Corporate Profiles - 2024 - 50

COMPANY overview
Grupo Bimbo SAB de CV
Restructuring of North American business
takes shape
T
he past 12 months have been a period
of transformation for the North American
business of Grupo Bimbo SAB de CV. The
change gradually has taken shape over the
course of the year as the company grappled
with a challenging operating environment for
the baking industry.
In addition to the actions taken within Bimbo
Bakeries USA, Grupo Bimbo during the year
effected a leadership change with the retirement
of Bimbo's longtime chief executive officer
Daniel Servitje and the promotion of Rafael
Pamias to CEO.
Plans for a restructuring program in North
America were referenced briefly and with few
our philosophy and strategy to be a sustainable,
highly productive and deeply humane
company. "
Hints about what was to come were offered
by Servitje when asked by an analyst for more
details about the program. He said Bimbo was
constantly evaluating and instituting " best-inworld
practices. "
" And we have a footprint in the US that is a
lot of local bakeries and a lot of acquisitions, "
he said. " So, we'll continue to look at specific
opportunities that we have to optimize our footprint
always. I won't go into anything specific,
but know that we're making investments in our
business and our decisions to better serve our
retailers and to continue to deliver high quality
and order fill for our consumers and customers.
So it's always in play for us, and we're always
looking to optimize our footprint in the US. "
While both Servitje and Gaxiola referenced
" investments, " it was the footprint optimization
that came to the fore in the months afterward.
The
executives' comments
came
several
Chief executive officer -
Rafael Pamias
specifics in February by Diego Gaxiola, group
chief financial officer.
" We will begin to implement a transformational
program designed to improve our North
American business and ultimately reach our full
potential, " Gaxiola said after Bimbo announced
its financial results for 2023. " We strongly believe
these investments will better align and focus
resources to drive growth and protect profitability
while continuing to create long-term
value for our shareholders, as has been the case
with past restructuring initiatives. "
Servitje said Bimbo restructuring efforts
were " aligned with our proactive approach to
identifying opportunities that resonate with
50 \ October 2024
weeks after Bimbo announced plans to close
its baking plant in Albuquerque, NM. More such
announcements followed. On May 9, Bimbo
said it would close its baking plant in Levis,
Que., and then a few days later said it would be
shuttering a plant in Bellevue, Neb.
The company's largest closing notification
came in July, when it said it would close two
plants in New York and one in Texas. The three
plants were located in Auburn and Olean in
New York and San Antonio.
Also during the year, Bimbo said it had
closed 28 outlet stores in the northeast United
States. The closed stores include outlets in Connecticut,
Maine, Massachusetts, New Hampshire,
New York and Vermont.
The actions were announced at a time Bimbo's
top- and bottom-line results have been
under pressure in North America.
Operating income of Bimbo's North American
business in the three months ended June 30 was
1.78 billion pesos ($95.4 million), down 46%
from 4.41 billion in the second quarter last
2022
398,706
2021
Source: Grupo Bimbo SAB de CV
2022
46,910
2021
Grupo Bimbo SAB de CV
net income
in millions of Mexican pesos
2023
15,477
15,916
Source: Grupo Bimbo SAB de CV
Grupo Bimbo SAB de CV
net sales
in millions of Mexican pesos
2023
399,879
338,792
Grupo Bimbo SAB de CV
share price
in Mexican pesos
Source: Mexican Stock Exchange
60
68
76
84
92
Sept. Nov.
2023
Jan.
2024
GRUPO BIMBO SAB DE CV
HIGH =
Dec. 18, 2023 = 88.09
LOW =
July 5, 2024 = 63.00
Sept. 3, 2024 = 68.94
March May
July
Sept.
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Corporate Profiles - 2024

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