Coca-Cola FEMSA(KOF)2025-04-26 00:40Financial Data and Key Metrics Changes - Consolidated volume declined 2.2% year-on-year to 986.5 million unit cases, primarily due to declines in Mexico and Colombia, partially offset by growth in Brazil, Argentina, Uruguay, and Guatemala [10] - Total revenues grew 10% to MXN 70.2 billion, with a currency neutral increase of 5.9% [11] - Gross profit increased 12% to MXN 31.8 billion, leading to a margin expansion of 80 basis points to 45.4% [11] - Operating income rose 7.3% to MXN 9.2 billion, with an operating margin contraction of 30 basis points to 13.2% [12] - Adjusted EBITDA increased 11% to MXN 13.3 billion, with an EBITDA margin expansion of 20 basis points to 18.9% [13] - Majority net income increased by 2.7% to MXN 5.1 billion [14] Business Line Data and Key Metrics Changes - In Mexico, volumes declined 5.4%, influenced by economic deceleration and geopolitical tensions [15] - Sparkling beverage volume declined 3.3%, while steel beverages grew 3.9% and bottled water grew 4.6% [10] - In Guatemala, volumes increased 1.9% despite high inflation affecting consumer sentiment [18] - Brazil saw a 2.5% volume growth, with Coca-Cola Zero Sugar growing 65% year-on-year [24] - Colombia experienced an 8.1% volume decline due to a challenging macro and sociopolitical context [27] - Argentina and Uruguay volumes increased by 9.1% and 6% respectively, with Argentina showing signs of gradual recovery [29] Market Data and Key Metrics Changes - Mexico's volume decline was attributed to a high comparison base from the previous year and a deceleration in economic activity [15] - In Guatemala, despite a 10% increase in remittances, consumer sentiment remained cautious, leading to a higher propensity to save [20] - Brazil's resilient consumer environment contributed to volume growth, despite a challenging comparison base [23] - Colombia's inflation and deteriorating consumer confidence negatively impacted volumes [27] Company Strategy and Development Direction - The strategic focus for 2025 includes growing the core business, enhancing the Juntos+ initiative, and fostering a customer-centric culture [8] - The company aims to navigate the current operating environment through tactical adjustments and promotional activities [7] - Sustainability remains a priority, with significant progress reported in renewable energy use and waste management [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to external challenges and maintain long-term objectives [7] - The competitive environment in Mexico has intensified, necessitating rapid adjustments in pricing and promotional strategies [58] - Management remains cautiously optimistic about the budget, anticipating a recovery in the second half of the year [113] Other Important Information - The company identified approximately 90 million in savings initiatives across all operations, with a focus on Mexico and Colombia [60] - The company reported a net effect of MXN 65 million from insurance payments in Mexico for the quarter [141] Q&A Session Summary Question: Insights on adjusting to the uncertain environment in Mexico - Management highlighted the need for accessible pricing and an intense promotional calendar to remain competitive in the current market [58] Question: Cost savings projections for 2025 - Management identified 90 million in savings initiatives, distributed across various operational areas [60] Question: Profitability by country in Latin America - Management noted margin expansion across all operations, particularly in Brazil and Argentina [70] Question: Market share trends in Mexico - Management acknowledged a decline in market share due to competitive pressures but indicated recovery efforts are underway [81] Question: Updates on the rollout of Juntos+ in Mexico - Management confirmed plans to start the rollout in Mexico around June or July, following successful implementation in Brazil [93] Question: Outlook for cost of goods sold - Management expects continued relief from lower sweetener prices and stable PET costs for the remainder of the year [136]