Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
FOR THE THIRD QUARTER ENDED AS OF SEPTEMBER 30, 2015
BACHOCO INDUSTRIES
(Translation of Registrant’s name into English)
Avenida Tecnológico #401
38010 Celaya, Guanajuato, Mexico
(Address of principal office)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
(Check One) Form 20-F x Form 40-F ¨
(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission
pursuant to Rule 12g-3-2(b) under the Securities Exchange Act of 1934.)
(Check One) Yes ¨ No x
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82_
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Industrias Bachoco, S.A.B. de C.V. (Registrant)
/s/ Daniel Salazar Ferrer, CFO
Date: October 22, 2015
Industrias Bachoco Announces Third Quarter 2015 Results
CELAYA, Mexico, Oct. 22, 2015 /PRNewswire/ -- Industrias Bachoco, S.A.B. de C.V., "Bachoco" or "the Company", (NYSE: IBA; BMV: Bachoco) announced today its unaudited results for the third quarter ("3Q15") and accumulated ("9M15") 2015 results ended September 30, 2015. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS"), and are presented in nominal million Mexican Pesos ("$").
HIGHLIGHTS - 2015 vs. 2014
CEO COMMENTS
Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "For Bachoco, this third quarter behaved as, what we can call, a typical third quarter for a year. Which, seasonally, use to be a weak one. The comparison with the 3Q14 is difficult, as last year did not present this behavior.
In general, even when we observed a good level of demand in the Mexican markets during the quarter, we also saw a stronger supply in our main product lines. At the same time, there was a strong supply in our US markets; where leg quarter prices were affected due to weaker exports.
For the quarter, our total sales continue increasing and volume in all of our product lines continued growing in both markets, so, we increased our total sales in 6.8%, and reached a two-digit EBITDA margin.
Our US operation continues delivering positive results while integrating our July's acquisition of the breeding assets in the state of Georgia, USA.
For the 9M15, we increased our total sales by 12.0%, achieving an EBITDA margin of 14.9%, same margin when compared with the equivalent period of 2014.
The Company remained in a healthy financial condition with a net cash of $10,303.7 million, as the cash and equivalents has increased 15.5% since the beginning of the year."
EXECUTIVE SUMMARY
The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2014.
QUARTERLY
RESULTS
NET SALES BY GEOGRAPHY |
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In millions of pesos |
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| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Net sales |
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| 11,335.6 | 10,615.0 | 720.6 | 6.8 |
Net sales in Mexico |
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| 8,551.8 | 8,481.0 | 70.9 | 0.8 |
Net sales in the U.S. |
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| 2,783.8 | 2,134.1 | 649.7 | 30.4 |
NET SALES BY SEGMENT |
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In millions of pesos |
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| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Net sales |
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| 11,335.6 | 10,615.0 | 720.6 | 6.8 |
Poultry |
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| 10,252.4 | 9,705.6 | 546.8 | 5.6 |
Other |
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| 1,083.3 | 909.5 | 173.8 | 19.1 |
NET VOLUME SOLD BY SEGMENT |
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In tons |
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| Change | ||
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| 3Q15 | 3Q14 | Volume | % | ||
Total sales volume: |
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| 512,347 | 452,957 | 59,390 | 13.11 | ||
Poultry |
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| 403,185 | 368,713 | 34,472 | 9.35 | ||
Others |
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| 109,162 | 84,244 | 24,918 | 29.58 | ||
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The Company's 3Q15 net sales totaled $11,335.6 million, $720.6 million or 6.8% more than $10,615.0 million reported in 3Q14. The increase is a result of more volume sold in all of our product lines during this quarter; partially compensate by weaker poultry prices than the same quarter of 2014.
In 3Q15, sales of our U.S. operations remained strong and represented 24.6% of our total sales; this compares with 20.1% in 3Q14.
GROSS PROFIT |
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In millions of pesos |
| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Cost of sales |
| 9,195.4 | 8,138.2 | 1,057.2 | 13.0 |
Gross profit |
| 2,140.2 | 2,476.8 | (336.6) | (13.6) |
Gross margin |
| 18.9% | 23.3% | - | - |
In 3Q15 the cost of sales totaled $9,195.4 million, $1,057.2 million or 13.0% higher than $8,138.2 million reported in 3Q14; the increase in cost of sales is mainly attributed to more volume sold.
The gross profit was $2,140.2 million with gross margin of 18.9% in 3Q15; this profit is lower than gross profit of $2,476.8 million and gross margin of 23.3% reported in 3Q14.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A") | |||||
In millions of pesos |
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| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Total SG&A |
| 1,088.9 | 945.2 | 143.7 | 15.2 |
Total SG&A expenses in 3Q15 were $1,088.9 million, $143.7 million or 15.2% more than the $945.2 million reported 3Q14. This increase is mainly attributed to higher volume.
Total SG&A expenses as a percentage of net sales represented 9.6% in 3Q15 compared to 8.9% in 3Q14.
OTHER INCOME (EXPENSE), NET | |||||
In millions of pesos |
| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Other income (expense), net |
| (35.6) | 0.6 | (36.2) | (5,635.3) |
This item mainly includes the sale of unused assets as well as hens and other by-products. We record such sales as expenses when the sale price is below the book value of those assets.
In 3Q15, we recorded other expenses of $35.6 million, compared with other income of $0.6 million reported in 3Q14.
OPERATING INCOME |
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In millions of pesos |
| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Operating income |
| 1,015.8 | 1,532.2 | (516.5) | (33.7) |
Operating margin |
| 9.0% | 14.4% | - | - |
Operating income in 3Q15 totaled $1,015.8 million; an operating margin of 9.0%, a decrease when compared to operating income of $1,532.2 million and a 14.4% operating margin reported in 3Q14.
The lower operating income was mainly attributed to lower gross profit, and higher SG&A's than in 3Q14.
NET FINANCIAL INCOME |
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In millions of pesos |
| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Net Financial Income |
| 92.4 | 53.1 | 39.3 | 74.0 |
Financial Income |
| 131.6 | 85.8 | 45.8 | 53.4 |
Financial Expense |
| 39.2 | 32.7 | 6.5 | 19.9 |
In 3Q15, the Company reported net financial income of $92.4 million, compared to income of $53.1 million reported in the same period of 2014, mainly due to higher financial income as we have higher levels of cash.
TAXES FOR THE PERIOD |
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In millions of pesos |
| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Total Taxes |
| 321.8 | 461.1 | (139.3) | (30.2) |
Income tax |
| 66.4 | 226.7 | (160.3) | (70.7) |
Deferred income tax |
| 255.5 | 234.5 | 21.0 | 9.0 |
Total taxes for the 3Q15 were $321.8 million, compared with total taxes of $461.1 million in the same period of 2014.
NET INCOME |
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In millions of pesos |
| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Net income |
| 786.3 | 1,124.2 | (337.9) | (30.1) |
Net margin |
| 6.9% | 10.6% | - | - |
Basic and diluted income per share1 |
| 1.31 | 1.87 | - | n/a |
Basic and diluted income per ADR2 |
| 15.69 | 22.47 | - | n/a |
Weighted average Shares outstanding3 |
| 599,548 | 600,000 | - | 0 |
1 In pesos | |||||
2 in pesos, an ADR equal to twelve shares | |||||
3 In thousands of shares |
The net income for 3Q15 was $786.3 million, representing a basic and diluted income of $1.31 pesos per share, compared with a higher net income of $1,124.2 million, which represented $1.87 pesos of basic and diluted income per share in 3Q14. This income represents a net margin of 6.9% and 10.6% for 3Q15 and 3Q14, respectively.
EBITDA AND ADJUSTED EBITDA |
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In millions of pesos |
| 3Q15 | 3Q14 | Change | |
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| $ | $ | $ | % |
Net controlling interest income |
| 783.8 | 1,123.4 | (339.7) | (30.2) |
Income tax expense (benefit) |
| 321.8 | 461.1 | (139.3) | n/a |
Result in associates |
| 2.5 | 0.7 | 1.8 | n/a |
Net finance (income) expense |
| (92.4) | (53.1) | (39.3) | n/a |
Depreciation and amortization |
| 205.8 | 209.3 | (3.5) | (1.7) |
EBITDA |
| 1,221.5 | 1,741.5 | (520.0) | (29.9) |
EBITDA Margin (%) |
| 10.8 | 16.4 | (5.6) | (34.3) |
Other expense (income) net |
| 35.6 | (0.6) | 36.2 | (5,635.3) |
Adjusted EBITDA |
| 1,257.1 | 1,740.8 | (483.7) | (27.8) |
Adjusted EBITDA Margin |
| 11.09% | 16.40% | - | - |
Net sales |
| 11,335.6 | 10,615.0 | 720.6 | 6.8 |
EBITDA in 3Q15 reached $1,221.5 million, representing an EBITDA margin of 10.8%, compared to EBITDA of $1,741.6 million in 3Q14, with an EBITDA margin of 16.4%.
The adjusted EBITDA in 3Q15 reached $1,257.1 million, representing an adjusted EBITDA margin of 11.09%, compared to adjusted EBITDA of $1,740.8 million in 3Q14, with an adjusted EBITDA margin of 16.4%.
ACCUMULATED RESULTS
NET SALES BY GEOGRAPHY |
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In millions of pesos |
| 9M15 | 9M14 | Change | |
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| $ | $ | $ | % |
Net Sales |
| 34,578.8 | 30,867.2 | 3,711.6 | 12.0 |
Net sales in Mexico |
| 26,320.4 | 24,696.4 | 1,624.0 | 6.6 |
Net sales in the U.S. |
| 8,258.4 | 6,170.9 | 2,087.6 | 33.8 |
NET SALES BY SEGMENT |
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In millions of pesos |
| 9M15 | 9M14 | Change | |
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| $ | $ | $ | % |
Net Sales |
| 34,578.8 | 30,867.2 | 3,711.6 | 12.0 |
Poultry |
| 31,369.5 | 28,168.4 | 3,201.1 | 11.4 |
Other |
| 3,209.3 | 2,698.8 | 510.5 | 18.9 |
NET VOLUME SOLD BY SEGMENT | ||||||
In tons |
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| Change | |||
| 9M15 | 9M14 | Volume | % | ||
Total sales volume: | 1,496,199 | 1,345,441 | 150,758 | 11.21 | ||
Poultry | 1,183,627 | 1,090,458 | 93,169 | 8.54 | ||
Others | 312,572 | 254,983 | 57,589 | 22.59 | ||
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During the first 9M15, net sales totaled $34,578.8 million, $3,711.6 million or 12.0% more than $30,867.2 million reported in the same period of 2014. The increase in sales is attributed to higher volume sold and prices in general.
In 9M15, sales of our U.S. operations represented 24.0% of our total sales, compared with 20.0% in 9M14.
ACCUMULATED OPERATING RESULTS |
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In millions of pesos |
| 9M15 | 9M14 | Change | |
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| $ | $ | $ | % |
Cost of Sales |
| 26,832.0 | 24,143.9 | 2,688.1 | 11.1 |
Gross Profit |
| 7,746.8 | 6,723.3 | 1,023.6 | 15.2 |
Total SG&A |
| 3,141.6 | 2,737.2 | 404.4 | 14.8 |
Other Income (expense) |
| (43.8) | (40.8) | 3.0 | 7.4 |
Operating Income |
| 4,561.4 | 3,945.3 | 616.1 | 15.6 |
Net Financial Income |
| 405.5 | 164.0 | 241.5 | 147.2 |
Income Tax |
| 1,520.4 | 1,236.6 | 283.8 | 22.9 |
Net Income |
| 3,446.5 | 2,872.7 | 573.8 | 20.0 |
In 9M15 the cost of sales totaled $26,832.5 million, $2,688.1 million or 11.1% higher than $24,143.9 million reported 9M14; the increase in the cost of sales is mainly attributable to higher volume sold.
As a result, we reached a gross profit of $7,746.8 million and a gross margin of 22.4% in 9M15, a higher result than $6,723.3 million of gross profit and a margin of 21.8% reached in the same period of 2014.
Total SG&A expenses in 9M15 were $3,141.6 million, $404.4 million or 14.8% more than the $2,737.2 million reported 9M14. Total SG&A expenses as a percentage of sales represented 9.1% in 9M15 compared to 8.9% in 9M14. This increase is mainly attribute to higher volume sold and additional expenses incurred in the implementation of projects to further improve the services we provide to our markets.
In 9M15 we had other expenses of $43.8 million, compared with other expenses of $40.8 million reported in 9M14.
The operating income in 9M15 was $4,561.4 million, which represents an operating margin of 13.2%, an improvement from an operating income of $3,945.3 million and an operating margin of 12.8% in 9M14.
The net financial income in 9M15 was $405.5 million, higher when compared to net financial income of $164.0 million in 9M14.
Total taxes were $1,520.4 million as of September 30, 2015. These taxes include $1,189.6 million of income tax and $330.8 million of deferred income taxes; this figure compares to total taxes of $1,236.6 million, which includes income taxes of $709.1 and $527.5 million of deferred income taxes in 9M14.
All the above result in a net income of $3,446.5 million or 10.0% of net margin for the 9M15, which represents $5.74 pesos of earnings per share, meanwhile in the 9M14 the net income totaled $2,872.7 million, 9.3% of net margin and $4.78 pesos of net income per share.
EBITDA AND ADJUSTED EBITDA |
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In millions of pesos |
| 9M15 | 9M14 | Change | |
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| $ | $ | $ | % |
Net controlling interest profit |
| 3,440.6 | 2,869.6 | 571.1 | 19.9 |
Income tax expense (benefit) |
| 1,520.4 | 1,236.6 | 283.8 | 22.9 |
Result in associates |
| 5.9 | 3.1 | 2.8 | n/a |
Net finance (income) expense |
| (405.5) | (164.0) | (241.5) | n/a |
Depreciation and amortization |
| 602.7 | 647.9 | (45.2) | (7.0) |
EBITDA |
| 5,164.1 | 4,593.2 | 570.9 | 12.4 |
EBITDA Margin (%) |
| 14.9 | 14.9 | 0.05 | 0.4 |
Other expense (income) net |
| 43.8 | 40.8 | 3.0 | 7.4 |
Adjusted EBITDA |
| 5,207.9 | 4,634.0 | 573.9 | 12.4 |
Adjusted EBITDA Margin |
| 15.06% | 15.01% | - | - |
Net sales |
| 34,578.8 | 30,867.2 | 3,711.6 | 12.0 |
EBITDA in 9M15 reached $5,164.1 million, representing an EBITDA margin of 14.9%, compared to EBITDA of $4,593.2 million in 9M14, with an EBITDA margin of 14.9%.
The adjusted EBITDA in 9M15 reached $5,207.9 million, representing an adjusted EBITDA margin of 15.06%, compared to adjusted EBITDA of $4,634.0 million in 9M14, with an adjusted EBITDA margin of 15.01%.
BALANCE SHEET
BALANCE SHEET DATA |
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In millions of pesos |
| Sept, 2015 | Dec. 31, 2014 | Change | |
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| $ | $ | $ | % |
TOTAL ASSETS |
| 38,827.3 | 34,793.8 | 4,033.5 | 11.6 |
Cash and cash equivalents |
| 13,817.2 | 11,961.6 | 1,855.6 | 15.5 |
Accounts receivable |
| 2,345.2 | 2,976.5 | - 631.3 | - 21.2 |
TOTAL LIABILITIES |
| 11,458.0 | 10,431.7 | 1,026.3 | 9.8 |
Accounts payable |
| 3,420.6 | 3,384.3 | 36.3 | 1.1 |
Short-term debt |
| 1,017.2 | 798.0 | 219.2 | 27.5 |
Long-term debt |
| 2,496.4 | 1,652.5 | 843.9 | 51.1 |
TOTAL STOCKHOLDERS' EQUITY |
| 27,369.3 | 24,362.1 | 3,007.2 | 12.3 |
Capital stock |
| 1,174.4 | 1,174.4 | - | - |
Cash and equivalents as of September 30, 2015 totaled $13,817.2; higher by $1,855.6 million than the level we had on December 31, 2014.
Total debt as of September 30, 2015 was $3,513.6 million, compared to $2,450.5 million reported as of December 31, 2014.
Net cash as of September 30, 2015 was $10,303.7 million, compared with a net cash of $9,511.2 million as of December 31, 2014.
CAPITAL EXPENDITURES | |||||
In millions of pesos |
| 9M15 | 9M14 | Change | |
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| $ | $ | $ | % |
Capital Expenditures |
| 1,154.4 | 826.0 | 328.4 | 39.8 |
Total CAPEX for the 9M15 was $1,154.4 million and $826.0 million in 9M14, mainly allocated toward organic growth and productivity projects across all of our facilities.
STOCK INFORMATION
As of September 30, 2015 | ||
Total Shares |
| 600,000,000 |
Total free float |
| 26.75% |
Total shares in treasury |
| 0 |
Market cap (millions of pesos) |
| $51,474 |
SHARE PRICE |
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| Mexican Stock Exchange |
| The New York Stock Exchange | ||||||
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| Ticker Symbol: Bachoco |
| Ticker Symbol: IBA | ||||||
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| In nominal pesos per Share |
| In U.S. Dollar per ADR | ||||||
Month |
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| High | Low | Close | High | Low | Close | |||
Sept-15 | 89.73 | 80.27 | 85.79 | 63.49 | 56.77 | 61.10 | |||||
Aug-15 | 79.42 | 72.72 | 79.42 | 57.79 | 50.51 | 56.83 | |||||
Jul-15 | 78.03 | 69.23 | 77.00 | 58.69 | 52.72 | 57.09 | |||||
Jun-15 | 73.07 | 70.50 | 70.50 | 56.36 | 54.11 | 54.11 | |||||
May-15 | 73.70 | 68.32 | 73.70 | 58.14 | 54.34 | 57.37 | |||||
Apr-15 | 69.69 | 64.38 | 68.32 | 54.40 | 50.87 | 53.79 | |||||
Mar-15 | 67.40 | 63.33 | 63.36 | 53.78 | 48.84 | 49.85 | |||||
Feb-15 | 64.00 | 60.20 | 63.26 | 51.58 | 48.97 | 51.02 | |||||
Jan-15 | 63.60 | 59.23 | 61.50 | 51.55 | 47.97 | 48.84 | |||||
Source: yahoo finances |
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ANALYST COVERAGE
Institution | Analyst name | |
ACTINVER | Carlos Hermosillo | chermosillo@actinver.com.mx |
BBVA BANCOMER | Fernando Olvera | fernando.olvera@bbva.com |
GBM | Miguel Mayorga | mmayorga@gbm.com.mx |
INTERACCIONES CASA DE BOLSA | Brian Flores | Ibflorese@interacciones.com |
JPMORGAN | Pedro Leduc | pedro.a.leduc@jpmorgan.com |
INTERCAM GRUPO FINANCIERO | Fernanda Simon | fsimon@intercam.com.mx |
SIGNUM RESEARCH | Emma Ochoa | Emma.ochoa@signumresearch.com |
APPENDICES
For reference, some figures have been translated into millions of U.S. dollars ("USD") using an exchange rate of $16.93 per USD $1.00, which corresponds to the rate at the close of September 30, 2015, according to Mexico's National Bank.
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||
-Unaudited- |
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| In U.S. Dollar | September 30, | December 31, |
In million pesos | 2015 | 2015 | 2014* |
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TOTAL ASSETS | $ 2,293.4 | 38,827.3 | 34,793.8 |
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Total current assets | 1,378.2 | 23,332.4 | 20,852.0 |
Cash and cash equivalents | 816.1 | 13,817.2 | 11,961.6 |
Total accounts receivable | 138.5 | 2,345.2 | 2,976.5 |
Inventories | 320.4 | 5,424.8 | 4,469.5 |
Other current assets | 103.1 | 1,745.2 | 1,444.3 |
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Total non current assets | 915.2 | 15,494.9 | 13,941.8 |
Net property, plant and equipment | 760.5 | 12,875.9 | 12,054.8 |
Other non current Assets | 154.7 | 2,619.0 | 1,887.0 |
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TOTAL LIABILITIES | $ 676.8 | 11,458.0 | 10,431.7 |
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Total current liabilities | 322.1 | 5,452.9 | 5,655.5 |
Notes payable to banks | 60.1 | 1,017.2 | 798.0 |
Accounts payable | 202.0 | 3,420.6 | 3,384.3 |
Other taxes payable and other accruals | 60.0 | 1,015.1 | 1,473.2 |
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Total long-term liabilities | 354.7 | 6,005.1 | 4,776.2 |
Long-term debt | 147.5 | 2,496.4 | 1,652.5 |
Other non current liabilities | 6.4 | 107.5 | 90.9 |
Deferred income taxes | 200.9 | 3,401.3 | 3,032.8 |
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TOTAL STOCKHOLDERS' EQUITY | $ 1,616.6 | 27,369.3 | 24,362.1 |
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Capital stock | 69.4 | 1,174.4 | 1,174.4 |
Commission in shares issued | 24.5 | 414.0 | 399.6 |
Repurchased shares | 46.0 | 778.3 | 101.1 |
Retained earnings | 1,440.1 | 24,380.8 | 22,513.2 |
Others accounts | 33.7 | 571.2 | 129.1 |
Non controlling interest | 3.0 | 50.5 | 44.6 |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,293.4 | 38,827.3 | 34,793.8 |
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*Audited |
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CONSOLIDATED STATEMENT OF INCOME |
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Third Quarter Results, ended September 30: |
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-Unaudited- |
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| U.S. Dollar |
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In millions pesos | 2015 | 2015 | 2014 |
Net sales | $ 669.6 | 11,335.6 | 10,615.0 |
Cost of sales | 543.1 | 9,195.4 | 8,138.2 |
Gross profit | 126.4 | 2,140.2 | 2,476.8 |
SG&A | 64.3 | 1,088.9 | 945.2 |
Other income (expenses), net | (2.1) | (35.6) | 0.6 |
Operating income | 60.0 | 1,015.8 | 1,532.2 |
Net finance income | 5.5 | 92.4 | 53.1 |
Income tax | 19.0 | 321.8 | 461.1 |
Net Income | $ 70.9 | 786.3 | 1,124.2 |
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Non-controlling interest | 0.1 | 2.5 | 0.74 |
Net controlling interest profit | 46.6 | 783.8 | 1,123.4 |
Basic and diluted earnings per share | 0.08 | 1.31 | 1.87 |
Basic and diluted earnings per ADR | 0.93 | 15.69 | 22.47 |
Weighted average Shares outstanding1 | 599,548 | 599,548 | 600,000 |
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EBITDA Result | $ 72.2 | 1,221.5 | 1,741.5 |
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Gross margin | 18.9% | 18.9% | 23.3% |
Operating margin | 9.0% | 9.0% | 14.4% |
Net margin | 7.0% | 6.9% | 10.6% |
EBITDA margin | 10.8% | 10.8% | 16.4% |
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CONSOLIDATED STATEMENT OF INCOME |
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Accumulated results, for the nine months ended September 30: |
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-Unaudited- |
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In millions pesos | 2015 | 2015 | 2014 |
Net sales | $ 2,042.5 | 34,578.8 | 30,867.2 |
Cost of sales | 1,584.9 | 26,832.0 | 24,143.9 |
Gross profit | 457.6 | 7,746.8 | 6,723.3 |
Selling, general and administrative expenses | 185.6 | 3,141.6 | 2,737.2 |
Other income (expenses), net | (2.6) | (43.8) | (40.8) |
Operating income | 269.4 | 4,561.4 | 3,945.3 |
Net finance income | 23.9 | 405.5 | 164.0 |
Income tax | 89.8 | 1,520.4 | 1,236.6 |
Net income | $ 317.3 | 3,446.5 | 2,872.7 |
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Non-controlling interest | 0.3 | 5.9 | 3.1 |
Net controlling interest profit | 203.9 | 3,440.6 | 2,869.6 |
Basic and diluted earnings per share | 0.34 | 5.74 | 4.78 |
Basic and diluted earnings per ADR | 4.07 | 68.9 | 57.40 |
Weighted average Shares outstanding1 | 599,508 | 599,508 | 599,940 |
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EBITDA Result | $ 305.0 | 5,164.1 | 4,593.2 |
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Gross margin | 22.4% | 22.4% | 21.8% |
Operating margin | 13.2% | 13.2% | 12.8% |
Net margin | 10.0% | 10.0% | 9.3% |
EBITDA margin | 14.9% | 14.9% | 14.9% |
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CONSOLIDATED STATEMENT OF CASH FLOWS |
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In million of pesos |
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| U.S. Dollar | September 30, | |
| 2015 | 2015 | 2014 |
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NET MAJORITY INCOME BEFORE INCOME TAX | $ 293.4 | 4,966.9 | 4,109.3 |
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ITEMS THAT DO NOT REQUIRE CASH: | - | - | - |
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ITEMS RELATING TO INVESTING ACTIVITIES: | 17.6 | 297.3 | 462.7 |
Depreciation and others | 35.6 | 602.7 | 647.9 |
Income (loss) on sale of plant and equipment | 2.1 | 36.1 | 67.5 |
Other Items | (20.2) | (341.4) | (252.8) |
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ITEMS RELATING TO FINANCING ACTIVITIES: | 5.7 | 96.5 | 106.5 |
Interest income (expense) | 5.7 | 96.5 | 106.5 |
Other Items | - | - | - |
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NET CASH GENERATED FROM NET INCOME BEFORE TAXES | 316.6 | 5,360.7 | 4,678.5 |
CASH GENERATED OR USED IN THE OPERATION: | (163.0) | (2,759.7) | (1,894.2) |
Decrease (increase) in accounts receivable | (13.6) | (230.7) | (743.0) |
Decrease (increase) in inventories | (40.8) | (690.7) | (464.1) |
Decrease (increase) in accounts payable | (111.4) | (1,885.4) | (741.3) |
Decrease (increase) in other liabilities | 2.8 | 47.1 | 54.2 |
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NET CASH FLOW FROM OPERATING ACTIVITIES | 153.6 | 2,601.0 | 2,784.3 |
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NET CASH FLOW FROM INVESTING ACTIVITIES | (87.1) | (1,475.0) | (558.5) |
Acquisition of property, plant and equipment | (68.2) | (1,154.4) | (826.0) |
Proceeds from sales of property plant and equipment | 3.2 | 54.0 | 20.0 |
Other Items | (22.1) | (374.7) | 247.5 |
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CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES | 66.5 | 1,126.0 | 2,225.8 |
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Net cash provided by financing activities: | 8.5 | 143.9 | 753.9 |
Proceeds from loans | 158.3 | 2,680.5 | 794.0 |
Principal payments on loans | (91.9) | (1,555.3) | (87.6) |
Dividends paid | (53.1) | (899.2) | - |
Other items | (4.9) | (82.1) | 47.5 |
Net increase (decrease) in cash and equivalents | 75.0 | 1,269.9 | 2,979.7 |
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Cash and investments at the beginning of year | $ 651.9 | 11,036.1 | 6,716.9 |
CASH AND INVESTMENTS AT END OF PERIOD | $ 726.9 | 12,305.9 | 9,696.6 |
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DERIVATIVES POSITION REPORT | ||||||||||
Third Quarter 2015 |
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Thousands of Mexican Pesos, as of September 30, 2015 |
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TYPE OF FINANCIAL INSTRUMENT | OBJETIVE | NOTIONAL | VALUE OF THE RELATED COMMODITY | REASONABLE VALUE | AMOUNTS DUE BY YEAR | GUARANTIES REQUIRED | ||||
3Q-2015 | 2Q-2015 | 3Q-2015 | 2Q-2015 | |||||||
Forwards and Knock out forwards. | Hedge | $ 4,554 | $ 16.93 |
| $ 15.70 |
| $ 320 | $ - | in 2015 | The deals consider the possibility of margin calls but not another kind of guarantee |
Futures for corn and soybean meal | Hedge | $ 125,901 | CORN | CORN | $ 784 | $ 25,382 | 75.3% in 2015 and 24.7% in 2016 | |||
In USD per Bushel | In USD per Bushel | |||||||||
month | price | month | price | |||||||
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| Jul-2015 | $ 4.140 | |||||||
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| Sep-2015 | $ 4.220 | |||||||
Dec-2015 | $ 3.878 | Dec-2015 | $ 4.315 | |||||||
May-2016 | $ 4.055 |
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Dec-2016 | $ 4.110 |
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SOYBEAN MEAL | SOYBEAN MEAL | |||||||||
In USD per ton | In USD per ton | |||||||||
month | price | month | price | |||||||
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| Jul-2015 | $ 359.500 | |||||||
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| Aug-2015 | $ 351.900 | |||||||
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| Sep-2015 | $ 348.300 | |||||||
Oct-2015 | $ 308.300 | Oct-2015 | $ 345.500 | |||||||
Dec-2015 | $ 309.000 |
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Jan-2016 | $ 308.200 |
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March-2016 | $ 306.700 |
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Options of Corn | Hedge | $ 52,377 | CORN | CORN | $ - | $ - | 2015 | |||
In USD per Bushel | In USD per Bushel | |||||||||
month | price | month | price | |||||||
Oct-2015 | $ 4.1250 |
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Options of soybean meal | Hedge | $ - | SOYBEAN MEAL | SOYBEAN MEAL | $ - | $ 246 | We have none at the end of the quarter | |||
In USD per ton | In USD per ton | |||||||||
month | price | month | price | |||||||
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| Aug-2015 | $ 351.90 | |||||||
Options of Heating Oil | Hedge | $ - | Heating Oil | Heating Oil | $ - | $ - | We have none at the end of the quarter | |||
In USD per gallon | In US cents per pound | |||||||||
month | price | month | price | |||||||
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| Aug-2015 | $ 1.887 | |||||||
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| Sep-2015 | $ 1.890 | |||||||
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| Oct-2015 | $ 1.904 | |||||||
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| Nov-2015 | $ 1.922 | |||||||
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| Dec-2015 | $ 1.941 | |||||||
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-The total financial instruments not exceed 5% of total assets as of September 30, 2015. |
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-The notional value represents the net position as of September 30, 2015 at the exchange rate of Ps.16.93 per one dollar. |
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-A negative value means an unfavorable effect for the Company. |
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PROBABLE SCENARIO
CONFERENCE CALL INFORMATION
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Third Quarter 2015 |
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Thousands of Mexican Pesos, as of September 30, 2015 |
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| PROBABLE SCENARIO | ||||
TYPE OF FINANCIAL INSTRUMENT | REASONABLE VALUE | VALUE OF THE RELATED COMMODITY | EFFECT ON THE INCOME STATEMENT | EFFECT ON THE CASH FLOW(3) | ||||
Reference Value | ||||||||
-2.5% | 2.5% | 5.0% | -2.5% | 2.5% | 5.0% | |||
Knock Out Forwards (1) | $ 320 | $16.51 | $ 17.35 | $ 17.78 | Direct | $ 2,790 | $ 434 | $ 548 |
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| -5% | 5% | 10% |
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Futures of Corn: (2) | $ 784 | $ 3.684 | $ 4.071 | $ 4.265 | The effect will materialize as the inventory is consumed | -$ 5,511 | $ 7,079 | $ 13,374 |
Futures of Soybean Meal: (2) | $ 292.9 | $ 323.7 | $ 339.1 | |||||
Options for Corn | $ - | $ 3.919 | $ 4.331 | $ 4.538 | $ - | $ - | $ - | |
Options of Soybean Meal | $ - | $ - | $ - | $ - | $ - | $ - | $ - | |
Options of Heating Oil | $ - | $ - | $ - | $ - | $ - | $ - | $ - | |
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NOTES |
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(1) The reference value is the exchange rate of Ps. $16.93 per USD as of Sept 30, 2015. |
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(2) The reference values are; the future of corn for Dec 2015, $3.8775 USD/bushel and the future of soybean meal for Oct 2015, $308.30 USD/ton. | ||||||||
All the evaluations are performed according with the corresponding future, here only the first month futures are shown. |
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(3) The Company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown. |
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-A negative value means an unfavorable effect for the Company. |
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The Company will host its third quarter 2015 earnings call, on Friday, October 23rd, 2015. The earnings call will take place at 9:00 am Central Time (10:00 am ET).
To participate in the earnings call, please dial:
Toll free in the U.S.: 1 (888) 771-4371
Toll free in Mexico: 001 866 779 0965
A current list of available local and international free phone telephone numbers: https://www.yourconferencecenter.com/AlternateNumbers/alternatenumbers.aspx?100374&t=A&o=UfGitkBNGvdkpq
Confirmation Number: 40913220
Visit the following link to access the webcast:
http://edge.media-server.com/m/p/wd2j86ts
COMPANY DESCRIPTION
Industrias Bachoco is the leader in the Mexican poultry industry, and one of the largest poultry producers globally. The Company was founded in 1952, and became a public company in 1997, via a public offering of shares on the Mexican and The New York Stock Exchange. Bachoco is a vertically integrated company headquartered in Celaya, Guanajuato located in Central Mexico. Its main business lines are: chicken, eggs, balanced feed, swine, and turkey and beef value-added products. Bachoco owns and manages more than a thousand facilities, organized in nine production complexes and 64 distribution centers in Mexico, and a production complex in the United States. Currently the Company employs more than 25,000 people.
The Company is rated AAA (MEX), the highest rating awarded by Fitch Mexico, S.A. de C.V., and HR AAA which signals that the Company and the offering both have the highest credit quality by HR Ratings de Mexico S.A. de C.V.
DISCLAIMER
The document contains certain information that could be considered forward looking statements concerning anticipated future events and performance of the Company. The statements reflect management's current beliefs based on information currently available and are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in our Annual Information Form, which could cause our actual results to differ materially from the forward-looking statements contained in this document. Those risks and uncertainties include risks associated with ownership in the poultry industry, competition for investments within the poultry industry, shareholder liability, governmental regulation, and environmental matters. As a result, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Industrias Bachoco, S.A.B. de C.V., undertakes no obligation to publicly update or revise any forward-looking statement.
Contact Information:
Maria Guadalupe Jaquez, IR
maria.jaquez@bachoco.net
T. +52(461)618 3555