The following is a summary of the Arca Continental, S.A.B. De C.V. (EMBVF) Q1 2024 Earnings Call Transcript:
Financial Performance:
Arca Continental saw a marginal consolidated revenue growth of 0.1% in Q1 2024, with EBITDA growing by 1.2%.
Despite a 26.1% downturn in Argentinean volumes, consolidated volumes still grew 0.1% to 565 million unit cases.
The beverage business in Mexico increased volume by 3.1%, its best Q1 performance since 2017, resulting in a net sales increase of 7.7% reaching MXN23.3 billion.
However, total revenue in South America decreased by 9.9% to MXN9.6 billion, with EBITDA seeing an 18.6% decrease down to MXN1.8 billion.
Meanwhile, Coca-Cola Southwest saw a revenue increase of 6.9% to $990.6 million and a volume growth of 2.3%.
Business Progress:
Arca Continental's 'digital nest' technology and innovation hub came online, supporting the development of the digital ecosystem.
The company experienced growth across their beverage businesses in Mexico, the U.S., Peru, and Ecuador while facing struggles in Argentina.
Arca plans next to extend beer distribution in Peru to an additional 40% of its territories.
Commitment to sustainability has led to the issuance of sustainability-linked bonds in the Mexican debt market.
The U.S. market exhibited robust growth, especially in still beverages, and a 3% growth in the Coca-Cola brand.
They aim to expand PetStar's recycling facilities and reach over 40 PET collection centers in Mexico by 2027.
Amid economic challenges, Arca Continental has focused on maintaining affordability and efficiency with their pricing strategy, especially in Argentina.
In Mexico, Arca reported double-digit growth in vending operations, driven by expansion into micro markets.
Arca Continental plans to increase investment in digital capabilities and cooler coverage in Ecuador.
They anticipate expansion following successful test evaluations of their portfolio expansion, and are steadily focusing on affordability expansion and operating expense control amid economic headwinds.
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