TRENDS (EL ECONOMISTA p.7) GRUMA.

The company’s stock has a price target consensus set at 57.14, according to a survey by Thomson Reuters, which also says that the company expects to deliver a 0.67 EPS for the year. 9%.

BURGER BOY TO INVESTIGATE THE USE OF ITS BRAND IN THE USA (EL UNIVERSAL 19) (EXCÉLSIOR 1-2)

Mexican company Burger Boy plans to look into the use of its brand in restaurants in the United States, as its name and logo are distinctly Mexican and registered with the Mexican Institute of Industrial Property, said company Vice President, Zuhaila Caram. According to Burger Boy, the brand was originally created by a man from Puerto Rico and another from Cuba, who sold the company to Gruma, before it was purchased by Whataburger in the nineties.

ON BOSSES. (EL FINANCIERO 15) (EL NORTE (ONLINE) 0)

Diet: tortillas and Coke. Gruma and Femsa are playing it safe, the first in the tortilla industry, and the other in the soft drink industry. The year has only just begun, and both of these companies reported the highest yields of any obtained by companies from Monterrey in January, standing at 13.6% and 6.3%, respectively. Experts believes this a reflection of the—logically—defensive nature of these companies. Even if the U.S. dollar climbs to 20 Mexican pesos, who is going to stop eating tacos? In fact, the strength of the dollar actually benefits the firm presided by Juan González, as it makes more than 70% of its earnings in “greenbacks.” 

OPPORTUNITY IN THE UNITED KINGDOM (MILENIO DIARIO 30)

Food and beverages, biotechnology and IT are the three industries that offer the best opportunities for expansion in the British market, according to Isaac Vargas, head of foreign investment at the British Embassy in Mexico. Following the Dual Year celebrated by both countries in 2015, the focus now is to follow up and seal the business deals negotiated, and stress the opportunities offered to micro, small and medium-sized enterprises in this market... Mexican companies currently enjoying success in the United Kingdom include Cemex, Gruma, Mexichem, and El Farolito.

GRUMA LEADS THE REGIO INDEX (LÓPEZ DÓRIGA ONLINE 0) (EL SOL DE MÉXICO ONLINE 0)

Gruma, the company led by Juan González, closed the first month of this year with one of the most profitable earnings reported on the stock exchange, with figures well above the Regio Index average. According to a Monex report, the Regio Index comprising 20 companies in the Monterrey region that collectively contribute 12% of the stock market value—produced 2.22% yields at the close of January, whereas Gruma yields stood at 13.7% at the end of the month, with a share price of MXN 274.80.

MATERIALS AND INDUSTRIAL INDUSTRIES WITH THE HIGHEST RANKINGS. (EL ECONOMISTA 9-10)

Broken down by sector, the highest expectations for EBITDA growth during Q415 are set for the materials sector, which is expected to grow 31%, on average, and the industrial sector, with its 15% growth a forecast as profits in both sectors are expected to increase 80% and 24.75%, respectively. In the food industry, Gruma is the only company expected to post positive results, as according to analysts its earnings are projected to grow by 21.3%, and its EBITDA by 33.9% year over year, based on Vector Casa de Bolsa calculations. Meanwhile, Accival analysts estimate growth in its operating cash flow to stand at 21%, and 17% growth in its earnings.

TRENDS  (EL ECONOMISTA P.7) GRUMA.

The issuer could post increased earnings of 21.4% in Q415, taking its total earnings to MXN 15.65 billion. Its EBITDA could surge by 33% to 2.658 billion MXN, according to Vector Casa de Bolsa forecasts.

GRUMA: MEXICAN TORTILLAS CONQUER THE UNITED STATES (ECONOMIAHOY.MX) (LÓPEZ DÓRIGA ON LINE 0)

Flour tortillas sales in the U.S. are exceeding hamburger bun sales in the U.S. According to data from Packaged Facts, in 2013 Americans spent USD 2.9 billion on tortillas, compared to the USD 2.1 billion spent on hamburger and hot dog buns. The company’s mass consumption and market analysis, Latino Culture Redefining American Cuisine noted that, in 2012, Latin American foods earned USD 8.2 billion, with the industry then expected to hit USD 11 billion by 2017, which would mean a 31% growth in under 10 years... It is no coincidence that large food chains such as McDonalds, Taco Bell, and Chipotle have joined in the tortilla boom, with their menus now offering burritos, quesadillas, tacos, and nachos with guacamole. Brands such as Mission and Guerrero, both owned by Mexican company Gruma, are now preferred by the American public and are helping to make the tortilla business in the country of their northern neighbors more than successful. “Gruma brands enjoy an excellent reputation in the United States. They are the strongest tortilla brands in the United States with a national presence while its competitors work at the regional level,” said Jerónimo Contreras, a GB analyst speaking of the positive Gruma forecast in the U.S. market. 

MAURICIO FLORES/PEOPLE BEHIND THE MONEY. (LA RAZÓN 24) (REPORTE 98.5 06:00-11:00)

Dollar tacos. Tortilla prices have skyrocketed in Mexican states Jalisco and Chiapas. Initially, Gruma, led by Juan González, and Minsa, led by Raymundo Gómez, had raised the kilo price of corn flour by 10 Mexican cents; however, this affected consumers to the tune of six pesos, with the “peso devaluation” being cited as the cause. But there is no apparent basis for the price increase, since there is a surplus of white corn crops, and the price of diesel, gas and electricity has fallen. The agricultural ministry led by José Calzada (SAGARPA), Alejandra Palacios’ national antitrust commission (COFECE) and the consumers’ ombudsman led by Rafael Ochoa (PROFECO) are launching an investigation into the corn and tortilla supply chain.

TRENDS. (EL ECONOMISTA p.7) GRUMA.

At the end of Q315, the issuer’s CapEx had risen by 147%, year over year, to MXN 979 million. During the same period, the company secured sufficient leverage by recording a net debt to EBITDA ratio of 1.5. 

POSITIVE OUTLOOK FOR JUAN GONZÁLEZ’S GRUMA IN 2016. (EL SOL DE MÉXICO ONLINE 0) (IMPACTO EL DIARIO ONLINE 0)

The high market volatility rates, economic slowdown in China, the fall in petrol prices, and the recent 50 bps rate hike by the Bank of Mexico will not halt the positive stock market performance of Gruma, the company led by Juan González. According to Alejandra Marcos, deputy analysis director at Intercam Casa de Bolsa, the movement in the base rate could lead the valuation of some companies to be negatively affected, but this isn’t the case for defensive-minded companies such as Gruma. The base rate hike, he added, impacts the exchange market more than it does the securities market, and we can anticipate further dollar appreciation against the peso, which will benefit Gruma in the short term.

TRENDS (EL ECONOMISTA p.7) GRUMA.

The company’s share price has risen by 17.9% so far this year while its market capitalization value at the close of trading on Friday was MXN 123.39 billion, which is 21% up on September 30 of last year.

WINNERS & LOSERS (FORBES MEXICO 14)

In its “Wealth and Power Index,” Forbes gives a mention to Juan González, who heads the Winners section after adding +8.56% to Gruma’s market value: MXN 109.511 billion. The article notes that, despite the fall in commodity prices, Gruma is one of the strongest issuers, with its share price having risen by almost 55% in 2015.

THE BEST CFOS (FORBES MEXICO 4-62-67)

Financial executives have taken on greater importance in the performance of companies, to become one of corporate management’s most captivating and emblematic figures. The Chief Financial Officer, often referred to as just the CFO in business jargon, has been granted increased power and influence in organizations, and the responsibilities and functions of the role have expanded considerably. Mexico’s best CFOs. FORBES MEXICO publishes its ranking of “The Best CFOs in Mexico,” compiled based on the financial management index produced for the purposes of this report. 6th place: Raúl Cavazos Morales. Gruma: financial management index: 60 points. Debt-to-EBITDA ratio: 1.4. Implicit interest rate: 6.3%. Interest coverage ratio: 9.3 Receivables collection period minus payables payment period: -8.1 days Profitability (ROIC): 14.1%. Current ratio: 1.6. Debt-to-Capital ratio: 59.8%. 

ALBERTO BARRANCO / ENTERPRISE. (EL UNIVERSAL 4)

Not a scratch… As we were saying a few days ago, the application of the Special Tax on Products and Services (IEPS) to the soft drinks industry hasn’t left a mark. Other impacted sectors such as processed food, confectionary and chocolate have been similarly unaffected. The total production of the Food and beverages industry amounted to MXN 1.1 trillion last year, accounting for 4.6% of Mexico’s gross domestic product. The market has an annual value of 140 billion USD, with an estimated growth rate of 4.6% until 2020. Industry stakeholders include Herdez, which recorded a 12.3% increase in its net profits during the third quarter of last year, and Grupo Maseca, which made a similar leap to the tune of 19.8%, with its total sales increasing by 21%. 

GRUMA’S OPERATING CASH FLOW UP 25%. (EL NORTE (ONLINE) 0) (REFORMA 2) (EL UNIVERSAL 4) (LA JORNADA 27) (EXCÉLSIOR 1-2) (EL FINANCIERO 20) (LA RAZÓN 16) (EL SOL DE MÉXICO 1-7) (EL ECONOMISTA 1-10-11) (MILENIO DIARIO MONTERREY 0) (EL PORVENIR 0)

Driven by a greater appetite for tortillas in the United States, and an improved sales volume and earnings, Grupo Maseca (Gruma) posted a 25% increase in its EBITDA, to MXN 2.49 billion, in the fourth quarter of 2015. The world’s leading tortilla and corn flour producer increased its sales volume by 4% while its earnings also rose by 17 percent on those recorded in the same quarter of 2014. Its gross profit margin and EBITDA achieved record growth during the quarter, standing at 39.7% and 16.4%, respectively.

ALICIA SALGADO / CURRENT ACCOUNT. (EXCÉLSIOR 5)

Deep pockets. Gruma, the company, led by Juan González, posted excellent results at the close 2015, with the company’s sales up 17% and its EBITDA up 25%. This growth was primarily driven by its U.S. operations, where the firm’s corn flour and tortilla operations were helped by the overall development of the tortilla industry as a whole, particularly among non-Hispanics. Its corn flour sales grew substantially due to the greater market share achieved by the company on account of its high quality and service; the growing popularity of Mexican restaurants; the increasing popularity of tortillas and corn chips in non-Mexican restaurants; and the growth achieved by snack manufacturers. The company’s net sales and EBITDA from operations outside of Mexico accounted for 73% and 72% of consolidated results, respectively. The changes driven by Juan González and his team are increasingly bearing fruit.

IMBALANCE. (EL UNIVERSAL 2)

USA drives Gruma’s results. One of the beneficiaries of the growth of the tortilla industry in the United States is Juan Antonio González, CEO of Gruma, as the non-Hispanic population has been particularly keen to pick up the habit of eating traditional Mexican food. There is more to it than this, however, with other factors including the increased market share of corn flour, the growing popularity of Mexican food, a greater prevalence of tortillas and corn chips in non-Mexican restaurants, and the growth of snack manufactures. These factors have led the company to post a 25% increase in its EBITDA during the fourth quarter of 2015, as well as a 17% rise in sales and a 4% upswing in sales volume compared to the same period of the previous year, all of which leaves the company on a steady footing, as far as we are told, in terms of its future prospects.

GRUMA SET TO ESTABLISH A PLANT IN DALLAS: 58% MORE INVESTMENT IN 2016 (EL FINANCIERO 22)

In 2016, Gruma is set to make capital investments of USD 250 million, which is 58% more than it invested last year. Part of these funds will be allocated to the expansion of its U.S. operations with the building of a plant in Dallas (TX), which could commence operations in the final quarter of this year. In a teleconference with analysts, Raúl Cavazos, the company’s CFO, revealed that they are also prospecting the setup of a new tortilla production plant in Monterrey while also continuing work on their Russian plant. “We have several projects we’re working on in several places [this year],” said Cavazos. Elsewhere, he stated that the company was expecting its EBITDA to increase by approximately 40 bps this year. 

BARBARA ANDERSON: U.S. GROWTH IN TORTILLA CONSUMPTION. (MILENIO TV’S TOP 10)

BARBARA ANDERSON: Today’s news concerns both consumption and large corporations. Because growth in tortilla consumption, particularly in the United States, has been positively reflected in the earnings of the leader of the sector, Grupo Maseca. Let me tell you that, according to its report submitted for the fourth quarter of 2016, and thanks to an increase in tortilla sales, its EBITDA rose by 25% to MXN 2.49 billion. Moreover, the company that is the world’s leading tortilla and corn flour producer increased its sales volume by 4%, while its earnings also rose by 17 percent on those recorded in the same quarter of 2014. What is surprising, according to Gruma’s report, is that the growth in the U.S. tortilla market was greatest among non-Hispanics. And there is more good news for Gruma with growth in the corn flour market thanks to the popularity of Mexican restaurants, particularly in the United States, and corn chip consumption, allied with the greater number of snack manufacturers that are buying corn flour. 

JULIO PILOTZI / FINANCIAL SPLIT. (EL SOL DE MÉXICO 2)

Gruma’s strength. Gruma, led by Juan Antonio González, closed 2015 with improvements in terms of its financial results and structure, obtaining a 17% increase in net sales compared to Q414, for a total of MXN 15.164 billion. This growth was primarily driven by Gruma Corporation. During the last quarter of 2015, the sales of the company’s non-Mexican operations accounted for 73% of its total operations. Its corn flour and tortilla operations continue to benefit from by the overall growth of the tortilla industry, particularly among non-Hispanics in the United States.

ACTIONS AND REACTIONS. (EL ECONOMISTA 2)

Gruma is to invest USD 350 million. Tortilla and corn flour producer Gruma, led by Juan González, hopes to make USD 350 million worth of capital investments during the course of this year, which shall primarily be aimed at maintaining and expanding its plant capacity in several countries. For instance, it plans to build a tortilla plant in Texas and a new corn flour facility in Indiana, in addition to reactivating a corn flour plant in Chalco, central Mexico. These investments will be self-funded.