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28 Jul 2008

FEMSA Delivers 9.4% Operating Income Growth in 2Q08


Monday, 07/28/2008, 11:19:31 am


Monterrey, Mexico, July 28, 2008 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) today announced its operational and financial results for the second quarter of 2008.
Second Quarter 2008 Highlights:
• Consolidated total revenues grew 7.7% and income from operations 9.4%.
- Operating leverage driven mainly by OXXO and Coca-Cola FEMSA.
• Coca-Cola FEMSA total revenues and income from operations increased 6.7% and 8.9%, respectively.
- Double-digit income from operations growth in its Latincentro and Mercosur divisions, combined with a stable performance in its Mexico division, drove these results.
• FEMSA Cerveza total revenues increased 7.2% and income from operations grew 0.6%.
- Sales volume grew 2.9% in Mexico, 4.4% in exports and a robust 12.8% in Brazil.
- Top line growth offset continued raw material pressures and sustained marketing investments behind our brands across our operations, resulting in stable income from operations.
• OXXO continued its steady pace of strong growth and margin expansion.
- Total revenues and income from operations increased 11.2% and 40.9%, respectively, delivering over 20% growth in income from operations for the ninth consecutive quarter, resulting in an operating margin expansion of 140 basis points to reach 6.5%.

José Antonio Fernández, Chairman and CEO of FEMSA, commented “During the second quarter we were again able to deliver consolidated operating income growth ahead of revenues in spite of an environment of sustained raw materials and inflationary pressures across our markets. These results highlight our team’s commitment to growth as well as the benefits of our balanced and diversified beverage platform. FEMSA Cerveza’s positive pricing trends in the key Mexican market, combined with contained administrative expenses, offset the continued pressure coming from grain prices and sustained marketing activity. During the quarter Coca-Cola FEMSA closed the acquisition of Remil, the new franchise territory in Brazil expanding its presence in this fast-growing market, and continued capturing the benefits of integrating Jugos del Valle into its platform. Meanwhile, OXXO opened 215 net new stores to reach 5,851 nationwide, picking up the pace of expansion and delivering strong bottom-line growth for the ninth consecutive quarter”. 

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