Press

Take advantage of the benefits of the center for journalists FEMSA

26 Apr 2012

Coca-Cola FEMSA Reports Results of the 1Q of 2012


Thursday, 04/26/2012, 12:00:00 am

  • Reported total revenues reached Ps. 33,542 million in the first quarter of 2012, an increase of 29.7% as compared to the first quarter of 2011, mainly as a result of double-digit total revenue growth in each division and the integration of Grupo Tampico and Grupo CIMSA in our Mexican territories. Excluding the recently integrated territories in Mexico, total revenues increased 21.6%.
  • Reported consolidated operating income grew 13.0% to Ps. 4,314 million for the first quarter of 2012, mainly driven by double-digit operating income growth in each division and including the integration of the new territories in Mexico. Our reported operating margin was 12.9% in the first quarter of 2012. Excluding the recently merged territories, operating income grew 7.9%.
  • Reported consolidated net controlling interest income grew 19.9%, reaching Ps. 2,636 million in the first quarter of 2012.

Mexico City (April 26, 2012), 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, announces results for the first quarter of 2012.

"In the face of an environment of continuing commodity cost pressures, the execution skills of our operators continued to bolster our competitive position, generating double-digit top- and bottom-line growth for the first quarter of 2012 In Mexico, we have already incorporated the territories of Grupo Tampico and Grupo CIMSA into the culture and operations of our company, and we are well on track to achieve the previously identified synergies. At the same time, we continue to seek for new opportunities to create value and deliver growth for our shareholders, as exemplified by our exclusivity agreement with The Coca-Cola Company to evaluate the potential acquisition of their bottling operations in the Philippines. Furthermore, our growing financial flexibility has strengthened our ability to return cash to our shareholders in the form of increased dividends. Specifically, the dividend of Ps. 2.77 per share that our company will distribute as of May 30, 2012, is four times the dividend paid in 2009," said Carlos Salazar Lomelin, Chief Executive Officer of the Company.

CONSOLIDATED RESULTS

Our reported consolidated total revenues increased 29.7% to Ps. 33,542 million in the first quarter of 2012, compared to the first quarter of 2011 as a result of double-digit total revenue growth in each division and the integration of Grupo Tampico and Grupo CIMSA in our Mexican operations(1). Excluding the recently integrated territories in Mexico, total revenues grew 21.6%. On a currency neutral basis and excluding the recently merged territories in Mexico, total revenue grew 18.0%, driven by average price per unit case growth in every operation, in combination with volume growth mainly in Venezuela, Mexico and Argentina.

Total sales volume increased 16.2% to reach 703.0 million unit cases in the first quarter of 2012 as compared to the same period in 2011. Excluding the integration of Grupo Tampico and Grupo CIMSA in Mexico, volumes grew 4.7% to 633.2 million unit cases. On the same basis, the sparkling beverage category grew 5%, mainly supported by strong volume growth of brand Coca-Cola in Mexico, Argentina and Venezuela, contributing more than 80% of incremental volumes. The still beverage category grew 14%, mainly driven by the introduction of the Jugos del Valle line of business in Venezuela, contributing close to 15% of incremental volumes. Our bottled water portfolio, including bulk water grew 1%, representing the balance.

Our reported gross profit increased 29.0% to Ps. 15,204 million in the first quarter of 2012, as compared to the first quarter of 2011. Reported cost of goods sold increased 30.3%, mainly as a result of (i) higher sweetener costs in Mexico, Venezuela, Argentina and Central America and (ii) increased PET costs in Brazil and Venezuela; in combination with the depreciation of the average exchange rate of the Argentine peso,(2) the Mexican peso(2) and the Brazilian real(2) and certain other operating currencies(2) as applied to our U.S. dollar-denominated raw material costs. Reported gross margin reached 45.3%, as compared to 45.6% in the first quarter of 2011.

Our reported consolidated operating income increased 13.0% to Ps. 4,314 million in the first quarter of 2012, driven by double-digit operating income growth in both divisions, and including the integration of Grupo Tampico and Grupo CIMSA in Mexico. Our reported operating margin reached 12.9% in the first quarter of 2012, as compared with 14.8% in the same period of 2011. Excluding the integration of the recently merged territories in Mexico, operating income grew 7.9%. On the same basis, operating expenses increased in the first quarter of 2012, mainly as a result of (i) higher labor costs in Venezuela and Brazil and higher labor and freight costs in Argentina, (ii) increased marketing investment to reinforce our execution in the marketplace, widen our cooler coverage and broaden our returnable base availability across our territories and (iii) additional expenses related to the development of information systems and commercial capabilities in connection with our commercial models.

During the first quarter of 2012, we recorded a gain of Ps. 63 million in the other operative expenses, net line. This gain mainly reflects the equity method income related to our operative investments.

Our comprehensive financing result in the first quarter of 2012 recorded an expense of Ps. 136 million as compared to an expense of Ps. 197 million in the same period of 2011. This difference was mainly driven by a foreign exchange gain that mainly resulted from the appreciation of the Mexican peso as compared with December of 2011, as applied to our dollar-denominated net debt position.

During the first quarter of 2012, income tax, as a percentage of income before taxes, was 33.8% as compared to 35.2% in the same period of 2011. During 2011, we registered an increase in the tax on shareholder’s equity in one of our subsidiaries in the South America division, which contributed to a higher tax rate in that year.

Our reported consolidated net controlling interest income grew 19.9% reaching Ps. 2,636 million in the first quarter of 2012 as compared to the first quarter of 2011. Earnings per share (EPS) in the first quarter of 2012 were Ps. 1.33 (Ps. 13.28 per ADS) computed on the basis of 1,985.4 million shares (each ADS represents 10 local shares).

(1) Our Mexican operations include Grupo Tampico’s results as of October, 2011 and Grupo CIMSA’s results as of December, 2011
(2) See page 11 for average and end of period exchange rates for the first quarter of 2012

MEXICO & CENTRAL AMERICA DIVISION OPERATING RESULTS (Mexico, Guatemala, Nicaragua, Costa Rica and Panama)

Coca-Cola FEMSA is including the results of Grupo Tampico as of October 2011 and Grupo CIMSA as of December 2011 in the Company’s Mexico & Central America divisions’ operating results.

Revenues

Reported total revenues from our Mexico and Central America division increased 30.2% to Ps. 14,473 million in the first quarter of 2012, as compared to the same period in 2011, supported by the integration of Grupo Tampico and Grupo CIMSA in our Mexican operations(1). Excluding the recently integrated territories in Mexico, total revenues grew 11.2%. On the same basis, increased average price per unit case, mainly reflecting selective price increases across our product portfolio implemented over the past several months, accounted for close to 70% of incremental total revenues and higher volumes represented the balance. On a currency neutral basis and excluding the recently merged territories in Mexico, total revenues increased 10.2%.

Reported total sales volume increased 24.3% to 412.4 million unit cases in the first quarter of 2012, as compared to the first quarter of 2011. Excluding the integration of Grupo Tampico and Grupo CIMSA in Mexico, volumes grew 3.3% to 342.6 million unit cases. On the same basis, sparkling beverages grew 4%, driven by a 5% increase in brand Coca-Cola, accounting for approximately 95% of incremental volumes. Still beverages grew 5% mainly driven by the Jugos del Valle line of products and the introduction of the Estrella Azul portfolio, representing the balance. Our bottled water portfolio, including bulk water, remained flat as compared with the first quarter of 2011.

Operating Income

Our reported gross profit increased 27.6% to Ps. 6,792 million in the first quarter of 2012 as compared to the same period in 2011. Reported cost of goods sold increased 32.5% as a result of higher sweetener costs across the division and PET cost pressures in Central America, in combination with the depreciation of the average exchange rate of the Mexican peso,(2) the Costa Rican Colon(2) and the Nicaraguan Cordoba(2) as applied to our U.S. dollar-denominated raw material costs. Reported gross margin reached 46.9% in the first quarter of 2012, as compared with 47.9% in the same period of the previous year.

Reported operating income increased 12.7% to Ps. 1,882 million in the first quarter of 2012, compared to Ps. 1,670 million in the same period of 2011. Our reported operating margin was 13.0% in the first quarter of 2012, as compared with 15.0% in the same period of 2011. Excluding the integration of Grupo Tampico and Grupo CIMSA in Mexico, operating income grew 1.0%. On the same basis, operating expenses increased mainly as a result of continued marketing investments across the division and additional expenses related to the development of information systems and commercial capabilities in connection with our commercial models.

SOUTH AMERICA DIVISION OPERATING RESULTS (Colombia, Venezuela, Brazil and Argentina)

Volume and average price per unit case exclude beer results.

Revenues

Reported total revenues were Ps. 19,069 million in the first quarter of 2012, an increase of 29.4% as compared to the same period of 2011 as a result of double-digit total revenue growth in every territory. Excluding beer, which accounted for Ps. 981 million during the quarter, revenues increased 30.5% to Ps. 18,088 million. Excluding beer, higher average prices per unit case across our operations accounted for close to 80% of incremental revenues and volume growth in every territory contributed the balance. On a currency neutral basis, total revenues increased 23.9%.

Reported total sales volume in our South America division increased 6.4% to 290.6 million unit cases in the first quarter of 2012 as compared to the same period of 2011, as a result of growth in every operation. Our sparkling beverage portfolio grew 6%, driven by 11% growth of brand Coca-Cola in Argentina and Venezuela and 14% growth in flavored sparkling beverages in the division, accounting for approximately 75% of incremental volumes. The still beverage category grew 29%, mainly driven by the introduction of the Jugos del Valle line of business in Venezuela, representing close to 20% of incremental volumes. Our water portfolio, including bulk water, grew 4%, contributing the balance.

Operating Income

Reported gross profit reached Ps. 8,412 million, an increase of 30.2% in the first quarter of 2012, as compared to the same period of 2011. Reported cost of goods sold increased 28.8% mainly driven by higher year-over-year PET costs in Brazil and Venezuela, in combination with the depreciation of the average exchange rate of the Argentine peso(1) and the Brazilian real(1) as applied to our U.S. dollar-denominated raw material costs. Reported gross margin reached 44.1% in the first quarter of 2012, an expansion of 30 basis points as compared to the same period of 2011.

Our reported operating income increased 13.3% to Ps. 2,432 million in the first quarter of 2012, compared to the same period of 2011. Reported operating expenses increased 40.2%, mainly as a result of (i) higher labor costs in Venezuela and Brazil, in combination with higher labor and freight costs in Argentina and (ii) increased marketing investment to reinforce our execution in the marketplace, widen our cooler coverage and broaden our returnable base availability across the division. Our reported operating margin was 12.8% in the first quarter of 2012 as compared with 14.6% in the same period of 2011.

RECENT DEVELOPMENTS

On March 20, 2012, Coca-Cola FEMSA held its Annual Ordinary General Shareholders Meeting during which its shareholders approved the Company’s consolidated financial statements for the year ended December 31, 2011, the declaration of dividends corresponding to fiscal year 2011 and the composition of the Board of Directors and Committees for 2012. Shareholders approved the payment of a cash dividend in the amount of Ps. 2.77 per each share. The dividend will be paid as of May 30, 2012.

On March 29, 2012, Coca-Cola FEMSA’s presented its quarterly and full year 2011 results under International Financial Reporting Standards. Beginning in 2012, Mexican companies with securities listed on the Mexican National Securities’ Registry (Registro Nacional de Valores) of the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores), are required to prepare their financial statements in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). For more information, please refer to the notes to Coca-Cola FEMSA’s 2011 financial statements contained in its annual report or visit the company’s website.

CONFERENCE CALL INFORMATION

Our first-quarter 2012 Conference Call will be held on April 27, 2012, at 08:00 A.M. Eastern Time (07:00 A.M. Mexico City Time). To participate in the conference call, please dial: Domestic U.S.: 866-700-7477 or International: 617-213-8840. We invite investors to listen to the live audiocast of the conference call on the Company’s website, www.coca-colafemsa.com

If you are unable to participate live, an instant replay of the conference call will be available through May 3, 2012. To listen to the replay, please dial: Domestic U.S.: 888-286-8010 or International: 617-801-6888. Pass code: 80296295.

###

Coca-Cola FEMSA, S.A.B. de C.V. produces and distributes Coca-Cola, Fanta, Sprite, Del Valle, and other trademark beverages of The Coca-Cola Company in Mexico (a substantial part of central Mexico, including Mexico City, as well as southeast and northeast Mexico), Guatemala (Guatemala City and surrounding areas), Nicaragua (nationwide), Costa Rica (nationwide), Panama (nationwide), Colombia (most of the country), Venezuela (nationwide), Brazil (greater São Paulo, Campiñas, Santos, the state of Mato Grosso do Sul, part of the state of Goias, and part of the state of Minas Gerais), and Argentina (Buenos Aires and surrounding areas), along with bottled water, juices, teas, isotonics, beer, and other beverages in some of these territories. The Company has 35 bottling facilities in Latin America and serves more than 1,700,000 retailers in the region.

###

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.

back to top

Calendar

M T W T F S S
 
 
 
1
 
2
 
3
 
4
 
5
 
6
 
7
 
8
 
9
 
10
 
11
 
12
 
13
 
14
 
15
 
16
 
17
 
18
 
19
 
20
 
21
 
22
 
23
 
24
 
25
 
26
 
27
 
28
 
29
 
30
 
31
 
 

Calendario

Actions with value

Press

Events

At the moment there are no related events.

Visit our calendar to find out about our upcoming events.