Monterrey, Mexico, April 28, 2025 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) (NYSE: FMX; BMV: FEMSAUBD, FEMSAUB) announced today its operational and financial results for the first quarter of 2025.
- FEMSA: Total Consolidated Revenues grew 11.1% and Income from Operations increased 4.9% compared to 1Q24.
- FEMSA Retail : Proximity Americas total Revenues grew 6.8% and Income from operations decreased 11.8% versus 1Q24.
- SPIN: Spin by OXXO had 8.9 million active users representing 20.9% growth compared to 1Q24 while Spin Premia had 25.2 million active loyalty users representing 15.9% growth compared to 1Q24, and an average tender of 42.5% which increased from 35.1% tender in 1Q24.
- COCA-COLA FEMSA: Total Revenues and Income from Operations grew 10.0% and 7.4%, respectively against 1Q24.
José Antonio Fernandez Carbajal, FEMSA’s Chief Executive Officer, commented:
“During the first quarter, we were able to navigate a challenging environment and calendar across several markets, particularly in Mexico, taking advantage of our resilient, geographically diversified business platform, and our outstanding team. For example, Coca-Cola FEMSA leveraged solid volume performance and currency tailwinds in most of its South American markets to offset softer trends in Mexico, keeping them in a position to deliver a solid set of results for the quarter. We also saw promising performances from several of our international health retail operations, enhanced by favorable FX tailwinds as certain South American currencies strengthened against the Mexican peso.
At Proximity Americas, we had a slower start to the year. In many ways we were able to anticipate this, given the combination of an adverse calendar, a continued soft consumer environment, and a demanding comparison base, particularly at OXXO Mexico where these trends manifested themselves in the form of a decline in same-store traffic, that in turn put some pressure on the top line. We were able to mitigate this pressure with another strong showing at the gross margin level, however, we are also facing higher expenses that largely reflect increased labor costs. Accordingly, we have put in place or accelerated a broad array of top-line and cost-cutting initiatives to drive revenues and commercial income, and to mitigate the higher operating and overhead expenses.
Fortunately, we have good visibility into certain elements of our Mexico business for the rest of the year, and our base case is projecting a recovery as we approach mid-year and gaining momentum during the third quarter and beyond. Global macroeconomic uncertainty is high right now, but given what we can estimate now, and the variables that are within our control, we anticipate 2025 will turn out to be another solid year for us, particularly when we consider that the second half of the year weighs more than the first half for many of our business units. We have been through slowdowns many times before, and our businesses have demonstrated time and time again their defensive and resilient nature, and their ability to adapt and emerge from these tough periods in good, if not better, shape.
We are constructive on the initiatives being implemented across businesses, and on the multiple levers we can utilize to drive incremental revenues, lower costs, and ultimately profitability. We remain cautiously optimistic and confident that we have a powerful and resilient business platform, a solid strategy, and the best possible team to carry out the task.”
QUARTERLY RESULTS
Results are compared to the same period of previous year
Total revenues increased 11.1% in 1Q25 compared to 1Q24, driven by growth across all our business units, and reflecting the benefit from favorable exchange rate effects due to the depreciation of the Mexican peso against many of our foreign operating currencies. After accounting for currency tailwinds and M&A, revenues grew 5.6%.
Gross profit increased 15.8%. Gross margin increased 160 basis points, mainly reflecting margin expansions in Proximity Americas, Health, Fuel and Coca-Cola FEMSA, offset by a margin contraction in Proximity Europe.
Income from operations increased 4.9%, mainly explained by favorable exchange rate effects. The consolidated operating margin was 17.2% as a percentage of total sales, representing a contraction of 180 basis points, reflecting margin contractions in Proximity Americas, Proximity Europe, Fuel and Coca-Cola FEMSA. This was partially offset by margin expansion in our Health Division. After accounting for currency tailwinds and M&A, income from operations grew 1.7%.
The effective income tax rate was 42.2% in 1Q25. Our income tax provision was Ps. 4,781 million in 1Q25, reflecting a combination of: i) a structurally higher effective tax rate due to recurring non-deductible tax losses from Spin and certain expenses which are primarily labor related, and ii) a one-time non-recurrent payment related to a contingency from 2018. Excluding the one-time effects, the income tax rate would have stood at approximately 37%, in line with last year’s recurrent trend.
Net consolidated income was Ps. 8,943 million, compared to Ps. 5,794 million in 1Q24, reflecting: i) a 630 million increase in income from operations, ii) a non-cash foreign exchange gain of Ps. 439 million, compared to a loss of Ps. 1,125 million in 1Q24 related to our U.S. dollar-denominated cash position positively impacted by the depreciation of the Mexican peso; iii) other financial income of Ps. 1,622 million compared to a 1,416 expense in 1Q24, reflecting a financial instrument gain of Ps. 1,107 million related to our remaining position in Heineken; and iv) a gain in net income from discontinued operations of Ps. 2,490 million reflecting a gain related to the divestment of our plastics solutions operations. This result was despite an increase in net interest expense of Ps. 3,046 million, compared to Ps. 1,961 million in 1Q24, and an increase in income taxes explained above.
Net majority income was Ps. 1.62 per FEMSA Unit and US$0.79 per FEMSA ADS.
Net Debt / EBITDA. As of March 31, 2025, cash and investments were Ps. 139,206 million and total debt was Ps. 185,033 million, resulting in net debt of Ps. 45,828 million. Our Net Debt / EBITDA ratio ex-KOF was 0.69x which was an increase from 0.24x in the 1Q24.
Capital expenditures amounted to Ps. 8,788 million, 4.5% as a percentage of total sales, and an increase of 16.1% compared to 1Q24, reflecting higher CAPEX at Coca-Cola FEMSA, mainly deployed to increase our production and distribution capacity, and in Proximity Americas, mainly allocated towards new store openings and the remodeling and optimization of existing stores.
RECENT DEVELOPMENTS
- On April 11, 2025, FEMSA announced that it held its Annual Shareholders’ Meeting today (“the Shareholders’ Meeting”), during which the shareholders approved the consolidated financial statements for the year ended December 31, 2024, the 2024 CEO’s annual report and the opinion of the Board of Directors for the year 2024.
The Annual Shareholders’ Meeting elected the members of the board of directors and the members of each of the Audit Committee, the Corporate Practices and Nominations Committee and the Operations and Strategy Committee of the Board for 2025.
The list of the elected directors can be found in the following link: https://femsa.gcs-web.com/corporate-governance/board-of-directors
The Annual Shareholders’ Meeting declared and approved the payment of an ordinary cash dividend of Ps. 0.95475 per each Series “D” share and Ps. 0.7638 per each Series “B” share, which amounts to Ps. 4.5826 per “BD” Unit (BMV: FEMSAUBD) or Ps. 45.826 per ADS (NYSE: FMX), and Ps. 3.8190 per “B” Unit (BMV: FEMSAUB), to be paid in four equal installments, payable on April 25 of 2025, July 18 of 2025, October 17 of 2025 and January 16 of 2026.
Additionally, the Annual Shareholders’ Meeting declared and approved the payment of an extraordinary cash dividend of Ps. 2.1060 per each Series “D” share and Ps. 1.6848 per each Series “B” share, which amounts to Ps. 10.1084 per “BD” Unit (BMV: FEMSAUBD) or Ps. 101.084 per ADS (NYSE: FMX), and Ps. 8.4240 per “B” Unit (BMV: FEMSAUB), to be paid in four equal installments, payable on April 25 of 2025, July 18 of 2025, October 17 of 2025 and January 16 of 2026.
For additional information, please refer to the Summary of Resolutions in the Shareholders Meeting section of our corporate website at: https://femsa.gcs-web.com/shareholder-meeting-information
On April 24, 2025, FEMSA announced that it had filed its annual report on Form 20-F for the fiscal year ended December 31, 2024 with the U.S. Securities and Exchange Commission (SEC) and its annual report, for the same period, with the Comisión Nacional Bancaria y de Valores (Mexican Banking and Securities Commission) and the Bolsa Mexicana de Valores (Mexican Stock Exchange). These reports are available on FEMSA’s investor relations website at http://ir.femsa.com .
CONFERENCE CALL INFORMATION
Our First Quarter 2025 Conference Call will be held on: Monday, April 28, 2025, 10:00 AM Eastern Time (8:00 AM Mexico City Time). The conference call will be webcast live through streaming audio.
Telephone: Toll Free US: (866) 580 3963
International: +1 (786) 697 3501
Webcast: https://edge.media-server.com/mmc/p/eovsj9jj/
Conference ID: FEMSA
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About FEMSA
FEMSA is a company that creates economic and social value through companies and institutions and strives to be the best employer and neighbor to the communities in which it operates. It participates in the retail industry through a Proximity Americas Division operating OXXO, a small-format store chain, and other related retail formats, and Proximity Europe which includes Valora, our European retail unit which operates convenience and foodvenience formats. In the retail industry it also participates though a Health Division, which includes drugstores and related activities; and Spin, which includes Spin by OXXO and Spin Premia, among other digital financial services initiatives. In the beverage industry, it participates through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume. FEMSA also participates in the logistics and distribution industry through its Strategic Business Unit, which additionally provides point-of-sale refrigeration and plastic solutions to its business units and third-party clients. Across its business units, FEMSA has more than 380,000 employees in 18 countries. FEMSA is a member of the Dow Jones Sustainability MILA Pacific Alliance, the FTSE4Good Emerging Index and the Mexican Stock Exchange Sustainability Index: S&P/BMV Total México ESG, among other indexes that evaluate its sustainability performance.
