Coca-Cola FEMSA(KOF) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenues increased by 10.0% to Ps. 70,157 million, with a currency-neutral growth of 5.9%[24] - Gross profit rose by 12.0% to Ps. 31,832 million, with a gross margin expansion of 80 basis points to 45.4%[25] - Operating income grew by 7.3% to Ps. 9,248 million, while the operating margin contracted by 30 basis points to 13.2%[26] - Majority net income increased by 2.7% to Ps. 5,139 million, with earnings per share at Ps. 0.31[33] - Total revenues increased by 17.4% to Ps. 30,488 million, driven mainly by volume growth and revenue management initiatives[49] - Gross profit rose by 22.8% to Ps. 12,947 million, with a gross margin expansion of 190 basis points to 42.5%[50] - Operating income increased by 31.1% to Ps. 3,848 million, resulting in an operating margin expansion of 130 basis points to 12.6%[51] - Adjusted EBITDA grew by 11.0% to Ps. 13,254 million, with a margin of 18.9%[68] - Adjusted EBITDA for Q1 2025 was 5,346 million Pesos, up 27.3% from 4,200 million Pesos in Q1 2024[76] Volume and Sales - Volume declined by 2.2% to 986.5 million unit cases, primarily due to decreases in Mexico and Colombia[23] - Volume increased by 1.0% to 433.2 million unit cases, primarily due to growth in Brazil (2.5%), Argentina (9.1%), and Uruguay (6.0%), despite an 8.1% decline in Colombia[48] - The number of transactions increased to 3,018.7 million, a growth of 2.7% from 2,938.9 million transactions in the same quarter last year[76] - Volume of sales reached 433.2 million unit cases, a slight increase of 1.0% from 428.8 million unit cases in Q1 2024[76] Expenses and Liabilities - Operating expenses rose by 14.3% to Ps. 22,478 million, impacting operating income growth[64] - The comprehensive financing result recorded an expense of Ps. 1,126 million, a decrease from Ps. 1,188 million in the previous year[29] - The company’s net debt rose to 42,552 million Pesos, an 11.0% increase from 38,329 million Pesos[83] - Total current liabilities decreased by 10% to 60,160 million Pesos from 67,171 million Pesos[81] Market and Economic Conditions - The company continues to monitor macroeconomic conditions across its operating regions, including inflation and currency fluctuations[94] - Inflation rates in key markets for 1Q25: Mexico at 0.26%, Colombia at 2.30%, and Argentina at 7.40%[94] - The average exchange rate for the Mexican Peso in 1Q25 was 20.42, a 20.2% increase from 1Q24[95] - The closing exchange rate for the Argentine Peso was 1,074.00 in March 2025, reflecting a 25.2% increase from March 2024[95] - Coca-Cola FEMSA's financial performance is influenced by regional economic factors, including inflation and exchange rates[94] Strategic Initiatives - The company is focused on long-term strategies while addressing short-term challenges through various initiatives[12] - The company enrolled over 1.3 million customers in the Premia Juntos loyalty program, achieving a redemption rate of 75%[15] - Future outlook includes potential strategies for market expansion and product innovation, although specific details were not disclosed in the call[96] - The company emphasizes the importance of adapting to local market conditions and consumer preferences in its operational strategies[96] Reporting and Compliance - Coca-Cola FEMSA reported 1Q25 results on April 25, 2025[96] - The CFO, Gerardo Cruz Celaya, signed the report, indicating the company's commitment to transparency and regulatory compliance[99]