Gruma (GRUMA) Q1 2025 earnings summary

Executive summary

• Delivered resilient results in Q1 2025 despite global economic uncertainty and changing U.S. consumer behavior, supported by a global footprint and diversified product lines, especially "Better for You" SKUs.

• Global leader in corn flour and tortilla production with $6.4B in sales and 75 plants worldwide as of March 31, 2025.

• Maintains strong brand awareness and top market positions across major regions, including the US, Mexico, and Europe.

• Focus on health-oriented and value-added products drives double-digit sales growth in these segments.

• Achieved 4% EBITDA growth and 17.8% EBITDA margin in 1Q25 despite U.S. economic uncertainty and weaker consumer sentiment.

Financial highlights

• Consolidated volume was 1.062 million metric tons, a 1.3% decline year-over-year.

• Net sales declined 6% year-over-year to $1.55 billion, mainly due to peso depreciation and lower U.S. food service volumes.

• EBITDA grew 4% to $276 million (8% growth excluding peso effects); net earnings rose 13% to $126 million.

• U.S. division: volume and sales declined 2% and 3% year-over-year, but EBITDA grew 6% with a 22% margin.

• Europe: sales up 7%, EBITDA up 20%, despite a 3% volume decline; retail tortilla business offset corn milling contraction.

• Central America: volumes up 2%, sales up 1%, EBITDA up 5%.

• Asia & Oceania: volumes and sales up 2%, but EBITDA down 11% due to higher costs; Australia strong, China weak.

Outlook and guidance

• Confident in delivering annual and sequential growth, maintaining original guidance for the year.

• Long-term expectations: low single-digit volume growth, mid-single-digit revenue growth, high single-digit EBITDA growth.

• Expects continued margin improvement in the US through a shift to higher-margin SKUs, plant efficiencies, and proprietary technology.

• European growth driven by increased tortilla adoption, retail focus, and potential M&A.

• Additional capacity planned in Central America to meet strong demand.