Industrias Bachoco Announces Third Quarter 2020 Results
CELAYA, Mexico, Oct. 28, 2020 /PRNewswire/ -- 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 ("3Q20") and first nine months of 2020 ("9M20") ended on September 30th, 2020. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$").
HIGHLIGHTS 2020
- Net sales increased 19.5% in 3Q20 and 8.5% in 9M20.
- SG&A expenses as a percentage of net sales were 8.8% in 3Q20 and 9.4% in 9M20.
- EBITDA margin was 10.0% for 3Q20 and 6.4% for the 9M20
- Earnings per basic and diluted share were $1.38 for 3Q20 and $4.93 for 9M20.
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "As economic activities started reactivating, after lockdown measures during the previous quarter, we observed the demand improving, which resulted in a better balance between supply and demand, mainly in Mexico. This allowed us to observe unseasonal good prices for the 3Q20.
The balance between supply and demand, and our strong and diversified participation in the Mexican market, allowed us to reach an increase in total sales of 19.5% for the quarter versus the same period of 2019.
In terms of cost, the depreciation of the Mexican peso vs the U.S dollar, year over year, still had a negative impact during 3Q20 regarding our raw materials value. As a result, our cost of sales increased 18.9% vs the same quarter of 2019.
On the other hand, we managed to keep our SG&A under control. As a percentage of sales, it represented 8.8% over sales vs the 9.8% reported in 3Q19.
Also, during this quarter, we integrated Sonora Agropecuaria to our financial results. Which is a swine processor and distributor with participation in the export market as well.
As a result of the conditions mentioned above, our operating profit for the quarter was $1,484.8 million which is 25.6% higher than the $1,181.8 million reported in 3Q20. In terms of EBITDA, we reported $1,828.2 million in 3Q20 which is 21.4% higher than the $1,505.8 million reported in 3Q19, that is 10.0% and 9.8% of EBITDA margin for each period respectively.
Our quarterly results, combined with our strong financial structure, allowed us to continue with our social responsibility initiatives.
Now more than ever, we are committed with the recovery of the families in need. To do so, we extended our donation program Apoyo de Corazón in coordination with public and private institutions. During the 3Q20 we donated more than 296,000 kilos of chicken which benefited more than 1.2 million people across Mexico. We look forward to keep with this program through the remaining of the year".
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 2019.
QUARTERLY RESULTS
NET SALES BY GEOGRAPHY |
|||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
||
$ |
$ |
$ |
% |
||
Net Sales |
18,292.4 |
15,312.9 |
2,979.5 |
19.5 |
|
Net sales in Mexico |
13,114.4 |
10,981.4 |
2,133.0 |
19.4 |
|
Net sales in the U.S. |
5,178.0 |
4,331.5 |
846.5 |
19.5 |
|
NET SALES BY SEGMENT |
|||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
||
$ |
$ |
$ |
% |
||
Net Sales |
18,292.4 |
15,312.9 |
2,979.5 |
19.5 |
|
Poultry |
16,226.6 |
13,879.8 |
2,346.8 |
16.9 |
|
Other |
2,065.7 |
1,433.1 |
632.6 |
44.1 |
|
NET VOLUME SOLD BY SEGMENT |
||||||
In tons |
Change |
|||||
3Q20 |
3Q19 |
Volume |
% |
|||
Total sales volume: |
568,470 |
550,640 |
17,830.7 |
3.2 |
||
Poultry |
434,272 |
424,645 |
9,627.1 |
2.3 |
||
Others |
134,198 |
125,994 |
8,203.5 |
6.5 |
||
The Company's 3Q20 net sales totaled $18,292.4 million; $2,979.5 million or 19.5% higher than the $15,312.9 million reported in 3Q19. The increase is a result of better prices in all our main business lines.
In 3Q20, sales of our U.S. operations represented 28.3% of our total sales which is the same level of 3Q19.
GROSS PROFIT |
|||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
||
$ |
$ |
$ |
% |
||
Cost of sales |
15,107.6 |
12,706.5 |
2,401.1 |
18.9 |
|
Gross profit |
3,184.7 |
2,606.4 |
578.4 |
22.2 |
|
Gross margin |
17.4% |
17.0% |
- |
- |
|
In 3Q20, cost of sales was $15,107.6 million; $2,401.1 million or 18.9% higher than the $12,706.5 million reported in 3Q19. 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 3Q20 was $3,184.7 million, higher than the gross profit of $2,606.4 million in 3Q19, with a gross margin of 17.4% for 3Q20 vs 17.0% in 3Q19.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A")
|
|||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
||
$ |
$ |
$ |
% |
||
Total SG&A |
1,600.8 |
1,497.6 |
103.2 |
6.9 |
|
Total SG&A expenses in 3Q20 were $1,600.8 million; $103.2 million higher than the $1,497.6 million reported in 3Q19. Total SG&A expenses as a percentage of net sales represented 8.8% in 3Q20 and 9.8% in 3Q19.
OTHER INCOME (EXPENSE), NET |
|||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
||
$ |
$ |
$ |
% |
||
Other income (expense), net |
(99.2) |
73.0 |
(172.2) |
(235.8) |
|
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 3Q20, we recorded other expenses of $99.2 million, compared with other income of $73.0 million reported in 3Q19.
OPERATING INCOME |
|||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
||
$ |
$ |
$ |
% |
||
Operating income |
1,484.8 |
1,181.8 |
303.0 |
25.6 |
|
Operating margin |
8.1% |
7.7% |
- |
- |
|
Operating income in 3Q20 totaled $1,484.8 million; $303.0 million higher than the Operating income of $1,181.8 million reported in 3Q19. This represents an operating margin of 8.1% for 3Q20, versus an operating margin of 7.7% in the same period of 2019. The increase in operating income is mainly attributed to higher prices and higher volume sold. This last one, mainly in other segment as a result of the consolidation of Sonora Agropecuaria.
NET FINANCIAL INCOME |
|||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
||
$ |
$ |
$ |
% |
||
Net Financial Income |
(267.5) |
405.7 |
(673.2) |
(165.9) |
|
Financial Income |
(212.9) |
486.7 |
(699.6) |
(143.7) |
|
Financial Expense |
54.6 |
81.0 |
(26.4) |
(32.6) |
|
In 3Q20, the Company reported net financial expenses of $267.5 million, compared to a net financial income of $405.7 million reported in the same period of 2019. The decrease is mainly attributed to lower exchange rate gains due to the appreciation of the Mexican peso when compared to the 2Q20.
TAXES FOR THE PERIOD |
||||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
|||
$ |
$ |
$ |
% |
|||
Total Taxes |
359.2 |
474.4 |
(115.2) |
(24.3) |
||
Income tax |
114.5 |
48.2 |
66.2 |
137.3 |
||
Deferred income tax |
244.7 |
426.1 |
(181.4) |
(42.6) |
||
Total taxes for the 3Q20 were $359.2 million, which is lower when compared with total taxes of the same period of 2019 as a result of lower income before taxes.
NET INCOME |
|||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
||
$ |
$ |
$ |
% |
||
Net income |
858.1 |
1,113.1 |
(255.0) |
(22.9) |
|
Net margin |
4.7% |
7.3% |
- |
- |
|
Basic and diluted earnings per share1 |
1.38 |
1.85 |
(0.5) |
n/a |
|
Basic and diluted earnings per ADR2 |
16.56 |
22.23 |
(5.7) |
n/a |
|
Weighted average Shares outstanding3 |
599,823 |
600,000 |
- |
- |
|
1 In pesos |
|||||
The net income for 3Q20 was $858.1 million, representing a basic and diluted income per share of $1.38 pesos, compared with a net income of $1,113.1 million, which represented a $1.85 pesos of net income per share in 3Q19. This decrease is mainly attributed to lower net income. Net margin in 3Q20 was 4.7% compared to a margin of 7.3% reported in 3Q19.
EBITDA |
|||||
In millions of pesos |
3Q20 |
3Q19 |
Change |
||
$ |
$ |
$ |
% |
||
Net income |
828.0 |
1,111.3 |
(283.4) |
(25.5) |
|
Income tax expense (benefit) |
359.2 |
474.4 |
(115.2) |
(24.3) |
|
Result in associates |
30.1 |
1.8 |
28.4 |
1,611.4 |
|
Net finance (income) expense |
267.5 |
(405.7) |
673.2 |
(165.9) |
|
Depreciation and amortization |
343.4 |
324.0 |
19.4 |
6.0 |
|
EBITDA |
1,828.2 |
1,505.8 |
322.4 |
21.4 |
|
EBITDA Margin (%) |
10.0% |
9.8% |
- |
- |
|
Net revenues |
18,292.4 |
15,312.9 |
2,979.5 |
19.5 |
|
EBITDA in 3Q20 reached $1,828.2 million representing an EBITDA margin of 10.0%, compared to an EBITDA of $1,505.8 million in 3Q19, with an EBITDA margin of 9.8%.
ACCUMULATED RESULTS
NET SALES BY GEOGRAPHY |
|||||
In millions of pesos |
9M20 |
9M19 |
Change |
||
$ |
$ |
$ |
% |
||
Net Sales |
50,462.7 |
46,520.6 |
3,942.1 |
8.5 |
|
Net sales in Mexico |
35,521.9 |
33,815.4 |
1,706.5 |
5.0 |
|
Net sales in the U.S. |
14,940.8 |
12,705.2 |
2,235.5 |
17.6 |
|
NET SALES BY SEGMENT |
|||||
In millions of pesos |
9M20 |
9M19 |
Change |
||
$ |
$ |
$ |
% |
||
Net Sales |
50,462.7 |
46,520.6 |
3,942.1 |
8.5 |
|
Poultry |
45,185.7 |
41,991.8 |
3,193.9 |
7.6 |
|
Other |
5,277.0 |
4,528.8 |
748.2 |
16.5 |
|
NET VOLUME SOLD BY SEGMENT |
||||||
In metric tons |
Change |
|||||
9M20 |
9M19 |
Volume |
% |
|||
Total sales volume: |
1,711,165 |
1,679,544 |
31,621 |
1.88 |
||
Poultry |
1,324,924 |
1,286,960 |
37,963 |
2.95 |
||
Others |
386,241 |
392,584 |
(6,343) |
(1.62) |
||
During the 9M20, net sales totaled $50,462.7 million; $3,942.1 million or 8.5% more than the $46,520.6 million reported in the same period of 2019.
In 9M20, sales of our U.S. operations represented 29.6% of our total sales, compared with 27.3% in 9M19.
OPERATING RESULTS |
|||||
In millions of pesos |
9M20 |
9M19 |
Change |
||
$ |
$ |
$ |
% |
||
Cost of Sales |
43,239.4 |
38,386.7 |
4,852.7 |
12.6 |
|
Gross Profit |
7,223.3 |
8,133.9 |
(910.6) |
(11.2) |
|
Total SG&A |
4,740.5 |
4,522.8 |
217.7 |
4.8 |
|
Other Income (expense) |
(311.2) |
69.6 |
(380.9) |
(546.9) |
|
Operating Income |
2,171.5 |
3,680.7 |
(1,509.1) |
(41.0) |
|
Net Financial Income |
2,036.8 |
573.3 |
1,463.5 |
255.3 |
|
Income Tax |
1,208.3 |
1,246.4 |
(38.2) |
(3.1) |
|
Net Income |
3,000.0 |
3,007.5 |
(7.5) |
(0.2) |
|
In the 9M20, the cost of sales totaled $43,239.4 million; $4,852.7 million or 12.6% higher than $38,386.7 million reported in the 9M19.
As a result, we reached a gross profit of $7,223.3 million and a gross margin of 14.3% in 9M20, when compared to $8,133.9 million of gross profit and a gross margin of 17.5% reached in the same period of 2019.
Total SG&A expenses in 9M20 were $4,740.5 million; $217.7 million or 4.8% more than the $4,522.8 million reported in 9M19. In 9M20 total SG&A expenses as a percentage of net sales represented 9.4%, slightly lower when compared to the 9.7% on 9M19.
In 9M20 we had other expenses of $311.2 million, compared with other income of $69.6 million reported in 9M19.
The operating income in 9M20 was $2,171.5 million, which represents an operating margin of 4.3%, a decrease from an operating income of $3,680.7 million and an operating margin of 7.9% in 9M19.
The net financial income in 9M20 was $2,036.8 million, higher when compared to a net financial income of $573.3 million in 9M19.
Total taxes were $1,208.3 million as of September 30th, 2020. These taxes include $617.4 million of income tax and $590.9 million of deferred income taxes. This figure compares to total taxes of $1,246.4 million in 9M19; the increase was mainly attributed to a lower income before taxes.
All the above resulted in a net income of $3.000.00 million or 5.9% of net margin in the 9M20, which represents $4.93 pesos of earnings per share; while in the 9M19 the net income totaled $3,007.5 million, 6.5% of net margin and $5.00 pesos of net income per share.
EBITDA |
|||||
In millions of pesos |
9M20 |
9M19 |
Change |
||
$ |
$ |
$ |
% |
||
Net controlling interest profit |
2,959.8 |
2,998.9 |
(39.1) |
(1.3) |
|
Income tax expense (benefit) |
1,208.3 |
1,246.4 |
(38.2) |
(3.1) |
|
Result in associates |
40.2 |
8.6 |
31.6 |
368.5 |
|
Net finance (income) expense |
(2,036.8) |
(573.3) |
(1,463.5) |
255.3 |
|
Depreciation and amortization |
1,041.6 |
963.3 |
78.2 |
8.1 |
|
EBITDA |
3,213.1 |
4,644.0 |
(1,430.9) |
(30.8) |
|
EBITDA Margin (%) |
6.4% |
10.0% |
- |
- |
|
Net revenues |
50,462.7 |
46,520.6 |
3,942.1 |
8.5 |
|
EBITDA in 9M20 reached $3,213.1 million, representing an EBITDA margin of 6.4%, compared to EBITDA of $4,644.0 million in 9M19, with an EBITDA margin of 10.0%.
BALANCE SHEET
BALANCE SHEET DATA |
|||||
In millions of pesos |
Sep 30, 2020 |
Dec. 31st, 2019 |
Change |
||
$ |
$ |
$ |
% |
||
TOTAL ASSETS |
58,051.2 |
55,702.5 |
2,348.7 |
4.2 |
|
Cash and cash equivalents |
18,240.2 |
19,182.9 |
(942.7) |
(4.9) |
|
Accounts receivable |
4,824.3 |
3,880.8 |
943.5 |
24.3 |
|
TOTAL LIABILITIES |
14,439.3 |
15,442.2 |
(1,002.8) |
(6.5) |
|
Accounts payable |
4,624.1 |
5,235.5 |
(611.4) |
(11.7) |
|
Short-term debt |
1,070.8 |
3,440.4 |
(2,369.6) |
(68.9) |
|
Long-term debt |
1,473.4 |
1,488.2 |
(14.8) |
(1.0) |
|
TOTAL STOCKHOLDERS' EQUITY |
43,611.9 |
40,260.3 |
3,351.5 |
8.3 |
|
Capital stock |
1,174.3 |
1,174.3 |
(0.1) |
(0.0) |
|
Cash and equivalents as of September 30th, 2020 totaled $18,240.2 million vs $19,182.9 million as of December 31, 2019.
Total debt as of September 30th, 2020 was $2,544.2 million, compared to $4,928.6 million reported as of December 31, 2019.
Net cash as of September 30th, 2020 was $15,696.0 million, compared to net cash of $14,254.3 million as of December 31, 2019.
CAPITAL EXPENDITURES |
|||||
In millions of pesos |
9M20 |
9M19 |
Change |
||
$ |
$ |
$ |
% |
||
Capital Expenditures |
1,570.1 |
1,301.2 |
268.9 |
20.7 |
|
Total CAPEX for the 9M20 was $1,570.1 million vs $1,301.2 million in 9M19, mainly allocated toward organic growth and productivity projects across all of our facilities.
STOCK INFORMATION |
||
As of September 30, 2020 |
||
Total Shares |
600,000,000 |
|
Total free float |
26.75% |
|
Market cap (millions of pesos) |
$42,018 |
|
Source: Yahoo Finances
SHARE PRICE
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-20 |
70.10 |
68.00 |
70.03 |
39.75 |
36.16 |
38.29 |
|||||||
Aug-20 |
70.38 |
65.56 |
68.43 |
37.85 |
34.73 |
37.55 |
|||||||
Jul-20 |
69.06 |
63.91 |
66.18 |
37.21 |
34.20 |
35.87 |
|||||||
Jun-20 |
69.75 |
65.32 |
67.08 |
39.01 |
34.70 |
35.17 |
|||||||
May-20 |
69.93 |
66.18 |
67.87 |
36.94 |
32.85 |
36.64 |
|||||||
Apr-20 |
69.93 |
60.81 |
69.93 |
35.09 |
29.80 |
34.88 |
|||||||
Mar-20 |
71.07 |
58.76 |
67.48 |
44.14 |
28.67 |
34.00 |
|||||||
Feb-20 |
75.83 |
68.57 |
71.07 |
48.87 |
42.67 |
43.04 |
|||||||
Jan-20 |
82.40 |
75.01 |
75.82 |
52.70 |
47.78 |
48.34 |
|||||||
ANALYST COVERAGE
Institution |
Analyst name |
|
ACTINVER |
Enrique Mendoza Farias |
|
BBVA BANCOMER |
Pablo Abraham Peregrina |
|
GBM |
Miguel Tortolero |
|
INTERCAM |
Richard Horbach Martinez |
|
INVEX |
Giselle Mojica |
|
JP MORGAN |
Ulises Argote |
ulises.argote@jpmorgan.com |
SANTANDER |
Hector Maya López |
APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $22.11 per USD $1.0, which corresponds to the rate at the close of September 30, 2020, according to Mexico's National Bank.
- Consolidated Statement of Financial Position
- Consolidated Statement of Income
- Consolidated Statement of Cash Flows
- Derivatives Position Report
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
|||
-Unaudited- |
|||
In U.S. Dollar |
September 30, |
December 31, |
|
In million pesos |
2020 |
2020 |
2019* |
TOTAL ASSETS |
$ 2,625.6 |
58,051.2 |
55,702.5 |
Total current assets |
1,451.3 |
32,088.4 |
31,097.2 |
Cash and cash equivalents |
825.0 |
18,240.2 |
19,182.9 |
Total accounts receivable |
218.2 |
4,824.3 |
3,880.8 |
Inventories |
357.6 |
7,905.5 |
6,753.4 |
Other current assets |
50.6 |
1,118.3 |
1,280.1 |
Total non current assets |
1,174.3 |
25,962.8 |
24,605.2 |
Net property, plant and equipment |
877.9 |
19,409.8 |
18,556.6 |
Other non current Assets |
296.4 |
6,553.0 |
6,048.6 |
TOTAL LIABILITIES |
$ 653.1 |
14,439.3 |
15,442.2 |
Total current liabilities |
324.2 |
7,169.0 |
8,908.1 |
Notes payable to banks |
48.4 |
1,070.8 |
3,440.4 |
Accounts payable |
209.1 |
4,624.1 |
5,235.5 |
Other taxes payable and other accruals |
66.7 |
1,474.1 |
232.2 |
Total long-term liabilities |
328.8 |
7,270.3 |
6,534.0 |
Long-term debt |
66.6 |
1,473.4 |
1,488.2 |
Other non current liabilities |
50.4 |
1,115.0 |
1,141.3 |
Deferred income taxes |
211.8 |
4,681.9 |
3,904.5 |
TOTAL STOCKHOLDERS' EQUITY |
$ 1,972.5 |
43,611.9 |
40,260.3 |
Capital stock |
53.1 |
1,174.3 |
1,174.3 |
Commission in shares issued |
18.7 |
414.5 |
414.5 |
Retained earnings |
1,812.3 |
40,070.0 |
37,732.9 |
Others accounts |
75.0 |
1,658.8 |
858.2 |
Non controlling interest |
13.3 |
294.3 |
80.4 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 2,625.6 |
58,051.2 |
55,702.5 |
*Audited |
|||
CONSOLIDATED STATEMENT OF INCOME |
|||
Third Quarter Results, ended September 30th: |
|||
-Unaudited- |
|||
U.S. Dollar |
|||
In millions pesos |
2020 |
2020 |
2019 |
Net sales |
$ 827.3 |
18,292.4 |
15,312.9 |
Cost of sales |
683.3 |
15,107.6 |
12,706.5 |
Gross profit |
144.0 |
3,184.7 |
2,606.4 |
SG&A |
72.4 |
1,600.8 |
1,497.6 |
Other income (expenses), net |
(4.5) |
(99.2) |
73.0 |
Operating income |
67.2 |
1,484.8 |
1,181.8 |
Net finance income |
(12.1) |
(267.5) |
405.7 |
Income tax |
16.2 |
359.2 |
474.4 |
Net Income |
$ 38.8 |
858.1 |
1,113.1 |
Non-controlling interest |
1.36 |
30.1 |
1.8 |
Net controlling interest profit |
37.45 |
828.0 |
1,111.3 |
Basic and diluted earnings per share |
0.06 |
1.38 |
1.85 |
Basic and diluted earnings per ADR |
0.75 |
16.6 |
22.23 |
Weighted average Shares outstanding1 |
599,823 |
599,823 |
600,000 |
EBITDA Result |
$ 82.7 |
1,828.2 |
1,505.8 |
Gross margin |
17.4% |
17.4% |
17.0% |
Operating margin |
8.1% |
8.1% |
7.7% |
Net margin |
4.5% |
4.7% |
7.3% |
EBITDA margin |
10.0% |
10.0% |
9.8% |
1 In thousands |
|||
CONSOLIDATED STATEMENT OF INCOME |
|||
Accumulated results, for the six months ended September 30. |
|||
-Unaudited- |
|||
U.S. Dollar |
|||
In millions pesos |
2020 |
2020 |
2019 |
Net sales |
$ 2,282.3 |
50,462.7 |
46,520.6 |
Cost of sales |
1,955.6 |
43,239.4 |
38,386.7 |
Gross profit |
326.7 |
7,223.3 |
8,133.9 |
Selling, general and administrative expenses |
214.4 |
4,740.5 |
4,522.8 |
Other income (expenses), net |
(14.1) |
(311.2) |
69.6 |
Operating income |
98.2 |
2,171.5 |
3,680.7 |
Net finance income |
92.1 |
2,036.8 |
573.3 |
Income tax |
54.6 |
1,208.3 |
1,246.4 |
Net income |
$ 135.7 |
3,000.0 |
3,007.5 |
Non-controlling interest |
1.8 |
40.24 |
8.6 |
Net controlling interest profit |
133.9 |
2,959.8 |
2,998.9 |
Basic and diluted earnings per share |
0.22 |
4.93 |
5.00 |
Basic and diluted earnings per ADR |
2.68 |
59.2 |
59.98 |
Weighted average Shares outstanding1 |
599,818 |
599,818 |
599,973 |
EBITDA Result |
$ 145.3 |
3,213.1 |
4,644.0 |
Gross margin |
14.3% |
14.3% |
17.5% |
Operating margin |
4.3% |
4.3% |
7.9% |
Net margin |
5.9% |
5.9% |
6.5% |
EBITDA margin |
6.4% |
6.4% |
10.0% |
1 In thousands |
|||
CONSOLIDATED STATEMENT OF CASH FLOWS |
|||
In million of pesos |
|||
-Unaudited- |
|||
U.S. Dollar |
September 30, |
||
2020 |
2020 |
2019 |
|
NET MAJORITY INCOME BEFORE INCOME TAX |
$ 190.3 |
4,208.3 |
4,254.0 |
ITEMS RELATING TO INVESTING ACTIVITIES: |
44.1 |
975.5 |
343.8 |
Depreciation and others |
59.3 |
1,312.0 |
963.3 |
Income (loss) on sale of plant and equipment |
1.2 |
25.8 |
(99.1) |
Other Items |
(16.4) |
(362.4) |
(520.4) |
NET CASH GENERATED FROM NET INCOME BEFORE TAXES |
234.5 |
5,183.9 |
4,597.8 |
CASH GENERATED OR USED IN THE OPERATION: |
(80.5) |
(1,779.4) |
(3,238.9) |
Decrease (increase) in accounts receivable |
(37.5) |
(829.4) |
489.6 |
Decrease (increase) in inventories |
(58.8) |
(1,300.9) |
(398.1) |
Increase (decrease) in accounts payable |
46.9 |
1,036.1 |
(2,199.0) |
Other Items |
(31.0) |
(685.2) |
(1,131.5) |
NET CASH FLOW FROM OPERATING ACTIVITIES |
154.0 |
3,404.4 |
1,358.9 |
NET CASH FLOW FROM INVESTING ACTIVITIES |
(57.5) |
(1,270.8) |
(583.1) |
Acquisition of property, plant and equipment |
(71.0) |
(1,570.1) |
(1,301.2) |
Proceeds from sales of property plant and equipment |
5.4 |
118.7 |
186.9 |
Other Items |
8.2 |
180.6 |
531.2 |
CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES |
96.5 |
2,133.6 |
775.7 |
Net cash provided by financing activities: |
(140.1) |
(3,098.0) |
(992.1) |
Proceeds from loans |
149.9 |
3,313.9 |
4,859.0 |
Principal payments on loans |
(272.9) |
(6,033.9) |
(4,858.6) |
Dividends paid |
(35.8) |
(791.7) |
(840.0) |
Other items |
18.7 |
413.8 |
(152.5) |
Net increase (decrease) in cash and equivalents |
(43.6) |
(964.4) |
(216.3) |
Cash and investments at the beginning of year |
$ 866.8 |
19,164.8 |
18,451.9 |
CASH AND INVESTMENTS AT END OF PERIOD |
$ 823.2 |
18,200.4 |
18,235.6 |
DERIVATIVES POSITION REPORT
Third Quarter 2020 |
||||||||||
Thousands of Mexican Pesos, as of September 30, 2020 |
||||||||||
TYPE OF FINANCIAL INSTRUMENT |
OBJECTIVE |
NOTIONAL |
VALUE OF THE RELATED COMMODITY |
REASONABLE VALUE |
AMOUNTS DUE BY YEAR |
GUARANTIES REQUIRED |
||||
3Q-2020 |
2Q-2020 |
3Q-2020 |
2Q-2020 |
|||||||
Forward Vanilla and KO Fwd |
Hedge |
$ 48,890 |
$ 22.11 |
$ 22.96 |
$ 14,904 |
$ 25,897 |
89% in 2021 and 11% in 2021 |
The deals consider the possibility of margin calls but not another kind of guarantee |
||
Futures for corn and soybean meal |
Hedge |
$ 264,862 |
CORN |
CORN |
$ 31,233 |
$ 2,944 |
67% in 2020 and 33% in 2021 |
|||
In USD per Bushel |
In USD per Bushel |
|||||||||
month |
price |
month |
price |
|||||||
Sep-20 |
$ 3.883 |
Sep-20 |
$ 3.415 |
|||||||
Dec-20 |
$ 3.790 |
Dec-20 |
$ 3.505 |
|||||||
Mar-21 |
$ 3.883 |
Mar-21 |
$ 3.613 |
|||||||
May-21 |
$ 3.935 |
May-21 |
$ 3.675 |
|||||||
Jul-21 |
$ 3.973 |
Jul-21 |
$ 3.728 |
|||||||
Sep-21 |
$ 3.668 |
|||||||||
Dec-21 |
$ 3.915 |
Dec-21 |
$ 3.730 |
|||||||
SOYBEAN MEAL |
SOYBEAN MEAL |
|||||||||
In USD per ton |
In USD per ton |
|||||||||
month |
price |
month |
price |
|||||||
Dec-20 |
$ 342.8 |
Aug-20 |
$ 289.1 |
|||||||
Aug-21 |
$ 331.3 |
Sep-20 |
$ 291.4 |
|||||||
Sep-21 |
$ 326.1 |
Oct-20 |
$ 292.9 |
|||||||
Oct-21 |
$ 319.9 |
Dec-20 |
$ 295.9 |
|||||||
Dec-21 |
$ 320.1 |
Jan-21 |
$ 296.3 |
|||||||
Jan-21 |
$ 342.1 |
Mar-21 |
$ 295.3 |
|||||||
Mar-21 |
$ 338.5 |
May-21 |
$ 294.5 |
|||||||
May-21 |
$ 334.6 |
Aug-21 |
$ 297.3 |
|||||||
Sep-21 |
$ 297.2 |
|||||||||
Oct-21 |
$ 296.1 |
|||||||||
Options of Corn |
Hedge |
$ 81,090 |
CORN |
CORN |
$ 7,724 |
$ 4,496 |
46% in 2020 and 54% in 2021 |
|||
In USD per Bushel |
In USD per Bushel |
|||||||||
month |
price |
month |
price |
|||||||
Sep-20 |
$ 3.415 |
|||||||||
Dec-20 |
$ 3.790 |
Dec-20 |
$ 3.505 |
|||||||
Mar-21 |
$ 3.883 |
Mar-21 |
$ 3.613 |
|||||||
May-21 |
$ 3.675 |
|||||||||
Options of soybean meal |
Hedge |
$ 82,169 |
SOYBEAN MEAL |
SOYBEAN MEAL |
$ 9,834 |
$ 1,571 |
100% in 2021 |
|||
In USD per ton |
In USD per ton |
|||||||||
month |
price |
month |
price |
|||||||
Ago-20 |
$ 289.1 |
|||||||||
Sep-20 |
$ 291.4 |
|||||||||
Oct-20 |
$ 292.9 |
|||||||||
Dec-20 |
$ 295.9 |
|||||||||
Jan-21 |
$ 342.1 |
Jan-21 |
$ 296.3 |
|||||||
Mar-21 |
$ 338.5 |
Mar-21 |
$ 295.3 |
|||||||
May-21 |
$ 334.6 |
May-21 |
$ 294.5 |
|||||||
Jul-21 |
$ 334.2 |
Jul-21 |
$ 296.5 |
|||||||
-The total financial instruments do not exceed 5% of total assets as of September 30, 2020. |
||||||||||
-The notional value represents the net position as of September 30, 2020 at the exchange rate of Ps. 22.11 per one dollar. |
||||||||||
-A negative value means an unfavorable effect for the Company. |
||||||||||
Third Quarter 2020 |
||||||||
Thousands of Mexican Pesos, as of September 30, 2020 |
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 |
$ 14,904 |
$21.55 |
$ 22.66 |
$ 23.21 |
Direct |
-$ 27,018 |
$ 20,110 |
$ 40,220 |
-5% |
5% |
10% |
-5% |
5% |
10% |
|||
Futures of Corn: (2) Futures of Soybean Meal: (2) |
$ 24,389 |
$ 3.601 $ 325.7 |
$ 3.980 $ 359.9 |
$ 4.169 $ 377.1 |
The effect will materialize as the inventory is consumed |
$ 13,982 |
$ 34,796 |
$ 45,203 |
Options for Corn |
$ 9,552 |
$ 3.601 |
$ 3.980 |
$ 4.169 |
$ 4,453 |
$ 14,652 |
$ 19,751 |
|
Options of Soybean Meal |
$ 14,988 |
$ 325.7 |
$ 359.9 |
$ 377.1 |
$ 8,947 |
$ 21,029 |
$ 27,070 |
|
(1)The reference value is the exchange rate of Ps. $22.11 per USD as of September 30, 2020. |
||||||||
(2)The reference values are; the future of corn for Dec 2020, $3.7900 USD/bushel and the future of soybeanmeal also for Dec 2020, $342.80USD/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 2020 |
||||||||||
Thousands of Mexican Pesos, as of September 30, 2020 |
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 |
$ 14,904 |
$11.05 |
$16.58 |
$27.63 |
$33.16 |
Direct |
-$540,357 |
-$270,178 |
$157,973 |
$315,947 |
CONFERENCE CALL INFORMATION
The Company will host its third quarter 2020 earnings call, on Thursday, October 29th 2020. The earnings call will take place at 9:00 am Central Time (11:00 am 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=ULauaiMkmstPAu
Confirmation Number: 49969766
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 28,000 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:
[email protected]
[email protected]
T. +52(461)618 3555
SOURCE Industrias Bachoco, S.A.B. de C.V.
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