Grupo Bimbo B de C : reports 3Q16 results

GRUPO BIMBO REPORTS NINE MONTHS 2016 RESULTS

MEXICO CITY, OCTOBER 27, 2016

Grupo Bimbo S.A.B. de C.V. ("Grupo Bimbo" or "the Company") (BMV: BIMBO) today reported its results for the nine months ended September 30, 2016.1

9M HIGHLIGHTS

Net sales rose 14.1% due to consistent organic growth in Mexico, FX rate benefit in North America2 and Europe, and the acquisition now known as Donuts Iberia

Gross margin expansion of 60 basis points was primarily driven by lower raw material costs in North America and Europe

Operating income increased 27.8%, with an 80 basis point expansion in the margin, primarily due to a decline in distribution and restructuring expenses in most regions

Adjusted EBITDA3 margin expanded 90 basis points, reflecting substantial operating improvements in North America (150 basis points) and Europe (350 basis points)

The Company closed the acquisition of Donuts Iberia in Spain last July

The company issued a 10-year, 7.56% local bond in September with a notional value of Ps. 8,000 million; proceeds were used to refinance an existing committed revolver credit facility

1 Figures included in this document are prepared in accordance with International Financial Reporting Standards (IFRS)

2 North America region includes operations in the United States and Canada

3 Operating Income plus depreciation, amortization and other non-cash items

Investor relations

www.grupobimbo.com/ri/

Tania Dib

[e-mail]

Estefanía Poucel

[e-mail]

(5255) 5268 6830

Diego Mondragón

[e-mail]

(5255) 5268 6789

1

NET SALES

(MILLIONS OF MEXICAN PESOS)

3Q16 3Q15 % Change Net Sales 9M16 9M15 % Change

20,810

19,148

8.7

Mexico

60,716

56,603

7.3

34,459

30,361

13.5

North America

98,254

83,603

17.5

7,349

6,229

18.0

Latin America

19,930

17,866

11.6

3,653

1,992

83.4

Europe

7,792

5,635

38.3

64,785

56,352

15.0

Consolidated

182,130

159,667

14.1

Consolidated results exclude inter-company transactions.

Cumulative net sales rose 14.1% reflecting consistent organic growth in Mexico, FX rate benefit in North America and

Europe, and the integration of Donuts Iberia.

Mexico

Net sales in Mexico rose 7.3% over the same period of 2015, driven by solid volume growth in key categories like sweet baked goods and cakes, healthy channel performance, most notably the convenience channel, and a better sales mix. Furthermore, premium breads such as Oroweat outperformed, and overall results were supported by increased market penetration, as well as product innovations such as Latte snack cake, Suavicremas cookies and Chips Chipotle Limón snacks.

North America

Net sales in peso terms grew 17.5% in the first nine months of the year, reflecting the exchange rate benefit, while dollar- denominated sales remained flat. Strategic brands and the sweet baked goods, snacks and frozen categories in the US registered volume growth and increased market share, and there was solid performance in pastries and English muffins in Canada; however, overall North American consumption trends for packaged bread continued to weigh on industry- wide performance.

18,824

1Q

19,944 18,631 19,962

2Q

19,148 20,810

3Q

24,935

1Q

30,181 28,307 33,613

2Q

30,361

3Q

34,459

(millions of Mexican pesos)

2015

2016

Latin America

The 11.6% rise in net sales reflected FX rate benefit and solid growth in local currencies across most countries in the region, notably the Latin Centro division, Chile and Peru, despite pressure from challenging economic conditions in some countries. This reflects the Company's focus on expanding its scale, along with ongoing market penetration and improved route efficiency.

Europe

Net sales rose a strong 38.3% primarily as a result of the Donuts Iberia acquisition, FX rate benefit and improved volume trends in Iberia, partially offset by continued pressure in the packaged bread category. The Eagle snack brand and Oroweat, Artesano and Rustik bread brands outperformed.

5,774

1Q

6,068 5,864 6,513

2Q

6,229 7,349

3Q

1,785

1Q

2,023 1,858 2,116

2Q

1,992 3,653

3Q

(millions of Mexican pesos)

GROSS PROFIT

(MILLIONS OF MEXICAN PESOS)

2015 2016

3Q16	3Q15	% Change	Gross Profit	9M16	9M15	% Change
11,928	11,146	7.0	Mexico	34,541	32,706	5.6
18,415	16,046	14.8	North America	52,195	42,890	21.7
3,321	2,825	17.6	Latin America	9,003	8,050	11.8
1,678	848	97.9	Europe	3,457	2,383	45.1
35,049	30,570	14.7	Consolidated	98,359	85,195	15.5

3Q16	3Q15	Change pp	Gross Margin (%)	9M16	9M15	Change pp
57.3	58.2	(0.9)	Mexico	56.9	57.8	(0.9)
53.4	52.8	0.6	North America	53.1	51.3	1.8
45.2	45.4	(0.2)	Latin America	45.2	45.1	0.1
45.9	42.6	3.3	Europe	44.4	42.3	2.1
54.1	54.2	(0.1)	Consolidated	54.0	53.4	0.6

Consolidated results exclude inter-company transactions.

Consolidated gross profit in the first nine months increased 15.5%, with a 60 basis point expansion in the margin to 54.0%. This expansion was on the back of lower raw material costs in North America and Europe, as well as lower indirect costs in Europe reflecting greater efficiencies across the supply chain.

53.5

52.4

54.454.2

53.354.1

The margin contraction in Mexico, during the quarter

26,234 30,294 28,391 33,016 30,570 35,049

and on a cumulative basis, reflected the impact of a stronger US dollar, despite underlying efficiency improvements and cost control initiatives.

1Q 2Q 3Q

2015 2016

(millions of Mexican pesos)

(% of net sales)

PROFIT BEFORE OTHER INCOME AND EXPENSES

(MILLIONS OF MEXICAN PESOS)

3Q16	3Q15	% Change	Profit Before Other Income & Expenses	9M16	9M15	% Change
3,340	3,320	0.6	Mexico	8,833	8,279	6.7
2,671	2,055	30.0	North America	6,597	4,663	41.5
(13)	71	NA	Latin America	(218)	(72)	>100
27	(41)	NA	Europe	(24)	(112)	(78.8)
6,247	5,296	17.9	Consolidated	15,832	12,853	23.2