GB Day 2005 R3 - mzweb.com.br · PDF fileBrio/Data warehouse implemented in mid-2004 BBU...

22ndnd Grupo Bimbo DayGrupo Bimbo Day

December 1December 1stst, 2005, 2005

Reynaldo Reyna Reynaldo Reyna

2.5

0.30.7

6.7 6.4

4.11.9 2.3 2.4

(1.0)

1996

1997

1998

1999

2000

2001

2002

2003

2004

LTM

FourFour--SSTexas: Texas:

distribution distribution conversionconversion

LowLow--carbcarbcrazecraze

Economic Economic slowdownslowdown

BBU BackgroundBBU Background

LTM: Last Twelve Months as of September 2005

BB

U E

BIT

DA

Mar

gin

(%)

Situation Assessment: TrinitySituation Assessment: Trinity

STRU

CTUR

ES

TECHNOLOGY

PROCESSES

Profitability

GrowthCustomer Service

PERSON

THREE KEY ENABLERSPeople

ProcessesTechnology

THREE KEY DRIVERSCustomer Service

ProfitabilityGrowth

The Transformation RoadmapThe Transformation Roadmap

Back to BasicsBusiness

PerformanceRevenue

Generation1

9

4

3

7

2

106 5

8

Turnaround TransformationSustainable, Profitable Growth

Market Execution Operational EfficienciesControl & Accountability


PerformanceRevenue

Generation

9

10




47 6 5

8

1 3

2 Control & Control & AccountabilityAccountability

1. Organizational restructure2. Financial control & visibility3. Process control

BBU Structure: Early 2004BBU Structure: Early 2004

Working well

Only minor change needed

Regional brand management and account responsibilities

Communication across regions less than perfect

Planning, accounting and other finance areas split between two areas

IT part of accounting even though majority of projects were IT related

Accounting Accounting Treasury, ITTreasury, IT

Commercial Commercial CentralCentral

Commercial Commercial WestWest

Commercial Commercial EastEast

Planning Planning and and

AnalysisAnalysis

Project Project OfficeOffice Operations Operations Human Human

ResourcesResources

President President

BBU Structure: 2005BBU Structure: 2005

Goal: simplify, standardize and centralize

Direct reports reduced from 8 to 6, all located in Texas

Sales and marketing separated, each with total BBU responsibilityNational account and category management teamsUnified brand management with category focus on bread, sweet goods and tortillas

All finance and accounting activities merged

IT independent from Finance, created new Control Desk

PresidentPresident

SalesSales MarketingMarketing FinanceFinance IT/PMOIT/PMO OperationsOperations H RH R

Financial Reporting: Early 2004Financial Reporting: Early 2004

Legacy organizational structureLegacy organizational structure for finance areafor finance area

Accounting group reporting to legal entitiesAccounting group reporting to legal entitiesFinance group reporting to regional P&LsFinance group reporting to regional P&LsNeither provided for proper accountabilityNeither provided for proper accountability

Existing reporting was primarily Existing reporting was primarily Excel Excel -- basedbased using using Oracle data downloadsOracle data downloads

InefficientInefficientSlowSlowInconsistentInconsistent

Financial Reporting: 2005Financial Reporting: 2005

HPMA roll-out started January 2005

Specific and standardized reports developed for sales, operations and administrative areas

Accountability for specific responsibilitiesIncreased visibility: - 66 top sales managers

- 62 top operations managers- Full administrative recap

Essbase reporting feature creates efficienciesNear automatic report generationE-mail and shared drivesQuicker distributionMore time for analysis

Process ControlProcess Control

Completed BXXI plant roll-out in late 2004

Brio/Data warehouse implemented in mid-2004

BBU Control Desk established in early 2005

Modern Depot being rolled out to allow for more focused management of sales operations (returns, etc.)

PCS (product control) reporting established to include all depots and distribution centers

SICOM roll-out and Hyperion Planning underway


PerformanceRevenue

Generation

9

10


1 3

2



47 6 5

8

Market Market ExecutionExecution


4. Returns reduction5. Allowances rationalization6. Client rationalization7. SKU rationalization8. Hispanic growth

Return ImprovementReturn Improvement

Focus on driving down returns while maintaining in-stock conditions throughout the retail market

Development of “Brio” exception reporting tools

Weekly regional conference calls: share best practices

Weekly review by BBU Executive Committee

SKU rationalization process: elimination of over 160 low volume/high return SKU’s

Modern Depot pilot: Pacific Northwest

Modern Depot Phase I BBU roll-out: Q4 2005

Results tied to individual performance goals

Posting consistent return reduction

Optimize and reduce trade marketing promotion spending:

Trade marketing disciplines implemented,

Monthly regional review: key metrics• Dollar spend, unit performance, cost per incremental unit,

profitability

Sophisticated planning tools for brand/segment

Sales operations and customer development team accountability

Enhanced forecasting for manufacturing

Migration to automated software tools

Reduced Western BBU region by 10%; re-invested in Oroweat media

Allowance RationalizationAllowance Rationalization

Client RationalizationClient Rationalization

Improve and optimize profitability of Restaurant and Institutional accounts by increasing net prices

Margin review of all BBU accounts

Increased prices on low-margin fast food accounts

• Loss of Jack in the Box, Burger King, Wendy’s (CA)

Project delivered standard benchmarks for evaluation of food service business: VCM’s / pound

Quarterly review of account scorecard: price / prune

Management accountability: price integrity

Profitable capture of new business in Texas and California

Hispanic Brand Growth InitiativeHispanic Brand Growth Initiative

Drive sales in core Bimbo and Marinela brands focusing on:

Geographic expansion in Midwest and East regions

Brand and route separation in mature California market

Placement of Marinela freezers

Convenience store penetration

Contributing 25% of 2005e BBU sales growth

TransformationSustainable, Profitable Growth


PerformanceRevenue

Generation

Turnaround

1 3

2

47 6 5

8



9

10

Operational Operational EfficienciesEfficiencies


9. Supply chain optimization10. Shared services

4. Returns reduction5. Allowances rationalization6. Client rationalization7. SKU rationalization8. Hispanic growth

Supply Chain OptimizationSupply Chain Optimization

Closing of La MiradaSlow and inefficient plantProduct quality improved55 positions eliminated$4.2 mm annual savings

Production Optimization“Caps Logistics” software508 SKU’s considered24 production lines impacted$1.7mm annual savings

AmDutch / PCDataImproved:

Order accuracyOn-time deliveryProduct accountabilityProduct allocationsSpace utilization

20% labor reduction: $700K

Shared ServicesShared Services

Leveraging the size and strength of the Group today

Research and Development

New product developmentProduct formula redesignIngredient optimizationInnovation councils

Financial Services:

Accounts payable, cash application and some accounting functions

Elimination of 38 FTE’s

Annual savings of $2.0mm before charges from SSC

The Results…The Results…

Sales Growth

0.8

1.9

7.0

1.1(0.6)

(0.2)

2.81.7

3.7 3.4

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

2003

2004

LTM

Revenue Growth: 7.9% in USDRevenue Growth: 7.9% in USD

Combination of: US and Hispanic brandedand private label volume gains

Relationship with key customers: awarded National Category Partner status by Kroger and Albertson’s

Introduced 5 successful new products, launched Mrs. Baird’s bread in Kansas City

Operating Margin: 1.4%Operating Margin: 1.4%

Second consecutive quarter of profits

YTD EBIT margin of 0.6%

Focus on our plan

Lower commodity prices

Higher absorption of fixed costs and expenses

Operating Margin

(3.3)

(2.2)

(2.5) (2.4) (2.2)(1.7)

(1.0)

1.51.4

(0.8)1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

2003

2004

LTM

3Q 2005

LTM: Last Twelve Months as of September 2005

Challenges AheadChallenges Ahead

Higher commodity prices

Higher energy prices

Aggressive competition

Tougher comparables vs previous year results

Thank YouThank You

GB Day 2005 R3 - mzweb.com.br · PDF fileBrio/Data warehouse implemented in mid-2004 BBU...

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