The Mexican bakery giant also signed an agreement with Cerealto Siro Foods to acquire a production plant in Medina del Campo, Spain, and acquired Modern Foods, a leading player in the baking industry in India.
“2020 was a year in which we were tested, confronted by the uncertainty caused by the proliferation of COVID-19, which required us as individuals, as a company and as a community to rise to meet the great challenge of the pandemic with unity, creativity, and dynamism,” said chairman and CEO Daniel Servitje.
“It was a remarkable year for Grupo Bimbo evidenced by several milestones, including record financial results. Even in this challenging environment, market share gains across multiple categories, IRA named us the fastest growing large consumer products company in the USA.”
CFO Diego Gaxiola added, “In 2020, we reached record levels for net sales and adjusted EBITDA, we doubled our gross cash flow and reached the lowest leverage of the past 10 years. We start 2021 stronger than ever and despite the tough comparable, we are ready to continue strengthening our financial position.”
Sales growth across all key categories of branded products fuelled a 12.4% rise in fourth-quarter results to 84.78 billion pesos ($4.05bn), while full year results saw a 13.4% increase to 331.05 billion ($15.83bn).
Adjusted EBITDA reached record levels, rising 18.2% in the fourth quarter to 12.77 billion pesos ($610m) and up by 19.3% in the full year to 45.19 billion ($2.16bn).
For the year ended December 31, 2020, operating income was 25.41 billion pesos (R1.21bn), up 24.4% from 20.42 billion ($976m) in 2019.
Fourth quarter net sales in North America increased 19.2%, while dollar sales increased 11.3%, primarily driven by continued branded growth across all key categories, as well as throughout the retail channel, which more than offset the weak results in the foodservice and convenience channels due to the pandemic.
Net sales in Mexico during the fourth quarter grew 1.6%, mainly due to improved price mix. The traditional and retail channels outperformed, as did the buns, bread, tortillas, pastries and snacks categories.
Cementing international footprint
Grupo Bimbo and its Indian subsidiary Ready Roti India have acquired Modern Foods from Everstone Capital for an undisclosed sum. The bread brand was offloaded by the private equity firm through its bread and bakery platform, Everfoods Asia.
Modern Foods operates seven plants that produce breads (commanding a 40% share of India’s bread market), as well as cakes, creme bites, rusks and muffins, which are sold through a distribution network covering over 80,000 retailers across India.
“Modern Food is a leading player in the baking industry in India. In fact, it is the market leader in South India,” said Servitje. “This acquisition strengthens and expands our geographical presence in the country as a current product portfolio and manufacturing footprint compliments exceptionally well with our long-term strategy to grow in India.”
Bimbo is also acquiring a factory in Spain – one of the Mexican company’s largest overseas markets – from local peer Cerealto Siro Foods.
“This plant in Spain has state-of-the-art technology ... and manufactures the sweet baked goods for Mercadona and other customers. This acquisition allows [us] to enter the sweet baked goods, private label market in Spain,” added Servitje. “It’s still subject to regulatory approval.”
Seeing the results
Servitje noted that sustainability is the core aspect of the company’s philosophy.
“We continued with the objective of mitigating our environmental footprint all over our entire value chain through actions such as innovation in our packaging with a biodegradable and compostable technologies, the reduction of our water footprints and emissions due to efficiency in our processes, waste management and the use of renewable energy and alternatives to fuels.
“Highlighting that by year-end, we have increased our global use of renewable electricity from 49% to 80%, meeting our 2020 objective and progressing in our commitment to achieve 95% renewable electricity by 2023.”
To cap its achievements, Bimbo was – for the fifth consecutive year – recognised as one of the world’s most ethical companies. The list, prepared by The Ethisphere Institute, awarded the coveted badge to 135 companies from 22 countries across 47 industries. Bimbo is the only Mexican company on the list.
“Today, I can see the results of 75 years of creation and progress, because thanks to our global leadership in an essential industry, the hard work of our associates, our geographic, channel and category diversification, our brands and our production capabilities, we were able to proudly serve our consumers during this time of disruption and extraordinary demand,” said Servitje.