Mexico City / MX. (gb) Grupo Bimbo S.A.B. de C.V. reported its results for the first quarter ended March 31, 2010. Net sales for the quarter were 28,3 billion MXN, nearly flat compared to the same period of last year. The slight decrease primarily reflected the impact of translating U.S. Dollar-denominated sales into New Mexican Pesos (MXN) at a significantly lower FX rate when compared to the first quarter of last year (14,36 MXN versus 12,80 MXN; a 10,9 percent decline), which more than offset a slight recovery in Mexico, where sales rose 3,2 percent during the period.
The consolidated gross margin expanded 1,2 percentage points over the same quarter of last year, to 52,3 percent, reflecting a significant expansion of 2,9 percentage points in Mexico that resulted mainly from lower commodity costs and a more favorable FX rate. Operating income and EBITDA rose by double digits in the quarter, increasing 19,8 percent and 17,4 percent, respectively, over the year ago period as a result of strong performance in Mexico and continued margin improvement in the United States. This resulted in expansions of 1,6 and 1,9 percentage points in the consolidated operating margin and EBITDA margin, respectively.
Net majority income totaled 1,3 billion MXN for the quarter, an increase of 22,9 percent when compared to the same period of 2009, while the margin expanded by 0,9 percentage points. It should be noted that results from the acquisition of Weston Foods Inc., now named BBU East, have been consolidated as of January 21, 2009, thus the current quarter benefited from an additional 20 days compared to the year ago period.
Mexico
Net sales in the quarter totaled 14.3 billion MXN, a 3,2 percent increase from the year ago period driven by volume growth in the sweet baked goods and cakes categories. While consumption remained relatively weak, results in March showed sequential volume improvement. As has been the case for several quarters, sales in the modern channels continued to outperform in the period.
United States
Net sales fell 4,7 percent in Mexican Pesos over the year ago period primarily due to the impact of currency translation. In dollar terms, sales increased 8,9 percent from the first quarter of 2009, due to:
the additional 20 days from BBU East when compared to 2009, and
healthy volume growth across all regions driven by product innovation and sales at national retailers, the latter reflecting the benefits of the new national platform.
The combination of the above factors offset the continued pressure on prices resulting from the competitive landscape.
Latin America
Net sales remained virtually unchanged compared to the same quarter of last year, up 0,8 percent, mainly affected by lower sales in Venezuela due to the devaluation of the Venezuelan Bolivar effective as of January 1, 2010, and the impact of the earthquake in Chile, where sales were disrupted in key urban areas. The above offset healthy volume performance in the region and the addition of more than 17’000 new clients in the quarter. As has been the case for several quarters, Brazil and Colombia continue to outperform in the region.
