Gruma (GRUMA) Q4 2024 earnings summary

Executive summary

• Closed 2024 with solid results above expectations, with Q4 continuing positive trends seen in the second half of the year.

• Achieved 7% EBITDA growth and 18.8% EBITDA margin in 4Q24, with full-year EBITDA up 12% and margin at 17.4%.

• Majority net income rose 29% year-over-year to $155.4M in 4Q24.

• Non-Mexican operations contributed 73% of net sales and 75% of EBITDA.

• Strong performance in "Better For You" products in the US, continued expansion in Europe, and steady growth in Asia and Oceania.

Financial highlights

• Consolidated volumes remained flat year-over-year in Q4 2024.

• EBITDA expanded by 7% (would have been 9% excluding FX effects), while sales contracted by 5% (would have been 2% excluding FX effects).

• Net sales declined 5% year-over-year to $1.56B, mainly due to currency effects and lower US food service volumes.

• Operating income increased 7% to $229.5M; operating margin expanded 170 bps to 14.8%.

• Gross margin improved to 39.3% from 36.2% year-over-year.

• Earnings per share rose 32% to $0.43.

• Free cash flow generation remained strong, supporting liquidity.

• Net debt to EBITDA closed at 1.2x.

• Capex for Q4 was $69 million; full-year 2024 capex reached $233 million.

• Repurchased 8.6 million shares ($153 million), with 4.7 million already canceled.

• Paid $100 million in dividends during the year.

Outlook and guidance

• U.S.: Defensive stance, projecting flat to low single-digit volume and sales growth, with margins up 10-50 bps.

• Mexico: Stable demand, low single-digit volume and sales growth, EBITDA margin up 20-30 bps.

• Central America: Single-digit volume growth, sales flat to low single-digit growth, EBITDA margin up 150 bps.

• Europe: Mid-single-digit volume growth, high single-digit sales growth, EBITDA margin up 30-40 bps.

• Asia/Oceania: Mid-single-digit volume and sales growth, EBITDA margin up 30-40 bps.

• Consolidated: Low single-digit volume growth, sales flat to low single-digit growth, margin expansion of 20-40 bps.

• Capex guidance for 2025 is $320 million, focused on maintenance, water treatment, and capacity expansions.

• Expect gradual recovery in US food service volumes and richer retail sales mix.

• Positive trends anticipated in GIMSA and Asia/Oceania as quality and service improve.