INDUSTRIAS BACHOCO, S.A.B. DE C.V. INDUSTRIAS BACHOCO ANNOUNCES THIRD QUARTER 2021 RESULTS
Celaya, Guanajuato, Mexico - October 25th, 2021
Industrias Bachoco, S.A.B. de C.V., "Bachoco" or "the Company", (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the third quarter ("3Q21") and first nine months of 2021 ("9M21") ended on September 30th, 2021. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$").
HIGHLIGHTS 2021
| · | Net sales increased 10.6% in 3Q21 and 19.8% in 9M21. |
| · | SG&A expenses as a percentage of net sales were 8.9% in 3Q21 and 8.5% in 9M21. |
| · | EBITDA margin was 5.6% for 3Q21 and 10.7% for the 9M21 |
| · | Earnings per basic and diluted share were $1.41 for 3Q21 and $7.37 for 9M21. |
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "This was a typical third quarter for the Company, in terms of seasonality, with chicken prices at their weakest as compared to the first half of the year.
In México, we observed lower demand which negatively affected our prices. Unlike the U.S., where main commodity prices remained strong for most of the quarter.
In terms of cost of sales, prices of corn and soybean meal remained high when compared to previous years, fully impacting our cost in México and the U.S. As a result, our cost of sales was 16.6% higher than reported in 3Q20.
The behavior in pricing and the increase in cost led us to an EBITDA of $1,127.4 million and a margin of 5.6% for the 3Q21 compared to the $1,828.2 million and margin of 10.0% of the same period of 2020. On the other hand, for the nine months of the year 2021, the EBITDA margin was 10.7%, higher when compared to 6.4% EBITDA margin of the same period of 2020.
Despite the challenging conditions of this quarter, the Company remained in a healthy financial condition as we reached a net cash level of $18,269.7 million, which will allow us to continue to support our growth plans."
EXECUTIVE SUMMARY
The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2020.
QUARTERLY RESULTS
| NET SALES BY GEOGRAPHY | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Net Sales | 20,229.0 | 18,292.4 | 1,936.6 | 10.6 | ||||||||||||
| Net sales in Mexico | 14,963.8 | 13,114.4 | 1,849.4 | 14.1 | ||||||||||||
| Net sales in the U.S. | 5,265.2 | 5,178.0 | 87.2 | 1.7 |
| NET SALES BY SEGMENT | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Net Sales | 20,229.0 | 18,292.4 | 1,936.6 | 10.6 | ||||||||||||
| Poultry | 17,765.7 | 16,226.6 | 1,539.1 | 9.5 | ||||||||||||
| Other | 2,463.3 | 2,065.7 | 397.6 | 19.2 |
NET VOLUME SOLD BY SEGMENT
| In tons | Change | |||||||||||||||
| 3Q21 | 3Q20 | Volume | % | |||||||||||||
| Total sales volume: | 570,381 | 568,470 | 1,911.2 | 0.3 | ||||||||||||
| Poultry | 442,665 | 434,272 | 8,392.9 | 1.9 | ||||||||||||
| Others | 127,716 | 134,198 | (6,481.7 | ) | (4.8 | ) |
The Company's 3Q21 net sales totaled $20,229.0 million; $1,936.6 million or 10.6% higher than the $18,292.4 million reported in 3Q20. The increase is a result of better prices in all our business lines.
In 3Q21, sales of our U.S. operations represented 26.0% and compared to 28.3% in the 3Q20.
| GROSS PROFIT | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Cost of sales | 17,619.0 | 15,107.6 | 2,511.4 | 16.6 | ||||||||||||
| Gross profit | 2,610.0 | 3,184.7 | (574.8 | ) | (18.0 | ) | ||||||||||
| Gross margin | 12.9 | % | 17.4 | % | - | - |
In 3Q21, cost of sales was $17,619.0 million; $2,511.4 million or 16.6% higher than the $15,107.6 million reported in 3Q20. This increase was mainly attributed to higher unit cost in our main business lines mainly as a result of higher raw material costs in peso terms.
The Company´s gross profit in 3Q21 was $2,610.0 million, lower than the gross profit of $3,184.7 million in 3Q20, with a gross margin of 12.9% for 3Q21 vs 17.4% in 3Q20.
| Selling, general and administrative expenses ("SG&A") | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Total SG&A | 1,790.9 | 1,600.8 | 190.1 | 11.9 |
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Total SG&A expenses in 3Q21 were $1,790.9 million; $190.1 million higher than the $1,600.8 million reported in 3Q20. Total SG&A expenses as a percentage of net sales represented 8.9%, slightly higher than the 8.8% in 3Q20.
| other income (expense), net | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Other income (expense), net | (80.7 | ) | (99.2 | ) | 18.5 | (18.7 | ) |
This item mainly includes the sale of unused assets as well as hens and other by-products. We record such sales as expenses when the sale price is below the book value of those assets.
In 3Q21, we recorded other expenses of $80.7 million, compared with other expenses of $99.2 million reported in 3Q20.
| OPERATING INCOME | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Operating income | 738.4 | 1,484.8 | (746.4 | ) | (50.3 | ) | ||||||||||
| Operating margin | 3.7 | % | 8.1 | % | - | - |
Operating income in 3Q21 totaled $738.4 million; $746.4 million lower than the Operating income of $1,484.8 million reported in 3Q20. This represents an Operating margin of 3.7% for 3Q21, versus an Operating margin of 8.1% in the same period of 2020. The decrease in Operating income is mainly attributed to higher cost of sales as a result of higher raw material costs both in USD and peso terms.
| NET FINANCIAL INCOME | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Net Financial Income | 459.6 | (267.5 | ) | 727.1 | (271.8 | ) | ||||||||||
| Financial Income | 527.5 | (212.9 | ) | 740.4 | (347.8 | ) | ||||||||||
| Financial Expense | 67.9 | 54.6 | 13.4 | 24.5 |
In 3Q21, the Company reported net financial income of $459.6 million, compared to a net financial expense of $267.5 million reported in the same period of 2020. The increase is mainly attributed to higher exchange rate gains.
| TAXES FOR THE PERIOD | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Total Taxes | 380.6 | 359.2 | 21.5 | 6.0 | ||||||||||||
| Income tax | (275.3 | ) | 114.5 | (389.7 | ) | (340.5 | ) | |||||||||
| Deferred income tax | 655.9 | 244.7 | 411.2 | 168.0 |
Total taxes for the 3Q21 were $380.6 million, which is higher when compared with total taxes of the same period of 2020.
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| NET CONTROLLING INTEREST INCOME | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Net income | 817.4 | 858.1 | (40.8 | ) | (4.7 | ) | ||||||||||
| Net margin | 4.0 | % | 4.7 | % | - | - | ||||||||||
| Non-Controlling Interest income | (26.4 | ) | 30.1 | (56.5 | ) | n/a | ||||||||||
| Net controlling interest income | 843.8 | 828.0 | 15.8 | 1.9 | ||||||||||||
| Basic and diluted income per share1 | 1.41 | 1.38 | 0.03 | n/a | ||||||||||||
| Basic and diluted income per ADR2 | 16.88 | 16.56 | 0.3 | n/a | ||||||||||||
| Weighted average Shares outstanding3 | 599,734 | 599,823 | - | - |
1 In pesos
2 in pesos, one ADR equals to twelve shares
3 In thousands of shares
Net controlling interest income for 3Q21 was $843.8 million, representing a basic and diluted income per share of $1.41 pesos, compared with a net controlling interest income of $828.0 million, which represented a $1.38 pesos of income per share in 3Q20.
| EBITDA | ||||||||||||||||
| In millions of pesos | 3Q21 | 3Q20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Net controlling interest income | 843.8 | 828.0 | 15.8 | 1.9 | ||||||||||||
| Income tax expense (benefit) | 380.6 | 359.2 | 21.5 | 6.0 | ||||||||||||
| Result in associates | (26.4 | ) | 30.1 | (56.5 | ) | (187.7 | ) | |||||||||
| Net finance (income) expense | (459.6 | ) | 267.5 | (727.1 | ) | (271.8 | ) | |||||||||
| Depreciation and amortization | 389.0 | 343.4 | 45.5 | 13.3 | ||||||||||||
| EBITDA | 1,127.4 | 1,828.2 | (700.8 | ) | (38.3 | ) | ||||||||||
| EBITDA Margin (%) | 5.6 | % | 10.0 | % | - | - | ||||||||||
| Net revenues | 20,229.0 | 18,292.4 | 1,936.6 | 10.6 |
EBITDA in 3Q21 reached $1,127.4 million representing an EBITDA margin of 5.6%, compared to an EBITDA of $1,828.2 million in 3Q20, with an EBITDA margin of 10.0%.
ACCUMULATED RESULTS
| NET SALES BY GEOGRAPHY | ||||||||||||||||
| In millions of pesos | 9M21 | 9M20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Net Sales | 60,447.5 | 50,462.7 | 9,984.9 | 19.8 | ||||||||||||
| Net sales in Mexico | 45,530.7 | 35,521.9 | 10,008.8 | 28.2 | ||||||||||||
| Net sales in the U.S. | 14,916.8 | 14,940.8 | (23.9 | ) | (0.2 | ) |
| NET SALES BY SEGMENT | ||||||||||||||||
| In millions of pesos | 9M21 | 9M20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Net Sales | 60,447.5 | 50,462.7 | 9,984.9 | 19.8 | ||||||||||||
| Poultry | 52,920.0 | 45,185.7 | 7,734.3 | 17.1 | ||||||||||||
| Other | 7,527.5 | 5,277.0 | 2,250.6 | 42.6 |
4
NET VOLUME SOLD BY SEGMENT
| In metric tons | Change | |||||||||||||||
| 9M21 | 9M20 | Volume | % | |||||||||||||
| Total sales volume: | 1,712,125 | 1,711,165 | 960.0 | 0.1 | ||||||||||||
| Poultry | 1,301,129 | 1,324,924 | (23,794.4 | ) | (1.8 | ) | ||||||||||
| Others | 410,995 | 386,241 | 24,754.3 | 6.4 |
During the 9M21, net sales totaled $60,447.5 million; $9,984.9 million or 19.8% more than the $50,462.7 million reported in the same period of 2020.
In 9M21, sales of our U.S. operations represented 24.7% of our total sales, compared with 29.6% in 9M20.
OPERATING RESULTS
| 9M21 | 9M20 | Change | ||||||||||||||
| $ | $ | $ | % | |||||||||||||
| Cost of Sales | 49,659.7 | 43,239.4 | 6,420.3 | 14.8 | ||||||||||||
| Gross Profit | 10,787.9 | 7,223.3 | 3,564.6 | 49.3 | ||||||||||||
| Total SG&A | 5,157.4 | 4,740.5 | 416.9 | 8.8 | ||||||||||||
| Other Income (expense) | (244.3 | ) | (311.2 | ) | 66.9 | (21.5 | ) | |||||||||
| Operating Income | 5,386.1 | 2,171.5 | 3,214.6 | 148.0 | ||||||||||||
| Net Financial Income | 682.2 | 2,036.8 | (1,354.5 | ) | (66.5 | ) | ||||||||||
| Income Tax | 1,733.3 | 1,208.3 | 525.0 | 43.4 | ||||||||||||
| Net Income | 4,335.1 | 3,000.0 | 1,335.1 | 44.5 | ||||||||||||
| Non-controlling interest | (85.8 | ) | 40.2 | (126.0 | ) | (313.2 | ) | |||||||||
| Net controlling interest Income | 4,420.9 | 2,959.8 | 1,461.1 | 49.4 |
In the 9M21, the cost of sales totaled $49,659.7 million; $6,420.3 million or 14.8% higher than $43,239.4 million reported in the 9M20.
As a result, we reached a gross profit of $10,787.9 million and a gross margin of 17.8% in 9M21, when compared to $7,223.3 million of gross profit and a gross margin of 14.3% reached in the same period of 2020.
Total SG&A expenses in 9M21 were $5,157.4 million; $416.9 million or 8.8% more than the $4,740.5 million reported in 9M20. In 9M21 total SG&A expenses as a percentage of net sales represented 8.5% lower when compared to the 9.4% on 9M20.
In 9M21 we had other expenses of $244.3 million, compared with other expenses of $311.2 million reported in 9M20.
The operating income in 9M21 was $5,386.1 million, which represents an operating margin of 8.9%, an increase from an operating income of $2,171.5 million and an operating margin of 4.3% in 9M20.
The net financial income in 9M21 was $682.2 million lower when compared to the net financial income of $2,036.8 million in 9M20.
Total taxes were $1,733.3 million as of September 30th, 2021. These taxes include $1,054.0 million of income tax and $679.2 million of deferred income taxes. This figure compares to total taxes of $1,208.3 million in 9M20; the increase was mainly attributed to a higher income before taxes.
5
All the above resulted in a net controlling interest income of $4,420.9 million in the 9M21, which represents $7.37 pesos of earnings per share; while in the 9M20 the net controlling interest income totaled $2,959.8 million, and $4.93 pesos of earnings per share.
| EBITDA | ||||||||||||||||
| In millions of pesos | 9M21 | 9M20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Net controlling interest profit | 4,420.9 | 2,959.8 | 1,461.1 | 49.4 | ||||||||||||
| Income tax expense (benefit) | 1,733.3 | 1,208.3 | 525.0 | 43.4 | ||||||||||||
| Result in associates | (85.8 | ) | 40.2 | (126.0 | ) | (313.2 | ) | |||||||||
| Net finance (income) expense | (682.2 | ) | (2,036.8 | ) | 1,354.5 | (66.5 | ) | |||||||||
| Depreciation and amortization | 1,092.1 | 1,041.6 | 50.5 | 4.8 | ||||||||||||
| EBITDA | 6,478.2 | 3,213.1 | 3,265.1 | 101.6 | ||||||||||||
| EBITDA Margin (%) | 10.7 | % | 6.4 | % | - | - | ||||||||||
| Net revenues | 60,447.5 | 50,462.7 | 9,984.9 | 19.8 |
EBITDA in 9M21 reached $6,478.2 million, representing an EBITDA margin of 10.7%, compared to EBITDA of $3,213.1 million in 9M20, with an EBITDA margin of 6.4%.
BALANCE SHEET
| BALANCE SHEET DATA | ||||||||||||||||
| In millions of pesos | Sep 30, 2021 | Dec. 31st, 2020 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| TOTAL ASSETS | 63,262.3 | 58,475.0 | 4,787.3 | 8.2 | ||||||||||||
| Cash and cash equivalents | 20,088.0 | 19,242.4 | 845.6 | 4.4 | ||||||||||||
| Accounts receivable | 4,743.4 | 4,366.7 | 376.7 | 8.6 | ||||||||||||
| TOTAL LIABILITIES | 15,601.5 | 14,548.2 | 1,053.3 | 7.2 | ||||||||||||
| Accounts payable | 6,503.2 | 5,834.0 | 669.3 | 11.5 | ||||||||||||
| Short-term debt | 1,818.3 | 1,251.7 | 566.6 | 45.3 | ||||||||||||
| Long-term debt | - | 1,460.4 | (1,460.4 | ) | (100.0 | ) | ||||||||||
| TOTAL STOCKHOLDERS' EQUITY | 47,660.8 | 43,926.8 | 3,734.0 | 8.5 | ||||||||||||
| Capital stock | 1,174.2 | 1,174.3 | (0.1 | ) | (0.0 | ) |
Cash and equivalents as of September 30th, 2021 totaled $20,088.0 million vs $19,242.4 million as of December 31, 2020.
Total debt as of September 30th, 2021 was $1,818.3 million, compared to $2,712.1 million reported as of December 31, 2020.
Net cash as of September 30th, 2021 was $18,269.7 million, compared to net cash of $16,530.3 million as of December 31, 2020.
| CAPITAL EXPENDITURES | ||||||||||||||||
| In millions of pesos | 9M21 | 9M20 | Change | |||||||||||||
| $ | $ | $ | % | |||||||||||||
| Capital Expenditures | 2,251.1 | 1,570.1 | 681.0 | 43.4 |
Total CAPEX for the 9M21 was $2,251.1 million vs $1,570.1 million in 9M20, mainly allocated toward organic growth and productivity projects across all of our facilities.
6
STOCK INFORMATION
| As of September 30, 2021 | ||||
| Total Shares | 600,000,000 | |||
| Total free float | 26.75 | % | ||
| Market cap (millions of pesos) | $ | 45,588 |
Source: Yahoo Finances
SHARE PRICE
| Mexican Stock Exchange | The New York Stock Exchange | |||||||||||||||||||||||
| Ticker Symbol: Bachoco | Ticker Symbol: IBA | |||||||||||||||||||||||
| In nominal pesos per Share | In U.S. Dollar per ADR | |||||||||||||||||||||||
| Month | High | Low | Close | High | Low | Close | ||||||||||||||||||
| Sep-21 | 77.07 | 73.02 | 75.98 | 47.11 | 43.82 | 44.20 | ||||||||||||||||||
| Aug-21 | 73.90 | 70.47 | 73.45 | 44.24 | 42.17 | 43.75 | ||||||||||||||||||
| Jul-21 | 78.00 | 72.86 | 72.86 | 47.00 | 43.89 | 43.89 | ||||||||||||||||||
| Jun-21 | 77.89 | 73.93 | 75.27 | 47.60 | 43.93 | 46.32 | ||||||||||||||||||
| May-21 | 77.50 | 74.92 | 76.52 | 46.76 | 44.55 | 46.40 | ||||||||||||||||||
| Apr-21 | 75.39 | 68.04 | 74.73 | 45.47 | 39.73 | 44.47 | ||||||||||||||||||
| Mar-21 | 69.42 | 67.16 | 68.04 | 40.45 | 38.30 | 39.95 | ||||||||||||||||||
| Feb-21 | 71.99 | 68.02 | 69.42 | 43.19 | 39.67 | 39.67 | ||||||||||||||||||
| Jan-21 | 73.60 | 69.22 | 69.28 | 44.66 | 41.14 | 41.14 |
ANALYST COVERAGE
| Institution | Analyst name | |||
| ACTINVER | Enrique Mendoza Farias | emendoza@actinver.com.mx | ||
| BBVA BANCOMER | Pablo Abraham Peregrina | pablo.abraham@bbva.com | ||
| GBM | Luis Rodrigo Willard Alonso | lrwillard@gbm.com | ||
| INTERCAM | Richard Horbach Martinez | rhorbach@intercam.com.mx | ||
| JP MORGAN | Ulises Argote | ulises.argote@jpmorgan.com | ||
| SANTANDER | Alanis Peña Alan | aalanis@santander.com.mx | ||
| BANK OF AMERICA | Fernando Olvera | folvera@bofa.com |
APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $20.64 per USD $1.0, which corresponds to the rate at the close of September 30, 2021, according to Mexico's National Bank.
| · | Consolidated Statement of Financial Position |
| · | Consolidated Statement of Income |
| · | Consolidated Statement of Cash Flows |
| · | Derivatives Position Report |
7
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||||||||||
| -Unaudited- | ||||||||||||
| In U.S. Dollar | September 30, | December 31, | ||||||||||
| In million pesos | 2021 | 2021 | 2020* | |||||||||
| TOTAL ASSETS | $ | 3,065.0 | 63,262.3 | 58,475.0 | ||||||||
| Total current assets | 1,750.8 | 36,137.1 | 32,586.0 | |||||||||
| Cash and cash equivalents | 973.3 | 20,088.0 | 19,242.4 | |||||||||
| Total accounts receivable | 229.8 | 4,743.4 | 4,366.7 | |||||||||
| Inventories | 427.1 | 8,814.6 | 7,701.0 | |||||||||
| Other current assets | 120.7 | 2,491.1 | 1,275.9 | |||||||||
| Total non current assets | 1,314.2 | 27,125.2 | 25,889.0 | |||||||||
| Net property, plant and equipment | 1,015.3 | 20,956.4 | 19,733.8 | |||||||||
| Other non current Assets | 298.9 | 6,168.8 | 6,155.2 | |||||||||
| TOTAL LIABILITIES | $ | 755.9 | 15,601.5 | 14,548.2 | ||||||||
| Total current liabilities | 503.3 | 10,388.9 | 8,179.8 | |||||||||
| Notes payable to banks | 88.1 | 1,818.3 | 1,251.7 | |||||||||
| Accounts payable | 315.1 | 6,503.2 | 5,834.0 | |||||||||
| Other taxes payable and other accruals | 100.2 | 2,067.4 | 1,094.1 | |||||||||
| Total long-term liabilities | 252.5 | 5,212.6 | 6,368.4 | |||||||||
| Long-term debt | - | - | 1,460.4 | |||||||||
| Other non current liabilities | 44.7 | 922.6 | 1,033.0 | |||||||||
| Deferred income taxes | 207.8 | 4,290.0 | 3,875.0 | |||||||||
| TOTAL STOCKHOLDERS' EQUITY | $ | 2,309.1 | 47,660.8 | 43,926.8 | ||||||||
| Capital stock | 56.9 | 1,174.2 | 1,174.3 | |||||||||
| Commission in shares issued | 20.0 | 413.3 | 413.4 | |||||||||
| Retained earnings | 2,148.5 | 44,345.6 | 40,874.4 | |||||||||
| Others accounts | 58.7 | 1,211.4 | 855.5 | |||||||||
| Non controlling interest | 25.0 | 516.4 | 609.2 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 3,065.0 | 63,262.3 | 58,475.0 |
*Audited
8
| CONSOLIDATED STATEMENT OF INCOME | ||||||||||||
| Third Quarter Results, ended September 30th: | ||||||||||||
| -Unaudited- | ||||||||||||
| U.S. Dollar | ||||||||||||
| In millions pesos | 2021 | 2021 | 2020 | |||||||||
| Net sales | $ | 980.1 | 20,229.0 | 18,292.4 | ||||||||
| Cost of sales | 853.6 | 17,619.0 | 15,107.6 | |||||||||
| Gross profit | 126.5 | 2,610.0 | 3,184.7 | |||||||||
| SG&A | 86.8 | 1,790.9 | 1,600.8 | |||||||||
| Other income (expenses), net | (3.9 | ) | (80.7 | ) | (99.2 | ) | ||||||
| Operating income | 35.8 | 738.4 | 1,484.8 | |||||||||
| Net finance income | 22.3 | 459.6 | (267.5 | ) | ||||||||
| Income tax | 18.4 | 380.6 | 359.2 | |||||||||
| Net Income | $ | 39.6 | 817.4 | 858.1 | ||||||||
| Non-controlling interest | (1.28 | ) | (26.4 | ) | 30.1 | |||||||
| Net controlling interest profit | 40.88 | 843.8 | 828.0 | |||||||||
| Basic and diluted earnings per share | 0.07 | 1.41 | 1.38 | |||||||||
| Basic and diluted earnings per ADR | 0.82 | 16.88 | 16.56 | |||||||||
| Weighted average Shares outstanding1 | 599,734 | 599,734 | 599,823 | |||||||||
| EBITDA Result | $ | 54.6 | 1,127.4 | 1,828.2 | ||||||||
| Gross margin | 12.9 | % | 12.9 | % | 17.4 | % | ||||||
| Operating margin | 3.7 | % | 3.7 | % | 8.1 | % | ||||||
| Net margin | 4.2 | % | 4.0 | % | 4.7 | % | ||||||
| EBITDA margin | 5.6 | % | 5.6 | % | 10.0 | % |
1 In thousands
9
| CONSOLIDATED STATEMENT OF INCOME | ||||||||||||
| Accumulated results, for the nine months ended September 30. | ||||||||||||
| -Unaudited- | ||||||||||||
| U.S. Dollar | ||||||||||||
| In millions pesos | 2021 | 2021 | 2020 | |||||||||
| Net sales | $ | 2,928.7 | 60,447.5 | 50,462.7 | ||||||||
| Cost of sales | 2,406.0 | 49,659.7 | 43,239.4 | |||||||||
| Gross profit | 522.7 | 10,787.9 | 7,223.3 | |||||||||
| Selling, general and administrative expenses | 249.9 | 5,157.4 | 4,740.5 | |||||||||
| Other income (expenses), net | (11.8 | ) | (244.3 | ) | (311.2 | ) | ||||||
| Operating income | 261.0 | 5,386.1 | 2,171.5 | |||||||||
| Net finance income | 33.1 | 682.2 | 2,036.8 | |||||||||
| Income tax | 84.0 | 1,733.3 | 1,208.3 | |||||||||
| Net income | $ | 210.0 | 4,335.1 | 3,000.0 | ||||||||
| Non-controlling interest | (4.16 | ) | (85.8 | ) | 40.2 | |||||||
| Net controlling interest profit | 214.2 | 4,420.9 | 2,959.8 | |||||||||
| Basic and diluted earnings per share | 0.36 | 7.37 | 4.93 | |||||||||
| Basic and diluted earnings per ADR | 4.29 | 88.5 | 59.21 | |||||||||
| Weighted average Shares outstanding1 | 599,766 | 599,766 | 599,818 | |||||||||
| EBITDA Result | $ | 313.9 | 6,478.2 | 3,213.1 | ||||||||
| Gross margin | 17.8 | % | 17.8 | % | 14.3 | % | ||||||
| Operating margin | 8.9 | % | 8.9 | % | 4.3 | % | ||||||
| Net margin | 7.3 | % | 7.2 | % | 5.9 | % | ||||||
| EBITDA margin | 10.7 | % | 10.7 | % | 6.4 | % |
1 In thousands
10
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||
| In million of pesos | ||||||||||||
| -Unaudited- | ||||||||||||
| U.S. Dollar | September 30, | |||||||||||
| 2021 | 2021 | 2020 | ||||||||||
| NET MAJORITY INCOME BEFORE INCOME TAX | $ | 294.0 | 6,068.4 | 4,208.3 | ||||||||
| ITEMS RELATING TO INVESTING ACTIVITIES: | 59.4 | 1,226.7 | 975.5 | |||||||||
| Depreciation and others | 65.8 | 1,358.3 | 1,312.0 | |||||||||
| Income (loss) on sale of plant and equipment | 3.1 | 63.3 | 25.8 | |||||||||
| Other Items | (9.4 | ) | (194.9 | ) | (362.4 | ) | ||||||
| NET CASH GENERATED FROM NET INCOME BEFORE TAXES | 353.4 | 7,295.1 | 5,183.9 | |||||||||
| CASH GENERATED OR USED IN THE OPERATION: | (56.5 | ) | (1,166.0 | ) | (1,779.4 | ) | ||||||
| Decrease (increase) in accounts receivable | (11.6 | ) | (239.0 | ) | (829.4 | ) | ||||||
| Decrease (increase) in inventories | (72.0 | ) | (1,487.0 | ) | (1,300.9 | ) | ||||||
| Increase (decrease) in accounts payable | 86.8 | 1,791.9 | 1,036.1 | |||||||||
| Other Items | (59.7 | ) | (1,231.9 | ) | (685.2 | ) | ||||||
| NET CASH FLOW FROM OPERATING ACTIVITIES | 297.0 | 6,129.1 | 3,404.4 | |||||||||
| NET CASH FLOW FROM INVESTING ACTIVITIES | (78.9 | ) | (1,629.1 | ) | (1,270.8 | ) | ||||||
| Acquisition of property, plant and equipment | (109.1 | ) | (2,251.1 | ) | (1,570.1 | ) | ||||||
| Proceeds from sales of property plant and equipment | 0.8 | 17.1 | 118.7 | |||||||||
| Other Items | 29.3 | 604.9 | 180.6 | |||||||||
| CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES | 218.0 | 4,500.0 | 2,133.6 | |||||||||
| Net cash provided by financing activities: | (177.1 | ) | (3,654.4 | ) | (3,098.0 | ) | ||||||
| Proceeds from loans | 59.9 | 1,237.2 | 3,313.9 | |||||||||
| Principal payments on loans | (92.2 | ) | (1,903.8 | ) | (6,033.9 | ) | ||||||
| Dividends paid | (41.3 | ) | (851.6 | ) | (791.7 | ) | ||||||
| Other items | (103.5 | ) | (2,136.1 | ) | 413.8 | |||||||
| Net increase (decrease) in cash and equivalents | 41.0 | 845.6 | (964.4 | ) | ||||||||
| Cash and investments at the beginning of year | $ | 932.3 | 19,242.4 | 19,164.8 | ||||||||
| CASH AND INVESTMENTS AT END OF PERIOD | $ | 973.3 | 20,088.0 | 18,200.4 |
11
DERIVATIVES POSITION REPORT
| Third Quarter 2021 | ||||||||||
| Thousands of Mexican Pesos, as of September 30, 2021 | ||||||||||
| TYPE OF FINANCIAL INSTRUMENT | OBJECTIVE | NOTIONAL | VALUE OF THE RELATED COMMODITY | REASONABLE VALUE | AMOUNTS DUE BY YEAR | GUARANTIES REQUIRED | ||||
| 3Q-2021 | 2Q-2021 | 3Q-2021 | 2Q-2021 | |||||||
| Forward Vanilla, and KO Fwd | Hedge | $ 130,725 | $ 20.64 | $ 19.95 | $ 63,580 | $-237,421 | 91% in 2021; 9% 2022 | The deals consider the possibility of margin calls but not another kind of guarantee | ||
| Futures for corn and soybean meal | Hedge | $ 63,826 | CORN | CORN | -$ 3,890 | $ 12,244 | 44% in 2021 and 56% in 2022 | |||
| In USD per Bushel | In USD per Bushel | |||||||||
| month | price | month | price | |||||||
| Dec-21 | $ 5.368 | Jul-21 | $ 7.200 | |||||||
| Mar-22 | $ 5.445 | Sep-21 | $ 5.993 | |||||||
| Dec-21 | $ 5.885 | |||||||||
| SOYBEAN MEAL | SOYBEAN MEAL | |||||||||
| In USD per ton | In USD per ton | |||||||||
| month | price | month | price | |||||||
| Dec-21 | $ 328.7 | Aug-21 | $ 377.5 | |||||||
| Jan-22 | $ 331.0 | Sep-21 | $ 379.0 | |||||||
| Mar-22 | $ 333.4 | Oct-21 | $ 378.8 | |||||||
| May-22 | $ 337.1 | Dec-21 | $ 381.7 | |||||||
| Jul-22 | $ 340.5 | Jan-22 | $ 380.1 | |||||||
| Aug-22 | $ 341.4 | Mar-22 | $ 374.1 | |||||||
| Sep-22 | $ 341.3 | May-22 | $ 371.8 | |||||||
| Oct-22 | $ 339.1 | Jul-22 | $ 373.7 | |||||||
| Dec-22 | $ 340.3 | Aug-22 | $ 369.6 | |||||||
| Sep-22 | $ 369.6 | |||||||||
| Options of Corn | Hedge | $ 152,988 | CORN | CORN | $ 23,350 | $ 88,823 | 95% in 2021 and 5% in 2022 | |||
| In USD per Bushel | In USD per Bushel | |||||||||
| month | price | month | price | |||||||
| Jul-21 | $ 7.200 | |||||||||
| Sep-21 | $ 5.993 | |||||||||
| Dec-21 | $ 5.885 | |||||||||
| Dec-21 | $ 5.368 | Mar-22 | $ 5.955 | |||||||
| Mar-22 | $ 5.445 | |||||||||
| Options of soybean meal | Hedge | $ 210,800 | SOYBEAN MEAL | SOYBEAN MEAL | -$ 21,390 | $ 3,603 | 59% in 2021 and 41% in 2022 | |||
| In USD per ton | In USD per ton | |||||||||
| month | price | month | price | |||||||
| Aug-21 | $ 377.5 | |||||||||
| Sep-21 | $ 379.0 | |||||||||
| Oct-21 | $ 343.1 | Oct-21 | $ 378.8 | |||||||
| Dec-21 | $ 328.7 | Dec-21 | $ 381.7 | |||||||
| Jan-22 | $ 331.0 | Jan-22 | $ 380.1 | |||||||
| Mar-22 | $ 333.4 | Mar-22 | $ 374.1 | |||||||
| May-22 | $ 337.1 | May-22 | $ 371.8 | |||||||
-The total financial instruments do not exceed 5% of total assets as of September 30, 2021.
-The notional value represents the net position as of September 30, 2021 at the exchange rate of Ps.20.64 per one dollar.
-A negative value means an unfavorable effect for the Company.
| Third Quarter 2021 | ||||||||
| Thousands of Mexican Pesos, as of September 30, 2021 | PROBABLE SCENARIO | |||||||
| TYPE OF FINANCIAL INSTRUMENT | REASONABLE VALUE | VALUE OF THE RELATED COMMODITY | EFFECT ON THE INCOME STATEMENT | EFFECT ON THE CASH FLOW(3) | ||||
| Reference Value (1) | ||||||||
| -2.5% | 2.5% | 5.0% | -2.5% | 2.5% | 5.0% | |||
| Forward Vanilla, and KO Fwd | $ 63,580 | $20.12 | $ 21.16 | $ 21.67 | Direct | -$ 6,254 | $ 122,273 | $ 189,766 |
| -5% | 5% | 10% | -5% | 5% | 10% | |||
| Futures of Corn: (2) | -$ 3,890 | $ 5.099 | $ 5.636 | $ 5.904 | The effect will materialize as the inventory is consumed | -$ 7,081 | -$ 699 | $ 2,493 |
| Futures of Soybean Meal: (2) | $ 325.9 | $ 360.3 | $ 377.4 | |||||
| Options for Corn | $ 23,350 | $ 5.099 | $ 5.636 | $ 5.904 | $ 15,700 | $ 30,999 | $ 38,648 | |
| Options of Soybean Meal | -$ 21,390 | $ 325.9 | $ 360.3 | $ 377.4 | -$ 33,681 | -$ 9,434 | $ 2,522 | |
(1) The reference value is the exchange rate of Ps. $20.64 per USD as of September 30, 2021.
(2) The reference values are; the future of corn for September 2021, $5.3675 USD/bushel and the future of soybeanmeal for October 2021, $343.10USD/ton.
'All the evaluations are performed according with the corresponding future, here only the first month futures are shown.
(3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown.
-A negative value means an unfavorable effect for the Company.
| Third Quarter 2021 | ||||||||||
| Thousands of Mexican Pesos, as of September 30, 2021 | STRESS SCENARIO | |||||||||
| TYPE OF FINANCIAL INSTRUMENT | REASONABLE VALUE | VALUE OF THE RELATED COMMODITY | EFFECT ON THE INCOME STATEMENT | EFFECT ON THE CASH FLOW | ||||||
| Reference Value | ||||||||||
| -50% | -25% | 25% | 50% | -50% | -25% | 25% | 50% | |||
| Forward Vanilla and KO Fwd | $63,580 | $10.32 | $15.48 | $25.80 | $30.96 | Direct | -$1,333,173 | -$634,798 | $602,090 | $1,171,086 |
12
CONFERENCE CALL INFORMATION
The Company will host its third quarter 2021 earnings call, on Monday, October 25th, 2021. The earnings call will take place at 3:00 pm Central Time (4:00 pm ET).
Toll free in the U.S.: 1 (888) 771-4371
Toll free in Mexico: 001 866 779 0965
A current list of available local and international free phone telephone numbers:
http://web.meetme.net/r.aspx?p=12&a=UanmoXYcFjkTlS
Confirmation Number: 50236531
COMPANY DESCRIPTION
Industrias Bachoco is the leader in the Mexican poultry industry, and one of the largest poultry producers globally. The Company was founded in 1952, and became a public company in 1997, via a public offering of shares on the Mexican and The New York Stock Exchange. Bachoco is a vertically integrated company headquartered in Celaya, Guanajuato located in Central Mexico. Its main business lines are: chicken, eggs, balanced feed, swine, and turkey and beef value-added products. Bachoco owns and manages more than a thousand facilities, organized in nine production complexes and 80 distribution centers in Mexico, and a production complex in the United States. Currently the Company employs more than 29,000 people.
The Company is rated AAA (MEX), the highest rating awarded by Fitch Mexico, S.A. de C.V., and HR AAA which signals that the Company and the offering both have the highest credit quality by HR Ratings de Mexico S.A. de C.V.
DISCLAIMER
The document contains certain information that could be considered forward looking statements concerning anticipated future events and performance of the Company. The statements reflect management's current beliefs based on information currently available and are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in our Annual Information Form, which could cause our actual results to differ materially from the forward-looking statements contained in this document. Those risks and uncertainties include risks associated with ownership in the poultry industry, competition for investments within the poultry industry, shareholder liability, governmental regulation, and environmental matters. As a result, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Industrias Bachoco, S.A.B. de C.V., undertakes no obligation to publicly update or revise any forward-looking statement.
IR contact information: maria.jaquez@bachoco.net andrea.guerrero@bachoco.net T. +52(461)618 3555 |
13
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Industrias Bachoco SAB de CV published this content on 25 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2021 12:33:06 UTC.
