Mexico: FEMSA reports double-digit growth in 2006
Fomento Económico Mexicano, S.A.B. de C.V. ("FEMSA") announced on February 26 a 13.0% increase in consolidated total revenues, reaching Ps. 32.812 billion. However, high commodity prices, continuing the third quarter trend, put pressure on the cost structure of our core beverage operations.
FEMSA Cerveza revenues (excluding Brazil) increased 8.3%. Domestic sales volume grew a robust 6.6% and export sales volume increased 13.1%, rounding off a solid year of top-line growth in Mexico and in the U.S.
Oxxo continued its pace of double-digit growth, increasing revenues by 15.1% driven by 365 net new stores and a 6.0% increase in same-store sales.
Consolidated Net Majority Income increased 14.8% to Ps. 6.622 billion.
FEMSA Cerveza revenues (excluding Brazil) increased 9.2%; income from operations increased 7.1%.
FEMSA Cerveza's Brazilian operations grew volumes consistently ahead of the industry during the second half of 2006, generating Ps. 110 million of EBITDA.
Ordinary dividend of US$135 million approved by FEMSA's Board of Directors, to be paid in 2007 and subject to approval at the annual shareholders meeting in March, representing a 44% increase over the prior year.
Three-for-One stock split approved by FEMSA's Board of Directors, subject to approval at the annual shareholders meeting in March.
José Antonio Fernández, Chairman and CEO of FEMSA, commented, "2006 closed as a year of important accomplishments both operationally and strategically. Results across our business units showed robust growth trends with Oxxo opening over 700 new stores across Mexico and the beer division achieving its fourth consecutive year of accelerated volume growth in Mexico, with exports well into the double-digits. On the strategic front, we completed several important transactions that will enhance our business in terms of growth opportunities, and leverage our distinct business model. The acquisition of Kaiser in Brazil, the announced agreement of Coca-Cola FEMSA to acquire Jugos del Valle jointly with The Coca-Cola Company, and our new cooperative framework with The Coca-Cola Company position FEMSA to continue to pursue value-creating opportunities and enhance our leadership position in Latin American beverages."
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 and important beer exporter to the United States; and Oxxo, the largest and fastest growing convenience store chain in Mexico with over 4,500 stores.
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