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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