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FEMSA(FMX) - 2025 Q1 - Quarterly Report
FEMSAFEMSA(US:FMX)2025-04-28 12:37

Highlights CEO Commentary The CEO noted a challenging Q1, particularly in Mexico, but highlighted resilience from diversified operations and anticipates a mid-year recovery - Navigated a challenging environment by leveraging a resilient, geographically diversified business platform. Coca-Cola FEMSA's performance in South America and favorable currency tailwinds offset softer trends in Mexico7 - Proximity Americas experienced a slow start with declining same-store traffic at OXXO Mexico, pressured by an adverse calendar, soft consumer demand, and a high comparison base. The company has initiated top-line and cost-cutting measures to mitigate these impacts8 - The company projects a recovery beginning mid-2025 and gaining momentum in the third quarter, anticipating a solid full-year result as the second half typically weighs more for many business units9 Financial Highlights FEMSA's consolidated revenues grew 11.1%, driven by Health and digital growth, despite Proximity Americas' operating income decline Q1 2025 Performance vs. Q1 2024 (As Reported) | Business Unit | Total Revenues Growth | Income from Operations Growth | Same-Store Sales Growth | | :--- | :--- | :--- | :--- | | FEMSA Consolidated | 11.1% | 4.9% | N/A | | Proximity Americas | 6.8% | (11.8)% | (1.8)% | | Proximity Europe | 18.0% | (14.6)% | N/A | | Health | 21.0% | 27.4% | 15.4% | | Fuel | 1.8% | (13.9)% | 6.1% | | Coca-Cola FEMSA | 10.0% | 7.4% | N/A | - Spin by OXXO's active user base grew 20.9% YoY to 8.9 million, while Spin Premia's active loyalty users grew 15.9% YoY to 25.2 million13 - The average tender for Spin Premia increased to 42.5% in Q1 2025, up from 35.1% in Q1 2024, indicating higher engagement within the OXXO ecosystem13 FEMSA Consolidated Financial Results Consolidated Performance FEMSA's Q1 2025 consolidated revenues grew 11.1% to Ps. 195,820 million, with net income surging 54.3% from non-operating gains FEMSA Consolidated Financial Summary Q1 2025 | Metric | 1Q25 (Ps. M) | 1Q24 (Ps. M) | Var. % | | :--- | :--- | :--- | :--- | | Total Revenues | 195,820 | 176,334 | 11.1% | | Gross Profit | 78,918 | 68,178 | 15.8% | | Income from Operations | 13,565 | 12,936 | 4.9% | | Adjusted EBITDA | 25,303 | 23,254 | 8.8% | | Net Income | 8,943 | 5,794 | 54.3% | - Revenue growth was driven by all business units, amplified by favorable exchange rate effects from the depreciation of the Mexican peso15 - The significant increase in net consolidated income was mainly due to a non-cash foreign exchange gain of Ps. 439 million (vs. a loss in 1Q24), a financial instrument gain of Ps. 1,107 million related to the Heineken position, and a gain from the divestment of plastics solutions operations19 - Capital expenditures increased 16.1% to Ps. 8,788 million, primarily for increasing production and distribution capacity at Coca-Cola FEMSA and for new store openings and remodeling at Proximity Americas21 Business Segment Performance Proximity Americas Proximity Americas' revenues grew 6.8%, but operating income declined 11.8% due to lower traffic and higher costs in Mexico Proximity Americas Financial Summary Q1 2025 | Metric | 1Q25 | 1Q24 | Var. % | | :--- | :--- | :--- | :--- | | Same-store sales | (1.8)% | - | - | | Total Revenues (Ps. M) | 74,886 | 70,085 | 6.8% | | Gross Profit (Ps. M) | 32,379 | 29,423 | 10.0% | | Income from Operations (Ps. M) | 4,389 | 4,979 | (11.8)% | - The decline in same-store sales was driven by a 6.6% decrease in store traffic, despite a 5.1% growth in average customer ticket29 - Operating income fell due to higher selling expenses from increased labor costs (related to Mexico's minimum wage hike) and administrative expenses from investments in commercial capabilities31 - The OXXO store base expanded by 384 stores in the quarter, reaching a total of 24,846 stores as of March 31, 202529 Proximity Europe Proximity Europe's revenues rose 18.0% (0.9% comparable) due to currency effects, while operating income declined 14.6% from lower B2B foodservice sales Proximity Europe Financial Summary Q1 2025 | Metric | 1Q25 (Ps. M) | 1Q24 (Ps. M) | Var. % | Comp. Var. % | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | 12,909 | 10,939 | 18.0% | 0.9% | | Gross Profit | 5,431 | 4,730 | 14.8% | (1.9)% | | Income from Operations | 331 | 388 | (14.6)% | (27.7)% | - Revenue growth was almost entirely due to favorable currency effects. Excluding these, revenues were nearly flat due to lower sales in the B2B foodservice business38 - The operating margin contracted by 90 basis points, reflecting the impact of weaker performance in the structurally higher-margin B2B foodservice segment40 Health The Health division delivered strong Q1 results with revenues up 21.0% and operating income up 27.4%, driven by South American markets and currency tailwinds Health Division Financial Summary Q1 2025 | Metric | 1Q25 (Ps. M) | 1Q24 (Ps. M) | Var. % | Comp. Var. % | | :--- | :--- | :--- | :--- | :--- | | Same-store sales | - | - | 15.4% | 3.5% | | Total Revenues | 21,972 | 18,154 | 21.0% | 7.0% | | Gross Profit | 6,453 | 5,226 | 23.5% | 8.7% | | Income from Operations | 766 | 601 | 27.4% | 11.7% | - Revenue growth was driven by strong performance in South American markets and favorable currency translation, which offset negative results in Mexico45 - Gross margin expanded by 60 basis points due to commercial initiatives, higher retail sales in Colombia, and efficiencies from a centralized purchasing office46 - The net store base decreased by 67 units during the quarter, reaching a total of 4,594 locations45 Fuel The Fuel division's revenues grew 1.8% from higher prices, but operating income declined 13.9% due to increased labor and restructuring costs Fuel Division Financial Summary Q1 2025 | Metric | 1Q25 (Ps. M) | 1Q24 (Ps. M) | Var. % | | :--- | :--- | :--- | :--- | | Same-station sales | - | - | 6.1% | | Total Revenues | 15,237 | 14,693 | 1.8% | | Gross Profit | 1,817 | 1,740 | 4.4% | | Income from Operations | 456 | 530 | (13.9)% | - Same-station sales growth of 6.1% was driven by a 5.9% increase in the average price per liter and a 0.2% growth in average volume53 - Operating income declined due to a 12.5% increase in operating expenses, reflecting higher labor costs and costs associated with a restructuring process55 Digital (Spin) FEMSA's Spin digital platform continued strong user growth in Q1 2025, with Spin by OXXO active users up 20.9% and Spin Premia active users up 15.9% - Spin by OXXO reached 13.8 million total users, with 8.9 million active users, representing a 20.9% YoY growth in the active base6566 - Spin Premia, the loyalty program, reached 55.7 million total users, with 25.2 million active users, a 15.9% YoY increase67 - The average tender for Spin Premia at OXXO stores increased to 42.5% during the quarter, up from 35.1% in Q1 20241367 Coca-Cola FEMSA (KOF) Coca-Cola FEMSA delivered solid Q1 2025 results with revenues up 10.0% and operating income up 7.3%, driven by South American growth offsetting declines elsewhere Coca-Cola FEMSA Financial Summary Q1 2025 (As Reported) | Metric | Growth vs. 1Q24 | | :--- | :--- | | Total Revenues | 10.0% | | Gross Profit | 12.0% | | Operating Income | 7.3% | | Majority Net Income | 2.7% | - The CEO noted that solid performance in most South American countries, including Brazil, Argentina, and Uruguay, offset volume declines in Mexico and Central America116 - Digital initiatives progressed with the rollout of Juntos v.4.0 in Costa Rica and Nicaragua, and the completion of the Juntos Advisor tool rollout in Brazil118 KOF Consolidated Results KOF's consolidated revenues grew 10.0% to Ps. 70,157 million, with operating income up 7.3%, despite a 2.2% volume decrease and slight margin contraction KOF Consolidated Results Q1 2025 (As Reported) | Metric | 1Q 2025 (Ps. M) | 1Q 2024 (Ps. M) | Δ% | | :--- | :--- | :--- | :--- | | Total revenues | 70,157 | 63,803 | 10.0% | | Gross profit | 31,832 | 28,428 | 12.0% | | Operating income | 9,248 | 8,617 | 7.3% | - Gross margin expanded by 80 basis points to 45.4%, driven by lower sweetener costs and raw material hedging initiatives129 - Operating margin contracted by 30 basis points, impacted by lower operating leverage and higher costs for freight, labor, depreciation, and maintenance130 KOF Mexico & Central America Division The Mexico & Central America division saw a 4.6% volume decrease and a 5.0% operating income decline due to a consumer slowdown and higher costs KOF Mexico & Central America Division Results Q1 2025 (As Reported) | Metric | 1Q 2025 (Ps. M) | 1Q 2024 (Ps. M) | Δ% | | :--- | :--- | :--- | :--- | | Total revenues | 39,669 | 37,844 | 4.8% | | Operating income | 5,400 | 5,681 | (5.0)% | - Volume declined 4.6%, driven by declines in Mexico, Panama, and Costa Rica, attributed to a decelerating consumer environment and a challenging comparison base141 KOF South America Division The South America division drove KOF's growth with volume up 1.0%, revenues up 17.4%, and operating income surging 31.1%, expanding its operating margin KOF South America Division Results Q1 2025 (As Reported) | Metric | 1Q 2025 (Ps. M) | 1Q 2024 (Ps. M) | Δ% | | :--- | :--- | :--- | :--- | | Total revenues | 30,488 | 25,958 | 17.4% | | Operating income | 3,848 | 2,935 | 31.1% | - Volume grew 1.0%, driven by a 2.5% increase in Brazil and a 9.1% increase in Argentina, which offset an 8.1% decrease in Colombia149 Recent Developments Shareholder Meeting and Dividends FEMSA's Annual Shareholders' Meeting on April 11, 2025, approved 2024 financial statements, elected the board, and authorized ordinary and extraordinary cash dividends - On April 11, 2025, the Annual Shareholders' Meeting approved the 2024 financial statements, CEO's report, and elected the board of directors for 202572 Declared Dividends per Unit (Payable in 4 installments) | Dividend Type | Per 'BD' Unit (Ps.) | Per 'B' Unit (Ps.) | Payment Dates | | :--- | :--- | :--- | :--- | | Ordinary | 4.5826 | 3.8190 | Apr 25, 2025; Jul 18, 2025; Oct 17, 2025; Jan 16, 2026 | | Extraordinary | 10.1084 | 8.4240 | Apr 25, 2025; Jul 18, 2025; Oct 17, 2025; Jan 16, 2026 | - On April 24, 2025, FEMSA filed its annual report on Form 20-F for the fiscal year 2024 with the U.S. SEC75 Financial Statements & Appendix Detailed Financial Tables This section provides detailed unaudited consolidated financial statements for Q1 2025, including income statements, balance sheets, segment breakdowns, and key financial metrics