B.B.U. posts strong third-quarter profit, sales

by Eric Schroeder
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MEXICO CITY — Operating income of Bimbo Bakeries USA in the third quarter ended Sept. 30 was 898 million pesos ($68.9 million), which compared with a loss of 424 million pesos in the same period a year ago. The largest driver of the operating loss in 2012 was a one-time charge of 1,037 million pesos associated with the withdrawal from two multiemployer pension plans (m.e.p.p.s).

Sales were 20,400 million pesos ($1,567 million), up 2% from 19,913 million in the third quarter last year.

“Net sales in dollar terms increased 4.6% reflecting positive performance across all channels and categories, including bread and sweet baked goods,” said Grupo Bimbo S.A.B. de C.V., B.B.U.’s parent company.

Operating margins in the United States rose to 4.4%, which compared with a negative margin of 2.1% in the third quarter last year.

At 4.4% the B.B.U. margins were narrower than the 14.1% the company earned in Mexico. Profit margins were negative in Bimbo’s other regional segments, including a negative margin of 1.2% in Latin America (compared with a negative 5.8% last year) and negative 3.7% in Iberia (versus a negative margin of 8.7% last year).

Consolidated net majority income of Group Bimbo in the third quarter was 1,527 million pesos ($117.3 million), up sharply from 368 million pesos in the third quarter of 2012.

Consolidated operating income increased 154% to 3,414 million pesos ($262.1 million) from 1,342 million pesos. Margin expanded 450 basis points to 7.6%.

“This reflected the charges on the ‘other income and expenses’ line that included a combination of integration costs of $36 million in the United States this year (compared to $26 million in 3Q12), a 41 million peso non-cash write-off of certain assets in Latin America, and a low basis of comparison from a non-cash charge of 1,037 million pesos in the United States generated by the withdrawal from two m.e.p.p.s in the previous year,” Grupo Bimbo said.

Consolidated sales were 45,152 million pesos ($3,463 million), up 4% from 43,515 million pesos.

For the nine months ended Sept. 30, consolidated net majority income of Grupo Bimbo was 2,994 million pesos, up 62% from 1,852 million pesos in the same period a year ago. Consolidated operating income in the nine months was 7,912 million pesos, up 54% from 5,139 million pesos, while consolidated sales totaled 130,282 million pesos, up 2% from 127,861 million pesos.
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