FEMSA Reports Solid Top Line in 3Q06 Growth According to Plan for Full Year
Monterrey, Mexico, October 27, 2006 Fomento Económico Mexicano, S.A. de C.V. ("FEMSA") today announced its operational and financial results as of the third quarter of 2006 and for the nine months ended September 30, 2006.
Third Quarter 2006 Highlights
FEMSA
- Consolidated total revenues increased 13.9%, reaching Ps. 32.152 billion. However, continued high commodity prices put pressure on the gross margin.
- Net majority income increased 11.3%, reaching Ps. 1.929 billion.
- New cooperative framework with The Coca-Cola Company focused on the sustainable growth of carbonated and non-carbonated beverages, horizontal growth of Coca-Cola FEMSA, and long-term perspective in relationship economics.
- Significantly increasing our stake in Coca-Cola FEMSA, by acquiring 8% of its equity from The Coca-Cola Company; transaction amounts to US$ 427.4 million and will take place on November 3, 2006.
Business Units
- FEMSA Cerveza revenues (excluding Kaiser) increased 8.1%. Domestic sales volume grew 4.2% and export sales volume increased 16.7%.
- Coca-Cola FEMSA total revenues increased 8.6%, driven by all regions. Pricing pressure in the Valley of Mexico eased sequentially.
- Oxxo increased its revenues by 18.5%, driven by 116 net new stores and 6.0% growth in same-store sales. There are now 4,482 Oxxo stores throughout Mexico.
"Results across our business units again showed robust growth trends, and we keep developing new ways to satisfy the demand of our growing consumer base. We continue to execute our long-term business strategy, and are encouraged by the results.
Our new cooperation framework with The Coca-Cola Company demonstrates the constructive relationship we continue to build with them and underscores our willingness to jointly look for value-creating alternatives from a potentially larger revenue pool. We will keep pursuing opportunities that seek to fulfill the growth potential that Coca-Cola FEMSA can achieve by transferring its strong and distinctive operating model and capabilities to other territories," stated Jose Antonio Fernandez, Chairman of FEMSA and Coca-Cola FEMSA.
To obtain the full text of this earnings release, please visit our Investor Relations website at 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 and important beer exporter to the United States; and Oxxo, the largest and fastest growing convenience store chain in Mexico with over 4,000 stores.