2019 INTEGRATED ANNUAL REPORT 2019 Ar
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2019 INTEGRATED ANNUAL REPORT 2019 ar I GRUPO BIMBO GRUPO BIMBO IS THE LARGEST BAKING COMPANY IN THE WORLD AND A RELEVANT PARTICIPANT IN SNACKS. GRUPO BIMBO HAS 194 PLANTS AND MORE THAN 1,700 SALES CENTERS STRATEGICALLY LOCATED IN 32 COUNTRIES THROUGHOUT THE AMERICAS, EUROPE, ASIA AND AFRICA. ITS MAIN PRODUCT LINES INCLUDE SLICED BREAD, BUNS & ROLLS, PASTRIES, CAKES, COOKIES, ENGLISH MUFFINS, BAGELS, TORTILLAS AND FLATBREADS, SALTY SNACKS AND CONFECTIONERY PRODUCTS, AMONG OTHERS. GRUPO BIMBO PRODUCES 1 OVER 13,000 PRODUCTS AND HAS ONE OF THE LARGEST DIRECT DISTRIBUTION NETWORKS IN THE WORLD, WITH APPROXIMATELY THREE MILLION POINTS OF SALE, AROUND 58,000 ROUTES AND MORE THAN 133,000 ASSOCIATES. ITS SHARES TRADE ON THE MEXICAN STOCK EXCHANGE (BMV) UNDER THE TICKER SYMBOL BIMBO, AND IN THE OVER-THE-COUNTER MARKET IN THE UNITED STATES WITH A LEVEL 1 ADR, UNDER THE TICKER SYMBOL BMBOY. MISSION BELIEFS Delicious and nutritious • We value the person baked goods and snacks in • We are a community the hands of all . • We get results • We compete and win • We are sharp operators • We act with integrity • We transcend and endure (GRI 102-1, 102-5, 102-2, 102-16) company deeply humane and highly productive asustainable, “Building SUSTAINABILITY SUSTAINABILITY MODEL OUR OUR .” ST THE OUR PILLAR AKEHOLDERS VA LU E CHAI S N D I S T R I B U T O IN R V S ES T • O C R O S N • P T RA P R R W A A O M R C D A T T T U N O E C R E R R T I S A S I L O • S W • C N A CORPORA • O E C R S • M L S E O L L P N O O B E CUL M C E T E G BUSINESS PLAN I I W A GRUPO BIMBO T I M I N T O S A TURE PURPOSE E R G T B U S S TE GOVERNANCE L I C N E • • S C G E I • U O T N • V S E V Y E T R R E O N G H M M Y P I E E C • R L N • L S P T A E R N • • S A O C T E C S O H • T U E D N S R S M C O E U • E S C M D I M • A E I E A T N M R E T S S • A • R E & R • D D S K • U E U C TI P A N P T G L • I IO SALES E R N S A • L N G O I s • N ST ITU TIONS (GRI 102-16, 102-4, 106) NET SALES 32 COUNTRIES '18 $289,320 '19 +100 +0.9% BRANDS $291,926 194 ITALY PERU INDIA CHILE SPAIN CHINA BRAZIL RUSSIA ADJUSTED MEXICO TURKEY FRANCE PLANTS CANADA PANAMA UKRAINE ECUADOR URUGUAY MOROCCO PARAGUAY COLOMBIA PORTUGAL HONDURAS COSTA RICA COSTA ARGENTINA NICARAGUA VENEZUELA EBITDA GUATEMALA EL SALVADOR SWITZERLAND SOUTH COREA SOUTH AFRICA '18 +13,000 $31,705 UNITED KINGDOM PRODUCTS '19 +5.4% $33,427 OF AMERICA UNITED STATES +58,000 ROUTES NET MAJORITY INCOME +133,000 '18 ASSOCIATES $5,808 '19 +8.8% +3 MILLIONS $6,319 POINTS OF SALE 2019 2019 ar ar I I DEAR GRUPO BIMBO SHAREHOLDERS: GRUPO BIMBO We have learned to look closely at our consumers in their homes and at the 4 point of sale, for opportunities that a global economy has to offer, and at 5 the evolution that this planet and the talent of new generations demand. In 2019, looking further produced several accomplishments: • We achieved revenue of 292 billion pesos, grew EBITDA by 5.4% with good performance in most regions, expanded by 40 basis points our return on equity and continued to de-lever our balance sheet • We strategically leveraged successful products, replicating them in other geographies, like Little Bites in 5 countries and Pinguinos in 18 countries • We continued to invest in our health and wellness portfolio, imple- (GRI 102-14, 102-15, 102-32, 201:103-1, 103-2, 103-3) menting new nutritional guidelines and clean label solutions, such as our “No Added Nonsense” Oroweat bread in the U.S. Throughout our history, we • We focused on having the right portfolio of brands and products in ev- ery market; in 2019 Sara Lee became a billion-dollar brand and Takis have strived to look further, became a 500 million-dollar brand to look beyond the present ... • We captured growth opportunities, by integrating strategic acquisi- tions like Mankattan in China and Nutrabien in Chile • We invested nearly US$680 million in capital expenditures, focused ... and anticipate the opportunities available on increasing our production efficiency and capacity, streamlining our distribution network with one state of the art distribution center to us in markets around the world, in Mexico City as well as targeted IT investments such as the imple- establishing Grupo Bimbo as the world’s mentation of Oracle in the cloud. leading baking company. As we begin 2020, we are pursuing the following initiatives: “We are commited to the planet, that is the reason for our concern with technological developments aimed at reducing emissions with electric and hybrid vehicles, in biodegradable and 2019 compostable packaging”. 2019 ar ar I I • We made investments such as electric and hybrid vehicles to de- I am pleased with how we have started 2020. However, we are now crease emissions, also in biodegradable and compostable packag- facing a very challenging global environment in the midst of the ing to reduce our environmental footprint, as well as in projects to COVID-19 pandemic. Is certainly the most serious health crisis we diminish our water footprint and in waste management through- have ever faced. out our supply chain. We have a great responsibility with our millions of customers and GRUPO BIMBO GRUPO BIMBO As we begin 2020, we are pursuing the following initiatives: consumers: reinforce our commitment within our Beliefs, Purpose, and Mission to keep nourishing a better world. • We are re-inventing our go-to-market strategy, optimizing our di- rect store distribution network to serve new profitable channels We sincerely thank our more than 133,000 associates for their 6 • We are leveraging technology, by: engagement and commitment. Grupo Bimbo has a bright future full 7 - Utilizing our route to market platform to drive productivity of opportunities; as we look further, we will continue to transform and improve execution at the point of sale, ourselves in order to capture them and better serve our consumers all - Harnessing revenue growth management tools to maximize over the world. our revenue and market share, and - Developing advanced analytics capabilities to enable data driven decisions • We are putting in place cost control efforts to reduce our selling, general and administrative expenses by: - Requiring Zero Based Budgeting Thank you for your support and trust. - Scaling-up global procurement - Proactively investing in restructuring opportunities - Deploying digital tools throughout our supply chain. • We continue to attract and develop talent, valuing our associates Daniel as the center of our culture, investing in the development of their capabilities, reinforcing our safety measures and promoting diver- Servitje sity and gender equality • We promote the well-being of society through projects that en- courage physical activity, healthy lifestyles and eating • We reinforce our ongoing commitment to our stakeholders, our communities, the planet, and to the ten principles of the United Nations Global Compact, as well as to the 17 Sustainable Develop- ment Goals of the United Nations Development Program. Chairman of the Board and CEO MORE THAN GLOBAL... 2019 2019 ar ar I LOCAL I BRANDS IN GLOBAL MARKETS GRUPO BIMBO 14 GRUPO BIMBO WE RESPOND TO THE NEEDS OF MARKETS 8 LOCALLY, IMPLEMENTING 9 1.THE BEST GLOBAL PRACTICES SUSTAINABLE STRATEGIES IN OUR SUPPLY CHAIN 16 GOBAL MARKET SHARE 10 GLOBAL OUR MAIN MARKET CATEGORIES 2019 2019 ar SHARE ar I I SLICED ENGLISH 1BREAD 6 MUFFINS GRUPO BIMBO GRUPO BIMBO To look ahead is to look at our consumers, understand and meet their needs with BAGELS 10 nutritional and affordable products that 11 are always available in more than three 7 BUNS2 million points of sale, in the 32 countries & ROLLS where we are present. To be Glocal is to take the best from 3 8 TORTILLAS AND other markets to new countries, use the PASTRIES FLATBREADS synergies of our operation and make SALTY technology our best ally, all with a single SNACKS purpose in mind: CAKES4 9 To nourish a better world. Today we are global leaders COOKIES in the baking industry. 5 10 CONFECTIONERY +US$250 2019 2019 ar OUR LEADING ar I I BRANDS GRUPO BIMBO +US$1,000 GRUPO BIMBO 12 +US$100 13 +100 +US$500 BRANDS Internal information based on estimated sales by brand during the last 12 months as of December 31, 2019. WE REPLICATE OUR SUCCESSFUL BRANDS THROUGHOUT THE WORLD (GRI 106, 102-2) 2019 2019 ar ar I CANADA I GRUPO BIMBO GRUPO BIMBO USA 14 15 MEXICO COLOMBIA SPAIN MOROCCO SCALE AND DISTRIBUTION VALUE OF A INNOVATION PRODUCT SUCCESS GLOBAL EFFICIENCY SOLID BRAND CAPACITY QUALITY FACTORS 1DIVERSIFICATION 2 3 4 5 SUPPLY CHAIN (GRI 102-9) 2019 2019 ar We work very closely and ar I efficiently with farmers I and suppliers to optimize our environmental and social performance GRUPO BIMBO GRUPO BIMBO 16 VALUE 17 CHAIN 1. SUPPLY AUDITED SUPPLIERS OF RAW MATERIALS 2. For this reason we have established valuable internal and external OPERATIONS alliances throughout our supply chain, from our suppliers and distribu- 194 PLANTS IN 32 COUNTRIES tors to our customers and consumers.