The lessons learned during the pandemic provided us with the tools and capabilities to deliver an exceptional year for Grupo Bimbo in 2021,generatingrecordlevelsofSalesandProfits, while transforming the business in a complex operating environment.
I’d like to acknowledge the hard work and dedication of our associates, overcoming several COVID-related challenges, while satisfying the strong demand for our products. I want to offer my deepest and most sincere condolences to the loved ones of our 114 associates who were victims of COVID, particularly in the early part of 2021.
These strong results reflect our focus on growth over the long term which has enabled us to reach record volumes, driven in part by successful Revenue Growth Management initiatives across our four regions, most significantly in Mexico and North America. The excellence of our teams, the strong execution of our plans and strategies, our ample diversification and the strength of our brands continue to be paramount in reaching our goals.
Consistent with our long-term strategy, we continued to consolidate our global leadership and strengthen our local presence with the successful completion of six strategic acquisitions: Popcornopolis and Emmy’s Organics in the U.S., Modern Foods and Kitty Bread in India, Medina del Campo in Spain and Aryzta do Brasil in Brazil in the QSR category. Also, we added 11 bakeries to our manufacturing footprint primarily from the acquired assets and closed six in order to optimize our global presence. Unfortunately, we experienced a major fire in our plant in San Fernando, Argentina, compelling its permanent closure.
We made significant progress on our digital transformation journey with, among other things, a successful transition to Oracle’s cloud- based ERP that has been implemented in 38% of our operations as of year-end. We reinforced the security of our information systems, with technology and advanced monitoring capabilities, and experienced no security breaches in our operations. We transitioned more than half of our global routes to our new Route to Market platforms. Through GB Connected, our Internet of Things platform, we connected 198 out of a total of 206 bakeries, providing real- time data to accelerate decision-making. We add value to our customers and consumers through our Connection Center platform in our main markets and with our digital platform T-Conecta, which is focused on the traditional channel and continued to expand in Mexico. Finally, we continue to envision the benefits of robotic process automation and AI-powered application startups.
In response to the increasingly dynamic marketplace, in 2016 Grupo Bimbo created Bimbo Ventures, a business unit designed to provide a window to the future, through the search for technological solutions. As a result of our presence in innovation ecosystems in the world and our continuous search for disruptive technology and product companies, in 2021 seven food product and technology companies were incorporated into Bimbo Ventures’ investment portfolio. We work synergistically with them on projects for improvement of our products and processes.
Last year we launched our new sustainability strategy with a renewed level of ambition and in line with the challenges we face as a society. At Grupo Bimbo we seek to Nourish a Better World for the well-being of people and the planet • through three action lines: better nutrition with simple and more natural recipes, fighting against the degradation of nature and empowering communities throughout our value chain.
Some of our most relevant achievements are:
- We are offering products with an improved nutritional quality:
nearly 100% of our breads, tortillas and buns comply with international standards of saturated & trans fats, sodium and added sugar.
- We signed the commitment to net zero carbon emissions by 2050 following the framework of the Science Based Targets initiative; we achieved 85% renewable electricity across our operations and reduced by 1.2 million kilograms the plastic in our packaging.
- We are active participants in regenerative agriculture initiatives in Mexico and developed our framework for other locations.
- We reaffirmed our commitment to always offer the highest quality products and ensure that our innovations better meet our consumers’ needs every day, optimizing our product portfolio with healthier options including launches such as Bimbo Cero Cero and our geographic expansion of Sanissimo.
- We continue strengthening the communities where we have presence with the execution of more than 200 Good Neighbor projects, financial and in-kind support of more than $143 million pesos, and the participation of our associates in numerous volunteer activities. Likewise, we supported the development of our small business partners in Mexico through training projects, and we also reaffirmed our commitment and support for the UN Global Compact Ten Principles and the Sustainable Development Goals.
- For the fifth consecutive year, we were named one of the most ethical companies in the world according to The Ethisphere Institute, a firm that recognizes companies that consider ethical commitment as one of the guiding principles in their day-to-day operations.
- And finally, we debuted in sustainable financing by renewing our committed revolving credit facility in the amount of $1.75 billion dollars linked to our sustainability goals: energy and water, providing us with liquidity and flexibility to continue strengthening our financial profile.
Our CAPEX investments reached the highest level in our history. This is not only a reflection of the strong results and the opportunities we are seeing in the markets and categories in which we participate, but also of our commitment to better serve our customers and consumers across our markets and industries. We invested more than one billion dollars, of which 45% was earmarked for growth and expansion projects and the rest to business continuity and the improvement of profitability throughout the entire value chain.
Our performance also reflects substantial and sustainable productivity savings coming from these investments and the restructuring efforts we have made in the past, which have enabled distribution efficiencies, automation improvements and integrated system solutions.
We provided to our shareholders approximately $6.5 million pesos, through a combination of both share buybacks and dividends.
In summary, our financial results for the full year were outstanding, especially considering the difficult comparison f rom the remarkable results of 2020, the FX conversion impact, overall inflation and the complicated operating environment in several countries.
We are cautiously optimistic about the future and our ability to navigate the multiple challenges ahead of us, including the Russia and Ukraine conflict, a high inflationary environment, labor shortages and supply chain disruptions in several countries, and consumers’ reaction to the economic challenges they face. We are taking many actions to offset the rising inflation, including price increases, Revenue Growth Management strategies, category and product mix, productivity initiatives, and we continue to proactively look for restructuring opportunities across our geographies.
We remain fully dedicated to the markets in which we participate, and we will continue reinvesting in our business, consistent with our long-term perspective and our commitment to achieving our Mission of delicious and nutritious baked goods and snacks in the hands of all.
Thank you for your trust and continued support to Grupo Bimbo.
Sincerely,
Daniel
