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26 Oct 2007

FEMSA reports 3Q07 revenue and income from operations growth of 7.2% and 7.4% respectively


Friday, 10/26/2007, 2:56:22 pm

Monterrey, Mexico, October 26, 2007 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) today announced its operational and financial results for the third quarter of 2007.

Third Quarter 2007 Highlights:

  • Consolidated total revenues increased 7.2% and income from operations increased 7.4%. Strong growth at Oxxo and Coca-Cola FEMSA more than offset weakness at FEMSA Cerveza.
  • Coca-Cola FEMSA total revenues increased 6.0% and income from operations increased 11.5%. Double-digit growth from most of our South American operations drove these results.
  • FEMSA Cerveza total revenues increased 3.3%. - Mexico sales volume grew 3.5%, Brazil sales volume grew 6.7% and export sales volume grew 2.3%. - Income from operations decreased 8.8%, reflecting continued high commodity prices, increased promotional activity in Mexico, and sustained marketing investments in our brands and competitive position.
  • Oxxo total revenues increased 15.2%, driven by 755 net new stores in the last twelve months for a total of 5,237 stores. Operating margin expanded by 120 basis points.

“As the months have gone by, the trends that were established in our businesses during the first half of the year have continued to develop, and generally conditions today have improved relative to the earlier periods. During the third quarter Coca-Cola FEMSA continued to build on the profitability of its all-important Mexico operation, achieving real growth in operating income for the first time in four quarters, while the rest of the territories continued their strong pace of earnings growth. Oxxo once again delivered a stellar quarter with solid revenue growth and remarkable margin expansion. At FEMSA Cerveza, we continued to experience a tough raw materials environment that, together with increased promotional activity in Mexico, put pressure on our profits in the short term even as we continued to make significant progress in the United States and Brazil.

And yet, our consolidated results for the quarter show robust growth in revenues and operating income above 7 percent in real terms. In a challenging year, we are being able to deliver results even as we continue to develop our brands and build the business model that will allow us to continue to compete successfully across our businesses and in a growing number of territories”, commented José Antonio Fernández, Chairman and CEO of FEMSA.

To obtain the full text of this earnings release, please visit our Investor Relations website at www.femsa.com/investor under the Financial Reports section.

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.

FEMSA is the leading beverage company in Latin America. It controls an integrated beverage platform that comprises Coca-Cola FEMSA, the largest Coca-Cola bottler in the region; FEMSA Cerveza, one of the leading brewers in Mexico and important beer exporter to the United States; and Oxxo, the largest and fastest growing convenience store chain in Mexico with over 5,000 stores.

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