Sigma Foods (SIGMAF) Q2 2024 earnings summary

Executive summary

• Double-digit EBITDA growth in Q2 and H1 2024, led by Sigma's record performance and operational efficiencies, with Alpek contributing through cost initiatives and savings.

• Sigma achieved its 13th consecutive quarter of year-on-year revenue growth and an all-time high quarterly EBITDA, supported by strong demand and favorable FX.

• Alpek completed a $75M annualized savings plan and continued cost competitiveness efforts, offsetting industry headwinds.

• 2024 guidance for both Sigma and consolidated results was raised, reflecting robust H1 performance and better-than-expected results.

• Strategic focus on deleveraging, asset monetization, and transformation to enable Alpek's separation and unlock value.

Financial highlights

• Consolidated revenues reached $4,221 million in Q2 2024, up from $4,197 million in Q1 2024.

• Q2 2024 EBITDA was $445 million, up 23% year-over-year and 5% sequentially; Sigma's Q2 EBITDA reached a historic high of $279 million.

• Alpek's accumulated comparable EBITDA of $312 million is on track for full-year guidance, with a 2% volume increase in H1, mainly from polyester.

• Net debt decreased by $117 million in Q2 2024 compared to Q1 2024, with Sigma's net leverage ratio at 2.0x, the lowest in nearly 11 years.

• Alpek's leverage ratio improved to 3.3x, with 5% lower net debt quarter-on-quarter and strong cash flow from reduced CapEx, dividends, and working capital optimization.

Outlook and guidance

• 2024 consolidated EBITDA guidance raised 5% to $1.59 billion, and revenues up 1% to $16.78 billion, with Sigma accounting for 62% of the new guidance.

• Sigma's 2024 revenue guidance raised to $8.85 billion and EBITDA to $1.0 billion, up 2% and 9% from original projections.

• Alpek's 2024 EBITDA guidance maintained at $600 million, targeting year-end net debt/EBITDA of 2.5x and no dividend payment in 2024.