Grupo Bimbo SAB de CV (BMBOY) Q3 2024 Earnings Call Highlights: Strong Sales Growth Amidst ...

GuruFocus News
5 min read

In This Article:

  • Net Sales Increase: 7.4% overall growth.

  • Mexico Sales Growth: 6.6% increase.

  • Adjusted EBITDA Margin (Mexico): Nearly 22%, with a 160 basis points expansion.

  • Adjusted EBITDA Margin (EAA): Record high at 10%, with a 240 basis points expansion.

  • Adjusted EBITDA Margin (Overall): Record for the third quarter at 14.7%.

  • North America Top Line Decline: 4% decrease, excluding FX effects.

  • Latin America Net Sales Increase: 7.7%, excluding FX effects.

  • Europe, Asia, and Africa Sales Increase: 7.3%, excluding FX effects.

  • Net Debt to Adjusted EBITDA Ratio: 2.8 times.

  • Total Debt: MXN146 billion.

  • CapEx Guidance: Expected to be approximately $1.8 billion for the year.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Grupo Bimbo SAB de CV (BMBOY) reported a 7.4% increase in net sales, showcasing strong performance across diverse geographies and categories.

  • The company achieved a record adjusted EBITDA margin of 14.7% for the third quarter, driven by strong volume growth and favorable mix effects.

  • In Mexico, Grupo Bimbo SAB de CV (BMBOY) achieved a strong EBITDA margin of nearly 22%, with positive volume contributions and lower commodity costs.

  • The Europe, Asia, and Africa region reported a remarkable adjusted EBITDA margin expansion of 240 basis points, resulting from solid sales performance and efficiencies throughout the supply chain.

  • Grupo Bimbo SAB de CV (BMBOY) continues to expand its global footprint with strategic acquisitions, including Pagnifique in Uruguay and Wickbold in Brazil, enhancing its portfolio and market presence.

Negative Points

  • The North American market faced a challenging environment with a 4% decline in top-line sales, attributed to weak consumer consumption and strategic exits from non-branded businesses.

  • Despite lower commodity costs, the adjusted EBITDA margin in North America contracted by 140 basis points due to strategic investments and one-time charges related to bakery closures.

  • Grupo Bimbo SAB de CV (BMBOY) announced the closure of five bakeries, which may lead to short-term operational disruptions and costs.

  • The Latin American region experienced a challenging consumption environment, particularly in Colombia and Chile, impacting overall performance.

  • The company's net debt increased due to strategic investments and currency depreciation, with a net to adjusted EBITDA ratio of 2.8 times, slightly above the comfort zone.

Q & A Highlights

Q: Can you comment on the promotional activity in the US and the outlook going forward? Also, explain the difference between EBIT and EBITDA margins. A: (Mark Bendix, Executive Vice President) We are focusing on offering more value through promotions and price reductions, but the response isn't as strong as in previous years. We're using our RGM process to evaluate promotions and meet consumer needs. (Diego Cuevas, CFO) The higher decrease in EBIT margin compared to EBITDA is mainly due to increased depreciation and amortization, and a small charge from Mets.

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