Grupo Bimbo: Net sales rose 12% in FY 2008

Mexico City / MX. (gb) Grupo Bimbo S.A.B. de C.V., the world´s No. 3 breadmaker, reported its results for the fourth quarter and full year ended December 31, 2008. The Q4/2008 results do not include any contribution from the purchase of the U.S. breadmaking operations of Canada´s George Weston Limited, which did not close until January.

As in the first nine months of the year, Grupo Bimbo continued to deliver solid growth in every region, resulting in strong top line performance in the fourth quarter. Net sales for the quarter were 22,2 billion MXN, a 15,1 percent rise compared to the same period of last year. These results are mainly attributable to pricing actions taken throughout the year, as well as stable sales volumes and an improved sales mix.

Gross margin decreased 2,2 percentage points in the fourth quarter to 50,4 percent as a result of continued pressure from raw material prices and the depreciation of currencies against the U.S. Dollar during the last three months of the year. On the other hand, operating expenses continued to trend positively in every region, decreasing 3,3 percentage points at the consolidated level. As a result, operating and EBITDA margins expanded 1,0 and 1,1 percentage points to 11,3 percent and 14,5 percent, respectively.

Net majority income totaled 1,3 billion MXN for the quarter, an increase of 31,1 percent compared to the same quarter of last year. Furthermore, net majority margin improved by 0,7 percentage points to 5,7 percent due primarily to solid performance at the operating level.

As of December 31, 2008, the Company´s cash holdings totaled 7,5 billion MXN, 84,9 percent higher than in the same quarter of last year. This increase is largely attributable to a 475 million USD drawdown in July of a committed credit facility.

Net Sales

The following figures expressed in millions of New Mexican Pesos (MXN). Consolidated results exclude inter-company transactions:

Mexico: Net sales rose 10,1 percent in the quarter and 10,3 percent for the year, mainly as a result of higher average prices and new product launches. As has been the trend throughout the year, the non-traditional channels continued to register positive performance. The baking division implemented an additional mid single-digit price increase in the month of December, which will be fully reflected in 2009, and is related to the impact on raw materials cost due to the currency devaluation.

United States: Net sales grew 22,9 percent in the quarter and 9,0 percent for the full year in MXN terms, while USD sales increased 1,9 percent and 6,8 percent, respectively. This performance was driven by several pricing actions taken over the past twelve months, growth at national retailers and positive performance of new product launches in Oroweat, Mrs. Bairds and the Mexican brands.

Latin America: In Latin America, net sales continued to grow over 30 percent, with gains registered in every country as a result of the integration of new operations, double-digit volume growth rates, higher average product prices and new product launches. Performance was strongest in Argentina, Brazil, Guatemala, Honduras and Uruguay. Excluding the acquisitions made during the past twelve months, sales growth would have been 15,4 percent and 16,5 percent in the quarter and for the year, respectively.

Operating Income plus Depreciation and Amortization (EBITDA)

For the quarter, EBITDA increased 24,7 percent, while the margin increased 1,1 percentage points to 14,5 percent. For the full year, EBITDA totaled 9,8 billion MXN; 12,0 percent higher than in 2007, while the margin remained practically flat when compared to 2007 at 11,9 percent. The following figures expressed in millions of New Mexican Pesos (MXN). Consolidated results exclude inter-company transactions.

Info: Further details are available at Grupo Bimbo (server) in «Grupo Bimbo Reports Record Top Line, EBITDA And Net Majority Income For The Fourth Quarter And Full Year 2008» (PDF / nine pages / 159 KB).