Q2 2025 Grupo Bimbo SAB de CV Earnings Call

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Rafael Palmier: I would now like to turn the conference over to Rafael Palmier, CEO. Please go ahead. Good afternoon, everyone. And thank you for joining us. Connected on the line today are our CFO, Diego Aguiola, Executive Vice President Mark Bendix, along with several members of our finance team.

Day and welcome to the group of bimbo. Second quarter, 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation that will be an opportunity to ask questions to ask a question. You may press star then 1 on your telephone keypad to draw your question please press star then 2 please note this event is being recorded.

Speaker Change: I would now like to turn the conference over to a file from here. CEO. Please go ahead.

Speaker Change: Good afternoon, everyone. And thank you for joining us connected on the line today. You are our CFO AA, Executive, Vice President, Mark Bendix along with several members of our finance team.

Rafael Palmier: Before we begin, I would like to take a moment to express our deepest condolences for the passing of Don Roberto Servizio Cendra, one of Grupo Bimbo's visionary founders. Don Roberto was not only instrumental in building and expanding the company into what it is today, a global leader in the baking industry, but he also embodied the values that continue to guide us, integrity, humility, hard work, high quality standards, and a deep commitment to people and society. His legacy is woven into the fabric of our organization, and we remain profoundly grateful for his leadership and inspiration. On behalf of the entire Grupo Bimbo family, we honor his memory and extend our heartfelt sympathies to Daniel, his family, and love.

Speaker Change: Before we begin, I would like to take a moment to express. Our deepest. Condolences for the passing of Don. Roberto, fits Sandra 1 of group of Bimbo's Visionary, founders,

Speaker Change: Don Roberto was not only instrumental in building and expanding the company into what it is today. A global leader in the baking industry but he also embodied the values that continue to guide us Integrity humility, hard, work, high quality standards and a deep commitment to people and Society.

Speaker Change: His Le his legacy is woven into the fabric of our organization and we remain profoundly grateful for his leadership and inspiration.

Speaker Change: On behalf of the entire group of bimbo family. We honor his memory and extend our heartfelt sympathies to Danielle, his family and loved ones.

Rafael Palmier: Now moving into our second quarter results. Our second quarter results clearly demonstrate the extent and resilience of our business as we continue to navigate a complex and rapidly evolving environment across multiple markets. What sets us apart is the power of our highly diversified model, spanning geographies, channels, categories and currencies, which provides the flexibility to deliver strong results today while we are strategically investing for the future. We are pleased to report a sequential acceleration in sales. Our operations outside the U.S. maintain strong momentum, achieving record performance in either sales or EBITDA margin. In North America, our teams made significant progress in unlocking productivity across the supply chain despite a challenging environment and succeeded in regaining share in key categories that had been under pressure for several quarters.

Speaker Change: Now, moving into our second quarter results.

Speaker Change: Our second quarter results, clearly demonstrate the extreme and resilience of our business as we continue to navigate a complex and rapidly evolving environment across multiple markets. But chess is a part in this the power of our highly Diversified model spanning geographies channels categories and currencies which provides the flexibility to deliver a strong results today while we strategically investing for the future.

Speaker Change: We are pleased to report a sequential acceleration in sales growth.

Rafael Palmier: Innovation remains at the core of our growth agenda. Our innovation rate has now surpassed 12% and we're actively firing up volume everywhere. At the same time, we are unlocking value from prior investments and laying the foundation for long-term sustainable growth. We're managing the present with discipline, but we're not standing still. We're looking into strategic investments, entering new business models and pursuing targeted acquisitions that strengthen our competitive position and accelerate value creation. We remain dedicated to advancing our ESG strategy. While we recognize the progress achieved, we continue to be focused on reducing our carbon footprint and are committed to enhance our portfolio by delivering the best nutritional experience with simpler and more natural recipes.

Our operations outside the US. Maintain strong momentum achieving record performance in either sales or edit the margin in North America. Our teams made significant progress in unlocking productivity across the supply chain despite a challenging environment and succeeded in regaining share in key categories that had been under pressure for several quarters.

Innovation remains at the core of our growth agenda. Our Innovation rate has now surpassed 12% and we're actively firing up volume everywhere. At the same time we are unlocking value from prior Investments and laying the foundation. For long-term sustainable growth with managing the present with discipline, but we're not standing still, we're looking into a strategic Investments entering new business models and pursuing targeted Acquisitions. That is threatening our competitive position and accelerate value creation.

Rafael Palmier: We're proud to report that 99% of our daily consumption products, including our core categories of bread, buns and rolls, tortillas, bagels, and English muffins, are now free from artificial flavors and colorants. These mentioned categories represent roughly 50% of our net sales globally and more than 70% of our sales in the U.S. We continue making solid progress towards our health and wellness targets. By year end, we expect 100% of our bread buns and breakfast portfolio to have positive nutrition, meaning the achievement of health star rating score plus or equal 3.5 stars. We're also broadening our focus to remove artificial colors from all of our products by the end of 2026.

Speaker Change: We remain dedicated to advancing our ESG strategy. While we recognize the progress achieved, we continue to be focused on reducing our carbon footprint and our committed to enhance our portfolio by delivering the best. Nutritional experience with simpler and more natural recipes.

Speaker Change: We're proud to report that 99% of our daily consumption products, including our core categories of bread, plans and Roads, tortillas bagels, and English muffins, are now free from artificial flavors and tolerance. This mentioned categories represents roughly 50% of our net sales globally, and More than 70% of our sales in the US.

Rafael Palmier: Looking further ahead, we've set a clear ambition for 2030. 100% of our baked goods and snacks will be made with simple, natural recipes, ensuring our products remain safe, nutritious, affordable, and accessible to consumers worldwide.

Speaker Change: We continue making solid progress towards our health and wellness targets by year. End we expect 100% of our bread buns and breakfast portfolio to have positive nutrition. Meaning the achievement of Health star rating score Plus or equal 3.5 Stars. We're also broadening our Focus to remove our artificial colors from all of our products by the end of 2026.

Speaker Change: Ahead. We've set a clear ambition for 2030.

Speaker Change: 100% of our baked goods and snacks will be made with simple natural recipes. Ensuring our products remain safe, nutritious, affordable and accessible to Consumers worldwide.

Rafael Palmier: Now looking into the results by region. In Mexico, we deliver sales growth of 3% despite a softer consumer environment, and on top of the record results achieved in the second quarter of 2024, reaching a new all-time high for the business. This performance was driven by a favorable mix and strong momentum across key categories such as buns and rolls, cookies, cakes, and pastries. Nearly all channels contributed to this growth with particularly strong results in convenient and traditional. It is worth noting that these results include a negative calendar effect from the shift of Easter week. Excluding this impact, sales would have grown by 4%.

Speaker Change: Now looking into the results by region.

In Mexico, we deliver sales growth of 3%, despite a software consumer environment and on top of the record results, achieve in the second quarter of 2024, reaching a new all-time high for the business.

This performance was driven by a favorable mix and strong momentum across key categories, such as buns and rolls Cookies, Cakes, and Pastries.

Nearly all channels contributed to this growth with particularly strong results in, convenient and traditional.

Rafael Palmier: We remain encouraged by the resilience of our business and brands and their consistent ability to generate value. Our record high margin of 20.3% underscores the strength and flexibility of our operating model enabled by a favorable mix and lower cost of sale. We are prioritizing volume performance and meet short-term volatility with successful initiatives, focusing on the right price-back architecture to meet evolving consumer needs across sectors. We are also strengthening our brand equity through innovative product launches such as Artesano Masa Madre, Bimbo Half Loaf Bread, A Valued Price Cookies Portfolio, and Field Premium Pastry. We are committed to enhance our portfolio by delivering the best nutritional.

It is worth noting that these results include a negative calendar effect from the shift of Easter week. Excluding this impact sales would have grown by 4%

Speaker Change: We remain encouraged by the resilience of our business and Brands under consistent ability to generate value, our record, high margin of 20.3%, underscores, the extension and flexibility of our operating model enabled by a favorable, mix and lower cost of sales.

Speaker Change: We are prioritizing volume performance and meet short-term volatility with successful initiatives. Focusing on the right price pack architecture to meet evolving consumer needs across segments. We are also strengthening our brand Equity through Innovative products. Launches such as artesano, Masa Madre, bimbo half love bread, a value, price cookie portfolio and field premium pastries

Rafael Palmier: Oh, sorry. At the same time, we continue to our long term strategy with discipline, investing to position the business for sustainable growth. aligned with our recent public commitment of investing over $2 billion in Mexico from 2025 to 2028.

Speaker Change: We are committed to enhance our portfolio by delivering the best nutritional up. Sorry.

Speaker Change: At the same time, we continue to our long-term strategy with discipline. Investing to position the business for sustainable growth.

Aligned with our recent public commitment of investing, over 2 billion dollars in Mexico, from 2025.

Rafael Palmier: In North America, excluding FX, sales declined more than 4%, reflecting continued softness in U.S. consumption as value-seeking behavior persists. We are also lapping the impact of last year's strategic exits from certain non-branded clients, which happened in October on the U.S. and this quarter in Canada. We remain committed to strengthening our revenue growth management strategy and enhancing our value proposition through innovation that aligns with evolving consumer preferences. Our recently launched price value bread portfolio is effectively addressing shifting consumption dynamics while our continued expansion in artisanal breads supports our premium offer. At the same time, we have gained market share in key categories such as branded buns and rolls, snacks, and mainstream bread, which had experienced several quarters of declines, but are now stabilizing for us.

Speaker Change: To 2028.

Speaker Change: In North America, excluding FX sales decline. More than 4% reflecting continued softness in US consumption as value. Seeking Behavior persists.

Speaker Change: we are also lapping the impact of last year's strategic exits, from certain number, and the clients which happen in October on the US and this quarter in Canada,

We remain committed to a strengthening our Revenue, growth management strategy and enhancing our value proposition through Innovation. That aligns with evolving consumer preferences, our recently launched price value. Bread portfolio is effectively addressing shifting consumption Dynamics while our continued expansion in artisanal breads, supports our premium offering

Rafael Palmier: This performance underscores the resilience and breadth of our portfolio. We're also capturing the benefits of the transformation project initiated a year ago with a strong notable productivity gains across our supply chain, including manufacturing, administrative, and logistic initiatives. As a result, our EBITDA margin has been improving sequentially, rising from 5.9 in Q4'24 to 7.4% in Q1'2025 and reaching 9% this quarter.

Speaker Change: the same time we have gained market share in key categories, such as branded, buns, and rolls snacks and mainstream bread, which had experienced several quarters of declines, but are now stabilizing for us,

Speaker Change: This performance underscores the resilience and breadth of our portfolio.

Speaker Change: We are also capturing the benefit of the transformation project initiated a year ago, with a strong notable, productivity gains across our supply chain, including manufacturing and Ministry of and logistic initiatives. As a result, our Aida margin has been improving sequentially rising from 5.94% in q1 2025, and reaching 9% this quarter.

Rafael Palmier: Moving on to Latin America, excluding FX Effect, we set a record for a second quarter for net sales, fueled by robust volume and sales momentum across every organization, showcased by the double-digit growth achieved in Latin Sur, Brazil, and El Salvador, along with consistent gains in Colombia and Chile. This robust top-line growth, combined with a solid volume performance and disciplined cost management, resulted in an adjusted EBITDA margin expansion of 100 basis points. Chile and Colombia continued to deliver strong profitability, while the Latin Sud and Latin Centro divisions stood out with exceptional performance. further reinforcing the region's positive trajectory.

Speaker Change: Moving on to Latin America, excluding FX effect, we set a record for a second quarter for net sales fueled by robust volume and sales, momentum across every organization showcase by the double digit growth achieved in Latin. Sure. Brazil and El Salvador along with consistent gains in Colombia and Chile.

Speaker Change: These robust Topline growth combined with a solid volume performance and discipline cost management. Resulted in an adjusted evidence margin expansion of 100 basis points.

Rafael Palmier: During this quarter, we acquired the remaining 40% stake of our business in Colombia. The acquisition of PANIFIC also contributed to a lesser extent to the growth of the region. Please be advised that we are still waiting for the authorization of the acquisition of Wikibold in Brazil, which we expect in the second half of the year.

Chile and Colombia continue to deliver a strong profitability while the Latin Insurance and Latin Central divisions. Stood out with the exceptional performance. Further reinforcing the Region's positive trajectory

Speaker Change: For the authorization of the acquisition of Wicca bold in Brazil, which we expect in the second half of the year.

Rafael Palmier: In Europe, Asia, and Africa, excluding FX Effect, sales increased by nearly 7%. This performance was primarily driven by the consistent strength of the Bimbo QSR business unit. India, Romania, and the UK, and the contribution from the acquisitions we completed in the last 12 months, including Mulandor in Tunisia, Caramolegos in Romania, and one month of Dondon in the Balkans. The adjusted EBITDA margin was benefited by the strong sales performance, lower commodity costs, and administrative expenses, along with the accretive effect from past acquisitions. However, these gains were upset by weaker results in our branded business in China, as well as the combined effect of minimum wage increases and the phase-out of wage subsidies in Romania.

Speaker Change: In Europe, Asia, and Africa, excluding FX affect sales, increase by nearly 7%. This performance was primarily driven by the consistent strength of the bimbo qsr business unit.

India Romania, and the UK, and the contribution from the Acquisitions. We completed in the last 12 months, including Mando in Tunisia, karamolegos, in Romania, and 1, month of dondon in the Balkans.

Speaker Change: The adjusted evida margin was benefited by the strong sales performance lower commodity costs, and admitted and instituted expenses along with the creative effect from past Acquisitions. However, these games were upset by weaker results in our branded business in China as well as the combined effect of minimum wage increases and the phase out of wage subsidies in Romania.

Rafael Palmier: I'm happy to share that we closed the acquisition of DomDom, a leading player in the baking industry in Southeast Europe with operations in four countries, Serbia, Slovenia, Croatia, and Montenegro, and exports to several others. Dundon has a strong, well-established brand, a robust manufacturing footprint, and an extensive distribution network. This acquisition is accretive. compliments our recent investment in this region, characterized by solid growth and high per capita bread consumption.

Speaker Change: I'm happy to share that we closed the acquisition of dondon, a leading player, in the baking industry, in southeast Europe, with operations in 4 countries, Serbia and Slovenia Croatia and Montenegro and exports to several others.

Speaker Change: Don't don't have a strong well established Brands, a robust. Manufacturing footprint and an extensive distribution Network. This acquisition is a creative

Rafael Palmier: With this acquisition, we now operate in 39 countries and through some strategic partnerships, we serve a total of 76 countries worldwide.

Speaker Change: and complements our recent investments. In this region, characterized by solid growth and Hyper capita bread consumption.

Diego Cuevas: With this, I would now like to turn over the call to Diego, who will walk you through our financials. Please, Diego. Go ahead. Thank you, Rafa. Good afternoon, everyone, and thank you for joining us today. We saw a notable performance across key regions this quarter with net sales reaching historic levels for a second quarter. This success was driven by our focus on innovation, productivity benefits in key markets, such as North America, and engaging both customers and consumers throughout most regions. As anticipated and shared during our last earnings call, our EBITDA margin contracted mostly due to the continued challenging environment in North America.

With this acquisition. We Now operate in 39 countries and through some strategic Partnerships with survey total of 76 countries worldwide.

Speaker Change: With this, I would like now like to turn over the call to Diego who will walk you through our financials. Uh, please go ahead.

Diego: Thank you. Good afternoon, everyone. And thank you for joining us today.

Diego: We saw a notable performance across key regions this water.

With net sales, reaching historic levels for a second quarter.

Diego: This success was written by our focus on Innovation for opportunity benefits in key markets.

Diego: Such as North America and engaging, both customers and consumers throughout most regions.

Diego: In our last earnings, call margin contracted mostly due to the continued challenging environment in North America.

Diego Cuevas: We continue to take deliberate actions that position us to generate sustained value for our shareholders over the long term. Our total debt close at 157 billion pesos. representing a $6 billion increase compared to the end of 2024. This was primarily driven by the acquisitions completed during the year and our ongoing CAPEX program, which reached $486 million as of the end of June. These effects were partially offset by the appreciation of the Mexican peso. Despite business-related investments, our net debt to adjusted dividends remained unchanged from the end of 2024 at $2.9 trillion. Our disciplined approach to financial management enables us to navigate macroeconomic challenges with privilege.

Diego: In the face of ongoing volatility, we continue to take deliberate actions that position us to generate sustained value for our shareholders over the long term.

Diego: Our total depth close at 157 billion pesos.

Diego: Representing a 6 billion increase compared to the end of 2024.

This was primarily driven by the Acquisitions completed during the year and our ongoing capex program which reached

Diego: 486 million as of the end of June.

Diego: This effects were partially offset by the appreciation of the Mexican peso.

Diego: Despite this isra investment our net debt to adjusted t.

Remain on change from the end of 2024 at 2.9 times.

Diego Cuevas: in the face of external pressure. We continue to prioritize operational efficiency. Cost Control and Strategic Resource Allocation to Project Margins and Drive Long-Term Value Creation. Supported by a strong financial foundation and a fully available $1.93 billion committed revolving credit facility. We are well positioned to adapt to a changing market dynamics while remaining focused on sustainable growth. As noted during our previous earnings call, we anticipated a challenging first half of the year in terms of margins. Primarily due to the continued pressure in North America from the transformation initiatives and a challenging consumer environment. It's important to note that the majority of the investments related to our transformation project began in the third quarter of 2024 creating a difficult year-over-year comparison during the first half of 2021.

Diego: our discipline approach to financial management, enable us to navigate microeconomic challenges with previous

Diego: in the face of external pressures.

We continue to prioritize operational efficiency, cause control, and strategic resource allocation to project margins and drive long-term value creation.

Diego: Supported by a strong financial foundation and a fully available. 1.93 billion committed revolving credit facility. We are well positioned to adapt to a changing market dynamics while remaining focused on sustainable growth.

At noted during our previous earnings call.

Diego: We are participated a challenging first half of the year in terms of margin.

Diego: Partly due to the continued pressure in North America from the transformation initiatives, and a challenging consumer environment.

Diego: Related to our transformation project.

Diego: Began in the third quarter of 2024 creating a difficult year-over-year comparison, during the first half of 2025,

Diego Cuevas: That said, we continue to anticipate an improvement in the second half of the year. driven by ongoing operational enhancement. and a more favorable year-over-year comparison. These factors reinforce our confidence. in delivering area margin expansion during the second half. Importantly, we are already beginning to see the benefits from this investment. as evidenced by our sequential margin improvement in North America. from 5.9% in the fourth quarter to 7.4% in the first quarter and closing the second quarter at 9%.

That said we continue to anticipate an improvement in the second half of the year.

Diego: Driven by ongoing operational enhancements.

Diego: And a more favorable year-over-year comparison.

This factors reinforce our confidence.

Diego: in delivering every the margin expansion during the second half,

Importantly, we are already beginning to see the benefits from this investment.

Diego: As evidence by your sequential margin Improvement in North America.

from 5.9% in the fourth quarter to 7.4 in the first quarter and closing the second quarter at 9%

Diego Cuevas: To conclude the call, we are revising our full-year guidance. We now anticipate an average exchange rate of 19.75%. versus the $20.50 that we previously expected. This $0.75 chain represents an impact. 250 basis points on our top-line growth. So we are adjusting our full-year outlook. reflecting this change. or C. We now expect amid single-digit growth rate. from the previous high single-digit growth rate. For our adjusted dividend margin, we anticipate a slight improvement compared to the previous guidance. We now expect a flat to a very slight margin contraction for the full year. As mentioned before, we foresee a margin expansion in the second half.

Diego: to conclude the call. We are revising our full year guidance.

Diego: Because of having a stronger professional.

Diego: We now anticipate.

Diego: An average exchange rate of 19.75 pesos.

Versus the 20 pesos 50 cents that we previously expected.

Diego: These 75 cents change.

Diego: Represents an impact of 250 basis points on our Topline growth.

Diego: Both, we are adjusting our full year outlook.

Reflecting this change.

For sales.

Diego: we now expect

Diego: a mid single digit growth rate.

Diego: From the previous High single digit growth rate.

Diego: For our adjusted TV margin. We anticipate a slight Improvement compared to the previous guidance.

Diego: Of a slight margin contraction.

Diego: We now expect a flat to a very slight margin contraction for the full year.

Diego Cuevas: which will contribute to these expectations for the full year.

As mentioned before we foresee a margin expansion in the second half.

Diego: Which will contribute to this expectation for the full year.

Diego Cuevas: As for Captain... We are lowering our guidance. to be between 1.3 to 1.4 billion dollars. from the $1.4 to $1.5 billion initially is.

Diego: As for capex.

We are lowering our guidance.

Diego: To give it to 1.3 to 1.4 billion dollars.

From the 1.4 to 1.5 billion initially expected.

Diego Cuevas: And finally, regarding the leverage ratio. Since the change in guidance is driven by a stronger peso, we now expect our net leverage ratio. close the year at around three times. as a portion of our debt is denominated in U.S. dollars.

Diego: And finally,

Diego: Regarding the leverage ratio.

Diego: Since the change in guidance is driven by a stronger peso. We now expect our net leverage ratio to close the year at around 3 times.

As a portion of our debt is denominated in US dollars.

Diego Cuevas: Despite the challenges we have faced this year and the ongoing uncertainty across key macroeconomic environments, We remain confident in our long-term strategy. As a highly diversified global company and industry leader, we are well positioned to navigate current headlines. Our unwavering commitment to investing in the business. driving growth and delivering sustainable value to all our stakeholders. continues to guide our action.

Despite the challenges, we have paid this year and the ongoing uncertainty across economic environments.

Diego: We remain confident in our long-term strategy.

Diego: as a highly Diversified global company and industry leader, we are well positioned to navigate current Headway

Diego: our unwavering commitment to investing in the business.

Diego: Writing growth and delivering sustainable value to all our stakeholders.

Diego: Continues to guide our actions.

Operator: Thank you for your time, and we can now move to the Q&A session. Thank you.

Diego: Thank you for your time and we can now move to the Q&A session.

Diego: Thank you.

Operator: To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

Diego: To ask a question. You may press star then 1 on your telephone keypad. If you're using a speaker-phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to address your question, please press star then 2

Diego Ardeon: First question comes from Diego Ardeon with CIDI. Please go ahead. Yes, hello. Good afternoon, everyone. Thank you for taking my question.

First question comes from Thiago or do you with City, please? Go ahead.

Diego Ardeon: I would like to explore a bit more two points here that were already discussed in the initial remarks. First, on the U.S. performance. We saw sales on an FX neutral basis declining 5%. So just wondering if we could get a little bit of a discussion regarding volumes versus pricing, whatever you can share with us so we can understand the two impacts here. And still in the US, we saw more optimism regarding the good performance in snacks. So just wondering if we could also discuss what's improving on a sequential basis for this category.

Thiago: Yes, hello, good afternoon everyone. Thank you for taking my questions.

Thiago: I would like to explore a bit more 2 points here that were already discussed in the initial remarks. First, on the, on the US performance.

Thiago: the 2 impact here and still in the US, we, we saw

Diego Ardeon: And secondly, if I may, going into Mexico, we saw stronger profitability, gross margin improving 80 bps year-on-year and even the margin 30 bps. So just hoping if you could drive us, just lead us through the main impacts here regarding COGS, SG&A. In the initial remarks, you mentioned also favorable mix. So just whatever you can give us to understand the different magnitudes of impact for the profitability in Mexico. That's it. Thank you very much.

more optimism regarding the good performance in snacks. So, just wondering if we could also discuss. Um, what improving on a sequential basis for this category and secondly, if I may going into Mexico, we saw a stronger profitability, gross margin improving ADP bibs year on year end and even the margin 30 bits. So, just hoping if you could drive us, just lead us through the main impacts here regarding cogs sgna, um, in the initial remarks, you mentioned also favorable mix. So, just whatever you can give us to understand uh, the different magnitudes of impact for the profitability in Mexico.

Thiago: Um, that's it. Thank you very much.

Mark Bendix: Okay, I'll take the first question about results in the US and what we're seeing in terms of business performance.

Mark Bendix: Thanks for the question. So many of our categories, as Rafa remarked, remain challenged in the US. But we are seeing small gains in our mainstream and our buns and rolls. And as you indicated in our salty snacks business. In the US, we're seeing a bifurcation of consumers, where the economically stressed consumers are moving down to private label or other value offerings, while more affluent consumers are moving to more premium products. So, that challenge has the largest flip. We have an oversized exposure in the largest segment of that category in the middle, which is where the bulk of the category declines are occurring.

Speaker Change: Okay, I'll, I'll take the first question about, uh, results in the US and what we're seeing in terms of business performance. Thanks for the question.

Speaker Change: So many of our categories as uh as Rafa remarked remain challenged in the us, but we are seeing small gains in our mainstream and our buns and rolls. And as you, uh, indicated in our salty, snacks business.

In the US, we're we're seeing a u, a bifurcation of consumers, where the economically stressed. Consumers are moving down to private label.

Or other value offerings, while more affluent, consumers are moving to more premium products.

So that challenge as the largest play, we have an oversized exposure in the largest segment of that category in the middle.

Mark Bendix: In our business momentum, we don't have enough momentum yet to offset the losses.

Speaker Change: Which is where the bulk of the category declines are occurring.

Mark Bendix: But what we're now focused on is expanding our offerings in the value segment. As Rafa indicated, we've introduced hot aflobes, which are doing extremely well, and bimbo bread in the value segment. And the distribution is expanding across the entire country. So, we're seeing bimbo buns also introduced into the value mainstream. And in the premium segment, we're expanding distribution of rustique and the introduction of protein-focused products, which have really resonated with the health conscious and the GLP consumers.

Um, and our business momentum. Uh, we are we don't have enough momentum yet to offset that uh, offset the losses. But what we're now focused on is expanding our offerings in the value segment. As Rafa indicated, we've uh, introduced thoroughly hot half lobes uh which are doing extremely well and Bimbo Bread in the value segment. And the distribution is expanding across the entire country. So we're seeing

Mark Bendix: So, That should give you a good sense of how our categories are performing and where we're challenged and where we're seeing some momentum. Yes. Thank you, Mark.

Speaker Change: Uh bimbo buns in also introduced into the value mainstream and in the premium segment, we're expanding distribution of our rustique and the introduction of protein focused products, which have uh really resonated with the health conscious and the glp consumer. So that should give you a good sense of how our categories are performing and where we're challenged and where we're seeing some momentum.

Diego Cuevas: Now, regarding the difference in Mexico between the expansion in the gross margin and the EBITDA margin that you mentioned that, yes, effectively, we have, let's say, 60 base... of Pressure in our AGNA. This mainly has to do that we have been investing heavily in our distribution to expand our reach. in order to continue growing our top line, as we did during the quarter. So this, we feel very confident, will continue to create benefits in the coming quarters. Fantastic. Very clear. Thank you very much.

Speaker Change: Yes. Thank you Mark. Uh now regarding the difference in Mexico between the expansion in the gross margin and the EV the margin uh that you mentioned that yes effectively we have let's say 60 basis of pressure in our agne

This mainly has to do that. Uh we have been investing heavily in our distribution uh to expand our reach.

Speaker Change: Uh, in order to continue growing our uh, Top Line as we did during the quarter. So this, we feel very confident we will continue to create benefits in the coming quarters.

Speaker Change: Fantastic. Very clear. Thank you very much.

Henrique Morello: The next question comes from Henrique Morello with Morgan Stanley. Please go ahead. Hi, everyone. Thank you so much for taking my question. So I'd just like to ask a follow-up on the revenue performance in the U.S. So if you could share any quantitative or even qualitative information or data or any additional details that could help us understand how the progress of the transformational progress you are going through in the U.S. is evolving, that would be very helpful for us. And then, given you already achieved the 9% of EBITDA margin this quarter, if you could also touch on how we should think about margins going forward and if we should still think about big sequential improvements and when perhaps we should see double digits again would be very helpful as well.

Henri Corello: The next question comes from Henri. Corello with Morgan Stanley. Please go ahead.

Henri Corello: Hi everyone. Uh thank you so much for for taking my question so I just like to ask a follow-up on the revenue performance in the US. So if you could share any uh, quantitative or even qualitative information or data, or any additional details, that could help us understand how the progress of the transformational progress, you, you are going through in the US, uh, is evolving. That will be very helpful for us and then uh given you already achieved the 9% uh of Aida margin.

Mark Bendix: Thank you very much. Great, thanks. Thanks for the question.

Henri Corello: Required. I could also touch on how we should think about margins, going forward. And if you should still think about uh, this sequential improvements and when perhaps we should see double digits, again, would be very helpful as well. Thank you very much.

Mark Bendix: Let me first start on the qualitative side of the transformation. And Diego, I'll let you address the quantitative side. What we're doing with our transformation program is we are optimizing and integrating across all aspects of our business, which includes our people, our processes, our technology, and our systems. And this is aimed at helping us reach our full potential in the U.S. We're refining and implementing our new capabilities and technologies and processes. We're growing our customer base across all major channels. And we're expanding our ability to get to new channels, including away from home. We're investing in our world class operational efficiencies.

Great, thanks. Thanks for the question. Let me first start on the qualitative side of the transformation in Diego, I'll let you address the quantitative side. Um, first

Speaker Change: Our people, our processes, our technology, and our systems. And this is aimed at helping us reach our full potential in the US.

Speaker Change: We're refining and implementing our new capabilities and Technologies and processes.

We're growing our customer base across all major channels.

Speaker Change: And we're expanding our ability to get to new channels, including away from home.

Mark Bendix: And our transformation really remains aligned with our long term expectations. The expected benefits from our transformation really begin in 2026. but we expect for our business to have sequentially improving results in the back half of this year. So, the progress is a little bit slower than anticipated due to the uncertain economic environment that we're seeing in the U.S., but our productivity transformation is really well on track and we continue to make steady progress towards our long-term goals for both growth and productivity.

Speaker Change: We're investing in our world world class, operational efficiencies, and our transformation. Uh, really remains aligned with our long-term expectations.

Speaker Change: The expected benefits from our transformation. Really begin in 2026.

Speaker Change: But we expect for, uh, our business to have sequentially improving results in the back half of this year.

Diego Cuevas: Diego, do you want to take it from here? Thank you, Mark, again. Yes, I mean, you're right. Sequentially, we have been able to achieve important margin expansion in North America since the fourth quarter. As I mentioned, we feel very confident we will continue to see a margin expansion, not necessarily sequentially because in the business, there is seasonality. Remember that second quarter and third quarter for North America are the best quarters. But I mean, taking out the seasonality, this is going to be really the big driver of our margin expansion in Grupo Bimbo for the second half.

So the progress is a little bit slower than anticipated due to the uncertain economic environment that we're seeing in the US. But our productivity transformation is really well on track, and we continue to make steady progress towards our long-term goals for both growth and productivity.

Diego: Diego. Do you want to take it from here?

Diego: Thank you, Mark again.

Uh,

Yes. I mean you're right, sequentially. We have

Diego: enabled to,

To achieve important, uh margin expansion uh in North America since the fourth quarter.

Diego: uh as I mentioned, we feel very confident we will continue to see a margin expansion, not necessarily sequentially because in the business

there is seasonality, remember that second quarter and third, quarter for North America, the the best quarter

But I mean taking out the seasonality uh this is going to be really the Big Driver of our margin expansion in group of ino for the second half.

Diego Cuevas: I don't think we're going to be reaching the double digit, as you mentioned, but we're going to see consistent high single digit EBITDA margins for the region in the coming two quarters. That's very helpful. Thank you very much.

Diego: Uh, I don't think we're going to be reaching the double digits as you mentioned, but we're going to see consistent High checking on digit. Is it a margin for the region in the coming? 2 quarters?

Diego: That's very helpful. Thank you very much.

Antonio Hernandez: The next question comes from Antonio Hernandez with Actonware. Please go ahead. Hi, good afternoon. Thanks for taking the Congress on the resource. Just a quick one regarding the sublated CAPEX guidance. Where do you see most of the changes in this new CAPEX guidance? Yes, we're lowering the guidance basically $100 million to reflect the current pace at which our key projects are progressing. This adjustment aligns with the actual timing of execution and ensures our investment levels remain disciplined while still supporting our long-term strategic priorities. So, we're not canceling any projects. We will continue to grow as we were planning.

The next question comes from Antonio, Fernandez with actinver, please go ahead.

Antonio Fernandez: Hi. Good afternoon. Thanks for taking my question. Congrats on, on your resource. Uh, just a quick 1 regarding this updated capex guidance. Where do you see most of the changes in in this new carpet silence. Thanks.

Yes, uh well 1 lowering the the guidance basically 100 million dollars.

Antonio Fernandez: To reflect the current Pace at which our key projects are progressing.

Diego Cuevas: It's just that we're going a little bit slower in the execution. And this $100 million will be reflected as more of a carryover capex in 2026.

Antonio Fernandez: Uh, these adjustments. Uh, aligned with the actual timing of the execution, and ensures. Our investment levels remain disciplined uh, while still supporting our long-term, strategic priorities. So we're not canceling any projects. Uh we will continue to grow as we were planning is just that uh we're going a little bit slower in the execution uh and this hundred million dollars will be reflected a more of a carryover capex in 2026.

Diego Cuevas: Okay, thanks for the call.

Diego Cuevas: And if I may just follow up on food service, what food service trends are you seeing across the different operating regions, mainly the most relevant regions? In the food service world, we're seeing the same challenge in North America that we see on the consumer side, consumer seeking value. But in developed European markets and the Asian markets, we're seeing growth in our food service businesses, primarily in our QSR business, which continues to have very good growth and very good profitability appreciation.

Okay, thanks for caller. And if I may just uh, as follow up on Food Service, uh what food service trains are you using across the different operating Visions mainly the the most relevant experience. Thanks.

Diego Cuevas: So, challenges in the U.S. better in developed European and Asia is very good.

Speaker Change: In the, in the Food Service World, we're seeing the same challenge in North America that we see on the consumer side, uh, consumer seeking value. But in developed European markets, and the Asian markets, we're seeing growth in our uh, in our food service businesses, primarily in our qsr business, which uh, continues to have, uh very good growth and very good profitability appreciation. So um, challenges in the US better in develop European and Asia is very good.

Diego Cuevas: Okay, thanks for the call, Dr. Sabat, thank you.

Speaker Change: Okay, thanks for the call. Have a great day.

Lucas Herrera: The next question comes from Lucas Herrera with J.P. Morgan. Please go ahead. Hi guys, I hope you're hearing me well. My first question is regarding Mexico. So we've been seeing a broad deceleration of the consumer in Mexico, the remittances numbers show this and that's, you know, the mood that I know you're very aware of. So my question is, in Mexico, if you were seeing the consumer, you know, trending weaker, especially now in June, July, if you're seeing any important deceleration in sales, and if you are, what the company is doing to avoid this deceleration or to eventually increase market share?

Lucas Sara: Question comes from Lucas Sara with

Morgan: Morgan, please go ahead.

Lucas Herrera: Is the company more promotional? Any color you can give on the consumption environment in Mexico, and what the company is doing to face these challenges would be great.

Lucas Herrera: And the second question, maybe to Diego, I just wanted to double check, I mean, Roman, some quick back and forth calculations here on the guidance, just to make sure these 200 bps change in top line is just exclusively related to your FX forecast change? Or if there's anything else driving this decline that you can share with us. Thank you very much.

Morgan: Of the, the, the consumer in Mexico. The remittances numbers show this and, uh, that's, uh, you know, the mood, I know you were very aware of. So, my question is, uh, in Mexico. If you were seeing um, the consumer, uh, you know, trending weaker specially now in June July. Uh, if you're seeing any important deceleration in in sales, and, and, and if you are what the company is doing, uh, to avoid this deceleration or to eventually increase market, share the company more promotional, any, any color you can give on, on the consumption environment in Mexico and what the company is doing to um to to face these challenges would be great and the second question maybe to Diego, I just wanted to double check. I mean the running some uh quick back on envelope calculations here on the guidance. Um,

Morgan: I'm just to to make sure uh these uh, 200 bits change in top line is just so exclusively, uh, related to the, to your effects, uh, forecast, change, or if there's anything else, uh, driving this this, uh, decline, uh, that you can that you can share with us. Thank you very much.

Diego Cuevas: Hi, Lucas. Good afternoon. Look, definitely remittances declined by nearly 5% in May, and this could place some pressure on the already soft in consumption in Mexico. Definitely. We're seeing some softness, but we continue to deliver growth in all channels and most categories in Mexico. I mean, we're happy to share that the convenience channel showed a recovery because we were working together with the customer, the main customer in this channel, with targeted initiatives to accelerate growth. I would say that the fact that Mexico has a strong market position and the trust of customers and consumers. And we feel that we're going to be wavering the softness in consumption.

Lucas Sara: Hi Lucas, good afternoon. Uh look definitely rep remittances declined by an early 5% in May and this could place some pressure on you already. Uh soft uh, in consumption in Mexico. Uh, definitely

We're seeing some softness, but we continue to deliver growth in all channels and most categories in in Mexico. I mean, we're happy to share that the convenience Channel, show that recovery, because we were working together with the customer. The main customer in this Channel, with targeted initiatives to accelerate growth. I would say that the fact that Mexico has a strong Market position and the trust of customers and consumers.

Diego Cuevas: Let me remind you that we have a lot of margin of maneuvering because we're present across both branded and unbranded. We offer a competitive portfolio across channels, categories, locations, and consumer needs. We can deliver fresh and pro. We are quite fast in adapting. Actually, we have kept growing in this softness environment because we have been quite smart on PPA activities in bread to play the whole field. We have been betting on premium offer in both bread and buns, and also into the goods with high quality chocolate filling. Also, we have been able to activate quickly some products with on-pack offerings and free gifts.

Lucas Sara: And we feel that we're going to be wavering the yes this softness in consumption. Um let me remind you that we have a lot of margin of maneuvering because we're present across both branded and unbranded. We offer a competitive portfolio across channels categories, locations and consumer needs.

Lucas Sara: We can deliver fresh and frozen frozen.

Lucas Sara: And we are quite fast in adapting. Actually, we have kept growing in this softness environment because we have been quite smart on GPA activities in bread to play the whole field.

Lucas Sara: We have been betting on premium offer in both bread and buns and also in trade buy Goods with high quality chocolate fillings

Diego Cuevas: Definitely, it is helping the fact that we are on high double digit innovation in Mexico. And last but not least, we are also planning to keep extending our commercial footprint in all channels. I mean, with a renewed effort and focus on wholesale, hard discounts, and the digital DSD. So all in all, I think that we are ready to fight the softness in consumption.

Lucas Sara: Also, we have been able to activate quickly, some products with on-pack offerings and free gifts. Definitely, it is helping the fact that we are on high double digit innovation in Mexico.

Lucas Sara: And last but not least. We are also plan to keep extending our commercial footprint, in all channels, I mean, with a renewed effort and focus on wholesale Harvest counts and the digital DSD. So, all in all, I think that we are

Lucas Sara: Ready to fight the softness in consumption.

Diego Cuevas: Hi Alvaro. Yes, the answer is the adjustment on the guidance is 100% because of the effects. And let me, in order to try to be clear, give you some rough numbers on how we arrived to the 250 base. adjustment on the top line growth for the full year. So again, this is rough numbers. You know that we have close to 70% of our revenues outside of Mexico, a little bit less then, but rounding the number to 70, that will get you to approximately $15 billion which are done outside of Mexico. Fifteen billion times 75 cents is an adjustment of more than 11.

and,

Hi Alvaro.

Lucas Sara: Uh yes the the look sorry. Uh yes. The the the answer is

Lucas Sara: Uh, the adjustment on the guidance, it's 100% because of the FX. And let me, you know, to try to be clear. Give you some uh, rough numbers. How we arrive to the 250 basis adjustment, on the top line growth for the full year.

Lucas Sara: So and again, this is what numbers uh, you know that we have close to 70% of our revenues outside of Mexico. A little bit less than but rounding the number to 70 that will get you to approximately 15 billion dollars which are done outside of Mexico.

Lucas Sara: 15 billion times 75 cents. It's an adjustment of more than 11

Diego Cuevas: From the base, this means more than 250 bases. We are adjusting the top line growth because of expecting now a stronger peso than what we did in the last call. Now, following that effect, which of course it is good news. For us, when you see the whole picture. The Mexico operation will win. of Mexico will be lower because of the stronger Mexican peso. In Mexico, the organization or the businesses with the highest margin creates also a positive effect in a way with the margin. And that is why we also adjusted the expectation on the EBITDA margin contraction.

Lucas Sara: billion pesos of negative effect in our Top Lane.

Lucas Sara: From the base. This means more than 250 bases.

Lucas Sara: So that that is why.

We are adjusting the Top Line, uh, growth because of expecting now a stronger peso than what we did in the last call.

Lucas Sara: In that affect which of course it is. Good news.

Lucas Sara: For us. When you see the whole picture,

Uh, the Mexico operation will win.

Lucas Sara: Uh, share within our group of invo for safo.

As the operations outside of Mexico will be lower because of the stronger, Mexican peso.

Diego Cuevas: And we believe we can either be flat for last year to a very slight contraction.

Lucas Sara: The Mexico, the organization or the businesses with the highest margin creates, also a positive effect in our way, with the margin. And that is why we also adjusted the expectation on the EV, the margin contraction.

And we believe s can either be flat to last year to a very slight contraction.

Diego Cuevas: Thank you very much, guys.

Lucas Sara: Thank you very much, guys.

Alvaro Garcia: My next question comes from Alvaro Garcia with BTG, please go ahead. Hi, thanks for the space for questions. First off, sorry to hear sad news about the passing of Ben Perlito. He was a legend. Question on, um, I have three questions. One, just to triple check what you literally just said, Diego, on the guidance, um, the margin improvement is entirely a function of seeing more Mexico in your P&L, uh, or if there is any specific margin improvements that you have relative to your initial expectations. That's my first question, uh, which I think you just answered, but just to triple check on that.

The next question comes from Alberta Garcia with btg, please go ahead.

Hi. Thanks for the space for questions. Uh, first off, sorry, to hear sad news about the passing of Don Roberto his Legend. Um,

Question on um I have 3 questions 1 just to triple check what you literally just said, Diego on on the guidance. Um the margin Improvement is entirely a function of seeing more Mexico in your pnl.

Alvaro Garcia: Um, and then... I don't want to generalize, a lot of different countries, but The Big Bet seems like a pretty big bet, Dundo, and I was just wondering if you could maybe expand on the opportunity and the plans Bimbo has, and maybe if you could expand potentially on some numbers. Diego, I don't know if you, now that it's closed, you could maybe share some numbers given that you noted it's accretive profitability or the like. And then one last one on artificial colors. Pretty interesting comments you had on sort of getting rid of that through 2026.

Uh, or if there's any specific margin improvements that you have relative to your initial expect, expectations. That's my first question. Uh, which I think you just answered but just a triple check on that. Um, and then

Lucas Sara: On. Um,

You mentioned. It was a creative, obviously, that has been a success in that region. I don't want to generalize a lot of different countries. Uh, but um,

It's a big bet. It seems like a pretty pretty big bet done. I was just wondering if you could maybe expand on the opportunity and the plans being will has and maybe if you could expand potentially on some numbers, you I don't know if you now that it's closed you could maybe share.

Lucas Sara: Some uh, some numbers given that you you noted. It's it's a creative uh profitability or the like um and then 1 last 1

Lucas Sara: On artificial colors. Um,

Alvaro Garcia: Is there a cost impact to this? And does this impact the taste profile at all of your products?

Diego Cuevas: Thank you. Hi, Alvaro. I'm sorry, Lucas, that I mentioned Alvaro. Well, let, let, I'm giving you a question regarding the adjustment on the. on the expectations. I would say the vast majority has to do with the adjustment on the exchange rate, but as I explained, creates a positive effect in our consolidated dividend margin because of the business mix of our portfolio. A little bit also, because we're seeing a better performance in LATAM, and we also feel very confident this will continue to be the case in the coming quarters. And as you have seen, in Mexico, even though the consumer environment hasn't been strong, our brands have proven to be very resilient, and we have been able to continue to grow our top line.

Pretty interesting comments. You had on on sort of getting rid of that through 2026. Is there a cost impact to this? Um and does this impact the taste profile at all of of your products? Thank you.

Alvaro: Hi Alvaro, I'm sorry Lucas that I mentioned earlier.

Alvaro: well, let let I'm telling you question, regarding the adjustment on the

On on on on the expectation I would say the vast majority has to do with the adjustment on the exchange rate but as I explained create a positive effect in our work, Consolidated with the margin because of the business mix of our portfolio.

Alvaro: A little bit also because we're seeing a very performance in latam. And we also feel very confident, this will continue to be the case in the coming quarters. And as you have seen in Mexico, even though we consumer, environment hasn't been strong.

Rafael Palmier: We have been investing in our distribution, which also gives us the confidence that we'll continue to achieve top line growth for the coming quarters. And I will let probably Rafa for the strategic part of RONDON, but let me get in advance just to mention, we do not disclose the specifics. of the acquisitions, what I can share with you is that this operation represents approximately 1% of our sales. And more than that, Grupo Bimbo SAB, on a consolidated level, not for the region. And on an EBITDA level, more than that, because it is an accretive acquisition.

Our Brands have proven to be very resilient and we have been able to continue to grow our Top Line, we have been investing in our distribution which also give us the confidence that we will will continue to achieve uh Topline growth for the coming quarters.

Alvaro: uh,

I would like probably Rafa for the Strategic part of London, but let me get in advance. Just to mention, we do not disclose the specific.

Alvaro: Uh of the Acquisitions what I can share with you is that this operation represents approximately 1% of our sales.

And more than that group of Ino sales on a Consolidated level, not for the region.

Diego Cuevas: already was in the second quarter. Unfortunately, only one month as we close the transaction at the very end of Yeah, that was 1% of sales. One percent, yes, of Grupo Bimbo SAB.

Uh, and on an Eva level more than that, because it is an accretive uh, acquisition. It already was in the second quarter unfortunately, only 1 month as we close the transaction at the very end of May

Rafael Palmier: Thank you very much. Let me, let me give you a qualitative perspective. Less than five years ago, our presence in EMEA was in four countries, Morocco, Portugal, Spain, and UK. Today we are in 10 countries directly and serving through smart logistic arcs and many more. I would say that what happened differently, five years ago we turned our focus on but growing hyper-capita consumption markets that were yet to be consolidated. And we thought that our know-how and our know-how in marketing, but also know-how in manufacturing and logistics was a great fit to really have the first mover advance an opportunity.

Yeah and let me let me start sorry sorry that was 1% of sales 1 1%. Yes of group of sales. Thank you very much.

Alvaro: Let me, let me give you a quality perspective. Um,

Alvaro: Less than 5 years ago, our presence in Amia was in 4 countries, Morocco, Portugal Spain and UK.

What happened differently? 5 years ago, we turn our focus on.

Alvaro: Um, still fragmented.

Rafael Palmier: And we're happy with that because all of our acquisitions in the region are positive and the overall... that we are on top of our business cases and in overall... We're looking for synergies and efficient logistic arcs in an area of... Many people consuming bread products. and we're happy with what we've seen. Also, we have found great talent, great local talent that allow us to take the companies to the next level. So we're quite happy with the new focus on MEI. And, Alvaro, I don't know if you can repeat the last question because we couldn't understand it.

That growing hyper capita consumption, markets that were yet to be Consolidated. And we thought that our know-how, uh, and our uh, know how in marketing but also know how in manufacturing and Logistics was a great fit to really have the first mover advantage and opportunity. And we're happy with that because all of our Acquisitions in the region are positive. And the overall conclusion of all that investment is that, uh, we are, uh, on top of our business cases and in overall,

Alvaro: With a creativeness.

Alvaro: So, um, we're looking for synergies and efficient logistic arcs in an area of

Many people consuming bread products and we're happy with what we've seen. Also, we have found great talent. Great to local talent that allow us to take the companies to the next level.

Alvaro: So, uh, we're quite happy with the new focus on on emia.

Rafael Palmier: Sure. Yeah, you gave some new color on artificial coloring in your products, in your prepared remarks, and in the press release. Um, I think you mentioned that you do away with artificial... Colors in your products by the end of 2026, and I was wondering if there was a cost. and the relevant costs and if it impacted the taste profile of your products at all. Yes, absolutely. I would say that we do not anticipate that we're going to be having significant changes or significant impact in costs, and we're making sure that we're going to remain a favorite of our customers.

Speaker Change: And Alvaro, I don't know if you can repeat the last question because, uh, we couldn't, uh, understand it sure. Yeah. You gave some, uh, some new color on, on, uh, artificial, uh, coloring in your products, in your prepared, remarks and in the press release,

Speaker Change: Um, I think you mentioned that you do away with artificial.

Colors in your, in your, in your products by the end of 2026. And I was wondering if there was a cost and a relevant cost, uh, and it's impacted the taste profile of your products at all.

Rafael Palmier: Let me give you a quick background, so I think it is the right moment to share it. The food industry has a fundamental responsibility of offering safe, nutritious, affordable and accessible products around the world. And this is seldom said, right? But definitely we're fully dedicated to delivering a superior healthy experience. And let me share with you that our efforts have led to measurable progress. For example, 45 of our global sales come from products that meet or exceed optimal nutritional standards. 99% of our daily consumption portfolio is free from artificial flavors and colorants. The daily portfolio basically is around bread, breakfast, flat breads, right?

Yes, absolutely. Um I would say that we do not anticipate that we're going to be having significant changes or significant impact in costs and we're making sure that we're going to remain a favorite of our consumers. Um, let me give you a a a quick background. So I think it is the right moment to share it. Uh, the food industry has a fundamental responsibility of offering safe nutritious, affordable and accessible products around the world and this is seldom set, right? But definitely, we're fully dedicated to delivering a superior healthy experience. And uh let me share with you that our efforts have led to measurable Pro, uh progress, for example, 45 of our global.

Speaker Change: Sales come from products that meet or exceed optimal nutritional standards.

Rafael Palmier: And definitely, our commitment doesn't stop there. In 2026, we're going to, by the end of 2026, we will have removal of artificial colors from all our portfolios. And by 2030, we're going to ensure that 100% of our baked goods and snacks will be made with simple, natural recipes that remain still affordable across all points of sale. So this is our commitment, but this is also the progress we have been making.

Speaker Change: 99% of our daily consumption. Portfolio is free from artificial flavors and tolerance. These daily portfolio basically is around Bread breakfast, flat breads, right?

And definitely, our commitment doesn't stop there in 2026. We're going to, by the end of 2026, we will have removed all artificial colors from all our portfolio. And by 2030, we're going to ensure that 100% of our baked goods. And snacks will be made with simple natural recipes that remains still affordable across all points of sale.

Speaker Change: so this is our commitment, but this is also the progress we have been making

Alvaro Garcia: Great. Thank you very much. I'm sorry for all the questions. Thank you.

Speaker Change: Great, thank you very much. I'm sorry for all the questions. Thank you.

Fernando Overa: Next question comes from Fernando Overa with Bank of America. Please go ahead. Hi, good afternoon and thanks for taking my question. The first one is related to Mexico.

Fernando overaa: The next question comes from Fernando overaa with Bank of America. Please go ahead.

Diego Cuevas: If you can comment about how the $2 billion in CapEx mentioned in the initial remarks and press release will be distributed between 2025 and 2028 and what will be the main projects. which you will invest. That's the first.

Hi, good afternoon and thanks for taking my question. The first 1 is related to Mexico if you can comment about how the 2 billion in capex mentioned in the initial remarks and press release will be distributed between 25 and 28 and what will be the main projects in which you will invest. That's the first 1

Diego Cuevas: Yes, hi, Fernando. Well, as you know, this is in four years, this is already included in our expectation. It's not necessarily one single project, as you know, we're investing in different businesses, in different locations in Mexico, manufacturing, distribution, distribution centers, electric bands that we're using. So it's, I would say, spread all over our operations and it's also equally, I could say, equally spread over the years. It's not that we will see a specific job in one of the years.

Speaker Change: Yes. Hi Fernando uh well you know this is uh in 4 years uh this is already included in our expectation.

I could say equally spread for the years is not that we will see any specific job in in 1 of the years.

Diego Cuevas: And again, this is already included in the guidance that we provided for 2020. Okay, great.

Speaker Change: And again, this is already included in the guidance that, uh, we provided for 2025.

Diego Cuevas: And my second question is, and if you have any update about about week goal? Yep. that goes with me. The transaction is still under the regulatory process. We expect to have the resolution in the second half of the year. Since the last time we met, the Tribunal of the CADE is performing the usual procedures and we are providing the information they required. The process is going to conclude by the second semester of the year. It's actually, we feel regulatory timings, that we know for sure. Great. Thank you so much.

Okay, great. And my second question is, if you have any update about uh, about weak Bowl,

Yep, that goes with me. Um, the transaction is still under the regulatory, the regulatory process

We expect to have the resolution in the second half of the year.

um since the last time we met um the tribunal of the C is performing the usual procedures and we are providing the information they required but it's it's going to the process is going to conclude by

Speaker Change: by the second semester of the year.

Speaker Change: It's actually within regulatory timings. That's that we know for sure.

Great, thank you so much.

Speaker Change: Thanks for you.

Felipe Nunez: Next question comes from Felipe Yucuz with Scotiabank. Please go ahead. Thanks, operator. Good evening, Rafael and the marketing team. Two quick questions. One on hedging off raw materials. Prices for some of the raw materials you use have remained stable. Volatility has been low. So just wondered if you've moved ahead on your hedging plans for 2026, taking advantage of this. And then the second one on your brief mention about market shares in the U.S. Since you've been recovering in the categories where you have some share, just wondering if you could share a little bit about what the drivers behind that were.

The next question comes from Philippe. You course, with kosha bank,

Speaker Change: Please go ahead.

Speaker Change: Operator. Um, good evening. Uh, Raphael Market team. Um, 2 2, quick questions. 1 on hedging up from materials. Um,

Mark Bendix: I know you mentioned innovation, but wondering if there's also been promotions or any other types of drivers that are kind of helping you make your way back up.

Mark Bendix: Thank you. Yes, hi, Felipe. Mark, if you want, I can take first the hedging. Please take the hedging. Yeah, please. Okay, so Felipe, we are already hit, I would say very close to 100% of our commodity needs for 2025. second half. In fact, we already started to hedge part of 2026. And let me tell you, we have a very disciplined approach. and a very disciplined methodology on how we hedge. So it is, I would say, more like a rolling methodology that we don't necessarily take a view. If we believe commodities are cheap and we tend to be more aggressive, I mean we do operate within a bandwidth, but it's a consistent methodology with the philosophy of providing the visibility for our operation.

Speaker Change: Prices for some of the raw materials you use. Um half remains stable volatility has been low so just wondered if you've moved ahead on on your hedging plans for 2026, uh, taking advantage of this. Um, and then the second 1 on your brief mention about market shares in the US, um, since you've been recovering in the categories, where you have shipped some share, um, just wondering if you could share a little bit about what the drivers behind that. Where I know you mentioned Innovation but wondering if there's also been promotions or any other types of drivers that are kind of helping you make your way back up. Thank you.

Speaker Change: Yes. Kipe. Uh, Mercy. If you want, I can take first, the, the hedging piece you take the Hedge in. Yeah, please. Yep. Okay, so, the little we are already hit. I was a very close to 100% of our commodity needs for 2025 for the second half. Uh, in fact, we already started to hedge 5 of 2026.

Speaker Change: And let me tell you, you have a very busy DC line discipline approach.

And a very disciplined methodology on how we help so it is say more like a rolling methodology that we don't surely take a view.

If we believe Commodities are cheap and we tend to be more aggressive, I mean, we do operate within a bandwidth but it's a consistent methodology with the philosophy of providing.

Mark Bendix: on the cost of the most important raw materials. So that way we can properly do all the strategic planning for price. So again, that is why we already started to hedge 2026 and we will continue to do this rolling methodology. We are very strict within the internal policy for hedges that we have in place and that we're very strict. and we basically never moved. Understood. And if I can follow up a little bit on that, 2026 is the year that I was interested in. I know you have some leeway between the bands in which you move.

Speaker Change: The visibility for our operations.

On the cost of the most important raw materials. So that way we can properly do all the Strategic, uh, planning for prices.

Uh, so again that is why we already started to hedge 2026 and we will continue to do this rolling methodology.

Uh, within the internal policy for Hedges that we have in place and that we're very strict.

Speaker Change: And we will basically never move.

Mark Bendix: Any color you can give us on where you are and percentage of needs for 2026? It's still not very relevant. We have some pages. For the first quarter, say, for some of the most important raw materials, probably more than half of our commodity needs in the first quarter, and we have just started to hedge the second quarter of 2020. exactly what I was looking for. Thanks a lot for that. Great. And Mark?

If I can follow up a little bit on that 2026, is the year that that I was interested in. I know you have some leeway between the bands in which you move, um, any any color you can give us on on on where you are and and percentage of needs for 26.

Speaker Change: Um, still is, is still not very relevant. We have some pages.

Speaker Change: For the first quarter say for some of the most important raw materials probably more than half of our commodity needs in the first quarter and we have just started to hedge the second quarter of 2026.

Speaker Change: Exactly what I was looking for. Thanks a lot for that.

Mark Bendix: Felipe, for the second part of your question, just a few comments, hopefully that help. First, we're driving stronger commercial performance through, first of all, portfolio simplification, expanding our distribution of value and premium products. So, Bimbo Bread is really resonating with consumers at the value end. And our product, Rustique, which is a sourdough super premium product, has really also resonated at the high end. So, we're hitting value and super premium where the market has bifurcated to. And we've implemented some strategic pricing, and we've maximized our buns and roll season, capturing really good opportunities and making sense to the consumer in our stratification of our value mainstream and premium.

Great. Thank you for the second part of your question. Uh, just a few comments. Uh, hopefully, that helped first. We're, we're driving stronger, commercial performance through. First of all, portfolios simplification.

Bimbo Bread is really resonating with consumers, uh, at the value end.

And uh, our product rustique which is a um, sourdough super premium product has really also resonated at the high end. So we're hitting both value and super premium where the, where the market has bifurcated to and we've uh, We've implemented some strategic pricing.

Mark Bendix: So, we feel good about that. And the reason why we're still optimistic is our top brands continue to grow household penetration and resonate with our consumers. We have exciting innovation, as Rafa said, our pipeline of Ballpark Butter Buns, Bimbo Buns, Thomas' Protein Bagels, and we're expanding Muffin Tops and Thomas' Croissant Bread. So, while trade down does exist, consumers are sticking with brands that they trust. And we have some of those most dominant brands. And so, especially when those brands offer clear functional or emotional benefits. We're also deploying our RGM discipline so that we're looking at promotions very, very critically because they're not responding as they have in the past.

And we've maximized our buns and rolls season in capturing really good opportunities and, uh, making sense to the consumer in, in our stratification of our value. Mainstream and premium,

so um we feel good about that and the reason why we're we're still optimistic is our Our Brands, our top brands continue to grow household penetration and resonate with our consumers

We have exciting Innovation. As Rafa said, our pipeline of ballpark, butter buns. Bimbo buns, Thomas's protein, bagels, and we're expanding muffin tops, and Thomas's croissant bread. So well, trade trade down. Does exist. Consumers are sticking with brands that they Trust.

and we have some of those most dominant Brands and so especially when those Brands offer clear functional or emotional benefits,

Mark Bendix: So, we found that discipline is helping a great deal. And interestingly enough, what you would, I think, find interesting in North America, our brands have a household penetration above 83 percent. So, strong base. There's a difficult consumer environment, but we remain optimistic. uh great color in that maybe if I can if any any additional color you can give us on on functional categories since they seem to be resonating with consumers quite a bit I think you mentioned uh protein focused uh breads just uh wondering what the view is on on whether it's a fat or you think there's uh this this functionality in bread is something that can stick for the long no I think with the younger consumers what we're seeing is the functional benefits are clearly important and it's not a fad it's a trend and so Rafa mentioned that we introduced Thomas's protein bagels where each bagel has 20 grams of protein in it and it tastes great so we have other products that are that on premium bread that include protein that we're just rolling out now and I think you'll see more functional benefit products come from our innovation pipeline in the quarters and years to come for sure.

We're also deploying our rgm discipline, so that we're looking at promotions, um, very, very critically because they're not responding as they have in the past. So, uh, we found that discipline is helping a great deal.

Speaker Change: And interestingly enough, what you would? I think find interesting in North America. Our Brands have a household penetration above 83%. So, strong base. Uh, there's a difficult consumer environment, but we remain optimistic,

Uh, great caller in that. Maybe if I can, if, if any any additional color, you can give us on on functional categories, since they seem to be resonating with consumers, quite a bit. I, I think you mentioned, uh,

Speaker Change: Protein focused uh Brad's just uh wondering what the view is on on what whether it's a fad, or you think there's, uh, this the this functionality in bread is, is something that can stick for the long run.

No, I I think with the younger consumers, what we're seeing is the functional benefits are clearly important and it's not a fad, it's a trend. And so uh Rafa mentioned that we introduced uh Thomas's protein Bagels, where each bagel has 20 grams of protein in it, and it tastes great.

So, um, we have other products that are in that, that on premium bread, that include protein that were just rolling out now. And I think you'll see more functional benefit products come from our Innovation pipeline in the quarters and years to come for sure.

Mark Bendix: Great. Thanks a lot for that call, Mark.

Speaker Change: Great. Thanks a lot for that call Mark.

Regina Carrillo: The next question comes from Regina Carrillo with GBM. Please go ahead. Hi, thank you for taking my question, and congratulations on the results. I was wondering about the CAPEX guidance. Do you think you could maybe guide us on how much of that guidance should we expect it to be maintenance versus gross CAPEX, and in the gross CAPEX, how much you use for organic versus inorganic developments? Yes, our munting and scap pig. It's between 800 to 900 million dollars every year. On top of that, we have some CAPEX. typically on the range of $100 million for productivity.

The next question comes from Regina. Carrillo with GBM. Please go ahead.

Hi, thank you for for taking my question and congratulations on the results. Um I was wondering about the capex. Guidance, do you think you could um,

Speaker Change: Maybe guide us on how much of that guidance. Should we expect it to be maintenance versus growth capex? And in the growth, uh, capex, how much you use for organic versus inorganic? Um, development.

Speaker Change: Yes. Uh, our monthly and capex.

Speaker Change: It's between 800 to 900 million dollars every year.

Speaker Change: Uh, on top of that, we have uh, some capex.

Typically on the range of a hundred million dollars for productivity.

Diego Cuevas: And we have between 300 to 400 million dollars of CAPEX for growth for this year. which is the one that has been lowering as compared to the previous two years. And that is why in 2023, we surpassed $2 billion of capital. We invested heavily for future growth. in different geographies and categories. Then in 2024, we invested $1.6 billion. And now, as I mentioned, we expect to be within the range of $1.3 to $1.4 billion.

Speaker Change: And we have between 300 to 400 million dollars of capex for growth, uh, for this year um which is the 1 that has been lowering as compared to the previous 2 years. And that is why in 2023, we surpassed 2 billion dollars of capex.

Speaker Change: We invested heavily for future growth uh in different geographies and categories. Uh then in 2024, we invested 1.6 billion dollars. And now as I mentioned, we expect to be within the range of 1.3 to 1.4 billion dollars

Regina Carrillo: Thank you so much, and if I may add another question, I was wondering about your snacks division. Would you give us some color on how, you know, Barcel and Takis have been performing versus other categories in your product line, please? Thank you. But we do not disclose the specific information, Regina, sorry, by product or by category. So, unfortunately, we cannot share any specifics on that. Okay, no worries. Thank you so much.

Thank you so much. And if I, if I may add another question, I was wondering about your snacks division. Uh, would you give us some color on how, you know, barcel and Takis have been performing versus other categories in in in your product line, please, thank you.

uh,

Speaker Change: what we do not disclose the specific information, Regina. Sorry my product or by category.

Speaker Change: Uh so unfortunately we cannot share any specifics on that.

Okay, no worries. Thank you so much.

Operator: This concludes the question and answer session.

Rafael Palmier: I would like to turn the conference back over to Rafael Palmiers for any closing remarks. Please go ahead. Thank you. Thank you all for your time today. Please do not hesitate to contact our investor relations team with any further comments or questions you might have. Have a great day, bye-bye.

Speaker Change: This concludes the question and answer session. I would like to turn the conference back over to the file premiere for any closing remarks. Please go ahead.

Speaker Change: Thank you, thank you all for your time today. Uh, please do not hesitate to contact our investor relations team with any further comments or questions you might have.

Speaker Change: A have a great day. Bye, bye.

Operator: The conference is now concluded.

You may now disconnect.

Speaker Change: The conference is now concluded. You may now disconnect