Grupo Bimbo expects to cut its capital expenditure in 2024 and the following year the Mexican bakery major reported falling quarterly sales and profits.
Speaking to analysts after Bimbo filed its first-quarter financial results yesterday (22 April), CFO Diego Gaxiola said the group was “expecting a slight decrease for this year” and “for 2025”.
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He added that Bimbo would “probably see a normalisation in [2026] going forward”.
The move comes as the group’s “capex peaked” in 2024, with a “very intensive” injection of over $2bn.
Bimbo also announced cuts to its sales guidance for the year, moving from “low- to mid-single digit” to “single-digit top-line growth”, according to Gaxiola.
The Little Bites brand owner saw its first-quarter net earnings drop more 40% to 2.3bn pesos ($158m).
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By GlobalDataOperating income fell 16.6% to 6.8bn pesos, while adjusted EBITDA dropped 7.8% to 11.8bn pesos.
Net sales were down 6% at 93.2bn pesos.
Despite signalling cuts to capex, the group announced another acquisition, confirming a deal for Romanian baked goods producer Trei Brutari.
Calling itself the largest bread producer in Romania, Trei Brutari operates three factories, which employ 400 people. These include two bread plants in Târgoviște and Buzău, as well as a biscuit factory in Iași.
Financial details of the purchase were not disclosed.
In March, local reports indicated that the New York Bagel Co. producer was looking to buy six new bakeries in a deal worth €100m ($106.9m).
Alongside Trei Brutari, Bimbo’s other recent acquisitions have included the Tunisian bakery Moulin D’Or and Costa Rican sweet baked cookies and snacks producer La Zarcereña.
Commenting on how the acquisitions might impact Bimbo’s growth, Gaxiola said: “It is not moving the needle. We’re not changing the guidance because of this. It has an important strategic approach.”
In North America, which made up nearly 50% of Bimbo’s revenue for the last year, the company saw its net sales dip 13.2% to 41bn pesos.
Bimbo’s European market followed with sales down 4.5% at 9.8bn pesos. Latin American sales dropped 3.1% to 8.9bn pesos.
Explaining the sales decline in North America, president Mark Bendix said “volume softness” was driven largely by “some strategic exits of some private label business that we felt had no longer utility for our business”.
He added: “We see our portfolio as resilient. And, sequentially, as we look out for the rest of the year, we see that mitigating in our branded business beginning to grow again moderately as we exit [2024].”
