Mexico City, April 24, 2024, Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOFUBL, 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 first quarter of 2024.
FIRST QUARTER HIGHLIGHTS
- Volume growth 7.3%
- Revenue growth 11.2%
- Operating income growth 11.6%
- Majority net income growth 27.8%
- Earnings per share1 were Ps. 0.30 (Earnings per unit were Ps. 2.38 and per ADS were Ps. 23.83)
- Successfully launched version 4.0 of Juntos+ app in Mexico, reaching more than 214K active monthly users
Ian Craig, Coca-Cola FEMSA’s CEO, commented:
“As we reflect on a positive first quarter, I am encouraged by the progress we are making across our strategic priorities. We continue implementing a sustainable growth model, building on the positive momentum of our core business. To this end, we posted solid volumes in key markets such as Mexico, Brazil, Colombia, Guatemala, and our Central America South territories, supporting our top-line and operating income to achieve double-digit growth.
Additionally, we continue laying the foundation to take Juntos+ to the next level with advanced artificial intelligence capabilities. During the quarter, we successfully launched Juntos+ version 4.0 in Mexico, which includes new features and an improved user experience, enabling us to serve our customers more effectively. Moreover, we continue fostering a customer-centric culture within our organization with the deployment of our KOF Principles.
All this would not be possible without the dedication and talent of our teams across our operations, and our shared commitment to creating long-term sustainable value for all of our stakeholders. As we progress throughout the year, we will continue focusing on these three drivers: build on the growth momentum of our core business, take Juntos+ to the next level, and foster a customer-centric and psychologically safe culture.”
RECENT DEVELOPMENTS
- On March 19, 2024, Coca-Cola FEMSA held its Annual Ordinary General Shareholders’ Meeting, during which its shareholders approved among other things, the Company’s consolidated financial statements for the year ended December 31, 2023, the annual report presented by the Board of Directors, the declaration and payment of dividends corresponding to the fiscal year 2023, and the appointment or reelection of the members of the Board of Directors, the Planning and Finance, Audit and Corporate Practices Committees for 2024. The shareholders’ meeting approved the payment of a cash dividend in the amount of Ps. 6.08 per KOF UBL unit (Ps. 0.76 per share) to be paid in four equal installments of Ps. 1.52 per KOF UBL unit (Ps. 0.19 per share) on April 16, July 16, October 15, and December 9, 2024, for all outstanding shares on the payment date.
- Coca-Cola FEMSA released its 2023 integrated report entitled, “Future-Ready – Driving Growth,” the annual report on Form 20-F filing to the U.S. Securities and Exchange Commission, and the annual report filing to the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores). These three reports are available on the Investor Relations section of Coca-Cola FEMSA´s website at www.coca-colafemsa.com
- On April 16, 2024, Coca-Cola FEMSA paid the first installment of the ordinary dividend approved for Ps. 0.19 per share, for a total cash distribution of Ps. 3,193.26 million.
CONSOLIDATED FIRST QUARTER RESULTS
Volume increased 7.3% to 1,008.6 million unit cases, driven by volume growth in most of our territories, including a strong performance in Mexico, Brazil, Colombia, Guatemala, and our Central America South territories, partially offset by a decrease in Argentina, Panama, and Uruguay.
Total revenues increased 11.2% to Ps. 63,803 million. This increase was driven mainly by solid volume growth, partially offset by unfavorable currency translation effects of most of our operating currencies into Mexican Pesos. Excluding currency translation effects, total revenues increased 17.7%.
Gross profit increased 11.7% to Ps. 28,428 million, and gross margin increased 20 basis points to 44.6%. This expansion was driven mainly by the operating leverage resulting from our top-line growth, and the appreciation of most of our operating currencies as applied to our U.S. dollar-denominated raw material costs. These effects were partially offset by higher sweetener costs across our territories and the depreciation of the Argentine Peso as compared to the same period of the previous year. Excluding currency translation effects, gross profit increased 18.5%.
Operating income increased 11.6% to Ps. 8,617 million, and operating margin remained flat at 13.5%. Operating income was driven mainly by gross profit growth and expense efficiencies. These effects were partially offset by increases in operating expenses such as labor, freight, and maintenance. In addition, our comparison base included a larger non-cash operating foreign exchange gain in Mexico, as a result of the appreciation of the Mexican Peso in the same period of the previous year. Excluding currency translation effects, operating income increased 18.9%.
Comprehensive financing result recorded an expense of Ps. 1,188 million, compared to an expense of Ps. 1,399 million in the previous year. This decrease was driven mainly by a foreign exchange gain of Ps. 26 million as compared to a loss of Ps. 640 million during the same period of the previous year. This loss was driven as our net cash exposure in U.S. dollars was negatively impacted by the quarterly appreciation of the Mexican Peso and the Brazilian Real.
In addition, we recognized a lower interest expense of Ps. 1,797 million as compared to an expense of Ps. 1,913 million in the same period of the previous year, mainly as a result of (i) a lower interest expense related to the maturity of a Mexican Peso denominated bond, and (ii) a decrease in interest rates in Brazil.
These effects were partially offset by a lower interest income of Ps. 623 million as compared to Ps. 1,042 million during the same period of the previous year, mainly as a result of a decrease in interest rates in Brazil and Mexico.
Additionally, we recorded a loss in financial instruments of Ps. 46 million as compared to a gain of Ps. 53 million in the same period of the previous year.
Finally, we recorded a lower gain in monetary positions in inflationary subsidiaries of Ps. 7 million, as compared to a gain of Ps. 60 million during the same period of the previous year.
Income tax as a percentage of income before taxes was 30.2% as compared to 32.4% during the same period of the previous year. The decrease was driven mainly by the recognition of certain non-taxable tax credits.
Net income attributable to equity holders of the company was Ps. 5,006 million as compared to Ps. 3,916 million during the same period of the previous year. This increase was driven mainly by operating income growth, coupled with a decrease in our comprehensive financing result. Earnings per share were Ps. 0.30 (Earnings per unit were Ps. 2.38 and per ADS were Ps. 23.83.).
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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 to a population of more than 272 million. With over 104 thousand employees, the Company markets and sells approximately 4 billion unit cases through more than 2.1 million points of sale a year. Operating 56 manufacturing plants and 252 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 MILA Pacific Alliance Index, FTSE4Good Emerging Index, and the S&P/BMV Total Mexico ESG Index, 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.
ADDITIONAL INFORMATION
All of the financial information presented in this report was prepared under International Financial Reporting Standards (IFRS).
This news release may contain forward-looking statements concerning Coca-Cola FEMSA’s future performance, which should be considered as good faith estimates by Coca-Cola FEMSA. These forward-looking statements reflect management’s expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, many of which are outside Coca-Cola FEMSA’s control, which could materially impact the Company’s actual performance. References herein to “US$” are to United States dollars. This news release contains translations of certain Mexican peso amounts into U.S. dollars for the convenience of the reader. These translations should not be construed as representations that Mexican peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated.
