In This Article:
Release Date: April 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Alfa SAB de CV (ALFFF) successfully completed its corporate transformation, evolving into a focused food company with leading brands across 17 countries.
-
The company's credit ratings improved, with both Alfa and Sigma now rated 3B, up from 3B minus, reflecting a simplified business model and lower leverage.
-
Alfa SAB de CV (ALFFF) achieved a 5% year-over-year revenue growth in local currencies, driven by resilient volume and solid currency-neutral performance.
-
Mexico operations showed strong performance with a 12% revenue increase in local currency, driven by revenue management and volume growth in packaged meats and cheese categories.
-
The company declared a cash dividend of $83 million and reconfigured its board of directors to align with post-transformation business needs, strengthening governance with deeper consumer sector expertise.
Negative Points
-
First quarter revenues and EBITDA were down 5% and 17% respectively, compared to record high results in 2024, due to a weaker foreign exchange rate.
-
The European operations were negatively impacted by the temporary closure of the Torrent plant due to flooding, affecting production and margins.
-
Raw material cost pressures, particularly in poultry due to avian flu, have not yet been fully offset by price actions, impacting margins.
-
In the United States, first quarter volume was 3% lower year-over-year due to temporary softness in mainstream brands linked to deferred promotional cycles.
-
Latin America experienced a 16% decline in EBITDA in local currency, primarily due to higher raw material costs, despite record first quarter volume and revenue.
Q & A Highlights
Q: Can you elaborate on the volume performance in Mexico and the impact of the European operations on your results this quarter? A: Roberto Olivares, Sigma's CFO, explained that in Mexico, volume grew by 1%, with traditional channels like mom-and-pop stores performing better than modern trade. Packaged meat and cheese categories saw the most volume growth. In Europe, the impact was mainly due to the Trente plant flooding, but they expect to recover through insurance. Excluding this, EBITDA in Europe increased by 3% in local currency.
Q: When do you expect the Trente plant operations to return to normal, and what factors contributed to the margin decline in Europe? A: Roberto Olivares stated that they have redirected 75% of the Trente plant's production to other facilities and are working on recovering full capacity. The margin decline was due to seasonal effects and raw material pressures, particularly turkey, affected by avian flu. Price increases have been negotiated and are expected to improve margins in the coming quarters.