��������������� ����������������������������������������� � ������������������������� ������������������������� ������������������ ������ ������������������������ ������������������ ������������������� ���� ����������� ����� ������������������������������������������������������������������ ������������������������������������� ���������� � ���������������������������������������� � ����������������������������������������������������������������������� ����������� � � ������������������������ � ��������������������������������������������������������������������� ������������������ ���������������� Grupo Bimbo is the leading baking company in the Americas and one of the largest in the world, with 71 plants and four divisions located in Business units 14 countries. Product lines include: bread and sweet baked goods, buns, cookies, BIMBO S.A. de C.V. fruit bars, pastries, packaged goods, • HEADQUARTERS: Mexico City, Mexico. tortillas, goat milk caramel (cajeta), • MAIN PRODUCTS: Packaged bread, buns, pastries, sweet rolls, cookies, tortillas, tostadas salted snacks and candies. and fruit bars. • MAIN BRANDS: Bimbo, Marinela, Tia Rosa, Wonder, Milpa Real, Lara, Suandy, Lonchibon, Del Hogar, La Mejor, Monarca, Breddy and Tulipan. Group Profile BARCEL S.A. de C.V. • HEADQUARTERS: Lerma, Mexico. • MAIN PRODUCTS: Sweet and salted snacks, confectionery products, chocolates, goat milk caramel (cajeta) and gummies. Grupo Bimbo manufactures more • MAIN BRANDS: Barcel, Ricolino, Coronado, Juicee Gumme and Parklane. than 4,500 products and manages approximately 100 well-known BIMBO BAKERIES USA, INC. brands. In addition, it has one of the • HEADQUARTERS: Ft Worth, Texas. most extensive distribution networks • MAIN PRODUCTS: Packaged bread, buns, in the world, covering 30,000 routes bagels, english muffins, pastries, sweet rolls, cookies, tortillas and pizza crusts. with over 29,000 vehicles. Th is makes • MAIN BRANDS: Oroweat, Mrs Baird’s, Bimbo, Entenmann’s, Thomas’, Tia Rosa, Marinela, it one of the largest transportation Francisco, Old Country, Boboli and Webers. fl eets in the western hemisphere, serving more than 1,300,000 points LATIN AMERICA DIVISION (OLA) of sale. Th e Group employs over • HEADQUARTERS: Buenos Aires, Argentina. 74,000 people. • MAIN PRODUCTS: Packaged bread, buns, pastries, cookies, alfajores, tortillas and pizza crusts. • MAIN BRANDS: Bimbo, Marinela, Pullman, Plus Vita, Ideal, Holsum, Trigoro, Pyc, Bontrigo,Cena and Fuchs. ����� ����� + 7.4% ����� Net Sales Grupo Bimbo around the world ����� MEXICO ���� � 33,197 35,651 millions of pesos 2003 2004 ������� ������� + 0.7% ������ Net Sales ������ BBU ������ Bimbo Bakeries USA ��� 13,344 13,442 millions of pesos 2003 2004 ���� ���� + 4.4% ���� Net Sales ���� OLA ��� Organización Latinoamérica � 3,405 3,556 millions of pesos 2003 2004 67% Sales Breakdown (cities) MEXICO Me xi co Chihuahua Mexico City Gómez Palacio Guadalajara Hermosillo Irapuato Mazatlán Percentage of consolidated net sales Mérida Mexicali Monterrey Puebla San Luis Potosí Tijuana Toluca Veracruz Villahermosa % 26 United States (cities) Sales Breakdown Abilene Denver Escondido Fort Worth Houston Los Angeles Lubbock Montebello BBU Bimbo Bakeries USA Portland Tampa Sacramento San Antonio San Francisco Waco Percentage of consolidated net sales Latin America (countries) 7% Argentina Brazil Chile Colombia Costa Rica El Salvador Guatemala Honduras Sales Breakdown Nicaragua Peru Venezuela OLA Organización Latinoamérica Europe (country) Percentage of Czech Republic consolidated net sales 1 � ���� � Net Sales ������� ���� � Earnings per Mexico 67% Operating ���� Income Share BBU 26% ��� +18.6% +146.7% OLA 7% � � 2004 3,485 4,136 millions of pesos 0.88 2.18 pesos ��� 2003 2004 2003 2004 Total Assets ��� ��� ��� Net Debt / ROIC Mexico 60% Stockholders´ Equity ��� BBU 29% ��� OLA 11% ��� ��� 2004 0.5 0.3 times 9.6% 13.3% % 2003 2004 2003 2004 Financial and operating highlights 2003 2004 Change • NET SALES 49,100 51,545 5.0% Mexico 33,197 35,651 7.4% BBU 13,344 13,442 0.7% OLA 3,405 3,556 4.4% • OPERATING INCOME 3,485 4,136 18.6% Mexico 4,067 4,484 10.3% BBU (442) (294) -33.5% OLA (158) (84) -46.8% • EBITDA 5,052 5,746 13.7% Mexico 5,143 5,554 8.0% BBU (120) 46 NA OLA 11 106 NA • MAJORITY NET INCOME 1,041 2,569 146.7% Total Assets 33,527 33,904 1.1% Total Liabilities 16,948 16,543 -2.4% Shareholders´ Equity 16,579 17,361 4.7% Net Debt / EBITDA 1.5x 0.8x Net Debt / Stockholders´ Equity 0.5x 0.3x ROA 3.1% 7.6% ROE 6.3% 14.8% ROIC 9.6% 13.3% Earnings per Share (pesos) 0.88 2.18 146.7% Total Shares Outstanding (´000s) 1,175,800 1,175,800 Share Price at year-end (pesos) 20.43 28.16 37.8% All figures herein are expressed in millions of constant Mexican pesos as of December 31, 2004, unless stated otherwise, and have been prepared according to Generally Accepted Accounting Principles in Mexico; all percentage changes are expressed in real terms. Consolidated results do not include inter-company transactions. 2 Message from the Chairman of the Board To our shareholders: Operations in the United States are very important to the Th e Company, accounting for just over 26% of total sales. We are I am pleased to report to you that the Grupo Bimbo´s confi dent that this division can turn in more positive results performance in 2004 was highly satisfactory. next year. Th ese are the kinds of results we were expecting when we Th e results from Latin America would have been better if not began the far-reaching internal reorganization, and the for Brazil, where we are still facing serious diffi culties, and intensive process of modernizing the Company´s systems 2004 absorbing the restructuring expenses for the Argentine around the world. operations. Th e results from Chile, Peru, Venezuela and the Central American countries were positive. We know there is still much to do, but we are pleased to see our expectations being met. Although the Latin America Division (OLA) covers 11 countries, it only accounts about 7% of the Company sales. Consolidated sales totaled 51.55 billion pesos in the year, 5% In the short term, however, we are expecting a signifi cant more than in the previous fi scal year. pickup in our results in Argentina, Brazil and Colombia. Operating income rose to 4.15 billion pesos, a 19% increase Th e most signifi cant developments in the Company´s over 2003. operations include: Net earnings, including extraordinary items (mainly tax We focused much of our eff ort on the opening of Barcel´s refunds) totaled 2.57 billion pesos, a 147% rise over 2003. Mérida plant and Fripan´s plant in Toluca, and as well as on the expansions of Ricolino´s plant in San Luis Potosí, and of Th e increase in sales was generated primarily by the 7% growth Valencia plant in Costa Rica. in our Bimbo and Barcel divisions. Latin America Division (OLA) improved its revenues by 4% while our operations in We concluded the announced shutdown of the Dallas plant, the United States were virtually unchanged, with a modest 1% the assets acquired from George Weston Ltd., and closed growth in constant peso terms and 3% in nominal dollars. plants in La Paz, Baja California in Mexico; Alajuela in Costa Rica; La Mejor in Guatemala; and Tia Rosa in Ohio. Bimbo and Barcel accounted for all of the profi ts. Our U.S. operations substantially narrowed their losses from the During the course of the past fi scal year, we negotiated the preceding year, but still lost a little over 24 million dollars, acquisition of Joyco de México, a leading producer of various while our results in Latin American division were a little candy products like Duvalín, Bocadín and Lunetas. Th is more than 14 million dollars in the negative. transaction was completed in May. Joyco’s sales total about 3 Message from the Chairman of the Board 500 million pesos, and the company was bought for 290 In addition, we continued our traditional practice of million pesos. We had anticipated, and in fact have already community involvement by supporting social programs with benefi ted from some important synergies that will allow us an emphasis on education and rural development. to completely recover our investment in the short term and deliver positive results. Finally, I would like to express my gratitude to our Board Members and shareholders for their continued interest As a result of these changes, we are now able to run 71 plants and trust. more effi ciently, and cover 30,000 distribution routes with our transportation vehicles. Th anks to our strong operating results, the Company ended the year with substantial cash in treasury. Even after setting aside reserves for future acquisitions and prepaying as much debt as possible, we were able to declare an extraordinary dividend that was very well received by the fi nancial community, and of course, by our shareholders. Roberto Servitje One aspect of central importance to the Company is remaining Chairman of the Board true to our fundamental objective of being highly productive and people oriented. I am therefore pleased to report that the annual review of all our labor unions´ contracts were amicably concluded with favorable conditions for all parties. We are also pleased with the progress of “Reforestamos México”, an organization we recently helped found that has already completed a number of successful programs. Th e organization has ambitious plans for the short term that will undoubtedly contribute signifi cantly to environmental protection and preservation in Mexico. 4 Message from the Chief Executive Officer Grupo Bimbo’s operating and financial indicators