MEXICO: Soft drinks drive FEMSA sales, profits growth
FEMSA reports strong growth
Sales rise across soft drinks, beer and retail divisions have driven a strong performance from Mexico-based Fomento Economico Mexicano (FEMSA) in 2009.
Net sales for the 12 months to the end of December rose by 17% to MXN197bn (US$15bn), compared to MXN168bn in 2008, FEMSA said today (12 February). Fourth quarter sales rose by 20%.
Net profits leapt by nearly 48% to MXN9.9bn, against MXN6.7bn in the previous year, while operating profits rose 19% to MXN27bn.
Growth was driven by all three of the firm's divisions, but Coca-Cola FEMSA and retail arm FEMSA Commercio grew significantly ahead of beer division FEMSA Cerveza, which is set to become part of Heineken following a deal signed between the two groups last month.
Favourable curreny rates also boosted profits as local currencies depreciated against the US$ in the fourth quarter, while the group also reported a one-time tax gain in Brazil. Effective tax rate in the fourth quarter in Brazil was 30%, compared to 41% in the same period of 2008.
FEMSA chairman and CEO José Antonio Fernández hailed the benefit of the Heineken deal for shareholders. FEMSA will take a 20% stake in Heineken in return for yielding control of its Cerveza division.
"At the same time, we increase FEMSA’s operational and financial flexibility, and we will be able to focus our attention and resources on the significant opportunities for Coca-Cola FEMSA and FEMSA Comercio," said Fernández.
He said last month that the group would seek acquisitions in soft drinks bottling and retail, following the Heineken deal. FEMSA's net debt to EBITDA ratio was just 0.7 at the end of 2009.
FEMSA Cerveza saw net sales rise 9% to MXN46bn in 2009, with sales in Brazil up 16% and export sales, excluding Brazil, up 9%.
Coca-Cola FEMSA reported net sales up 17% for the year, to MXN197bn.
FEMSA Commercio, meanwhile, reported sales up 13.6% to MXN53.5bn for the year.
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