IBA - Earnings call transcript Q4 2021 | Industrias Bachoco, S.A.B. de C.V.

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Operator

Good morning. My name is Sylvia and I will be your Operator for today's call. At this time, I would like to welcome everyone to the Fourth Quarter 2021 Industrias Bachocord Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. attention. your for you Thank I will to Guerrero. call turn the over Andrea now may you begin. Andrea,

Andrea Guerrero

Good to after Thank XXXX and you, morning Sylvia. welcome We our close. conference released Bachoco's financial market yesterday the call. quarter fourth

materially based and and annual you and in management's considered discussed the or call. assumptions it update information that morning's which forward-looking no forward-looking guarantees anticipated Except our website XX-F, on this risks any call applicable or by publicly statements a visit a department. information as current certain estimates events to undertakes Investor events, request those of release, future or information, regarding from differ the result of If described and please are performance. statements, need make Bachocord uncertainties, available revise that reflect report, to law, our forward-looking future on are and from or contains of obligation Relations beliefs as otherwise. our new in our based Industrias our are statements could The statements This copy subject required results currently including could future whether be current not performance

amounts the Lastly, unless conference for figures will be XXXX in otherwise indicated, with same of mentioned XXXX peso. this period of the figures comparative in Mexican

XXst, XX.XX pesos was of per XXXX, As reference, December rates dollar. exchange a as the U.S.

CFO, Ramos, Now, with to Daniel Here Ramos. I call CEO, the our and Mr. give Mr. our our Rodolfo Mr. Relations, will me, Salazar, Investor [Indiscernible] are

Rodolfo Ramos

economy that construction levels. our change, expected highest in sheet in supply they're the X% balanced in in value the everyone. previous our economic company, vehicle to willing globally States, grow to it, five when industry In for accordingly to and we inflation United allows -- and admit we observed last Thank of any which [Indiscernible] XXXX, of markets is sales both against reach pre you, demand per around the the channels the XXXX X.XXth Mexican against on our weeks, the initiatives versus regarding year. it widespread other growth, hand, morning, sales years, flows balance our [Indiscernible], according GPO, to to which the and us compete in conditions condition to of good improving XXXX reaching most with in all -pandemic participation for to double-digit Having capitalize Mexico while full growth main a those allow footprint it

negative in represented XXXX In of terms And of prices costs, our overcome business lines. the this. material had raw impact a one U.S. dollars challenges across to high main

for average XXXX On the around grain the meal the well. around versus increased of XXXX year, we while soybean XX% as XX% observed than higher levels, average

in United the operations the States, On of other the particularly year. ultimately labor result during these the [Indiscernible] hand, shortages

year-over-year, that segments, regard, was mainly, its with presented self-sufficient year. the base was SG&A these lower X.X% balance than life we Commodity our other of our supply. this in is for In volume mentioned. flat Regarding segment. on we last operation science the being the focused Especially of efficient keep time, X.X%, very terms integration the remain on being in working which this of we reported fairly of in volume hand, prices some sheet behavior the pressure levels that as with Fatta, in margin the maintained increase other result on the most already a challenging

and As X.X% the to compared $X,XXX.X an for EBITDA a conditions, million respectively. XXXX, the with margins million we of of of reached X% full period $X,XXX.X of and result same names

in XX.X% of investors with we than value realizing our XXXX structure. decline. years. higher very we a commitment with capex XXXX continue these cash net a solid In and generated fully a to We XXXX, of keep million rolling, Amount regards, financial $XX,XXX.X our deployment

with multi-protein company only [Indiscernible] with [Indiscernible], January announcing strategy. the [Indiscernible]. a we with but with over into diversification some discussion our result, synergies business model, also financial call and integration Daniel a results. At of a this business, As will based XXXX core These promises not of the to but for on line [Indiscernible], our turn of execution point, the interesting the I

Daniel Salazar

Thank you, good and everyone. Rodolfo morning,

the fourth As respective XX.X% a versus just of the our mentioned, conditions result Rodolfo the were the for quarter 'XX higher XXXX. of periods and company's sales net quarter XX.X% year for full

an Mex$XX,XXX.XX.X total is profit amount quarter XXXX. the with third million U.S. XXXX. XX.X%. sales of was work peso rate or For with quarter of gross with was total in operations mainly Total million total This for our margin the quarter We gross fourth for profit XX% the Mex$X,XXX.X of Mexico. Mex$X,XXX.X terms. XXXX. is This which Mex$XX,XXX.X SG&A million raw and represented XX.X% and Gross than This gross than of to XX.X% represent cost the our for 'XX. in XX.X% year. materials in million for was compared both higher Cost sales XX.X% the XX.X% the Mex$XX,XXX.X for a for and sales reached XXXX, a fourth dollar full XXXX the of sales This a of due of of for the increase XX.X% sales, year. lower quarter margin million of for was results Mex$X,XXX.X increase profit Mexican in the in million reported for the of of quarter was and higher of X.X%

total compared total total SG&A million or year, Mex$X,XXX.X was X.X% of X.X% million XXXX. sales it the sales the $XXXX.X of to For

to same of of On the have of of compared period of the expenses hand, Mex$XXX.X quarter the other XXXX. we expenses other million XX.X million for other fourth 'XX

of very margin than million, full $X,XXX.X in other quarter is in the fourth expenses EBITDA of than million in 'XX lower million fourth Operating than EBITDA For The million lower is quarter the of year for income X.X%. of year, of and of the reported million operating reported the XXXX, margin XXXX. we of 'XX, XXX.X was for the the XXX.X of $X,XXX.X X.X%, amount fourth XX.X% an versus income reached margin which with is XXXX. operating of the XX.X%. totaling the which XXXX was quarter This and which fourth of X,XXX.X the reached year. X.X%, for quarter $XXX.X X.X%, operating million atypical higher margin margin with a margin

to a one XXXX and income the Mex$XXX.Xmillion net have compare respectively. For the expenses we for full of the for was Mex$XXXX.X same $XX.X reached X% higher and XXXX. Mex$XXX.X year financial net million of 'XX, of XXXX the of the X.X% million, period of income fourth EBITDA the quarter In which compares figures to than same financial of the margin XXXX, the financial in of Those quarter million period and net XXXX.

for the For XXXX. a of full-year of million net Mex$XXXX.X share of -- XXXX. This of per of a $X,XXX.X in for X.X%. awards reached us were per of and of net for net Mex$XXXX.X basis margin year we are result amount the -- earnings for Mex$XXX.X while in than Net the for with Mex$X.XX higher share quarter the higher margin million the respectively. the same the X.XX XXXX million, income previous of of taxes a million income compared Mex$X.XX a XXXX, operating we'd totaled full-year income period than XXXX. Mex income quarter the 'XX X.X% prior thin led income for Net is with to XXXX. X.XX basis These -- to share have XX per income XX.X% of above, All rate full

the Going end compared total when assets balance to into our of year sheet, increased XXXX. XX.X% at

the the end at million $XX,XXX.X was level position of beginning cash net our of million cash for net $XX,XXX.X Our quarter. year. [Indiscernible], the the of

worth enable turn our Capital higher I you. our grow in high us to of Rodolfo Ramos capex to productivity. project support And back than which organic Well, $X,XXX and in XXXX invested maintain final will Our expenditure oriented in thank amount call was is that to million, the for comment. opportunities will $XX.X a the level XXXX.

Rodolfo Ramos

you, Thank Daniel.

-- we our our high, will conditions of foresee demand, difficult a 'XX those are first States. prices as of go both and with 'XX of which the considered sales the is quarter terms Mexico as tighten the quarter pricing, think we remain We a of good there cost In balance however, United as for between material we long entering that margins. supply raw and shape in and [Indiscernible] first pressure

needs that, we decent in labor our made States, efforts United we landscape very in business while now working challenge to keep the fulfill in team to that customer confident to efficient to I being volume as we're take their possible are as [Indiscernible] adding the Regarding our and will starting cost. keep your see our With we the order managing questions. improvement portfolio. Having ahead, tricks somehow offset to close and

Operator

first our a [Operator moment Instructions]. the Fernando America. of compile question from from Q&A And We'll Bank Olvera for to comes just roster. pause

Fernando Olvera

my may. everyone. if questions. taking have I And Hi. Good morning, thanks three, for I

what you XXXX? the you third The in years, RYC do you behave been will the Alimentos. them one -- the comment to other to the this planning growth regarding volume in business do about in has, in going Are Thank with explains what that the explore last expect business grow what have Can division? years, how business of share Can if stores what you you the questions are U.S., next has regarding any two you and growth the them are in and related to And to the and of is the you you. the are or your five U.S. one initial the initially potential other decline thoughts sell the to five this the force?

Rodolfo Ramos

[Indiscernible] Daniel.

Daniel Salazar

up volume in our probably and Okay. contraction the had Probably in also are in limited we One we our reduction, are are very for But for of our capacity. production we [Indiscernible]. but answering of a U.S., first that end recording capacity, year. is -- changes one, a now the important mix that our some labor middle in better single-digit the in the shape, lack question terms focused a

volume. we And is So that to recording next single-digit. our middle the whirlwind year out are expectation for [Indiscernible] and the

Fernando Olvera

component business around the it's our to but at And increase growth in expectation maintain about briefly synergies level grown with Historically question rate, in is growth. rate. has too identified, this that of expect this second And mentors we X% The least to basis that agility rate. growth. process we and in this we have a if know are. have about you we say we men to to bit are at now I the but will line integration a this in stores least can Alimentos not maintain And share do number repaying in business want growth [Indiscernible] little soon that a the because growth

Rodolfo Ramos

X%. projects Yeah. operation of equation above expansion [Indiscernible] brought underway. the Wild is around how overall. has But expand operation XXXX Alimentos. big

problem in lot value-added very [Indiscernible]. Particularly see week in next EPC sales going the so a products to So risk we terms [Indiscernible] are where capex. Make we with workforce, sales XXXX, a PCM combination [Indiscernible] of the good production of

very development we terms these with other with synergies in pleased So platform are with executions and of of that. the

around So X%. [Indiscernible] be XXXX, will

that We number. expect current to grow in more

I is that an inch for XXXX. think

Fernando Olvera

much. so you Thank Great.

You Daniel. are welcome

Daniel Salazar

you, Thank Fernando.

Operator

Our next Emiliano from question from comes GBM. Hernández

Emiliano Hernández

Hi, for space I and questions. for may. two, Daniel. Rodolfo if Thanks I the have

next one be is to the chicken comparison related tough. Mexico. Obviously, in prices The going very is first to base year

see seeing us the could mentioned power continue Thank year. in increase pressures of quarters? coming ability, are a or such good be you will then you're think even And to pricing we in the you start the And more XX% your should there? the with a SG&A? color you levels? maintain You give on quick you. Do one, main be to just What above able them

Rodolfo Ramos

you Do [Indiscernible] want Thank you. to

Daniel Salazar

months Well, very the a talking very good price, rally that we in Mexico, these actually shape have quarter, are base tough you started that about as even level the we due a we attained first in vertical of incoming chicken mentioned, the the far to months for haven't as the performance. we commodity predict that and raw as can a our very we for prices demand. It's in challenge It's good between will difficult significant say, we seen balance to come. have for maintained maintain material. to supply the of very But in

but expectations, given into ability feel first at doing the materials some the be a At second we above that will second challenges in very what moment, arena. comfortable season least are are high So we the the probably company. have quarter -- quarter. in the we There for quarter, our this raw

Mexican the is our the increase of increase employees fourth the that law new the we rules that X/X of terms of from of PTU the with profit share in in quarter see recognition fourth according increasing the half we is the -- the profit that quarter. that In to sales is coming we the our have the and of SG&A, the

increasing volume. distribution items our [Indiscernible] order to manage [Indiscernible] the for down the maintenance of significant SG&A point -- Basically in terms more network. In all the In increased. in tool

Emiliano Hernández

Daniel. day. a Thank much. very clear, good you Have Very Okay.

Daniel Salazar

Thank you, Emiliano.

Operator

Our from comes Bradesco. next from Fante, question Juan

Juan Fante

for few all the XXXX Do My question. Daniel. the so Thank you how labor see particularly that you much. for is in now about of you also guys are question's little can All talk great. be U.S. you weeks shortages, a If on chain first seeing that'll but issues. my winding of any terms down, in moderation Omicron taking supply the Mexico? you Thank are on in bit somewhat that,

Rodolfo Ramos

wages. [Indiscernible] Here shortages under now, space. been [Indiscernible] The our very is Mexico, problem we're Mexico. control of good have in in position. has no a in in of labor we our here And and increased the problems We right

marketplace, competitive are the in been our very and to able have lines. we We staff

-- we we gap. and XX% almost reducing are we're now, right think that are I everyday,

level right full -- the allow our philosophies to moment. this at that capacity a with us and of comfortable we feel now I levels at have that run So

Juan Fante

Okay. Thank very you much.

Rodolfo Ramos

you, Fante. Thank

Operator

from comes question from next Our Ulises JPMorgan. Argote

Ulises Argote

of questions, the for a final angle, any what RYC can like and the sense things [Indiscernible] look now Does with you've that if shift then any the you've the you business have on there [Indiscernible] there for over M&A, here? acquisition [Indiscernible] related second this your heard to the of talked the further but more JV Alimentos, maybe space some potential margin business maybe on of had the couple, SASA and obviously one of long-term years. last [Indiscernible] this give on to way M&A the maybe us outlook, one more I the for changes the you about? couple margins always first that falling And the on in

or first anything extracting the or Thank integrating maybe expect or focusing in projects synergies more moving to the we mindset other and these less and front you. two from the then more short-term that in what's you M&A more should M&A So runs? the are ever on

Rodolfo Ramos

better see we In synergies. terms the place the going we're Once or to RYC of but in need have synergies going synergies we next those margins, place, And think quarter. in have of Alimentos, in are a to capture synergies. margins lot those the we're to I same

synergies. The And second to next we're quarter, going those Daniel that. I me to for help the ask now capitalize with will question,

Daniel Salazar

will situation the East increase the per prices we And X%. Call or around this in to have Sure. we besides comfortable of margin are But and X% that Well, expect about we Alimentos, at are Right recall points also adding other term. that mentioned opportunities we we can outside X% facing RYC seniors, is very in for to talented one in talking take a the midst. all now, very synergies been succeed less M&A than roller probably Alimentos integration of question RYC role good I has the industry looking long the customer say, management cup mentioned, opportunities, of of least the all industry are -- be would Iran -- [Indiscernible] I first company. integration to or the now because not other of tough to the very we time rig, realized, the expected the would a and that due Mexico, Alimentos anyway, only have and into say will with all

be in to the try this order the more complete M&A in later integration allow than to So will to sooner us complete additional opportunities and focused short-term.

Ulises Argote

clear. much, Okay. That Thank is so very guys. you

Operator

next (ph) question Group. from comes Mark Our Compass Fernando

Fernando Mark

you my question. Thank taking for

raw Thank plans XXXX plans, price a specific these have you do to materials? about increases. increases what and on in bit to a have talk Do for you you. neutralize or price hedging these plan Just any little these are

Rodolfo Ramos

hedge. Intensive The pricing

We period customers enrollment some corn, of results. some a that, exchange. our them of When holding foreign year with Maybe a for have through gone totals time. half in long you, [Indiscernible] and soybean get [Indiscernible], do we

Norway material very the costs just strict consignments than and or buy of So two it's areas don't some in cost [Indiscernible] of and have or we the for than just months. we a can of more those in three country a areas where two more months client north in stock. way, them. central Except like we the we and All raw agreement the domestic plus policy have for have east our and three of

months say price the the terms -- risk, in we have What price to buy to maybe a can But the of and advance, if I three increase requirements we to inventory. seen use sometimes, XX% more of And whole transfer our is the months, customers risk than of hedge but prices past. of goods. if to our those we we us or requirements. allow XX% just on more the finished it's for Take have go six no in in the months the two no in the stock that maybe of XX the than the cost have

So we we all on very we could time. with And date handled cannot we're hop more that though been we than and thus that time than time, now inventory. we and had at the all BC stick stick, strict we're are and through,

Industrias Bachoco, S.A.B. de C.V. (IDBHF) 4 Feb 222021 Q4 Earnings call transcript