MEXICO CITY — Despite a weak overall bread market, Bimbo Bakeries USA was able to generate sales growth in many categories of its business while profitability surged.
Operating income of the North American business of Grupo Bimbo S.A.B. de C.V. was 2,429 million pesos ($130 million) in the third quarter ended Sept. 30, up 34% from 1,806 million pesos in the third quarter of 2015. Quarterly sales were 34,459 million pesos ($1,840 million), up 13% from 30,361 million.
Lower raw material and distribution expenses helped boost profitability during the quarter, Grupo Bimbo said. Higher integration and restructuring expenses in Canada were a partial offset. These expenses included enterprise software migration and investments in manufacturing efficiency. In May, the company announced plans to close its North Bay, Ont., plant in August.
Sales gains were recorded on numerous fronts, Bimbo said.
“Strategic brands and the sweet baked goods, snacks and frozen categories in the U.S. registered volume growth and increased market share, and there was solid performance in pastries and English muffins in Canada,” the company said. “However, overall North American consumption trends for packaged bread continued to weigh on industry-wide performance.”
Year-to-date operating income was 5,655 million pesos ($302 million), up 54% from 3,668 million pesos in January-September 2015. Sales were 98,254 million pesos ($5,247 million), up 18% from 83,603 million pesos.
Operating margins in North America were 7.1% in the third quarter, up from 5.9% in the same period last year. Year-to-date margins were 5.8%, up from 4.4% in January-September 2015. Operating margins for Bimbo’s business in Mexico were 16.2% in the quarter and 14.8% year-to-date.
Net majority income of Grupo Bimbo was 2,541 million pesos ($131 million) in the third quarter, up 12% from 2,270 million in the same period in 2015. Consolidated sales were 64,785 million pesos ($3,460 million), up 15% from 56,352 million pesos in the third quarter of 2015.
Year-to-date earnings were 5,707 million pesos ($305 million), up 17%. Sales were 182,130 million ($9,726 million), up 14%.
Total Grupo Bimbo debt as of Sept. 30 was 81.5 billion pesos ($4.4 billion), versus 67.8 billion on Dec. 31, 2015.“This 20% increase was primarily due to a 13% U.S. dollar revaluation that increased the Mexican peso value of U.S. dollar-denominated debt and the financing for the Donuts Iberia acquisition,” the company said. In July, Bimbo completed the acquisition of Panrico S.A.U. in Spain and Portugal.