just on Call: Coca-Cola FEMSA eyes life beyond Latin America
Coca-Cola FEMSA said it had not yet reached any conclusion on the potential purchase of the Philippines unit
Speaking on the firm's earnings call yesterday (28 February), Coca-Cola FEMSA's CEO, Carlos Salazar Lomelin, told analysts that the company was attracted to the Philippines unit due to the similarities in consumption power and market fragmentation to those of Latin America. However, he said the company's decision on whether to purchase the unit will depend on the outcome of an analysis process, which has only just begun.
Last week, Coca-Cola FEMSA announced it had signed a 12-month exclusivity agreement to evaluate the potential acquisition. This would be its first acquisition outside Latin America.
Lomelin said: "The 12 months is to do with the fact that we are starting during a very important season for sales in the Philippines, so they prefer to delay our landing to start the analysis that we have to do."
Some analysts are uncertain about the bottler's credentials to integrate businesses outside of Latin America. But, Lomelin said: "We have very little information, but based on what we know, we think that it is a market that has certain similar aspects to what we have in Latin America in the fragmentation of the system, and the consumption power of some of the consumers.
"We think that we can take advantage of some of our expertise that we have in developing these types of markets."
He added that Coca-Cola FEMSA may look for more opportunities outside of its home region. "When you look at what is left in Latin America, you have a very large bottler like Arca, but assuming that these bottlers continue independently, there is not much opportunity to continue growing," he told analysts. "There are a few territories in Mexico, there are some in Brazil, but then there is not much left."
The CEO pointed to Asia. "Asia always catches our attention during our analyses, because of the potential for growth that you see, and the development that you see."
Coca-Cola FEMSA yesterday reported an increase in full-year profits, despite a "challenging commodity cost environment". For the 12 months to the end of December, net profits climbed by 8.3% to MXN10.61bn (US$826.3m). Operating profits grew by 18% to MXN20.15bn, while net sales in the period amounted to MXN124.71bn, a 20.5% increase on 2010.
The flags have been folded away, the medals handed out and the Olympic flag handed to the Mayor of Rio: London 2012 is over and Richard Corbett, like many, enjoyed it. But, did sports drinks producers...
- What do A-B InBev results mean for SABMiller deal?
- Interview - Beam Suntory's EMEA president
- Interview - William Grant & Sons
- Beckham, Diageo and the Allure of the VIP Pop-Up
- just The Preview - Brown-Forman Q3 & YTD
- Diageo, Beckham launch VIP pop-up for Haig Club
- Diageo completes Don Julio, Bushmills swap deal
- Pernod Ricard sends Martell Mumm PJ head to Asia
- Pinnacle Vodka, Skinnygirl roll out on ice
- Tesco reinstates Dan Jago following suspension
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research
- Wine, 2014 and the future
- Spirits and RTDs, 2014 and the future
- Beam Suntory Inc. - Strategy and SWOT Report
- Global RTD/RTS insights - market forecasts, product innovation and consumer trends research