Highlights from the quarter: Net sales increased 19.9%, driven by the Canada Bread acquisition as well as growth in all regions and beneficial FX rate from the US Operating income rose 67.6%, while the margin expanded a significant 150 basis points EBITDA increased 43%, with a strong 140 basis point expansion in the margin Net majority income increased 111.0%, reflecting a margin expansion of 80 basis points The acquisition of Saputo Bakery Inc. in Canada was finalized Investor Relations Marcos Camacho (5255) 5268 6704 marcos.camacho@grupobimbo.com Estefanía Poucel (5255) 5268 6830 estefania.poucel@grupobimbo.com Diego Mondragón (5255) 5268 6789 diego.mondragon@grupobimbo.com | GRUPO BIMBO REPORTS FIRST QUARTER 2015 RESULTS Mexico City, April 23, 2015 - Grupo Bimbo S.A.B. de C.V. ("Grupo Bimbo" or "the Company") (BMV: BIMBO) today reported results for the three months ended March 31, 2015.1 Consolidated net sales in the first quarter of the year rose 19.9% to Ps. 49,843 million, posting higher sales in all regions. This reflected the Canada Bread and Ecuador acquisitions, coupled with solid organic growth in Mexico and Latin America, as well as the FX effect on US dollar-denominated revenues. Profit before other income & expenses rose 38.5% in the quarter, with an 80 basis point expansion in the margin, reflecting gross margin stability and lower operating expenses as a percentage of net sales. Operating income grew 67.6%, a 150 basis point margin expansion, mainly on lower restructuring expenses in the US. Net majority income totaled Ps. 907 million during the quarter, a 111% increase from the year ago period, reflecting positive operating performance and a lower effective tax rate. Net margin expanded 80 basis points to 1.8%. During the quarter the Company, through its subsidiary Canada Bread Company, Limited, completed the acquisition of Saputo Bakery Inc., the leading producer of snack cakes in Canada. This transaction includes one production facility and well-positioned brands such as Vachon®, Jos Louis®, Ah Caramel®, Passion Flakie® and May West®, among others, and further strengthens the Company's position in the North American market enhancing its distribution network, manufacturing base and product portfolio. |
1Figures included in this document are prepared in accordance with International Financial Reporting Standards (IFRS). |
(Millions of Mexican pesos)
Net Sales(millions of Mexican pesos)
17,709
18,824
Note: Consolidated results exclude inter-company transactions.
1Q
US & Canada(Millions of Mexican pesos)
24,935
18,415
1Q
Latin America(Millions of Mexican pesos)
5,073 5,569
1Q
Europe(Millions of Mexican pesos)
1,451 1,785
1Q
MexicoNet sales during the first quarter posted the highest growth in the past two years, rising 6.3% from the year ago period. The Company posted healthy performance across all channels and categories, most notably in bread, cakes, tortillas and cookies. These results were primarily driven by stronger execution at the point of sale, a wide array of commercial efforts and ongoing product innovation, along with an improvement in the overall consumption environment.
US & CanadaDuring the period, net sales in US & Canada rose 35.4%, mainly reflecting the Canada Bread acquisition, which accounted for 21.5%, as well as the effect of a stronger US dollar. While overall volumes remained under pressure due to still challenging market dynamics, sales growth in the sweet baked goods and breakfast categories remained strong.
Latin AmericaNet sales in the first quarter reflected good performance in local currencies across most of the countries in the region, most notably in Brazil, Colombia and Chile, along with the Supan acquisition in Ecuador. Ongoing market penetration efforts, specifically in the traditional channel, and successful positioning of new products helped drive growth in the period.
Europe
Europe posted a net sales increase of 23.0% to Ps. 1,785 million, primarily due to the contribution of the UK operation acquired as part of the Canada Bread transaction. The bread, buns and toasted bread categories performed well in the period, while a broader market presence and cross-regional product introduction strategy also supported growth.
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First Quarter 2015 Results
Gross Profit(Millions of Mexican pesos)
Gross Profit(millions of Mexican pesos)
21,999
52.8
52.9
26,329
1Q
Note: Consolidated results exclude inter-company transactions.
Operating Expenses(% of net sales)
47.6 46.6
1Q
Consolidated gross profit in the quarter increased 19.7% to Ps. 26,329 million, while the margin remained stable, due to the Company´s discipline hedging strategy regarding commodities and FX rates.
Operating ExpensesOperating expenses during the quarter, expressed as a percentage of net sales, decreased 90 basis points to 46.6%, reflecting lower distribution costs across all regions coupled with synergies and waste reduction initiatives, particularly in the US.
Profit before Other Income & Expenses(millions of Mexican pesos)
Profit before Other Income & Expenses(Millions of Mexican pesos)
2,225
6.2
5.4
3,081
1Q
Note: Consolidated results exclude inter-company transactions.
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First Quarter 2015 Results
Profit before other income & expenses totaled Ps. 3,081 million, an increase of 38.5%. The 80 basis point expansion in the margin reflected gross margin stability and lower operating expenses as a percentage of net sales. It should be noted that performance in Latin America primarily reflected higher general expenses in the region related to IT efforts, the effect of a much higher FX rate in Venezuela (from $50 to $192
USD/VEF) and a temporary operational matter in Peru, which has already been resolved.
(Millions of Mexican pesos)
Operating Income(millions of Mexican pesos)
5.2
3.7
2,575
1,537
1Q
Note: Consolidated results exclude inter-company transactions.
Comprehensive Financing Result(Millions of Mexican pesos)
(628) |
(960)
1Q
Operating income in the first quarter increased 67.6% to Ps. 2,575 million, while the margin expanded 150 basis points to 5.2%. This primarily reflected lower expenses in the US & Canada related to the asset reconfiguration and optimization strategy (Ps. 439 million during the first quarter of 2015 vs. Ps. 594 million during the first quarter of 2014). The decrease in the operating margin in Latin America is due to the aforementioned effects in the other income and expenses line.
Comprehensive Financing Result
Comprehensive financing resulted in a Ps. 960 million cost in the first quarter, compared to a Ps. 628 million cost in the same period of last year. The increase reflects the incremental interest expense related to the Canada Bread acquisition in May 2014 as well as a higher peso-dollar FX rate which increased the peso value of dollar denominated interest expenses.
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First Quarter 2015 Results
Net Majority Income(Millions of Mexican pesos)
Net Majority Income(millions of Mexican pesos)
1Q15 | 1Q14 | % Change | |
Consolidated | 907 | 430 | >100 |
430
1.8
1.0
1Q
907
Note: Consolidated results exclude inter-company transactions.
Net majority income for the quarter increased 111.0% to Ps. 907 million, with an 80 basis point expansion in the margin, reflecting performance at the operating level and a lower effective tax rate of 35.5%, compared to the year ago rate of 40.7%.
EBITDA(Millions of Mexican pesos)
Operating Income plus Depreciation and Amortization (EBITDA)(millions of Mexican pesos)
8.5
7.1
4,227
2,955
1Q
Note: Regional results do not reflect inter-company royalties, while consolidated results exclude inter-company transactions.
EBITDA in the quarter increased 43.0% to Ps. 4,227 million, while the margin expanded 140 basis points to 8.5%.
Financial Structure
The Company's cash position as of March 31, 2015 totaled Ps. 2,254 million, compared to Ps. 2,571 million on March 31, 2014.
Total debt as of March 31, 2015 was Ps. 64.8 billion, compared to Ps.
62.2 billion at March 31, 2014. The increase was mainly due to financing for the Canada Bread and Saputo acquisitions, along with a higher
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First Quarter 2015 Results
peso/dollar FX rate which increased the peso value of dollar denominated debt.
The total debt to EBITDA ratio was 3.3 times compared to 3.4 times at December 31, 2014. On a pro-forma basis, taking into account 2 months of pro-forma EBITDA of Canada Bread, the total debt to EBITDA ratio was 3.2 times. The net debt to EBITDA ratio was 3.2 times.
The average maturity of the debt is 8.5 years with an average cost of
4.3%. Long-term debt comprised 95% of the total; 72% of the debt was denominated in US dollars, 27% in Canadian dollars and 1% in Mexican
pesos.
The 1Q2015 conference call will be held on Friday, April 24, 2015 at
11:00 am Eastern time (10:00 am Central time). To participate in the call, please dial: domestic US +1(877) 317-6776; international +1(412) 317-
6776; conference ID: GRUPO BIMBO. A webcast for this call can also be
accessed at Grupo Bimbo's website at http://www.grupobimbo.com/ir.
An instant replay of the conference call will be available through May 6,
2015. To access the replay, please dial domestic US +1(877) 344-7529;
international +1(412) 317-0088; conference ID: 10062870.
Grupo Bimbo is the largest baking Company in the world in terms of volume and sales. Grupo Bimbo has 167 plants and approximately 1,600
sales centers strategically located in 22 countries throughout the
Americas, Europe and Asia. Its main product lines include fresh and frozen sliced bread, buns, cookies, snack cakes, english muffins, bagels,
pre-packaged foods, tortillas, salted snacks and confectionery products,
among others. Grupo Bimbo produces over 10,000 products and has one of the largest direct distribution networks in the world, with more than 2.4 million points of sale, more than 52,000 routes and more than 128,000 associates. Grupo Bimbo's shares have traded on the Mexican Stock Exchange since 1980 under the ticker symbol BIMBO.
Note on Forward-Looking Statements
This announcement contains certain statements regarding the expected financial and operating performance of Grupo Bimbo, S.A.B. de C.V., which are based on current financial information, operating levels, and market conditions, as well as on estimations of the Board of Directors of the Company related to possible future events. The results of the Company may differ in regards with those expressed on these statements, due to different factors that are beyond the Company's control, such as: adjustments in price levels, variations in the costs of its raw materials, changes in laws and regulations, or economic or political conditions not foreseen in the countries where the Company operates. Therefore, the Company is not responsible for such differences in the information and suggests that readers review such statements prudently. Moreover, the Company will not undertake any obligation to publicly release any revisions to the statements due to variations of such factors after the date of this press release.
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First Quarter 2015 Results
CONSOLIDATED INCOME STATEMENT (M ILLIONS OF M EX ICA N PESOS) | 2014 | 2015 | |||||
CONSOLIDATED INCOME STATEMENT (M ILLIONS OF M EX ICA N PESOS) | 1Q % | 2Q % | 3Q % | 4Q % | ACCUM % | 1Q % | ACCUM % |
NET SALES | 41,558 100.0 | 44,941 100.0 | 49,429 100.0 | 51,124 100.0 | 187,053 100.0 | 49,843 100.0 | 49,843 100.0 |
M EXICO US & CANADA EUROPE LATIN AM ERICA | 17,709 42.6 18,415 44.3 1,451 3.5 5,073 12.2 | 17,692 39.4 21,548 47.9 1,637 3.6 5,159 11.5 | 18,110 36.6 24,741 50.1 1,918 3.9 5,653 11.4 | 18,586 36.4 25,672 50.2 1,890 3.7 6,046 11.8 | 72,097 38.5 90,375 48.3 6,897 3.7 21,931 11.7 | 18,824 37.8 24,935 50.0 1,785 3.6 5,569 11.2 | 18,824 37.8 24,935 50.0 1,785 3.6 5,569 11.2 |
COST OF GOODS SOLD GROSS PROFIT | 19,559 47.1 21,999 52.9 | 20,807 46.3 24,134 53.7 | 23,126 46.8 26,303 53.2 | 24,423 47.8 26,701 52.2 | 87,916 47.0 99,136 53.0 | 23,514 47.2 26,329 52.8 | 23,514 47.2 26,329 52.8 |
M EXICO US & CANADA EUROPE LATIN AM ERICA | 9,994 56.4 9,345 50.7 591 40.7 2,208 43.5 | 10,421 58.9 10,921 50.7 714 43.6 2,214 42.9 | 10,501 58.0 12,626 51.0 809 42.2 2,502 44.3 | 10,924 58.8 12,438 48.5 802 42.4 2,643 43.7 | 41,840 58.0 45,330 50.2 2,916 42.3 9,568 43.6 | 10,975 58.3 12,371 49.6 755 42.3 2,497 44.8 | 10,975 58.3 12,371 49.6 755 42.3 2,497 44.8 |
OPERATING EXPENSES PROFIT (LOSS) BEFORE OTHER INCOM E (EXPENSES), NET | 19,774 47.6 2,225 5.4 | 20,188 44.9 3,945 8.8 | 21,828 44.2 4,475 9.1 | 21,845 42.7 4,856 9.5 | 83,635 44.7 15,501 8.3 | 23,249 46.6 3,081 6.2 | 23,249 46.6 3,081 6.2 |
M EXICO US & CANADA EUROPE LATIN AM ERICA | 1,592 9.0 689 3.7 (58) (4.0) (25) (0.5) | 2,313 13.1 1,623 7.5 (2) (0.1) (20) (0.4) | 2,778 15.3 1,578 6.4 5 0.2 86 1.5 | 3,651 19.6 970 3.8 41 2.2 165 2.7 | 10,333 14.3 4,860 5.4 (14) (0.2) 207 0.9 | 2,281 12.1 794 3.2 (20) (1.1) (83) (1.5) | 2,281 12.1 794 3.2 (20) (1.1) (83) (1.5) |
OTHER (EXPENSES) INCOM E NET OPERATING PROFIT | (688) (1.7) 1,537 3.7 | (668) (1.5) 3,280 7.3 | (537) (1.1) 3,935 8.0 | (3,297) (6.5) 1,559 3.1 | (5,190) (2.8) 10,311 5.5 | (505) (1.0) 2,575 5.2 | (505) (1.0) 2,575 5.2 |
M EXICO US & CANADA EUROPE LATINOAM ERICA | 1,575 8.9 94 0.5 (74) (5.1) (65) (1.3) | 2,326 13.1 1,033 4.8 (39) (2.4) (66) (1.3) | 2,727 15.1 1,145 4.6 (28) (1.4) 63 1.1 | 3,505 18.9 (1,881) (7.3) (67) (3.6) 72 1.2 | 10,134 14.1 392 0.4 (208) (3.0) 4 0.0 | 2,259 12.0 342 1.4 (44) (2.4) (118) (2.1) | 2,259 12.0 342 1.4 (44) (2.4) (118) (2.1) |
INTEGRAL COST OF FINANCING INTEREST PAID (NET) (EXCHANGE) GAIN LOSS M ONETARY (GAIN) LOSS EQUITY IN RESULTS OF ASSOCIATED COM PANIES EXTRAORDINARY CHARGES INCOM E BEFORE TAXES INCOM E TAXES PROFIT BEFORE DISCONTINUED OPERATIONS NET M INORITY INCOM E NET M AJORITY INCOM E EARINGS BEFORE INTERESTS, TAXES, DEPRECIATON AND AM | (628) (1.5) (675) (1.6) 32 0.1 15 0.0 (10) (0.0) 0 0.0 900 2.2 366 0.9 533 1.3 103 0.2 430 1.0 2,955 7.1 | (559) (1.2) (716) (1.6) 132 0.3 25 0.1 (13) (0.0) 0 0.0 2,705 6.0 969 2.2 1,737 3.9 125 0.3 1,612 3.6 4,654 10.4 | (974) (2.0) (988) (2.0) (2) (0.0) 16 0.0 (10) (0.0) 0 0.0 2,955 6.0 1,118 2.3 1,837 3.7 131 0.3 1,706 3.5 5,475 11.1 | (1,104) (2.2) (1,042) (2.0) (72) (0.1) 10 0.0 (29) (0.1) 0 0.0 426 0.8 502 1.0 (76) (0.1) 154 0.3 (230) (0.5) 5,334 10.4 | (3,264) (1.7) (3,420) (1.8) 90 0.0 66 0.0 (61) (0.0) 0 0.0 6,986 3.7 2,955 1.6 4,031 2.2 513 0.3 3,518 1.9 18,418 9.8 | (960) (1.9) (1,006) (2.0) 35 0.1 11 0.0 (8) (0.0) 0 0.0 1,607 3.2 571 1.1 1,037 2.1 130 0.3 907 1.8 4,227 8.5 | (960) (1.9) (1,006) (2.0) 35 0.1 11 0.0 (8) (0.0) 0 0.0 1,607 3.2 571 1.1 1,037 2.1 130 0.3 907 1.8 4,227 8.5 |
M EXICO US & CANADA EUROPE LATIN AM ERICA | 2,072 11.7 801 4.4 (48) (3.3) 123 2.4 | 2,782 15.7 1,727 8.0 (9) (0.5) 127 2.5 | 3,188 17.6 1,977 8.0 11 0.6 270 4.8 | 4,007 21.6 1,082 4.2 (18) (0.9) 333 5.5 | 12,049 16.7 5,588 6.2 (64) (0.9) 854 3.9 | 2,731 14.5 1,267 5.1 1 0.1 92 1.7 | 2,731 14.5 1,267 5.1 1 0.1 92 1.7 |
Regional results do not reflect royalties, while consolidated results exclude inter-company transactions.
INDIRECT M ETHOD MAR MAR
INCOM E (LOSS) BEFORE INCOM E TAXES 900 1,607
+ (-) ITEMS NOT REQUIRING CASH - -
+ (-) ITEMS RELATED TO INVESTING ACTIVITIES 1,458 1,659
+ (-) ITEMS RELATED TO FINANCING ACTIVITIES 576 960
CASH FLOW BEFORE INCOM E TAX 2,934 4,227
CASH FLOW PROVIDED OR USED IN OPERATION 2,119 (3,009)
NET CASH FLOWS PROVIDED OF OPERATING ACTIVITIES 5,053 1,218
NET CASH FLOW FROM INVESTING ACTIVITIES (1,023) (2,836) FINANCING ACTIVITIES 4,030 (1,618) NET CASH FLOW FROM FINANCING ACTIVITIES (3,084) 613
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 947 (1,005) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 25 688
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD 2,504 2,571
CASH AND CASH EQUIVALENTS AT END OF PERIOD 3,475 2,254
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