Edgar Filing: Industrias Bachoco S.A.B. de C.V.

Unassociated Document

CONFORMED

Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 Or 15d-16

Of The

Securities Exchange Act of 1934

For the month of October 26, 2009

BACHOCO INDUSTRIES

(Translation of Registrant’s name into English)

Avenida Tecnológico No. #401

38010 Celaya, Guanajuato

(Address of principal office)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

(Check One) Form 20-F x Form 40-F ¨

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g-3-2(b) under the Securities Exchange Act of 1934.)

(Check One) Yes ¨ No x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82__.)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Industrias Bachoco, S.A. de C.V.
		(Registrant)

Date: October 26, 2009	By	/s/ Daniel Salazar Ferrer, CFO

Industrias Bachoco Announces Third Quarter 2009 Results

Celaya, Gto., Mexico, - October 26, 2009 - Industrias Bachoco S.A.B. de C.V. (“Bachoco” or “the Company”) (NYSE: IBA; BMV: Bachoco), Mexico’s leading producer and processor of poultry products, announced today its unaudited results for the third quarter and first nine months ended September 30, 2009. All figures have been prepared in accordance with Mexican GAAP. In line with the Mexican Accounting Principles, data is presented in nominal Mexican pesos.

Highlights:

During the quarter total sales increased 19.3% over the 3Q08.

The Company achieved a positive EBITDA margin of 3.6% compared with a negative result of 2.0% in the same year-ago quarter.

Prices increased across the board for all of Bachoco’s main business lines.

Earnings per ADS for the first nine months reached $1.36 USD compared to $0.48 USD for the same period of 2008. The result per ADS for 3Q09 even when negative at $0.08 USD was better than the same year-ago period.

CEO’s Comments:

Cristóbal Mondragón, Bachoco’s CEO, stated, “During the third quarter, the Mexican economy continued to slow down, affecting the purchasing power of Mexican consumers, and, consequently, we saw a weaker demand for our products when compared with the second quarter.

“In particular, the Mexican poultry industry was affected by higher raw materials costs, mainly those of soybean meal, following the trends in the commodity market. The slowdown in the economy did not allow us to fully transfer the costs increases to our products’ prices. In addition, it is worth noting that traditionally this quarter is the weakest of the year.

“Despite this condition, we managed to increase our total sales and were able to reach positive operating results. We continued implementing our growth plans through the integration of several business agreements reached during the quarter, with which we expect to strength our leadership position in the Mexican poultry industry.

“Finally, our financial position remained strong, we generated a good level cash and our indebtedness level remained low,” concluded Mr. Mondragón.

-2-

THIRD QUARTER 2009 RESULTS

Net Sales

Net sales for the third quarter amounted to Ps. 5,613.6 million, 19.3% above the Ps. 4,704.5 million reported in 3Q08. This increase was mainly driven by a 24.7% increase in chicken sales, 1.7% increase in table eggs sales, and 7.3% increase in swine sales, but was partially offset by a 2.7% decrease in balance feed sales.

Net sales	3Q09 (%)			3Q08 (%)
Chicken		79.2			75.8
Eggs		9.7			11.4
Balanced feed		6.5			7.9
Swine		1.0			1.1
Other lines		3.6			3.8
		100.00	%		100.00	%

Operating Results

Bachoco’s third quarter gross margin was 12.0%, higher than the 7.5% reached in the same quarter of 2008. The increase in the gross margin is attributed to the 16.0% increase in sale prices, which were partially offset by a 13.4% increase in the cost of sales.

The Company had an operating profit of Ps. 35.3 million, compared to an operating loss of Ps. 243.6 million in the same quarter of 2008. The operating margin for the third quarter of 2009 was 0.62%.

The EBITDA result was Ps. 200.7 million, compared with a negative EBITDA result reported in the same quarter last year of Ps. 92.7 million.

Taxes

Total taxes recognized for the third quarter were Ps. 11.8 million.

Comprehensive Financial Income (Cost)

The Company’s financial comprehensive cost was Ps. 27.9 million during the quarter, compared to a financial comprehensive cost of Ps. 235.5 million reported in the same last year’s quarter.

Net Majority Income (loss)

Net majority loss for the third quarter totaled Ps. 53.1 million, or Ps. 0.09 per share (US$0.08 per ADS), compared to a net majority loss of Ps. 100.3 million, or Ps. 0.17 per share (US$0.15 per ADS) reported in the same 2008 period.

RESULTS BY BUSINESS SEGMENT

Chicken

Sales of chicken products increased 24.7% as chicken prices rose 14.3% and the volume grew 9.1%. Even when the result was positive, this business line was sharply affected by the pressure of chicken prices, decreasing significantly from 2Q09, mainly due to a weaker demand in the industry.

-3-

Table Eggs

Demand for table egg products was strong; sales of table eggs increased by 1.7% during the third quarter as egg prices rose 2.5% from the previous year. The result was partially offset by a slight volume decrease of 0.8% directly attributed to an adjustment in the Company’s production.

Balanced Feed

Sales of balanced feed decreased by 2.7%, mainly due to a 9.1% increase in prices, which was partially offset by a 10.8% decrease in balance feed volume. This business line was directly affected by higher grain costs.

Swine

The swine business line was stable during the third quarter, swine sales rose 7.3% as a result of a 2.0% increase in swine prices and a 5.2% increase in swine volumes when compared to the same period of 2008.

Other Lines

Sales of other lines increased 13.8% when compared with 3Q08. The main products sold were by-product sales, such as poultry manure.

FIRST NINE MONTHS OF 2009

Net Sales

Net sales for the first nine months of 2009 amounted to Ps. 17,471.5 million, 21.0% above the Ps. 14,435.3 million reported in the same period of 2008. The increase was mainly driven by the 24.2% increase in chicken sales, 13.8% in table eggs sales, 15.3% in swine sales and 0.2% increase in balanced feed sales.

Net sales	Jan - Sep 2009 (%)			Jan -Sep 2008 (%)
Chicken		78.6			76.6
Eggs		10.0			10.7
Balanced feed		6.4			7.7
Swine		1.0			1.0
Other lines		4.0			4.0
		100.00	%		100.00	%

Operating Results

The Company’s gross margin for the first nine months of the year was 18.5% higher than 14.3% in the same 2008 period, and was mainly attributed to higher sales in all of our business lines, mainly for chicken and table eggs products. The Company’s operating profit was Ps. 1,388.7 million, which favorably compares to an operating profit of Ps. 312.3 million reached in the same period of 2008. EBITDA was Ps. 1,874.3 million, well above the Ps. 761.0 million recorded in the same last year’s period. EBITDA margin for the first nine months of 2009 was 10.7%.

Taxes

The Company recognized income taxes and deferred income taxes amounting to Ps. 223.9 million.

-4-

Net Majority Income

Net majority income for the first nine months of the year was Ps. 916.5 million, or Ps. 1.53 per share (US$1.36 per ADS), compared to net income of Ps. 324.9 million, or Ps. 0.54 per share (US$0.48 per ADS) reported in the same 2008 period.

Balance Sheet

Liquidity is solid with cash and cash equivalents amounting to Ps. 2,259.9 million as of September 30, 2009. The total debt outstanding was Ps. 1,048.8 million as of September 30, 2009.

Capital Expenditures

CAPEX during the first nine months of 2009 amounted to Ps.706.5 million.

Exhibits:

A.- Consolidated Balanced Sheets

B.- Consolidated Statement of Income

C.- Consolidated Statement Cash Flow

D.- Derivatives Position Report

Company Description

Industrias Bachoco S.A.B. de C.V. (also referred to in this report as Bachoco or the Company) is the largest poultry company in Mexico, with over 700 production and distribution facilities currently organized in nine complexes throughout the country. Bachoco’s main business lines are: chicken, eggs, and balanced feed, among others. The Company is also present in other businesses like swine, beef, margarine and turkey in Mexico. The Company’s headquarters are in Celaya, Guanajuato, located in Mexico’s central region. For more information, please visit Bachoco’s website at http://www.bachoco.com.mx or contact our IR department.

This press release contains certain forward-looking statements that are subject to a number of uncertainties, assumptions and risk factors that may influence its accuracy. Actual results may differ. Factors that could cause these projections to differ include, but are not limited to: supply and demand, industry competition, environmental risks, economic and financial market conditions in Mexico and operating cost estimates. For more information regarding Bachoco and its outlook, please contact the Company’s Investor Relations Department.

-5-

Exhibit A: Consolidated Balance Sheets

Industrias Bachoco, S.A.B. de C.V.

Condensed Consolidated Balance Sheets

			Mexican Pesos
	U.S.D.		2009(2)		2008(2)
	2009(1)		As of September 30,		As of September 30,
ASSETS
Current assets
Cash and cash equivalents	$	167	Ps	2,260	Ps	1,988
Total accounts receivable		99		1,331		1,129
Inventories		327		4,413		4,919
Other current assets		-		-		-
Total current assets		593		8,004		8,036
Net property, plant and equipment		811		10,949		10,717
Other non current assets		41		554		368
TOTAL ASSETS	$	1,445	Ps	19,507	Ps	19,121

LIABILITIES
Current liabilities
Notes payable to banks		37		502		69
Accounts payable		93		1,255		1,184
Other taxes payable and other accruals		31		422		431
Total current liabilities		161		2,179		1,684
Long-term debt		41		547		63
Labor obligations		7		95		73
Deferred income taxes and others		143		1,932		2,465
Total long-term liabilities		191		2,574		2,601
TOTAL LIABILITIES	$	352	Ps	4,753	Ps	4,286
STOCKHOLDERS' EQUITY
Majority stockholder's equity:
Capital stock		170		2,295		2,295
Paid-in capital		55		744		744
Reserve for repurchase of shares		12		159		159
Retained earnings		785		10,592		11,418
Net majority income of the year		68		917		325
Deficit from restatement of stockholder's equity		-		-		-
Derivate financial instruments		-		-		(150	)
Total majority stockholder's equity		1,089		14,706		14,791
Minority interest		4		48		45
TOTAL STOCKHOLDERS' EQUITY		1,093		14,754		14,836
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,445	Ps	19,507	Ps	19,121

(1) For reference, in millions of U.S. dollars using an exchange rate of $13.50 as of September 30, 2009

(2) Millions of Mexican nominal pesos

-6-

Exhibit B: Consolidated Statement of Income

INDUSTRIAS BACHOCO, S.A.B. DE C.V.

Consolidated Statements of Income

-unaudited-

	THIRD QUARTER									FIRST NINE MONTHS OF YEAR
	U.S.D.			Mexican Pesos						U.S.D.				Mexican Pesos
	2009(1)			2009(2)			2008(2)			2009(1)				2009(2)			2008(2)

Net sales	$	416		Ps	5,614		Ps	4,705		US	$	1,294		Ps	17,472		Ps	14,435
Cost of sales		366			4,938			4,353				1,055			14,238			12,364
Gross profit (loss)		50			676			352				239			3,233			2,072
Selling, general and administrative expenses		47			641			595				137			1,844			1,759
Operating income (loss)		3			35			(244	)			103			1,389			312
Comprehensive financing (cost) income		(2	)		(28	)		(235	)			(10	)		(134	)		(252	)
Interest income		2			33			(174	)			8			107			(76	)
Interest expense and financing expenses		(2	)		(23	)		(111	)			(5	)		(67	)		(182	)
Foreign exchange gain (loss), net		(1	)		(18	)		50				(3	)		(37	)		5
Other financial income (expense) net		(1	)		(20	)		-				(10	)		(137	)		-
Other income (expense) net		(5	)		(70	)		(33	)			(8	)		(106	)		(27	)
Income before income tax, asset tax		(5	)		(63	)		(512	)			85			1,149			33
Total income taxes		(1	)		(12	)		(413	)			17			224			(296	)
Income tax, asset tax		2			21			(57	)			5			72			69
Deferred income taxes		(2	)		(33	)		(356	)			11			152			(365	)
Net income	$	(4	)	Ps	(51	)	Ps	(99	)			69			925			329
Minority net income		0			2			2				1			9			4
Majority net income		(4	)		(53	)		(100	)			68			917			325
weighted average shares outstanding (in thousands)		599,954			599,954			600,000				599,930			599,930			600,000
Net majority Income per share (in U.S.D per ADS)		(0.08	)		(0.09	)		(0.17	)			1.36			1.53			0.54

(1) For reference, in millions of U.S. dollars using an exchange rate of $13.50 as of September 30, 2009

(2) Millions of Mexican nominal pesos

-7-

Exhibit C: Consolidated Statement of Cash Flows

Industrias Bachoco, S.A.B. de C.V.

Consolidated Statement of Cash Flows

				Mexican Pesos
	U.S.D.			2009(2)			2008(2)
	2009(1)			As of September 30,			As of September 30,

NET MAJORITY INCOME BEFORE INCOME TAX	$	85		Ps.	1,149		Ps.	33
ITEMS THAT DO NOT REQUIRE CASH:		(18	)		(237	)		197
Other Items		(18	)		(237	)		197
ITEMS RELATING TO INVESTING ACTIVITIES:		34			455			434
Depreciation and others		36			486			449
Income (loss) on sale of plant and equipment		(2	)		(22	)		(10	)
Other Items		(1	)		(9	)		(4	)
ITEMS RELATING TO FINANCING ACTIVITIES:		11			151			106
Interest income (expense)		3			44			182
Other Items		8			107			(76	)

NET CASH GENERATED FROM NET INCOME BEFORE TAXES	$	112		Ps.	1,518		Ps.	770

CASH GENERATED OR USED IN THE OPERATION		(44	)		(589	)		(810	)

Decrease (increase) in accounts receivable		12			163			78
Decrease (increase) in inventories		52			705			(1,155	)
Increase (decrease) in accouts payable		(54	)		(727	)		19
Income taxes paid		(54	)		(729	)		248

NET CASH FLOW FROM FINANCING ACTIVITIES	$	69		Ps.	929		Ps.	(40	)

INVESTING ACTIVITIES

NET CASH FLOW FROM INVESTING ACTIVITIES		(61	)		(821	)		(667	)
Acquisition of property, plant and equipment		(52	)		(706	)		(927	)
Proceeds from sales of property plant and equipment		(1	)		(17	)		34
Other Items		(7	)		(98	)		225

CASH FLOW SURPLUS (REQUIREMENTS OF) TO BE USED IN FINANCING ACTIVITIES	$	8		Ps.	108		Ps.	(707	)

FINANCING ACTIVITIES

Net cash provided by financing activities:		13			180			(345	)
Proceeds from loans		133			1,800			468
Principal payments on loans		(102	)		(1,377	)		(445	)
Dividends paid		(19	)		(250	)		(236	)
Other items		1			7			(132	)

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS		21			288			(1,052	)

CASH AND INVESTMENTS AT THE BEGINNING OF YEAR		146			1,972			3,040

CASH AND INVESTMENTS AT END OF PERIOD	$	167		Ps.	2,260		Ps.	1,988

(1) For reference, in millions of U.S. dollars using an exchange rate of $13.50 as of September 30, 2009

(2) Millions of Mexican nominal pesos

-8-

Exhibit D: Derivatives Position Report

Industrias Bachoco, S.A.B. de C.V.

Thousands of Mexican Pesos, as of September 30, 2009

Table 1

Type of Financial Instrument

Objective of

Notional

Value of the Related Commodity

Reasonable Value

Amounts

Guaranties

The instrument

3Q-2009

2Q-2009

3Q-2009

2Q-2009

Due by Year

Required

Forwards, knock out forwards,

Hedge and

1,384,290

13.50

13.17

27,246

- 74,408

puts, collars and others under

negotiation

different amounts and conditions*

Corn Futures and

Hedge

240,862

Corn of Dec and March, $3.4400 and

Corn of Sep and Dec, $3.5450 and

-32,870

- 22,565

soybean meal Futures**

$3.5675 USD/bushel respectively.

$3.6725 USD/bushel respectively.

The deals

Soybean meal of Dec and Jan

Soybean meal of Aug and Sep

consider the

$285.5 and $282.7 USD/ton.

$374.30 and $339.30 USD/ton.

2009 and

possibility of

Options for corn***

Hedge

699

Corn: $3.4400 USD/ per bushel

Corn: $3.5450 USD/ per bushel

2010

margin calls

and

for Dec and $3.5675 for January

for Sep and $3.6725 for

699

but not

negotiation

2010

December.

another kind

of guaranty

Options for soybean meal****

Hedge

- 1,716

Soybean meal: $285.5 USD/per

Soybean meal: $374.30 USD/per

and

ton for Dec and $282.7

ton for Aug and $314.3 and

- 1,716

7,044

negotiation

for January 2010.

$306.30 USD/ton for

Oct and Dec respectively

None of the financial instruments exceed 5% of total assets as of September 30, 2009

* The 58.1% of the instruments will due in 2009 and the rest during the first half of 2010.

The notional value represents the net position as of September 30, 2009 at the exchange rate of Ps.13.50 per USD.

** The 99% of the instruments will be due in 2009

*** All the instruments will be due in 2009

**** The 38% of the instruments will be due in 2009

A negative value means an unfavorable effect for the Company

Industrias Bachoco, S.A.B. de C.V.

Thousands of Mexican Pesos, as of September 30, 2009

Table 2

Kind of Financial Instrument	Reasonable		Value of the Related Commodity						Effect on the	Effect on the
	Value As of		/reference value						Income	Cash Flow*****
	March 31		-3%		3%		5%		Statement	-3%		3%		5%
Forwards, knock out forwards,	$	27,246	$	13.10	$	13.91	$	14.18	Direct	$	3,237	$	62,584	$	33,464
puts, collars and others under
different amounts and
conditions*
			-5%		5%		10%			-5%		5%		10%
Corn Futures and	-$	32,870	$	3.27	$	3.61	$	3.78		-$	43,270	-$	22,470	-$	12,071
soybean meal Futures**			$	271.23	$	299.78	$	314.05

Options for corn***	$	699	$	3.27	$	3.61	$	3.78	The effect will materialize as the inventory is consumed.	$	1,756	-$	180	-$	386

Options for soybean meal****	-$	1,716	$	271.23	$	299.78	$	314.05		-$	6,087	$	2,655	$	7,026

* The reference value is the exchange rate of the Mexican peso and USD, $13.50 pesos per USD as of September 30 of 2009.

** The reference value is the future in USD per bushel, here referenced to corn,

$3.4400 for December and $285.5 USD/ton for December for Soybean meal.

*** The reference value is the future in USD per bushel, here referenced to corn for December 2009.

**** The reference value is the future in USD per ton, here referenced to Soybean meal for December 2009.

***** The company has credit lines with the majority of its counterparts, so that the effect in cash flow is lower than the amount shown