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What does guidance in Mexican Materials look like? And what should it look like?

This week, we are coming back to our guidance trends analyses, focusing on one of the largest sectors in the Mexican market: Materials. As we have said in our other guidance analyses, metrics included in guidance strategies vary from sector to sector, and hence, so do best practices on this matter. The idea is that companies should share the metrics that are most relevant for investors and analysts so they can be able to accurately forecast earnings and value their stocks.

It is important to note that, as usual, we only consider guidance to be formal guidance if it is properly disclosed, numeric (even if it is a range), and not only broad management comments on a very high-level view of the direction the business is taking. As for the sector classification of companies, we are following the definitions from the BMV (Bolsa Mexicana de Valores).

Materials – Current formal guidance strategy

 Source: Company Materials


  • Bio Pappel and Elementia formally delisted from the BMV in 2021. 

What can we read from this table?

  • Currently only three out of 15 peers in the Materials sector in Mexico offer formal guidance. This represents 20% of the sector.
  • For the companies that do provide guidance, they all disclose at least five or more metrics on a quarterly basis.
  • All these companies include their guidance in their earnings presentations and calls, and one additionally publishes press releases on it.
  • All of them include guidance on EBITDA and CapEx, as well as material volumes and/or costs.


So, what do the largest materials companies (by market cap) in the world do?

The “Materials” sector in Mexico includes companies that sell many different types of materials. So, for global peers, we chose some of the largest companies in the Iron and Steel, Paper and Pulp, and Cement sectors:

  • Vale (iron and steel): only discloses ranges of its iron, nickel, and copper productions, on a quarterly basis. This is done through press releases, earnings presentations, and calls.
  • International Paper (paper and pulp): provides guidance on adjusted EBITDA, CapEx, free cash flow, net interest expense, corporate expense, and effective tax rates every quarter. It uses range and point estimates, and disclosure is done through earnings presentations and calls.
  • Holcim (cement): publishes its guidance through press releases, earnings presentations, and calls on a quarterly basis. Its guidance includes recurring EBIT, net sales growth, CapEx, cash conversion, ROIC, and leverage (using range and point estimates).


What should we learn from this?

The number of metrics included in guidance strategies, as well as the updates frequency, is similar between the global peers we analyzed and the three Mexican companies that do provide guidance. There are also similarities in the channels used to disclose guidance (earnings presentations and calls); press releases were more popular on the international front. Guidance on EBITDA, CapEx, and production figures were the most common metrics published across the board with all players.

Although the Mexican companies that do offer guidance seem to have a similar approach to big global players (and thus what investors and analysts would expect from them), there are many companies in this sector which don’t provide guidance yet. In some cases, this is most likely related to the liquidity of their stocks (and the lower dependency on investors and analysts), but for some of them we believe it would make sense to launch a formal guidance strategy if they intend to increase their investor relations effort over the coming year.

There are still many factors disrupting companies’ operations across the globe, which is why we believe investors and analysts need guidance now more than ever. Formally sticking to the disclosure of certain metrics from quarter to quarter ¾even if they must be disclosed in wider-than-usual ranges or as directional comments¾  can strengthen the market’s view on your company’s risk management and transparency. If you would like to revamp and relaunch your guidance strategy, or if it’s your first time planning one, let us know! We will be happy to help you with the process.

Contacts at Miranda Partners

Damian Fraser
Miranda Partners

Ana María Ybarra Corcuera