GRUPO BIMBO REPORTS FIRST NINE MONTHS 2017 RESULTS
MEXICO CITY, OCTOBER 26, 2017
Grupo Bimbo, S.A.B. de C.V. ("Grupo Bimbo" or "the Company") (BMV: BIMBO) today reported its results for the nine months ended September 30, 2017.1
"Our year to date results reflect our ongoing investments to drive forward our long-term focus on profitability through superior execution, enduring and meaningful brands, and ongoing innovation", said Daniel Servitje, CEO and Chairman of Grupo Bimbo.
HIGHLIGHTS OF THE PERIOD
RECENT DEVELOPMENTS
Net sales rose 7.3%, primarily reflecting organic growth in Mexico, FX rate benefit, and previous period acquisitions, notably Donuts Iberia
Gross profit rose 6.3%, while the margin declined 40 basis points, mainly due to higher raw material costs in Mexico
Adjusted EBITDA2 margin contracted 120 basis points, primarily as a result of higher expenses in EAA and increased costs in Mexico
Net majority margin declined 110 basis
On October 6, the Company successfully issued Ps. 10 billion at 8.18% fixed rate local bonds, due 2027
On October 16, Grupo Bimbo completed the accretive acquisition of East Balt Bakeries, now Bimbo QSR, becoming a leading participant within the Quick Service Restaurants ("QSR") industry
On October 20, the Company prepaid the BIMBO 12 local bond due 2018 (Ps. 5.1 billion), increasing the tenor of the Company's
debt
points on the abovementioned operational
performance and a higher effective tax rate
Figures included in this document are prepared in accordance with International Financial Reporting Standards (IFRS)
Operating Income plus depreciation, amortization and other non-cash items
Investor Relations
http://www.grupobimbo.com/ri/
Tania Dib tania.dib@grupobimbo.com
Estefanía Poucel estefania.poucel@grupobimbo.com (5255) 5268 6830
María del Mar Velasco maria.velasco@grupobimbo.com (5255) 5268 6789
1
NET SALES
(MILLIONS OF MEXICAN PESOS)
3Q17
3Q16
% Change
Net Sales
9M17
9M16
% Change
23,075
20,562
12.2
Mexico
67,205
60,069
11.9
33,161
34,460
(3.8)
North America
101,367
98,254
3.2
6,739
7,728
(12.8)
Latin America
21,312
21,080
1.1
4,305
3,900
10.4
EAA
12,450
8,438
47.5
65,390
65,164
0.3
Consolidated
196,584
183,279
7.3
Consolidated results exclude inter-company transactions.
Consolidated net sales rose 7.3% primarily reflecting continued organic growth in Mexico, FX rate benefit, and acquisitions made in previous periods, most notably Donuts Iberia.
Mexico
Net sales in Mexico rose 11.9% over the first nine months of 2016, driven by continued volume gains in every channel, especially the modern channel, as well as price increases in line with inflation and a better price mix. The latter reflected better performance in the sweet baked goods and snacks categories. New product launches such as Bimbo Vital bread and Barcel Cheese Chips continued to contribute to growth, as did increased penetration and healthy sales in the Sanissimo and Panditas brands.
North America3
Net sales increased 3.2% on a cumulative basis, due to exchange rate benefit, growth in strategic brands and snacks, as well as a better price mix in the US. Nonetheless, continued pressure in the private label and premium categories in the US, as well as in the frozen category continued to weigh on overall sales.
Third quarter sales decline was attributable to FX rate impact, while sales in US dollar terms rose approximately 1%, a trend improvement compared to the first half of the year, driven by market share gains in the US, positive volume gains in Canada, which resulted in part for new product launches such as Dempster's Whole Grain with chia, as well as organic growth at the recently acquired Stonemill Bakehouse business.
22,083 22,047
19,775 19,732
20,562
23,075
34,002 33,613 34,204
30,181
34,46033,161
1Q 2Q 3Q
North America region includes operations in the United States and Canada
1Q 2Q 3Q
(millions of Mexican pesos) 2016 2017
Latin America
Even though last year's results include Venezuela, net sales rose 1.1% in Latin America, mainly due to increased sales in the Latin Centro division, as well as in the traditional channel due to ongoing market penetration and, to a lesser extent, FX rate benefit. Volumes remained under pressure in Brazil, although of particular note in the latter, results reflected better pricing and an improved sales mix, combined with increased market share in mainstream bread and snack cakes.
Third quarter results were affected by Venezuela's deconsolidation, done in June 1st, 2017, and to a lesser extent, FX rate pressure. These effects were partially offset by growth in local currencies across the three divisions.
EAA (Europe, Asia & Africa)
Sales during the first nine months of the year increased 47.5%, driven by the acquisitions of Donuts Iberia, Ready Roti and Groupe Adghal, as well as FX rate benefit.
In the third quarter, weaker pace of sales growth reflected a more comparable basis of the Donuts Iberia acquisition concluded in July 21, 2016, integration-related delays in Iberia and production difficulties in a line in the UK, which have already been solved.
7,703
7,728
4,218
4,305
6,489 6,863 6,870 6,739
3,927
3,900
2,1922,346
1Q 2Q 3Q
1Q 2Q 3Q
GROSS PROFIT
(MILLIONS OF MEXICAN PESOS)
(millions of Mexican pesos) 2016 2017
3Q17 | 3Q16 | % Change | Gross Profit | 9M17 | 9M16 | % Change |
12,536 | 11,753 | 6.7 | Mexico | 36,955 | 34,299 | 7.7 |
17,903 | 18,422 | (2.8) | North America | 54,800 | 52,195 | 5.0 |
3,176 | 3,621 | (12.3) | Latin America | 9,889 | 9,695 | 2.0 |
1,536 | 1,769 | (13.2) | EAA | 4,956 | 3,699 | 34.0 |
34,652 | 35,276 | (1.8) | Consolidated | 105,324 | 99,051 | 6.3 |
3Q17 | 3Q16 | Change pp | Gross Margin (%) | 9M17 | 9M16 | Change pp | |
54.3 | 57.2 | (2.9) | Mexico | 55.0 | 57.1 | (2.1) | |
54.0 | 53.5 | 0.5 | North America | 54.1 | 53.1 | 1.0 | |
47.1 | 46.8 | 0.3 | Latin America | 46.4 | 46.0 | 0.4 | |
35.7 | 45.4 | (9.7) | EAA | 39.8 | 43.8 | (4.0) | |
53.0 | 54.1 | (1.1) | Consolidated | 53.6 | 54.0 | (0.4) |
Consolidated results exclude inter-company transactions.
Cumulative consolidated gross profit increased 6.3%, while the margin contracted 40 basis points to 53.6%, due to higher raw material costs in Mexico arising from a
53.7
53.7
54.3 54.1
54.1
53.0
stronger US dollar due to hedges in place, which are expected to gradually lessen in the next year, and the aforementioned impact of slower sales growth in EAA during the most recent quarter. This was somewhat offset by lower raw material costs in North America and Latin America.
30,638
35,464 35,208
33,137
35,276
34,652
1Q 2Q 3Q
(millions of Mexican pesos)
(% of net sales)
2016 2017
PROFIT BEFORE OTHER INCOME AND EXPENSES
(MILLIONS OF MEXICAN PESOS)
3Q17 | 3Q16 | % Change | Profit Before Other Income & Expenses | 9M17 | 9M16 | % Change |
3,418 | 3,310 | 3.3 | Mexico | 9,240 | 8,966 | 3.1 |
2,639 | 2,679 | (1.5) | North America | 7,019 | 6,597 | 6.4 |
57 | 167 | (66.1) | Latin America | (186) | (14) | >100 |
(434) | (26) | >100 | EAA | (758) | (156) | >100 |
5,730 | 6,354 | (9.8) | Consolidated | 15,338 | 16,037 | (4.4) |
Grupo Bimbo SAB de CV published this content on 26 October 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 October 2017 23:52:06 UTC.
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