SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2017
FOMENTO ECONÓMICO MEXICANO, S.A.B. DE C.V.
(Exact name of Registrant as specified in its charter)
Mexican Economic Development, Inc.
(Translation of Registrant’s name into English)
United Mexican States
(Jurisdiction of incorporation or organization)
General Anaya No. 601 Pte.
Colonia Bella Vista
Monterrey, Nuevo León 64410
México
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _______
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _______
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_____________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.
| FOMENTO ECONÓMICO MEXICANO, S.A. DE C.V. | ||
| By: | /s/ Eduardo Padilla | |
| Eduardo Padilla | ||
| Chief Financial and Corporate Officer | ||
| Date: February 27, 2017 | ||
Exhibit 99.1
FEMSA Announces Fourth Quarter
and Full Year 2016 Results
Monterrey, Mexico, February 27, 2017 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) (NYSE: FMX; BMV: FEMSAUBD) announced today its operational and financial results for the fourth quarter and full year 2016.
Fourth Quarter 2016 Highlights:
| · | FEMSA consolidated total revenues increased 22.8% and income from operations grew 9.8% compared to the fourth quarter of 2015, reflecting solid growth across all operations. On an organic basis,1 total revenues increased 20.1% and income from operations grew 5.9%. |
| · | FEMSA Comercio – Retail Division achieved growth in total revenues of 17.3% and income from operations of 10.2% compared to the fourth quarter of 2015, reflecting the opening of 530 net new stores and an 8.6% increase in OXXO’s same-store sales. |
| · | FEMSA Comercio – Health Division total revenues grew 32.1% and income from operations increased 19.8% compared to the fourth quarter of 2015, reflecting growth in the store base and a 22.5% increase in same-store sales, as well as positive foreign exchange translation effects from our South American operations. |
| · | FEMSA Comercio – Fuel Division total revenues increased 31.6% and income from operations increased 89.7% compared to the fourth quarter of 2015, reflecting growth in the number of stations and a 12.2% increase in same-station sales. |
| · | Coca-Cola FEMSA total revenues increased 21.6% and income from operations grew 7.8% compared to the fourth quarter of 2015, reflecting the positive translation effect resulting from the appreciation of the Brazilian real and the Colombian peso, and despite the depreciation of the Venezuelan bolivar and the Argentine peso; all as compared to the Mexican peso. On a currency-neutral basis, excluding Venezuela and the non-comparable effect of the integration of Vonpar in the Brazilian operation, total revenues grew 3.7% and income from operations decreased 8.3%. |
1 Excludes non-comparable results and significant acquisitions in the last twelve months.
2016 Full Year Highlights:
| · | FEMSA consolidated total revenues increased 28.2% and income from operations grew 10.9% compared to 2015, mainly driven by the integration of Socofar in FEMSA Comercio’s Health Division and by solid growth across all operations. On an organic basis,1 total revenues increased 16.6% and income from operations grew 6.3%. |
| · | FEMSA Comercio – Retail Division total revenues and income from operations increased 14.4% and 11.6%, each as compared to 2015, reflecting new store openings and a 7.0% increase in OXXO’s same-store sales. |
| · | FEMSA Comercio – Health Division total revenues and income from operations amounted to Ps. 43,411 million and Ps. 1,572 million respectively, driven by the integration of Socofar and 220 net new store openings across territories. Same-store sales for the Division rose 22.4%. On an organic basis,1 total revenues increased 24.0% and income from operations grew 5.8%. |
| · | FEMSA Comercio – Fuel Division total revenues increased 54.6% and income from operations grew 22.2% compared to 2015, reflecting growth in the number of stations and a 7.6% increase in same-station sales. |
| · | Coca-Cola FEMSA’s total revenues and income from operations increased 16.6% and 5.6% compared to 2015. On a currency-neutral basis, excluding Venezuela and the non-comparable effect of the integration of Vonpar in our Brazilian operation, total revenues and income from operations grew 6.6% and 4.0%, respectively. |
| · | Ordinary dividend of Ps. 8,636 million proposed by FEMSA’s Board of Directors, to be paid in 2017 subject to approval at the annual shareholders meeting to be held on March 16, 2017. |
Carlos Salazar Lomelín, FEMSA’s CEO, commented: “During the fourth quarter, FEMSA Comercio again delivered robust growth across divisions, increasing revenues by 22 percent versus the comparable period of last year. At the Retail Division, same-store sales at OXXO accelerated relative to the third quarter and increased 8.6 percent, on top of a similar growth rate last year. At the Health Division revenue growth was also strong, as a solid performance in our South American operations provided cover for the intense integration and infrastructure work we are carrying out in Mexico. In addition, the Fuel Division again saw double-digit growth in same-station sales, as well as healthy price-driven improvements in profitability.
1 Excludes non-comparable results and significant acquisitions in the last twelve months.
| 2 | February 27, 2017 |
At Coca-Cola FEMSA, during the fourth quarter we saw a continuation of the trends from the third quarter, with Mexico still benefiting from a healthy consumer that supported moderate volume and transactions growth with robust pricing. However, most of our markets in South America continued to face adverse consumer and macroeconomic environments, and we saw raw material cost pressures across territories, particularly with regards to sugar. However, we did benefit from the positive currency translation effects from many of these markets relative to the Mexican peso.
Looking ahead to 2017, we still see a resilient consumer environment in our key Mexico market, but there is more uncertainty than usual largely driven by external dynamics, including the expectation for higher inflation, and we must exercise caution as we continue to execute our growth strategy. We are encouraged by the strength of our business platform, by the skill and experience of our team, and by the reliably defensive nature of our business. Beyond Mexico, we are optimistic that as the year progresses, market dynamics should improve in several of our markets, particularly Brazil. So, it should be an interesting year. As always, we look forward to the challenge.”
FEMSA Consolidated
Total revenues increased 22.8% to Ps. 109,907 million in 4Q16 compared to 4Q15, reflecting solid growth across all operations. On an organic basis,1 total revenues grew 20.1% compared to 4Q15.
For the full year of 2016, total revenues increased 28.2% to Ps. 399,507 million compared to 2015, mainly driven by the integration of Socofar in FEMSA Comercio’s Health Division and by solid growth across all operations. On an organic basis,1 total revenues for the full year of 2016 increased 16.6% compared to the same period in 2015.
Gross profit increased 17.7% to Ps. 41,999 million in 4Q16 compared to 4Q15. Gross margin decreased 170 basis points to 38.2% of total revenues compared to 4Q15, reflecting a contraction in Coca-Cola FEMSA’s gross margin and the growth of lower margin businesses in FEMSA Comercio.
For the full year of 2016, gross profit increased 20.3% to Ps. 148,204 million compared to 2015. Gross margin decreased 240 basis points to 37.1% of total revenues compared to the same period in 2015, reflecting again a contraction in Coca-Cola FEMSA’s gross margin and the incorporation and growth of lower margin businesses in FEMSA Comercio.
Income from operations increased 9.8% to Ps. 11,678 million in 4Q16 compared to 4Q15. On an organic basis,1 income from operations increased 5.9% compared to the same period in 2015. Consolidated operating margin decreased 130 basis points to 10.6% of total revenues in 4Q16 compared to 4Q15, driven by a margin contraction across several of our businesses.
For the full year of 2016, income from operations increased 10.9% to Ps. 37,427 million compared to 2015. On an organic basis,1 income from operations increased 6.3%. Our consolidated operating margin decreased 140 basis points to 9.4% as a percentage of total revenues as compared to 2015, driven by an operating margin contraction across businesses and the integration and faster growth of FEMSA Comercio’s divisions, whose lower margins tend to compress FEMSA’s consolidated margins over time.
Our effective income tax rate was 31.6% in 4Q16 compared to 29.4% in 4Q15.
1 Excludes non-comparable results and significant acquisitions in the last twelve months.
| 3 | February 27, 2017 |
Net consolidated income increased 20.9% to Ps. 8,828 million in 4Q16 compared to 4Q15, driven mainly by growth in FEMSA’s income from operations and by a foreign exchange gain related to FEMSA’s US dollar-denominated cash position, as impacted by the depreciation of the Mexican peso during the quarter.
For the full year of 2016, net consolidated income increased 16.8% to Ps. 27,175 million compared to 2015, also reflecting growth in our income from operations and lower financing expenses, which more than offset higher non-operating expenses.
Net majority income in 4Q16 was Ps. 1.86 per FEMSA Unit2. Net majority income per FEMSA ADS was US$ 0.90 for the fourth quarter of 2016. For the full year of 2016, net majority income per FEMSA Unit2 was Ps. 5.91 (US$ 2.87 per ADS).
Capital expenditures amounted to Ps. 8,378 million in 4Q16, reflecting higher investments in most operations.
Our consolidated balance sheet as of December 31, 2016 recorded a cash balance of Ps. 43,757 million (US$ 2,122 million), an increase of Ps. 14,342 million (US$ 696 million) compared to December 31, 2015. Short-term debt was Ps. 7,281 million (US$ 353 million), while long-term debt was Ps. 123,494 million (US$ 5,990 million). Our consolidated net debt balance was Ps. 87,018 million (US$ 4,221 million).
FEMSA Comercio – Retail Division
Total revenues increased 17.3% to Ps. 36,493 million in 4Q16 compared to 4Q15, reflecting the opening of 530 net new OXXO stores in the quarter to reach 1,164 total net new store openings for the last twelve months. As of December 31, 2016, FEMSA Comercio’s Retail Division had a total of 15,225 OXXO stores. OXXO’s same-store sales increased an average of 8.6% for the fourth quarter of 2016 over 4Q15. This performance was driven by a 7.0% increase in average customer ticket and an increase of 1.5% in store traffic.
For the full year of 2016, total revenues increased 14.4% to reach Ps. 137,139 million compared to 2015. OXXO’s same-store sales increased an average of 7.0% compared to 2015, driven by a 6.8% increase in average customer ticket and a slight increase of 0.2% in store traffic.
Gross profit increased by 18.3% in 4Q16 compared to 4Q15, resulting in a gross margin expansion of 40 basis points to 40.6% of total revenues. This expansion mainly reflects healthy trends in our commercial income activity and the sustained growth of the services category, including income from financial services. For the full year of 2016, gross margin expanded by 80 basis points to 37.2% of total revenues compared to 2015.
Income from operations increased 10.2% to Ps. 4,083 million in 4Q16 over 4Q15. Operating expenses increased 21.8% to Ps. 10,734 million in 4Q16 compared to 4Q15, above revenues, mainly reflecting: i) the tough comparison base in 4Q15, when retail operating margin expanded above trend, ii) the recent pick-up in electricity tariffs, and iii) our initiative to improve the compensation structure of key in-store personnel. Operating margin decreased 70 basis points to 11.2% of total revenues in 4Q16 compared to 4Q15.
For the full year of 2016, income from operations increased 11.6% to Ps. 11,485 million compared to 2015, resulting in an operating margin of 8.4%, which represents a contraction of 20 basis points from the prior year.
2 FEMSA Units consist of FEMSA BD Units and FEMSA B Units. Each FEMSA BD Unit is comprised of one Series B Share, two Series D-B Shares and two Series D-L Shares. Each FEMSA B Unit is comprised of five Series B Shares. The number of FEMSA Units outstanding as of December 31, 2016 was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided by 5.
| 4 | February 27, 2017 |
FEMSA Comercio – Health Division
Total revenues increased 32.1% to Ps. 12,293 million in 4Q16 compared to 4Q15 mainly driven by solid growth in our South American operations and continued store expansion across our territories, along with a translation benefit from the appreciation of the Chilean and Colombian pesos. As of December 31, 2016 FEMSA Comercio’s Health Division had a total of 2,120 points of sale across our territories, reflecting the addition of 19 net new stores in the quarter. Same-store sales for drugstores increased by an average of 22.5% in 4Q16 as compared to 4Q15, reflecting strong growth trends in South America that more than offset softness in Mexico, where we continue to experience pressure in oil-heavy southeastern markets as well as increased competitive dynamics in certain regions. This comparable growth rate also includes the benefit of currency translation, as described above.
For the full year of 2016, total revenues amounted to Ps. 43,411 million compared to Ps. 13,053 million in 2015. On an organic basis,1 total revenues for the full year of 2016 increased 24.0% compared to the same period in 2015. Same-store sales for drugstores increased an average of 22.4% compared to 2015.
Gross profit increased by 36.1% in 4Q16 compared to 4Q15, resulting in a gross margin expansion of 90 basis points to 30.8% of total revenues, reflecting higher structural gross margins at the South American operations. For the full year of 2016, gross margin expanded by 100 basis points to 29.3% of total revenues compared to 2015.
Income from operations increased 19.8% to Ps. 599 million in 4Q16 over 4Q15. Operating expenses increased 39.6% to Ps. 3,188 million in 4Q16 compared to 4Q15. Operating margin contracted 50 basis points to 4.9% of total revenues in 4Q16 compared to 4Q15, reflecting: i) higher expenses in Mexico as we continue to build infrastructure and prepare for further growth while we integrate our four legacy drugstore operations into a single platform; ii) improvements to the incentive structure for our in-store personnel; and iii) certain one-time expenses in South America.
For the full year of 2016, income from operations increased 157.7% to Ps. 1,572 million compared to 2015, resulting in an operating margin of 3.6%, which represents a contraction of 110 basis points from the prior year. On an organic basis,1 income from operations increased 5.8% compared to 2015.
FEMSA Comercio – Fuel Division
Total revenues increased 31.6% to Ps. 8,054 million in 4Q16 compared to 4Q15, reflecting the addition of 34 net new OXXO GAS stations in the quarter to reach 75 total net new stations for the last twelve months. As of December 31, 2016, FEMSA Comercio’s Fuel Division had a total of 382 OXXO GAS service stations. Same-station sales increased an average of 12.2% in 4Q16 over 4Q15, as average volume increased 7.8% while the average price per liter increased by 4.1%, reflecting national price increases instituted during the second half of 2016.
For the full year of 2016, total revenues increased 54.6% to Ps. 28,616 million compared to the ten-month period from March to December of 2015. Same-station sales increased an average of 7.6% compared to the comparable period in 2015, driven by a 6.9% increase in average volume and a slight increase of 0.7% in average price per liter.
1 Excludes non-comparable results and significant acquisitions in the last twelve months.
| 5 | February 27, 2017 |
Gross profit increased by 33.8% in 4Q16 compared to 4Q15, resulting in a gross margin expansion of 20 basis points to 7.9% of total revenues, reflecting the benefit of price increases and a better geographic mix. For the full year of 2016, gross profit increased by 58.3% compared to the ten-month period from March to December of 2015. Gross margin expanded by 20 basis points to 7.9% of total revenues compared to the comparable period in 2015, for the reasons mentioned above.
Income from operations increased 89.7% to Ps. 74 million in 4Q16 over 4Q15. Operating expenses increased 28.8% to Ps. 559 million in 4Q16 compared to 4Q15. Operating margin expanded 30 basis points to 0.9% of total revenues in 4Q16 compared to 4Q15, reflecting the benefit of price increases as well as higher operating leverage.
For the full year of 2016, income from operations increased 22.2% to Ps. 253 million compared to the ten-month period from March to December of 2015, resulting in an operating margin of 0.9%, which represents a contraction of 20 basis points from the comparable period in 2015, reflecting the ongoing expansion of our infrastructure to accommodate rapid growth across more territories, as well as higher regulation costs.
Soft Drinks – Coca-Cola FEMSA
Coca-Cola FEMSA’s financial results and discussion thereof are incorporated by reference from Coca-Cola FEMSA’s press release, which is attached to this press release or may be accessed by visiting www.coca-colafemsa.com.
Recent Developments
| · | On December 6, 2016, 2016 Coca-Cola FEMSA announced that its Brazilian subsidiary, Spal Industria Brasileira de Bebidas S.A., had successfully closed the agreement to acquire Vonpar. |
|
CONFERENCE CALL INFORMATION:
Our Fourth Quarter and Full Year 2016 Conference Call will be held on: Monday, February 27, 2016, 11:00 AM Eastern Time (10:00 AM Mexico City Time). To participate in the conference call, please dial: Domestic US: (888) 401 4669; International: (719) 457 2621; Conference Id: 6211176. The conference call will be webcast live through streaming audio. For details please visit www.femsa.com/investor.
If you are unable to participate live, the conference call audio will be available on http://ir.FEMSA.com/results.cfm. |
FEMSA is a leading company that participates in the beverage industry through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume; and in the beer industry, through its ownership of the second largest equity stake in Heineken, one of the world's leading brewers with operations in over 70 countries. In the retail industry it participates through FEMSA Comercio, comprising a Retail Division operating various small-format store chains including OXXO, a Fuel Division, operating the OXXO GAS chain of retail service stations, and a Health Division, which includes drugstores and related operations. Additionally, through its Strategic Businesses unit, it provides logistics, point-of-sale refrigeration solutions and plastics solutions to FEMSA's business units and third-party clients.
| 6 | February 27, 2017 |
The translations of Mexican pesos into US dollars are included solely for the convenience of the reader, using the noon buying rate for Mexican pesos as published by the Federal Reserve Bank of New York on December 30, 2016, which was 20.6170 Mexican pesos per US dollar.
FORWARD-LOOKING STATEMENTS
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.
Seven pages of tables and Coca-Cola FEMSA’s press release to follow.
FEMSA
Consolidated Income Statement
Millions of Pesos
| For the fourth quarter of: | For the twelve months of: | |||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | % of rev. | 2015 | % of rev. | % Var. | % Org (A) | 2016 | % of rev. | 2015 | % of rev. | % Var. | % Org (A) | |||||||||||||||||||||||||||||||||||||
| Total revenues | 109,907 | 100.0 | 89,469 | 100.0 | 22.8 | 20.1 | 399,507 | 100.0 | 311,589 | 100.0 | 28.2 | 16.6 | ||||||||||||||||||||||||||||||||||||
| Cost of sales | 67,908 | 61.8 | 53,774 | 60.1 | 26.3 | 251,303 | 62.9 | 188,410 | 60.5 | 33.4 | ||||||||||||||||||||||||||||||||||||||
| Gross profit | 41,999 | 38.2 | 35,695 | 39.9 | 17.7 | 148,204 | 37.1 | 123,179 | 39.5 | 20.3 | ||||||||||||||||||||||||||||||||||||||
| Administrative expenses | 3,849 | 3.5 | 3,473 | 3.9 | 10.8 | 14,730 | 3.7 | 11,705 | 3.8 | 25.8 | ||||||||||||||||||||||||||||||||||||||
| Selling expenses | 25,997 | 23.7 | 21,234 | 23.7 | 22.4 | 95,547 | 23.9 | 76,375 | 24.5 | 25.1 | ||||||||||||||||||||||||||||||||||||||
| Other operating expenses (income), net (1) | 475 | 0.4 | 350 | 0.4 | 35.7 | 500 | 0.1 | 1,364 | 0.4 | (63.3 | ) | |||||||||||||||||||||||||||||||||||||
| Income from operations(2) | 11,678 | 10.6 | 10,638 | 11.9 | 9.8 | 5.9 | 37,427 | 9.4 | 33,735 | 10.8 | 10.9 | 6.3 | ||||||||||||||||||||||||||||||||||||
| Other non-operating expenses (income) | 645 | 460 | 40.2 | 4,208 | 954 | N.S. | ||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 2,648 | 2,523 | 5.0 | 9,646 | 7,777 | 24.0 | ||||||||||||||||||||||||||||||||||||||||||
| Interest income | 386 | 217 | 77.9 | 1,299 | 1,024 | 26.9 | ||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 2,262 | 2,306 | (1.9 | ) | 8,347 | 6,753 | 23.6 | |||||||||||||||||||||||||||||||||||||||||
| Foreign exchange loss (gain) | (1,151 | ) | (69 | ) | N.S. | (1,131 | ) | 1,193 | (194.8 | ) | ||||||||||||||||||||||||||||||||||||||
| Other financial expenses (income), net. | (655 | ) | (87 | ) | N.S. | (2,597 | ) | (328 | ) | N.S. | ||||||||||||||||||||||||||||||||||||||
| Financing expenses, net | 456 | 2,150 | (78.8 | ) | 4,619 | 7,618 | (39.4 | ) | ||||||||||||||||||||||||||||||||||||||||
| Income before income tax and participation in associates results | 10,577 | 8,028 | 31.8 | 28,600 | 25,163 | 13.7 | ||||||||||||||||||||||||||||||||||||||||||
| Income tax | 3,339 | 2,364 | 41.3 | 7,888 | 7,932 | (0.6 | ) | |||||||||||||||||||||||||||||||||||||||||
| Participation in associates results(3) | 1,590 | 1,640 | (3.0 | ) | 6,463 | 6,045 | 6.9 | |||||||||||||||||||||||||||||||||||||||||
| Net consolidated income | 8,828 | 7,304 | 20.9 | 27,175 | 23,276 | 16.8 | ||||||||||||||||||||||||||||||||||||||||||
| Net majority income | 6,672 | 5,436 | 22.7 | 21,140 | 17,683 | 19.5 | ||||||||||||||||||||||||||||||||||||||||||
| Net minority income | 2,156 | 1,868 | 15.4 | 6,035 | 5,593 | 7.9 | ||||||||||||||||||||||||||||||||||||||||||
| 2016 | % of rev. | 2015 | % of rev. | % Var. | % Org (A) | 2016 | % of rev. | 2015 | % of rev. | % Var. | % Org (A) | |||||||||||||||||||||||||||||||||||||
| Operative Cash Flow & CAPEX | ||||||||||||||||||||||||||||||||||||||||||||||||
| Income from operations | 11,678 | 10.6 | 10,638 | 11.9 | 9.8 | 5.9 | 37,427 | 9.4 | 33,735 | 10.8 | 10.9 | 6.3 | ||||||||||||||||||||||||||||||||||||
| Depreciation | 3,192 | 2.9 | 2,580 | 2.9 | 23.7 | 12,076 | 3.0 | 9,757 | 3.1 | 23.8 | ||||||||||||||||||||||||||||||||||||||
| Amortization & other non-cash charges | 2,322 | 2.1 | 843 | 0.9 | 175.4 | 5,484 | 1.4 | 3,134 | 1.1 | 75.0 | ||||||||||||||||||||||||||||||||||||||
| Operative Cash Flow (EBITDA) | 17,192 | 15.6 | 14,061 | 15.7 | 22.3 | 19.1 | 54,987 | 13.8 | 46,626 | 15.0 | 17.9 | 13.2 | ||||||||||||||||||||||||||||||||||||
| CAPEX | 8,378 | 7,008 | 19.6 | 22,155 | 18,885 | 17.3 | ||||||||||||||||||||||||||||||||||||||||||
| Financial Ratios | 2016 | 2015 | Var. p.p. | |||||||||||||||||||||||||||||||||||||||||||||
| Liquidity(4) | 1.37 | 1.33 | 0.04 | |||||||||||||||||||||||||||||||||||||||||||||
| Interest coverage(5) | 7.60 | 6.10 | 1.50 | |||||||||||||||||||||||||||||||||||||||||||||
| Leverage(6) | 0.91 | 0.69 | 0.21 | |||||||||||||||||||||||||||||||||||||||||||||
| Capitalization(7) | 31.92 | % | 26.88 | % | 5.04 | |||||||||||||||||||||||||||||||||||||||||||
(A) % Org. represents the variation in a given measure excluding the effects of significant mergers and acquisitions in the last twelve months.
(1) Other operating expenses (income), net = other operating expenses (income) +(-) equity method from operated associates.
(2) Income from operations = gross profit - administrative and selling expenses - other operating expenses (income), net.
(3) Mainly represents the equity method participation in Heineken´s results, net.
(4) Total current assets / total current liabilities.
(5) Income from operations + depreciation + amortization & other / interest expense, net.
(6) Total liabilities / total stockholders' equity.
(7) Total debt / long-term debt + stockholders' equity.
Total debt = short-term bank loans + current maturities of long-term debt + long-term bank loans.
| 7 | February 27, 2017 |
FEMSA
Consolidated Balance Sheet
Millions of Pesos
| ASSETS | Dec-16 | Dec-15 | % Var. | |||||||||
| Cash and cash equivalents | 43,757 | 29,415 | 48.8 | |||||||||
| Accounts receivable | 26,222 | 19,906 | 31.7 | |||||||||
| Inventories | 31,932 | 24,680 | 29.4 | |||||||||
| Other current assets | 16,040 | 12,722 | 26.1 | |||||||||
| Total current assets | 117,951 | 86,723 | 36.0 | |||||||||
| Investments in shares | 128,601 | 111,731 | 15.1 | |||||||||
| Property, plant and equipment, net | 102,223 | 80,296 | 27.3 | |||||||||
| Intangible assets (1) | 153,268 | 108,341 | 41.5 | |||||||||
| Other assets | 43,580 | 22,241 | 95.9 | |||||||||
| TOTAL ASSETS | 545,623 | 409,332 | 33.3 | |||||||||
| LIABILITIES & STOCKHOLDERS´ EQUITY | ||||||||||||
| Bank loans | 1,912 | 2,239 | (14.6 | ) | ||||||||
| Current maturities of long-term debt | 5,369 | 3,656 | 46.9 | |||||||||
| Interest payable | 976 | 597 | 63.5 | |||||||||
| Operating liabilities | 78,032 | 58,854 | 32.6 | |||||||||
| Total current liabilities | 86,289 | 65,346 | 32.0 | |||||||||
| Long-term debt (2) | 123,494 | 80,856 | 52.7 | |||||||||
| Labor liabilities | 4,447 | 4,229 | 5.2 | |||||||||
| Other liabilities | 45,223 | 17,045 | 165.3 | |||||||||
| Total liabilities | 259,453 | 167,476 | 54.9 | |||||||||
| Total stockholders’ equity | 286,170 | 241,856 | 18.3 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 545,623 | 409,332 | 33.3 | |||||||||
| December 31, 2016 | ||||||||
| DEBT MIX (2) | % of Total | Average Rate | ||||||
| Denominated in: | ||||||||
| Mexican pesos | 36.4 | % | 7.4 | % | ||||
| U.S. Dollars | 1.6 | % | 5.2 | % | ||||
| Euros | 16.4 | % | 1.8 | % | ||||
| Colombian pesos | 2.0 | % | 9.5 | % | ||||
| Argentine pesos | 0.5 | % | 31.7 | % | ||||
| Brazilian reais | 39.3 | % | 12.6 | % | ||||
| Chilean pesos | 3.8 | % | 6.3 | % | ||||
| Total debt | 100 | % | 8.6 | % | ||||
| Fixed rate(2) | 68.6 | % | ||||||
| Variable rate(2) | 31.4 | % | ||||||
| % of Total Debt | 2017 | 2018 | 2019 | 2020 | 2021 | 2022+ | ||||||||||||||||||
| DEBT MATURITY PROFILE | 4.9 | % | 18.4 | % | 6.4 | % | 8.6 | % | 5.8 | % | 55.9 | % | ||||||||||||
(1) Includes mainly the intangible assets generated by acquisitions.
(2) Includes the effect of derivative financial instruments on long-term debt.
| 8 | February 27, 2017 |
FEMSA Comercio- Retail Division (1)
Results of Operations
Millions of Pesos
| For the fourth quarter of: | For the twelve months of: | |||||||||||||||||||||||||||||||||||||||
| 2016 | % of rev. | 2015 | % of rev. | % Var. | 2016 | % of rev. | 2015 | % of rev. | % Var. | |||||||||||||||||||||||||||||||
| Total revenues | 36,493 | 100.0 | 31,116 | 100.0 | 17.3 | 137,139 | 100.0 | 119,879 | 100.0 | 14.4 | ||||||||||||||||||||||||||||||
| Cost of sales | 21,676 | 59.4 | 18,595 | 59.8 | 16.6 | 86,149 | 62.8 | 76,235 | 63.6 | 13.0 | ||||||||||||||||||||||||||||||
| Gross profit | 14,817 | 40.6 | 12,521 | 40.2 | 18.3 | 50,990 | 37.2 | 43,644 | 36.4 | 16.8 | ||||||||||||||||||||||||||||||
| Administrative expenses | 775 | 2.1 | 653 | 2.1 | 18.7 | 2,924 | 2.1 | 2,487 | 2.1 | 17.6 | ||||||||||||||||||||||||||||||
| Selling expenses | 9,905 | 27.2 | 8,084 | 25.9 | 22.5 | 36,341 | 26.5 | 30,631 | 25.5 | 18.6 | ||||||||||||||||||||||||||||||
| Other operating expenses (income), net | 54 | 0.1 | 79 | 0.3 | (31.6 | ) | 240 | 0.2 | 238 | 0.2 | 0.8 | |||||||||||||||||||||||||||||
| Income from operations | 4,083 | 11.2 | 3,705 | 11.9 | 10.2 | 11,485 | 8.4 | 10,288 | 8.6 | 11.6 | ||||||||||||||||||||||||||||||
| Depreciation | 975 | 2.7 | 787 | 2.5 | 23.9 | 3,607 | 2.6 | 3,027 | 2.5 | 19.2 | ||||||||||||||||||||||||||||||
| Amortization & other non-cash charges | 105 | 0.2 | 109 | 0.4 | (3.7 | ) | 417 | 0.3 | 402 | 0.3 | 3.7 | |||||||||||||||||||||||||||||
| Operative cash flow | 5,163 | 14.1 | 4,601 | 14.8 | 12.2 | 15,509 | 11.3 | 13,717 | 11.4 | 13.1 | ||||||||||||||||||||||||||||||
| CAPEX | 2,561 | 1,910 | 34.1 | 7,632 | 5,625 | 35.7 | ||||||||||||||||||||||||||||||||||
| Information of OXXO Stores | ||||||||||||||||||||||||||||||||||||||||
| Total stores | 15,225 | 14,061 | 8.3 | |||||||||||||||||||||||||||||||||||||
| Net new convenience stores: | ||||||||||||||||||||||||||||||||||||||||
| vs. Last quarter | 530 | 520 | 1.9 | |||||||||||||||||||||||||||||||||||||
| Year-to-date | 1,164 | 1,208 | (3.6 | ) | ||||||||||||||||||||||||||||||||||||
| Same-store data: (2) | ||||||||||||||||||||||||||||||||||||||||
| Sales (thousands of pesos) | 762.3 | 702.0 | 8.6 | 743.6 | 695.1 | 7.0 | ||||||||||||||||||||||||||||||||||
| Traffic (thousands of transactions) | 23.2 | 22.9 | 1.5 | 23.2 | 23.2 | 0.2 | ||||||||||||||||||||||||||||||||||
| Ticket (pesos) | 32.8 | 30.7 | 7.0 | 32.0 | 30.0 | 6.8 | ||||||||||||||||||||||||||||||||||
(1) As of the 4Q15 FEMSA Comercio- Fuel Division began to report as a separate segment and as of 1Q16 FEMSA Comercio- Health Division began to report as a separate segment.
(2) Monthly average information per store, considering same stores with more than twelve months of operations, income from services are included.
| 9 | February 27, 2017 |
FEMSA Comercio- Health Division (1)
Results of Operations
Millions of Pesos
| For the fourth quarter of: | For the twelve months of: | |||||||||||||||||||||||||||||||||||||||||||
| 2016 | % of rev. | 2015 | % of rev. | % Var. | 2016 | % of rev. | 2015 | % of rev. | % Var. | % Org.(A) | ||||||||||||||||||||||||||||||||||
| Total revenues | 12,293 | 100.0 | 9,304 | 100.0 | 32.1 | 43,411 | 100.0 | 13,053 | 100.0 | N.S. | 24.0 | |||||||||||||||||||||||||||||||||
| Cost of sales | 8,506 | 69.2 | 6,521 | 70.1 | 30.4 | 30,673 | 70.7 | 9,365 | 71.7 | N.S. | ||||||||||||||||||||||||||||||||||
| Gross profit | 3,787 | 30.8 | 2,783 | 29.9 | 36.1 | 12,738 | 29.3 | 3,688 | 28.3 | N.S. | ||||||||||||||||||||||||||||||||||
| Administrative expenses | 481 | 3.9 | 324 | 3.5 | 48.5 | 1,769 | 4.1 | 414 | 3.2 | N.S. | ||||||||||||||||||||||||||||||||||
| Selling expenses | 2,691 | 21.9 | 1,977 | 21.2 | 36.1 | 9,365 | 21.5 | 2,682 | 20.5 | N.S. | ||||||||||||||||||||||||||||||||||
| Other operating expenses (income), net | 16 | 0.1 | (18 | ) | (0.2 | ) | (188.9 | ) | 32 | 0.1 | (18 | ) | (0.1 | ) | N.S. | |||||||||||||||||||||||||||||
| Income from operations | 599 | 4.9 | 500 | 5.4 | 19.8 | 1,572 | 3.6 | 610 | 4.7 | 157.7 | 5.8 | |||||||||||||||||||||||||||||||||
| Depreciation | 148 | 1.2 | 118 | 1.3 | 25.4 | 546 | 1.3 | 155 | 1.2 | N.S. | ||||||||||||||||||||||||||||||||||
| Amortization & other non-cash charges | 76 | 0.6 | 23 | 0.2 | N.S. | 317 | 0.7 | 33 | 0.2 | N.S. | ||||||||||||||||||||||||||||||||||
| Operative cash flow | 823 | 6.7 | 641 | 6.9 | 28.4 | 2,435 | 5.6 | 798 | 6.1 | N.S. | 16.7 | |||||||||||||||||||||||||||||||||
| CAPEX | 100 | 327 | (69.4 | ) | 474 | 423 | 12.1 | |||||||||||||||||||||||||||||||||||||
| Information of pharmacies | ||||||||||||||||||||||||||||||||||||||||||||
| Total stores | 2,120 | 1,900 | 11.6 | |||||||||||||||||||||||||||||||||||||||||
| Net new stores (2): | ||||||||||||||||||||||||||||||||||||||||||||
| vs. Last quarter | 19 | 1,017 | (98.1 | ) | ||||||||||||||||||||||||||||||||||||||||
| Year-to-date | 220 | 1,295 | (83.0 | ) | ||||||||||||||||||||||||||||||||||||||||
| Same-store data: (3) | ||||||||||||||||||||||||||||||||||||||||||||
| Sales (thousands of pesos) | 1,667.0 | 1,361.3 | 22.5 | 1,552.9 | 1,268.4 | 22.4 | ||||||||||||||||||||||||||||||||||||||
(1) As of the 1Q16 FEMSA Comercio- Health Division began to report as a separate segment.
(2) Aquisitions are included.
(3) Monthly average information per store, considering same stores with more than twelve months of all the operations of FEMSA Comercio - Health Division.
(A) % Org. represents the variation in a given measure excluding the effects of significant mergers and acquisitions in the last twelve months.
| 10 | February 27, 2017 |
FEMSA Comercio- Fuel Division (1)
Results of Operations
Millions of Pesos
| For the fourth quarter of: | For the twelve months of: | |||||||||||||||||||||||||||||||||||||||
| 2016 | % of rev. | 2015 | % of rev. | % Var. | 2016 | % of rev. | 2015 | % of rev. | % Var. | |||||||||||||||||||||||||||||||
| Total revenues | 8,054 | 100.0 | 6,121 | 100.0 | 31.6 | 28,616 | 100.0 | 18,510 | 100.0 | 54.6 | ||||||||||||||||||||||||||||||
| Cost of sales | 7,421 | 92.1 | 5,647 | 92.3 | 31.4 | 26,368 | 92.1 | 17,090 | 92.3 | 54.3 | ||||||||||||||||||||||||||||||
| Gross profit | 633 | 7.9 | 473 | 7.7 | 33.8 | 2,248 | 7.9 | 1,420 | 7.7 | 58.3 | ||||||||||||||||||||||||||||||
| Administrative expenses | 33 | 0.4 | 29 | 0.5 | 13.8 | 127 | 0.4 | 88 | 0.5 | 44.3 | ||||||||||||||||||||||||||||||
| Selling expenses | 524 | 6.6 | 405 | 6.6 | 29.4 | 1,865 | 6.6 | 1,124 | 6.1 | 65.9 | ||||||||||||||||||||||||||||||
| Other operating expenses (income), net | 2 | - | - | - | N.S. | 3 | - | 1 | - | N.S. | ||||||||||||||||||||||||||||||
| Income from operations | 74 | 0.9 | 39 | 0.6 | 89.7 | 253 | 0.9 | 207 | 1.1 | 22.2 | ||||||||||||||||||||||||||||||
| Depreciation | 22 | 0.3 | 18 | 0.3 | 22.2 | 82 | 0.3 | 56 | 0.3 | 46.4 | ||||||||||||||||||||||||||||||
| Amortization & other non-cash charges | 16 | 0.2 | 4 | 0.1 | N.S. | 27 | 0.1 | 24 | 0.2 | 12.5 | ||||||||||||||||||||||||||||||
| Operative cash flow | 112 | 1.4 | 61 | 1.0 | 83.6 | 362 | 1.3 | 287 | 1.6 | 26.1 | ||||||||||||||||||||||||||||||
| CAPEX | 118 | 50 | 136.0 | 299 | 228 | 31.1 | ||||||||||||||||||||||||||||||||||
| Information of OXXO Gas service stations | ||||||||||||||||||||||||||||||||||||||||
| Total service stations | 382 | 307 | 24.4 | |||||||||||||||||||||||||||||||||||||
| Net new service stations | ||||||||||||||||||||||||||||||||||||||||
| vs. Last quarter | 34 | 34 | ||||||||||||||||||||||||||||||||||||||
| Year-to-date | 75 | |||||||||||||||||||||||||||||||||||||||
| Volume (million of liters) total stations (2) | 652.2 | 512.2 | 27.3 | 2,391.8 | 1,542.2 | 55.1 | ||||||||||||||||||||||||||||||||||
| Same-stations data: (3) | ||||||||||||||||||||||||||||||||||||||||
| Sales (thousands of pesos) | 7,785.7 | 6,938.2 | 12.2 | 7,536.4 | 7,003.0 | 7.6 | ||||||||||||||||||||||||||||||||||
| Volume (thousands of liters) | 626.0 | 580.7 | 7.8 | 624.3 | 584.0 | 6.9 | ||||||||||||||||||||||||||||||||||
| Average price per liter | 12.4 | 11.9 | 4.1 | 12.1 | 12.0 | 0.7 | ||||||||||||||||||||||||||||||||||
(1) As of the 4Q15, FEMSA Comercio- Fuel Division began to report as a separate segment.
(2) Volume accumulated for 2015 corresponds to the period of March to December.
(3) Monthly average information per station, considering same stations with more than twelve months of operations.
| 11 | February 27, 2017 |
Coca-Cola FEMSA
Results of Operations
Millions of Pesos
| For the fourth quarter of: | For the twelve months of: | |||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | % of rev. | 2015 | % of rev. | % Var. | % Org.(A) | 2016 | % of rev. | 2015 | % of rev. | % Var. | % Org.(A) | |||||||||||||||||||||||||||||||||||||
| Total revenues | 49,533 | 100.0 | 40,742 | 100.0 | 21.6 | 17.7 | 177,718 | 100.0 | 152,360 | 100.0 | 16.6 | 15.6 | ||||||||||||||||||||||||||||||||||||
| Cost of sales | 27,146 | 54.8 | 21,426 | 52.6 | 26.7 | 98,056 | 55.2 | 80,330 | 52.7 | 22.1 | ||||||||||||||||||||||||||||||||||||||
| Gross profit | 22,388 | 45.2 | 19,315 | 47.4 | 15.9 | 79,662 | 44.8 | 72,031 | 47.3 | 10.6 | ||||||||||||||||||||||||||||||||||||||
| Administrative expenses | 1,875 | 3.8 | 1,681 | 4.1 | 11.5 | 7,423 | 4.2 | 6,404 | 4.2 | 15.9 | ||||||||||||||||||||||||||||||||||||||
| Selling expenses | 12,883 | 26.0 | 10,742 | 26.4 | 19.9 | 48,039 | 27.0 | 41,880 | 27.5 | 14.7 | ||||||||||||||||||||||||||||||||||||||
| Other operating expenses (income), net | 463 | 0.9 | 244 | 0.6 | 89.8 | 280 | 0.2 | 1,102 | 0.7 | (74.6 | ) | |||||||||||||||||||||||||||||||||||||
| Income from operations | 7,167 | 14.5 | 6,649 | 16.3 | 7.8 | 2.4 | 23,920 | 13.5 | 22,645 | 14.9 | 5.6 | 4.0 | ||||||||||||||||||||||||||||||||||||
| Depreciation | 2,072 | 4.2 | 1,600 | 3.9 | 29.5 | 7,579 | 4.3 | 6,310 | 4.1 | 20.1 | ||||||||||||||||||||||||||||||||||||||
| Amortization & other non-cash charges | 1,573 | 3.1 | 571 | 1.4 | 175.5 | 3,996 | 2.2 | 2,278 | 1.5 | 75.4 | ||||||||||||||||||||||||||||||||||||||
| Operative cash flow | 10,812 | 21.8 | 8,820 | 21.6 | 22.6 | 18.2 | 35,495 | 20.0 | 31,233 | 20.5 | 13.6 | 12.4 | ||||||||||||||||||||||||||||||||||||
| CAPEX | 5,164 | 4,322 | 19.5 | 12,391 | 11,484 | 7.9 | ||||||||||||||||||||||||||||||||||||||||||
| Sales volumes | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Millions of unit cases) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Mexico and Central America | 502.2 | 58.9 | 498.7 | 54.6 | 0.7 | 2,025.7 | 60.7 | 1,952.4 | 56.8 | 3.8 | ||||||||||||||||||||||||||||||||||||||
| South America | 160.4 | 18.8 | 210.2 | 23.0 | (23.7 | ) | 659.2 | 19.8 | 789.6 | 23.0 | (16.5 | ) | ||||||||||||||||||||||||||||||||||||
| Brazil | 190.2 | 22.3 | 204.5 | 22.4 | (7.0 | ) | 649.1 | 19.5 | 693.6 | 20.2 | (6.4 | ) | ||||||||||||||||||||||||||||||||||||
| Total | 852.8 | 100.0 | 913.4 | 100.0 | (6.6 | ) | 3,334.0 | 100.0 | 3,435.6 | 100.0 | (3.0 | ) | ||||||||||||||||||||||||||||||||||||
(A) % Org. represents the variation in a given measure excluding the effects of significant mergers and acquisitions in the last twelve months.
| 12 | February 27, 2017 |
FEMSA
Macroeconomic Information
| End-of-period Exchange Rates | ||||||||||||||||||||||||
| Inflation | Dec-16 | Dec-15 | ||||||||||||||||||||||
| 4Q 2016 | LTM(1) Dec-16 | Per USD | Per Mx. Peso | Per USD | Per Mx. Peso | |||||||||||||||||||
| Mexico | 2.19 | % | 3.36 | % | 20.66 | 1.0000 | 17.21 | 1.0000 | ||||||||||||||||
| Colombia | 0.74 | % | 5.75 | % | 3,000.71 | 0.0069 | 3,149.47 | 0.0055 | ||||||||||||||||
| Venezuela | 91.80 | % | 456.80 | % | 673.76 | 0.0307 | 198.70 | 0.0866 | ||||||||||||||||
| Brazil | 0.38 | % | 6.29 | % | 3.26 | 6.3404 | 3.90 | 4.4065 | ||||||||||||||||
| Argentina | 6.65 | % | 39.20 | % | 15.89 | 1.3004 | 13.04 | 1.3195 | ||||||||||||||||
| Chile | 0.21 | % | 2.71 | % | 667.29 | 0.0310 | 707.34 | 4.4526 | ||||||||||||||||
| Euro Zone | 0.99 | % | 1.12 | % | 0.95 | 21.7741 | 0.91 | 18.9403 | ||||||||||||||||
(1) LTM = Last twelve months
| 13 | February 27, 2017 |
2016 FOURTH QUARTER AND FULL YEAR RESULTS
Mexico City, February 24, 2017, Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOFL, NYSE: KOF) (“Coca-Cola FEMSA” or the “Company”), the largest franchise bottler in the world by sales volume, announces results for the fourth quarter of 2016.
Operational and Financial Highlights
| · | Revenues grew 21.6%, while comparable revenues grew 3.7% for the fourth quarter of 2016. |
| · | Operating income grew 7.8%, but on a comparable basis, it declined 8.3% for the fourth quarter of 2016. |
| · | Operating cash flow increased 22.6%, but decreased 2.3% as a comparable metric for the fourth quarter of 2016. |
| · | Earnings per share were up 12.4% to Ps. 1.69, whereas comparable earnings dropped 11.1% to Ps. 1.30 in the fourth quarter of 2016. |
Results Summary
| Fourth Quarter | Year to Date | |||||||||||||||||||||||||||||||
| as Reported | Comparable (1) | as Reported | Comparable (1) | |||||||||||||||||||||||||||||
| 2016 | D% | 2016 | D% | 2016 | D% | 2016 | D% | |||||||||||||||||||||||||
| Total revenues | 49,533 | 21.6 | % | 44,300 | 3.7 | % | 177,718 | 16.6 | % | 157,277 | 6.6 | % | ||||||||||||||||||||
| Gross profit | 22,388 | 15.9 | % | 20,237 | 1.3 | % | 79,662 | 10.6 | % | 72,284 | 4.5 | % | ||||||||||||||||||||
| Operating income | 7,167 | 7.8 | % | 6,251 | (8.3 | %) | 23,920 | 5.6 | % | 22,646 | 4.0 | % | ||||||||||||||||||||
| Operating cash flow (2) | 10,812 | 22.6 | % | 8,685 | (2.3 | %) | 35,495 | 13.6 | % | 30,931 | 4.0 | % | ||||||||||||||||||||
| Net income attributable to equity holders of the company | 3,509 | 12.4 | % | 2,690 | (11.1 | %) | 10,070 | (1.6 | %) | 9,290 | 0.6 | % | ||||||||||||||||||||
| Earnings per share (3) | 1.69 | 1.30 | 4.86 | 4.48 | ||||||||||||||||||||||||||||
Expressed in millions of Mexican pesos.
(1) Comparable: with respect to a year over year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods. Currently, only Venezuela qualifies as a hyperinflationary economy.
(2) Operating cash flow = operating income + depreciation + amortization & other operative non-cash charges.
(3) Quarterly & FY earnings / outstanding shares as of the end of period. Outstanding shares as of 4Q'16 and YTD were 2,072.9 million.
Message from the Chief Executive Officer
“We closed 2016 focused on our operating and financial discipline, while capturing opportunities that enabled us to strengthen our portfolio and consolidate geographically. We managed to deliver solid financial results for the year in the face of a very complex macroeconomic environment. On a comparable basis, our revenues and operating income increased by 6.6% and 4.0%, respectively, by leveraging our pricing flexibility across our markets.
Our transactions continued to outperform volumes across most of our operations thanks to our focus on affordability, commercial practices, and improved route-to-market capabilities. In Mexico, volume and transactions grew across our sparkling and still beverage categories, propelling our operation to a banner year. While in Central America, our performance was driven by Costa Rica and Nicaragua’s highest volume growth in the past 10 years. Our South America division faced the most difficult macroeconomic and consumer environments of our territories. Nevertheless, our flexibility to adapt to local market conditions enabled us to maintain or gain market share across key markets and categories. Finally, our Philippines operation delivered accelerated volume and transaction growth, while improving profitability, ahead of its consolidation in 2017.
During the year, we accelerated the transformation of our operating models, highlighted by the aggressive rollout of our KOFmmercial Digital Platform in Mexico and its initial rollout in Brazil. Importantly, we strengthened our footprint by closing our acquisition of Vonpar, bolstering our leading position in Brazil.
As we enter a new year, we renew our efforts to strengthen our portfolio, deploy our transformational initiatives, and continue our cultural evolution in order to deliver sustainable, profitable growth for our shareholders.” said John Santa Maria Otazua, Chief Executive Officer of the Company.
| Press Release 4Q 2016 February 24, 2017 | Page 14 |
4Q16 Consolidated Results
Comparable means, with respect to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods. From our operations, only Venezuela qualifies as a hyperinflationary economy. In our “as reported” figures, our Venezuelan operation’s results were translated into Mexican pesos using the DICOM exchange rate published on December31, 2016 of 673.7617 bolivars per US dollar.
Comparable figures:
Revenues: Comparable total revenues grew 3.7% to Ps. 44,300 million driven by average price per unit case growth across most of our operations and volume growth in Mexico and Central America.
Transactions: The comparable number of transactions declined 6.4% to 4,746.1 million. Transactions of our sparkling beverage portfolio declined 6.3% driven by declines in Brazil, Colombia and Argentina, offsetting flat performance of Mexico. Our still beverage category decreased transactions by 4.8%, mainly driven by declines in Brazil and Colombia, offsetting increases in Mexico and Argentina. Transactions of water, including bulk water, decreased 9.6% driven by declines across most of our operations, offsetting growth in Mexico.
Volume: Comparable sales volume declined 5.9% to 806.8 million unit cases in the fourth quarter of 2016 as compared to the same period in 2015. Our sparkling beverage portfolio declined 5.9% mainly driven by contractions in Brazil, Argentina and Colombia, which offset growth in Mexico and Central America. The still beverage category decreased 3.9% driven by declines in Brazil, Colombia and Central America which offset growth in Vallefrut orangeade, del Valle juice and Santa Clara in Mexico. Volume of our bottled water portfolio decreased 8.6% driven by growth in Mexico offset by declines across the rest of our operations. Volume of our bulk water portfolio declined 5.0% mainly driven by declines of Crystal in Brazil, Brisa in Colombia and Ciel in Mexico offset by increases in Central America and Argentina.
Gross profit: Comparable gross profit grew 1.3% to Ps. 20,237 million with a gross margin contraction of 110 basis points in the period. Higher sugar prices, plus the depreciation of the average exchange rate of the Argentine peso and the Mexican peso as applied to our U.S. dollar-denominated raw material costs, and an unfavorable currency hedging position in Brazil, were not fully offset by the benefit of lower PET prices and our ongoing currency hedging strategy.
Other operative expenses: On a comparable basis, during the fourth quarter of 2016, the other operative expenses net line recorded an expense of Ps. 215 million, which compares to an expense of Ps. 65 million during the fourth quarter of 2015.
Equity method: The comparable reported share of the profits of associates and joint ventures line recorded a loss of Ps. 275 million in the fourth quarter of 2016, which compares to a loss of Ps. 76 million recorded in the fourth quarter of 2015, mainly due to a loss in our stake in Coca-Cola FEMSA Philippines, Inc. and in our non-carbonated beverage joint venture in Brazil that could not be compensated by a gain in our non-carbonated beverage joint venture in Mexico during the fourth quarter of 2016.
Operating Income: Comparable operating income declined 8.3% to Ps. 6,251 million with a 190 basis points margin contraction, reaching 14.1% in the fourth quarter of 2016.
Operating cash flow: Comparable operating cash flow declined 2.3% to Ps. 8,685 million with a margin contraction of 120 basis points to 19.6% in the fourth quarter of 2016. Amortization and other operative non-cash charges in the fourth quarter of 2016 were higher due to (i) operating currency fluctuation effects, (ii) an equity method loss.
Comprehensive financing result: Our comparable comprehensive financing result in the fourth quarter of 2016 recorded an expense of Ps. 2,076 million, as compared to an expense of Ps. 2,793 million in the same period of 2015. As compared to the previous year, we recorded a foreign exchange gain mainly driven by the reduction of our dollar denominated net debt position.
Income tax: During the fourth quarter of 2016, comparable income tax as a percentage of income before taxes was 25.3% as compared to 27.6% in the same period of 2015.
Net income: Comparable net controlling interest income declined 11.1% to Ps. 2,690 million in the fourth quarter of 2016, resulting in earnings per share (EPS) of Ps. 1.30 (Ps. 12.98 per ADS).
(Continued on next page)
| Press Release 4Q 2016 February 24, 2017 | Page 15 |
As reported figures
Revenues: Total revenues increased 21.6% to Ps. 49,533 million in the fourth quarter of 2016, supported by the positive translation effect resulting from the appreciation of the Brazilian real and the Colombian peso, and despite of the depreciation of the Venezuelan bolivar and the Argentine peso; all as compared to the Mexican peso.
Transactions: Reported total number of transactions declined 7.3% to 4,982.9 million in the fourth quarter of 2016 as compared to the same period in 2015.
Volume: Reported total sales volume declined 7.0% to 849.9 million unit cases in the fourth quarter of 2016 as compared to the same period in 2015.
Gross profit: Gross profit grew 15.9% to Ps. 22,388 million and gross margin declined 220 basis points to 45.2%.
Operating Income: Operating income grew 7.8% to Ps. 7,167 million and operating margin contracted 180 basis points to 14.5%.
Operating cash flow: Operating cash flow grew 22.6% to Ps. 10,812 million and operating cash flow margin expanded 20 basis points to 21.8%.
Net income: Reported consolidated net controlling interest income increased 12.4% to Ps. 3,509 million in the fourth quarter of 2016, resulting in reported earnings per share (EPS) of Ps. 1.69 (Ps. 16.93 per ADS).
| Press Release 4Q 2016 February 24, 2017 | Page 16 |
Balance Sheet (1)
As of December 31, 2016, we had a cash balance of Ps. 10,476 million, including US$ 114 million denominated in U.S. dollars, a decrease of Ps. 5,513 million as compared to December 31, 2015. This difference was mainly driven by the use of cash for Vonpar´s acquisition. In November, we paid the second installment of the 2015 dividend in the amount of Ps. 1.68 per share.
As of December 31, 2016, total short-term debt was Ps. 3,052 million and long-term debt was Ps. 85,857 million. Total debt increased by Ps. 22,179 million, compared to year end 2015 mainly due to the negative translation effect resulting from the depreciation of the Mexican peso as applied to our U.S. dollar denominated debt position and the contract of new debt for Vonpar´s acquisition. Net debt increased by Ps. 27,692 million compared to year end 2015.
The weighted average cost of debt for the quarter, including the effect of debt swapped to Brazilian reals and Mexican peso, was 10.78%. The following charts set forth the Company’s debt profile by currency, interest rate type and maturity date as of December 31, 2016.
| Currency | % Total Debt(2) | % Interest Rate Floating(2)(3) | ||||||
| Mexican pesos | 36.6 | % | 8.4 | % | ||||
| U.S. dollars | 2.4 | % | 0.0 | % | ||||
| Colombian pesos | 3.0 | % | 65.3 | % | ||||
| Brazilian reals | 57.3 | % | 98.9 | % | ||||
| Argentine pesos | 0.8 | % | 5.9 | % | ||||
Debt Maturity Profile
| Maturity Date | 2017 | 2018 | 2019 | 2020 | 2021 | 2022+ | ||||||||||||||||||
| % of Total Debt | 3.4 | % | 25.2 | % | 8.4 | % | 12.0 | % | 7.7 | % | 43.3 | % | ||||||||||||
| (1) | See page 19 for detailed information. |
| (2) | After giving effect to cross currency swaps. |
| (3) | Calculated by weighting each year’s outstanding debt balance mix. |
Selected Financial Ratios
| FY 2016 | FY 2015 | D % | ||||||||||
| Net debt including effect of hedges (1)(3) | 80,043 | 48,828 | 63.9 | % | ||||||||
| Net debt including effect of hedges / Operating cash flow (1)(3) | 2.26 | 1.56 | ||||||||||
| Operating cash flow/ Interest expense, net (1) | 5.25 | 5.27 | ||||||||||
| Capitalization (2) | 41.3 | % | 38.8 | % | ||||||||
(1) Net debt = total debt - cash
(2) Total debt / (long-term debt + shareholders' equity)
(3) After giving effect to cross currency swaps.
| Press Release 4Q 2016 February 24, 2017 | Page 17 |
Mexico & Central America Division
(Mexico, Guatemala, Nicaragua, Costa Rica and Panama)
Comparable means, with respect to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods. From our operations, only Venezuela qualifies as a hyperinflationary economy.
Comparable figures:
Revenues: Comparable total revenues from our Mexico and Central America division increased 7.4% to Ps. 22,593 million in the fourth quarter of 2016, as compared to the same period in 2015, driven by volume growth and an average price per unit case increase of 8.0% in Mexico. Our division’s comparable average price per unit case grew 6.5%, reaching Ps. 44.83.
Transactions: Total transactions in the Mexico and Central America division grew 0.7%, in line with volume performance, totaling 2,815.2 million in the fourth quarter of 2016. Transactions of our sparkling beverage portfolio remained flat, mainly driven by a decline in flavored sparkling beverages in Central America offset by a 2.5% growth of flavored sparkling beverages in Mexico, and a 2.1% improvement in brand Coca-Cola in Central America. Our still beverage category increased transactions by 5.8%, mainly driven by Mexico, which generated more than 16 million incremental transactions this quarter. Transactions of water, including bulk water, increased 2.1% mainly driven by Mexico.
Volume: Total sales volume increased 0.7% to 502.2 million unit cases in the fourth quarter of 2016, as compared to the same period of 2015. Volume in Mexico increased 0.7% and volume in Central America increased 0.5%. Our sparkling beverage category increased 0.6%, mainly driven by growth of brand Coca-Cola in Mexico and Central America, while Limon&Nada, Naranja&Nada, and Sprite Zero drove growth in Mexico. Our still beverage category grew 9.0%, mainly driven by the performance of Vallefrut, the del Valle juice portfolio Santa Clara in Mexico, and FUZE tea in Central America. Our personal water portfolio grew 0.9%, driven by a growth in Mexico. Our Bulk water portfolio declined 2.4% driven by a decline in Ciel bulk water in Mexico.
Gross profit: Comparable gross profit grew 5.1% to Ps. 11,122 million in the fourth quarter of 2016 as compared to the same period in 2015, with a margin decrease of 110 basis points to reach 49.2%. Lower PET prices in the division, in combination with our currency hedging strategy, were offset by higher prices of sugar and the depreciation of the average exchange rate of the Mexican peso as applied to our U.S. dollar-denominated raw material costs.
Operating income: Comparable operating income in the division declined 2.3% to Ps. 3,561 million in the fourth quarter of 2016, with a margin contraction of 150 basis points to reach 15.8%. Our operating expenses in the division, as a percentage of sales, contracted 80 basis points.
Operating cash flow: Comparable operating cash flow grew 4.8% to Ps. 5,108 million in the fourth quarter of 2016 as compared to the same period in 2015. Our comparable operating cash flow margin was 22.6%, with a margin decrease of 60 basis points. Other operative non-cash charges in the fourth quarter of 2016 were higher as a result of (i) operating currency fluctuation effects and (ii) the recording of an equity method loss.
As reported figures
Revenues: Reported total revenues increased 10.0% in the fourth quarter of 2016, driven by a combination of volume growth and solid pricing, coupled with a positive translation effect that resulted from the appreciation of the currencies in our Central American operations as compared to the Mexican peso.
Gross profit: Reported gross profit increased 7.3% in the fourth quarter of 2016 and gross profit margin reached 49.2%.
Operating income: Our reported operating income increased 3.0% in the fourth quarter of 2016, and operating income margin reached 15.8%, contracting 100 basis points during the period.
Operating cash flow: Reported operating cash flow increased 7.2% in the fourth quarter of 2016, resulting in a margin of 22.6%.
| Press Release 4Q 2016 February 24, 2017 | Page 18 |
South America Division
(Colombia, Venezuela, Brazil and Argentina)
Comparable means, with respect to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods. From our operations, only Venezuela qualifies as a hyperinflationary economy. In our “as reported” figures, our Venezuelan operation’s results were translated into Mexican pesos using the DICOM exchange rate published on December 31, 2016 of 673.7617 bolivars per US dollar.
Comparable figures:
Revenues: Comparable total revenues remained flat at Ps. 21,707 million, driven by average price per unit case growth across our territories. Revenues of beer in Brazil accounted for Ps. 2,485 million in the fourth quarter of 2016.
Transactions: Comparable transactions in the division declined 15.1% totaling 1,931.0 million in the fourth quarter of 2016. Transactions of our sparkling beverage portfolio decreased 14.4%, driven by decreases in Argentina, Brazil and Colombia. Our still beverage category decreased transactions by 17.3% driven by an increase in Argentina offset by decreases in Brazil and Colombia. Transactions of water, including bulk water, decreased 18.4% driven by declines in all countries.
Volume: Comparable total sales volume in our South America division decreased 15.0% to 304.6 million unit cases in the fourth quarter of 2016 as compared to the same period of 2015. Our sparkling beverage category decreased 14.1%, driven by a 17.5% decline in Brazil, a 9.0% contraction in Argentina, and a 8.8% volume decrease in Colombia. The still beverage category decreased 19.4%, driven by declines in Colombia and Brazil offsetting Cepita’s growth in Argentina. Our personal water category declined 17.4%, driven by Manantial in Colombia, Aquarius in Argentina and Crystal in Brazil. Our bulk water business declined 23.9%, mainly driven by Crystal in Brazil and Brisa bulk water in Colombia offsetting a growth in Argentina.
Gross profit: Comparable gross profit decreased 3.0% to Ps. 9,115 million, with a margin contraction of 140 basis points, as a result of higher prices of sugar and the depreciation of the average exchange rate of our division’s currencies as applied to our U.S. dollar-denominated raw material costs, in combination with an unfavorable currency hedging position in Brazil, as a result of the appreciation of the Brazilian real; all of which offset lower PET prices.
Operating income: Comparable operating income declined 15.3% to Ps. 2,690 million, with a margin contraction of 220 basis points as compared to the same period of the previous year.
Operating cash flow: Comparable operating cash flow decreased 11.1% to Ps. 3,577 million, reaching an operating cash flow margin of 16.5% and recording a margin contraction of 210 basis points as compared to the same period of 2015.
As reported figures
Revenues: Reported total revenues grew 33.3% to Ps. 26,940 million in the fourth quarter of 2016.
Transactions: Reported total number of transactions declined 16.0% to 2,167.7 million in the fourth quarter of 2016 as compared to the same period in 2015.
Volume: Reported total sales volume declined 16.2% to 347.7 million unit cases in the fourth quarter of 2016 as compared to the same period in 2015, driven by volume declines in all operations.
Gross profit: Reported gross profit increased 25.9% to Ps. 11,266 million in the fourth quarter of 2016 and gross profit margin contracted 250 basis points to 41.8%.
Operating income: Our reported operating income grew 13.0% to Ps. 3,606 million in the fourth quarter of 2016, and operating income margin reached 13.4%, a contraction of 240 basis points.
Operating cash flow: Reported operating cash flow grew 40.6% to reach Ps. 5,704 million in the fourth quarter of 2016, resulting in a margin of 21.2%, an expansion of 110 basis points.
| Press Release 4Q 2016 February 24, 2017 | Page 19 |
YTD Consolidated Results
Comparable means, with respect to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods. From our operations, only Venezuela qualifies as a hyperinflationary economy. In our “as reported” figures, our Venezuelan operation’s results were translated into Mexican pesos using the DICOM exchange rate published on December 31, 2016 of 673.7617 bolivars per US dollar.
Comparable figures:
Revenues: Comparable total revenues grew 6.6% to Ps. 157,277 million driven by average price per unit case growth across most of our operations and volume growth in Mexico and Central America.
Transactions: The comparable number of transactions declined 0.3% to 18,902.4 million, outpacing volume performance. Transactions of our sparkling beverage portfolio declined 0.6% driven by the positive performance of Mexico, which increased 4.5%; Central America, which grew 3.1%; and offset by Colombia, Argentina and Brazil which declined 1.2%, 9.2% and 10.0% respectively. Our still beverage category increased transactions by 2.6%, mainly driven by Mexico and Central America which grew 8.3%. Transactions of water, including bulk water, declined 1.1% driven by a positive performance in Mexico, Central America and Colombia, offset by a decline in Brazil.
Volume: Comparable sales volume declined 0.9% to 3,171.3 in 2016, as compared to 2015. Our sparkling beverage portfolio contracted 1.0% driven by declines in Brazil and Argentina which offset growth in Mexico and Central America. Our still beverage category increased 2.9% driven by Vallefrut, del Valle juice and Santa Clara in Mexico. Volume of our bottled water portfolio declined 1.1% mainly driven by Brazil and Colombia offsetting growth in Mexico and Argentina. Volume of our bulk water portfolio decreased 1.9% mainly driven by a decline of Brisa and Crystal bulk water in Colombia and Brazil respectively.
Gross profit: Comparable gross profit grew 4.5% to Ps. 72,284 million with a gross margin contraction of 90 basis points in the period. Higher sugar prices, plus the depreciation of the average exchange rate of the Argentine peso, the Colombian Peso, the Brazilian Real and the Mexican peso as applied to our U.S. dollar-denominated raw material costs; and an unfavorable currency hedging position in Brazil, were not fully offset by the benefit of lower PET prices, and our ongoing currency hedging strategy.
Other operative expenses: On a comparable basis, during 2016, the other operative expenses net line recorded an expense of Ps. 339 million, which compares to an expense of Ps. 770 million during the same period of 2015.
Equity method: The comparable reported share of the profits of associates and joint ventures line recorded a gain of Ps. 43 million for year 2016, which compares to a loss of Ps. 21 million recorded in the same period of 2015, mainly due to a positive contribution of our stake in Coca-Cola FEMSA Philippines, Inc. and the non-carbonated beverage joint venture in Mexico.
Operating Income: Comparable operating income grew 4.0% to Ps. 22,646 million with a 40 basis points margin contraction, reaching 14.4% for the full year 2016.
Operating cash flow: Comparable operating cash flow grew 4.0% to Ps. 30,931 million with a margin decline of 50 basis points as compared to the same period of 2015. Other operative non-cash charges in 2016 were lower as a result of (i) operating currency fluctuation effects and (ii) the recording of an equity method gain.
Comprehensive financing results: Our comparable comprehensive financing result for the full year 2016 recorded an expense of Ps. 8,589 million, as compared to an expense of Ps. 8,352 million in the same period of 2015. The difference was mainly driven by (i) a foreign exchange loss as a result of the depreciation of the Mexican peso as applied to our U.S. dollar-denominated net debt position and (ii) higher interest expense in Mexican pesos, mainly driven by the effect of the depreciation of the Mexican peso as applied to our interest payments denominated in U.S. dollars and Brazilian reals.
Income tax: During 2016, comparable income tax as a percentage of income before taxes was 26.8% as compared to 30.4% in the same period of 2015. The lower tax rate in 2016 resulted from (i) certain tax efficiencies across our operations, (ii) a lower effective tax rate in Colombia and (iii) ongoing efforts to reduce non-deductible items across our operations.
Net income: Comparable net controlling interest income increased 0.6% to Ps. 9,290 million for the full year 2016, resulting in earnings per share (EPS) of Ps. 4.48 (Ps. 44.82 per ADS).
(Continued on next page)
| Press Release 4Q 2016 February 24, 2017 | Page 20 |
YTD as reported figures
Revenues: Reported total revenues increased 16.6% to Ps. 177,718 million for the full year 2016, supported by the positive translation effect originated by the appreciation of the Brazilian real, and the Colombian Peso despite the depreciation of the Venezuelan bolivar and the Argentine peso; all as compared to the Mexican peso.
Transactions: Reported total number of transactions declined 2.5% to 19,774.4 million during 2016 as compared to 2015.
Volume: Reported total sales volume declined 3.0% to 3,334.0 million unit cases for the full year 2016 as compared to the same period in 2015.
Gross profit: Reported gross profit grew 10.6% to Ps. 79,662 million and gross margin declined 250 basis points to 44.8%.
Operating Income: Reported operating income grew 5.6% to Ps. 23,920 million and operating margin contracted 140 basis points to 13.5%.
Operating cash flow: Reported operating cash flow grew 13.6% to Ps. 35,495 million and operating cash flow margin declined 50 basis points to reach 20.0%.
Net income: Reported consolidated net controlling interest income decreased 1.6% to Ps. 10,070 million during 2016, resulting in reported earnings per share (EPS) of Ps. 4.86 (Ps. 48.58 per ADS).
| Press Release 4Q 2016 February 24, 2017 | Page 21 |
Philippines Operation
Total transactions during the year grew 8.6%, in line with volume growth, which grew 8.9% driven by the performance of Colas and flavored sparkling beverages. Colas growth was mainly driven by our single-serve and multi-serve returnable glass bottles as well as our multi-serve PET presentation. In flavored sparkling beverages, our single-serve “Mismo” one-way PET presentation continued to deliver growth. Also, our growth in water came both from multi-serve and single-serve presentations. For the year, our Philippines operation and its encouraging top- and bottom-line performance, contributed positively to the company’s consolidated results.
Sustainability
At Coca-Cola FEMSA, our purpose is to generate economic, social and environmental value. Thus, sustainability is a core element of our business’ strategic framework.
In 2016, we continued our initiatives aligned with the three pillars of our Sustainability Framework: Our People, Our Community, and Our Planet. Consistent with our 2020 Goals, we increased our water use efficiency ratio to a global average of 1.72 liters of water per liter of beverage produced, up 12% from 2010. We replenished 100% of the water we used to produce our beverages in Mexico and Brazil. Since 2010, we increased our energy efficiency by 19% and reduced our manufacturing operations’ carbon footprint by 28%. Additionally, we covered 46% and 74% of our Mexican and Brazilian bottling operations’ energy requirements, respectively, from clean sources of energy—achieving 29% coverage globally. We fostered healthy lifestyles throughout our operations, benefiting more than 950,000 people from our programs, and we launched the Latin American Commitment for a Healthy Future in alliance with other companies in the beverage industry.
Recent Developments
| · | On December 6, 2016 Coca-Cola FEMSA announced that its Brazilian subsidiary, Spal Industria Brasileira de Bebidas S.A., had successfully closed the agreement to acquire Vonpar. |
| · | Coca-Cola FEMSA announced on January 30th its selection as member of the first edition of the FTSE4Good Emerging Index. |
| · | Commencing on February 1, 2017, Coca-Cola FEMSA started consolidating the results of Coca-Cola FEMSA Philippines, Inc. in its financial statements. |
| · | On February 23, 2017 Coca-Cola FEMSA Board of Directors agreed to propose, for approval at the annual Shareholders meeting to be held on March 14, 2017, an ordinary dividend of Ps. 3.35 per share to be paid in two installments, Ps. 1.67 per share in May and Ps. 1.68 per share in November of 2017. |
Conference Call Information
Our fourth quarter 2016 conference call will be held on February 24, 2017, at 12:30 P.M. Eastern Time (11:30 A.M. Mexico City Time). To participate in the conference call, please dial: Domestic U.S.: 888-256-1027 or International: 913-312-0850. Participant code: 7683144. We invite investors to listen to the live audiocast of the conference call on the Company’s website, www.coca-colafemsa.com. If you are unable to participate live, the conference call audio will be available at www.coca-colafemsa.com.
Mexican Stock Exchange Quarterly Filing
Coca-Cola FEMSA encourages the reader to refer to our quarterly filing to the Mexican Stock Exchange (Bolsa Mexicana de Valores or BMV) for more detailed information. This filing contains a detailed cash flow statement and selected notes to the financial statements, including segment information. This filing is available at www.bmv.com.mx in the Información Financiera section for Coca-Cola FEMSA (KOF) and in our corporate website at www.coca-colafemsa.com/inversionistas/registros-bmv.
| Press Release 4Q 2016 February 24, 2017 | Page 22 |
Additional Information
This news release may contain forward-looking statements concerning Coca-Cola FEMSA’s future performance, which should be considered as good faith estimates by Coca-Cola FEMSA. These forward-looking statements reflect management’s expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, many of which are outside Coca-Cola FEMSA’s control, which could materially impact the Company’s actual performance. References herein to “US$” are to United States dollars. This news release contains translations of certain Mexican peso amounts into U.S. dollars for the convenience of the reader. These translations should not be construed as representations that Mexican peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated.
All the financial information presented in this report was prepared under International Financial Reporting Standards (IFRS).
In an effort to provide our readers with a more useful representation of our company's underlying financial and operating performance we are including the term “Comparable”. This means, with respect to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods. Currently, the only operation that qualifies as a hyperinflationary economy is Venezuela. In preparing this measure, management has used its best judgment, estimates and assumptions in order to maintain comparability.
Earnings per share were computed based on 2,072.9 million outstanding shares (each ADS represents 10 local shares).
For reporting purposes, all corporate expenses, including the equity method recorded from our stake of the results of Coca-Cola FEMSA Philippines, Inc., are included in the results of the Mexico and Central America division. Starting on February 2013, we are incorporating our stake of the results of Coca-Cola FEMSA Philippines, Inc. through the equity method.
About the Company
Stock listing information: Mexican Stock Exchange, Ticker: KOFL | NYSE (ADR), Ticker: KOF | Ratio of KOF L to KOF = 10:1
Coca-Cola FEMSA, S.A.B. de C.V. is the largest franchise bottler in the world by sales volume. The company produces and distributes trademark beverages of The Coca-Cola Company, offering a wide portfolio of 154 brands to more than 375 million consumers daily. With over 100 thousand employees, the company markets and sells approximately 4 billion unit cases through 2.8 million points of sale a year. Operating 66 manufacturing plants and 328 distribution centers, Coca-Cola FEMSA is committed to generating economic, social, and environmental value for all of its stakeholders across the value chain. The company is a member of the Dow Jones Sustainability Emerging Markets Index, FTSE4Good Emerging Index, and the Mexican Stock Exchange’s IPC and Social Responsibility and Sustainability Indices, among other indexes. Its operations encompass franchise territories in Mexico, Brazil, Colombia, Argentina, and Guatemala and, nationwide, in the Philippines, Venezuela, Nicaragua, Costa Rica, and Panama. For more information, please visit www.coca-colafemsa.com.
For additional information or inquiries contact the Investor Relations team:
| · | Maria Dyla Castro | mariadyla.castro@kof.com.mx | (5255) 1519-5186 |
| · | Jorge Collazo | jorge.collazo@kof.com.mx | (5255) 1519-5218 |
| · | Tania Ramírez | tania.ramirez@kof.com.mx | (5255) 1519-5013 |
Financial Tables
(12 pages of tables to follow)
| Press Release 4Q 2016 February 24, 2017 | Page 23 |
Quarter - Consolidated Income Statement
Expressed in millions of Mexican pesos(1)
| 4Q 16 | % Rev | 4Q 15 | % Rev | D % Reported | ||||||||||||||||
| Transactions (million transactions) | 4,982.9 | 5,374.8 | -7.3 | % | ||||||||||||||||
| Volume (million unit cases) (2) | 849.9 | 913.4 | -7.0 | % | ||||||||||||||||
| Average price per unit case (2) | 54.41 | 42.59 | 27.8 | % | ||||||||||||||||
| Net revenues | 49,229 | 40,637 | 21.1 | % | ||||||||||||||||
| Other operating revenues | 304 | 105 | 188.6 | % | ||||||||||||||||
| Total revenues (3) | 49,533 | 100.0 | % | 40,742 | 100.0 | % | 21.6 | % | ||||||||||||
| Cost of goods sold | 27,146 | 54.8 | % | 21,426 | 52.6 | % | 26.7 | % | ||||||||||||
| Gross profit | 22,388 | 45.2 | % | 19,315 | 47.4 | % | 15.9 | % | ||||||||||||
| Operating expenses | 14,757 | 29.8 | % | 12,423 | 30.5 | % | 18.8 | % | ||||||||||||
| Other operative expenses, net | 188 | 0.4 | % | 175 | 0.4 | % | 7.4 | % | ||||||||||||
| Operative equity method (gain) loss in associates(4) | 275 | 0.6 | % | 69 | 0.2 | % | 301.0 | % | ||||||||||||
| Operating income (5) | 7,167 | 14.5 | % | 6,649 | 16.3 | % | 7.8 | % | ||||||||||||
| Other non operative expenses, net | 346 | 0.7 | % | 367 | 0.9 | % | -5.7 | % | ||||||||||||
| Non Operative equity method (gain) loss in associates(6) | (33 | ) | -0.1 | % | (34 | ) | -0.1 | % | -3.4 | % | ||||||||||
| Interest expense | 2,095 | 2,085 | 0.5 | % | ||||||||||||||||
| Interest income | 192 | 114 | 68.3 | % | ||||||||||||||||
| Interest expense, net | 1,903 | 1,971 | -3.5 | % | ||||||||||||||||
| Foreign exchange loss (gain) | (66 | ) | 66 | -199.8 | % | |||||||||||||||
| Loss (gain) on monetary position in inflationary subsidiries | (838 | ) | (6 | ) | 12938.7 | % | ||||||||||||||
| Market value (gain) loss on financial instruments | 213 | (30 | ) | -799.2 | % | |||||||||||||||
| Comprehensive financing result | 1,211 | 2,000 | -39.4 | % | ||||||||||||||||
| Income before taxes | 5,643 | 4,316 | 30.7 | % | ||||||||||||||||
| Income taxes | 1,929 | 1,207 | 59.8 | % | ||||||||||||||||
| Consolidated net income | 3,714 | 3,110 | 19.4 | % | ||||||||||||||||
| Net income attributable to equity holders of the company | 3,509 | 7.1 | % | 3,121 | 7.7 | % | 12.4 | % | ||||||||||||
| Non-controlling interest | 205 | (11 | ) | -1940.7 | % | |||||||||||||||
| Operating income (5) | 7,167 | 14.5 | % | 6,649 | 16.3 | % | 7.8 | % | ||||||||||||
| Depreciation | 2,072 | 1,600 | 29.5 | % | ||||||||||||||||
| Amortization and other operative non-cash charges | 1,573 | 571 | 175.5 | % | ||||||||||||||||
| Operating cash flow (5)(7) | 10,812 | 21.8 | % | 8,820 | 21.6 | % | 22.6 | % | ||||||||||||
| CAPEX | 5,164 | 4,322 | ||||||||||||||||||
(1) Except transactions, volume and average price per unit case figures.
(2) Sales volume, transactions and average price per unit case exclude beer results.
(3) Includes total revenues of Ps. 19,076 million from Mexico, Ps. 14,889 million from Brazil, Ps. 4,264 million from Colombia, and Ps. 4,128 million from Argentina, for the fourth quarter of 2016; and Ps. 17,545 million from Mexico, Ps. 10,312 million from Brazil, Ps. 3,484 from Colombia, and Ps. 4,105 million from Argentina for the same period of the previous year. Total revenues includes Beer in Brazil for Ps. 2,988 million during the fourth quarter of 2016 and Ps. 1,735 million for the same period of the previous year.
(4) Includes equity method in Jugos del Valle, Coca-Cola FEMSA Philippines, Inc., Leao Alimentos and Estrella Azul, among others.
(5) The operating income and operating cash flow lines are presented as non-gaap measures for the convenience of the reader.
(6) Includes equity method in PIASA, IEQSA, Beta San Miguel, IMER and KSP Participacoes.
(7) Operating cash flow = operating income + depreciation, amortization & other operative non-cash charges.
| Press Release 4Q 2016 February 24, 2017 | Page 24 |
YTD - Consolidated Income Statement
Expressed in millions of Mexican pesos(1)
| YTD 16 | % Rev | YTD 15 | % Rev | D % Reported | ||||||||||||||||
| Transactions (million transactions) | 19,774.4 | 20,279.6 | -2.5 | % | ||||||||||||||||
| Volume (million unit cases) (2) | 3,334.0 | 3,435.6 | -3.0 | % | ||||||||||||||||
| Average price per unit case (2) | 50.75 | 42.34 | 19.9 | % | ||||||||||||||||
| Net revenues | 177,082 | 151,914 | 16.6 | % | ||||||||||||||||
| Other operating revenues | 636 | 446 | 42.5 | % | ||||||||||||||||
| Total revenues (3) | 177,718 | 100.0 | % | 152,360 | 100.0 | % | 16.6 | % | ||||||||||||
| Cost of goods sold | 98,056 | 55.2 | % | 80,330 | 52.7 | % | 22.1 | % | ||||||||||||
| Gross profit | 79,662 | 44.8 | % | 72,031 | 47.3 | % | 10.6 | % | ||||||||||||
| Operating expenses | 55,462 | 31.2 | % | 48,284 | 31.7 | % | 14.9 | % | ||||||||||||
| Other operative expenses, net | 323 | 0.2 | % | 1,099 | 0.7 | % | -70.6 | % | ||||||||||||
| Operative equity method (gain) loss in associates(4) | (43 | ) | -0.0 | % | 3 | 0.0 | % | -1658.3 | % | |||||||||||
| Operating income (5) | 23,920 | 13.5 | % | 22,645 | 14.9 | % | 5.6 | % | ||||||||||||
| Other non operative expenses, net | 3,489 | 2.0 | % | 650 | 0.4 | % | 436.8 | % | ||||||||||||
| Non Operative equity method (gain) loss in associates(6) | (104 | ) | -0.1 | % | (158 | ) | -0.1 | % | -34.2 | % | ||||||||||
| Interest expense | 7,471 | 6,337 | 17.9 | % | ||||||||||||||||
| Interest income | 715 | 414 | 72.7 | % | ||||||||||||||||
| Interest expense, net | 6,756 | 5,923 | 14.1 | % | ||||||||||||||||
| Foreign exchange loss (gain) | 1,792 | 1,459 | 22.9 | % | ||||||||||||||||
| Loss (gain) on monetary position in inflationary subsidiries | (2,417 | ) | 33 | -7324.4 | % | |||||||||||||||
| Market value (gain) loss on financial instruments | (51 | ) | (142 | ) | -64.3 | % | ||||||||||||||
| Comprehensive financing result | 6,080 | 7,273 | -16.4 | % | ||||||||||||||||
| Income before taxes | 14,455 | 14,880 | -2.9 | % | ||||||||||||||||
| Income taxes | 3,928 | 4,551 | -13.7 | % | ||||||||||||||||
| Consolidated net income | 10,527 | 10,329 | 1.9 | % | ||||||||||||||||
| Net income attributable to equity holders of the company | 10,070 | 5.7 | % | 10,235 | 6.7 | % | -1.6 | % | ||||||||||||
| Non-controlling interest | 457 | 94 | 383.4 | % | ||||||||||||||||
| Operating income (5) | 23,920 | 13.5 | % | 22,645 | 14.9 | % | 5.6 | % | ||||||||||||
| Depreciation | 7,579 | 6,310 | 20.1 | % | ||||||||||||||||
| Amortization and other operative non-cash charges | 3,996 | 2,278 | 75.4 | % | ||||||||||||||||
| Operating cash flow (5)(7) | 35,495 | 20.0 | % | 31,233 | 20.5 | % | 13.6 | % | ||||||||||||
| CAPEX | 12,391 | 11,484 | ||||||||||||||||||
(1) Except transactions, volume and average price per unit case figures.
(2) Sales volume, transactions and average price per unit case exclude beer results.
(3) Includes total revenues of Ps. 74,413 million from Mexico, Ps. 43,900 million from Brazil, Ps. 15,120 million from Colombia, and Ps. 12,273 million from Argentina for the full year 2016; and Ps. 67,772 million from Mexico, Ps. 37,825 million from Brazil operation, Ps. 12,984 from Colombia, and Ps. 13,943 million from Argentina for the same period of the previous year. Total Revenues includes Beer in Brazil of Ps. 7,887 million for the full year 2016 and Ps. 6,459 million for the same period of the previous year.
(4) Includes equity method in Jugos del Valle, Coca-Cola FEMSA Philippines, Inc., Leao Alimentos and Estrella Azul, among others.
(5) The operating income and operating cash flow lines are presented as non-gaap measures for the convenience of the reader.
(6) Includes equity method in PIASA, IEQSA, Beta San Miguel, IMER and KSP Participacoes.
(7) Operating cash flow = operating income + depreciation, amortization & other operative non-cash charges.
| Press Release 4Q 2016 February 24, 2017 | Page 25 |
Quarter - Comparable Income Statement (8)
Expressed in millions of Mexican pesos(1)
| 4Q 16 | % Rev | 4Q 15 | % Rev | D % Comparable(8) | ||||||||||||||||
| Transactions (million transactions) | 4,746.1 | 5,070.0 | -6.4 | % | ||||||||||||||||
| Volume (million unit cases) (2) | 806.8 | 857.0 | -5.9 | % | ||||||||||||||||
| Average price per unit case (2) | 51.48 | 47.67 | 8.0 | % | ||||||||||||||||
| Net revenues | 44,018 | 42,586 | 3.4 | % | ||||||||||||||||
| Other operating revenues | 282 | 120 | 135.5 | % | ||||||||||||||||
| Total revenues (3) | 44,300 | 100.0 | % | 42,706 | 100.0 | % | 3.7 | % | ||||||||||||
| Cost of goods sold | 24,063 | 54.3 | % | 22,723 | 53.2 | % | 5.9 | % | ||||||||||||
| Gross profit | 20,237 | 45.7 | % | 19,982 | 46.8 | % | 1.3 | % | ||||||||||||
| Operating expenses | 13,495 | 30.5 | % | 13,028 | 30.5 | % | 3.6 | % | ||||||||||||
| Other operative expenses, net | 215 | 0.5 | % | 65 | 0.2 | % | 230.7 | % | ||||||||||||
| Operative equity method (gain) loss in associates(4) | 275 | 0.6 | % | 76 | 0.2 | % | 263.6 | % | ||||||||||||
| Operating income (5) | 6,251 | 14.1 | % | 6,814 | 16.0 | % | -8.3 | % | ||||||||||||
| Other non operative expenses, net | 385 | 0.9 | % | (20 | ) | -0.0 | % | -2043.3 | % | |||||||||||
| Non Operative equity method (gain) loss in associates(6) | (33 | ) | -0.1 | % | (38 | ) | -0.1 | % | -12.8 | % | ||||||||||
| Interest expense | 2,064 | 3,069 | -32.8 | % | ||||||||||||||||
| Interest income | 142 | 119 | 19.2 | % | ||||||||||||||||
| Interest expense, net | 1,922 | 2,950 | -34.8 | % | ||||||||||||||||
| Foreign exchange loss (gain) | (58 | ) | 52 | -212.7 | % | |||||||||||||||
| Loss (gain) on monetary position in inflationary subsidiries | 0 | (0 | ) | -131.3 | % | |||||||||||||||
| Market value (gain) loss on financial instruments | 213 | (208 | ) | -202.1 | % | |||||||||||||||
| Comprehensive financing result | 2,076 | 2,793 | -25.7 | % | ||||||||||||||||
| Income before taxes | 3,824 | 4,078 | -6.2 | % | ||||||||||||||||
| Income taxes | 967 | 1,127 | -14.2 | % | ||||||||||||||||
| Consolidated net income | 2,857 | 2,951 | -3.2 | % | ||||||||||||||||
| Net income attributable to equity holders of the company | 2,690 | 6.1 | % | 3,025 | 7.1 | % | -11.1 | % | ||||||||||||
| Non-controlling interest | 167 | (74 | ) | -326.6 | % | |||||||||||||||
| Operating income (5) | 6,251 | 14.1 | % | 6,814 | 16.0 | % | -8.3 | % | ||||||||||||
| Depreciation | 1,818 | 1,695 | 7.2 | % | ||||||||||||||||
| Amortization and other operative non-cash charges | 616 | 383 | 61.1 | % | ||||||||||||||||
| Operating cash flow (5)(7) | 8,685 | 19.6 | % | 8,891 | 20.8 | % | -2.3 | % | ||||||||||||
(1) Except transactions, volume and average price per unit case figures.
(2) Sales volume, transactions and average price per unit case exclude beer results.
(3) Includes total revenues of Ps. 19,076 million from Mexico, Ps. 13,315 million from Brazil, Ps. 4,264 million from Colombia, and Ps. 4,128 million from Argentina for the fourth quarter of 2016; and Ps. 17,545 million from Mexico, Ps. 14,256 million from Brazil, Ps. 4,205 from Colombia, and Ps. 3,220 million from Argentina for the same period of the previous year. Total Revenues includes Beer in Brazil of Ps. 2,485 million for the fourth quarter of 2016 and Ps. 1,735 million for the same period of the previous year.
(4) Includes equity method in Jugos del Valle, Coca-Cola FEMSA Philippines, Inc., Leao Alimentos and Estrella Azul, among others.
(5) The operating income and operating cash flow lines are presented as non-gaap measures for the convenience of the reader.
(6) Includes equity method in PIASA, IEQSA, Beta San Miguel, IMER and KSP Participacoes.
(7) Operating cash flow = operating income + depreciation, amortization & other operative non-cash charges.
(8) Comparable: with respect to a year over year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods. From our operations, only Venezuela qualifies as a hyperinflationary economy.
| Press Release 4Q 2016 February 24, 2017 | Page 26 |
YTD - Comparable Income Statement (8)
Expressed in millions of Mexican pesos(1)
| YTD 16 | % Rev | YTD 15 | % Rev | D % Comparable(8) | ||||||||||||||||
| Transactions (million transactions) | 18,902.4 | 18,961.5 | -0.3 | % | ||||||||||||||||
| Volume (million unit cases) (2) | 3,171.3 | 3,200.0 | -0.9 | % | ||||||||||||||||
| Average price per unit case (2) | 46.91 | 43.93 | 6.8 | % | ||||||||||||||||
| Net revenues | 156,662 | 147,026 | 6.6 | % | ||||||||||||||||
| Other operating revenues | 614 | 449 | 36.8 | % | ||||||||||||||||
| Total revenues (3) | 157,277 | 100.0 | % | 147,475 | 100.0 | % | 6.6 | % | ||||||||||||
| Cost of goods sold | 84,992 | 54.0 | % | 78,305 | 53.1 | % | 8.5 | % | ||||||||||||
| Gross profit | 72,284 | 46.0 | % | 69,170 | 46.9 | % | 4.5 | % | ||||||||||||
| Operating expenses | 49,342 | 31.4 | % | 46,596 | 31.6 | % | 5.9 | % | ||||||||||||
| Other operative expenses, net | 339 | 0.2 | % | 770 | 0.5 | % | -56.0 | % | ||||||||||||
| Operative equity method (gain) loss in associates(4) | (43 | ) | 0.0 | % | 21 | 0.0 | % | -308.8 | % | |||||||||||
| Operating income (5) | 22,646 | 14.4 | % | 21,783 | 14.8 | % | 4.0 | % | ||||||||||||
| Other non operative expenses, net | 906 | 0.6 | % | 173 | 0.1 | % | 425.2 | % | ||||||||||||
| Non Operative equity method (gain) loss in associates(6) | (104 | ) | -0.1 | % | (58 | ) | -0.0 | % | 79.0 | % | ||||||||||
| Interest expense | 7,358 | 7,332 | 0.4 | % | ||||||||||||||||
| Interest income | 478 | 353 | 35.6 | % | ||||||||||||||||
| Interest expense, net | 6,880 | 6,979 | -1.4 | % | ||||||||||||||||
| Foreign exchange loss (gain) | 1,760 | 1,527 | 15.2 | % | ||||||||||||||||
| Loss (gain) on monetary position in inflationary subsidiries | (0 | ) | (0 | ) | 0.0 | % | ||||||||||||||
| Market value (gain) loss on financial instruments | (51 | ) | (154 | ) | -67.2 | % | ||||||||||||||
| Comprehensive financing result | 8,589 | 8,352 | 2.8 | % | ||||||||||||||||
| Income before taxes | 13,255 | 13,317 | -0.5 | % | ||||||||||||||||
| Income taxes | 3,546 | 4,046 | -12.3 | % | ||||||||||||||||
| Consolidated net income | 9,709 | 9,271 | 4.7 | % | ||||||||||||||||
| Net income attributable to equity holders of the company | 9,290 | 5.9 | % | 9,239 | 6.3 | % | 0.6 | % | ||||||||||||
| Non-controlling interest | 419 | 32 | 1192.8 | % | ||||||||||||||||
| Operating income (5) | 22,646 | 14.4 | % | 21,783 | 14.8 | % | 4.0 | % | ||||||||||||
| Depreciation | 6,768 | 6,306 | 7.3 | % | ||||||||||||||||
| Amortization and other operative non-cash charges | 1,517 | 1,665 | -8.9 | % | ||||||||||||||||
| Operating cash flow (5)(7) | 30,931 | 19.7 | % | 29,754 | 20.2 | % | 4.0 | % | ||||||||||||
(1) Except transactions, volume and average price per unit case figures.
(2) Sales volume, transactions and average price per unit case exclude beer results.
(3) Includes total revenues of Ps. 74,413 million from Mexico, Ps. 42,326 million Brazil, Ps. 15,120 million from Colombia, and Ps. 12,273 million from Argentina for the full year of 2016; and Ps. 67,772 million from Mexico, Ps. 42,844 million from Brazil, Ps. 13,825 from Colombia, and Ps. 10,335 million from Argentina for the same period of the previous year. Total Revenues includes Beer in Brazil of Ps. 7,384 million for the full year 2016 and Ps. 6.459 million for the same period of the previous year.
(4) Includes equity method in Jugos del Valle, Coca-Cola FEMSA Philippines, Inc., Leao Alimentos and Estrella Azul, among others.
(5) The operating income and operating cash flow lines are presented as non-gaap measures for the convenience of the reader.
(6) Includes equity method in PIASA, IEQSA, Beta San Miguel, IMER and KSP Participacoes.
(7) Operating cash flow = operating income + depreciation, amortization & other operative non-cash charges.
(8) Comparable: with respect to a year over year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods. From our operations, only Venezuela qualifies as a hyperinflationary economy.
| Press Release 4Q 2016 February 24, 2017 | Page 27 |
Mexico & Central America Division
Expressed in millions of Mexican pesos(1)
Quarterly information
| 4Q 16 | % Rev | 4Q 15 | % Rev | D % Reported | D % Comparable(6) | |||||||||||||||||||
| Transactions (million transactions) | 2,815.2 | 2,794.9 | 0.7 | % | 0.7 | % | ||||||||||||||||||
| Volume (million unit cases) | 502.2 | 498.7 | 0.7 | % | 0.7 | % | ||||||||||||||||||
| Average price per unit case | 44.83 | 41.12 | 9.0 | % | 6.5 | % | ||||||||||||||||||
| Net revenues | 22,511 | 20,509 | 9.8 | % | 7.2 | % | ||||||||||||||||||
| Other operating revenues | 81 | 22 | 268.0 | % | 200.0 | % | ||||||||||||||||||
| Total revenues (2) | 22,593 | 100.0 | % | 20,531 | 100.0 | % | 10.0 | % | 7.4 | % | ||||||||||||||
| Cost of goods sold | 11,471 | 50.8 | % | 10,166 | 49.5 | % | 12.8 | % | 9.8 | % | ||||||||||||||
| Gross profit | 11,122 | 49.2 | % | 10,365 | 50.5 | % | 7.3 | % | 5.1 | % | ||||||||||||||
| Operating expenses | 7,175 | 31.8 | % | 6,711 | 32.7 | % | 6.9 | % | 4.8 | % | ||||||||||||||
| Other operative expenses, net | 140 | 0.6 | % | 146 | 0.7 | % | -4.3 | % | 245.1 | % | ||||||||||||||
| Operative equity method (gain) loss in associates (3) | 245 | 1.1 | % | 50 | 0.2 | % | 392.1 | % | 392.1 | % | ||||||||||||||
| Operating income (4) | 3,561 | 15.8 | % | 3,459 | 16.8 | % | 3.0 | % | -2.3 | % | ||||||||||||||
| Depreciation, amortization & other operative non-cash charges | 1,547 | 6.8 | % | 1,306 | 6.4 | % | 18.5 | % | 25.8 | % | ||||||||||||||
| Operating cash flow (4)(5) | 5,108 | 22.6 | % | 4,764 | 23.2 | % | 7.2 | % | 4.8 | % | ||||||||||||||
| Accumulated information | ||||||||||||||||||||||||
| YTD 16 | % Rev | YTD 15 | % Rev | D % Reported | D % Comparable(6) | |||||||||||||||||||
| Transactions (million transactions) | 11,382.1 | 10,877.1 | 4.6 | % | 4.6 | % | ||||||||||||||||||
| Volume (million unit cases) | 2,025.6 | 1,952.4 | 3.7 | % | 3.7 | % | ||||||||||||||||||
| Average price per unit case | 43.17 | 40.28 | 7.2 | % | 4.8 | % | ||||||||||||||||||
| Net revenues | 87,438 | 78,651 | 11.2 | % | 8.7 | % | ||||||||||||||||||
| Other operating revenues | 120 | 58 | 106.3 | % | 90.0 | % | ||||||||||||||||||
| Total revenues (2) | 87,558 | 100.0 | % | 78,709 | 100.0 | % | 11.2 | % | 8.8 | % | ||||||||||||||
| Cost of goods sold | 43,989 | 50.2 | % | 38,578 | 49.0 | % | 14.0 | % | 11.2 | % | ||||||||||||||
| Gross profit | 43,569 | 49.8 | % | 40,131 | 51.0 | % | 8.6 | % | 6.5 | % | ||||||||||||||
| Operating expenses | 28,569 | 32.6 | % | 26,125 | 33.2 | % | 9.4 | % | 7.2 | % | ||||||||||||||
| Other operative expenses, net | 330 | 0.4 | % | 715 | 0.9 | % | -53.9 | % | -46.2 | % | ||||||||||||||
| Operative equity method (gain) loss in associates (3) | (55 | ) | -0.1 | % | 53 | 0.1 | % | -202.7 | % | 0.0 | % | |||||||||||||
| Operating income (4) | 14,725 | 16.8 | % | 13,238 | 16.8 | % | 11.2 | % | 8.2 | % | ||||||||||||||
| Depreciation, amortization & other operative non-cash charges | 5,174 | 5.9 | % | 5,195 | 6.6 | % | -0.4 | % | -0.5 | % | ||||||||||||||
| Operating cash flow (4)(5) | 19,899 | 22.7 | % | 18,434 | 23.4 | % | 8.0 | % | 5.8 | % | ||||||||||||||
(1) Except transactions, volume and average price per unit case figures.
(2) For the quarter: Includes total revenues of Ps. 19,076 million from Mexico for the fourth quarter of 2016; and Ps. 17,545 million for the same period of the previous year.
For YTD information: Includes total revenues of Ps. 74,413 million from Mexico for the full year 2016; and Ps. 67,772 million for the same period of the previous year.
(3) Includes equity method in Jugos del Valle, Coca-Cola FEMSA Philippines, Inc. and Estrella Azul, among others.
(4) The operating income and operating cash flow lines are presented as non-gaap measures for the convenience of the reader.
(5) Operating cash flow = operating income + depreciation, amortization & other operative non-cash charges.
(6) Comparable: Comparable: with respect to a year over year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods.
| Press Release 4Q 2016 February 24, 2017 | Page 28 |
South America Division
Expressed in millions of Mexican pesos(1)
Quarterly information
| 4Q 16 | % Rev | 4Q 15 | % Rev | D % Reported | ||||||||||||||||
| Transactions (million transactions) | 2,167.7 | 2,579.9 | -16.0 | % | ||||||||||||||||
| Volume (million unit cases) (2) | 347.7 | 414.7 | -16.2 | % | ||||||||||||||||
| Average price per unit case (2) | 68.24 | 44.35 | 53.9 | % | ||||||||||||||||
| Net revenues | 26,718 | 20,128 | 32.7 | % | ||||||||||||||||
| Other operating revenues | 222 | 83 | 168.6 | % | ||||||||||||||||
| Total revenues (3) | 26,940 | 100.0 | % | 20,211 | 100.0 | % | 33.3 | % | ||||||||||||
| Cost of goods sold | 15,675 | 58.2 | % | 11,260 | 55.7 | % | 39.2 | % | ||||||||||||
| Gross profit | 11,266 | 41.8 | % | 8,950 | 44.3 | % | 25.9 | % | ||||||||||||
| Operating expenses | 7,582 | 28.1 | % | 5,712 | 28.3 | % | 32.7 | % | ||||||||||||
| Other operative expenses, net | 48 | 0.2 | % | 29 | 0.1 | % | 66.9 | % | ||||||||||||
| Operative equity method (gain) loss in associates (4) | 30 | 0.1 | % | 19 | 0.1 | % | 60.2 | % | ||||||||||||
| Operating income (5) | 3,606 | 13.4 | % | 3,190 | 15.8 | % | 13.0 | % | ||||||||||||
| Depreciation, amortization & other operative non-cash charges | 2,098 | 7.8 | % | 866 | 4.3 | % | 142.3 | % | ||||||||||||
| Operating cash flow (5)(6) | 5,704 | 21.2 | % | 4,056 | 20.1 | % | 40.6 | % | ||||||||||||
Accumulated information
| YTD 16 | % Rev | YTD 15 | % Rev | D % Reported | ||||||||||||||||
| Transactions (million transactions) | 8,392.3 | 9,402.5 | -10.7 | % | ||||||||||||||||
| Volume (million unit cases) (2) | 1,308.4 | 1,483.2 | -11.8 | % | ||||||||||||||||
| Average price per unit case (2) | 62.49 | 45.04 | 38.7 | % | ||||||||||||||||
| Net revenues | 89,644 | 73,263 | 22.4 | % | ||||||||||||||||
| Other operating revenues | 516 | 388 | 33.0 | % | ||||||||||||||||
| Total revenues (3) | 90,160 | 100.0 | % | 73,651 | 100.0 | % | 22.4 | % | ||||||||||||
| Cost of goods sold | 54,067 | 60.0 | % | 41,751 | 56.7 | % | 29.5 | % | ||||||||||||
| Gross profit | 36,093 | 40.0 | % | 31,900 | 43.3 | % | 13.1 | % | ||||||||||||
| Operating expenses | 26,893 | 29.8 | % | 22,160 | 30.1 | % | 21.4 | % | ||||||||||||
| Other operative expenses, net | (7 | ) | -0.0 | % | 383 | 0.5 | % | -101.8 | % | |||||||||||
| Operative equity method (gain) loss in associates (4) | 12 | 0.0 | % | (51 | ) | -0.1 | % | -122.8 | % | |||||||||||
| Operating income (5) | 9,195 | 10.2 | % | 9,406 | 12.8 | % | -2.2 | % | ||||||||||||
| Depreciation, amortization & other operative non-cash charges | 6,401 | 7.1 | % | 3,393 | 4.6 | % | 88.7 | % | ||||||||||||
| Operating cash flow (5)(6) | 15,596 | 17.3 | % | 12,799 | 17.4 | % | 21.8 | % | ||||||||||||
(1) Except transactions, volume and average price per unit case figures.
(2) Sales volume and average price per unit case exclude beer results.
(3) For the quarter: Includes total revenues of Ps. 14,889 million from Brazil, Ps. 4,264 million from Colombia, and Ps. 4,128 million from Argentina for the fourth quarter of 2016; and Ps. 10,312 million from Brazil, Ps. 3,484 from Colombia, and Ps. 4,105 million from Argentina for the same period of the previous year. Total Revenues includes Beer in Brazil of Ps. 2,988 million for the fourth quarter of 2016 and Ps. 1,735 million for the same period of the previous year.
For the YTD information: Includes total revenues of Ps. 43,900 million from Brazil, Ps. 15,120 million from Colombia, and Ps. 12,273 million from Argentina for the full year 2016; and Ps. 37,825 million from Brazil, Ps. 12,984 from Colombia, and Ps. 13,943 million from Argentina for the same period of the previous year. Total Revenues includes Beer in Brazil of Ps. 7,887 million for the full year 2016 and Ps. 6,459 million for the same period of the previous year.
(4) Includes equity method in Leao Alimentos, among others.
(5) The operating income and operating cash flow lines are presented as non-gaap measures for the convenience of the reader.
(6) Operating cash flow = operating income + depreciation, amortization & other operative non-cash charges.
| Press Release 4Q 2016 February 24, 2017 | Page 29 |
Venezuela Operation
Expressed in millions of Mexican pesos(1)
Quarterly information
| 4Q 16 | % Rev | 4Q 15 | % Rev | D % Reported | D % Comparable(3) | |||||||||||||||||||
| Transactions (million transactions) | 137.3 | 304.8 | -54.9 | % | -54.9 | % | ||||||||||||||||||
| Volume (million unit cases) | 23.6 | 56.4 | -58.2 | % | -58.2 | % | ||||||||||||||||||
| Average price per unit case | 155.29 | 40.94 | 279.3 | % | 1130.5 | % | ||||||||||||||||||
| Net revenues | 3,660 | 2,309 | 58.5 | % | 414.1 | % | ||||||||||||||||||
| Other operating revenues | 0 | 0 | 0.0 | % | 0.0 | % | ||||||||||||||||||
| Total revenues | 3,660 | 100.0 | % | 2,309 | 100.0 | % | 58.5 | % | 414.1 | % | ||||||||||||||
| Cost of goods sold | 2,056 | 56.2 | % | 1,259 | 54.5 | % | 63.4 | % | 431.2 | % | ||||||||||||||
| Gross profit | 1,603 | 43.8 | % | 1,050 | 45.5 | % | 52.6 | % | 393.7 | % | ||||||||||||||
| Operating expenses | 991 | 27.1 | % | 561 | 24.3 | % | 76.6 | % | 478.8 | % | ||||||||||||||
| Other operative expenses, net | 58 | 1.6 | % | (8 | ) | -0.4 | % | -799.2 | % | 33.9 | % | |||||||||||||
| Operating income | 554 | 15.1 | % | 498 | 21.6 | % | 11.4 | % | 374.5 | % | ||||||||||||||
| Depreciation, amortization & other operative non-cash charges | 1,183 | 32.3 | % | 176 | 7.6 | % | 572.9 | % | 1187.8 | % | ||||||||||||||
| Operating cash flow (2) | 1,737 | 47.5 | % | 673 | 29.2 | % | 157.9 | % | 732.5 | % | ||||||||||||||
Accumulated information
| YTD 16 | % Rev | YTD 15 | % Rev | D % Reported | D % Comparable(3) | |||||||||||||||||||
| Transactions (million transactions) | 772.6 | 1,318.1 | -41.4 | % | -41.4 | % | ||||||||||||||||||
| Volume (million unit cases) | 143.1 | 235.6 | -39.3 | % | -39.3 | % | ||||||||||||||||||
| Average price per unit case | 131.82 | 37.76 | 249.1 | % | 1490.1 | % | ||||||||||||||||||
| Net revenues | 18,868 | 8,899 | 112.0 | % | 865.9 | % | ||||||||||||||||||
| Other operating revenues | - | (0 | ) | -100.0 | % | -100.0 | % | |||||||||||||||||
| Total revenues | 18,868 | 100.0 | % | 8,899 | 100.0 | % | 112.0 | % | 865.9 | % | ||||||||||||||
| Cost of goods sold | 12,037 | 63.8 | % | 4,531 | 50.9 | % | 165.7 | % | 1096.1 | % | ||||||||||||||
| Gross profit | 6,830 | 36.2 | % | 4,368 | 49.1 | % | 56.4 | % | 621.1 | % | ||||||||||||||
| Operating expenses | 5,849 | 31.0 | % | 2,759 | 31.0 | % | 112.0 | % | 905.3 | % | ||||||||||||||
| Other operative expenses, net | 69 | 0.4 | % | 209 | 2.3 | % | -67.0 | % | -21.1 | % | ||||||||||||||
| Operating income | 913 | 4.8 | % | 1,400 | 15.7 | % | -34.8 | % | 212.9 | % | ||||||||||||||
| Depreciation, amortization & other operative non-cash charges | 3,262 | 17.3 | % | 773 | 8.7 | % | 321.9 | % | 1506.9 | % | ||||||||||||||
| Operating cash flow (2) | 4,174 | 22.1 | % | 2,173 | 24.4 | % | 92.1 | % | 743.8 | % | ||||||||||||||
(1) Except transactions, volume and average price per unit case figures.
(2) Operating cash flow = operating income + depreciation, amortization & other operative non-cash charges.
(3) Comparable: with respect to a year over year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures and (ii) translation effects resulting from exchange rate movements.
| Press Release 4Q 2016 February 24, 2017 | Page 30 |
Comparable South America Division
Expressed in millions of Mexican pesos(1)
Quarterly information
| 4Q 16 | % Rev | 4Q 15 | % Rev | D % Comparable(7) | ||||||||||||||||
| Transactions (million transactions) | 1,930.9 | 2,275.1 | -15.1 | % | ||||||||||||||||
| Volume (million unit cases) (2) | 304.6 | 358.3 | -15.0 | % | ||||||||||||||||
| Average price per unit case (2) | 62.44 | 55.39 | 15.7 | % | ||||||||||||||||
| Net revenues | 21,506 | 21,584 | -0.4 | % | ||||||||||||||||
| Other operating revenues | 201 | 97 | 106.4 | % | ||||||||||||||||
| Total revenues (3) | 21,707 | 100.0 | % | 21,682 | 100.0 | % | 0.1 | % | ||||||||||||
| Cost of goods sold | 12,592 | 58.0 | % | 12,281 | 56.6 | % | 2.5 | % | ||||||||||||
| Gross profit | 9,115 | 42.0 | % | 9,401 | 43.4 | % | -3.0 | % | ||||||||||||
| Operating expenses | 6,320 | 29.1 | % | 6,175 | 28.5 | % | 2.3 | % | ||||||||||||
| Other operative expenses, net | 76 | 0.3 | % | 26 | 0.1 | % | 193.1 | % | ||||||||||||
| Operative equity method (gain) loss in associates (4) | 30 | 0.1 | % | 26 | 0.1 | % | 16.5 | % | ||||||||||||
| Operating income (5) | 2,690 | 12.4 | % | 3,174 | 14.6 | % | -15.3 | % | ||||||||||||
| Depreciation, amortization & other operative non-cash charges | 887 | 4.1 | % | 848 | 3.9 | % | 4.6 | % | ||||||||||||
| Operating cash flow (5)(6) | 3,577 | 16.5 | % | 4,022 | 18.6 | % | -11.1 | % | ||||||||||||
Accumulated information
| YTD 16 | % Rev | YTD 15 | % Rev | D % Comparable(7) | ||||||||||||||||
| Transactions (million transactions) | 7,520.3 | 8,084.3 | -7.0 | % | ||||||||||||||||
| Volume (million unit cases) (2) | 1,145.7 | 1,247.6 | -8.2 | % | ||||||||||||||||
| Average price per unit case (2) | 53.98 | 48.22 | 11.9 | % | ||||||||||||||||
| Net revenues | 69,225 | 66,614 | 3.9 | % | ||||||||||||||||
| Other operating revenues | 494 | 390 | 26.6 | % | ||||||||||||||||
| Total revenues (3) | 69,719 | 100.0 | % | 67,004 | 100.0 | % | 4.1 | % | ||||||||||||
| Cost of goods sold | 41,003 | 58.8 | % | 38,749 | 57.8 | % | 5.8 | % | ||||||||||||
| Gross profit | 28,716 | 41.2 | % | 28,255 | 42.2 | % | 1.6 | % | ||||||||||||
| Operating expenses | 20,774 | 29.8 | % | 19,954 | 29.8 | % | 4.1 | % | ||||||||||||
| Other operative expenses, net | 10 | 0.0 | % | 160 | 0.2 | % | -94.0 | % | ||||||||||||
| Operative equity method (gain) loss in associates (4) | 12 | 0.0 | % | (33 | ) | -0.0 | % | -135.4 | % | |||||||||||
| Operating income (5) | 7,921 | 11.4 | % | 8,174 | 12.2 | % | -3.1 | % | ||||||||||||
| Depreciation, amortization & other operative non-cash charges | 3,111 | 4.5 | % | 2,771 | 4.1 | % | 12.2 | % | ||||||||||||
| Operating cash flow (5)(6) | 11,032 | 15.8 | % | 10,946 | 16.3 | % | 0.8 | % | ||||||||||||
(1) Except transactions, volume and average price per unit case figures.
(2) Sales volume and average price per unit case exclude beer results.
(3) For the quarter: Includes total revenues of Ps. 13,315 million from Brazil, Ps. 4,264 million from Colombia, and Ps. 4,128 million from Argentina for the fourth quarter of 2016; and Ps. 14,256 million from Brazil, Ps. 4,205 from Colombia, and Ps. 3,220 million from Argentina for the same period of the previous year. Total Revenues includes Beer in Brazil of Ps. 2,485 million for the fourth quarter of 2016 and Ps. 1,735 million for the same period of the previous year.
For the YTD information: Includes total revenues of Ps. 42,326 million from Brazil, Ps. 15,120 million from Colombia, and Ps. 12,273 million from Argentina for the full year 2016; and Ps. 42,844 million from Brazil, Ps. 13,825 from Colombia, and Ps. 10,335 million from Argentina for the same period of the previous year. Total Revenues includes Beer in Brazil of Ps. 7,384 million for the full year 2016 and Ps. 6,459 million for the same period of the previous year.
(4) Includes equity method in Leao Alimentos, among others.
(5) The operating income and operating cash flow lines are presented as non-gaap measures for the convenience of the reader.
(6) Operating cash flow = operating income + depreciation, amortization & other operative non-cash charges.
(7) Comparable: with respect to a year over year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures, (ii) translation effects resulting from exchange rate movements and (iii) the results of hyperinflationary economies in both periods.
| Press Release 4Q 2016 February 24, 2017 | Page 31 |
Consolidated Balance Sheet
Expressed in millions of Mexican pesos.
| Dec-16 | Dec-15 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash, cash equivalents and marketable securities | Ps. | 10,476 | Ps. | 15,989 | ||||
| Total accounts receivable | 15,005 | 9,647 | ||||||
| Inventories | 10,744 | 8,066 | ||||||
| Other current assets | 9,229 | 8,530 | ||||||
| Total current assets | 45,453 | 42,232 | ||||||
| Property, plant and equipment | - | - | ||||||
| Property, plant and equipment | 106,696 | 81,569 | ||||||
| Accumulated depreciation | (41,408 | ) | (31,037 | ) | ||||
| Total property, plant and equipment, net | 65,288 | 50,532 | ||||||
| Investment in shares | 22,357 | 17,873 | ||||||
| Intangibles assets and other assets | 123,964 | 90,754 | ||||||
| Other non-current assets | 22,194 | 8,858 | ||||||
| Total Assets | Ps. | 279,256 | Ps. | 210,249 | ||||
| Liabilities and Equity | ||||||||
| Current Liabilities | ||||||||
| Short-term bank loans and notes payable | Ps. | 3,052 | Ps. | 3,470 | ||||
| Suppliers | 21,489 | 15,470 | ||||||
| Other current liabilities | 15,327 | 11,540 | ||||||
| Total current liabilities | 39,867 | 30,480 | ||||||
| Long-term bank loans and notes payable | 85,857 | 63,260 | ||||||
| Other long-term liabilities | 24,298 | 7,774 | ||||||
| Total liabilities | 150,022 | 101,514 | ||||||
| Equity | - | - | ||||||
| Non-controlling interest | 7,096 | 3,986 | ||||||
| Total controlling interest | 122,138 | 104,749 | ||||||
| Total equity | 129,234 | 108,735 | ||||||
| Total Liabilities and Equity | Ps. | 279,256 | Ps. | 210,249 | ||||
| Press Release 4Q 2016 February 24, 2017 | Page 32 |
Quarter - Volume & Transactions
For the three months ended December 31, 2016 and 2015
Volume
Expressed in million unit cases
| 4Q 2016 | 4Q 2015 | |||||||||||||||||||||||||||||||||||||||
| Sparkling | Water (1) | Bulk Water (2) | Still | Total | Sparkling | Water (1) | Bulk Water (2) | Still | Total | |||||||||||||||||||||||||||||||
| Mexico | 340.4 | 23.5 | 67.4 | 26.5 | 457.7 | 338.9 | 23.0 | 69.1 | 23.5 | 454.5 | ||||||||||||||||||||||||||||||
| Central America | 37.3 | 2.3 | 0.2 | 4.6 | 44.4 | 36.5 | 2.6 | 0.2 | 5.0 | 44.2 | ||||||||||||||||||||||||||||||
| Mexico & Central America | 377.7 | 25.8 | 67.5 | 31.1 | 502.2 | 375.4 | 25.6 | 69.2 | 28.6 | 498.7 | ||||||||||||||||||||||||||||||
| Colombia | 58.5 | 6.3 | 4.8 | 6.8 | 76.5 | 64.2 | 7.6 | 6.3 | 10.4 | 88.5 | ||||||||||||||||||||||||||||||
| Venezuela | 18.6 | 3.3 | 0.2 | 1.4 | 23.6 | 48.5 | 3.5 | 0.5 | 3.9 | 56.4 | ||||||||||||||||||||||||||||||
| Brazil | 166.0 | 11.0 | 1.5 | 8.9 | 187.3 | 179.6 | 13.2 | 2.2 | 9.5 | 204.5 | ||||||||||||||||||||||||||||||
| Argentina | 48.8 | 6.3 | 0.9 | 4.3 | 60.4 | 53.7 | 6.8 | 0.9 | 4.0 | 65.3 | ||||||||||||||||||||||||||||||
| South America | 291.9 | 26.9 | 7.4 | 21.4 | 347.7 | 346.0 | 31.1 | 9.9 | 27.7 | 414.7 | ||||||||||||||||||||||||||||||
| Total | 669.6 | 52.7 | 75.0 | 52.5 | 849.9 | 721.4 | 56.6 | 79.1 | 56.3 | 913.4 | ||||||||||||||||||||||||||||||
(1) Excludes water presentations larger than 5.0 Lt ; includes flavored water
(2) Bulk Water = Still bottled water in 5.0, 19.0 and 20.0 - liter packaging presentations; includes flavored water
Transactions
Expressed in million transactions
| 4Q 2016 | 4Q 2015 | |||||||||||||||||||||||||||||||
| Sparkling | Water | Still | Total | Sparkling | Water | Still | Total | |||||||||||||||||||||||||
| Mexico | 2,047.8 | 173.9 | 224.7 | 2,446.5 | 2,045.7 | 169.4 | 208.2 | 2,423.3 | ||||||||||||||||||||||||
| Central America | 293.9 | 14.5 | 60.3 | 368.7 | 295.4 | 15.1 | 61.2 | 371.7 | ||||||||||||||||||||||||
| Mexico & Central America | 2,341.7 | 188.4 | 285.0 | 2,815.2 | 2,341.1 | 184.4 | 269.4 | 2,794.9 | ||||||||||||||||||||||||
| Colombia | 426.9 | 83.3 | 71.1 | 581.3 | 473.4 | 100.8 | 96.1 | 670.3 | ||||||||||||||||||||||||
| Venezuela | 97.0 | 32.0 | 8.4 | 137.3 | 243.0 | 28.2 | 33.6 | 304.8 | ||||||||||||||||||||||||
| Brazil | 978.4 | 93.1 | 93.9 | 1,165.4 | 1,090.6 | 110.1 | 103.3 | 1,304.0 | ||||||||||||||||||||||||
| Argentina | 223.7 | 30.9 | 29.1 | 283.7 | 239.1 | 34.0 | 27.6 | 300.7 | ||||||||||||||||||||||||
| South America | 1,725.9 | 239.2 | 202.6 | 2,167.7 | 2,046.1 | 273.1 | 260.7 | 2,579.9 | ||||||||||||||||||||||||
| Total | 4,067.6 | 427.6 | 487.6 | 4,982.9 | 4,387.2 | 457.5 | 530.0 | 5,374.8 | ||||||||||||||||||||||||
| Press Release 4Q 2016 February 24, 2017 | Page 33 |
YTD - Volume & Transactions
For the twelve months ended December 31, 2016 and 2015
Volume
Expressed in million unit cases
| YTD 2016 | YTD 2015 | |||||||||||||||||||||||||||||||||||||||
| Sparkling | Water (1) | Bulk Water (2) | Still | Total | Sparkling | Water (1) | Bulk Water (2) | Still | Total | |||||||||||||||||||||||||||||||
| Mexico | 1,356.8 | 96.0 | 291.2 | 106.6 | 1,850.7 | 1,306.7 | 92.3 | 292.2 | 93.3 | 1,784.6 | ||||||||||||||||||||||||||||||
| Central America | 145.1 | 9.9 | 0.6 | 19.2 | 174.9 | 138.2 | 10.0 | 0.4 | 19.3 | 167.8 | ||||||||||||||||||||||||||||||
| Mexico & Central America | 1,501.9 | 105.9 | 291.9 | 125.9 | 2,025.6 | 1,444.9 | 102.2 | 292.7 | 112.6 | 1,952.4 | ||||||||||||||||||||||||||||||
| Colombia | 226.7 | 27.6 | 21.1 | 31.7 | 307.0 | 228.2 | 27.9 | 27.2 | 36.6 | 320.0 | ||||||||||||||||||||||||||||||
| Venezuela | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 203.1 | 14.3 | 1.7 | 16.6 | 235.6 | ||||||||||||||||||||||||||||||
| Brazil | 554.2 | 38.0 | 5.4 | 32.0 | 629.7 | 609.2 | 44.0 | 5.9 | 34.5 | 693.6 | ||||||||||||||||||||||||||||||
| Argentina | 168.7 | 23.2 | 3.4 | 13.9 | 209.1 | 195.1 | 22.5 | 2.3 | 14.0 | 233.9 | ||||||||||||||||||||||||||||||
| South America | 949.6 | 88.7 | 29.9 | 77.6 | 1,145.8 | 1,235.6 | 108.8 | 37.1 | 101.7 | 1,483.2 | ||||||||||||||||||||||||||||||
| Total | 2,451.5 | 194.7 | 321.7 | 203.4 | 3,171.3 | 2,680.5 | 211.1 | 329.7 | 214.3 | 3,435.6 | ||||||||||||||||||||||||||||||
(1) Excludes water presentations larger than 5.0 Lt ; includes flavored water
(2) Bulk Water = Still bottled water in 5.0, 19.0 and 20.0 - liter packaging presentations; includes flavored water
Transactions
Expressed in million transactions
| YTD 2016 | YTD 2015 | |||||||||||||||||||||||||||||||
| Sparkling | Water | Still | Total | Sparkling | Water | Still | Total | |||||||||||||||||||||||||
| Mexico | 8,256.0 | 721.9 | 906.2 | 9,884.1 | 7,899.7 | 699.9 | 829.5 | 9,429.1 | ||||||||||||||||||||||||
| Central America | 1,181.4 | 61.5 | 255.0 | 1,498.0 | 1,145.6 | 59.3 | 243.2 | 1,448.0 | ||||||||||||||||||||||||
| Mexico & Central America | 9,437.5 | 783.5 | 1,161.2 | 11,382.1 | 9,045.3 | 759.2 | 1,072.7 | 10,877.1 | ||||||||||||||||||||||||
| Colombia | 1,698.9 | 373.7 | 328.3 | 2,400.9 | 1,720.0 | 363.8 | 326.8 | 2,410.7 | ||||||||||||||||||||||||
| Venezuela | 579.3 | 118.5 | 74.8 | 772.6 | 1,042.2 | 127.6 | 148.3 | 1,318.1 | ||||||||||||||||||||||||
| Brazil | 3,516.5 | 330.4 | 359.2 | 4,206.1 | 3,811.4 | 373.9 | 393.3 | 4,578.6 | ||||||||||||||||||||||||
| Argentina | 801.0 | 112.3 | 99.3 | 1,012.6 | 881.7 | 113.5 | 99.8 | 1,095.0 | ||||||||||||||||||||||||
| South America | 6,595.7 | 934.9 | 861.7 | 8,392.3 | 7,455.3 | 978.9 | 968.2 | 9,402.5 | ||||||||||||||||||||||||
| Total | 16,033.1 | 1,718.3 | 2,022.9 | 19,774.4 | 16,500.6 | 1,738.1 | 2,040.9 | 20,279.6 | ||||||||||||||||||||||||
| Press Release 4Q 2016 February 24, 2017 | Page 34 |
Macroeconomic Information
Fourth quarter 2016
Inflation
| LTM | 4Q2016 | YTD | ||||||||||
| Mexico | 3.36 | % | 2.19 | % | 3.36 | % | ||||||
| Colombia | 6.19 | % | 0.74 | % | 6.19 | % | ||||||
| Venezuela (2) | 478.90 | % | 91.21 | % | 478.90 | % | ||||||
| Brazil | 6.61 | % | 0.38 | % | 6.61 | % | ||||||
| Argentina (2) | 37.50 | % | 6.58 | % | 37.50 | % | ||||||
(1) Source: inflation is published by the Central Bank of each country.
(2) Inflation based on unofficial publications.
Average Exchange Rates for each Period
| Quarterly Exchange Rate (local currency per USD) | Acummulated Exchange Rate (local currency per USD) | |||||||||||||||||||||||
| 4Q 16 | 4Q 15 | D % | YTD 16 | YTD 15 | D % | |||||||||||||||||||
| Mexico | 19.8285 | 16.7481 | 18.4 | % | 18.6572 | 15.8485 | 17.7 | % | ||||||||||||||||
| Guatemala | 7.5023 | 7.6483 | -1.9 | % | 7.6024 | 7.6557 | -0.7 | % | ||||||||||||||||
| Nicaragua | 29.1475 | 27.7591 | 5.0 | % | 28.6211 | 27.2569 | 5.0 | % | ||||||||||||||||
| Costa Rica | 559.7426 | 540.3772 | 3.6 | % | 551.0478 | 540.6881 | 1.9 | % | ||||||||||||||||
| Panama | 1.0000 | 1.0000 | 0.0 | % | 1.0000 | 1.0000 | 0.0 | % | ||||||||||||||||
| Colombia | 3,015.4915 | 3,058.2401 | -1.4 | % | 3,054.6229 | 2,741.7205 | 11.4 | % | ||||||||||||||||
| Venezuela | 663.7398 | 199.6838 | 232.4 | % | 493.8149 | 173.3144 | 184.9 | % | ||||||||||||||||
| Brazil | 3.2934 | 3.8426 | -14.3 | % | 3.4901 | 3.3315 | 4.8 | % | ||||||||||||||||
| Argentina | 15.4529 | 10.1821 | 51.8 | % | 14.7803 | 9.2683 | 59.5 | % | ||||||||||||||||
End of Period Exchange Rates
| Quarter Exchange Rate (local currency per USD) | Previous Quarter Exchange Rate (local currency per USD) | |||||||||||||||||||||||
| Dec 2016 | Dec 2015 | D % | Sep 2016 | Sep 2015 | D % | |||||||||||||||||||
| Mexico | 20.6640 | 17.2065 | 20.1 | % | 19.5002 | 17.0073 | 14.7 | % | ||||||||||||||||
| Guatemala | 7.5221 | 7.6324 | -1.4 | % | 7.5207 | 7.6755 | -2.0 | % | ||||||||||||||||
| Nicaragua | 29.3247 | 27.9283 | 5.0 | % | 28.9672 | 27.5869 | 5.0 | % | ||||||||||||||||
| Costa Rica | 561.1000 | 544.8700 | 3.0 | % | 558.8000 | 541.0400 | 3.3 | % | ||||||||||||||||
| Panama | 1.0000 | 1.0000 | 0.0 | % | 1.0000 | 1.0000 | 0.0 | % | ||||||||||||||||
| Colombia | 3,000.7100 | 3,149.4700 | -4.7 | % | 2,879.9500 | 3,121.9400 | -7.8 | % | ||||||||||||||||
| Venezuela | 673.7617 | 198.6986 | 239.1 | % | 658.8853 | (*) | 199.4204 | 230.4 | % | |||||||||||||||
| Brazil | 3.2591 | 3.9048 | -16.5 | % | 3.2462 | 3.9729 | -18.3 | % | ||||||||||||||||
| Argentina | 15.8900 | 13.0400 | 21.9 | % | 15.3100 | 9.4220 | 62.5 | % | ||||||||||||||||
(*) Exchange rate as of December, 31 2016 and (**) as of June, 30 2016
| Press Release 4Q 2016 February 24, 2017 | Page 35 |