Baking & Snack - June 2023 - 16

SPECIAL REPORT
Grupo Bimbo
BIMBO STRONG FOR
2023
Chairman and CEO Daniel Servitje is upbeat
about the company's expansion opportunities.
by Josh Sosland
T
The opportunities open to Grupo Bimbo SAB de CV for
global expansion in grain-based foods have not nearly
been exhausted, Daniel Servitje, chairman and chief executive
officer, said in an April 27 earnings call.
Mr. Servitje made the observation in response to a
question from an investment analyst about the lack of
large acquisitions by Bimbo in recent years. The analyst
asked whether Bimbo was now either focused on smaller
acquisitions or was reaching " the point where it's about
to maybe return some of that cash to shareholders. "
" We still see a lot of opportunities in the grain-based
foods business in which we are, " Mr. Servitje said. " So
definitely, our business is not local. It's not only Mexico
or US. It's global. And the way we are organized, we see
that we still have a lot of opportunities for organic and
also from nonorganic growth. And that's why we are
continually looking at opportunities on both ends. But
having said that, we will remain also reasonable in terms
of what can we digest. "
Diego Gaxiola, chief financial officer, said that while
Bimbo would continue seeking acquisition opportunities
and remained committed to investing in capital expenditures
to maintain and enhance productivity, Bimbo
also has returned dollars to shareholders. He noted the
company on April 26 declared a dividend that represented
a 20% increase in the payout rate and also issued
an extraordinary dividend in connection with its sale of
Ricolino to Mondelez International Inc. in April 2022.
The Bimbo executives were upbeat about the company's
first-quarter financial results. While earnings were
down in the quarter ended March 31, the company's
16 Baking & Snack June 2023 / www.bakingbusiness.com
leaders saw considerable cause to be encouraged. Total
Grupo Bimbo sales in the quarter jumped 9.9% and fell
just shy of 100 billion pesos, reaching 99.6 billion.
" We kicked off the year with a very strong first quarter, "
Mr. Servitje said. " We continue to see the benefit
from the pricing strategy implemented during 2022,
which enabled us to surpass our expectations and last
year's results. Our sales reached historic levels for the
first quarter. Our EBITDA margin closed at 12.9%. "
Operating income of the North American business of
Grupo Bimbo SAB de CV was 2.77 billion pesos ($154
million), down 30% from 3.96 billion pesos in the first
quarter of 2022. Operating margin was 5.9%, down 280
basis points from 8.7% in the first quarter of 2022. Sales
were 47.2 billion pesos ($2.6 billion), up 4.3% from 45.3
billion pesos in the first quarter the year before.
Bimbo said higher costs of sales and an inflationary
environment put pressure on margins. Operating income
was also boosted a year earlier by a $73 million
noncash benefit connected with multi-employer pension
plans.
Bimbo said the company benefited from strong sales
performance and lower distribution and administrative
expenses.
Net sales in North America were up 15% in US dollars,
mostly reflecting higher prices.
" The premium bread and snacks categories outperformed, "
Bimbo said. " This was partially offset by a difficult
comparison from the Omicron surge effect during
the first quarter of 2022. "
Adjusted EBITDA in North America was 4.87 bil
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Baking & Snack - June 2023

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