Sigma Foods: 2Q26 Earnings Conference Highlights

Research evidence excerpt

Sigma Foods: 2Q26 Earnings Conference Highlights

inds expected to

more than offset them.

• Financial Expense Increase. The increase in financial expense was almost entirely due

to FX impacts, as the appreciation of the Mexican peso reduced FX gains compared to

2Q25. Accumulated net financial cost reached $123mn versus $57mn in 1H25, with

management attributing ~90% of the change to lower FX gains. The remaining ~10%

reflects higher interest expense resulting from restructuring debt into peso-denominated

instruments, aligning more closely with EBITDA generation. Management reiterated FX

sensitivity of roughly $30–35mn of EBITDA translation impact per peso of depreciation,

and is focused on balancing sustainable volume growth with strong EBITDA per ton,

using revenue management to incentivize volume while protecting margins.

• SG&A as % of Sales Increasing. SG&A as a percentage of sales increased, with one-

third of the effect attributed to MXN appreciation; on a currency-neutral basis, growth

was materially lower. Payroll costs rose due to inflation, and additional freight costs were

incurred from trucker availability and higher fuel prices. As Sigma moves more yogurt

volumes, logistics become less efficient, and marketing expenses have increased to

support volume and market share growth.

• Buybacks Being Executed Selectively. Share buybacks are being executed selectively

and opportunistically, reflecting management’s constructive view of the business’s

underlying value amid recent share price declines. However, the net leverage ratio

remains slightly above the long-term target, so buybacks are balanced with a commitment

to a strong balance sheet.

• Free Cash Flow and Net Debt. Free cash flow in 1H26 was muted due to inventory