Femsa Financial Tale: Femsa, the Mexican juggernaut that controls one of the world’s largest Coca-Cola bottlers and a sprawling empire of Oxxo corner shops, has encountered a few bumps in the road in its latest financial report. The third-quarter net profit shows a 9% year-on-year decline, and some factors are to blame.
A robust peso, with a 14% appreciation from September 2022 to September 2023, played a role, as did a drop in income from discontinued operations, including a stake in Heineken. However, amid these challenges, Femsa’s core operations are holding strong, and it’s a tale of resilience when examining trends on a constant currency basis.
For the time, Femsa earned 9.74 billion pesos ($559 million), down from 10.75 billion the year before. EBITDA, on the other hand, rose 15% to 25.37 billion pesos.
Wall Street, as per usual, has its say. JP Morgan analysts chimed in, noting that despite the peso’s pesky strength, Femsa’s “operating momentum remains robust, particularly when looking at trends on a constant currency basis.” It’s a testament to the company’s ability to weather currency fluctuations and remain solid at the core.
The financial markets responded with a vote of confidence, as shares in Femsa enjoyed a bump of around 3% during mid-morning trading. The company’s strategy to focus on its core business by divesting stakes in Heineken and Jetro Restaurant Depot seems to be resonating well with investors.
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Femsa’s Oxxo stores across Latin America have witnessed a 15% growth in same-store sales, driven by the relentless demand for snacks, beer, and other beverages. While this growth is expected to ease slightly into the higher single digits next year, the possibility of double-digit growth remains tantalizingly close on the horizon.
Femsa’s fintech arm, Spin by Oxxo, is on an impressive trajectory, adding 1.2 million new users in the quarter. The total user base now stands at 8.8 million, more than double what it was a year ago. It’s a testament to the company’s ability to adapt to the evolving landscape and diversify its offerings.
In terms of financial performance, Femsa’s revenue for the July-to-September period rose by a commendable 19%, reaching 188.1 billion pesos (or approximately $10.79 billion). The growth trajectory points to a company that’s agile and dynamic, consistently exploring new avenues for expansion and efficiency.
Femsa isn’t resting on its laurels. The company has its sights set on a deal that’s brewing to establish a joint supply platform for cleaning products, food disposables, and packaging in the United States. This move underscores Femsa’s commitment to innovation and diversification, aligning its strategies with the ever-evolving market dynamics.
While the peso’s strength poses some headwinds, Femsa’s core businesses remain robust, especially when analyzed on a constant currency basis. The company continues to adapt and expand its offerings, with growth in its fintech arm and the establishment of a joint supply platform in the United States. All in all, it’s a testament to Femsa’s enduring ability to navigate the complex currents of the business world.
Our Reader’s Queries
What are the results of FEMSA?
Femsa has reported impressive results for the third quarter of 2023, with a 19.3% growth in total consolidated revenues compared to the same period last year. The retail arm of the company, Proximity Americas, also saw a significant increase in total revenues, up by 20.8% from 3Q22. The digital sector of Femsa also performed well, with Spin by OXXO boasting 6.4 million active users, while Spin Premia had 17.7 million active loyalty users with an average tender of 28.3%. These results demonstrate Femsa’s continued success and growth in various sectors.
How many employees does FEMSA have?
Our Business Units boast a workforce of over 320k+ employees spread across 18 countries. These countries include Germany, Argentina, Austria, Brazil, Chile, Colombia, Costa Rica, Ecuador, the United States of America, Guatemala, Luxembourg, Mexico, Nicaragua, the Netherlands, Panama, Peru, Switzerland, and Uruguay.
Where is FEMSA headquarters?
FEMSA, or Fomento Económico Mexicano, S.A.B. de C.V., is a multinational company based in Monterrey, Mexico. It specializes in beverages and retail, and is known for operating the world’s largest independent Coca-Cola bottling group. Additionally, FEMSA is the largest convenience store chain in Mexico.
What is the annual revenue of Oxxo?
OXXO, a leading company in its industry, boasts a remarkable revenue of $2.5 billion. With a workforce of 129,001 employees, the revenue per employee ratio stands at an impressive $19,379. In 2022, OXXO reached its peak revenue of $2.5 billion, a testament to its success and growth in the market.