The following is a summary of the Arca Continental, S.A.B. De C.V. (EMBVF) Q4 2023 Earnings Call Transcript:
Financial Performance:
Arca Continental reported total consolidated volume growth of 2.4% for Q4 and 4.3% for the full year, reaching a record 2.5 billion unit cases.
Despite a 5% decline in Q4 revenue, due to currency impact, full-year consolidated revenues rose 2.8% to MEX$ 213.6 billion. On a currency-neutral basis, Q4 revenues grew 6.7% and 12.8% for the year.
Q4 Consolidated EBITDA grew 0.2% to reach MEX$ 10 billion, while full-year EBITDA rose 7% to MEX$ 42.4 billion.
The Q4 EBITDA margin was 20% and full-year was 19.8%, marking expansions of 100 and 70 basis points respectively.
Reported Q4 gross margin was 47.9%, up 250 basis points from 2022, and for the year, it expanded 140 basis points to reach 46.3%.
Q4 net income was MEX$ 4.5 billion, a 14.8% increase year-over-year, with annual net income reaching MEX$ 17.5 billion, a 12.9% increase from 2022.
The company's total debt was MEX$ 45.2 billion with a net debt-to-EBITDA ratio of 0.5 times.
Business Progress:
Arca Continental exhibited strong performance in key markets such as Mexico, Peru, and the U.S. demonstrating volume growth and profitability.
The company intends to maintain a disciplined pricing strategy in 2024, with a high single-digit increase in revenue in currency-neutral terms anticipated.
To further its digital transformation agenda, Arca Continental plans to allocate 6-7% of total sales to strengthen market execution and expand manufacturing.
A new tool for price optimization has been implemented and the company is developing a digital mobile platform aimed at improving the core business.
Arca Continental overcame economic challenges in Argentina through strategies such as revising pricing strategies, expanding returnables, enhancing operational efficiency, and exploring new distribution agreements.
Capital expenditure in 2023 equaled 6% of sales, aimed at increasing production capacity and commercial capabilities.
The company successfully issued a MEX$ 6,050 million bond in the Mexican debt market in January.
Future plans include progressing in its digital agenda and evolving commercial models to meet changing customer needs.
More details: ARCA CONTINENTAL SAB DE CV IR
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