Grupo Bimbo, S.A.B. de C.V.

Good afternoon, everyone. Thank you for joining us. Connected on the line today are our CFO, Diego Gagiola, and Executive Vice President, Mark Bendix, along with several members of our finance team. During the third quarter, we delivered growth in both sales and EBITDA, and so improved sequential volume trends, driven primarily by disciplined pricing strategies, strong geographical diversification, and material operational efficiencies. At the same time, we continue to demonstrate the resilience and breadth of our portfolio by gaining or maintaining market share in five out of our six categories. In North America, we posted very solid results with three quarters in a row with sequential margin improvements. In fact, we went back to double-digit EBITDA margin due to the excellent work of our associates throughout the transformation program. Overall, this performance underscores our ability to maintain profitability and agility, adapt and compete effectively, and stay connected with consumers supported by a diversified global footprint that spans through 91 countries worldwide, including 39 where we operate directly, enabling us to navigate the challenging and fluctuating market dynamics. Despite a challenging environment in some markets, our diversified geographic footprint continues to pay off. In Mexico, while consumption was soft, the business has demonstrated notable resilience and reached the highest level of sales, while continuing to report strong EBITDA margins at above 20%, even with a very tough basis of comparison. Meanwhile, we are observing encouraging signs of recovery in North America with improving price mix dynamics and trends in core categories like buns and mainstream bread. EAA also reported extraordinary results hitting records in several metrics. Additionally, recent inorganic growth initiatives have proven highly accretive, reinforcing our strategic roadmap and strengthening our long-term value creation potential. I am proud to share that we held the 2025 Bimbo Global Race, our 10th, and thanks to more than 165,000 participants, more than 3 million slices of bread are being donated to food banks around the world. We were also recognized by Merco as the company with the best corporate reputation in Mexico for the ninth consecutive year. Now looking into the results by region, in Mexico, despite a softer economic environment, consumer environment, rather, and on top of the record results achieved in the third quarter of 2024, when we grew nearly 7%, we delivered sales growth of 0.3%. This performance reflects our ability to sustain growth even under challenging market conditions, supported by a favorable mix and continued expansion across key categories such as buns and rolls, cakes, and sweetbread goods. All channels contributed to this result with particularly strong performance in convenience and traditional, demonstrating the resilience of our portfolio and the strength of our commercial execution. During the quarter, we faced higher commodity costs, mainly due to the FX edge positions we had in place, as well as the ongoing investments we're making to drive growth, enhance operational productivity, and strengthen costs and control. And it is worth mentioning that even with a very tough basis of comparison of quarter 3-24, when we reported the highest margin ever, where we were able to maintain our margins at above 20%, so this is still a very good quarter within the top three since 2022. After a difficult August, we regained positive momentum in September, driven by press pack architecture initiatives and innovation launches. we are also advancing the transformation of our go-to-market model to serve our customers and consumers more efficiently and to fully capture the benefits of digitalization across our operations. So we remain optimistic about the near and long-term future of our operations in the country. In North America... Excluding FX, sales declined by 3.5%, reflecting continued softness in U.S. consumption and a bifurcation of consumer behavior, with some consumers trading down to more value-oriented products, while others are increasingly choosing premium offerings. We are also cycling the impact of last year's strategic exits from certain non-branded customers, which occurred in October in the U.S. and during the second quarter of 2025 in Canada. Although volumes remain under pressure, trends are improving, and we and the business is showing clear signs of stabilization. Private label performance has softened, after a strong start to the year, while our branded bread portfolio, led by Bimbo, Saralee, and our premium artisanal breads, continues to gain share. Sequentially, we saw lower sales declines, market share gains in core categories, and a positive price-mix effect, supported by disciplined revenue management and more efficient trade spending. Turning now to our transformation project, We continue to advance as planned and are now seeing tangible results. The first phase, focused on productivity, is delivering record outcomes. In fact, productivity gains are running at twice the level achieved during last year's record performance. This led to an evident margin expansion of 90 basis points and a sequential margin improvement from 7.4% in Q125 to and 9.0% in Q2 2025, going back to the double-digit margins. This transformation is enabling us to serve our customers better and more consistently. I would like to walk you through our process. This project is centered on three key pillars. The first is about right-sizing our cost base via productivity, which is where we are now. Second, becoming a better version of ourselves through enhanced revenue growth management and performance governance, and finally, expanding beyond our current core through new growth channels, new distribution models, and by addressing new markets. Looking ahead, our main challenge and opportunity lie in reigniting top-line growth. We now have better visibility and stronger alignment to achieve this, supported by the progress of our transformation initiatives. We are focused on unlocking the full potential of our brands, even amid external consumption headwinds, by capitalizing on the significant opportunities we see in our portfolio. We are seeing specifically some growing interest in more elevated experiences and more health and wellness propositions. Moving on to Latin America, excluding FX Effect, we set a record for a third quarter for net sales, fueled by robust volume and sales momentum across every organization, with sales outperformance in several countries, highlighting those within the Central America region, as well as consistent growth in Colombia, Brazil, Chile, Ecuador, and Argentina. Sales were also benefited to a lesser extent by the inorganic contribution from the acquisition of PANIFIC in Uruguay, completed in September of 2024. Adjusted EBITDA margin contracted 110 basis points, mainly due to the higher raw material costs in Brazil and Argentina. mainly related to the FX fluctuations, as well as increased general expenses due to strategic investments for future growth, including distribution improvements in Chile and Argentina. We remain fully focused on driving both growth and profitability, supported by the strength of our portfolio, the power of our brands, the agility of our route-to-market strategies, and the outstanding execution of our associates at the point of sale. leveraging as well from disciplined revenue growth management strategies to further enhance our market competitiveness. I'm also very happy to share that this month we have completed the acquisition of Wigbolt in Brazil, adding Wigbolt's trusted brands, such as Wigbolt and Seven Boys, as well as their manufacturing capabilities and distribution reach. That strengthens our portfolio and creates a strong platform for sustainable growth, enabling us to deliver even greater value to our customers, consumers, and shareholders. In Europe, Asia, and Africa, excluding FXFX, sales increased more than 17%. This performance was primarily driven by the consistent strength of Romania, the UK, India, Morocco, and the BIMBO QSR business unit, coupled with the contribution from the acquisitions we completed in the last 12 months, including Calamoligos in Romania and Dondon in the Balkans. The adjusted EBITDA margin was benefited by the strong sales performance and lower administrative expenses, along with the accreted effect from past acquisitions and lower restructuring expenses related to last year's bakery closure in Spain. We continue to see challenging 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. 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. Overall, our third quarter results were resilient, with clear signs of stabilization in key markets, such as North America. Our geographic diversification once again proved to be a significant advantage, enabling us to maintain the record margin achieved in the same quarter of last year, despite challenges in some markets. In addition, our recent acquisitions have been highly accretive to both sales and margins. further strengthening our portfolio and reinforcing our ability to deliver sustainable, profitable growth. Moving on to our balance sheet, our total debt increased 6 billion pesos as compared to the end of 2024. This was driven primarily by the acquisitions completed during the year and our CAPEX program. which reached $728 million as of the end of September. These effects were partially upset by the appreciation of the Mexican peso. Despite these strategic investments, our net debt to adjusted EBITDA ratio declined to 2.8 times. Our disciplined financial management continues to guide to guide us through a challenging macroeconomic environment. We remain focused on operational efficiency, cost control, and strategic resource allocation to protect margins and drive long-term value creation. Backed by a solid balance sheet and a recently renewed and upsized $2.35 billion committed revolving credit facility, we are well positioned to navigate evolving market conditions while staying firmly focused on sustainable growth. As shared with you previously, we anticipated a better third quarter for North America. We went back to a double-digit margin with a 90 basis point expansion. When compared to the same quarter of last year, driven by material productivity savings. Now, regarding our guidance, we are adjusting our average FX assumption by 50 cents, reflecting the recent appreciation of the Mexican peso. This stronger peso represents approximately a 200 basis impact on our top line growth. Despite this effect, and thanks to strong results of the third quarter and our confidence for the rest of the year, we are not changing our guidance. We continue to expect mid-single-digit growth in top line and flat to a slight contraction in our EBITDA margins. What we are updating is our leverage outlook. With the stronger peso, we now expect to end the year below three times, more specifically at 2.9 times, instead of our previous estimate of three times. Despite the challenges we have faced this year and the ongoing uncertainty in 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 near-term headwinds. Thank you for your time, and now we're ready to go to the Q&A session.

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