GRUPO BIMBO REPORTS FOURTH QUARTER AND FULL YEAR 2018 RESULTS MEXICO CITY, FEBRUARY 21, 2019

Transcription

1 GRUPO BIMBO REPORTS FOURTH QUARTER AND FULL YEAR 2018 RESULTS MEXICO CITY, FEBRUARY 21, 2019 We clsed the year with recrd-breaking levels f net sales, grss prfit, perating incme and adjusted EBITDA, psitining us as a strnger and leaner Cmpany that will cntinue t create value and serve ur cnsumers. -Daniel Servitje, Chairman and CEO The Cmpany's slid financial psitin and rbust results reflect tp line grwth and the underlying strength f ur businesses fllwing a perid f investments in restructuring. -Dieg Gaxila, CFO

2 Grup Bimb S.A.B. de C.V. ( Grup Bimb r the Cmpany ) (BMV: BIMBO) tday reprted its results fr the three and twelve mnths ended December 31, HIGHLIGHTS OF THE QUARTER Net sales rse 7.6%, primarily n the back f strng perfrmance in Mexic and Nrth America Adjusted EBITDA increased 25.8%, while the margin expanded 180 basis pints Operating incme increased 40.1% frm the prir year, with a 190 basis pint expansin in the margin Net majrity incme increased nearly six times and the margin expanded 270 basis pints RECENT DEVELOPMENTS In early 2019, Grup Bimb pened its drs t 2,000 Yuth Building the Future in Mexic Grup Bimb became the first Cmpany in Mexic t prduce Clean Energy Certificates fr Distributed Generatin Grup Bimb cmpleted the acquisitin f Nutra Bien, a Chilean sweet baked gds cmpany FINANCIAL SUMMARY 4Q18 4Q17 Change Change Net Sales 76,309 70, % 288, , % Operating Incme 6,191 4, % 18,509 17, % Adjusted EBITDA 2 9,441 7, % 31,705 27, % Net Majrity Incme 2, >100% 5,808 4, % Ttal Debt/Adj. EBITDA 2,3 2.8x 3.4x (0.6x) 2.8x 3.4x (0.6x) ROE 7.7% 6.8% 0.9pp 1. Figures included in this dcument are prepared in accrdance with Internatinal Financial Reprting Standards (IFRS). 2. Adj. EBITDA fr the last twelve mnths as f December 31st,2018, excludes the nn-cash charges related t the VSP and rganizatinal restructuring initiatives implemented in the U.S. and Canada. 3. Prfrma figures including Bimb QSR EBITDA. 2

3 NET SALES 4Q18 4Q17 % Change Net Sales % Change 25,254 23, Mexic 99,859 90, ,630 36, Nrth America 143, , ,661 7, Latin America 28,192 28,602 (1.4) 6,839 6, EAA 25,574 18, ,309 70, Grup Bimb 288, , Cnslidated results exclude inter-cmpany transactins. 10% EAA LATAM 9% 31% MX 4 48% NA 50% Furth quarter net sales rse 7.6%, primarily attributable t strng sales perfrmance acrss mst regins, ntably in Mexic and Nrth America. M E X I C O Net sales in Mexic rse 9.0%, primarily driven by strng vlume grwth in every channel especially the traditinal, and every categry, mainly cakes, buns and sweet baked gds, as well as new prduct launches such as Bimb Dnuts, a crss-market intrductin frm Spain. Increased custmer reach and utperfrmance f the Bimb and Marinela brands als cntributed t grwth. N O R T H A M E R I C A 5 Net sales rse 6.4%, reflecting FX rate benefit and an apprximate 2% increase in dllar terms arising frm a cmbinatin f price increases and grwth in strategic brands in the U.S., as well as slid perfrmance in Canada, especially f the bread and salty snacks categries. This was partially ffset by weak vlumes acrss the private label categry in the U.S. 4. Inter-cmpany transactins have been remved frm Mexic. 5. Nrth America regin includes peratins in the United States and Canada. 3

4 L A T I N A M E R I C A 6 Furth quarter net sales increased 5.1%, primarily because f the gd utcme in the Central America divisin, Clmbia and Ecuadr, as well as strng vlume grwth in Chile, in part due t the trtillas categry. These factrs were able t ffset the difficult ecnmic cnditins and a negative FX effect, mainly in Brazil, Argentina and Uruguay. EAA 7 Sales increased 10.2%, predminantly n the back f the acquisitin f Mankattan in China, gd perfrmance f the bread categry in Iberia, healthy grwth in the U.K. especially in crissants, and in part due t FX rate benefit; hwever, in Iberia the sweet baked gds categry underperfrmed. On a cumulative basis, net sales grew 7.8% mainly frm strng sales in Mexic and Nrth America, as well as the acquisitins cmpleted during the year. G R O S S P R O F I T 4Q18 4Q17 % Change Grss Prfit % Change 14,211 13, Mexic 56,031 50, ,472 19, Nrth America 76,780 74, ,301 3,309 (0.3) Latin America 12,820 13,199 (2.9) 2,484 2, EAA 9,283 6, ,010 37, Grup Bimb 152, , Q18 4Q17 Change pp Grss Margin (%) Change pp Mexic (0.3) Nrth America (0.4) (2.3) Latin America (0.6) EAA (1.1) (0.4) Grup Bimb (0.5) Cnslidated results exclude inter-cmpany transactins. 6. Latin America regin includes peratins in Central and Suth America. 7. EAA regin includes peratins in Eurpe, Asia and Africa. 4

5 Cnslidated grss prfit fr the furth quarter increased 6.7%, while the margin cntracted 40 basis pints mainly due t higher csts f sales. Fr 2018, grss prfit rse 6.8% while the margin cntracted 50 basis pints t 52.9% because f higher csts f gds sld in Nrth America and a different business mix in EAA attributable t the incrpratin f Bimb QSR. OPERATING INCOME 4Q18 4Q17 % Change Operating Incme % Change 4,471 3, Mexic 15,750 13, ,101 1, Nrth America 5,100 7,701 (33.8) (304) (582) (47.7) Latin America (529) (1,284) (58.8) (423) (638) (33.7) EAA (1,481) (2,395) (38.2) 6,191 4, Grup Bimb 18,509 17, Q18 4Q17 Change pp Operating Margin (%) Change pp Mexic Nrth America (2.1) (4.0) (8.0) 4.0 Latin America (1.9) (4.5) 2.6 (6.2) (10.3) 4.1 EAA (5.8) (12.8) Grup Bimb (0.1) Reginal results d nt reflect inter-cmpany ryalties and cnslidated results exclude inter-cmpany transactins. Operating incme increased 40.1% frm the prir year, with a 190 basis pint expansin in the margin reflecting strng sales perfrmance, lwer general expenses cming frm cst reductin initiatives such as thse achieved frm restructuring investments like the Vluntary Separatin Prgram ( VSP ), alng with rute ptimizatin effrts and zer based budgeting, in additin t a lwer figure in the ther incme and expenses line due t lwer extrardinary expenses. These effects were partially ffset by the abvementined higher csts f gds sld. 5

6 M E X I C O The 90 basis pint expansin in the perating margin in Mexic was primarily attributable t strng sales perfrmance, partially ffset by higher distributin csts. N O R T H A M E R I C A In Nrth America, the 30 basis pint expansin in the margin reflected gd sales grwth, as well as efficiencies and savings achieved frm past restructuring investments, such as the VSP in the U.S. and the rganizatinal restructuring initiative in Canada. Impairment charges registered during the quarter were caused by the prtfli ptimizatin initiatives being implemented acrss the U.S., and restructuring expenses were in part related t the clsure f the Madisn plant in the U.S. L A T I N A M E R I C A Operating margin in Latin America expanded 400 basis pints when cmpared with the previus year because nne impairment charges were included during the quarter. Grup Bimb classified Argentina as a hyperinflatinary ecnmy and started t apply IAS 29 t this business. E A A EAA perating incme increased 33.7%, while the margin ntably imprved 410 basis pints, primarily n the back f lwer general expenses cming frm synergies achieved in Iberia and manufacturing efficiencies in the bagel plant in the U.K., which was partially ffset by integratin expenses in China. On a cumulative basis, cnslidated perating incme increased 5.9%, while the margin slightly declined 10 basis pints mainly because f the VSP initiative implemented in the U.S. in the secnd quarter. ADJUSTED EBITDA 4Q18 4Q17 % Change Adjusted EBITDA % Change 5,127 4, Mexic 18,200 15, ,822 3, Nrth America 12,993 12, (76.4) Latin America (427) NA EAA 105 (1,590) NA 9,441 7, Grup Bimb 31,705 27,

7 4Q18 4Q17 Change pp Adj. EBITDA Margin (%) Change pp Mexic Nrth America (0.2) (2.5) Latin America (6.9) 8.2 EAA 0.4 (8.5) Grup Bimb Reginal results dn t reflect inter-cmpany ryalties and cnslidated results exclude inter-cmpany transactins. Adjusted EBITDA increased 25.8% with a 180 basis pints margin expansin. Nrth America and Mexic grew substantially, reaching recrd levels, while EAA swung t a psitive result. In 2018, the Cmpany reached the highest level f Adjusted EBITDA ttaling Ps. 31,705 millin. COMPREHENSIVE FINANCIAL RESULT Cmprehensive Financial Result ttaled Ps. 1,714 millin in the perid, cmpared t Ps. 1,453 millin in the furth quarter f last year. The 18% increase was mainly explained by the swap frm Canadian and U.S. dllar denminated debt t Mexican pess, which was partially ffset by a Ps. 202 millin benefit related t the net mnetary psitin in Latin America. NET MAJORITY INCOME 4Q18 4Q17 % Change Net Majrity Incme % Change 2, >100 Grup Bimb 5,808 4, Q18 4Q17 Change pp Net Majrity Margin (%) Change pp Grup Bimb Net majrity incme increased nearly six times, while the margin expanded 270 basis pints frm a cmbinatin f the strng perating perfrmance acrss mst f the regins and a lwer effective tax rate, which was partially ffset by a higher financing cst. Cumulative net majrity incme increased 25.4% with a margin expansin f 30 basis pints, n the back f strng perating perfrmance and a lwer effective tax rate which std at 41.8% cmpared t 52.6%, this decline reflected the enactment f the Tax Cuts and Jbs Act ( Tax Refrm ) in the U.S. implemented n January 1 st, 2018, the latter was partially ffset by a higher financing cst. Earnings per share ttaled Ps. 1.23, cmpared t Ps in

8 F I N A N C I A L S T R U C T U R E Ttal debt at December 31 st, 2018, was Ps billin, cmpared t Ps billin n December 31 st, This decrease was predminantly related t the prepayment f US $123 millin utstanding frm the revlving credit facility and, t a lesser extent, the repurchase f almst $450 millin pess in lcal bnds. MXN 36% Average debt maturity was 10.6 years with an average cst f 5.97%. Lng-term debt cmprised 98.7% f the ttal; 59% f the debt was denminated in US dllars, 36% in Mexican pess and 5% in Canadian dllars. The ttal debt t adjusted EBITDA rati, excluding the VSP charge was 2.8 times cmpared t 3.4 times at December 31 st, 2017, while the net debt t adjusted EBITDA rati was 2.6 times cmpared t 3.2 times at December 31 st, CAD 5% Currency Mix USD 59% The Cmpany invested Ps. 1.2 billin in its share repurchase prgram, buying back arund 30 millin shares. AMORTIZATION PROFILE 8 (MILLIONS OF U.S. DOLLARS) Lcal Ntes Internatinal Ntes Ntes 8. Des nt include debt at the subsidiary level f US$190 millin. 8

9 RECENT DEVELOPMENTS On December 7 th, 2018, Grup Bimb and ther private cmpanies signed an agreement with the gvernment t supprt the grwth in Mexic s labr frce, pening its drs t 2,000 Yuth Building the Future in 2019 s that wmen and men culd gain wrk experience and receive training in the Cmpany s strategic areas. Grup Bimb is ne f the cmpanies that will take in the mst participants each year, which will cntribute significantly t the prgram s bjective. The Cmpany cmpleted the acquisitin f Aliments Nutra Bien S.A. ( Nutra Bien ), a leading Chilean cmpany in sweet baked gds that prduces, markets and distributes brwnies, cakes, ckies, and ther prducts in ne plant. This acquisitin cmplements Grup Bimb s current prtfli thrugh tp f mind brands and expands its distributin reach, increasing penetratin especially in the traditinal channel. Grup Bimb became the first Cmpany in Mexic t prduce Clean Energy Certificates fr Distributed Generatin. This initiative, accmplished thanks t the cllabratin f private cmpanies and the gvernment, will cntribute t achieving Mexic s gal f using 50% renewable energy by It will als help qualified users and cmpanies frm the retail electricity market fulfill their bligatin t purchase at least 5% f their energy frm clean surces. CONFERENCE CALL INFORMATION D I A L - IN A cnference call will be held n Friday, February 22, 2019 at 11:00 am Eastern (10:00 am Central). T access the call, please dial: Dmestic U.S.: +1 (844) Internatinal: +1 (412) Cnference ID: GRUPO BIMBO W E B C A S T A webcast fr this call can als be accessed at Grup Bimb s website: R E P L A Y A replay will be available until March 6, Yu can access the replay thrugh Grup Bimb s website r by dialing: U.S.: +1 (877) Internatinal: +1 (412) Canada: +1 (855) Cnference ID:

10 ABOUT GRUPO BIMBO Grup Bimb is the largest baking Cmpany in the wrld and a relevant participant in snacks. Grup Bimb has 199 plants and mre than 1,800 sales centers strategically lcated in 32 cuntries thrughut the Americas, Eurpe, Asia and Africa. Its main prduct lines include fresh and frzen sliced bread, buns, ckies, snack cakes, English muffins, bagels, pre-packaged fds, trtillas, salty snacks and cnfectinery prducts, amng thers. Grup Bimb prduces ver 13,000 prducts and has ne f the largest direct distributin netwrks in the wrld, with mre than 3.3 millin pints f sale, arund 60,000 rutes and mre than 138,000 assciates. Its shares trade n the Mexican Stck Exchange (BMV) under the ticker symbl BIMBO, and in the ver-the-cunter market in the United States with a Level 1 ADR, under the ticker symbl BMBOY. NOTE ON FORWARD- LOOKING STATEMENTS This annuncement cntains certain statements regarding the expected financial and perating perfrmance f Grup Bimb, S.A.B. de C.V., which are based n current financial infrmatin, perating levels, and market cnditins, as well as n estimatins f the Bard f Directrs f the Cmpany related t pssible future events. The results f the Cmpany may differ in regards with thse expressed n these statements, due t different factrs that are beynd the Cmpany s cntrl, such as: adjustments in price levels, variatins in the csts f its raw materials, changes in laws and regulatins, r ecnmic r plitical cnditins nt freseen in the cuntries where the Cmpany perates. Therefre, the Cmpany is nt respnsible fr such differences in the infrmatin and suggests that readers review such statements prudently. Mrever, the Cmpany will nt undertake any bligatin t publicly release any revisins t the statements due t variatins f such factrs after the date f this press release. INVESTOR RELATIONS CONTACT ir@grupbimb.cm (5255)

11 CONSOLIDATED BALANCE SHEET BALANCE SHEET Change % TOTAL ASSETS 263, , % CURRENT ASSETS 44,852 42, % Cash and Equivalents 7,584 7, % Accunts and Ntes Receivables, Net 25,942 24, % Inventries 9,340 8, % Other Current Assets 1,987 2,100 (5.4%) Prperty, Machinery and Equipment, Net 87,243 82, % Intangible Assets and Deferred Charges, Net and Investment in Shares f Assciated Cmpanies 123, ,350 (0.4%) Other Assets 7,307 9,437 (22.6%) TOTAL LIABILITIES 178, ,226 (1.9%) CURRENT LIABILITIES 50,612 48, % Trade Accunts Payable 21,983 20, % Shrt-Term Debt 1,153 1,886 (38.9%) Other Current Liabilities 27,477 26, % Lng-Term Debt 88,693 91,546 (3.1%) Other Lng-Term Nn Financial Liabilities 39,438 42,025 (6.2%) STOCKHOLDER'S EQUITY 84,574 77, % Minrity Stckhlder's Equity 4,885 4, % Majrity Stckhlder's Equity 79,688 72, % CONSOLIDATED INCOME STATEMENT CONSOLIDATED INCOME STATEMENT 4Q18 4Q17 Change % Change % Net Sales 76,309 70, % 288, , % Cst f Gds Sld 36,299 33, % 135, , % GROSS PROFIT 40,010 37, % 152, , % General Expenses 32,922 31, % 127, , % Other Expenses (Incme), Net 897 1,861 (51.8%) 6,219 4, % OPERATING PROFIT 6,191 4, % 18,509 17, % Integral Cst f Financing 1,714 1, % 6,995 5, % Interest Paid Net 1,910 1, % 7,283 5, % Exchange Rate Lss (Gain) 6 (198) NA (85) 118 NA Mnetary (Gain) Lss (202) - NA (202) 79 NA Equity in Results f Assciated Cmpanies - (43) NA (194) (234) (17.2%) INCOME BEFORE TAXES 4,477 3, % 11,707 11,951 (2.0%) Incme Taxes 1,739 2,268 (23.3%) 4,897 6,282 (22.1%) PROFIT BEFORE DISCONTINUED OPERATIONS 2, % 6,811 5, % Net Minrity Incme (28.9%) 1,003 1,040 (3.6%) NET MAJORITY INCOME 2, % 5,808 4, % ADJUSTED EBITDA 9,441 7, % 31,705 27, % 11