Monterrey, Mexico, April 28, 2016 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) announced today its operational and financial results for the first quarter of 2016.
Since the acquisition of its first drugstore chain in May of 2013, FEMSA Comercio has consolidated the results of its drugstore operations. Given the growing importance and significant potential of this segment, already representing more than ten percent of FEMSA consolidated revenues, and in a permanent effort to refine our disclosure to better communicate our performance, we are making incremental changes to the way we present FEMSA Comercio’s results. As of the first quarter of 2016, FEMSA Comercio’s results are split into three divisions: Fuel, referring only to that business, Health, which includes all our drugstore and related operations, and Retail, encompassing OXXO and all other operations of FEMSA Comercio. This is also consistent with how senior management and decision makers look at operating and financial information. Therefore, the Retail Division’s first quarter 2016 results exclude any contribution from the Health or Fuel Divisions.
First Quarter 2016 Highlights:
FEMSA consolidated total revenues and income from operations grew 31.7% and 16.4% compared to the first quarter of 2015, driven by solid growth across segments, and reflecting the integration of Socofar into FEMSA Comercio’s Health Division. On an organic basis1 total revenues and income from operations increased 12.0% and 12.2%, respectively.
FEMSA Comercio – Retail Division total revenues grew 15.6% and income from operations increased 27.8%, each as compared to the first quarter of 2015, reflecting new store openings and robust 8.8% growth in same-store sales for OXXO.
FEMSA Comercio – Health Division total revenues amounted to Ps. 9.512 billion compared to Ps. 988 million in the first quarter of 2015 and income from operations increased from Ps. 42 million in the first quarter of 2015 to Ps. 249 million in the same period of 2016, reflecting the integration of Socofar and Farmacon.
FEMSA Comercio – Fuel Division total revenues amounted to Ps. 6.078 billion compared to Ps. 1.659 billion in the one-month period of March 2015; income from operations amounted to Ps. 29 million compared to Ps. 30 million in the one-month period of March 2015.
Coca-Cola FEMSA total revenues increased 7.9% and income from operations grew 9.0% compared to the first quarter of 2015, reflecting volume growth in Mexico and a solid average price per unit case increase in most of the territories, despite adverse foreign exchange pressures across key markets.
Carlos Salazar Lomelín, FEMSA’s CEO, commented: “We started the year on a solid note. FEMSA Comercio as a whole, including its three divisions and recently acquired operations, increased its revenues by 58.8 percent versus the first quarter of last year, and we are investing and adding talent to enable further growth. At its Retail Division, we continued to see strong comparable growth and profitability gains at OXXO, supported by our in-store initiatives and execution as well as by a robust macroeconomic backdrop in Mexico, while taking advantage of positive calendar shifts around the Easter holidays and the leap year. Our drugstore operations, now presented separately as the Health Division, include the results of Socofar and are also performing strongly, while allowing us to grow our store base and to invest in the integration of a single operating platform in Mexico. For its part, the Fuel Division is facing some temporary headwinds driven by a national price reduction and by our sustained rapid expansion strategy, both of which put short-term pressure on margins, but as we increase our scale over time we should be in a position to drive profits. At Coca-Cola FEMSA we achieved robust revenue growth in Mexico as well as market share and profitability gains in several key markets, even in the face of sustained macroeconomic and foreign exchange pressure, which makes us optimistic about the outlook for the business.
Beyond our operations, we keep working hard to position ourselves to continue taking advantage of our balance sheet flexibility as we pursue the many strategic opportunities ahead.”
FEMSA is a leading company that participates in the beverage industry through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world; and in the beer industry, through its ownership of the second largest equity stake in Heineken, one of the world`s leading brewers with operations in over 70 countries. In the retail industry it participates with FEMSA Comercio, operating various small-format store chains including OXXO. Additionally, through FEMSA Strategic Businesses, it provides logistics, point-of-sale refrigeration solutions and plastics solutions to FEMSA`s business units and third-party clients.