Latin American Business Outlook Part of the Global Business Outlook

1. Latin American Business OutlookPart of the Global Business Outlook A joint survey effort between Duke University FundaçãoGetúlio Vargas CFO magazine El IMEF PyME Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

2. Top Concerns for Latin American CFOs Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

3. Business Optimism Index CFO optimism moderate in Mexico and Peru, Brazil and Chile remain pessimistic Global Trends Sep 2015 Response • Country Business Optimism Index Country / Region • Own-Firm Business Optimism Index Own Company Notes: Presented data are the mean value for each region or country, Scale from 0-100 Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

4. Expected Increase in Product Prices Latin American inflationary expectations are relatively high overall, driven by Brazil. Global Trends Sept 2015 Outlook Product Prices Inflation expectations stay flat in Latin America • Latin American CFOs expect significant price increases, due mainly to high inflation in Brazil. CFOs in Europe, US and Asia expect low inflation or deflation. Inflation expectations high in Brazil • Of responding countries, Brazil has the highest inflationary expectations • Prices are expected to increase slowly in Peru and Ecuador. Notes: Presented data are the mean values for each region or country. Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

5. Expected Growthin Sales Revenue CFOS in Brazil expect greater than 10% increase in revenues; other Latin American CFOs expect 6% or less. Sept 2015 Outlook Global Trends Revenue Latin American revenue growth rises • Revenue expectations rise up from last quarter’s 3.9% expected revenue growth • Revenue growth will be the slowest in Asia. Ecuador and Mexico expect fastest growth • Among responding L.A. countries, revenues in Brazil will grow the fastest, followed by Mexico. • Net of inflation, Brazil’s sales growth is modest • Ecuador expects revenues to decline over the next year. Notes: Presented data are the mean value for each region or country. Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

6. Expected Increase in Capital Spending Latin American capital spending will be flat overall, pulled down by Brazil and Chile Sept 2015 Outlook Global Trends Capital Spending Capital spending plans remain weak • Latin American expects business spending to stay constant. • Business spending is strong in the United Stateand Europe Business spending varies within Latin America • Capital spending will grow positively in Peru and Mexico • Spending expected to decline in Brazil and Chile. Notes: Presented data are the mean value for each region or country. Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

7. Expected Change in Earnings Small earnings growth expected in Latin America Sept 2015 Outlook Global Trends Earnings Earnings growth becomes positive this quarter • Latin American earnings growth increases from zero last quarter to 2.9% this quarter. • African earnings are expected to increase sharply. Asian earnings growth expect to stay flat. Weaker earnings in surveyed Latam countries • Brazil, Mexico and Peru expect earnings to grow • Earnings in Brazil will not keep pace with inflation • Earnings expectations are negative in Chile and Ecuador. Notes: Presented data are the mean public company value for each region or country. Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

8. Moderate Increase in Fulltime Employment Latin American CFOs expect no change in fulltime domestic employment in 2015 Sept 2015 Outlook Global Trends # FT Employees Flat employment in Latin America • Latam CFOs expect no employment growth in the next year. • US, Europe and Africa expect positive employment growth. Employment growth varies across L.A. • Brazil, Peru and Chile expect reductions in fulltime employment. • Employment growth moderate in Mexico, at an expected rate of 2.7%. Notes: Presented data are the mean value for each region or country #FT=Number of Fulltime Employees Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

9. Expected Wage and Salary Increase Wages and salaries are projected to increase by 5.5% in Latin America. Sept 2015 Outlook Global Trends Wages & Salaries Rapid wage growth in emerging economies • Asia and Africa expect wages to rise more than 5%, which is higher than the overall inflationary expectations in these regions. • The US and Europe expect wages to grow by around 3%. Real wage growth is negative in Brazil • With product market inflation of 9.6% and wage growth of 7.3%, wages will not keep up with inflation in Brazil. Similar for Chile. • In Peru and Mexico, wages are likely to increase. Notes: Presented data are the mean value for each region or country Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

10. Difficulty in Filling Key Positions How difficult is it for your firm to fill you key job opening? Percentage for finding it is difficult • Many Latam firms have difficulty fillling key jobs • Europe is best able to fill positions, while emerging economies like Asia and Africa have more difficulty. • Hiring difficulties vary across Latam countries • Mexican firms have the most difficulty, and Brazilian firms have the least Latin American Business Outlook Duke University / FGV / CFO Magazine Sep 2015

11. Merger and Acquisition Activity As a region, Latin American M&A potential activity is below the US, Europe, Asia and Africa. About 17.7% of Latam CFOs expect their firms to make an acquisition in the next year World-wide, slightly more than one-fourth of companies expect to acquire assets of another firm • M&A activity is comparatively lower in Latin America, especially in Peru where only 14.3% of firms expect to acquire. M&A activity will be highest in Asia and lowest in Latam. Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

12. Reasons for Making Acquisitions Why is your firm making acquisition(s)? (Choose 3) Latin American firms acquire mainly to improve industry position and consolidation • Cost and revenue synergies also drive acquisitions. • Attractive target valuation encourages firms to acquire. Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

13. Has risk management become complacent? Do you believe that firms in your industry have become complacent about the threat of, and potential negative effects of, future economic stress (for example, a recession or crisis)? Percentage for answering yes • 40% of Latin American firms are complacent about risk management • Africa is the least complacent • Nearly half of Asian firms are complacent about risk management, highest in the world Latin American Business Outlook Duke University / FGV / CFO Magazine Sep 2015

14. Has risk management become complacent? Do you believe that firms in your industry have become complacent about the threat of, and potential negative effects of, future economic stress (for example, a recession or crisis)? Percentage for answering yes • Level of complacency about risk management varies across Latin America • Peru is the most complacent (48%), followed by Chile and Brazil • Few companies in Uruguay are complacent about managing downside risk. Latin American Business Outlook Duke University / FGV / CFO Magazine Sep 2015

15. Is the stock market overvalued/undervalued? I believe that the stock market in my country is: Percentage for overvalued/undervalued Latin American is the only region in which CFOs think the stock market is undervalued • Only 6$% of US firms think the US stock market is undervalued, lowest in the world • Most African CFOs think their stock market is overvalued Global Business Outlook Duke University Sep 2015

16. Is the stock market overvalued/undervalued? I believe that the stock market in my country is: Percentage for overvalued/undervalued Many Latin American CFOs believe the stock market is undervalued • Brazil has the highest proportion of firms that believe the stock market is undervalued, at 78% • CFOs in Chile and Uruguay believe their stock markets are overvalued Global Business Outlook Duke University Sep 2015

17. Return on Assets (ROA) Profit growth varies by country in Latin America Profit margins are expected to rise in all regions, relative to 2014 profits • CFOs in Latin America expect lower ROA improvement than the rest of the world, with Chile expecting the worst return on assets. Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

18. Duke/FGV CFO Survey in Latin America Press The Latin American Business Outlook is frequently reported in the press Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

19. Duke/FGV CFO Survey in Latin America Press The Latin American Business Outlook is frequently reported in the press Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015

20. Latin American Business OutlookPart of the Global Business Outlook A joint survey effort between Duke University FundaçãoGetúlio Vargas CFO magazine El IMEF PyME Latin American Business Outlook Duke University / FGV / CFO Magazine Sept 2015