Grupo Bimbo posts record Q2 net profit on increased demand

MEXICO— Mexican bakery giant Grupo Bimbo reported second-quarter net profit doubled from the same period the previous year, and the company raised its sales and operating earnings outlook, citing strong demand from regions including the United States and Europe.

Net profit rose to 6.1 billion pesos (US$305 million), the company said in a filing to Mexico’s main stock exchange.

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Revenue reached a record level at Ps. 96,434m (US$4.6m) – an increase of 18.1% from the year-ago period – attributed to a favorable price mix and volume performance across every region, the company said in a filing to Mexico’s main stock exchange.

In North America, net sales increased 16.3% to Ps. 49,452m (US$2.39m), particularly driven by premium breads and snacks.

Net sales in Mexico grew 21.6% to Ps. 31,768m (US$3.47m), attributable to bread, sweet baked goods, snack cakes, cookies and snacks in the convenience channel.

Net sales in EAA grew 7.4% to Ps. 8,906m (US$431k), mostly driven by Spain and Portugal from its acquisition of Medina del Campo in 2021.

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Bimbo’s Latin Centro division also reached record levels for the quarter – 30.8% increase to Ps. 9.641m (US$466k) – benefitted by contribution from the acquisition of Aryzta do Brazil in 2021.

Despite the historic levels, the company said that inflation pressures continue to be strong pretty much across the board and this had had some effect on its Q2 results. However, Bimbo’s CFO Diego Gaxiola said the company was finding ways to rally amidst the higher commodity prices and overall inflationary environment.

“We are pulling several levers to offset the rising inflation, including revenue growth management strategies, our category and product mix, pricing actions, productivity initiatives, and we continue to proactively look for restructuring opportunities,” said Gaxiola.

“We will continue this approach throughout the year to proactively look for restructuring opportunities across the value chain and to deploy our digital transformation strategy,” said Group Bimbo Chairman and CEO Daniel Servitje.

In May, Bimbo announced it was backing an initiative by the Mexican government to tame prices amid rising inflation and put a price freeze on its white bread for six months.

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Even as it weathers the precarious inflationary environment, the company said it expects to see continued strength in its sales, driven by innovation, efficient revenue growth management and efficiency to help offset its effects.

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