“TORTILLA CONSUMPTION IN THE U.S. DRIVES GRUMA RESULTS AS OF Q320: SALES UP 17%, EBITDA UP 20%, NET PROFIT UP 26%”.

• Net sales totaled MXN 23.473 billion while operating income stood at MXN 2.998 billion in Q320.

• EBITDA was MXN 3.954 billion, and the EBITDA margin stood at 16.8%.

• Net sales and EBITDA from operations outside of Mexico represented 77% and 82% of the consolidated figures, respectively.

• The company invested USD 50 million in Q320, primarily in its operations in the U.S., Mexico, and Europe.

• Gruma’s net debt in Q320 decreased by 4% vs. Q220, to stand at USD 1.46 billion. Net Debt to EBITDA is 1.7x.

Mexico City, October 28, 2020. At the end of this year’s third quarter (Q320), Gruma’s results benefited from increased consumption of tortillas in households primarily in the United States, particularly among the non-Hispanic community. Preferences for healthier food products such as those offered by Gruma and the versatility of tortillas to prepare a variety of dishes have driven consumption increase in the USA.

In the United States, net sales grew 10% in U.S. dollars and 24% in Mexican pesos, driven primarily by the demand for tortillas in supermarkets and grocery stores, as the COVID-19 pandemic strengthened the trend of more people eating tortillas at home, as consumers continue to stock their pantries during the pandemic. The company’s sales also benefited from the exchange rate and the combination of higher value products on the market. 

Some of the company’s high-value products include Super Soft low carb and gluten-free wheat tortillas fortified with proteins and preferred by consumers looking for healthy alternatives, and other product presentations introduced by Gruma. 

It should be noted that the Northwest region of the United States, including Massachusetts, Michigan, New York, Ohio, Pennsylvania, and Washington DC, registered the strongest increase in Gruma’s annual sales volumes to stand at 27%.

The company, which maintained its growth trend in the reported quarter, believes that these factors will continue to drive the tortilla industry’s expansion on the international level at an even faster pace.

Financial results

At the end of Q320, sales volumes for the global leader of wraps and corn and flour tortilla production worldwide remained stable at 1,053 metric tons.

The company’s net sales stood at MXN 23.473 billion, 17% above Q319, driven by higher prices, primarily for Gruma U.S. products and the dollar’s strength against the peso.

Gruma is becoming increasingly internationalized. In Q320, sales from operations outside of Mexico represented 77% of the total.

As a percentage of Gruma’s net sales, the cost of sales went from 61% to 62.9%, driven primarily by better sales in the United States. In absolute terms, the cost of sales was up 14% to MXN 14.321 billion, due to the strength of the dollar over the peso and, to a lesser degree, to the increase in costs at Gruma U.S. and Grupo Industrial Maseca, as well as the extraordinary costs generated by the COVID-19 pandemic. Globally, these expenses reached MXN 196 million during the reported period.

Gross profit reported by Gruma in Q320 was MXN 9.152 billion, 23% higher than the amount reported in Q319. In comparison, the gross margin grew from 37.1% to 39%.

Operating profit of the world’s leading wrap, tortilla, and corn flour producer, increased 21% compared to the same quarter of 2019 to stand at MXN 2.998 billion while operating margins improved to 12.8% from 12.3%.

The multinational’s EBITDA at the end of Q320 grew 20% compared to the same quarter last year to stand at MXN 3.954 billion, while EBITDA margins improved to 16.8% from 16.5%.

Gruma reported MXN 1.645 billion in net profits for the period, 26% higher than net profits reported in the same quarter of 2019.

Majority Net Income stood at MXN 1.645 billion, 26% higher than the amount reported in Q319, due to better operating performance, the strength of the U.S. dollar against the Mexican peso, and a reduction in interest expenses.

The Mexican multinational’snet debt in Q320 dropped 4% compared to Q220 to stand at USD 1.46 billion. Net Debt to EBITDA is 1.7x.

During the third quarter of the year, Gruma’s capital investments totaled USD 50 million; that is, MXN 1.103 billion,primarily on

1)    Expanding capacity at its plant in Dallas, Texas, in the United States to add new production lines for corn tortillas, wheat tortillas, and flatbreads.

2)    Ecological improvements at the cornmeal plant in Evansville, Indiana, in the United States.

3)    Expansion of the tortilla plant in Spain.

4)    Capacity expansions to produce wheat tortillas and snacks at the tortilla plant in Monterrey, Mexico.

5)    Maintenance and general technological updates across the company.

Thanks to Gruma’s positive results, the company did well on the Mexican Stock Exchange between Q319 to Q320, as its share price wentfrom MXN 201.94 to MXN 245.05, for an annual growth rate of 21.3%.