Mexico-based bakery giant Grupo Bimbo saw its sales climb more than 11% in the first half of 2017, helped by growth at home and recent M&A, but said restructuring costs weighed on its earnings.
The owner of brands, including Bimbo, Little Bites and New York Bakery Co reported a 6.4% fall in operating income and a 23.9% slide in net majority income for the six months to the end of June.
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Grupo Bimbo’s first-half net sales reached MXN131.2bn (US$7.39bn), up 11.1% year-on-year. The company’s net sales in Mexico rose 11.7%, with the group reporting higher volumes “across most categories and channels”.
In North America, Grupo Bimbo’s net sales were up 6.9%, boosted by exchange rates and by “growth” in its branded business. However, Grupo Bimbo said “pressure” on its non-branded and frozen businesses, as well as in the premium category, weighed on sales volumes, which led to a 1% dip in sales when measured in dollars.
In Latin America, Grupo Bimbo’s net sales climbed 9.1%, mainly reflecting favourable exchange rates. The net sales from the company’s Europe, Asia and Africa unit jumped 79.5%, largely driven by the contribution from recent acquisitions in Iberia, India and Morocco.
Grupo Bimbo’s operating income reached MXN8.18bn in the first half of 2017, compared to MXN8.74bn a year earlier. The business pointed to integration and restructuring costs. The company cited plant closures in Morocco and the US, as well as restructuring moves in Argentina, Chile and Brazil.
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By GlobalDataFinancing costs and a higher effective tax rate further weighed on Grupo Bimbo’s net majority income, which stood at MXN2.49bn, versus MXN3.28bn in the first half of 2016.
