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 2018
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-_____________
FEMSA
Announces Second Quarter 2018 Results
Monterrey, Mexico, July
27, 2018 —
Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) (NYSE: FMX; BMV: FEMSAUBD) announced
today its operational and financial results for the second quarter of 2018.
FINANCIAL
HIGHLIGHTS:
|
·
|
8.6% revenue growth at FEMSA Consolidated
|
|
·
|
130 basis points of gross margin expansion at FEMSA Comercio’s Retail Division
|
|
·
|
180 basis points of operating margin expansion at FEMSA Comercio’s Health Division
|
|
·
|
Operating margin recovery to 0.7% of total revenues at FEMSA Comercio’s Fuel Division
|
|
·
|
2.7% volume growth at Coca-Cola FEMSA Brazil
|
FINANCIAL SUMMARY FOR THE
SECOND QUARTER AND FIRST SIX MONTHS OF 2018
Change vs. same period of last
year
|
|
Revenues
|
|
|
Gross Profit
|
|
|
Income
from Operations
|
|
|
Same-Store Sales
|
|
|
|
2Q18
|
|
|
YTD18
|
|
|
2Q18
|
|
|
YTD18
|
|
|
2Q18
|
|
|
YTD18
|
|
|
2Q18
|
|
|
YTD18
|
|
FEMSA CONSOLIDATED
|
|
|
8.6
|
%
|
|
|
7.2
|
%
|
|
|
8.3
|
%
|
|
|
7.4
|
%
|
|
|
3.0
|
%
|
|
|
2.3
|
%
|
|
|
|
|
|
|
|
|
FEMSA COMERCIO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Division
|
|
|
9.7
|
%
|
|
|
11.7
|
%
|
|
|
13.7
|
%
|
|
|
14.4
|
%
|
|
|
7.7
|
%
|
|
|
12.4
|
%
|
|
|
3.0
|
%
|
|
|
5.1
|
%
|
Health Division
|
|
|
17.1
|
%
|
|
|
10.1
|
%
|
|
|
22.5
|
%
|
|
|
15.3
|
%
|
|
|
93.3
|
%
|
|
|
57.9
|
%
|
|
|
11.8
|
%
|
|
|
6.2
|
%
|
Fuel Division
|
|
|
21.5
|
%
|
|
|
18.9
|
%
|
|
|
50.9
|
%
|
|
|
46.7
|
%
|
|
|
N.S.
|
|
|
|
N.S.
|
|
|
|
5.0
|
%
|
|
|
4.3
|
%
|
COCA-COLA FEMSA
|
|
|
3.9
|
%
|
|
|
2.0
|
%
|
|
|
0.6
|
%
|
|
|
0.4
|
%
|
|
|
(3.3
|
)%
|
|
|
(4.8
|
)%
|
|
|
|
|
|
|
|
|
Eduardo Padilla, FEMSA’s
CEO, commented:
“Our results for the second
quarter were solid. FEMSA Comercio’s Retail Division again showed healthy trends across its income statement, particularly
considering the tough comparison base from the Holy Week calendar shift, as well as a record pace of expansion. The Health Division
delivered encouraging results across its markets, reflecting improved commercial activity and more effective execution. For its
part, the Fuel Division again faced a low comparison base and thus delivered another quarter of margin recovery, in spite of soft
volumes, as well as an improved rate of unit growth. And at Coca-Cola FEMSA, we saw resilient top line performance in Mexico driven
by strong pricing, as well as sustained positive volume trends in Brazil, despite the challenging macro environment. Furthermore,
during the quarter we took a couple of important steps in our consolidation efforts in the region by announcing the expansion of
our bottling operations in Guatemala and the addition of Uruguay to our platform.
In terms of macroeconomic trends,
the consumer environment in our key Mexico market has been stable, as evidenced by OXXO’s six-month comparable sales growth
of 5.1 percent, right in line with our long term expectations. Other variables such as the peso-dollar exchange rate, have improved
slightly in recent weeks, which is encouraging. But Mexico is not immune to global concerns on international trade, and there are
other macro questions to be answered in the near future. Beyond Mexico, we also face challenges and uncertainties in several markets,
so we remain vigilant as ever as we continue to execute our strategy across businesses.”
Results are compared
to the same period of previous year
femsa
consolidated
FEMSA CONSOLIDATED
2Q18 Financial Summary
(Millions of Ps.)
|
|
2Q18
|
|
|
2Q17
|
|
|
Var.
|
|
Revenues
|
|
|
124,708
|
|
|
|
114,801
|
|
|
|
8.6
|
%
|
Income from Operations
|
|
|
10,733
|
|
|
|
10,425
|
|
|
|
3.0
|
%
|
Income from Operations Margin (%)
|
|
|
8.6
|
|
|
|
9.1
|
|
|
|
-50 bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
15,744
|
|
|
|
15,284
|
|
|
|
3.0
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
12.6
|
|
|
|
13.3
|
|
|
|
-70 bps
|
|
Net Income
|
|
|
10,777
|
|
|
|
6,418
|
|
|
|
67.9
|
%
|
CONSOLIDATED BALANCE SHEET
(Millions of Ps.)
As of June 30, 2018
|
|
Ps.
|
|
|
US$
3
|
|
Cash
|
|
|
53,876
|
|
|
|
2,742
|
|
Short-term debt
|
|
|
14,302
|
|
|
|
728
|
|
Long-term debt
|
|
|
120,296
|
|
|
|
6,122
|
|
Net debt
4
|
|
|
80,722
|
|
|
|
4,108
|
|
Total
revenues
increased 8.6% in 2Q18 compared to 2Q17, mainly reflecting solid growth across FEMSA Comercio’s three
divisions. On an organic basis,
1
total revenues grew
8.9%.
Gross
profit
increased 8.3%. Gross margin decreased 10 basis points, reflecting a contraction in Coca-Cola FEMSA’s
gross margin driven by higher costs for raw materials in certain markets, partially offset by solid gross margin expansion across
FEMSA Comercio’s three divisions.
Income
from operations
increased 3.0%. On an organic basis,
1
it decreased 1.2%. Consolidated operating margin decreased 50 basis points to 8.6% of total revenues, mostly driven
by: i) margin contraction at Coca-Cola FEMSA, reflecting a non-cash operating foreign exchange loss in Mexico coupled with additional
expenses related to their recent acquisitions, and ii) margin contraction at FEMSA Comercio’s Retail Division, driven by
lower sales growth from the negative Holy Week calendar shift.
Our
effective
income tax rate
was 32.3% compared to 26.8% in 2Q17.
Net
consolidated income
increased 67.9%, mainly driven by a non-cash foreign exchange gain related to FEMSA’s U.S.
dollar-denominated cash position as impacted by the depreciation of the Mexican peso, and to a lesser extent, by a lower interest
expense and an increase in income from operations. As is customary, for 2Q18 we are using Heineken’s 1Q18 net income figure
translated at the 2Q18 exchange rate.
Net
majority income
was Ps. 2.46 per FEMSA Unit
2
and
US$ 1.25 per FEMSA ADS.
Capital
expenditures
amounted to Ps. 6,347 million, reflecting higher investments across all business units.
1
Excludes the effects of significant mergers and acquisitions in the last twelve month and the results of Coca-Cola FEMSA Venezuela
in 2017. The cumulative results of the year Includes the results of Coca-Cola FEMSA Philippines Inc., as if consolidation had taken
place at January 2017.
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 June 30, 2018 was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided
by 5.
3
The exchange rate published
by the Federal Reserve Bank of New York for June 29, 2018 was 19.6495 MXN per USD.
4
Includes the effect of derivative
financial instruments on long-term debt.
July 27, 2018
|
|
2
|
FEMSA
COMERCIO – RETAIL DIVISION
FEMSA COMERCIO – RETAIL DIVISION
2Q18 Financial Summary
(Millions of Ps. except same-stores sales)
|
|
2Q18
|
|
|
2Q17
|
|
|
Var.
|
|
Same-store sales (thousands of Ps.)
|
|
|
802
|
|
|
|
778
|
|
|
|
3.0
|
%
|
Revenues
|
|
|
43,517
|
|
|
|
39,660
|
|
|
|
9.7
|
%
|
Income from Operations
|
|
|
3,519
|
|
|
|
3,268
|
|
|
|
7.7
|
%
|
Income from Operations Margin (%)
|
|
|
8.1
|
|
|
|
8.2
|
|
|
|
-10 bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
4,844
|
|
|
|
4,427
|
|
|
|
9.4
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
11.1
|
|
|
|
11.2
|
|
|
|
-10 bps
|
|
Total
revenues
increased 9.7% in 2Q18 compared to 2Q17, reflecting the opening of 483 net new OXXO stores in the quarter
to reach 1,472 total net new store openings for the last twelve months, ahead of schedule and showing success in our effort to
shift more openings toward the first half of the year. As of June 30, 2018, FEMSA Comercio’s Retail Division had a total
of 17,246 OXXO stores. OXXO’s same-store sales increased an average of 3.0%, reflecting resilient consumer demand, partially
offset by the negative Holy Week calendar shift. This performance was driven by 2.1% growth in average customer ticket and an
increase of 1.0% in store traffic.
Gross
profit
increased by 13.7%, resulting in a gross margin expansion of 130 basis points to 38.3% of total revenues. This
expansion mainly reflects: i) sustained growth of the services category, including income from financial services, ii) healthy
trends in our commercial income activity, and iii) increased and more efficient promotional programs with our key supplier partners.
Income
from operations
increased 7.7%. Operating expenses increased 15.5% to Ps. 13,153 million, above revenues, mainly reflecting:
i) our continuing initiative to strengthen our compensation structure of key in-store personnel, in a tightening labor market,
ii) increased secure cash transportation costs driven by incremental volume and higher fuel costs, and iii) the accelerated pace
of store openings during the quarter, which put pressure on our operating leverage. Operating margin decreased 10 basis points
to 8.1% of total revenues.
July 27, 2018
|
|
3
|
FEMSA
COMERCIO – HEALTH DIVISION
FEMSA COMERCIO – HEALTH DIVISION
2Q18 Financial Summary
(Millions of Ps. except same-stores sales)
|
|
2Q18
|
|
|
2Q17
|
|
|
Var.
|
|
Same-store sales (thousands of Ps.)
|
|
|
1,615
|
|
|
|
1,444
|
|
|
|
11.8
|
%
|
Revenues
|
|
|
13,380
|
|
|
|
11,431
|
|
|
|
17.1
|
%
|
Income from Operations
|
|
|
634
|
|
|
|
328
|
|
|
|
93.3
|
%
|
Income from Operations Margin (%)
|
|
|
4.7
|
|
|
|
2.9
|
|
|
|
180 bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
886
|
|
|
|
561
|
|
|
|
57.9
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
6.6
|
|
|
|
4.9
|
|
|
|
170 bps
|
|
Total
revenues
increased 17.1% in 2Q18 compared to 2Q17, mainly driven by growth in our South American operations as well
as gradually improving trends in Mexico. As of June 30, 2018, FEMSA Comercio’s Health Division had a total of 2,251 points
of sale across our territories, reflecting the addition of 16 net new stores in the quarter to reach 97 total net new store openings
for the last twelve months. Same-store sales for drugstores increased by an average of 11.8%, reflecting a positive currency translation
effect related to the depreciation of the Mexican peso compared to the Chilean and Colombian pesos in our operations in South
America.
Gross
profit
increased by 22.5%, resulting in a gross margin expansion of 140 basis points to 30.6% of total revenues, reflecting:
i) commercial activity driving positive margin mix and more effective execution across markets, ii) benefits from the incipient
leverage of our recently integrated operating platform in Mexico, and iii) a favorable comparison base from last year.
Income
from operations
increased 93.3%. Operating expenses increased 14.8% to Ps. 3,459 million, below revenues. Operating
margin expanded 180 basis points to 4.7% of total revenues reflecting the sales growth and gross margin expansion as described
above, combined with tailwinds such as: i) the strength of the Chilean and Colombian pesos relative to the Mexican peso during
the second quarter, and ii) increased operating leverage generated by tight expense control and our recently integrated platform
in Mexico.
July 27, 2018
|
|
4
|
FEMSA
COMERCIO – FUEL DIVISION
FEMSA COMERCIO – FUEL DIVISION
2Q18 Financial Summary
(Millions of Ps. except same-stations sales)
|
|
2Q18
|
|
|
2Q17
|
|
|
Var.
|
|
Same-station sales (thousands of Ps.)
|
|
|
8,515
|
|
|
|
8,111
|
|
|
|
5.0
|
%
|
Revenues
|
|
|
11,511
|
|
|
|
9,473
|
|
|
|
21.5
|
%
|
Income from Operations
|
|
|
82
|
|
|
|
2
|
|
|
|
N.S.
|
|
Income from Operations Margin (%)
|
|
|
0.7
|
|
|
|
-
|
|
|
|
70 bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
122
|
|
|
|
37
|
|
|
|
N.S.
|
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
1.1
|
|
|
|
0.4
|
|
|
|
70 bps
|
|
Total
revenues
increased 21.5% in 2Q18 compared to 2Q17, reflecting the addition of 32 net new OXXO GAS stations in the quarter
to reach 109 total net new stations for the last twelve months. As of June 30, 2018, FEMSA Comercio’s Fuel Division had
a total of 499 OXXO GAS service stations. Same-station sales increased an average of 5.0%, as average price per liter increased
by 13.6%, while average volume decreased 7.6%.
Gross
profit
increased by 50.9% resulting in a gross margin recovery of 160 basis points to 8.0% of total revenues, reflecting
a low comparable base as gross profit per liter remained flat in 2Q17 versus 2016 in peso terms.
Income
from operations
increased significantly. Operating expenses increased 37.9% to Ps. 834 million, above revenues. However,
operating margin recovered 70 basis points to 0.7% of total revenues, reflecting better operating leverage that more than offset
higher regulatory expenses, information technology upgrades, and expansion-related investments.
July 27, 2018
|
|
5
|
Results
are compared to the same period of previous year
femsa
consolidated
FEMSA CONSOLIDATED
Financial Summary for the First Six Months
(Millions of Ps.)
|
|
2018
|
|
|
2017
|
|
|
Var.
|
|
Revenues
|
|
|
240,046
|
|
|
|
224,020
|
|
|
|
7.2
|
%
|
Income from Operations
|
|
|
19,142
|
|
|
|
18,708
|
|
|
|
2.3
|
%
|
Income from Operations Margin (%)
|
|
|
8.0
|
|
|
|
8.4
|
|
|
|
-40 bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
28,750
|
|
|
|
28,128
|
|
|
|
2.2
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
12.0
|
|
|
|
12.6
|
|
|
|
-60 bps
|
|
Net Income
|
|
|
12,254
|
|
|
|
13,307
|
|
|
|
(7.9
|
)%
|
Total
revenues
increased 7.2%, mainly reflecting solid growth at FEMSA Comercio’s three divisions. On an organic basis,
1
total revenues increased 7.1%.
Gross
profit
increased 7.4%. Gross margin increased 10 basis points to 36.3% of total revenues, reflecting gross margin expansion
across FEMSA Comercio’s three divisions.
Income
from operations
increased 2.3%. On an organic basis,
1
it decreased 1.0%. Our consolidated operating margin
decreased 40 basis points to 8.0% of total revenues, reflecting: i) an operating margin contraction in Coca-Cola FEMSA and FEMSA
Comercio Retail Division, and ii) the integration and faster growth of FEMSA Comercio’s three divisions, whose lower margins
tend to compress FEMSA’s consolidated margins over time.
Net
consolidated income
decreased 7.9% to Ps. 12,254 million, reflecting: i) an unfavorable comparison base from Coca-Cola
FEMSA’s consolidation of the Philippines operations in 2017, which resulted in a lower tax rate and a gain in the other
non-operating line, coupled with ii) a decrease in our participation in Heineken’s results, partially offset by a positive
foreign exchange gain and lower financing expenses.
Net
majority income
per FEMSA Unit
2
was Ps.
2.46 (US$ 1.25 per ADS).
1
Excludes the effects of significant mergers and acquisitions in the last twelve month and the results of Coca-Cola FEMSA Venezuela
in 2017. The cumulative results of the year Includes the results of Coca-Cola FEMSA Philippines Inc., as if consolidation had taken
place at January 2017.
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 June 30, 2018 was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided
by 5.
July 27, 2018
|
|
6
|
femsa
comercio – retail division
FEMSA COMERCIO – RETAIL
DIVISION
Financial Summary for the
First Six Months
(Millions of Ps. except same-stores
sales)
|
|
2018
|
|
|
2017
|
|
|
Var.
|
|
Same-store sales (thousands of Ps.)
|
|
|
766
|
|
|
|
728
|
|
|
|
5.1
|
%
|
Revenues
|
|
|
82,323
|
|
|
|
73,730
|
|
|
|
11.7
|
%
|
Income from Operations
|
|
|
5,392
|
|
|
|
4,797
|
|
|
|
12.4
|
%
|
Income from Operations Margin (%)
|
|
|
6.5
|
|
|
|
6.5
|
|
|
|
0 bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
8,010
|
|
|
|
7,087
|
|
|
|
13.0
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
9.7
|
|
|
|
9.6
|
|
|
|
10 bps
|
|
Total
revenues
increased 11.7%. OXXO’s same-store sales increased an average of 5.1%, driven by a 3.4% increase in
average customer ticket and a 1.6% increase in store traffic.
Gross
profit
increased by 14.4%. Gross margin expanded by 90 basis points to 37.2% of total revenues.
Income
from operations
increased 12.4% resulting in an operating margin of 6.5%, in line with 2017.
femsa
comercio – health division
FEMSA COMERCIO – HEALTH
DIVISION
Financial Summary for the
First Six Months
(Millions of Ps. except same-stores
sales)
|
|
2018
|
|
|
2017
|
|
|
Var.
|
|
Same-store sales (thousands of Ps.)
|
|
|
1,581
|
|
|
|
1,489
|
|
|
|
6.2
|
%
|
Revenues
|
|
|
25,835
|
|
|
|
23,455
|
|
|
|
10.1
|
%
|
Income from Operations
|
|
|
914
|
|
|
|
579
|
|
|
|
57.9
|
%
|
Income from Operations Margin (%)
|
|
|
3.5
|
|
|
|
2.5
|
|
|
|
100 bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
1,417
|
|
|
|
1,058
|
|
|
|
33.9
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
5.5
|
|
|
|
4.5
|
|
|
|
100 bps
|
|
Total
revenues
increased by 10.1%. Same-store sales for drugstores increased by an average of 6.2%.
Gross
profit
increased by 15.3%. Gross margin expanded by 130 basis points to 30.1% of total revenues, driven by more efficient
and effective commercial activity across markets, and to benefits that are gradually beginning to materialize in Mexico from our
integration into a single operating platform.
Income
from operations
increased 57.9% resulting in an operating margin of 3.5%, which represents an expansion of 100 basis
points, due to an increased operating leverage.
July 27, 2018
|
|
7
|
FEMSA
COMERCIO – FUEL DIVISION
FEMSA COMERCIO – FUEL DIVISION
Financial Summary for the First Six Months
(Millions of Ps. except same-stations sales)
|
|
2018
|
|
|
2017
|
|
|
Var.
|
|
Same-station sales (thousands of Ps.)
|
|
|
8,339
|
|
|
|
7,994
|
|
|
|
4.3
|
%
|
Revenues
|
|
|
22,104
|
|
|
|
18,587
|
|
|
|
18.9
|
%
|
Income from Operations
|
|
|
219
|
|
|
|
65
|
|
|
|
N.S.
|
|
Income from Operations Margin (%)
|
|
|
1
|
|
|
|
0.3
|
|
|
|
70 bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
296
|
|
|
|
129
|
|
|
|
129.5
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
1.3
|
|
|
|
0.7
|
|
|
|
60 bps
|
|
Total
revenues
increased 18.9%. Same-station sales increased an average of 4.3%, driven by an 11.3% increase in the average
price per liter and a decrease of 6.2% in the average volume.
Gross
profit
increased by 46.7%. Gross margin recovered by 160 basis points to 8.2% of total revenues, reflecting the fact
that gross profit per liter remained flat in peso terms compared to the same period in 2017.
Income
from operations
increased significantly resulting in an operating margin of 1.0%, which represents a recovery of 70
basis points. This increase reflects better operating leverage that more than offsets higher regulatory expenses.
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
.
July 27, 2018
|
|
8
|
CONFERENCE CALL INFORMATION:
|
Our Second Quarter 2018
Conference Call will be held on: Friday, July 27, 2018, 10:00 AM Eastern Time (9:00 AM Mexico City Time). To participate in the
conference call, please dial: Domestic US: (800) 289 0438; International: +1 (323) 794 2423; Conference Id: 3906562. 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.
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 29, 2018, which was 19.6495 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
July 27, 2018
|
|
9
|
FEMSA
Consolidated Income Statement
Millions of Pesos
|
|
For
the second quarter of:
|
|
|
For
the six months of:
|
|
|
|
2018
|
|
|
%
of rev.
|
|
|
2017
|
|
|
%
of rev.
|
|
|
%
Var.
|
|
|
%
Org
(A)
|
|
|
2018
|
|
|
%
of rev.
|
|
|
2017
|
|
|
%
of rev.
|
|
|
%
Var.
|
|
|
%
Org
(A)
|
|
Total revenues
|
|
|
124,708
|
|
|
|
100.0
|
|
|
|
114,801
|
|
|
|
100.0
|
|
|
|
8.6
|
|
|
|
8.9
|
|
|
|
240,046
|
|
|
|
100.0
|
|
|
|
224,020
|
|
|
|
100.0
|
|
|
|
7.2
|
|
|
|
7.1
|
|
Cost of sales
|
|
|
78,991
|
|
|
|
63.3
|
|
|
|
72,597
|
|
|
|
63.2
|
|
|
|
8.8
|
|
|
|
|
|
|
|
152,964
|
|
|
|
63.7
|
|
|
|
142,916
|
|
|
|
63.8
|
|
|
|
7.0
|
|
|
|
|
|
Gross profit
|
|
|
45,717
|
|
|
|
36.7
|
|
|
|
42,204
|
|
|
|
36.8
|
|
|
|
8.3
|
|
|
|
|
|
|
|
87,082
|
|
|
|
36.3
|
|
|
|
81,104
|
|
|
|
36.2
|
|
|
|
7.4
|
|
|
|
|
|
Administrative expenses
|
|
|
4,902
|
|
|
|
3.9
|
|
|
|
3,972
|
|
|
|
3.5
|
|
|
|
23.4
|
|
|
|
|
|
|
|
9,194
|
|
|
|
3.8
|
|
|
|
8,093
|
|
|
|
3.6
|
|
|
|
13.6
|
|
|
|
|
|
Selling expenses
|
|
|
29,477
|
|
|
|
23.7
|
|
|
|
27,615
|
|
|
|
24.0
|
|
|
|
6.7
|
|
|
|
|
|
|
|
57,940
|
|
|
|
24.2
|
|
|
|
54,445
|
|
|
|
24.3
|
|
|
|
6.4
|
|
|
|
|
|
Other operating expenses (income),
net
(1)
|
|
|
605
|
|
|
|
0.5
|
|
|
|
192
|
|
|
|
0.2
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
806
|
|
|
|
0.3
|
|
|
|
(142
|
)
|
|
|
(0.1
|
)
|
|
|
N.S.
|
|
|
|
|
|
Income from operations
(2)
|
|
|
10,733
|
|
|
|
8.6
|
|
|
|
10,425
|
|
|
|
9.1
|
|
|
|
3.0
|
|
|
|
(1.2
|
)
|
|
|
19,142
|
|
|
|
8.0
|
|
|
|
18,708
|
|
|
|
8.4
|
|
|
|
2.3
|
|
|
|
(1.0
|
)
|
Other non-operating expenses (income)
|
|
|
415
|
|
|
|
|
|
|
|
1,376
|
|
|
|
|
|
|
|
(69.8
|
)
|
|
|
|
|
|
|
603
|
|
|
|
|
|
|
|
(1,079
|
)
|
|
|
|
|
|
|
(155.9
|
)
|
|
|
|
|
Interest expense
|
|
|
2,292
|
|
|
|
|
|
|
|
2,696
|
|
|
|
|
|
|
|
(15.0
|
)
|
|
|
|
|
|
|
4,884
|
|
|
|
|
|
|
|
5,797
|
|
|
|
|
|
|
|
(15.7
|
)
|
|
|
|
|
Interest income
|
|
|
567
|
|
|
|
|
|
|
|
301
|
|
|
|
|
|
|
|
88.4
|
|
|
|
|
|
|
|
1,334
|
|
|
|
|
|
|
|
636
|
|
|
|
|
|
|
|
109.7
|
|
|
|
|
|
Interest expense, net
|
|
|
1,725
|
|
|
|
|
|
|
|
2,395
|
|
|
|
|
|
|
|
(28.0
|
)
|
|
|
|
|
|
|
3,550
|
|
|
|
|
|
|
|
5,161
|
|
|
|
|
|
|
|
(31.2
|
)
|
|
|
|
|
Foreign exchange loss (gain)
|
|
|
(5,644
|
)
|
|
|
|
|
|
|
504
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
(711
|
)
|
|
|
|
|
|
|
2,170
|
|
|
|
|
|
|
|
(132.8
|
)
|
|
|
|
|
Other financial
expenses (income), net.
|
|
|
70
|
|
|
|
|
|
|
|
(129
|
)
|
|
|
|
|
|
|
(154.3
|
)
|
|
|
|
|
|
|
326
|
|
|
|
|
|
|
|
(844
|
)
|
|
|
|
|
|
|
(138.6
|
)
|
|
|
|
|
Financing expenses,
net
|
|
|
(3,849
|
)
|
|
|
|
|
|
|
2,770
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
3,165
|
|
|
|
|
|
|
|
6,487
|
|
|
|
|
|
|
|
(51.2
|
)
|
|
|
|
|
Income before income tax and participation in associates results
|
|
|
14,167
|
|
|
|
|
|
|
|
6,279
|
|
|
|
|
|
|
|
125.6
|
|
|
|
|
|
|
|
15,374
|
|
|
|
|
|
|
|
13,300
|
|
|
|
|
|
|
|
15.6
|
|
|
|
|
|
Income tax
|
|
|
4,581
|
|
|
|
|
|
|
|
1,680
|
|
|
|
|
|
|
|
172.7
|
|
|
|
|
|
|
|
5,182
|
|
|
|
|
|
|
|
3,105
|
|
|
|
|
|
|
|
66.9
|
|
|
|
|
|
Participation in associates results
(3)
|
|
|
1,191
|
|
|
|
|
|
|
|
1,819
|
|
|
|
|
|
|
|
(34.5
|
)
|
|
|
|
|
|
|
2,062
|
|
|
|
|
|
|
|
3,112
|
|
|
|
|
|
|
|
(33.7
|
)
|
|
|
|
|
Net consolidated income
|
|
|
10,777
|
|
|
|
|
|
|
|
6,418
|
|
|
|
|
|
|
|
67.9
|
|
|
|
|
|
|
|
12,254
|
|
|
|
|
|
|
|
13,307
|
|
|
|
|
|
|
|
(7.9
|
)
|
|
|
|
|
Net majority income
|
|
|
8,796
|
|
|
|
|
|
|
|
4,657
|
|
|
|
|
|
|
|
88.9
|
|
|
|
|
|
|
|
8,797
|
|
|
|
|
|
|
|
8,247
|
|
|
|
|
|
|
|
6.7
|
|
|
|
|
|
Net minority income
|
|
|
1,981
|
|
|
|
|
|
|
|
1,761
|
|
|
|
|
|
|
|
12.5
|
|
|
|
|
|
|
|
3,457
|
|
|
|
|
|
|
|
5,060
|
|
|
|
|
|
|
|
(31.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operative Cash Flow & CAPEX
|
|
|
2018
|
|
|
|
%
of rev.
|
|
|
|
2017
|
|
|
|
%
of rev.
|
|
|
|
%
Var.
|
|
|
|
%
Org
(A)
|
|
|
|
2018
|
|
|
|
%
of rev.
|
|
|
|
2017
|
|
|
|
%
of rev.
|
|
|
|
%
Var.
|
|
|
|
%
Org
(A)
|
|
Income from operations
|
|
|
10,733
|
|
|
|
8.6
|
|
|
|
10,425
|
|
|
|
9.1
|
|
|
|
3.0
|
|
|
|
(1.2
|
)
|
|
|
19,142
|
|
|
|
8.0
|
|
|
|
18,708
|
|
|
|
8.4
|
|
|
|
2.3
|
|
|
|
(1.0
|
)
|
Depreciation
|
|
|
3,960
|
|
|
|
3.2
|
|
|
|
3,775
|
|
|
|
3.3
|
|
|
|
4.9
|
|
|
|
|
|
|
|
7,778
|
|
|
|
3.2
|
|
|
|
7,439
|
|
|
|
3.3
|
|
|
|
4.6
|
|
|
|
|
|
Amortization & other non-cash
charges
|
|
|
1,051
|
|
|
|
0.8
|
|
|
|
1,084
|
|
|
|
0.9
|
|
|
|
(3.0
|
)
|
|
|
|
|
|
|
1,830
|
|
|
|
0.8
|
|
|
|
1,981
|
|
|
|
0.9
|
|
|
|
(7.6
|
)
|
|
|
|
|
Operative Cash Flow (EBITDA)
|
|
|
15,744
|
|
|
|
12.6
|
|
|
|
15,284
|
|
|
|
13.3
|
|
|
|
3.0
|
|
|
|
2.6
|
|
|
|
28,750
|
|
|
|
12.0
|
|
|
|
28,128
|
|
|
|
12.6
|
|
|
|
2.2
|
|
|
|
0.1
|
|
CAPEX
|
|
|
6,347
|
|
|
|
|
|
|
|
5,232
|
|
|
|
|
|
|
|
21.3
|
|
|
|
|
|
|
|
10,437
|
|
|
|
|
|
|
|
11,120
|
|
|
|
|
|
|
|
(6.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios
|
|
|
2018
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
Var.
p.p.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
(4)
|
|
|
1.49
|
|
|
|
|
|
|
|
1.73
|
|
|
|
|
|
|
|
(0.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest coverage
(5)
|
|
|
9.13
|
|
|
|
|
|
|
|
6.38
|
|
|
|
|
|
|
|
2.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage
(6)
|
|
|
0.80
|
|
|
|
|
|
|
|
0.75
|
|
|
|
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization
(7)
|
|
|
30.24
|
%
|
|
|
|
|
|
|
27.80
|
%
|
|
|
|
|
|
|
2.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
Organic basis (% Org.) Excludes the effects of
significant mergers and acquisitions in the last twelve month and the results of Coca-Cola FEMSA Venezuela in 2017. The cumulative
results of the year Includes the results of Coca-Cola FEMSA Philippines Inc., as if consolidation had taken place at January 2017.
(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.
July 27, 2018
|
|
10
|
FEMSA
Consolidated Balance Sheet
Millions of Pesos
ASSETS
|
|
Jun-18
|
|
|
Dec-17
|
|
|
% Var.
|
|
Cash and cash equivalents
|
|
|
53,876
|
|
|
|
96,944
|
|
|
|
(44.4
|
)
|
Investments
|
|
|
24,627
|
|
|
|
2,160
|
|
|
|
N.S.
|
|
Accounts receivable
|
|
|
27,095
|
|
|
|
32,316
|
|
|
|
(16.2
|
)
|
Inventories
|
|
|
34,612
|
|
|
|
34,840
|
|
|
|
(0.7
|
)
|
Other current assets
|
|
|
18,407
|
|
|
|
14,928
|
|
|
|
23.3
|
|
Total current assets
|
|
|
158,617
|
|
|
|
181,188
|
|
|
|
(12.5
|
)
|
Investments in shares
|
|
|
91,207
|
|
|
|
96,097
|
|
|
|
(5.1
|
)
|
Property, plant and equipment, net
|
|
|
116,471
|
|
|
|
116,712
|
|
|
|
(0.2
|
)
|
Intangible assets
(1)
|
|
|
151,353
|
|
|
|
154,093
|
|
|
|
(1.8
|
)
|
Other assets
|
|
|
67,084
|
|
|
|
40,451
|
|
|
|
65.8
|
|
TOTAL ASSETS
|
|
|
584,732
|
|
|
|
588,541
|
|
|
|
(0.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS´ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans
|
|
|
3,458
|
|
|
|
2,830
|
|
|
|
22.2
|
|
Current maturities of long-term debt
|
|
|
10,844
|
|
|
|
10,760
|
|
|
|
0.8
|
|
Interest payable
|
|
|
792
|
|
|
|
976
|
|
|
|
(18.9
|
)
|
Operating liabilities
|
|
|
91,253
|
|
|
|
90,456
|
|
|
|
0.9
|
|
Total current liabilities
|
|
|
106,347
|
|
|
|
105,022
|
|
|
|
1.3
|
|
Long-term debt
(2)
|
|
|
120,296
|
|
|
|
110,917
|
|
|
|
8.5
|
|
Labor liabilities
|
|
|
5,547
|
|
|
|
5,373
|
|
|
|
3.2
|
|
Other liabilities
|
|
|
27,829
|
|
|
|
30,317
|
|
|
|
(8.2
|
)
|
Total liabilities
|
|
|
260,019
|
|
|
|
251,629
|
|
|
|
3.3
|
|
Total stockholders’ equity
|
|
|
324,713
|
|
|
|
336,912
|
|
|
|
(3.6
|
)
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
584,732
|
|
|
|
588,541
|
|
|
|
(0.6
|
)
|
|
|
June 30, 2018
|
|
DEBT MIX
(2)
|
|
% of Total
|
|
|
Average Rate
|
|
Denominated in:
|
|
|
|
|
|
|
|
|
Mexican pesos
|
|
|
46.8
|
%
|
|
|
8.1
|
%
|
U.S. Dollars
|
|
|
0.9
|
%
|
|
|
3.0
|
%
|
Euros
|
|
|
17.3
|
%
|
|
|
1.8
|
%
|
Colombian pesos
|
|
|
1.9
|
%
|
|
|
7.1
|
%
|
Argentine pesos
|
|
|
0.2
|
%
|
|
|
36.8
|
%
|
Brazilian reais
|
|
|
29.2
|
%
|
|
|
6.9
|
%
|
Chilean pesos
|
|
|
3.7
|
%
|
|
|
5.5
|
%
|
Total debt
|
|
|
100.0
|
%
|
|
|
6.5
|
%
|
|
|
|
|
|
|
|
|
|
Fixed rate
(2)
|
|
|
85.6
|
%
|
|
|
|
|
Variable rate
(2)
|
|
|
14.4
|
%
|
|
|
|
|
DEBT MATURITY PROFILE
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
2023+
|
|
% of Total Debt
|
|
|
9.0
|
%
|
|
|
10.2
|
%
|
|
|
8.1
|
%
|
|
|
9.3
|
%
|
|
|
1.7
|
%
|
|
|
61.7
|
%
|
|
(1)
|
Includes mainly the intangible assets generated by acquisitions.
|
|
(2)
|
Includes the effect of derivative financial instruments
on long-term debt.
|
July 27, 2018
|
|
11
|
FEMSA Comercio - Retail Division
Results of Operations
Millions of Pesos
|
|
For the second quarter of:
|
|
|
For the six months of:
|
|
|
|
2018
|
|
|
% of rev.
|
|
|
2017
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
2018
|
|
|
% of rev.
|
|
|
2017
|
|
|
% of rev.
|
|
|
% Var.
|
|
Total revenues
|
|
|
43,517
|
|
|
|
100.0
|
|
|
|
39,660
|
|
|
|
100.0
|
|
|
|
9.7
|
|
|
|
82,323
|
|
|
|
100.0
|
|
|
|
73,730
|
|
|
|
100.0
|
|
|
|
11.7
|
|
Cost of sales
|
|
|
26,845
|
|
|
|
61.7
|
|
|
|
25,001
|
|
|
|
63.0
|
|
|
|
7.4
|
|
|
|
51,677
|
|
|
|
62.8
|
|
|
|
46,932
|
|
|
|
63.7
|
|
|
|
10.1
|
|
Gross profit
|
|
|
16,672
|
|
|
|
38.3
|
|
|
|
14,659
|
|
|
|
37.0
|
|
|
|
13.7
|
|
|
|
30,646
|
|
|
|
37.2
|
|
|
|
26,798
|
|
|
|
36.3
|
|
|
|
14.4
|
|
Administrative expenses
|
|
|
973
|
|
|
|
2.2
|
|
|
|
806
|
|
|
|
2.0
|
|
|
|
20.7
|
|
|
|
1,840
|
|
|
|
2.2
|
|
|
|
1,581
|
|
|
|
2.1
|
|
|
|
16.4
|
|
Selling expenses
|
|
|
12,097
|
|
|
|
27.8
|
|
|
|
10,525
|
|
|
|
26.6
|
|
|
|
14.9
|
|
|
|
23,262
|
|
|
|
28.3
|
|
|
|
20,292
|
|
|
|
27.5
|
|
|
|
14.6
|
|
Other operating expenses (income), net
|
|
|
83
|
|
|
|
0.2
|
|
|
|
60
|
|
|
|
0.2
|
|
|
|
38.3
|
|
|
|
152
|
|
|
|
0.2
|
|
|
|
128
|
|
|
|
0.2
|
|
|
|
18.8
|
|
Income from operations
|
|
|
3,519
|
|
|
|
8.1
|
|
|
|
3,268
|
|
|
|
8.2
|
|
|
|
7.7
|
|
|
|
5,392
|
|
|
|
6.5
|
|
|
|
4,797
|
|
|
|
6.5
|
|
|
|
12.4
|
|
Depreciation
|
|
|
1,188
|
|
|
|
2.7
|
|
|
|
1,038
|
|
|
|
2.6
|
|
|
|
14.5
|
|
|
|
2,359
|
|
|
|
2.9
|
|
|
|
2,051
|
|
|
|
2.8
|
|
|
|
15.0
|
|
Amortization & other non-cash charges
|
|
|
137
|
|
|
|
0.3
|
|
|
|
121
|
|
|
|
0.4
|
|
|
|
13.2
|
|
|
|
259
|
|
|
|
0.3
|
|
|
|
239
|
|
|
|
0.3
|
|
|
|
8.4
|
|
Operative cash flow
|
|
|
4,844
|
|
|
|
11.1
|
|
|
|
4,427
|
|
|
|
11.2
|
|
|
|
9.4
|
|
|
|
8,010
|
|
|
|
9.7
|
|
|
|
7,087
|
|
|
|
9.6
|
|
|
|
13.0
|
|
CAPEX
|
|
|
2,431
|
|
|
|
0
|
|
|
|
2,026
|
|
|
|
-
|
|
|
|
20.0
|
|
|
|
3,935
|
|
|
|
0
|
|
|
|
3,650
|
|
|
|
-
|
|
|
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information of OXXO Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,246
|
|
|
|
|
|
|
|
15,774
|
|
|
|
|
|
|
|
9.3
|
|
Net new convenience stores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
vs. Last quarter
|
|
|
483
|
|
|
|
|
|
|
|
373
|
|
|
|
|
|
|
|
29.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date
|
|
|
720
|
|
|
|
|
|
|
|
549
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last-twelve-months
|
|
|
1,472
|
|
|
|
|
|
|
|
1,313
|
|
|
|
|
|
|
|
12.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store data:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales (thousands of pesos)
|
|
|
801.7
|
|
|
|
|
|
|
|
778.1
|
|
|
|
|
|
|
|
3.0
|
|
|
|
765.7
|
|
|
|
|
|
|
|
728.4
|
|
|
|
|
|
|
|
5.1
|
|
Traffic (thousands of transactions)
|
|
|
23.7
|
|
|
|
|
|
|
|
23.4
|
|
|
|
|
|
|
|
1.0
|
|
|
|
22.8
|
|
|
|
|
|
|
|
22.4
|
|
|
|
|
|
|
|
1.6
|
|
Ticket (pesos)
|
|
|
33.9
|
|
|
|
|
|
|
|
33.2
|
|
|
|
|
|
|
|
2.1
|
|
|
|
33.6
|
|
|
|
|
|
|
|
32.5
|
|
|
|
|
|
|
|
3.4
|
|
(A)
Organic basis (% Org.) Excludes the effects of significant mergers and acquisitions in the last twelve month
(1)
Monthly average information per store, considering same stores with more than twelve months of operations, income from services
are included.
July 27, 2018
|
|
12
|
FEMSA Comercio - Health Division
Results of Operations
Millions of Pesos
|
|
For the second quarter of:
|
|
|
For the six months of:
|
|
|
|
2018
|
|
|
% of rev.
|
|
|
2017
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
2018
|
|
|
% of rev.
|
|
|
2017
|
|
|
% of rev.
|
|
|
% Var.
|
|
Total revenues
|
|
|
13,380
|
|
|
|
100.0
|
|
|
|
11,431
|
|
|
|
100.0
|
|
|
|
17.1
|
|
|
|
25,835
|
|
|
|
100.0
|
|
|
|
23,455
|
|
|
|
100.0
|
|
|
|
10.1
|
|
Cost of sales
|
|
|
9,287
|
|
|
|
69.4
|
|
|
|
8,090
|
|
|
|
70.8
|
|
|
|
14.8
|
|
|
|
18,046
|
|
|
|
69.9
|
|
|
|
16,700
|
|
|
|
71.2
|
|
|
|
8.1
|
|
Gross profit
|
|
|
4,093
|
|
|
|
30.6
|
|
|
|
3,341
|
|
|
|
29.2
|
|
|
|
22.5
|
|
|
|
7,789
|
|
|
|
30.1
|
|
|
|
6,755
|
|
|
|
28.8
|
|
|
|
15.3
|
|
Administrative expenses
|
|
|
514
|
|
|
|
3.8
|
|
|
|
381
|
|
|
|
3.3
|
|
|
|
34.9
|
|
|
|
1,000
|
|
|
|
3.9
|
|
|
|
834
|
|
|
|
3.6
|
|
|
|
19.9
|
|
Selling expenses
|
|
|
2,923
|
|
|
|
21.9
|
|
|
|
2,618
|
|
|
|
22.9
|
|
|
|
11.7
|
|
|
|
5,832
|
|
|
|
22.5
|
|
|
|
5,318
|
|
|
|
22.6
|
|
|
|
9.7
|
|
Other operating expenses (income), net
|
|
|
22
|
|
|
|
0.2
|
|
|
|
14
|
|
|
|
0.1
|
|
|
|
57.1
|
|
|
|
43
|
|
|
|
0.2
|
|
|
|
24
|
|
|
|
0.1
|
|
|
|
79.2
|
|
Income from operations
|
|
|
634
|
|
|
|
4.7
|
|
|
|
328
|
|
|
|
2.9
|
|
|
|
93.3
|
|
|
|
914
|
|
|
|
3.5
|
|
|
|
579
|
|
|
|
2.5
|
|
|
|
57.9
|
|
Depreciation
|
|
|
166
|
|
|
|
1.2
|
|
|
|
151
|
|
|
|
1.3
|
|
|
|
9.9
|
|
|
|
331
|
|
|
|
1.3
|
|
|
|
312
|
|
|
|
1.3
|
|
|
|
6.1
|
|
Amortization & other non-cash charges
|
|
|
86
|
|
|
|
0.7
|
|
|
|
82
|
|
|
|
0.7
|
|
|
|
4.9
|
|
|
|
172
|
|
|
|
0.7
|
|
|
|
167
|
|
|
|
0.7
|
|
|
|
3.0
|
|
Operative cash flow
|
|
|
886
|
|
|
|
6.6
|
|
|
|
561
|
|
|
|
4.9
|
|
|
|
57.9
|
|
|
|
1,417
|
|
|
|
5.5
|
|
|
|
1,058
|
|
|
|
4.5
|
|
|
|
33.9
|
|
CAPEX
|
|
|
229
|
|
|
|
0
|
|
|
|
176
|
|
|
|
-
|
|
|
|
30.1
|
|
|
|
580
|
|
|
|
0
|
|
|
|
372
|
|
|
|
-
|
|
|
|
55.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information of Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,251
|
|
|
|
|
|
|
|
2,154
|
|
|
|
|
|
|
|
4.5
|
|
Net new stores
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
vs. Last quarter
|
|
|
16
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
(11.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date
|
|
|
26
|
|
|
|
|
|
|
|
34
|
|
|
|
|
|
|
|
(23.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last-twelve-months
|
|
|
97
|
|
|
|
|
|
|
|
120
|
|
|
|
|
|
|
|
(19.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store data:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales (thousands of pesos)
|
|
|
1,614.7
|
|
|
|
|
|
|
|
1,444.1
|
|
|
|
|
|
|
|
11.8
|
|
|
|
1,581.1
|
|
|
|
|
|
|
|
1,489.2
|
|
|
|
|
|
|
|
6.2
|
|
(1)
Aquisitions are included.
(2)
Monthly average information per store, considering same stores with more than twelve months of all the operations of FEMSA
Comercio - Health Division.
July 27, 2018
|
|
13
|
FEMSA Comercio - Fuel Division
Results of Operations
Millions of Pesos
|
|
For the second quarter of:
|
|
|
For the six months of:
|
|
|
|
2018
|
|
|
% of rev.
|
|
|
2017
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
2018
|
|
|
% of rev.
|
|
|
2017
|
|
|
% of rev.
|
|
|
% Var.
|
|
Total revenues
|
|
|
11,511
|
|
|
|
100.0
|
|
|
|
9,473
|
|
|
|
100.0
|
|
|
|
21.5
|
|
|
|
22,104
|
|
|
|
100.0
|
|
|
|
18,587
|
|
|
|
100.0
|
|
|
|
18.9
|
|
Cost of sales
|
|
|
10,595
|
|
|
|
92.0
|
|
|
|
8,866
|
|
|
|
93.6
|
|
|
|
19.5
|
|
|
|
20,301
|
|
|
|
91.8
|
|
|
|
17,358
|
|
|
|
93.4
|
|
|
|
17.0
|
|
Gross profit
|
|
|
916
|
|
|
|
8.0
|
|
|
|
607
|
|
|
|
6.4
|
|
|
|
50.9
|
|
|
|
1,803
|
|
|
|
8.2
|
|
|
|
1,229
|
|
|
|
6.6
|
|
|
|
46.7
|
|
Administrative expenses
|
|
|
61
|
|
|
|
0.5
|
|
|
|
38
|
|
|
|
0.4
|
|
|
|
60.5
|
|
|
|
113
|
|
|
|
0.5
|
|
|
|
74
|
|
|
|
0.4
|
|
|
|
52.7
|
|
Selling expenses
|
|
|
771
|
|
|
|
6.8
|
|
|
|
563
|
|
|
|
6.0
|
|
|
|
36.9
|
|
|
|
1,468
|
|
|
|
6.7
|
|
|
|
1,084
|
|
|
|
5.9
|
|
|
|
35.4
|
|
Other operating expenses (income), net
|
|
|
2
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
(50.0
|
)
|
|
|
3
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
|
(50.0
|
)
|
Income from operations
|
|
|
82
|
|
|
|
0.7
|
|
|
|
2
|
|
|
|
-
|
|
|
|
N.S.
|
|
|
|
219
|
|
|
|
1.0
|
|
|
|
65
|
|
|
|
0.3
|
|
|
|
N.S.
|
|
Depreciation
|
|
|
32
|
|
|
|
0.3
|
|
|
|
26
|
|
|
|
0.3
|
|
|
|
23.1
|
|
|
|
63
|
|
|
|
0.3
|
|
|
|
50
|
|
|
|
0.3
|
|
|
|
26.0
|
|
Amortization & other non-cash charges
|
|
|
8
|
|
|
|
0.1
|
|
|
|
9
|
|
|
|
0.1
|
|
|
|
(11.1
|
)
|
|
|
14
|
|
|
|
-
|
|
|
|
14
|
|
|
|
0.1
|
|
|
|
-
|
|
Operative cash flow
|
|
|
122
|
|
|
|
1.1
|
|
|
|
37
|
|
|
|
0.4
|
|
|
|
N.S.
|
|
|
|
296
|
|
|
|
1.3
|
|
|
|
129
|
|
|
|
0.7
|
|
|
|
129.5
|
|
CAPEX
|
|
|
129
|
|
|
|
0
|
|
|
|
41
|
|
|
|
-
|
|
|
|
N.S.
|
|
|
|
193
|
|
|
|
0
|
|
|
|
79
|
|
|
|
-
|
|
|
|
144.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information of OXXO GAS Service Stations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total service stations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
499
|
|
|
|
|
|
|
|
390
|
|
|
|
|
|
|
|
27.9
|
|
Net new service stations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
vs. Last quarter
|
|
|
32
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date
|
|
|
47
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last-twelve-months
|
|
|
109
|
|
|
|
|
|
|
|
55
|
|
|
|
|
|
|
|
98.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (million of liters) total stations
|
|
|
708
|
|
|
|
|
|
|
|
661
|
|
|
|
|
|
|
|
7.1
|
|
|
|
1,382
|
|
|
|
|
|
|
|
1,292
|
|
|
|
|
|
|
|
6.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-stations data:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales (thousands of pesos)
|
|
|
8,514.5
|
|
|
|
|
|
|
|
8,110.8
|
|
|
|
|
|
|
|
5.0
|
|
|
|
8,339.4
|
|
|
|
|
|
|
|
7,994.2
|
|
|
|
|
|
|
|
4.3
|
|
Volume (thousands of liters)
|
|
|
523.4
|
|
|
|
|
|
|
|
566.2
|
|
|
|
|
|
|
|
(7.6
|
)
|
|
|
521.3
|
|
|
|
|
|
|
|
555.9
|
|
|
|
|
|
|
|
(6.2
|
)
|
Average price per liter
|
|
|
16.3
|
|
|
|
|
|
|
|
14.3
|
|
|
|
|
|
|
|
13.6
|
|
|
|
16.0
|
|
|
|
|
|
|
|
14.4
|
|
|
|
|
|
|
|
11.3
|
|
Ticket (pesos)
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Monthly average information per station, considering same
stations with more than twelve months of operations.
|
July 27, 2018
|
|
14
|
Coca-Cola FEMSA
Results of Operations
Millions of Pesos
|
|
For the second quarter of:
|
|
|
For the six months of:
|
|
|
|
2018
|
|
|
% of rev.
|
|
|
2017
|
|
|
% of rev.
|
|
|
% Var.
(A)
|
|
|
% Org.
(B)
|
|
|
2018
|
|
|
% of rev.
|
|
|
2017
|
|
|
% of rev.
|
|
|
% Var.
(A)
|
|
|
% Org.
(B)
|
|
Total revenues
|
|
|
52,086
|
|
|
|
100.0
|
|
|
|
50,108
|
|
|
|
100.0
|
|
|
|
3.9
|
|
|
|
4.5
|
|
|
|
101,799
|
|
|
|
100.0
|
|
|
|
99,849
|
|
|
|
100.0
|
|
|
|
2.0
|
|
|
|
1.8
|
|
Cost of sales
|
|
|
29,135
|
|
|
|
55.9
|
|
|
|
27,282
|
|
|
|
54.4
|
|
|
|
6.8
|
|
|
|
|
|
|
|
56,931
|
|
|
|
55.9
|
|
|
|
55,175
|
|
|
|
55.3
|
|
|
|
3.2
|
|
|
|
|
|
Gross profit
|
|
|
22,951
|
|
|
|
44.1
|
|
|
|
22,825
|
|
|
|
45.6
|
|
|
|
0.6
|
|
|
|
|
|
|
|
44,868
|
|
|
|
44.1
|
|
|
|
44,674
|
|
|
|
44.7
|
|
|
|
0.4
|
|
|
|
|
|
Administrative expenses
|
|
|
2,438
|
|
|
|
4.7
|
|
|
|
2,255
|
|
|
|
4.5
|
|
|
|
8.1
|
|
|
|
|
|
|
|
4,637
|
|
|
|
4.6
|
|
|
|
4,419
|
|
|
|
4.4
|
|
|
|
4.9
|
|
|
|
|
|
Selling expenses
|
|
|
13,688
|
|
|
|
26.3
|
|
|
|
13,913
|
|
|
|
27.7
|
|
|
|
(1.6
|
)
|
|
|
|
|
|
|
27,424
|
|
|
|
27.4
|
|
|
|
27,749
|
|
|
|
27.8
|
|
|
|
(1.2
|
)
|
|
|
|
|
Other operating expenses (income), net
|
|
|
548
|
|
|
|
1.1
|
|
|
|
166
|
|
|
|
0.3
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
648
|
|
|
|
0.6
|
|
|
|
(269
|
)
|
|
|
(0.3
|
)
|
|
|
N.S.
|
|
|
|
|
|
Income from operations
|
|
|
6,276
|
|
|
|
12.0
|
|
|
|
6,491
|
|
|
|
13.0
|
|
|
|
(3.3
|
)
|
|
|
(9.5
|
)
|
|
|
12,159
|
|
|
|
11.9
|
|
|
|
12,775
|
|
|
|
12.8
|
|
|
|
(4.8
|
)
|
|
|
(9.4
|
)
|
Depreciation
|
|
|
2,478
|
|
|
|
4.8
|
|
|
|
2,477
|
|
|
|
4.9
|
|
|
|
0.0
|
|
|
|
|
|
|
|
4,831
|
|
|
|
4.7
|
|
|
|
4,839
|
|
|
|
4.8
|
|
|
|
(0.2
|
)
|
|
|
|
|
Amortization & other non-cash charges
|
|
|
757
|
|
|
|
1.5
|
|
|
|
802
|
|
|
|
1.6
|
|
|
|
(5.6
|
)
|
|
|
|
|
|
|
1,226
|
|
|
|
1.3
|
|
|
|
1,387
|
|
|
|
1.4
|
|
|
|
(11.6
|
)
|
|
|
|
|
Operative cash flow
|
|
|
9,511
|
|
|
|
18.3
|
|
|
|
9,770
|
|
|
|
19.5
|
|
|
|
(2.6
|
)
|
|
|
(3.3
|
)
|
|
|
18,217
|
|
|
|
17.9
|
|
|
|
19,000
|
|
|
|
19.0
|
|
|
|
(4.1
|
)
|
|
|
(7.1
|
)
|
CAPEX
|
|
|
2,722
|
|
|
|
|
|
|
|
2,539
|
|
|
|
|
|
|
|
7.2
|
|
|
|
|
|
|
|
4,587
|
|
|
|
|
|
|
|
6,425
|
|
|
|
|
|
|
|
(28.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales volumes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of unit cases)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico and Central America
|
|
|
552.2
|
|
|
|
56.5
|
|
|
|
543.7
|
|
|
|
54.7
|
|
|
|
1.6
|
|
|
|
|
|
|
|
1,027.1
|
|
|
|
54.5
|
|
|
|
1,016.7
|
|
|
|
54.2
|
|
|
|
1.0
|
|
|
|
|
|
South America
|
|
|
99.9
|
|
|
|
10.2
|
|
|
|
124.5
|
|
|
|
12.5
|
|
|
|
(19.8
|
)
|
|
|
|
|
|
|
218.2
|
|
|
|
11.6
|
|
|
|
250.3
|
|
|
|
13.3
|
|
|
|
(12.8
|
)
|
|
|
|
|
Brazil
|
|
|
170.8
|
|
|
|
17.5
|
|
|
|
166.3
|
|
|
|
16.7
|
|
|
|
2.7
|
|
|
|
|
|
|
|
365.6
|
|
|
|
19.4
|
|
|
|
356.4
|
|
|
|
19.0
|
|
|
|
2.6
|
|
|
|
|
|
Philippines
|
|
|
154.2
|
|
|
|
15.8
|
|
|
|
160.5
|
|
|
|
16.1
|
|
|
|
(4.0
|
)
|
|
|
|
|
|
|
274.0
|
|
|
|
14.5
|
|
|
|
252.8
|
|
|
|
13.5
|
|
|
|
8.4
|
|
|
|
|
|
Total
|
|
|
977.1
|
|
|
|
100.0
|
|
|
|
995.0
|
|
|
|
100.0
|
|
|
|
(1.8
|
)
|
|
|
|
|
|
|
1,884.9
|
|
|
|
100.0
|
|
|
|
1,876.3
|
|
|
|
100.0
|
|
|
|
0.5
|
|
|
|
|
|
(A)
The consolidation of Coca- Cola Philippines started on February 1, 2017 additionally the results from Coca-Cola FEMSA Venezuela
are no longer included as of January 1, 2018
(B)
Organic basis (% Org.) Excludes the effects of significant mergers and acquisitions in the last twelve month and the results
of Coca-Cola FEMSA Venezuela in 2017. The cumulative results of the year Includes the results of Coca-Cola FEMSA Philippines Inc.,
as if consolidation had taken place at January 2017.
July 27, 2018
|
|
15
|
FEMSA
Macroeconomic Information
|
|
Inflation
|
|
|
End-of-period Exchange
Rates
|
|
|
|
2Q 2018
|
|
|
LTM
(1)
Jun-18
|
|
|
Jun-18
|
|
|
Dec-17
|
|
|
|
|
|
|
|
|
|
Per USD
|
|
|
Per MXN
|
|
|
Per USD
|
|
|
Per MXN
|
|
Mexico
|
|
|
-0.72
|
%
|
|
|
4.67
|
%
|
|
|
19.86
|
|
|
|
1.0000
|
|
|
|
19.74
|
|
|
|
1.0000
|
|
Colombia
|
|
|
0.50
|
%
|
|
|
3.19
|
%
|
|
|
2,930.80
|
|
|
|
0.0068
|
|
|
|
2,984.00
|
|
|
|
0.0066
|
|
Venezuela
|
|
|
387.34
|
%
|
|
|
12732.12
|
%
|
|
|
346,399.01
|
|
|
|
0.0001
|
|
|
|
22,793.30
|
|
|
|
0.0009
|
|
Brazil
|
|
|
0.79
|
%
|
|
|
2.95
|
%
|
|
|
3.86
|
|
|
|
5.1515
|
|
|
|
3.31
|
|
|
|
5.9660
|
|
Argentina
|
|
|
6.97
|
%
|
|
|
27.61
|
%
|
|
|
28.85
|
|
|
|
0.6885
|
|
|
|
18.65
|
|
|
|
1.0583
|
|
Chile
|
|
|
1.04
|
%
|
|
|
2.20
|
%
|
|
|
647.95
|
|
|
|
0.0307
|
|
|
|
615.22
|
|
|
|
0.0321
|
|
Philippines
|
|
|
0.51
|
%
|
|
|
5.27
|
%
|
|
|
53.52
|
|
|
|
0.3711
|
|
|
|
49.92
|
|
|
|
0.3953
|
|
Euro Zone
|
|
|
2.12
|
%
|
|
|
2.50
|
%
|
|
|
0.87
|
|
|
|
22.9215
|
|
|
|
0.84
|
|
|
|
23.5729
|
|
|
(1)
|
LTM = Last twelve months.
|
July 27, 2018
|
|
16
|
2018 SECOND QUARTER AND FIRST
SIX MONTHS RESULTS
Mexico City, July 26, 2018, Coca-Cola FEMSA, S.A.B. de C.V.
(BMV: KOFL, NYSE: KOF) (“Coca-Cola FEMSA” or the “Company”), the largest Coca-Cola franchise bottler in
the world by sales volume, announces results for the second quarter of 2018.
Operational and Financial Highlights
|
|
·
|
Volumes and financial results of the
newly acquired territories in Guatemala were consolidated as of May 1, 2018, while the Uruguay acquisition will be consolidated
as of July 1, 2018. Coca-Cola FEMSA de Venezuela was deconsolidated as of December 31, 2017.
|
|
·
|
Volumes increased in Brazil and Central
America while remaining flat in Mexico; transactions outperformed volumes in Argentina, Brazil, Mexico and the Philippines.
|
|
·
|
Revenues increased 3.9%, driven by
pricing ahead of inflation in Mexico and Argentina, partially offset by unfavorable currency translation effects.
|
|
·
|
Comparable revenues grew 7.8% for the
quarter driven by growth in Argentina, Brazil, Guatemala and Mexico.
|
|
·
|
Operating income declined 3.3%, while
comparable operating income declined 5.9% for the quarter, driven mainly by higher PET costs across most of our operations, a non-cash
operating foreign exchange loss in Mexico, additional expenses related to our acquisitions, and higher sweetener costs in the Philippines,
partially offset by raw material tailwinds in South America.
|
|
·
|
Operating cash flow declined 2.6%,
while comparable operating cash flow remained flat.
|
|
·
|
Majority net income increased 24.7%
during the second quarter of 2018, driven by a reduction in our comprehensive financing result, coupled with a decline in other
non-operating expenses as compared to the second quarter of 2017, which included Venezuela.
|
|
Second Quarter
|
|
Year to Date
|
|
as Reported
|
|
Comparable
(1)
|
|
as Reported
|
|
Comparable
(1)
|
Expressed in millions of Mexican pesos.
|
2018
|
D
%
|
|
D
%
|
|
2018
|
D
%
|
|
D
%
|
Total revenues
|
52,086
|
3.9%
|
|
7.8%
|
|
101,799
|
2.0%
|
|
7.5%
|
Gross profit
|
22,951
|
0.6%
|
|
2.8%
|
|
44,868
|
0.4%
|
|
4.2%
|
Operating income
|
6,276
|
(3.3)%
|
|
(5.9)%
|
|
12,159
|
(4.8)%
|
|
(3.9)%
|
Operating cash flow
(2)
|
9,511
|
(2.6)%
|
|
(0.0)%
|
|
18,217
|
(4.1)%
|
|
0.8%
|
Net income attributable to equity holders of the company
|
2,781
|
24.7%
|
|
|
|
5,195
|
(38.3)%
|
|
|
Earnings per share
(3)
|
1.32
|
|
|
|
|
2.47
|
|
|
|
|
(2)
|
Operating cash flow = operating income + depreciation +
amortization & other operating non-cash charges.
|
|
(3)
|
Quarterly earnings / outstanding shares as of the end of
the period. Outstanding shares were 2,100.8 million
|
Message from the Chief Executive Officer
|
“In the second quarter, we delivered
comparable revenue growth of 7.8%, while protecting our comparable operating cash flow. These results reflect our consistent top-line
growth in Mexico, third consecutive quarter of volume growth in Brazil, profitability improvements in South America, and better
than expected volume performance in the Philippines—all under complex environments. Importantly, during the quarter, we took
important steps to continue consolidating our leadership position in the global beverage market as we announced strategic acquisitions
in Uruguay and Guatemala, increasing our geographic footprint to 11 countries worldwide. As we enter the second half of the year,
we are encouraged by the positive trends in our core markets and the power of our transformational initiatives: our KOFmmercial
Digital Platform enables us to leverage on advanced analytics to deploy targeted initiatives at each point of sale, playing a fundamental
role in our improved ability to detect and capture opportunities.” said John Santa Maria Otazua, Chief Executive Officer
of the Company.
(1)
Comparability
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.
Press Release 2Q 2018
|
|
Page
17
|
July 26, 2018
|
|
|
Consolidated results for the second quarter
|
Comparable
figures:
Revenues:
Comparable
total revenues grew 7.8% in the second quarter of 2018 as compared to the same period of 2017, driven by growth in average price
per unit case ahead of inflation in Argentina and Mexico, coupled with volume growth in Brazil and Central America and flat performance
in Mexico; partially offset by volume declines in Argentina, Colombia and the Philippines.
Transactions:
Comparable
number of transactions increased 0.4%. Our sparkling beverage category grew 3.2%, driven by 6.3% growth in our colas portfolio,
partially offset by a 4.6% decline in flavors. Our positive performance in colas was driven by growth in Brazil, Colombia, and
the Philippines, partially offset by a decline in Argentina and Central America. Our still beverage category remained flat, driven
mainly by the positive performance of Brazil and Mexico, offset by declines in the rest of our operations. Finally, our water category’s
transactions increased by 9.4%, driven by growth across our operations, partially offset by a decline in Argentina.
Volume:
Comparable sales
volume declined 1.4% in the second quarter of 2018 as compared to the same period in 2017. Our sparkling beverage portfolio’s
volume declined 1.0%, driven by a decline in our flavors portfolio that was partially offset by 1.3% growth in our colas portfolio.
Our growth in colas was driven by the positive performance of Brazil, Central America, Colombia and Mexico. Our still beverage
category’s volume grew 4.6%, driven by Brazil, Central America and Mexico. Our personal water portfolio’s volume grew
3.4% due to positive performance in most of our operations. Finally, our bulk water portfolio’s volume declined 5.4%, driven
by a decline in Mexico, partially offset by growth in the rest of our operations.
Gross profit:
Comparable
gross profit grew 2.8%. Our pricing initiatives, lower sweetener prices in most of our operations and favorable currency hedging
positions in Mexico and South America were offset by higher PET prices across most of our operations, higher concentrate prices
in Mexico, an unfavorable raw material hedging position in Brazil, higher sweetener costs and the inclusion of the excise tax in
the Philippines, which is applied as a cost; and the depreciation in the average exchange rate of the Argentine Peso, the Brazilian
Real, and the Philippine Peso as applied to our U.S. dollar-denominated raw material costs.
Operating Income:
Comparable
operating income declined 5.9% for the second quarter of 2018 as compared to the same period of 2017, driven by non-cash operating
foreign exchange loss in Mexico and additional expenses related to our acquisitions.
Operating cash flow:
Comparable operating cash flow remained flat in the second quarter of 2018.
As reported
figures:
Revenues:
Total revenues
increased 3.9% to Ps. 52,086 million in the second quarter of 2018 driven by the consolidation of recently acquired territories
in Guatemala as of May 1, 2018, coupled with volume growth in Brazil and Central America and price increases above inflation in
Argentina and Mexico. These factors were partially offset by the negative translation effect resulting from the depreciation of
the Argentine Peso, the Brazilian Real and the Philippine Peso as compared to the Mexican Peso, combined with the deconsolidation
of Coca-Cola FEMSA de Venezuela as of December 31, 2017.
Transactions:
Reported
total number of transactions remained flat at 6,699.1 million in the second quarter of 2018 as compared to the same period in 2017.
Volume:
Reported total
sales volume decreased 1.8% to 977.1 million unit cases in the second quarter of 2018 as compared to the same period in 2017.
Gross profit:
Gross profit
increased 0.6% to Ps. 22,951 million, and gross margin contracted 150 basis points to 44.1%.
(Continued on next page)
Press Release 2Q 2018
|
|
Page
18
|
July 26, 2018
|
|
|
Equity method:
T
he
reported share of the profits of associates and joint ventures recorded a loss of Ps. 67 million in the second quarter of 2018,
compared to a loss of Ps. 35 million recorded in the second quarter of 2017. This is mainly due to a loss in our dairy joint venture
in Panama, partially offset by gains in our joint ventures in Brazil and in our
Jugos del Valle
joint venture in Mexico.
Operating Income:
Operating
income decreased 3.3% to Ps. 6,276 million, and operating margin contracted 100 basis points to 12.0% during the second quarter
2018 as compared with the same period of 2017. This decline was driven by non-cash operating foreign exchange loss in Mexico, additional
expenses related to our acquisitions, which were partially offset by marketing and freight efficiencies in the Philippines.
Other non-operative expenses,
net:
Other non-operative expenses, net, recorded an expense of Ps. 59 million, compared to an expense of Ps. 1,330 million
during the second quarter of 2017 which mainly resulted from the effects of negative currency fluctuations in Coca-Cola FEMSA de
Venezuela.
Comprehensive financing result:
Comprehensive financing result in the second quarter of 2018 recorded an expense of Ps. 1,381 million, compared to an expense of
Ps. 1,711 million in the same period of 2017.
During the second quarter of
2018, we recorded an interest expense, net, of Ps. 1,589 million, compared to Ps. 1,946 million in the second quarter of 2017.
This decrease was driven by the decline of short-term interest rates in Brazil; the average exchange rate depreciation of the Brazilian
Real compared to the Mexican Peso as applied to existing Brazilian Real-denominated interest expense; and the reduction of debt
in Brazil and Colombia. However, these effects were partially offset by: (i) the financing of Ps. 10,100 million for the acquisition
of our new territories in Guatemala and Uruguay; and (ii) interest rate increases in Mexico.
In addition, for the second
quarter, we recorded a foreign exchange gain of Ps. 268 million as compared to a gain of Ps. 139 million in 2017, which resulted
from the quarterly depreciation of the Mexican Peso as applied to our U.S. dollar-denominated cash position.
Moreover, due to the deconsolidation
of Coca-Cola FEMSA de Venezuela no monetary position in hyperinflationary subsidiaries was recorded in the second quarter of 2018
as compared to the same period of 2017.
Market value on financial instruments
recorded a loss of Ps. 59 million as compared to a loss of Ps. 82 million in the second quarter of 2017.
Income tax:
During the
second quarter of 2018, reported income tax as a percentage of income before taxes was 34.3%, compared to 24.7% in the same period
of 2017. This effect was mainly driven by the increase in the relative weight of Brazil’s profits in our consolidated results,
which has a higher tax rate, coupled with the deconsolidation of Venezuela, which had deferred taxes in the second quarter 2017.
Net income:
Consolidated
net controlling interest income increased 24.7% to Ps. 2,781 million in the second quarter of 2018, resulting in earnings per share
(EPS) of Ps. 1.32 (Ps. 13.24 per ADS).
Operating cash flow:
Operating cash flow decreased 2.6% to Ps. 9,511 million, and operating cash flow margin contracted 120 basis points to 18.3%.
Press Release 2Q 2018
|
|
Page
19
|
July 26, 2018
|
|
|
As of June 30, 2018, we had a cash balance
of Ps. 23,469 million, including US$ 251 million denominated in U.S. dollars, an increase of Ps. 4,702 million as compared to December
31, 2017. As of June 30, 2018, total short-term debt was Ps. 12,003 million, and long-term debt was Ps. 81,258 million. Total debt
increased by Ps. 9,901 million, and net debt increased by Ps. 5,199 million compared to year-end 2017, due mainly to the financing
of Ps. 10,100 million for the acquisition of our new territories in Guatemala and Uruguay.
The weighted average cost of debt for the
quarter, including the effect of debt swapped to Brazilian Reals and Mexican Pesos, was 7.66%, a reduction as compared to the fourth
quarter 2017, due mainly to the reduction of interest rates in Brazil. The following charts set forth the Company’s debt
profile by currency and interest rate type and by maturity date as of June 30, 2018.
Currency
|
% Total Debt
(2)
|
% Interest Rate Floating
(2)(3)
|
Mexican Pesos
|
53.3%
|
14.1%
|
U.S. Dollars
|
1.3%
|
0.0%
|
Colombian Pesos
|
2.7%
|
79.0%
|
Brazilian Reals
|
42.4%
|
12.2%
|
Argentine Pesos
|
0.2%
|
0.0%
|
Debt Maturity Profile
Maturity Date
|
2018
|
2019
|
2020
|
2021
|
2022
|
2023+
|
% of Total Debt
|
11.0%
|
14.4%
|
11.0%
|
13.0%
|
1.7%
|
49.1%
|
|
(1)
|
See page 17 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
|
|
LTM 2018
|
FY 2017
|
D
%
|
Net debt including effect of hedges
(1)(3)
|
67,770
|
68,973
|
-1.7%
|
Net debt including effect of hedges / Operating cash flow
(1)(3)
|
1.75
|
1.74
|
|
Operating cash flow/ Interest expense, net
(1)
|
5.72
|
4.99
|
|
Capitalization
(2)
|
43.6%
|
39.3%
|
|
(1) Net debt = total debt - cash
(2) Total debt / (long-term debt + shareholders' equity)
(3) After giving effect to cross-currency swaps.
Press Release 2Q 2018
|
|
Page
20
|
July 26, 2018
|
|
|
Mexico & Central America Division
|
(Costa Rica, Guatemala, México,
Nicaragua, and Panama)
Comparable figures:
Revenues:
Comparable
total revenues from our Mexico and Central America division increased 4.3% in the second quarter of 2018, compared to the same
period in 2017, driven by an increase in average price per unit case ahead of inflation and flat volumes in Mexico coupled with
volume growth in Central America.
Transactions:
Total transactions
in our Mexico and Central America division remained flat in the second quarter of 2018. Our sparkling beverage portfolio’s
transactions contracted 0.9%, driven by a 0.7% decline in our colas portfolio and a 1.5% decline in flavors. Our still beverage
category’s transactions increased 4.2% in the division, driven by 5.9% growth in Mexico, while our water transactions, including
bulk water, increased 1.9%, driven by growth in both Mexico and in Central America.
Volume:
Total sales volume
for the division remained flat in the second quarter of 2018, compared to the same period of 2017. Our sparkling beverage category’s
volume increased 0.3%, driven by a 1.3% increase in our colas portfolio. Performance in colas for the division was driven by growth
in both Mexico and Central America. Our still beverage category’s volume increased 9.0%, driven by 10.2% growth in Mexico
and 2.2% growth in Central America. Our personal water portfolio’s volume increased 1.3%, driven by 2.1% growth in Mexico,
partially offset by a 7.3% decline in Central America. Our bulk water portfolio’s volume declined 6.5% in the division due
to a contraction in Mexico, partially offset by growth in Central America.
Gross profit:
Comparable
gross profit grew 2.8% in the second quarter of 2018 as compared to the same period in 2017. In Mexico, our pricing initiatives,
declining sweetener costs and a favorable currency hedging position were offset by the increase in concentrate costs, higher PET
prices and the depreciation of the average exchange rate of the Mexican Peso as applied to U.S. dollar-denominated raw material
costs. In Central America, lower sweetener prices were offset by higher PET prices and, an unfavorable price mix in Costa Rica
and Guatemala coupled with the depreciation of the average exchange rates of the Guatemalan Quetzal and the Nicaraguan Cordoba
as applied to U.S. dollar-denominated raw material costs.
Operating income:
Comparable
operating income in the division decreased 12.5% in the second quarter of 2018 as compared to the same period in 2017.
Operating cash flow:
Comparable operating cash flow decreased 2.9% in the second quarter of 2018 as compared to the same period in 2017.
As reported figures:
Revenues:
Reported total
revenues increased 7.5% in the second quarter of 2018 as compared to the same period of 2017, driven by the consolidation of recently
acquired territories in Guatemala as of May 1, 2018, coupled with price increases above inflation in Mexico and organic volume
growth in Central America.
Transactions:
Reported
total number of transactions increased 2.5% in the second quarter of 2018 as compared to the same period in 2017.
Volume:
Reported total
sales volume increased 1.6% in the second quarter of 2018 as compared to the same period in 2017.
Gross profit:
Reported
gross profit increased 5.9% in the second quarter of 2018, and gross profit margin reached 48.8%, a gross margin contraction of
70 basis points.
Operating income:
Reported
operating income decreased 10.4% in the second quarter of 2018, and operating income margin reached 14.4%, contracting 290 basis
points during the period.
Operating cash flow:
Reported operating cash flow declined 0.4% in the second quarter of 2018, resulting in a margin contraction of 170 basis points
to 21.3%.
Press Release 2Q 2018
|
|
Page
21
|
July 26, 2018
|
|
|
(Argentina, Brazil and Colombia)
Comparable figures:
Revenues:
Comparable
total revenues increased 5.9%, driven mainly by volume growth in Brazil, coupled with an average price per unit case increase ahead
of inflation in Argentina, which was partially offset by volume declines in Argentina and Colombia.
Transactions:
Comparable
transactions in the division decreased 0.3% during the second quarter of 2018. Our sparkling beverage portfolio’s transactions
decreased 2.0%, driven by a decline in our flavors portfolio, partially offset by 1.8% growth in colas. Our positive performance
in colas was driven by growth in Brazil and Colombia. Our still beverage category’s transactions increased 1.3% driven by
growth in Brazil. Our water transactions, including bulk water, increased 13.3%, driven by growth in Brazil and Colombia.
Volume:
Comparable total
sales volume in South America declined 2.4% during the second quarter of 2018 as compared to the same period of 2017. Our sparkling
beverage category’s volume decreased 3.4%, driven by a decline in our flavors portfolio, which was partially offset by 1.5%
growth in colas. Colas’ positive performance was driven by growth in Brazil and Colombia. Our still beverage category’s
volume decreased 4.5%, driven by declines in Argentina and Colombia, partially offset by positive performance in Brazil. Our personal
water category’s volume increased 6.6%, driven by growth in Brazil and Colombia. Our bulk water business’s volume increased
14.4%, driven by the positive performance of all our South America operations.
Gross profit:
Comparable
gross profit increased 7.5% as a result of lower sweetener prices and favorable currency hedging position in the division, the
appreciation of the Colombian Peso as applied to U.S. dollar-denominated raw material costs, which offset higher PET prices in
the division, an unfavorable raw material hedging position in Brazil, and the depreciation of the average exchange rate of the
Brazilian Real and the Argentine Peso as applied to our U.S. dollar-denominated raw material costs.
Operating income:
Comparable
operating income in the division increased 19.9% as compared to the same period in 2017.
Operating cash flow:
Comparable operating cash flow increased 16.6% as compared to the same period of 2017.
As reported figures:
Revenues:
Reported total
revenues declined 7.5% to Ps. 18,177 million in the second quarter of 2018, driven by an unfavorable currency translation effect
resulting from the depreciation of the Argentine Peso and the Brazilian Real as compared to the Mexican Peso and the deconsolidation
of Coca-Cola FEMSA de Venezuela as of December 31, 2017. These effects were partially offset by volume growth in Brazil, coupled
with an average price per unit case increase in Argentina.
Transactions:
Reported
total number of transactions decreased 5.4% to 1,808.2 million in the second quarter of 2018 as compared to the same period in
2017.
Volume:
Reported total
sales volume decreased 6.9% to 270.8 million unit cases in the second quarter of 2018 as compared to the same period in 2017.
Gross profit:
Reported
gross profit decreased 3.6% to Ps. 7,976.4 million in the second quarter of 2018, and gross profit margin expanded 180 basis points
to 43.9%.
Operating income:
Reported
operating income grew 25.7% to Ps. 2,151.9 million in the second quarter of 2018, resulting in a margin expansion of 310 basis
points to 11.8%.
Operating cash flow:
Reported operating cash flow increased 1.2% to Ps. 3,112.4 million in the second quarter of 2018, resulting in a margin expansion
of 140 basis points to 17.1%.
Press Release 2Q 2018
|
|
Page
22
|
July 26, 2018
|
|
|
(The Philippines)
As of January 1, 2018,
the Philippines implemented a comprehensive tax reform. As part of this reform, among other initiatives, excise taxes on sweetened
beverages were applied as follows: (i) 6 Philippine Pesos per liter on beverages containing sugar or non-caloric sweeteners; and
(ii) 12 Philippine Pesos per liter on beverages containing high fructose corn syrup (HFCS).
As this excise tax is
applied to soft drink production, margins in 2018 in this operation are not comparable with margins from 2017. This impact in comparability
is caused by the recognition of this excise tax in cost of goods sold and the Company’s increased prices to adjust to this
change, resulting in increased revenues.
Comparable figures:
Revenues:
Comparable
total revenues increased 27.7% during the second quarter of 2018, driven by an average price per unit case increase as an adjustment
to the excise tax, partially offset by a 4.0% volume decline.
Gross profit:
Comparable
gross profit decreased 11.9% as compared to the same period of 2017, driven mainly by the inclusion of the excise tax on soft drink
production as a cost of goods sold, as well as higher sweetener and PET prices and the devaluation of the Philippine Peso as applied
to our U.S. dollar-denominated raw material costs.
Operating income:
Comparable
operating income decreased 40.1% as compared to the same period of 2017.
Operating cash flow:
Comparable operating cash flow decreased 26.2% as compared to the same period of 2017.
As reported figures:
Revenues:
Reported total
revenues increased 27.0% to Ps. 7,517 million for the second quarter 2018 as compared to the same period of 2017. Total revenues
were driven by an average price per unit case increase, as an adjustment to the excise tax, partially offset by a volume decline
and the negative translation effect resulting from the depreciation the Philippine Peso as compared to the Mexican Peso.
Transactions:
Reported
total number of transactions increased 2.1% to 1,818.8 million in the second quarter of 2018 as compared to the same period of
2017. Our sparkling beverage portfolio’s transactions increased 4.0%, driven by growth in both our colas and flavors portfolio.
Our still beverage category’s transactions, excluding powders, increased 18.5%. Our water transactions, including bulk water,
increased 4.8%.
Volume:
Reported total
sales volume decreased 4.0% to 154.2 million unit cases in the second quarter of 2018. Our sparkling beverage category’s
volume decreased slightly by 0.8%, driven by a 4.2% decline in our colas portfolio, partially offset by 5.7% growth in flavors.
Our still beverage category’s volume, excluding powders, increased 11.8%
.
Our personal water category’s volume
decreased 1.6%
.
Our bulk water business’s volume grew 32.9%
.
Gross profit:
Gross profit decreased 12.4% to Ps. 2,094 million, and gross margin contracted 1,250 basis points to 27.9%.
Operating income:
Reported
operating income declined 40.0% to Ps. 324.0 million in the second quarter of 2018, resulting in a margin contraction of 480 basis
points to 4.3%.
Operating cash flow:
Reported operating cash flow declined 25.9% to Ps. 785.0 million in the second quarter of 2018, resulting in a margin of contraction
of 750 basis points to 10.4%.
Press Release 2Q 2018
|
|
Page
23
|
July 26, 2018
|
|
|
Comparable
figures:
Revenues:
Comparable
total revenues grew 7.5% in the first six months of 2018 as compared to the same period of 2017, driven by average price per unit
case growth above inflation in Argentina and Mexico, coupled with volume growth in Brazil, Central America and Colombia, partially
offset by volume declines in the rest of our operations.
Transactions:
Comparable
number of transactions increased 0.7%. Our sparkling beverage category grew 3.9%, driven by 7.6% growth in our colas portfolio.
Our positive performance in colas was driven by growth in Brazil, Central America, Colombia and the Philippines. Our still beverage
category increased 1.8% driven mainly by the positive performance of Brazil, Mexico and Central America. Finally, our water category’s
transactions increased by 10.9%, driven by growth across our operations, partially offset by a decline in Argentina and Central
America.
Volume:
Comparable sales
volume declined 0.7% in the first six months of 2018 as compared to the same period in 2017. Our sparkling beverage portfolio’s
volume declined 0.6%, mainly driven by a decline in flavors that was partially offset by 2.2% growth in our colas portfolio which
was driven by positive performance in most of our operations. Our still beverage category’s volume decreased 6.4%, driven
by declines in Argentina, Colombia and the Philippines, which offset positive performance in the rest of our operations. Our personal
water portfolio’s volume grew 4.6% due to positive performance in most of our operations. Finally, our bulk water portfolio’s
volume remained flat, driven by growth in most of our operations, which was offset by a decline in Mexico.
Gross profit:
Comparable
gross profit grew 4.2%. Our pricing initiatives, coupled with lower sweetener prices in most of our operations, were offset by
an unfavorable currency hedging position in Mexico, higher concentrate prices in Mexico, higher sweetener and PET costs and the
inclusion of the excise tax on beverage production in the Philippines, which is applied as a cost; and the depreciation in the
average exchange rate of the Argentine Peso, the Brazilian Real, and the Philippine Peso as applied to our U.S. dollar-denominated
raw material costs.
Operating Income:
Comparable
operating income declined 3.9% for the first six months of 2018 as compared to the same period of 2017.
Operating cash flow:
Comparable operating cash flow increased 0.8% in the first six months of 2018.
As reported figures:
Revenues:
Total revenues
increased 2.0% to Ps. 101,799 million in the first six months of 2018 driven by the consolidation of recently acquired territories
in Guatemala as of May 1, 2018, coupled with volume growth in Brazil, Central America, and Colombia and price increases above inflation
in Argentina and Mexico. These effects were partially offset by the negative translation effect resulting from the depreciation
of the Argentine Peso, the Brazilian Real and the Philippine Peso as compared to the Mexican Peso, and the deconsolidation of Coca-Cola
FEMSA de Venezuela as of December 31, 2017.
Transactions:
Reported
total number of transactions increased 3.3% to 12,836.7 million in the first six months of 2018 as compared to the same period
in 2017.
Volume:
Reported total
sales volume increased 0.5% to 1,884.9 million unit cases in the first six months of 2018 as compared to the same period in 2017.
Gross profit:
Gross profit
increased 0.4% to Ps. 44,868 million, and gross margin contracted 60 basis points to 44.1%.
(Continued on next page)
Press Release 2Q 2018
|
|
Page
24
|
July 26, 2018
|
|
|
Equity method:
T
he
reported share of the profits of associates and joint ventures recorded a loss of Ps. 116 million in the first six months of 2018,
compared to a gain of Ps. 11 million recorded in the first six months of 2017. This is mainly due to a loss in our dairy joint
venture in Panama, partially offset by gains in our joint ventures in Brazil and in our
Jugos del Valle
joint venture in
Mexico.
Operating Income:
Operating
income decreased 4.8% to Ps. 12,159 million, and operating margin contracted 90 basis points to 11.9% during the first six months
of 2018 as compared with the same period of 2017. This decline was driven by additional expenses related to our acquisitions, which
were partially offset by marketing and freight efficiencies in the Philippines, as compared to a non-cash operating foreign exchange
gain in Mexico in the same period of 2017.
Other non-operative expenses,
net:
Other non-operative expenses, net, recorded an expense of Ps. 121 million, compared to a gain of Ps. 1,335 million during
the first six months of 2017 due mainly to the consolidation of Coca-Cola FEMSA Philippines, Inc., starting February 2017 and the
effect of negative currency fluctuations in Venezuela during the first six months of 2017.
Comprehensive financing result:
Comprehensive financing result in the first six months of 2018 recorded an expense of Ps. 3,453 million, compared to an expense
of Ps. 3,310 million in the same period of 2017.
During the first six months
of 2018, we recorded an interest expense, net, of Ps. 3,187 million, compared to Ps. 4,279 million in the same period of 2017.
This decrease was driven by the decline of short-term interest rates in Brazil; the average exchange rate depreciation of the Brazilian
Real compared to the Mexican Peso as applied to existing Brazilian Real-denominated interest expense; and the reduction of debt
in Argentina, Brazil, and Colombia. However, these effects were partially offset by: (i) an interest rate increase in Mexico; (ii)
the financing of Ps. 10,100 million for the acquisition of our new territories in Guatemala and Uruguay; and (iii) an interest
rate increase resulting from swapping U.S. dollar denominated debt to Brazilian Real and Mexican Peso-denominated debt, as part
of our strategy to eliminate our U.S. dollar net debt exposure.
In addition, for the first six
months of 2018, we recorded a foreign exchange gain of Ps. 39 million as compared to a gain of Ps. 193 million in 2017, which resulted
from the depreciation of the Mexican Peso as applied to our U.S. dollar-denominated cash position.
Moreover, due to the deconsolidation
of Coca-Cola FEMSA de Venezuela no monetary position in hyperinflationary subsidiaries was recorded in the first six months of
2018 as compared to the same period of 2017.
Market value on financial instruments
recorded a loss of Ps. 305 million as compared to a gain of Ps. 352 million in the first six months of 2017 due to the decrease,
during the period, in the long-term interest rates in Brazil as applied to our fixed rate cross-currency swaps.
Income tax:
During the
first six months of 2018, reported income tax as a percentage of income before taxes was 33.3%, compared to 17.4% in the same period
of 2017. The lower tax rate in the first six months of 2017 was driven mainly by a one-time non-cash gain recorded in connection
with the consolidation of Coca-Cola FEMSA Philippines, Inc. in February 2017.
Net income:
Consolidated
net controlling interest income decreased 38.3% to Ps. 5,195 million in the first six months of 2018, resulting in earnings per
share (EPS) of Ps. 2.47 (Ps. 24.73 per ADS), in the face of a high comparable driven mainly by a one-time non-cash gain recorded
in connection with the consolidation of Coca-Cola FEMSA Philippines, Inc. in February 2017.
Operating cash flow:
Operating cash flow decreased 4.1% to Ps. 18,217 million, and operating cash flow margin contracted 110 basis points to 17.9%.
Press Release 2Q 2018
|
|
Page
25
|
July 26, 2018
|
|
|
|
·
|
On April 25, 2018, Coca-Cola FEMSA announced
that, through subsidiaries, it had acquired two separate franchise territories in Guatemala from The Coca-Cola Company in all cash
transactions for US$53.4 million and US$124.6 million, on a cash free and debt free basis. Volumes and financial results were consolidated
as of May 1, 2018.
|
|
·
|
On April 30, 2018, Coca-Cola FEMSA announced
that Moody’s and Standard and Poor’s (“S&P”) affirmed their credit ratings on Coca-Cola FEMSA and revised
their outlook from negative to stable, reflecting the Company’s strong liquidity and adequate credit metrics.
|
|
o
|
On April 16, 2018, Moody’s affirmed its “A2” global scale rating; and
|
|
o
|
On April 27, 2018, S&P affirmed its “A-” global scale rating.
|
|
·
|
On June 28, 2018, Coca-Cola FEMSA announced
the acquisition of Montevideo Refrescos S.R.L. from The Coca-Cola Company in an all cash transaction. The aggregate enterprise
value of this transaction is US$250.7 million, on a cash free and debt free basis. Volumes and financial results will be consolidated
as of July 1, 2018.
|
The comparability of our financial and
operating performance in the second quarter of 2018, as compared to the same period of 2017, was affected by the following factors:
(a) as of May 1, 2018 the inclusion of two bottling franchise acquisitions in Guatemala and, (b) as of December 31, 2017, the deconsolidation
of Coca-Cola FEMSA de Venezuela.
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 of a given measure excluding the effects of: (i) mergers, acquisitions,
and divestitures, (ii) translation effects resulting from exchange rate movements, (iii) the results of Coca-Cola FEMSA de Venezuela
in 2017; and including the results of Coca-Cola FEMSA Philippines, Inc., as if its consolidation had taken place on January 1,
2017. In preparing this measure, management has used its best judgment, estimates, and assumptions in order to maintain comparability.
Furthermore, as of January 1, 2018, margin
comparability in the Philippines was impacted by the excise tax on soft drink production, accounted for in cost of goods sold.
Conference Call Information
|
Our second quarter 2018 conference call
will be held on July 26, 2018, at 12:30 A.M. Eastern Time (11:30 A.M. Mexico City Time). To participate in the conference call,
please dial: Domestic U.S.: 800-239-9838 or International: +1 323-794-2551. Participant code: 8474769. We invite investors to
listen to the live audio cast 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 on our corporate website at
www.coca-colafemsa.com/inversionistas/registros-bmv
.
Press Release 2Q 2018
|
|
Page
26
|
July 26, 2018
|
|
|
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 of the financial information presented
in this report was prepared under International Financial Reporting Standards (IFRS).
Earnings per share were computed based
on 2,100.8 million 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., were included in the results
of the Mexico and Central America division. Starting on February 2013 and ending on January 2017, we incorporated our stake of
the results of Coca-Cola FEMSA Philippines, Inc. through the equity method.
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 169 brands to more than 396 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 67 manufacturing
plants and 344 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,
Dow Jones Sustainability MILA Pacific Alliance Index, FTSE4Good Emerging Index, and the Mexican Stock Exchange’s IPC and
Social Responsibility and Sustainability Indices, among others. Its operations encompass franchise territories in Mexico, Guatemala,
Colombia, Brazil, and Argentina, and, nationwide, in Nicaragua, Costa Rica, Panama, Uruguay, Venezuela and the Philippines. For
further 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
|
|
·
|
Maria Fernanda Garcia | maria.garciacr@kof.com.mx
| (5255) 1519-6240
|
(7 pages of tables to follow)
Press Release 2Q 2018
|
|
Page
27
|
July 26, 2018
|
|
|
Quarter - Consolidated Income Statement
Expressed in millions of Mexican pesos
(1)
|
|
2Q 18
|
|
|
% Rev
|
|
|
2Q 17
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(8)
|
|
Transactions (million transactions)
|
|
|
6,699.1
|
|
|
|
|
|
|
|
6,690.2
|
|
|
|
|
|
|
|
0.1
|
%
|
|
|
0.4
|
%
|
Volume (million unit cases)
(2)
|
|
|
977.1
|
|
|
|
|
|
|
|
995.0
|
|
|
|
|
|
|
|
-1.8
|
%
|
|
|
-1.4
|
%
|
Average price per unit case
(2)
|
|
|
50.29
|
|
|
|
|
|
|
|
47.89
|
|
|
|
|
|
|
|
5.0
|
%
|
|
|
|
|
Net revenues
|
|
|
51,985
|
|
|
|
|
|
|
|
50,049
|
|
|
|
|
|
|
|
3.9
|
%
|
|
|
|
|
Other operating revenues
|
|
|
101
|
|
|
|
|
|
|
|
59
|
|
|
|
|
|
|
|
72.0
|
%
|
|
|
|
|
Total revenues
(3)
|
|
|
52,086
|
|
|
|
100.0
|
%
|
|
|
50,108
|
|
|
|
100.0
|
%
|
|
|
3.9
|
%
|
|
|
7.8
|
%
|
Cost of goods sold
|
|
|
29,135
|
|
|
|
55.9
|
%
|
|
|
27,282
|
|
|
|
54.4
|
%
|
|
|
6.8
|
%
|
|
|
|
|
Gross profit
|
|
|
22,951
|
|
|
|
44.1
|
%
|
|
|
22,825
|
|
|
|
45.6
|
%
|
|
|
0.6
|
%
|
|
|
2.8
|
%
|
Operating expenses
|
|
|
16,126
|
|
|
|
31.0
|
%
|
|
|
16,168
|
|
|
|
32.3
|
%
|
|
|
-0.3
|
%
|
|
|
|
|
Other operating expenses, net
|
|
|
481
|
|
|
|
0.9
|
%
|
|
|
132
|
|
|
|
0.3
|
%
|
|
|
264.6
|
%
|
|
|
|
|
Operating equity method (gain) loss in associates
(4)
|
|
|
67
|
|
|
|
0.1
|
%
|
|
|
35
|
|
|
|
0.1
|
%
|
|
|
92.2
|
%
|
|
|
|
|
Operating income
(5)
|
|
|
6,276
|
|
|
|
12.0
|
%
|
|
|
6,491
|
|
|
|
13.0
|
%
|
|
|
-3.3
|
%
|
|
|
-5.9
|
%
|
Other non operating expenses, net
|
|
|
59
|
|
|
|
|
|
|
|
1,330
|
|
|
|
|
|
|
|
-95.6
|
%
|
|
|
|
|
Non Operating equity method (gain) loss in associates
(6)
|
|
|
(18
|
)
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
Interest expense
|
|
|
1,682
|
|
|
|
|
|
|
|
2,128
|
|
|
|
|
|
|
|
-21.0
|
%
|
|
|
|
|
Interest income
|
|
|
93
|
|
|
|
|
|
|
|
182
|
|
|
|
|
|
|
|
-49.1
|
%
|
|
|
|
|
Interest expense, net
|
|
|
1,589
|
|
|
|
|
|
|
|
1,946
|
|
|
|
|
|
|
|
-18.3
|
%
|
|
|
|
|
Foreign exchange loss (gain)
|
|
|
(268
|
)
|
|
|
|
|
|
|
(139
|
)
|
|
|
|
|
|
|
92.7
|
%
|
|
|
|
|
Loss (gain) on monetary position in inflationary subsidiries
|
|
|
-
|
|
|
|
|
|
|
|
(178
|
)
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
Market value (gain) loss on financial instruments
|
|
|
59
|
|
|
|
|
|
|
|
82
|
|
|
|
|
|
|
|
-27.6
|
%
|
|
|
|
|
Comprehensive financing result
|
|
|
1,381
|
|
|
|
|
|
|
|
1,711
|
|
|
|
|
|
|
|
-19.3
|
%
|
|
|
|
|
Income before taxes
|
|
|
4,854
|
|
|
|
|
|
|
|
3,439
|
|
|
|
|
|
|
|
41.2
|
%
|
|
|
|
|
Income taxes
|
|
|
1,664
|
|
|
|
|
|
|
|
850
|
|
|
|
|
|
|
|
95.7
|
%
|
|
|
|
|
Consolidated net income
|
|
|
3,191
|
|
|
|
|
|
|
|
2,589
|
|
|
|
|
|
|
|
23.2
|
%
|
|
|
|
|
Net income attributable to equity holders of the company
|
|
|
2,781
|
|
|
|
5.3
|
%
|
|
|
2,229
|
|
|
|
4.4
|
%
|
|
|
24.7
|
%
|
|
|
|
|
Non-controlling interest
|
|
|
410
|
|
|
|
|
|
|
|
360
|
|
|
|
|
|
|
|
14.0
|
%
|
|
|
|
|
Operating income
(5)
|
|
|
6,276
|
|
|
|
12.0
|
%
|
|
|
6,491
|
|
|
|
13.0
|
%
|
|
|
-3.3
|
%
|
|
|
|
|
Depreciation
|
|
|
2,478
|
|
|
|
|
|
|
|
2,477
|
|
|
|
|
|
|
|
0.0
|
%
|
|
|
|
|
Amortization and other operating non-cash charges
|
|
|
757
|
|
|
|
|
|
|
|
802
|
|
|
|
|
|
|
|
-5.6
|
%
|
|
|
|
|
Operating cash flow
(5)(7)
|
|
|
9,511
|
|
|
|
18.3
|
%
|
|
|
9,770
|
|
|
|
19.5
|
%
|
|
|
-2.6
|
%
|
|
|
-0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPEX
|
|
|
2,722
|
|
|
|
|
|
|
|
2,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Except volume and average price
per unit case figures.
(2)
Sales volume and average price
per unit case exclude beer results.
(3)
Please refer to page 18 for revenue
breakdown.
(4)
Includes equity method in Jugos
del Valle, Leao Alimentos, 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 among others.
(7)
Operating cash flow = operating
income + depreciation, amortization & other operating non-cash charges.
(8)
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.
Press Release 2Q 2018
|
|
Page
28
|
July 26, 2018
|
|
|
YTD - Consolidated Income Statement
Expressed in millions of Mexican pesos
(1)
|
|
YTD 2018
|
|
|
% Rev
|
|
|
YTD 2017
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(8)
|
|
Transactions (million transactions)
|
|
|
12,836.7
|
|
|
|
|
|
|
|
12,431.9
|
|
|
|
|
|
|
|
3.3
|
%
|
|
|
0.7
|
%
|
Volume (million unit cases)
(2)
|
|
|
1,884.9
|
|
|
|
|
|
|
|
1,876.3
|
|
|
|
|
|
|
|
0.5
|
%
|
|
|
-0.7
|
%
|
Average price per unit case
(2)
|
|
|
50.48
|
|
|
|
|
|
|
|
49.97
|
|
|
|
|
|
|
|
1.0
|
%
|
|
|
|
|
Net revenues
|
|
|
101,580
|
|
|
|
|
|
|
|
99,694
|
|
|
|
|
|
|
|
1.9
|
%
|
|
|
|
|
Other operating revenues
|
|
|
218
|
|
|
|
|
|
|
|
154
|
|
|
|
|
|
|
|
41.8
|
%
|
|
|
|
|
Total revenues
(3)
|
|
|
101,799
|
|
|
|
100.0
|
%
|
|
|
99,849
|
|
|
|
100.0
|
%
|
|
|
2.0
|
%
|
|
|
7.5
|
%
|
Cost of goods sold
|
|
|
56,931
|
|
|
|
55.9
|
%
|
|
|
55,175
|
|
|
|
55.3
|
%
|
|
|
3.2
|
%
|
|
|
|
|
Gross profit
|
|
|
44,868
|
|
|
|
44.1
|
%
|
|
|
44,674
|
|
|
|
44.7
|
%
|
|
|
0.4
|
%
|
|
|
4.2
|
%
|
Operating expenses
|
|
|
32,061
|
|
|
|
31.5
|
%
|
|
|
32,168
|
|
|
|
32.2
|
%
|
|
|
-0.3
|
%
|
|
|
|
|
Other operating expenses, net
|
|
|
532
|
|
|
|
0.5
|
%
|
|
|
(258
|
)
|
|
|
-0.3
|
%
|
|
|
NA
|
|
|
|
|
|
Operating equity method (gain) loss in associates
(4)
|
|
|
116
|
|
|
|
0.1
|
%
|
|
|
(11
|
)
|
|
|
-0.0
|
%
|
|
|
NA
|
|
|
|
|
|
Operating income
(5)
|
|
|
12,159
|
|
|
|
11.9
|
%
|
|
|
12,775
|
|
|
|
12.8
|
%
|
|
|
-4.8
|
%
|
|
|
-3.9
|
%
|
Other non operating expenses, net
|
|
|
121
|
|
|
|
|
|
|
|
(1,335
|
)
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
Non Operating equity method (gain) loss in associates
(6)
|
|
|
(6
|
)
|
|
|
|
|
|
|
(26
|
)
|
|
|
|
|
|
|
-76.2
|
%
|
|
|
|
|
Interest expense
|
|
|
3,694
|
|
|
|
|
|
|
|
4,641
|
|
|
|
|
|
|
|
-20.4
|
%
|
|
|
|
|
Interest income
|
|
|
506
|
|
|
|
|
|
|
|
362
|
|
|
|
|
|
|
|
39.9
|
%
|
|
|
|
|
Interest expense, net
|
|
|
3,187
|
|
|
|
|
|
|
|
4,279
|
|
|
|
|
|
|
|
-25.5
|
%
|
|
|
|
|
Foreign exchange loss (gain)
|
|
|
(39
|
)
|
|
|
|
|
|
|
(193
|
)
|
|
|
|
|
|
|
-79.7
|
%
|
|
|
|
|
Loss (gain) on monetary position in inflationary subsidiries
|
|
|
-
|
|
|
|
|
|
|
|
(424
|
)
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
Market value (gain) loss on financial instruments
|
|
|
305
|
|
|
|
|
|
|
|
(352
|
)
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
Comprehensive financing result
|
|
|
3,453
|
|
|
|
|
|
|
|
3,310
|
|
|
|
|
|
|
|
4.3
|
%
|
|
|
|
|
Income before taxes
|
|
|
8,592
|
|
|
|
|
|
|
|
10,825
|
|
|
|
|
|
|
|
-20.6
|
%
|
|
|
|
|
Income taxes
|
|
|
2,860
|
|
|
|
|
|
|
|
1,884
|
|
|
|
|
|
|
|
51.8
|
%
|
|
|
|
|
Consolidated net income
|
|
|
5,732
|
|
|
|
|
|
|
|
8,941
|
|
|
|
|
|
|
|
-35.9
|
%
|
|
|
|
|
Net income attributable to equity holders of the company
|
|
|
5,195
|
|
|
|
5.1
|
%
|
|
|
8,413
|
|
|
|
8.4
|
%
|
|
|
-38.3
|
%
|
|
|
|
|
Non-controlling interest
|
|
|
537
|
|
|
|
|
|
|
|
528
|
|
|
|
|
|
|
|
1.7
|
%
|
|
|
|
|
Operating income
(5)
|
|
|
12,159
|
|
|
|
11.9
|
%
|
|
|
12,775
|
|
|
|
12.8
|
%
|
|
|
-4.8
|
%
|
|
|
|
|
Depreciation
|
|
|
4,831
|
|
|
|
|
|
|
|
4,839
|
|
|
|
|
|
|
|
-0.2
|
%
|
|
|
|
|
Amortization and other operating non-cash charges
|
|
|
1,226
|
|
|
|
|
|
|
|
1,387
|
|
|
|
|
|
|
|
-11.6
|
%
|
|
|
|
|
Operating cash flow
(5)(7)
|
|
|
18,217
|
|
|
|
17.9
|
%
|
|
|
19,000
|
|
|
|
19.0
|
%
|
|
|
-4.1
|
%
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPEX
|
|
|
4,587
|
|
|
|
|
|
|
|
6,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Except volume and average
price per unit case figures.
(2)
Sales volume and average
price per unit case exclude beer results.
(3)
Please refer to page
19 for revenue breakdown.
(4)
Includes equity method
in Jugos del Valle, Leao Alimentos, Estrella Azul, among others. For January '17 includes Coca-Cola FEMSA Philippines, Inc.
(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 among others.
(7)
Operating cash flow
= operating income + depreciation, amortization & other operating non-cash charges.
(8)
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.
Press Release 2Q 2018
|
|
Page
29
|
July 26, 2018
|
|
|
Mexico & Central America Division
Expressed in millions of Mexican pesos
(1)
Quarterly information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 18
|
|
|
% Rev
|
|
|
2Q 17
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(6)
|
|
Transactions (million transactions)
|
|
|
3,072.2
|
|
|
|
|
|
|
|
2,997.5
|
|
|
|
|
|
|
|
2.5
|
%
|
|
|
-0.1
|
%
|
Volume (million unit cases)
|
|
|
552.2
|
|
|
|
|
|
|
|
543.7
|
|
|
|
|
|
|
|
1.6
|
%
|
|
|
-0.1
|
%
|
Average price per unit case
|
|
|
47.78
|
|
|
|
|
|
|
|
45.13
|
|
|
|
|
|
|
|
5.9
|
%
|
|
|
|
|
Net revenues
|
|
|
26,383
|
|
|
|
|
|
|
|
24,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
9
|
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(2)
|
|
|
26,392
|
|
|
|
100.0
|
%
|
|
|
24,547
|
|
|
|
100.0
|
%
|
|
|
7.5
|
%
|
|
|
4.3
|
%
|
Cost of goods sold
|
|
|
13,511
|
|
|
|
51.2
|
%
|
|
|
12,386
|
|
|
|
50.5
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
12,881
|
|
|
|
48.8
|
%
|
|
|
12,161
|
|
|
|
49.5
|
%
|
|
|
5.9
|
%
|
|
|
2.8
|
%
|
Operating expenses
|
|
|
8,719
|
|
|
|
33.0
|
%
|
|
|
7,906
|
|
|
|
32.2
|
%
|
|
|
|
|
|
|
|
|
Other operating expenses, net
|
|
|
276
|
|
|
|
1.0
|
%
|
|
|
(26
|
)
|
|
|
-0.1
|
%
|
|
|
|
|
|
|
|
|
Operating equity method (gain) loss in associates
(3)
|
|
|
85
|
|
|
|
0.3
|
%
|
|
|
42
|
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
Operating income
(4)
|
|
|
3,800
|
|
|
|
14.4
|
%
|
|
|
4,239
|
|
|
|
17.3
|
%
|
|
|
-10.4
|
%
|
|
|
-12.5
|
%
|
Depreciation, amortization & other operating non-cash charges
|
|
|
1,814
|
|
|
|
6.9
|
%
|
|
|
1,396
|
|
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(4)(5)
|
|
|
5,614
|
|
|
|
21.3
|
%
|
|
|
5,635
|
|
|
|
23.0
|
%
|
|
|
-0.4
|
%
|
|
|
-2.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2018
|
|
|
|
% Rev
|
|
|
|
YTD 2017
|
|
|
|
% Rev
|
|
|
|
D
%
Reported
|
|
|
|
D
%
Comparable
(6)
|
|
Transactions (million transactions)
|
|
|
5,746.2
|
|
|
|
|
|
|
|
5,677.9
|
|
|
|
|
|
|
|
1.2
|
%
|
|
|
-0.2
|
%
|
Volume (million unit cases)
|
|
|
1,027.1
|
|
|
|
|
|
|
|
1,016.7
|
|
|
|
|
|
|
|
1.0
|
%
|
|
|
0.1
|
%
|
Average price per unit case
|
|
|
47.37
|
|
|
|
|
|
|
|
45.24
|
|
|
|
|
|
|
|
4.7
|
%
|
|
|
|
|
Net revenues
|
|
|
48,652
|
|
|
|
|
|
|
|
45,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
17
|
|
|
|
|
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(2)
|
|
|
48,669
|
|
|
|
100.0
|
%
|
|
|
46,020
|
|
|
|
100.0
|
%
|
|
|
5.8
|
%
|
|
|
4.7
|
%
|
Cost of goods sold
|
|
|
25,305
|
|
|
|
52.0
|
%
|
|
|
23,433
|
|
|
|
50.9
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
23,365
|
|
|
|
48.0
|
%
|
|
|
22,587
|
|
|
|
49.1
|
%
|
|
|
3.4
|
%
|
|
|
2.4
|
%
|
Operating expenses
|
|
|
16,585
|
|
|
|
34.1
|
%
|
|
|
15,399
|
|
|
|
33.5
|
%
|
|
|
|
|
|
|
|
|
Other operating expenses, net
|
|
|
172
|
|
|
|
0.4
|
%
|
|
|
(92
|
)
|
|
|
-0.2
|
%
|
|
|
|
|
|
|
|
|
Operating equity method (gain) loss in associates
(3)
|
|
|
144
|
|
|
|
0.3
|
%
|
|
|
46
|
|
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
Operating income
(4)
|
|
|
6,463
|
|
|
|
13.3
|
%
|
|
|
7,233
|
|
|
|
15.7
|
%
|
|
|
-10.7
|
%
|
|
|
-11.4
|
%
|
Depreciation, amortization & other operating non-cash charges
|
|
|
3,247
|
|
|
|
6.7
|
%
|
|
|
2,641
|
|
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(4)(5)
|
|
|
9,710
|
|
|
|
20.0
|
%
|
|
|
9,875
|
|
|
|
21.5
|
%
|
|
|
-1.7
|
%
|
|
|
-2.6
|
%
|
(1)
Except volume and average
price per unit case figures.
(2)
Please refer to pages
18 and 19 for revenue breakdown.
(3)
Includes equity method in Jugos del
Valle, Estrella Azul, among others. For January '17 includes Coca-Cola FEMSA Philippines, Inc.
(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 operating non-cash charges.
(6)
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.
Press Release 2Q 2018
|
|
Page
30
|
July 26, 2018
|
|
|
South America Division
Expressed in millions of Mexican pesos
(1)
Quarterly information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 18
|
|
|
% Rev
|
|
|
2Q 17
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(7)
|
|
Transactions (million transactions)
|
|
|
1,808.2
|
|
|
|
|
|
|
|
2,016.7
|
|
|
|
|
|
|
|
-5.4
|
%
|
|
|
-0.3
|
%
|
Volume (million unit cases)
(2)
|
|
|
270.8
|
|
|
|
|
|
|
|
316.1
|
|
|
|
|
|
|
|
-6.9
|
%
|
|
|
-2.4
|
%
|
Average price per unit case
(2)
|
|
|
56.29
|
|
|
|
|
|
|
|
59.12
|
|
|
|
|
|
|
|
-4.8
|
%
|
|
|
|
|
Net revenues
|
|
|
18,085
|
|
|
|
|
|
|
|
19,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
93
|
|
|
|
|
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(3)
|
|
|
18,177
|
|
|
|
100.0
|
%
|
|
|
19,643
|
|
|
|
100.0
|
%
|
|
|
-7.5
|
%
|
|
|
5.9
|
%
|
Cost of goods sold
|
|
|
10,201
|
|
|
|
56.1
|
%
|
|
|
11,369
|
|
|
|
57.9
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
7,976
|
|
|
|
43.9
|
%
|
|
|
8,274
|
|
|
|
42.1
|
%
|
|
|
-3.6
|
%
|
|
|
7.5
|
%
|
Operating expenses
|
|
|
5,649
|
|
|
|
31.1
|
%
|
|
|
6,415
|
|
|
|
32.7
|
%
|
|
|
|
|
|
|
|
|
Other operating expenses, net
|
|
|
194
|
|
|
|
1.1
|
%
|
|
|
154
|
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
Operating equity method (gain) loss in associates
(4)
|
|
|
(18
|
)
|
|
|
-0.1
|
%
|
|
|
(8
|
)
|
|
|
-0.0
|
%
|
|
|
|
|
|
|
|
|
Operating income
(5)
|
|
|
2,152
|
|
|
|
11.8
|
%
|
|
|
1,712
|
|
|
|
8.7
|
%
|
|
|
25.7
|
%
|
|
|
19.9
|
%
|
Depreciation, amortization & other operating non-cash charges
|
|
|
961
|
|
|
|
5.3
|
%
|
|
|
1,363
|
|
|
|
6.9
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(5)(6)
|
|
|
3,112
|
|
|
|
17.1
|
%
|
|
|
3,076
|
|
|
|
15.7
|
%
|
|
|
1.2
|
%
|
|
|
16.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2018
|
|
|
|
% Rev
|
|
|
|
YTD 2017
|
|
|
|
% Rev
|
|
|
|
D
%
Reported
|
|
|
|
D
%
Comparable
(7)
|
|
Transactions (million transactions)
|
|
|
3,819.7
|
|
|
|
|
|
|
|
3,929.0
|
|
|
|
|
|
|
|
-2.8
|
%
|
|
|
2.1
|
%
|
Volume (million unit cases)
(2)
|
|
|
583.8
|
|
|
|
|
|
|
|
606.7
|
|
|
|
|
|
|
|
-3.8
|
%
|
|
|
0.5
|
%
|
Average price per unit case
(2)
|
|
|
57.20
|
|
|
|
|
|
|
|
63.05
|
|
|
|
|
|
|
|
-9.3
|
%
|
|
|
|
|
Net revenues
|
|
|
39,821
|
|
|
|
|
|
|
|
44,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
201
|
|
|
|
|
|
|
|
129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(3)
|
|
|
40,022
|
|
|
|
100.0
|
%
|
|
|
44,311
|
|
|
|
100.0
|
%
|
|
|
-9.7
|
%
|
|
|
6.3
|
%
|
Cost of goods sold
|
|
|
22,314
|
|
|
|
55.8
|
%
|
|
|
26,057
|
|
|
|
58.8
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
17,708
|
|
|
|
44.2
|
%
|
|
|
18,254
|
|
|
|
41.2
|
%
|
|
|
-3.0
|
%
|
|
|
12.1
|
%
|
Operating expenses
|
|
|
12,153
|
|
|
|
30.4
|
%
|
|
|
13,719
|
|
|
|
31.0
|
%
|
|
|
|
|
|
|
|
|
Other operating expenses, net
|
|
|
329
|
|
|
|
0.8
|
%
|
|
|
(181
|
)
|
|
|
-0.4
|
%
|
|
|
|
|
|
|
|
|
Operating equity method (gain) loss in associates
(4)
|
|
|
(28
|
)
|
|
|
-0.1
|
%
|
|
|
(57
|
)
|
|
|
-0.1
|
%
|
|
|
|
|
|
|
|
|
Operating income
(5)
|
|
|
5,255
|
|
|
|
13.1
|
%
|
|
|
4,773
|
|
|
|
10.8
|
%
|
|
|
10.1
|
%
|
|
|
14.9
|
%
|
Depreciation, amortization & other operating non-cash charges
|
|
|
1,925
|
|
|
|
4.8
|
%
|
|
|
2,694
|
|
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(5)(6)
|
|
|
7,181
|
|
|
|
17.9
|
%
|
|
|
7,467
|
|
|
|
16.9
|
%
|
|
|
-3.8
|
%
|
|
|
14.1
|
%
|
(1)
Except volume and average
price per unit case figures.
(2)
Sales volume and average
price per unit case exclude beer results.
(3)
Please refer to pages
18 and 19 for revenue breakdown.
(4)
Includes equity method
in Leao Alimentos, Verde Campo, 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 operating non-cash charges.
(7)
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.
Press Release 2Q 2018
|
|
Page
31
|
July 26, 2018
|
|
|
Asia Division
Expressed in millions of Mexican pesos
(1)
Quarterly information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 18
|
|
|
% Rev
|
|
|
2Q 17
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(4)
|
|
Transactions (million transactions)
|
|
|
1,818.8
|
|
|
|
|
|
|
|
1,780.5
|
|
|
|
|
|
|
|
2.1
|
%
|
|
|
2.1
|
%
|
Volume (million unit cases)
|
|
|
154.2
|
|
|
|
|
|
|
|
160.5
|
|
|
|
|
|
|
|
-4.0
|
%
|
|
|
-4.0
|
%
|
Average price per unit case
|
|
|
48.75
|
|
|
|
|
|
|
|
36.87
|
|
|
|
|
|
|
|
32.2
|
%
|
|
|
|
|
Net revenues
|
|
|
7,517
|
|
|
|
|
|
|
|
5,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(3)
|
|
|
7,517
|
|
|
|
100.0
|
%
|
|
|
5,917
|
|
|
|
100.0
|
%
|
|
|
27.0
|
%
|
|
|
27.7
|
%
|
Cost of goods sold
|
|
|
5,423
|
|
|
|
72.1
|
%
|
|
|
3,527
|
|
|
|
59.6
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2,094
|
|
|
|
27.9
|
%
|
|
|
2,390
|
|
|
|
40.4
|
%
|
|
|
-12.4
|
%
|
|
|
-11.9
|
%
|
Operating expenses
|
|
|
1,759
|
|
|
|
23.4
|
%
|
|
|
1,847
|
|
|
|
31.2
|
%
|
|
|
|
|
|
|
|
|
Other operating expenses, net
|
|
|
11
|
|
|
|
0.1
|
%
|
|
|
3
|
|
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
Operating income
(5)
|
|
|
324
|
|
|
|
4.3
|
%
|
|
|
540
|
|
|
|
9.1
|
%
|
|
|
-40.0
|
%
|
|
|
-40.1
|
%
|
Depreciation, amortization & other operating non-cash charges
|
|
|
461
|
|
|
|
6.1
|
%
|
|
|
519
|
|
|
|
8.8
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(5)(6)
|
|
|
785
|
|
|
|
10.4
|
%
|
|
|
1,059
|
|
|
|
17.9
|
%
|
|
|
-25.9
|
%
|
|
|
-26.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2018
|
|
|
|
% Rev
|
|
|
|
YTD 2017
(2)
|
|
|
|
% Rev
|
|
|
|
D
%
Reported
|
|
|
|
D
%
Comparable
(4)
|
|
Transactions (million transactions)
(2)
|
|
|
3,270.8
|
|
|
|
|
|
|
|
2,825.1
|
|
|
|
|
|
|
|
15.8
|
%
|
|
|
0.6
|
%
|
Volume (million unit cases)
(2)
|
|
|
274.0
|
|
|
|
|
|
|
|
252.8
|
|
|
|
|
|
|
|
8.4
|
%
|
|
|
-5.8
|
%
|
Average price per unit case
(2)
|
|
|
47.83
|
|
|
|
|
|
|
|
37.65
|
|
|
|
|
|
|
|
27.0
|
%
|
|
|
|
|
Net revenues
|
|
|
13,107
|
|
|
|
|
|
|
|
9,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(3)
|
|
|
13,107
|
|
|
|
100.0
|
%
|
|
|
9,518
|
|
|
|
100.0
|
%
|
|
|
37.7
|
%
|
|
|
23.6
|
%
|
Cost of goods sold
|
|
|
9,312
|
|
|
|
71.0
|
%
|
|
|
5,685
|
|
|
|
59.7
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
3,795
|
|
|
|
29.0
|
%
|
|
|
3,833
|
|
|
|
40.3
|
%
|
|
|
-1.0
|
%
|
|
|
-14.4
|
%
|
Operating expenses
|
|
|
3,323
|
|
|
|
25.3
|
%
|
|
|
3,050
|
|
|
|
32.0
|
%
|
|
|
|
|
|
|
|
|
Other operating expenses, net
|
|
|
31
|
|
|
|
0.2
|
%
|
|
|
15
|
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
Operating income
(5)
|
|
|
441
|
|
|
|
3.4
|
%
|
|
|
768
|
|
|
|
8.1
|
%
|
|
|
-42.6
|
%
|
|
|
-44.3
|
%
|
Depreciation, amortization & other operating non-cash charges
|
|
|
885
|
|
|
|
6.8
|
%
|
|
|
890
|
|
|
|
9.4
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(5)(6)
|
|
|
1,326
|
|
|
|
10.1
|
%
|
|
|
1,658
|
|
|
|
17.4
|
%
|
|
|
-20.0
|
%
|
|
|
-27.0
|
%
|
(1)
Except volume and average
price per unit case figures.
(2)
Includes February to
June for 2017
(3)
Operating cash flow
= operating income + depreciation, amortization & other operating non-cash charges.
(4)
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.
Press Release 2Q 2018
|
|
Page
32
|
July 26, 2018
|
|
|
Consolidated Balance Sheet
Expressed in millions of Mexican pesos.
|
|
|
|
|
|
|
|
|
Jun-18
|
|
|
Dec-17
|
|
Assets
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and marketable securities
|
|
Ps.
|
23,469
|
|
|
Ps.
|
18,767
|
|
Total accounts receivable
|
|
|
13,766
|
|
|
|
17,576
|
|
Inventories
|
|
|
11,385
|
|
|
|
11,364
|
|
Other current assets
|
|
|
8,330
|
|
|
|
7,950
|
|
Total current assets
|
|
|
56,951
|
|
|
|
55,657
|
|
Property, plant and equipment
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
121,442
|
|
|
|
121,968
|
|
Accumulated depreciation
|
|
|
(48,918
|
)
|
|
|
(46,141
|
)
|
Total property, plant and equipment, net
|
|
|
72,523
|
|
|
|
75,827
|
|
Investment in shares
|
|
|
11,327
|
|
|
|
12,540
|
|
Intangibles assets and other assets
|
|
|
122,394
|
|
|
|
124,243
|
|
Other non-current assets
|
|
|
18,271
|
|
|
|
17,410
|
|
Total Assets
|
|
Ps.
|
281,466
|
|
|
Ps.
|
285,677
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Short-term bank loans and notes payable
|
|
Ps.
|
12,003
|
|
|
Ps.
|
12,171
|
|
Suppliers
|
|
|
16,728
|
|
|
|
19,956
|
|
Other current liabilities
|
|
|
20,810
|
|
|
|
23,467
|
|
Total current liabilities
|
|
|
49,542
|
|
|
|
55,595
|
|
Long-term bank loans and notes payable
|
|
|
81,258
|
|
|
|
71,189
|
|
Other long-term liabilities
|
|
|
17,838
|
|
|
|
18,184
|
|
Total liabilities
|
|
|
148,637
|
|
|
|
144,968
|
|
Equity
|
|
|
|
|
|
|
|
|
Non-controlling interest
|
|
|
17,049
|
|
|
|
18,141
|
|
Total controlling interest
|
|
|
115,779
|
|
|
|
122,568
|
|
Total equity
|
|
|
132,829
|
|
|
|
140,710
|
|
Total Liabilities and Equity
|
|
Ps.
|
281,466
|
|
|
Ps.
|
285,677
|
|
Press Release 2Q 2018
|
|
Page
33
|
July 26, 2018
|
|
|
Quarter - Volume, Transactions & Revenues
For the three months ended on June 30, 2018 and 2017
Volume
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expressed in million unit cases
|
2Q 2018
|
|
2Q 2017
|
|
YoY
|
Sparkling
|
Water
(1)
|
Bulk
(2)
|
Stills
|
Total
|
|
Sparkling
|
Water
(1)
|
Bulk
(2)
|
Stills
|
Total
|
|
D%
|
Mexico
|
360.9
|
29.0
|
76.4
|
32.4
|
498.7
|
|
360.7
|
28.4
|
81.7
|
29.5
|
500.3
|
|
-0.3%
|
Central America
|
45.5
|
2.6
|
0.1
|
5.2
|
53.5
|
|
35.7
|
2.6
|
0.1
|
5.0
|
43.4
|
|
23.2%
|
Mexico and Central America
|
406.4
|
31.6
|
76.5
|
37.7
|
552.2
|
|
396.3
|
31.0
|
81.9
|
34.5
|
543.7
|
|
1.6%
|
Colombia
|
47.3
|
7.9
|
2.7
|
3.9
|
61.8
|
|
48.9
|
7.7
|
2.7
|
5.7
|
64.9
|
|
-4.8%
|
Venezuela
|
-
|
-
|
-
|
-
|
-
|
|
11.6
|
1.2
|
0.1
|
0.4
|
13.3
|
|
-
|
Brazil
|
150.0
|
9.7
|
1.6
|
9.6
|
170.8
|
|
149.8
|
7.5
|
1.3
|
7.7
|
166.3
|
|
2.7%
|
Argentina
|
31.0
|
3.6
|
1.0
|
2.5
|
38.1
|
|
37.6
|
4.6
|
0.7
|
3.4
|
46.3
|
|
-17.6%
|
South America
|
228.3
|
21.2
|
5.3
|
16.0
|
270.8
|
|
247.8
|
21.0
|
4.7
|
17.2
|
290.8
|
|
-6.9%
|
Philippines
|
126.8
|
7.4
|
11.9
|
8.0
|
154.2
|
|
127.9
|
7.5
|
9.0
|
16.2
|
160.5
|
|
-4.0%
|
Asia
|
126.8
|
7.4
|
11.9
|
8.0
|
154.2
|
|
127.9
|
7.5
|
9.0
|
16.2
|
160.5
|
|
-4.0%
|
Total
|
761.5
|
60.2
|
93.7
|
61.7
|
977.1
|
|
772.0
|
59.6
|
95.5
|
67.9
|
995.0
|
|
-1.8%
|
(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
|
2Q 2018
|
|
2Q 2017
|
|
YoY
|
Sparkling
|
Water
|
Stills
|
Total
|
|
Sparkling
|
Water
|
Stills
|
Total
|
|
D%
|
Mexico
|
2,154.8
|
211.5
|
261.2
|
2,627.5
|
|
2,169.3
|
207.4
|
246.8
|
2,623.6
|
|
0.2%
|
Central America
|
364.9
|
16.0
|
63.7
|
444.7
|
|
293.3
|
15.7
|
65.0
|
374.0
|
|
18.9%
|
Mexico and Central America
|
2,519.8
|
227.5
|
325.0
|
3,072.2
|
|
2,462.6
|
223.2
|
311.8
|
2,997.5
|
|
2.5%
|
Colombia
|
348.0
|
82.2
|
44.4
|
474.5
|
|
371.2
|
72.4
|
56.4
|
500.0
|
|
-5.1%
|
Venezuela
|
-
|
-
|
-
|
-
|
|
84.1
|
9.9
|
4.9
|
98.8
|
|
-
|
Brazil
|
936.1
|
82.2
|
107.2
|
1,125.5
|
|
924.4
|
67.5
|
88.3
|
1,080.2
|
|
4.2%
|
Argentina
|
169.5
|
20.5
|
18.1
|
208.2
|
|
187.0
|
23.3
|
22.8
|
233.1
|
|
-10.7%
|
South America
|
1,453.6
|
184.9
|
169.7
|
1,808.2
|
|
1,566.7
|
173.1
|
172.4
|
1,912.2
|
|
-5.4%
|
Philippines
|
1,636.5
|
92.4
|
89.9
|
1,818.8
|
|
1,573.2
|
88.1
|
119.3
|
1,780.5
|
|
2.1%
|
Asia
|
1,636.5
|
92.4
|
89.9
|
1,818.8
|
|
1,573.2
|
88.1
|
119.3
|
1,780.5
|
|
2.1%
|
Total
|
5,609.8
|
504.7
|
584.6
|
6,699.1
|
|
5,602.5
|
484.3
|
603.4
|
6,690.2
|
|
0.1%
|
Revenues
|
|
|
|
|
Expressed in million Mexican Pesos
|
2Q 2018
|
2Q 2017
|
D%
|
|
|
Mexico
|
22,437
|
21,361
|
5.0%
|
|
Central America
|
3,955
|
3,186
|
24.1%
|
|
Mexico and Central America
|
26,392
|
24,547
|
7.5%
|
|
Colombia
|
3,493
|
3,463
|
0.8%
|
|
Venezuela
|
-
|
921
|
-
|
|
Brazil
(3)
|
12,318
|
12,237
|
0.7%
|
|
Argentina
|
2,366
|
3,022
|
-21.7%
|
|
South America
|
18,177
|
19,643
|
-7.5%
|
|
Philippines
|
7,517
|
5,917
|
27.0%
|
|
Asia
|
7,517
|
5,917
|
27.0%
|
|
Total
|
52,086
|
50,108
|
3.9%
|
|
(3)
Brazil includes Beer revenues of Ps.
2,843 million for the second quarter of 2018 and Ps. 2,402 million for the same period of the previous year.
Press Release 2Q 2018
|
|
Page
34
|
July 26, 2018
|
|
|
YTD - Volume, Transactions & Revenues
For the six months ended on June 30, 2018 and 2017
Volume
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expressed in million unit cases
|
YTD 2018
|
|
YTD 2017
|
|
YoY
|
Sparkling
|
Water
(1)
|
Bulk
(2)
|
Stills
|
Total
|
|
Sparkling
|
Water
(1)
|
Bulk
(2)
|
Stills
|
Total
|
|
D%
|
Mexico
|
671.0
|
54.2
|
142.9
|
60.6
|
928.7
|
|
674.6
|
52.3
|
150.3
|
55.6
|
932.7
|
|
-0.4%
|
Central America
|
82.3
|
5.5
|
0.3
|
10.2
|
98.4
|
|
68.8
|
5.2
|
0.3
|
9.6
|
84.0
|
|
17.2%
|
Mexico and Central America
|
753.3
|
59.7
|
143.2
|
70.8
|
1,027.1
|
|
743.4
|
57.4
|
150.6
|
65.3
|
1,016.7
|
|
1.0%
|
Colombia
|
97.7
|
16.7
|
5.9
|
8.2
|
128.5
|
|
93.8
|
15.1
|
5.4
|
11.4
|
125.8
|
|
2.1%
|
Venezuela
|
-
|
-
|
-
|
-
|
-
|
|
22.1
|
2.6
|
0.1
|
1.1
|
25.9
|
|
-
|
Brazil
|
319.3
|
22.1
|
3.6
|
20.6
|
365.6
|
|
317.9
|
18.8
|
3.0
|
16.8
|
356.5
|
|
2.6%
|
Argentina
|
71.8
|
8.9
|
2.5
|
6.5
|
89.7
|
|
79.2
|
10.4
|
1.5
|
7.5
|
98.6
|
|
-9.1%
|
South America
|
488.8
|
47.7
|
12.0
|
35.3
|
583.8
|
|
513.0
|
46.9
|
10.1
|
36.8
|
606.8
|
|
-3.8%
|
Philippines
(3)
|
224.0
|
13.3
|
22.1
|
14.7
|
274.0
|
|
201.2
|
11.8
|
14.9
|
24.9
|
252.8
|
|
8.4%
|
Asia
|
224.0
|
13.3
|
22.1
|
14.7
|
274.0
|
|
201.2
|
11.8
|
14.9
|
24.9
|
252.8
|
|
8.4%
|
Total
|
1,466.1
|
120.7
|
177.3
|
120.8
|
1,884.9
|
|
1,457.6
|
116.2
|
175.5
|
127.0
|
1,876.3
|
|
0.5%
|
(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
(3)
Philippines information reported for
2017 includes February to June.
Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expressed in million transactions
|
YTD 2018
|
|
YTD 2017
|
|
YoY
|
Sparkling
|
Water
|
Stills
|
Total
|
|
Sparkling
|
Water
|
Stills
|
Total
|
|
D%
|
Mexico
|
4,041.3
|
394.1
|
491.6
|
4,927.0
|
|
4,091.8
|
384.9
|
473.9
|
4,950.5
|
|
-0.5%
|
Central America
|
659.8
|
32.2
|
127.2
|
819.2
|
|
570.6
|
31.3
|
125.4
|
727.4
|
|
12.6%
|
Mexico and Central America
|
4,701.1
|
426.4
|
618.8
|
5,746.2
|
|
4,662.4
|
416.2
|
599.3
|
5,677.9
|
|
1.2%
|
Colombia
|
722.4
|
167.6
|
90.3
|
980.4
|
|
721.5
|
139.8
|
116.3
|
977.6
|
|
0.3%
|
Venezuela
|
-
|
-
|
-
|
-
|
|
155.5
|
24.6
|
8.7
|
188.8
|
|
-
|
Brazil
|
1,960.3
|
190.6
|
223.3
|
2,374.2
|
|
1,918.7
|
167.5
|
188.2
|
2,274.5
|
|
4.4%
|
Argentina
|
373.9
|
48.0
|
43.2
|
465.1
|
|
387.1
|
51.9
|
49.1
|
488.1
|
|
-4.7%
|
South America
|
3,056.6
|
406.2
|
356.9
|
3,819.7
|
|
3,182.8
|
383.8
|
362.3
|
3,928.9
|
|
-2.8%
|
Philippines
(3)
|
2,927.0
|
164.8
|
179.0
|
3,270.8
|
|
2,500.5
|
136.7
|
187.9
|
2,825.1
|
|
15.8%
|
Asia
|
2,927.0
|
164.8
|
179.0
|
3,270.8
|
|
2,500.5
|
136.7
|
187.9
|
2,825.1
|
|
15.8%
|
Total
|
10,684.7
|
997.4
|
1,154.6
|
12,836.7
|
|
10,345.8
|
936.6
|
1,149.5
|
12,431.9
|
|
3.3%
|
Revenues
|
|
|
|
|
Expressed in million Mexican Pesos
|
YTD 2018
|
YTD 2017
|
D%
|
|
|
Mexico
|
41,521
|
39,474
|
5.2%
|
|
Central America
|
7,148
|
6,546
|
9.2%
|
|
Mexico and Central America
|
48,669
|
46,020
|
5.8%
|
|
Colombia
|
7,093
|
7,098
|
-0.1%
|
|
Venezuela
|
-
|
2,173
|
-
|
|
Brazil
(4)
|
27,166
|
28,311
|
-4.0%
|
|
Argentina
|
5,763
|
6,728
|
-14.3%
|
|
South America
|
40,022
|
44,311
|
-9.7%
|
|
Philippines
(3)
|
13,107
|
9,518
|
37.7%
|
|
Asia
|
13,107
|
9,518
|
37.7%
|
|
Total
|
101,799
|
99,849
|
2.0%
|
|
(4)
Brazil includes Beer revenues of Ps.
6,429 million for the first six months of 2018 and Ps. 5,927 million for the same period of the previous year.
Press Release 2Q 2018
|
|
Page
35
|
July 26, 2018
|
|
|
Macroeconomic Information
Second quarter 2018
Inflation
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTM
|
2Q 18
|
YTD
|
|
|
|
|
Mexico
|
4.67%
|
-0.72%
|
0.57%
|
|
|
|
|
Colombia
|
3.19%
|
0.50%
|
2.57%
|
|
|
|
|
Brazil
|
2.95%
|
0.79%
|
1.73%
|
|
|
|
|
Argentina
|
27.61%
|
6.97%
|
14.18%
|
|
|
|
|
Philippines
|
5.27%
|
0.51%
|
3.11%
|
|
|
|
|
(1)
Source: inflation estimated by the
company based on historic publications from the Central Banks of each country.
Average Exchange Rates for each Period
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Exchange Rate (local currency per USD)
|
|
Accumulated Exchange Rate (local currency per USD)
|
|
2Q 18
|
2Q 17
|
D
%
|
|
YTD 18
|
YTD 17
|
D
%
|
Mexico
|
19.37
|
18.60
|
4.2%
|
|
19.07
|
19.49
|
-2.2%
|
Guatemala
|
7.44
|
7.34
|
1.4%
|
|
7.40
|
7.39
|
0.3%
|
Nicaragua
|
31.36
|
29.86
|
5.0%
|
|
31.17
|
29.68
|
5.0%
|
Costa Rica
|
569.03
|
575.31
|
-1.1%
|
|
570.49
|
570.01
|
0.1%
|
Panama
|
1.00
|
1.00
|
0.0%
|
|
1.00
|
1.00
|
0.0%
|
Colombia
|
2,840.31
|
2,918.63
|
-2.7%
|
|
2,850.34
|
2,920.35
|
-2.4%
|
Brazil
|
3.61
|
3.21
|
12.2%
|
|
3.43
|
3.18
|
7.8%
|
Argentina
|
23.53
|
15.73
|
49.5%
|
|
21.62
|
15.70
|
37.6%
|
Philippines
|
52.45
|
49.86
|
5.2%
|
|
51.95
|
49.92
|
4.1%
|
End of Period Exchange Rates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Exchange Rate (local currency per USD)
|
|
Previous Quarter Exchange Rate (local currency per USD)
|
|
Jun 2018
|
Jun 2017
|
D
%
|
|
Mar 2018
|
Mar 2017
|
D
%
|
Mexico
|
19.86
|
17.90
|
11.0%
|
|
18.34
|
18.81
|
-2.5%
|
Guatemala
|
7.49
|
7.34
|
2.2%
|
|
7.40
|
2.56
|
188.7%
|
Nicaragua
|
31.55
|
30.04
|
5.0%
|
|
31.16
|
29.68
|
5.0%
|
Costa Rica
|
570.08
|
579.87
|
-1.7%
|
|
569.31
|
567.34
|
0.3%
|
Panama
|
1.00
|
1.00
|
0.0%
|
|
1.00
|
1.00
|
0.0%
|
Colombia
|
2,930.80
|
3,038.26
|
-3.5%
|
|
2,780.47
|
2,880.24
|
-3.5%
|
Brazil
|
3.86
|
3.31
|
16.6%
|
|
3.32
|
3.17
|
4.9%
|
Argentina
|
28.85
|
16.63
|
73.5%
|
|
20.15
|
15.39
|
30.9%
|
Philippines
|
53.52
|
50.47
|
6.1%
|
|
52.21
|
50.19
|
4.0%
|
(2)
Average exchange rate for each period
computed with the average exchange rate of each month.
Press Release 2Q 2018
|
|
Page
36
|
July 26, 2018
|
|
|
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 Executive Officer
|
Date: July 27, 2018
Fomento Economico Mexica... (PK) (USOTC:FMXUF)
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