The increase in prices boosted Herdez’s sales by 17.7% in the third quarter of 2022. For the remainder of the year, the prices of some products are expected to follow the same trend with single-digit volume growth. The company will focus on designing new marketing strategies that allow it to boost its sales in an inflationary and pricing context.
Grupo Herdez, which brings together brands such as Doña María, Nutrisa, Del Fuerte or Helados Nestlé, is one of the companies adhering to the Package Against Inflation and Scarcity (Pacic) implemented by the Mexican government since last May. Under this pact, in force until February 2023, the companies agree not to raise the prices of their products in exchange for less tax and bureaucratic burdens for the import of inputs.
“There is a lot of work to do because pricing has been very strong and now we have to work on creating demand. We have a very good structure in terms of fixed assets to sell more. I think the improvements in our ice cream portfolio have been great. So we believe that we have a very good portfolio to achieve those objectives,” Gerardo Canavati, director of administration and finance for Grupo Herdez, said in a conference with analysts.
The directors advanced in a conference with analysts that for the next year they would focus more on promotions and other strategies to boost their sales.
Canavati
“Despite persistent inflation, we achieved good performance in all segments, maintained reasonable operating margins and generated working capital efficiencies,” Héctor Hernández-Pons Torres, president and CEO of Grupo Herdez.
Regarding capital investments, the company will make a disbursement of 1,300 million pesos and announced that a new operation is coming, which will be announced in the coming weeks. The company announced that it will be a percentage of less than 5% of its assets and will not mean a significant movement for what was planned in 2023.
In the financial report they mentioned that net sales in the canned segment amounted to 6,342 million pesos, 18.5% more than in the same quarter of 2021. In the accumulated, sales grew 21.1%, reaching 17,941 million pesos. In the quarter, the performance of vegetables, mayonnaise, homemade sauces and pasta stood out.
On the other hand, net export sales in the quarter were 561 million, while in the accumulated, they totaled 1,762 million. The foregoing represents increases of 8.4% and 27.8%, respectively, mainly benefited by the higher sales volume of homemade sauces and mole.
The Herdez manager highlighted that despite the inflationary environment, they gained market share in half of the categories of the canned portfolio, which during the third quarter of 2022 rose 18.5% in sales, with a value of 6,342 million pesos.
“We continue to grapple with persistent supply chain constraints and the highest levels of commodity inflation in decades. However, we remain focused on what is under market execution control, such as discipline in managing expenses and working capital,” added Canavati.
In the results guide for the end of 2022, the company reiterated that its growth in sales will be 20%, while for the EBITDA (operating flow, for its acronym in English) it is expected that it could end below 20%. In the first nine months of the year, the company recorded a 22% rise in revenues and an EBITDA increase of 30.5%.
“Despite persistent inflation, we achieved good performance in all segments, maintained reasonable operating margins and generated working capital efficiencies,” Héctor Hernández-Pons Torres, president and CEO of Grupo Herdez.
Regarding capital investments, the company will make a disbursement of 1,300 million pesos and announced that a new operation is coming, which will be announced in the coming weeks. The company announced that it will be a percentage of less than 5% of its assets and will not mean a significant movement for what was planned in 2023.
