Grupo Bimbo: net profits fall 67% in 2023 due to pension plans

He Mexican group Bimbothe largest bakery company in the world, reported this Monday net profits of 15,477 million pesos (about US$ 908.3 million) in all of 2023, 67% less than the 46,910 million pesos (US$ 2,752 million) in 2022.

According to its fourth quarterly report of the year to Mexican Stock Exchange (BMV), The Mexican bakery company with a presence in 34 countries indicated that this is due to “the benefits of their ‘multi-employer pension plans,’” implemented a year earlier, and by the sale of its subsidiary Ricolino.

However, he noted that, by excluding these phenomena, net profits decreased 0.9% and the margin contracted only 10 basis points.

Daniel Servitje, Chairman of the Board and CEO of Grupo Bimbo, highlighted in a statement to investors that for the company 2023 was a record year in several metrics.“including our capital investments, marked by outstanding performance despite challenges in some markets.”

The Mexican transnational reported that between January and December 2023 its income amounted to 399,879 million pesos (US$ 23,467 million), 11.4% higher than that observed in the same period of 2022, when it reached 398,706 million pesos (US $23,398 million).

This is without including the effect of the exchange rate, in a year in which the Mexican peso also reached record levels against the dollar, as well as “the result of the favorable price mix in most regions.”

“Despite many challenges and the negative effect of the exchange rate, we achieved record levels in Sales and Adjusted EBITDA -earnings before financial income, taxes, depreciation and amortization-, and achieved our financial guidance”said the global director of Administration and Finance of Grupo Bimbo, Diego Gaxiola, in the statement.

He also highlighted that it was a year of “long-term strategic and historical investments, and a period where we strengthened our debt profile, while reaffirming our commitment to investment grade.”

Quarterly results

Grupo Bimbo’s annual decline was also reflected in its performance in the fourth quarter of 2023, since in the 12 months of the previous year it reported net profits of 3,260 million pesos (about US$ 191.3 million).

The above meant a drop of 89.2% compared to the third quarter of 2022, when the Mexican global bakery company reported net profits of 46,910 million pesos (US$ 2,752 million) to the BMV.

The reduction, Bimbo said, reflected “mainly the benefit from multi-employer pension plans recorded in the fourth quarter of 2022 and the sale of Ricolino.”

“Excluding these effects, majority net income decreased 10.8% and the margin contracted 10 basis points”accurate.

In the fourth quarter alone, without excluding the effect of the exchange rate, the revenues of the Bimbo group They were reduced to 101,883 million pesos (US$ 5,979 million), that is, a year-on-year contraction of 6.5% from the sales recorded for 108,996 million pesos (US$ 6,396 million).

The most important market for Grupo Bimbo is North America, where Mexico is its main driver, followed by Latin America and the rest of the world.