Monterrey, Mexico, March 1, 2021 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) (NYSE: FMX; BMV: FEMSAUBD) announced today its operational and financial results for the fourth quarter and full year of 2020. Eduardo Padilla, FEMSA’s CEO, commented: “We ended the year on a solid note, still facing important challenges but outperforming our own expectations for the fourth quarter. For some of our operations like OXXO and OXXO Gas, a new wave of COVID cases and virus variants brought more stringent operating restrictions and again hampered customer mobility, while other business units continued to have good momentum, such as our Health Division led by favorable dynamics in Chile and Mexico. For its part, Coca-Cola FEMSA managed to deliver double-digit growth in operating income in a challenging environment. Looking back at 2020, my main takeaway without question is the remarkable effort that was made by every one of our colleagues at FEMSA, to adapt and succeed against such a complex backdrop during this strange, unique year. Our people demonstrated resilience, passion, agility, innovation, and grit. Once again, my most sincere appreciation goes out to them. As we look ahead we see that short-term uncertainty levels remain high, but we anticipate an eventual recovery to take hold on the back of broad vaccination efforts and a pandemic that gradually cedes ground to normalcy as the year advances. We are again planning for growth across all our business units, optimistic about their long-term potential, and leveraging the strengths we all found in 2020 in ourselves and more importantly, in our organization.”
Total revenues decreased 1.5% in 4Q20 compared to 4Q19, reflecting the impact of the COVID-19 pandemic across most of our business units. On an organic basis,1 total revenues decreased 5.3%.
Gross profit remained flat. Gross margin expanded 60 basis points, mainly driven by expansion at Coca-Cola FEMSA and FEMSA Comercio’s Proximity and Fuel Divisions, partially offset by a contraction at FEMSA Comercio’s Health Division.
Income from operations decreased 3.5%. On an organic basis,1 income from operations decreased 3.8%. Consolidated operating margin decreased 20 basis points to 10.1% of total revenues, reflecting a margin contraction at FEMSA Comercio’s Proximity Division driven by operating deleverage as a result of the effects of the COVID-19 pandemic, partially offset by a margin expansion at Coca-Cola FEMSA and FEMSA Comercio’s Health and Fuel Divisions.
Income tax was Ps. 3,154 million in 4Q20.
Net consolidated income decreased 88.0% to Ps. 730 million, reflecting: i) lower income from operations; ii) a negative impact due to FEMSA’s participation in Heineken results; iii) a non-cash foreign exchange loss related to FEMSA’s U.S. dollardenominated cash position as impacted by the appreciation of the Mexican peso; and iv) higher interest expense.
Net majority loss was Ps. 0.35 per FEMSA Unit2 and US$0.17 per FEMSA ADS.
Capital expenditures amounted to Ps. 6,377 million, reflecting reduced investments at most of our business units.
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 FEMSA Comercio, comprising a Proximity Division operating OXXO, a small-format store chain, a Health Division, which includes drugstores and related activities, and a Fuel Division, which operates the OXXO GAS chain of retail service stations. In the beverage industry, it participates through Coca-Cola FEMSA, a public bottler of Coca-Cola products; and in the beer industry, as a shareholder of HEINEKEN, a brewer with operations in over 70 countries. Additionally, through its Strategic Businesses unit, it provides logistics, point-of-sale refrigeration solutions and plastics solutions to FEMSA’s business units and third-party clients. FEMSA also participates in the specialized distribution industry in the United States. Through its business units, FEMSA has more than 320,000 employees in 13 countries. FEMSA is a member of the Dow Jones Sustainability MILA Pacific Alliance, the FTSE4Good Emerging Index and the Mexican Stock Exchange Sustainability Index, among other indexes that evaluate its sustainability performance.