Milling & Baking News - March 9, 2021 - 34

Financial Results

Bimbo 2020 N. American operating
income up 84%; sales rise 22%
ready to continue strengthening our
financial position. "
Reviewing fourth-quarter results
during a Feb. 24 conference call with
investment analysts, Daniel Servitje,
chief executive officer, identified numerous highlights, including the record profit margins.
" We were able to gain market share
in all our branded categories, especially in breakfast from the Thomas'
bagels brand, buns and rolls driven
by Ballpark brand strength and sweet
baked goods where Entenmann's
outperformed the category. We also
continue to see strong performance

THOMAS

MEXICO CITY - Sales growth across
all key categories of branded products
fueled strong fourth-quarter sales at
the North American business of Grupo Bimbo SAB de CV. Adjusted EBITDA margins widened sharply.
For the year ended Dec. 31, 2020,
operating income of Bimbo Bakeries USA was 11.2 billion pesos ($542
million), up 84% from 6.09 billion in
2019. Sales were 176.4 billion pesos
($8.545 billion), up 22% from 144.01
billion in 2019.
In the fourth quarter, BBU operating income was 3.64 billion pesos
($177 million), up 148% from 1.47

static investments in our brands. "
Responding to an analyst question, Fred Penny, president of BBU,
cautioned that the outlook for 2021
in the United States rests on the success of the currently expanding vaccination program and other efforts to
curtail the COVID-19 pandemic. He
said Bimbo and other food companies
likely will be unable to match secondquarter sales figures, when panic buying by consumers was rife.
" So the question then becomes
what's going to happen in the back half
of the year, and that really depends on
lots of things like availability of vaccine, when are schools going to be
fully back in, when are colleges going
to be fully back in, what happens with
changes in work from home versus

Thomas' brand bagels were among a range of Bimbo Bakeries USA products that performed well in the fourth quarter.

billion in October-December 2019.
Sales were 44.54 billion pesos ($2.16
billion), up 19% from 37.37 billion
pesos a year earlier.
Bimbo said business in North
America was strong across all key categories. Foodservice and convenience
channels were weak. Fourth-quarter
EBITDA margins widened 270 basis
points, mostly due to the strong sales,
favorable commodity prices and productivity savings. COVID-19 related
expenses were an offset.
The strong North American results
were part of a record year at Grupo
Bimbo, said Diego Gaxiola, chief financial officer.
" In 2020 we reached record levels
for net sales and adjusted EBITDA;
we doubled our gross cash flow and
reached the lowest leverage of the
past 10 years, " Mr. Gaxiola said. " We
start 2021 stronger than ever and despite the tough comparable, we are
34 / March 9, 2021

Milling & Baking News

of the retail channel, which includes
grocery, mass merchandising and
club, and the e-commerce channel more than doubled its size. We
gained millions of new households
due to the exposure of our brands in
the pandemic, which we intend to retain by continuing to add incremental
marketing investments and excellent
in-store execution.
" Due to the lack of demand as
customers continue to lean toward
branded products, volumes continue
to be soft across the private label category and in foodservice and institutions, and school closings persist
through the pandemic. Our adjusted
EBITDA margin reached a record
level, reflecting the strong sales performance, lower commodity prices
and productivity benefits from past
investments, which were partially
offset by one-time expenses incurred
due to the coronavirus as well as

work from office, etc., " he said. " And
that remains to be seen. I wouldn't
want to overly speculate on that. But
we've had strong brand performance
across most of our categories. We're
working hard to continue that. And at
the same time, we hope for recovery in
segments of our foodservice business,
if you think about that as a different
channel. "
Reflecting the company's optimism
about the future, Mr. Servitje said capital expenditures are expected to total
close to $1 billion.
" We think we will have very
strong capex for 2021, which basically reflects the delayed projects as
well as specific categories where we
need to increase our capacity given
the growth that we had in our product lines, " he said. " So that happens
all around the world, and that's
why we are basically strengthening the capex program as well as to
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Milling & Baking News - March 9, 2021

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