Core Insights - Fomento Económico Mexicano, S.A.B. de C.V. (FMX) is recognized as a strong defensive stock amid economic challenges, primarily due to its strategic expansion and market adaptation [1][2] Group 1: U.S. Expansion - FMX is accelerating its retail presence in the U.S. with the acquisition of 249 Delek convenience stores for $385 million, which will be rebranded as Oxxo locations [2] - By September 2025, approximately 40 stores in West Texas will be converted, featuring expanded product lines including Andatti coffee [2] - This initiative aims for incremental sales growth and modernization of offerings to enhance competitiveness in the Southwest U.S. [2] Group 2: Domestic Operations - In Mexico, FMX has closed 432 underperforming pharmacy stores to enhance profitability and operational efficiency amid a challenging consumer environment [3] - Despite mixed domestic results, overall revenues increased by 6.3% last quarter, largely driven by international expansion [3] - The company continues to optimize product assortments, pricing, and overheads to strengthen its core markets ahead of year-end [3] Group 3: Leadership and Analyst Sentiment - On September 17, 2025, FMX appointed José Antonio Fernandez Garza-Laguera as the new CEO to lead its cross-border strategy [4] - Analyst sentiment has improved following positive performance of U.S. stores and ongoing international growth [4]

Core Viewpoint - FEMSA has appointed Jose Antonio Fernández Garza-Lagüera as the new CEO effective November 1, 2025, following a structured leadership succession planning process [1][2]. Group 1: Leadership Transition - The Corporate Practices and Nominations Committee of FEMSA's Board of Directors worked on the succession planning, leading to the formation of a Special Committee to oversee the process [2]. - The Special Committee, chaired by Ricardo Saldívar Escajadillo, included members from the Corporate Practices and Nominations Committee and independent directors, ensuring adherence to high corporate standards [2]. Group 2: Jose Antonio Fernández Garza-Lagüera's Background - Jose Antonio joined Cervecería Cuauhtémoc Moctezuma Heineken in 2011 and has held various management roles within FEMSA, including CEO of FEMSA Proximity & Health [3]. - He currently leads over 180,000 employees and oversees more than 28,000 proximity stores, 4,300 drugstores, and 550 fuel stations across multiple countries [3]. Group 3: Strategic Vision - Jose Antonio is expected to bring a strategic focus and results-driven leadership style to FEMSA, emphasizing growth, innovation, and sustainability [4]. - The company aims to enhance economic and social value creation while focusing on the development of its employees and the communities it serves [4]. Group 4: Current Leadership - José Antonio Fernández Carbajal will continue as Executive Chairman and has been interim CEO since July 2023, receiving gratitude from the Board for his leadership during the transition [5]. Group 5: Company Overview - FEMSA operates in the retail industry through its Proximity Americas Division, which includes OXXO, and has a significant presence in the beverage industry as the largest franchise bottler of Coca-Cola products by volume [6]. - The company employs over 392,000 people across 18 countries and is recognized in various sustainability indices [6].

Core Insights - FEMSA has entered into definitive agreements with Raízen to amicably terminate their joint venture "Grupo Nós" in Brazil, allowing both companies to focus on their respective business strategies [1] - FEMSA will retain all OXXO stores in Brazil and the distribution center in Cajamar, while Raízen will keep all Shell Select convenience stores [1] - The transaction will be cash-neutral for both parties, with FEMSA assuming the existing debt of Grupo Nós at closing [1] Company Strategy - OXXO Brazil is a strategic priority for FEMSA, with plans for accelerated store expansion and adaptation of the OXXO format to local consumer needs [2] - The company aims to drive long-term returns through sustained top-line growth and operational efficiency in the Brazilian market [2] Market Positioning - FEMSA has tailored OXXO's offerings to meet local consumer preferences, introducing modern retail experiences in a market dominated by traditional trade [3] - The low penetration of modern convenience formats in Brazil presents a significant growth opportunity for FEMSA [3] Leadership Perspective - The CEO of FEMSA Retail expressed appreciation for the collaboration with Raízen and emphasized the commitment to strengthening OXXO's presence in Brazil as part of the long-term growth strategy [4] - The completion of the separation of OXXO and Shell Select stores is subject to regulatory approvals and is expected to close in the coming months [4] Company Overview - FEMSA operates in the retail industry through various divisions, including Proximity Americas with OXXO and Proximity Europe with Valora, and also has a significant presence in the beverage industry through Coca-Cola FEMSA [5] - The company employs over 392,000 people across 18 countries and is recognized in several global sustainability indices [5]

Core Viewpoint - Foment (FMX.US) has had its MSCI ESG rating downgraded from AA to A as of August 27, 2025 [1] Summary by Relevant Categories - **Company ESG Rating** - Foment's MSCI ESG rating was downgraded from AA to A [1]

Company Overview - Fomento Económico Mexicano, S.A.B. de C.V. (NYSE: FMX) is the largest bottler by sales volume of Coca-Cola and operates in 18 countries [1] - The company has diversified interests in logistics, beverages, healthcare, and fuel [1] Market Presence - FMX has a significant international presence, indicating its strong market position and operational capabilities across various sectors [1] Investment Insights - The company is recognized as a major player in the beverage industry, particularly in its role as a bottler for Coca-Cola, which may present potential investment opportunities [1]

Core Insights - FEMSA reported a second-quarter 2025 net majority earnings per ADS of $0.42, down from $1.87 in the same quarter last year, missing the Zacks Consensus Estimate of $0.91 [1][7] - Total revenues for the quarter were $10.84 billion, reflecting a 6.3% year-over-year increase in local currency, but fell short of the Zacks Consensus Estimate of $11.2 billion [2][7] - The company's net consolidated income was Ps. 5,593 million (approximately $297 million), showing a growth of 64.3% from the previous year [1] Revenue and Earnings Performance - Revenue growth was driven by gains in business units outside Mexico and favorable currency rates due to the depreciation of the Mexican Peso [2] - Including currency effects and M&A, revenues grew by 2.2% year over year [2] - The gross profit increased by 4.2% year over year to Ps. 85,922 million (approximately $4.56 billion), but the consolidated gross margin contracted by 80 basis points to 40.7% [4][8] Segment Performance - Proximity Americas: Revenues rose 6.9% year over year to Ps. 83,958 million (approximately $4.5 billion), but same-store sales dropped by 0.4% due to a decline in store traffic [9] - Proximity Europe: Revenues grew 31.4% year over year to Ps. 15,065 million (approximately $800 million), benefiting from currency appreciation [11] - Health Division: Revenues increased by 15.6% year over year to Ps. 21,850 million (approximately $1.16 billion), with same-store sales rising by 13.1% in Mexican pesos [12] - Fuel Division: Revenues rose 0.6% year over year to Ps. 17,100 million (approximately $908.2 million), with operating income improving by 13.6% [13] - Coca-Cola FEMSA: Revenues advanced 5% year over year to Ps. 72,917 million (approximately $3.9 billion), but the operating margin contracted by 60 basis points to 13.4% [14] Financial Position - As of June 30, 2025, FEMSA had cash and cash equivalents of Ps. 129,825 million (approximately $6.9 billion) and long-term debt of Ps. 136,215 million (approximately $7.2 billion) [15] - Capital expenditure in the second quarter totaled Ps. 9,203 million (approximately $488.8 million), a decline from the previous year due to reduced spending in Proximity Americas and the Health division [15]

Financial Data and Key Metrics Changes - Total revenue growth for the second quarter of 2025 was 6.3%, despite a challenging environment in Mexico, offset by solid trends outside Mexico and currency tailwinds [19][20] - Operating income increased by only 0.2% year-over-year, impacted by inflationary effects on costs and expenses [19] - Net consolidated income decreased by 64.3% to COP 5,600,000,000, primarily due to a noncash foreign exchange loss and lower interest income [20] Business Line Data and Key Metrics Changes - Proximity Americas division saw same store sales decline by 0.4%, with a solid average ticket growth of 6.6% but weaker traffic, which contracted by 6.6% [21][22] - OXXO LATAM experienced same store sales growth in the high teens, indicating better performance compared to Mexico [22] - The Health division reported total revenue growth of 15.6% in pesos, with same store sales growing 13.1%, driven by strong performance in Colombia and Ecuador [28] Market Data and Key Metrics Changes - Coca Cola FEMSA's revenues increased by 5%, despite nearly a 10% decline in volumes in Mexico and Central America due to adverse weather conditions [31] - The company noted a loss of competitiveness in convenience categories relative to other channels, impacting sales [23][60] Company Strategy and Development Direction - The company is focused on leveraging data from the Spin Premier Rewards program to enhance retail media efforts and drive higher commercial income [39] - There is a strategic imperative to evolve OXXO's convenience value proposition into digital, with plans to explore financial services including savings and credit products [52] - The company aims to maintain strong operational discipline and strategic investments to navigate the evolving consumer environment [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging consumer environment in Mexico and the need for commercial initiatives to address traffic declines [22][34] - The company remains cautiously optimistic for the second half of the year, despite potential volatility amid a soft macroeconomic environment [34] - Management emphasized the importance of operational discipline and rigorous capital allocation to deliver sustainable growth [34] Other Important Information - The company has successfully completed the divestiture of its logistics business and is focused on investing in core operations [33] - Shareholder remuneration plans include deploying COP 66,000,000,000 through dividends and share repurchases [33] Q&A Session Summary Question: What are the missing pieces to maximize Spin and Spin Premier's potential? - Management highlighted the importance of leveraging data from the Premier Rewards program to improve personalization and drive higher commercial income [39][40] Question: Are there signs of better traffic data for Spin users compared to non-users? - Management confirmed that users of the Spin program tend to show increased loyalty and engagement, leading to more frequent store visits [43] Question: How does FEMSA Digital fit within OXXO to leverage its physical footprint? - Management expressed excitement about the collaboration between SPIN and OXXO, emphasizing the need for a digital value proposition that complements the physical presence [50][51] Question: What is driving the volatility in net income and equity income? - Management attributed the decline in net income primarily to foreign exchange losses on U.S. Dollar cash balances [88] Question: What initiatives are being taken to improve traffic and same store sales? - Management mentioned various initiatives, including adjustments in product assortment and promotional activities, to address traffic challenges [61][86]

Financial Data and Key Metrics Changes - Total revenue growth for the second quarter of 2025 was 6.3%, despite a challenging environment in Mexico, offset by solid trends outside Mexico and currency tailwinds [18][19] - Operating income increased by only 0.2% year-over-year, impacted by inflationary effects on costs and expenses [18] - Net consolidated income decreased by 64.3% to COP 5,600,000,000, primarily due to a noncash foreign exchange loss and lower interest income [19][20] Business Line Data and Key Metrics Changes - Proximity Americas division saw same store sales decline by 0.4%, with a solid average ticket growth of 6.6% but weaker traffic, which contracted by 6.6% [20][21] - OXXO LATAM experienced same store sales growth in the high teens, indicating better performance compared to Mexico [20] - Health division revenues increased by 15.6% in pesos, with same store sales growing 13.1%, driven by strong performance in Colombia and Ecuador [27] Market Data and Key Metrics Changes - Coca Cola FEMSA revenues increased by 5%, despite nearly 10% volume decline in Mexico and Central America due to adverse weather conditions [29] - Valora in Europe reported total revenues increased by 31.4% in pesos, driven by strong retail performance in Switzerland [26] Company Strategy and Development Direction - The company is focusing on enhancing its digital ecosystem through SPIN, aiming to integrate digital and physical experiences to meet consumer needs [6][10] - There is a strategic emphasis on financial services, including savings and credit products, to drive monetization opportunities [38][49] - The company plans to maintain operational discipline and strategic investments to navigate the evolving consumer environment [31][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging consumer environment in Mexico and the need for commercial initiatives to improve traffic [21][22] - There is cautious optimism for the second half of the year, with expectations for stable full-year operating margins at Proximity Americas [31][32] - The management team is focused on improving profitability through operational efficiency and cost discipline [27][28] Other Important Information - The company has successfully completed the divestiture of its logistics business and is prioritizing investments in core operations [30][31] - The company is committed to deploying approximately COP 66,000,000,000 in shareholder remuneration through dividends and share repurchases [31] Q&A Session Summary Question: What are the missing pieces to maximize SPIN and SPIN Premier? - Management highlighted the importance of leveraging data from the Premier Rewards program to enhance retail media efforts and drive higher commercial income [36][38] Question: Are there better traffic data for SPIN users compared to non-users? - Management confirmed that users of the SPIN program tend to visit stores more frequently, indicating a positive impact on traffic [41][42] Question: How does FEMSA Digital fit within OXXO? - Management expressed excitement about the collaboration between SPIN and OXXO, emphasizing the need for a digital value proposition leveraging OXXO's physical footprint [48][49] Question: What initiatives are being taken to improve traffic at OXXO? - Management mentioned various initiatives, including adjustments in product offerings and promotional activities to address traffic challenges [58][59] Question: What is driving the volatility in net income? - The primary reason for the decline in net income was attributed to foreign exchange losses on U.S. Dollar cash balances, alongside higher taxes [86][87]

Core Insights - FEMSA reported a mixed set of results for Q2 2025, facing challenges in Mexico due to a soft consumer environment and adverse weather, while operations outside Mexico showed strong performance [3][4]. Financial Performance - Total consolidated revenues grew by 6.3% in Q2 2025 compared to Q2 2024, while income from operations increased by 1.2% [5]. - Proximity Americas saw total revenues increase by 6.9%, but income from operations decreased by 2.8% compared to Q2 2024 [5]. - Coca-Cola FEMSA's total revenues and income from operations grew by 5.0% and 0.2%, respectively, against Q2 2024 [5]. Operational Highlights - Proximity Americas Mexico experienced weak traffic numbers, particularly in convenience categories like soft drinks, beer, and tobacco, which underperformed compared to other categories [4]. - Spin by OXXO had 9.4 million active users, representing an 18.8% growth compared to Q2 2024, while Spin Premia had 26.6 million active loyalty users, reflecting a 16.9% growth [5]. - The retail operations outside of Mexico showed encouraging signs, with improvements in competitive positioning and strong results in certain South American markets [4][5]. Strategic Focus - The company is focused on reversing traffic and volume trends while managing costs and expenses in the second half of the year [5]. - FEMSA is working with supplier partners to adjust product assortments and pricing strategies to remain competitive as they approach the key selling season in Q4 [4].

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) FEMSA's 2Q25 results showed mixed performance with revenue growth and operational income increase, despite challenges from a soft consumer environment and adverse weather in Mexico [2Q 2025 Highlights](index=1&type=section&id=2Q%202025%20Highlights) FEMSA reported mixed results for 2Q25, with total consolidated revenues growing 6.3% and income from operations increasing 1.2%. Performance was challenged by a soft consumer environment and adverse weather in Mexico, impacting retail and beverage volumes. However, strong results from international proximity and beverage operations, coupled with currency tailwinds, helped mitigate these impacts. Digital initiatives like Spin by OXXO and Spin Premia showed significant user growth 2Q25 Change vs 2Q24 (As Reported) | Metric | 2Q25 Change vs 2Q24 (As Reported) | | :----------------------- | :----------------------------------- | | Total Consolidated Revenues | 6.3% | | Income from Operations | 1.2% | | Proximity Americas Revenues | 6.9% | | Proximity Americas Income from Operations | (2.8)% | | Coca-Cola FEMSA Revenues | 5.0% | | Coca-Cola FEMSA Income from Operations | 0.2% | - FEMSA's CEO noted a challenging combination of a soft consumer environment and adverse weather in Mexico, impacting retail operations and beverage volumes. Positive performance from international proximity and beverage operations, along with currency tailwinds, helped to offset these challenges[8](index=8&type=chunk) Digital Initiative Performance | Digital Initiative | 2Q25 Active Users | YoY Growth | | :----------------- | :---------------- | :--------- | | Spin by OXXO | 9.4 million | 18.8% | | Spin Premia | 26.6 million | 16.9% | | Spin Premia Average Tender at OXXO Mexico | 45.8% | Up from 36.1% in 2Q24 | [FEMSA Consolidated Financial Performance](index=2&type=section&id=FEMSA%20Consolidated%20Financial%20Performance) FEMSA's consolidated financial performance in 2Q25 and YTD25 showed revenue growth, but profitability was significantly impacted by foreign exchange losses and margin contractions [Second Quarter 2025 Consolidated Results](index=2&type=section&id=2.1.%20Second%20Quarter%202025%20Consolidated%20Results) FEMSA's consolidated results for 2Q25 showed revenue growth driven by international operations and favorable exchange rates, but profitability was impacted by margin contractions in key segments and a significant non-cash foreign exchange loss. Net income saw a substantial decline 2Q25 Consolidated Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | Var. (%) | Comp. (%) | | :----------------------- | :--- | :--- | :------- | :-------- | | Total Revenues | 211,364 | 198,744 | 6.3% | 2.2% | | Gross Profit | 85,922 | 82,440 | 4.2% | 0.0% | | Gross Profit Margin (%) | 40.7 | 41.5 | (80 bps) | | | Income from Operations | 17,832 | 17,626 | 1.2% | (1.5)% | | Operating Margin (%) | 8.4 | 8.9 | (50 bps) | | | Adjusted EBITDA | 29,589 | 28,614 | 3.4% | (0.3)% | | EBITDA Margin (%) | 14.0 | 14.4 | (40 bps) | | | Consolidated Net Income | 5,593 | 15,669 | (64.3)% | | - Total revenues increased **6.3%** (**2.2% comparable**) due to growth across business units outside Mexico and favorable exchange rates. Gross profit increased **4.2%** (flat comparable), but gross margin decreased **80 basis points** due to margin contractions in Proximity Europe, Coca-Cola FEMSA, and Health[14](index=14&type=chunk)[15](index=15&type=chunk) - Net consolidated income decreased by **64.3%** to **Ps. 5,593 million**, primarily due to a **Ps. 4,102 million non-cash foreign exchange loss** (compared to a Ps. 6,131 million gain in 2Q24) and lower interest income[18](index=18&type=chunk) [Year-to-Date 2025 Consolidated Results](index=12&type=section&id=2.2.%20Year-to-Date%202025%20Consolidated%20Results) For the first six months of 2025, FEMSA's consolidated revenues grew, but net income significantly declined due to higher tax rates, increased net interest expense, and a foreign exchange loss, contrasting with a gain in the prior year YTD 2025 Consolidated Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | YTD 2025 | YTD 2024 | Var. (%) | Comp. (%) | | :----------------------- | :------- | :------- | :------- | :-------- | | Total Revenues | 406,812 | 375,507 | 8.3% | 2.7% | | Gross Profit | 164,686 | 150,779 | 9.2% | 4.5% | | Gross Profit Margin (%) | 40.5% | 40.2% | 30 bps | | | Income from Operations | 31,368 | 30,582 | 2.6% | (3.9)% | | Operating Margin (%) | 7.7 | 8.1 | (40 bps) | | | Adjusted EBITDA | 54,832 | 51,919 | 5.6% | 1.5% | | Adjusted EBITDA Margin (%) | 13.5 | 13.8 | (30 bps) | | | Consolidated Net Income | 14,533 | 21,450 | (32.2)% | | - Net consolidated income declined **32.2%** to **Ps. 14,533 million**, primarily due to a **non-cash foreign exchange loss of Ps. 3,660 million** (compared to a Ps. 5,008 million gain in 2024), higher net interest expense, and an increased effective income tax rate of **41.1%** (vs. 31.9% in 2024)[74](index=74&type=chunk)[75](index=75&type=chunk) - Capital expenditures amounted to **Ps. 17,987 million**, a decrease of **1.4%** compared to 2024, mainly reflecting lower CAPEX in Proximity Americas (due to paused expansion in Chile and Peru) and in Health and Fuel divisions, partially offset by higher investments at Coca-Cola FEMSA[77](index=77&type=chunk) [Consolidated Financial Position & Debt](index=2&type=section&id=2.3.%20Consolidated%20Financial%20Position%20%26%20Debt) FEMSA's net debt ex-KOF increased to Ps. 55,809 million as of June 30, 2025, with a higher Net Debt/EBITDA ratio. The company's debt profile is diversified across currencies, with a majority in Mexican pesos and a significant portion at fixed rates Financial Position as of June 30, 2025 (Millions of Ps.) | As of June 30, 2025 (Millions of Ps.) | Amount | | :------------------------------------ | :----- | | Cash and Investments | 125,171 | | Financial Debt | 74,040 | | Lease Liabilities | 106,940 | | Net debt | 55,809 | - Net Debt / EBITDA ratio ex-KOF increased to **0.93x** as of June 30, 2025, up from **0.64x** in 2Q24[19](index=19&type=chunk) Debt Denomination and Rate | Debt Denomination | % of Total Debt | Average Rate | | :---------------- | :-------------- | :----------- | | Mexican pesos | 49.0% | 9.1% | | U.S. Dollars | 30.9% | 3.5% | | Euros | 7.2% | 2.6% | | Brazilian reais | 9.5% | 10.9% | | Fixed rate | 81.8% | | | Variable rate | 18.2% | | [FEMSA Business Segment Performance](index=4&type=section&id=FEMSA%20Business%20Segment%20Performance) FEMSA's business segments showed varied performance, with strong international growth offsetting challenges in Mexico's retail and health divisions, while Proximity Europe and Fuel divisions demonstrated robust profitability improvements [Proximity Americas](index=4&type=section&id=3.1.%20Proximity%20Americas) Proximity Americas experienced a challenging quarter in Mexico due to adverse weather and a soft consumer environment, leading to a decline in same-store sales and traffic. However, store expansion and strong performance in OXXO Latam and other formats like Bara and OXXO Brazil partially offset these challenges, driving overall revenue growth Proximity Americas Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | Var. (%) | Comp. (%) | | :----------------------- | :--- | :--- | :------- | :-------- | | Total Revenues | 83,958 | 78,526 | 6.9% | 2.0% | | Same-store sales (thousands of Ps.) | 1,023.5 | 1,028.0 | (0.4)% | (0.6)% | | Income from Operations | 7,540 | 7,757 | (2.8)% | (3.1)% | | Operating Margin (%) | 9.0 | 9.9 | (90 bps) | | | Adjusted EBITDA | 11,809 | 11,746 | 0.5% | (0.4)% | - Same-store sales declined **0.4%** (**0.6% comparable**) due to a **6.6% decrease in store traffic**, despite a **6.6% increase in average ticket**. This was primarily driven by weak performance in Mexico's convenience categories (beer, soft drinks, tobacco) and adverse weather[27](index=27&type=chunk) - The OXXO store base in Mexico, USA, and Latam expanded by **334 stores** in 2Q25, reaching a total of **25,180 stores**. OXXO Latam showed strong same-store sales growth in the **high teens** on a currency-neutral basis[27](index=27&type=chunk) [OXXO (Mexico, USA & Latam)](index=4&type=section&id=3.1.1.%20OXXO%20(Mexico,%20USA%20%26%20Latam)) OXXO operations across Mexico, USA, and Latam faced challenges in Mexico with declining same-store sales and traffic, but saw overall store expansion OXXO Same-Store Sales Metrics | OXXO Metric | 2Q25 | 2Q24 | Var. (%) | | :------------ | :--- | :--- | :------- | | Same-store sales (thousands of Ps.) | 1,023.5 | 1,028.0 | (0.4)% | | Traffic (thousands of transactions) | 17.1 | 18.3 | (6.6)% | | Ticket (pesos) | 59.7 | 56.0 | 6.6% | - OXXO Mexico experienced lackluster results in 'Thirst and Gathering' consumption occasions, with decreases in beer, soft drinks, and tobacco categories[27](index=27&type=chunk) - Proximity Americas added **1,500 net new stores** over the last twelve months, including **249 stores** from the acquisition of Delek's retail operations in the USA[27](index=27&type=chunk) [Other Formats (Bara, OXXO Brazil)](index=5&type=section&id=3.1.2.%20Other%20Formats%20(Bara,%20OXXO%20Brazil)) Other formats like Bara and OXXO Brazil demonstrated strong revenue and same-store sales growth, contributing positively to the segment's performance - Bara's total revenues increased by **28.0%** in 2Q25, with same-store sales up **8.9%**, driven by strong performance in grocery, dairy, and frozen food categories. The Bara store base expanded by **23 units** in the quarter, reaching **533 stores**[30](index=30&type=chunk) - OXXO Brazil (Grupo Nós) total revenues grew **33.8%** year-over-year, with same-store sales growth of **12.8%**, reflecting successful evolution and expansion of the OXXO value proposition[31](index=31&type=chunk) [Proximity Europe](index=6&type=section&id=3.2.%20Proximity%20Europe) Proximity Europe (Valora) delivered strong revenue and operating income growth in 2Q25, significantly boosted by favorable currency effects. Despite a gross margin contraction due to lower-margin B2C foodservice sales and product mix, effective cost management led to an improved operating margin Proximity Europe Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | Var. (%) | Comp. (%) | | :----------------------- | :--- | :--- | :------- | :-------- | | Total Revenues | 15,065 | 11,466 | 31.4% | 5.9% | | Gross Profit | 6,233 | 4,964 | 25.6% | 1.2% | | Gross Profit Margin (%) | 41.4 | 43.3 | (190 bps) | | | Income from Operations | 688 | 445 | 54.4% | 24.0% | | Operating Margin (%) | 4.6 | 3.9 | 70 bps | | | Adjusted EBITDA | 2,179 | 1,666 | 30.8% | 5.2% | - Total revenues increased **31.4%** (**5.9% excluding currency effects**), driven by the appreciation of the Euro and Swiss Franc and increased retail sales in Switzerland[35](index=35&type=chunk) - Gross margin contracted by **190 basis points** to **41.4%**, mainly due to lower B2C foodservice sales (higher margin) and a product-mix effect from higher tobacco sales. Income from operations increased **54.4%** (**24.0% comparable**) due to retail sales growth and effective cost management[36](index=36&type=chunk)[37](index=37&type=chunk) [Health Division](index=7&type=section&id=3.3.%20Health%20Division) The Health Division's revenues grew in 2Q25, supported by currency appreciation and strong performance in Colombia and Ecuador, which offset negative results and store closures in Mexico. Despite gross and operating margin contractions, Adjusted EBITDA saw growth Health Division Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | Var. (%) | Comp. (%) | | :----------------------- | :--- | :--- | :------- | :-------- | | Total Revenues | 21,850 | 18,894 | 15.6% | 6.7% | | Same-store sales (thousands of Ps.) | 1,029.0 | 909.6 | 13.1% | 4.8% | | Gross Profit | 6,496 | 5,719 | 13.6% | 4.5% | | Gross Profit Margin (%) | 29.7 | 30.3 | (60 bps) | | | Income from Operations | 819 | 775 | 5.7% | (5.2)% | | Operating Margin (%) | 3.8 | 4.1 | (30 bps) | | | Adjusted EBITDA | 1,981 | 1,696 | 16.9% | 3.7% | - Total revenues increased **15.6%** (**6.7% currency-neutral**), driven by positive performance in Colombia and Ecuador, offsetting negative results in Mexico. Same-store sales increased **13.1%** (**4.8% currency-neutral**)[42](index=42&type=chunk) - The net store base decreased by **273 units** in 2Q25, including **311 net closures in Mexico**, reaching **4,321 locations**. Gross margin contracted **60 basis points** due to the challenging environment in Mexico and store closures[42](index=42&type=chunk)[45](index=45&type=chunk) [Fuel Division](index=8&type=section&id=3.4.%20Fuel%20Division) The Fuel Division reported modest revenue growth in 2Q25, primarily from increased same-station sales volume and average price per liter, despite a decline in the wholesale business. Gross and operating margins expanded due to cost efficiencies and a shift away from lower-margin wholesale operations Fuel Division Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | Var. (%) | | :----------------------- | :--- | :--- | :------- | | Total Revenues | 17,100 | 16,996 | 0.6% | | Same-station sales (thousands of Ps.) | 9,209.5 | 8,778.5 | 4.9% | | Gross Profit | 2,147 | 2,014 | 6.6% | | Gross Profit Margin (%) | 12.6 | 11.9 | 70 bps | | Income from Operations | 800 | 704 | 13.6% | | Operating Margin (%) | 4.7 | 4.1 | 60 bps | | Adjusted EBITDA | 1,141 | 1,027 | 11.1% | - Total revenues increased **0.6%**, driven by a **4.9% increase in same-station sales** (**4.2% volume growth**, **0.6% average price increase**), offset by a decline in the wholesale business[50](index=50&type=chunk) - Gross profit margin expanded **70 basis points** to **12.6%**, reflecting a slight contraction in cost of sales and the decline in the lower-margin wholesale business. Income from operations increased **13.6%** due to higher efficiencies and cost controls[51](index=51&type=chunk)[52](index=52&type=chunk) [Retail Operations Summary](index=9&type=section&id=3.5.%20Retail%20Operations%20Summary) FEMSA's retail operations showed varied performance across regions and formats in 2Q25. While OXXO Mexico and FEMSA Health Mexico faced declines in revenue and same-store sales, OXXO Latam, Bara, OXXO Brazil, and FEMSA Health in Colombia and Ecuador demonstrated strong growth, highlighting the importance of geographic diversification 2Q25 Total Revenue Growth by Segment/Region | Segment/Region | 2Q25 Total Revenue Growth (% vs year ago) | | :--------------- | :-------------------------------------- | | OXXO Mexico | 1.4% | | OXXO Latam | 36.8% | | Bara | 28.0% | | OXXO Brazil | 33.8% | | Proximity Europe | 5.9% | | FEMSA Health Colombia | 15.3% | | FEMSA Health Mexico | (16.8)% | 2Q25 Same-Store Sales Growth by Segment/Region | Segment/Region | 2Q25 Same-Store Sales (% vs year ago) | | :--------------- | :------------------------------------ | | OXXO Mexico | (1.2)% | | OXXO Latam | 19.3% | | Bara | 8.9% | | OXXO Brazil | 12.8% | | FEMSA Health Colombia | 24.4% | | FEMSA Health Mexico | (8.7)% | 2Q25 Total Unit Growth by Segment/Region | Segment/Region | 2Q25 Total Unit Growth (% vs year ago) | | :--------------- | :------------------------------------- | | OXXO Mexico | 5.4% | | OXXO Latam | 3.2% | | Bara | 37.0% | | OXXO Brazil | 14.9% | | FEMSA Health Mexico | (24.8)% | [Digital Initiatives (SPIN)](index=11&type=section&id=Digital%20Initiatives%20(SPIN)) FEMSA's digital initiatives, Spin by OXXO and Spin Premia, demonstrated robust growth in active users and engagement, reinforcing their strategic importance [Spin by OXXO](index=11&type=section&id=4.1.%20Spin%20by%20OXXO) Spin by OXXO continued its strong user acquisition and engagement growth in 2Q25, significantly increasing its active user base and monthly transactions Spin by OXXO Performance Metrics | Metric | 2Q25 | 2Q24 | YoY Growth | | :---------------------- | :----- | :----- | :--------- | | Total Acquired Users | 14.5M | 11.8M | 22.9% | | Active Users | 9.4M | | 18.8% | | Average Monthly Transactions | 73.7M | | 28.9% | [Spin Premia](index=11&type=section&id=4.2.%20Spin%20Premia) Spin Premia also demonstrated robust user growth and increased penetration within OXXO Mexico sales, indicating successful loyalty program adoption Spin Premia Performance Metrics | Metric | 2Q25 | 2Q24 | YoY Growth | | :---------------------- | :----- | :----- | :--------- | | Total Acquired Users | 58.3M | 47.2M | 23.5% | | Active Users | 26.6M | | 16.9% | | Average Tender at OXXO Mexico | 45.8% | 36.1% | 9.7 p.p. | [Recent Developments (FEMSA)](index=12&type=section&id=Recent%20Developments%20(FEMSA)) FEMSA undertook strategic financial actions, including an Accelerated Share Repurchase and the divestiture of certain Solistica logistics operations, to optimize capital structure and focus its portfolio [Accelerated Share Repurchase (ASR)](index=12&type=section&id=5.1.%20Accelerated%20Share%20Repurchase%20(ASR)) FEMSA completed an Accelerated Share Repurchase (ASR) agreement, repurchasing $250 million of its ADSs to enhance capital returns to shareholders - On May 19, 2025, FEMSA entered into an ASR agreement to repurchase **USD $250 million** of its ADSs[79](index=79&type=chunk) - The ASR was completed by July 21-22, resulting in the repurchase of **2,439,936 ADSs** at an average price of **USD $102.46 per ADS**[79](index=79&type=chunk) [Solistica Divestiture](index=13&type=section&id=5.2.%20Solistica%20Divestiture) FEMSA finalized the divestiture of certain logistics operations (Solistica) to Grupo Traxión, generating Ps. 4,040 million in consideration - On July 1, 2025, FEMSA closed the divestiture of certain logistics operations (Solistica) to Grupo Traxión, S.A.B. de C.V[82](index=82&type=chunk) - The transaction included FEMSA's transportation management and contract logistics operations in Mexico, Colombia, and Brazil, excluding LTL operations in Brazil[82](index=82&type=chunk) - Total consideration for the transaction was **Ps. 4,040 million** on a cash-free, debt-free basis[82](index=82&type=chunk) [Coca-Cola FEMSA Financial Performance](index=26&type=section&id=Coca-Cola%20FEMSA%20Financial%20Performance) Coca-Cola FEMSA's financial performance in 2Q25 and YTD25 was characterized by revenue growth driven by pricing and currency effects, despite volume declines, with profitability impacted by higher financing expenses and operating costs [Second Quarter 2025 Consolidated Results (KOF)](index=26&type=section&id=6.1.%20Second%20Quarter%202025%20Consolidated%20Results%20(KOF)) Coca-Cola FEMSA faced a challenging 2Q25 with volume declines, particularly in Mexico, but managed revenue growth through pricing and favorable currency effects. Profitability was pressured by higher fixed costs and operating expenses, leading to a decrease in majority net income 2Q25 KOF Consolidated Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | Δ% (Reported) | Δ% (Comparable) | | :----------------------- | :--- | :--- | :------------ | :-------------- | | Total Revenues | 72,917 | 69,456 | 5.0% | 2.4% | | Gross Profit | 33,042 | 31,961 | 3.4% | 0.9% | | Operating Income | 9,767 | 9,746 | 0.2% | (2.6)% | | Adj. EBITDA | 13,388 | 13,922 | (3.8)% | (6.3)% | | Majority Net Income | 5,312 | 5,608 | (5.3)% | (8.1)% | - Volume declined **5.5%** to **1,035.3 million unit cases**, mainly due to decreases in Mexico, Brazil, Colombia, and Panama, partially offset by growth in Argentina, Uruguay, Guatemala, and Nicaragua[134](index=134&type=chunk) - Gross margin contracted **70 basis points** to **45.3%**, driven by lower operating leverage, unfavorable mix effects, and higher fixed costs, partially offset by lower sweetener costs and hedging initiatives[136](index=136&type=chunk) - Comprehensive financing result recorded a higher expense of **Ps. 1,189 million** (vs. Ps. 885 million in 2Q24), mainly due to higher net interest expense from a new U.S. dollar-denominated bond and increased interest rates in Brazil and Colombia[139](index=139&type=chunk) [First Six Months 2025 Consolidated Results (KOF)](index=30&type=section&id=6.2.%20First%20Six%20Months%202025%20Consolidated%20Results%20(KOF)) Coca-Cola FEMSA's year-to-date results for 2025 showed revenue growth, but net income declined due to higher financing expenses and income taxes, despite a slight increase in operating income. Volume continued to be a challenge, primarily in Mexico and Colombia YTD 2025 KOF Consolidated Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | YTD 2025 | YTD 2024 | Δ% (Reported) | Δ% (Comparable) | | :----------------------- | :------- | :------- | :------------ | :-------------- | | Total Revenues | 142,703 | 133,685 | 6.7% | 5.4% | | Gross Profit | 64,716 | 60,561 | 6.9% | 5.3% | | Operating Income | 18,986 | 18,380 | 3.3% | 0.7% | | Adj. EBITDA | 26,584 | 25,949 | 2.4% | 1.3% | | Majority Net Income | 10,450 | 10,598 | (1.4)% | (5.9)% | - Volume decreased **3.9%** to **2,021.8 million unit cases**, mainly driven by declines in Mexico and Colombia, partially offset by increases in Argentina, Uruguay, and Guatemala[148](index=148&type=chunk) - Gross margin expanded **10 basis points** to **45.4%**, supported by lower sweetener costs, top-line growth, and hedging initiatives, but partially offset by higher fixed costs[150](index=150&type=chunk) - Net income attributable to equity holders decreased **1.4%** to **Ps. 10,450 million**, primarily due to higher comprehensive financing results and income taxes, despite a slight increase in operating income[157](index=157&type=chunk) [Coca-Cola FEMSA Segment Performance](index=32&type=section&id=Coca-Cola%20FEMSA%20Segment%20Performance) Coca-Cola FEMSA's segment performance showed a challenging quarter in Mexico and Central America with volume and profitability declines, while South America delivered strong revenue and operating income growth [Mexico & Central America Division (KOF)](index=32&type=section&id=7.1.%20Mexico%20%26%20Central%20America%20Division%20(KOF)) The Mexico & Central America Division experienced volume declines in 2Q25, particularly in Mexico, due to unfavorable weather and a challenging comparison base. This led to a decrease in gross profit and operating income, despite revenue management initiatives 2Q25 KOF Mexico & Central America Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | Δ% (Reported) | Δ% (Comparable) | | :----------------------- | :--- | :--- | :------------ | :-------------- | | Total Revenues | 45,306 | 45,067 | 0.5% | (1.9)% | | Gross Profit | 21,404 | 21,948 | (2.5)% | (4.8)% | | Operating Income | 6,829 | 7,291 | (6.3)% | (8.6)% | | Adj. EBITDA | 8,926 | 9,882 | (9.7)% | (11.8)% | - Volume declined **8.4%**, driven by decreases in Mexico and Panama, partially offset by growth in Guatemala, Nicaragua, and Costa Rica[160](index=160&type=chunk) - Gross margin contracted **150 basis points** to **47.2%**, mainly due to unfavorable mix effects, higher fixed costs (labor), and the depreciation of the Mexican Peso against U.S. dollar-denominated raw material costs[162](index=162&type=chunk) [South America Division (KOF)](index=33&type=section&id=7.2.%20South%20America%20Division%20(KOF)) The South America Division delivered strong financial performance in 2Q25, with significant revenue, gross profit, and operating income growth. This was driven by revenue management, favorable mix, and currency translation effects, despite slight volume declines in Brazil and Colombia 2Q25 KOF South America Financial Metrics (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | Δ% (Reported) | Δ% (Comparable) | | :----------------------- | :--- | :--- | :------------ | :-------------- | | Total Revenues | 27,611 | 24,389 | 13.2% | 10.3% | | Gross Profit | 11,639 | 10,014 | 16.2% | 13.1% | | Operating Income | 2,937 | 2,455 | 19.6% | 14.9% | | Adj. EBITDA | 4,462 | 4,040 | 10.4% | 7.3% | - Volume declined **0.5%**, mainly due to decreases in Brazil and Colombia, partially offset by growth in Argentina and Uruguay[167](index=167&type=chunk) - Gross margin expanded **110 basis points** to **42.2%**, driven by top-line growth, decreased raw material costs (sweeteners), and cost efficiencies, partially offset by currency depreciation against the U.S. dollar[169](index=169&type=chunk) - Operating income increased **19.6%** (**14.9% comparable**), with operating margin expanding **50 basis points** to **10.6%**, primarily due to increased gross profit[170](index=170&type=chunk) [Coca-Cola FEMSA Recent Developments](index=27&type=section&id=Coca-Cola%20FEMSA%20Recent%20Developments) Coca-Cola FEMSA demonstrated financial strength through a senior notes issuance and dividend payment, alongside continued recognition for its sustainability efforts [Senior Notes Issuance](index=27&type=section&id=8.1.%20Senior%20Notes%20Issuance) Coca-Cola FEMSA successfully issued US$500 million in senior notes due 2035, reflecting strong investor confidence and financial discipline - On May 1, 2025, Coca-Cola FEMSA issued **US$500 million** principal amount of senior notes due 2035[130](index=130&type=chunk) - The notes were priced at US 10 Year Treasury +93 basis points with a coupon of **5.100%**, attracting broad participation from investment grade dedicated investors[130](index=130&type=chunk) - Proceeds are intended for general corporate purposes, including working capital, capital expenditures, and debt repayment[130](index=130&type=chunk) [Dividend Payment](index=27&type=section&id=8.2.%20Dividend%20Payment) Coca-Cola FEMSA paid the second installment of its ordinary dividend, distributing Ps. 3,865.5 million to shareholders - On July 16, 2025, Coca-Cola FEMSA paid the second installment of the ordinary dividend, amounting to **Ps. 0.23 per share**[130](index=130&type=chunk) - The total cash distribution for this installment was **Ps. 3,865.5 million**[130](index=130&type=chunk) [Sustainability Recognition](index=27&type=section&id=8.3.%20Sustainability%20Recognition) Coca-Cola FEMSA achieved its tenth consecutive inclusion in the FTSE4Good sustainability indices, with an improved score, demonstrating progress in ESG performance and transparency - Coca-Cola FEMSA has been included in the FTSE4Good sustainability indices for the **tenth consecutive year**[130](index=130&type=chunk) - The company achieved an improved score of **3.9 out of 5.0** (up from 2.9), surpassing consumer goods industry and beverage subsector averages[130](index=130&type=chunk) [Financial Statements & Supplementary Information](index=15&type=section&id=Financial%20Statements%20%26%20Supplementary%20Information) This section provides detailed financial statements and supplementary information for FEMSA and Coca-Cola FEMSA, offering comprehensive insights into their financial performance and position [FEMSA Consolidated Income Statement](index=15&type=section&id=9.1.%20FEMSA%20Consolidated%20Income%20Statement) The consolidated income statement provides a detailed breakdown of FEMSA's revenues, costs, and expenses for 2Q25 and YTD25, highlighting changes in profitability metrics and the impact of financing and tax items FEMSA Consolidated Income Statement (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | Var. (%) | YTD 2025 | YTD 2024 | Var. (%) | | :----------------------- | :--- | :--- | :------- | :------- | :------- | :------- | | Total revenues | 211,364 | 198,744 | 6.3% | 406,812 | 375,507 | 8.3% | | Gross profit | 85,922 | 82,440 | 4.2% | 164,686 | 150,779 | 9.2% | | Income from operations | 17,832 | 17,626 | 1.2% | 31,368 | 30,582 | 2.6% | | Financing expenses, net | 6,719 | (4,622) | N.S. | 8,124 | (1,237) | N.S. | | Income tax | 4,339 | 6,555 | (33.8)% | 9,100 | 9,936 | (8.4)% | | Consolidated net income | 5,593 | 15,669 | (64.3)% | 14,533 | 21,450 | (32.2)% | | Adjusted EBITDA | 29,589 | 28,614 | 3.4% | 54,832 | 51,919 | 5.6% | | CAPEX | 9,203 | 10,672 | (13.8)% | 17,987 | 18,242 | (1.4)% | [FEMSA Consolidated Balance Sheet](index=16&type=section&id=9.2.%20FEMSA%20Consolidated%20Balance%20Sheet) The consolidated balance sheet shows FEMSA's financial position as of June 30, 2025, with a decrease in total assets and stockholders' equity compared to December 31, 2024, while total liabilities increased FEMSA Consolidated Balance Sheet (Millions of Ps.) | Asset/Liability/Equity (Millions of Ps.) | Jun-25 | Dec-24 | % Var. | | :--------------------------------------- | :----- | :----- | :----- | | Total current assets | 323,259 | 342,311 | (5.6)% | | Total Assets | 831,042 | 851,536 | (2.4)% | | Total current liabilities | 241,372 | 202,930 | 18.9% | | Total liabilities | 505,992 | 470,405 | 7.6% | | Total stockholders' equity | 325,050 | 381,131 | (14.7)% | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 831,042 | 851,536 | (2.4)% | [FEMSA Net Debt & Adjusted EBITDA ex-KOF](index=17&type=section&id=9.3.%20FEMSA%20Net%20Debt%20%26%20Adjusted%20EBITDA%20ex-KOF) This section provides a reconciliation of FEMSA's Net Debt and Adjusted EBITDA excluding Coca-Cola FEMSA, offering a clearer view of the core FEMSA operations' financial leverage FEMSA Adjusted EBITDA ex-KOF (Millions of US$) | Metric (Millions of US$) | Twelve months ended June 30, 2025 | | :----------------------- | :-------------------------------- | | Reported Adj. EBITDA | 5,683 | | Adj. EBITDA Ex-KOF | 2,853 | | Dividends Received | 326 | | FEMSA Consolidated ex-KOF | 3,179 | FEMSA Net Debt (Millions of US$) | Metric (Millions of US$) | As of June 30, 2025 | | :----------------------- | :------------------ | | Cash & Equivalents | 6,648 | | Financial Debt | 3,932 | | Lease Liabilities | 5,679 | | FEMSA Net Debt | 2,964 | [FEMSA EPS with Repurchased Shares](index=18&type=section&id=9.4.%20FEMSA%20EPS%20with%20Repurchased%20Shares) This section details the Earnings Per Share (EPS) calculation, both as reported and proforma, considering the impact of share repurchases and cancellations FEMSA EPS Metrics | Metric | YTD 2025 | 2Q25 | | :---------------------- | :------- | :--- | | Net majority income (Millions of Ps.) | 8,516 | 2,712 | | FEMSA Units Outstanding | 3,469,469,527 | 3,469,469,527 | | EPS (Mxn Ps. / Unit) | 2.45 | 0.78 | - The cancellation of **108,756,743 FEMSA Units** acquired from the stock repurchase program (November 2023 to March 2025) was approved at the April 11, 2025 Shareholders meeting[102](index=102&type=chunk) [Proximity Americas Results of Operations](index=19&type=section&id=9.5.%20Proximity%20Americas%20Results%20of%20Operations) Detailed operational and financial results for Proximity Americas show revenue growth driven by store expansion, but same-store sales and traffic declined, particularly in Mexico. Operating income and EBITDA were also impacted Proximity Americas Results of Operations (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | % Var. | Comp. (%) | YTD 2025 | YTD 2024 | % Var. | Comp. (%) | | :----------------------- | :--- | :--- | :----- | :-------- | :------- | :------- | :----- | :-------- | | Total revenues | 83,958 | 78,526 | 6.9 | 2.0 | 158,844 | 148,611 | 6.9 | 1.7 | | Gross profit | 37,014 | 34,627 | 6.9 | 4.3 | 69,394 | 64,049 | 8.3 | 5.7 | | Income from operations | 7,540 | 7,757 | (2.8) | (3.1) | 11,929 | 12,735 | (6.3) | (10.8) | | Adjusted EBITDA | 11,809 | 11,746 | 0.5 | (0.4) | 20,432 | 20,443 | (0.1) | (4.0) | | CAPEX | 3,722 | 4,749 | (21.6) | | 6,681 | 8,020 | (16.7) | | OXXO Stores Information | OXXO Stores Information | YTD 2025 | YTD 2024 | % Var. | | :---------------------- | :------- | :------- | :----- | | Total stores | 25,180 | 23,680 | 6.3% | | Stores Mexico | 23,876 | 22,658 | 5.4% | | Stores LATAM | 1,055 | 1,022 | 3.2% | | Stores USA | 249 | - | - | [Proximity Europe Results of Operations](index=20&type=section&id=9.6.%20Proximity%20Europe%20Results%20of%20Operations) Proximity Europe's detailed results show strong revenue and operating income growth, significantly influenced by favorable currency translation. Despite a gross margin contraction, effective cost management contributed to improved operating profitability Proximity Europe Results of Operations (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | % Var. | Comp. (%) | YTD 2025 | YTD 2024 | % Var. | Comp. (%) | | :----------------------- | :--- | :--- | :----- | :-------- | :------- | :------- | :----- | :-------- | | Total revenues | 15,065 | 11,466 | 31.4 | 5.9 | 27,974 | 22,405 | 24.9 | 3.5 | | Gross profit | 6,233 | 4,964 | 25.6 | 1.2 | 11,664 | 9,694 | 20.3 | (0.3) | | Income from operations | 688 | 445 | 54.4 | 24.0 | 1,019 | 833 | 22.3 | 0.6 | | Adjusted EBITDA | 2,179 | 1,666 | 30.8 | 5.2 | 3,929 | 3,336 | 17.8 | (2.4) | | CAPEX | 356 | 288 | 23.4 | | 611 | 669 | (8.7) | | [Health Results of Operations](index=21&type=section&id=9.7.%20Health%20Results%20of%20Operations) The Health Division's detailed results show revenue growth and positive same-store sales, despite a significant reduction in the store base, particularly in Mexico. Profitability metrics were impacted by margin contractions and increased operating expenses Health Results of Operations (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | % Var. | Comp. (%) | YTD 2025 | YTD 2024 | % Var. | Comp. (%) | | :----------------------- | :--- | :--- | :----- | :-------- | :------- | :------- | :----- | :-------- | | Total revenues | 21,850 | 18,894 | 15.6 | 6.7 | 43,822 | 37,048 | 18.3 | 6.8 | | Gross profit | 6,496 | 5,719 | 13.6 | 4.5 | 12,949 | 10,945 | 18.3 | 6.5 | | Income from operations | 819 | 775 | 5.7 | (5.2) | 1,585 | 1,376 | 15.2 | 2.2 | | Adjusted EBITDA | 1,981 | 1,696 | 16.9 | 3.7 | 3,962 | 3,425 | 15.7 | 2.8 | | CAPEX | 356 | 391 | (8.9) | | 613 | 559 | 9.6 | | Health Stores Information | Health Stores Information | YTD 2025 | YTD 2024 | % Var. | | :------------------------ | :------- | :------- | :----- | | Total stores | 4,321 | 4,496 | (3.9)% | | Stores Mexico | 1,311 | 1,743 | (24.8)% | | Stores South America | 3,010 | 2,753 | 9.3% | [Fuel Results of Operations](index=22&type=section&id=9.8.%20Fuel%20Results%20of%20Operations) The Fuel Division's detailed results show modest revenue growth driven by same-station sales, with notable improvements in gross and operating margins due to cost efficiencies and a favorable business mix Fuel Results of Operations (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | % Var. | YTD 2025 | YTD 2024 | % Var. | | :----------------------- | :--- | :--- | :----- | :------- | :------- | :----- | | Total revenues | 17,100 | 16,996 | 0.6 | 32,338 | 31,959 | 1.2 | | Gross profit | 2,147 | 2,014 | 6.6 | 3,964 | 3,754 | 5.6 | | Income from operations | 800 | 704 | 13.6 | 1,256 | 1,234 | 1.8 | | Adjusted EBITDA | 1,141 | 1,027 | 11.1 | 1,941 | 1,866 | 4.0 | | CAPEX | 10 | 86 | (88.6) | 56 | 94 | (41.0) | OXXO GAS Information | OXXO GAS Information | YTD 2025 | YTD 2024 | % Var. | | :------------------- | :------- | :------- | :----- | | Total service stations | 559 | 570 | (1.9)% | | Same-station sales (thousands of pesos) | 8,740.0 | 8,308.3 | 5.2% | | Volume (thousands of liters) | 393.8 | 386.0 | 2.0% | [Coca-Cola FEMSA Consolidated Income Statement](index=23&type=section&id=9.9.%20Coca-Cola%20FEMSA%20Consolidated%20Income%20Statement) The detailed income statement for Coca-Cola FEMSA shows revenue growth despite volume declines, with gross profit increasing but operating income remaining relatively flat due to higher expenses. Net income was impacted by increased financing costs KOF Consolidated Income Statement (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | % Var. | Comp. (%) | YTD 2025 | YTD 2024 | % Var. | Comp. (%) | | :----------------------- | :--- | :--- | :----- | :-------- | :------- | :------- | :----- | :-------- | | Total revenues | 72,917 | 69,456 | 5.0 | 2.4 | 142,703 | 133,685 | 6.7 | 3.3 | | Gross profit | 33,042 | 31,961 | 3.4 | 0.9 | 64,716 | 60,561 | 6.9 | 3.5 | | Income from operations | 9,767 | 9,746 | 0.2 | (2.6) | 18,986 | 18,380 | 3.3 | 0.3 | | Adjusted EBITDA | 13,388 | 13,922 | (3.8) | (6.3) | 26,584 | 25,949 | 2.4 | (0.5) | | CAPEX | 5,419 | 5,410 | 0.2 | | 9,640 | 8,733 | 10.4 | 3.3 | KOF Sales Volumes (Millions of unit cases) | Sales Volumes (Millions of unit cases) | 2Q25 | 2Q24 | % Var. | YTD 2025 | YTD 2024 | % Var. | | :------------------------------------- | :--- | :--- | :----- | :------- | :------- | :----- | | Mexico and Central America | 636.9 | 695.6 | (8.4) | 1,190.2 | 1,275.4 | (6.7) | | South America | 398.4 | 400.2 | (0.5) | 831.6 | 829.0 | 0.3 | | Total | 1,035.3 | 1,095.8 | (5.5) | 2,021.8 | 2,104.4 | (3.9) | [Coca-Cola FEMSA Mexico & Central America Results of Operations](index=37&type=section&id=9.10.%20Coca-Cola%20FEMSA%20Mexico%20%26%20Central%20America%20Results%20of%20Operations) The Mexico & Central America Division's detailed results show a decline in volume, transactions, and profitability metrics for both the quarter and year-to-date, reflecting a challenging operating environment KOF Mexico & Central America Results of Operations (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | % Var. | Comp. (%) | YTD 2025 | YTD 2024 | % Var. | Comp. (%) | | :----------------------- | :--- | :--- | :----- | :-------- | :------- | :------- | :----- | :-------- | | Total Revenues | 45,306 | 45,067 | 0.5 | (1.9) | 84,975 | 82,911 | 2.5 | (0.7) | | Gross profit | 21,404 | 21,948 | (2.5) | (4.8) | 40,289 | 39,836 | 1.1 | (1.9) | | Operating income | 6,829 | 7,291 | (6.3) | (8.6) | 12,229 | 12,972 | (5.7) | (8.8) | | Adj. EBITDA | 8,926 | 9,882 | (9.7) | (11.8) | 16,834 | 17,626 | (4.5) | (7.6) | KOF Mexico & Central America Volume (million unit cases) | Volume (million unit cases) | 2Q25 | 2Q24 | % Var. | YTD 2025 | YTD 2024 | % Var. | | :-------------------------- | :--- | :--- | :----- | :------- | :------- | :----- | | Mexico and Central America | 636.9 | 695.6 | (8.4)% | 1,190.2 | 1,275.4 | (6.7)% | [Coca-Cola FEMSA South America Results of Operations](index=37&type=section&id=9.11.%20Coca-Cola%20FEMSA%20South%20America%20Results%20of%20Operations) The South America Division's detailed results highlight strong revenue and gross profit growth, with operating income also increasing significantly, demonstrating robust performance despite slight volume fluctuations KOF South America Results of Operations (Millions of Ps.) | Metric (Millions of Ps.) | 2Q25 | 2Q24 | % Var. | Comp. (%) | YTD 2025 | YTD 2024 | % Var. | Comp. (%) | | :----------------------- | :--- | :--- | :----- | :-------- | :------- | :------- | :----- | :-------- | | Total Revenues | 27,611 | 24,389 | 13.2 | 10.3 | 57,727 | 50,774 | 13.7 | 15.7 | | Gross profit | 11,639 | 10,014 | 16.2 | 13.1 | 24,427 | 20,725 | 17.9 | 19.7 | | Operating income | 2,937 | 2,455 | 19.6 | 14.9 | 6,757 | 5,408 | 24.9 | 24.0 | | Adj. EBITDA | 4,462 | 4,040 | 10.4 | 7.3 | 9,750 | 8,323 | 17.1 | 21.3 | KOF South America Volume (million unit cases) | Volume (million unit cases) | 2Q25 | 2Q24 | % Var. | YTD 2025 | YTD 2024 | % Var. | | :-------------------------- | :--- | :--- | :----- | :------- | :------- | :----- | | South America | 398.4 | 400.2 | (0.5)% | 831.6 | 829.0 | 0.3% | [Coca-Cola FEMSA Consolidated Balance Sheet](index=38&type=section&id=9.12.%20Coca-Cola%20FEMSA%20Consolidated%20Balance%20Sheet) Coca-Cola FEMSA's consolidated balance sheet as of June 30, 2025, shows an increase in total assets and liabilities, with a slight decrease in total equity compared to December 31, 2024. Net debt increased, and capitalization ratio also rose KOF Consolidated Balance Sheet (Millions of Ps.) | Asset/Liability/Equity (Millions of Ps.) | Jun-25 | Dec-24 | % Var. | | :--------------------------------------- | :----- | :----- | :----- | | Total Assets | 313,860 | 307,986 | 2% | | Total Liabilities | 169,116 | 157,445 | 7% | | Total Equity | 144,744 | 150,542 | (4)% | | Net debt including effect of hedges | 44,824 | 38,329 | 16.9% | | Capitalization | 36.6% | 33.3% | | KOF Debt Mix (June 30, 2025) | Debt Mix (June 30, 2025) | % of Total Debt | Average Interest Rate | | :----------------------- | :-------------- | :-------------------- | | Mexican Pesos | 51.6% | 8.5% | | U.S. Dollars | 26.3% | 4.2% | | Brazilian Reals | 17.7% | 10.9% | | Total Debt | 100% | 8.0% | [Coca-Cola FEMSA Quarterly Volume, Transactions & Revenues](index=40&type=section&id=9.13.%20Coca-Cola%20FEMSA%20Quarterly%20Volume,%20Transactions%20%26%20Revenues) This section provides a detailed breakdown of Coca-Cola FEMSA's volume, transactions, and revenues by product category and geographic region for 2Q25, highlighting regional performance differences KOF 2Q25 Volume (million unit cases) | Region | 2Q25 Volume (million unit cases) | YoY Δ % | | :----- | :------------------------------- | :------ | | Mexico | 539.4 | -10.0% | | Guatemala | 51.3 | 1.6% | | South America | 398.4 | -0.5% | | TOTAL | 1,035.3 | -5.5% | KOF 2Q25 Transactions (million transactions) | Region | 2Q25 Transactions (million transactions) | YoY Δ % | | :----- | :--------------------------------------- | :------ | | Mexico | 2,541.7 | -10.5% | | Guatemala | 392.6 | 3.2% | | South America | 2,852.1 | 1.6% | | TOTAL | 6,131.9 | -3.8% | KOF 2Q25 Revenues (million Mexican Pesos) | Region | 2Q25 Revenues (million Mexican Pesos) | Δ % | | :----- | :------------------------------------ | :-- | | Mexico | 36,629 | -2.3% | | Guatemala | 4,458 | 15.9% | | South America | 27,611 | 13.2% | | TOTAL | 72,917 | 5.0% | [Coca-Cola FEMSA YTD Volume, Transactions & Revenues](index=42&type=section&id=9.14.%20Coca-Cola%20FEMSA%20YTD%20Volume,%20Transactions%20%26%20Revenues) This section presents Coca-Cola FEMSA's year-to-date volume, transactions, and revenues by product category and geographic region, showing overall declines in volume and transactions but revenue growth KOF YTD 2025 Volume (million unit cases) | Region | YTD 2025 Volume (million unit cases) | YoY Δ % | | :----- | :--------------------------------- | :------ | | Mexico | 1,003.3 | -7.9% | | Guatemala | 98.1 | 1.8% | | South America | 831.6 | 0.3% | | TOTAL | 2,021.8 | -3.9% | KOF YTD 2025 Transactions (million transactions) | Region | YTD 2025 Transactions (million transactions) | YoY Δ % | | :----- | :----------------------------------------- | :------ | | Mexico | 4,767.5 | -8.1% | | Guatemala | 745.7 | 2.6% | | South America | 5,870.8 | 2.2% | | TOTAL | 12,053.7 | -2.2% | KOF YTD 2025 Revenues (million Mexican Pesos) | Region | YTD 2025 Revenues (million Mexican Pesos) | Δ % | | :----- | :-------------------------------------- | :-- | | Mexico | 67,892 | -0.6% | | Guatemala | 8,631 | 19.1% | | South America | 57,727 | 13.7% | | TOTAL | 142,703 | 6.7% | [Macroeconomic Information](index=24&type=section&id=Macroeconomic%20Information) This section provides key macroeconomic indicators, including inflation and exchange rates, for FEMSA and Coca-Cola FEMSA's operating regions, crucial for understanding the broader economic context impacting their financial results [FEMSA Macroeconomic Information](index=24&type=section&id=10.1.%20FEMSA%20Macroeconomic%20Information) This section provides macroeconomic data relevant to FEMSA's operations, including inflation rates and end-of-period exchange rates for key operating countries, highlighting currency movements against the USD and MXN FEMSA Inflation Rates | Country/Region | 2Q 2025 Inflation | LTM Jun-25 Inflation | | :--------------- | :---------------- | :------------------- | | Mexico | 0.99% | 4.51% | | Colombia | 0.98% | 5.08% | | Brazil | 0.43% | 5.35% | | Euro Zone | -0.14% | 1.63% | FEMSA Exchange Rates (Per USD) | Country/Region | Jun-25 Exchange Rate (Per USD) | Jun-24 Exchange Rate (Per USD) | | :--------------- | :----------------------------- | :----------------------------- | | Mexico | 18.89 | 18.38 | | Colombia | 4,069.67 | 4,148.04 | | Brazil | 5.46 | 5.56 | | Euro Zone | 0.86 | 0.93 | [Coca-Cola FEMSA Macroeconomic Information](index=44&type=section&id=10.2.%20Coca-Cola%20FEMSA%20Macroeconomic%20Information) This section provides macroeconomic data specific to Coca-Cola FEMSA's operating regions, including inflation rates and average/end-of-period exchange rates, which are crucial for understanding currency translation effects on financial results KOF Inflation Rates | Country/Region | LTM Inflation | 2Q25 Inflation | YTD Inflation | | :--------------- | :------------ | :------------- | :------------ | | Mexico | 4.51% | 1.41% | 1.67% | | Colombia | 5.08% | 1.51% | 3.84% | | Brazil | 5.35% | 1.15% | 2.97% | | Argentina | 39.63% | 7.64% | 15.61% | KOF Average Exchange Rates (Local/USD) | Country/Region | 2Q25 Avg. Exchange Rate (Local/USD) | 2Q24 Avg. Exchange Rate (Local/USD) | Δ % | | :--------------- | :---------------------------------- | :---------------------------------- | :-- | | México | 19.55 | 17.21 | 13.6% | | Colombia | 4,197.35 | 3,928.59 | 6.8% | | Brasil | 5.67 | 5.22 | 8.6% | | Argentina | 1151.04 | 886.47 | 29.8% | [Company Information & Disclosures](index=13&type=section&id=Company%20Information%20%26%20Disclosures) This section provides essential information about FEMSA and Coca-Cola FEMSA, including their business profiles, comparability definitions, forward-looking statements, and investor contact details [About FEMSA](index=13&type=section&id=11.1.%20About%20FEMSA) FEMSA is a diversified company focused on creating economic and social value, operating across retail (Proximity Americas & Europe, Health, Spin) and beverages (Coca-Cola FEMSA). It employs over 392,000 people in 18 countries and is recognized in various sustainability indices - FEMSA operates in the retail industry through Proximity Americas (OXXO, other formats), Proximity Europe (Valora), Health Division (drugstores), and Spin (digital financial services)[85](index=85&type=chunk) - In the beverage industry, FEMSA participates through Coca-Cola FEMSA, the world's largest franchise bottler of Coca-Cola products by volume[85](index=85&type=chunk) - FEMSA has over **392,000 employees** in **18 countries** and is a member of several sustainability indices, including Dow Jones Best-in-Class World Index and FTSE4Good Emerging Index[85](index=85&type=chunk) [About Coca-Cola FEMSA](index=35&type=section&id=11.2.%20About%20Coca-Cola%20FEMSA) Coca-Cola FEMSA is the world's largest Coca-Cola franchise bottler by sales volume, serving over 276 million consumers across various territories. The company emphasizes generating economic, social, and environmental value and is recognized in sustainability indices - Coca-Cola FEMSA is the largest Coca-Cola franchise bottler globally by sales volume, producing and distributing trademark beverages to over **276 million consumers**[177](index=177&type=chunk) - The company operates **56 manufacturing plants** and **256 distribution centers**, marketing approximately **4.2 billion unit cases annually** through **2.2 million points of sale**[177](index=177&type=chunk) - KOF's operations span Mexico, Brazil, Guatemala, Colombia, Argentina, Costa Rica, Nicaragua, Panama, and Uruguay, and it is a member of sustainability indices like the Dow Jones Sustainability MILA Pacific Alliance Index[177](index=177&type=chunk) [Comparability & Forward-Looking Statements](index=14&type=section&id=11.3.%20Comparability%20%26%20Forward-Looking%20Statements) This section defines 'comparable' financial measures, which exclude the effects of M&A and exchange rate movements for year-over-year comparisons. It also includes a standard disclaimer regarding forward-looking statements and the preliminary nature of the financial information - The term 'comparable' excludes the effects of mergers, acquisitions, divestitures, and translation effects from exchange rate movements for year-over-year comparisons[90](index=90&type=chunk) - The report contains forward-looking statements that are estimates based on management's expectations and current data, subject to future events and uncertainties[88](index=88&type=chunk) - The financial information presented is preliminary and unaudited, subject to change upon completion of financial closing procedures and independent audit[89](index=89&type=chunk) [Investor & Media Contacts](index=1&type=section&id=11.4.%20Investor%20%26%20Media%20Contacts) Contact information for FEMSA's investor relations and media inquiries is provided for stakeholders seeking further information - FEMSA Investor Contact: **(52) 818-328-6167**, investor@femsa.com.mx, femsa.gcs-web.com[3](index=3&type=chunk) - FEMSA Media Contact: **(52) 555-249-6843**, comunicacion@femsa.com.mx, femsa.com[3](index=3&type=chunk)