Grupo Bimbo is set to reduce its capital expenditure for 2024 and 2025 following a downturn in quarterly sales and profits, the Mexican bakery giant has reported.
CFO Diego Gaxiola, speaking to analysts after the company presented its first-quarter financial results on 22 April, mentioned that the group was “expecting a slight decrease for this year” and “for 2025”. He suggested that there would likely be a “normalisation in [2026] going forward”.
This announcement arrives as the group’s capital expenditure reached its zenith in 2024, characterised by a “very intensive” investment surpassing $2bn.
Concurrently, Bimbo revised its sales forecast for the year downward from “low- to mid-single digit” growth to “single-digit top-line growth”, as stated by Gaxiola.
The Little Bites brand owner recorded a significant decline in its first-quarter net earnings, dropping more than 40% to 2.3bn pesos ($158m).
The company also reported a 16.6% decrease in operating income to 6.8bn pesos, while adjusted EBITDA fell by 7.8% to 11.8bn pesos. Net sales decreased by 6% to 93.2bn pesos.
Despite the planned cuts to capex, Grupo Bimbo announced a new acquisition, confirming the purchase of Romanian baked goods manufacturer Trei Brutari. Known as the largest bread producer in Romania, Trei Brutari operates three factories employing 400 individuals. These facilities include two bread plants in Târgoviște and Buzău, as well as a biscuit factory in Iași.
The financial specifics of the acquisition were not disclosed.
Earlier in March, it was reported that the company, also known for producing New York Bagel Co., was aiming to acquire six new bakeries in a transaction valued at €100m ($106.9m).
Recent acquisitions by Bimbo also include Tunisian bakery Moulin D’Or and Costa Rican confectionery producer La Zarcereña.
Discussing the impact of these acquisitions on Bimbo’s growth, Gaxiola remarked: “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 accounted for nearly 50% of Bimbo’s revenue last year, the company saw a 13.2% decline in net sales to 41bn pesos.
Sales in the European market also fell by 4.5% to 9.8bn pesos, while sales in Latin America decreased by 3.1% to 8.9bn pesos.
Explaining the downturn in North American sales, president Mark Bendix noted that “volume softness” was primarily driven by “some strategic exits of some private label business that we felt had no longer utility for our business”.
He concluded: “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].”