Mexico City, October 26, 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 third quarter and the first nine months of 2020.
THIRD QUARTER OPERATIONAL AND FINANCIAL HIGHLIGHTS
- Consolidated volumes decreased 4.1%, a sequential improvement versus the second quarter, as most markets gradually reduced COVID-19 lockdowns and social distancing measures. Volume increased in Brazil, Guatemala, and Uruguay.
- Total revenues decreased 4.0%, while comparable revenues remained flat. Revenue management initiatives across our operations and extraordinary other operating revenues related to tax reclaims in Brazil 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. Mainly driven by a 16% unfavorable translation effect from the Brazilian real.
- Operating income increased 1.5%, while comparable operating income increased 7.1%. Declining PET costs, favorable hedging initiatives, operating expense efficiencies, and extraordinary tax effects in Brazil were partially 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 raw material costs.
- Majority net income decreased 38.8%, impacted mainly by extraordinary non-operating expenses of Ps. 1,813 million. Excluding these effects, majority net income would have increased 6.2%.
- Earnings per share1 were Ps. 0.15 (Earnings per unit were Ps. 1.17 and per ADS were Ps. 11.72.).
John Santa Maria, Coca-Cola FEMSA’s CEO, commented:
“In the face of what is still a very complex operating environment, I am encouraged to see sequential improvements across our operations. These positive trends are driven not only by gradually recovering consumer mobility, but also by our portfolio initiatives, reinforced point-of-sale execution, and the tremendous effort and commitment from all of Coca-Cola FEMSA’s employees. Consequently, despite a 4.0% decline in revenues for the quarter, we managed to grow our operating income by 1.5%, while expanding our operating cash flow margin by 90 basis points. Importantly, driven by favorable raw material costs and a relentless focus on savings and efficiency, our Mexico and Central America division continued to improve its profitability, generating operating income growth of 5.9% and an operating cash flow margin expansion to reach 23.0%. Additionally, our South America division delivered a significant sequential recovery, driven mainly by our Brazilian operation’s strong volume growth.
I am pleased with our business’ continued resiliency, as we continue to reinforce our portfolio to offer more affordability to our consumers and transform our operating capabilities to ensure our business’ profitable, long-term growth. We remain committed to generating economic value and positively contributing to society and the environment. I am confident that the structural measures we are putting in place will continue to provide solid short- and long-term results and opportunities.”
ABOUT THE COMPANY
Stock listing information: Mexican Stock Exchange, Ticker: KOFUBL | NYSE (ADS), Ticker: KOF | Ratio of KOFUBL to KOF = 10:1
Coca-Cola FEMSA files reports, including annual reports and other information with the U.S. Securities and Exchange Commission, or the “SEC,” and the Mexican Stock Exchange (Bolsa Mexicana de Valores, or the “BMV”) pursuant to the rules and regulations of the SEC (that apply to foreign private issuers) and of the BMV. Filings we make electronically with the SEC and the BMV are available to the public on the Internet at the SEC’s website at www.sec.gov, the BMV’s website at www.bmv.com.mx, and our website at www.coca-colafemsa.com.
Coca-Cola FEMSA, S.A.B. de C.V. is the largest Coca-Cola franchise bottler in the world by sales volume. The Company produces and distributes trademark beverages of The Coca-Cola Company, offering a wide portfolio of 129 brands to a population of more than 261 million. With over 80 thousand employees, the Company markets and sells approximately 3.4 billion unit cases through close to 2 million points of sale a year. Operating 49 manufacturing plants and 268 distribution centers, Coca-Cola FEMSA is committed to generating economic, social, and environmental value for all of its stakeholders across the value chain. The Company is a member of the Dow Jones Sustainability Emerging Markets Index, Dow Jones Sustainability MILA Pacific Alliance Index, FTSE4Good Emerging Index, and the Mexican Stock Exchange’s IPC and Social Responsibility and Sustainability Indices, among others. Its operations encompass franchise territories in Mexico, Brazil, Guatemala, Colombia, and Argentina, and, nationwide, in Costa Rica, Nicaragua, Panama, Uruguay, and Venezuela through its investment in KOF Venezuela. For further information, please visit www.coca-colafemsa.com.