Gruma (GRUMA) Q3 2024 earnings summary

Executive summary

• Consolidated EBITDA grew 3% year-over-year, with strong performance in Better For You products and international segments, despite a 4% sales decline and lower U.S. food service volumes.

• Global retail tortilla business and innovation in health-oriented products drove growth, while Europe and Asia/Oceania delivered strong results despite distribution and geopolitical challenges.

• Net sales reached $1.6 billion in Q3 2024, with non-Mexican operations contributing 74% of sales.

• Gruma USA, GIMSA (Mexico), and Gruma Europe remain leading subsidiaries with strong market positions.

Financial highlights

• Q3 2024 consolidated volumes decreased 1% to 1,086 thousand metric tons; sales declined 4% to $1,623.4 million; EBITDA rose 3% to $288.0 million, with a 17.7% margin.

• U.S. volumes contracted 2% and revenues declined 2%, but EBITDA grew 3% to $191.6 million.

• GIMSA (Mexico): Flat volume, net sales down 1%, EBITDA up 20% to $50.9 million; margin expansion aided by cost efficiencies and insurance claims.

• Europe: Net sales up 5%, EBITDA up 45% to $17.1 million, despite corn milling contraction.

• Central America: Volume up 6%, net sales up 10%, EBITDA up 48% to $15.9 million, with a 16% margin.

Outlook and guidance

• Guidance unchanged: flat sales and volumes, with a 120 basis point margin expansion expected.

• U.S. food service volumes expected to recover by Q1 2025; logistics costs in Mexico seen as temporary, while U.S. and European logistics costs may persist.

• Continued focus on innovation, especially in Better For You, and expansion in Europe, Asia/Oceania, and Central America.