Grupo Bimbo: Reported increase in Q2/2009 Sales

Mexico City / MX. (div) Grupo Bimbo S.A.B. de C.V. reported an increase of 70 percent in its net profit for the second quarter 2009. It also informed that – due to the acquisition of US-based business – its sales increased. The company reported that its earnings in Q2/2009 were 1’427 million Mexican Pesos (MXN) when compared to 840 million MXN in Q2/2008. During January 2009, the company, for 2’380 million USD has acquired the US bread making business of Canada´s George Weston. The company has posted a net sales of 28’580 million MXN in the second quarter 2009, an increase by 43 percent – reflecting the consolidation of Weston Foods that produces Boboli, Brownberry, Entenmann´s and Thomas´ brands.

Operating income of Bimbo Bakeries USA (BBU) was 1’233 million MXN in Q2/2009, compared with a loss of 35 million MXN during Q2/2008. Operating margins were 9,7 percent for BBU versus negative margins a year earlier of 0,8 percent. The improvement principally reflected the integration of BBU East (George Weston Bakeries Inc.) but also reflected productivity gains in both the company´s U.S. regions and cost savings resulting from the integration.

Excluding the acquisition, the operating margin would have been 6,2 percent in Q2/2009. BBU sales increased to 12’694 million MXN from 4’294 million MXN in Q2/2008. The integration of BBU East, organic growth resulting from pricing actions and strength in the US-Dollar drove the growth. Excluding the acquisition, Dollar sales in the quarter would have risen 0,4 percent in Q2/2009. On a company-wide basis, sales rose 43 percent and net majority income increased 70 percent for Grupo Bimbo in Q2/2009 versus Q2/2008. Second-quarter sales were 28’581 million MXN, up from 19’996 million MXN. Excluding the U.S. acquisition, sales would have risen 4,6 percent. Q2/2009 net income was 1,4 billion MXN.