GRUPO HERDEZ
FIRST QUARTER 2021
EARNINGS RELEASE
CONSOLIDATED HIGHLIGHTS FOR THE QUARTER
- Net sales increased by 1.7%, and on a comparable basis 7.7% with respect to the same quarter of the previous year, driven mainly by price increases in the Preserves segment.
- EBIT before other income and expenses fell 4.2% to MXN 638 million, while the margin stood at 10.9%, 0.7 percentage points below that recorded in 2020, which is mainly explained by lower sales in the Frozen segment.
Net income totaled MXN 542 million, 18.7% lower than the previous year due to the extraordinary income from the sale of three tuna vessels recorded in 2020.
Mexico City, Mexico, April 22, 2021 - Grupo Herdez, S.A.B. DE C.V. ("Grupo Herdez" or the "Company") (MSE: HERDEZ) today announced results for the first quarter 2021, ended March 31, 2021.
"We are proud of the organic growth achieved in the quarter. On the other hand, we are optimistic about the quarter-over-quarter performance of our Frozen segment, despite the challenging circumstances we are still facing," said Héctor Hernández-Pons Torres, Chairman and Chief Executive Officer of Grupo Herdez.
1
The information contained in this document is prepared in accordance with International Financial Reporting Standards ("IFRS") and is expressed in Mexican pesos unless stated otherwise.
Grupo Herdez consolidates 100 percent of its Frozen division, Barilla Mexico, Herdez Del Fuerte - Mexico, and McCormick de Mexico in its financial statements. The proportional stake of Herdez Del Fuerte in MegaMex is registered in Equity Investments in Associated Companies.
NET SALES
Net sales in the first quarter were MXN 5.8 billion, 1.7% above the previous year, even though the 2020 comparable basis considers the sales of Nair tuna, fresh tuna and Ocean Spray. On a comparable basis - excluding fresh tuna, Nair tuna and Ocean Spray- consolidated net sales would have increased 7.7%. Net sales in the Preserves segment grew 2.7%, 10.4% on a like-to-like basis, due to price increases implemented across the portfolio in the last twelve months. The categories with double-digit growth were spices, mayonnaise, mole and teas.
The Frozen segment reported net sales of MXN 613 million, 14.9% lower than last year due to the mobility restrictions that affected the results for January and February 2021. Performance in modern trade, price clubs and convenience stores continued to show double-digit growth, while the traditional channel maintained the same trend as last year. Exports were MXN 456 million in net sales, 20.5% higher than in the same period of the previous year, driven by higher sales volumes.
NET SALES | 1Q21 | 1Q20 | % change | |||||
Consolidated | 5,849 | 5,752 | 1.7 | ||
Preserves | 4,779 | 4,653 | 2.7 | ||
Frozen | 613 | 721 | (14.9) | ||
2 | |||||
Exports | 456 | 379 | 20.5 | ||
Figures in millions of MXN.
NET SALES PERFORMANCE
5,752 | 6,091 | 5,817 | 6,375 | 5,849 |
1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 |
GROSS PROFIT
Consolidated gross margin for the quarter was 37.5%, practically unchanged from a year ago. In the Preserves segment, margin increased 1.9 percentage points to 37.4%, mainly due to price increases implemented at the end of the third quarter of last year and a better sales mix. In the Frozen segment, gross margin decreased 5.9 percentage points because of lower sales due to temporary store closures, as well as higher sales in modern trade, price clubs and convenience stores for Helados Nestlé. Gross margin in
the Exports segment decreased 5.9 percentage points to 13.5%, due to the appreciation of the U.S. dollar against the peso.
GROSS MARGIN | 1Q21 | 1Q20 | % change | |||||
Consolidated | 2,195 | 2,174 | 1.0 | |||||
Preserves | 1,787 | 8.2 | ||||||
1,652 | ||||||||
Frozen | 346 | 450 | (22.9) | |||||
Exports | 62 | 73 | (15.9) | |||||
Figures in millions of MXN. | ||||||||
GROSS MARGIN | 1Q21 | 1Q20 | pp change | |||||
Consolidated | 37.5 | 37.8 | (0.3) | |||||
Preserves | 37.4 | 35.5 | 1.9 | |||||
Frozen | 56.5 | 62.4 | (5.9) | |||||
Exports | 13.5 | 19.4 | (5.9) | |||||
Figures in percentages.
GROSS PROFIT PERFORMANCE
3
2,174 | 2,288 | 2,180 | 2,346 | 2,195 | ||
37.8 | 37.6 | 37.5 | 36.8 | 37.5 | ||
1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | ||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A)
Consolidated SG&A represented 26.6% of net sales in the quarter, 0.4 percentage points above the prior year, mainly due to expenses related to the Company's digital transformation project.
EARNINGS BEFORE INTERESTS AND TAXES BEFORE OTHER INCOME
EBIT before other income was MXN 638 million, 4.2% lower than in the first quarter of the previous year. In the Preserves segment, EBIT before other income increased 16.2%, while the margin expanded 2.0 percentage points to 16.8%.
The Frozen segment recorded an operating loss of MXN 195 million in the quarter, compared to the operating loss of MXN 72 million recorded in the same period of the previous year. This resulted from the mobility restrictions at the beginning of this year, which compares unfavorably with the months prior to the pandemic. In the Exports segment, the margin was 6.7%, 5.7 percentage points lower than last year, mainly due to the appreciation of the dollar against the peso.
OTHER INCOME
During the quarter, net other income was MXN 8 million, compared to the MXN 194 million posted in the first quarter of the previous year related to the sale of three tuna vessels.
EARNINGS BEFORE INTERESTS AND TAXES (EBIT)
Operating income in the first quarter decreased 24.8% to MXN 646 million, with a margin of 11.0%, 3.9 percentage points lower than the same period of 2020.
EBIT | 1Q21 | 1Q20 | % change | |||||
Consolidated | 646 | 859 | (24.8) | ||||||||||||
Preserves | 809 | 869 | (6.8) | ||||||||||||
Frozen | (194) | (56) | NA | ||||||||||||
4 | |||||||||||||||
Exports | 30 | 47 | (35.2) | ||||||||||||
Figures in millions of MXN. | |||||||||||||||
EBIT MARGIN (%) | 1Q21 | 1Q20 | pp change | ||||||||||||
Consolidated | 11.0 | 14.9 | (3.9) | ||||||||||||
Preserves | 16.9 | 18.7 | (1.8) | ||||||||||||
Frozen | (31.6) | (7.8) | NA | ||||||||||||
Exports | 6.7 | 12.4 | (5.7) | ||||||||||||
Figures in percentages.
EBIT PERFORMANCE
1,100 | ||||||
859 | ||||||
14.9 | 647 | 649 | 17.3 | 646 | ||
10.6 | 11.2 | 11.0 | ||||
1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | ||
COMPREHENSIVE FINANCING RESULT
In the first quarter, net financing cost was MXN 152 million, 171.7% higher than in the same period of 2020. This increase is mainly explained by a MXN 102 million foreign exchange gain recorded in the first quarter of the previous year.
EQUITY INVESTMENTS IN ASSOCIATED COMPANIES
Equity Investments in Associated Companies totaled MXN 243 million in the quarter, 77.7% higher than in the first quarter of 2020, due to ongoing recovery in the United States business.
EQUITY INVESTMENT | ||||||
IN ASSOCIATED | 1Q21 | 1Q20 | % change | |||
COMPANIES | ||||||
Consolidated | 243 | 137 | 77.7 | |||
MegaMex | 230 | 160 | 44.1 | |||
Others | 13 | (23) | NA | |||
Figures in millions of MXN. |
MEGAMEX CONSOLIDATED RESULTS (100%) | |
Net sales totaled MXN 3.4 billion during the quarter, 3.5% higher than in the same period of the previous | |
year. This was due to the recovery of sales in the institutional channel. | 5 |
Gross margin was 36.3%, 6.1 percentage points higher than in 2020. EBIT and EBITDA margins increased
4.7 and 4.8 percentage points, respectively, to 15.2% and 18.1%, due to lower avocado prices and the recovery of the institutional channel. As a result, net income increased 44.1% to MXN 460 million, representing a margin of 13.4%
MEGAMEX I N C O M E | S T A T E M E N T | ||||||||||||||||
MEGAMEX | 1Q21 | % | 1Q20 | % | % | ||||||||||||
change | |||||||||||||||||
Net Sales | 3,426 | 100.0 | 3,309 | 100.0 | 3.5 | ||||||||||||
Gross profit | 1,244 | 36.3 | 998 | 30.2 | 24.6 | ||||||||||||
EBIT | 520 | 15.2 | 346 | 10.5 | 50.1 | ||||||||||||
EBITDA | 619 | 18.1 | 441 | 13.3 | 40.3 | ||||||||||||
Net Income | 9.7 | ||||||||||||||||
460 | 13.4 | 319 | 44.1 | ||||||||||||||
Figures in millions of MXN
NET INCOME
In the first quarter, consolidated net income was MXN 542 million, 18.7% lower than in the same period of the previous year. Consolidated net margin stood at 9.3%, a contraction of 2.3 percentage points. Excluding
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Grupo Herdez SAB de CV published this content on 22 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2021 21:53:02 UTC.