SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2017
FOMENTO ECONÓMICO MEXICANO, S.A.B. DE
C.V.
(Exact name of Registrant as specified in its
charter)
Mexican Economic Development, Inc.
(Translation of Registrant’s name into
English)
United Mexican States
(Jurisdiction of incorporation or organization)
General Anaya No. 601 Pte.
Colonia Bella Vista
Monterrey, Nuevo León 64410
México
(Address of principal executive offices)
Indicate by check mark whether the registrant
files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form
20-F
x
Form 40-F
¨
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
_______
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
_______
Indicate by check mark whether by furnishing
the information contained in this
Form, the registrant is also thereby furnishing
the information to the
Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes
¨
No
x
If "Yes" is marked, indicate below
the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-_____________
FEMSA
Announces Third Quarter 2017 Results
Monterrey, Mexico, October 26, 2017 —
Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) (NYSE: FMX; BMV: FEMSAUBD) announced today its operational
and financial results for the third quarter of 2017.
FINANCIAL
HIGHLIGHTS:
|
·
|
14.3% revenue growth (5.4% on an organic
1
basis) at FEMSA Consolidated
|
|
·
|
11.9% revenue growth at FEMSA Comercio’s Retail Division
|
|
·
|
5.3% income from operations growth at FEMSA Comercio’s Health Division
|
|
·
|
16.2% same-station sales growth at FEMSA Comercio’s Fuel Division
|
|
·
|
16.6% revenue growth (-1.8% on an organic
1
basis) at Coca-Cola FEMSA
|
FINANCIAL SUMMARY FOR THE THIRD QUARTER AND
FIRST NINE MONTHS OF 2017
Change vs. same period of last year
|
|
Revenues
|
|
|
Gross Profit
|
|
|
Income
from Operations
|
|
|
Same-Store Sales
|
|
|
|
3Q17
|
|
|
YTD17
|
|
|
3Q17
|
|
|
YTD17
|
|
|
3Q17
|
|
|
YTD17
|
|
|
3Q17
|
|
|
YTD17
|
|
FEMSA CONSOLIDATED
|
|
|
14.3
|
%
|
|
|
20.9
|
%
|
|
|
13.3
|
%
|
|
|
18.9
|
%
|
|
|
0.9
|
%
|
|
|
8.0
|
%
|
|
|
|
|
|
|
|
|
FEMSA COMERCIO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Division
|
|
|
11.9
|
%
|
|
|
13.3
|
%
|
|
|
13.8
|
%
|
|
|
15.7
|
%
|
|
|
6.6
|
%
|
|
|
9.0
|
%
|
|
|
4.9
|
%
|
|
|
7.0
|
%
|
Health Division
|
|
|
1.8
|
%
|
|
|
12.0
|
%
|
|
|
5.2
|
%
|
|
|
13.6
|
%
|
|
|
5.3
|
%
|
|
|
2.4
|
%
|
|
|
0.2
|
%
|
|
|
8.6
|
%
|
Fuel Division
|
|
|
27.5
|
%
|
|
|
37.2
|
%
|
|
|
19.2
|
%
|
|
|
20.6
|
%
|
|
|
3.3
|
%
|
|
|
-11.7
|
%
|
|
|
16.2
|
%
|
|
|
21.0
|
%
|
COCA-COLA FEMSA
|
|
|
16.6
|
%
|
|
|
25.6
|
%
|
|
|
16.6
|
%
|
|
|
22.9
|
%
|
|
|
-2.8
|
%
|
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
Carlos Salazar Lomelín, FEMSA’s
CEO, commented: “The third quarter was atypical, and one that unfortunately we will remember for the number and severity
of natural disasters that took place during the month of September. In particular, the earthquakes in Mexico caused tremendous
human loss. Much less importantly, but of relevance to our results, these disasters had a moderate impact on our numbers.
However, our business units made progress across
markets. FEMSA Comercio’s Retail Division added new stores at an accelerated pace, and same-store-sales continued to grow
well in spite of some quake-related temporary store closures, while we saw stable results at our Health Division. And at the Fuel
Division, we saw sequential improvement in profitability as the industry continues to evolve. Meanwhile, at Coca-Cola FEMSA our
Mexico operations had to contend with flooding and business disruptions linked to the natural disasters, while we continued to
see challenging conditions in some of our South American markets but early signs of stabilization in Brazil, and encouraging trends
in Argentina.
Finally, as you know we successfully monetized
a small portion of our Heineken shares, strengthening our balance sheet and improving our financial flexibility in an efficient
manner. All told, it was an eventful third quarter that sets us up for a solid close of the year and, more importantly, for sustained
growth in 2018 and beyond.”
1
Excludes the effects of significant mergers and acquisitions in the last twelve months. Includes the results of Coca-Cola FEMSA
Philippines Inc., as if consolidation had taken place in 2016.
Follow tomorrow’s event live
9:00 AM ET
Earnings Conference Call
|
|
1
|
Quarterly results
Results are compared
to the same period of previous year
femsa
consolidated
FEMSA CONSOLIDATED
3Q17 Financial Summary
(Millions of Ps.)
|
|
3Q17
|
|
|
3Q16
|
|
|
Var.
|
|
Revenues
|
|
|
114,648
|
|
|
|
100,325
|
|
|
|
14.3
|
%
|
Income from Operations
|
|
|
9,385
|
|
|
|
9,303
|
|
|
|
0.9
|
%
|
Income from Operations Margin (%)
|
|
|
8.2
|
|
|
|
9.3
|
|
|
|
-110 bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
14,813
|
|
|
|
13,340
|
|
|
|
11.0
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
12.9
|
|
|
|
13.3
|
|
|
|
-40 bps
|
|
Net Income
|
|
|
33,715
|
|
|
|
7,930
|
|
|
|
N.S.
|
|
CONSOLIDATED BALANCE SHEET
(Millions of Ps.)
As of September 30, 2017
|
|
Ps.
|
|
|
US$
3
|
|
Cash Balance
|
|
|
101,139
|
|
|
|
5,573
|
|
Short-term debt
|
|
|
6,737
|
|
|
|
371
|
|
Long-term debt
|
|
|
113,121
|
|
|
|
6,233
|
|
Net debt
4
|
|
|
18,719
|
|
|
|
1,031
|
|
Total revenues
increased 14.3%, reflecting growth across all operations including the consolidation of the Philippines and the integration of
Vonpar at Coca-Cola FEMSA. On an organic basis,
1
total
revenues grew 5.4%.
Gross profit
grew 13.3%. Gross margin contracted 30 basis points, mostly driven by the growth of lower margin businesses at FEMSA Comercio.
Income from operations
increased 0.9%. On an organic basis,
1
income from operations
decreased 5.9% reflecting a decline at Coca-Cola FEMSA. Consolidated operating margin decreased 110 basis points to 8.2% of total
revenues, mostly driven by a margin contraction at Coca-Cola FEMSA. This decrease also reflects higher freight and labor expenses,
and the consolidation of Coca-Cola FEMSA’s results in the Philippines, as well as a margin contraction at FEMSA Comercio’s
Retail Division.
Our
effective
income tax rate
was 16.8% in 3Q17 compared to 21.9% in 3Q16.
Net consolidated
income
increased significantly to reach Ps. 33,715 million, mainly driven by the extraordinary non-operating income
generated from the sale of 5.24% of the combined interest in the Heineken Group completed on September 18, 2017. This increase
also reflected a gain in Other financial income driven by Coca-Cola FEMSA, and a foreign exchange gain related to a substantially
higher U.S. dollar-denominated cash position at FEMSA coming from the sale of the Heineken shares, as impacted by the depreciation
of the Mexican peso during the final days of the quarter.
Net
majority income
was Ps. 9.07 per FEMSA Unit
2
and
US$ 5.00 per FEMSA ADS.
Capital expenditures
amounted to Ps. 6,139 million, reflecting higher investments in Coca-Cola FEMSA.
1
Excludes the effects of significant mergers and acquisitions in the last twelve months. Includes the results of Coca-Cola FEMSA
Philippines Inc., as if consolidation had taken place in 2016.
2
FEMSA Units consist of FEMSA BD Units and FEMSA B Units. Each FEMSA BD Unit is comprised of one Series B Share, two Series D-B
Shares and two Series D-L Shares. Each FEMSA B Unit is comprised of five Series B Shares. The number of FEMSA Units outstanding
as of September 30, 2017 was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided
by 5.
3
The exchange rate published by
the Federal Reserve Bank of New York for September 29, 2017 was 18.1480 MXN per USD.
4
Includes the effect of derivative
financial instruments on long-term debt.
October 26, 2017
|
|
2
|
FEMSA
COMERCIO – RETAIL DIVISION
FEMSA COMERCIO – RETAIL DIVISION
3Q17 Financial Summary
(Millions of Ps. except same-stores sales)
|
|
3Q17
|
|
|
3Q16
|
|
|
Var.
|
|
Same-store sales (thousands of Ps.)
|
|
|
788
|
|
|
|
751
|
|
|
|
4.9
|
%
|
Revenues
|
|
|
40,292
|
|
|
|
35,997
|
|
|
|
11.9
|
%
|
Income from Operations
|
|
|
3,267
|
|
|
|
3,064
|
|
|
|
6.6
|
%
|
Income from Operations Margin (%)
|
|
|
8.1
|
|
|
|
8.5
|
|
|
|
-40
bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
4,446
|
|
|
|
4,084
|
|
|
|
8.9
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
11.0
|
|
|
|
11.3
|
|
|
|
-30
bps
|
|
Total revenues
increased 11.9% reflecting the opening of 225 net new OXXO stores in the quarter to reach 1,304 total net new store openings for
the last twelve months. As of September 30, 2017, FEMSA Comercio’s Retail Division had a total of 15,999 OXXO stores. OXXO’s
same-store sales increased an average of 4.9%, reflecting resilient consumer trends that were partially offset by the headwinds
from natural disasters that affected central and southern Mexico during September. This performance was driven by 3.8% growth in
average customer ticket and an increase of 1.1% in store traffic.
Gross profit
increased by 13.8%, resulting in a gross margin expansion of 60 basis points to 37.4% of total revenues, on top of a challenging
comparison base in 2016. This expansion mainly reflects: i) sustained growth of the services category, including income from financial
services; ii) increased and more efficient promotional programs with our key supplier partners; and iii) healthy trends in our
commercial income activity.
Income from
operations
increased 6.6%. Operating expenses increased 15.9% to Ps. 11,788 million, above revenues, mainly reflecting:
i) our continuing initiative to improve the compensation structure of key in-store personnel; ii) a sustained increase in electricity
tariffs year over year; and iii) higher secure cash transportation costs driven by increased volume and higher fuel prices. Operating
margin contracted 40 basis points to 8.1% of total revenues.
October 26, 2017
|
|
3
|
FEMSA
COMERCIO – HEALTH DIVISION
FEMSA COMERCIO – HEALTH DIVISION
3Q17 Financial Summary
(Millions of Ps. except same-stores sales)
|
|
3Q17
|
|
|
3Q16
|
|
|
Var.
|
|
Same-store sales (thousands of Ps.)
|
|
|
1,482
|
|
|
|
1,479
|
|
|
|
0.2
|
%
|
Revenues
|
|
|
11,395
|
|
|
|
11,194
|
|
|
|
1.8
|
%
|
Income from Operations
|
|
|
417
|
|
|
|
396
|
|
|
|
5.3
|
%
|
Income from Operations Margin (%)
|
|
|
3.7
|
|
|
|
3.5
|
|
|
|
20
bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
636
|
|
|
|
625
|
|
|
|
1.8
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
5.6
|
|
|
|
5.6
|
|
|
|
0
bps
|
|
Total revenues
increased 1.8%, mainly driven by growth in our South American operations. As of September 30, 2017, FEMSA Comercio’s Health
Division had a total of 2,178 points of sale across our territories, reflecting the addition of 24 net new stores in the quarter
to reach 77 total net new store openings for the last twelve months. Same-store sales for drugstores increased an average of 0.2%,
reflecting soft growth trends in the Chilean market as well as in Mexico, where we continued to experience pressure in oil-dependent
southeastern markets as well as increased competitive dynamics overall.
Gross profit
increased by 5.2%, resulting in a gross margin expansion of 90 basis points to 29.9% of total revenues, reflecting positive sales
mix as well as a more effective collaboration and execution with our key supplier partners.
Income from
operations
grew 5.3%. Operating expenses increased 5.1% to Ps. 2,992 million, ahead of revenues. Operating margin increased
20 basis points to 3.7% of total revenues. In Mexico we again saw pressure on profitability as we continue advancing the integration
of a single operating platform, building our distribution capabilities and increased services at our drugstores such as on-site
doctors and home delivery in Mexico.
October 26, 2017
|
|
4
|
FEMSA
COMERCIO – FUEL DIVISION
FEMSA COMERCIO – FUEL DIVISION
3Q17 Financial Summary
(Millions of Ps. except same-stations sales)
|
|
3Q17
|
|
|
3Q16
|
|
|
Var.
|
|
Same-station sales (thousands of Ps.)
|
|
|
8,520
|
|
|
|
7,335
|
|
|
|
16.2
|
%
|
Revenues
|
|
|
9,624
|
|
|
|
7,548
|
|
|
|
27.5
|
%
|
Income from Operations
|
|
|
94
|
|
|
|
91
|
|
|
|
3.3
|
%
|
Income from Operations Margin (%)
|
|
|
1.0
|
|
|
|
1.2
|
|
|
|
-20
bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
130
|
|
|
|
115
|
|
|
|
13.0
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
1.4
|
|
|
|
1.5
|
|
|
|
-10
bps
|
|
Total revenues
increased 27.5% reflecting a national price increase established at the beginning of the year as well as moderate growth in the
number of stations. As of September 30, 2017, FEMSA Comercio’s Fuel Division had a total of 397 OXXO GAS service stations.
Same-station sales increased an average of 16.2%, as the average price per liter increased by 18.2% reflecting the national price
increase mentioned above, while the average volume decreased by 1.7% mainly from consumer reaction to the higher prices.
Gross profit
increased by 19.2%, below revenues, resulting in a gross margin contraction of 50 basis points to 7.5% of total revenues as a consequence
of the aforementioned national price increase.
Income from
operations
increased 3.3%. Operating expenses increased 22.1% to Ps. 625 million, below revenues. Operating margin contracted
20 basis points to 1.0% of total revenues, reflecting the gross margin contraction described in the previous paragraph, partially
offset by expense containment and certain operating efficiencies at our service stations.
October 26, 2017
|
|
5
|
results FOR THE FIRST
NINE MONTHS OF 2017
Results are compared
to the same period of previous year
femsa
consolidated
FEMSA CONSOLIDATED
YTD Financial Summary
(Millions of Ps.)
|
|
YTD17
|
|
|
YTD16
|
|
|
Var.
|
|
Revenues
|
|
|
340,950
|
|
|
|
281,970
|
|
|
|
20.9
|
%
|
Income from Operations
|
|
|
27,580
|
|
|
|
25,548
|
|
|
|
8.0
|
%
|
Income from Operations Margin (%)
|
|
|
8.1
|
|
|
|
9.1
|
|
|
|
-100
bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
43,287
|
|
|
|
36,556
|
|
|
|
18.4
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
12.7
|
|
|
|
13.0
|
|
|
|
-30
bps
|
|
Net Income
|
|
|
45,693
|
|
|
|
18,356
|
|
|
|
148.9
|
%
|
Total revenues
increased 20.9%, mainly driven by the consolidation of Coca-Cola FEMSA Philippines and Vonpar into Coca-Cola FEMSA’s results
and by solid growth across all operations. On an organic basis,
1
total revenues increased 11.0%.
Gross profit
increased 18.9%. Gross margin decreased 60 basis points to 36.1% of total revenues, reflecting a contraction in Coca-Cola FEMSA’s
gross margin as a result of higher sugar costs in Mexico, as well as the incorporation and growth of lower margin businesses at
FEMSA Comercio.
Income from
operations
increased 8.0%. On an organic basis,
1
income from operations decreased 1.8%. Our consolidated
operating margin decreased 100 basis points to 8.1% of total revenues, reflecting: i) the incorporation of structurally lower-margin
results from Coca-Cola FEMSA Philippines, ii) an operating margin contraction across several businesses, and iii) the integration
and faster growth of FEMSA Comercio’s three divisions, whose lower margins tend to compress FEMSA’s consolidated margins
over time.
Net consolidated
income
increased 148.9% to Ps. 45,693 million, reflecting growth in our income from operations and higher non-operating
income resulting from the sale of 5.24% of the combined interest in the Heineken Group completed on September 18, 2017, which more
than offset higher financing expenses.
Net
majority income
per FEMSA Unit
2
was Ps.
11.00 (US$ 6.06 per ADS).
Capital expenditures
amounted to Ps. 17,183 million, reflecting higher investments in most of our business units.
1
Excludes the effects of significant mergers and acquisitions in the last twelve months. Includes the results of Coca-Cola FEMSA
Philippines Inc., as if consolidation had taken place in 2016.
2
FEMSA Units consist of FEMSA BD Units and FEMSA B Units. Each FEMSA BD Unit is comprised of one Series B Share, two Series D-B
Shares and two Series D-L Shares. Each FEMSA B Unit is comprised of five Series B Shares. The number of FEMSA Units outstanding
as of September 30, 2017 was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided
by 5.
October 26, 2017
|
|
6
|
femsa
comercio – retail division
FEMSA COMERCIO – RETAIL DIVISION
YTD Financial Summary
(Millions of Ps. except same-stores sales)
|
|
YTD17
|
|
|
YTD16
|
|
|
Var.
|
|
Same-store sales (thousands of Ps.)
|
|
|
764
|
|
|
|
714
|
|
|
|
7.0
|
%
|
Revenues
|
|
|
114,022
|
|
|
|
100,646
|
|
|
|
13.3
|
%
|
Income from Operations
|
|
|
8,064
|
|
|
|
7,401
|
|
|
|
9.0
|
%
|
Income from Operations Margin (%)
|
|
|
7.1
|
|
|
|
7.4
|
|
|
|
-30
bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
11,533
|
|
|
|
10,346
|
|
|
|
11.5
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
10.1
|
|
|
|
10.3
|
|
|
|
-20
bps
|
|
Total revenues
increased 13.3%. OXXO’s same-store sales increased an average of 7.0%, driven by a 4.2% increase in average customer ticket
and a 2.6% increase in store traffic.
Gross profit
increased by 15.7%. Gross margin expanded by 80 basis points to 36.7% of total revenues.
Income from
operations
increased 9.0% resulting in an operating margin of 7.1%, which represents a contraction of 30 basis points,
largely reflecting our continuing initiative to improve the compensation structure of key in-store personnel and a sustained increase
in electricity tariffs.
femsa
comercio – health division
FEMSA COMERCIO – HEALTH DIVISION
YTD Financial Summary
(Millions of Ps. except same-stores sales)
|
|
YTD17
|
|
|
YTD16
|
|
|
Var.
|
|
Same-store sales (thousands of Ps.)
|
|
|
1,551
|
|
|
|
1,428
|
|
|
|
8.6
|
%
|
Revenues
|
|
|
34,850
|
|
|
|
31,119
|
|
|
|
12.0
|
%
|
Income from Operations
|
|
|
996
|
|
|
|
973
|
|
|
|
2.4
|
%
|
Income from Operations Margin (%)
|
|
|
2.9
|
|
|
|
3.1
|
|
|
|
-20
bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
1,694
|
|
|
|
1,613
|
|
|
|
5.0
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
4.9
|
|
|
|
5.2
|
|
|
|
-30
bps
|
|
Total revenues
increased by 12.0%. Same-store sales for drugstores increased by an average of 8.6%.
Gross profit
increased by 13.6%. Gross margin expanded by 40 basis points to 29.2% of total revenues.
Income from
operations
increased 2.4% resulting in an operating margin of 2.9%, which represents a contraction of 20 basis points,
reflecting: i) higher expenses in Mexico stemming from the ongoing integration of a shared business platform, ii) improvements
to the incentive and compensation structure for our in-store personnel, and iii) increased services at our drugstores in Mexico.
October 26, 2017
|
|
7
|
FEMSA
COMERCIO – FUEL DIVISION
FEMSA COMERCIO – FUEL DIVISION
YTD Financial Summary
(Millions of Ps. except same-stations sales)
|
|
YTD17
|
|
|
YTD16
|
|
|
Var.
|
|
Same-station sales (thousands of Ps.)
|
|
|
8,437
|
|
|
|
6,972
|
|
|
|
21.0
|
%
|
Revenues
|
|
|
28,211
|
|
|
|
20,562
|
|
|
|
37.2
|
%
|
Income from Operations
|
|
|
158
|
|
|
|
179
|
|
|
|
-11.7
|
%
|
Income from Operations Margin (%)
|
|
|
0.6
|
|
|
|
0.9
|
|
|
|
-30
bps
|
|
Operative Cash Flow (EBITDA)
|
|
|
259
|
|
|
|
250
|
|
|
|
3.6
|
%
|
Operative Cash Flow (EBITDA) Margin (%)
|
|
|
0.9
|
|
|
|
1.2
|
|
|
|
-30
bps
|
|
Total revenues
increased 37.2%. Same-station sales increased an average of 21.0%, driven by a 21.6% increase in the average price per liter and
a slight decrease of 0.5% in the average volume.
Gross profit
increased by 20.6%. Gross margin contracted by 100 basis points to 6.9% of total revenues, reflecting the fact that gross profit
per liter remained flat in peso terms compared to the same period in 2016.
Income from
operations
decreased 11.7%, resulting in an operating margin contraction of 30 basis points, as expense containment
and operational efficiencies only partially offset the contraction in gross margin described above.
coca-cola
femsa
Coca-Cola FEMSA’s financial results
and discussion thereof are incorporated by reference from Coca-Cola FEMSA’s press release, which is attached to this press
release or may be accessed by visiting
www.coca-colafemsa.com
.
recent developments
FEMSA
COMPLETES SHARE OFFERING OF A 5.24% COMBINED INTEREST IN THE HEINEKEN GROUP
On September 18, 2017, FEMSA announced the
sale of 5.24% of the combined interest in the Heineken Group (the “Equity Offering”), comprising a combination of existing
issued ordinary shares of both Heineken N.V. and Heineken Holding N.V.
The Equity
Offering consisted of:
|
·
|
22,485,000 Shares in Heineken N.V. representing 3.90% of the issued share capital at a price of
€84.50 per share, raising gross proceeds of approximately 1.9 billion Euros.
|
|
·
|
7,700,000 Shares in Heineken Holding N.V. representing 2.67% of the issued share capital at a price
of €78.00 per share, raising gross proceeds of approximately 600 million Euros.
|
Following the completion of the Equity Offering,
FEMSA’s shareholding in Heineken N.V. decreased from 12.53% to 8.63% and in Heineken Holding N.V. from 14.94% to 12.26%,
for an overall decrease of FEMSA’s economic interest in the Heineken Group from 20.00% to 14.76%. L'Arche Green N.V., the
entity through which the Heineken family exercises control of Heineken Holding N.V., acquired 2,564,102 shares of Heineken Holding
N.V. in the Equity Offering.
After the Equity Offering, FEMSA, under the
terms of the Corporate Governance Agreement dated April 30, 2010, retained its existing governance rights, including one seat on
the Board of Directors of Heineken Holding N.V. and two seats on the Supervisory Board of Heineken N.V.
October 26, 2017
|
|
8
|
FEMSA continues to be a significant shareholder
in the Heineken Group and a long term supporter of the Heineken Group's strategy.
CONFERENCE CALL INFORMATION:
|
Our Third Quarter 2017 Conference
Call will be held on: Friday, October 27, 2017, 9:00 AM Eastern Time (8:00 AM Mexico City Time). To participate in the
conference call, please dial: Domestic US: (888) 602 6363; International: (719) 457 2735; Conference Id: 9150893. The
conference call will be webcast live through streaming audio. For details please visit
www.femsa.com/investor
.
|
If
you are unable to participate live, the conference call audio will be available on
http://ir.FEMSA.com/results.cfm
.
|
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 by volume; 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 through FEMSA Comercio, comprising a Retail Division
operating various small-format store chains including OXXO, a Fuel Division, operating the OXXO GAS chain of retail service stations,
and a Health Division, which includes drugstores and related operations. 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.
The translations of Mexican pesos into US dollars
are included solely for the convenience of the reader, using the noon buying rate for Mexican pesos as published by the Federal
Reserve Bank of New York on September 29, 2017, which was 18.1480 Mexican pesos per US dollar.
|
FORWARD-LOOKING STATEMENTS
This report may contain certain forward-looking
statements concerning our future performance that should be considered as good faith estimates made by us. These forward-looking
statements reflect management’s expectations and are based upon currently available data. Actual results are subject to future
events and uncertainties, which could materially impact our actual performance.
Seven pages of tables and Coca-Cola FEMSA’s
press release to follow
October 26, 2017
|
|
9
|
FEMSA
Consolidated Income Statement
Millions of Pesos
|
|
For the third quarter of:
|
|
|
For the nine months of:
|
|
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
% Org
(A)
|
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
% Org
(A)
|
|
Total revenues
|
|
|
114,648
|
|
|
|
100.0
|
|
|
|
100,325
|
|
|
|
100.0
|
|
|
|
14.3
|
|
|
|
5.4
|
|
|
|
340,950
|
|
|
|
100.0
|
|
|
|
281,970
|
|
|
|
100.0
|
|
|
|
20.9
|
|
|
|
11.0
|
|
Cost of sales
|
|
|
73,130
|
|
|
|
63.8
|
|
|
|
63,694
|
|
|
|
63.5
|
|
|
|
14.8
|
|
|
|
|
|
|
|
217,818
|
|
|
|
63.9
|
|
|
|
178,384
|
|
|
|
63.3
|
|
|
|
22.1
|
|
|
|
|
|
Gross profit
|
|
|
41,518
|
|
|
|
36.2
|
|
|
|
36,631
|
|
|
|
36.5
|
|
|
|
13.3
|
|
|
|
|
|
|
|
123,132
|
|
|
|
36.1
|
|
|
|
103,586
|
|
|
|
36.7
|
|
|
|
18.9
|
|
|
|
|
|
Administrative expenses
|
|
|
3,895
|
|
|
|
3.4
|
|
|
|
3,316
|
|
|
|
3.3
|
|
|
|
17.5
|
|
|
|
|
|
|
|
12,151
|
|
|
|
3.6
|
|
|
|
10,475
|
|
|
|
3.7
|
|
|
|
16.0
|
|
|
|
|
|
Selling expenses
|
|
|
27,920
|
|
|
|
24.3
|
|
|
|
23,883
|
|
|
|
23.8
|
|
|
|
16.9
|
|
|
|
|
|
|
|
83,247
|
|
|
|
24.4
|
|
|
|
67,541
|
|
|
|
23.9
|
|
|
|
23.3
|
|
|
|
|
|
Other operating expenses (income),
net
(1)
|
|
|
318
|
|
|
|
0.3
|
|
|
|
129
|
|
|
|
0.1
|
|
|
|
146.5
|
|
|
|
|
|
|
|
154
|
|
|
|
-
|
|
|
|
22
|
|
|
|
-
|
|
|
|
N.S.
|
|
|
|
|
|
Income from operations
(2)
|
|
|
9,385
|
|
|
|
8.2
|
|
|
|
9,303
|
|
|
|
9.3
|
|
|
|
0.9
|
|
|
|
(5.9
|
)
|
|
|
27,580
|
|
|
|
8.1
|
|
|
|
25,548
|
|
|
|
9.1
|
|
|
|
8.0
|
|
|
|
(1.8
|
)
|
Other non-operating expenses (income)
|
|
|
(28,161
|
)
|
|
|
|
|
|
|
965
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
(27,793
|
)
|
|
|
|
|
|
|
2,261
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
Interest expense
|
|
|
2,734
|
|
|
|
|
|
|
|
2,506
|
|
|
|
|
|
|
|
9.1
|
|
|
|
|
|
|
|
8,544
|
|
|
|
|
|
|
|
6,958
|
|
|
|
|
|
|
|
22.8
|
|
|
|
|
|
Interest income
|
|
|
443
|
|
|
|
|
|
|
|
329
|
|
|
|
|
|
|
|
34.7
|
|
|
|
|
|
|
|
1,083
|
|
|
|
|
|
|
|
821
|
|
|
|
|
|
|
|
31.9
|
|
|
|
|
|
Interest expense, net
|
|
|
2,291
|
|
|
|
|
|
|
|
2,177
|
|
|
|
|
|
|
|
5.2
|
|
|
|
|
|
|
|
7,461
|
|
|
|
|
|
|
|
6,137
|
|
|
|
|
|
|
|
21.6
|
|
|
|
|
|
Foreign exchange loss (gain)
|
|
|
(771
|
)
|
|
|
|
|
|
|
(147
|
)
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
1,409
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
Other financial
expenses (income), net.
|
|
|
(1,535
|
)
|
|
|
|
|
|
|
(378
|
)
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
(2,819
|
)
|
|
|
|
|
|
|
(1,159
|
)
|
|
|
|
|
|
|
143.2
|
|
|
|
|
|
Financing expenses,
net
|
|
|
(15
|
)
|
|
|
|
|
|
|
1,652
|
|
|
|
|
|
|
|
(100.9
|
)
|
|
|
|
|
|
|
6,051
|
|
|
|
|
|
|
|
4,978
|
|
|
|
|
|
|
|
21.6
|
|
|
|
|
|
Income before income tax and participation in associates results
|
|
|
37,561
|
|
|
|
|
|
|
|
6,686
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
49,322
|
|
|
|
|
|
|
|
18,309
|
|
|
|
|
|
|
|
169.4
|
|
|
|
|
|
Income tax
|
|
|
6,302
|
|
|
|
|
|
|
|
1,468
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
9,197
|
|
|
|
|
|
|
|
4,827
|
|
|
|
|
|
|
|
90.5
|
|
|
|
|
|
Participation in associates results
(3)
|
|
|
2,456
|
|
|
|
|
|
|
|
2,712
|
|
|
|
|
|
|
|
(9.4
|
)
|
|
|
|
|
|
|
5,568
|
|
|
|
|
|
|
|
4,874
|
|
|
|
|
|
|
|
14.2
|
|
|
|
|
|
Net consolidated income
|
|
|
33,715
|
|
|
|
|
|
|
|
7,930
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
45,693
|
|
|
|
|
|
|
|
18,356
|
|
|
|
|
|
|
|
148.9
|
|
|
|
|
|
Net majority income
|
|
|
32,449
|
|
|
|
|
|
|
|
6,691
|
|
|
|
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
39,368
|
|
|
|
|
|
|
|
14,477
|
|
|
|
|
|
|
|
171.9
|
|
|
|
|
|
Net minority income
|
|
|
1,266
|
|
|
|
|
|
|
|
1,239
|
|
|
|
|
|
|
|
2.2
|
|
|
|
|
|
|
|
6,325
|
|
|
|
|
|
|
|
3,879
|
|
|
|
|
|
|
|
63.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operative Cash Flow & CAPEX
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
% Org
(A)
|
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
% Org
(A)
|
|
Income from operations
|
|
|
9,385
|
|
|
|
8.2
|
|
|
|
9,303
|
|
|
|
9.3
|
|
|
|
0.9
|
|
|
|
(5.9
|
)
|
|
|
27,580
|
|
|
|
8.1
|
|
|
|
25,548
|
|
|
|
9.1
|
|
|
|
8.0
|
|
|
|
(1.8
|
)
|
Depreciation
|
|
|
4,148
|
|
|
|
3.6
|
|
|
|
3,074
|
|
|
|
3.1
|
|
|
|
34.9
|
|
|
|
|
|
|
|
11,858
|
|
|
|
3.5
|
|
|
|
8,602
|
|
|
|
3.1
|
|
|
|
37.9
|
|
|
|
|
|
Amortization & other non-cash
charges
|
|
|
1,280
|
|
|
|
1.1
|
|
|
|
963
|
|
|
|
0.9
|
|
|
|
32.9
|
|
|
|
|
|
|
|
3,849
|
|
|
|
1.1
|
|
|
|
2,406
|
|
|
|
0.8
|
|
|
|
60.0
|
|
|
|
|
|
Operative Cash Flow (EBITDA)
|
|
|
14,813
|
|
|
|
12.9
|
|
|
|
13,340
|
|
|
|
13.3
|
|
|
|
11.0
|
|
|
|
1.3
|
|
|
|
43,287
|
|
|
|
12.7
|
|
|
|
36,556
|
|
|
|
13.0
|
|
|
|
18.4
|
|
|
|
6.4
|
|
CAPEX
|
|
|
6,139
|
|
|
|
|
|
|
|
5,704
|
|
|
|
|
|
|
|
7.6
|
|
|
|
|
|
|
|
17,183
|
|
|
|
|
|
|
|
13,320
|
|
|
|
|
|
|
|
29.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios
|
|
2017
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
Var. p.p.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
(4)
|
|
|
1.88
|
|
|
|
|
|
|
|
1.37
|
|
|
|
|
|
|
|
0.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest coverage
(5)
|
|
|
6.47
|
|
|
|
|
|
|
|
6.13
|
|
|
|
|
|
|
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage
(6)
|
|
|
0.81
|
|
|
|
|
|
|
|
0.91
|
|
|
|
|
|
|
|
(0.10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization
(7)
|
|
|
28.11
|
%
|
|
|
|
|
|
|
31.92
|
%
|
|
|
|
|
|
|
(3.81
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
Organic basis (% Org.) Excludes the effects of
significant mergers and acquisitions in the last twelve months. Includes the results of Coca-Cola FEMSA Philippines Inc., as if
consolidation had taken place at the beginning of first quarter 2016.
(1)
Other operating expenses (income), net = other
operating expenses (income) +(-) equity method from operated associates.
(2)
Income from operations = gross profit - administrative
and selling expenses - other operating expenses (income), net.
(3)
Mainly represents the equity method participation
in Heineken´s results, net.
(4)
Total current assets / total current liabilities.
(5)
Income from operations + depreciation + amortization
& other / interest expense, net.
(6)
Total liabilities / total stockholders' equity.
(7)
Total debt / long-term debt + stockholders' equity.
Total debt = short-term bank loans + current maturities of long-term
debt + long-term bank loans.
October 26, 2017
|
|
10
|
FEMSA
Consolidated Balance Sheet
Millions of Pesos
ASSETS
|
|
Sep-17
|
|
|
Dec-16
|
|
|
%
Var.
|
|
Cash and cash equivalents
|
|
|
101,139
|
|
|
|
43,757
|
|
|
|
131.1
|
|
Accounts receivable
|
|
|
24,666
|
|
|
|
26,222
|
|
|
|
(5.9
|
)
|
Inventories
|
|
|
30,751
|
|
|
|
31,932
|
|
|
|
(3.7
|
)
|
Other current assets
|
|
|
18,631
|
|
|
|
16,040
|
|
|
|
16.2
|
|
Total current assets
|
|
|
175,187
|
|
|
|
117,951
|
|
|
|
48.5
|
|
Investments in shares
|
|
|
86,954
|
|
|
|
128,601
|
|
|
|
(32.4
|
)
|
Property, plant and equipment, net
|
|
|
114,256
|
|
|
|
102,223
|
|
|
|
11.8
|
|
Intangible assets
(1)
|
|
|
151,238
|
|
|
|
153,268
|
|
|
|
(1.3
|
)
|
Other assets
|
|
|
39,081
|
|
|
|
43,580
|
|
|
|
(10.3
|
)
|
TOTAL ASSETS
|
|
|
566,716
|
|
|
|
545,623
|
|
|
|
3.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
& STOCKHOLDERS´ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans
|
|
|
2,434
|
|
|
|
1,912
|
|
|
|
27.3
|
|
Current maturities of long-term debt
|
|
|
4,303
|
|
|
|
5,369
|
|
|
|
(19.9
|
)
|
Interest payable
|
|
|
1,562
|
|
|
|
976
|
|
|
|
60.0
|
|
Operating liabilities
|
|
|
84,921
|
|
|
|
78,032
|
|
|
|
8.8
|
|
Total current liabilities
|
|
|
93,220
|
|
|
|
86,289
|
|
|
|
8.0
|
|
Long-term debt
(2)
|
|
|
113,121
|
|
|
|
123,494
|
|
|
|
(8.4
|
)
|
Labor liabilities
|
|
|
5,008
|
|
|
|
4,447
|
|
|
|
12.6
|
|
Other liabilities
|
|
|
42,167
|
|
|
|
45,223
|
|
|
|
(6.8
|
)
|
Total liabilities
|
|
|
253,516
|
|
|
|
259,453
|
|
|
|
(2.3
|
)
|
Total stockholders’ equity
|
|
|
313,200
|
|
|
|
286,170
|
|
|
|
9.4
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
|
|
|
566,716
|
|
|
|
545,623
|
|
|
|
3.9
|
|
|
|
September 30, 2017
|
|
DEBT MIX
(2)
|
|
% of Total
|
|
|
Average Rate
|
|
Denominated in:
|
|
|
|
|
|
|
|
|
Mexican pesos
|
|
|
42.1
|
%
|
|
|
7.9
|
%
|
U.S. Dollars
|
|
|
0.6
|
%
|
|
|
4.5
|
%
|
Euros
|
|
|
16.8
|
%
|
|
|
1.8
|
%
|
Colombian pesos
|
|
|
2.0
|
%
|
|
|
8.3
|
%
|
Argentine pesos
|
|
|
0.1
|
%
|
|
|
22.4
|
%
|
Brazilian reais
|
|
|
34.7
|
%
|
|
|
9.1
|
%
|
Chilean pesos
|
|
|
3.7
|
%
|
|
|
5.8
|
%
|
Total debt
|
|
|
100.0
|
%
|
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
Fixed rate
(2)
|
|
|
77.2
|
%
|
|
|
|
|
Variable rate
(2)
|
|
|
22.8
|
%
|
|
|
|
|
DEBT MATURITY PROFILE
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
2022+
|
|
% of Total Debt
|
|
|
2.8
|
%
|
|
|
13.0
|
%
|
|
|
6.0
|
%
|
|
|
9.0
|
%
|
|
|
5.7
|
%
|
|
|
63.5
|
%
|
(1)
Includes mainly the intangible assets generated
by acquisitions.
(2)
Includes the effect of derivative financial instruments
on long-term debt.
October 26, 2017
|
|
11
|
FEMSA Comercio - Retail Division
Results of Operations
Millions of Pesos
|
|
For the third quarter of:
|
|
|
For the nine months of:
|
|
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
Total revenues
|
|
|
40,292
|
|
|
|
100.0
|
|
|
|
35,997
|
|
|
|
100.0
|
|
|
|
11.9
|
|
|
|
114,022
|
|
|
|
100.0
|
|
|
|
100,646
|
|
|
|
100.0
|
|
|
|
13.3
|
|
Cost of sales
|
|
|
25,237
|
|
|
|
62.6
|
|
|
|
22,764
|
|
|
|
63.2
|
|
|
|
10.9
|
|
|
|
72,171
|
|
|
|
63.3
|
|
|
|
64,473
|
|
|
|
64.1
|
|
|
|
11.9
|
|
Gross profit
|
|
|
15,055
|
|
|
|
37.4
|
|
|
|
13,233
|
|
|
|
36.8
|
|
|
|
13.8
|
|
|
|
41,851
|
|
|
|
36.7
|
|
|
|
36,173
|
|
|
|
35.9
|
|
|
|
15.7
|
|
Administrative expenses
|
|
|
777
|
|
|
|
1.9
|
|
|
|
726
|
|
|
|
2.0
|
|
|
|
7.0
|
|
|
|
2,358
|
|
|
|
2.1
|
|
|
|
2,149
|
|
|
|
2.1
|
|
|
|
9.7
|
|
Selling expenses
|
|
|
10,954
|
|
|
|
27.3
|
|
|
|
9,372
|
|
|
|
26.1
|
|
|
|
16.9
|
|
|
|
31,245
|
|
|
|
27.3
|
|
|
|
26,437
|
|
|
|
26.2
|
|
|
|
18.2
|
|
Other operating expenses (income),
net
|
|
|
57
|
|
|
|
0.1
|
|
|
|
71
|
|
|
|
0.2
|
|
|
|
(19.7
|
)
|
|
|
184
|
|
|
|
0.2
|
|
|
|
186
|
|
|
|
0.2
|
|
|
|
(1.1
|
)
|
Income from operations
|
|
|
3,267
|
|
|
|
8.1
|
|
|
|
3,064
|
|
|
|
8.5
|
|
|
|
6.6
|
|
|
|
8,064
|
|
|
|
7.1
|
|
|
|
7,401
|
|
|
|
7.4
|
|
|
|
9.0
|
|
Depreciation
|
|
|
1,077
|
|
|
|
2.7
|
|
|
|
914
|
|
|
|
2.5
|
|
|
|
17.8
|
|
|
|
3,128
|
|
|
|
2.7
|
|
|
|
2,632
|
|
|
|
2.6
|
|
|
|
18.8
|
|
Amortization & other non-cash
charges
|
|
|
102
|
|
|
|
0.2
|
|
|
|
106
|
|
|
|
0.3
|
|
|
|
(3.8
|
)
|
|
|
341
|
|
|
|
0.3
|
|
|
|
313
|
|
|
|
0.3
|
|
|
|
8.9
|
|
Operative cash flow
|
|
|
4,446
|
|
|
|
11.0
|
|
|
|
4,084
|
|
|
|
11.3
|
|
|
|
8.9
|
|
|
|
11,533
|
|
|
|
10.1
|
|
|
|
10,346
|
|
|
|
10.3
|
|
|
|
11.5
|
|
CAPEX
|
|
|
2,247
|
|
|
|
|
|
|
|
2,232
|
|
|
|
|
|
|
|
0.7
|
|
|
|
5,898
|
|
|
|
|
|
|
|
5,068
|
|
|
|
|
|
|
|
16.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information of OXXO Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,999
|
|
|
|
|
|
|
|
14,695
|
|
|
|
|
|
|
|
8.9
|
|
Net new convenience stores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
vs. Last quarter
|
|
|
225
|
|
|
|
|
|
|
|
234
|
|
|
|
|
|
|
|
(3.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date
|
|
|
774
|
|
|
|
|
|
|
|
634
|
|
|
|
|
|
|
|
22.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last-twelve-months
|
|
|
1,304
|
|
|
|
|
|
|
|
1,154
|
|
|
|
|
|
|
|
13.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store data:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales (thousands of pesos)
|
|
|
787.7
|
|
|
|
|
|
|
|
750.8
|
|
|
|
|
|
|
|
4.9
|
|
|
|
763.6
|
|
|
|
|
|
|
|
713.9
|
|
|
|
|
|
|
|
7.0
|
|
Traffic (thousands of transactions)
|
|
|
23.6
|
|
|
|
|
|
|
|
23.3
|
|
|
|
|
|
|
|
1.1
|
|
|
|
23.2
|
|
|
|
|
|
|
|
22.6
|
|
|
|
|
|
|
|
2.6
|
|
Ticket (pesos)
|
|
|
33.4
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
3.8
|
|
|
|
33.0
|
|
|
|
|
|
|
|
31.6
|
|
|
|
|
|
|
|
4.2
|
|
(1)
Monthly average information per store, considering
same stores with more than twelve months of operations, income from services are included.
October 26, 2017
|
|
12
|
FEMSA Comercio - Health Division
Results of Operations
Millions of Pesos
|
|
For the third quarter of:
|
|
|
For the nine months of:
|
|
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
Total revenues
|
|
|
11,395
|
|
|
|
100.0
|
|
|
|
11,194
|
|
|
|
100.0
|
|
|
|
1.8
|
|
|
|
34,850
|
|
|
|
100.0
|
|
|
|
31,119
|
|
|
|
100.0
|
|
|
|
12.0
|
|
Cost of sales
|
|
|
7,986
|
|
|
|
70.1
|
|
|
|
7,952
|
|
|
|
71.0
|
|
|
|
0.4
|
|
|
|
24,686
|
|
|
|
70.8
|
|
|
|
22,168
|
|
|
|
71.2
|
|
|
|
11.4
|
|
Gross profit
|
|
|
3,409
|
|
|
|
29.9
|
|
|
|
3,242
|
|
|
|
29.0
|
|
|
|
5.2
|
|
|
|
10,164
|
|
|
|
29.2
|
|
|
|
8,951
|
|
|
|
28.8
|
|
|
|
13.6
|
|
Administrative expenses
|
|
|
392
|
|
|
|
3.4
|
|
|
|
527
|
|
|
|
4.7
|
|
|
|
(25.6
|
)
|
|
|
1,226
|
|
|
|
3.5
|
|
|
|
1,288
|
|
|
|
4.1
|
|
|
|
(4.8
|
)
|
Selling expenses
|
|
|
2,560
|
|
|
|
22.4
|
|
|
|
2,310
|
|
|
|
20.7
|
|
|
|
10.8
|
|
|
|
7,878
|
|
|
|
22.6
|
|
|
|
6,675
|
|
|
|
21.6
|
|
|
|
18.0
|
|
Other operating expenses (income),
net
|
|
|
40
|
|
|
|
0.4
|
|
|
|
9
|
|
|
|
0.1
|
|
|
|
N.S.
|
|
|
|
64
|
|
|
|
0.2
|
|
|
|
15
|
|
|
|
-
|
|
|
|
N.S.
|
|
Income from operations
|
|
|
417
|
|
|
|
3.7
|
|
|
|
396
|
|
|
|
3.5
|
|
|
|
5.3
|
|
|
|
996
|
|
|
|
2.9
|
|
|
|
973
|
|
|
|
3.1
|
|
|
|
2.4
|
|
Depreciation
|
|
|
158
|
|
|
|
1.4
|
|
|
|
127
|
|
|
|
1.1
|
|
|
|
24.4
|
|
|
|
470
|
|
|
|
1.3
|
|
|
|
398
|
|
|
|
1.3
|
|
|
|
18.1
|
|
Amortization & other non-cash
charges
|
|
|
61
|
|
|
|
0.5
|
|
|
|
102
|
|
|
|
1.0
|
|
|
|
(40.2
|
)
|
|
|
228
|
|
|
|
0.7
|
|
|
|
242
|
|
|
|
0.8
|
|
|
|
(5.8
|
)
|
Operative cash flow
|
|
|
636
|
|
|
|
5.6
|
|
|
|
625
|
|
|
|
5.6
|
|
|
|
1.8
|
|
|
|
1,694
|
|
|
|
4.9
|
|
|
|
1,613
|
|
|
|
5.2
|
|
|
|
5.0
|
|
CAPEX
|
|
|
155
|
|
|
|
|
|
|
|
187
|
|
|
|
|
|
|
|
(17.1
|
)
|
|
|
527
|
|
|
|
|
|
|
|
255
|
|
|
|
|
|
|
|
106.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information of Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,178
|
|
|
|
|
|
|
|
2,101
|
|
|
|
|
|
|
|
3.7
|
|
Net new stores
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
vs. Last quarter
|
|
|
24
|
|
|
|
|
|
|
|
67
|
|
|
|
|
|
|
|
(64.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date
|
|
|
58
|
|
|
|
|
|
|
|
201
|
|
|
|
|
|
|
|
(71.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last-twelve-months
|
|
|
77
|
|
|
|
|
|
|
|
1,218
|
|
|
|
|
|
|
|
(93.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store data:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales (thousands
of pesos)
|
|
|
1,481.8
|
|
|
|
|
|
|
|
1,478.7
|
|
|
|
|
|
|
|
0.2
|
|
|
|
1,550.6
|
|
|
|
|
|
|
|
1,428.2
|
|
|
|
|
|
|
|
8.6
|
|
(1)
Aquisitions are included.
(2)
Monthly average information per store, considering
same stores with more than twelve months of all the operations of FEMSA Comercio - Health Division.
October 26, 2017
|
|
13
|
FEMSA Comercio - Fuel Division
Results of Operations
Millions of Pesos
|
|
For the third quarter of:
|
|
|
For the nine months of:
|
|
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
|
2017
|
|
|
% of rev.
|
|
|
2016
|
|
|
% of rev.
|
|
|
% Var.
|
|
Total revenues
|
|
|
9,624
|
|
|
|
100.0
|
|
|
|
7,548
|
|
|
|
100.0
|
|
|
|
27.5
|
|
|
|
28,211
|
|
|
|
100.0
|
|
|
|
20,562
|
|
|
|
100.0
|
|
|
|
37.2
|
|
Cost of sales
|
|
|
8,905
|
|
|
|
92.5
|
|
|
|
6,945
|
|
|
|
92.0
|
|
|
|
28.2
|
|
|
|
26,263
|
|
|
|
93.1
|
|
|
|
18,947
|
|
|
|
92.1
|
|
|
|
38.6
|
|
Gross profit
|
|
|
719
|
|
|
|
7.5
|
|
|
|
603
|
|
|
|
8.0
|
|
|
|
19.2
|
|
|
|
1,948
|
|
|
|
6.9
|
|
|
|
1,615
|
|
|
|
7.9
|
|
|
|
20.6
|
|
Administrative expenses
|
|
|
38
|
|
|
|
0.4
|
|
|
|
32
|
|
|
|
0.4
|
|
|
|
18.8
|
|
|
|
113
|
|
|
|
0.4
|
|
|
|
95
|
|
|
|
0.5
|
|
|
|
18.9
|
|
Selling expenses
|
|
|
582
|
|
|
|
6.0
|
|
|
|
480
|
|
|
|
6.4
|
|
|
|
21.3
|
|
|
|
1,666
|
|
|
|
5.9
|
|
|
|
1,340
|
|
|
|
6.5
|
|
|
|
24.3
|
|
Other operating expenses (income),
net
|
|
|
5
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
N.S.
|
|
|
|
11
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
N.S.
|
|
Income from operations
|
|
|
94
|
|
|
|
1.0
|
|
|
|
91
|
|
|
|
1.2
|
|
|
|
3.3
|
|
|
|
158
|
|
|
|
0.6
|
|
|
|
179
|
|
|
|
0.9
|
|
|
|
(11.7
|
)
|
Depreciation
|
|
|
27
|
|
|
|
0.3
|
|
|
|
21
|
|
|
|
0.3
|
|
|
|
28.6
|
|
|
|
76
|
|
|
|
0.3
|
|
|
|
60
|
|
|
|
0.3
|
|
|
|
26.7
|
|
Amortization & other non-cash
charges
|
|
|
9
|
|
|
|
0.1
|
|
|
|
3
|
|
|
|
-
|
|
|
|
N.S.
|
|
|
|
25
|
|
|
|
-
|
|
|
|
11
|
|
|
|
-
|
|
|
|
127.3
|
|
Operative cash flow
|
|
|
130
|
|
|
|
1.4
|
|
|
|
115
|
|
|
|
1.5
|
|
|
|
13.0
|
|
|
|
259
|
|
|
|
0.9
|
|
|
|
250
|
|
|
|
1.2
|
|
|
|
3.6
|
|
CAPEX
|
|
|
72
|
|
|
|
|
|
|
|
86
|
|
|
|
|
|
|
|
(16.3
|
)
|
|
|
151
|
|
|
|
|
|
|
|
180
|
|
|
|
|
|
|
|
(16.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information of OXXO GAS Service Stations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total service stations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
397
|
|
|
|
|
|
|
|
348
|
|
|
|
|
|
|
|
14.1
|
|
Net new service stations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
vs. Last quarter
|
|
|
7
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
(46.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date
|
|
|
15
|
|
|
|
|
|
|
|
41
|
|
|
|
|
|
|
|
(63.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last-twelve-months
|
|
|
49
|
|
|
|
|
|
|
|
75
|
|
|
|
|
|
|
|
(34.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (million of liters) total stations
|
|
|
670
|
|
|
|
|
|
|
|
622
|
|
|
|
|
|
|
|
7.8
|
|
|
|
1,963
|
|
|
|
|
|
|
|
1,740
|
|
|
|
|
|
|
|
12.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-stations data:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales (thousands of pesos)
|
|
|
8,519.8
|
|
|
|
|
|
|
|
7,334.9
|
|
|
|
|
|
|
|
16.2
|
|
|
|
8,436.5
|
|
|
|
|
|
|
|
6,972.1
|
|
|
|
|
|
|
|
21.0
|
|
Volume (thousands of liters)
|
|
|
594.1
|
|
|
|
|
|
|
|
604.3
|
|
|
|
|
|
|
|
(1.7
|
)
|
|
|
586.9
|
|
|
|
|
|
|
|
589.9
|
|
|
|
|
|
|
|
(0.5
|
)
|
Average price per liter
|
|
|
14.3
|
|
|
|
|
|
|
|
12.1
|
|
|
|
|
|
|
|
18.2
|
|
|
|
14.4
|
|
|
|
|
|
|
|
11.8
|
|
|
|
|
|
|
|
21.6
|
|
Ticket (pesos)
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Monthly average information per station, considering
same stations with more than twelve months of operations.
October 26, 2017
|
|
14
|
Coca-Cola FEMSA
Results of Operations
Millions of Pesos
|
|
For
the third quarter of:
|
|
|
For
the nine months of:
|
|
|
|
2017
|
|
|
%
of rev.
|
|
|
2016
|
|
|
%
of rev.
|
|
|
%
Var.
|
|
|
%
Org.
(A)
|
|
|
2017
|
|
|
%
of rev.
|
|
|
2016
|
|
|
%
of rev.
|
|
|
%
Var.
|
|
|
%
Org.
(A)
|
|
Total revenues
|
|
|
49,363
|
|
|
|
100.0
|
|
|
|
42,351
|
|
|
|
100.0
|
|
|
|
16.6
|
|
|
|
(1.8
|
)
|
|
|
151,459
|
|
|
|
100.0
|
|
|
|
120,628
|
|
|
|
100.0
|
|
|
|
25.6
|
|
|
|
5.1
|
|
Cost of sales
|
|
|
27,347
|
|
|
|
55.4
|
|
|
|
23,474
|
|
|
|
55.4
|
|
|
|
16.5
|
|
|
|
|
|
|
|
84,266
|
|
|
|
55.6
|
|
|
|
65,950
|
|
|
|
54.7
|
|
|
|
27.8
|
|
|
|
|
|
Gross profit
|
|
|
22,016
|
|
|
|
44.6
|
|
|
|
18,877
|
|
|
|
44.6
|
|
|
|
16.6
|
|
|
|
|
|
|
|
67,193
|
|
|
|
44.4
|
|
|
|
54,678
|
|
|
|
45.3
|
|
|
|
22.9
|
|
|
|
|
|
Administrative expenses
|
|
|
2,412
|
|
|
|
4.9
|
|
|
|
1,434
|
|
|
|
3.4
|
|
|
|
68.2
|
|
|
|
|
|
|
|
6,991
|
|
|
|
4.6
|
|
|
|
5,144
|
|
|
|
4.3
|
|
|
|
35.9
|
|
|
|
|
|
Selling expenses
|
|
|
13,852
|
|
|
|
28.1
|
|
|
|
11,761
|
|
|
|
27.7
|
|
|
|
17.8
|
|
|
|
|
|
|
|
42,482
|
|
|
|
28.2
|
|
|
|
33,147
|
|
|
|
27.5
|
|
|
|
28.2
|
|
|
|
|
|
Other operating expenses (income),
net
|
|
|
266
|
|
|
|
0.5
|
|
|
|
38
|
|
|
|
0.1
|
|
|
|
N.S.
|
|
|
|
|
|
|
|
(25
|
)
|
|
|
-
|
|
|
|
(189
|
)
|
|
|
(0.2
|
)
|
|
|
(86.8
|
)
|
|
|
|
|
Income from operations
|
|
|
5,487
|
|
|
|
11.1
|
|
|
|
5,644
|
|
|
|
13.3
|
|
|
|
(2.8
|
)
|
|
|
(12.6
|
)
|
|
|
17,744
|
|
|
|
11.7
|
|
|
|
16,576
|
|
|
|
13.7
|
|
|
|
7.0
|
|
|
|
(6.5
|
)
|
Depreciation
|
|
|
2,788
|
|
|
|
5.6
|
|
|
|
1,853
|
|
|
|
4.4
|
|
|
|
50.5
|
|
|
|
|
|
|
|
7,892
|
|
|
|
5.2
|
|
|
|
5,231
|
|
|
|
4.3
|
|
|
|
50.9
|
|
|
|
|
|
Amortization & other non-cash
charges
|
|
|
1,028
|
|
|
|
2.1
|
|
|
|
683
|
|
|
|
1.6
|
|
|
|
50.5
|
|
|
|
|
|
|
|
3,002
|
|
|
|
2.0
|
|
|
|
1,666
|
|
|
|
1.5
|
|
|
|
80.2
|
|
|
|
|
|
Operative cash flow
|
|
|
9,303
|
|
|
|
18.8
|
|
|
|
8,180
|
|
|
|
19.3
|
|
|
|
13.7
|
|
|
|
(0.9
|
)
|
|
|
28,638
|
|
|
|
18.9
|
|
|
|
23,473
|
|
|
|
19.5
|
|
|
|
22.0
|
|
|
|
4.7
|
|
CAPEX
|
|
|
3,292
|
|
|
|
|
|
|
|
2,742
|
|
|
|
|
|
|
|
20.1
|
|
|
|
|
|
|
|
9,642
|
|
|
|
|
|
|
|
6,893
|
|
|
|
|
|
|
|
39.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales volumes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
unit cases)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico and Central America
|
|
|
506.1
|
|
|
|
52.7
|
|
|
|
521.9
|
|
|
|
63.3
|
|
|
|
(3.0
|
)
|
|
|
|
|
|
|
1,522.8
|
|
|
|
53.7
|
|
|
|
1,523.4
|
|
|
|
61.4
|
|
|
|
(0.0
|
)
|
|
|
|
|
South America
|
|
|
133.3
|
|
|
|
13.9
|
|
|
|
155.6
|
|
|
|
18.9
|
|
|
|
(14.3
|
)
|
|
|
|
|
|
|
383.7
|
|
|
|
13.5
|
|
|
|
498.8
|
|
|
|
20.0
|
|
|
|
(23.1
|
)
|
|
|
|
|
Brazil
|
|
|
181.9
|
|
|
|
18.9
|
|
|
|
146.9
|
|
|
|
17.8
|
|
|
|
23.8
|
|
|
|
|
|
|
|
538.4
|
|
|
|
19.0
|
|
|
|
461.5
|
|
|
|
18.6
|
|
|
|
16.6
|
|
|
|
|
|
Philippines
|
|
|
139.5
|
|
|
|
14.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
N/A
|
|
|
|
|
|
|
|
392.3
|
|
|
|
13.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
N/A
|
|
|
|
|
|
Total
|
|
|
960.9
|
|
|
|
100.0
|
|
|
|
824.5
|
|
|
|
100.0
|
|
|
|
16.6
|
|
|
|
|
|
|
|
2,837.3
|
|
|
|
100.0
|
|
|
|
2,483.8
|
|
|
|
100.0
|
|
|
|
14.2
|
|
|
|
|
|
(A)
Organic basis (% Org.) Excludes the effects of
significant mergers and acquisitions in the last twelve months. Includes the results of Coca-Cola FEMSA Philippines
Inc., as if consolidation had taken place in 2016.
October 26, 2017
|
|
15
|
FEMSA
Macroeconomic Information
|
|
Inflation
|
|
|
End-of-period Exchange Rates
|
|
|
|
3Q 2017
|
|
|
LTM
(1)
Sep-17
|
|
|
Sep-17
|
|
|
Dec-16
|
|
|
|
|
|
|
|
|
|
Per USD
|
|
|
Per MXN
|
|
|
Per USD
|
|
|
Per MXN
|
|
Mexico
|
|
|
1.62
|
%
|
|
|
6.55
|
%
|
|
|
18.20
|
|
|
|
1.0000
|
|
|
|
20.66
|
|
|
|
1.0000
|
|
Colombia
|
|
|
0.12
|
%
|
|
|
4.35
|
%
|
|
|
2,936.67
|
|
|
|
0.0062
|
|
|
|
3,000.71
|
|
|
|
0.0069
|
|
Venezuela
|
|
|
153.43
|
%
|
|
|
1158.69
|
%
|
|
|
3,345.00
|
|
|
|
0.0054
|
|
|
|
673.76
|
|
|
|
0.0307
|
|
Brazil
|
|
|
0.08
|
%
|
|
|
2.20
|
%
|
|
|
3.17
|
|
|
|
5.7443
|
|
|
|
3.26
|
|
|
|
6.3404
|
|
Argentina
|
|
|
4.86
|
%
|
|
|
25.12
|
%
|
|
|
17.31
|
|
|
|
1.0513
|
|
|
|
15.89
|
|
|
|
1.3004
|
|
Chile
|
|
|
0.13
|
%
|
|
|
2.01
|
%
|
|
|
636.85
|
|
|
|
0.0286
|
|
|
|
667.29
|
|
|
|
0.0310
|
|
Philippines
|
|
|
0.88
|
%
|
|
|
2.05
|
%
|
|
|
51.07
|
|
|
|
0.3563
|
|
|
|
49.81
|
|
|
|
0.4148
|
|
Euro Zone
|
|
|
0.18
|
%
|
|
|
1.68
|
%
|
|
|
0.85
|
|
|
|
21.4521
|
|
|
|
0.95
|
|
|
|
21.7741
|
|
(1)
LTM = Last twelve months.
October 26, 2017
|
|
16
|
2017 THIRD QUARTER AND FIRST NINE MONTHS RESULTS
Mexico City, October 25, 2017, 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 by sales volume, announces results for the third quarter of 2017.
Operational and Financial Highlights
|
|
·
|
Revenues grew 16.6%, while comparable
revenues grew 3.9% for the third quarter of 2017.
|
|
·
|
Operating income decreased 2.8%, while
comparable operating income grew 3.3% during the third quarter of 2017.
|
|
·
|
Operating cash flow increased 13.7%,
while comparable operating cash flow grew 5.2% for the third quarter of 2017.
|
|
·
|
Majority net income increased 39.2%
in the third quarter of 2017.
|
|
Third Quarter
|
|
Year to Date
|
|
as Reported
|
|
Comparable
(1)
|
|
as Reported
|
|
Comparable
(1)
|
|
2017
|
D
%
|
|
D
%
|
|
2017
|
D
%
|
|
D
%
|
Total revenues
|
49,363
|
16.6%
|
|
3.9%
|
|
151,459
|
25.6%
|
|
2.8%
|
Gross profit
|
22,016
|
16.6%
|
|
6.6%
|
|
67,193
|
22.9%
|
|
5.0%
|
Operating income
|
5,487
|
-2.8%
|
|
3.3%
|
|
17,744
|
7.0%
|
|
3.5%
|
Operating cash flow
(2)
|
9,303
|
13.7%
|
|
5.2%
|
|
28,638
|
22.0%
|
|
3.5%
|
Net income attributable to equity holders of the company
|
3,152
|
39.2%
|
|
|
|
10,233
|
55.5%
|
|
|
Earnings per share
(3)
|
1.50
|
|
|
|
|
4.90
|
|
|
|
Expressed in millions of Mexican pesos.
(1)
Comparable means, with respect
to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements (iii) the results of hyperinflationary economies in both periods,
and (iv) includes the results of Coca-Cola FEMSA Philippines Inc., as if the consolidation had taken place at the beginning of
first quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy.
(2)
Operating cash flow = operating
income + depreciation + amortization & other operative non-cash charges.
(3)
3Q EPS calculated with 2,100.8
million shares outstanding as of September 30 2017. YTD EPS calculated with 2,088.2 million shares, the weighted average of the
Company’s outstanding shares over the period.
Message from the Chief Executive Officer
|
“As we strengthen our focus on improving
our operational efficiency, rolling out our portfolio initiatives, and effectively executing at the point of sale across our markets,
our revenues and operating cash flow for the third quarter grew 16.6% and 13.7%, respectively, resulting in majority net income
growth of 39.2%.
Underscoring our company’s ability
to adapt to diverse conditions, our Mexico and Central America division continues implementing our transformational initiatives,
which helped mitigate margin pressures and the effects that hurricanes and earthquakes had on the consumer. Importantly, our operations’
effort to maintain our levels of excellence—while supporting our affected communities—merits our recognition. In South
America, our affordability initiatives are showing encouraging results in Argentina and Brazil’s recovering consumer environments.
In addition, our Brazilian operation continues to improve margins, driven by favorable raw material costs and efficiencies generated
by our transformational initiatives. Finally, our operation in the Philippines continues to build on the growth achieved last year,
delivering comparable volume and operating cash flow growth.
As we approach the final stretch of the
year, we remain focused on our strategic framework to continue strengthening our portfolio, digitizing our operational capabilities,
and creating a strong unified corporate culture to continue delivering value for all our stakeholders,” said John Santa Maria
Otazua, Chief Executive Officer of the Company.
Press Release 3Q 2017
|
Page
17
|
October 25, 2017
|
|
Consolidated results for the third quarter
|
Comparable means, with
respect to a year-over-year comparison, the change in a given measure excluding the effects of: (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements, (iii) the results of hyperinflationary economies in both periods;
and (iv) includes the results of Coca-Cola FEMSA Philippines, Inc., as if the consolidation had taken place at the beginning of
first quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy. In our “as reported”
figures, our Venezuelan operation’s results were translated into Mexican pesos using the DICOM exchange rate published on
September 30, 2017, of 3,345.00 bolivars per US dollar.
Comparable
figures:
Revenues:
Comparable
total revenues grew 3.9% in the third quarter of 2017 as compared to the same period of 2016, driven by average price per unit
case growth across most of our operations and volume growth in the Philippines and Argentina, partially offset by volume declines
in the rest of our operations.
Transactions:
Comparable
number of transactions declined 0.7%. Our water category grew 5.0% mainly driven by the positive performance of the Philippines,
Argentina and Central America. Our sparkling category had a slight contraction of 0.8% driven by growth in Argentina and the Philippines
offset by declines in the rest of our operations. Finally, our still beverage category declined 4.2% where growth in Brazil, Argentina
and the Philippines was mainly offset by a decline in Colombia.
Volume:
Comparable sales
volume declined 1.6% in the third quarter of 2017 as compared to the same period in 2016. Our personal water portfolio’s
volume grew 2.7% due to a positive performance in most of our operations. Our bulk water portfolio’s volume remained flat,
driven by growth in most of our operations which was offset by a decline in Mexico. Our sparkling beverage portfolio’s volume
contracted 1.7% despite growth obtained in the Philippines and Argentina. Finally, our still beverage category’s volume decreased
5.9% where growth in Brazil and Argentina was mainly offset by a decline in Colombia.
Gross profit:
Comparable
gross profit grew 6.6%. Our pricing initiatives, coupled with lower PET and sweetener prices in most of our operations, offset
higher sweetener and concentrate prices in Mexico and the depreciation in the average exchange rate of the Argentine Peso, the
Philippine Peso, and the Colombian Peso as applied to our U.S. dollar-denominated raw material costs.
Operating Income:
Comparable
operating income grew 3.3% for the third quarter of 2017 as compared to the same period of 2016.
Operating cash flow:
Comparable operating cash flow increased 5.2% in the third quarter of 2017.
As reported figures:
Revenues:
Total revenues
increased 16.6% to Ps. 49,363 million in the third quarter of 2017, including the acquisition of Vonpar in Brazil and the consolidation
of our operation in the Philippines, combined with price increases aligned with or above inflation in key territories such as Mexico,
Brazil and Colombia, supported by volume growth in Argentina, the Philippines, and improvements in Brazil; all despite the negative
translation effect resulting from the depreciation of all our operating currencies as compared to the Mexican Peso.
Transactions:
Reported
total number of transactions increased 32.1% to 6,485.1 million in the third quarter of 2017 as compared to the same period in
2016.
Volume:
Reported total
sales volume increased 16.6% to 960.9 million unit cases in the third quarter of 2017 as compared to the same period in 2016.
Gross profit:
Gross profit
grew 16.6% to Ps. 22,016 million, and gross margin remained flat at 44.6%.
(Continued on next page)
Press Release 3Q 2017
|
Page
18
|
October 25, 2017
|
|
Equity method:
T
he
reported share of the profits of associates and joint ventures recorded a loss of Ps. 6 million in the third quarter of 2017, compared
to a gain of Ps. 49 million recorded in the third quarter of 2016. This is mainly due to (i) the consolidation of Coca-Cola FEMSA
Philippines, Inc., which is not included in the equity method as of February 2017 (ii) gains in Jugos Del Valle and our joint ventures
in Brazil; and (iii) a loss in our dairy joint venture in Panama.
Operating Income:
Operating
income declined 2.8% to Ps. 5,487 million, and operating margin contracted 220 basis points to 11.1%, mainly driven by higher labor
costs, higher freight costs, and higher diesel and gasoline prices. Due to the consolidation of Coca-Cola FEMSA Philippines in
February 2017, the results of this operation are not included in our share of the profit of associates for 2017, as compared to
2016. These effects were partially offset by an operative foreign exchange gain.
Other non-operative expenses,
net:
Other non-operative expenses, net, recorded an expense of Ps. 597 million, compared to Ps. 806 million during the third
quarter of 2016, due mainly to negative currency fluctuation effects in our Venezuela operation.
Comprehensive financing result:
Comprehensive financing result in the third quarter of 2017 recorded an expense of Ps. 295 million, compared to an expense of Ps.
1,860 million in the same period of 2016.
During the third quarter of
2017, we recorded an interest expense of Ps. 2,170 million, compared to Ps. 1,925 million in the third quarter of 2016. This increase
was driven by: (i) the interest rate increase from swapping U.S. dollar-denominated debt to Brazilian Real and Mexican Peso-denominated
debt, as part of our strategy to eliminate our U.S. dollar net debt exposure; (ii) additional interest expense related to our refinancing
strategy, as we issued new debt in Mexican Pesos at the end of June and made a partial early redemption of U.S. dollar-denominated
notes in August; (iii) additional debt related to the acquisition of Vonpar; and (iv) the interest rate increase in Mexico.
These effects were partially
offset by the decrease of interest rates in Brazil, the average exchange rate depreciation of the Brazilian Real compared to the
Mexican Peso as applied to the existing Brazilian Real-denominated interest expense, and the reduction of debt in Argentina.
In addition, for the third quarter,
we recorded a foreign exchange gain of Ps. 97 million as compared to a loss of Ps. 432 million in 2016, which was generated as
a result of the quarterly depreciation of the Mexican peso as applied to our U.S. dollar-denominated net debt position in 2016.
During the third quarter of
2017, we recorded a gain on monetary position in inflationary subsidiaries of Ps. 1,301 million as compared to Ps. 478 million
during the same period of 2016, related to higher inflation during the period in our operation in Venezuela.
Market value on financial instruments
recorded a gain of Ps. 203 million as compared to a loss of Ps. 134 million in the third quarter of 2016 due to the recent decrease
of interest rates in Brazil as applied to our floating rate cross-currency swaps.
Income tax:
During the
third quarter of 2017, reported income tax as a percentage of income before taxes was 28.0%, compared to 23.2% in the same period
of 2016. The increase of the tax rate in 2017 resulted from (i) a higher effective tax rate in Colombia; and (ii) a higher effective
tax rate in the Philippines. These effects were not fully offset by tax efficiencies and ongoing efforts to reduce non-deductibles
across our operations.
Net income:
Reported
consolidated net controlling interest income increased 39.2% to Ps. 3,152 million in the third quarter of 2017, resulting in reported
earnings per share (EPS) of Ps. 1.50 (Ps. 15.01 per ADS).
Operating cash flow:
Operating cash flow grew 13.7% to Ps. 9,303 million, and operating cash flow margin contracted 50 basis points to 18.8%.
Press Release 3Q 2017
|
Page
19
|
October 25, 2017
|
|
As of September 30, 2017, we
had a cash balance of Ps. 20,206 million, including US$209 million denominated in U.S. dollars, an increase of Ps. 9,730 million
as compared to December 31, 2016. This difference was mainly driven by the cash obtained from the issuance of shares to former
Vonpar’s shareholders, the consolidation of the Philippines, and the cash flow generation across our territories.
As of September 30, 2017, total
short-term debt was Ps. 2,155 million, and long-term debt was Ps. 76,510 million. Total debt decreased by Ps. 10,244 million, compared
to year-end 2016, mainly due to the positive translation effect resulting from the appreciation of the end-of-period exchange rate
of the Mexican Peso as applied to our U.S. dollar-denominated debt position. Net debt decreased by Ps. 19,974 million compared
to year-end 2016.
The weighted average cost of
debt for the quarter, including the effect of debt swapped to Brazilian Reals and Mexican Pesos at a floating and fixed rates,
was 8.72%, a reduction as compared to the second quarter 2017 due mainly to the reduction of interest rates in Brazil. The following
charts set forth the Company’s debt profile by currency and interest rate type and by maturity date as of September 30, 2017.
Currency
|
% Total Debt
(2)
|
% Interest Rate Floating
(2)(3)
|
Mexican Pesos
|
44.8%
|
3.2%
|
U.S. Dollars
|
0.8%
|
0.0%
|
Colombian Pesos
|
2.9%
|
72.8%
|
Brazilian Reals
|
51.3%
|
84.7%
|
Argentine Pesos
|
0.1%
|
0.0%
|
Debt Maturity Profile
Maturity Date
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022+
|
% of Total Debt
|
0.2%
|
14.3%
|
8.5%
|
12.0%
|
8.1%
|
57.0%
|
|
(1)
|
See page 18 for detailed information.
|
|
(2)
|
After giving effect to cross-currency swaps.
|
|
(3)
|
Calculated by weighting each year’s outstanding debt balance mix.
|
Selected Financial Ratios
|
|
LTM 2017
|
FY 2016
|
D
%
|
Net debt including effect of hedges
(1)(3)
|
65,742
|
80,043
|
-17.9%
|
Net debt including effect of hedges / Operating cash flow
(1)(3)
|
1.76
|
2.26
|
|
Operating cash flow/ Interest expense, net
(1)
|
4.63
|
5.25
|
|
Capitalization
(2)
|
37.1%
|
41.3%
|
|
|
(1)
|
Net debt = total debt - cash
|
|
(2)
|
Total debt / (long-term debt + shareholders' equity)
|
|
(3)
|
After giving effect to cross-currency swaps.
|
Press Release 3Q 2017
|
Page
20
|
October 25, 2017
|
|
Mexico & Central America Division
|
(Mexico, Guatemala, Nicaragua, Costa Rica
and Panama)
Comparable means, with
respect to a year-over-year comparison, the change in a given measure excluding the effects of: (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements, (iii) the results of hyperinflationary economies in both periods;
and (iv) includes the results of Coca-Cola FEMSA Philippines, Inc., as if the consolidation had taken place at the beginning of
first quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy. In our “as reported”
figures, our Venezuelan operation’s results were translated into Mexican pesos using the DICOM exchange rate published on
September 30, 2017, of 3,345.00 bolivars per US dollar.
Comparable figures:
Revenues:
Comparable
total revenues from our Mexico and Central America division increased 4.1% in the third quarter of 2017, compared to the same period
in 2016, driven by an increase in average price per unit case in Mexico, partially offset by volume declines in the division.
Transactions:
Total transactions
in our Mexico and Central America division declined 4.1% in the third quarter of 2017. Our sparkling beverage portfolio’s
transactions contracted 4.3%. Our still beverage category’s transactions decreased by 4.7%. Our water transactions, including
bulk water, remained flat driven mainly by flat performance in Mexico, not fully offset by growth in Central America.
Volume:
Total sales volume
for the division decreased 3.0% in the third quarter of 2017, compared to the same period of 2016. Volume decline during the quarter
was mostly generated by natural disasters impacting the region. Our sparkling beverage category’s volume declined 3.6% in
the division, driven by colas and partially offset by a flat performance in our flavored sparkling portfolio. Our still beverage
category’s volume declined 1.6% while our personal water portfolio’s volume grew 2.0% driven by positive performance
in both Mexico and Central America. Our bulk water portfolio’s volume declined 2.5% in the division due to a contraction
in Mexico, which was not fully offset by growth in Central America.
Gross profit:
Comparable
gross profit grew 2.4% in the third quarter of 2017 as compared to the same period in 2016. In Mexico our pricing initiatives,
lower PET prices, and the appreciation of the average exchange rate of the Mexican Peso as applied to U.S. dollar-denominated raw
material costs were offset by the increase of concentrate cost, higher prices of sweeteners. and an unfavorable currency hedging
position. In Central America, lower sweetener, PET, and aluminum prices were partially offset by the depreciation of the average
exchange rates of local currencies as applied to U.S. dollar-denominated raw material costs.
Operating income:
Comparable
operating income in the division decreased 7.0% in the third quarter of 2017 as compared to the same period in 2016.
Operating cash flow:
Comparable operating cash flow decreased 1.8% in the third quarter of 2017 as compared to the same period in 2016.
As reported figures:
Revenues:
Reported total
revenues increased 3.2% in the third quarter of 2017, driven by an average price per unit case increase in Mexico, offset by volume
declines in the division.
Gross profit:
Reported
gross profit increased 1.6% in the third quarter of 2017, and gross profit margin reached 48.6%, a gross margin contraction of
70 basis points.
Operating income:
Reported
operating income decreased 8.2% in the third quarter of 2017, and operating income margin reached 15.2%, contracting 190 basis
points during the period, due mainly to extraordinary one-time expenses related to earthquake relief, an increase in freight expenses,
higher diesel and gasoline prices in Mexico, and higher labor costs in Central America. In addition, due to the consolidation of
Coca-Cola FEMSA Philippines, the results of this operation are not included in the share of the profit of associates for 2017,
as compared to 2016.
Operating cash flow:
Reported operating cash flow decreased 2.5% in the third quarter of 2017, resulting in a margin contraction of 120 basis points,
reaching 21.6%.
Press Release 3Q 2017
|
Page
21
|
October 25, 2017
|
|
(Colombia, Venezuela, Brazil and Argentina)
Comparable means, with
respect to a year-over-year comparison, the change in a given measure excluding the effects of: (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements, (iii) the results of hyperinflationary economies in both periods;
and (iv) includes the results of Coca-Cola FEMSA Philippines, Inc., as if the consolidation had taken place at the beginning of
first quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy. In our “as reported”
figures, our Venezuelan operation’s results were translated into Mexican pesos using the DICOM exchange rate published on
September 30, 2017, of 3,345.00 bolivars per US dollar.
Comparable figures:
Revenues:
Comparable
total revenues increased 3.1%, driven mainly by an average price per unit case increase in most of our operations and volume growth
in Argentina, which were not fully offset by volume declines in Colombia and Brazil.
Transactions:
Comparable
transactions in the division declined 3.3% during the third quarter of 2017. Our sparkling beverage portfolio’s transactions
decreased 2.5% driven by growth in Argentina offset by a decline in Colombia and Brazil. Our still beverage category’s transactions
decreased 10.9% where growth in Brazil and Argentina was offset by Colombia. Our water transactions, including bulk water, decreased
1.8% driven by growth in Argentina and a flat performance in Brazil.
Volume:
Comparable total
sales volume in South America contracted 3.0% during the third quarter of 2017 as compared to the same period of 2016. Our sparkling
beverage category’s volume decreased 3.3%, driven by growth in Argentina, offset by Brazil and Colombia. Our still beverage
category’s volume decreased 3.8% driven by growth in Brazil and Argentina, offset by Colombia. Our personal water category’s
volume declined 3.8%, where growth in Argentina and Brazil was offset by Colombia. Our bulk water business’s volume grew
13.5%, driven by growth in all territories.
Gross profit:
Comparable
gross profit increased 11.4% as a result of our pricing initiatives, the benefit of lower PET and sweetener prices, and the appreciation
of the Brazilian Real as applied to U.S. dollar-denominated raw material costs, which offset the depreciation of the average exchange
rate of the Argentine Peso and the Colombian Peso as applied to U.S. dollar-denominated raw material costs.
Operating income:
Comparable
operating income in the division increased 18.3% as compared to the same period in 2016.
Operating cash flow:
Comparable operating cash flow increased 13.6% as compared to the same period of 2016.
As reported figures:
Revenues:
Reported total
revenues grew 7.1% to Ps. 21,226 million in the third quarter of 2017, driven by the integration of Vonpar in Brazil, coupled with
price increases aligned with inflation in Brazil and Colombia, volume growth in Argentina, and an improving performance in Brazil.
These effects were partially offset by volume declines in Colombia and Venezuela and the negative translation effect resulting
from the depreciation of all operating currencies of the division as compared to the Mexican Peso.
Transactions:
Reported
total number of transactions increased 3.8% to 2,076.1 million in the third quarter of 2017 as compared to the same period in 2016.
Volume:
Reported total
sales volume increased 4.2% to 315.3 million unit cases in the third quarter of 2017 as compared to the same period in 2016.
Gross profit:
Reported
gross profit increased 13.5% to Ps. 8,810 million in the third quarter of 2017, and gross profit margin expanded 230 basis points
to 41.5%.
Operating income:
Reported
operating income grew 0.7% to Ps. 1,801 million in the third quarter of 2017, resulting in a margin of 8.5%, a contraction of 50
basis points.
Operating cash flow:
Reported operating cash flow grew 17.9% to reach Ps. 3,580 million in the third quarter of 2017, resulting in a margin of 16.9%,
an expansion of 160 basis points.
Press Release 3Q 2017
|
Page
22
|
October 25, 2017
|
|
(The Philippines)
Comparable means, with
respect to a year-over-year comparison, the change in a given measure excluding the effects of: (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements, (iii) the results of hyperinflationary economies in both periods;
and (iv) includes the results of Coca-Cola FEMSA Philippines, Inc., as if the consolidation had taken place at the beginning of
first quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy. In our “as reported”
figures, our Venezuelan operation’s results were translated into Mexican pesos using the DICOM exchange rate published on
September 30, 2017, of 3,345.00 bolivars per US dollar.
Comparable figures:
Revenues:
Comparable
total revenues increased 6.1% during the third quarter of 2017, driven by volume growth.
Transactions:
Comparable
transactions increased 9.0% in the third quarter of 2017. Our sparkling beverage portfolio’s transactions increased 7.5%.
Our still beverage category’s transactions increased by 7.9%. Our water transactions, including bulk water, increased 49.1%.
Volume:
Comparable total
sales volume increased 7.0% in the third quarter of 2017. Our sparkling beverage category’s volume grew 9.1%, driven by 9.9%
growth in colas and 7.7% growth in flavors. Our still beverage category’s volume, excluding powders, increased 28.7%
.
Our personal water category’s volume increased 32.4%
.
Our bulk water business volume grew 12.6%
.
Gross profit:
Comparable
gross profit increased 15.8% as compared to the same period of 2016, mainly driven by lower prices of sweeteners and PET resin,
partially offset by the devaluation of the Philippine Peso as applied to our U.S. dollar-denominated raw material costs.
Operating income:
Comparable
operating income increased to Ps. 145 million during the third quarter of 2017.
Operating cash flow:
Comparable operating cash flow increased 35.0% as compared to the same period of 2016.
Press Release 3Q 2017
|
Page
23
|
October 25, 2017
|
|
YTD C
onsolidated Results
|
Comparable means, with
respect to a year-over-year comparison, the change in a given measure excluding the effects of: (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements, (iii) the results of hyperinflationary economies in both periods;
and (iv) includes the results of Coca-Cola FEMSA Philippines, Inc., as if the consolidation had taken place at the beginning of
first quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy. In our “as reported”
figures, our Venezuelan operation’s results were translated into Mexican pesos using the DICOM exchange rate published on
September 30, 2017, of 3,345.00 bolivars per US dollar.
Comparable
figures:
Revenues:
Comparable
total revenues grew 2.8%, driven by average price per unit case growth across most of our operations and volume growth in Mexico
and the Philippines, which was partially offset by volume declines in the rest of our operations.
Transactions:
Comparable
number of transactions declined 3.2%. Our sparkling beverage portfolio’s transactions declined 3.4%, driven by growth in
Argentina, offset by the rest of our operations. Our still beverage category’s transactions decreased 3.9%, driven by growth
in Mexico, Argentina, and the Philippines offset by declines in Colombia and Brazil. Our water transactions, including bulk water,
remained flat, driven by growth in Mexico and the Philippines, offset by the rest of our operations.
Volume:
Comparable sales
volume contracted 2.6% in the first nine months of 2017 as compared to the same period in 2016. Our sparkling beverage portfolio’s
volume declined 2.9%, driven by growth in the Philippines and a flat performance in Mexico, offset by a contraction in South America
.
Our still beverage category’s volume declined 4.2%, driven by growth in Mexico and Argentina that was offset by declines
in other operations. Our personal water portfolio’s volume decreased 1.0%, driven mainly by growth in Mexico, Central America
and the Philippines offset by contractions in South America. Our bulk water portfolio’s volume declined 0.3%, driven by growth
in the Philippines and a flat performance in Mexico, which were offset by declines in South America and Central America.
Gross profit:
Comparable
gross profit grew 5.0%. Our pricing initiatives, coupled with our currency and raw material hedging strategies, offset higher sweetener
prices and the depreciation in the average exchange rate of the Mexican Peso, the Argentine Peso, and the Philippine Peso as applied
to U.S dollar-denominated raw material costs.
Operating Income:
Comparable
operating income grew 3.5% in the first nine months of 2017.
Operating cash flow:
Comparable operating cash flow increased 3.5% in the first nine months of 2017.
As reported figures:
Revenues:
Total revenues
increased 25.6% to Ps. 151,459 million in the first nine months of 2017, including the results of the Vonpar acquisition in Brazil
and the consolidation of our operation in the Philippines beginning in February. Total revenues were also driven by price increases
aligned with or above inflation in key territories, supported by the positive translation effect resulting from the appreciation
of the Brazilian Real and the Colombian Peso, despite the depreciation of the Argentine Peso, the Philippine Peso, and the Venezuelan
Bolivar; all as compared to the Mexican Peso.
Transactions:
Reported
total number of transactions increased 27.9% to 18,917.0 million in the first nine months of 2017 as compared to the same period
in 2016.
Volume:
Reported total
sales volume increased 14.2% to 2,837.3 million unit cases in the first nine months of 2017 as compared to the same period in 2016.
Gross profit:
Gross profit
grew 22.9% to Ps. 67,193 million, and gross margin declined 90 basis points to 44.4%.
Equity method:
T
he
reported share of the profits of associates and joint ventures recorded a gain of Ps. 5 million in the first nine months of 2017,
compared to a gain of Ps. 318 million recorded in the first nine months of 2016. This is due to (i) the consolidation of Coca-Cola
FEMSA Philippines, Inc., which is no longer included in the equity method as of February 2017, (ii) gains from our Jugos Del Valle
joint venture and our joint ventures in Brazil; and (iii) a loss in our dairy joint venture in Panama.
(Continued on next page)
Press Release 3Q 2017
|
Page
24
|
October 25, 2017
|
|
Operating Income:
Operating
income increased 7.0% to Ps. 17,744 million, and operating margin contracted 200 basis points to 11.7%, due mainly to an increase
in operating expenses, partially offset by an operative foreign exchange gain.
Other non-operative expenses,
net:
Other non-operative expenses, net, recorded an expense of Ps. 707 million, compared to expenses of Ps. 1,839 million during
the first nine months of 2016, due mainly to the negative currency fluctuation effects in our operation in Venezuela, partially
offset by income related to the consolidation of Coca-Cola FEMSA Philippines.
Comprehensive financing result:
Our comprehensive financing result in the first nine months of 2017 recorded an expense of Ps. 3,190 million, compared to an expense
of Ps. 5,687 million in the same period of 2016.
During the first nine months
of 2017, we recorded an interest expense of Ps. 6,829 million, compared to Ps. 5,336 million in the first nine months of 2016.
This increase was driven by: (i) the interest rate increase from swapping U.S. dollar-denominated debt to Brazilian Real and Mexican
Peso-denominated debt, as part of our strategy to eliminate our U.S, dollar net debt exposure; (ii) additional debt related to
the acquisition of Vonpar; (iii) the average exchange rate appreciation of the Brazilian Real compared to the Mexican Peso as applied
to our existing Brazilian Real-denominated interest expense; and (iv) the interest rate increase in Mexico. These effects were
partially offset by the decrease of interest rates in Brazil and the reduction of debt in Argentina.
In addition, for the first nine
months, we recorded a foreign exchange gain of Ps. 279 million as compared to a loss of Ps. 1,838 million in 2016, which resulted
from the depreciation of the Mexican peso as applied to our U.S. dollar-denominated net debt position in 2016.
During the first nine months
of 2017, we recorded a gain on monetary position in inflationary subsidiaries of Ps. 2,163 million as compared to Ps. 794 million
during the same period of 2016 related to our operation in Venezuela.
Market value on financial instruments
recorded a gain of Ps. 556 million due to the recent decrease of interest rates in Brazil as applied to our floating rate cross-currency
swaps.
Income tax:
During the
first nine months of 2017, reported income tax as a percentage of income before taxes was 21.3%, compared to 25.1% in the same
period of 2016. This reduction was driven mainly by the one-time non-operative income recorded in connection with the consolidation
of Coca-Cola FEMSA Philippines, Inc. in February.
Net income:
Reported
consolidated net controlling interest income increased 55.5% to Ps. 10,233 million in the first nine months of 2017, resulting
in reported earnings per share (EPS) of Ps. 4.90 (Ps. 49.00 per ADS).
Operating cash flow:
Operating cash flow grew 22.0% to Ps. 28,638 million, and operating cash flow margin contracted 60 basis points to 18.9%.
Press Release 3Q 2017
|
Page
25
|
October 25, 2017
|
|
|
·
|
During September 2017, Coca-Cola FEMSA
was selected as a member of the Dow Jones Sustainability Emerging Markets Index for the fifth consecutive year.
|
|
·
|
As of November 1, 2017, we will pay the
second installment of the 2016 dividend in the amount of Ps. 1.67 per share.
|
Conference Call Information
|
Our third quarter 2017 conference call
will be held on October 25, 2017, at 12:00 P.M. Eastern Time (11:00 A.M. Mexico City Time). To participate in the conference call,
please dial: Domestic U.S.: 800-839-7875 or International: 719-457-2628. Participant code: 6110147. We invite investors to listen
to the live audio cast of the conference call on the Company’s website,
www.coca-colafemsa.com
. If you are unable
to participate live, the conference call audio will be available at
www.coca-colafemsa.com
.
Mexican Stock Exchange Quarterly Filing
|
Coca-Cola FEMSA encourages the reader to
refer to our quarterly filing to the Mexican Stock Exchange (
Bolsa Mexicana de Valores
or BMV) for more detailed information.
This filing contains a detailed cash flow statement and selected notes to the financial statements, including segment information.
This filing is available at
www.bmv.com.mx
in the
Información Financiera
section for Coca-Cola FEMSA (KOF)
and on our corporate website at
www.coca-colafemsa.com/inversionistas/registros-bmv
.
Press Release 3Q 2017
|
Page
26
|
October 25, 2017
|
|
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.
All the financial information presented
in this report was prepared under International Financial Reporting Standards (IFRS).
In an effort to provide our readers with
a more useful representation of our company's underlying financial and operating performance we are including the term “Comparable.”
This means, with respect to a year-over-year comparison, the change in a given measure excluding the effects of: (i) mergers, acquisitions
and divestitures, (ii) translation effects resulting from exchange rate movements, (iii) the results of hyperinflationary economies
in both periods, and (iv) includes the results of Coca-Cola FEMSA Philippines, Inc., as if the consolidation had taken place at
the beginning of the first quarter of 2016. Currently, the only operation that qualifies as a hyperinflationary economy is Venezuela.
In preparing this measure, management has used its best judgment, estimates, and assumptions in order to maintain comparability.
As a result of newly issued KOF L shares,
year-to-date earnings per share were computed based on 2,088.2 million shares, the weighted average outstanding shares over the
period. At the end of September 2017, total outstanding shares were 2,100.8 million shares (each ADS represents 10 local shares).
For reporting purposes, all corporate expenses,
including the equity method recorded from our stake of the results of Coca-Cola FEMSA Philippines, Inc., were included in the results
of the Mexico and Central America division. Starting on February 2013 and ending on January 2017, we incorporated our stake of
the results of Coca-Cola FEMSA Philippines, Inc. through the equity method.
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. is the
largest franchise bottler in the world by sales volume. The company produces and distributes trademark beverages of
The Coca-Cola
Company
, offering a wide portfolio of 154 brands to more than 375 million consumers daily. With over 100 thousand employees,
the company markets and sells approximately 4 billion unit cases through 2.8 million points of sale a year. Operating 66 manufacturing
plants and 328 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 Emerging Markets Index, FTSE4Good
Emerging Index, and the Mexican Stock Exchange’s IPC and Social Responsibility and Sustainability Indices, among other indexes.
Its operations encompass franchise territories in Mexico, Brazil, Colombia, Argentina, and Guatemala and, nationwide, in the Philippines,
Venezuela, Nicaragua, Costa Rica, and Panama. For more information, please visit
www.coca-colafemsa.com
.
For additional information or inquiries
contact the Investor Relations team:
|
·
|
Maria Dyla Castro | mariadyla.castro@kof.com.mx
| (5255) 1519-5186
|
|
·
|
Jorge Collazo | jorge.collazo@kof.com.mx
| (5255) 1519-5218
|
|
·
|
Tania Ramírez | tania.ramirez@kof.com.mx
| (5255) 1519-5013
|
(7 pages of tables to follow)
Press Release 3Q 2017
|
Page
27
|
October 25, 2017
|
|
Quarter - Consolidated Income Statement
|
Expressed in millions of Mexican pesos
(1)
|
|
|
3Q 17
|
|
|
% Rev
|
|
|
3Q 16
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(8)
|
|
Transactions (million transactions)
|
|
|
6,485.1
|
|
|
|
|
|
|
|
4,908.2
|
|
|
|
|
|
|
|
32.1
|
%
|
|
|
-0.7
|
%
|
Volume (million unit cases)
(2)
|
|
|
960.9
|
|
|
|
|
|
|
|
824.5
|
|
|
|
|
|
|
|
16.6
|
%
|
|
|
-1.6
|
%
|
Average price per unit case
(2)
|
|
|
48.37
|
|
|
|
|
|
|
|
49.01
|
|
|
|
|
|
|
|
-1.3
|
%
|
|
|
|
|
Net revenues
|
|
|
49,252
|
|
|
|
|
|
|
|
42,242
|
|
|
|
|
|
|
|
16.6
|
%
|
|
|
|
|
Other operating revenues
|
|
|
112
|
|
|
|
|
|
|
|
109
|
|
|
|
|
|
|
|
2.5
|
%
|
|
|
|
|
Total revenues
(3)
|
|
|
49,363
|
|
|
|
100.0
|
%
|
|
|
42,351
|
|
|
|
100.0
|
%
|
|
|
16.6
|
%
|
|
|
3.9
|
%
|
Cost of goods sold
|
|
|
27,347
|
|
|
|
55.4
|
%
|
|
|
23,474
|
|
|
|
55.4
|
%
|
|
|
16.5
|
%
|
|
|
|
|
Gross profit
|
|
|
22,016
|
|
|
|
44.6
|
%
|
|
|
18,877
|
|
|
|
44.6
|
%
|
|
|
16.6
|
%
|
|
|
6.6
|
%
|
Operating expenses
|
|
|
16,264
|
|
|
|
32.9
|
%
|
|
|
13,195
|
|
|
|
31.2
|
%
|
|
|
23.3
|
%
|
|
|
|
|
Other operative expenses, net
|
|
|
260
|
|
|
|
0.5
|
%
|
|
|
87
|
|
|
|
0.2
|
%
|
|
|
199.8
|
%
|
|
|
|
|
Operative equity method (gain) loss in associates
(4)
|
|
|
6
|
|
|
|
0.0
|
%
|
|
|
(49
|
)
|
|
|
-0.1
|
%
|
|
|
-112.2
|
%
|
|
|
|
|
Operating income
(5)
|
|
|
5,487
|
|
|
|
11.1
|
%
|
|
|
5,644
|
|
|
|
13.3
|
%
|
|
|
-2.8
|
%
|
|
|
3.3
|
%
|
Other non operative expenses, net
|
|
|
597
|
|
|
|
1.2
|
%
|
|
|
806
|
|
|
|
1.9
|
%
|
|
|
-25.9
|
%
|
|
|
|
|
Non Operative equity method (gain) loss in associates
(6)
|
|
|
(40
|
)
|
|
|
-0.1
|
%
|
|
|
0
|
|
|
|
0.0
|
%
|
|
|
-11943.1
|
%
|
|
|
|
|
Interest expense
|
|
|
2,170
|
|
|
|
|
|
|
|
1,925
|
|
|
|
|
|
|
|
12.7
|
%
|
|
|
|
|
Interest income
|
|
|
274
|
|
|
|
|
|
|
|
153
|
|
|
|
|
|
|
|
79.1
|
%
|
|
|
|
|
Interest expense, net
|
|
|
1,896
|
|
|
|
|
|
|
|
1,772
|
|
|
|
|
|
|
|
7.0
|
%
|
|
|
|
|
Foreign exchange loss (gain)
|
|
|
(97
|
)
|
|
|
|
|
|
|
432
|
|
|
|
|
|
|
|
-122.4
|
%
|
|
|
|
|
Loss (gain) on monetary position in inflationary subsidiries
|
|
|
(1,301
|
)
|
|
|
|
|
|
|
(478
|
)
|
|
|
|
|
|
|
172.1
|
%
|
|
|
|
|
Market value (gain) loss on financial instruments
|
|
|
(203
|
)
|
|
|
|
|
|
|
134
|
|
|
|
|
|
|
|
-251.4
|
%
|
|
|
|
|
Comprehensive financing result
|
|
|
295
|
|
|
|
|
|
|
|
1,860
|
|
|
|
|
|
|
|
-84.1
|
%
|
|
|
|
|
Income before taxes
|
|
|
4,635
|
|
|
|
|
|
|
|
2,978
|
|
|
|
|
|
|
|
55.6
|
%
|
|
|
|
|
Income taxes
|
|
|
1,296
|
|
|
|
|
|
|
|
691
|
|
|
|
|
|
|
|
87.7
|
%
|
|
|
|
|
Consolidated net income
|
|
|
3,339
|
|
|
|
|
|
|
|
2,287
|
|
|
|
|
|
|
|
46.0
|
%
|
|
|
|
|
Net income attributable to equity holders of the company
|
|
|
3,152
|
|
|
|
6.4
|
%
|
|
|
2,265
|
|
|
|
5.3
|
%
|
|
|
39.2
|
%
|
|
|
|
|
Non-controlling interest
|
|
|
186
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
720.2
|
%
|
|
|
|
|
Operating income
(5)
|
|
|
5,487
|
|
|
|
11.1
|
%
|
|
|
5,644
|
|
|
|
13.3
|
%
|
|
|
-2.8
|
%
|
|
|
|
|
Depreciation
|
|
|
2,788
|
|
|
|
|
|
|
|
1,853
|
|
|
|
|
|
|
|
50.5
|
%
|
|
|
|
|
Amortization and other operative non-cash charges
|
|
|
1,028
|
|
|
|
|
|
|
|
683
|
|
|
|
|
|
|
|
50.5
|
%
|
|
|
|
|
Operating cash flow
(5)(7)
|
|
|
9,303
|
|
|
|
18.8
|
%
|
|
|
8,180
|
|
|
|
19.3
|
%
|
|
|
13.7
|
%
|
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPEX
|
|
|
3,292
|
|
|
|
|
|
|
|
2,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Except volume and average price
per unit case figures.
(2)
Sales volume and average price
per unit case exclude beer results.
(3)
Includes total revenues of Ps.
20,332 million from our Mexican operation, Ps. 13,190 million from our Brazilian operation, Ps. 3,415 million from our Colombian
operation, Ps. 2,851 million from our Argentine operation, and Ps. 4,899 million from our Philippines operation for the third quarter
of 2017; and Ps. 19,362 million from our Mexican operation, Ps. 10,676 million from our Brazilian operation, Ps. 3,849 from our
Colombian operation, and Ps. 2,774 million from our Argentine operation for the same period of the previous year. Total Revenues
includes Beer revenues in Brazil of Ps. 2,768 million for the third quarter of 2017 and Ps. 1,836 million for the same period of
the previous year.
(4)
Includes equity method in Jugos
del Valle, Leao Alimentos, Estrella Azul, among others. For the 3Q16 includes Coca-Cola FEMSA Philippines, Inc.
(5)
The operating income and operative
cash flow lines are presented as non-gaap measures for the convenience of the reader.
(6)
Includes equity method in PIASA,
IEQSA, Beta San Miguel, IMER and KSP Participacoes among others.
(7)
Operative cash flow = operating
income + depreciation, amortization & other operative non-cash charges.
(8)
Comparable means, with respect
to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements (iii) the results of hyperinflationary economies in both periods,
and (iv) includes the results of Coca-Cola FEMSA Philippines Inc, as if the consolidation had taken place at the beginning of first
quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy.
Press Release 3Q 2017
|
Page
28
|
October 25, 2017
|
|
YTD - Consolidated Income Statement
|
Expressed in millions of Mexican pesos
(1)
|
|
|
YTD 17
|
|
|
% Rev
|
|
|
YTD 16
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(8)
|
|
Transactions (million transactions)
|
|
|
18,917.0
|
|
|
|
|
|
|
|
14,793.1
|
|
|
|
|
|
|
|
27.9
|
%
|
|
|
-3.2
|
%
|
Volume (million unit cases)
(2)
|
|
|
2,837.3
|
|
|
|
|
|
|
|
2,483.8
|
|
|
|
|
|
|
|
14.2
|
%
|
|
|
-2.6
|
%
|
Average price per unit case
(2)
|
|
|
50.22
|
|
|
|
|
|
|
|
46.46
|
|
|
|
|
|
|
|
8.1
|
%
|
|
|
|
|
Net revenues
|
|
|
151,193
|
|
|
|
|
|
|
|
120,296
|
|
|
|
|
|
|
|
25.7
|
%
|
|
|
|
|
Other operating revenues
|
|
|
266
|
|
|
|
|
|
|
|
332
|
|
|
|
|
|
|
|
-19.8
|
%
|
|
|
|
|
Total revenues
(3)
|
|
|
151,459
|
|
|
|
100.0
|
%
|
|
|
120,628
|
|
|
|
100.0
|
%
|
|
|
25.6
|
%
|
|
|
2.8
|
%
|
Cost of goods sold
|
|
|
84,266
|
|
|
|
55.6
|
%
|
|
|
65,950
|
|
|
|
54.7
|
%
|
|
|
27.8
|
%
|
|
|
|
|
Gross profit
|
|
|
67,193
|
|
|
|
44.4
|
%
|
|
|
54,678
|
|
|
|
45.3
|
%
|
|
|
22.9
|
%
|
|
|
5.0
|
%
|
Operating expenses
|
|
|
49,473
|
|
|
|
32.7
|
%
|
|
|
38,291
|
|
|
|
31.7
|
%
|
|
|
29.2
|
%
|
|
|
|
|
Other operative expenses, net
|
|
|
(20
|
)
|
|
|
-0.0
|
%
|
|
|
129
|
|
|
|
0.1
|
%
|
|
|
-115.2
|
%
|
|
|
|
|
Operative equity method (gain) loss in associates
(4)
|
|
|
(5
|
)
|
|
|
-0.0
|
%
|
|
|
(318
|
)
|
|
|
-0.3
|
%
|
|
|
-98.4
|
%
|
|
|
|
|
Operating income
(5)
|
|
|
17,744
|
|
|
|
11.7
|
%
|
|
|
16,576
|
|
|
|
13.7
|
%
|
|
|
7.0
|
%
|
|
|
3.5
|
%
|
Other non operative expenses, net
|
|
|
707
|
|
|
|
0.5
|
%
|
|
|
1,839
|
|
|
|
1.5
|
%
|
|
|
-61.6
|
%
|
|
|
|
|
Non Operative equity method (gain) loss in associates
(6)
|
|
|
(66
|
)
|
|
|
-0.0
|
%
|
|
|
(71
|
)
|
|
|
-0.1
|
%
|
|
|
-7.4
|
%
|
|
|
|
|
Interest expense
|
|
|
6,829
|
|
|
|
|
|
|
|
5,336
|
|
|
|
|
|
|
|
28.0
|
%
|
|
|
|
|
Interest income
|
|
|
641
|
|
|
|
|
|
|
|
430
|
|
|
|
|
|
|
|
49.0
|
%
|
|
|
|
|
Interest expense, net
|
|
|
6,188
|
|
|
|
|
|
|
|
4,906
|
|
|
|
|
|
|
|
26.1
|
%
|
|
|
|
|
Foreign exchange loss (gain)
|
|
|
(279
|
)
|
|
|
|
|
|
|
1,838
|
|
|
|
|
|
|
|
-115.2
|
%
|
|
|
|
|
Loss (gain) on monetary position in inflationary subsidiries
|
|
|
(2,163
|
)
|
|
|
|
|
|
|
(794
|
)
|
|
|
|
|
|
|
172.4
|
%
|
|
|
|
|
Market value (gain) loss on financial instruments
|
|
|
(556
|
)
|
|
|
|
|
|
|
(263
|
)
|
|
|
|
|
|
|
111.1
|
%
|
|
|
|
|
Comprehensive financing result
|
|
|
3,190
|
|
|
|
|
|
|
|
5,687
|
|
|
|
|
|
|
|
-43.9
|
%
|
|
|
|
|
Income before taxes
|
|
|
13,913
|
|
|
|
|
|
|
|
9,121
|
|
|
|
|
|
|
|
52.5
|
%
|
|
|
|
|
Income taxes
|
|
|
2,966
|
|
|
|
|
|
|
|
2,288
|
|
|
|
|
|
|
|
29.6
|
%
|
|
|
|
|
Consolidated net income
|
|
|
10,947
|
|
|
|
|
|
|
|
6,833
|
|
|
|
|
|
|
|
60.2
|
%
|
|
|
|
|
Net income attributable to equity holders of the company
|
|
|
10,233
|
|
|
|
6.8
|
%
|
|
|
6,581
|
|
|
|
5.5
|
%
|
|
|
55.5
|
%
|
|
|
|
|
Non-controlling interest
|
|
|
714
|
|
|
|
|
|
|
|
252
|
|
|
|
|
|
|
|
183.4
|
%
|
|
|
|
|
Operating income
(5)
|
|
|
17,744
|
|
|
|
11.7
|
%
|
|
|
16,576
|
|
|
|
13.7
|
%
|
|
|
7.0
|
%
|
|
|
|
|
Depreciation
|
|
|
7,892
|
|
|
|
|
|
|
|
5,231
|
|
|
|
|
|
|
|
50.9
|
%
|
|
|
|
|
Amortization and other operative non-cash charges
|
|
|
3,002
|
|
|
|
|
|
|
|
1,666
|
|
|
|
|
|
|
|
80.2
|
%
|
|
|
|
|
Operating cash flow
(5)(7)
|
|
|
28,638
|
|
|
|
18.9
|
%
|
|
|
23,473
|
|
|
|
19.5
|
%
|
|
|
22.0
|
%
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPEX
|
|
|
9,642
|
|
|
|
|
|
|
|
6,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Except volume and average price
per unit case figures.
(2)
Sales volume and average price
per unit case exclude beer results.
(3)
Includes total revenues of Ps.
59,806 million from our Mexican operation, Ps. 41,500 million from our Brazilian operation, Ps. 10,514 million from our Colombian
operation, and Ps. 9,579 million from our Argentine operation for the first nine months of 2017; Ps. 55,337 million from our Mexican
operation, Ps. 29,011 million from our Brazilian operation, Ps. 10,856 from our Colombian operation, and Ps. 8,145 million from
our Argentine operation for the same period of the previous year. Total Revenues includes Beer revenues in Brazil of Ps. 8,695
million for the first nine months of 2017 and Ps. 4,899 million for the same period of the previous year.
(4)
Includes equity method in Jugos
del Valle, Leao Alimentos, Estrella Azul, one month of 2017 and nine months of 2016 from Coca-Cola FEMSA Philippines, Inc., among
others.
(5)
The operating income and operative
cash flow lines are presented as non-gaap measures for the convenience of the reader.
(6)
Includes equity method in PIASA,
IEQSA, Beta San Miguel, IMER and KSP Participacoes among others.
(7)
Operative cash flow = operating
income + depreciation, amortization & other operative non-cash charges.
(8)
Comparable means, with respect
to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements (iii) the results of hyperinflationary economies in both periods,
and (iv) includes the results of Coca-Cola FEMSA Philippines Inc, as if the consolidation had taken place at the beginning of first
quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy.
Press Release 3Q 2017
|
Page
29
|
October 25, 2017
|
|
Mexico & Central America Division
|
Expressed in millions of Mexican pesos
(1)
|
Quarterly information
|
|
|
3Q 17
|
|
|
% Rev
|
|
|
3Q 16
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(6)
|
|
Transactions (million transactions)
|
|
|
2,789.9
|
|
|
|
|
|
|
|
2,908.4
|
|
|
|
|
|
|
|
-4.1
|
%
|
|
|
-4.1
|
%
|
Volume (million unit cases)
|
|
|
506.1
|
|
|
|
|
|
|
|
521.9
|
|
|
|
|
|
|
|
-3.0
|
%
|
|
|
-3.0
|
%
|
Average price per unit case
|
|
|
45.89
|
|
|
|
|
|
|
|
43.13
|
|
|
|
|
|
|
|
6.4
|
%
|
|
|
|
|
Net revenues
|
|
|
23,223
|
|
|
|
|
|
|
|
22,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
15
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(2)
|
|
|
23,239
|
|
|
|
100.0
|
%
|
|
|
22,527
|
|
|
|
100.0
|
%
|
|
|
3.2
|
%
|
|
|
4.1
|
%
|
Cost of goods sold
|
|
|
11,942
|
|
|
|
51.4
|
%
|
|
|
11,412
|
|
|
|
50.7
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
11,297
|
|
|
|
48.6
|
%
|
|
|
11,114
|
|
|
|
49.3
|
%
|
|
|
1.6
|
%
|
|
|
2.4
|
%
|
Operating expenses
|
|
|
7,652
|
|
|
|
32.9
|
%
|
|
|
7,244
|
|
|
|
32.2
|
%
|
|
|
|
|
|
|
|
|
Other operative expenses, net
|
|
|
57
|
|
|
|
0.2
|
%
|
|
|
42
|
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
Operative equity method (gain) loss in associates
(3)
|
|
|
48
|
|
|
|
0.2
|
%
|
|
|
(27
|
)
|
|
|
-0.1
|
%
|
|
|
|
|
|
|
|
|
Operating income
(4)
|
|
|
3,540
|
|
|
|
15.2
|
%
|
|
|
3,855
|
|
|
|
17.1
|
%
|
|
|
-8.2
|
%
|
|
|
-7.0
|
%
|
Depreciation, amortization & other operative non-cash charges
|
|
|
1,475
|
|
|
|
6.3
|
%
|
|
|
1,288
|
|
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(4)(5)
|
|
|
5,015
|
|
|
|
21.6
|
%
|
|
|
5,143
|
|
|
|
22.8
|
%
|
|
|
-2.5
|
%
|
|
|
-1.8
|
%
|
|
|
YTD 17
|
|
|
% Rev
|
|
|
YTD 16
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(6)
|
|
Transactions (million transactions)
|
|
|
8,467.8
|
|
|
|
|
|
|
|
8,567.0
|
|
|
|
|
|
|
|
-1.2
|
%
|
|
|
-1.2
|
%
|
Volume (million unit cases)
|
|
|
1,522.8
|
|
|
|
|
|
|
|
1,523.4
|
|
|
|
|
|
|
|
-0.0
|
%
|
|
|
-0.0
|
%
|
Average price per unit case
|
|
|
45.45
|
|
|
|
|
|
|
|
42.62
|
|
|
|
|
|
|
|
6.7
|
%
|
|
|
|
|
Net revenues
|
|
|
69,218
|
|
|
|
|
|
|
|
64,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
41
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(2)
|
|
|
69,259
|
|
|
|
100.0
|
%
|
|
|
64,965
|
|
|
|
100.0
|
%
|
|
|
6.6
|
%
|
|
|
6.3
|
%
|
Cost of goods sold
|
|
|
35,375
|
|
|
|
51.1
|
%
|
|
|
32,518
|
|
|
|
50.1
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
33,883
|
|
|
|
48.9
|
%
|
|
|
32,447
|
|
|
|
49.9
|
%
|
|
|
4.4
|
%
|
|
|
4.1
|
%
|
Operating expenses
|
|
|
23,051
|
|
|
|
33.3
|
%
|
|
|
21,393
|
|
|
|
32.9
|
%
|
|
|
|
|
|
|
|
|
Other operative expenses, net
|
|
|
(36
|
)
|
|
|
-0.1
|
%
|
|
|
190
|
|
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
Operative equity method (gain) loss in associates
(3)
|
|
|
94
|
|
|
|
0.1
|
%
|
|
|
(300
|
)
|
|
|
-0.5
|
%
|
|
|
|
|
|
|
|
|
Operating income
(4)
|
|
|
10,774
|
|
|
|
15.6
|
%
|
|
|
11,164
|
|
|
|
17.2
|
%
|
|
|
-3.5
|
%
|
|
|
-1.3
|
%
|
Depreciation, amortization & other operative non-cash charges
|
|
|
4,117
|
|
|
|
5.9
|
%
|
|
|
3,627
|
|
|
|
5.6
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(4)(5)
|
|
|
14,890
|
|
|
|
21.5
|
%
|
|
|
14,791
|
|
|
|
22.8
|
%
|
|
|
0.7
|
%
|
|
|
0.3
|
%
|
(1)
Except volume and average price
per unit case figures.
(2)
For the quarter
:
Includes total revenues of Ps. 20,332 million from our Mexican operation for the third quarter of 2017 and 19,362 for the same
period of the previous year
YTD information:
Includes total
revenues of Ps. 59,806 million from our Mexican operation for the first nine months of 2017 and 55,337 for the same period of
the previous year
(3)
For the quarter:
Includes equity
method in Jugos del Valle, Estrella Azul, among others.
For YTD information:
Includes Jugos del Valle, Estrella Azul,
one month of 2017 and nine months of 2016 of Coca-Cola FEMSA Philippines, Inc., among others.
(4)
The operating income and operative
cash flow lines are presented as non-gaap measures for the convenience of the reader.
(5)
Operative cash flow = operating
income + depreciation, amortization & other operative non-cash charges.
(6)
Comparable means, with respect
to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements (iii) the results of hyperinflationary economies in both periods,
and (iv) includes the results of Coca-Cola FEMSA Philippines Inc, as if the consolidation had taken place at the beginning of first
quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy.
Press Release 3Q 2017
|
Page
30
|
October 25, 2017
|
|
South America Division
|
Expressed in millions of Mexican pesos
(1)
|
Quarterly information
|
|
|
3Q 17
|
|
|
% Rev
|
|
|
3Q 16
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(7)
|
|
Transactions (million transactions)
|
|
|
2,076.1
|
|
|
|
|
|
|
|
1,999.8
|
|
|
|
|
|
|
|
3.8
|
%
|
|
|
-3.3
|
%
|
Volume (million unit cases)
(2)
|
|
|
315.3
|
|
|
|
|
|
|
|
302.5
|
|
|
|
|
|
|
|
4.2
|
%
|
|
|
-3.0
|
%
|
Average price per unit case
(2)
|
|
|
58.24
|
|
|
|
|
|
|
|
59.15
|
|
|
|
|
|
|
|
-1.5
|
%
|
|
|
|
|
Net revenues
|
|
|
21,129
|
|
|
|
|
|
|
|
19,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
96
|
|
|
|
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(3)
|
|
|
21,226
|
|
|
|
100.0
|
%
|
|
|
19,824
|
|
|
|
100.0
|
%
|
|
|
7.1
|
%
|
|
|
3.1
|
%
|
Cost of goods sold
|
|
|
12,416
|
|
|
|
58.5
|
%
|
|
|
12,061
|
|
|
|
60.8
|
%
|
|
|
|
|
|
|
0.0
|
%
|
Gross profit
|
|
|
8,810
|
|
|
|
41.5
|
%
|
|
|
7,763
|
|
|
|
39.2
|
%
|
|
|
13.5
|
%
|
|
|
11.4
|
%
|
Operating expenses
|
|
|
6,883
|
|
|
|
32.4
|
%
|
|
|
5,951
|
|
|
|
30.0
|
%
|
|
|
|
|
|
|
|
|
Other operative expenses, net
|
|
|
167
|
|
|
|
0.8
|
%
|
|
|
45
|
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
Operative equity method (gain) loss in associates
(4)
|
|
|
(42
|
)
|
|
|
-0.2
|
%
|
|
|
(22
|
)
|
|
|
-0.1
|
%
|
|
|
|
|
|
|
|
|
Operating income
(5)
|
|
|
1,801
|
|
|
|
8.5
|
%
|
|
|
1,789
|
|
|
|
9.0
|
%
|
|
|
0.7
|
%
|
|
|
18.3
|
%
|
Depreciation, amortization & other operative non-cash charges
|
|
|
1,779
|
|
|
|
8.4
|
%
|
|
|
1,249
|
|
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(5)(6)
|
|
|
3,580
|
|
|
|
16.9
|
%
|
|
|
3,038
|
|
|
|
15.3
|
%
|
|
|
17.9
|
%
|
|
|
13.6
|
%
|
|
|
YTD 17
|
|
|
% Rev
|
|
|
YTD 16
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
|
D
%
Comparable
(7)
|
|
Transactions (million transactions)
|
|
|
6,005.0
|
|
|
|
|
|
|
|
6,226.2
|
|
|
|
|
|
|
|
-3.6
|
%
|
|
|
-9.4
|
%
|
Volume (million unit cases)
(2)
|
|
|
922.1
|
|
|
|
|
|
|
|
960.4
|
|
|
|
|
|
|
|
-4.0
|
%
|
|
|
-9.1
|
%
|
Average price per unit case
(2)
|
|
|
63.84
|
|
|
|
|
|
|
|
52.55
|
|
|
|
|
|
|
|
21.5
|
%
|
|
|
|
|
Net revenues
|
|
|
67,557
|
|
|
|
|
|
|
|
55,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
226
|
|
|
|
|
|
|
|
293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(3)
|
|
|
67,783
|
|
|
|
100.0
|
%
|
|
|
55,663
|
|
|
|
100.0
|
%
|
|
|
21.8
|
%
|
|
|
0.1
|
%
|
Cost of goods sold
|
|
|
40,217
|
|
|
|
59.3
|
%
|
|
|
33,432
|
|
|
|
60.1
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
27,566
|
|
|
|
40.7
|
%
|
|
|
22,231
|
|
|
|
39.9
|
%
|
|
|
24.0
|
%
|
|
|
6.8
|
%
|
Operating expenses
|
|
|
21,644
|
|
|
|
31.9
|
%
|
|
|
16,898
|
|
|
|
30.4
|
%
|
|
|
|
|
|
|
|
|
Other operative expenses, net
|
|
|
(35
|
)
|
|
|
-0.1
|
%
|
|
|
(60
|
)
|
|
|
-0.1
|
%
|
|
|
|
|
|
|
|
|
Operative equity method (gain) loss in associates
(4)
|
|
|
(99
|
)
|
|
|
-0.1
|
%
|
|
|
(19
|
)
|
|
|
-0.0
|
%
|
|
|
|
|
|
|
|
|
Operating income
(5)
|
|
|
6,057
|
|
|
|
8.9
|
%
|
|
|
5,412
|
|
|
|
9.7
|
%
|
|
|
11.9
|
%
|
|
|
7.6
|
%
|
Depreciation, amortization & other operative non-cash charges
|
|
|
5,325
|
|
|
|
7.9
|
%
|
|
|
3,269
|
|
|
|
5.9
|
%
|
|
|
|
|
|
|
|
|
Operating cash flow
(5)(6)
|
|
|
11,382
|
|
|
|
16.8
|
%
|
|
|
8,681
|
|
|
|
15.6
|
%
|
|
|
31.1
|
%
|
|
|
6.1
|
%
|
(1)
Except volume and average price
per unit case figures.
(2)
Sales volume and average price
per unit case exclude beer results.
(3)
Quarter information:
Includes
total revenues of Ps. 13,190 million from our Brazilian operation, Ps. 3,415 million from our Colombian operation, and Ps. 2,851
million from our Argentine operation for the third quarter of 2017; and Ps. 10,676 million from our Brazilian operation, Ps. 3,849
from our Colombian operation, and Ps. 2,774 million from our Argentine operation for the same period of the previous year. Total
Revenues includes Beer revenues in Brazil of Ps. 2,768 million for the third quarter of 2017 and Ps. 1,836 million for the same
period of the previous year.
(3)
Year to date information:
Includes total revenues of Ps. 41,500 million from our Brazilian operation, Ps. 10,514 million from our Colombian operation, and
Ps. 9,579 million from our Argentine operation for the first nine months of 2017; and Ps. 29,011 million from our Brazilian operation,
Ps. 10,856 from our Colombian operation, and Ps. 8,145 million from our Argentine operation for the same period of the previous
year. Total Revenues includes Beer revenues in Brazil of Ps. 8,695 million for the first nine months of 2017 and Ps. 4,899 million
for the same period of the previous year.
(4)
Includes equity method in Leao
Alimentos, Verde Campo, among others.
(5)
The operating income and operative
cash flow lines are presented as non-gaap measures for the convenience of the reader.
(6)
Operative cash flow = operating
income + depreciation, amortization & other operative non-cash charges.
(7)
Comparable means, with respect
to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements (iii) the results of hyperinflationary economies in both periods,
and (iv) includes the results of Coca-Cola FEMSA Philippines Inc, as if the consolidation had taken place at the beginning of first
quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy.
Press Release 3Q 2017
|
Page
31
|
October 25, 2017
|
|
Venezuela Operation
|
Expressed in millions of Mexican pesos
(1)
|
Quarterly information
|
|
|
3Q 17
|
|
|
% Rev
|
|
|
3Q 16
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
Transactions (million transactions)
|
|
|
129.3
|
|
|
|
|
|
|
|
195.1
|
|
|
|
|
|
|
|
-33.7
|
%
|
Volume (million unit cases)
|
|
|
18.8
|
|
|
|
|
|
|
|
35.3
|
|
|
|
|
|
|
|
-46.7
|
%
|
Average price per unit case
|
|
|
94.20
|
|
|
|
|
|
|
|
71.61
|
|
|
|
|
|
|
|
31.5
|
%
|
Net revenues
|
|
|
1,770
|
|
|
|
|
|
|
|
2,525
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
1,770
|
|
|
|
100.0
|
%
|
|
|
2,525
|
|
|
|
100.0
|
%
|
|
|
-29.9
|
%
|
Cost of goods sold
|
|
|
1,522
|
|
|
|
86.0
|
%
|
|
|
1,804
|
|
|
|
71.5
|
%
|
|
|
|
|
Gross profit
|
|
|
248
|
|
|
|
14.0
|
%
|
|
|
721
|
|
|
|
28.5
|
%
|
|
|
-65.6
|
%
|
Operating expenses
|
|
|
942
|
|
|
|
53.2
|
%
|
|
|
695
|
|
|
|
27.5
|
%
|
|
|
|
|
Other operative expenses, net
|
|
|
20
|
|
|
|
1.2
|
%
|
|
|
38
|
|
|
|
1.5
|
%
|
|
|
|
|
Operating income
|
|
|
(715
|
)
|
|
|
-40.4
|
%
|
|
|
(12
|
)
|
|
|
-0.5
|
%
|
|
|
5743.2
|
%
|
Depreciation, amortization & other operative non-cash charges
|
|
|
939
|
|
|
|
53.0
|
%
|
|
|
451
|
|
|
|
17.9
|
%
|
|
|
|
|
Operating cash flow
(2)
|
|
|
224
|
|
|
|
12.7
|
%
|
|
|
439
|
|
|
|
17.4
|
%
|
|
|
-48.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 17
|
|
|
% Rev
|
|
|
YTD 16
|
|
|
% Rev
|
|
|
D
%
Reported
|
|
Transactions (million transactions)
|
|
|
318.1
|
|
|
|
|
|
|
|
635.2
|
|
|
|
|
|
|
|
-49.9
|
%
|
Volume (million unit cases)
|
|
|
44.7
|
|
|
|
|
|
|
|
119.6
|
|
|
|
|
|
|
|
-62.6
|
%
|
Average price per unit case
|
|
|
138.38
|
|
|
|
|
|
|
|
63.99
|
|
|
|
|
|
|
|
116.2
|
%
|
Net revenues
|
|
|
6,189
|
|
|
|
|
|
|
|
7,651
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
6,189
|
|
|
|
100.0
|
%
|
|
|
7,651
|
|
|
|
100.0
|
%
|
|
|
-19.1
|
%
|
Cost of goods sold
|
|
|
4,953
|
|
|
|
80.0
|
%
|
|
|
5,022
|
|
|
|
65.6
|
%
|
|
|
|
|
Gross profit
|
|
|
1,236
|
|
|
|
20.0
|
%
|
|
|
2,630
|
|
|
|
34.4
|
%
|
|
|
-53.0
|
%
|
Operating expenses
|
|
|
2,991
|
|
|
|
48.3
|
%
|
|
|
2,444
|
|
|
|
31.9
|
%
|
|
|
|
|
Other operative expenses, net
|
|
|
(22
|
)
|
|
|
-0.4
|
%
|
|
|
5
|
|
|
|
0.1
|
%
|
|
|
|
|
Operating income
|
|
|
(1,733
|
)
|
|
|
-28.0
|
%
|
|
|
180
|
|
|
|
2.4
|
%
|
|
|
-1060.7
|
%
|
Depreciation, amortization & other operative non-cash charges
|
|
|
2,616
|
|
|
|
42.3
|
%
|
|
|
1,046
|
|
|
|
13.7
|
%
|
|
|
|
|
Operating cash flow
(2)
|
|
|
884
|
|
|
|
14.3
|
%
|
|
|
1,226
|
|
|
|
16.0
|
%
|
|
|
-27.9
|
%
|
(1)
Except volume and average price
per unit case figures.
(2)
Operative cash flow = operating
income + depreciation, amortization & other operative non-cash charges.
Press Release 3Q 2017
|
Page
32
|
October 25, 2017
|
|
Asia Division
|
Expressed in millions of Mexican pesos
(1)
|
Quarterly information
|
|
|
3Q 17
|
|
|
% Rev
|
|
|
D
%
Comparable
(4)
|
|
Transactions (million transactions)
|
|
|
1,619.1
|
|
|
|
|
|
|
|
9.0
|
%
|
Volume (million unit cases)
(2)
|
|
|
139.5
|
|
|
|
|
|
|
|
7.0
|
%
|
Average price per unit case
(2)
|
|
|
35.11
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
4,899
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total revenues
(3)
|
|
|
4,899
|
|
|
|
100.0
|
%
|
|
|
6.1
|
%
|
Cost of goods sold
|
|
|
2,989
|
|
|
|
61.0
|
%
|
|
|
|
|
Gross profit
|
|
|
1,910
|
|
|
|
39.0
|
%
|
|
|
15.8
|
%
|
Operating expenses
|
|
|
1,728
|
|
|
|
35.3
|
%
|
|
|
|
|
Other operative expenses, net
|
|
|
36
|
|
|
|
0.7
|
%
|
|
|
|
|
Operating income
(5)
|
|
|
145
|
|
|
|
3.0
|
%
|
|
|
1933.0
|
%
|
Depreciation, amortization & other operative non-cash charges
|
|
|
562
|
|
|
|
11.5
|
%
|
|
|
|
|
Operating cash flow
(5)(6)
|
|
|
707
|
|
|
|
14.4
|
%
|
|
|
35.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 17
|
|
|
% Rev
|
|
|
D
%
Comparable
(4)
|
|
Transactions (million transactions)
|
|
|
4,444.2
|
|
|
|
|
|
|
|
0.3
|
%
|
Volume (million unit cases)
(2)
|
|
|
392.3
|
|
|
|
|
|
|
|
0.9
|
%
|
Average price per unit case
(2)
|
|
|
36.75
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
14,417
|
|
|
|
|
|
|
|
|
|
Other operating revenues
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total revenues
(3)
|
|
|
14,417
|
|
|
|
100.0
|
%
|
|
|
-1.9
|
%
|
Cost of goods sold
|
|
|
8,674
|
|
|
|
60.2
|
%
|
|
|
|
|
Gross profit
|
|
|
5,743
|
|
|
|
39.8
|
%
|
|
|
3.0
|
%
|
Operating expenses
|
|
|
4,778
|
|
|
|
33.1
|
%
|
|
|
|
|
Other operative expenses, net
|
|
|
51
|
|
|
|
0.4
|
%
|
|
|
|
|
Operating income
(5)
|
|
|
914
|
|
|
|
6.3
|
%
|
|
|
43.5
|
%
|
Depreciation, amortization & other operative non-cash charges
|
|
|
1,452
|
|
|
|
10.1
|
%
|
|
|
|
|
Operating cash flow
(5)(6)
|
|
|
2,366
|
|
|
|
16.4
|
%
|
|
|
14.0
|
%
|
(1)
Except volume and average price
per unit case figures.
(2)
YTD Includes the results of February
to September
(3)
Operative cash flow = operating
income + depreciation, amortization & other operative non-cash charges.
(4)
Comparable means, with respect
to a year-over-year comparison, the change in a given measure excluding the effects of (i) mergers, acquisitions and divestitures,
(ii) translation effects resulting from exchange rate movements (iii) the results of hyperinflationary economies in both periods,
and (iv) includes the results of Coca-Cola FEMSA Philippines Inc, as if the consolidation had taken place at the beginning of first
quarter 2016. From our operations, only Venezuela qualifies as a hyperinflationary economy.
Press Release 3Q 2017
|
Page
33
|
October 25, 2017
|
|
Consolidated Balance Sheet
|
Expressed in millions of Mexican pesos.
|
|
|
Sep-17
|
|
|
Dec-16
|
|
Assets
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
.
|
|
|
|
|
|
Cash, cash equivalents and marketable securities
|
|
Ps.
|
20,206
|
|
|
Ps.
|
10,476
|
|
Total accounts receivable
|
|
|
12,073
|
|
|
|
15,005
|
|
Inventories
|
|
|
11,240
|
|
|
|
10,744
|
|
Other current assets
|
|
|
10,464
|
|
|
|
9,229
|
|
Total current assets
|
|
|
53,983
|
|
|
|
45,454
|
|
Property, plant and equipment
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
126,202
|
|
|
|
106,696
|
|
Accumulated depreciation
|
|
|
(50,729
|
)
|
|
|
(41,408
|
)
|
Total property, plant and equipment, net
|
|
|
75,473
|
|
|
|
65,288
|
|
Investment in shares
|
|
|
11,292
|
|
|
|
22,357
|
|
Intangibles assets and other assets
|
|
|
123,607
|
|
|
|
123,964
|
|
Other non-current assets
|
|
|
18,824
|
|
|
|
22,194
|
|
Total Assets
|
|
Ps.
|
283,179
|
|
|
Ps.
|
279,256
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Short-term bank loans and notes payable
|
|
Ps.
|
2,155
|
|
|
Ps.
|
3,052
|
|
Suppliers
|
|
|
18,796
|
|
|
|
21,489
|
|
Other current liabilities
|
|
|
21,244
|
|
|
|
15,327
|
|
Total current liabilities
|
|
|
42,195
|
|
|
|
39,868
|
|
Long-term bank loans and notes payable
|
|
|
76,510
|
|
|
|
85,857
|
|
Other long-term liabilities
|
|
|
29,040
|
|
|
|
24,298
|
|
Total liabilities
|
|
|
147,745
|
|
|
|
150,023
|
|
Equity
|
|
|
|
|
|
|
|
|
Non-controlling interest
|
|
|
16,341
|
|
|
|
7,096
|
|
Total controlling interest
|
|
|
119,093
|
|
|
|
122,137
|
|
Total equity
|
|
|
135,434
|
|
|
|
129,233
|
|
Total Liabilities and Equity
|
|
Ps.
|
283,179
|
|
|
Ps.
|
279,256
|
|
Press Release 3Q 2017
|
Page
34
|
October 25, 2017
|
|
Quarter - Volume & Transactions
|
For the three months ended September 30, 2017 and 2016
|
|
Volume
|
Expressed in million unit cases
|
|
3Q 2017
|
|
3Q 2016
|
|
Sparkling
|
Water
(1)
|
Bulk
Water
(2)
|
Still
|
Total
|
|
Sparkling
|
Water
(1)
|
Bulk
Water
(2)
|
Still
|
Total
|
Mexico
|
340.0
|
23.6
|
73.3
|
27.4
|
464.3
|
|
353.2
|
23.3
|
75.2
|
27.9
|
479.7
|
Central America
|
34.4
|
2.5
|
0.1
|
4.9
|
41.9
|
|
35.0
|
2.3
|
0.1
|
4.9
|
42.3
|
Mexico & Central America
|
374.4
|
26.1
|
73.4
|
32.2
|
506.1
|
|
388.2
|
25.6
|
75.3
|
32.7
|
521.9
|
Colombia
|
51.2
|
6.0
|
5.0
|
5.7
|
67.9
|
|
56.1
|
7.2
|
4.7
|
7.6
|
75.8
|
Venezuela
|
16.2
|
1.8
|
0.2
|
0.6
|
18.8
|
|
29.9
|
3.4
|
0.1
|
1.9
|
35.3
|
Brazil
|
161.8
|
9.4
|
1.5
|
9.2
|
181.9
|
|
130.2
|
8.2
|
1.1
|
7.4
|
146.9
|
Argentina
|
37.6
|
4.6
|
0.9
|
3.5
|
46.6
|
|
37.0
|
4.3
|
0.5
|
2.8
|
44.6
|
South America
|
266.8
|
21.8
|
7.6
|
19.1
|
315.3
|
|
253.2
|
23.1
|
6.5
|
19.7
|
302.5
|
Philippines
|
110.1
|
6.5
|
9.4
|
13.6
|
139.5
|
|
-
|
-
|
-
|
-
|
-
|
Asia
|
110.1
|
6.5
|
9.4
|
13.6
|
139.5
|
|
-
|
-
|
-
|
-
|
-
|
Total
|
751.2
|
54.4
|
90.4
|
64.9
|
960.9
|
|
641.4
|
48.7
|
81.8
|
52.5
|
824.5
|
(1) Excludes water presentations larger than 5.0 Lt ; includes
flavored water
(2) Bulk Water = Still bottled water in 5.0, 19.0 and 20.0 -
liter packaging presentations; includes flavored water
Transactions
|
Expressed in million transactions
|
|
3Q 2017
|
|
3Q 2016
|
|
Sparkling
|
Water
|
Still
|
Total
|
|
Sparkling
|
Water
|
Still
|
Total
|
Mexico
|
2,027.5
|
175.9
|
223.3
|
2,426.7
|
|
2,128.2
|
176.7
|
234.6
|
2,539.5
|
Central America
|
286.1
|
14.8
|
62.3
|
363.1
|
|
289.5
|
14.3
|
65.0
|
368.8
|
Mexico & Central America
|
2,313.5
|
190.7
|
285.6
|
2,789.9
|
|
2,417.7
|
191.0
|
299.6
|
2,908.4
|
Colombia
|
388.1
|
91.6
|
55.5
|
535.2
|
|
424.3
|
97.2
|
84.2
|
605.7
|
Venezuela
|
105.7
|
17.3
|
6.3
|
129.3
|
|
148.1
|
32.0
|
15.0
|
195.1
|
Brazil
|
984.6
|
81.7
|
106.0
|
1,172.2
|
|
817.5
|
71.1
|
83.0
|
971.5
|
Argentina
|
191.9
|
24.3
|
23.3
|
239.4
|
|
185.0
|
21.8
|
20.7
|
227.5
|
South America
|
1,670.2
|
214.8
|
191.1
|
2,076.1
|
|
1,574.8
|
222.1
|
202.9
|
1,999.8
|
Philippines
|
1,419.5
|
77.5
|
122.2
|
1,619.1
|
|
-
|
-
|
-
|
-
|
Asia
|
1,419.5
|
77.5
|
122.2
|
1,619.1
|
|
-
|
-
|
-
|
-
|
Total
|
5,403.2
|
483.0
|
598.9
|
6,485.1
|
|
3,992.5
|
413.1
|
502.5
|
4,908.2
|
Press Release 3Q 2017
|
Page
35
|
October 25, 2017
|
|
YTD - Volume & Transactions
|
For the nine months ended September 30, 2017 and 2016
|
|
Volume
|
Expressed in million unit cases
|
|
YTD 2017
|
|
YTD 2016
|
|
Sparkling
|
Water
(1)
|
Bulk
Water
(2)
|
Still
|
Total
|
|
Sparkling
|
Water
(1)
|
Bulk
Water
(2)
|
Still
|
Total
|
Mexico
|
1,012.6
|
75.7
|
223.7
|
84.9
|
1,397.0
|
|
1,016.4
|
72.6
|
223.9
|
80.1
|
1,393.0
|
Central America
|
103.3
|
7.6
|
0.4
|
14.5
|
125.9
|
|
107.9
|
7.5
|
0.5
|
14.6
|
130.5
|
Mexico & Central America
|
1,115.9
|
83.3
|
224.2
|
99.4
|
1,522.8
|
|
1,124.2
|
80.2
|
224.3
|
94.7
|
1,523.4
|
Colombia
|
145.2
|
16.9
|
14.2
|
17.4
|
193.7
|
|
167.6
|
22.1
|
16.0
|
24.9
|
230.6
|
Venezuela
|
38.3
|
4.4
|
0.3
|
1.7
|
44.7
|
|
101.3
|
9.7
|
1.1
|
7.4
|
119.6
|
Brazil
|
479.6
|
28.2
|
4.6
|
26.0
|
538.4
|
|
406.4
|
27.2
|
4.1
|
23.9
|
461.5
|
Argentina
|
116.8
|
15.0
|
2.4
|
11.1
|
145.3
|
|
119.8
|
16.9
|
2.4
|
9.6
|
148.7
|
South America
|
780.0
|
64.5
|
21.5
|
56.1
|
922.1
|
|
795.2
|
75.9
|
23.6
|
65.8
|
960.4
|
Philippines
(3)
|
311.3
|
18.3
|
24.3
|
38.5
|
392.3
|
|
-
|
-
|
-
|
-
|
-
|
Asia
|
311.3
|
18.3
|
24.3
|
38.5
|
392.3
|
|
-
|
-
|
-
|
-
|
-
|
Total
|
2,207.2
|
166.1
|
270.0
|
194.0
|
2,837.3
|
|
1,919.4
|
156.0
|
247.9
|
160.5
|
2,483.8
|
(1) Excludes water presentations larger than 5.0 Lt ; includes
flavored water
(2) Bulk Water = Still bottled water in 5.0, 19.0 and 20.0 -
liter packaging presentations; includes flavored water
Transactions
|
Expressed in million transactions
|
|
YTD 2017
|
|
YTD 2016
|
|
Sparkling
|
Water
|
Still
|
Total
|
|
Sparkling
|
Water
|
Still
|
Total
|
Mexico
|
6,119.3
|
560.8
|
697.2
|
7,377.2
|
|
6,208.2
|
548.0
|
681.5
|
7,437.6
|
Central America
|
856.7
|
46.1
|
187.7
|
1,090.5
|
|
887.6
|
47.0
|
194.7
|
1,129.3
|
Mexico & Central America
|
6,976.0
|
606.9
|
884.9
|
8,467.8
|
|
7,095.7
|
595.1
|
876.2
|
8,567.0
|
Colombia
|
1,109.6
|
231.3
|
171.8
|
1,512.7
|
|
1,272.1
|
290.4
|
257.2
|
1,819.7
|
Venezuela
|
261.3
|
41.9
|
14.9
|
318.1
|
|
482.3
|
86.5
|
66.4
|
635.2
|
Brazil
|
2,903.3
|
249.2
|
294.2
|
3,446.7
|
|
2,539.9
|
236.5
|
265.9
|
3,042.3
|
Argentina
|
579.0
|
76.1
|
72.4
|
727.5
|
|
577.3
|
81.4
|
70.2
|
728.9
|
South America
|
4,853.1
|
598.6
|
553.3
|
6,005.0
|
|
4,871.5
|
694.9
|
659.8
|
6,226.2
|
Philippines
(3)
|
3,920.0
|
214.1
|
310.1
|
4,444.2
|
|
-
|
-
|
-
|
-
|
Asia
|
3,920.0
|
214.1
|
310.1
|
4,444.2
|
|
-
|
-
|
-
|
-
|
Total
|
15,749.1
|
1,419.6
|
1,748.3
|
18,917.0
|
|
11,967.3
|
1,289.9
|
1,536.0
|
14,793.1
|
(3) YTD information for the Philippines includes February to
September
Press Release 3Q 2017
|
Page
36
|
October 25, 2017
|
|
Macroeconomic Information
|
Third quarter 2017
|
|
LTM
|
3Q 17
|
YTD
|
Mexico
|
6.55%
|
1.62%
|
4.26%
|
Colombia
|
4.35%
|
0.12%
|
3.59%
|
Venezuela
(2)
|
1158.69%
|
153.43%
|
556.23%
|
Brazil
|
2.20%
|
0.08%
|
1.81%
|
Argentina
|
25.12%
|
4.86%
|
17.31%
|
Philippines
|
3.78%
|
0.88%
|
2.35%
|
(1)
Source: inflation estimated by the company based
on historic publications from the Central Banks of each country.
(2)
Inflation based on unofficial publications.
Average Exchange Rates for each Period
(3)
|
|
Quarterly Exchange Rate (local currency per USD)
|
|
Accumulated Exchange Rate (local currency per USD)
|
|
3Q 17
|
3Q 16
|
D
%
|
|
YTD 17
|
YTD 16
|
D
%
|
Mexico
|
17.82
|
18.72
|
-4.8%
|
|
18.94
|
18.27
|
3.7%
|
Guatemala
|
7.29
|
7.55
|
-3.4%
|
|
7.36
|
7.64
|
-3.7%
|
Nicaragua
|
30.23
|
28.79
|
5.0%
|
|
29.87
|
28.45
|
5.0%
|
Costa Rica
|
577.25
|
556.68
|
3.7%
|
|
572.43
|
548.15
|
4.4%
|
Panama
|
1.00
|
1.00
|
0.0%
|
|
1.00
|
1.00
|
0.0%
|
Colombia
|
2,976.12
|
2,951.04
|
0.8%
|
|
2,938.94
|
3,067.67
|
-4.2%
|
Venezuela
|
3,035.00
|
646.09
|
369.7%
|
|
1,675.25
|
437.17
|
283.2%
|
Brazil
|
3.16
|
3.25
|
-2.6%
|
|
3.17
|
3.56
|
-10.8%
|
Argentina
|
17.28
|
14.95
|
15.6%
|
|
16.23
|
14.56
|
11.5%
|
Philippines
|
50.84
|
47.06
|
8.0%
|
|
50.23
|
46.95
|
7.0%
|
End of Period Exchange Rates
|
|
Quarter Exchange Rate (local currency per USD)
|
|
Previous Quarter Exchange Rate (local currency per USD)
|
|
Sep 2017
|
Sep 2016
|
D
%
|
|
Jun 2017
|
Jun 2016
|
D
%
|
Mexico
|
18.20
|
19.50
|
-6.7%
|
|
17.90
|
18.91
|
-5.4%
|
Guatemala
|
7.34
|
7.52
|
-2.3%
|
|
7.34
|
7.64
|
-4.0%
|
Nicaragua
|
30.41
|
28.97
|
5.0%
|
|
30.04
|
28.61
|
5.0%
|
Costa Rica
|
574.13
|
558.80
|
2.7%
|
|
579.87
|
554.20
|
4.6%
|
Panama
|
1.00
|
1.00
|
0.0%
|
|
1.00
|
1.00
|
0.0%
|
Colombia
|
2,936.67
|
2,879.95
|
2.0%
|
|
3,038.26
|
2,916.15
|
4.2%
|
Venezuela
|
3,345.00
|
658.89
|
407.7%
|
|
2,640.00
|
628.34
|
320.2%
|
Brazil
|
3.17
|
3.25
|
-2.4%
|
|
3.31
|
3.21
|
3.1%
|
Argentina
|
17.31
|
15.31
|
13.1%
|
|
16.63
|
15.04
|
10.6%
|
Philippines
|
51.07
|
48.26
|
5.8%
|
|
50.47
|
46.96
|
7.5%
|
(3)
Average exchange rate for each period computed
with the average exchange rate of each month.
(*)
Exchange rate as of September, 30 2017
Press Release 3Q 2017
|
Page
37
|
October 25, 2017
|
|
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the
registrant has duly caused this report to be
signed on its behalf of the
undersigned, thereunto duly authorized.
|
FOMENTO ECONÓMICO MEXICANO, S.A. DE C.V
.
|
|
|
|
|
By:
|
/s/ Eduardo Padilla
|
|
|
Eduardo Padilla
|
|
|
Chief Financial and Corporate Officer
|
Date: October 26, 2017
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