociedad Agente de Bolsa SA
of Nutresa. We think it’s a low-ball bid (see pg. 2 for valuation discussion and comps),
but beyond valuation, we believe that the bid is unlikely to reach the minimum threshold PERTINENT DATA

for control. Shares will be suspended for some weeks while the process moves along Rating Sector Outperform
(timeline in pg. 7) but they will trade again in a few days/weeks. Regardless of the 1-Yr. Target COP 28,000
likelihood of approval (in its current form/price), the offer does raise several interesting NUTRESA-CN COP 21,900

points. First, it’s likely that the Gilinski’s know about the low likelihood of success, so this 1-Yr. Return 31.1%
Div. (NTM) $708.84
begs the question: what are we missing? Some theories in pg. 5. Div. (Curr.) $677.66
Yield (Curr.) 3.1%

Additionally, this supports our long-held thesis that the shares are deeply undervalued Valuation: Explicit 10-Year DCF @ 11.0%

due to several reasons. We explore them in pg. 3, but the reality is that a new higher
PERTINENT REVISIONS
value for the shares has been put on the table and that subsequent higher ones could
New Old
follow. That’s good for Nutresa shareholders which should see the shares rise when
Rating SO SP
they reopen for trading.

From our point of view, we had a neutral on Nutresa shares due low valuation with a
lack of drivers (inflation, commodities, elections). However, a driver was just put on the
table and we’ll stick to our long-held mantra: valuation plus drivers equals upgrade. We
are raising Nutresa to Outperform. We expect the shares to rise when they trade again.

Lastly, this is a wake-up call for GEA because it may have just been put in an
uncomfortable position. If it wants to keep control, the offer fail must fail. If it does, then
it’d better hope that the shares don’t plunge back down. Because if they do, it will look
like GEA denied the opportunity to minority shareholders of receiving a 37% premium on
their shares. And that’s not good marketing.

Hostile Take-over Announcement: Grupo Gilinski, issued a hostile takeover bid for
50.1% to 62.625% of Nutresa at a price of US$7.71 (or ~COP 29,891) that represents
a 37% premium to Nov. 10 market close (COP 21,740). If successful, the takeover bid
would amount to between US$1.8bn and US$2.2bn. We don’t think it will be successful
in its current form/price.

Who is Grupo Gilinski? One of the richest family conglomerates in Colombia, with
CAPITALIZATION
holdings that include Banco GNB Sudameris (traditional commercial bank), Revista
Semana (magazine), Yupi (snacks), Lulo (online bank venture), and large real estate Market Cap. (M) US$2,598
Enterprise Value (B) $13,578
holdings around the world, among many others. They were also owners of Banco de Shares O/S (M) 460
Colombia (before the selling to GEA) and Banco Andino. [Continues on page 2] Float O/S (M) 255
Qtly EPS (Basic) Q1 Q2 Q3 Q4 Year P/EPS
Volume and Closing Price for NUTRESA-CN
2019A $379.11 $231.42 $285.69 $204.33 $1,100.55 23.1x
5 27k
2020A $413.57 $300.96 $305.77 $230.32 $1,250.62 19.2x
26k
2021E $498.89A $298.09A $365.71A $313.18 $1,475.86 14.7x 4
2022E $422.85 $334.51 $402.57 $350.63 $1,510.57 14.4x 25k

3 24k
(FY-Dec.) 2019A 2020A 2021E 2022E
Vol (M)

Price

23k
Revenues (M) $9,958,851 $11,127,541 $12,572,089 $13,653,444 2 22k
EBITDA (M) $1,347,229 $1,443,576 $1,566,732 $1,705,603 21k
EBITDA Margin 13.5% 13.0% 12.5% 12.5% 1
20k
Return on Equity 8.7% 9.2% 10.5% 10.2%
0 19k
Historical price multiple calculations use FYE prices. All values in COP unless otherwise indicated. Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21
Volume NUTRESA-CN
Source: FactSet; company reports; Scotiabank GBM estimates.
Source: FactSet.
Dissemination: November 12, 2021, 09:57 ET. Production: November 12, 2021, 09:48 ET.

For Reg AC Certification and important disclosures see Appendix A of this report. Analysts employed by non-U.S. affiliates are not 1
registered/qualified as research analysts with FINRA in the U.S. unless otherwise noted within this report.
 EQUITY RESEARCH | DAILY EDGE
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Opportunistic Investors that Don’t Shy Away from Controversy: The Gilinskis have a reputation for an
opportunistic investment style. The group has very profitably bought and sold off troubled banks several
times. That has led them to multiple appearances in the covers of newspapers. In addition, there’s the
recent acquisition of Semana, one of the largest magazines in Colombia, which was also highly controversial
and you can read it here. The Gilinskis are not shy, and the group won’t mind if this story is widely covered
and opined by the media in Colombia over the coming weeks.

Historically Not Best Friends: The fact that the Gilinskis didn’t do a friendly approach to GEA for Nutresa
should not be surprising to international investors. You can read here and here about another controversial
transaction in which both groups bumped heads over the Banco de Colombia takeover.

Valuation – What is Nutresa Worth?

1. Is the offer fair or attractive? Not in our opinion.

It Has Been at This Price Before: First, let’s remember that Nutresa already traded near the offer price in
2014 (see Exhibit 1), when its EBITDA was ~40% lower than in 2020. If Nutresa was in a crisis, then that
would be understandable, but it’s not. So that’s a first sign that the offer is not great.

Offer is at Historical Trading Average: Second, ignoring business/macro cycles and speaking purely from
a fundamental angle, the LatAm F&B sector has traded around 9x EV/EBITDA over the decade that
preceded the pandemic. Therefore, a multiple of 9x for normalized EBITDA would be a fair market value for
a publicly traded company.

Exhibit 1: Nutresa Stock Price Performance (in COP) Exhibit 2: LatAm Food – Historical NTM EV/EBITDA

30,000 13x
Industry Avg: 9.4x
12x
27,500
11x
25,000
10x

22,500 9x

8x
20,000
7x
17,500 6x
Q2-12

Q4-14
Q4-10
Q2-11
Q4-11

Q4-12
Q2-13
Q4-13
Q2-14

Q2-15
Q4-15
Q2-16
Q4-16
Q2-17
Q4-17
Q2-18
Q4-18
Q2-19
Q4-19
Q2-20
Q4-20
15,000 Q2-21
Oct-10
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
Oct-19
Apr-20
Oct-20
Apr-21
Oct-21

+/- 1 Std. Dev. Industry EV/EBITDA (NTM) Industry Avg.

Source: Bloomberg; Scotiabank GBM. Source: Bloomberg; Company reports; Scotiabank GBM estimates.

Which Completely Ignores the Control Premium: However, there’s the issue of the control premium. If
you want to buy a share in the open market, you pay the market price, but if you want 50% plus one share,
the price tag is another one because you need to convince the controller to sell.

Transaction Comps Say that the Offer is Not Good Enough: That’s why we look at this transaction
comps table (see Exhibit 3) which shows that while comps traded at 9x historically, control premiums of 40%
to 50% have usually taken average transaction multiples to 13x EBITDA.

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Exhibit 3: LatAm Food Coverage – Selected Material Transactions

Food Coverage - Material Transactions
Deal Details Deal Valuation Sales (Prior to Acq.)
Announce Target EV (in Target (in
Buyer Target Target Country EV/Sales EV/EBITDA % of Buyer
Date US$ million) US$ million)
Alicorp Intradevco 31-Jan-19 Peru $515 2.4x 12.6x $215 8%
M. Dias Branco Piraquê 29-Jan-18 Brazil $418 2.0x 14.0x $214 13%
Alicorp 1 IdA & ADM-SAO 16-Jan-18 Bolivia $420 0.9x 6.3x $447 20%
Lala Vigor 01-Aug-17 Brazil $1,307 1.8x 21.6x $727 24%
Lala Lala US 30-May-16 United States $246 1.2x NA $200 7%
Nutresa El Corral 28-Nov-14 Colombia $384 1.8x 11.0x $232 7%
Bimbo Canada Bread 12-Feb-14 Canada $1,358 1.0x 7.8x $1,411 10%
Nutresa Tresmontes Lucchetti 18-Jul-13 Chile $739 1.7x 12.3x $440 14%
Alicorp Pastificio Santa Amália 07-Feb-13 Brazil $422 1.4x 15.6x $293 17%
Herdez Grupo Nutrisa 17-Jan-13 Mexico $238 2.6x 18.1x $87 9%
Average $605 1.7x 13x $427 13%
Median $421 1.7x 13x $262 12%

(1) Includes
Recent FoodtheMega-Deals
consumer business at 9.2x
(including (LTM) and
Withdrawn the crushing business at 4.4x (cycle adjusted).
Offers)
Note: We define material transactions if the target’s
Deal sales prior to acquisition are equal to or higher than 5% of the
Details buyer’s
Deal Valuation
sales in the same period. Sales (Prior to Acq.)
Announce Target EV (in Target (in
Source: FactSet;
BuyerBloomberg; Company reports;
Target Scotiabank GBM estimates. Target Country EV/Sales EV/EBITDA % of Buyer
Date US$ million) US$ million)
2
ConAgra Brands Inc. Pinnacle Foods Inc. 27-Jun-18 United States $10,749 3.4x 18.3x $3,140 40%
EBITDA
Ferrero SpAis2 Also Depressed: Nestle'sThat compares
Confectionery Biz to a 9x NTM EBITDA
16-Jan-18 multiple offered
United States by the Gilinskis
$2,800 3.1x (based NA $900 9%
on our model),
Campbell Soup Co.which
2
is not only significantly
Snyder's-Lance, Inc. below the control
18-Dec-17 premium,
United States but also one that uses a2.8x
$5,989 depressed 23.8x $2,123 27%
The Hershey
EBITDA dueCo.to the currentAmplify Snack and
logistics Brands, Inc. 17-Dec-17
commodities turmoil United
we States
have baked into $1,488
our 2022 4.0x
numbers. 18.3x $372 5%
The Kraft Heinz Co. 2 Unilever Plc 17-Feb-17 United Kingdom $154,495 2.6x 15.1x $58,311 220%
Danone WhiteWave Foods 07-Jul-16 United States $12,086 3.0x 24.0x $3,866 16%
37% Sounds
Mondelez 2
Nice, but 96% is Better:
The Hershey Co. While a 37% premium
30-Jun-16 mayStates
United sound nice to$25,649
some, a deeper 3.5xlook 15.0x $7,336 27%
PE Group Krispy Kreme Doughnuts
shows the2 reality that Nutresa is one of the most 09-May-16 United States
attractive food companies in LatAm, $1,264
with leading2.4x
market 17.1x $523 NA
McCormick Premier Foods 23-Mar-16 United Kingdom $1,650 1.4x 9.6x $1,159 27%
shares
Mondelezin+ almost
PE Groupevery category,
Keurig Greenand that to purchase
Mountain control,
07-Dec-15 youStates
United have to pay dearly
$14,115(in our view,
3.1xit’s a 13.7x $4,520 17%
Pinnacle
better Foodsthan anything
asset Boulder Brands
on that comps list). 24-Nov-15 United States $959 1.9x 23.5x $508 19%
Snyder's-Lance Diamond Foods 28-Oct-15 United States $1,914 2.2x 17.8x $864 46%
H.J. Heinz + PE Group Kraft Foods Group 25-Mar-15 United States $54,810 3.0x 15.0x $18,205 167%
13X
The J.EBITDA,
M. Smucker isCo.approximately a 96%
Big Heart Pet Brands premium03-Feb-15
to the latest price.
United That’s better
States than 37%. 2.5x
$5,614 16.1x $2,267 41%
The Hillshire Brands 2 Pinnacle Foods 12-May-14 United States $6,616 2.7x 14.3x $2,495 63%
D.E. Master Blenders 1753 Mondelez's Coffee Biz 07-May-14 United States $5,295 1.4x NA $3,900 NA
The Bimbo and MDB Analogy: We’ll put it like this: do you think that Daniel Servitje or the Dias Branco
Average $19,093 2.7x 17x $6,906 52%
family
Medianwould sell Bimbo or M. Dias Branco at 9x EBITDA? Not a chance, right? There’s$5,802 your answer.
2.7x The 17x $2,381 27%
Gilinsksi bid is a low-ball bid. But one that creates a problem for GEA (more on that later).

However, this raises another question: why is Nutresa so cheap that a 37% premium only takes it to 9x
EBITDA?

2. Why are the shares so deeply undervalued today?

Many factors. First, there’s LatAm and the commodities cycle. Its current multiple reflects a general rerating
of publicly traded securities in LatAm since the end of the last commodities super-cycle. Food companies
traded down from 12x to 7x EBITDA since 2013, the peak of that cycle. However, we appear to have past
the bottom of the super-cycle and pandemic, and firms are generally rebounding from the depths of last year
(6x EBITDA). Take a look at Bimbo or Gruma. Or even Arca, KOF, CCU and Ambev.

However, Nutresa has decoupled from its comps. That’s due to the political risk in Colombia which is
nearing elections with a leftist candidate ahead in the polls. Not to mention the rising fiscal risk.

Lastly, the shares volume has dropped their ADTV below US$1mn. This, added to the crossholding
structure, also drives a large number of international investors away, and likely drives another piece of the

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discount. After this is all over, we would not be surprised if Nutresa aimed to solve these problems in an
accelerated manner.

In our view, anybody that sells at the offer price is selling at the worst moment and on the cheap.

Shareholding Structure – Why the Deal is Likely to Fail, in our view

GEA – Cross-Holding Structure: GEA (Grupo Empresarial Angtioqueño) is not far from controversy either.
International investors tend to dislike their cross-holding structure, where dual shareholding structures
abound. That structure was originally intended to defend from hostile takeovers. While the structure has
been criticized, this is exactly why it’s in place. GEA controls ~45% of Nutresa via Sura (35.5%) and Grupo
Argos (9.9%%), and it is well understood that if minorities buy into Nutresa, they are likely giving away the
chance of receiving a takeover premium.

Structure Makes this a No-Go: Assuming that GEA doesn’t want to sell (as has usually been the case), the
Gilinskis would need to get to the approval threshold via the remaining 55% float. That’s a steep ask, given
that the Gilinskis would still have to get the founding families, Nutresa’s treasury shares, Proteccion’s vote
and some typical non-voters to support the transaction.

The Medellin Founding Families: In addition to the crossholdings, there are several Medellin families in
the shareholding structure, which have shares because the businesses they founded are now part of
Nutresa (outright sales, mergers, share exchanges and many others). Given their position in GEA boards,
their family’s tradition in the company and social bonds that tie them to the fabric of Medellin, we are highly
skeptical that they would sell to the Gilinskis. We estimate them at 7.5% of Nutresa’s shareholding, and we
are not even including Amalfi SAS (they have been reducing their share to less than 1% and they are from
Cali).

Nutresa’s Treasury Shares: Nutresa has actively been buying its own shares given its attractive multiples.
In our opinion this is the best M&A the company has ever done, but putting that aside, it’s another 0.5% of
the shares that Gilinskis are not getting a vote from.

Non-voters: It’s also well known that a percentage of the float does not vote in these transactions. The
shares might be in a succession process, the holder may be travelling and not checking emails from the
broker, or they read the proxy email and forgot to respond. Either way, there’s a margin for error here, too.

Protección: The count already puts GEA way ahead of the 50% that Gilinski needs. But then there’s
Protección, GEAs pension fund. If the price was higher and eventually attractive, they might have to vote in
favor of the transaction (fiduciary issues), but at this level, they have all the support they need to vote
against the takeover. Which puts the GEA votes firmly above the threshold where the offer is a no-go.

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Exhibit 4: Nutresa – Main Shareholders and GEA Crossholdings Structure

49.4%

12.5% 9.9%

13.1% 35.5% 5.3%

Other long-term 7.5% 13.9% Other Colombian

shareholders based in Pension Funds (Skandia,
Medellín Colfondos & Porvenir)
Source: Company reports; Scotiabank GBM estimates.

But the Gilinskis surely got some advice ahead of the transaction and what we know just as well. So, what’s
their angle?

So, what’s their Angle?

We’ve explored other theories from some of the investors that called us after the announcement and here
are the two most repeated stories:

Theory 1 – Trading Position: Some think that the Gilinkis may have built a position in Nutresa ahead of
today’s offer. In that case, if the offer fails, it would still yield them some handsome profits from the pre-built
position because shares usually trade up to levels near the offer price.

Our Opinion – We Don’t Think So: We’ve looked at recent holdings in Nutresa and out of the reported
positions as of 6/30/21, we don’t see any vehicles above 1% holding that appear to be the Gilinskis. In
addition, based on the trading volume of Nutresa and the fact the Nutresa has been repurchasing shares, a
position built past 6/30/21 would not be large enough to merit the trouble for a group this large. We think this
is an unlikely thesis.

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Theory 2 – Politics: Finally, an investor has asked us if we think that the current recall process of the mayor
of Medellin, Daniel Quintero, could be related. We were unaware of the process, so we’ve read in depth
about it. Here are a few long articles in Spanish, but if you want to talk to us about this, we are available for
calls:

- Quintero Fights with Medellin’s Business Establishment and Hands Power to His Friends

- GEA Denies the Accusations from Quintero

- Medellin Mayor Reveals his First Appointees to EPM and Ruta N Boards

- Ángel Beccassino: An Old Ally of the Gilinskis in his Old Fight Against GEA is now Daniel
Quintero’s Key Advisor

- Daniel Quintero Reaches a New Low in Approval Rating Levels

- Recall on Daniel Quintero Gathers Enough Signatures to Oust Him

Abu Dhabi’s Involvement – Unlimited Firepower IS a Risk: Newspapers have been writing that Abu
Dhabi is involved as a partner in the Gilinski offer. We could not verify this information, but one thing is clear.
With that kind of backing, the firepower could be nearly unlimited. And that’s definitely something that GEA
should be looking at carefully. If they are going to defend their position, it might be a good idea to bring in a
partner with equally unlimited fire-power (old friends from the Sura transaction perhaps?). Because maybe,
this is just the first of many steps, where there are subsequent higher offers until there can be a lawsuit for
breach of fiduciary duties (due to the cross-holding structure), or a point where the offer is too good for the
families to ignore.

Our Opinion – We Don’t Have One: None. This definitely sounds like a Colombian novela. If you haven’t
seen one, perhaps you’ve seen a Mexican one. So, take that, and now multiply it by three. All jokes-aside,
we don’t know enough about Medellin’s politics to give an educated opinion about this. In fact, all of the
articles we referenced (we tried to mix and match across publications to avoid a bias) are things we read in
the last few hours after talking to investors.

Our Conclusion

Win/win for Minority Investors: Regardless of where this ends up, it’s good for minority investors. Gilinski
has shown willingness to pay a price that is 37% above current prices and the shares should re-rate purely
on that news. Now, depending on GEA’s next move, this could become a bidding war, which is also be great
for minorities. It’s a win-win for them.

Awkward Position for GEA

Two Options to Play: There’s a catch to all this. If the OPA is accepted by regulators, the shares will trade
again during a period where the OPA will be open (starting from a few days from now to a little more than 30
from now under Exito’s timeline). And that means that GEA can select if it lets the process play out (trusting
that founding families don’t go for the offer) or if it acquires some more shares (say 4%-6%), which will take
them near or above the 50% threshold, guaranteeing a failed OPA.

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4%-6% Acquisition is a Better Option: We think that the latter option carries lower risk (and could make
the shares trade higher than the Gilinski offer). Some GEA shareholders may have limits, but others may
not. In any case, GEA has a hand to play defense. However, all of this has put GEA in an awkward ESG
position, especially on the G side.

Awkward Position: There’s a high chance that GEA picks a scenario, wins the battle, and Gilinskis have to
walk away or come back with a new offer. However, if that happens, the shares may come back down to
where they were ahead of the original offer. And in that case, GEA might have to explain why it stopped
minorities from getting a 37% higher price in the first place.

Exhibit 5: Tender Offer Timeline Details

Steps Description:
1. Request for approval sent to the Colombia's Securities Regulator (SFC). Colombia's Stock Exchange (BVC) suspends the target company’s stock trading.
2. SFC gives its final opinion (otherwise, administrative silence is considered as a positive response to the request).
3. The tender offer statement is published, and the target's stock resumes trading.
4. Tender offer begins.
5. Offer period - Min: 10d / Max: 30d.
6. Request for period extension.

Source: Superintendencia Financiera de Colombia (SFC); Scotiabank GBM.

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Company Overview

Company Description
Nutresa is a leading Latin American manufacturer and distributor of branded consumer food products. Founded in 1920 in Colombia,
where it evolved through a solid combination of organic growth and a successful acquisition strategy, it manages more than 168 brands,
17 of which generate annual sales of US$50 million each. While Nutresa’s products can be found in nearly 72 countries around the
world, the company mainly generates revenue through eight business segments distributed in the 14 countries where it operates its 45
manufacturing plants.

Risks
Key Risks: Economic, raw materials, foreign exchange, political and geographic, regulatory, interest rate, M&A, corporate governance.

Total Return Index of NUTRESA-CN

Source: Scotiabank GBM; FactSet.

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Appendix A: Important Disclosures

Company Disclosures (see legend below)*

Bimbo VS0429
M. Dias Branco J, V0178, VS0687

I, Felipe Ucros, certify that (1) the views expressed in this report in connection with securities or issuers that I analyze accurately reflect
my personal views and (2) no part of my compensation was, is, or will be directly or indirectly, related to the specific recommendations
or views expressed by me in this report.
This document has been prepared by Research Analysts employed by The Bank of Nova Scotia and/or its affiliates. The Bank of Nova
Scotia, its subsidiaries, branches and affiliates are referred to herein as "Scotiabank." "Scotiabank" together with "Global Banking and
Markets" is the marketing name of the global corporate and investment banking and capital markets business of The Bank of Nova
Scotia and its affiliates. Scotiabank, Global Banking and Markets produces research reports under a single marketing identity referred
to as "globally branded research" under U.S. rules. This research is produced on a single global research platform with one set of rules
which meet the most stringent standards set by regulators in the various jurisdictions in which the research reports are produced. In
addition, the Research Analysts who produce the research reports, regardless of location, are subject to one set of policies designed to
meet the most stringent rules established by regulators in the various jurisdictions where the research reports are produced.
Scotiabank relies on information barriers to control the flow of non-public or proprietary information contained in one or more areas
within Scotiabank into other areas, units, groups or affiliates of Scotiabank. In addition, Scotiabank has implemented procedures to
prevent research independence being compromised by any interactions they may have with other business areas of The Bank of Nova
Scotia. The compensation of the Research Analyst who prepared this document is determined exclusively by Scotiabank Research
Management and senior management (not including investment or corporate banking).
Research Analyst compensation is not based on investment or corporate banking revenues; however, compensation may relate to
the revenues of Scotiabank as a whole, of which investment banking, corporate banking, sales and trading are a part. Scotiabank
Research will initiate, update and cease coverage solely at the discretion of Scotiabank Research Management. Scotiabank Research
has independent supervisory oversight and does not report to the corporate or investment banking functions of Scotiabank.
For Scotiabank, Global Banking and Markets Research Analyst Standards and Disclosure Policies, please visit
www.gbm.scotiabank.com/disclosures.
For additional questions, please contact Scotiabank, Global Banking and Markets Research, 4 King St W, 12th Flr, Toronto, Ontario,
M5H 1A1.

Time of dissemination: November 12, 2021, 09:57 ET. Time of production: November 12, 2021, 09:48 ET. Note: Time of dissemination
is defined as the time at which the document was disseminated to clients. Time of production is defined as the time at which the
Supervisory Analyst approved the document.

*Legend

J Scotia Capital (USA) Inc. or its affiliates expects to receive or intends to seek compensation for investment banking services in
the next 3 months.
V0178 Scotiabank Brasil S.A. Banco Multiplo is acting as financial advisor to M. Dias Branco SA in the announced agreement to
acquire privately owned Latinex Importacao E Exportacao De Alimentos SA.
VS0429 Research Associate Juan Guzman visited Azcapotzalco, a production plant, on May 25, 2016. The issuer did not pay for any
of the travel-related expenses incurred by the Research Analyst to visit the site.
VS0687 Research Associate Juan Guzman visited M. Dias Branco's Piraquê production plant in Rio de Janeiro on December 5, 2018.
The issuer did not pay for any of the travel-related expenses incurred by the Research Associate to visit this site.

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Rating and Price Target History

Nutresa (NUTRESA-CN) as of November 11, 2021 (in COP)

02-06-2017 02-24-2020 04-27-2020 08-03-2021
Price: 24,000.00 Price: 25,300.00 Price: 23,200.00 Price: 20,350.00
Rating: SO Rating: SO Rating: SO Rating: SP
Target: 31,000.00 Target: 33,000.00 Target: 30,000.00 Target: 28,000.00
30,000

28,000
26,000

Price (COP)
24,000

22,000

20,000

18,000

16,000
Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22

*Represents the value(s) that changed.

Ratings Legend: FS=Focus Stock; SO=Sector Outperform; SP=Sector Perform; SU=Sector Underperform; T=Tender; UR=Under Review; CS=Coverage Suspended;
DC=Discontinued Coverage
Source: Scotiabank GBM estimates; FactSet.

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Definition of Scotiabank, Global Banking and Markets Equity Research Ratings

Scotiabank has a three-tiered rating system, with ratings of Sector Outperform, Sector Perform, and Sector Underperform. Each
Research Analyst assigns a rating that is relative to his or her coverage universe or an index identified by the Research Analyst that
includes, but is not limited to, stocks covered by the Research Analyst.
The rating assigned to each security covered in this report is based on the Scotiabank, Global Banking and Markets Research Analyst’s
12-month view on the security. Research Analysts may sometimes express in research reports shorter-term views on these securities
that may impact the price of the equity security in a manner directly counter to the Research Analyst’s 12-month view. These shorter-
term views are based upon catalysts or events that may have a shorter-term impact on the market price of the equity securities
discussed in research reports, including but not limited to the inherent volatility of the marketplace. Any such shorter-term views
expressed in research report are distinct from and do not affect the Research Analyst’s 12-month view and are clearly noted as such.
Ratings

Sector Outperform (SO) Other Ratings

The stock is expected to outperform the average 12-month total
Under Review – The rating has been temporarily
return of the analyst’s coverage universe or an index identified
placed under review, until sufficient information has
by the analyst that includes, but is not limited to, stocks covered
been received and assessed by the analyst.
by the analyst.
Tender – As of January 25, 2021, Scotiabank GBM
Sector Perform (SP)
discontinued the Tender rating.
The stock is expected to perform approximately in line with
the average 12-month total return of the analyst’s coverage Risk Ranking
universe or an index identified by the analyst that includes, but The Speculative risk ranking reflects exceptionally
is not limited to, stocks covered by the analyst. high financial and/or operational risk, exceptionally
low predictability of financial results, and
Sector Underperform (SU)
exceptionally high stock volatility. The Director
The stock is expected to underperform the average 12-month
of Research and the Supervisory Analyst jointly
total return of the analyst’s coverage universe or an index
make the final determination of the Speculative risk
identified by the analyst that includes, but is not limited to,
ranking.
stocks covered by the analyst.
Focus Stock (FS)
As of April 29, 2019, Scotiabank GBM discontinued the Focus
Stock rating. A stock assigned this rating represented an
analyst’s best idea(s); stocks in this category were expected
to significantly outperform the average 12-month total return
of the analyst’s coverage universe or an index identified by the
analyst that included, but was not limited to, stocks covered by
the analyst.
Scotiabank, Global Banking and Markets Equity Research Ratings Distribution*
Distribution by Ratings and Equity and Equity-Related Financings*
75%
Percentage of companies covered by
Scotiabank, Global Banking and Markets Equity
51.9% Research within each rating category.
50%
42.9%
Percentage of companies within each rating
category for which Scotiabank, Global Banking
25% and Markets has undertaken an underwriting
liability or has provided advice for a fee within
5.2% the last 12 months.
34.1% 20.3% 6.9%
0%
Sector Outperform Sector Perform Sector
Underperform

* As of October 31, 2021. Source: Scotiabank GBM.

For the purposes of the ratings distribution disclosure FINRA requires members who use a ratings system with terms different
than “buy,” “hold/neutral” and “sell,” to equate their own ratings into these categories. Our Sector Outperform, Sector Perform,
and Sector Underperform ratings are based on the criteria above, but for this purpose could be equated to buy, neutral and
sell ratings, respectively.

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General Disclosures
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In the normal course of offering investment and banking products and services to clients, Scotiabank may act in several capacities
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The information in this document has been prepared without taking into account any investor's objectives, financial situation or needs,
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Scotiabank accepts no liability whatsoever for the actions of third parties in this respect. Images may depict objects or elements that are
protected by third-party copyright, trademarks and other intellectual property rights.

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Equity research reports published by Scotiabank are initially and simultaneously made available electronically to intended recipients
through its proprietary research website, ScotiaView, e-mail, and through third-party aggregators. The mediums in which research
is disseminated to clients may vary depending on client preference as to the frequency and manner of receiving research reports.
Institutional clients with questions regarding distribution of equity research or who wish to access the proprietary model used to produce
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A list of all investment recommendations in an equity security or issuer that have been disseminated during the preceding 12 months is
available at the following location: www.gbm.scotiabank.com/disclosures.

Additional Disclosures
Australia: This report is provided in Australia by the Bank of Nova Scotia, an APRA-regulated Authorised Deposit-Taking Institution
(Foreign Bank ADI) holding an Australian Financial Services License (AFSL).
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advice. This report is prepared by analysts employed by The Bank of Nova Scotia and certain of its affiliates, including Scotia Capital
Inc.
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of any investment performed based on the contents of this research report.
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This document is intended for general circulation only and any recommendation that may be contained in this document concerning
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to persons who are eligible counterparties or professional clients. Scotiabank Europe plc is authorized by the Prudential Regulation
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Commission (“SEC”), any state securities commission in the United States or any other U.S. or non-U.S. regulatory authority. None

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of these authorities has passed on or endorsed the merits or the accuracy or adequacy of this document. Any representation to the
contrary is a criminal offense in the United States.
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Scotiabank Europe plc, Scotiabank (Ireland) Designated Activity Company, Scotiabank Inverlat S.A., Institución de Banca Múltiple,
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Inverlat Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities.

© The Bank of Nova Scotia 2021

This report and all the information, opinions, and conclusions contained in it are protected by copyright. This report may not be
reproduced in whole or in part, or referred to in any manner whatsoever, nor may the information, opinions, and conclusions contained
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and Global Banking and Markets logo and names are among the registered and unregistered trademarks of The Bank of Nova Scotia.
All rights reserved.

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