Sigma Foods (SIGMAF) Q2 2024 earnings summary

Executive summary

• Consolidated results exceeded expectations in 2Q24 and 1H24, with double-digit EBITDA growth mainly driven by Sigma's outstanding performance and operational efficiencies.

• Sigma achieved its 13th consecutive quarter of year-on-year revenue growth and record quarterly EBITDA, supported by strong consumer demand and favorable FX in Mexico.

• Alpek maintained stable volumes despite operational disruptions, completed a $75 million annualized savings plan, and remains on track for full-year guidance.

• ALFA raised its 2024 EBITDA guidance by 5% to $1.59 billion, reflecting Sigma's upward revision to a historic $1.0 billion.

• Advanced non-core asset sales and debt reduction initiatives, with Sigma posting its lowest net leverage ratio in nearly 11 years.

Financial highlights

• 2Q24 revenues were $4.20 billion, up from $4,197 million in 1Q24 and $4,106 million in 4Q23, but down 1% year-over-year as Sigma's growth offset Alpek's decline.

• 2Q24 EBITDA reached $445 million, up 23% year-over-year and 5% sequentially; Sigma's EBITDA rose 28% and Alpek's 15%.

• Comparable 2Q24 EBITDA was $433 million, up 2% year-over-year, with Sigma up 21% and Alpek down 21%.

• Net debt at quarter-end was $4.98 billion, down 2% sequentially; net leverage ratio at 3.3x.

• Sigma's Q2 2024 EBITDA reached an all-time high of $279 million, with record volume and sales in Mexico, the US, and Latin America.

Outlook and guidance

• 2024 consolidated revenue guidance raised to $16.78 billion and EBITDA to $1.59 billion.

• Sigma's 2024 EBITDA guidance increased 9% to $1.0 billion; revenue guidance raised to $8.85 billion.

• Alpek's 2024 EBITDA guidance maintained at $600 million.

• Sigma's new guidance assumes an average exchange rate of 18.5 MXN per USD for H2 2024.

• ALFA continues to focus on debt reduction and transformation, including potential Alpek spin-off.