Monterrey, Mexico, July 25, 2019 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) (NYSE: FMX; BMV: FEMSAUBD) announced today its operational and financial results for the second quarter of 2019.
- 9.4% revenue growth (6.7% on an organic basis) at FEMSA Consolidated
- 180 basis point gross margin expansion at FEMSA Comercio’s Proximity Division
- 13.9% revenue growth (0.1% on an organic1 basis) at FEMSA Comercio’s Health Division
- 7.8% revenue growth at FEMSA Comercio’s Fuel Division
- 7.6% revenue growth (5.1% on an organic1 basis) at Coca-Cola FEMSA
Eduardo Padilla, FEMSA’s CEO, commented:
“FEMSA delivered solid results in the second quarter, which was an interesting one from a calendar standpoint. We had tailwinds from the Holy Week shift in April, as well as a tough comparison base from last year’s World Cup that began in June. However, a key positive theme across most of our operations was one of strong revenue growth driven by healthy pricing, that in turn allowed us to deliver margin expansion at FEMSA Comercio’s Proximity and Fuel Divisions. At the Health Division, our Mexican operations continued to perform well but were overshadowed by soft results and unfavorable foreign exchange dynamics in Chile, while Colombia continued to expand, and we were happy to close the acquisition of GPF in Ecuador during the quarter. For its part, Coca-Cola FEMSA also achieved strong top-line dynamics in most of its markets, which flowed all the way down the income statement.”
Total revenues increased 9.4% in 2Q19 compared to 2Q18, reflecting growth across all business units. On an organic basis,2 total revenues grew 6.7%.
Gross profit grew 9.7%. Gross margin expanded 10 basis points, mainly driven by strong expansion at FEMSA Comercio’s Proximity and Fuel Divisions, partially offset by a contraction at Coca-Cola FEMSA and FEMSA Comercio’s Health Division.
Income from operations increased 8.3%. On an organic basis, income from operations increased 6.6%. Consolidated operating margin decreased 10 basis points to 9.3% of total revenues, reflecting margin contraction at Coca-Cola FEMSA and FEMSA Comercio’s Health Division. These were largely offset by margin expansion at FEMSA Comercio’s Proximity and Fuel Divisions.
Income tax was Ps. 2,174 million in 2Q19.
Net consolidated income decreased 26.0% to Ps. 7,747 million, as the increase in our Income from operations described above did not fully offset a non-cash foreign exchange loss related to FEMSA’s U.S. dollar-denominated cash position as impacted by the appreciation of the Mexican peso.
Net majority income was Ps. 1.58 per FEMSA Unit3 and US$0.82 per FEMSA ADS.
Capital expenditures amounted to Ps. 6,130 million, reflecting higher investments at most of our business units.
Our Second Quarter 2019 Conference Call will be held on: Friday, July 26, 2019, 9:30 AM Eastern Time (8:30 AM Mexico City Time). To participate in the conference call, please dial: Domestic US: (866) 548 4713; International: +1 (323) 794 2093; Conference Id: 3218306. The conference call will be webcast live through streaming audio. For details please visit www.femsa.com/investor.