SIGMA reports EBITDA of US $220 million in 1Q25, on track to reach full-year Guidance of US $1 billion

Rhea-AI Summary

ALFA|SIGMA reported strong Q1 2025 financial results with EBITDA reaching US $220 million, positioning the company on track to meet its full-year guidance of US $1 billion. The quarter marked significant corporate milestones, including the completion of Alpek spin-off and an S&P credit rating upgrade to 'BBB'.

Key financial highlights include:

• Second-highest first quarter Revenue and EBITDA performance
• Record first quarter Volume in Mexico and Latin America
• Total revenue of US $2.091 billion
• Net Debt of US $2.596 billion with Net Debt/EBITDA ratio of 2.6x

Notable challenges included a 3% volume decline in Europe due to Torrente plant flooding, resulting in 42% lower EBITDA in that region. The company expects insurance reimbursements for damages and business interruption before year-end. Shareholders approved an US $83 million cash dividend and a Board reconfiguration to align with the company's new consumer sector focus.

Positive

• Credit rating upgrade to BBB by S&P
• Record first quarter volume in Mexico and Latin America
• Second-highest Q1 Revenue and EBITDA performance
• Expected insurance reimbursement for Torrente plant flooding
• Successful completion of Alpek spin-off transformation

Negative

• European operations EBITDA down 42% due to Torrente plant flooding
• Overall volume down 1% year-over-year
• Net Debt increased 5% quarter-over-quarter to US $2.596 billion
• Interest coverage ratio declined to 3.3x from 3.7x year-over-year

Insights

Financial Analyst

SIGMA's Q1 EBITDA on guidance track despite 17% YoY decline; transformation benefits emerging amid operational challenges.

SIGMA delivered $220 million in EBITDA for Q1 2025, marking its second-highest first quarter despite a 17% year-over-year decline. The company remains on track to achieve its full-year guidance of $1 billion in EBITDA, suggesting management anticipates stronger performance in upcoming quarters to compensate for the Q1 shortfall.

Regional performance showed significant variations. Mexico achieved record first-quarter volume with EBITDA of $146 million, though down 17% year-over-year. Europe faced substantial challenges with EBITDA plummeting 43% to $8 million, primarily due to flooding at the Torrente plant, with insurance reimbursements expected before year-end. The U.S. operation delivered $53 million in EBITDA (10% YoY decline), while Latin America posted record volume and revenue but experienced a 17% EBITDA contraction.

The company's financial position remains relatively stable with net debt at $1.975 billion, though the Net Debt/EBITDA ratio increased to 2.0x from 1.7x in the previous quarter. This modest leverage increase coincided with a reduction in interest coverage to 4.6x from 5.0x. Despite these metrics, S&P upgraded SIGMA's credit rating to 'BBB', citing improved leverage post-Alpek spin-off and simplified business structure—a vote of confidence in the company's financial trajectory.

Corporate Strategy Expert

ALFA completes transformation into Alfa|SIGMA, unlocking value recognition as a pure-play global food business.

The strategic transformation of ALFA into Alfa|SIGMA represents a watershed moment for the company, completing its evolution into a dedicated global branded food business. The earlier-than-expected distribution of Controladora Alpek shares on April 7, 2025, marks the final step in a comprehensive restructuring designed to enhance market value recognition through business unit separation. This transformation is already yielding tangible benefits, with S&P upgrading Alfa|SIGMA's credit rating to 'BBB' from 'BBB-'.

Most significantly, the market appears to be responding positively to this strategic pivot, with the company noting that "the historic valuation gap against global food peers has narrowed," suggesting improved value recognition in the consumer sector. Management's decision to reconfigure the Board of Directors—combining members from both ALFA's Board and Sigma's Advisory Board—demonstrates commitment to aligning governance with the company's new consumer-focused identity.

The declaration of a $83 million cash dividend signals confidence in the company's financial stability despite the transformation costs and operational challenges in Europe. Looking ahead, Alfa|SIGMA is advancing with comprehensive rebranding initiatives, including plans to change the corporate name to a Sigma-related name before year-end, reinforcing its identity as "a dedicated, global branded food business with the purpose of providing consumers 'Delicious Food for a Better Life'." This strategic repositioning offers what management describes as "a unique combination of transformation upside and food industry stability."

SAN PEDRO GARZA GARCÍA, N.L. Mexico, April 23, 2025 /PRNewswire/ -- ALFA, S.A.B. de C.V. (BMV: ALFAA) ("ALFA") announced today its unaudited results for the first quarter of 2025 ("1Q25"). All figures have been prepared in accordance with International Financial Reporting Standards ("IFRS").

1Q25 HIGHLIGHTS

Alfa|SIGMA	•  Alfa|SIGMA completed its transformation following the earlier-than-expected distribution of Controladora Alpek shares to ALFA Shareholders •  S&P upgraded Alfa|SIGMA credit ratings to 'BBB', citing improved leverage and a simplified business structure resulting from the Alpek spin-off •  Shareholders approved a reconfiguration of the Board of Directors and declared a cash dividend totaling US $83 million •  Rebranding efforts are underway, including preparations to change the corporate name of ALFA, S.A.B. de C.V to Sigma-related name, aligned with the new post-transformation identity
SIGMA	•  1Q25 results are on track to meet full-year Guidance •  Second-highest first quarter Revenue and EBITDA •  Resilient Volume amid revenue management to offset higher costs and foreign exchange rate fluctuations •  S&P upgraded Sigma credit ratings to 'BBB' reflecting the agency's expectation of steady operating and financial performance.
Mexico	•  Record first quarter Volume •  Second-highest first quarter Revenue and EBITDA
Europe	•  Volume down 3% as impact from Torrente plant flooding was partially mitigated through operational adjustments •  1Q25 EBITDA down 42% mainly due to the Torrente plant flooding. Pro-forma EBITDA was flat year-on-year and increased 3% in local currency.  •  Sigma expects insurance reimbursements, before year-end, for all damages and business interruption caused by flash floods in Spain
United States	•  Second-highest first quarter Volume, Revenue and EBITDA
Latam	•  Record first quarter Volume and Revenue, as well as second-highest 1Q EBITDA

Message from ALFA's Chairman & CEO

"The start of the year has been transcendental as the corporate transformation of Alfa|SIGMA is now complete. Following careful planning and methodical execution, our team successfully delivered on the strategic goal to separate all business units and enable a more targeted recognition of market value.

Alpek was the last company to be transferred directly to each ALFA Shareholder. We are pleased that the process leading to the first day of trading of Controladora Alpek on April 7, 2025, advanced faster than expected.

In turn, Alfa|SIGMA has effectively become a dedicated, global branded food business with the purpose of providing consumers "Delicious Food for a Better Life".

The positive response from financial market participants has been encouraging. The historic valuation gap against global food peers has narrowed, following a trend we expect to continue as the recognition of Alfa|SIGMA in the consumer sector advances.

Credit ratings also improved as a result of our profound transformation. Most recently, S&P raised Alfa|SIGMA's rating to 'BBB', up from 'BBB-', highlighting the Company's improved leverage post spin-off and simplified business structure.

On March 25, 2025, Alfa|SIGMA held its Annual Shareholders' meeting.  In addition to declaring a cash dividend totaling $83 million, Shareholders approved a reconfiguration of the Board of Directors to enhance alignment with post-transformation business needs focusing in the consumer sector. The new Alfa|SIGMA Board combines members who served on ALFA's Board and Sigma's Advisory Board.

Next, we are moving forward to rebrand Alfa|SIGMA. Among other considerations, this involves calling an Extraordinary Shareholders' Meeting to propose changing the name of ALFA, S.A.B. de C.V. for a Sigma-related name which more accurately reflects our new identity. We expect to complete this process before year-end.

In addition to the exciting developments on the transformational front, Sigma's financial results are on track to reach full-year Guidance supported by resilient volume and solid currency-neutral performance in the first quarter.

Alfa|SIGMA offers a unique combination of transformation upside and food industry stability that is especially valuable under the current economic climate."

Best regards,
Álvaro Fernández

Important notes on changes to Alfa|SIGMA's
Consolidated Financial Statements

Controladora Alpek

ALFA's shareholders approved to spin-off ALFA's share ownership of Alpek into a new, listed entity called "Controladora Alpek" on October 24, 2024. In accordance with International Financial Reporting Standards (IFRS), Alpek meets the definition of a "Discontinued Operation" for purposes of ALFA's Consolidated Financial Statements. "Discontinued Operations" are the net results of an entity that is either being held for disposal or which has already been disposed of.

The changes in ALFA's Consolidated Financial Statements are as follows:

• The Consolidated Statement of Financial Position presents Alpek's assets as "Current Assets from Discontinued Operations" and its liabilities as "Current Liabilities from Discontinued Operations" beginning in 3Q24. Prior periods are not restated.
• The Consolidated Statement of Income presents Alpek's net revenues and expenses as a single line item "Profit (loss) from Discontinued Operations" as follows:

• • 1Q25: accumulated figures for the three months ended March 31, 2025
  • 4Q24: accumulated figures for the three months ended December 31, 2024
  • 1Q24: accumulated figures for the three months ended March 31, 2024
  • 2025: accumulated figures for the three months ended March 31, 2025
  • 2024: accumulated figures for the three months ended March 31, 2024

• The Change in Net Debt presents Alpek's net inflows and outflows as a single line item "Decrease (Increase) in Net Debt from Discontinued Operations" as follows:
  
  • 1Q25: no figures presented related to Alpek
  • 4Q24: no figures presented related to Alpek
  • 1Q24: accumulated figures for the three months ended March 31, 2024
    
    
• The Change in Net Debt also presents Alpek's Net Debt balance as "Net Debt from Discontinued Operations" at the close of 3Q24. Prior periods are not restated and following periods do not present Alpek's Net Debt balance.

SELECTED FINANCIAL INFORMATION (US $ MILLION)

				(%) 1Q25 vs.
	1Q25	4Q24	1Q24	4Q24	1Q24
Volume SIGMA (kTons)	446	454	449	(2)	(1)
Mexico	245	247	243	(1)	1
Europe	89	95	91	(6)	(3)
United States	85	82	88	3	(3)
Latam	27	29	26	(7)	3
Revenue Alfa|SIGMA	2,091	2,197	2,204	(5)	(5)
SIGMA	2,064	2,166	2,170	(5)	(5)
Mexico	1,008	1,027	1,078	(2)	(6)
Europe	508	585	546	(13)	(7)
United States	396	388	398	2	0
Latam	153	165	149	(7)	3
EBITDA Alfa|SIGMA 1	271	177	254	53	7
SIGMA	220	222	264	(1)	(17)
Mexico	146	123	176	19	(17)
Europe	8	40	14	(80)	(43)
United States	53	43	59	22	(10)
Latam	13	16	16	(18)	(17)
Comparable EBITDA Alfa|SIGMA 2	220	211	257	4	(14)
SIGMA	220	214	264	3	(17)
Majority Net Income Alfa|SIGMA 3	178	(311)	60	157	197
SIGMA	66	12	68
CAPEX & Acquisitions Alfa|SIGMA 4	47	121	41	(61)	15
SIGMA	47	124	38	(62)	24
Net Debt Alfa|SIGMA 5	2,596	2,471	5,094	5	(49)
SIGMA	1,975	1,821	2,084	(8)	5
Net Debt/EBITDA Alfa|SIGMA 6	2.6	2.5	3.5
SIGMA	2.0	1.7	2.2
Interest Coverage Alfa|SIGMA 7	3.3	3.3	3.7
SIGMA	4.6	5.0	5.9

1 EBITDA = Operating Income + depreciation and amortization + impairment of assets.

2 Comparable EBITDA = Operating Income + depreciation and amortization + impairment of assets + extraordinary items.

3 Majority Net Income includes Majority Net Income from Discontinued Operations (Alpek).

4 Excludes divestments and Discontinued Operations (Alpek).

5 Net Debt adjusted for Discontinued Operations (excluding Alpek) at the beginning of 3Q24; previous periods unchanged.

6 Times. LTM= Last 12 months. Ratio calculated with Discontinued Operations for all periods.

7 Times. LTM= Last 12 months. Interest Coverage= EBITDA/Net Financial Expenses with Discontinued Operations for all periods.

1Q25 EARNINGS CALL INFORMATION

Date:            Thursday, April 24, 2025
Time:            2:00 p.m. EDT (NY) / 12:00 p.m. CST (CDMX)
Registration: https://us02web.zoom.us/webinar/register/WN_bMTFbXkwSYKyY_goQKXPBw
Replay:         https://www.alfa.com.mx/en/events/

About Alfa|SIGMA

Alfa|SIGMA has simplified its corporate structure to concentrate on Sigma, a leading multinational food company that focuses on the production, marketing, and distribution of quality foods through recognized brands in Mexico, Europe, the United States, and Latin America. In 2024, Alfa|SIGMA reported revenues of Ps. 163,242 million (US $8.9 billion), and EBITDA of Ps. 17,665 million (US $976 million). Alfa|SIGMA's shares are quoted on the Mexican Stock Exchange and on Latibex, the market for Latin American shares of the Madrid Stock Exchange. For more information, please visit www.alfa.com.mx

Disclaimer

This document contains forward-looking information based on numerous variables, expectations and assumptions that are inherently uncertain. They involve judgments with respect to, among other things, future economic, competitive and financial market conditions and future business decisions, all of which are difficult or impossible to predict accurately. Accordingly, future results are likely to vary from those set forth in this document. You should not place undue reliance on forward-looking information. All forward-looking information is made as of the date of this document, based on information available to us as of such date, and we assume no obligation to update any forward-looking information. Copyright^© 2025 ALFA, S.A.B. de C.V. All rights reserved.

 

FAQ

What is ALFA|SIGMA's Q1 2025 EBITDA and how does it compare to guidance?

ALFA|SIGMA reported Q1 2025 EBITDA of US $220 million, which puts the company on track to achieve its full-year guidance of US $1 billion.

How did the Torrente plant flooding impact ALFA|SIGMA's European operations in Q1 2025?

The flooding caused a 3% volume decline and 42% EBITDA reduction in European operations, though the company expects insurance reimbursements for damages and business interruption before year-end.

What was ALFA|SIGMA's dividend payout for Q1 2025?

Shareholders approved a cash dividend totaling US $83 million during the Annual Shareholders' meeting on March 25, 2025.

What is ALFA|SIGMA's current credit rating following the Alpek spin-off?

S&P upgraded ALFA|SIGMA's credit rating to 'BBB' from 'BBB-', citing improved leverage and simplified business structure post spin-off.