Grupo Bimbo Aktie

Good afternoon, everyone, and welcome to Grupo Bimbo's Third Quarter 2026 Results Conference Call. [Operator Instructions] If you need a copy of the press release issued earlier today, it is available on the company's website at grupobimbo.com.

Before we begin the presentation, I would like to remind you that this call is being recorded and that the information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties and actual results may differ materially. Please refer to the detailed note in the company's press release regarding forward-looking statements.

I'll now turn the call over to Mr. Alejandro Rodríguez Bas, Chief Executive Officer of Grupo Bimbo. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining us today. With me today are our Chief Financial Officer, Diego Gaxiola; and the President of Bimbo USA, Greg Koehrsen, along with members of our finance team. Before we begin, I want to recognize our more than 152,000 associates around the world. Their commitment to serving our consumers and customers every day is what drives our performance, and I want to thank them for another strong quarter.

The third quarter demonstrated the strength and resilience of our business. Excluding foreign exchange, net sales increased 3.6%, supported by price/mix, positive volume and, to a lesser extent, recent acquisitions. Importantly, that growth translated into stronger profitability. Adjusted EBITDA margin reached 15.7%, an expansion of 100 basis points, while net margin increased 80 basis points to 3.9%. We delivered these results despite a consumer environment that remains challenging in several markets. Inflation continues to pressure household budgets, but our performance reinforces what we have long believed. Bakery and snacking are resilient. Everyday categories and our scale brands, geographic diversification and execution capabilities are powerful competitive advantages. Our focus is not simply on growing. It's on growing profitably, consistently and sustainably.

Let me turn to our regions. In North America, the recovery continues to gain momentum. Net sales grew in U.S. dollars for a third consecutive quarter, providing further evidence that our transformation is delivering results. Volumes remain soft as consumers continue to manage their spending carefully. At the same time, our sales trajectory is clearly improving, supported by stronger revenue growth management and a better marketplace execution.

We're also seeing progress where it matters most. We gained share in 4 of our 6 categories and margins improved for consecutive quarter. Our productivity agenda continues to deliver across the value chain. We're reducing waste, improving recipes and packaging, operating our plants more efficiently optimizing our manufacturing footprint and routes, strengthening, sourcing and simplifying the organization. The important point is that these improvements are structural, not temporary. We're building a more competitive, efficient and agile North America business.

We're encouraged by the progress, but we are not declaring victory. The transformation will not be completed until North America returns to sustained profitable volume growth. That remains our objective.

Mexico delivered another outstanding quarter. The business continued to grow profitably while strengthening consumer preference with contributions across categories and channels. Adjusted EBITDA margin expanded 200 basis points to 22.4%, driven primarily by a strong top line performance and a lower cost of sales, supported by a stronger exchange rate and lower waste.

EAA also delivered an excellent quarter. Almost every business in the region grew in local currency despite a demanding comparison base, while adjusted EBITDA margin expanded 110 basis points to 12.3%. So particularly strong performance across Bimbo QSR, India, the Balkans and the U.K, complemented by a small contribution from our recent acquisition, Bonel in Tunisia.

Latin America was more mixed. Most of our markets continue to show healthy sales momentum while profitability was affected primarily by Brazil. Brazil remains our priority. We're taking targeted actions to strengthen commercial execution and advanced integration of Wickbold, and we expect those efforts to increasingly contribute to performance. As a reminder, beginning next quarter, Wickbold will no longer be included in our inorganic growth contribution following its acquisition in October 2025.

Let me close with how we see the business going forward. [indiscernible] but we're also clear about what comes next. Our priority is to build volume momentum while continuing to protect and expand profitability. As we move forward 2027, we remain mindful of a more inflationary environment. But we enter it with significant strengths, a diversified geographic and category portfolio, leading brands, a strong innovation agenda, a meaningful productivity pipeline and above all, exceptional people. Those advantages give me the confidence in our ability to navigate what comes next, and continue delivering profitable, sustainable growth over the long term.

With that, let me turn the call over to Diego to take you through the financial results in greater detail.

Thank you, Alejandro, and good afternoon to everyone. We appreciate you taking the time to join us today. This quarter represents one of the clearest demonstration of the strength of our business model in recent years. We delivered broad-based growth across geographies, continued margin expansion, strong cash generation and further deleveraging, all while continuing to invest behind our brands, operations and long-term growth agenda.

Throughout the year, we have consistently delivered growth through both volume and price/mix, demonstrating not only the resilience of consumer demand for our brands, but also our ability to capture growth while maintaining pricing discipline. We believe this combination is the strongest indicator of the quality and sustainability of our growth profile. We reached a record EBITDA margin at 15.7%, a 100 basis point expansion versus last year, which is the largest third quarter improvement we have seen in more than a decade. This also marks our fifth consecutive quarter with EBITDA margins above 14%, providing further evidence that the improvements we have made across our network, manufacturing footprint, revenue management capabilities and operational execution are becoming embedded in the business.

One of the standout highlights of the first 9 months of the year was our free cash flow generation. The strong EBITDA performance together with improvements in working capital, allow us to generate approximately MXN 17 billion of free cash flow, even after investing approximately MXN 12 billion in CapEx. This strong cash generation also allow us to further deleverage the company, bringing net debt to EBITDA down to 2.4x, even after returning MXN 6 billion to our shareholders.

Moving on to our guidance. It's worth taking a step back for a moment. We started the year expecting a slight EBITDA margin expansion. And as our results came in consistently ahead of our expectations, we have raised our guidance quarter after quarter throughout the year. Today, we are raising our guidance once again, marking the third upward revision this year and reflecting both the strength of our year-to-date performance and our increasing confidence in the trajectory of our business.

So we're raising the lower end of our full year adjusted EBITDA margin guidance from 70 to 85 basis points, resulting in a new range of 85 to 120 basis points of expansion as compared to 2025. On the top line, we continue to expect net sales, excluding FX, to grow at a mid-single-digit rate, which translates into flat to a low single-digit decline in pesos.

Looking ahead to 2027, we see a number of encouraging drivers across the portfolio. We expect continued benefits from the transformation initiatives underway in North America, sustained profitable growth in Mexico, improving performance across Latin America and a continued momentum in EAA. At the same time, the investments we have made in capacity, distribution automation and digital capabilities over the last several years position us well to support future growth while enhancing productivity.

As every year, we will provide formal guidance on our fourth quarter conference quarter. On CapEX for 2026, our guidance remains in the range of $1 billion to $1.2 billion. As we mentioned on prior calls, we made a decision to push certain projects into 2027. And as a result, we now expect CapEx next year to come in somewhat above the level we will see in 2026. As we look to the future, we remain focused on the same priorities that have served us well, driving profitable growth, expanding margins, generating strong cash flow and creating long-term value for our shareholders.

We appreciate your continued interest in Grupo Bimbo and look forward to updating you on our progress in the coming quarters. Thank you for your time. Operator, please open the line for questions.

We have our first raised hand from Fernando Olvera.

Fernando Olvera of Bank of America. My first one is related to North America. As you highlighted in your initial remarks, top line has been positive for the third quarter in just lower terms. So wondering if you can elaborate where is your outlook for consumption now in the next quarter in 2027, considering that U.S. inflation is likely to continue rising amid raw material price volatility? That's the first question.

Thanks for the question, Fernando. I appreciate it. I would say the consumer environment in the United States continues to be mixed. Certainly, we see a consumer that is value conscious, especially in lower and middle income households. But categories remain resilient. Breads are staple. People are still buying brands that deliver clear value. There's a bifurcation of course, between the value-conscious consumer and the premium consumer. Both the value-conscious consumer and the premium consumer are continuing to gain traction within the market.

Our portfolio bifurcates into value mainstream and premium. We make sure that we have the right products at the right price points for each of them. So while the total environment may be mixed, we also believe that we're well positioned to activate with the various consumer segments not only for the balance of this year, but going into next year.

Okay. And my second question is related to Mexico. If you can comment how much of the gross margin expansion came from efficiencies versus lower costs? And how should we think about gross margin in 4Q in 2027? Any color would be great.

Yes, Fernando. You know that we do not provide the specifics. What I can tell you is that thanks to the hedges that we have on commodities, we still haven't faced a significant inflation on our cost of sales on the most important raw materials. On the other hand, the exchange rate helped -- you know that we have a big exposure to the U.S. dollar. The peso has been strong. We also have a hedging strategy in place. But even if you see the exchange rate that was, let's say, 6 months ago, which is more or less as a rule of top what you can contemplate in our current P&L for the quarter, we have a positive effect versus the same quarter of last year. So that is healthy.

And of course, a lot of efficiencies that have been implemented in the manufacturing process in the different plants that help also to expand together with the increase in volumes that because of the operating leverage also has a positive impact on our gross margins. So all this together gave us the expansion that we reported. Now it's still early to provide a specific guidance for 2027, even more for a segment, either Mexico or any other of the segments.

What I can tell you in advance is that 2027, we're going to face headwinds in terms of the cost of sales because of the cost of the raw materials. We have continued with our disciplined hedging strategy, but considering the cost that we have had for 2026, 2027, it's going to be a challenge. Now just to be clear, we're not providing any guidance that we're expecting a decline in margins. I'm just mentioning that it can be a negative effect and particularly for Mexico. My guess is that we will have some pressure from the exchange rate as it was a very strong peso. And as everybody knows, it has started to evaluate a little bit. But again, early to tell and early to give specific guidance.

Our next raised hand is Antonio Hernandez.

This is Antonio Hernandez from Actinver. Congrats on your results. Well, my question is regarding margin performance in the U.S., I mean, it's been quite strong expanding and our estimates. But overall, you also mentioned that the work is not done until volumes improve and get positive, right? So I wanted to add a sense on your expectations. I know you don't provide guidance per se, at least right now for next year, but overall expectations on volumes and maybe how far away are we from seeing North American operations in maybe the optimal target margin that you see?

Yes. Thank you, Antonio. I appreciate the question. First of all, let me thank the team. The progress that we've made over the last number of quarters is largely due to the incredible work that they've done. We've talked about in previous calls all the work that we've done from a cost perspective, along procurement, supply chain, our manufacturing operations to name a few. We've made changes that, as Alejandro mentioned, we believe are structural in nature. And so we feel good about the progress and the sustainability going forward.

We will continue to push all productivity levers to make sure that we're turning over every rock to ensure that we're delivering product at the most efficient way that we can for consumers. And as it relates to growth going forward, we have many opportunities that we're working on with customers. And as Alejandro said, we're not going to be satisfied until we create consistent volume growth within the U.S. And so that's what we continue to strive for with all of our customers.

Our next raised hand is from Felipe Ucros Nunez.

This is Felipe Ucros from Scotia. Quick question on U.S. margins. You're almost back to 2019 levels. But it seems to me that after the volume contractions that we have over the last 2 to 3 years, you probably have some spare capacity in there, so there is some operating leverage. And also, it seems that you've had the margin bounce back largely on lower restructuring costs. But I imagine there's a payback on margins from these projects that you've embarked on the last couple of years. So just looking at it from here, it seems like there's a lot of upside to the U.S. from this point, which was a high point before Covid. Correct me if I'm wrong here and give us some idea of where things can go. I know you can't give us exact numbers, but directionally, do you also feel like there's a lot of upside.

And then the second one on leverage. Pretty powerful effect on the lower interest costs below the lag as you continue to deleverage. I think pretax was up something like 18%. But you're already at 2.4 in previous cycles, the previous few cycles where you've levered above 3x and then come back down something around 2 to 2.5 seems to be the bottom. So are you ready to start relevering again? Or do you want to see a little more deleveraging on the balance sheet before you start looking to reaccelerate M&A?

Thank you, Felipe, for the question. So you're spot on. We believe the opportunity in the U.S., it's ready for us to take on. Most of it has come from productivity and some price mix. The reality is we have installed capacity. We are developing differentiated products according to the new trends. We are creating new offerings as we have said, we need to go out service and conquer that volume. So we do have capacity, and we're working on it, and that is our main focus, to regain volume to continue to take advantage of our capabilities.

You mentioned leverage, and we're continuously evaluating opportunities, and we will continue to do that. And when the time comes, if we find the right fit, whether it's a tuck-on or whether it's something strategic that we decide to go on, we will take advantage of that leverage.

Yes. And let me probably here complement a little bit Alejandro. I mean, we have a strong pipeline of projects, and we have been working very hard on many different targets. But we have a very disciplined strategy on the M&A front. So we have to make sure that whatever we close becomes a successful acquisition. So we don't -- I know that in the history of the company, if you look back probably in the last 20 years, you will see this cycle of getting to 2.5 or even slightly below 2.5 and then taking more debt and doing more acquisitions. But that's not really the way we're managing the capital structure of the company. I would say -- and we have mentioned this several at several times in the past.

Where we feel comfortable is having a leverage of 2.0x to 2.5x. That doesn't necessarily mean that the costs were below 2.5x or slightly below today we're going to become more aggressive or start to do bigger acquisitions. I think we have the space. Also, it's important to keep in mind that today, just to put the example to quantify the impact of the leverage ratio because of the size of the company and the EBITDA generation that we have to go back to about 3x, we will have to do like $2 billion of acquisitions, which we have never done.

So my point is, is don't -- don't necessarily expect that because we have been able to deleverage the company, we are going to go in a shopping spree and see what we can buy. We're going to continue to be very disciplined and make sure that any acquisition that we make has a strategic component, has the right value. And also, we do a very total due diligence process just to make sure that we capture the synergies, the risks and everything that has to be [indiscernible] acquisition.

Fantastic...

[indiscernible] meaning of your question, Felipe. Sorry?

No, I was saying fantastic color. Thanks so much. .

Our next raised hand is from Henrique Morello.

This is Henrique Morello from Morgan Stanley. Congratulations on the results. I have just a follow-up on the U.S. margin dynamics. Maybe similar to Mexico, I guess, you're not cycling still significant inflation in raw materials, given your hedges. But we are curious to hear if you -- this quarter are already cycling maybe some higher energy fuel distribution logistics costs or other unhedged parts of your cost structure? And how does that inflation so far compares to what you can read in terms of benefits from the restructuring that you guys have been doing in the U.S.? And thinking about the restructuring as well, if you could provide some examples or where are your -- most of your efforts right now in terms of low-hanging fruits for offsetting such [indiscernible] pressures in the next couple of quarters, that would be very helpful as well.

Yes. So Henrique, thank you for the question. Let me give you some color in the cost of sales of North America. Yes, we also have the same hedging strategy as we do for most of the markets. So still -- we're not seeing still the spot that you see on the different commodities that have gone up. So in terms of other components of inflation, we have had an impact, which is probably not fully reflected because of other efficiencies that we have been able to achieve on the manufacturing process in our operations in North America.

I would say we're seeing a bigger impact on the increase of fuel has been in distribution. The cost of transportation has gone up. This also has an impact on the cost of sales because one thing is that we hedge the commodity. The other is the embedded costs that we faced on having the transportation of the ingredients to our different production points. So it is impacting the whole strategies and initiatives that we have implemented are offsetting most of this negative impact.

Yes. And as it relates to some examples from the productivity savings that we've been able to earn over time, we've talked about the main categories in which we've achieved them. I'll give you just a flavor of some of them. We've talked about our supply chain in the past for our supply chain. It really is about taking a close look at our footprint, the way that products are flowing from bakeries through our sales centers to stores. We're looking at all of our transportation lanes from a bakery operations perspective, it's literally a bakery by bakery look at all of the opportunities that we have to become more efficient at producing the products that we produce.

From a procurement perspective, you can imagine that we're -- we've taken a hard look at all of our purchasing categories and worked collaboratively with our vendor partners to ensure that we're getting not only the highest quality products, but certainly those at the right cost.

Another -- a couple of other key components of this, and we've talked about this before, our sales disciplines, ensuring that we are providing the right product in the right amounts for every single customer and store in which we serve. And finally, part of our transformation has been reinvigorating our leadership team in Dallas. That was a move that we made at the beginning of the year. And so we have, as a leadership team, come together to be able to work more collaboratively and cross-functionally than we have previously. So that's been part of it. So hopefully, Henrique, that provides a little bit of color into the transformation.

Yes. And Henrique, also, let me add, probably forgot to mention -- in terms of another impact that we're facing in the U.S. operations as opposed to Mexico, a strong exchange rate has a negative impact in our U.S. operations. So just to give you an example, we, of course, comply with the transfer pricing regulation. So we have manufacturing in Mexico. We have a fixed markup, let's say that the cost is more or less the same, then we have to apply the markup, but the receiving product in the U.S. operations has a substantial increase in the costs seen in U.S. dollars.

Now this doesn't mean that our operations are going to be able to transfer this through increases in the market. So at the end, we have to absorb and we have a negative impact in our North American operations because of these internal trade operations that are becoming more relevant quarter-by-quarter.

Our next raised hand is from Reid Monahan.

We'll move to next raise-hand. Our next raised hand is from Alejandro Fuchs.

Alejandro Fuchs from Itau BBA. Congratulations on very impressive results. I have 2 quick ones, if I may. The first one, maybe for Greg. I want to see if you could elaborate a little bit into how much of this more cautious consumer in the U.S. and these new trends evolving in the market in terms of consumption dynamics? how much of that do you think is structural? And how much do you think maybe this is people having a tough time with purchasing power and inflation? So do we go back to how things were in the past? Or has the market changed going forward? That will be the first one.

And the second one, maybe for Diego. We just wanted to understand a little bit the interest payment line, right? When we see on a sequential basis, there was a big decrease year-over-year. Is this the new level that we should expect going forward? Or was there any type of hedging that may make this quarter a little bit...

[indiscernible]

The interest expense line it decreased a lot sequentially. So we do see if maybe there was any hedge in place there? Or is this the new level that we should expect?

Yes. Thank you very much, Alejandro. Appreciate the question. As it relates to the consumer in the U.S., I would say it would probably be over representing my understanding is to predict how sustainable these changes are. What I would say, however, is that clearly, the consumer has been moving over the last number of months and years. There's no doubt about that. And some of the things that consumers are asking for is they're asking for value, they're asking for quality. They're asking for let's say, renovation and innovation of portfolio. And so we've really grabbed on to that. As we've talked about before in terms of having the right propositions for all of the consumer cohorts in the market, whether that be value-based or more mainstream and more premium. It's important for us that we are -- we have a portfolio of solutions across various consumer cohorts. That's certainly one element.

The other element, as we've asked and we've stated publicly before, is we've been doing a pretty significant renovation within our portfolio. It's been work that we've done previously in terms of things like taking Red 3 out of products before it actually is required by the end of this year, all artificial colors are going to be removed from every single product and the vast majority, that's already true. And we are continuing to evolve our portfolio across our key brands, continuing to change the recipes that we have to continue to move towards where the consumer is going. So we feel very excited about the moves, even though the consumer is changing and their expectations have evolved over the last couple of years. We also believe that we're well positioned to be able to stay in front of those consumers and where they're going.

Yes. Alejandro. Well, you know that the net financing cost is made up of several components. In terms of the interest expense that we have, it has probably 3 components. The amount of debt which is lower, that is helping; the exchange rate exposure that we have on the interest that we pay, that it also helped during the third quarter, which is not necessarily going to be the case. In fact, my belief is that we will see some pressure in this effect in 2027 as we are a little bit more cautious on the exchange rate expectation for 2027. And there are some other items. And you probably remember that I explained the [indiscernible], which is a virtual purchasing agreement that we have for energy in some of our operations that is quite volatile as we have to recognize the difference in the mark-to-market in the cost of financing, and that also creates some volatility.

So probably, and to be clear, we don't necessarily expect this level of interest expenses to continue to be either to continue to decline or even to maintain the reported leverage.

Super clear, and congratulations again.

Our next raise hand is from Alvaro Garcia.

Alvaro Garcia from BTG Pactual. I have a couple of questions. The first one is on taxes in Mexico. There were some changes on sort of deductibility sort of in drafts for next year's budget. And I was wondering, if you could have any sort of preliminary color on whether there will be an impact to Grupo Bimbo as a result. That's my first question.

Yes. Well, you know that the proposed tax reform is still going through the approval process. We continue to assess its potential implications. And based on the proposal, as it is currently drafted, we do not currently anticipate a significant impact on our operations. There might be some things that we have to better understand and see if we have to do some things about it or if we will face a slight negative impact.

Okay. Great. That's helpful. And then on hedging, you've been very clear over the years on sort of the clear parameters your team has on procurement on sort of hedging of soft commodities for your business, and there's a specific time frame in place for that. There's obviously been a lot of volatility for some of your key input prices over the last 6 months. And my point -- I guess my question is, my understanding is that when volatility spikes to this degree, you're more likely to be on the shorter end of that range. And I guess my question is, is that true? And is that fair heading into '27 that maybe you're less covered than you would typically be heading into '27?

No, not really. I mean we probably might start to be a little bit more cautious on the tenor on the hedges that we take. But I wouldn't say that we are less hedged as any other year during this month. So I think we have a good visibility, which is the main objective of this strategy. Today, we are able to provide this visibility to the different business units, of course, not fully hedged to 2027 because that will represent 15 months, and there is -- that it's something that we never do. But just to give you an idea of the main raw materials, we already hedged almost 100% of the first half. And of course, fourth quarter is fully hedged.

Our next raise hand is from Renata Cabral.

My first one is a follow-up on Mexican operations. The company highlighted that convenience in wholesale as out in performing channels in Mexico. So my question is about the continued opportunity on those channels of growth. And as their contribution increases, should we expect a change in terms of profitability mix even before considering further productivity improvements on my first question.

Thank you, Renata. All channels grew despite that we recognized 2 of them growing a little bit more. The reality is we don't see a major change going forward. And yes, our margin expansion has come a little bit of price mix, but mostly out of productivity, and we will continue to replicate what we're doing in other geographies, which is to continue to try to compensate with productivity what we're facing going forward that we have talked, which potentially be the rise in prices.

Very clear. And my second question is about the Brazilian operations. On the initial remarks, the company highlighted the importance -- the strategic importance of Brazil. So beyond the integration costs, my question is, has Wickbold give [indiscernible] customers, channels or regions where Bimbo previously had limited penetration. And are there opportunities to consolidate distribution networks or the different -- differences in product portfolio and geographical cohorts, make those synergies more easy or difficult to capture? If you can give some color on the Brazilian operation, specifically on Wickbold.

You were spot on. Wickbold will allow us to reach places where we traditionally did not reach through the Bimbo servicing network. At the same time, we have products that we can bring from Wickbold to the Bimbo system. We have faced operating challenges, and it has taken us more time than we anticipated because, as you know, geographies, clients, portfolio are being leveraged, but it's taking more time. We do expect some more pressure as we continue to integrate these mature companies, and this will take time, but we see a meaningful opportunity that we will unlock over the many months to come to see all our products in all our geographies all the time.

Our next raised hand is from Ulises Argote.

This is Ulises Argote from Santander. Diego, I just had a follow-up there on the capital allocation comments that you were making. So with the improvement of free cash flow that you were citing and your comments on M&A, how are you thinking in terms of the potential for buybacks or incremental dividends going forward?

And then the other question that I had was, obviously, after the good results that we are seeing in North America with all of the transformation initiatives and investments that you made there. Is there any other region where you see kind of space to run a similar revamp and target kind of this improving profitability in the longer run as well?

Hi, Ulises. I would say, strategically speaking, the capital allocation of the company hasn't changed. Our first priority will continue to be to give money back into the business. Now as I mentioned, we have a lower expectation on the CapEx because we have deferred some projects, and this will have an increase on CapEx for 2027. We still believe we're going to close between $1 billion to $1.1 billion in 2026 and a little bit higher, most likely for 2027. So that is the main priority.

Now in terms of dividends, we will continue to the same strategy that we have been implementing in the last many years, which is to be able to grow our dividend slightly above inflation. And I think that we're very well positioned to do that, and we are not going to face any challenges in terms of our capital structure to be able to increase our dividends.

In terms of the buyback program, definitely, we see an opportunity we have been active in the market. We bought back 20 million shares, approximately MXN 1.2 billion in the quarter. We still have around MXN 14 billion in our legal reserve. And definitely with current valuation that it's a very good place to put our capital, so you can expect the buyback program to continue to operate.

Our next raised hand, Lucas Valera.

I have a couple of follow-ups on the U.S. operations. The first one is that you mentioned that now you have some of a leaner organization, more agile organization, now you're going to be fighting to deliver volume expansion. My question is simply, where do you see these opportunities? Is this about more the convenience channel you guys were focusing on or any other specific channel or category you see more room to grow. So if you can give us a bit more details where you're going to be focusing your go-to-market in 2027?

And then on the profitability side of the U.S., you already discussed cost trends, et cetera, but also mentioned a linear organization. So where is the margin opportunity? Is it coming from in your view, pricing or better monetizing the channels, you're already gaining penetration, maybe removing discounting, just to understand the profitability drivers beyond obviously, the natural raw material price volatility we normally see. But beyond that, how to better monetize these channels?

Yes. Thanks, Lucas. Appreciate the question. You might not be satisfied with my simple version of the answer to your first question, which is basically everywhere. Saying a little bit more, historically, our business has really been focused on what I would call large format retail. We still believe that there are opportunities for us to grow and compete effectively in the space, places where we've been maybe less penetrated on average would be small format retail and our away from home business. If you take them all together, that's effectively the entire market. And so we have teams that are actively working against all of those opportunities across our entire customer base.

As it relates to, let's say, margins going forward, I would just simply say that we're going to continue to be diligent about looking at our overall operating business and continuing to look for opportunities to remove costs out of the business and drive productivity. Yes, we will be disciplined on pricing and promotion, but the vast majority of what we see going forward is to continue to be very diligent about being as low cost on operation as we possibly can be. I hope that helps.

Our next raised hand is Regina Carrillo.

Congratulations on the results. I wanted to relate it to a previous question on market or consumer changes in the market, we are seeing a lot of private label competition across the industry. I just wanted to ask specifically for Mexico and the U.S., are you seeing this competition in the U.S., you are gaining market share and your competitors are losing market share also to private label. So I just wanted to see in which categories you are seeing this competition and how you are fighting it?

Regina, thank you for the question. We are following the consumer wherever they choose to shop. And the reality is both in Mexico and in the U.S., these channels -- these offerings are growing, and we will continue to try to gain a space there. The reality is we're positioned because we have the capability, we have the recipes. We understand the consumer, and we can provide tailored offerings for those channels. So we will continue to pursue those opportunities.

As Greg mentioned, we're trying to be not only physically everywhere, but we're trying to pursue this key consumer. We're on the one hand seeking value, but on the opposite side, they're looking for functionality and value equations. So we do see that happening. And our focus will be to capture demand more effectively in all these new upcoming segments while trying not to cannibalize serving all the market.

We would just try to raise hand from Reid Monahan again, please.

In that case, can I please hand back to Mr. Alejandro Rodríguez Bas to close the call.

Can we try just one more for Reid.

So I want to start with LatAm. We saw 15-plus percent growth ex FX, but we saw EBITDA decline slightly and EBIT nearly flat. How much of that profitability pressure kind of reflects the temporary with bulls integration costs associated with that versus underlying weakness in Brazil? And sort of how are you guys addressing the remaining underperformance in that market?

The reality is all of it is in Brazil. We see a very strong results across Latin America. We are growing, as you can see, volume in Brazil. We're trying to find the way to capture the synergies. As Renata asked us before, what is the possibility we see and we see all our products in all the corners, but it's taking time, and it's costing. And the cost of the integration perhaps is higher than what we thought it was going to be, but we're working hard on an operational turnaround and trying to sustain the strong momentum in the top line that we're getting there. So we believe that over time, profitability will improve. But right now, we're focusing in gaining preference and continue to drive volume there to become the choice.

Great. That's very helpful. And then I just have a quick follow-up on EAA. So we saw good margin expansion, EBITDA margin expansion there, despite the continued weakness in China Romania. Sort of wondering how much of the improvement reflects sustainable operating gains or versus like lower restructuring expenses in Spain, sort of what's needed to improve the performance there?

Yes. I mean the margin proven that we have seen in the region definitely it's sustainable. Remember that a few years ago, a few quarters, we were able to reach a double-digit EBITDA margin. We are now at 12.3%. It was definitely a very strong performance in most of the markets. So we continue to see potential in the region. We have grown sales in the last 5 years at a low double-digit compounded annual growth rate while being able to expand our EBITDA margin 320 basis points. We're not over. We still have potential. So I would say that you can expect a gradual improvement in the coming quarters and the coming years.

That's very helpful. Congrats on the results.

There are no further raised hands [indiscernible] back to Mr. Alejandro Rodríguez Bas to close the call. Thank you.

Thank you all for joining us today. Please feel free to reach out to our Investor Relations team with additional questions or comments you may have. I hope you all have a great rest of your day.

Good day, and welcome to the Grupo Bimbo's Second Quarter 2026 Results and Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Alejandro Rodriguez Bas, CEO of Grupo Bimbo. Please go ahead.

Good afternoon, everyone, and thank you for joining us today. With me on the call are our Chief Financial Officer, Diego Gaxiola; and the President of Bimbo USA, Greg Koehrsen, together with several members of our finance team.

Before turning into the numbers, I would like to express our deepest solidarity with the people of Venezuela and all those affected by the recent earthquakes, including members of our Bimbo family. Our hearts go to everyone affected by this tragedy. Through our alliance with Save the Children, we're helping to channel humanitarian aid to the affected communities, and we have launched a campaign through which people can donate. We encourage anyone who wishes to contribute to do so through this initiative. Grupo Bimbo will match contributions up to $1 million to help extend the reach of this support. To all our friends and colleagues in Venezuela, we stand with you, and we will continue supporting you through the recovery process.

I also want to extend my heartfelt appreciation to our more than 152,000 associates across the globe. Their dedication, their passion for our brands and their day-to-day commitment serving consumers are what continue to power the growth of this company. These results belong to them.

Now turning to the results. We carried our momentum forward this quarter, delivering solid net sales growth on a current neutral (sic) [ currency-neutral ] basis and further expansion of our adjusted EBITDA margin reaching 14.4%. What is most exciting is the quality of this growth. Even against demanding backdrop in some of our markets, both price mix and volumes moved in the right direction. Growth and margin expansion were led by our 2 largest markets, North America and Mexico, with EAA also delivering strong contribution. North America continued to build on its own recovery, posting a second consecutive quarter of positive sales growth and at a faster pace than the first quarter.

This sustained return to year-over-year growth confirms that the region is improving even as consumers remain under pressure, supported by strong revenue growth management strategy and sharper execution. Perhaps the most encouraging data point this quarter is that we have gained market share across every category in the U.S. for the first time since 2020. This is particularly noteworthy, given that several industry categories continue to face volume pressure. The fact that we're gaining share across all categories and in most cases, growing sales, highlights the effectiveness of our commercial execution, innovation pipeline and revenue growth management strategy. Combined with a double-digit EBITDA margin and another quarter of margin expansion, these results clearly demonstrate that our transformation initiatives are delivering tangible and sustainable benefits and are resonating with consumers.

Mexico delivered another standout quarter showing that we can keep growing profitably even as consumers tighten their spending. The momentum was broad-based across nearly every category and channel, underpinned by the best-in-class service levels, disciplined execution, and the enduring power of our brands. Results in both North America and Mexico were in part supported by incremental consumption associated with the World Cup. EAA continued to shine. Growth was broad-based across the region, with nearly every organization growing in local currency despite a tough comparison base, complemented by the contribution of the Don Don and Bonel acquisitions. It is not -- it is worth noting that this will be the last quarter in which Don Don generates an inorganic effect on our numbers as we acquired it in May of 2025.

Latin America delivered mixed results. Net sales grew in local currencies and profitability held up well across nearly every country. The one exception was Brazil. which, as we anticipated, it's still reflecting the effect of the Wickbold integration process. The related efficiencies will take time to fully materialize.

Looking ahead, we remain mindful of the volatility and uncertainty in the global environment, including ongoing geopolitical tensions. That said, we have strong conviction in the resilience of our business, in the strength of our people, and in the effectiveness of our strategy. We are well positioned to navigate this environment and to continue delivering strong, consistent and sustainable results for our shareholders.

With that, let me turn the call over to Diego, who will walk you through the financial details. Diego, over to you.

Thank you, Alejandro, and good afternoon to everyone. We appreciate you taking the time to join us today. This was without a doubt, an exceptional second quarter, a strong validation of how well we are executing our strategy across the company, the strength of our business model, the operating efficiencies embedded in many of our operations and the breadth of our geographic and category diversification. We are especially pleased with these results given the complexity of the operating environment in several regions and the ongoing geopolitical headwinds.

Despite the backdrop, we delivered strong performance across several key financial metrics, propelled by healthy organic growth in local currencies, the strong operating execution and continued margin expansion. Stripping out the FX translation effect, net sales grew 4.5%, marking our strongest second quarter performance since the second quarter of 2023. The adjusted EBITDA margin reached 14.4%, reflecting solid execution, the productivity benefits of our long-term strategic investments including the North America transformation project, continued supply chain efficiencies, and a disciplined G&A expense management.

One of the highlights of the first quarter was our free cash flow generation. The strong EBITDA performance together with improvements in working capital, allowed us to generate approximately MXN 12 billion of free cash flow, even after investing approximately MXN 7 billion in CapEx. This strong cash generation also allowed us to deleverage the company at the same time that we returned more than MXN 5 billion to shareholders through dividends and share buybacks.

Finally, we're raising our full year guidance. Even though we're expecting a higher inflationary environment impact for the year as a result of the ongoing geopolitical developments, our business has performed better than what we expected. The strong results delivered during the second quarter together with the continued benefits from our transformation and productivity initiatives and the strong operating execution across the organization, give us more confidence in our ability to generate additional efficiencies during the remainder of the year. Therefore, we are raising our EBITDA margin expansion guidance to the range of 70 to 120 basis points for 2026. And we continue to expect net sales, excluding the FX to grow at a mid-single-digit rate, which translates into a flat to a low single-digit decline in Mexican pesos.

On CapEx while we remain fully committed to our long-term strategic priorities. We are refining our full year outlook based on the phasing of certain investments in line with evolving volume trends and market conditions. We now expect CapEx to be in the range of $1 billion to $1.2 billion for the year, compared to our previous guidance of $1.2 billion to $1.4 billion.

While we're not providing guidance for 2027 at this stage, let me share a few thoughts on the environment we are currently seeing. We do expect the inflationary environment to remain challenging. We have seen upward pressure across several key inputs, including wheat, resins and energy and current market conditions suggest that some of these pressures could persist into next year. That said, we believe we are well positioned to navigate this environment. Our productivity pipeline remains strong, supported by automation initiatives, supply chain efficiencies and disciplined cost management. Combined with our revenue growth management capabilities and the continued growth of the business, we expect these actions to help mitigate the inflationary pressures over time.

Thank you. And with that, let's move on into the Q&A. So operator, please go ahead.

[Operator Instructions] The first question comes from Ben Theurer with Barclays.

Just a quick one following up and maybe the one for Greg. Looking into the U.S. business, which kind of like kept a relatively good momentum. So I wanted to understand, similar to what you provided a quarter ago, how the performance was across the different categories that you usually report just in comparison to a private label but then also against your peers and where you see maybe opportunity to gain further momentum, market share or whatever you want to call it? And then I have a very quick follow-up for Diego on the guidance.

Yes, absolutely. Thanks, Ben, for the question. I appreciate it. We were very happy with our performance during the second quarter. As Alejandro and Diego mentioned, we were share positive in all the categories in which we play. And what I would say is that the foundation for that was our continued improved commercial execution, both in terms of how we go to market with our DSD system and then also how we have remained disciplined around pricing and promotion activities. So we feel like we have really established ourselves well in the second quarter and carry momentum going forward.

You also asked about private label. Private label, we see as not just a threat. It's actually an opportunity. We value the offerings within our branded portfolio, but we're also a producer of private label as well, and we use it strategically with some of our key customers. So we continue to see positive momentum in both our branded business and also our private label business.

Okay. Perfect. And then Diego, just if you could clarify real quick. I remember first quarter when you gave the EBITDA margin guidance initially, it was $60 million to $110 million, but it included like that 20 basis point headwind from the Iran conflict. Is it fair to assume that the now increase of margin by 10 basis points, it's just because of less of an impact from Iran? Or is there something else that helps you offsetting what the 20 basis points that you've mentioned about 3 months ago as a headwind? How should we think about it? What's driving the increase here?

Yes. Very good question, Ben. Yes. In fact, I mean, at the end of the first quarter, we did anticipate like a $50 million impact in inflation for the remaining 9 months of 2026. As the conflict has continued, and we have seen additional inflation than what at that time we were expecting, we now have a higher impact. It's more in the range of $70 million to $90 million for the year. Of course, this is including what we already faced during the second quarter. So this basically translates to something around 35 to 45 basis. But even though we increased the impact from this inflationary impact we are increasing the guidance approximately 10 additional basis. So if we were to exclude this additional inflationary impact, our guidance would have been even more positive. So I don't know if I was clear, Ben.

Yes. Basically, it would have been 30 basis points if it would have been unchanged, but now it's only 10, correct? Yes, how to think about it, give or take. Okay, super clear, thank you very much Diego, and congrats.

The next question comes from Renata Cabral with Citigroup.

My question will be towards the Mexican operations, and we saw volumes growing and there's some mentions about the World Cup. So I would like to understand if you can give some color on how much the World Cup helped here? On the same line? So if you can give some color on if you see any signs of consumer improvement in the quarter. And related to EBITDA margin in Mexico, if those levels you think are sustainable?

Thank you, Renata, for the question. So let me divide it in 2 pieces. The World Cup and its benefit. We had a positive contribution from the World Cup. Buns and rolls and snacks are part of the festivities. We had favorable momentum across all channels. But the reality is the incremental tailwind rather than -- it was an incremental tailwind rather than the primary driver for performance. So it's really been our ability to service and be present this summer.

Now the Mexican consumer. I think we have a resilient consumer environment in Mexico. Demand for our categories remains healthy, and this summer has proven to be for the third time in consecutive quarters in the mid-single-digit sales growth and we have benefited from a favorable seasonal dynamic. So what we see ahead is the ability to sustain this momentum. Now the reality is our strategic initiatives are working and despite that in some spaces, there are softness we continue to enhance our value proposition. We continue to capture seasonal opportunities by being there at the moment of consumption. We're investing in driving engagement, reminding consumers that we're ready to serve, and finally, strongly executing at the point of sale, and that has helped us to reach a record EBITDA margin.

And Renata, this is Diego. An answer regarding the commodities and also in terms of what we think on the sustainability of our margins in our operations in Mexico. In terms of commodities, as of the end of the second quarter, we haven't really seen still the impact that started to happen because of the conflict, generally speaking. Why? Because, as you know, we have a hedging strategy that provides the visibility for the different operations of the company. And because of this strategy, we still haven't seen the impact.

What I mentioned is that it's looking tougher for 2027 as we continue to execute this strategy. We are taking positions today at a higher cost of the one that we're facing in 2026. So definitely, we will have some impact and some headwinds regarding inflation for 2027. Early to tell on more details, but as I said, we feel confident that we're going to be able to continue to generate efficiencies and productivity initiatives, and continue with the transformation in the U.S. that will help us offset the potential impact that we're foreseeing today.

In terms of Mexico, being able to sustain the margin, I would say, yes, and not only that, I mean, in fact, we're targeting with a long-term view to continue to have improvement in the margin of Mexico. Now as of the end of June on an accumulated basis, we have 100 basis of incremental margin, which is very positive. We have had a very good operating performance. We had the positive effect of the World Cup that contributed a little bit to the margin expansion in the second quarter and also remember that in the first quarter, we had the positive extraordinary income of selling the minority participation that we used to have in La Moderna, and this created an extraordinary positive effect. But even excluding these effects, we're seeing a good year, a strong performance and we do not have a reason not to believe that we're going to be able to continue seeing improvements in our profitability in Mexico and, of course, in the other operations as well.

That was really helpful. And congrats on the results.

The next question comes from Lucas Mussi with Morgan Stanley.

Congrats on the results. Two quick questions. First one on the U.S., maybe if you could share a bit more color on how much do you see your innovation pipeline, new lines, new SKUs, maybe the participation of the healthiness and wellness portfolio has played out in your performance in the last 2 quarters or so where you were able to go back to the positive sales growth. So a bit more color on innovation as it pertains to your top line growth, if you could share a bit?

And then my second question to maybe to Diego, is, we have seen your eliminations EBITDA or your other EBITDA is slightly negative this quarter. It has been mostly positive for the last couple of years. So I don't know if it was an accounting issue or an accounting one-off. But if you could share some thoughts there just for us to understand a little bit better how to think about your eliminations or your others line going forward?

Absolutely. This is Greg. Thanks for the question. As it relates to innovation and specifically, I think your question was around health and wellness, we've been pretty pleased with the results of our innovation in the health and wellness space. Two things I think we've talked about in the past, but just to highlight them again, our Thomas' high-protein bagels and our Sara Lee half loaves continue to outperform our expectations that we've had. So it's given us an opportunity to really lean into consumer spaces that value, let's say, health and wellness and premium.

I would say, too, in addition to that and just to go back to some of the things that we talked about earlier is we're present in 83% of U.S. households. So we participate in a premium or health and wellness portion of the market. We participate in mainstream, and we participate in more value segment of the marketplace. And because of that, we have offerings that we can make to every consumer cohort within the United States, which we're very happy about. And so because of that, our offerings of innovation, not only along health and wellness, but even around indulgence has been performing in a way that we've met our expectations and even exceeded our expectations.

And just to underline a little bit the execution that we have -- the execution gains and improvement that we've made in our operations are really impacting the full breadth of our portfolio in the health and wellness and premium segment and also in mainstream and value. And I'll turn it over to Diego for the second question.

So Lucas, regarding the eliminations, I'm going to be completely honest and open here. I do not have the color, but I will make sure that the IR team gets back to you and gives you a little bit more on the potential accounting effects that we had during the quarter. I'm probably sure that it's something unique for the quarter that would not necessarily prevail for the coming periods.

The next question comes from Alejandro Fuchs with Itau.

Congratulations on the results. I just have one very quick one in terms of capital allocation, maybe for Diego. Now with the new guidance expected for CapEx and the very strong cash flow generation this year, what would be some of the priorities to allocate this better free cash flow generation? And if you could maybe elaborate a little bit which of the projects on the CapEx side, are you going to be pushing forward or why the lower CapEx?

Yes. Alejandro, Well, I mean, definitely, cash generation has been better than what we expected, as I already mentioned, because of the operating performance and also some CapEx projects that are running behind schedule, and it has been a little bit harder to execute the program. But I would say that the capital allocation of the company is not changing. I mean, we have had and we will continue to have the #1 priority to put money back into the business. It's been the case, even though it's behind what we thought. It's almost $400 million in the first half. And as I said, we're expecting something between $1 billion to $1.2 billion. So it's going to be the highest use of our cash generation for the CapEx. And of course, this includes the 3 buckets, it's maintenance, growth and productivity. So dividends, buybacks will continue to be more or less to the same extent, we already paid a dividend of 2026. So we do not see anything additional or extraordinary.

The next question comes from Antonio Hernandez with Santander.

This is Antonio Hernandez from Actinver. Well, my congrats on your results, very, very solid. Just a quick one regarding foodservice. I mean it wasn't mentioned this time, and I guess it's a headwind right now. But do you expect any recovery in the short to medium term and maybe to contribute to results as well?

We did mention a little bit about it, Antonio. And in North America, we continue to reflect value-driven consumer behavior, and we're working hard to excel in this geography. In Europe and Asia, we have a healthy growth. Asia demands are strong, and they remain strong. So we're growing. In the case of Brazil, we continue to perform well. And in overall, the QSR channel remains very, very healthy.

And here, let me probably complement you a little bit, Alex. Regarding North America, I would say that even though it hasn't been the best couple of quarters, we're seeing this also as an opportunity to attack some other customers as the ones that we were serving have been closing some units. So I think we're going to be able to capitalize and materialize this opportunity for 2027.

The next question comes from Alvaro Garcia with BTG Pactual.

I have a question on the U.S., which I think could be extended to most of your geographies. But the question is on pricing. We've been on this sort of multiyear battle to get sort of volume share back on the right track. It's been a difficult pricing environment. It's been very promotional. You had very clear commentary on having gained share this quarter across all categories. I was wondering, given your comments on sort of this inflationary environment we're living in and how '27 is looking trickier, how you're thinking about pricing into the second half of this year and into 2027?

Yes, absolutely. I mean as you know, Alvaro, we don't provide specific guidance as it relates to pricing. But what I can share is that we've been pretty disciplined over the last year plus on the pricing actions that we've taken and the promotional actions that we've taken. And I think the teams, let's say, improvement and commitment to that has -- we've reaped benefits from that.

We're going to continue to do the same thing going forward. And again, this really is different by subcategory and subsegments. So we're going to think about this differently in, let's say, a premium and health and wellness environment where consumers are asking for certain things and potentially differently in a value proposition environment. So I know that doesn't fully answer your question, but I would say that we're looking at it very carefully across all subsegments to make sure that we have the right pricing and promotional actions across all of those segments.

But Alvaro, we need to focus on another P, which is the 1 we can control internally, and that is productivity. We believe that consumers are facing challenging times around the world, and we need to be able to compensate within.

The next question comes from Diego Serrano with HSBC.

Just wanted to ask about Brazil and Wickbold. So you mentioned that the benefits will still take some time to materialize. So with that in mind, could you talk about what's left to do there, what these efficiencies are -- and when are you expecting them? And then maybe comment about the long term, maybe on how meaningful do you think this Brazil business can become for the group?

Let me start from the end. So Brazil, it's becoming very meaningful within the region, the LATAM region. Now as much as we have identified several key initiatives, both in operation and commercial improvements, and we continue to keep a diversified separated portfolio, we've decided to better understand the ins and outs of Wickbold. So rather than materializing really fast, we believe that it's going to gradually be done over the coming quarters. It's a big company. We need to find good synergies and it's going to take longer, but we'd rather do it slowly than at an accelerated pace that could put us in trouble.

The next question comes from Regina Carrillo with GBM.

Congratulations on the results. I just wanted to ask you if the lower CapEx, does this raise your expectations for more free cash flow generation for the year? And maybe where do you see the leverage evolving towards the end of the year?

Yes. Well, definitely, we now expect to generate more cash than what we commented on the previous call because of two things. One, we're more or less leaving the same expectation on the top line, but we are increasing, as I said, the margin and this will translate into a higher EBITDA. At the same time, we're lowering a little bit, probably $100 million to $150 million, the guidance on the CapEx and that, of course, will also translate into additional cash flow. And part of this is already reflected to what we have seen during the first half. And that is why we are now at 2.5x net debt to EBITDA.

Remember that we were at 2.7 at the end of 2025. We were at 2.9 a year ago. So the deleverage of Grupo Bimbo has been fast, and it has been driven mainly by our operational results as we have continued to have as a priority, the CapEx. And as you also know, we have continued to do some acquisitions. Now during the first half of the year, acquisitions have been very slow. It has been only Bonel, which was a very small acquisition in Tunisia, but not material. This is not changing the guidance.

We do expect and we hope to be able to close some bolt-on acquisitions during the second half. It's hard to tell how many of the projects we're going to be able to conclude in this specific time period. But again, we have a strong pipeline of bolt-on acquisitions that make a lot of sense and have a very relevant strategic edge for the different operations of the company. Now if we were to assume that we do not close any acquisitions, we will continue to see a deleverage. And I think you can do the math and the conclusion is quite obvious, both because of the cash generation, but also because of the growth of the EBITDA.

The next question comes from Froylan Mendez with JPMorgan.

I have two, one on the U.S. Firstly, you're now back to positive sales growth, and you mentioned gain shares. Could you help us to understand what actually changed on the ground to drive this turnaround? Has it to do with your pricing strategy, maybe the new distribution channels or simply a category that is gaining share against others? And a similar question, but in Mexico, we are seeing, let's say, a very weak consumer backdrop. You see the results from the retailers, a big deceleration, but Bimbo seems to be a quite strong exception in that trend. What do you think explains that decoupling from the rest of the industry performance? And in that sense, who do you think is funding more of the promotional activity today between suppliers or CPGs versus the retailers? So three questions, in fact.

Absolutely. Thanks. I'll take the first question as it relates to the U.S. Yes, fundamentally, and I think we -- I mentioned this a couple of times, but the main driver, I would say, of our improved share performance has been our commercial execution. And that impacts all of the categories in which we play. So it's really a credit to the team in terms of how we've done that. I would add to that, we continue to be very disciplined around our pricing and promotion activities. And we believe that these are things that we can continue going forward. So we're excited about the momentum that we've built.

Now in the case of Mexico, we remain focused on delivering the right value proposition through a balanced price pack architecture and well-targeted product mix. And we continue to leverage our innovation, but especially our best-in-class execution at the point of sale. And the reality is we continue to expand our distribution network of all our SKUs, and we're working really hard internally to develop a better, more precise sales and operation planning and sales and operation execution. So I think the result has been driven in this difficult consumer environment for being there at the moment of truth, servicing our clients and expecting the response that has been positive from our customers and consumers.

Now you ask me who's spending more money if it's the retailers or the manufacturers, honestly, I don't have the answer. I haven't seen it. I know there's been softness, but at the same time, there's a lot of opportunities, and that's where we're focused. We're focused in servicing better, in having things on time, and have the right assortment at the right place.

And what about the channel performance between the formal, informal, maybe the convenience? Can you give us some color on how has that channel performed differently in Mexico so far?

Yes. In our case, all channels delivered growth. Now coupled with the effect of the summer and with the enhancement of the World Cup, convenience became stronger in this period. But everywhere, we've seen this same growth. So we're trying to find our space everywhere. And I think for us, that's the name of the game to be focused on what we do best, which is service.

This concludes the question-and-answer session. I would like to turn the conference back over to management for any closing remarks. Please go ahead.

Thank you all for joining us today. Please feel free to reach out to our Investor Relations team with any additional questions or comments you may have. And we wish you a happy rest of your summer.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to Grupo Bimbo's First Quarter 2026 Results Conference Call. [Operator Instructions]

Please note, this event is being recorded. I would now like to turn the conference over to Alejandro Rodríguez Bas, CEO. Please go ahead.

Good afternoon, everyone, and thank you for joining us today. Connected on the line today are our CFO, Diego Gaxiola; BBU President, Greg Koehrsen, along with several members of our finance team. I would like to begin by sincerely thanking our teams and more than 152,000 associates around the world for their dedication and hard work in delivering these outstanding results.

At Grupo Bimbo, we operate with one mindset, all for one and one for all and that one is Grupo Bimbo. We kicked off 2026 on a very strong note, delivering record net sales and achieving the highest first quarter EBITDA margin in our history. Importantly, despite the complex environment, we are beginning to see favorable shift in both price/mix and volumes, signaling a recovery in underlying demand across our portfolio.

In addition, our recent acquisitions are contributing, supporting both top line growth and margin expansion. All 4 of our regions delivered growth, with particularly strong contributions from North America and Mexico and our 2 largest markets as well as EAA. In North America, we reached an important milestone, delivering positive sales growth for the first time since the third quarter of 2023. This return to year-over-year growth reflects early signs of stabilization, supported by improved execution and enhanced commercial discipline. Volumes improved sequentially, across nearly all segments, and we gained market share in key categories, including mainstream bread, buns, salty snacks and breakfast. These results underscore the continued progress of our transformation initiatives, which are delivering tangible productivity benefits. Notably, this marks our third consecutive quarter of margin expansion in the region.

Mexico delivered outstanding results, achieving the highest net sales level in its history for any quarter. This performance highlights our ability to grow even in a softer consumer environment with broad-based strength across categories and channels, supported by high-quality service, disciplined execution and the continued strength of our brands. In EAA, performance remains exceptional with another quarter of record results despite a strong comparison base.

Importantly, growth is becoming increasingly diversified with Iberia, our largest market in the region, now contributing to overall momentum. Latin America also delivered a very strong performance achieving record sales levels. Profitability was solid across nearly all countries, with the exception of Brazil. As expected, Brazil results reflect the temporary impact of the Wickbold integration with cost efficiencies and synergies expected to be realized over time. We continue to strengthen our portfolio through disciplined and strategic capital allocation.

In April, we acquired Bonel in Tunisia, the market leader in single-serve croissants. The acquisition complements our existing operations and reinforces our strategy of pursuing targeted opportunity that enhance our capabilities and expand our presence in attractive categories and geographies. Additionally, to our venture capital arm, Bimbo Ventures, we divested a small minority stake in Mexico. On ESG, we received a total of 18 recognitions during the quarter, including being named as one of the world's most ethical companies for the tenth consecutive year.

These decisions underscore our continued commitment to the highest standards of governance as well as our ongoing focus on environmental stewardship and social impact. Looking ahead, we remain mindful of the uncertainty and volatility in the global environment, including, geopolitical tensions. However, we're confident in the strength of our business, the resilience of our teams and the effectiveness of our strategy. We believe we're well positioned to navigate this environment and continue delivering strong consistent performance. With that, we'll now turn the call over to Diego, who will walk you through our financial results. Diego, please go ahead.

Thank you, Alejandro, and good afternoon, everyone. Thank you for joining us today. This was an exceptional first quarter, reflecting the strong execution of our strategy across the organization. The resilience of our business model, the operating efficiencies we have been able to implement in several of our organizations and our strong diversification.

We are particularly pleased with these results, especially considering the complex operating environment in certain regions and the geopolitical challenges that we are facing. Even in this context, we delivered record performance across several key metrics, supported by solid organic growth in local currencies and continued margin expansion. Excluding the FX translation effect, we delivered mid-single-digit top line growth, a level not seen in over 2 years. 2 consecutive quarters of double-digit EBITDA growth, also not seen in 3 years.

We also achieved more than 150 basis points of EBITDA margin expansion for 2 consecutive quarters, making our strongest quarterly expansion since 2021, underscoring the strength of our execution and the operating leverage generated by our long-term strategic investments, including the ongoing transformation in North America as well as continued supply chain efficiencies and reductions in general and administrative expenses.

Turning to the balance sheet. Earlier in the year, we completed a MXN 12 billion dual tranche local bond issuance, primarily used to refinance the Bimbo 16 notes. As a result, total debt increased during the period. On another side, net debt decreased by MXN 7 billion versus the year-end of 2025, supported by strong cash flow generation, improved working capital and lower CapEx deployment. Combined with higher EBITDA, this resulted in a net debt to adjusted EBITDA ratio of 2.5x, representing an improvement of 0.2x compared to December and reflecting our continued and consistent deleverage trend.

Geopolitical tensions, particularly those arising from the conflict in Iran, have reintroduced inflationary pressures across global markets, primarily in energy, logistics and packaging costs. That said, we entered this period from a position of strength. Thanks to our disciplined hedging strategy which we execute consistently year after year, we have reduced our exposure to commodities volatility. This has allowed us to mitigate much of the near-term impact and protect our margins despite the current environment.

However, certain inputs and operational components remain exposed to market dynamics. And as these pressures persist, we do expect a portion of the inflationary impact to flow through our cost and expenses structure. While 2026 remains relatively protected, we prudently included in our guidance, a potential impact. We remain focused on actively managing this environment through disciplined pricing, operational efficiencies and supply chain optimization to mitigate the impact and sustained value creation.

Now turning to our guidance. We are making a few important updates relative to what we shared a couple of months ago. First, we are revising our FX assumption to MXN 17.60 per dollar. This is MXN 0.15 stronger than our previous estimate. This alone represents an impact of approximately 50 basis points on top line and EBITDA growth.

In addition and reflecting a prudent approach given the current environment, we are also incorporating a potential impact of 20 basis points in EBITDA margin from the war. That said, when we consider these external factors, alongside the strong results delivered in the first quarter as well as the continued acceleration in operational efficiencies and productivity initiatives, we are increasing our top line outlook in local currency. We now expect net sales to grow at a mid-single-digit rate. While [ inspecting ] peso terms because of the FX effect, we now expect from flat to a low single-digit decline.

On profitability, while we prudently guided a slight EBITDA margin expansion, today, we are raising that outlook. Even after incorporating the external impacts, we now expect a higher EBITDA margin expansion in the range of 60 to 110 basis points, resulting in a full year EBITDA margin of 14.5% to 15%. These Increased confidence reflects the strengths of our first quarter performance, the resilience of our business model and the growing contribution from productivity and efficiency initiatives.

Regarding capital allocation, we are maintaining our full year CapEx guidance of $1.2 billion to $1.4 billion. Although we now expect to trend towards the lower end of the range, the first quarter reflects a lower start in our CapEx [ program, ] primarily due to an accelerated investment in the fourth quarter of last year, which has shifted the timing of certain projects.

We expect to catch up as the year progresses. Finally, from a leverage perspective, with a combination of the strong cash generation, disciplined capital allocation and profitability improvements, we are maintaining our expectation of a slight deleverage by year-end versus the end of 2025. Overall, despite a more challenging external environment, we remain confident in our ability to continue strengthening both our operating performance and financial position. Thank you for your time. We can now proceed with the Q&A session. So please go ahead.

[Operator Instructions] The first question comes from Fernando Olvera with Bank of America.

Diego, maybe starting with the updated guidance, maybe if you can give us some color of what changed, I mean, regarding the margin expansion, what changed with the guidance shared a couple of months ago. And what do you expect will be the driver for this...

Sorry, Fernando, can you repeat the question please? Can you repeat the question? We weren't able to listen to you very well.

Okay. Can you hear me?

Hi?

Hello?

Yes, we can hear you. Can you repeat the question please? Fernando, we can hear you now. We are now able to hear you now.

Now, can you hear me there?

Yes, but it's a little far off. Before it was better.

Okay. Let me repeat the question. Based on the current guidance or the updated guidance, if you can share, Diego, what changed versus 2 months ago? And what will be the drivers of this margin expansion? That's the first question.

Yes. Fernando, as I explained, we have considered a couple of negative effects, a little bit of reconsidering the expectation of a stronger peso for the year, which is putting some pressure to our top line growth in Mexican pesos as well as for the EBITDA growth of approximately 0.5 percentage point. We also included the impact of unexpected inflation, which is very volatile and hard to know exactly what's going to happen, but we are being conservative and we did included a 20 basis point impact on the EBITDA line for the full year.

Now while even considering these couple of negative effects, we are improving our expectation for the year has to do. First, with the strong results of the first quarter that completely exceeded our expectations in most of the regions, as Alejandro mentioned, as you clearly can see North America improved much more than what we expected. Mexico was stable, also with the extraordinary positive impact of selling the minority stake that we had in a subsidiary that had a positive impact on our results. So that was not considered in the initial guidance. So that is also helping. And lastly, the confidence that we have that we're going to be able to continue to implement even in a challenging environment, the operating efficiencies and the productivity initiatives across the different segments of the company.

Okay. And these efficiencies are expected, I mean, across the board? Or is there any region that might stand out?

Probably the one that has surprised us more on the positive side, it's North America. We are running ahead the initial program in terms of the operating efficiencies and the productivity initiatives. We're seeing an improvement in top line, but it's still with a small decline in the first quarter, but better than what we expected, and we feel confident for the coming quarters. So I would probably say North America is the one that is pushing more than the other segments, the expectations for Grupo Bimbo.

Mexico has been very stable. Of course, in Mexico, we have the positive impact again from the profits that we had from the sale of the minority stake in the subsidiary, that is reflected under the segment of Mexico. I think that LatAm is behaving as expected.

As Alejandro mentioned, we had in the quarter some expenses related to the integration of Wickbold in Brazil. It is not going to be only one quarter. It is something that will continue to happen in 2026 as we consider a couple of months ago. So that is why even though it's not going to be the strongest year for LatAm, it's quite in line with the initial expectation. And Europe, Asia, Africa, it's also performing slightly better than expected, Fernando.

Okay. And just a second quick question. Considering that the sale of this minority stake in Mexico, [ how consider ] can you share more details on this? And what was the amount of the gain recognized and what would have been the EBITDA performance with such gains this quarter?

Yes, sure. I mean we do not disclose the specific information in terms of the amount. It was 4% minority stake that we had in Grupo La Moderna and Pasta4all, which was a related company to Grupo La Moderna. The profit or the positive impact on the EBITDA at the Grupo Bimbo level represented approximately 50 basis points.

5-0?

5-0, yes, 50 basis in the quarter. At Grupo Bimbo level, so for the year, it's going to be more like between 10 to 13 basis points. In the full year, okay?

The next question comes from Alejandro Fuchs with Itau.

I have just one very quick one, maybe for Alejandro. I want to see if you could elaborate a little bit on the U.S. business, with a growth of 1%, let's say in dollars in top line. You commented that you are seeing better [ sequential ] volumes. I wanted to see if you can elaborate a little bit more into which channels in the U.S. where is the growth coming from or the improvement coming from and how are you seeing the consumer overall in the U.S. And if you could also tell us a little bit of your expectations, let's say, going forward for this consumption environment in the country.

Alejandro, thank you for the question. As you know, we don't reveal information in all the channels. What we are seeing, despite all the trends is that we have been able to adapt to these new trends. And we're starting to see recovery pretty much across most of our channels. And our different lines. But let me pass you to Greg, so he can put a little bit more color to it.

Thank you, Alejandro. From a consumer perspective, the U.S. consumer continues to be under some amount of pressure as they have been over the last number of quarters and even the last number of years. However, as part of our transformational effort, we are seeing increased performance through our executional disciplines with our frontline associates in our sales execution. And we are seeing benefit period by period and quarter by quarter, which gives us some positivity about the future.

The next question comes from Ben Theurer with Barclays.

Congrats on a good start. Diego, maybe one for you. You've touched on it obviously, the implications from the Middle East conflict as it relates to certain things such as packaging, et cetera, transportation. But you haven't talked much about the raw material input in terms of like just the commodities that you need.

Could you give us an update as it relates to where you stand roughly on hedging for the next couple of months, quarters or whatever you want to call out? And how you would think this could potentially be a headwind at some point? Or what are the effects of it. What you can do to mitigate some of that pressure. So just like the raw material commodity piece.

Yes. Well, at this point, we haven't seen any material impact in our operations. We started the year with an important portion of the commodity needs of 2026 already hedged. Today, we have the vast majority of our needs also hedged for 2026. As you know, we have a rolling methodology. So we have just started to take some positions for 2027, which considering existing prices might probably have some pressure. Slight pressure for 2027.

If things were to stay as what we're seeing today with the spot rate, the impact wouldn't be very big. Although, again, what we have seen is a lot of volatility. So we did assume that this is going to impact our profits in 2026, not from the commodities, but even in some of the raw materials, the commodities hedge but not the accessories and transporting kind of the flour, the wheat flour to our facilities, and that is having an incremental cost. So that is why we're putting this assumption, and I want to highlight that it's an assumption based on what we know today, but we're not 100% certain in terms of the magnitude and how long it's going to last. But I think it will be irresponsible not to consider something. So what we did was an assumption of 20 basis for the year.

Okay. Got it. And then just one quick follow-up. We saw obviously a good gross margin expansion in North America, but in an even better operating margin expansion. Can you help us bridge what was the main driver, first on the gross side and then maybe on the operating side to see like where that leverage is coming from as it relates to the North American business?

Yes, I mean, in one hand, we had a positive raw material cost, okay? And that is helping the gross margin, say, and a little bit also with the top line effect. Now where we're seeing the margin upside is in SG&A. We delivered record productivity gains. We also had lower restructuring expenses. And so that's helping the EBITDA margin. And again, as I said, we are considering that these operating efficiencies and productivity initiatives will continue to be there for the year, but also the additional ones that we're working on as we speak that will start to kick in, in the coming quarters and will also create a positive effect in 2026.

The next question comes from Renata Cabral with Citigroup.

My first one is a follow-up on the U.S.. As we think about the U.S. recovery, what are the key indicators or milestones that you believe it will help us to gain confidence in the sustainability of the improvement? And as you are expanding further in sweet and salt snacks in the U.S., how that's already contributing to the overall growth and margins? And the second question is related to LatAm. We saw margins impacted by the integration of Wickbold in Brazil. Could you share how you see this evolving over the next few quarters. And when margins might normalize in the region?

Thanks, Renata, for the question. I'll take the first question as it relates to the U.S. and some of the markers that we've been seeing that measures our progress. First of all, as we talked about last time, with our transformational effort, we're looking at how to become a much more efficient and productive organization through all areas and all functions. And what would tell you is that we're seeing the results of that...

[Technical Difficulty]

Renata, thanks for the question, and apologies if I'm repeating some of this. You asked about sort of markers of progress within North America. I would say that we have looked at every area of our operational engine to become more efficient and productive within that operating engine. We're looking at procurement. We're looking at logistics, manufacturing and of course, overall G&A. And what I would tell you is that we're making progress on all of those. We measure the team and have clear KPIs around all of those different efforts.

The other thing I would offer too, is that we have, over the last couple of quarters, taken a very rational and disciplined approach related to pricing and promotion and that clearly is a metric that we are following, and we see progress on. So that will hopefully answer the first question. I'll turn it over to Diego for the next 2.

Yes, Renata [indiscernible]. First, let me remind you all that the acquisition of Wickbold, [ internal position ] but the value is based on the synergies that we have on merging and putting together the operations of Wickbold in Brazil, all across the P&L, top line costs, logistics, G&A. So being a big business for Brazil, the integration is going to take time. So what we saw during the quarter, probably in the same case for the coming 3 quarters, and we will continue to see some pressure in our profitability for the LatAm region being the biggest operation in LatAm for us in 2026.

Now as I mentioned, this is not a surprise. As I said, this is something that we previously considered in our expectation. Of course, we knew that this is going to take a lot of time, effort and money. And it's going to our profitability this year, but we feel very optimistic. We feel very positive about the potential, and we will see this once we end the integration of the business.

The next question comes from Antonio Hernadez with Actinver.

Congrats on those very solid results. Just a question regarding -- I mean you've been mentioning for several conference calls, the K-shaped economy signs in the U.S., if I listened correctly, I think [ you ] mentioned that this time, I don't know if you continue to see those signs as well? And also if you see...

Sorry Antonio -- sorry to interrupt, I don't know if it's our line or the other side of the line, it was very hard to hear you. So I don't know if you can repeat the question a little bit more slowly and louder, please?

Sure. Sure, of course. My question is regarding the K-shaped economy signs that you've been mentioning in previous conference calls in the U.S. I don't know if I listen to correctly, but I think that you didn't mention that this time. So I wanted to know if you continue to see the signs in the U.S. and in many case, if you're seeing any signs of this as well in Mexico.

Antonio, let me capture this. Are you talking about the K consumer? This impact it's having.

Exactly.

So let me build a little bit on it. Yes.

So as you know, the polarization of the economies are in a way, dividing our markets within the countries and we are developing solutions and new products for these 2 occasions. On the one hand, we want to be where consumers are going, whether it's in lower segments or in premiumization. So we are launching around the world, and Mexico is not an exemption. Protein-based products. We're launching and enhancing more attributes to our products, so we can cater to all the audiences that we have around the world. And Mexico, like I said, it's not an exemption. You can see that we're offering more value-added products as well as products that are also supporting affordability.

The next question comes from Alvaro Garcia with BTG.

My questions for Alejandro on [ Marcel ] specifically. I know it's a business you know well. Just my question is on the chips brand. So the chips brand has obviously done quite well in Mexico. Just given the relative size of your snacks business in the U.S., the success of Takis, so I was wondering just from a strategy angle, if it would make sense to eventually roll out the chips brand in the U.S. Any thoughts on that would be greatly appreciated.

Sorry. As much as we don't disclose our specific plans, you're right. In that product that you mentioned, our chips brand is very strong. And yes, we would like to see it all around the world, including the U.S. one day.

Me too. Great. I'll follow up with the second one. The Mexican consumer I was wondering if you can maybe give some detail on -- there's obviously a lot of questions on the degree of weakness in the Mexican consumer that we've seen. Is there anything you can mention maybe from a geographic standpoint that you're seeing in your business or from a channel standpoint that you're seeing in your business as to the sort of state of the Mexican consumer.

I think what I can talk about Mexican performance by zone is that we're seeing a very strong acceptance in the central and Southeast part of Mexico. As you have seen, we're gaining share, and we're gaining the preference of new and existing consumers. So we will continue to bring innovation.

In most of our segments, we -- despite that it's a difficult space, and the economy not necessarily growing, we are finding the same as in the U.S. with a good execution, we are able to service customers and clients that are waiting for us.

Next question comes from Diego Serrano with HSBC.

Just wanted to ask another one on margins. You had a really strong expansion this quarter, which was supported by productivity gains and some other factors. So in that sense, I wanted to ask, how should we think about the sustainability of these margins going forward, especially the transformation in North America advances and you continue with the integration of your recent acquisitions.

Yes. I mean [indiscernible] as you can imagine, we are not expecting a margin expansion as big as the one that we had during the first quarter, which was a 160 basis. As I mentioned, we are expecting an expansion for the full year in the range of 60 to 110 basis. So at the Grupo Bimbo level we feel confident that we will see improvements in our margins. But again, not with the size of the improvement that we had during this first quarter.

Also, you have to keep in mind that in the first quarter of 2025, we had 30 basis points decrease. So we had a slight [indiscernible] comparison than the ones that we will start to face in the coming quarters. And we will also not have the 50 basis points that came from the sale of the minority stake in [ Grupo La Romania ]. So we want to adjust [indiscernible] positive transaction. Our margin expansion was more in the range of 110 basis. So I hope that answers your question of the Grupo [ Bimbo. ] Now in the retail segments, coming again, as we already mentioned, that is on a [indiscernible] during the coming quarters [indiscernible] because of [indiscernible] the international expenses of Wickbold.

The next question comes from Froylan Mendez with JPMorgan.

Sorry, Diego, can you repeat just the guidance on top line. My line got a little bit cut off when you said it, the new guidance on top line. And my real question would be how far are we from the margin run rate in the U.S.? Or in other words, how much of the efficiency benefits are yet to be reflected in results.

Yes. So again, let me try to be very clear. Our expectation in top line in Mexican pesos is to end the year flat to a low single-digit decline, okay, in Mexican pesos. Of course, in local currencies, we're expecting a mid-single-digit [indiscernible], okay? So we are assuming strong peso for the average of the year, and this is putting that pressure into our top line growth. Now in terms of EBITDA, we are expecting a margin expansion for the full year between 60 to 110 basis points.

Now regarding the questions on the specific of the potential of North America. We do not disclose that information. What we can share with you is that we feel happy with what we have been able to achieve, and we feel confident about the future and a positive future performance for North America in the coming quarters and the coming years.

The next question comes from Lucas Mussi with Morgan Stanley.

Congratulations on the results reported tonight. I think I wanted to ask a bit about what you guys talked about the hedging situation, especially as it pertains perhaps to the late part of 2026. And as we look even a bit forward into 2027, I know we are still living in a very volatile environment. But I wanted to explore your early thoughts at least on what do you think could happen if next year futures curves indeed materialize, we see higher material costs, distribution costs, how do you see Bimbo perhaps, especially in the U.S. positioned to face the higher cost structure?

Do you think there is still room given the customer environment for maybe additional pass-through to prices? Competitively speaking, do you think that based at least on the recent past that you could gain share given your competitors will probably be worse positioned than you are, given your scale, the quality of our brands. So I wanted to explore a bit more thoughts maybe a bit early, but still useful as we go into the later part of 2026 and 2027, which is when we probably see a worse cost inflation for the whole industry.

As you said, there are a lot of unforeseen events that could or could not happen. What we will do is we will continue to focus inward. How do we serve in a better way. How do we serve in a cheaper way. How do we produce in a way that we can be prepared for whatever that is happening on the outside. So this transformation started a year ago. I think it's going to take 2 or 3 years. This transformation can start happening around the world.

So I guess our obligation is to look inward and see how it is that we can serve our clients and consumers better. Now what's going to happen, as you said, we don't know. We do forecast sometimes how bad could it get, but we cannot control it. So we will continue to work inward to be in a better position to service client and customers.

This concludes the question-and-answer session. I would like to turn the conference back over to Alejandro Rodriguez Bas for any closing remarks. Please go ahead.

Thank you all for your time today. Please do not hesitate to contact our Investor Relations team with any further comments or questions you might have. I hope you have a great night. Thank you all.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, everyone, and welcome to Grupo Bimbo's Fourth Quarter and Full Year 2025 Results Conference Call. If you need a copy of the press release issued earlier today, it is available on the company's website at grupobimbo.com.

Before we begin, I would like to remind you that this call is being recorded and that the information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company's press release regarding forward-looking statements.

I will now turn the call over to Mr. Alejandro Rodriguez, Chief Executive Officer of Grupo Bimbo. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining us today. Connected on the line today are CFO, Diego Gaxiola; BBU President, [ Derek Karsen ], along with several members of our finance teams.

I'm very excited and deeply honored by the opportunity and the trust placed to lead this extraordinary company as CEO. I would like to extend my sincere gradilute to Rafael Pamias for his leadership and dedication to Grupo Bimbo. Under his guidance, the company strengthened its strategic positioning and operational discipline, always driven by a long-term vision. My commitment is to build on this trajectory and continue positioning Grupo Bimbo as a beloved company in households around the world by driving growth through our powerful brands and expanding our global presence. Together with the leadership team, we will maintain a constant focus on our associates, customers and consumers. While preserving and strengthening our culture and philosophy of building a sustainable, highly productive and deeply [ humane ] company.

Before we move forward, I would like to recognize the recent retirement of Tony Gavin and Mark Bendix in the near future. Tony served as President of Bimbo [indiscernible] U.S.A, completing an extraordinary 42-year career with the group. And Mark will be concluding more than 12 years in the company, serving most recently as Executive Vice President of Grupo Bimbo. We are deeply grateful for their leadership, commitment and lasting contributions to Grupo Bimbo.

As part of our planned leadership transition, [ Greg Person ] was appointed President of Bimbo [indiscernible] USA and joined our steering committee in January 2026. Greg brings more than a decade of leadership experience with Grupo Bimbo. He has held several senior positions across the organization, most recently leading BBU's transformation journey. We're pleased to have Greg leading the continued evolution of BBU. He will join us on all future conference calls and will be available to address questions regarding the North America business.

Now turning into the year in 2025. We proudly celebrate our 8-year anniversary. Over at least 8 decades, we have grown from a small bakery in Mexico into the world's largest baking company and a relevant player in snacks with a global footprint and deeply [ humane ] culture that continues to define who we are. As part of this milestone, we [indiscernible] in Mexico City, an interactive new team that honors our journey and brings our story closer to the community. We warmly invite everyone to visit.

Celebrating our history also reinforces our commitment to innovation, long-term value creation and to [indiscernible] a better world over the next 80 years. In 2025, we advanced its commitments through discipline and execution and deliberate actions. Despite the complex global environment marked by microeconomic volatility, inflationary pressures and shifting consumer behaviors, our performance demonstrated underlying strength and resilience of our business model. We delivered record financial results and market share gains across multiple categories, supported by continued investment in our brands, expanded distribution and a robust innovation pipeline.

We also achieved solid profitability gains driven by disciplined operational performance across regions, further supported by productivity gains in North America, where we're capturing the early benefits of the transformation initiatives launched in 2024, with notable efficiencies across manufacturing, administrative and logistics operations. As a result, we achieved margin expansion for the full year, all while continuing to execute with discipline [indiscernible] strategic bolt-on acquisitions in attractive high-growth markets, including Eastern Europe. These actions strengthen our global footprint, expanding our presence to 93 countries, enhance our capabilities and improved our ability to serve evolving consumer needs.

Building on this foundation, as consumption habits allocations continue to diversify, innovation remains key to our strategy. Our innovation rate now exceeds 12%, reflecting our ability to translate consumer insights into differentiated offerings. By leveraging the strength of our trusted brands, together with the prior CapEx investments, operational excellence initiatives and recent acquisitions, we have reinforced our competitive position to further strengthen our market leadership. This integrated approach provides a strong platform for the long term, sustainable growth, supporting incremental volume gains, enhancing profitability and creating enduring value across our markets.

On our ESG journey, 2025 marked a milestone year in advancing our commitments, aligned with our purpose of nourishing a better world through our Bake For You initiatives, 98% of our bread, buns and breakfast portfolio delivered positive nutrition. We remain on track to eliminate all artificial colors by 2026 and continue to strengthen our core portfolio with around 48% of sales meeting or exceeding the 3.5 star benchmark under the [ health star ] rating system, demonstrating optimal nutritional quality in everybody.

Our environmental agenda through our [indiscernible] nature initiatives have achieved 100% reuse of treated water versus our 2020 baseline, while exceeding our generic agriculture target with more than 500,000 hectares cultivated under these practices. We also reached 99% recyclable packaging. We continue to progress in renewable energy and free electrification with more than 40,000 electric vehicles. Looking ahead, we remain fully focused on advancing our medium- and long-term ESG ambitions.

While challenges remain celebrating Grupo Bimbo's anniversary with record results and the ongoing commitment of our people highlights the strength of our operational model and culture with disciplined execution at the core of all our efforts. We are well positioned to continue delivering consistent performance, driving profitable growth, enhancing returns and creating sustainable value in 2026 and beyond.

Now taking a look at the regional results of the fourth quarter. In Mexico, we delivered [ 4.8 ] sales growth, reaching an all-time high for a fourth quarter. This solid performance reflects our ability to grow despite a softer consumer environment, delivering positive results across all categories with particularly strong performance in sweet baked goods, cakes and buns, and rolls. Results were also driven by favorable product mix and positive execution across all channels, with convenience standing out, positioning double-digit growth.

This positive momentum accelerated towards the end of the quarter, including a record sales week in December, marking the strongest weekly performance in the region's history. This robust top line growth, combined with the distribution efficiencies, productivity gains and disciplined cost control resulted in an adjusted EBITDA margin expansion of 40 basis points to robust 22%, reflecting the strength and flexibility of our operational model. Looking ahead we remain encouraged by the resilience of our portfolio and the strength of our commercial execution. Through initiatives focused on prioritizing volume performance and delivering an attractive value proposition across both price and product mix, supported by innovation, we expect to maintain positive momentum.

In North America, excluding FX, fourth quarter sales declined by 3%, reflecting a still soft consumption environment. That said, our top line trends continue sequentially, supported by the actions taken throughout the year to strengthen revenue growth management. A more refined price pack architecture and bring differentiated innovation to market, all to enhance our value proposition to consumers.

We are particularly encouraged by recent innovation launches that address the evolving consumer needs, including [indiscernible] designed to serve smaller households and more accessible price points. And Thomas' protein [indiscernible], which resonate with health conscious consumers. Our actions in 2025 are reinforcing our confidence that we have and continued to improve a portfolio of attractive consumer-centric products that positions us well to drive sustainable growth. Our efforts have resulted in market share performance improvements across all branded categories with positive gains in bonds and rolls, mainstream bread and salty snacks.

On profitability, thanks to the record productivity benefits captured throughout our transformation initiatives, we delivered a strong 330 basis points EBITDA margin expansion to 9.2%. This performance demonstrates how our team's discipline and focus are translating into structural improvements, strengthening efficiency and competitiveness across the operation. Looking ahead, while external headwinds remain, the improving momentum across key categories, coupled with the operational strength built throughout the transformation initiatives position us well to continue progressing and to support a more balanced path toward growth and profitability over time.

Moving on to Latin America. Excluding FX [indiscernible], net sales grew 15.4% to a record 4 quarter level, driven by positive momentum across every organization as a reflection of a strong focus on execution and effective price/mix strategy. Sales results also benefited from the acquisition of [indiscernible] completed in October 2025. [indiscernible] is a leading bakery player in Brazil that complements our brand portfolio and expands our presence in key categories, further strengthening our leadership position in the market. This acquisition offers meaningful synergy potential, including commercial opportunities and scale efficiencies that will enhance profitability over time.

During the quarter, integration-related expenses led to a contraction of 420 basis points on the EBITDA margin. These investments are focused on capturing future synergies and strengthening the long-term value of the business, while additional integration costs are expected in the coming quarters. There are strategic in nature and aim at unlocking efficiencies and commercial opportunities. As integration advances, we expect margins to progressively improve.

Excluding integration expenses, adjusted EBITDA margin for Latin America contracted 180 basis points due to higher raw material costs in Brazil attributable to the FX impact, as well as increased general expenses from strategic investments, future growth, mostly related to improvements in Chile's commercial operating model. [indiscernible] supply chain, including benefits from the transformation project in North America and most accretive acquisitions.

In Europe and Asia and Africa, excluding FX effect, sales increased 17.8%, reaching an all-time high. This performance was primarily driven by the [indiscernible] strength of Bimbo QSR, Romania, U.K. and India, which posted double-digit growth rates. Coupled with the contribution from the acquisition completed during the year, including [ Caramolegos ] in Romania and [indiscernible] in the [indiscernible]. The remarkable adjusted EBITDA margin expansion of 420 basis points resulted from the solid sales performance productivity initiatives, lower administrative and restructuring expenses related to last year's bakery closure in Spain and the accretive contribution from the past acquisitions. This performance led to a record double-digit margin of 13.8%.

With this, I would like now to turn over the call to Diego, who will walk you through our financials. Please, Diego, go ahead.

Thank you, Alejandro. Good afternoon, everyone, and thank you for joining us today. 2025 demonstrated the value of our diversification, disciplined execution and long-term view. Despite a challenging operating environment, we not only met our guidance achieving record levels of sales and adjusted EBITDA, receded our profitability outlook driven by a better-than-expected fourth quarter performance. As a result, adjusted EBITDA margin expanded by 30 basis points to 13.9%, the second highest annual margin in our history.

Across our operations, performance was underpinned by notable traits. Our [ EAA ] region substantially increased profitability reaching a record double-digit margin. Significant contribution came from our operations in Mexico, posting sustained growth and an all-time high adjusted EBITDA margin of 20.4%. These achievements helped offset the softer consumption environment in North America and short-term headwinds that we faced in Lat Am.

Furthermore, we continue to capture record productivity benefits from the transformation project in North America, driving a margin expansion of 60 basis points to 9% for the year, reinforcing our confidence in the path we have set. Alongside these efforts, enhanced revenue growth management capability, lower raw material costs and disciplined strategic investments also helped us surpass our original profitability outlook despite continued volatility in the global operating environment.

From a capital allocation perspective, the $1.2 billion in CapEx that Alejandro mentioned for 2025 came below both prior year levels and our initial guidance of $1.3 billion to $1.4 billion. Although investments were lower than expected, our capital allocation priorities remain unchanged. Centered on productivity, growth initiatives and long-term value creation. This same approach guided the acquisitions completed during the year, strengthening our platforms in attractive markets and supporting long-term returns. In addition, we also distributed MXN 5.6 billion, through dividends and share buybacks.

Moving on to the balance sheet. Our total debt closed at MXN 154 billion. The increase compared to 2024 reflects the financing for CapEx and strategic investments, partially offset by the 11% appreciation of the Mexican peso. While we have originally anticipated [indiscernible] deleveraging phase to start in 2026, our strong operating results, our focus on cash flow discipline allows to start the beginning of this deleverage process in 2025. With our net debt to adjusted EBITDA ratio declining 0.2x as compared to 2024, closing at 2.7x.

Also 3 weeks ago, we issued MXN 12 billion in the Mexican significant bonds in 2 tranches, 4 and 9 years. It was a success. It attracted a remarkable demand of MXN 19 billion, which underscores the confidence investors have in our strategy, financial profile and long-term objectives. Now I would like to provide some visibility of what we are expecting for 2026.

First, regarding top line. Excluding the effect of the appreciation of the Mexican peso, we anticipate sales to increase in the low to mid-single-digit range, driven by growth across all regions in local currency, supported by continued investments behind our brands, value-accretive innovation for consumers, and a strong frontline execution. We also foresee a gradual improvement in the consumer environment, particularly in North America.

Now incorporating our exchange rate assumption where we are estimating an appreciation of the Mexican peso in 2026 as compared to 2025 of [ MXN 1.50 ]. And given that approximately 2/3 of our sales are generated outside of Mexico. This appreciation represents an impact of more than 500 basis points on our expected top line growth. As a result, we expect net sales in peso terms to be flattish.

Regarding our adjusted EBITDA margin, we expect a slight margin expansion, driven primarily by operational leverage and efficiencies across the supply chain, including benefits from the transformation project in North America and past accretive acquisitions. As for our raw material costs, we expect stability towards slight tailwinds throughout the year as some commodities have experienced decreases. Finally, we expect CapEx investments to range between $1.2 billion to $1.4 billion, reflecting the carryover from 2025 as we closed below the plan. This is just a timing effect as we continue to follow a focus on prudent investment approach, center on returns, efficiency and strategic growth.

As we look to 2026, we do so with confidence, supported by exceptional team, a resilient business model and a globally diversified platform that continues to deliver solid results. The progress achieved in 2025 has strengthened this foundation, positioning us to continue advancing on our long-term value creation path. Thank you all for your time. We can now proceed with the Q&A session. So please go ahead.

[Operator Instructions] The first question will come from Ricardo Alves with Morgan Stanley.

Impressive performance in Mexico, particularly on the profitability, congrats on that. Now it beat, at least our numbers, mainly on SG&A. We noticed in the release, and I quote "efficiencies in distribution, productivity across the value chain and lower admin expenses". Can you expand here, what's striking to us is that you'd find ways to cut cost in such a high-performing division already? So I think it's worth exploring what were those low-hanging fruits, those initiatives that is still found perhaps in Mexico, how sustainable that could be? And I think that, that would help us model the division a little bit better. So just more thoughts on the Mexico profitability.

My second question is quicker. I think that this one is probably to Diego on financial expenses. Financial expenses were higher than what we expected a bit. I think that in the release, you're making reference to energy hedges and higher leverage in rates. So just wanted to hear a little bit more details as it pertains to the magnitude of each effect. It's not 100% clear to what would be cash in nature. For instance, we did notice that there is an FX component an FX loss component, but it's too small to explain. So if you could elaborate a little bit more on those other issues Diego, that will be super helpful.

Thank you very much for your question. So we drove EBITDA margin expansion through solid top line growth. But as you asked, we also worked in 3 fronts. So the first one was distribution efficiency. So despite that we seem to be mature, we have worked with our commercial execution and route-to-market model that expanded customer reach and improved selling efficiency. So -- but you said it's a mature model, but we will continue to work on it.

Productivity gains. We're working on food waste reduction as we have had. We're just doubling down on it and improved finished goods control. And finally, a disciplined cost control, enabling savings across administrative and operational expenses. For instance, we're using AI in administrative tasks to look further for optimization.

Ricardo, thank you for joining the call. Well, let me [indiscernible] bit more details on the financing cost for the full year, if I got your question correctly, right, not just for the quarter.

The question was a little bit more on the quarter, but that's totally fine also.

I can jump to the quarter. No problem. So basically, yes, as you mentioned, we have an important increase of a little more than 20% for the fourth quarter, which is mainly driven by the impact of energy cost hedges, which I will probably get into a little bit more of [indiscernible] to provide the right visibility and understanding of this movement. We also have higher interest expenses from an increased debt position. And finally, a less material, a higher foreign exchange loss.

Now what happened also [indiscernible] base, what we have related to the [indiscernible], a virtual purchasing power agreement, which, as you know, it's a financial contract with renewable energy developer that allow us to support the renewable energy generation without physically receiving the power has some fluctuations on the P&L, depending on the price as compared to what we have in the agreement.

So what happened last year is that we had a movement on the cost of energy where the fixed price was lower than the projected energy prices, which made us to recognize a benefit in the income statement. And of course, conversely, if the fixed price is higher than the projected prices, then it will have an impact in our results. So mainly this quarter wasn't a big movement. What happened is that in the comparable quarter 2024, we did have a positive impact. So that is basically the [ PPPA ].

And then the other, as I mentioned, I think it's very clear. We have a higher leverage in absolute terms, although we were able to deleverage the company before our expectations. Remember that we have for the full year guidance of a slight improvement to a flat leverage ratio. So seeing today, the leverage of the company at 2.7x has converted to 2.9x. It's a very good news. We were able to anticipate the deleverage, as I mentioned, by being very careful on the CapEx. We ended below the expectation, but also a better operating performance, as you know, basically across all different segments.

The next question will come from Ben Theurer with Barclays.

This is [indiscernible] in for Ben. Sort of two here. Firstly, as there's been more discussion around [ GLP-1 ] adoption potential implications for food consumption. Have you seen any measurable impacts over 2025 in volume or mix, particularly in North America and more developed markets such as Europe? And how do you materially view this as a factor today versus something that still more of a longer-term consideration?

And secondly, EAA saw a meaningful step up in profitability this quarter. Can you break down the key drivers of the margin expansion and discuss how much of this seen a sustainable versus one-off? Sort of, how should we think about the margin progression over the next few quarters?

Thank you, [indiscernible]. I will take the first one. So the impact from [ Ozempic GLP-1 ]. We have a great understanding of the phenomenon now and its consequences, and we have detected some changes in consumer behavior among users. We're actively working on enhancing our portfolio, and let me share with you 4 initiatives.

One example, we're making products with a higher fiber and protein content. We believe this trend is here to stay, and we will continue to ride on it as [indiscernible] or within the Thomas' brand. And we're also around the world developing products in our big breakfast category. So we expect to see more innovations like this ones.

The second one is we're also offering smaller portions in snacks with a minimal nutrition density. And by bringing smaller portions, we accompany this kind of adopting consumers.

The third one is, we have been development in sugar [ print ] recipes and increased innovation in premium products. These premium products that will overall maximize the experience of this seeking a reward, but at the same time with a lower or nonsugar content.

And finally, we will continue to transition into simpler and more natural recipes. By this, we will provide options for these emerging consumers. So as I said, more grains, higher fiber, more protein-based solutions and continue to innovate in that space.

Yes. So now for the question regarding the improvement in the margin. I mean 2025 was a record year for EAA. It's a reflection of an exceptional performance, driven by both, one, solid organic growth but also the contribution from accretive acquisitions, particularly the last one that we did in the [ Balkan ] that, as we mentioned, when we concluded this acquisition is accretive in all points of view the profitability of the company.

We feel confident that this margin is not only sustainable, but that we can continue to improve it in the future. Specifically, EAA has been a region that has outperformed. In 2025, we achieved a 12%, 5-year compounded annual growth rate in sales. and reached the record annual margin of 10.8% with more than a 300 basis expansion for the year. So we're very happy with the performance, but also we're very confident for a positive future for this region.

The next question will come from Alvaro Garcia with BTG.

My question is on North America. You mentioned you foresee a gradual improvement in the [indiscernible] there. You also made some comments on sort of where the transformation project is in the context of your margin guidance. So yes, any color on sort of the factors driving that potential gradual improvement? And any commentary on margins specifically for North America in '26 would be very helpful.

Thanks for the question. I'll talk a few points on trends and then you also asked about our transformational efforts. So as it relates to trends, you saw in our prepared comments and it's pretty clear and syndicated data that the total category continues to be somewhat pressured. We are seeing sequential improvement in the category quarter-over-quarter in 2025. And beyond that, we've seen improvement quarter-over-quarter in our share performance over that period of time.

We're particularly excited about our performance in mainstream bread, in buns and rolls, and in salty snacks, where we've seen positive share gains in the fourth quarter, and those have candidly continued on even at the beginning of this year. So the thing I would leave you with is that the consumer continues to be bifurcated across the market. Value, mainstream and premium, and our response is to make sure that we are innovating into those spaces appropriately to move where our consumers are going for each of the cohorts. So that's how I might think about the trends.

In terms of our transformation journey, I would say we've made significant progress in 2025. As you could imagine, we looked at every area of our business from a cost perspective, manufacturing, logistics, procurement and our G&A spend. And I just want to thank the team for the progress that they've made together over the course of time. I would expect us to continue to be very inspecting all areas of our cost base. We will continue to do that.

The other area that I think is important is that our price promotion, we looked at our price and promotion very carefully over the last couple of quarters. We're going to continue to look at our pricing and promotion activities very carefully to make sure that we're doing so in a way that is beneficial to our customers. And we will continue to have rational and disciplined pricing and promotion activities as we go forward as well. So I think that's important to understand as we think about our transformation journey.

The next question will come from Antonio Hernandez with Actinver.

Just a quick one regarding Latin America. What are your expectations there? Especially in Brazil and in now the new acquisition and which saw an interesting year because of elections. So the overall outlook in the region and more specifically in Brazil.

Antonio, we weren't able to hear the last part of your question. So do you mind repeating, please?

Sure. My question is reading your outlook in Latin America and more specifically in Brazil, given the recent acquisition, an interesting year there in Brazil because of elections as well. So overall outlook in the region?

Yes. I mean, we feel confident for the region also that we will start to see positive trends as we believe the fundamentals for sustained growth are in place. Now I want to be very specific that in the fourth quarter and in the coming quarters, we will still have some extraordinary expenses for the integration of the [ Quik Bolt ] acquisition. That, of course, I mean, you know it was a project that took a lot of time to be approved. And it's a project that has the potential to create synergies, but we need to invest a lot and many of these investments are going to be reflected through the [indiscernible] so that can put some pressure in the short term.

But again, now with a more long-term view, I think that the region will start to roll back to previous margins. And now with the acquisition and once we end the integration, and we feel confident we're going to be able to sort of pass even the level of margins that we had in the past.

The next question will come from [indiscernible] Mendez with JPMorgan.

Can you hear me well? Can you hear me well, sorry?

Yes. Yes. We can hear you.

Excellent. Regarding the evolution of the project in the U.S., how far are we from stabilized margins? How far can they go? And could you share a little bit more color on the outlook on a per region basis, both top line and margins if possible?

Yes. Thanks for the question. I would say in terms of where we are in the transformation journey, we've made significant progress, as you can see in the results in 2025. To reiterate, we will continue to look at every area of the business. We expect that our -- the gains that we made in this past year, we feel good about how they will carry on into the future. And short of giving specific guidance, I would say that we will continue to look at every area of the business as we have done and we'll continue to do.

Yes. And regarding the guidance or the outlook for the different regions we do not provide a specific guidance. What I can tell you without being specific is that, of course, we feel confident that it's going to be a positive year in local currencies. So organically, we're going to be able to see some growth. And also, as I mentioned, for Grupo Bimbo, we expect a slight margin increase which is, of course, the consequence of improvement in the different regions.

Maybe if I can then add a little bit on the U.S. In the U.S., where do you face your, let's say, view that there should be an improvement in this more on your side, regaining share or receive more of a consumer recovery that you're seeing or expecting?

Yes. Maybe a couple of things. Again, I think we see moderate improvement in the category, but it's a category that continues to be pressured. There are certainly pockets of growth. And for us, it's really about making sure that we are being disciplined about innovating in the right spaces for our consumers.

I would say, too, as we continue to be rational and disciplined as it relates to pricing and promotion. I do think that, that will continue to be positive for the entire category in 2026.

The next question will come from [ Matteo Basara ] with TRG.

Congrats on the results. I don't know if you already touched on this so sorry if you did. I wanted to know if you could provide a little bit more color on what drove the margin is improving in [ Peru ]? See if there were any unusual tailwinds or is it fair to expect this type of structurally higher margins from now on, like consistently on the [indiscernible] basis?

We had a strong operating performance in many markets. The LatAm region is the composition of several countries. Peru, Ecuador, Chile, there are many markets that had a very good performance. And again, that we still believe that we can continue to have an improvement in the margins. Of course, we do not disclose not only the guidance, but the specific margins by country.

Now the -- for the quarter, the region have what we mentioned, the impact, particularly from the operations of Brazil because of two things. One, the pressure that we have from the cost of sales due to the hedges that we have for the FX. And also the onetime expenses related to the integration of [indiscernible] as part of the [indiscernible] Brazil business.

Sorry, if I don't know if I said I wanted to hear about Europe margins.

I thought you were asking [indiscernible] I probably made -- it wasn't very clear. So for Europe, I think that this was also previously asked. In Europe, we had a record year. We had an organic growth, but also the positive contribution of the acquisitions that we did entering into new -- 4 new markets through the acquistion of [indiscernible] in the Balkans. This has helped also the margins of the regions. It was a very accretive acquisition. We believe that this margin is not only sustainable, but we have room to see a continuous improvement.

The next question will come from Renata Cabral with Citigroup.

I have two, actually a follow-up one. Is related to the transformational projects in the U.S. I wonder if you could share some color of the advancement in terms of operation that you achieved so far? And for 2026, what should be the top priority within the products, for instance, the distribution of the south, or this [indiscernible], you see more opportunity in one or in the other, or both? If they -- although the capabilities are already in place. If not, where do you see some opportunities to tackle in 2026? Would be really helpful.

And another one, a follow-up on margins in the U.S. because we are seeing some transformation in the markets that the company operates. From one side, we have the increase in the portfolio of the private label. On the other hand, we have this new transformational projects. So both interacting will end up in maybe 3 to 5 years in different margin for the company. So not asking for guidance here, but more direction in terms of what you think the margin from U.S. will go towards the next couple of years?

Thank you for the question. I'll start, and then I'll turn it over to Diego for the second part of the question.

As it relates to the transformation journey, I would think about 2026 [indiscernible] deepening our efforts on almost every area that we've already talked about. So logistics, manufacturing, our pricing and promotion disciplines, all of those we're going to continue to work along. If there's one thing I would maybe add to the discussion, and Alejandro already mentioned this in his prepared comments, is using AI as an enabler across all of those different areas. So demand forecasting, network optimization, et cetera, those are areas that we believe that AI can be utilized in our organization in order to make it even better in the future. So that might be one area of color that would be additive to the conversation.

For the rest of it, I'll turn it to Diego.

Thank you, Greg. Well, let me give you a little bit of color. I am going to go back a few years. We used to operate in North America. And this, of course, is past history in the low lower digits. So 2022 was 11%. Then in 2023, we had a 50 basis point contraction. And then as everybody knows, we had a very complicated second half in 2024, and we ended the year in [ 8.4, 8.5. ]

Now what we're seeing in 2025, I think it's outside more considering that we still haven't seen a recovery in the consumption environment, as we already talked about. Unfortunately, we're still seeing a decline on volumes. But even though we're facing that complicated consumer environment in the U.S., we were able to deliver, I would say, an impressive and above our expectation margin expansion not only in the fourth quarter but for the full second year.

I perfectly remember when we provided the guidance last year that we were very specific that still for the first half of 2025, we were expecting a margin contraction, and that exactly happened. Now what we feel very happy about is to see how sequentially the margin contraction in North America started in the first quarter with [ 230 ] basis than negative 70 basis. Then we were able to achieve 90 basis point expansion. And of course, this quarter, 330 basis. So we were able to end the year with a positive margin expansion in North America, 60 basis.

Now consider that first volumes were not necessarily on an optimistic environment and second, that we have a lot of onetime expenses in the year, a lot of expenses that have to do with the transformation that we have talked a lot of out and that Greg explained, and that is putting some pressure to the results. So now are we going to continue to have expenses definitely because we haven't ended this transformation. Is this going to create some pressure? Yes, not certainly more than the one that we already have in 2025.

Now on the side of the expenses. What is to say encouraging is to think that we will start to see and capitalize on these past investments. So I think that more than a specific comment on the guidance for 2026 or 2027, I will definitely say that we're on the right path to go back not only to the margins that we had in the past, but even to end having a company with a higher profitability than the one that we had some years ago.

The next question will come from Felipe Ucros with Scotia Bank.

I think you just took one from me on where long-term margins can go in the U.S., on whether you would get back to old levels. I had a second one, which had to do with the market share gains. You discussed this quite a bit in your remarks and also in the release.

I know there's been a little bit of innovation, but I imagine those categories are still small. Wondering what you think was the main driver in getting those shares back up? Any color you can give a number would be great.

Yes. Thanks for the question. And I'm assuming that the market share gains that you're talking about were -- I'll at least speak to North America and if there's a question beyond that, I'll let Alejandro take it.

As it relates to North America, I would say a couple of things. First, the innovation is -- has been successful. So -- and Alejandro talked about both of the ones that I'd like to highlight. Small loads, which really go to a shrinking overall households in terms of number of people and then our protein efforts, Thomas' [ bagels ] being one example of that, where we are reaching to not only new consumer cohorts but also existing consumer cohorts that are changing their purchasing behaviors and their consumption behavior. So you can expect us to continue to innovate along those lines because those have both been successful, and we expect to do more edition like that in the future.

I would also add that part of our transformation efforts has been around sales execution. And with that, that's around all of our DSD disciplines. And we've seen improvement in our DSD disciplines, thanks to the fine efforts of our frontline associates that are in the field every single day and that goes to our ordering patterns. It goes to executing at a high level on our innovation when we do launch it, and then also executing at a high level our promotional activities when we partner with customers in order to do something exciting within the consumption environment. So I would say execution has been part of our improvement as it relates to our share gains. So innovation and execution would be where I would underline

The next question is a follow-up from Ricardo Alves with Morgan Stanley.

It's on snacks. We noticed two divergent sales trends more recently. In sweet snacks, [indiscernible] seems to be losing a little bit of share on the margins. I just wonder if there is any update on the competitive environment in the U.S., specifically around [indiscernible] and your main competitors. Any pricing or discount that we should be aware or I don't know, maybe packaging or channel issues?

On the flip side, as I said, diverging trends. Salty snacks, super strong. So I wonder what's up with Takis, what is the latest double-digit growth in the fourth quarter? So -- just wanted to see the industry is still kind of flattish. So anything that you could do if you could zoom a little bit further into those 2 subcategories that will be helpful to understand what's going on.

Yes. Great. Thanks for the question. I appreciate it. I'll answer the question as it relates to sweet snacking and then I'll turn it over to Alejandro, who can probably talk more broadly about salty snacking.

Yes. As it relates to sweet snacking, I would say it's always -- it always has been and continues to be a very competitive environment. It is a subcategory that has been under -- probably a little bit more consumer pressure than most subcategories. So there's certainly that component of it. I would say as it relates to the competitive environment, we're continuing to take a hard look at the intimates business specifically and our sweet baked goods portfolio in general. We believe that there are innovation that we can bring to those brands into the category that we think will be helpful to the consumer who is still very interested in those offerings. So it's some work to do, I would say, on sweet baked goods, but we're actively working on that as we go forward.

Thank you, Ricardo. And as you know, used to be the leading person of the salty snacks globally. So I think our success in the U.S. in this fourth quarter has been the result of what Greg was talking. It's all about execution. It's focusing in what we know what to do, and we're just doing it better. Our product is awaited. It's awaited everywhere. And we're just being able to drive through more product and the response of consumers has been very good you have seen.

Good day, and welcome to Grupo Bimbo's Third Quarter 2025 Earnings Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Rafael Pamias, CEO. Please go ahead.

Good afternoon, everyone. Thank you for joining us. Connected on the line today are our CFO, Diego Gaxiola; and Executive Vice President, Mark Bendix, along with several members of our finance team.

During the third quarter, we delivered growth in both sales and EBITDA and saw improved sequential volume trends, driven primarily by disciplined pricing strategies, strong geographical diversification and material operational efficiencies. At the same time, we continue to demonstrate the resilience and breadth of our portfolio by gaining or maintaining market share in 5 out of our 6 categories.

In North America, we posted very solid results with 3 quarters in a row with sequential margin improvements. In fact, we went back to double-digit EBITDA margin due to the excellent work of our associates throughout the transformation program.

Overall, this performance underscores our ability to maintain profitability and agility, adapt and compete effectively and stay connected with consumers supported by a diversified global footprint that spans through 91 countries worldwide, including 39 where we operate directly, enabling us to navigate the challenging and fluctuating market dynamics.

Despite a challenging environment in some markets, our diversified geographic footprint continues to pay off. In Mexico, while consumption was soft, the business has demonstrated notable resilience and reached the highest level of sales while continuing to report strong EBITDA margins at above 20% even with a very tough basis of comparison.

Meanwhile, we are observing encouraging signs of recovery in North America with improving price/mix dynamics and trends in core categories like bonds and mainstream bread. EAA also reported extraordinary results hitting records in several metrics. Additionally, recent inorganic growth initiatives have proven highly accretive, reinforcing our strategic road map and strengthening our long-term value creation potential.

I am proud to share that we held the 2025 Bimbo Global Raise, our tenth, and thanks to more than 165,000 participants, more than 3 million slices of bread are being donated to food banks around the world. We were also recognized by Merco as the company with the best corporate reputation in Mexico for the ninth consecutive year.

Now looking into the results by region. In Mexico, despite a softer economic environment -- consumer environment and on top of the record results achieved in the third quarter of 2024, where we grew nearly 7%, we delivered sales growth of 0.3%. This performance reflects our ability to sustain growth even under challenging market conditions supported by a favorable mix and continued expansion across key categories such as buns and rolls, cakes and

All channels contributed to this result with particularly strong performance in convenience and traditional, demonstrating the resilience of our portfolio and the strength of our commercial execution.

During the quarter, we faced higher commodity costs, mainly due to the FX hedge positions we had in place as well as the ongoing investments we are making to drive growth, enhance operational productivity and strengthen cost and control. And it is worth mentioning that even with a very fast basis of comparison of quarter 3, '24, when we reported the highest margin ever where we were able to maintain our margins at above 20%.

So this is still a very good quarter we've seen in the top 3 since 2022. After a difficult August, we regained positive momentum in September driven by architecture initiatives and innovation launches. We are also advancing the transformation of our go-to-market model to serve our customers and consumers more efficiently and to fully capture the benefits of digitalization across our operations. So we remain optimistic about the near and long-term future of our operations in the country.

In North America, excluding FX, sales declined by 3.5%, reflecting continued softness in U.S. consumption and a bifurcation of consumer behavior with some consumers trading down to more value-oriented products while others are increasingly choosing premium offerings. We are also cycling the impact of last year's strategic exits from certain nonbranded customers which occurred in October in the U.S. and during the second quarter of 2025 in Canada.

Although volumes remain under pressure, trends are improving, and we -- and the business is showing clear signs of stabilization. Private label performance has softened after a strong start to the year, while our branded bread portfolio, led by Bimbo, and our premium artisanal breads continues to gain share.

Sequentially, we saw lower sales declines, market share gains in core categories and a positive price/mix effect supported by disciplined revenue management and more efficient trade spending.

Turning now to our transformation project. We continue to advance as planned and are now seeing tangible results. The first phase focused on productivity is delivering record outcomes. In fact, productivity gains are running at twice the level achieved during last year's record performance. This led to an EBITDA margin expansion of 90 basis points and a sequential margin improvement from 7.4% in Q1 '25 and 9.0% in Q2 '25 going back to the double-digit margins.

This transformation is enabling us to serve our customers better and more consistently. I would like to walk you through our process. This project is centered on 3 key pillars. The first is about rightsizing our cost base via productivity, which is where we are now; second, becoming a better version of ourselves through enhanced revenue growth management and performance governance; and finally, expanding beyond our current core through new growth channels, new distribution models and by addressing new markets.

Looking ahead, our main challenge and opportunity lie in reigniting top line growth. We now have better visibility and stronger alignment to achieve this, supported by the progress of our transformation initiatives. We are focused on unlocking the full potential of our brands, even amid external consumption headwinds, by capitalizing on the significant opportunities we see in our portfolio.

We are seeing specifically some growing interest in more elevated experiences and more health and wellness propositions.

Moving on to Latin America. Excluding FX effect, we set a record for the third quarter for net sales fueled by robust volume and sales momentum across every organization with sales outperformance in several countries, highlighting those within the Central America region as well as consistent growth in Colombia, Brazil, Chile, Ecuador and Argentina.

Sales were also benefited to a lesser extent by the inorganic contribution from the acquisition of in Uruguay completed in September of 2024. Adjusted EBITDA margin contracted 110 basis points, mainly due to the higher raw material costs in Brazil and Argentina, mainly related to the FX fluctuations as well as increased general expenses due to strategic investments for future growth, including distribution improvements in Chile and Argentina.

We remain fully focused on driving both growth and profitability, supported by the strength of our portfolio, the power of our brands, the agility of our route-to-market strategies and the outstanding execution of our associates at the point of sale, leveraging as well from disciplined revenue growth management strategies to further enhance our market competitiveness.

I'm also very happy to share that this month, we have completed the acquisition of Wickbold in Brazil, adding Wickbold trusted brands such as Wickbold and as well as their manufacturing capabilities and distribution reach, that strengthens our portfolio and create a strong platform for sustainable growth enabling us to deliver even greater value to our customers, consumers and shareholders.

In Europe, Asia and Africa, excluding FX effect, sales increased more than 17%. This performance was primarily driven by the consistent strength of Romania, the U.K., India, Morocco and the Bimbo QSR business unit coupled with the contribution from the acquisitions we completed in the last 12 months, including Caramolegos in Romania and Don Don the Balkans.

The adjusted EBITDA margin was benefited by the strong sales performance and lower administrative expenses, along with the accretive effect from past acquisitions and lower restructuring expenses related to last year's bakery closure in Spain. We continue to see challenging results in our branded business in China as well as the combined effect of minimum wage increases and the phaseout of wage subsidized in Romania.

With this, I would now like to turn over the call to Diego, who will walk you through our financials. Please, Diego, go ahead.

Thank you, Rafael. Good afternoon, everyone, and thank you for joining us today.

Overall, our third quarter results were resilient with clear signs of stabilization in key markets such as North America. Our geographic diversification once again proved to be a significant advantage, enabling us to maintain the record margin achieved in the same quarter of last year despite challenges in some markets.

In addition, our recent acquisitions have been highly accretive to both sales and margins, further strengthening our portfolio and reinforcing our ability to deliver sustainable, profitable growth.

Moving on to our balance sheet. Our total debt increased MXN 6 billion as compared to the end of 2024. This was driven primarily by the acquisitions completed during the year and our CapEx program, which reached $728 million as of the end of September. These effects were partially offset by the appreciation of the Mexican peso.

Despite these strategic investments, our net debt to adjusted EBITDA ratio declined to 2.8x. Our disciplined financial management continues to guide us through a challenging macroeconomic environment. We remain focused on operational efficiency, cost control and strategic resource allocation to protect margins and drive long-term value creation.

Backed by a solid balance sheet and a recently renewed and $2.35 billion committed revolving credit facility, we are well positioned to navigate evolving market conditions, while staying firmly focused on sustainable growth.

As shared with you previously, we anticipated a better third quarter for North America. We went back to a double-digit margin with a 90 basis point expansion, when compared to the same quarter of last year, driven by material productivity savings.

Now regarding our guidance, we are adjusting our average FX assumption by $0.50, reflecting the recent appreciation of the Mexican peso. This stronger peso represents approximately a 200 basis impact on our top line growth. Despite this effect and thanks to strong results of the third quarter and our confidence for the rest of the year, we are not changing our guidance.

We continue to expect mid-single-digit growth in top line and flat to a slight contraction in our EBITDA margin. What we are updating is our leverage outlook. With a stronger peso, we now expect to end the year below 3x, more specifically at 2.9x instead of our previous estimate of 3x.

Despite the challenges we have faced this year and the ongoing uncertainty in key macroeconomic environment, we remain confident in our long-term strategy. As a highly diversified global company and industry leader, we are well positioned to navigate near-term headwinds.

Thank you for your time. And now we're ready to go to the Q&A session.

[Operator Instructions] The first question comes from Alejandro Fuchs with Itau.

Congratulations on the results. I have one quick one related to the gross margin in the U.S. Obviously, we saw a very strong expansion year-over-year, but this is quite different to the trends seen in all the regions. So when you see if you could elaborate a little bit more into what's driving this very strong gross margin expansion in the U.S.?

And you commented better mix in the productivity savings. I wanted to see if maybe you can give us some color on how much is productivity, how much is the mix? And do you see these maybe being sustainable going forward?

Alejandro, this is Diego. Yes, and let me tell you, one of the big differences between the regions is the FX impact that we had, I mean, particularly in Mexico as well as in Brazil, Chile and other economies a little bit, very little in North America and Canada.

What we're seeing today in the third quarter results is the hedges that we took approximately 6, 8 months ago as part of our continuous hedging strategy that you know we're very disciplined, and we do not speculate and we provide the visibility and the certainty for the different operations in terms of the cost of the FX for the operation.

What happened is that, as you remember, at the beginning of the year with all the uncertainty in regards of the tariffs that we're going to change between North America -- the U.S. and all the other countries, we start to see a very big depreciation of those currencies. So what happened -- what we're seeing today is the effect of this depreciation on our results.

This will continue to have some additional pressure in the fourth quarter. As you heard, we are optimistic about the outlook for the fourth quarter, even with this additional pressure. Now that's the main reason for having a negative gross margin in Mexico, LatAm and Europe, Asia, Africa.

In the U.S., we have no effect from the exchange rate, and we are seeing the full benefit of a much better cost of commodities. On top of the cost of commodities, we're seeing many benefits from the productivity initiatives that have been implemented as part of the transformation in the U.S.

And finally, we have a positive mix effect in the U.S. that is also helping with the gross margin.

The next question comes from Ricardo Alves with Morgan Stanley.

I have a follow-up question on North America margin. I think that certainly that was the biggest positive surprise versus our numbers to see the margins back to the double digits, so congrats on that.

As it pertains to the transformation, can you talk qualitatively about the main strides that you've achieved in North America? I think Diego just alluded to that. I think that in the release you say record productivity benefits, if I'm not mistaken. So can you share with us some of the key metrics you're monitoring, the key metrics that maybe you've been able to already improve a lot versus, for example, last year, just so that we can rest a little bit better where this efficiency gains are coming from and for us to have an idea of how much of that could continue going forward?

My second question, if I may, is also related to profitability, and it's also related to what Diego just mentioned. But going to Mexico, when we look at the FX curve to the point that you just mentioned, Diego, we also see the possibility of a higher pressure on FX, but perhaps a better a better dynamic on a couple of raw materials that we see.

So I just wanted to check if that is indeed what you see, the net-net impact in the very short term in Mexico being still pressured? And if that's the case, is there room for frontline pricing adjustment? And I ask that in the context of the flat revenues that you've achieved in Mexico.

So if your COGS is inflating maybe because of the past FX issues, is there room, given what we are seeing with the Mexican consumer today, do you see the possibility of you adjusting prices, frontline pricing a little more aggressive going forward?

Ricardo, this is Mark, and thanks for your question. First off, I want to acknowledge it definitely is a difficult consumption environment in the U.S. But I really need to point out, I'm truly proud of our North American team and how they've embraced and committed to our transformation initiative. We have democratized the transformation process to many initiative owners to unlock our full potential.

And we know that many hands will make light work. More specifically, we have delivered resilient performance through Q3, with gross profit and EBITDA margin expansion. And looking ahead to the fourth quarter, our focus is on stimulating category growth and continuing this momentum that you've seen throughout the year with sequential improvement in our results.

And we're going to do that through disciplined commercial investments, improved frontline execution and innovation. We are also working on automation, standardization and digital tools to drive our efficiency down to the right level. Our process optimization to enhance our manufacturing, we're working on warehousing optimization and distribution.

We're minimizing waste everywhere you can possibly find it and increasing our labor efficiencies. And we're, frankly, ruthlessly managing our G&A and discretionary expense spend. So you can see it's multifaceted. It's across our business. And we're also seeing positive price/mix with some of our price pack architecture as well. Those are the main drivers that you're seeing the benefits in Q3, and we see that continuing on through Q4 and into '26.

Thank you, Mark. Regarding Mexico, let me first start by the last comment that you mentioned about the flat growth that we had during the third quarter. And I would like to reiterate and highlight that the main reason for having a flat performance is because of the comparison.

We had a tremendous quarter in the third quarter of last year. It was our record history margin and also a very strong top line performance. And the same happened in the fourth quarter, okay? I would say, when we zoom into Mexico, and you might probably remember that I was very explicit when we provided the guidance, but we felt very confident that for the second half of the year, we're going to see a margin expansion and that we were expecting a margin contraction for the first half of the year.

And I think we're pretty much in line with our initial expectation, of course, with the changes on the exchange rate and the effect that it has in our top line growth. But I would say that in terms of margins, we feel confident it's going to be the case at a Grupo Bimbo level.

When we zoom in in Mexico, it's probably a little bit the opposite because of the comparison. We are still seeing a very strong operating performance of the different businesses in Mexico. We're going to be for the second half in the above the 20% EBITDA margin mark, which is outstanding.

If you look at the history of Mexico, 20%, it's a very strong level for our operation. So I just wanted to be clear that it's not that we're having a problem is that we have this tough comparison versus in the second half of last year.

In terms of the FX. I already mentioned, we will continue to see some pressure in the fourth quarter. To give you an idea, we have an average exchange rate of approximately MXN 20 per dollar for the second half of the year when last year, we had an exchange rate below MXN 18. So we're having a big impact on the exchange rate.

Fortunately, this is going to pass through. I mean this is going to go once we start to see the effect of the stronger peso that we're seeing in the spot market today that is going to be reflected in 2, 3 quarters in our P&L, and that, of course, will start to create a positive effect for 2026.

In terms of the pricing strategy in Mexico say that we're still operating as typically we already apply selective pricing where possible, always in line with inflation. Everybody knows that we're not seeing a strong consumer environment, so we're being very cautious and very selective on which of the SKUs are having some price increases, so it's not all across the portfolio.

The next question comes from Renata Cabral with Citibank.

I have 2 here. The first one is a follow-up about the transformational project -- that was his private as fast transformation. And my question is in terms of top line contribution, it seems it's only the beginning of the contribution for the company. And in terms of time line, should we expect this impact in 2026 or that should be more towards in 2027, you have some sort of color on the incremental opportunities on the side on the top line?

And my second question is related to the transformational projects. So the company is making huge transformation in effort. But my question is, if you also see opportunities for M&A to accelerate this front?

Great. Renata, thanks for your question. I think how you should look at our transformation is this is not just 1 or 2 months. This is a multiyear journey in transformation and expect to see it over multiple years. We've begun this journey and we're having very good success. But we need to get our growth algorithm going in the right direction, and we're really -- our strategic focus is on multi-brand channel and format strategy to capture younger new consumers, smaller households, so our products are relevant.

And certainly, everybody talks about the health So we're refreshing our portfolio with new flavors, products, pack sizes. Some of the examples that you would see would be our butter buns and Bimbo buns. Thomas Protein Bagels and the expansion of Muffentops and Thomas' bread, those kinds of products. So don't look at this as a single year journey, but a multiple-year journey.

And I'll let Diego and Rafa talk about acquisitions as a strategy for fueling that growth.

You were referring to M&A going forward in the U.S. or globally in Grupo Mexico -- in Grupo Bimbo?

In the U.S. specifically.

Look, we proactively review the opportunities on the M&A horizon and analyze them thoroughly. As you know, we have acquired medium and small companies in the numbers of 24 during the last 6 years, following a very distinct pattern focusing on, as I said, acquisitions, on consolidating the presence in existing markets, entering interesting geographies and to learn processes or technology.

In the case of the U.S., we are exploring always opportunities to complete our portfolio, knowing that our geographical distribution and presence is quite strong. So we're looking at these kind of opportunities, always. And if those make sense, why not? But they would be more on the top line arena.

Next question comes from Antonio Hernandez with Actinver.

Just a quick one regarding competition in Mexico. I mean, you already mentioned, of course, the consumption environment and overall we've seen a similar speech across consumer companies. But anything more specifically maybe in terms of geographies or in terms of competition or the different categories? Anything -- any more color that you could provide, that would be great.

Yes. What I would say, I mean, as you know, volume is expected to remain soft in the near term, and this is for everybody, ourselves and competition. If you're referring if competition is denting our market share significantly or that if we see that there are some segments or categories where we're suffering more than others, I would say -- or channels.

I would say that no, it is not happening. I would say that category performance, most categories contributed to our growth. Highlighting very specially buns and rolls, cakes and sweet baked goods and all this driven by differentiated innovations that are resonating quite well with consumers.

And notably, we have our programming initiatives with Hershey's, featuring high-quality chocolate fillings, et cetera. So I would say that on the category performance, I wouldn't say that our soft consumption, our soft volume could come from that. Neither on channel performance, all channels grew showcasing the resilience of our business, brand recognition and competitive position.

And we're being quite active in every single channel to offer propositions that cannot be beaten. So I would say that competition is not part of the equation on on the general softness of the volume.

The next question comes from Lucas Ferreira with JPMorgan.

My first one is in the U.S. and on the transformation project. I know it's a multiyear project that there's many layers to understand that. But I think maybe at this point you can already view share with us some expectations. In terms of -- when you add efficiency, when you leave some categories, they are probably not super profitable when you enter new more promising categories and all things together.

Should we expect that operation to be sort of a low-teens like it used to be during the pandemics or with sort of the revamp of productivity where we could be talking more sort of type of margin? And also on the growth side, I understand there's also many factors impacting the growth there on the top line front. But if you can share at least on in terms of volumes, what's your expectations on when should we start to see volumes in North America again?

And if I may, a quick one on Europe, EAA actually. So if you can just give us some guidance on what is the sort of organic growth of that operation, so we understand a little bit how to model this in 2026 excluding the inorganic. So just to understand how much the region is growing on a sort of a more normalized basis.

Lucas, again, this is Mark. Thanks for your question. I'll address your question about what you should expect from the U.S. as we go forward.

So I think you should expect from us portfolio expansion, addressing underperforming and underpenetrated consumer opportunities, including the value-oriented products to meet evolving consumer needs. An example would be our entrance of Bimbo bread into the value-oriented consumer as well as Bimbo half loads addressing smaller households, but also economically challenged consumers.

The balance of the year for 2025 you should expect top line performance to gradually improve through the end of this year and then into next year, as our commercial initiatives gain more and more traction because you've seen a piece of it, but you haven't seen all of it yet. We had market share gains in mainstream bread that we're beginning to experience, buns and rolls and snacks.

We remain committed to strengthening our share in the bread category. We're not walking away. This -- it's a large category. So we've got to innovate and capture it. Productivity is still a keen focus for us and we'll focus on expenses, and it will continue to help us drive margin expansion.

As you've seen so far, our business has demonstrated resilience through various challenges, and we're strategically positioned now to drive the business into a sustainable, profitable growth in 2025 this year and then beyond. And we remain committed to delivering long-term value to our shareholders throughout the strategic investments and our operational excellence and our focus on consumer needs.

And I will continue with the question with Europe. Obviously, inorganic has represented some weight in our good results, and by the way, all accretive growth. Having said that, our organic results are strong, too. And we have been enjoying top line and bottom line growth in India, in our operations in North Africa, Romania and U.K.

So I would say that the results of Europe, Asia and Africa, excluding FX effect, increasing by more than 17%, they are due to mostly the organic. So we're happy with that.

The next question comes from Ben Theurer with Barclays.

I wanted to follow up actually on Lucas' question here in EAA. Clearly, not only sales but also profit continues to be very strong and with a very significant margin expansion. So I would like to understand a little bit more what's driving that? Is it from a cost perspective, is it mix? And how should we think about going forward, as you've just said this is a strong growth driver. Obviously, it gains momentum, it gains relevance from like a margin profile. Is that going to be in line with what North America should be?

Is it going to get better than that because there is an emerging market component? Just help us understand aside from sales growth, also maybe the margin profile for the region.

Yes, of course. On the sales side, what we're seeing is a quite remarkable expansion of our Bimbo QSR business unit. We are seeing more sales in the 4 big top customers that we serve. As you know, we have an extensive footprint in Europe, in Russia, Ukraine, France, Italy, and the likes. This is one piece. Also, we are seeing robust double-digit top line growth in India.

And U.K. is also benefiting from portfolio expansion. So as you see -- and also, definitely, Romania is growing robustly. So I would say that we have been tailor making different strategies depending on the country. In India, it's all about category growth, and we are very well positioned with great brands.

In U.K., it is about great additions to our portfolio. In Romania, it is about following our business plan, where we are pushing for consolidating a fragmented market and making the transition from unpack and branded to pack and branded solutions. So I would say that it has been a different strategy per business unit sort of speaking.

And on the bottom line, I remind you that all of our acquisitions in the region has been accretive from the EBITDA margin point of view, most especially the ones in Romania and we've Don Don in the Balkans. So all in all, a pretty good picture in the past, and we hope the following quarters with EAA.

The next question comes from [indiscernible] with GBM.

I wanted to ask you, we saw a significant reduction in CapEx deployment. Could you help us understand the difference? And what was the CapEx used for this quarter?

Rafael, you're okay, I can take this one. .

Yes. Yes, please.

So year-to-date, we have invested $728 million, which is 33% lower versus the same period of last year. As part of our full year guidance, we're expecting CapEx to be in the low part of the range that we mentioned to be between $1.3 billion to $1.4 billion. Our investments are mainly in maintenance, maintenance CapEx, productivity projects and also growth initiatives.

So what we have been seeing since 3 years ago, so a gradual decrease on the amount of CapEx that we have been investing coming from $2 billion, then $1.6 billion and now we're going to end probably at $1.3 billion because our project for growth are demanding less resources than the heavy lifting that we were doing 2, 3 years ago.

On the maintenance CapEx, it's more or less the same than what we typically invest, which is in the range of $800 million per year. In productivity, we're investing a little bit more this year, particularly from the transformation project in the U.S.

The next question comes from lvaro Garc a with BTG.

A couple on my end. Mark, on the U.S. consumer, I was wondering if you could maybe perhaps seeing some weakness. We've heard from other consumer companies, some weakness out of the Hispanic consumer specifically naturally overindexes to a degree. So maybe if you could speak to any week out of that cohort, that would be helpful.

And then a second one on Wickbold in Brazil, congrats on closing the deal. I'm assuming that we'll see that in the fourth quarter. And I was wondering if your leverage guidance for the end of the year considers that transaction?

Well, thanks for the question. In the U.S., I'll give you a sense of the overall trend that we're seeing. So we're seeing expectations for more health and wellness products and the consumer has definitely shifted pretty dramatically. And we're currently trying to appeal to a broader consumer demand for healthier options.

There is increased demand for high protein foods. Consumers are prioritizing protein sources, including plant-based, as you're probably well aware of -- and with the onset of GLP-1 drugs, we're seeing that in the environment.

In terms of the Hispanic consumer, there's no doubt, we don't have a detail that breaks that out to tell us that the Hispanic consumer is overly stressed. But I -- in the environment in the U.S., I would expect that to be true, but I don't have data that would support that, lvaro. But we're positioned to capture this in many different consumers because we're offering a lot more value-oriented products.

As I said earlier, we're working on Sara Lee half loafs, where we've introduced Bimbo bread across the United States and launched it nationally and it fills a spot above private label, but below the national brands. So hopefully, that's helpful.

This is Diego. As you know, Wickbold acquisition was completed during this month in October. So I mean, no effect either on the P&L or the balance sheet as of the end of the third quarter. We will start to see the effect on the P&L in the fourth quarter. And yes, the guidance that I mentioned for the leverage of 2.9x by the end of 2025 it's including the acquisition of Wickbold.

The next question comes from Fernando Olvera with Bank of America.

My questions are for you, Diego. I mean just a follow-up regarding Wickbold, maybe if you can give us some color what will be the contribution of Wickbold in sales and EBITDA?

And my second question is regarding your leverage. Considering the net debt-to-EBITDA ratio is likely to end below 3x, how are you thinking about share buybacks for the remainder of the year and early next year?

Yes. Well, as you know, we do not disclose the specifics on acquisitions that are not transformational as the effect on our sales is no material at the Grupo Bimbo level is less than 1%. So as I said, it's going to be reported beginning in the fourth quarter, but we're not going to be disclosing any specifics on Wickbold.

In terms of the net debt-to-EBITDA connected to the buyback program, I'd say that we're still in a financial position with a leverage that is above our comfort zone. We are planning to enter into a deleverage stage gradually. It's not going to happen very fast. But we do expect to see a gradual deleverage beginning in 2026 and going forward.

But having said that, we still operate with the same methodology that considers, of course, the cash flow generation, the expectations that we have under demand of resources, both in inorganic and organic needs and also, of course, the evaluation of the company. So we're there, we're going to be always analyzing if there's an opportunity and we can start to operate. So is not that we're on freeze. So anytime soon, we might probably start to operate the buyback program.

The next question comes from Felipe Ucros with Scotiabank.

Just a couple on my side, most of the ones that I had have been asked. But one that caught my attention now is going to release was the mention about starting to see a positive price/mix performance in North America. So I was just wondering if you guys could talk a little bit about the sources of improvement on the price/mix, whether it comes from the innovation things that you have rolled out or whether it comes from different consumption or channel behaviors or perhaps some actions on pricing on your behalf?

Just any color you could give us on the turnaround on the price/mix in North America would be great. And then the second one, I was positively surprised to see a couple of countries in Latin America where things haven't been going asked well for most of the corporates that we've seen reporting this quarter. Argentina, for example, Ecuador, for example, you guys had good performances in those countries, but the macro seems to be pretty poor. So any color you can give us on how you're managing to achieve positive performance in those countries would be great.

Felipe, this is Mark again. In terms of the U.S. As we mentioned at the outset, we are seeing a bifurcation of consumers, both on the value end, but also on the premium end. And a little bit of that price/mix that you're seeing or commenting on is the artisan products that we've introduced into the market have had a very nice effect on our P&L. So we are excited and looking at extending and expanding more artisan products, but that's what you're seeing and commenting on. And in terms of the rest of the question, I'll turn it back over to Diego.

Actually, I'm going to answer on LatAm growth profile, right? I just want to remind you that we undertook a significant full potential and turnaround in key geographies 4, 5 years ago, definitely the step one in Brazil and Argentina mainly was to create a more competitive organization to get that out of the system, but also we create a very competitive one.

So Brazil, our largest operation, has been consistently growing and improving profitability for several years. It is growing market share, has been able to increase full investment, and we have been able to source much needed in the past, capacity in bread, tortillas and snacks. So I would say that turning around Brazil and Argentina, we aided internally the source for tool and more capacity.

So what we have been seeing is increasing our sales and extending our portfolios. Also, when it comes to Chile and Colombia, last year were not so good years for both economies, if you remember our previous quarters, but we just acted on both. We improved basically in Colombia, DSD performance, and we expanded significantly in hard discounters, which are a big thing in Colombia.

And in Chile, we turn around the poor modern trade performance, I mean, a hiccup last year while doubling up our full portfolio in DSD. So net-net, I would say, that we have relied, and rightly so, with our excellent themes. And we have been very intentional on our full potential plans that sometimes we have shared with you guys. So I would say that we are outperforming the market in the top line.

And if I may, last, but not least, of course, because of better prospects in LatAm, we have also been more, I would say, active on acquisitions in new categories, channels and technologies. For example, Costa Rica helped us focus on the artisanal original sweet baked goods and is opening up new channels such as in-store and frozen service. So all in all, I would say that despite the hiccups normal to the LatAm geography, we are coping with them with a stronger themes and portfolios.

This concludes our question-and-answer session. I would like to turn the conference back over to Rafael Pamias for any closing remarks. Please go ahead.

Yes. Thank you. Thank you all for your time today. Please do not hesitate to contact our Investor Relations team with any further comments or questions you might have. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.