ENVIRONMENT

ANNUAL REPORT 2006









DELIVERING results

in a challenging

ENVIRONMENT

Grupo Bimbo today is one of the baking

A LEADERSHIP PROFILE leadership enterprises around the world

and number one in the American Continent.



It has 72 plants in 3 continents, there it

produces packaged bread, pastries, rolls,

cookies, cakes, packaged products, tortillas,

goat milk caramel (cajeta), salted snacks,

chocolates and candies among others.



The company produces 5,000 products and

has 100 well-known brands, along with

one of the most extensive distribution networks

in the world: more than 32,000 routes and

38,000 vehicles that service more than

1 million points of sale. It has more than

85,000 associates.









production • finance • planning • logistics • corporate affairs • sales • distribution • human relations • management • development • operations • marketing

production • finance • planning • logistics • corporate affairs • sales • distribution • human relations • management • development • operations • marketing









The art of baking implies commitment towards our consumers

and their families, and we in Grupo Bimbo understand this,

as well as indeed you all do. Those of us who are part of this

industry know that it is founded upon daily devotion, dedication,

a vocation of service and caring.

– Lorenzo Servitje

GRUPO BIMBO

IN THE WORLD

UNITED STATES

(cities)

Abilene

Beaverton

Denver

Elk Grove

Escondido

Fort Worth

Grand Prairie

Houston

Lubbock

Montebello

San Antonio

San Francisco

Waco

MEXICO

(cities)

Atitalaquia LATIN AMERICA

Mexico City (countries)

Chihuahua Argentina

Cholula Brazil

Gómez Palacio Chile

Guadalajara Colombia

Hermosillo Costa Rica

Irapuato El Salvador

León Guatemala

Matehuala Honduras

Mazatlán Nicaragua

Mérida Panamá

Mexicali Peru

Monterrey Uruguay

Puebla Venezuela

San Luis Potosí

San Nicolás de los Garza

Tijuana

Toluca

Veracruz

Villahermosa

Zapopan









68% 24% 8%

PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF

CONSOLIDATED SALES CONSOLIDATED SALES CONSOLIDATED SALES

Mexico United States Latin America

BIMBO, S.A. DE C.V.









DIVISIONS

Europe ◆ Is headquartered in Mexico City. Produces packaged bread,

(country) pastries, rolls, pound cakes and cupcakes, snack cakes, cookies,

Czech Republic

packaged tortillas, toasted tortillas, and whole-grain cereal bars.

◆ Its main brands are Bimbo, Marinela, Tia Rosa, Wonder, Milpa

Real, Lara, Suandy, Lonchibon, Del Hogar, Monarca, Breddy and

El Globo.



BARCEL, S.A. DE C.V.

◆ Is headquartered in Lerma, State of Mexico. It produces salted

snacks, candies, chocolates, goat milk caramel (cajeta), chewing

gum and gummy candies.

◆ Among its main brands are Barcel, Ricolino, Coronado, La

Corona, Juicee Gummee and Park Lane.



BIMBO BAKERIES USA, INC.

Asia

◆ Operates from Fort Worth, Texas, in the United States. It

(country)

China produces packaged bread and pastries, rolls, bagels, english

muffins, poundcakes and cupcakes, snack cakes, cookies,

packaged tortillas and prepared pizza dough.

◆ Its leading brands are Oroweat, Mrs Baird’s, Bimbo,

Entenmann’s, Thomas’, Tia Rosa, Marinela, Francisco, Old Country,

Boboli and Webers’.



ORGANIZACION LATINOAMERICA

◆ Headquartered in Buenos Aires, Argentina, makes packaged

bread and pastries, rolls, pound cakes, cookies, snack cakes,

sandwich cookies, tortillas and prepared pizza dough.

◆ Among its most popular brands are Bimbo, Marinela, Pullman,

Plus Vita, Ideal, Holsum, Trigoro, Pyc, Bontrigo, Cena and Fuchs.









41,545 44,703 14,102 15,218 4,376 5,330





’05 ’06 ’05 ’06 ’05 ’06

millions of pesos millions of pesos millions of pesos









+ 7.6% + 7.9% + 21.8%

NET SALES NET SALES NET SALES

Mexico United States Latin America

2006 2005 % CHANGE





NET SALES 63,633 58,643 8.5

Mexico 44,703 41,545 7.6

United States 15,218 14,102 7.9

Latin America 5,330 4,376 21.8

OPERATING INCOME 5,857 5,444 7.5

Mexico 5,546 5,261 5.4

United States 229 80 186.3

Latin America 39 56 -30.4

EBITDA 7,765 7,394 5.0

Mexico 6,892 6,584 4.7

United States 562 528 6.4

Latin America 270 235 14.9

NET MAJORITY INCOME 3,535 2,975 18.8

Total Assets 41,815 38,732 8.0

Total Liabilities 18,092 17,975 0.7

Stockholders’ Equity 23,724 20,757 14.3

Net Debt / EBITDA 0.38 0.60

Net Debt / Stockholders’ Equity 0.12 0.21

ROA 8.5% 7.7%

ROE 15.2% 14.7%

ROIC 11.7% 11.9%

Earnings per Share (pesos) 3.01 2.59 16.2

Total Shares Outstanding (‘000s) 1,175,800 1,175,800

Share price at the year-end (pesos) 54.00 36.45 48.1









All figures herein are expressed in millions of constant Mexican pesos of December 31, 2006, unless stated otherwise, and

have been prepared according to Mexican Financial Reporting Standards; all percentage changes are expressed in real terms.

Consolidated results do not include inter-company transactions.









NET SALES ’06 TOTAL ASSETS ’06 ‘05 ‘06 ‘05 ‘06 ‘05 ‘06 ‘05 ‘06

Mexico 68% Mexico 64% 5,444 5,857 2.59 3.01 0.21 0.12 11.9 11.7

United States 24% United States 26% (millions of pesos) (millions of pesos) (times) (%)

Latin America 8% Latin America 10% Operating Earnings per Net Debt / ROIC

Income Share Stockholders’

+7.5% +16.2% Equity









FINANCIALANDOPERATINGHIGHLIGHTS

G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2

LETTERFROMTHECHAIRMANOFTHEBOARD

I am very pleased to inform you that the

performance and results of the Group during

fiscal year 2006 were highly satisfactory.

Consolidated sales totaled Ps63.6 billion,

slightly higher than we had budgeted, and 8.5%

higher than in 2005.









Roberto Servitje S.

CHAIRMAN OF THE BOARD









This was due in part to the fact that the improvement we reported > Pan Europa, in Guatemala, which helped make us a

in the results of our United States and Latin American operations market leader in Central America.

in 2005 was continued and intensified in 2006, bringing growth > Beijing Pan Rico, in China, which finally made our

rates of 7.9% and 21.8%, respectively. dream of entering the vast Asian market, a reality.

> Productos Roma, in Medellin, Colombia, which

Net majority income totaled Ps. 3.5 billion, 18.8% more than extends our coverage in that country, where mountainous

in 2005. terrain makes the transportation of products by land more

difficult. This plant joins the three we already had in the cities

Much of this encouraging progress was the product of of Bogota, Cali and Barranquilla.

operating improvements, given that recent acquisitions had > Quizz, a Mexican powdered drink, which will allow us to

no material impact on the year’s results. expand the Ricolino brand lines.



The most important acquisitions made in 2006 were: On the other hand, during the year we closed five plants:



> Pastelerias El Molino. Although this was a modest The Caucagua plant in Venezuela, which was unsatisfactorily

investment, it not only contributed to the expansion plans located; equipment from that plant was moved to the

for our retail division, but also brought us considerable Guarenas facilities.

satisfaction because, in a way, this company was one of the

forerunners of our Group. As for the other four plants, which came with our acquisitions

> Los Sorchantes, in Uruguay, a baking company located of La Corona, Duvalín, Productos Confitados and Industrial

in Montevideo, one of the leaders in this region. de Maíz Monterrey, they were closed either because of poor









M E S S A G E F R O M T H E C H A I R M A N O F T H E B O A R D / P. 3

location or to take advantage of synergies; their equipment was It was with great surprise that we learned that the Mexican

transferred to existing plants. Postal Service had issued a commemorative stamp with the

image of the smiling baby goose that is the face of Gansito,

It is interesting to note that although BBU’s operations in the to celebrate its anniversary. This is the only time the Mexican

U. S. have begun to yield positive results, we know this is a mail has given such an honorable distinction to any brand.

very competitive market, and we intend to keep a close eye not

only on operations, but also on the possibilities for expansion. Another important note is that the company’s stock

However, our export of products from Mexico to that country, repurchase reserve was not applied to any transactions

particularly in the Bimbo, Marinela and Barcel brand lines, have during 2006.

been growing at a spectacular pace, and to date we have more

distribution routes covering most of the United States, in addition I am pleased to convey the congratulations of this Board to

to the operated by BBU. all our shareholders and personnel, for their part in these

very satisfying events. The Board of Directors has approved

I am also pleased to inform that, in our Planning Meetings, the report by the Chief Executive Officer, which has been

I have seen the same or greater enthusiasm for carrying presented to you, and the report on management’s activities

on the vigorous growth for which this Group is known, both in fiscal year 2006. Its approval was based on the favorable

nationally and internationally, through direct investments or new opinion of our external auditors, and the Board considers

acquisitions. that the report by the Chief Executive Officer and the financial

statements of the Group have been prepared according

As we do every year, in 2006 we reviewed all the collective labor to the Mexican Financial Reporting Standards; that the

contracts for the Group’s workers. In Mexico, not only were these accounting policies and criteria were applied consistently and

contract revisions carried out harmoniously, as always, but also, appropriately to the circumstances of this corporation; and

at the suggestion of the Union itself, we agreed on the creation finally, that the financial information reasonably reflects the

of an additional retirement reserve fund, over and above the company’s financial position and results.

regular retirement fund which has maintained a balance well

above actuarial calculations for some years now. This new fund Finally, together with this report, we are presenting the

will provide an additional income for our personnel at the time of Stockholders’ meeting with the reports of the Audit

their retirement. Committee, the Corporate Practices Committee, the report by

the Chief Executive Officer, and a report on the company’s

We had the good fortune to mark a number of happy occasions compliance with its fiscal obligations.

in 2006: Marinela Mexico had its 50th anniversary on May 9;

Bimbo de Occidente also completed 50 years of operations on I am sincerely grateful for the support and confidence we

December 9; and our popular Gansito Marinela snack cake, which have received from our valued stockholders.

was born in both companies around the same time, was given an

all-out celebration, because this is one of the Group’s winning

products, still a strong leader in the market.









M E S S A G E F R O M T H E C H A I R M A N O F T H E B O A R D / P. 4

CEO’SLETTER

Dear Shareholders:

Grupo Bimbo reported good financial and operating

results in 2006. We are particularly pleased with this

performance given the unique market pressures we

faced in the year.



Daniel Servitje

Chief Executive Officer









Consolidated net sales rose 8.5% year over year, to $63,633 Our challenge is to continue growing profitably. While our business

million, reflecting healthy growth in each of our markets. Greater units each focus on different markets and operate in disparate

volumes and higher prices contributed to the 7.6% sales environments, we share one singular goal as a group: to be the

increase in Mexico. The impressive growth at Bimbo Bakeries global leader in the baking industry and one of the best food

USA (BBU) drove dollar sales up 11.1%, or 7.9% in peso companies in the world.

terms. At Organizacion Latinoamerica (OLA), the considerably

larger client base contributed to the 21.8% sales increase. The I am confident that we can reach that goal and sustain a

performance of our international operations, which only two leadership position over the long term by remaining focused on

years ago lagged behind that of our domestic market, is today our strategic imperatives. We seek to:

the growth driver of the Group, following an aggressive—and

effective—turnaround plan. > Produce the right products to meet the changing tastes and

demands of consumers all over the world, with a focus on taste,

However, raw material costs rose at a much faster rate than sales. For health and innovation.

example, the hard red winter wheat prices increased by an average > Ensure broad distribution via comprehensive cost-effective

of 38% year over year and corn 27%, which clearly put pressure on network that delivers our fresh products in a timely manner to all

our profitability. That we closed the year with a 9.2% operating margin, our customers.

virtually unchanged from the previous year, is a testament to the ability > Identify growth markets that will propel our performance, in

of our associates to implement significant operating improvements. terms of new geographic regions and new consumer segments.

> Create value for stakeholders by increasing our

Highlights from the year include the strong growth at BBU, the profitability and strengthening our financial position, and

launch of almost 151 new products, reflecting our deep focus on continuing to be a highly productive, people oriented, trusted

the consumer and an effective research and development strategy; and respected company.

new joint venture partnerships with Arcor and Grupo Lala that

further enhanced our product portfolio; new capacity brought online In this report we outline our strategy for delivering results

in Mexico, Guatemala, Venezuela and Colombia, along with some in each of these areas. As we look ahead at 2007, we see

plant consolidations that improved overall efficiency; entry into new the benefits of our strategy with continued sales growth and

markets such as Uruguay and China; expansion of the distribution incremental margin improvement. I look forward to working

network in each of our markets; and the initial implementation of together with all our associates, partners and stakeholders to

SICOM, our advanced commercial system, in the U.S. ensure that Grupo Bimbo continues to deliver results.









C E O ’ S L E T T E R T O S H A R E H O L D E R S / P. 5

Our market research confirms three

main trends: consumers in all our markets

continue to seek products with higher health

and nutritional value; convenience foods

that cater to working families are growing in

popularity; and youngsters, particularly in

Mexico and Central America, are drawn to

intense flavors and sensations such as sour

and spicy.









SATISFYINGCONSUMERTASTESANDTRENDS



Challenge: To offer consumers tasty, healthy

and innovative choices for every meal and every

occasion, while improving the overall nutritional

value of our product portfolio.



Grupo Bimbo is delivering results with successful

new product launches and reformulations, and a

commitment to the products consumers love.







G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 6

Millions of people enjoy our products every day. With more than

5,000 items in our portfolio, we have something for every taste

and every occasion.



While many of our brands offer the nostalgic and familiar taste of

childhood, our success lies in staying attuned to—and often ahead

of—consumer tastes and consumption trends. This continuous

innovation process is driven by disciplined and extensive market

research, along with scientific research and development.



The result is evident in the nearly 150 products launched in 2006.

Some of these products satisfy curious palates with new flavors R&D: More than Nutrition Grupo Bimbo’s research and

and sensations, while others provide convenience for on-the-go development efforts extend beyond nutrition and health to areas

lifestyles. Some are in entirely new categories, while others offer such as production technology, shelf life and packaging. For

improved formulations and healthier ingredients. What they all example, a bread-baking technique we identified that limits the

share, however, is having been brought to market with a deep fermentation process could significantly improve productivity; and

understanding of the consumer. we are evaluating biodegradable packaging materials that would

reduce our environmental footprint.

As such, our most successful launches in 2006 catered to these Key focus areas in 2006 included building partnerships with local

trends. These included, among others, Multigrano Nuez Bar, Fruty universities on specific areas of research and expanding the

Snack Bar, Bimbo Natura Bar, Mini Rocko, Toreadas Habanero portfolio of functional and nutritional ingredients. Our relationship

Chips, Doble Fibra Chocolate Bar, Golden Nuts, Takis Fuego, Stilo with external researchers is a competitive advantage, as it gives

Salads and Kranky Yogurt Strawberry. us a window into new opportunities. This year, we coordinated

the second Bimbo Pan-American Nutrition Award in Food, Science

We believe we have a special responsibility to help consumers and Technology, which grants research funding to nutrition and

make healthy choices, even in the most fun and indulgent technology research being conducted in the Americas.

categories. To boost the health value of some products, we added In 2007, we plan to establish new research relationships in China,

functional ingredients such as those that lower cholesterol or and will work closely with our own market research and product

enhance mineral absorption. We lowered the salt, sugar and fat development teams to create differentiated products.

content of many of our products without compromising taste.



And we created a range of portion sizes to give consumers

more choices about their intake. These changes complement our

broader philosophy of a healthy lifestyle that we transmit through

In 2006 we celebrated the 50th Anniversary mass market communications campaigns, event sponsorships and

of Gansito, one of our most popular and community programs.

enduring products, a uniquely Mexican

snack cake covered in chocolate and The intersection between what people want and what people need

filled with cream and strawberry jam. drives our development efforts. This year, we formally launched a

Gansito evokes happy memories of childhood program called “Consumer Deep Understanding” (EPC) that will tie

for many adults, and remains extremely popular in product innovation, consumer needs and marketing efforts to

among today’s youth as well. The celebration was marked with help streamline our go-to-market strategy in the years ahead. This

a special issue stamp, the first time a consumer product was so will ensure that we continue to deliver results in a rapidly changing

honored by the Mexican Postal Services. environment.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 7

Our efforts in 2006 focused on

continued expansion, better service,

and greater efficiency and cost-savings.

Our approach in each region reflected

the existing infrastructure and unique

requirements of that market.









EXPANDINGOURREACH



Challenge: To ensure that consumers throughout

our markets have access to our products

wherever they shop, work and play.



Grupo Bimbo is delivering results by significantly

expanding and enhancing the distribution network

with segmentation, new routes and better systems.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 8

We have one of the most extensive distribution networks in the

Americas, with more than 1 million points of sale.



In Mexico, we further segmented the traditional, or “mom & pop”

channel, to differentiate between high-volume stores and those

that carry a more limited product line with less frequent turnover.

This allowed us to match service levels to the sales potential and

open new, underserved markets. As a result, we added more than

100,000 new points of sale in the mom & pop channel in 2006.



We increased the efficiency and utilization of our fleet this year

with new delivery schemes, and introduced the “Enlace” concept, SICOM: Focus on the Customer, not in the Route. For

docking stations that connect empty trucks with re-stocked trailers, many years, distribution routes have been the focus of our internal

allowing drivers to reach more points of sale without returning to performance analysis, and we have worked hard to make them as

efficient as possible. With the expansion of our product portfolio and

the distribution center.

manufacturing facilities, however, many stores now lie on overlapping

routes, receiving different product lines from different trucks at

In Latin America, the significant increase in sales this year was

different times. To conduct analysis on a single customer, we have to

largely due to the expansion of the distribution network. Taking a look at data from the snack route, the bread route, the cookie route,

country by country approach and focusing largely on the traditional and so forth.

channel, we increased our client base by 35%, translating into

significantly higher sales volume. With SICOM, our advanced commercial software system, the focus

is on the customer. It is seamless to the salesman and his handheld

device, but the data gathered is centralized and cross-referenced

In the United States, we increased our shelf space in the large

across all units. And by measuring and analyzing performance on

retail category by partnering more effectively with national chains

the account level, we can provide targeted sales strategies and

such as Wal-Mart, Costco and Target. We further expanded into the

customized service on an unprecedented basis.

Northeast and Mid-Atlantic regions, as well as in the convenience

store channel in California. But our most significant growth

continues to come from the sale of Mexican goods to hispanic In 2006, we launched a pilot test of our new commercial software

consumers, and we opened numerous new routes in select cities to system, SICOM, in 400 routes in the Western U.S. The full

better reach that segment. implementation of SICOM throughout the company is a vital and

strategic project for us, which will allow for greater visibility into

customer, salesforce and product performance. In 2007, SICOM

will be fully implemented in our proprietary routes in the U.S., and

a pilot test will be launched in Mexico. The new commercial system

will ultimately be implemented throughout the organization.



The Brazil Strategy. The turnaround Our goal is “Execution Excellence”. This means having the logistics

performance in Brazil this year was an exciting and distribution systems in place that will allow our product

success story. To penetrate the large traditional innovation engine to continue delivering results.

channel in a cost-effective way, we turned to local-

distributors in this market. The advantages have

been tremendous – not only do we benefit from

a cost savings perspective, but we gain our

partners’ local knowledge, and relationships.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 9

This year, we fully integrated the

La Corona acquisition of 2005 and leveraged

the Arcor alliance.









IDENTIFYINGGROWTHMARKETS



Challenge: To identify new categories, segments

and markets that will drive future growth.



Grupo Bimbo is delivering results by creating

new concepts, connecting with new consumers

and leveraging M&A opportunities.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 0

Grupo Bimbo’s annual sales growth consistency exceeds GDP in

the countries which has operations. Satisfying consumer tastes and

reaching customers effectively have been vital to this effort, but we

also attribute it to a third critical factor: the ability to identify and

penetrate new growth markets successfully, either on our existing

brand platforms or via alliances and acquisitions.



This year, we fully integrated the La Corona acquisition of 2005

and leveraged the Arcor alliance, positioning us as one of the

largest domestic producer in a US$ 2 billion market. Our products

include chocolates, marshmallows, gummies, caramels, chewing

gum and candy. The U.S. Hispanic Market: A Natural Growth

Opportunity. The taste of home, made convenient and

The challenge we have is a good one: with strong growth and new available with our growing distribution network, is one of the

product launches, confectionary lines in our plants are operating key factors behind the remarkable 2006 performance of our

at full capacity. We are currently modifying some equipment to operations in the United States. Our fastest growing products

increase production flexibility, and will seek to expand our capacity in that market are Mexican branded goods targeted at U.S.

in the future. hispanic consumers.





Our El Globo chain of pastry stores, acquired in 2005, allows us to

reach more affluent consumers who choose specialty and artisan

baked goods. This year, we expanded from 198 sites to more In 2006, we entered one of the fastest growing and most dynamic

than 230 through a combination of new store openings and an markets in the world, with the acquisition of Beijing Pan Rico

acquisition. In addition, we leveraged El Globo’s installed capacity Food Processing Center in China. Pan Rico specializes in baked

to produce goods for other Bimbo brands. goods in the local markets of Beijing and Tianjing, with 108

urban distribution routes. Our inmediate goal is to gain a better

Aside from the traditional type of El Globo stores, our new understanding of this vital market and develop appropriate growth

openings included a smaller and very successful kiosk format. We strategies, while applying the systems and processes that have

acquired El Molino, a family-owned chain of pastry shops that is proven successful in our core markets.

an ideal complement to El Globo in the middle market segment.

These developments, along with an aggressive plan for new store While we continue to seek targeted acquisition opportunities,

openings, will drive important growth at El Globo in the year ahead. organic growth will always drive our performance. Because

consumers know and trust our brands, they are a strong platform

for innovation that allows us to successfully enter new categories,

such as cereal bars, ready-to-eat meals and pre-prepared dough.

In 2006, we introduced a number of new concepts, all of which

leveraged widespread consumption trends: Marinela´s Fruty Snack,

We also formed a strategic alliance with Grupo a 100% natural fruit and low calorie fruit bar and Lonchibon’s Stilo,

Lala, Mexico’s leading dairy company, called a line of fresh prepared salads.

“Food Innovation”. Our first launch was Cer Ok!

and Cer Ok! light, a packaged cereal with milk Grupo Bimbo, now entering its seventh decade, enjoys solid

product ideal for every member of the family. performance and healthy market share. Nonetheless, we have a

passionate commitment to identifying new growth opportunities

that will drive the next generation of our business.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 1

150 products

launched in 2006

some are in entirely

new categories, while

others offer improved

formulations and

healthier ingredients.









CREATINGVALUE



Challenge: To enhance and sustain

shareholder value over the long term.



Grupo Bimbo is delivering results by mitigating

rising costs and competitive pressures, improving

operational performance, enhancing its intangible

assets, and strengthening its financial position.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 2

We seek to be a strong and sound investment for our shareholders.

For us, this means more than delivering favorable financial results

on a quarterly or annual basis. Rather, it is ensuring that the

associates and processes, strategies and tactics, and creativity

and passion behind everything we do are aligned and focused on

sustainable growth.



2006 was indeed a year of growth. We entered new markets,

launched dozens of new products and thousands of new

distribution routes, added new capacity and grew our market

share. As a result, revenue in Mexico rose 7.6%, in Latin

America 21.8%, and in the United States 7.9%. The remarkable Our financial position also grew stronger in the year.

performance of our internal operations helped deliver consolidated Efficient debt management led to a net debt to EBITDA ratio of 0.4

top line growth of 8.5% in the year. times on December 31, 2006, compared to 0.6 times in 2005.

With healthy free cash flow generated in the year, we declared an

These results came in the context of some unique external extraordinary dividend of 31 cents per share, raising our yield to

challenges. Our industry, however, did face significantly higher raw 1.6% for the year, compared to 1.0% in the year prior.

materials prices compared to the previous year. The average price

for hard red winter wheat rose by 38% and corn by 27% to name

but a few examples.



Our primary focus was on enhancing operational efficiency, In an environment like this, the value of our brands and

which we achieved through greater utilization of fixed assets and trademarks becomes even more clear. Although we raised prices

significant improvements in the distribution network. As a result, to help partially offset rising raw material costs, sales volumes

despite the cost of goods rising at a much higher pace than sales, actually rose, and we strengthened our market share in a number

our operating margin remained virtually unchanged year over year. of key categories.



The financial markets also rewarded our performance this year

with a 48.1% rise in the share price, making Grupo Bimbo one

of the top performers on the Mexican Stock Exchange. Our year

end market capitalization was Ps$63,493 million, equivalent to

US$5,838 million.





With more than 100 brands in our portfolio, our

solid and continued investment in marketing and

advertising is a critical means of creating value.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 3

SUMMARYOFOPERATIONS

The exceptional performance of our international

operations helped drive the company’s growth

in 2006, while sales in Mexico continued to

outperform the market. Greater volumes and

higher prices for our products led to an 8.5%

increase in consolidated net sales for the year.







A key challenge facing Grupo Bimbo, as well as the broader focus on R&D and product development, with the goal of enhancing

industry, was the significant rise in raw material costs, which put the nutritional value of product portfolio, translated into multiple

pressure on our gross margins. At the operating level, however, we new product launches and line extensions that benefited sales

were able to almost entirely offset the impact of those increases volume in each of our markets.

with significant efficiency and productivity improvements. As a

result, our operating margin remained stable at 9.2%. Following are the outstanding operating results from each of our

business units:

While our business units have a great deal of autonomy in

managing their operations, the synergies derived from the Group

structure are vital to the company’s performance and growth.

Shared functions such as research and development, information

technology, procurement and product development offer us a

competitive advantage in terms of cost structure. In addition, we

take successful ideas, practices and tools from one market and

apply them across the organization, and leverage our brand equity

to develop effective cross-product and business promotions.



In 2006, the value of the corporate structure was particularly

clear in the challenging raw materials environment. We hedged

a portion of our supply needs and benefited from long-term

contracts to supply all our operations. In addition, our increased









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 4

BIMBO, S.A. DE C.V. On the production side, we

started up a new cookie line

in the Toluca plant and began

Higher volumes in most categories helped increase revenues in to produce bread locally in

both Mexico and Central America, and we grew our market share Guatemala.

in cookies and bars.

In distribution, we opened new

We launched one of the largest marketing efforts in our routes during the year and

history with the “Haz Sandwich” campaign. The multi-faceted enhanced productivity in the

program helped increase sales volume in bread during the year. network by leveraging new models such as standalone distribution

Separately, Gansito celebrated its 50th anniversary in 2006 with centers and on-route restocking, further segmentation of the

a number of campaigns and promotions that kept sales strong traditional mom & pop channel, and strengthening relationships

for this perennial favorite. with supermarkets.



Cereal bar volumes declined as a whole, but we grew our market

share in this category in part due to successful line extensions such

as Multigrano Nuez Bar, Doble Fibra Bar and the new Bimbo Natura

line of bars. We also launched a new concept with the low calorie,

100% natural Fruty Snack apple bar at year-end, with positive

BARCEL, S.A. de C.V.

preliminary sales figures. Other new product launches included Revenue growth in the year was driven by good performance in

Bimbo Bites, a line of mini-muffins and Lonchibon Stilo salads. both salted snacks and confectionary goods.



At El Globo, we focused on consolidating the business within our

operations this year, and acquired El Molino, a small chain of Exports to the United States increased importantly in the year and

pastry shops. The number of stores at year-end more than 230, will continue to be a strategic part of this business. Our market

compared to 198 in the previous year. share expanded during the year, and we hold the number one or

two position in almost every category in which we participate.



Successful line extensions

launched in the year include

Takis Fuego and Kranky

Yogurt Strawberry. Among the

products developed to address

the demand for healthier snack

were Applix fruit snack, Chip´s

New product launches

low sodium, and Nubes baked

include Lonchibon

snacks.

Stylo salads









The “Haz Sandwich” campaign is one

of the largest marketing efforts in the

history of Grupo Bimbo.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 5

To improve productivity, we share in both bread and pastries increased in the year, with marketing

consolidated production campaigns such as Mrs Bairds Great Grocery Giveaway and World Cup

facilities by closing two plants promotions for the Bimbo and Marinela brands.

and inaugurating a new salted

snack facility in Hermosillo, From a sales and distribution perspective, we added new routes

Sonora. We also fine-tuned to further expand our presence on the East Coast and among

our distribution strategy and regional retailers in California. We also adapted our category

opened new routes in the year, management practices to strengthen our relationships with

allowing us to further expand national retailers, and saw important growth in terms of shelf

our reach into the traditional segment and specialized channels. space as a result.









Bimbo Bakeries USA, Organización

Inc. (BBU)

Latinoamérica, (OLA)

Significant volume growth drove sales in the U.S. to record levels,

with new products, broader distribution and better sales execution

facilitating that growth. The expansion of the client base by 35% drove sales volume

significantly higher in the year. This largely reflected efforts to

penetrate the traditional mom & pop channel.

Despite the impact of raw material prices, operating profit

and margin more than doubled due to important operational

improvements. On a country basis, our largest market Brazil swung to profitability

in the second half of the year, where we now outsource the

Portfolio optimization, better category management and production majority of our distribution. We successfully integrated acquisitions

process improvements resulted in significantly stronger performance in Uruguay and Colombia,

indicators in manufacturing, sales and customer service. and focused on cutting costs

in Argentina by optimizing

Mexican branded goods grew at a double-digit rate, as the variety of the portfolio and controlling

imported goods increased and more distribution routes and points of distribution costs.

sale added. Successful product launches in the core brands include

new varieties of Mrs Bairds and Oroweat breads line. Our market In 2007, we will continue to

pursue double-digit growth

with further penetration of the

traditional channel, investments

in brand development and targeted capacity expansion. We will

also continue aggressive turnaround efforts in certain markets

to strengthen profitability on a consolidated basis.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 6

SOCIALRESPONSIBILITY

One of our core values is Grupo Bimbo’s

commitment to social responsibility.









Our key areas of concern are the health and well-being of our Nutrition, however, is only one component of a healthy lifestyle,

consumers, communities and associates; the environment, on therefore our efforts are broader as well. In 2006, we launched the

whose resources we depend and must safeguard for the next “Comprometidos con tu Salud” (Comitted to your health) campaign

generation; children and education, to strengthen our communities to consolidate our efforts in six key areas: products and research

development. and development, education, physical activity, alliances, and being

a distinguished company.

Health and Well-Being

In education, highlights this year include the ongoing publication of

As a food company, we pay particular attention to the nutritional Nutrinotas, which reaches 300,000 prints and online subscribers,

value of our products in order to help consumers make the best and the distribution of sports and nutrition materials for 21,000

choices. In this report we outline our nutritional efforts, research

and development strategy, and the continued rollout of healthy

options within our product portfolio.









(Comitted to your health)









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 7

students at private and public Environment

schools. Physical activity is a key

component of a healthy lifestyle, Our ecological initiatives include the rational use of natural

which we promote by sponsoring resources in our production processes. For example, water

sporting events, showcasing consumption has declined by 23% per ton of product sold since

active consumers in our television 2000. Similarly, electric energy consumption, as measured by

advertising, and coordinating megawatt hours per ton of product sold, has decreased by 15.8%

Futbolito Bimbo Stars, a nationwide since 2000 and thermic energy consumption has decreased 19.2%

soccer tournament for children. In since 2000, as measured by Gigacal per ton of product sold.

2006, over 26,000 children aged 9-12 participated, with the winning

team traveling to Germany to attend the FIFA World Cup 2006.



Our alliance with Pfizer Labs screened over 230,000 people

this year for cardiovascular health, providing at-risk individuals

with customized nutritional programs. We also participate in

organizations such as the International Life Science Institute

(ILSI) which links the scientific community, food manufacturers,

health professionals, educators, government and the media;

the Grain Foods Foundation, a similar organization in the U.S.;

the Mexican Foundation for Health; the APAC Foundation, which

rehabilitates and reintegrates people with cerebral palsy; the Casa

de la Amistad which supports children with cancer and the Ronald

In 2006, we planted 750,000 trees in Izta-Popo National Park

McDonald Children’s Foundation.

and 100,000 trees in Nevado de Toluca National Park.

Our role as a Socially Responsible Company starts with our own

associates, by providing more healthy options in our cafeterias and

ongoing health and nutritional education. A portion of these energy savings was used to create and fund

Reforestamos México, a non-profit organization committed to

education, preserving and restoring Mexico’s forests. In 2006, we

planted 750,000 trees in Izta-Popo National Park and 100,000

trees in Nevado de Toluca National Park; co-founded a trust to

preserve 85,000 hectares of tropical forest in Campeche; started

conservation work in the Lacandona rainforest in Chiapas, one

of the last virgin rainforests in Mexico; and committed to create a

“Green Belt” around Mexico City by planting 100,000 trees every

year, through an alliance with the non-profit organization Naturalia.









The winning team traveled to Germany to attend the FIFA World

Cup 2006.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 8

In addition, all visitors to

our plants are invited to

adopt a tree; to date, more

than half a million saplings

have been adopted

and planted throughout

Mexico. To further foster

an ecological spirit among

children, we are sponsoring

an acorn germinating

contest in which more than

7,000 students are currently participating. We also support the We also support the Papalote Museo del Niño where we

environment through the Center for Environmental Information sponsor trips for 4,500 low-income children.

and Communication of North America and the Chapultepec

Forest Trust.



Community Development



We support two distinct types of community development efforts.

The first is with indigenous communities in Mexico, whom we

support through Reforestamos México with community forestry

initiatives that help teach sustainable forest management skills,

along with other means to improve their livelihoods and move

out of subsistence living. In 2006, we worked with 11 native

communities, from Chihuahua to Chiapas, seeding 78,000

plants in five community greenhouses and planting more than

178,000 trees. We also support the Mexican Foundation for Rural

Development, Patronato ProZona Mazahua, the Tarahumara

Committed to create a “Green Belt” around Mexico City by planting Foundation and the Friends of the Folk Art Museum, which benefits

100,000 trees every year. more than 8 million Mexican artisans and their communities.



Our secondary focus is geared towards developing and promoting

Children and Education an entrepreneurial culture in Mexico. To this end, we support the

Fundacion Pro Empleo Productivo and Impulsa.

Along with our environmental and health programs for children,

we welcome students of all ages to visit our plants, with special

activities for them to learn about our operations. We continue

to directly support Crisol, an elementary school for low-income

children, and contribute to a number of educational institutions

and foundations such as the Instituto Tecnológico de Estudios

Superiores de Monterrey (ITESM); Escuela Bancaria y Comercial

(EBC); Universidad de Monterrey UDEM; the UNAM Foundation and

the Televisa Foundation. We also support the Papalote Museo del

Niño where we sponsor trips for 4,500 low-income children and In recognition of our commitment to social responsibility in 2006,

contribute to UNICEF each year. the Mexican Center for Philanthropy (CEMEFI) awarded us the

Socially Responsible Company award for the sixth consecutive year.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 1 9

CORPORATEGOVERNANCE

Bolstering the Confidence of our Investors

Throughout its development, Grupo Bimbo has worked on the basis of the financial statements of Grupo Bimbo, and on matters

of ethical business principles. Grupo Bimbo follows the Code of Best regarding the execution of material or uncommon transactions.

Corporate Practices, an initiative of the Mexican Stock Exchange

(BMV) which establishes the bases of corporate governance for Corporate Practices Committee

companies operating in Mexico, particularly those listed on the BMV, Pursuant to the provisions of the Securities Law, as amended

and provides firm support for investor confidence. on December 2005, the Board of Directors of Grupo Bimbo

incorporated a new committee to carry out the activities

At Grupo Bimbo, these principles for sound business management of corporate practices. Integrated only by Independent

are applied through our Board of Directors, one of whose duties Directors, such Committee has the authority to issue opinions

is to help management define policies and strategies and to on transactions with related parties, opinions regarding the

recommend ways to make the company more efficient, for the appointment, evaluation and destitution of the Chief Executive

benefit of its shareholders. It also participates in decisions on the Officer and relevant officers of the company, as well as regarding

effective allocation of the Group’s resources, particularly on the the integral compensation of the CEO and the relevant officers of

purchase or sale of productive assets. Grupo Bimbo.



Evaluation and Results Committee

Structure of the Board of Directors This committee has the authority to analyze and approve the

general structure of compensation of Grupo Bimbo as well as

The Board of Directors of Grupo Bimbo is comprised of 18 the policies and guideline for the compensation and development

directors and 18 alternate directors, appointed at the Extraordinary programs of the officers of Grupo Bimbo and its subsidiaries. Also,

General Shareholders’ meeting on November 14, 2006. the committee has the authority to analyze the financial results of

Grupo Bimbo and its impact in the general compensation structure

To perform its duties, the Board relies on the support of four of the Group.

governance committees.

Finance and Planning Committee

Audit Committee This committee is responsible for analyzing and submitting to the

Integrated only by Independent Directors, its main job is to consideration of the Board of Directors, the evaluation of long-

verify that the operation of Grupo Bimbo is carried out pursuant term strategies and investment and financing policies for Grupo

to the applicable regulations, having the authority to evaluate Bimbo, and identify risks and evaluate risk management policies.

and supervise the activities of the management related to the

compliance of accounting policies and practices, the performance

of the external and internal auditors of Grupo Bimbo; investigate Code of Ethics

violations to the policies of internal control and internal audit; and In addition to these policies and committees, Grupo Bimbo has

evaluate the policies for risk management, among others. Likewise, self-regulatory rules that govern our business practices, like our

the Audit Committee issues opinions on any material changes in the own code of ethics that covers general aspects and policies for

accounting policies, criteria and practices applied in the preparation interacting with the various groups around us:









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 0

With our associates, to guarantee respect for their dignity and Conflicts of Interest

individuality and to ensure a workplace environment that promotes Internally, in order to avoid conflicts between the personal

their well-being and development. interests of our associates and those of the company, and

With our shareholders, to provide them with a reasonable profit on to establish a solution to such conflicts if necessary, all our

a sustained basis. associates are responsible for declaring any financial or non-

With our suppliers, to maintain cordial relations and encourage their financial interest they may have that might enter into conflict with

development. their duties at Grupo Bimbo.

With our customers, to provide exemplary service and to support them

in their growth and development through the value of our brands. In the case of our executives and directors, we have a clearly

With our competitors, to compete vigorously and fairly, on the basis defined policy on conflict of interest, which includes the annual

of fair business practices. completion of a special form for this purpose. Any violation of

With consumers, to guarantee healthy foods and a wide variety of this policy is considered grounds for termination.

products, by continually innovating and improving them.

With society at large, to promote universal ethical values and

support the economic and social growth of the communities where

we operate.









MANAGEMENTCOMMITTEE2006

Daniel Servitje Reynaldo Reyna Alberto Díaz Guillermo Quiroz

Chief Executive Officer, President, Bimbo Bakeries President, Organización Chief Financial Officer

Grupo Bimbo USA, Inc. (BBU) Latinoamérica (OLA) Joined Grupo Bimbo in 1999.

Joined Grupo Bimbo in 1978, Joined Grupo Bimbo in 2001. Joined Grupo Bimbo in 1999. Obtained a degree in Actuarial

obtained a Bachelor’s Degree Studied Industrial and Systems Studied Industrial Engineering Studies and an MBA from

in Business Administration from Engineering and obtained a and obtained a Master’s IPADE. Member of the Board

Universidad Iberoamericana Masters’ Degree in Operations Degree in Management from of Grupo Altex and Fincomun.

and an MBA from Stanford Research and Finance from the University of Miami. 53 years old.

University. Member of Wharton University. 52 years old.

the Board of Directors of 51 years old.

Coca-Cola FEMSA, Grupo Rosalío Rodríguez Javier Millán

Financiero Banamex, Grocery Javier Augusto González Corporate President Corporate VP of Human

Manufacturers of America, President, Barcel, S. A. de C.V. Joined Grupo Bimbo in Relations

Centro de Colaboración Cívica, Joined Grupo Bimbo in 1977. 1976. Studied Biochemical Joined Grupo Bimbo in 1977.

ITAM’s Business School and Earned a degree in Chemical Engineering. Member of the Studied Philosophy and

Advisor to the Wal-Mart Mexico Engineering and an MBA Board of International Life Business Administration.

Suppliers Association. from Universidad Diego Science Institute, Quality Board Member of the

48 years old. Portales in Chile. Bakers of America, the Asociación Mexicana en

51 years old. American Institute of Baking, Dirección de Recursos

Pablo Elizondo Panglo of Mexico and the Humanos.

President, Bimbo, S. A. de C.V. Board of Beta San Miguel. 58 years old.

Joined Grupo Bimbo in 1977. 54 years old

Studied Chemical Engineering.

Vice Chairman of the Board of

CONMEXICO.

53 years old.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 1

BOARDOFDIRECTORS

Directors Alternate Directors

PR Roberto Servitje Jaime Chico

I Henry Davis Paul Davis

I José Antonio Fernández Javier Fernández

I Arturo Fernández Alejandro Hernández

I Ricardo Guajardo Anthony McCarthy

I Agustín Irurita José Manuel Irurita

PR Luis Jorba Jaime Jorba

PR Mauricio Jorba Ramón Pedroza

PR Francisco Laresgoiti María del Pilar Mariscal

R Fernando Lerdo de Tejada Francisco Laresgoiti

PR José Ignacio Mariscal Raúl Obregón

PI María Isabel Mata Javier de Pedro

PR Victor Milke Victor Milke

PR Raúl Obregón Nicolás Mariscal

PR Roberto Quiroz Rosa María Mata

I Alexis E. Rovzar Vicente Corta

PR Lorenzo Sendra Jorge Sendra

PR Daniel Servitje Pablo Elizondo



Chairman Alternate Chairman

Roberto Servitje Daniel Servitje PR Patrimonial Related

PI Patrimonial Independent

Secretary Alternate Secretary I Independent

Luis Miguel Briola Pedro Pablo Barragán R Related









GOVERNANCECOMMITTEES

Audit Corporate Practices Evaluation and Results Finance and Planning

Committee Committee Committee Committee

Henry Davis Ricardo Guajardo Raúl Obregón José Ignacio Mariscal

Chairman Chairman Chairman Chairman



Arturo Fernández Henry Davis Roberto Servitje Ricardo Guajardo

Agustín Irurita José Antonio Fernández Javier de Pedro Mauricio Jorba

Alexis E. Rovzar José Antonio Fernández Victor Milke

Roberto Quiroz Raúl Obregón

Daniel Servitje Guillermo Quiroz

Lorenzo Sendra

Daniel Servitje









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 2

BOARDOFDIRECTORS’PROFILES2006

Roberto Servitje Raúl Obregón José Antonio Fernández María Isabel Mata

Chairman of the Board of Directors Managing Partner of: Alianzas, Chairman of the Board and Chief Member of the Board of Tepeyac, A.C.

of Grupo Bimbo Estrategia y Gobierno Executive Officer of Grupo Fomento

Board member of the following Corporativo, S.C. and Proxy Económico Mexicano, S.A.B. de C.V. Roberto Quiroz

companies: Fomento Económico Gobernanza Corporativa, S.C. Chairman of the Board of Coca-Cola Chairman of the Board and

Mexicano, S.A.B. de C.V., Director Member of the Board of: FEMSA, S.A.B. de C.V.; Joint Chairman Chief Executive Officer of Grupo

DaimlerChrysler de México, S.A. Industrias Peñoles S.A.B. de C.V., of the Board of the Woodrow Industrial Trébol

de C.V., Grupo Altex, S.A. de C.V., Grupo Palacio de Hierro S.A.B. Wilson Center Mexico Institute; Vice Board member of: Grupo Valacci,

Escuela Bancaria y Comercial and de C.V., Envases y Laminados Chairman of the Board of the Instituto Grupo Altex, Grupo Invermat and

Memorial Hermann International S.A. de C.V., Altamira Unión de Tecnológico y de Estudios Superiores Advisory Council of Grupo Financiero

Advisory Board (Houston, Texas) Crédito S.A. de C.V.; Alternate de Monterrey; Board member of the Banamex; Member of the Board of

Director Member of the Board following companies: Grupo Financiero Directors of Tepeyac, A.C.

Daniel Servitje of: Grupo Profuturo S.A. de C.V., BBVA Bancomer, Industrias Peñoles

Chief Executive Officer, Grupo Arrendadora Valmex S.A. de C.V., and Grupo Industrial Saltillo Henry Davis

Bimbo, S.A.B. de C.V. Crédito Afianzador S.A., Grupo Chairman, Promotora DAC, S.A.

Board member of the following Nacional Provincial, S.A. Francisco Laresgoiti Chairman of the Board of Desarrollo

organizations: Coca-Cola FEMSA, Médica Integral GNP S.A. de C.V. Chief Executive Officer, Grupo Banderas S.A. de C.V; Board member

S.A.B de C.V., Grupo Financiero and Valores Mexicanos Casa de Laresgoiti of: Grupo Financiero IXE, S.A. de C.V.

Banamex, S.A. de C.V., Centro de Bolsa, S.A. de C.V. Member of the Board of Directors and Grupo Aeroportuario del Pacífico,

Colaboración Cívica, A.C., Grocery of Fundación Mexicana para el S.A. de C.V

Manufacturers of America (USA), José Ignacio Mariscal Desarrollo Rural, A.C.

Advisory Board of the ITAM Chief Executive Officer, Grupo Arturo Fernández

Business School and Wal-Mart Marhnos Ricardo Guajardo Dean of Instituto Tecnológico

Mexico Suppliers Association Chairman of: Uniapac Non Executive Chairman, BBVA Autónomo de México (ITAM)

Internacional; President of the Holdings in the U.S.A. Board member of the following

Fernando Lerdo de Tejada Committee of Only One Economy, Chairman of SOLFI, S.A. de C.V. companies: Industrias Peñoles,

Chairman of the Board of Everyone within the Law and of (Soluciones Financieras) and S.A.B. de C.V., Grupo Nacional

Estrategia Total the Mexican Business Council; Fondo para la Paz; Board member Provincial, S.A.B. de C.V., Grupo

Member of the Executive Vice Chairman of: Fincomún- of the following companies: Grupo Palacio de Hierro, S.A.B. de C.V.,

Committee of the Mexican Servicios Financieros Comunitarios Financiero BBVA Bancomer, Valores Mexicanos, Casa de Bolsa,

Agricultural Council and Fundación Juan Diego; Instituto Técnologico y de Estudios S.A.B. de C.V., Crédito Afianzador,

Board member of the following Superiores de Monterrey, Fomento S.A., Grupo Financiero BBVA

Victor Milke organizations: Sociedad de Económico Mexicano (FEMSA), Bancomer and Fomento Económico

Chief Executive Officer of Inversión de Capital de Posadas Coca-Cola FEMSA, S.A.B. de C.V., Mexicano, S.A.B. de C.V.

Corporación Premium, S.C. de México, Grupo Calidra, Grupo Industrial Alfa, El Puerto de

Board member for the following USEM Confederation Executive Liverpool, Grupo Aeroportuario del Luis Jorba

organizations: Nacional Financiera, Committee, Coparmex Executive Sureste (ASUR) and Grupo Coppel Chief Executive Officer, Frialsa

Mexico City, Congelación y Alma- Committee and Mexican Institute Frigoríficos

cenaje, S.A. and Frialsa, S.A. de C.V. for the Christian Social Doctrine Agustín Irurita Chairman of the Board: Efform,

Chairman of the Board of Grupo ADO S.A. de C.V.; Board member of

Alexis E. Rovzar Lorenzo Sendra National Advisor and Member of the the following companies: Texas

Managing Partner of the Group Chairman of the Board of Executive Committee of the Employers´ Mexico Frozen Food Council,

of Latin American Practices, Directors of Proarce, S.A. de C.V. Confederation of Mexico (COPARMEX); International Association of

Despacho Internacional White Board member of the following Board member of the following Refrigerated Warehouses and

& Case, LLP organizations: Ronald McDonald organizations: Mexican Chamber of World Food Logistics Organization

Board member of the following Foundation, Fomento de Passenger and Tourism Transportation

companies: Coca-Cola FEMSA, Nutrición y Salud, Fundación Services (Lifetime member), Grupo Mauricio Jorba

S.A.B. de C.V., Fomento Económico Mexicana para el Desarrollo Comercial Chedraui, S.A. de C.V., Chief Executive Officer, European

Mexicano, S.A.B. de C.V., Grupo ACIR, Rural, A.C. and Financiera FinComún Servicios Financieros Operations

Grupo COMEX, Ray & Berndtson de Promotora para el Desarrollo Comunitarios, S.A. de C.V. and Member of the Board of

México and The Bank of Nova Scotia Rural (FIMEDER) Afianzadora Aserta, S.A. de C.V. Directors of VIDAX









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 3

ADVISORYBOARD2006



BBU

Ambassador, Jeffrey Davidow

OLA

João Alves de Queiroz

President, Institute of the Americas Chairman of the Board of Monte Cristalina, S.A.

(Former U.S. Ambassador to Mexico) São Paulo, Brazil

La Jolla, CA

Carlos Mario Giraldo

Henry Davis Chairman of the Board of Compañía de Galletas Noel, S.A.

Chief Executive Officer, Promotora DAC, S.A. de C.V. Marketing and Executive Vice Chairman of Inversiones Nacional de

Mexico City Chocolates S.A.

Medellín, Colombia

Bernard Kastory

Professor, New York University Victor Milke

(Former Executive Vice President of Bestfoods) Chief Executive Officer of Corporación Premium, S.C.

Saratoga Springs, NY Mexico City



José Ignacio Mariscal Luis Pagani

Chief Executive Officer, Marhnos, S.A. de C.V. Chairman of the Board of Grupo Arcor

Mexico City Buenos Aires, Argentina



Robert C. Nakasone Leslie Pierce

Chief Executive Officer, NAK Enterprises, L.L.C. General Manager of Alicorp, S.A.

(Former Executive Vice President of Jewel, and CEO of Toys R Us, Inc.) Lima, Peru

Santa Barbara, CA

Lorenzo Sendra

Betsy Sanders Chairman of the Board of Proarce, S.A. de C.V.

Chief Executive Officer, The Sanders Partnership Mexico City

Sutter Creek, CA

Eduardo Tarajano

Roberto Servitje Private Investor

Chairman of the Board, Grupo Bimbo Key Biscayne, Florida



Daniel Servijte Roberto Servitje

Chief Executive Officer, Grupo Bimbo Chairman of the Board, Grupo Bimbo



Reynaldo Reyna Daniel Servijte

Chief Executive Officer, Bimbo Bakeries USA, Inc. Chief Executive Officer, Grupo Bimbo



Rosalío Rodríguez Alberto Díaz

Corporate Director, Grupo Bimbo Chief Executive Officer, Latin America Division (OLA)



Guillermo Quiroz Rosalío Rodríguez

Chief Financial Officer, Grupo Bimbo Corporate Director, Grupo Bimbo



Guillermo Quiroz

Chief Financial Officer, Grupo Bimbo









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 4

Audit Committee’s Letter

To the Board of Directors of

Grupo Bimbo, S. A .B. de C. V.









As chairman of the Audit Committee (the “Committee”) of Grupo Bimbo, S.A.B. de C.V. (the “Company”), and in compliance with point

e), section II of Article 42 of the Securities Market Act, I hereby present to you the opinion of this Committee on the content of the Chief

Executive Officer’s report on the financial position and results of the Company for the year ended December 31, 2006.









In the opinion of this Committee, the accounting and information policies and criteria followed by the Company and used in preparing the

consolidated financial information are appropriate and sufficient, and were applied consistently and in keeping with Mexican Financial

Reporting Standards. Therefore, the consolidated financial information presented by the Chief Executive Officer reasonably reflects the

financial position and results of the Company as of December 31, 2006.









Sincerely,









Henry Davis

Chairman of the Audit Committee



Mexico City, March 21, 2007









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 5

Audit Committee Report

To the Board of Directors of In issuing our opinion on the financial statements, with the support of the internal and

Grupo Bimbo, S. A .B. de C. V. external auditors, we made sure that the criteria, accounting policies and information

used by Management in preparing the financial information was adequate and sufficient,

and had been applied in a manner consistent with the preceding fiscal year. As a result,

Dear Sirs: the information presented by Management reasonably reflects the financial position,

In accordance with Articles 42 and 43 of the Securities Law and with the Audit Committee operating results and changes in the financial position of the Company.

Regulations, I hereby submit to you this report on the activities of the Audit Committee for We approved the adoption of new accounting procedures and rules that took

the year ended December 31, 2006. In the course of our work, we abided continuously by effect in 2006, which were issued by the organization responsible for accounting

the recommendations of the Code of Best Corporate Practices. The Company’s statutory regulations in Mexico.

auditor was invited to attend and was present at our work meetings during the time his COMPLIANCE WITH APPLICABLE REGULATIONS AND LAWS. CONTINGENCIES

appointment remained in effect. We met at least on a quarterly basis and, based on a work With the support of the internal and external auditors, we confirmed the existence and

program, we carried out the activities described below. reliability of the controls that the Company has established to ensure compliance with

INTERNAL CONTROL the various legal provisions governing it, and ensured that they were appropriately

We made sure that Management, in the performance of its duties in the area of internal disclosed in the financial information.

control, had established the general guidelines and processes necessary for its applica- We regularly reviewed the various fiscal, legal and labor contingencies encountered by

tion and execution. In addition, we followed up on the commentaries and observations the Company, and monitored the effectiveness of the procedures established to identify,

made in this regard by the external and internal auditors in the course of their work. enforce, appropriately disclose and record them.

With regard to the company’s information systems, we held meetings with the head of CODE OF ETHICS

that area in order to learn about the security and strength of those systems. We recom- With the support of the internal auditors and other areas of the Company, we made sure

mended the correction of potential risks, a recommendation that was duly addressed. that its personnel complied with the Code of Ethics currently in effect within the Group.

EXTERNAL AUDIT PERFORMANCE OF OTHER OBLIGATIONS

We made a recommendation to the Board of Directors on the external auditors that We met with directors and officers of the Company as we considered necessary

should be engaged by the Company. In this effort, we inquired into their independence in order to remain abreast of the progress of the Company and of any unusual

and their compliance with the requirements for personnel turnover established by law. material events or activities.

We worked together with these auditors to analyze their focus and work program, and

We learned of any significant matters that could involve a possible breach of the

their relationship with the Internal Audit area.

operating policies, internal control systems and bookkeeping policies, and gathered

We maintained direct communication with the two auditing firms to learn of the progress information on the corrective measures taken in each of these cases, which we found

of their work, any observations they had, and the remarks they made in the course to be satisfactory.

of their review of the quarterly and annual financial statements. We were informed

In the fiscal year in question, we did not find it necessary to request the support or

promptly of their conclusions and reports on the annual financial statements.

opinion of independent experts because the matters dealt with in each session were

We authorized the fees paid to the external auditors for their auditing and other permit- duly supported by the necessary material information, so the conclusions we reached

ted services, ensuring that these payments did not compromise their independence with were satisfactory for the Committee members.

respect to the company.

As Chairman of the Audit Committee, I reported on a quarterly basis to the Board of

Taking into account the Management’s points of view, we evaluated the services provi- Directors on the activities we conducted on a collective basis within that committee.

ded in the preceding year and reviewed the preliminary financial statements.

INTERNAL AUDIT The work we carried out was duly documented in the minutes of each meeting, which

With regard to the internal audit area: were promptly reviewed and approved by the Committee members.

1. We reviewed and approved on a timely basis their work program and annual

activities budget.

2. We received regular reports on the progress of their approved work program.

3. We followed up on the observations and suggestions they offered, as well as on their Sincerely,

implementation.

4. We made sure they had implemented an annual training program.

FINANCIAL STATEMENTS AND ACCOUNTING POLICIES

We went over the Company’s quarterly and annual financial statements with the persons

responsible for their preparation, and recommended that the Board of Directors appro- Henry Davis

ve and authorize them for publication. As part of this process, we took into account the Chairman of the Audit Committee

opinion and observations of the external auditors. Mexico City, March 21, 2007









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 6

Corporate Practices Committee Report

Don Roberto Servitje

Chairman of the Board of Directors of Grupo Bimbo, S.A.B. de C.V.



Dear Mr. Servitje,



In accordance with article 43, section I of the Securities Law, I hereby submit to you this annual report of the activities of the Corporate

Practices Committee of Grupo Bimbo, S.A.B. de C.V. (“Bimbo” or the “Company”).



Be advised that the Committee was formally instated by a delegation of faculties of the Company’s Board of Directors on

February 15 of this year.



Given the Committee’s recent creation, we only took part in a review of the transaction to capitalize Fincomún, Servicios Financieros

Comunitarios, S.A. de C.V., Sociedad Financiera Popular (“FinComun”), by Bimbo, in which we issued our favorable opinion to the Board of

Directors, due to the existence of related parties in the Company as Shareholders and Board members of FinComún. It should be noted

that Mr. Henry Davis Signoret abstained from participating in the discussions and recommendation by the Committee because of a conflict of

interest in the above-mentioned transaction.



Due to the Committee’s recent creation, it did not review the performance of the Chief Executive Officer or other top executives, nor their

compensation. Instead, the Evaluation and Compensation Committee handled these duties for the fiscal year 2006, in accordance with the

provisions of the Securities Law in effect for that year, as well as with the Company’s bylaws.



Please do not hesitate to contact me at your convenience, if you have any questions or comments on the above.









Sincerely,









Ricardo Guajardo Touché

Chairman of the Corporate Practices Committee



March 7, 2007









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 7

Management’s Discussion and Analysis of Results



for the year ended December 31, 2006





All figures herein are expressed in millions of constant Mexican pesos of December 31, 2006, unless stated otherwise, and have been

prepared according to Mexican Financial Reporting Standards; all percentage changes are expressed in real terms.





Overview > Higher raw material costs compared to 2005, due to

In 2006, Grupo Bimbo reported the highest sales in its history, commodity cycles, speculative pricing, market demand, and

rising 8.5% over the previous year and reflecting increases in weather and related environmental factors. For example, the

each of the Company’s operating regions. Contributing to this average market price for wheat and corn rose 38% and 27%

performance were strong volume growth, a better sales mix, year over year, respectively.

greater market penetration in the U.S. and Latin America, and in

most markets higher product prices that were implemented to > The opening of more than 1,700 distribution routes

offset rising costs. To a lesser extent, acquisitions in Mexico and in the year, with a particular focus on expansion throughout

Latin America during 2005 and 2006 also contributed to this non-traditional channels in Mexico, the traditional channel in

performance. Latin America, and for Mexican branded goods in the United

States.

The operating margin remained virtually unchanged, at 9.2%,

despite significant increases in raw material costs. Better > Ongoing execution of the turnaround plan in the

absorption of fixed costs and expenses, as well as an important United States and Latin America. Efforts include the

reduction in administrative expenses in Mexico and the United optimization of the sales mix and product portfolio, and

States, helped offset the margin pressure. expansion and segmentation of the distribution network. In

addition, as part of the turnaround, the Company is investing in

Net majority income rose 18.8% to Ps. 3.5 billion for the year. manufacturing upgrades, IT systems, and other operational and

administrative processes that are enhancing the productivity

and efficiency of the operations in these markets.

Factors Affecting Performance

A number of external factors and trends, combined with internal

operating initiatives, impacted the Company’s operating and

financial performance in 2006:



> Ongoing growth in consumer demand for healthy and

nutritious options; the Company has significantly expanded

its product portfolio in recent years to meet this demand, and

is increasing the pace at which it can develop and launch new +8.5%

products. Net Sales



> Brand building efforts that resulted in market share gains

across multiple product segments in the Company’s markets. ■ Mexico ’05 ’06

■ United States 58,643 63,633

■ Latin America (millions of pesos)









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 8

Net Sales Operating Expenses

Net sales totaled Ps. 63,633 in 2006, an 8.5% increase Operating expenses accounted for 44.2% of net sales in the

over 2005 that was driven by favorable results across all the year, a decrease of 50 basis points from 2005. Distribution and

Company’s operating regions. administrative expenses both benefited from greater absorption

of fixed expenses in all operations and lower labor costs in

In Mexico, sales rose 7.6% to Ps. 44,703. This is attributable the U.S. As a percentage of sales, distribution expenses were

to higher volumes in most product categories; price increases virtually unchanged in the year, despite significant expansion of

that were implemented to help offset higher input costs; and the network and higher average energy costs. They comprised

the benefit of the incorporation of El Globo and Chocolates La 37.8% of sales in the current period.

Corona, acquisitions made in 2005.

Furthermore, tighter control of administrative expenses in

Net sales in the United States rose 7.9% to Ps. 15,218, and Mexico and the U.S. helped reduce these expenses to 6.5% of

in dollar terms 11.1% to US$ 1.4 billion, reflecting a favorable net sales, compared to 7.0% in 2005.

sales mix, strong volumes, new product launches, significant

growth in Mexican branded goods, and price increases that

were implemented during the year. Operating Income

On a consolidated basis, operating income grew 7.5% in 2006

In Latin America, the 21.8% rise in net sales to Ps. 5,330 to Ps. 5,857, corresponding to a 9.2% operating margin.

primarily reflected the significant expansion of the distribution This compares to the 9.3% margin in the previous year. The

network and client base, as well as intensive marketing activity. stability in the margin reflects pricing actions undertaken to

On a country basis, performance in Brazil, Venezuela and Chile pass on a part of the increased raw material costs, and the

was particularly strong. aforementioned improvement of operating expenses as a

percentage of sales.



Gross Margin The performance of the international operations was

The gross margin was 53.5%, a 0.5 percentage point particularly notable having registered operating income for the

decline from 2005, reflecting higher average raw material second consecutive year.

costs; this was partially offset by greater absorption of fixed

costs generated by higher sales volume, price increases, In the U.S., operating margin more than doubled in the twelve

a better sales mix, and lower labor costs in the month period, representing 1.5% of net sales, despite the

United States. important increase in raw material costs, energy and the impact

of expanded distribution routes into the Hispanic market.









9.3%



9.2%

+7.5%

Cost of Operating Operating

Goods Sold Expenses Income

margin

’05 ’06 ’05 ’06 ■ Mexico ’05 ’06

46.0% 46.5% 44.7% 44.2% ■ United States 5,444 5,857

(% of net sales) (% of net sales) ■ Latin America (millions of pesos)









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 2 9

In Latin America, operating margin declined from 1.3% in Net Majority Income

2005 to 0.7% in the current period, due to the near 24% Net majority income rose 18.8% in 2006, to Ps. 3,535, while

rise in raw material costs and the increase in labor costs. the net margin increased 50 basis points to 5.6%. These gains

Nevertheless, improvements in Brazil were particularly were mainly the result of lower financing costs and other income

notable, having achieved operating profitability in the second in the year. Combined, both figures more than offset the decline

half of the year. in gross margin.





Comprehensive Cost of Financing Earnings Before Interest, Taxes, Depreciation and

Financing costs declined significantly by 24.3% year over year, Amortization (EBITDA)

to Ps. 292, primarily as a result of lower interest expense, as EBITDA for 2006 was Ps. 7,765, a 5.0% increase over the

well as the effect of the charge taken in 2005 for the adoption previous year. As with operating income, EBITDA performance

of Mexican GAAP Bulletin C-10, “Derivative Financial Instruments reflected the containment of administrative expenses and the

and Hedging Activities.” positive trend in international operations. On a margin basis,

EBITDA represented 12.2% of sales, a 0.4 percentage point

decline from 2005. This is mainly explained by the negative

Other Income and Expenses impact of cost of goods, which the rise in sales and decrease in

The Company registered income of Ps. 131, compared to a administrative expenses were not able to offset. In addition, the

Ps. 141 expense in the previous year. This income was decline included an extraordinary charge applied to depreciation

comprised mainly of the proceeds generated by the sale of the in the U.S. related to the write-off of certain assets in 2005.

Company’s share in Agusa, S.A. de C.V., and a gain related to

a favorable judicial ruling on the deductibility of labor related

expenses from earlier fiscal periods. Financial Structure

The Company’s net debt at year-end 2006 totaled Ps. 2.9

billion, a decrease of 33.4% from 2005. This was primarily the

result of a 27.1% increase in the Company’s cash position. The

net debt to equity ratio at December 31, 2006 was 0.12 times,

compared to 0.21 times in 2005, while the net debt to EBITDA

ratio went from 0.6 times in 2005 to 0.4 times in 2006.









12.6%





12.2%

+5.0% +18.8%

EBITDA Majority Net Net Debt /

Income EBITDA

margin

■ Mexico ’05 ’06 ’05 ’06 ’05 ’06

■ United States 7,394 7,765 2,975 3,535 0.6 0.4

■ Latin America (millions of pesos) (millions of pesos) (times)









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 3 0

Independent Auditors’ Report



To the Board of Directors and Stockholders of

Grupo Bimbo, S. A. B. de C. V.



We have audited the accompanying consolidated balance sheets of Grupo Bimbo, S. A. B. de C. V. and subsidiaries

(formerly Grupo Bimbo, S. A. de C. V.) (the “Company”) as of December 31, 2006 and 2005, and the related consolidated statements of

income, changes in stockholders’ equity and changes in financial position for the years then ended, all expressed in millions of Mexican

pesos of purchasing power as of December 31, 2006. These financial statements are the responsibility of the Company’s management. Our

responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of certain

consolidated subsidiaries, which statements reflect total assets constituting 39% and 40%, respectively, of consolidated total assets as of

December 31, 2006 and 2005, and net sales constituting 30% and 31%, respectively, of consolidated net sales for the years then ended.

Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the

amounts included for those entities, is based solely on the reports of such other auditors.



We conducted our audits in accordance with auditing standards generally accepted in Mexico. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and that they

are prepared in accordance with Mexican financial reporting standards. An audit includes examining, on a test basis, evidence supporting the

amounts and disclosures in the financial statements. An audit also includes assessing the financial reporting standards used and significant

estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports

of the other auditors provide a reasonable basis for our opinion.



Effective January 1, 2005, the Company applied the dispositions of the new bulletin C-10 “Financial Derivative Instruments and Hedging

Transactions”. The effects of the adoption of this new accounting bulletin are described in Note 3.a. to these financial statements.



In our opinion, based on our audits and the reports of the other auditors, such consolidated financial statements present fairly, in all material

respects, the financial position of Grupo Bimbo, S. A. B. de C. V. and subsidiaries (formerly Grupo Bimbo, S. A. de C. V.) as of December 31,

2006 and 2005, and the results of their operations, changes in their stockholders’ equity and changes in their financial position for the years

then ended in conformity with Mexican financial reporting standards.



The accompanying consolidated financial statements have been translated into English for the convenience of users.









Galaz, Yamazaki, Ruiz Urquiza, S. C.

Member of Deloitte Touche Tohmatsu









.

C. P A. Javier Montero Donatto

February 28, 2007









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 3 1

Consolidated Balance Sheets



Grupo Bimbo, S.A.B. de C.V. and Subsidiaries (formerly Grupo Bimbo, S.A. de C.V.)

As of December 31, 2006 and 2005 (In millions of Mexican pesos of purchasing power of December 31, 2006)



2006 2005

Assets

Current assets:

Cash and equivalents $ 5,443 $ 4,284

Accounts and notes receivable, net 4,141 3,646

Inventories, net 1,660 1,400

Prepaid expenses 276 320

Financial derivative instruments 26 12

Total current assets 11,546 9,662

Property, plant and equipment, net 20,464 19,315

Investment in shares of associates 915 714

Deferred income taxes 1,257 1,501

Trademarks and rights of use 3,253 3,137

Goodwill 3,677 3,555

Intangible assets for employee retirement benefits 234 423

Other assets, net 469 425

Total $ 41,815 $ 38,732



Liabilities and stockholders’ equity

Current liabilities:

Current portion of long-term debt $ 3,112 $ 267

Trade accounts payable 3,827 3,161

Other accounts payable and accrued liabilities 2,542 2,497

Due to related parties 443 382

Statutory employee profit sharing payable 438 430

Derivative financial instruments 30 –

Total current liabilities 10,392 6,737

Long-term debt 5,268 8,426

Derivative financial instruments 54 111

Employee retirement benefits and workers’ compensation 1,120 1,263

Deferred statutory employee profit sharing 45 60

Deferred income taxes 1,213 1,378

Total liabilities 18,092 17,975

Stockholders’ equity:

Capital stock 7,717 7,717

Reserve for repurchase of shares 732 732

Retained earnings 23,595 20,804

Other comprehensive loss (6,505) (6,615)

Initial cumulative effect of deferred income taxes (2,293) (2,293)

Derivative financial instruments (31) (71)

Majority stockholder’s equity 23,215 20,274

Minority interest in consolidated subsidiaries 509 483

Total stockholders’ equity 23,724 20,757

Total $ 41,815 $ 38,732





See accompanying notes to consolidated financial statements.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 3 2

Consolidated Statements of Income



Grupo Bimbo, S.A.B. de C.V. and Subsidiaries (formerly Grupo Bimbo, S.A. de C.V.)

For the years ended December 31, 2006 and 2005 (In millions of Mexican pesos of purchasing power of December 31, 2006, except for earnings per share expressed in Mexican pesos)



2006 2005

Net sales $ 63,633 $ 58,643



Cost of sales 29,627 26,967

Gross profit 34,006 31,676



Operating expenses:

Distribution and selling 24,039 22,100

Administrative 4,110 4,132

28,149 26,232

Income from operations 5,857 5,444



Net comprehensive financing cost:

Interest expense, net 483 675

Exchange (gain) loss, net 95 (23)

Monetary position gain (286) (266)

292 386

Other (income) expenses, net (131) 141

Income before income taxes, statutory employee profit sharing and equity in

results of associated companies 5,696 4,917



Income tax expense 1,669 1,526



Statutory employee profit sharing expense 439 407

Equity in income of associated companies 37 60



Income before extraordinary gain and cumulative effect of change

in financial reporting standards 3,625 3,044

Extraordinary gain – (78)

Cumulative effect of change in financial reporting standards, net – 69

Consolidated net income for the year $ 3,625 $ 3,053

Net income of majority stockholders $ 3,535 $ 2,975

Net income of minority stockholders $ 90 $ 78



Earnings per share:

Income before extraordinary gain and cumulative effect of change in financial

reporting standards $ 3.01 $ 2.59

Extraordinary gain $ – $ 0.06

Cumulative effect of change in financial reporting standards, net $ – $ (0.06)

Basic earnings per common share $ 3.01 $ 2.53



Weighted average number of shares outstanding (000’s) 1,175,800 1,175,800









See accompanying notes to consolidated financial statements.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 3 3

Consolidated Statements of Changes in Stockholders’ Equity



Grupo Bimbo, S.A.B. de C.V. and Subsidiaries (formerly Grupo Bimbo, S.A. de C.V.)

For the years ended December 31, 2006 and 2005 (In millions of Mexican pesos of purchasing power of December 31, 2006)





Reserve

for

Capital repurchase Retained

stock of shares earnings



Balances, January 1, 2005 $ 7,717 $ 732 $ 18,180



Dividends declared – – (351)

Balances before comprehensive income 7,717 732 17,829



Initial cumulative effect of valuation of derivative instruments – – –

Consolidated net income for the year – – 2,975

Effect of valuation of derivatives – – –

Restatement effects of financial instruments – – –

Restatement effects for the year – – –

Adjustment to additional pension liability – – –

Translation effects of foreign subsidiaries – – –

Comprehensive income (loss) – – 2,975



Balances, December 31, 2005 7,717 732 20,804



Dividends declared – – (744)

Balances before comprehensive income 7,717 732 20,060



Consolidated net income for the year – – 3,535

Effect of valuation of financial instruments – – –

Restatement effects for the year – – –

Adjustment to additional pension liability – – –

Translation effects of foreign subsidiaries – – –

Comprehensive income (loss) – – 3,535



Balances, December 31, 2006 $ 7,717 $ 732 $ 23,595









See accompanying notes to consolidated financial statements.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 3 4

Initial

cumulative Minority

Other effect of Derivative Majority interest in Total

comprehensive deferred financial stockholder’s consolidated stockholders’

loss income taxes instruments equity subsidiaries equity



$ (6,307) $ (2,293) $ – $ 18,029 $ 446 $ 18,475



– – – (351) – (351)

(6,307) (2,293) – 17,678 446 18,124



– – (106) (106) – (106)

– – – 2,975 78 3,053

– – 1 1 – 1

– – 34 34 – 34

148 – – 148 28 176

(163) – – (163) – (163)

(293) – – (293) (69) (362)

(308) – (71) 2,596 37 2,633



(6,615) (2,293) (71) 20,274 483 20,757



– – – (744) (75) (819)

(6,615) (2,293) (71) 19,530 408 19,938



– – – 3,535 90 3,625

– – 40 40 – 40

140 – – 140 11 151

(52) – – (52) – (52)

22 – – 22 – 22

110 – 40 3,685 101 3,786



$ (6,505) $ (2,293) $ (31) $ 23,215 $ 509 $ 23,724









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 3 5

Consolidated Statements of Changes in Financial Position



Grupo Bimbo, S.A.B. de C.V. and Subsidiaries (formerly Grupo Bimbo, S.A. de C.V.)

For the years ended December 31, 2006 and 2005 (In millions of Mexican pesos of purchasing power of December 31, 2006)



2006 2005

Operating activities:

Income before extraordinary gain and cumulative effect of change in

financial reporting standards $ 3,625 $ 3,044

Items that did not require (generate) resources-

Depreciation and amortization 1,908 1,950

Equity in income of associated companies (37) (60)

Employee retirement benefits and workers’ compensation 46 63

Deferred income taxes and statutory employee profit sharing 64 (78)

Impairment of long-lived assets 2 130

5,608 5,049

Changes in current assets and liabilities:

(Increase) decrease in:

Accounts and notes receivable (495) 280

Inventories (326) 177

Prepaid expenses 44 (87)

Increase (decrease) in:

Trade accounts payable 666 152

Other accounts payable, accrued liabilities and statutory employee profit sharing 53 228

Due to related parties 61 (20)

Net resources generated by operating activities 5,611 5,779



Financing activities:

Short-term loans from financial institutions, net – 50

Long-term debt (313) (510)

Dividends declared (819) (351)

Derivative financial instruments (1) (42)

Adjustment to additional pension liability (52) (163)

Translation effects of foreign entities 22 (362)

Net resources used in financing activities (1,163) (1,378)



Investing activities:

Acquisition of property, plant and equipment, net of retirements (2,843) (3,144)

(Increase) decrease in investment in associated companies (164) 66

Trademarks and usage rights (116) (532)

Goodwill (122) (367)

Other assets (44) (202)

Net resources used in investing activities (3,289) (4,179)



Cash and equivalents:

Increase 1,159 222

Balance at beginning of year 4,284 4,062



Balance at end of year $ 5,443 $ 4,284





See accompanying notes to consolidated financial statements.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 3 6

Notes to Consolidated Financial Statements



Grupo Bimbo, S.A.B. de C.V. and Subsidiaries (formerly Grupo Bimbo, S.A. de C.V.)

For the years ended December 31, 2006 and 2005 (In millions of Mexican pesos of purchasing power of December 31, 2006)





1. The Company

Grupo Bimbo, S. A. B. de C. V. and subsidiaries (“Bimbo” or the “Company”) (formerly Grupo Bimbo, S. A. de C. V.) are engaged in the

manufacture, distribution and sale of bread, cookies, cakes, candies, chocolates, snacks, tortillas and processed foods.

The Company operates in the following geographical areas: Mexico, the United States of America (“USA”), Central and South America (“OLA”),

Europe, and China. Due to the relatively low materiality, the financial information of the Europe and China regions are aggregated with Mexico

in the geographical disclosures included in Note 17.



2. Basis of presentation

a. Explanation for translation into English - The accompanying consolidated financial statements have been translated from Spanish into

English for use outside of Mexico. These consolidated financial statements are presented on the basis of Mexican financial reporting

standards (“MFRS”). Certain financial reporting standards applied by the Company that conform with MFRS may not conform with

accounting principles generally accepted in the country of use.

b. Consolidation of financial statements - The consolidated financial statements include those of Grupo Bimbo, S. A. B. de C. V. and its

subsidiaries, of which some of the more significant are shown below:

Ownership Principal

Subsidiary percentage Business

Bimbo, S. A. de C. V. 97 Bakery

Barcel, S. A. de C. V. 97 Candies and snacks

Gastronomía Avanzada, S. A. de C. V. (“El Globo”) 100 Bakery and cakes

Bimbo Bakeries USA, Inc. (“BBU” or “USA”) 100 Bakery

Bimbo do Brasil, Ltd. 100 Bakery

Ideal, S. A. (Chile) 100 Bakery



All significant intercompany balances and transactions have been eliminated in these consolidated financial statements.

The Company’s investments in unconsolidated associated companies is valued by the equity method or historical costs, depending on

the shareholding percentage, and are not consolidated in these financial statements as the Company does not have control over such

entities.

During 2006 and 2005, net sales of Bimbo, S. A. de C. V. and Barcel, S. A. de C. V. in Mexico represented approximately 62% and 66%,

respectively, of consolidated net sales.

c. Acquisitions - On June 19, 2006, the Company concluded its acquisition of certain assets and brands of the bakeries “El Molino”. This

transaction totaled $42, which was settled with the Company’s own resources.

On March 24, 2006, the Company acquired 98% of the outstanding stock and net debt of 1.3 million euros of Beijing Panrico Food

Processing Center for 9.2 million. As a result of this acquisition, net sales of $81 attributable to the acquired company were included in

the 2006 consolidated results, and goodwill of $83 was recorded.

On January 30, 2006, the Company acquired the Uruguayans enterprises Walter M. Doldán y Cía., S. A., and los Sorchantes, S.A., this

transaction totaled 7 million of United States dollars (“US$”), of which US$5.5 million were used to acquire 100% of the shares, and the

rest was applied to pay the financials debts. As a result of this acquisition, net sales of $77 attributable to these acquired companies were

included in the 2006 consolidated results, and intangible assets representing brand names of $26 and goodwill of $88 were recorded.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 3 7

During December 2005, the Company acquired 100% of the shares of Corporación PVC de Guatemala, S. A. for US$14.5 million. As a

result of this transaction, intangible assets representing brand names of $52 and goodwill of $88 were recorded.

On September 23, 2005, the Company concluded its acquisition of 99.99% of the common voting stock of Controladora y Administradora

de Pastelerías, S. A. de C. V. and subsidiaries (“El Globo”), a company engaged in the production and sale of cakes and other baked

goods. Beginning from the acquisition date, the results of operations of El Globo have been included in the consolidated financial

statements of the Company, incorporating net sales of $1,067 and $260 in 2006 and 2005, respectively. This transaction totaled

$1,350, which was settled with the Company’s own resources, and goodwill of $363 was generated at that time.

On July 29, 2005 the Company acquired certain assets and brands of Empresas Chocolates La Corona, S. A. de C. V. (“La Corona”), a

company engaged in the production and sale of confectionery and candy products. This transaction totaled $471, which was settled

using the Company’s own resources and generated goodwill of $113 at that time.

d. Translation of subsidiaries’ financial statements - To consolidate the financial statements of foreign subsidiaries operating independently

from the Company (located in the USA and other Latin American and European countries, which in 2006 and 2005 constituted 32%

of consolidated net sales, and 40% and 41%, respectively, of consolidated total assets), the same accounting policies as those of the

Company are applied. Accordingly, such financial statements are restated for inflation of the country in which the subsidiaries operate

and are expressed in local currency of purchasing power at year end. Subsequently, all assets and liabilities are translated at the

exchange rate prevailing at year end. Capital stock is translated at the exchange rate of the dates the contributions were made, and

retained earnings, at the year end exchange rate of the year in which they were obtained. Revenues, costs and expenses are translated

at the exchange rate of the closing of the year in which they were reported. The translation adjustment effects are recorded directly in

stockholders’ equity.

The financial statements of foreign subsidiaries included in the 2005 consolidated financial statements are restated in constant currency

of the countries where they operate and translated into Mexican pesos, using the exchange rate of the latest year presented.

e. Comprehensive income and other comprehensive income (loss) - Comprehensive income (loss) presented in the accompanying statement

of changes in stockholders’ equity is the modification of stockholders’ equity during the year for items that are not distributions and

movements of contributed capital and includes consolidated net income for the year plus other items that represent a gain or loss for

the same period which, in conformity with MFRS, are recorded directly in stockholders’ equity without affecting the results of operations.

In 2006 and 2005, the items of other comprehensive income (loss) consist of the excess (insufficiency) in restatement of stockholders’

equity, the adjustment to additional pension liability, the unrealized accrued effects of derivative instruments and the translation effects

of foreign entities and minority stockholders’ equity. The other concepts of the accrued comprehensive in loss consist of the balance of

comprehensive income (loss) of majority stockholders’ equity.

f. Reclassifications - Certain amounts in the financial statements as of December 31, 2005 have been reclassified decreasing the balance of

other assets and increasing the goodwill by $310, to conform the presentation of the financial statements as of December 31, 2006.



3. Summary of significant accounting policies

New financial reporting standards - As of June 1, 2004, the function of establishing and issuing MFRS became the responsibility of the

Mexican Board for Research and Development of Financial Reporting Standards (“CINIF”). CINIF decided to rename the accounting principles

generally accepted in Mexico (MEX GAAP), previously issued by the Mexican Institute of Public Accountants (“IMCP”), as Mexican Financial

Reporting Standards. As of December 31, 2005, eight Series A standards had been issued (NIF A-1 to NIF A-8), representing the Conceptual

Framework, intended to serve as the supporting rationale for the development of such standards, and as a reference to resolve issues

arising in practice; NIF B-1, Accounting Changes and Correction of Errors, was also issued. The Series A NIFs and NIF B-1 went into effect

as of January 1, 2006. Application of the new MFRS did not have a material impact on the Company’s financial position, results of operations

or related disclosures.

The accounting policies followed by the Company are in conformity with MFRS, which require management to make certain estimates and use

certain assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Although these

estimates are based on management’s best knowledge of current events, actual results may differ. The significant accounting policies of the

Company are as follows:









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 3 8

a. Change in accounting principles - Effective January 1, 2005, the Company adopted the provisions of the accounting bulletin C-10

“Derivative Financial Instruments and Hedging Activities” (“C-10”), which requires that all derivative instruments be recognized at fair

value, sets the rules to recognize hedging activities and requires separation, if practical, of embedded derivative instruments. With

respect to cash flow hedging, C-10 establishes that the effective portion be recognized temporarily under comprehensive income within

stockholders’ equity, with subsequent reclassification to current earnings at the time it is affected by the hedged item. The ineffective

portion should be immediately recognized in current earnings. Up to December 31, 2004, according to prior accounting standards

(Bulletin C-2, “Financial Instruments”), the Company recognized the effect of hedging derivatives under financial expenses of the

associated liabilities when the flow exchanges mentioned in the swap contract were actually executed. At January 1, 2005, the effect of

initial adoption of C-10 resulted in the recognition of a net liability for derivative financial instruments of $130, with a corresponding debit

to the deferred income tax assets of $36 and comprehensive income within stockholders’ equity of $93. In addition, a charge to results

of $69 for the cumulative effect of the change in financial reporting standards for trading derivatives was recorded.

b. Recognition of the effects of inflation - The Company restates the financial statements of the Mexican entities and foreign subsidiaries in

terms of the purchasing power of the Mexican peso at the date of the latest balance sheet, thereby recognizing the effects of inflation.

Consequently, the financial statements presented for the prior year have also been restated based on the same purchasing power, so

that their figures differ from those originally presented, which are shown in pesos of purchasing power at the close of that year. In

consequence, the financial statements of the past year that are presented for comparative effects, also has been restated in terms of the

same acquisition power and their amounts defer of the original presented, that was in pesos of acquisition power to close of that year.

Consequently, the figures shown in the accompanying financial statements are comparable as they are expressed in constant pesos.

Recognition of the effects of inflation results in recording of inflationary effects on nonmonetary and monetary items with their respective

gains and losses for inflation recognized in the following two headings, respectively:

• Insufficiency in restated stockholders' equity - This item consists of the result from monetary position accrued through the first

restatement of the financial statements and the loss from holding nonmonetary assets, which represents the change in the specific

level of prices above or below inflation.

• Monetary position result - The result from monetary position, which represents the erosion of the purchasing power of monetary

items due to inflation, is calculated by applying factors derived from the National Consumer Price Index (“NCPI”) to the monthly net

monetary position. Gains arise from maintaining a net liability monetary position.

c. Cash and cash equivalents - Consists mainly of bank deposits in checking accounts and readily available daily investments of cash

surpluses with immediately disposition. The cash is stated at nominal value plus accrued yields, which are recognized in results as they

accrue.

d. Inventories and cost of sales - Inventories are stated at average costs, which are similar to their replacement value at year end, without

exceeding net realizable value. The cost of sales is stated at actual cost, which is similar to replacement cost at the time goods are

sold.

e. Property, plant and equipment - Are recorded at acquisition or construction cost and restated using NCPI factors. Depreciation is

calculated based on the followings percentages.

Buildings 5

Manufacturing equipment 8, 10 and 35

Vehicles 10 and 25

Office furniture and fixtures 10

Computers 30









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f. Derivative financial instruments - The Company states all derivatives at fair value in the balance sheet, regardless of the purpose for

holding them. The determination of the fair value is determined using prices quoted on recognized markets. If such instruments are

not traded, fair value is determined by applying recognized valuation techniques.

Changes in the fair value of derivative instruments designated as hedging are recognized as follows; (1) for fair value hedges, changes

in both the derivative instrument and the hedged item are recognized in current earnings; (2) for cash flow hedges, changes are

temporarily recognized as a component of comprehensive income and then reclassified to current earnings when affected by the hedged

item. The ineffective portion of the change in fair value is immediately recognized in current earnings, within comprehensive financing

cost (CIF), regardless of whether the derivative instrument is designated as a fair value hedge or a cash flow hedge.

The Company uses interest rate swaps and foreign currency forward contracts to manage its exposure to interest rate and foreign currency

fluctuations, as well as futures to fix the purchase price of raw materials. The Company formally documents all hedging relationships,

including their objectives and risk management strategies to carry out derivative transactions. Derivative trading is performed only with

institutions of recognized solvency, and limits have been established for each institution.

While certain derivative financial instruments are contracted for hedging from an economic point of view, they are not designated

as hedges for accounting purposes. Changes in fair value of such derivative instruments are recognized in current earnings as a

component of CIF.

The hedging derivative instruments are recorded as assets or liabilities without offsetting them against the hedged items.

g. Goodwill - Goodwill represents the excess of cost over book value of subsidiaries at the acquisition date. It is restated using the NCPI

and, at least once a year, is subject to impairment tests. Through December 31, 2006 the goodwill recorded is primarily attributable to

the acquisitions of its U.S. subsidiary, Mrs. Baird’s Bakeries, Inc., and the acquisitions in Mexico of El Globo and La Corona.

h. Trademarks and rights of use - Mainly derived from the acquisition of the George Weston, Ltd. businesses, the Company acquired the

trademark of Oroweat bread, as well as a direct distribution system consisting of approximately 1,300 routes. Similarly, it acquired the

usage rights of the Entenmann’s, Thomas and Boboli trademarks. Such rights are no longer amortized; however, the values are subject

to impairment tests.

i. Impairment of long-lived assets in use - The Company reviews the carrying amounts of long-lived assets in use when an impairment

indicator suggests that such amounts might not be recoverable, considering the greater of the present value of future net cash flows

or the net sales price upon disposal. Impairment is recorded when the carrying amounts exceed the greater of the amounts mentioned

above. The impairment indicators considered for these purposes are, among others, the operating losses or negative cash flows in the

period if they are combined with a history or projection of losses, depreciation and amortization charged to results, which in percentage

terms in relation to revenues are substantially higher than that of previous years, obsolescence, reduction in the demand for the products

manufactured, competition and other legal and economic factors. During 2006 and 2005, the Company recorded brand impairment of

$2 and $130, respectively, mainly due to changes in market strategies, deciding not to use certain brands in the future.

j. Employee retirement benefits and workers’ compensation - The liability from seniority premiums and pensions is recorded as accrued

and is calculated by independent actuaries using the projected unit credit method at actual interest rates. Therefore, the liability is being

recognized at present value, on the assumption that the liability for these benefits will be paid on the estimated general retirement date

of the Company’s employees.

Workers’ compensation relates to the insurable risks such as general liability, automobile liability, and workers’ compensation that are

self-insured by the Company, with insurance coverage subject to specified limits. Liabilities for insurable risks have been determined using

the Company’s historical data and insurance industry data according to actuarial calculations.

k. Income tax, tax on assets and statutory employee profit sharing - The provisions for income tax (ISR) and statutory employee profit

sharing (PTU) are recorded in results of the year in which incurred. Deferred ISR assets and liabilities are recognized for temporary

differences resulting from comparing the accounting and tax values of assets and liabilities plus any future benefits from tax loss

carryforwards. A deferred ISR asset is recorded only when it is highly probable that it will be realized. Deferred PTU is derived from

temporary differences between accounting and income for PTU purposes and is recognized only when it can be reasonably assumed that

they will generate a liability or benefit, and there is no indication that this situation will change in such a way that the liabilities will not be

paid or benefits will not be realized.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 4 0

Tax on assets (“IMPAC”) paid that is expected to be recoverable is recorded as an advance payment of ISR and is presented in the

balance sheet decreasing the deferred ISR.

l. Foreign currency balances and transactions - Foreign currency transactions are recorded at the applicable exchange rate in effect at

the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into Mexican pesos at the applicable

exchange rate in effect at the balance sheet date. Exchange fluctuations are recorded as a component of results of the period.

m. Revenue recognition - Revenues are recognized in the period in which the risks and rewards of the products are transferred to the

customers who purchased them, which generally occurs when these products are delivered to the customer. The Company deducts

certain marketing expenses, such as promotion expenses, from sales.

n. Earnings per share - Basic earnings per share is calculated by dividing consolidated net majority income by the weighted average number

of shares outstanding during the year.



4. Accounts and notes receivable



2006 2005

Customers and agencies $ 3,530 $ 3,030

Allowance for doubtful accounts (127) (107)

3,403 2,923

Notes receivable 72 95

Value-added tax and other recoverable taxes 50 3

Sundry debtors 609 583

Officers and employees 7 42

$ 4,141 $ 3,646



5. Inventories



2006 2005

Finished products $ 644 $ 478

Orders in-process 40 36

Raw materials, containers and wrapping 849 757

Other 51 62

Allowance for slow moving inventories (6) (5)

1,578 1,328

Advances to suppliers 20 9

Raw materials-in-transit 62 63

$ 1,660 $ 1,400









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6. Property, plant and equipment



2006 2005

Buildings $ 7,522 $ 7,163

Manufacturing equipment 18,308 17,135

Vehicles 7,142 6,853

Office furniture and fixtures 371 355

Computers 1,226 1,055

34,569 32,561

Less- Accumulated depreciation (16,973) (16,056)

17,596 16,505

Land 1,986 2,080

Construction in-progress and machinery in-transit 882 730

$ 20,464 $ 19,315



7. Investment in shares of associates

At December 31, 2006 and 2005, the investment in associated companies is as follows:

Associated companies % of ownership 2006 2005

Artes Gráficas Unidas, S. A. de C. V. 15 $ – $ 76

Beta San Miguel, S. A. de C. V. 8 256 237

Bismark Acquisition, L.L.C. 30 29 36

Congelación y Almacenaje del Centro, S. A. de C. V. 10 43 41

Grupo Altex, S. A. de C. V. 11 69 64

Grupo La Moderna, S. A. de C. V. 3 127 125

Ovoplus, S. A. de C. V. 25 33 30

Pierre, L.L.C. 30 17 17

Productos Rich, S. A. de C. V. 18 49 45

Mundo Dulce, S. A. de C. V. 50 244 –

Others Various 48 43

$ 915 $ 714









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8. Long-term debt



2006 2005

Committed Revolving line (Multi-currency) - On July 20, 2005, the Company restructured

certain of the terms of committed revolving line of credit contract originally agreed on

May 21, 2004, with four financial institutions with an original amount US$250, and maturity

date in May, 2008. The new amount of the line of credit is US$600 million, of which 50% will

be available in Mexican pesos and the new term is over 5 years, with maturity in July 2010.

The new financial conditions applicable are as follow: For US dollar borrowings, the Company

must pay the LIBOR rate plus 0.40% until the third anniversary and LIBOR rate plus 0.45%

during the remaining term, while in case of Mexican pesos borrowings, the Company must

pay the TIIE rate plus 0.35% until the third anniversary and TIIE rate plus 0.40% thereafter

until the maturity date.

At July 20, 2006 and 2005, the used balance of this credit line was US$125 millions. The

interest rate at December 31, 2006 was 5.7750%.

$ 1,359 $ 1,393

Share certificates - The Company issued share certificates on four occasions (payable upon

maturity) to refinance short-term liabilities contracted to acquire certain assets in the

Western United States. Such issues were structured as follows:

- Bimbo 02- For $2,750 issued on May 17, 2002, maturing in May 2007, with a variable

interest rate equal to the 182-day CETES rate plus 0.92 percentage points, equivalent to

8.18% per annum as of December 31, 2006;

- Bimbo 02-2- For $750 issued on May 17, 2002, maturing in May 2012, with a fixed

interest rate of 10.15% per annum;

- Bimbo 02-3- For $1,150 issued on August 2, 2002, maturing in August 2009, with a

fixed interest rate of 11% per annum;

- Bimbo 02-4- For $1,850 issued on August 2, 2002, maturing in August 2008, with a

variable interest rate equal to the 182-day CETES plus 0.97 percentage points, equivalent

to 8.31% per annum as of December 31, 2006. 6,500 6,763

Direct loans - On February 2, 1996, the Company contracted financing of US$140 million, comprised

of 3 promissory notes with International Finance Corporation (IFC). Notes “A” and “B” bear a fixed

interest rate of 8.74% and “C” bears a variable interest rate at the 6-month LIBOR, paid

semiannually.February 1998. Note “C” is for 10 years. Note C was paid early on April 12, 2002.

In February 2005, the Company paid off US$11.8 million on Notes A and B; therefore, the balance

of this loan at December 31, 2006 is US$23.6 million. 257 395

Other - Certain subsidiaries have contracted other direct loans, which will be paid from 2007 to 2011,

at various interest rates. 264 142

8,380 8,693

Less – Current portion of long-term debt (3,112) (267)

Long-term debt $ 5,268 $ 8,426









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At December 31, 2006, long-term debt matures as follows:

2008 $ 1,978

2009 1,153

2010 1,359

2011 28

2012 750

$ 5,268



The loan contracts establish certain covenants and also require that the Company, based on the consolidated financial statements, maintain

determined financial ratios. At December 31, 2006 and 2005, the Company had complied with all the obligations established in the loan

contracts.



9. Derivative financial instruments



Mexico-

Interest rate hedges - The Company issued share certificates for $6,500 in 2002 (described in Note 8) and simultaneously contracted swaps

that change the profile of the debt from variable to fixed rate; the notional amount is $3,750 and represents 58% of the share certificates

outstanding. These derivatives were designated as cash flow hedges, and as of their formal designation it was assumed that they would not

generate ineffective portions.

As of December 31, 2006 and 2005, the trading characteristics of the hedge instruments are as follows:

Swaps that set share certificate rates

Date of Notional amount Interest rate Fair

Commencement Maturity Floating (collected) Fixed (Paid) value



Figures as of December 31, 2006

May 17, 2002 May 10, 2007 $ 2,750 8.18% 10.38% $ (30)

Aug 2, 2002 Aug 2, 2008 $ 1,000 8.31% 10.94% (54)

$ (84)

Figures as of December 31, 2005

May 17, 2002 May 10, 2007 $ 2,750 9.68% 10.38% $ (58)

Aug 2, 2002 Aug 2, 2008 $ 1,000 10.68% 10.94% (53)

$ (111)



The fair value of the swaps as of December 31, 2006 and 2005 was recognized as a liability for $84 (30 is to short term and 54 to long

term) and $ 111 (to long term), net of deferred income tax liabilities of $24 and $31, respectively, and net comprehensive income of $60

and $80, respecitvely. It is estimated that in 2006, $14 will be reclassified (net of income tax) from comprehensive income to results, which

will be recognized in the same heading as the item being hedged, as part of the CIF.

Interest-rate and foreign currency hedges - In the year 2005 derivatives with interest rate and foreign currency underlying for a notional

amount of US$270 million reached term and were sold before maturity, of which US$170 million was classified as trading, because it did not

meet the requirements for accounting recognition as hedging. The cumulative effect as of January 1, 2005 of the loss on the sale of trading

instruments was $69, net of income tax, which was recognized in 2005 results under the heading of cumulative effect due to change in

accounting principle.









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Foreign currency forwards - In January 2005, six forward contracts matured with a notional amount of US$96 million, which set the exchange

rate for the acquisition of futures at the weighted average rate of $11.28 per US$1.00. The exchange loss of $5 on the settlement of these

instruments was recorded in CIF. At the close of 2005, there were no derivatives contracted with this underlying.

Wheat price hedges - The Company signs wheat futures contracts to minimize the risks of variation in international prices of wheat, the

primary component of the flour which is the main input used by the Company in the manufacture of its products. The transactions are

performed in recognized commodities markets, and through their formal documentation are designated as forecast transaction hedges

(wheat purchases).

As of December 31, 2006 and 2005, the characteristics of these hedging instruments are as follows:

Futures contracts to set the purchase price of wheat

Commencement Contracts Fair

date Position Number Maturity value

Figures at December 31, 2006

August to October 2006 Long 324 March 2007 $ 5

October 2006 Long 200 July 2007 4

November 2006 Long 190 March 2007 1

December 2006 Long 250 March 2007 (1)

December 2006 Long 300 May 2007 2

December 2006 Long 200 July 2007 1

$ 12

Figures at December 31, 2005

August - November 2005 Long 628 March 2006 $ 8

November 2005 Long 111 May 2006 1

$ 9





The fair value for future contracts at December 31, 2006 is for a total amount of $12, which is recognized as a current asset with a credit

of $3 for income deferred taxes and of $9 for comprehensive income. The balance of comprehensive income at December 31 for futures

contracts is for $15, because includes closed contracts for $6 which have not been transferred to the cost of sales due to the fact they have

not been consumed. At December 31, 2005 the fair value is for $9, recognized as an asset with a credit to income deferred tax as liability

for $2 and a credit to the comprehensive income for $7. As of December 31, 2005, the closed contracts recognized into the comprehensive

income that have not been consumed are for $2. It is estimated that comprehensive income of futures contracts at December 31, 2006 will

be reclassified during 2007.

At December 31 2006 and 2005, the Company has other futures contracts which have not been designated as a hedge, which fair value at

the close of these transactions is for $14 and $13, respectively, and for that reason are presented as an asset and their valuation effect in

the Comprehensive Financing Cost (CIF) in the income statement.

Embedded derivative instruments - At December 31, 2006 and 2005, the Company does not have embedded derivatives.









G R U P O B I M B O A N N U A L R E P O R T 2 0 0 6 / P. 4 5

USA-

Wheat price hedges - To protect itself from risks derived from fluctuations in wheat commodities prices, the Company uses futures contracts

on a selective basis. Fluctuations in the value of derivative financial instruments, stated at fair value, are recognized in results of operations

for the year, net of the costs and expenses derived from the assets whose risks are being hedged. The premiums paid or received for the

derivative financial instruments acquired for hedging purposes are deferred and amortized, with a charge to results for the year during the

life of such instruments.

During 2006 and 2005, BBU performed derivative financial transactions intended to cover increases in the price of wheat for bread-making,

which generated gains for $1 in both years. These effects were recognized in results of each year within cost of sales.

Figure at December 31, 2006.

Commencement Contracts Fair

date Position Number Maturity value

December, 2006 Long 103 March, 2007 1



Figure at December 31, 2005

Commencement Contracts Fair

date Position Number Maturity value

December, 2005 Long 125 May, 2006 2





10. Employee retirement benefits and workers’ compensation

a. Mexico - The Company has pension and death or total disability plans for its management-level employees and a seniority premium plan

for all of its employees, which consist of a one-time payment of 12 days for each year worked based on their final salary, not exceeding

double the minimum wage established by law for all its personnel, as stipulated in the respective employment contracts. The related

liability and annual benefits costs are calculated by an independent actuary in conformity with the bases defined in the plans, using the

projected unit credit method.

The present value of these obligations and the rates used in the calculation are as follows:

2006 2005

Actuarial present value of accumulated benefit obligation $ (3,274) $ (2,907)

Projected benefit obligation $ (4,035) $ (3,587)

Plan assets (fund in trust) 4,040 3,739

Funded status 5 152

Items to be amortized:

Past service costs and changes to the plan (10) (10)

Variances in assumptions and adjustments for experience 289 331

Transition asset (441) (468)

Net projected (liability) asset (included in other assets) (157) 5

(Additional liability) / intangible asset (6) (28)

$ (163) $ (23)









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Net period costs are as follows:

2006 2005

Cost of services for the year $ 221 $ 206

Amortization of transition asset (27) (26)

Amortization in past services and changes to the plan, variances in assumptions

and adjustments for experience 1 11

Cost of financing for the year 159 149

Less – yield on fund assets (185) (170)

Net cost of the period $ 169 $ 170



The present value of the obligation for termination indemnity, are as follows:

2006 2005

Actuarial present value of accumulated benefit obligation $ (280) $ (404)

Projected benefit obligation $ (298) $ (430)

Plan assets (fund in trust) – –

Funded status (298) (430)

Items to be amortized:

Past service costs and changes to the plan (142) –

Variances in assumptions and adjustments for experience (19) –

Transition asset 406 419

Net projected (liability) asset (included in other assets) (53) (11)

(Additional liability) / intangible asset (228) (389)

$ (281) $ (400)



The net period costs are as follows:

2006 2005

Cost of services for the year $ 56 $ 50

Amortization of transition asset 23 (22)

Cost of financing for the year 18 17

Less – yield on fund assets – –

Net cost of the period $ 97 $ 45



The actual interest rates used in the actuarial calculations were:

2006 2005

Discount of projected benefit obligation at present value 4.50% 4.50%

Wage increase 1.50% 1.50%

Yield on fund assets 5.00% 5.00%



Unrecognized items are charged to results based on the average remaining service lives of employees expected to receive benefits,

which is 30 years.









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b. USA - The Company has established defined benefit pension plans (“the Pension Plans”) that cover eligible employees. The Company’s

funding policy is to make discretionary annual contributions. During 2006 and 2005, the Company made contributions to the Pension

Plans of $230 and $92, respectively. As of January 1, 2005, certain benefits plans were frozen for certain nonunion employees. The

starting date for such calculation was December 31, 2005.

The following table sets forth the funded status and amounts recognized for the Pension Plans and the workers’ compensation liability in

the consolidated balance sheet as of December 31, 2006 and 2005:

2006 2005

Actuarial present value of accumulated benefit obligation $ (1,542) $ (1,466)



Projected benefit obligation $ (1,577) $ (1,654)

Plan assets 1,145 928

Funded status (432) (726)

Unamortized actuarial loss and cost of past services, net 536 607

Net projected asset (liability) 104 (119)

Additional liability (502) (420)

(398) (539)

Workers’ compensation (278) (301)

Employee retirement benefits and workers’ compensation $ (676) $ (840)



Net pension cost includes the following components:

2006 2005

Cost of services for the year $ 47 $ 54

Cost of financing for the year 32 82

Expected return on plan assets (43) (82)

Net loss recognition 18 18

Net pension cost $ 54 $ 72



Following is a summary of significant actuarial assumptions used:

2006 2005

Weighted average discount rates 5.75% 5.75%

Rates of increase in compensation levels 1.18% 3.75%

Expected long-term rate of return on assets 4.84% 8.25%



c. Other countries - At December 31, 2006, the liability from employee retirement benefits in other countries is not significant.









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11. Stockholders’ equity

a. At December 31, 2006, stockholders’ equity consists of the following:

Restatement /

Number Par translation

of shares value effect Total

Fixed Capital

Series A 1,175,800,000 $ 1,902 $ 5,815 $ 7,717

Series B – – – –

Total shares 1,175,800,000 $ 1,902 $ 5,815 $ 7,717



Reserve for repurchase of shares 600 132 732

Retained earnings 11,137 12,458 23,595

Other items of the accumulated comprehensive income (loss) (276) (6,229) (6,505)

Initial cumulative deferred income taxes effect (1,747) (546) (2,293)

Financial instruments (30) (1) (31)

Minority interest 457 52 509

Total $ 12,043 $ 11,681 $ 23,724



Capital stock is fully subscribed and paid, and represents fixed capital. Variable capital cannot exceed 10 times the amount of minimum

fixed capital without right of withdrawal and must be represented by Series “B”, ordinary, nominative, no-par shares and/or limited voting,

nominative, no-par shares of the Series to be named when they are issued. Limited voting shares cannot represent more than 25% of

non-voting capital stock.

b. Dividends paid in 2006 and 2005 were:

Mexican Value at

pesos per Per value December 31,

Approved at the stockholders’ meeting of: share Total 2006

November 23, 2006 $ 0.31 $ 364 $ 367

April 6, 2006 $ 0.31 $ 364 $ 377

April 8, 2005 $ 0.28 $ 329 $ 351





c. Retained earnings include the statutory legal reserve. The General Corporate Law requires that at least 5% of net income of the year

be transferred to the legal reserve until the reserve equals 20% of capital stock at par value (historical pesos). The legal reserve may

be capitalized but may not be distributed unless the entity is dissolved. The legal reserve must be replenished if it is reduced for any

reason. At December 31, 2006 and 2005, the legal reserve, in historical pesos, was $500.

d. Stockholders’ equity, except restated paid-in capital and tax retained earnings, will be subject to income tax at the rate in effect when the

dividend is distributed. In 2005 the ISR rate was 30% and it will decrease in 1% to 28% in 2007. Any tax paid on such distribution may

be credited against the income tax payable of the year in which the tax on the dividend is paid and the two fiscal years following such

payment.

e. The balances in the stockholders’ equity tax accounts at December 31 are:

2006 2005

Paid-in capital $ 7,097 $ 7,097

Net after-tax income 18,483 15,651

Total $ 25,580 $ 22,748









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12. Foreign currency balances and transactions

a. At December 31, 2006 and 2005, the foreign currency monetary position in millions of US dollars, for the Mexican entities only, is as

follows:

2006 2005

Current assets 134 164

Liabilities-

Short term (12) (17)

Long term (137) (149)

Total liabilities (149) (166)

Liability position, net (15) (2)

Mexican peso equivalent $ (163) $ (22)



b. The Company has significant operations in USA and OLA as indicated in Note 17.

c. The transactions in millions of US dollars, for the Mexican entities only, after to been eliminated the transactions between consolidated

subsidiaries, were as follows:

2006 2005

Export sales (not include $155 and $139, related to exportations to consolidated

subsidiaries in 2006 and 2005, respectively) 24 12



Imported purchases 87 77



d. The exchange rates in effect at the dates of the balance sheets and of issuance of these financial statements, respectively, were as

follows:

December 31, February 28,



2006 2005 2007

Pesos per one US dollar 10.8755 10.7109 11.0790



13. Transactions and balances with related parties

a. Transactions with related parties, carried out in the ordinary course of business, were as follows:

2006 2005

Expenses-

Purchases of raw materials and finished products $ 3,864 $ 3,969









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b. The net balances due to related parties are:

2006 2005

Beta San Miguel, S. A. de C. V. $ 107 $ 91

Artes Gráficas Unidas, S. A. de C. V. – 37

Efform, S. A. de C. V. 11 10

Frexport, S. A. de C. V. 47 27

Grupo Altex, S. A. de C. V. 144 111

Industrial Molinera Montserrat, S. A. de C. V. 21 15

Industrial Molinera San Vicente de Paul, S. A. de C. V. 14 11

Makymat, S. A. de C. V. 6 6

Ovoplus del Centro, S. A. de C. V. 29 23

Pan-Glo de México, S. de R. L. de C. V. 2 8

Paniplus, S. A. de C. V. 19 15

Proarce, S. A. de C. V. 21 16

Grupo La Moderna, S. A. de C. V. 10 3

Uniformes y Equipo Industrial, S. A. de C. V. 12 9

$ 443 $ 382



14. Tax environment

Income taxes, tax on assets and statutory employee profit sharing in Mexico

The Company is subject to income tax (ISR) and tax on assets (IMPAC). ISR is computed taking into consideration the taxable and deductible

effects of inflation, such as depreciation calculated on restated asset values, taxable income is increased or reduced by the effects of inflation

on certain monetary assets and liabilities through the inflationary component, which is similar to the gain or loss from monetary position. On

the year 2005 the tax rate was 30%, in 2006 29% and in 2007 will be of 28%. For income tax purposes, cost of sales is deducted instead

of inventory purchases in this year were possible to accumulate over a period from 4 and 12 years the inventories as December 31. 2004,

determined in base with tax rules; when electing to accumulate the inventories, the balance of this, must be decrease with the balance of

inventories not deduced of the 106 rule and the unamortized tax loss. After to 2006 will be decrease in the totality the statutory employees’

profits that will be pay.

IMPAC is calculated by applying 1.8% on the net average of the majority of restated assets less certain liabilities and is payable only to the

extent that it exceeds ISR payable for the same period; any required payment of IMPAC is creditable against the excess of ISR over IMPAC of

the following ten years.

For modifying in the IMPAC law, that has been published at December 2006, and it Hill apply for the year 2007, the rate is reduce of 1.8 %

to 1.25%, and it’s can’t possible deduce the debts, the only base is the asset value that is determinate in base to law. This applies since of

provisional payments of the year 2007.

Grupo Bimbo, S.A.B. de C. V. determines consolidated ISR and IMPAC with its Mexican subsidiaries, in the proportion held of the voting stock

of its subsidiaries at year-end.









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Income taxes, tax on assets and statutory employee profit sharing in other countries

The foreign subsidiaries calculate income taxes on their individual results, in accordance with the regulations of each country. The subsidiaries

in the USA have authorization to file a consolidated income tax return.

The tax rates applicable in other countries where the Company operates and the period in which tax losses may be applied, are as follows:

Statutory Income Tax Rate (%) Period of

2006 2005 Expiration



Austria 25.0 34.0 (a)

Argentina 35.0 35.0 5

Brazil (b) 34.0 (b) 34.0 (c)

Colombia (d) 35.0 (d) 35.0 (e)

Costa Rica 30.0 30.0 3

Chile 17.0 17.0 (f)

China 33.0 (k) 5

El Salvador 25.0 25.0 (g)

Spain 35.0 35.0 15

United States of America (h) 35.0 (h) 35.0 20

Guatemala 31.0 31.0 (i)

Honduras 25.0 al 30.0 25.0 al 30.0 (g)

Hungary 16.0 18.0 (f)

Nicaragua 30.0 30.0 3 to 4

Peru 30.0 30.0 (j)

Czech Republic 26.0 28.0 5 to 7

Uruguay 30.0 30.0 3

Venezuela 34.0 34.0 3



(a) The losses generated after 1990 may be applied indefinitely but can only be offset each year up to an amount equal to 75% of the net

taxable profit for the year.

(b) The income tax rate in Brazil is 15%, and above certain amounts an additional 10% may be added, plus corporate benefit charges of

9%, whose calculation base is similar to the statutory income tax rate.

(c) Tax losses may be applied indefinitely, but may only be offset each year up to an amount equivalent to 30% of the net taxable profit for

the year.

(d) Includes a surcharge of 10% above the statutory rate to 35%

(e) In Colombia, the tax losses generated prior to December 31, 2002 may be applied over a five-year period, and those losses generated

after January 1, 2003 can be applied over an eight-year period, but are limited to 25% of the taxable profit for each year.

(f) No expiration date.

(g) Cannot be applied.

(h) This percentage must be increased by a percentage for state tax, which varies in every state of the US. The weighted statutory rate for

the Company in 2006 and 2005 was 38.3% and 38.2%, respectively.

(i) In Guatemala, tax losses may only be applied by newly created companies, for which reason this does not apply to the Company’s

operations.

(j) In Peru, the tax losses generated prior to 2005, so far the year in which generated tax profit, it has 4 years to can applied 100%, thee

generated prior to 2006 it can to opt for applied in four years or with limited term to 50% of the profit in each year.

(k) China operation was incorporated beginning 2006.









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Operations in Argentina, Colombia, Guatemala, Nicaragua and Venezuela are subject to minimal payments of ISR or IMPAC.

Operations in Brazil and Venezuela are subject to PTU payments according to certain rules based on accounting income. During 2006 and

2005 there were no PTU payments in such countries.

Items comprising the ISR provision, effective rate and deferred effects

a. The ISR and PTU consist of the following:

2006 2005

ISR:

Current $ 1,619 $ 1,589

Deferred 50 (63)

$ 1,669 $ 1,526



PTU:

Current $ 454 $ 425

Deferred (15) (18)

$ 439 $ 407



b. Following is a reconciliation of the statutory and effective ISR rates expressed as a percentage of income before ISR and PTU at

December 31, 2006 and 2005:

(%)

2006 2005

Statutory income tax rate 29.0 30.0

Inflationary effects (1.3) 0.8

Non deductible expenses and others 1.5 0.2

Difference in tax rates and currency applied by subsidiaries located in various tax jurisdictions (0.2) 0.3

Change in the valuation of tax loss carryforwards allowance 0.3 (0.3)

Effective tax rate 29.3 31.0



c. At December 31, 2006 and 2005, the main items comprising the net deferred income tax asset are as follows:

2006 2005

Advances to customers $ (22) $ (119)

Allowance for doubtful accounts (44) (33)

Inventories 110 202

Property, plant and equipment and intangibles 2,194 1,919

Other investments (27) (60)

Other reserves (806) (670)

Tax loss carryforwards (1,773) (1,750)

Valuation allowance 581 593

Recoverable tax on assets (245) (205)

Other items (12) –

Total assets, net $ (44) $ (123)









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The net deferred income tax asset has not been offset in the accompanying consolidated balance sheet as they result from different

taxable entities and tax authorities. Gross amounts are as follows:

2006 2005

Deferred income tax asset $ (1,257) $ (1,501)

Deferred income tax liability 1,213 1,378

Total asset, net $ (44) $ (123)

Deferred PTU liability $ 45 $ 60



d. Since the Company’s tax losses are mainly derived from its transactions with USA and different countries of the OLA, certain tax losses

will not be recoverable before their expiration date. Consequently, the Company has recognized a valuation allowance for part of such

tax items.

e. Tax loss carryforwards and recoverable IMPAC for which the deferred ISR asset and prepaid ISR, respectively, can be recovered subject

to certain conditions. Tax losses generated in countries for which an expiration date exists will expire from 2007 through 2024, with most

expiring as of 2020.



15. Extraordinary gain

The extraordinary gain during 2005 corresponds to the result of a tax lawsuit on the deductibility of PTU for 2003.



16. Commitments

Guaranties and/or guarantors

a. At December 31, 2006, in conjunction with certain subsidiaries, Grupo Bimbo, S. A. B. de C. V. with some subsidiaries companies has

guaranteed bonded issued letters of credit to guarantee commercial obligations and contingent risks related to the labor obligations of

certain subsidiaries. The value of such letters of credit, added to those issued to guarantee certain third-party obligations, derived from

long-term supply contracts signed by the Company, totals US$93 million, of which a liability of US$32 million has already been recorded

for employment benefits in the USA.

b. The Company has guaranteed certain contingent obligations of associated companies for the amount of US$23.5 million. Similarly, the

Company has issued guarantees for third party obligations derived from the sale of assets in prior years, for the amount of US$15

million.

Leasing commitments

a. The Company has long-term commitments under operating leases, principally for the facilities used to produce, distribute and sell its

products. These commitments vary from three to 14 years, with a renewal option of between one and five years. Certain leases require

the Company to pay all related expenses, such as taxes, maintenance and insurance for the term of the contracts. The total amount of

lease commitments is as follows:

Year



2007 $ 309

2008 268

2009 234

2010 291

2011 and posteriors 246

Total $ 1,348









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17. Information by geographical area

The following is the principal data by geographical area in which the Company operates for the years ended December 31, 2006 and 2005:

2006

Consolidation

Mexico USA OLA eliminations Total

Net sales $ 44,703 $ 15,218 $ 5,330 $ (1,619) $ 63,633

Operating income $ 5,546 $ 229 $ 39 $ 41 $ 5,857

Majority net income $ 3,169 $ 333 $ 13 $ 20 $ 3,535

Depreciation and amortization

(excluding amortization

of goodwill) $ 1,345 $ 333 $ 230 $ – $ 1,908

Operating income, plus depreciation

and amortization (EBITDA) $ 6,892 $ 562 $ 270 $ 41 $ 7,765

Total assets $ 29,334 $ 10,704 $ 4,232 $ (2,455) $ 41,815

Total liabilities $ 18,699 $ 1,999 $ 1,271 $ (3,877) $ 18,092



2005

Consolidation

Mexico USA OLA eliminations Total

Net sales $ 41,545 $ 14,102 $ 4,376 $ (1,381) $ 58,643

Operating income $ 5,261 $ 80 $ 56 $ 47 $ 5,444

Majority net income (loss) $ 2,754 $ 224 $ (23) $ 19 $ 2,975

Depreciation and amortization

(excluding amortization

of goodwill) $ 1,323 $ 448 $ 179 $ – $ 1,950

Operating income, plus depreciation

and amortization (EBITDA) $ 6,584 $ 528 $ 235 $ 47 $ 7,394

Total assets $ 27,056 $ 10,436 $ 3,406 $ (2,166) $ 38,732

Total liabilities $ 18,123 $ 2,367 $ 1,031 $ (3,546) $ 17,975



18. New accounting principles

When Mexican NIF Series A went into effect on January 1, 2006, which represents the Conceptual Framework described in Note 3, some of its

provisions created divergence with specific MFRS already in effect. Consequently, in March 2006, CINIF issued Interpretation Number 3 (INIF

No. 3), Initial Application of MFRS, establishing, that provisions set forth in specific MFRS that have not been amended should be followed

until their adaptation to the Conceptual Framework is complete. For example, in 2006, revenues, costs and expenses were not required to be

classified as ordinary and non-ordinary in the statement of income and other comprehensive income items in the statement of stockholders’

equity were not required to be reclassified into the statement of income at the time net assets that gave rise to them were realized.

CINIF continues to pursue its objective of moving towards a greater convergence with international financial reporting standards. To this end,

on December 22, 2006, it issued the following MFRS, which will become effective for fiscal years beginning on January 1, 2007:

NIF B-3, Statement of Income

NIF B-13, Events Occurring after the Date of the Financial Statements

NIF C-13, Related Parties

NIF D-6, Capitalization of Comprehensive Financing Result









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Some of the significant changes established by these standards are as follows:

NIF B-3, Statement of Income, sets the general standards for presenting and structuring the statement of income, the minimum content

requirements and general disclosure standards. Consistent with NIF A-5, Basic Elements of Financial Statements, NIF B-3 now classifies

revenues, costs and expenses, into ordinary and non-ordinary. Ordinary items (even if not frequent) are derived from the primary activities

representing and entity’s main source of revenues. Non-ordinary items are derived from activities other than those representing an entity’s

main source of revenues. Consequently, the classification of certain transactions as special or extraordinary, according to former Bulletin B-

3, was eliminated. As part of the structure of the statement of income, ordinary items should be presented first and, at a minimum, present

income or loss before income taxes, income or loss before discontinued operations, if any, and net income or loss. Presenting operating

income is neither required nor prohibited by NIF B-3. If presented, the line item other income (expense) is presented immediately before

operating income. Cost and expense items may be classified by function, by nature, or a combination of both. When classified by function,

gross income may be presented. Statutory employee profit sharing should now be presented as an ordinary expense (within other income

(expense) pursuant to INIF No. 4 issued in January 2007) and no longer presented within income tax. Special items mentioned in particular

MFRS should now be part of other income and expense and items formerly recognized as extraordinary should be part of non-ordinary

items.

NIF B-13, Events Occurring after the Date of the Financial Statements, requires that for (i) asset and liability restructurings and (ii) creditor

waivers to their right to demand payment in case the entity defaults on contractual obligations, occurring in the period between the date of the

financial statements and the date of their issuance, only disclosure needs to be included in a note to the financial statements while recognition

of these items should take place in the financial statements of the period in which such events take place. Previously, these events were

recognized in the financial statements instead in addition to their disclosure. NIF A-7, Presentation and Disclosure, in effect as of January

1, 2006, requires, among other things, that the date on which the issuance of the financial statements is authorized be disclosed as well as

the name of authorizing management officer(s) or body (bodies). NIF B-13 establishes that if the entity owners or others are empowered to

modify the financial statements, such fact should be disclosed. Subsequent approval of the financial statements by the stockholders or other

body does not change the subsequent period, which ends when issuance of the financial statements is authorized.

NIF C-13, Related Parties, broadens the concept “related parties” to include a) the overall business in which the reporting entity participates;

b) close family members of key or relevant officers; and c) any fund created in connection with a labor-related compensation plan. NIF C-

13 requires the following disclosures: a) the relationship between the controlling and subsidiary entities, regardless of whether or not any

intercompany transactions took place during the period; b) that the terms and conditions of consideration paid or received in transactions

carried out between related parties are equivalent to those of similar transactions carried out between independent parties and the reporting

entity, only if sufficient evidence exists; c) benefits granted to key or relevant officers; and d) name of the direct controlling company and,

if different, name of the ultimate controlling company. Notes to comparative financial statements of prior periods should disclose the new

provisions of NIF C-13.

NIF D-6, Capitalization of Comprehensive Financing Result, establishes general capitalization standards that include specific accounting for

financing in domestic and foreign currencies or a combination of both. Some of these standards include: a) mandatory capitalization of

comprehensive financing cost (“RIF”) directly attributable to the acquisition of qualifying assets; b) in the instance financing in domestic

currency is used to acquire assets, yields obtained from temporary investments before the capital expenditure is made are excluded from the

amount capitalized; c) exchange gains or losses from foreign currency financing should be capitalized considering the valuation of associated

hedging instruments, if any; d) a methodology to calculate capitalizable RIF relating to funds from generic financing; e) regarding land, RIF

may be capitalized if development is taking place; and f) conditions that must be met to capitalize RIF, and rules indicating when RIF should

no longer be capitalized. The entity may decide on whether to apply provisions of NIF D-6 for periods ending before January 1, 2007, in

connection with assets that are in the process of being acquired at the time this NIF goes into effect.

The Company does not expect significant effects in its financial statements upon the adoption of these new standards.

19. Financial statements issuance authorization

The issuance of these consolidated financial statements was authorized by Lic. Daniel Servitje Montull, General Director of the Company.

These consolidated financial statements are subject to the approval of the Board of Directors and the General Stockholders’ Meeting, who

may modify the financial statements, based on provisions set forth by the General Corporate Law.









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Investor Relations Corporate Affairs



Armando Giner Martha Eugenia Hernández

Phone: (52 55) 5268-6924 Phone: (52 55) 5268-6780

Fax (52 55) 5268-6697 Fax (52 55) 5268-6833

aginer@grupobimbo.com mhernmor@grupobimbo.com





Andrea Amozurrutia Mónica Bretón

Phone: (52 55) 5268-6962 Phone: (52 55) 5268-6585

Fax (52 55) 5268-6697 Fax (52 55) 5268-6833

aamozurrutia@grupobimbo.com mbretsal@grupobimbo.com





relaciones_institucionales@grupobimbo.com









Website Corporate Website

http://ir.grupobimbo.com www.grupobimbo.com









Ticker Symbol

Mexican Stock Exchange

design: signi.com.mx









production • finance • planning • logistics • corporate affairs • sales • distribution • human relations • management • development • operations • marketing









Produce and market food products, develop the value of our brands. Commiting

OURMISSION









ourselves to be a Company:

◆ Highly productive and people oriented.



◆ Innovative, competitive and strongly focused towards satisfying our customers



and consumers.

◆ International leader in the bakery industry, with long-term vision.

www.grupobimbo.com



Prolongación Paseo de la Reforma No. 1000

Col. Peña Blanca Santa Fé

Delegación Álvaro Obregón

México D.F., 01210

Phone: (52 55) 5268-6600