Grupo Bimbo, the world’s largest bakery products supplier, is actively pursuing mergers and acquisitions (M&A) opportunities after successfully acquiring three businesses in 2023.
During a recent discussion with analysts following the release of its second-quarter financial results, Grupo Bimbo’s CFO Diego Gaxiola expressed the company’s continued interest in expanding through strategic M&A projects.
Gaxiola stated, “To continue advancing our strategic plan and capitalizing on opportunities in various markets, we will continue to explore and pursue inorganic growth through M&A projects. However, none of these projects will be transformative or significantly impact the company’s leverage.”
In its results statement, Grupo Bimbo confirmed its acquisition of a bagel business in the US, National Choice Bakery. The company did not provide additional comments on the acquisition, and National Choice Bakery was unavailable for comment at the time of publication.
Earlier this year, Grupo Bimbo expanded its presence in North America through the acquisition of Natural Bakery, a rye bread producer in Canada, and entered the Romanian market by acquiring Vel Pitar.
Gaxiola highlighted, “We have already completed three acquisitions this year, and we have a robust pipeline of potential targets in various geographies, including markets where we are already present and new markets.”
In addition, Grupo Bimbo recently became a shareholder in Zero Carb Company, a Netherlands-based gluten-free bread start-up.
In the second quarter, Grupo Bimbo achieved a 4.1% increase in net sales, reaching a record 100.37 billion pesos ($5.96 billion), primarily driven by a favorable price/mix effect. Adjusted EBITDA rose by 7.8% to 14 billion pesos, also reaching a record margin of 14%.
President and CEO Daniel Servitje attributed the company’s strong sales growth and margin expansion to the strength of its brands and the dedication of its associates in executing sales strategies.
However, Grupo Bimbo’s net majority income declined by 35.1% to 3.95 billion pesos, primarily due to a pension benefit recorded in the second quarter of 2022.
Looking ahead, Grupo Bimbo anticipates a low- to mid-single-digit increase in annual net sales and a mid- to high-single-digit growth in adjusted EBITDA. These forecasts represent a slight adjustment from the initial guidance provided after the first-quarter results presentation.
Gaxiola noted that currency exchange rates had an impact on the company’s outlook, resulting in a revision of sales guidance. However, despite this adjustment, Grupo Bimbo remains confident in its margin expansion and expects to exceed its expectations in local currencies.
