Mexico City, July 22, 2020, Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOF UBL, NYSE: KOF) (“Coca-Cola FEMSA”, “KOF” or the “Company”), the largest Coca-Cola franchise bottler in the world by sales volume, announces results for the second quarter and the first six months of 2020.
SECOND QUARTER OPERATIONAL AND FINANCIAL HIGHLIGHTS
- Consolidated volumes decreased 7.2% driven mainly by COVID-19 lockdowns and social distancing measures implemented across our territories.
- Total revenues decreased 10.2%, while comparable revenues decreased 8.6%. Our pricing initiatives were offset by unfavorable price-mix effects across our markets coupled with unfavorable currency translation effects from most of our operating currencies in South America.
- Operating income decreased 19.1%, while comparable operating income decreased 17.6%. Declining PET costs, favorable hedging initiatives and operating expense efficiencies were offset by unfavorable price-mix effects, higher concentrate costs and the depreciation of most of our operating currencies as applied to our U.S. dollar-denominated costs.
- Majority net income decreased 39.4%, driven mainly by impairments recognized in other non-operating expenses of Ps. 903 million. Excluding these effects, majority net income would have decreased 18.3%.
- Underscoring the Company’s solid financial position, cash from operations was Ps. 18,140 million, up 14% versus the previous year. In addition, as compared to the first quarter 2020, our cash position increased to Ps. 41,473 million including the payment of the first installment of dividends during early May.
- Earnings per share1 were Ps. 0.13 (Earnings per unit were Ps. 1.01 and per ADS were Ps. 10.07).
John Santa Maria, Coca-Cola FEMSA’s CEO, commented:
“Our second quarter results underscore the tremendous effort and commitment of all of Coca-Cola FEMSA employees, as well as our organization’s ability to execute in the face of dire conditions. Our Mexico operation consistently delivered a resilient volume performance, while in Brazil and Colombia our volume improved significantly after a challenging start to the quarter. Moreover, our business in Guatemala continued to grow and we managed to strengthen our competitive position and our cash flow generation. Importantly, our rollout of digital initiatives and our ability to implement aggressive savings and efficiencies were crucial to expand margins in our Mexico and Central America division. As a result, despite significant currency headwinds and the overall challenging environment that mostly impacted our South America division, our consolidated operating cash flow margin for the quarter remained flat as compared to the previous year.
While many countries are starting to ease lockdowns and show early signs of recovery, the COVID-19 pandemic continues to have an important impact on people’s lives. Accordingly, at Coca-Cola FEMSA we have continued to support our employees and communities through several initiatives. Even in these times of immediate concern, we continue to focus on our long-term strategy. We are confident that we have the right objectives and capabilities to emerge a stronger Coca-Cola FEMSA, committed to creating sustainable value for all of our stakeholders for years to come.”