Grupo Bimbo (BIMBOA) Q2 2024 earnings summary

Executive summary

• Achieved record Adjusted EBITDA margin of 14.2% for Q2, driven by strong performance in Mexico and EAA, offsetting challenges in North America and some Latin countries.

• EAA region reached a record double-digit margin of 10.4%, with notable contributions from UK, Romania, and recent acquisitions.

• Mexico delivered sustained growth and profitability, with EBITDA margin expanding 140 basis points year-over-year to 20.0%.

• Gross margin expanded 120 basis points to 52.3% due to lower raw material costs and favorable mix.

• Continued progress on sustainability, reducing Scope 3 emissions by 12% vs. 2022 and 93% of packaging now recyclable.

Financial highlights

• Net sales excluding FX impact grew 0.5% year-over-year, with robust growth in EAA and Mexico, offset by softness in North America.

• Mexico sales grew 4.4% year-over-year despite tough comps and weather, with positive price mix and volume evolution.

• North America top line declined 3.4% excluding FX, due to tough comps and strategic exits from non-branded business.

• Latin America net sales increased 3.8% excluding FX, led by Brazil and smaller countries, with resilience in Argentina.

• Net debt to Adjusted EBITDA ratio at 2.6x; total debt at MXN 135 billion, up due to CapEx, acquisitions, and peso depreciation.

Outlook and guidance

• Reiterated full-year guidance: flat to low single-digit top-line growth and low single-digit EBITDA growth, with margin expansion expected in the second half.

• CAPEX expected between US$1.8Bn and US$2.0Bn for 2024.

• No adjustment to guidance despite recent peso depreciation and ongoing North American consumer challenges.