FEMSA Announces Second Quarter 2024 Results

Rhea-AI Summary

FEMSA announced its Q2 2024 results, showing strong performance across core business units. Total Consolidated Revenues grew 12.2% compared to Q2 2023. Proximity Americas saw an 8.9% increase in total Revenues, while Coca-Cola FEMSA reported 13.1% revenue growth. Digital services showed significant user growth, with Spin by OXXO increasing active users by 37.0% to 7.9 million.

Key financial highlights include:

• FEMSA Consolidated: 19.1% increase in Gross Profit, 15.8% growth in Income from Operations
• Proximity Americas: 17.2% increase in Gross Profit, 7.6% growth in Income from Operations
• Coca-Cola FEMSA: 17.2% increase in Gross Profit, 13.8% growth in Income from Operations

The company continued to execute its capital allocation framework, returning capital to shareholders through dividends and share buybacks. FEMSA also progressed with its divestiture plans, including the sale of its stake in Jetro Restaurant Depot.

Positive

• Total Consolidated Revenues grew 12.2% compared to Q2 2023
• Proximity Americas total Revenues increased 8.9% versus Q2 2023
• Coca-Cola FEMSA reported 13.1% revenue growth and 7.5% volume growth
• Digital services showed significant user growth, with Spin by OXXO increasing active users by 37.0%
• FEMSA Consolidated Gross Profit increased by 19.1%
• Income from Operations grew 15.8% for FEMSA Consolidated
• Successful execution of capital allocation framework, including dividends and share buybacks
• Progress on divestiture plans, including sale of stake in Jetro Restaurant Depot

Negative

• Health division faced competitive headwinds in Mexico
• Deceleration in same-store sales growth in Mexico for Proximity Americas
• Challenging expense environment for Proximity Americas

MONTERREY, Mexico, July 24, 2024 (GLOBE NEWSWIRE) -- Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) (NYSE: FMX; BMV: FEMSAUBD, FEMSAUB) announced today its operational and financial results for the second quarter of 2024.

• FEMSA: Total Consolidated Revenues grew 12.2% compared to 2Q23.
• FEMSA Retail¹: Proximity Americas total Revenues increased 8.9% versus 2Q23.
• DIGITAL: Spin by OXXO had 7.9 million active users² representing a 37.0% growth compared to 2Q23 while Spin Premia had 22.8 million active loyalty users² representing a 44.3% growth compared to 2Q23 and an average tender³ of 36.1%.
• COCA-COLA FEMSA: Total volume and revenues grew 7.5% and 13.1%, respectively against 2Q23.

Financial Summary for the Second Quarter 2024 Change vs. comparable period
	Total Revenues		Gross Profit		Income from Operations		Same-Store Sales
	2Q24	YTD24	2Q24	YTD24	2Q24	YTD24	2Q24	YTD24
FEMSA Consolidated	12.2%	11.6%	19.1%	14.9%	15.8%	14.9%
Proximity Americas	8.9%	11.8%	17.2%	18.4%	7.6%	9.1%	4.1%	6.6%
Proximity Europe	5.8%	7.0%	8.8%	9.9%	41.0%	82.3%	N.A.	N.A.
Health	(0.4%)	(1.3%)	(0.2%)	(4.4%)	(14.8%)	(28.0%)	(1.1%)	(0.3%)
Fuel	16.2%	14.7%	12.5%	7.8%	24.1%	13.1%	15.9%	14.6%
Coca-Cola FEMSA	13.1%	12.7%	17.2%	15.0%	13.8%	13.0%

José Antonio Fernandez Carbajal, FEMSA’s Chief Executive Officer, commented:

During the second quarter, we continued to see good momentum and strong performance from our core business units. Once again, most of our operations, including the two that contribute most to our results, delivered solid numbers. Proximity Americas saw a deceleration in the pace of same-store sales growth in Mexico against a tough comparison base, due in part to a shift in the timing of Holy Week celebrations, volatile weather, and the restriction of alcohol sales ahead of the national election, but offset by stellar gross margin and solid store expansion. Despite a challenging expense environment, Proximity Americas generated solid growth in operating income. For its part, Coca-Cola FEMSA delivered a remarkable set of numbers showing double-digit increases across its own income statement, driven once again by strong volume and revenue growth in its major markets.

We continued to see good results at Valora and OXXO Gas, with both businesses delivering double-digit growth in operating income. However, at our Health division we again faced competitive headwinds in Mexico offset by a stable performance in Chile and continued solid results in Colombia retail, and we are laser-focused with our plans to change the trajectory in Mexico to bring it in line with the positive dynamics we see elsewhere at FEMSA. Finally, at Digital, we continued to add users and advance towards our ecosystem objectives.

During the quarter, we also made strides on the execution of our capital allocation framework, actively utilizing both the dividend and share buyback levers to return capital to shareholders. And in early July, we received the remaining payments for the divestiture of our stake in Jetro Restaurant Depot, and we signed agreements to divest our refrigeration and foodservice equipment operations, as we continue to act on our stated objectives.

I want to thank our entire team for yet another quarter of excellent effort and results. We are maintaining the push into the second half of the year, confident that we can further maintain our positive momentum.

To obtain the full text of this earnings release, please visit our Investor Relations website at https://femsa.gcs-web.com/ under the Financial Reports section

CONFERENCE CALL INFORMATION
Our Second Quarter 2024 Conference Call will be held on: Wednesday, July 24, 2024, 11:00 AM Eastern Time (9:00 AM Mexico City Time). The conference call will be webcast live through streaming audio.
Telephone:	Toll Free US:        (866) 580 3963
	International:        +1 (786) 697 3501
Webcast:	https://edge.media-server.com/mmc/p/u8qgeyf5/
Conference ID:	FEMSA
If you are unable to participate live, the conference call audio will be available on https://femsa.gcs-web.com/financial-reports/quarterly-results

ABOUT FEMSA
FEMSA is a company that creates economic and social value through companies and institutions and strives to be the best employer and neighbor to the communities in which it operates. It participates in the retail industry through a Proximity Americas Division operating OXXO, a small-format store chain, and other related retail formats, and Proximity Europe which includes Valora, our European retail unit which operates convenience and foodvenience formats. In the retail industry it also participates through a Health Division, which includes drugstores and related activities and Digital@FEMSA, which includes Spin by OXXO and Spin Premia, among other digital financial services initiatives. In the beverage industry, it participates through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume. Across its business units, FEMSA has more than 392,000 employees in 18 countries. FEMSA is a member of the Dow Jones Sustainability MILA Pacific Alliance, the FTSE4Good Emerging Index and the Mexican Stock Exchange Sustainability Index: S&P/BMV Total México ESG, among other indexes that evaluate its sustainability performance.

^{_______________________________________________}

¹ FEMSA Retail: Proximity Americas & Europe, Fuel and FEMSA Health.
² Active User for Spin by OXXO: Any user with a balance or that has transacted within the last 56 days.
   Active User for Spin Premia: User that has transacted at least once with OXXO Premia within the last 90 days.
³ Tender: OXXO MXN sales with Spin Premia redemption or accrual / Total OXXO MXN Sales, during the period.

FAQ

What was FEMSA's (FMX) revenue growth in Q2 2024?

FEMSA's Total Consolidated Revenues grew 12.2% in Q2 2024 compared to Q2 2023.

How did Coca-Cola FEMSA perform in Q2 2024?

Coca-Cola FEMSA reported 13.1% revenue growth and 7.5% volume growth in Q2 2024 compared to Q2 2023.

What was the growth in active users for Spin by OXXO in Q2 2024?

Spin by OXXO reported a 37.0% growth in active users, reaching 7.9 million in Q2 2024.

How did FEMSA's Proximity Americas division perform in Q2 2024?

Proximity Americas total Revenues increased 8.9% versus Q2 2023, with a 17.2% increase in Gross Profit and 7.6% growth in Income from Operations.

What challenges did FEMSA face in Q2 2024?

FEMSA faced competitive headwinds in its Health division in Mexico and experienced a deceleration in same-store sales growth in Mexico for Proximity Americas.