FEMSA Grows Total Revenue Across Operations in 2013

February 27, 2014

MONTERREY, MEXICO--(Marketwired - Feb 27, 2014) - Fomento Económico Mexicano, S.A.B. de C.V. ("FEMSA") ( NYSE : FMX ) ( BMV : FEMSAUBD ) ( BMV : FEMSAUB ) announced today its operational and financial results for the fourth quarter and full year 2013.

Fourth Quarter 2013 Highlights:

  • FEMSA consolidated total revenues grew 11.1% compared to the fourth quarter of 2012, reflecting growth at Coca-Cola FEMSA and FEMSA Comercio. On an organic basis1, total revenues grew 3.2%.

  • Coca-Cola FEMSA total revenues increased 8.5% compared to the fourth quarter of 2012. On an organic basis1, total revenues decreased 2.2% reflecting a negative translation effect resulting from the devaluation of currencies in our South America division. On a currency neutral basis and excluding the non-comparable effect of the integration of Grupo Yoli in our Mexican territories, Companhia Fluminense de Refrigerantes and Spaipa S.A. Industria Brasileira de Bebidas in our Brazilian operation, total revenues grew 12.1%.

  • FEMSA Comercio achieved total revenues growth of 13.5% and income from operations growth of 24.4%, each as compared to 4Q12, driven by new store openings and 2.5% growth in same-store sales. On an organic basis1, total revenues and income from operations grew 10.0% and 23.6%, respectively.

2013 Full Year Highlights:

  • FEMSA consolidated total revenues grew 8.3% compared to 2012 driven by Coca-Cola FEMSA and FEMSA Comercio. On an organic basis1, total revenues grew 4.6%.

  • Coca-Cola FEMSA total revenues increased 5.6% compared to 2012 driven by a result of mid single-digit growth in its two operating Divisions. On an organic basis1 total revenues grew 1.0%.

  • FEMSA Comercio continued its pace of strong floor space growth by opening 1,120 net new stores in 2013. Same-store sales rose 2.4% and income from operations increased 16.6%, each as compared to 2012. On an organic basis1, total revenues and income from operations grew 10.6% and 15.6%, respectively.

Carlos Salazar Lomelín, FEMSA CEO, commented: "During the fourth quarter, trends for our two core businesses followed separate trajectories. For Coca-Cola FEMSA, in Mexico top-line was resilient but profitability numbers reflected a very demanding comparison base, while the consumer environment remained tough in Brazil and local currencies continued under pressure in most of South America. For its part, at FEMSA Comercio sequential top-line trends improved slightly and expenses remained contained during the quarter, helping to drive positive margin dynamics. In addition, we were able to deliver on our expectations of opening more than 1,000 new stores in a calendar year yet again.

On the strategic front, 2013 was an important and busy year during which we took opportunities to increase our bottling presence in our two largest markets, Mexico and Brazil, with three key acquisitions: Yoli, Fluminense and Spaipa. These transactions should allow us to create value in the medium- and long-term, and we are well advanced in our integration efforts in both countries. We also made our entrance into the Philippine market a reality, with very encouraging early results. For its part, FEMSA Comercio took the initial steps of leveraging its capabilities by entering new small-format retail markets in Mexico through acquisitions in the drugstore and quick-service restaurant segments. And so, we continued to privilege the execution of our long-term strategy even in the face of short-term market noise.

Looking forward, there are certainly challenges ahead but, as always, we continue to position ourselves to capture opportunities down the road. On the beverage front, the new tax environment in Mexico is already requiring meaningful adjustments to our price and presentation architecture, as well as rationalization efforts to our cost and expense structures, in order to mitigate the pressure to our top and bottom lines. And in South America, several of our markets are going through some level of macroeconomic dislocation. These conditions should be transitory, and we have navigated similar waters in the past, but that does not mean they do not present headwinds. As for FEMSA Comercio, even though the consumer environment in Mexico has not yet shown signs of improvement, we aim to deliver results that outperform our industry and we continue to make progress in developing additional avenues for growth."

To obtain the full text of this earnings release, please visit our Investor Relations website a www.femsa.com/investor under the Financial Reports section

This report may contain certain forward-looking statements concerning our future performance that should be considered as good faith estimates made by us. These forward-looking statements reflect management's expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which could materially impact our actual performance.

FEMSA is a leading company that participates in the beverage industry through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world; and in the beer industry, through its ownership of the second largest equity stake in Heineken, one of the world's leading brewers with operations in over 70 countries. In the retail industry it participates with FEMSA Comercio, operating various small-format chain stores, including OXXO, the largest and fastest-growing chain of stores in Latin America. All of which is supported by a Strategic Business unit.

Excludes non-comparable results from Coca-Cola FEMSA and FEMSA Comercio acquisitions in the last twelve months.