Mexico City / MX. (gb) Grupo Bimbo S.A.B. de C.V. reported its results for the third quarter ended September 30, 2008. Net sales totaled 20,6 billion MXN, a solid 12,1 percent increase over the third quarter of last year, reflecting higher average prices and a better product mix across every operation. Double-digit sales growth was driven by an 11,2 percent increase in Mexico and 32,9 percent in Latin America.
Input costs for several of the Company´s key raw materials, while easing from the second quarter of the year, continued to put significant pressure on the gross margin, which declined by 2,3 percentage points year over year, to 51,7 percent. However, significant expense reduction efforts and efficiency improvements in distribution and administration helped limit the decline in the operating margin to only 0,4 percentage points, to 10,1 percent.
Net majority income grew 9,0 percent, while the margin registered only a 0,2 percentage point reduction in the quarter, to 6,6 percent, resulting from the aforementioned pressure on the operating results. As of September 30, 2008, the Company´s cash position totaled 6,6 billion MXN, which reflected a 475 million USD drawdown in July of a committed revolving credit facility. The funds were secured mainly in anticipation of the August maturity date of a local bond and the advanced process of the restructuring of Compañía de Alimentos Fargo.
- Net sales rise a healthy twelve percent to 20,6 billion MXN, with growth across all regions.
- Operating income rises eight percent from Q3/2007 despite continued pressure from raw material costs.
- US operations return to profitability and register a year over year margin expansion of 0,3 percent.
- Net majority income rises nine percent from Q3/2007, while margin declines only 0,2 percent.
Mexico
Net sales rose 11,2 percent in the quarter to 14,1 billion MXN, mainly reflecting higher average prices and successful new product launches. The cookie, salty snacks, dry goods, tortilla and tostada categories registered the greatest sales growth in the quarter, while the convenience store channel remained the fastest growing in the period. On a cumulative basis, sales in Mexico increased 10,4 percent, reflecting higher average product prices, new product launches and stable volumes.
United States
Net sales registered a 4,0 percent increase in the quarter, and 4,2 percent for the first nine months of the year in peso terms, while dollar sales increased 10,0 percent and 8,6 percent, respectively. Performance in the quarter benefited from several pricing actions taken over the past twelve months. The Oroweat, Thomas´ and Mrs. Baird´s brands grew most significantly, while the Hispanic brands outperformed on a volume basis. Sales growth for the first nine months was driven by higher average prices, greater penetration of Hispanic brands, and growth among national retailers.
Latin America
Net sales rose a strong 32,9 percent in the quarter, and 30,6 percent on a cumulative basis, with gains registered across the region as a result of the integration of new operations, volume growth, higher average product prices and new product launches. Performance was strongest in Argentina, Brazil, Colombia and Uruguay. Excluding acquisitions, sales growth in the third quarter and nine months would have been 17,5 percent and 17,9 percent, respectively (complete release | PDF | eight pages | 169 KB).
100 Euro (EUR) = 1’819,02 Mexican Pesos (MXN)
100 Mexican Pesos (MXN) = 5,497 Euro (EUR)
