FEMSA Delivers Double-Digit Growth in 4Q08 and 2008
Monterrey, Mexico, February 26, 2009 - Fomento Económico Mexicano, S.A.B. de C.V. ("FEMSA") announced today its operational and financial results for the fourth quarter and full year 2008.
Fourth Quarter 2008 Highlights:
- Consolidated total revenues grew 15.4% and income from operations grew 15.0%. In spite of the increasingly challenging economic environment and a more cautious consumer, FEMSA delivered robust growth in operating income driven by strong results at Coca-Cola FEMSA and FEMSA Comercio that more than offset the mixed results at FEMSA Cerveza.
Coca-Cola FEMSA total revenues and income from operations increased 23.9% and 25.7%, respectively. Driven by double-digit income from operations growth in Mercosur and Latincentro and robust growth in Mexico.
FEMSA Cerveza total revenues increased 8.6%. In an environment of healthy pricing and lapping solid 6.0% volume growth in 4Q07, sales volume decreased 0.7% in Mexico. In Brazil, volumes declined 3.5% having grown 9.3% in 4Q07, and as a result of unfavorable weather conditions. Export sales volume grew a robust 12.3%, despite the decline in the overall US import category. Continued raw material pressures and sustained marketing investments behind our brands across our operations resulted in a 9.3% decrease in income from operations.
FEMSA Comercio continued its pace of strong growth and margin expansion. Income from operations increased over 27.0% for the 8th consecutive quarter, resulting in an operating margin expansion of 110 basis points to reach 9.3%.
2008 Full Year Highlights:
Consolidated total revenues increased 13.9%. All operating units contributed to this top-line growth.
Consolidated income from operations increased 14.9%, driven by double-digit growth at Coca-Cola FEMSA and FEMSA Comercio.
Coca-Cola FEMSA total revenue and income from operations increased 19.8% and 19.2%, respectively. Strong growth in Mercosur, supported by the integration of Remil, and by Latincentro, as well as more tempered growth in Mexico drove these results.
FEMSA Cerveza total revenues increased 7.1%, mainly as a result of increases in average price per hectoliter across our main operations in local currencies. Income from operations decreased 1.9%, reflecting continued pressure on raw materials and sustained investment in our brands.
FEMSA Comercio income from operations increased 32.6%, reaching an all-time-high operating margin of 6.5% and resulting in a 100 basis point expansion. For the 7th consecutive year, income from operations increased over 25%, driven by the opening of 811 new stores during the year as well as by stable same store sales.
José Antonio Fernández, Chairman and CEO of FEMSA, commented: "2008 was a challenging year for businesses across geographies and industries, and yet, we were able to deliver double digit growth in revenues and income from operations. Over the past decade, our results underscore the strengths of an integrated beverage platform and continuous improvement driven at every stage of the value chain. During the year, every one of our business units advanced in the execution of our strategy, and today our competitive position and our skill set are stronger than ever before.
As we enter another tough year, the business environment continues to soften. Our products are defensive in nature and we expect the impact of the downturn to be relatively moderate, but clearly we are not immune and our consumers are going through difficult times. However, in terms of the business drivers that are within our control, we are taking broad measures to rationalize costs, expenses and investments at every level of the organization, so that we are in a good position to weather the storm and come out in even better shape than we are today".
www.femsa.com/investor under the Financial Reports section
This report may contain certain forward-looking statements concerning our future performance that should be considered as good faith estimates made by us. These forward-looking statements reflect management's expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which could materially impact our actual performance.
FEMSA is the leading beverage company in Latin America. It controls an integrated beverage platform that comprises Coca-Cola FEMSA, the largest Coca-Cola bottler in the region; FEMSA Cerveza, one of the leading brewers in Mexico, with presence in Brazil, and an important beer exporter to the United States and other countries; and Oxxo, the largest and fastest growing convenience store chain in Mexico with over 6,300 stores.