The following is a summary of the Fomento Económico Mexicano, S.A.B. De C.V. (FMX) Q1 2024 Earnings Call Transcript:

Financial Performance:

• FEMSA experienced an 11.3% increase in revenues and a 14.4% rise in EBITDA, fuelled by robust growth performance from Proximity and Coca-Cola FEMSA.

• Despite the revenue growth, the company's net consolidated income saw a significant decrease of 88.3%, reaching MXN5.9 billion primarily due to a difficult comparison base in Q1 2023 and increased net financial expenses.

• The objective of achieving a leverage ratio of two times net debt to EBITDA, excluding Coca-Cola FEMSA, is projected to be reached by 2026.

• Capital deployment is concentrated on disciplined, organic, and inorganic investment, with further options for returning capital to shareholders under investigation.

• Shareholders approved an extraordinary dividend of approximately $600 million during 2024, supplementing the regular dividend of nearly $800 million.

Business Progress:

• Expansion plans for OXXO in Mexico and in several South American markets are ongoing, while efforts are being made to accelerate health division growth by optimizing multi-country platforms and elements like pricing.

• The brand's digital platform, 'Spin by OXXO', exhibits impressive growth with 7.4 million active users marking a 77.9% increase year-on-year.

• The company is concurrently harnessing AI to boost operations with initiatives such as monitoring transaction patterns and optimizing staff assignments across thousands of stores.

• Future endeavors include the acceleration of pharmacy expansion in Mexico, the exploration of potential strategic partnerships, and the examination of opportunities for mergers or acquisitions.

• FEMSA aims to capitalize on growth in the discount retailing space, without necessarily following the conventional rules of the 'hard discount' model.

• Efforts are being made to expand the user base of 'Spin by OXXO' beyond the store as a strategic necessity and a clear business opportunity, possibly extending its use to small businesses and providing them with customized loyalty programs and point of sale terminals.

More details: FEMSA IR

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