Mexico City February 25, 2015, Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOFL, NYSE: KOF) (“Coca-Cola FEMSA” or the “Company”), the largest franchise bottler in the world, announces results for the fourth quarter of 2014:
Given current operating and macroeconomic conditions in Venezuela, Coca-Cola FEMSA decided to use the previously denominated SICAD II exchange rate of 50 bolivars per US dollar to translate this operation’s fourth quarter and full year 2014 results into our reporting currency, the Mexican peso. Consequently, Venezuela’s contribution to our consolidated results reduced importantly and now represents 7% of volumes and 6% of both revenues and operative cash flow. Government authorities have clearly stated that the applicable exchange rate for the majority of the total imports of the country including food, medicines and other basic goods such as raw materials, will continue to be the 6.30 bolivars per U.S. dollar rate. Coca-Cola FEMSA continues to have access to this rate for raw material purchases. Coca-Cola FEMSA remains committed to the market and we will continue producing, selling and distributing the products that our Venezuelan consumers enjoy on a daily basis.
Message from the Chief Executive Officer
“In 2014, each of our operations performed positively, maximizing the full potential of our business and delivering comparable, currency neutral revenue growth of 25% and a margin expansion of 170 basis points at the consolidated level. In Mexico, our impeccable market execution and competitive portfolio strategy compensated for the effects of a large excise tax-related price increase designed to pass along this cost to the consumer. In Brazil, we advanced our affordable packaging strategy, enabling us to offer a very compelling value proposition—driving volume growth in a tough economic and consumer environment. Notably, on top of our successful integration of Spaipa and Fluminense, we started production at our new Itabirito plant and opened a new mega-distribution center in São Paulo, unlocking enormous potential to satisfy current and future demand, while positioning Coca-Cola FEMSA as a benchmark in the Brazilian Coca-Cola system. Together with our partner The Coca-Cola Company, we continued our successful acceleration plan in Colombia and expanded it to Central America, implementing a winning strategy in countries with low per capita consumption. In Argentina and Venezuela, we operated and thrived in complex environments to deliver solid bottom-line results for the year. In the Philippines, we demonstrated the effectiveness of our strategy as we continued to implement portfolio, route-to-market, and supply chain initiatives with positive results. Overall, our actions and our innovative and robust portfolio allowed us to generate a substantial amount of transactions with our consumers, successfully overcoming major challenges for the year, including beverage taxes in Mexico, a general economic slowdown in many countries, and a volatile currency environment across our operations.
Today, Coca-Cola FEMSA is evolving to capture the next wave of growth. We ignited an organizational transformation to create a leaner, more agile, and efficient company, while focusing on our core strategic capabilities through centers of excellence in the areas of commercial, supply chain, and IT innovation. Despite the challenges that we face going forward, we are confident that each of our operations will continue delivering solid results, enabling us to create sustained economic, social, and environmental value for all of our stakeholders,” said John Santa Maria Otazua, Chief Executive Officer of the Company.
Stock listing information
Mexican Stock Exchange, Ticker: KOFL | NYSE (ADR), Ticker: KOF | Ratio of KOF L to KOF = 10:1
Coca-Cola FEMSA, S.A.B. de C.V. produces and distributes Coca-Cola, Fanta, Sprite, Del Valle, and other trademark beverages of The Coca-Cola Company in Mexico (a substantial part of central Mexico, including Mexico City, as well as southeast and northeast Mexico), Guatemala (Guatemala City and surrounding areas), Nicaragua (nationwide), Costa Rica (nationwide), Panama (nationwide), Colombia (most of the country), Venezuela (nationwide), Brazil (greater São Paulo, Campiñas, Santos, the state of Mato Grosso do Sul, the state of Paraná, part of the state of Goias, part of the state of Rio de Janeiro and part of the state of Minas Gerais), Argentina (federal capital of Buenos Aires and surrounding areas) and Philippines (nationwide), along with bottled water, juices, teas, isotonics, beer, and other beverages in some of these territories. The Company has 64 bottling facilities and serves more than 351 million consumers through more than 2,800,000 retailers with more than 120,000 employees worldwide.