Sigma Foods (SIGMAF) Q2 2024 earnings summary

Executive summary

• Consolidated results exceeded expectations in Q2 and H1 2024, 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 completed a $75 million annualized savings plan and advanced cost reduction initiatives, helping offset industry headwinds.

• Sigma posted its lowest net leverage ratio in nearly 11 years, supported by debt reduction and non-core asset sales.

• Sigma appointed Juan Ignacio Amat as CEO of Sigma Europe to drive profitability.

Financial highlights

• 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.

• Alpek's accumulated comparable EBITDA was $312 million in H1, on track for full-year guidance of $600 million.

• Consolidated revenues reached $4,221 million in Q2 2024, up from $4,197 million in Q1 2024.

• 2Q24 EBITDA was $445 million, up 23% year-over-year and 5% sequentially.

• Net debt decreased by $117 million in Q2 2024 compared to Q1 2024.

Outlook and guidance

• 2024 consolidated EBITDA guidance raised 5% to $1.59 billion; revenue guidance up 1% to $16.78 billion.

• Sigma's full-year revenue guidance revised to $8.85 billion and EBITDA to $1 billion, up 2% and 9% from original projections.

• 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.

• Sigma expects continued strong performance, with margin improvement opportunities and capacity expansions planned in key regions.