Grupo Bimbo posts rise and fall in financials during ‘traditional year’

By Gill Hyslop

- Last updated on GMT

Bakery giant Grupo Bimbo posted a rise in sales boosted by expanding its global presence through acqusitions. Pic: ©GettyImages/monsitj
Bakery giant Grupo Bimbo posted a rise in sales boosted by expanding its global presence through acqusitions. Pic: ©GettyImages/monsitj

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Mexican bakery conglomerate Grupo Bimbo reported a 6% increase in sales - helped by several acqusitions that expanded the company's presence into new markets - but noted a drop in profits.

Grupo Bimbo’s net sales increased by 6.1% to 267.52bn pesos ($14.38bn) versus MXN252.14bn ($13.565bn) for the year prior, as a result of several acquisitions that enabled the company to cement its footprint in 10 new countries in Asia, the Middle East and Africa.

According to a company statement, sales increased by 48% in 2017 for the company’s EAA (Europe, Asia & Africa) division, driven by acquisitions completed during the last 12 months, including Bimbo QSR, Ready Roti, Grupo Adghal and Donuts Iberia, which contributed to 45% of growth.

However, organic growth was affected by the delays related to the integration in Iberia, together with production difficulties in a line in the UK and the plant in China, said the company.

Bimbo also reported it had established a record for the number of customers served frequently through its direct distribution system, reaching more than three million points of sale.

FY2017 highlights

  • Net sales up 6.1% at MXN267.52bn versus MXN252.14bn
  • Gross profit up 4.9% at MXN142.75bn from MXN136.14bn
  • Operating income 3.4% lower at MXN17.47bn
  • Net majority income fell 21.5% to MXN4.63bn

“2017 was a year of transition in terms of reinvestment and positioning of our company for growth and the creation of long-term value,”​ said Bimbo's chairman and CEO Daniel Servitje.

Full year results

The company also reported a rise in FY2017 gross profit of 4.9% to MXN142.75bn ($7.67bn) from MXN136.14bn ($7.32bn)

However, this was offset by a 3.4% decrease in operating income to MXN17.47bn ($0.93bn) from MXN18.03bn ($0.96bn), and a 21.5% fall in net majority income to MXN 4.63bn ($0.24bn) from MXN5.89bn ($0.31bn), mainly due to the increase in costs of raw materials in Mexico and the US.

For the 12 months ending December 31, 2017, Bimbo posted a fourth quarter net profit of MXN427m ($22.9m), up nearly fivefold from the MXN86.2m ($4.63m) profit reported for the year prior.

Grupo Bimbo, the world’s largest baking company, has 196 plants and approximately 1,800 sales centers located in 32 countries in the Americas, Europe, Asia and Africa, employing more than 138,000 staff.

It manufactures more than 13,000 products, including boxed and frozen bread, buns, cookies, pastries, muffins, bagels, packaged products, tortillas, salted snacks and confectionery, among others.

The publicly listed company has one of the largest distribution networks in the world around 58,000 routes.

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