October 28, 2008
FEMSA Delivers 8.6% Operating Income Growth in 3Q08
MONTERREY, Mexico, Oct. 28 /PRNewswire-FirstCall/ -- Fomento Economico Mexicano, S.A.B. de C.V. ("FEMSA") today announced its operational and financial results for the third quarter of 2008.
Third Quarter 2008 Highlights:-- Consolidated total revenues grew 10.8% and income from operations grew 8.6%.
-- In spite of the challenging environment and a more cautious consumer, FEMSA delivered robust growth in operating income driven by strong results at Coca-Cola FEMSA and FEMSA Comercio that more than offset weakness at FEMSA Cerveza.
-- Coca-Cola FEMSA total revenues and income from operations increased 14.5% and 10.3%, respectively.
-- Results mainly driven by double-digit income from operations growth in Mercosur, supported by the integration of Remil.
-- FEMSA Cerveza total revenues increased 5.7%
-- In an environment of healthy pricing, sales volume in Mexico decreased 1.9%, while sales volume grew 8% in Brazil and 10% in exports.
-- Continued raw material pressures and sustained marketing investments behind our brands across our operations, resulted in an 8.2% decrease in income from operations.
-- FEMSA Comercio continued its pace of strong growth and margin expansion.
-- Income from operations increased over 30% for the seventh consecutive quarter, resulting in an operating margin expansion of 110 basis points to reach 6.5%.
Jose Antonio Fernandez, Chairman and CEO of FEMSA, commented, "After a strong first half performance, during the third quarter we started seeing some signals of a softening consumer in our main market on top of growing macroeconomic pressures and sustained raw materials inflation across our markets. However, we were again able to deliver consolidated operating income growth. FEMSA Cerveza's positive pricing trends in the key Mexican market, combined with contained administrative expenses, partially offset the continued pressure from grain prices and sustained marketing activity. Coca- Cola FEMSA continued capturing the benefits of integrating Remil and Jugos del Valle into its platform. Meanwhile, FEMSA Comercio opened 851 net new stores in the last twelve months to surpass the 6,000-store milestone, delivering strong bottom-line growth for the tenth consecutive quarter.
"These are tough times, however FEMSA's business position remains as solid as ever. Our balance sheet is healthy, our competitive position across businesses and across markets has never been stronger, and we are working hard to ensure that we maintain our momentum through this challenging period."
To obtain the full text of this earnings release, please visit our Investor Relations website a http://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 the leading beverage company in Latin America. It controls an integrated beverage platform that comprises Coca-Cola FEMSA, the largest Coca- Cola bottler in the region; FEMSA Cerveza, one of the leading brewers in Mexico, with presence in Brazil, and an important beer exporter to the United States and other countries; and Oxxo, the largest and fastest growing convenience store chain in Mexico with over 6,000 stores.
Web site: http://www.femsa.com/investor