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 July 2023

 

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/ Eugenio Garza y Garza
	Eugenio Garza y Garza
	Director of Finance and Corporate Development

 

Date: July, 27, 2023

 

 

Exhibit 99.1

 

 

2Q 2023

Results

July 27, 2023

 

 

Investor Contact

(52) 818-328-6167

investor@femsa.com.mx

femsa.gcs-web.com

 

Media Contact

(52) 555-249-6843

comunicacion@femsa.com.mx

femsa.com

 

 

 

HIGHLIGHTS

 

Monterrey, Mexico, July 27, 2023 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) (NYSE: FMX; BMV: FEMSAUBD, FEMSAUB) announced today its operational and financial results for the second quarter of 2023.

 

•

FEMSA: Total Consolidated Revenues grew 18.3% against 2Q22.

 

•

FEMSA Retail1: Proximity Americas total Revenues increased 19.9% against 2Q22.

 

•

DIGITAL: Spin by OXXO had 5.7 million active users2 while Spin Premia had 15.8 million active loyalty users2 and an average tender3 of 24.0%.

 

•

COCA-COLA FEMSA: Total revenues grew 7.2% against 2Q22.

 

Financial Summary for the Second Quarter and First Six Months 2023

Change vs. comparable period

 

		Total Revenues								Gross Profit								Income from Operations								Same-Store Sales
		2Q23				YTD23				2Q23				YTD23				2Q23				YTD23				2Q23				YTD23
FEMSA Consolidated			18.3	%			19.9	%			20.1	%			21.3	%			8.0	%			6.8	%
Proximity Americas			19.9	%			20.8	%			19.3	%			19.5	%			18.0	%			18.7	%			15.3	%			16.7	%
Health			0.6	%			0.1	%			6.5	%			5.7	%			(0.5	)%			(3.5	)%			(3.7	)%			(5.1	)%
Fuel			9.3	%			14.4	%			6.9	%			13.7	%			(0.9	)%			15.0	%			3.2	%			9.3	%
Coca-Cola FEMSA			7.2	%			9.2	%			7.9	%			9.9	%			11.9	%			12.1	%
Envoy Solutions			23.1	%			23.4	%			31.1	%			27.1	%			(7.1	)%			(8.6	)%

 

José Antonio Fernandez Carbajal, FEMSA’s Chief Executive Officer, commented:

 

“It is a great privilege to lead this amazing company again. It is also a challenge that I embrace, particularly as we find ourselves in the process of implementing our transformational FEMSA Forward strategy, and as we pursue our ambitious long-range growth plans for all our core business units, setting the course for sustained, long-term value creation.

 

The second quarter results announced today represent an example of the organic growth potential we have before us. Among the highlights, Proximity Americas increased revenues by 20 percent, again driven by strong same-store sales trends at OXXO and reflecting an accelerated store expansion. In Europe, Valora reported solid top line growth, while Health revenues were stable, reflecting a challenging comparison base in Chile as well as currency headwinds. For its part, Coca-Cola FEMSA again delivered a strong performance, while Envoy Solutions showed sustained revenue growth driven by recent acquisitions. On the Digital side, we continued to add users at a rapid pace, with active users growing more than one hundred percent year-over-year.

 

I want to extend my gratitude to our hardworking team who continue to find a way to post strong results, putting us on the right path to meet or exceed our long-term aspirations.”

 

1	FEMSA Retail: Proximity Americas & Europe, Fuel and FEMSA Health.
2	Active User for Spin by OXXO: Any user with a balance or that has transacted within the last 56 days. Active User for Spin Premia: User that has transacted at least once with OXXO Premia within the last 90 days.
3	Tender: OXXO Mexico MXN sales with OXXO Premia or Spin Premia redemption or accrual divided by Total OXXO Mexico MXN Sales, during the period.

 

 

QUARTERLY RESULTS

Results are compared to the same period of previous year

 

FEMSA CONSOLIDATED  

 

2Q23 Financial Summary

Amounts expressed in millions of Mexican Pesos (Ps.)

 

			2Q23				2Q22				Var.				Org.
Total Revenues			198,220				167,504				18.3	%			9.5	%
Income from Operations			16,581				15,355				8.0	%			4.5	%
Operating Margin (%)			8.4				9.2				(80	)bps
EBITDA5			27,134				23,370				16.1	%			8.5	%
EBITDA Margin (%)			13.7				14.0				(30	)bps
Net Income			8,926				7,640				16.8	%

 

Net Debt ex-KOF⁶  

Amounts expressed in millions of Mexican Pesos (Ps.)

 

As of June 30, 2023		Ps.				US$4
Cash			133,846				7,807
Long-Term Debt			73,329				4,277
Lease Liabilities			91,633				5,345
Net debt			31,115				1,815
ND / EBITDA			0.54	x			-

 

Total revenues increased 18.3% in 2Q23 compared to 2Q22, driven by growth across our business units. On an organic¹ basis, total revenues increased 9.5%.

 

Gross profit increased 20.1%. Gross margin expanded 50 basis points, reflecting the consolidation of Proximity Europe, as well as margin expansions at Coca-Cola FEMSA, Envoy Solutions, and FEMSA Health. This was partially offset by a margin contraction at Fuel and Proximity Americas.

 

Income from operations increased 8.0%. On an organic basis, income from operations increased 4.5%. Consolidated operating margin decreased 80 basis points to 8.4% of total revenues, reflecting margin expansion at Coca-Cola FEMSA, offset by margin contractions at Proximity Americas, Health, Fuel, and Envoy Solutions, as well as the consolidation of Proximity Europe.

 

Our effective income tax rate was 30.0% in 2Q23 compared to 38.0% in 2Q22. Our income tax provision was Ps. 5,618 million in 2Q23.

 

Net consolidated income was Ps. 8,926 million, reflecting: i) higher income from operations; ii) a Ps. 9,410 other non-operating income, mostly reflecting the divestment of FEMSA’s minority stake in Jetro Restaurant Depot; and iii) a decrease in net interest expenses during the quarter. This was offset by: i) a non-cash foreign exchange loss of Ps. 6,456, related to FEMSA’s U.S. dollar-denominated cash position as impacted by the appreciation of the Mexican peso and, ii) a net loss of discontinued operations of Ps. 3,953 driven by the market value fluctuation of the Heineken shares underlying FEMSA’s outstanding exchangeable bond.²

 

Net majority income was Ps. 1.72 per FEMSA Unit³ and US$1.00 per FEMSA ADS.

 

Capital expenditures amounted to Ps. 8,375 million, driven by ongoing investment activities across our business units.

 

1	Excludes the effects of significant mergers and acquisitions in the last twelve months, including the acquisition of Valora.
2	As of June 30, 2023, FEMSA maintained 5,228,758 Heineken shares, underlying FEMSA’s exchangeable bond into Heineken shares issued in connection with the divestment of this stake in February 2023.
3	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 June 30, 2023 was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided by 5.
4	The exchange rate published by the Federal Reserve Bank of New York for June 30, 2023 was 17.1439 MXN per USD.
5	EBITDA: Operating Income + Depreciation + Amortizations.
6	ex-KOF: FEMSA Consolidated reported information – Coca-Cola FEMSA Consolidated reported information. EBITDA ex-KOF: FEMSA Consolidated EBITDA as described above – Coca-Cola FEMSA’s Consolidated EBITDA + Dividends received by FEMSA from Coca-Cola FEMSA and other investments. All Net Debt calculations are shown on an Ex-KOF basis. For a detailed reconciliation of this metric please see table on page 17 of this document.

 

 

PROXIMITY AMERICAS OXXO (Mexico & Latam1)

 

2Q23 Financial Summary

Amounts expressed in millions of Mexican Pesos (Ps.) except same-store sales    

 

			2Q23				2Q22				Var.
Same-store sales (thousands of Ps.)			1,042.5				903.9				15.3	%
Total Revenues			72,099				60,136				19.9	%
Income from Operations			7,211				6,110				18.0	%
Income from Operations Margin (%)			10.0				10.2				(20	)bps
EBITDA			10,473				9,172				14.2	%
EBITDA Margin (%)			14.5				15.3				(80	)bps

 

Net Additions Vs. comparable quarter	Store Base As of 1Q23	Same-Store Sales In thousands of Ps.	EBITDA In millions of Ps.

 

Total revenues increased 19.9% in 2Q23 compared to 2Q22, reflecting a 15.3% average same-store sales increase, driven by 7.4% growth in average customer ticket and an increase of 7.4% in store traffic. These figures reflect a strong performance across most of OXXO’s categories supported by the strong performance of the thirst and gathering occasions, such as beer, snacks, and other beverages, as well as the continued recovery of mobility-driven occasions. During the quarter, the OXXO store base in Mexico & Latam expanded by 444 units to reach 1,391 total net store additions for the last twelve months. As of June 30, 2023, Proximity Americas had a total of 22,059 OXXO stores.

 

Gross profit reached 41.0% of total revenues, reflecting strong commercial activity and promotional programs from key suppliers, offset by a decrease in the contribution of financial services relative to 2Q22.

 

Income from operations amounted to 10.0% of total revenues. Operating expenses increased 19.7% to Ps. 22,332 million, slightly below revenues, as operating leverage and efficiencies offset an increase in labor expenses in connection with recent labor reforms in Mexico.

 

¹ OXXO Latam: OXXO Colombia, Chile and Peru. 

 

 

PROXIMITY AMERICAS Other formats

 

Bara¹

 

Total revenues increased 44.1% in 2Q23 compared to 2Q22, driven by a 22.7% average same-store sales increase, reflecting the strong performance of the groceries, home hygiene and convenience categories, mainly driven by beverages. During the quarter, the Bara store base expanded by 13 units to reach 296 total Bara stores as of June 30, 2023.

 

Grupo Nós²

 

Total revenues for the period grew 207.1% year-over-year, reaching R$176.4 million³. This figure reflects the successful evolution and expansion of the OXXO value proposition which resulted in same-store sales growth at OXXO of 20.5%⁴, as well as the addition of 218 net new OXXO stores for the last twelve months. During the quarter, the store base of Grupo Nós expanded by 35 units, including 32 net new OXXO stores. As of June 30, 2023, Grupo Nós had a total of 1,638 stores, which include 346 company owned and operated OXXO stores.

 

¹ Bara store count and results are not consolidated within the Proximity Americas reported figures.

² OXXO’s non-consolidated joint-venture with Raízen in Brazil.

³ The exchange rate published by the Federal Reserve Bank of New York for June 30, 2023 was 4.8102 BRL per USD.

⁴ Local currency, BRL.

⁵ The Proximity Europe segment is comprised of Valora. The acquisition of Valora was concluded in October 2022. 

 

 

PROXIMITY EUROPE5 Valora

 

2Q23 Financial Summary
Amounts expressed in millions of Mexican Pesos (Ps.)  

 

		2Q23
Total Revenues			10,833
Income from Operations			316
Income from Operations Margin (%)			2.9
EBITDA			1,518
EBITDA Margin (%)			14.0

 

Total revenues increased 8.4%¹ in 2Q23 compared to 2Q22 to Ps. 10,833 million, reflecting traffic recovery as well as positive pricing initiatives, and the growth of Valora’s foodservice and B2B business. As of the end of the period, Proximity Europe had 2,784 points of sale.

 

Gross profit reached 42.1% of total revenues, reflecting the continued recovery of the foodservice category, which has a structurally higher margin.

 

Income from operations amounted to 2.9% of total revenues, reflecting the contribution of foodservice, as well as positive operating leverage.

 

¹ Local currency, CHF. 

 

 

HEALTH

 

2Q23 Financial Summary
Amounts expressed in millions of Mexican Pesos (Ps.) except same-store sales

 

		2Q23				2Q22				Var.
Same-store sales (thousands of Ps.)			1,167.4				1,212.4				(3.7	)%
Total Revenues			18,962				18,844				0.6	%
Income from Operations			910				915				(0.5	)%
Income from Operations Margin (%)			4.8				4.9				(10	)bps
EBITDA			1,934				1,834				5.5	%
EBITDA Margin (%)			10.2				9.7				50	bps

 

Net Additions Vs. comparable quarter	Locations As of 2Q23	Same-Store Sales In thousands of Ps.	EBITDA In millions of Ps.

 

Total revenues increased 0.6% in 2Q23 compared to 2Q22, mainly reflecting positive local currency sales trends in Colombia and Ecuador, offset by a demanding comparison base in Chile and Mexico, and by a negative currency translation effect related to the depreciation of the Chilean and Colombian pesos relative to the Mexican peso. During the quarter, Health’s store base expanded by 81 units reaching a total of 4,267 locations across its territories as of June 30, 2023. This figure reflects the addition of 369 net new locations for the last twelve months. Same-store sales decreased an average of 3.7%, reflecting the trends described above. On a currency-neutral¹ basis, total revenues grew 14.1% while same-store sales increased by 7.9%.

 

Gross profit represented 30.2% of total revenues, reflecting improved efficiency and more effective collaboration and execution with key supplier partners, as well as a positive mix effect reflecting a decrease in the contribution of our institutional sales channel in Chile.

 

Income from operations amounted to 4.8% of total revenues. Operating expenses increased 8.0% to Ps. 4,818 million, reflecting an increase in labor expenses in Mexico, partially offset by tight expense control across our operations.

 

¹ Calculated by translating comparable period figures at the foreign currency exchange rates used in the current period. 

 

 

FUEL

 

2Q23 Financial Summary
Amounts expressed in millions of Mexican Pesos (Ps.) except same-station sales

 

		2Q23				2Q22				Var.
Same-station sales (thousands of Ps.)			7,457.6				7,227.0				3.2	%
Total Revenues			14,455				13,220				9.3	%
Income from Operations			567				572				(0.9	)%
Income from Operations Margin (%)			3.9				4.3				(40	)bps
EBITDA			861				842				2.3	%
EBITDA Margin (%)			6.0				6.4				(40	)bps

 

Net Additions Vs. comparable quarter	Service Station Base As of 1Q23	Same-Station Sales In thousands of Ps.	EBITDA In millions of Ps.

 

Total revenues increased 9.3% in 2Q23 compared to 2Q22, reflecting a 3.2% average same-station sales increase, driven by 0.6% growth in average volume and 2.6% increase in the average price per liter, as well as volume growth in our institutional and wholesale customer network. The OXXO Gas retail network had 570 points of sale as of June 30, 2023. This figure reflects the addition of one net station for the last twelve months.

 

Gross profit was 12.0% of total revenues.

 

Income from operations amounted to 3.9% of total revenues. Operating expenses increased 11.1% to Ps. 1,169 million, reflecting increased labor expenses.

 

 

FEMSA Retail Operations Summary

 

Currency-neutral terms where applicable    

 

Total Revenue Growth (% vs year ago)  

 

		2Q23
Proximity Americas
OXXO1			19.9	%
Mexico			19.9	%
OXXO Latam1			36.6	%
Other Proximity Americas formats
Bara			44.1	%
OXXO Brazil2			207.1	%
Proximity Europe4			8.4	%
OXXO Gas			9.3	%
FEMSA Health5			14.1	%
Chile			10.6	%
Colombia			13.6	%
Ecuador			7.3	%
Mexico			7.6	%

 

1	OXXO Consolidated figures shown in MXN including currency effects.
2	Includes OXXO Colombia, Chile and Peru.
3	Operated through Grupo Nós, our joint-venture with Raízen.
4	Local currency (CHF).
5	FEMSA Health Include franchised stores in Ecuador.

 

Total Unit Growth (% vs year ago)

 

		2Q23
Proximity Americas
OXXO			6.7	%
Mexico			5.9	%
OXXO Latam1			41.9	%
Other Proximity Americas formats
Bara			30.4	%
OXXO Brazil2			170.3	%
Proximity Europe3			2.2	%
OXXO Gas			-
FEMSA Health			10.5	%
Chile			2.0	%
Colombia			16.0	%
Ecuador			8.0	%
Mexico			12.0	%

 

1	Includes OXXO Colombia, Chile and Perú.
2	Operated through Grupo Nós, our joint-venture with Raízen.
3	Includes company owned and franchised units.

 

Same-Store Sales

 

		2Q23
Proximity Americas
OXXO1			15.3	%
Mexico			15.6	%
OXXO Latam1			12.6	%
Other Proximity Americas formats
Bara			22.7	%
OXXO Brazil2			20.5	%
Proximity Europe3			N.A.
OXXO Gas4			3.2	%
FEMSA Health5			7.9	%
Chile			4.0	%
Colombia			15.8	%
Ecuador			12.4	%
Mexico			1.0	%

 

1	OXXO Consolidated figures shown in MXN including currency effects.
2	Includes OXXO Colombia, Chile and Peru.
3	Operated through Grupo Nós, our joint-venture with Raízen.
4	Local currency (CHF).
5	Only includes retail sales. FEMSA Health Include franchised stores in Ecuador.

 

 

DIGITAL@FEMSA1

 

Spin by OXXO

 

Spin by OXXO acquired 1.2 million users during the quarter to reach 7.6 million total users in 2Q23, compared to 3.1 million users in 2Q22. This represents an increase of 142.1% YoY and a 7.6% compound monthly growth rate. Active users² represented 75.8% of the total acquired user base. Total transactions per month increased 23.5%³ during the quarter to reach an average of 36.2 million per month in 2Q23, reflecting an increase in user engagement.

 

Spin Premia

 

Spin Premia acquired 3.8 million users during the quarter to reach 32.7 million total users in 2Q23, compared to 15.2 million users in 2Q22. This represents an increase of 115.1% YoY and a 6.6% compound monthly growth rate. Active users⁴ represented 48.3% of the total acquired user base. The average tender⁵ during the quarter was 24.0%.

 

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 coca-colafemsa.com.

 

¹ Digital@FEMSA’s results are included within the Other business segment.

² Active User for Spin by OXXO: Any user with a balance or that has transacted within the last 56 days.

³ Represents the quarter-over-quarter growth of average monthly transactions.

⁴ Active User for Spin Premia: User that has transacted at least once with OXXO Premia or Spin Premia within the last 90 days.

⁵ Tender: OXXO Mexico MXN sales with OXXO Premia or Spin Premia redemption or accrual divided by Total OXXO Mexico MXN Sales, during the period. 

 

 

 

ENVOY SOLUTIONS1

 

2Q23 Financial Summary
Amounts expressed in millions of Mexican Pesos (Ps.)
		2Q23				2Q22				Var.
Total Revenues			13,482				10,949				23.1	%
Income from Operations			508				547				(7.1	)%
Income from Operations Margin (%)			3.8				5.0				(120	)bps
EBITDA			1,220				896				36.2	%
EBITDA Margin (%)			9.0				8.2				80	bps

 

Revenues In millions of Ps.	EBITDA In millions of Ps.

 

Total revenues increased 23.1% in 2Q23 compared to 2Q22, reflecting the acquisitions made by Envoy Solutions during the last twelve months.

 

Gross profit represented 29.2% of total revenues, reflecting strong trends in the janitorial and sanitation segment, as well as price optimization strategies.

 

Income from operations represented 3.8% of total revenues. Operating expenses increased 39.6% to Ps. 3,267 million, reflecting the strong inorganic expansion of this business as well as expenses related to synergy capture across Envoy Solutions. On a comparable basis², income from operations increased 10.9% compared to 2Q22.

 

¹ During 2021 and 2022, Envoy Solutions results were included within the Logistics & Distribution business segment.

² Comparable basis: Excluding non-recurrent M&A expenses and on a currency-neutral basis. 

 

 

RESULTS FOR THE FIRST SIX MONTHS OF 2023

Results are compared to the same period of previous year

 

FEMSA CONSOLIDATED

 

Financial Summary for the First Six Months

Amounts expressed in millions of Mexican Pesos (Ps.)

 

		2023				2022				Var.				Org.
Total Revenues			378,086				315,269				19.9	%			10.8	%
Income from Operations			29,108				27,267				6.8	%			3.8	%
Operating Margin (%)			7.7				8.6				(90	)bps
EBITDA1			49,260				43,095				14.3	%			6.8	%
EBITDA Margin (%)			13.0				13.7				(70	)bps
Net Income			59,252				13,504				N.S.

 

Total revenues increased 19.9%. On an organic basis², total revenues increased 10.8% reflecting growth across most of our operations.

 

Gross profit increased 21.3%. Gross margin increased 40 basis points to 37.4% of total revenues, reflecting gross margin expansion at Coca-Cola FEMSA, Health and Envoy Solutions as well as the consolidation of Proximity Europe, offset by margin contraction at Proximity Americas and Fuel.

 

Income from operations increased 6.8%. On an organic basis², income from operations increased 3.8%. Our consolidated operating margin decreased 90 basis points to 7.7% of total revenues, reflecting margin expansions at Coca-Cola FEMSA, Fuel and Envoy Solutions, offset by margin contractions at Proximity Americas and Health, as well as by the consolidation of Proximity Europe.

 

Net consolidated income increased to Ps. 59,252 million, reflecting; i) a Ps. 36,653 million net income from discontinued operations, reflecting the accounting re-measurement from historical cost to fair value of FEMSA’s investment in Heineken, as well as the divestiture of this investment as part of the FEMSA Forward strategy announced on February 15, 2023, net of taxes; ii) a Ps. 10,275 million non-cash financial product that mostly reflects the repurchase of US$ 1.7 billion³ of FEMSA’s outstanding debt at favorable price levels during 1Q23, also in connection with FEMSA Forward; and iii) a Ps. 9,160 other non-operating income, mostly reflecting the divestment of FEMSA’s minority stake in Jetro Restaurant Depot. This was offset by a non-cash foreign exchange loss of Ps. 8,999, related to FEMSA’s U.S. dollar-denominated cash position as impacted by the appreciation of the Mexican peso.

 

Net majority income per FEMSA Unit⁴ was Ps.15.16 (US$8.84 per ADS).

 

Capital expenditures amounted to Ps. 13,531 million, reflecting the reactivation of ongoing investment activities at most of our business units.

 

¹ EBITDA: Operating Income + Depreciation + Amortizations.

² Excludes the effects of significant mergers and acquisitions in the last twelve months.

³ Face value

⁴ 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 June 30, 2023 was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided by 5. 

 

 

RECENT DEVELOPMENTS

 

·

On May 30, 2023, FEMSA announced the offering by the Company and its wholly-owned subsidiaries Compañía Internacional de Bebidas, S.A. de C.V. and Grupo Industrial Emprex, S. de R.L. de C.V. of existing issued ordinary shares of both Heineken N.V. and Heineken Holding N.V. (together, the “Heineken Group”) in the total amount of approximately EUR 3.3 billion (approximately 5.9% of the combined interest in the Heineken Group) (the “Equity Offering”). The Company also announced a tap issuance of euro denominated senior unsecured bonds in the aggregate principal amount of up to EUR 250 million (the “New Bonds”), exchangeable into ordinary shares of Heineken Holding N.V. (the “Exchangeable Offering” and together with the Equity Offering, the “Offering”). The New Bonds will be consolidated and form a single series with the Company’s EUR 500 million 2.625% senior unsecured Exchangeable Bonds due 2026, originally issued on 24 February 2023 (the “Original Bonds” and together with the New Bonds, the “Bonds”) with effect from on or about 18 July 2023 (the “Consolidation Date”).

 

·

On May 31, 2023, FEMSA announced the pricing of the sale by the Company and its wholly-owned subsidiaries Compañía Internacional de Bebidas, S.A. de C.V. and Grupo Industrial Emprex, S. de R.L. de C.V. of its entire holding of existing issued ordinary shares of both Heineken N.V. and Heineken Holding N.V. (together, the “Heineken Group”) by way of an accelerated book build of shares in the total amount of EUR 3.3 billion (approximately 6.0% of the combined interest in the Heineken Group) (the “Equity Offering”) as well as a bilateral sale of additional shares to Heineken N.V., except for any shares retained underlying FEMSA’s outstanding EUR 500 million 2.625% senior unsecured Exchangeable Bonds due 2026 (the “Bonds”), exchangeable into ordinary shares of Heineken Holding N.V. Given the strength of demand seen for the Equity Offering, the Company has decided not to proceed with the concurrent tap issuance of its outstanding Bonds announced on May 30, 2023.

 

·

On May 31, 2023, FEMSA announced that consistent with its FEMSA Forward strategy as communicated on February 15, 2023, it has entered into a definitive agreement to divest its minority investment in Jetro Restaurant Depot and related entities (“JRD”). Subject to customary closing conditions, FEMSA will receive total cash consideration of US$1,400 million, with approximately US$467 million payable on closing in the second quarter of 2023, and the remainder payable over two years.

 

·

On July 10, 2023, FEMSA announced that Daniel Rodríguez Cofré, after consulting with his family and doctors, would step down from his role as CEO, to focus on his health and treatment of a previously announced colon cancer diagnosis. Until a replacement is appointed, José Antonio Fernández Carbajal, Executive Chairman and former CEO of FEMSA, will serve as acting Chief Executive Officer on an interim basis, with the continued support of FEMSA’s senior leadership team and the CEOs of the business units.

 

 

CONFERENCE CALL INFORMATION

 

Our Second Quarter 2023 Conference Call will be held on: Thursday, July 27, 2023, 11:00 AM Eastern Time (9:00 AM Mexico City Time). The conference call will be webcast live through streaming audio.

 

Telephone:	Toll Free US:	(866) 580 3963
	International:	+1 (786) 697 3501

 

Webcast:	https://edge.media-server.com/mmc/p/chfb9z24
Conference ID:	FEMSA

 

If you are unable to participate live, the conference call audio will be available on https://femsa.gcs-web.com/financial-reports/quarterly-results

 

 

ABOUT FEMSA

 

FEMSA is a company that creates economic and social value through companies and institutions and strives to be the best employer and neighbor to the communities in which it operates. It participates in the retail industry through a Proximity Americas Division operating OXXO, a small-format store chain, and other related retail formats, and Proximity Europe which includes Valora, our European retail unit which operates convenience and foodvenience formats. In the retail industry it also participates though a Health Division, which includes drugstores and related activities and Digital@FEMSA, which includes Spin by OXXO and Spin Premia, among other digital financial services initiatives. In the beverage industry, it participates through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume. FEMSA also participates in the logistics and distribution industry through its Strategic Business Unit, which additionally provides point-of-sale refrigeration and plastic solutions to its business units and third-party clients. Across its business units, FEMSA has more than 350,000 employees in 18 countries. FEMSA is a member of the Dow Jones Sustainability MILA Pacific Alliance, the FTSE4Good Emerging Index and the Mexican Stock Exchange Sustainability Index: S&P/BMV Total México ESG, among other indexes that evaluate its sustainability performance.

 

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 June 30, 2023, which was 17.1439 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.

 

Nine pages of tables and Coca-Cola FEMSA’s press release to follow

 

 

FEMSA – Consolidated Income Statement

Amounts expressed in millions of Mexican Pesos (Ps.)

 

		For the second quarter of:																								For the six months of:
		2023				% of rev.				2022				% of rev.				% Var.				% Org.(A)				2023				% of rev.				2022				% of rev.				% Var.				% Org.(A)
Total revenues			198,220				100.0				167,504				100.0				18.3				9.5				378,086				100.0				315,269				100.0				19.9				10.8
Cost of sales			123,650				62.4				105,408				62.9				17.3								236,570				62.6				198,645				63.0				19.1
Gross profit			74,570				37.6				62,096				37.1				20.1								141,516				37.4				116,624				37.0				21.3
Administrative expenses			11,101				5.6				7,699				4.6				44.2								19,722				5.2				14,998				4.8				31.5
Selling expenses			46,274				23.3				38,836				23.2				19.2								92,329				24.4				74,146				23.5				24.5
Other operating expenses (income), net (1)			614				0.3				206				0.1				198.1								357				0.1				213				0.1				67.6
Income from operations (2)			16,581				8.4				15,355				9.2				8.0				4.5				29,108				7.7				27,267				8.6				6.8				3.8
Other non-operating expenses (income)			(9,410	)							234								N.S.								(9,160	)							104								N.S.
Interest expense			2,874								4,197								(31.5	)							6,570								8,144								(19.3	)
Interest income			1,763								787								124.0								10,275								1,526								N.S.
Interest expense, net			1,111								3,410								(67.4	)							(3,705	)							6,618								N.S.
Foreign exchange loss (gain)			6,456								(111	)							N.S.								8,999								1,422								N.S.
Other financial expenses (income), net			(303	)							(477	)							(36.5	)							13								317								(95.9	)
Financing expenses, net			7,264								2,822								157.4								5,307								8,357								(36.5	)
Income before income tax and participation in associates results			18,727								12,299								52.3								32,961								18,806								75.3
Income tax			5,618								4,668								20.4								9,935								6,697								48.4
Participation in associates results (3)			(230	)							(54	)							N.S.								(427	)							(102	)							N.S.
Continued Operations net income (Loss)			12,879								7,577								70.0								22,599								12,007								88.2
Discontinued Operations net income (Loss)			(3,953	)							63								(151.7	)							36,653								1,497								171.4
Consolidated net income (Loss)			8,926								7,640								16.8								59,252								13,504								N.S.
Net majority income			6,164								5,208								18.4								54,239								9,211								N.S.
Net minority income			2,762								2,432								13.6								5,013								4,293								16.8

 

Operative Cash Flow & CAPEX		2023				% of rev.				2022				% of rev.				% Var.				% Org.(A)				2023				% of rev.				2022				% of rev.				% Var.				% Org.(A)
Income from operations			16,581				8.4				15,355				9.2				8.0				4.5				29,108				7.7				27,267				8.6				6.8				3.8
Depreciation			8,346				4.2				6,702				4.0				24.5								16,606				4.4				13,182				4.2				26.0
Amortization & other non-cash charges			2,207				1.1				1,313				0.8				68.1								3,546				0.9				2,646				0.9				34.0
EBITDA			27,134				13.7				23,370				14.0				16.1				8.5				49,260				13.0				43,095				13.7				14.3				6.8
CAPEX			8,375								6,296								33.0								13,531								12,065								12.2

 

^(A) Organic basis (% Org.) excludes 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 results of our joint-venture with Raízen, Grupo Nós, net of taxes.

⁽⁴⁾ At the end of June, the CAPEX effectively paid is equivalent to Ps. 5,072 million.

 

 

 

FEMSA – Consolidated Balance Sheet
Amounts expressed in millions of Mexican Pesos (Ps.)

 

ASSETS		Jun-23				Dec-22				% Inc.
Cash and cash equivalents			153,999				83,439				84.6
Investments			10,796				51				N.S.
Accounts receivable			47,375				45,527				4.1
Inventories			58,557				62,224				(5.9	)
Assets Available for sale			26				-				N.S.
Other current assets			43,341				35,208				23.1
Total current assets			314,094				226,449				38.7
Investments in shares			10,781				103,669				(89.6	)
Property, plant and equipment, net			133,476				134,001				(0.4	)
Right of use			187,551				83,966				123.4
Intangible assets (1)			83,864				190,772				(56.0	)
Other assets			51,236				59,958				(14.5	)
TOTAL ASSETS			781,002				798,815				(2.2	)

 

LIABILITIES & STOCKHOLDERS’ EQUITY		Jun-23				Dec-22				% Inc.
Bank loans			1,921				1,862				3.2
Current maturities of long-term debt			6,619				14,471				(54.3	)
Interest payable			1,564				2,075				(24.6	)
Current maturities of long-term leases			11,954				12,095				(1.2	)
Operating liabilities			155,990				144,411				8.0
Total current liabilities			178,048				174,914				1.8
Long-term debt (2)			130,547				170,989				(23.7	)
Long-term leases			81,496				81,222				0.3
Laboral obligations			7,273				7,048				3.2
Other liabilities			21,930				26,841				(18.3	)
Total liabilities			419,294				461,014				(9.0	)
Total stockholders’ equity			361,708				337,801				7.1
TOTAL LIABILITIES AND STOCKHOLERS’ EQUITY			781,002				798,815				(2.2	)

 

		June 30, 2023
DEBT MIX (2)		% of Total				Average Rate
Denominated in:
Mexican pesos			45.9	%			8.3	%
U.S. Dollars			21.3	%			2.5	%
Euros			21.1	%			2.1	%
Swiss Francs			0.7	%			0.9	%
Colombian pesos			0.6	%			6.5	%
Argentine pesos			0.0	%			0.0	%
Brazilian reais			9.4	%			10.7	%
Chilean pesos			0.7	%			8.7	%
Uruguayan Pesos			0.2	%			6.3	%
Guatemalan Quetzal			0.0	%			0.0	%
Total debt			100.0	%			5.9	%
Fixed rate (2)			83.7	%
Variable rate (2)			16.3	%

 

DEBT MATURITY PROFILE		2024				2025				2026				2027				2028				2029+
% of Total Debt			0.9	%			3.6	%			1.5	%			9.1	%			13.8	%			71.1	%

 

⁽¹⁾ Includes mainly the intangible assets generated by acquisitions.

⁽²⁾ Includes the effect of derivative financial instruments on long-term debt.

 

 

Net Debt & EBITDA ex-KOF

Amounts expressed in millions of US Dollars (US.)

 

		Twelve months ended June 30, 2023
		Reported EBITDA				Adjustments				EBITDA Ex-KOF4
Proximity Americas & Europe1			2,256				-				2,256
Fuel			191				-				191
Health Division			417				-				417
Envoy Solutions			218				-				218
Coca-Cola FEMSA2			2,392				(2,392	)			-
Other3			(147	)			-				(147	)
FEMSA Consolidated			5,328				(2,392	)			2,935
Dividends Received4			-				444				444
FEMSA Consolidated ex-KOF			5,328				(1,948	)			3,379

 

		As of June 30, 2023
		Reported				Adjustments				Ex-KOF
Cash & Equivalents			7,807				-				7,807
Coca-Cola FEMSA Cash & Equivalents			1,805				(1,805	)			-
Cash & Equivalents			9,612				(1,805	)			7,807
Financial Debt5			4,277				-				4,277
Coca-Cola FEMSA Financial Debt			3,836				(3,836	)			-
Lease Liabilities			5,345				-				5,345
Coca-Cola FEMSA Lease Liabilities			106				(106	)			-
Debt			13,564				(3,942	)			9,622
FEMSA Net Debt			3,951				(2,136	)			1,815

 

Translated to USD for readers’ convenience using the exchange rate published by the Federal Reserve Bank of New York for June 30, 2023 which was 17.1439 MXN per USD.

1 Includes Proximity Europe only for the consolidated period.

2 Coca-Cola FEMSA adjustment represents 100% of its LTM EBITDA.

3 Includes FEMSA Other Businesses (including Solistica and Digital@FEMSA), FEMSA corporate expenses and the effects of consolidation adjustments

4 Reflects cash dividends received from Coca-Cola FEMSA for approximately US$295 mm, US$45 mm from JRD, and US$96 mm from Heineken during the last twelve months.

5 Includes EUR€ 500.0 mm in notes convertible to Heineken Holding N.V. shares.

 

 

Proximity Americas – Results of Operations

Amounts expressed in millions of Mexican Pesos (Ps.)

 

		For the second quarter of:															For the six months of:
		2023			% of rev.			2022			% of rev.			% Var.			2023			% of rev.			2022			% of rev.			% Var.
Total revenues		72,099			100.0			60,136			100.0			19.9			132,970			100.0			110,054			100.0			20.8
Cost of sales		42,556			59.0			35,373			58.8			20.3			78,881			59.3			64,800			58.9			21.7
Gross profit		29,543			41.0			24,763			41.2			19.3			54,089			40.7			45,254			41.1			19.5
Administrative expenses		1,650			2.3			1,570			2.6			5.1			2,770			2.1			2,876			2.6			(3.7	)
Selling expenses		20,632			28.6			17,010			28.3			21.3			39,577			29.7			32,422			29.5			22.1
Other operating expenses (income), net		50			0.1			73			0.1			(31.5	)		70			0.1			119			0.1			(41.2	)
Income from operations		7,211			10.0			6,110			10.2			18.0			11,672			8.8			9,837			8.9			18.7
Depreciation		3,033			4.2			2,734			4.5			10.9			6,055			4.6			5,400			4.9			12.1
Amortization & other non-cash charges		229			0.3			328			0.6			(30.2	)		443			0.3			565			0.6			(21.6	)
EBITDA		10,473			14.5			9,172			15.3			14.2			18,170			13.7			15,802			14.4			15.0
CAPEX		3,258						2,038						59.9			5,606						3,790						47.9
Information of OXXO Stores
Total stores																	22,059						20,668						6.7
Stores Mexico																	21,389						20,196						5.9
Stores South America																	670						472						41.9
Net new convenience stores:
vs. Last quarter		444						168						164.3
Year-to-date		601						237						153.6
Last-twelve-months		1,391						834						66.8
Same-store data: (1)
Sales (thousands of pesos)		1,042.5						903.9						15.3			968.5						830.2						16.7
Traffic (thousands of transactions)		19.4						18.1						7.4			18.3						17.1						6.6
Ticket (pesos)		53.7						50.0						7.4			53.0						48.4						9.5

 

⁽¹⁾ Monthly average information per store, considering same stores with more than twelve months of operations, income from services are included.

 

 

Proximity Europe – Results of Operations

Amounts expressed in millions of Mexican Pesos (Ps.)

 

		For the second quarter of:								For the six months of:
		2023				% of rev.				2023				% of rev.
Total revenues			10,833				100.0				20,944				100.0
Cost of sales			6,272				57.9				12,120				57.9
Gross profit			4,561				42.1				8,824				42.1
Administrative expenses			768				7.1				1,520				7.3
Selling expenses			3,503				32.3				6,897				32.8
Other operating expenses (income), net			(26	)			(0.2	)			(50	)			(0.2	)
Income from operations			316				2.9				457				2.2
Depreciation			1,071				9.9				2,182				10.4
Amortization & other non-cash charges			131				1.2				207				1.0
EBITDA			1,518				14.0				2,846				13.6
CAPEX			80								275

 

 

Health Division – Results of Operations
Amounts expressed in millions of Mexican Pesos (Ps.)

 

		For the second quarter of:																				For the six months of:
		2023				% of rev.				2022				% of rev.				% Var.				2023				% of rev.				2022				% of rev.				% Var.
Total revenues			18,962				100.0				18,844				100.0				0.6				37,536				100.0				37,500				100.0				0.1
Cost of sales			13,234				69.8				13,466				71.5				(1.7	)			26,090				69.5				26,671				71.1				(2.2	)
Gross profit			5,728				30.2				5,378				28.5				6.5				11,446				30.5				10,829				28.9				5.7
Administrative expenses			765				4.0				420				2.2				82.1				1,469				3.9				1,182				3.2				24.3
Selling expenses			4,011				21.2				4,040				21.4				(0.7	)			8,032				21.4				7,656				20.4				4.9
Other operating expenses (income), net			42				0.2				3				-				N.S.				33				0.1				9				-				N.S.
Income from operations			910				4.8				915				4.9				(0.5	)			1,912				5.1				1,982				5.3				(3.5	)
Depreciation			767				4.0				747				4.0				2.7				1,550				4.1				1,476				3.9				5.0
Amortization & other non-cash charges			257				1.4				172				0.8				49.4				500				1.4				376				1.0				33.0
EBITDA			1,934				10.2				1,834				9.7				5.5				3,962				10.6				3,834				10.2				3.3
CAPEX			385								245								57.5				618								245								152.6
Information of Stores
Total stores																							4,267								3,862								10.5
Stores Mexico																							1,659								1,481								12.0
Stores South America																							2,608								2,381								9.5
Net new stores:
vs. Last quarter			81								144								(43.8	)
Year-to-date			161								210								(23.3	)
Last-twelve-months			369								403								(8.4	)
Same-store data: (1)
Sales (thousands of pesos)			1,167.4								1,212.4								(3.7	)			1,177.2								1,239.6				(5.0	)

 

⁽¹⁾ Monthly average information per store, considering same stores with more than twelve months of all the retail operations of the Health Division.

 

 

Fuel – Results of Operations

Amounts expressed in millions of Mexican Pesos (Ps.)

 

		For the second quarter of:																				For the six months of:
		2023				% of rev.				2022				% of rev.				% Var.				2023				% of rev.				2022				% of rev.				% Var.
Total revenues			14,455				100.0				13,220				100.0				9.3				27,595				100.0				24,115				100.0				14.4
Cost of sales			12,719				88.0				11,596				87.7				9.7				24,224				87.8				21,151				87.7				14.5
Gross profit			1,736				12.0				1,624				12.3				6.9				3,371				12.2				2,964				12.3				13.7
Administrative expenses			68				0.5				57				0.4				19.3				129				0.5				90				0.4				43.3
Selling expenses			1,101				7.6				1,002				7.7				9.9				2,151				7.7				1,933				8.0				11.3
Other operating expenses (income), net			-				-				(7	)			(0.1	)			(100.0	)			-				-				(8	)			-				(100.0	)
Income from operations			567				3.9				572				4.3				(0.9	)			1,091				4.0				949				3.9				15.0
Depreciation			281				1.9				256				1.9				9.8				559				2.0				518				2.1				7.9
Amortization & other non-cash charges			13				0.2				14				0.2				(7.1	)			30				0.1				24				0.2				25.0
EBITDA			861				6.0				842				6.4				2.3				1,680				6.1				1,491				6.2				12.7
CAPEX			44								(0	)							N.S.				68								36								88.2
Information of OXXO GAS Service Stations
Total stores																							570								569								0.2
Net new convenience stores:
vs. Last quarter			0								0								-
Year-to-date			2								2								-
Last-twelve-months			1								6								(83.3	)
Volume (millions of liters) total stations			616								613								0.6				1,190								1,129								5.4
Same-store data: (1)
Sales (thousands of pesos)			7,457.6								7,227.0								3.2				7,169.2								6,558.3								9.3
Traffic (thousands of transactions)			360.4								358.2								0.6				348.1								330.2								5.4
Ticket (pesos)			20.7								20.2								2.6				20.6								19.9								3.7

 

^(A) Unaudited consolidated financial information.

⁽¹⁾ Monthly average information per station, considering same stations with more than twelve months of operations.

 

 

Coca-Cola FEMSA – Results of Operations

Amounts expressed in millions of Mexican Pesos (Ps.)

 

		For the second quarter of:																				For the six months of:
		2023				% of rev.				2022				% of rev.				% Var.				2023				% of rev.				2022				% of rev.				% Var.
Total revenues			61,428				100.0				57,311				100.0				7.2				118,641				100.0				108,635				100.0				9.2
Cost of sales			34,161				55.6				32,039				55.9				6.6				65,985				55.6				60,702				55.9				8.7
Gross profit			27,267				44.4				25,271				44.1				7.9				52,657				44.4				47,933				44.1				9.9
Administrative expenses			3,521				5.7				2,868				5.0				22.8				6,591				5.6				5,330				4.9				23.7
Selling expenses			15,274				24.9				14,580				25.4				4.8				29,979				25.3				27,919				25.6				7.4
Other operating expenses (income), net			(90	)			(0.1	)			171				0.3				(152.6	)			(182	)			(0.2	)			173				0.2				N.S.
Income from operations			8,562				13.9				7,652				13.4				11.9				16,269				13.7				14,512				13.4				12.1
Depreciation			2,403				3.9				2,399				4.2				0.2				4,717				4.0				4,755				4.4				(0.8	)
Amortization & other non-cash charges			473				0.8				556				0.9				(14.9	)			944				0.8				1,195				1.0				(21.0	)
EBITDA			11,439				18.6				10,607				18.5				7.8				21,930				18.5				20,461				18.8				7.2
CAPEX			4,243								4,052								4.7				6,749								7,157								(5.7	)
Sales Volumes
(Millions of unit cases)
Mexico and Central America			643.3				63.1				590.7				62.0				8.9				1,180.7				60.3				1,084.7				59.1				8.8
South America			135.3				13.3				131.1				13.8				3.2				276.6				14.1				267.8				14.6				3.3
Brazil			240.4				23.6				230.7				24.2				4.2				501.3				25.6				481.5				26.3				4.1
Total			1,018.9				100.0				952.4				100.0				7.0				1,958.5				100.0				1,834.1				100.0				6.8

 

⁽¹⁾ Organic basis (% Org.) excludes the effects of significant mergers and acquisitions in the last twelve months.

 

 

Envoy Solutions – Results of Operations

Amounts expressed in millions of Mexican Pesos (Ps.)

 

		For the second quarter of:																				For the six months of:
		2023				% of rev.				2022				% of rev.				% Var.				2023				% of rev.				2022				% of rev.				% Var.
Total revenues			13,482				100.0				10,949				100.0				23.1				26,949				100.0				21,836				100.0				23.4
Cost of sales			9,540				70.8				7,942				72.5				20.1				19,252				71.4				15,780				72.3				22.0
Gross profit			3,942				29.2				3,008				27.5				31.1				7,696				28.6				6,056				27.7				27.1
Administrative expenses			1,694				12.6				900				8.2				88.2				3,202				11.9				1,847				8.5				73.4
Selling expenses			1,732				12.7				1,552				14.2				11.6				3,484				12.9				3,110				14.2				12.0
Other operating expenses (income), net			7				0.1				8				0.1				(12.5	)			15				0.1				10				0.0				50.0
Income from operations			508				3.8				547				5.0				(7.1	)			996				3.7				1,090				5.0				(8.6	)
Depreciation			260				1.9				204				1.9				27.5				506				1.9				335				1.5				51.0
Amortization & other non-cash charges			452				3.3				145				1.3				N.S.				649				2.4				295				1.4				120.0
EBITDA			1,220				9.0				896				8.2				36.2				2,151				8.0				1,720				7.9				25.1
CAPEX			57								47								19.9				114								181								(37.2	)

 

 

FEMSA Macroeconomic Information

 

		Inflation								End-of-period Exchange Rates
		2Q 2023				LTM (1) Jun-23				Jun-23								Jun-22
										Per USD				Per MXN				Per USD				Per MXN
Mexico			0.92	%			7.44	%			17.07				1.0000				19.98				1.0000
Colombia			5.57	%			15.86	%			4,191.28				0.0041				4,127.47				0.0048
Brazil			2.26	%			7.37	%			4.82				3.5425				5.24				3.8153
Argentina			41.51	%			157.82	%			256.70				0.0665				125.23				0.1596
Chile			2.26	%			13.53	%			801.66				0.0213				932.08				0.0214
Euro Zone			2.55	%			9.32	%			0.91				18.7056				0.94				21.1948

 

⁽¹⁾ LTM = Last twelve month

 

 

 

 

Mexico City, July 25, 2023, Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOFUBL, NYSE: KOF) (“Coca-Cola FEMSA”, “KOF” or the “Company”), the largest Coca-Cola franchise bottler in the world by sales volume, announces results for the second quarter of 2023.

 

SECOND QUARTER HIGHLIGHTS

 

·

Volume growth 7.0% — achieved a record of one billion unit cases for the first time during a quarter

 

·

Revenue growth 7.2%

 

·

Operating income growth 11.9%

 

·

Majority net income growth 6.5%

 

·

Earnings per share1 were Ps. 0.29. (Earnings per unit were Ps. 2.34 and per ADS were Ps. 23.45.)

 

·

Achieved more than 910 thousand monthly active buyers on Juntos+, our omnichannel B2B platform

 

FIRST SIX MONTHS HIGHLIGHTS

 

·

Volume growth 6.8%

 

·

Revenue growth 9.2%

 

·

Operating income growth 12.1%

 

·

Majority net income growth 17.3%

 

·

Earnings per share1 were Ps. 0.53. (Earnings per unit were Ps. 4.21 and per ADS were Ps. 42.07.)

 

·

Achieved more than US$ 1 billion in digital revenues through Juntos+

 

FINANCIAL SUMMARY FOR THE SECOND QUARTER RESULTS

 

Change vs. same period of last year

 

				Total Revenues								Gross Profit								Operating Income								Majority Net Income
				2Q23				YTD 2023				2Q23				YTD 2023				2Q23				YTD 2023				2Q23				YTD 2023
		Consolidated			7.2	%			9.2	%			7.9	%			9.9	%			11.9	%			12.1	%			6.5	%			17.3	%
As Reported		Mexico & Central America			13.4	%			14.7	%			13.0	%			13.3	%			13.7	%			7.9	%
		South America			(2.2	)%			1.6	%			(1.6	)%			3.9	%			6.6	%			23.8	%
		Consolidated			16.9	%			19.2	%			16.9	%			19.2	%			18.7	%			19.4	%
Comparable (2)		Mexico & Central America			15.1	%			16.4	%			14.6	%			14.9	%			15.1	%			9.2	%
		South America			20.3	%			23.9	%			22.1	%			28.5	%			31.5	%			54.5	%

 

Ian Craig, Coca-Cola FEMSA’s CEO, commented:

 

“We are pleased to report another set of positive results. During the quarter, our volume grew across all territories, and surpassed a billion unit cases for the first time during a quarter. Notably, our efforts to optimize costs and generate efficiencies, resulted in sequential margin improvements. On the digital front, the rollout of Juntos+, our B2B omnichannel platform, enabled us to reach more than US$ 1 billion in digital sales during the first six months of year. All this, as we continue bolstering our customer centricity to deepen our connection with our customers and improve their overall experience. As we enter the second half of the year, we are confident in our ability to maintain our growth momentum.

 

Finally, I want to congratulate our team at Coca-Cola FEMSA Argentina, which was recognized by The Coca-Cola Company with the Candler Cup 2022 due to its excellence in execution, talent, and culture. Working together as one single team with our colleagues from The Coca-Cola Company, our team in Argentina have made this recognition possible.”

 

	(1)	Quarterly earnings / outstanding shares. Earnings per share (EPS) were calculated using 16,806.7 million shares outstanding. For the convenience of the reader, as a KOFUBL Unit is comprised of 8 shares (3 Series B shares and 5 Series L shares), earnings per unit are equal to EPS multiplied by 8. Each ADS represents 10 KOFUBL Units.
	(2)	Please refer to page 10 for our definition of “comparable” and a description of the factors affecting the comparability of our financial and operating performance.

 

 

RECENT DEVELOPMENTS

 

·

On May 3, 2023, Coca-Cola FEMSA paid the first installment of the dividend declared in the Annual Ordinary General Shareholders’ Meeting in the amount of Ps. 0.3625 per share, for a total cash distribution of Ps. 6,092 million.

 

·

On June 12, 2023, Coca-Cola FEMSA provided an update on the previously disclosed cybersecurity incident. In this update, the Company announced that its investigation determined that the party responsible for the incident extracted and published certain Company data. Importantly, the Company also announced that this cybersecurity incident did not materially adversely impact Coca-Cola FEMSA’s business operations or related functions, and our serv