Fitch affirms Grupo Bimbo's IDR at 'BBB+': outlook stable

Fitch affirms Grupo Bimbo's IDR at 'BBB+': outlook stable

In a recent update, Fitch Ratings affirmed Grupo Bimbo's Investment Grade Rating (IDR) at 'BBB+' with a stable outlook. The ratings agency cited the company's strong financial performance and resilient business model as key factors behind this decision. Fitch Ratings noted that Grupo Bimbo's solid revenue growth and strategic investments in global expansion positions the company well for future success.

According to the second-quarter financial report [1], Grupo Bimbo reported net sales of MXN 107.50 billion (€4.98 billion), marking a 9.4% increase year-on-year. This growth was driven by favorable exchange rates, sales growth in Mexico, Latin America, and EAA, and recent acquisitions. Despite a decline in North American sales due to soft consumption in the US and strategic exits of non-branded businesses, the company saw significant growth in Mexico and EAA, with sales in these regions increasing by 3% and 26.1% respectively.

Operating profit declined by 2.2%, with margin contracting to 7.9%, primarily due to higher depreciation and amortization from past investments, soft North American consumption, and ongoing investments in the North American transformation project. Adjusted EBITDA amounted to MXN 14.9 billion (€690 million), reflecting a 6.7% increase. However, the EBITDA margin contracted to 13.9%, mainly due to the soft North American environment, investments in the North American transformation project, and higher labor costs in Romania.

Grupo Bimbo's CEO, Rafael Pamias, emphasized the company's highly diversified model, which provides flexibility to deliver strong results today while strategically investing for the future. The company continued its global expansion in the quarter by acquiring the remaining stake in its Colombian operations and finalizing the purchase of Don Don, a major baking company in Southeast Europe. This growth brings Bimbo's presence to 39 countries, serving consumers in 76 markets worldwide.

By the end of 2025, Grupo Bimbo aims for 100% of its daily consumption products to be below established limits for added sugars, sodium, and certain fats. This commitment is already evident in the US, where over 70% of sales are generated by products that receive positive ratings under the Health Star Rating System.

References:
[1] https://www.esmmagazine.com/supply-chain/grupo-bimbo-reports-9-4-sales-growth-in-second-quarter-293244