GRUPO BIMBO, S.A.B. DE C.V.
Prolongación Paseo de la Reforma No. 1000
Colonia Peña Blanca Santa Fé, 01210
Delegación Álvaro Obregón
México, D.F.
Tel. 52 (55) 5268-6924
Fax. 52 (55) 5268-6697
Market Quote: "BIMBO"
STATEMENT OF INFORMATION ABOUT CORPORATE RESTRUCTURING
November 9, 2010
In accordance with Article 35 and Annex P of the Securities Issuers Regulations (Disposiciones de Carácter General Aplicables a las Emisoras de
Valores y a otros Participantes del Mercado de Valores) issued by the Comisión Nacional Bancaria y de Valores (National Banking and Securities
Commission; the “CNBV”), Grupo Bimbo, S.A.B. de C.V. ("Grupo Bimbo" or the "Company") informs its shareholders and the public investors that
it has reached an agreement to acquire the fresh bakery business in the United States of America (the "United States") of Sara Lee Corporation
("Sara Lee"), as well as an exclusive, perpetual, irrevocable, non sub-licensable and royalty-free license to use diverse brands and other industrial
property rights.
Brief Summary of the Acquisition
Grupo Bimbo reached an agreement, through the execution of the necessary documentation, which is subject to standard conditions and
authorizations for this type of transactions, to acquire Sara Lee's fresh bakery business in the United States. The price of the Acquisition is
approximately US$959 million dollars, currency of the United States. The Acquisition includes the right to use an exclusive, perpetual, irrevocable,
non sub-licensable and royalty-free license of a brand portfolio (and other industrial property rights) that includes "Sara Lee"®, "Rainbo"®,
"Heiner's"® and "Colonial"®, used in diverse products part of the fresh bakery business, as well as the purchase of 41 plants and nearly 4,800
distribution routes (the "Acquisition").
The Acquisition is part of Grupo Bimbo's growth strategy to consolidate its global platform and is in line with its vision to become a worldwide
leading company and one of the most important food companies in an international level.
The shares of Grupo Bimbo's are registered in the Registro Nacional de Valores (National Registry of Securities, the “Registry”) and are listed in
the Bolsa Mexicana de Valores (Mexican Stock Exchange; the "BMV"), with the market quote "BIMBO".
Registration of Grupo Bimbo's shares in the Registry does not imply certification about the value of the securities, the solvency of
Grupo Bimbo or the accuracy or completeness of the information contained in this Informative Brochure, nor it validates acts that have
been performed against the laws.
This Informative Brochure is not an offer to sell securities in Mexico and has been prepared and made available to public in order for Grupo
Bimbo's shareholders to be informed about the Acquisition. The board of directors of Grupo Bimbo approved the Acquisition on November 3,
2010, subject to the execution of the definitive documents related to the Acquisition. Since such documents were executed on November 9, 2010,
such resolution became effective precisely on such date.
The Acquisition does not imply the issuance of new shares of the Company, nor any amendment to the current shares or the by-laws of the
Company.
Copies of this Informative Brochure are at disposal of the investors at Grupo Bimbo's Relationship Investors Area, whose offices are located in the
address mentioned above, Attention: Armando Giner Chávez, Telephone: 52 (55) 5268-6924, e-mail [email protected] and/or
Azul Argüelles, Telephone 52 (55) 5268-6962, e-mail azul.argü[email protected] . The electronic version of this Informative Brochure may
be reviewed in any of the following web pages: www.grupobimbo.com and www.bmv.com.mx.
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INDEX
1.
TERMS AND DEFINITIONS……………………………………………………………………………...3
2.
EXECUTIVE SUMMARY………………………………………………………………………………… .5
3.
DETAILED INFORMATION ABOUT THE ACQUISITION…………………………………………… 7
3.1.
4.
5.
6.
7.
Detailed Description of the Acquisition…………………………………………......… 7
3.2.
Purposes of the Acquisition………………………………………………………….. . 8
3.3.
Financing Sources and Expenses……………………………………………………... 8
3.4.
Acquisition's Approval Date……………………………………………………….……..8
3.5.
Acquisition's Accounting Treatment……………………………………………….…… 9
3.6.
Acquisition's Tax Consequences………………………………………………………. 11
PARTIES TO THE ACQUISITION……………………………………………………………………….. 12
4.1.
Grupo Bimbo………………………………………………………………………………. 12
4.1.1.
Name of the Issuer ..……………………………………………………………………. 12
4.1.2.
Business Description………………………………………………………………………12
4.1.3.
Evolution and Recent Events……………………………………………………………. 12
4.1.4.
Capital Structure……………………………………………………………………………12
4.1.5.
Significant Changes in the Financial Statements from the Last Annual Report….…12
4.2.
Sara Lee……………………………………………………………………………………..12
4.2.1.
Name of the Company…………………………………………………………………….12
4.2.2.
Business Description………………………………………………………………………12
4.2.3.
Evolution and Recent Events……………………………………………………………..12
4.2.4.
Capital structure…………………………………………………………………………….13
4.2.5.
Significant Changes in the financial statements from the Last Annual Report………13
RISK FACTORS………………………………………………………………………………………… … 14
5.1.
Risk Factors Related to Grupo Bimbo…………………………………………………
5.2.
Risk Factors Related to the Acquisition………………………………………………… 14
14
SELECTED FINANCIAL INFORMATION………………………………………………………………… 16
MANAGEMENT’S COMMENTS AND ANALYSIS REGARDING THE RESULTS
OF OPERATION AND FINANCIAL CONDITION …………………………………………………………19
7.1. Results of Operation ……………………………………………………………………………………19
7.2. Financial Situation, Liquidity and Capital Resources……………………….……………………….20
8.
RESPONSIBLE PERSONS……………………………………………………………………………..……22
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1. TERMS AND DEFINITIONS
Unless otherwise required by the context, all references to the following
terms contained in this Informative Brochure, will have the meaning assigned
herein and will be applicable either to the singular or plural of the defined terms:
"BMV"
Shall have the meaning assigned in the
cover of this Informative Brochure.
"CINIF"
Means the Mexican Board for the
Investigation
and
Development
of
Financial Information Standards (Consejo
Mexicano para la Investigación y
Desarrollo de Normas de Información
Financiera, A.C.).
"CNBV"
Shall have the meaning assigned in the
cover of this Informative Brochure.
"Rules"
Means the Securities Issuers Regulations
(Disposiciones de Carácter General
Aplicables a las Emisoras de Valores y a
otros Participantes del Mercado de
Valores) published in the Official Gazette
of the Federation on March 19, 2003, as
amended from time to time.
"US$" and "Dollars"
Means the lawful currency of the United
States.
"United States"
Shall have the meaning assigned in the
cover of this Informative Brochure.
"Financing"
Has the meaning assigned to such term in
Section 3.3 of this Informative Brochure.
"Informative Brochure"
Means this Statement of Information about
Corporate Restructuring, made by Grupo
Bimbo in accordance with Article 35 and
Annex P of the Rules.
"Grupo Bimbo" or the
"Company"
"Mexico"
Means Grupo Bimbo, S.A.B. de C.V. and,
when required by context, Grupo Bimbo,
S.A.B. de C.V. together with its
consolidated subsidiaries.
Means the United Mexican States.
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"NIF"
Means Financial Information Standards
(Normas de Información Financiera)
issued by the CINIF.
"Acquisition"
Shall have the meaning assigned in the
cover of this Informative Brochure.
"Pesos" o "$"
Means the lawful currency and legal
tender in Mexico.
"Annual Report"
Means Grupo Bimbo's annual report for
the year ended on December 31, 2009,
filed with the CNBV and the BMV in
accordance with the Rules, which may be
reviewed at www.grupobimbo.com and
www.bmv.com.mx .
"Quarterly Report"
Means Grupo Bimbo's quarterly report for
the quarter ended on September 30, 2010,
filed with the CNBV and the BMV in
accordance with the Rules, which may be
reviewed at www.grupobimbo.com and
www.bmv.com.mx .
"Sara Lee"
Means Sara Lee Corporation.
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2. EXECUTIVE SUMMARY
This summary includes a brief description of the most relevant aspects of the
Acquisition and does not intend to contain all the information that could be relevant
about it, so it is complemented with the more detailed information and the financial
information included in other sections of this Informative Brochure, as well as with
Grupo Bimbo's Annual Report and Quarterly Report, which may be reviewed at
www.grupobimbo.com and www.bmv.com.mx.
Grupo Bimbo is one of the most important baking companies in the world and
one of the most prominent food companies in the Americas. Grupo Bimbo is
dedicated to the production, distribution and marketing of sliced bread, buns,
confectionary goods, cookies, cereal bars, candies, chocolates, sweet and salad
snacks, wheat tortillas, tostadas, milk caramel and fast food, among others.
Likewise, Grupo Bimbo has one of the most broad distribution networks in the world,
with more than 39,000 routes and above 100,000 employees.
Grupo Bimbo operates in 17 countries, including the United States, Mexico,
Latinamerica and, to a lesser extent, China. Currently, Grupo Bimbo operates 98
production plants worldwide, with capacity to produce commercial quantities of a
wide variety of products in its primary markets. To ensure the freshness and quality
of its products, Grupo Bimbo has developed an extensive direct-distribution network,
which fields one of the largest sales fleets in the Americas. As of December 31,
2009, Grupo Bimbo's direct-distribution network included more than 39,000
distribution routes, spread across more than 1,000 distribution centers, and reached
more than 1.3 million points of sale. Grupo Bimbo considers that this distribution
network is one of its key competitive advantages.
Since 1980, Grupo Bimbo's shares have traded in the BMV under the ticker
symbol "BIMBO". For a complete description of Grupo Bimbo's business and
operations, please refer to the Annual Report and to the Quarterly Report.
On November 9, 2010, Grupo Bimbo reached an agreement, which is subject to
several standard conditions and authorizations for these type of transactions, to
purchase Sara Lee's fresh bakery business in the United States, as well as several
licenses to use a portfolio of brands and other industrial property rights.
The price of the Acquisition is approximately US$959 million Dollars, currency of
the United States. The Acquisition includes the right to use an exclusive, perpetual,
irrevocable, non sub-licensable and royalty-free license of a brand portfolio (and
other industrial property rights) that includes "Sara Lee"®, "Rainbo"®, "Heiner's"® and
Colonial"®, used in diverse products part of the fresh bakery business, as well as the
purchase of 41 plants and nearly 4,800 distribution routes.
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The Acquisition excludes certain assets owned by Sara Lee's which include
Sara Lee's bakery business outside of the United States, including Australia, New
Zealand and certain European Countries, the food business managed by Sara Lee's
food division, and Sara Lee's refrigerated and frozen bread business.
The Acquisition is part of Grupo Bimbo's growth strategy to consolidate its
global platform and it is in line with its vision to become a worldwide leading bakery
company and one of the most important food companies on an international level.
In order to consummate the Acquisition, Grupo Bimbo will use several
available committed credit lines from several Mexican and foreign financial
institutions. See "Detailed Information about the Acquisition – Financing Sources
and Expenses" below.
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3. DETAILED INFORMATION ABOUT THE ACQUISITION
3.1.
Detailed Description of the Acquisition
On November 9, 2010, Grupo Bimbo (through one of its subsidiaries) and Sara
Lee, among other parties, signed, among others, a share purchase agreement, by
which Grupo Bimbo agreed to acquire the shares of Sara Lee Bakery Group Inc., a
Sara Lee's subsidiary, as well as other assets and the right to use an exclusive,
perpetual, irrevocable, non sub-licensable and royalty-free license of certain brands
and other industrial property rights related with Sara Lee's fresh bakery business in
the United States.
Sara Lee’s shares are listed in the New York Stock Exchange in the United
States. Sara Lee, through its subsidiaries, is one of the largest food processing and
distribution companies in the world, including bread, coffee, cold meats and
packaged foods, with a well-recognized worldwide brand portfolio, including, among
others, "Sara Lee"®, "Rainbo"®, "Heiner's"® and "Colonial"®.
Sara Lee Bakery Group, Inc. is a company incorporated and existing in
accordance with the laws of the State of Delaware, United States, which operates
Sara Lee's bakery business in the United States. Sara Lee Bakery Group, Inc. has
41 plants in the United States, and nearly 4,800 distribution routes.
The Acquisition excludes certain assets owned by Sara Lee, including Sara
Lee's bakery business outside of the United States, including Australia, New Zealand
and certain European Countries, the food business managed by Sara Lee's food
division, and Sara Lee's refrigerated and frozen bread business.
The purchase price for the shares of Sara Lee Bakery Group, Inc.'s is
approximately US$959 million Dollars, to be paid precisely on the closing date of the
Acquisition. The purchase price is subject to certain adjustments, which may
increase or decrease it, derived from accounting variations (including debt and
working capital), taxes and certain financial derivative transactions. Likewise, Grupo
Bimbo has the right to be indemnified by Sara Lee in case of breach of
representations and obligations contained in the purchase agreement. Upon
payment of the purchase price, Grupo Bimbo will be the owner of the shares subject
to the Acquisition.
The effectiveness of the purchase agreement is subject, among other standard
conditions for this type of transaction, to the approval from the antitrust authorities of
the United States.
The purchase agreement and, consequently, the Acquisition, may be terminated
solely in case the antitrust authorities of the United prohibit that the Acquisition is
consummated within 12 months after the date of the purchase agreement. In such
case, Grupo Bimbo will be obligated to pay Sara Lee the amount of US$100 million
Dollars.
The purchase agreement is governed by the laws of the State of New York in
the United States, and both parties have agreed to submit to the jurisdiction and
competence of the courts of the State of New York, in the United States of America.
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3.2.
Purposes of the Acquisition
For Grupo Bimbo, the Acquisition has several objectives, including:
to develop a product portfolio that satisfies the needs of its clients in all the
regions in which it participates in the United States,
to improve its production and distribution system, in order to reduce costs, be
more competitive, and improve services to its clients, and
to improve the profitability of Grupo Bimbo's operations in the United States by
means of creating a low cost platform.
3.3.
Financing Sources and Expenses
Grupo Bimbo has credit lines available from several Mexican and foreign
financial institutions, which are documented by means of credit agreements, from
which it is able to draw upon up an amount equivalent to approximately US$1,150
million Dollars (the "Financing") in order to consummate the Acquisition.
The Financing will have maturities on April 2012 and on July 2013.
Most of such credit lines may be disposed in Dollars, while a minor portion of
such credit lines may be disposed in Pesos. Dollar-denominated loans will accrue
interests based on the LIBOR rate plus a margin, while Peso-denominated loans will
accrue interests based on the TIIE rate plus a margin.
The agreements documenting the Financing contain several limitations (which
are not more onerous than those to which Grupo Bimbo is subject under its current
credit agreements), including restrictions to incur in additional indebtedness,
limitations to pay dividends in certain circumstances, limitations in the use of funds
resulting from asset sales, as well as several financial ratios and limitations.
Likewise, Grupo Bimbo's payment obligations under the Financing will be
guaranteed (por aval) by some of its subsidiaries.
The banks that have committed to grant the Financing are Banco Santander
(México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander, Bank of
America, N.A., BBVA Bancomer, S,.A., Institución de Banca Múltiple, Grupo
Financiero BBVA Bancomer, Citibank, N.A., Banco Nacional de México, S.A.,
Integrante del Grupo Financiero Banamex, HSBC México, S.A., Institución de Banca
Múltiple, Grupo Financiero HSBC, ING Bank, N.V., Dublin Branch and Banco
Inbursa, S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa.
On the other hand, Grupo Bimbo estimates that the expenses related to the
Acquisition amount approximately US$10 million Dollars.
3.4.
Acquisition's Approval Date
Grupo Bimbo's board of directors approved the Acquisition in its meeting held
on November 3, 2010, subject to the execution of the definitive documents related to
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the Acquisition. Since such documents were executed on November 9, 2010, such
resolution became effective precisely on such date.
Since the Acquisition does not represent the 20% or more of the consolidated
assets of Grupo Bimbo, based on the financial statements corresponding to the
quarter ended on September 30, 2010 that are included in the Quarterly Report,
there is no need for Grupo Bimbo's general shareholders’ meeting to approve the
Acquisition, as provided in Article 47 of the Securities Market Law and in Grupo
Bimbo's by-Laws.
3.5.
Acquisition's Accounting Treatment
The valuation and registration of the Acquisition, in accordance with what stated
by the financial information standard (NIF) B-7 "Business Acquisitions" would be as
follows:
Business acquisitions must be recognized by means of the purchase method,
which requires, in all cases, (i) to evaluate whether the acquired asset classifies as
business, (ii) to identify the purchaser, (iii) to determine the acquisition's date, (iv) to
value the identifiable acquired assets, the assumed liabilities, as well as the noncontrolling participation in the acquired entity, (v) to valuate the price, and (vi)
recognize an acquired goodwill or a purchase gain, as set forth in such NIF.
Additional Costs in the Acquisition
They will be registered in profit and loss entries at the moment of their expense and,
in accordance with the NIF B-7 "Business Acquisitions", they will not be a part of the
acquired entity's cost.
Allocation of the acquired entity's cost to the acquired assets and the assumed
liabilities
The purchasing entity will allocate the cost of the acquired entity to the acquired
assets and the assumed liabilities, based on their fair values as of the acquisition
date.
Before the allocation, the purchasing entity will (i) review if the price is different from
cash, to ensure that the assets and liabilities are adequately valued, and (ii) identify
all the assets and liabilities, including intangibles, regardless if they are registered in
the acquired entity.
Among other relevant information sources, independent and actuarial valuations as
well as other valuations may be used as support to determine the estimated fair
values of the acquired assets and the assumed liabilities.
The general criteria to allocate value to assets and liabilities, except the goodwill, are:
(i)
financial instruments, at fair value;
(ii)
accounts receivable, at present value of the amounts to be received,
calculated using the applicable interest rate (those that are due in a period of
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less than a month are calculated at face value) less the estimation for
uncollectible accounts;
(iii)
inventories:
-
finished goods and merchandises, at the estimated sale price less the
disposition costs and a fair profit estimation for the selling effort of the
purchasing entity,
-
output in process, at the estimated sale price of the finished goods less the
completion costs, distribution costs and a fair estimation for the completion
and selling efforts by Grupo Bimbo, and
-
raw materials, at replacement cost, without exceeding its realizable value;
(iv)
real estate, plant and equipment:
-
those maintained for use, at their current replacement cost for similar capacity,
unless the recovery value of the assets indicate a cheaper value for Grupo
Bimbo, and
-
those available for sale, at an estimated sale price less its corresponding
disposition cost;
(v)
intangible assets, at their fair value;
(vi)
other assets, natural resources and non negotiable instruments, at fair value;
(vii)
permanent equity investments, at fair value;
(viii)
accounts payable, at present value of the payable amounts, calculated with
the applicable interest rate;
(ix)
employees benefits, valued in accordance with the NIF D-3 guidelines, taking
in consideration that liabilities for defined plans must be for the total amount of
such liabilities, without deducting the redeemable items generated for granting
new benefits or for variations in assumptions;
(x)
accrued liabilities and provisions, which must contemplate those in anticipation
of the reorganization of the acquired business, including other related costs,
such as severance payments; these liabilities will be recognized at present
value of the payable amounts, calculated using the applicable interest rate;
and
(xi)
prior contingencies, at fair value, if its determination is possible, or in the
contrary, to the best estimation possible.
Goodwill
The excess of an acquired entity's cost over the net amounts allocated to the
acquired assets and to the assumed liabilities, will be recognized as goodwill.
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An intangible acquired asset that does not comply with the NIF C-8 guidelines will be
included in the amount recognized as goodwill.
Goodwill's Accounting Treatment
The goodwill of an acquired entity shall not be amortized; notwithstanding, it will be
subject, at least annually, to impairment tests. The determination of its impairment
shall be made considering the provisions of NIF C-15.
3.6.
Acquisition's Tax Consequences
Grupo Bimbo will not have tax consequences exclusively as a result of the
Acquisition.
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4.
4.1.
PARTIES TO THE ACQUISITION
Grupo Bimbo
4.1.1.
Name of the Issuer
Grupo Bimbo, S.A.B. de C.V.
4.1.2.
Business Description
For information on the business description of Grupo Bimbo, see the
Annual Report and to the Quarterly Report.
4.1.3.
Evolution and Recent Events
For information regarding Grupo Bimbo's evolution, including the events
occurred within the last year, see the quarterly reports and the relevant events that
the Company has published during 2010, which are available at
www.grupobimbo.com and www.bmv.com.mx.
4.1.4.
Capital Structure
For information regarding Grupo Bimbo's capital structure, see the
Annual Report and to the Quarterly Report.
4.1.5.
Significant Changes in the Financial Statements from the
Last Annual Report
There have not been any significant changes in Grupo Bimbo's financial
statements since the publication of the Annual Report.
4.2.
Sara Lee
4.2.1.
Name of the Company
Sara Lee.
4.2.2.
Business Description
For information on the business description of Sara Lee, see its annual
report available at www.saralee.com.
Sara Lee Bakery Group, Inc. is a Sara Lee's subsidiary. Sara Lee’s
shares are listed in the New York Stock Exchange of the United States. Sara Lee,
through its subsidiaries, is one of the largest food processing and distribution in the
world, including bread, coffee, cold meats and packaged foods, with a widely
recognized worldwide brands portfolio, including, among others, "Sara Lee"®,
"Rainbo", ® "Heiner's"® and "Colonial"®.
4.2.3.
Evolution and Recent Events
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For information regarding Sara Lee's evolution, including the events
occurred within the last year, see its annual report, its quarterly reports and other
related information available at www.saralee.com.
4.2.4.
Capital Structure
For information regarding Sara Lee's capital structure, see its annual
report available at www.saralee.com.
Sara Lee is an American company whose ordinary shares quote in the
New York Stock Exchange with the ticker symbol "SLE". The public information
regarding Sara Lee may be consulted in the abovementioned web page.
4.2.5.
Significant Changes in the Financial Statements from the
Last Annual Report
For information regarding significant changes, if any, to Sara Lee's
financial statements, from the date of its last annual report, see the available
information at www.saralee.com.
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5.
5.1.
RISK FACTORS
Risk Factors Related to Grupo Bimbo
For more information regarding the risk factors applicable to Grupo Bimbo, see
the Annual Report, which is available at www.grupobimbo.com and
www.bmv.com.mx.
5.2.
Risk Factors Related to the Acquisition
In connection with the Acquisition, Grupo Bimbo will incur in significant
debt; the refinancing of such debt will depend on the market conditions, which
may be adverse.
In order to consummate the Acquisition, Grupo Bimbo will incur in significant
debt, which may have an adverse effect in the price of Grupo Bimbo´s shares. Such
debt may also have important consequences for Grupo Bimbo, including an increase
in its cost of interest. The agreements evidencing such debt contain several
limitations (which are not more onerous than those to which Grupo Bimbo is actually
subject under its current credit agreements), including restrictions to incur in
additional debt, limitations to pay dividends in certain circumstances, limitations in the
use of funds from asset sales, as well as several financial ratios and limitations. As a
consequence, Grupo Bimbo´s ability to pay dividends, to finance acquisitions,
expansions, maintenance expenses and investments, and to maintain flexibility in the
management of its business, may be limited in an important way.
On the other hand, all or an important part of such debt, may be Dollardenominated. Although an important part of Grupo Bimbo´s sales is Dollardenominated, a devaluation or depreciation of the value of the Peso, or of any other
currency of the countries in which Grupo Bimbo operates, relative to the Dollar, may
adversely affect Grupo Bimbo's ability to pay principal and interest in respect of such
Dollar-denominated debt.
Grupo Bimbo may refinance the debt incurred in connection with the Acquisition
in the future. Grupo Bimbo´s ability to refinance such debt in favorable terms and
conditions depends on several factors which are out of Grupo Bimbo´s control, such
as market conditions and availability of funds.
For a description of the Financing related to the Acquisition, see "Detailed
Description of the Acquisition – Financing Sources and Expenses" herein.
The antitrust authorities in the United States may not grant the
authorization to consummate the Acquisition; in such case, Grupo Bimbo
would be obliged to pay a penalty.
The closing of the Acquisition is subject to the authorization of the antitrust
authorities in the United States. Grupo Bimbo cannot ensure that it will obtain such
authorization or the date on which it will be obtained. If such authorization is not
obtained or it is obtained in non acceptable terms for Grupo Bimbo, Grupo Bimbo
may not be able to consummate the Acquisition. In case that such authorization is
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not obtained, Grupo Bimbo will be required to pay Sara Lee a penalty of US$100
million Dollars.
Grupo Bimbo may not be able to successfully integrate Sara Lee's fresh
bakery business in the United States.
A key element to achieve the expected benefits of the Acquisition is to be able
to integrate Sara Lee's fresh bakery operations in the United States to the current
operations of Grupo Bimbo in the United States in a timely and efficient way. No
assurance can be made that such efforts will be successful or will be completed as
expected by Grupo Bimbo. If such integration is not successful, Grupo Bimbo´s
operations, financial conditions and results of operations may be adversely and
significantly affected.
Information about Estimations and Associated Risks
The information included in this Informative Brochure reflects Grupo Bimbo´s
perspective in connection with future events and may contain information about
financial results, economic situations, tendencies and uncertain facts. Expressions
such as "believe", "expects", "estimates", "considers", "foresees", "plans", and other
similar expressions, identify such projections or estimations. When evaluating such
projections or estimations, investors should take into account the risk factors
described in this section and other warnings contained in this Informative Brochure or
in any other document disclosed to the public in respect of the Acquisition. Such risk
factors and projections describe the circumstances which could originate that the real
results differ significantly from expected results.
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6.
SELECTED FINANCIAL INFORMATION
Below is Grupo Bimbo´s financial information and Grupo Bimbo´s pro-forma
financial information considering Sara Lee´s fresh bakery business for the 12-month
period ended on December 31, 2009, and for the 9-month period ended on
September 30, 2010.
In the case of Grupo Bimbo, such information was prepared using (i) Grupo
Bimbo's consolidated audited financial statements for the year ended on December
31, 2009 and (ii) Grupo Bimbo's internal consolidated financial statements for the 9month period ended on September 30, 2010, which were prepared based on the
quarterly financial statements delivered by Grupo Bimbo to the BMV in each of the
first three quarters of 2010.
In the case of Sara Lee, the following considerations were made:
(i) Sara Lee´s combined audited financial statements of the fresh bakery business
in the United Stated (NAFB) dated July 3, 2010 were used taken as a basis to
prepare such information.
(ii) certain adjustments agreed between Grupo Bimbo and Sara Lee were
incorporated, which adjustments were not included in such audited financial
statements and that reflect a more adequate financial situation of the acquired
business under Mexican NIF;
(iii) with respect to the income statement, in the comparative periods, the
management books published by Sara Lee were taken in consideration; for
2009, four consecutive quarters where the fourth quarter is dated December 26,
2009 were taken; for 2010, three consecutive quarters where the third quarter is
dated October 2, 2010 were taken; to convert Sara Lee´s results to Pesos, the
monthly average exchange rate of 2009 and of the nine months of 2010 were
used, respectively; and
(iv) with respect to the balance sheet, the combined audited balance of Sara Lee´s
fresh bakery business in the United States (NAFB) dated July 3, 2010, with the
aforementioned adjustments, was used; the conversion to Pesos was made
using the exchange rates at the end of December 2009 and September 2010,
respectively.
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BALANCE SHEET
December 31., 2009
Amounts expressed in million Pesos
Cash and Banks
Accounts Receivable
Inventary
Other Current Assets
Total Current Assets
Real Estate, Plant and Equipment
Intangible Assets
Total Non Current Assets
Total Assets
Accounts Payable
Other Current Liabilities
Total Current Liabilities
Total Debt
Other Liabilities
Total Long Term Liabilities
4,981
9,605
2,969
676
18,231
32,763
45,719
78,482
96,713
5,341
7,550
12,891
36,740
6,125
42,865
Pro-Forma
Grupo Bimbo +
Sara Lee NAFB
2,122
11,440
3,385
1,048
17,995
37,681
59,146
96,827
114,822
6,536
9,837
16,374
46,330
10,873
57,204
Shareholder's Equity
40,957
41,245
Grupo Bimbo
INCOME STATEMENT
December 31., 2009
Amounts expressed in million Pesos
Grupo Bimbo
Total Sales
Sales Costs and General Expenses
Profit after General Expenses
CIF
Other Expenses
Participation in the results of associated companies
Profit Before Taxes
Taxes
Net Income
EBITDA
17
Pro-Forma
Grupo Bimbo +
Sara Lee NAFB
116,353
104,299
12,054
2,012
1,176
42
8,908
2,827
6,081
144,443
131,707
12,736
2,600
1,176
42
9,002
2,623
6,379
15,835
17,606
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BALANCE SHEET
September 30, 2010
Amounts expressed in million Pesos
Cash and Banks
Accounts Receivable
Inventary
Other Current Assets
Total Current Assets
Real Estate, Plant and Equipment
Intangible Assets
Total Non Current Assets
Total Assets
Accounts Payable
Other Current Liabilities
Total Current Liabilities
Total Debt
Other Liabilities
Total Long Term Liabilities
4,932
11,162
2,953
672
19,719
31,463
45,362
76,825
96,544
5,681
8,454
14,135
32,663
6,396
39,059
Pro-Forma
Grupo Bimbo +
Sara Lee NAFB
2,195
12,918
3,351
1,028
19,493
36,171
57,754
93,925
113,418
6,825
10,534
17,360
41,844
10,941
52,785
Shareholder's Equity
43,350
43,273
Grupo Bimbo
INCOME STATEMENT
September 30, 2010
Amounts expressed in million Pesos
Grupo Bimbo
Pro-Forma
Grupo Bimbo +
Sara Lee NAFB
Total Sales
Sales Costs and General Expenses
Profit after General Expenses
CIF
Other Expenses
Participation in the results of associated companies
Profit Before Taxes
Taxes
Net Income
86,689
77,973
8,716
1,948
564
51
6,255
2,129
4,126
106,476
97,567
8,909
2,363
564
51
6,033
1,985
4,048
EBITDA
11,462
12,450
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7.
MANAGEMENT’S COMMENTS AND ANALYSIS
REGARDING THE RESULTS OF OPERATION
AND FINANCIAL CONDITION
The following analysis shall be read jointly with the quarterly reports published by
Grupo Bimbo as of December 31, 2009 and September 30, 2010, which are available
at http://ir.grupobimbo.com. The following analysis is prepared to provide more
comprehension of Grupo Bimbo's financial statements and Grupo Bimbo's pro-forma
financial statements considering Sara Lee's fresh bakery business in the United
States, which are included in this Informative Brochure. In this section, Sara Lee
NAFB refers to the fresh bakery business in the United States of Sara Lee, which is
the subject of the Acquisition.
Unless otherwise specified, all Peso amounts in this section are expressed in million
Pesos. Sara Lee's NAFB figures are expressed in million Pesos at the monthly
average exchange rate at the end of 2009 and as of September 30, 2010,
respectively.
7.1.
Results of Operations
Comparative analysis of the base and pro-forma financial statements as of December
31, 2009 and to September 30, 2010.
Income Statement
Total Sales
Net sales would have grown 24% and of 22.8% as a result of the incorporation of
$28,090 and $19,787 generated by Sara Lee NAFB during 2009 and as of
September 30, 2010, respectively. As a result, the sales of the Company from the
United States operations would have represented 54.0% and 2.2% of the total sales,
for the same periods.
Profit after General Expenses
By incorporating Sara Lee's NAFB profit registered during 2009 and the first nine
months of 2010, profits earned by the Company would have grown to $12,736 and
$8,909, in other words, 5.7% and 2.2% above the base scenario, respectively.
Likewise, Grupo Bimbo's margin after general expenses would have been 8.8% and
8.4%, -1.6 pp and -1.7 pp less than the reported in 2009 and 2010, respectively. The
foregoing derives from the incorporation of Sara Lee's NAFB profit, whose margin
was 2.4% and 1.0% for such periods, 7.9 pp and 9.1 pp lower to the ones reported
by the Company.
Integral Cost of Financing
In 2009, the change in this item would be explained, mainly, by the recognition of the
debt incurred to fund the Acquisition.
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When comparing the figures as of September 30, 2010, the increase in this item
would be explained, mostly, by the registration of interest, as explained by the
preceding paragraph.
Profit before Taxes
The increase by $94 in the pro-forma income statement as of December 30, 2009,
would be explained by the incorporation of Sara Lee's NAFB results.
When comparing the amounts for 2010, there is a 3.5% decrease in this item.
Taxes
The decrease in this item corresponds, mainly, to the interest deductions that the
debt incurred in connection with the Acquisition would have generated.
For 2010, this item shows a decrease of 6.7%.
Net Profit
By incorporating Sara Lee's NAFB results, the net profit of the pro-forma income
statements for December 30, 2009 would have increased 4.9% with respect to the
base scenario. Net margin would have registered a 0.8 pp decrease, to end at 4.4%.
For 2010, net profit would have been of $4,048, 1.9% less than the base scenario, as
a result of the increase in interest paid, which could not have been set off by the
increase in the net profit. Net margin would have been at 3.8%, 1.0 pp below the one
registered by the Company in such period.
7.2.
Financial Situation, Liquidity and Capital Resources
Balance Sheet
Cash and Banks
For 2009 and 2010, this item presents a reduction of 57.4% and 55.5%, respectively.
These decreases would be the result of the registration in the pro-forma balance for
the use of the Company’s cash in hand to pay the Acquisition price.
Goodwill and Intangible Assets
The increase in these items is the result of the incorporation of Sara Lee's NAFB
goodwill and intangible assets, as well as to the goodwill generated by the
Acquisition.
Accounts Receivable
The change in this item results from the incorporation of Sara Lee's NAFB accounts
receivable, as a result of its client portfolio.
Short and Long Term Debt
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The increase in these items results from the recognition of the debt incurred to
finance the Acquisition, assuming that such debt would be of US$700 million Dollars
and that the Company would use its cash in hand to pay the balance of the purchase
price.
For the other items in the balance sheet, the changes presented in the pro-forma
financial statements are explained by the incorporation of Sara Lee's NAFB amounts
related to its usual operation.
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8. RESPONSIBLE PERSONS
The undersigned state, under oath, that within our own functions, we prepared the
information related to the issuer contained in this Informative Brochure, which, to the
best of our knowledge, fairly reflect its situation. Likewise, we express that we have
no knowledge of relevant information that has been omitted or falsified in this
Informative Brochure or that it contains information that may induce investors to error.
__________________________________
By: Pablo Elizondo Huerta
Charge: Deputy General Manager
__________________________________
By: Guillermo Quiroz Abed
Charge: Chief Financial Officer
_____________________________
By: Luis Miguel Briola Clément
Charge: Legal Counsel
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