S&P boosts Bimbo

S&P said it raised its ratings for Grupo Bimbo SAB de CV and its senior unsecured notes to BBB+ and mxAAA from BBB and mxAA+, respectively. The agency also raised Bimbo's perpetual subordinated bond rating to BBB- from BB+.

“Bimbo has successfully expanded its EBITDA margin by more than 300 basis points (bps) from about 10% a decade ago. In our view, Bimbo's extensive and efficient production and distribution networks, advanced analytics, pricing capabilities, and strict cost controls have been key for such margin improvement. Although we still expect sticky inflation on key input costs at least through 2023, we believe that Bimbo's EBITDA margin still has room to gradually expand toward 14%, including a 30-basis point (bps) growth year-over-year, in the next two years. In our view, margin growth will be driven by its pricing capabilities–although moderating versus 2022 to ensure steady volume growth–cost efficiencies, and productivity gains from past and ongoing investments,” S&P said in a press release.

Additionally, the agency said it projects Bimbo's revenue base to grow about 6% annually in 2023 and 2024.

The outlook is stable.

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