Grupo Bimbo (BIMBOA) Q3 2024 earnings summary

Executive summary

• Achieved record net sales and adjusted EBITDA margin for 3Q24, driven by geographic and category diversification, strong execution in Mexico and EAA, and global expansion through acquisitions.

• Gross margin expanded by 150 bps to 53.1% due to lower input costs and favorable mix, while operating margin declined 100 bps to 8.8% from supply chain and value chain investments.

• Net Majority Income declined 11.6% to Ps.3,695 million, mainly due to long-term investments and higher debt.

• Strategic focus on optimizing global footprint, including closure of five bakeries and ongoing productivity initiatives.

• Multiple recognitions received for corporate reputation and employer excellence.

Financial highlights

• Net sales increased 7.4% year-over-year, reaching Ps.106,046 million for 3Q24, with Mexico sales up 6.6% and Latin America up 7.7% excluding FX effects.

• Adjusted EBITDA margin reached 14.7% for the quarter, with Mexico at nearly 22% and EAA at a record 10%.

• Gross profit rose 10.3% to Ps.56,291 million; operating income fell 3.7% to Ps.9,359 million.

• Net debt to adjusted EBITDA ratio at 2.8x; total debt at Ps.146 billion, up due to acquisitions and peso depreciation.

• ROE declined to 11.1% from 14.6% year-over-year.

Outlook and guidance

• Full-year guidance reiterated, with CapEx expected near the low end of the range at approximately $1.8 billion.

• 2024 guidance projects low to mid-single digit net sales growth and flat to slight adjusted EBITDA margin expansion.

• Anticipates continued challenging consumer environment in North America, but strong trends in other regions.

• Management expects long-term benefits from ongoing value chain investments, especially in North America.

• Early 2025 outlook withheld pending further developments; focus remains on cost structure, distribution expansion, and margin improvement.