25-07-2025
Grupo Bimbo SAB de CV (BMBOY) Q2 2025 Earnings Call Highlights: Record Sales Amidst North ...
Net Sales: Achieved historic levels for the second quarter.
EBITDA Margin: Improved sequentially in North America from 5.9% in Q4 2024 to 9% in Q2 2025.
Total Debt: MXN157 billion, a MXN6 billion increase from the end of 2024.
CapEx: $486 million as of the end of June 2025.
Net Debt to Adjusted EBITDA: Remained unchanged at 2.9 times from the end of 2024.
Sales Growth in Mexico: 3% growth, reaching a new all-time high.
Sales Decline in North America: More than 4% decline, excluding FX effects.
Sales Growth in Latin America: Record net sales with double-digit growth in Latin Sur, Brazil, and El Salvador.
Sales Growth in Europe, Asia, and Africa: Nearly 7% increase, excluding FX effects.
Full-Year Guidance Revision: Mid-single-digit sales growth expected, with a flat to slight margin contraction.
CapEx Guidance: Lowered to $1.3 billion to $1.4 billion from $1.4 billion to $1.5 billion.
Leverage Ratio Guidance: Expected to close the year at around 3x.
Warning! GuruFocus has detected 3 Warning Sign with BMBOY.
Release Date: July 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Grupo Bimbo SAB de CV (BMBOY) reported a sequential acceleration in sales growth, demonstrating resilience in a complex market environment.
The company achieved record performance in sales or EBITDA margin outside the US, with strong momentum in regions like Latin America and Europe.
Innovation is a key driver, with an innovation rate surpassing 12%, contributing to volume growth and long-term sustainable growth.
The company is advancing its ESG strategy, with 99% of daily consumption products now free from artificial flavors and colorants.
Grupo Bimbo SAB de CV (BMBOY) is strategically investing in new business models and targeted acquisitions to strengthen its competitive position.
Negative Points
Sales in North America declined by more than 4% due to continued softness in US consumption and strategic exits from certain non-branded clients.
The EBITDA margin contracted due to a challenging environment in North America, impacting overall profitability.
The company faces challenges in the US market with economically stressed consumers shifting to private labels and value offerings.
There is ongoing pressure from macroeconomic challenges, including a stronger Mexican peso impacting top-line growth.
The transformation project in North America is progressing slower than anticipated due to the uncertain economic environment.
Q & A Highlights
Q: Can you discuss the US performance, particularly the decline in sales and the optimism in the snacks category? A: Mark Bendix, Deputy General Manager, North America and the Bimbo QSR business unit: In the US, we are seeing a bifurcation of consumers, with economically stressed consumers moving to private labels and more affluent consumers opting for premium products. We are expanding our offerings in the value segment with products like Bimbo bread and buns, and in the premium segment with Rustik and protein-focused products. Our snacks category is showing sequential improvement due to these strategic adjustments.
Q: Could you elaborate on the profitability improvements in Mexico, particularly the gross and EBITDA margins? A: Rafael Romero, Chief Executive Officer: The improvement in Mexico's profitability is due to a favorable mix and strategic investments in distribution to expand our reach. This has resulted in an 80 basis point improvement in gross margin and a 30 basis point improvement in EBITDA margin.
Q: How is the transformation in the US progressing, and what are the expectations for future margins? A: Mark Bendix, Deputy General Manager, North America and the Bimbo QSR business unit: Our transformation program is optimizing our business across people, processes, technology, and systems. We expect sequential improvements in the second half of the year, although reaching double-digit margins might not be immediate. We anticipate consistent high single-digit EBITDA margins in the coming quarters.
Q: What changes are reflected in the new CapEx guidance, and how does it affect your strategic priorities? A: Mark Bendix, Deputy General Manager, North America and the Bimbo QSR business unit: We have lowered our CapEx guidance by $100 million to align with the current pace of key projects. This adjustment ensures disciplined investment levels while supporting our long-term strategic priorities. The reduction will be reflected as a carryover into 2026.
Q: How is Grupo Bimbo addressing the softer consumer environment in Mexico, and what strategies are in place to maintain growth? A: Rafael Romero, Chief Executive Officer: Despite a softer consumer environment, we continue to deliver growth across channels and categories. We are leveraging our strong market position, expanding our commercial footprint, and focusing on premium offerings and innovation. Our strategy includes targeted initiatives and on-pack promotions to maintain consumer engagement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
