PRESS RELEASE

Cementos de Chihuahua reports 2016 results

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Tuesday, February 28, 2017

PRESS RELEASE

(This is an abridged version of the press release.)

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Chihuahua, Chihuahua, Mexico, February 27, 2017 - Grupo Cementos de Chihuahua, S.A.B. de C.V.

("GCC" or the "Company") (BMV: GCC*), a leading producer of cement and ready mix in markets in the

United States and Mexico, today announced its results for the fourth quarter of 2016.

HIGHLIGHTS

GCC completed 2016 with important progress in its growth strategy, with the acquisition of the cement

plant in Odessa, Texas, and the ready mix and other construction materials operations in Texas and New

Mexico. In addition, the Company achieved solid performance with strong double-digit increases in sales,

operating income and EBITDA in the quarter and year.

• Total sales grew 24.8% in the fourth quarter and 16.8% in the year

• Operating income before other expenses rose 21.1% in the quarter and 41.1% in 2016

• EBITDA grew 29.7% in the quarter and 33.6% in the year

• Net income declined 10.0% in the quarter and rose 40.3% in 2016

• Net leverage (net debt/EBITDA) was 2.57 times at the close of 2016

• Fitch Ratings and Standard & Poor's affirmed GCC's credit rating

FINANCIAL RESULTS

Net Sales for the fourth quarter of 2016 increased 24.8% over the same period of 2015, totaling $3,678.4

million pesos. This is a result of higher cement volumes in Mexico and the United States, higher ready

mix volumes in the United States, a better pricing environment for GCC products in both countries, as

well as the effect of the 12.5% depreciation of the peso against the dollar on sales denominated in dollars.

Results in the United States include the acquired cement and ready mix operations in Texas and New

Mexico starting on November 18.

In the United States, sales rose 27.4% in the last quarter of 2016 compared to the same period of the

previous year, totaling $2,735.0 million pesos and representing 74.4% of GCC's consolidated net sales.

This strong increase was due to a combination of the following factors: an increase of 2% for ready mix

prices and a slightly positive increase for cement prices; higher cement sales volumes in the states of

Texas, Colorado, New Mexico, and Minnesota; higher ready mix volumes in the states of Texas, Arkansas, Oklahoma, and Iowa; and the positive impact on sales from the effect of the peso depreciation against

the US dollar.

The segments with the highest investment in construction in the regions where GCC operates were

public services, manufacturing, commercial, construction of schools, hotels and office buildings, as well

as the public sector with urban paving and highway projects, while the residential sector was less active.

Sales in the United States expressed in dollar terms rose 7.6% in the fourth quarter compared to the same

period of 2015.

In Mexico, sales for the fourth quarter of 2016 rose 17.9% over the fourth quarter of 2015, totaling $943.4

million pesos and representing 25.6% of consolidated net sales. This was a result of a 4% increase in

cement sales volumes, reflecting higher retail sales and development in the commercial and industrial

sectors, which offset the decline in public sector construction. This also had an effect on the sales mix,

which, combined with the effect of the depreciation of the peso against the dollar on the prices of

exported cement, generated price increases of 19% for cement and 18% for ready mix.

Consolidated net sales for 2016 rose 16.8% over 2015 and totaled $13,996.8 million pesos. Sales in the

United States represented 73.6% of the total, while sales in Mexico accounted for 26.4%.

In the United States, sales for the year increased 20.6% reaching $10,307.2 million pesos. The factors that

led to this increase were: a better pricing environment with increases of 3% for cement and 3% for ready

mix; a 10% rise in ready mix volumes; and the 17.7% depreciation of the peso against the dollar. US sales

in dollar terms increased 2.8% for the year.

In 2016, Mexico's sales increased 7.4% over 2015, to a total of $3,689.6 million pesos. This was due to a

combination of the following factors: a 4% rise in cement volumes driven by greater development of the

commercial and industrial sectors, mainly in the construction of hotels, commercial plazas and industrial

buildings, which offset the decline in the public sector due to the completion of two important urban

paving and highway construction projects that took place in 2015, and a 13% increase in the ready mix

price. In addition, the effect of the depreciation of the peso against the US dollar on cement exports

contributed to a 16% increase in cement price.

The Cost of Sales in the fourth quarter of 2016 totaled $2,725.0 million pesos and represented 74.1% of

net sales, a rise of 0.7 percentage points from the same quarter of last year. This was due to the

incorporation in the United States of the cement, ready mix and construction materials businesses

acquired in the quarter, which increased fixed production costs; the effect of the depreciation of the peso

against the US dollar; and higher depreciation costs. These factors were partially offset by lower freight

costs in the United States, and lower costs for electricity and fuel, as well as a better pricing environment

in both countries.

The cumulative cost of sales in 2016 represented 73.0% of net sales, and decreased by 2.7 percentage

points compared to 2015, mainly reflecting a decrease in distribution costs arising from lower fuel costs

in the United States that offset the effect of the depreciation of the peso against the dollar.

Operating Expenses for the fourth quarter of 2016 totaled $432.3 million pesos, 22.3% higher than

those in the same quarter of last year, and represented 11.8% of sales, down 0.2 percentage points from

the fourth quarter of 2015. This was mainly due to the depreciation of the peso against the US dollar on

dollar-denominated expenses, and a higher depreciation expense.

During 2016 operating expenses increased 14.2% as a result of the effect of the peso depreciation against

the US dollar, and the increase in depreciation expenses. As a percentage of sales, operating expenses in

2016 decreased 0.2 percentage points from the previous year.

Operating Income before Other Expenses for the fourth quarter of 2016 increased 21.1% compared

to the same quarter of 2015 and totaled $521.1 million pesos. Cumulative operating income before other

expenses in the year rose 41.1% over the previous year, and totaled $2,362.1 million pesos.

On the Other Expenses, Net line, $61.7 million pesos were registered in the fourth quarter of the year,

compared to $19.5 million pesos recorded in the same quarter of 2015. This increase was generated by

extraordinary expenses incurred in connection with the acquisition of the cement and ready mix

operations in Texas and New Mexico. For the same reason, $118.8 million pesos in other expenses were

recorded in 2016, compared to $25.3 million pesos in the previous year.

Operating Income for the fourth quarter of 2016 totaled $459.4 million pesos, an increase of 11.8%

compared to the last quarter of 2015. Operating income for 2016 increased 36.0% compared to the prior

year, and totaled $2,243.3 million pesos.

EBITDA for the fourth quarter of 2016 was $883.8 million pesos, 29.7% more than in the fourth quarter

of 2015. The margin increased by 0.9 percentage points and represented 24.0% of sales. EBITDA for 2016

increased 33.6% over the previous year and totaled $3,525.6 million pesos, with a margin of 25.2% of

sales, 3.2 percentage points higher than in 2015.

In 2016, EBITDA generated by the operations in the United States represented 66.5% of the total, while

33.5% was generated by the operations in Mexico.

Net Financial Expenses in the fourth quarter of 2016 totaled $255.7 million pesos, rising 71.1% over the

same quarter of the previous year. This was due to the following factors: a higher debt balance arising

from the US$253.5 million dollar financing for the acquisition of assets in the US; a charge of $24.1 million

pesos for an exchange rate fluctuation which unfavorably compares to the $6.3 million peso gain in the

fourth quarter of 2015; and the effect of the depreciation of the peso against the US dollar.

The cumulative net financial expenses in 2016 totaled $670.9 million pesos, rising 16.3% over 2015 as a

result of the effect of the depreciation of the peso against the dollar on the conversion of financial

expenses to pesos, and a higher debt balance, which were partially offset by a lower interest rate and a

rise in financial income.

In the fourth quarter of 2016, Income Taxes totaled $21.8 million pesos, a figure that is $56.2 million

pesos lower than in the same period of last year as a result of a lower taxable base. Income tax in 2016

totaled $308.2 million pesos, compared to $169.7 million in 2015, reflecting the rise in pre-tax profit.

Consolidated Net Income in the fourth quarter of 2016 totaled $187.1 million pesos, a 10.0% decrease

from the fourth quarter of 2015. In 2016, consolidated net income totaled $1,284.2 million pesos, a figure

40.3% higher than the $915.5 million pesos recorded in 2015.

Free Cash Flow in the fourth quarter of the year was $1,002.3 million pesos, 5.4% higher than the $950.6

million pesos of cash flow in the last quarter of 2015. This variation is mainly due to the combination of

the following factors: a 29.7% increase in EBITDA, a 50% decrease in capital expenditures (excluding

investments in growth capex), a lower reduction in working capital, an increase in financial expenses,

and a decrease in other accounts payable.

During 2016, $2,205.5 million pesos in resources were generated, an increase of 65.1% compared to 2015

cash flow of $1,336.2 million pesos. This increase was mainly due to a 33.6% increase in EBITDA and a

10.2% decrease in capital expenditures (excluding investments in growth capex), partially offset by a

13.4% increase in financial expenses.

Additionally, during the quarter, GCC used US$6.1 million dollars of its cash resources for the South

Dakota cement plant expansion project, and US$52.5 million dollars in partial payment for the

acquisition of cement and ready mix operations in Texas and New Mexico. The remainder of the

acquisition was financed with a bank loan of US$253.5 million dollars.