SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF OCTOBER
2003
FOMENTO ECONOMICO MEXICANO, S.A. DE C.V.
(Exact name of Registrant as specified in its charter)
Mexican Economic Development, Inc.
(Translation of Registrant's name into English)
United Mexican States
(Jurisdiction of incorporation or organization)
General Anaya No. 601 Pte.
Colonia Bella Vista
Monterrey, NL 64410 Mexico
(Address of principal executive offices)
(Indicate by check mark whether the
registrant files or will file annual
reports under cover of Form 20-F of Form
40-F.)
Form 20-F x Form 40-F
--- ---
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934.)
Yes No x
--- ---
(If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82--.)
FEMSA REPORTS RECORD REVENUES IN 3rd QUARTER WITH NET INCOME UP 18%
CONTACTS:
Juan Fonseca / (52) 81 83 28 62 45 / juan.fonseca@femsa.com.mx
Alan Alanis / (52) 81 83 28 62 11 / alan.alanis@femsa.com.mx
Emily Klingbeil / (52) 81 83 28 61 89 / emily.klingbeil@femsa.com.mx
Monterrey, Mexico, October 23, 2003 -- Fomento Economico Mexicano,
S.A. de C.V. ("FEMSA") (NYSE: FMX; BMV: FEMSA UBD; FEMSA UB), the
Leader in Latin Beverages, today reported its operational and
financial results for the third quarter and first nine months of 2003.
-- FEMSA consolidated total revenues reached Ps. 20.783 billion
during the third quarter with a consolidated operating margin
of 15.6%. Consolidated net income was Ps. 1.045 billion, 18.1%
higher than the same period last year.
-- Coca-Cola FEMSA contributed more than half of FEMSA
consolidated total revenues and operating income for the
quarter. Total revenue growth of 126.8% reflects the addition
of the recently acquired territories into the KOF system.
Comparable volume for Mexico grew 1.8% from the same period
last year.
-- FEMSA Cerveza's quarterly domestic and export beer sales
volume increased 3.1% and 9.2% respectively, in large part due
to the solid performance of our Sol brand in the domestic
market and our Dos Equis and Tecate brands in the US.
-- Oxxo opened 142 new stores during the quarter, totaling 2,541
locations nationwide. We successfully increased quarterly net
sales by 23.6% while maintaining our operating margin (before
management fees) at 5.1% of sales.
-- FEMSA made several adjustments at the senior management levels
to adapt its organizational structure to the increased scale
and evolving nature of its beverage businesses.
Jose Antonio Fernandez, Chairman and CEO of FEMSA, commented, "We
are very pleased with these results given the unfavorably rainy summer
in Mexico and the increasingly competitive landscape in our soft
drinks operations. Overall performance will benefit with the gradual
recovery of demand for consumer products in the Mexican market.
Furthermore, the smooth integration of the new Coca-Cola FEMSA
territories, the advancements in the transformation of FEMSA Cerveza
and the expansion in the number of Oxxo stores throughout Mexico,
illustrate our ability to maneuver successfully towards the vision of
making FEMSA the premier beverage company in Latin America.
1
With that same vision in mind, and after a thorough analysis of
the new structural and managerial demands of our operations, we are
announcing today a number of changes at the most senior executive
levels of FEMSA and several of our operating subsidiaries. Utilizing
the world-class management talent within our organization, we are
modifying some structures and redeploying several key executives to
new responsibilities. We are convinced that these adjustments will be
instrumental as we guide FEMSA through the exciting new stage of
growth that is now under way."
UNAUDITED FINANCIAL RESULTS FOR THE THIRD QUARTER AND NINE MONTHS
ENDED SEPTEMBER 30, 2003 COMPARED TO THE THIRD QUARTER AND NINE MONTHS
ENDED SEPTEMBER 30, 2002
Notice
Upon the completion of our acquisition of Panamerican Beverages,
Inc. ("Panamco"), we began consolidating their operating results as of
May 2003. Therefore, operating results for Coca-Cola FEMSA and for
FEMSA consolidated will not be fully comparable with previous quarters
until the third quarter of 2004.
FEMSA Consolidated
------------------
Total Revenues
During the third quarter of 2003, our consolidated total revenues
increased by 47.4% to Ps. 20.783 billion driven by revenue growth in
every one of our main subholding companies. In line with the second
quarter of this year, most of the incremental revenue relates to
Coca-Cola FEMSA and its new revenue sources. FEMSA Comercio posted
strong revenue growth of 23.6%, related mainly to its rapid expansion
of selling space and to a slight pick-up in demand due to an
increasingly evident economic upturn in Mexico. FEMSA Cerveza
increased its domestic sales volume by 3.1%, which combined with a
weak pricing environment, resulted in an increase in total revenues of
1.3%. FEMSA Empaques recorded revenue growth of 6.1%, mainly
reflecting an increase in demand for bottles and beverage cans, as
well as more favorable currency conditions. For the first nine months
of the year, consolidated total revenues reached Ps. 52.932 billion.
Income from Operations
During the third quarter of 2003, our consolidated income from
operations (including results of affiliated companies) increased by
20.1% to Ps. 3.234 billion, and our consolidated operating margin was
15.6%. The observed margin contraction primarily resulted from the
incorporation of Coca-Cola FEMSA's new bottling territories that have
a lower level of profitability than Coca-Cola FEMSA's original
territories. FEMSA Cerveza and FEMSA Empaques also recorded operating
margin contractions reflecting a lower gross profit margin at both
subsidiaries caused by lack of pricing, the impact of a weaker peso on
the cost of dollar denominated raw materials, and higher energy costs.
For the first nine months of the year, consolidated operating income
reached Ps. 8.339 billion.
2
Integral Cost of Financing and Taxes
Net Interest Expense. Consolidated net interest expense during the
third quarter of 2003 amounted to Ps. 769 million, resulting from the
interest expense related to new debt issued by Coca-Cola FEMSA in
order to finance the acquisition of Panamco (for further detail,
please refer to the attached press release of Coca-Cola FEMSA). For
the first nine months of the year, FEMSA consolidated net interest
expense reached Ps. 1.363 billion.
Foreign Exchange. For the third quarter of 2003, we recorded a
consolidated foreign exchange loss of Ps. 1.108 billion. This amount
primarily reflects our higher US dollar denominated liabilities
including the new debt incurred for our recent acquisition and a 5.3%
depreciation of the Mexican peso vs. the dollar during the quarter.
For the first nine months of the year, consolidated foreign exchange
loss amounted to Ps. 2.047 billion.
Monetary Position. For the third quarter of 2003, the gain on
monetary position amounted to Ps. 442 million, compared to a loss of
Ps. 55 million during the same period of 2002. Approximately 81.0% of
the third quarter gain is attributable to the inflation rate over the
liabilities attained from the various territories in our recent
acquisition. Changes in monetary position reflect adjustments for
inflation over the period, such that monetary assets and liabilities
obtained or disposed of during the period are not eroded. For the
first nine months of the year, gain on monetary position amounted to
Ps. 471 million.
Taxes. For the third quarter of 2003, we recognized consolidated
income tax, tax on assets and employee profit sharing expense
("taxes") of Ps. 617 million. The effective tax rate for the quarter
was 37.1%. For the nine months of 2003, income taxes amounted to Ps.
1.899 billion with an effective tax rate of 40.3%.
Net Income
Consolidated net income amounted to Ps. 1.045 billion, an 18.1%
increase with respect to the same quarter of the previous year. For
the first nine months of 2003, the consolidated net income reached Ps.
2.811 billion.
Consolidated Net Majority Income
Consolidated net majority income amounted to Ps. 691 million for
the third quarter of 2003 and to Ps. 1.867 billion for the first nine
months of 2003. Net majority income per FEMSA Unit was Ps. 0.652 for
the third quarter of 2003 and of Ps. 1.762 for the first nine months
of 2003. Net majority income per FEMSA ADR, considering an exchange
rate of Ps. 10.99 per dollar, was 0.59 dollars for the third quarter
of 2003 and of 1.60 dollars for the first nine months of the year.
Coca-Cola FEMSA
---------------
Coca-Cola FEMSA's financial results and discussion are
incorporated by reference from Coca-Cola FEMSA's press release
attached to this press release.
3
FEMSA Cerveza
-------------
For the third quarter of 2003, FEMSA Cerveza's total revenues
reached Ps. 5.638 billion, a 1.3% increase compared to the same period
last year, resulting from total volume growth of 3.6% which offset a
2.4% decline in total real revenues per hectoliter. Domestic sales
volume grew by 3.1% to 5.801 million hectoliters, despite adverse
weather conditions. We believe that the increase in demand during the
quarter was driven by a combination of (i) the absence of a price
increase during the first nine months of 2003 and (ii) evident gradual
economic recovery, throughout the center and south of Mexico. Average
domestic revenue per hectoliter remained 90 basis points above 4.0%
inflation for the period, declining by only 3.1%. This attests to a
successful shift in mix towards more premium presentations.
Export sales volume increased by 9.2%, as exports to the United
States gained traction towards the end of the quarter. We continued to
see solid growth in the export market for our Dos Equis and Tecate
brands. Additionally, export revenues continued to benefit from the
peso devaluation relative to the previous year, posting a 9.0%
increase in average revenue per hectoliter in real peso terms.
Gross profit decreased by 0.7% compared to the third quarter of
2002. An increase in dollar-denominated raw materials and utility
prices, contributed to a reduction of 100 basis points in FEMSA
Cerveza's gross margin as a percentage of total revenues.
Selling expenses decreased 0.3% to Ps. 1.558 billion, due to
various cost containment initiatives throughout the organization.
Administrative expenses, in turn, increased 3.3% to Ps. 567 million
due to the amortization associated with the ongoing Enterprise
Resource Planning system (ERP) rollout. Combined SG&A expenses
increased slightly by 0.6% compared with the same quarter of the
previous year. Operating expense growth contention was not enough to
compensate for the deterioration at the gross margin level, resulting
in a decrease of 1.4% to Ps. 1.164 billion in operating income before
management fees. Femsa Cerveza's operating margin before management
fees was 20.7% for the quarter.
During the first nine months of 2003, FEMSA Cerveza increased its
total revenues 0.7% reaching Ps. 16.121 billion, while operating
income decreased 3.5% to Ps. 2.917 billion. The operating margin
during these nine months was 18.1% of total revenues.
Non-Cash Charges. Exclusivity amortization continued to move in
line with revenue growth and has been stable over the past three
quarters. Quarterly figures were Ps. 252 million, Ps. 263 million, and
Ps. 256 million for the first, second, and third quarters of 2003
respectively.
Where are we in the transformation of Cerveza?
What Has Changed:
-- As of September 30, 2003, 81.0% of our domestic beer volume is
being sold through presale, reaching our stated objective.
Prior to presale, an average of 45.3% of the beer on the
delivery truck would return unsold to the warehouse at the end
of each day. Today this figure has declined to only 4.4%.
4
-- Presale and information systems have enabled us to decrease
the number of routes by 5.0% and the number of warehouses by
11.0%, year to date.
-- As of the end of the quarter, every one of the existing 8
sales agencies in the greater Monterrey metropolitan area were
"online" with the ERP system, as were the cities of
Guadalajara and Merida.
-- As the transformation process continues, we look forward to
more positive updates.
What Has Not Changed:
-- Our drive to develop an innovative approach to the beverage
business in Mexico is focused on a firm belief that this
transformation is necessary and inevitable. We are fully
committed to its successful implementation.
FEMSA Comercio
--------------
During the third quarter of 2003, FEMSA Comercio continued its
impressive expansion rate by adding 142 new stores to the Oxxo
convenience store chain while maintaining an operating margin in line
with 2002 levels. There are several strategic initiatives that started
not long ago that have proven to be extremely successful. For
instance, we now have 32 fully operational administrative offices
across the country that drive our decentralized expansion process,
while keeping a centralized supervision of the standard guidelines and
timing of execution to open a new store. Similarly, the creation of
Category Managers has proven useful in creating a closer relationship
with suppliers, enabling us to develop new and more effective
promotions to help our stores increase their sales. Finally, strong
operational and financial performance has enabled us to increase
advertising initiatives resulting in brand enhancement and continued
rapid growth of the Oxxo chain.
FEMSA Comercio's net sales increased by 23.6% to Ps. 4.227
billion, primarily a result of the rapid expansion in selling space
through the opening of new Oxxo stores. Sales of comparative mature
stores (those with more than 18 months in operation) increased by 0.7%
in the quarter as a result of the combination of two offsetting
factors: (i) a higher ticket per transaction thanks to the effective
implementation of category management initiatives and (ii) slightly
lower traffic per store, particularly during September, due to the
increased rainfall throughout Mexico. FEMSA Comercio achieved a gross
margin of 26.6% of net sales, in line with 2002 levels, attesting to
successful category management and close relationships with suppliers.
Due to an increase in electricity costs and maintenance and site
enhancements, operating expenses as a percentage of total revenues
increased by 20 basis points. FEMSA Comercio's operating margin before
management fees remained at 5.1%.
Accumulated results for the first nine months of 2003 show FEMSA
Comercio with revenue growth of 24.5% to Ps. 11.896 billion, driving
growth in income from operations of 22.6% to Ps. 540 million,
resulting in an operating margin of 4.5%.
5
FEMSA Empaques
--------------
For the third quarter of 2003, FEMSA Empaques saw an increase in
sales of packaging products and refrigeration equipment for the now
expanded Coca-Cola FEMSA operations contributing to solid revenue
growth of 6.1% to 1.883 billion. In addition, dollar-denominated
revenues (such as beverage cans) benefited from the favorable effect
of the depreciation of the peso against the dollar. Glass bottles
recorded sales volume growth of 3.9% during the quarter due to an
increase in purchases from FEMSA Cerveza, which compensated the
continued trend of reducing sales to third parties. However, gross
margin contracted by 310 basis points to 24.4% of net sales. This was
mainly due to the divergent trend between the lower price per unit of
our core products, and the higher dollar denominated costs of raw
materials. Furthermore, we experienced significantly higher energy
costs during the quarter. Operating expenses decreased by 0.1%,
reflecting lower labor costs. Operating income before management fees
decreased by 9.1%, representing an operating margin contraction of 270
basis points to 15.8% of total revenues for the third quarter.
For the first nine months of 2003, FEMSA Empaques posted growth in
total revenue of 6.6% to Ps. 5.328 billion and growth in income from
operations of 1.2% to Ps. 802 million, for a nine-month operating
margin of 15.1%.
Net Debt
--------
On September 30, 2003, FEMSA recorded total consolidated debt of
Ps. 40.714 billion and consolidated cash & equivalents of Ps. 9.837
billion, resulting in Ps. 30.877 billion of consolidated net debt. As
of the end of the third quarter, approximately 53% of FEMSA's
consolidated total debt had a fixed interest rate, while the remaining
47% had a variable one. Likewise, 53% of this total debt is
denominated in dollars, while the remaining amount is denominated in
local currency. We would also like to note that despite the Peso
depreciation seen during the period, we reduced our consolidated net
debt by 268 million dollars quarter over quarter.
NET DEBT BY SUBSIDIARY
(for the third quarter ended, September 30, 2003)
---------------------------------------------------------------------------------------
FEMSA Holdco Coca-Cola FEMSA FEMSA FEMSA
and Other 1 FEMSA Cerveza Comercio Empaque TOTAL
------------ ---------- ---------- ---------- ---------- ------------
Cash & Equivalents 1,157 4,510 2,959 482 729 9,837
Total Debt 646 30,332 5,668 1,445 2,623 40,714
Total Net Debt -512 25,823 2,709 963 1,894 30,877
---------------------------------------------------------------------------------------
Note: Figures in millions of pesos.
1. Other includes FEMSA Logistica and Mundet.
6
Structural and Management Reorganization
----------------------------------------
Few executives understand the beverage industry in Mexico and
Latin America as well as Alfredo Martinez Urdal. During the 1990s, he
was instrumental in the transformation of Coca-Cola FEMSA into an
operational powerhouse, and in recent years he has also led the
profound transformation effort at FEMSA Cerveza that is now well
advanced and reaching the stage where the tools and skills are in
place to begin delivering significant results. Therefore, in order to
allow every one of our businesses to benefit from Alfredo's vast
experience and unique vision, our Board of Directors has named him
Deputy CEO of FEMSA. From this vantage point, Alfredo will provide his
invaluable input to FEMSA's Board and its Chairman as they chart the
strategic course for our Company. This new role will complement his
main responsibility of leading the ongoing transformation of our beer
operations, for which he has been named Chairman of the Board of FEMSA
Cerveza.
At Cerveza, the operating responsibilities of the CEO will be
shared by two seasoned FEMSA executives: Javier Astaburuaga and Jorge
Luis Ramos. Until now, Javier and Jorge Luis headed Cerveza's domestic
commercial operations, with Javier running the North of the country
while Jorge Luis focused on Central and Southern Mexico. Going
forward, Jorge Luis will run the commercial operations nationwide,
while Javier will be responsible for manufacturing, marketing,
international operations and all corporate functions such as finance,
planning and human resources.
Having Jorge Luis completely focused on sales and distribution
will allow him to fully leverage the unprecedented tools and
infrastructure developed with the transformation of Cerveza. Price
differentiation, promotions, and competitive strategies will be
designed and implemented with the national picture in mind, extracting
maximum benefits from the powerful system that has been built.
Meanwhile, Javier will apply the experience gained over his 21 years
at FEMSA to make Cerveza more profitable, efficient and nimble. We are
certain that the combination of these talented executives under the
trained eye of Alfredo will produce extraordinary results.
As the competitive landscape continues to evolve for our beverage
operations, the strategic advantages provided by the Oxxo chain become
ever more relevant. For Coca-Cola FEMSA, Oxxo represents a powerful
tool in its comprehensive strategy to deal with new and old
competitors. However, it is for FEMSA Cerveza that our retail
operations have become most useful, as Oxxo's expansion strategy is
becoming instrumental for Cerveza's own growth. As our portfolio
becomes more differentiated, as revenue management capabilities
increase and as channel marketing develops further, Oxxo plays an
increasingly important role. The chain's growing scale and the
enormous potential it brings to complement and enhance the
distribution of our beverage products require increased resources and
focus from its management team. Consequently, FEMSA's Board of
Directors has determined that Eduardo Padilla, who until now headed
all of our strategic businesses, will concentrate entirely on FEMSA
Comercio as its Chief Executive Officer. Eduardo has been the lead
architect of Comercio's record expansion. He will have the renewed
mandate to fully support our beverage businesses while continuing to
develop the extraordinary distribution channel that is Oxxo.
Furthermore, he will carefully explore opportunities to expand our
retail capabilities in support of our core beverage operations outside
of Mexico, in order to provide them with an additional competitive
advantage where appropriate.
7
Our packaging operations will become part of FEMSA Strategic
Procurement, and will incorporate the design and coordination of
procurement efforts across FEMSA under the stewardship of Sergio
Saenz, until now Chief Financial Officer of FEMSA Cerveza. Sergio's
considerable operating experience will serve us well as this business
unit adjusts to supply the growing demands of our beverage operations
throughout Latin America. His position as Cerveza's CFO will be taken
by Gerardo Estrada, previously Cerveza's Administrative Director.
These changes represent the next step in the evolution of FEMSA in
our pursuit of excellence as the premier beverage company in Latin
America. They follow and build upon our consistent track record of
delivering profitable growth, year after year. The businesses where we
operate are constantly changing, and we will continue to change with
them. We are fortunate to have a deep bench of talented managers,
which we continue to invest in and develop. We are also convinced that
the new structure is the right one for the continued long-term success
of FEMSA as we take on new challenges and new opportunities.
CONFERENCE CALL INFORMATION:
Our Third Quarter 2003 Conference Call will be held on: Thursday
October 23, 2003, 1:00 P.M. Eastern Time (12:00 noon Mexico City
Time). To participate in the conference call, please dial: Domestic
U.S.: 1-800-915-4836, International: 973-317-5319. This Conference
Call will also be transmitted through live webcast at
http:ir.femsa.com
If you are unable to participate live, an instant replay of the
conference call will be available through October 30, 2003. To listen
to the replay please dial: Domestic U.S.: 1-800-428-6051;
International: 973-709-2089, Passcode: 309424.
Set forth in this press release is certain unaudited financial
information for FEMSA for the third quarter ended September 30, 2003,
compared to the third quarter ended September 30, 2002. We are a
holding company whose principal activities are grouped under the
following subholding companies (the "Subholding Companies") and
carried out by their respective operating subsidiaries: FEMSA Cerveza,
S.A. de C.V. ("FEMSA Cerveza"), which engages in the production,
distribution and marketing of beer; Coca-Cola FEMSA, S.A. de C.V.
("Coca-Cola FEMSA"), which engages in the production, distribution and
marketing of non-alcoholic beverages; FEMSA Empaques, S.A. de C.V.
("FEMSA Empaques"), which engages in the production and distribution
of packaging materials; and FEMSA Comercio, S.A. de C.V. ("FEMSA
Comercio"), which engages in the operation of convenience stores.
FEMSA Units consists of FEMSA UBD units and FEMSA UB units. Each
FEMSA UBD unit is comprised of one Series B share, two Series D-B
shares and two Series D-L shares. Each FEMSA UB unit is comprised of
five series B shares. The number of FEMSA Units outstanding as of
September 30, 2003 was 1,059,462,090, equivalent to the total number
of shares of the Company outstanding as of September 30, 2003 divided
by 5.
All of the figures in this report have been restated in constant
Mexican pesos ("Pesos" or "Ps.") with purchasing power as of September
30, 2003 and were prepared in accordance with Mexican Generally
Accepted Accounting Principles ("Mexican GAAP"). As a result, all
percentage changes are expressed in real terms.
8
The restatement was calculated using the following inflation
factors and exchange rates:
Macroeconomic Information
Inflation Exchange Rate
----------------------------------------------------
LTM 3Q'03 Per Us. Dll. Per Peso
------------------------------- ----------- ------------ -----------
Mexico 4.040% 1.040% 10.9900 1.0000
Colombia 0.380% 2,889.3900 0.0038
Venezuela 4.570% 1,853.0000 0.0059
Brazil 1.220% 2.9234 3.7593
Argentina 3.340% 0.500% 2.9150 3.7702
=============================== =========== ============ ===========
FORWARD LOOKING STATEMENTS
This report may contain certain forward-looking statements
concerning our future performance that should be considered as good
faith estimates made by us. These forward-looking statements reflect
management expectations and are based upon currently available data.
Actual results are subject to future events and uncertainties, which
could materially impact our actual performance.
NOTES:
We invite you to register in our Investor Relations Site located
at http:ir.femsa.com to receive notification of all of our press
releases, earnings releases and IR Events automatically through our
e-mail alert service.
Please contact FEMSA's Investor Relations officers if you wish to
have your name added or removed from this distribution list or to
receive this press release through a specific medium only.
Four pages of tables and Coca-Cola FEMSA's press release to
follow.
9
================================================================
CONSOLIDATED INCOME STATEMENT
For the three months and nine months ended September 30,:
(Expressed in Millions of Pesos as of September 30, 2003)
For the III quarter For the nine months
of: of:
-----------------------------------------
2003 2002 %Var 2003 2002 %Var
---------------------------------------------------------------
Net sales 20,744 14,044 47.7 52,765 40,303 30.9
Other operating
revenues 39 55 (29.1) 167 148 12.8
---------------------------------------------------------------
Total revenues 20,783 14,099 47.4 52,932 40,451 30.9
Cost of sales 10,768 6,865 56.9 27,443 20,050 36.9
---------------------------------------------------------------
Gross profit 10,015 7,234 38.4 25,489 20,401 24.9
---------------------------------------------------------------
Administrative
expenses 1,542 1,227 25.7 4,080 3,590 13.6
Selling expenses
5,275 3,333 58.3 13,086 9,624 36.0
---------------------------------------------------------------
Operating expenses
6,817 4,560 49.5 17,166 13,214 29.9
Participation in N.S.
affiliated companies 36 18 100.0 16 27
---------------------------------------------------------------
Income from operations 3,234 2,692 20.1 8,339 7,214 15.6
---------------------------------------------------------------
Interest expense(1,020) (230) N.S.(1,944) (656) N.S.
Interest income 251 105 139.0 581 312 86.2
---------------------------------------------------------------
Interest expense, N.S. N.S.
net (769) (125) (1,363) (344)
Foreign exchange N.S. N.S.
(loss) gain (1,108) (116) (2,047) (257)
Gain (loss) on
monetary position 442 (55)(903.6) 471 423 11.3
---------------------------------------------------------------
Integral result of N.S. N.S.
financing (1,435) (296) (2,939) (178)
Other (expenses) N.S. N.S.
income (137) (506) (690) (749)
---------------------------------------------------------------
Income before taxes
1,662 1,890 (12.1) 4,710 6,287 (25.1)
Taxes (617)(1,005) (38.6)(1,899)(2,825)(32.8)
---------------------------------------------------------------
Net Income 1,045 885 18.1 2,811 3,462 (18.8)
---------------------------------------------------------------
Net majority income
691 604 14.4 1,867 2,155 (13.4)
Net minority income
354 281 26.0 944 1,307 (27.8)
---------------------------------------------------------------
% Total Revenues % Total Revenues
-----------------------------------------
Var Var
2003 2002 P.P. 2003 2002 P.P.
----------------------------------------------------------------
Net sales 99.8 99.6 0.2 99.7 99.6 0.1
Other operating
revenues 0.2 0.4 (0.2) 0.3 0.4 (0.1)
---------------------------------------------------------------
Total revenues 100.0 100.0 - 100.0 100.0 -
Cost of sales(1) 51.9 48.9 3.0 52.0 49.7 2.3
---------------------------------------------------------------
Gross profit(1)
48.3 51.5 (3.2) 48.3 50.6 (2.3)
---------------------------------------------------------------
Administrative
expenses 7.4 8.7 (1.3) 7.7 8.9 (1.2)
Selling expenses 25.4 23.6 1.8 24.7 23.8 0.9
---------------------------------------------------------------
Operating expenses
32.8 32.3 0.5 32.4 32.7 (0.3)
Participation in
affiliated companies 0.2 0.1 0.1 - 0.1 (0.1)
---------------------------------------------------------------
Income from operations
15.6 19.1 (3.5) 15.8 17.8 (2.0)
---------------------------------------------------------------
(1) % to Net sales
==============================================
CONSOLIDATED BALANCE SHEET
As of September 30, :
(Expressed in Millions of Pesos as of September 30, 2003)
------------------------
ASSETS 2003 2002 % Var
----------------------------------------------
Cash and cash
equivalents 9,837 9,516 3.4
Accounts receivable
4,306 3,192 34.9
Inventories 6,606 4,782 38.1
Prepaid expenses 1,387 1,051 32.0
----------------------------------------------
Total Current Assets 22,136 18,541 19.4
Property, plant and
equipment, net 40,790 29,463 38.4
Deferred charges and
other assets 7,573 6,043 25.3
Bottling and
distribution
rights(2) 31,901 401 7,855.4
----------------------------------------------
TOTAL ASSETS
102,400 54,448 88.1
----------------------------------------------
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------------------
Bank loans 2,111 1,734 21.7
Current maturities
long term debt 5,549 821 575.9
Interest payable
454 195 132.8
Operating liabilities
11,116 7,010 58.6
----------------------------------------------
Total Current
Liabilities 19,230 9,760 97.0
Bank loans
33,054 6,830 383.9
Deferred
income taxes 3,402 4,048 (16.0)
Other
liabilities 4,267 1,486 187.2
----------------------------------------------
Total
Liabilities 59,953 22,124 171.0
Total
Stockholders'
equity 42,447 32,324 31.3
----------------------------------------------
LIABILITIES &
STOCKHOLDERS' EQUITY 102,400 54,448 88.1
----------------------------------------------
FINANCIAL Var.
RATIOS p.p.
----------------------------------------------
Liquidity 1.15 1.90 (0.75)
Interest
coverage(3) 8.94 30.08 (21.14)
Leverage 1.41 0.68 0.73
Capitalization 50.23% 23.48% 26.76
----------------------------------------------
For the III For the nine
quarter of: months of:
--------------------------------
OTHER
INFORMATION 2003 2002 2003 2002
----------------------------------------------
Depreciation 717.2 520.5 1,862.0 1,579.8
Other non-cash
charges 745.6 541.7 1,982.1 1,553.3
Capex 1,951.7 1,448.1 4,923.5 3,760.0
Net Debt (MM
dollars) 2,809.5 (12.1)
----------------------------------------------
(2) Includes the intangible assets generated
by Panamco acquisition.
(3) Income from operations + depreciation +
other non-cash charges / interest expense,
net
(3) Include non-cash charges related to
working capital.
10
Results from operations
For the third quarter of:
(Expressed in Millions of Pesos as of September 30, 2003)
FEMSA Coca-Cola FEMSA FEMSA
Cerveza FEMSA Comercio Empaques
---------------------- ----------------------- ---------------------- ----------------------
2003 2002 % Var 2003 2002 % Var 2003 2002 % Var 2003 2002 % Var
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Net sales 5,593.9 5,528.9 1.2 10,466.2 4,580.2 128.5 4,226.8 3,418.9 23.6 1,876.6 1,769.8 6.0
Other revenues 44.3 39.3 12.7 23.9 45.7 N.S. 6.4 4.4 45.8
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Total revenues 5,638.2 5,568.2 1.3 10,490.1 4,625.9 126.8 4,226.8 3,418.9 23.6 1,883.0 1,774.2 6.1
Cost of good sold 2,385.3 2,292.4 4.1 5,346.0 2,132.9 N.S. 3,102.2 2,511.5 23.5 1,425.6 1,286.8 10.8
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Gross margin 3,252.9 3,275.8 (0.7) 5,144.1 2,493.0 106.3 1,124.6 907.5 23.9 457.5 487.5 (6.2)
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Administrative expenses 567.3 549.1 3.3 708.9 376.3 88.4 62.8 57.5 9.1 42.3 45.7 (7.4)
Sales expenses 1,557.6 1,563.0 (0.3) 2,741.8 964.8 N.S. 847.2 670.7 26.3 117.1 114.0 2.8
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Operating expenses 2,124.9 2,112.1 0.6 3,450.7 1,341.1 157.3 910.0 728.2 25.0 159.4 159.6 (0.1)
Participation in affiliated
companies 36.3 17.7 105.1
-------------------------------------------------- ----------------------- ---------------------- ----------------------
Income from operations
before
management fee 1,164.3 1,181.4 (1.4) 1,693.4 1,151.9 47.0 214.6 179.3 19.7 298.1 327.8 (9.1)
Management fee 103.1 99.6 3.5 24.0 26.8 (10.5) 27.8 26.8 3.5
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Income from operations 1,061.2 1,081.8 (1.9) 1,693.4 1,151.9 47.0 190.6 152.5 25.0 270.3 301.0 (10.2)
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
% to Total Revenues
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Income from operations
before
management fee 20.7 21.2 (0.5) 16.1 24.9 (8.8) 5.1 5.2 (0.1) 15.8 18.5 (2.7)
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
OTHER INFORMATION
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Depreciation 287.6 302.0 (4.8) 314.5 124.3 153.0 32.4 21.0 54.1 74.2 63.4 17.0
Other non-cash charges 395.3 351.1 12.6 305.6 142.9 113.9 33.2 25.6 29.5 25.3 20.8 21.5
Capex 718.1 775.3 (7.4) 868.1 284.3 205.3 304.3 275.4 10.5 45.0 77.3 (41.8)
--------------------------- ---------------------- ----------------------- ---------------------- ----------------------
11
Results from operations
For the nine months of:
(Expressed in Millions of Pesos as of September 30, 2003)
FEMSA Coca-Cola FEMSA FEMSA
Cerveza FEMSA Comercio Empaques
----------------------- ------------------------ ----------------------- ---------------------
2003 2002 % Var 2003 2002 % Var 2003 2002 % Var 2003 2002 % Var
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
Net sales 16,011.6 15,886.5 0.8 23,525.4 13,519.3 74.0 11,896.0 9,554.6 24.5 5,310.6 4,986.3 6.5
Other revenues 109.6 118.6 (7.6) 134.6 111.8 20.4 17.7 13.1 34.8
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
Total revenues 16,121.2 16,005.1 0.7 23,660.0 13,631.1 73.6 11,896.0 9,554.6 24.5 5,328.3 4,999.5 6.6
Cost of good sold 6,924.2 6,831.4 1.4 11,880.4 6,283.2 89.1 8,768.6 7,080.1 23.8 4,058.3 3,765.8 7.8
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
Gross margin 9,197.0 9,173.7 0.3 11,779.6 7,347.9 60.3 3,127.4 2,474.5 26.4 1,270.1 1,233.7 3.0
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
Administrative expenses 1,708.7 1,690.6 1.1 1,590.8 1,103.1 44.2 192.1 171.6 12.0 133.4 135.0 (1.2)
Sales expenses 4,587.4 4,487.1 2.2 5,725.3 2,898.2 97.5 2,395.5 1,862.6 28.6 334.4 306.2 9.2
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
Operating expenses 6,296.1 6,177.7 1.9 7,316.1 4,001.3 82.8 2,587.6 2,034.2 27.2 467.8 441.2 6.0
Participation in N.S.
affiliated companies 15.8 26.5
------------------------------------------------- ------------------------ ----------------------- ---------------------
Income from operations
before
management fee 2,916.7 3,022.5 (3.5) 4,463.5 3,346.6 33.4 539.8 440.2 22.6 802.3 792.5 1.2
Management fee 310.8 302.0 2.9 58.7 71.1 (17.5) 80.8 75.0 7.8
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
Income from operations 2,605.9 2,720.5 (4.2) 4,463.5 3,346.6 33.4 481.1 369.1 30.3 721.4 717.5 0.5
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
% to Total Revenues
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
Income from operations
before
management fee 18.1 18.9 (0.8) 18.9 24.6 (5.7) 4.5 4.6 (0.1) 15.1 15.9 (0.8)
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
OTHER INFORMATION
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
Depreciation 857.6 868.1 (1.2) 681.1 433.3 57.2 93.8 64.9 44.4 201.1 182.5 10.2
Other non-cash charges 1,209.2 1,024.9 18.0 603.3 378.8 59.3 95.6 74.2 28.9 57.9 52.5 10.4
Capex 2,159.1 2,324.7 (7.1) 1,675.4 811.4 106.5 765.2 508.3 50.5 294.8 142.7 N.S.
Net debt (million N.S.
dollars) 246.5 144.1 71.0 2,349.6 (229.9) 87.6 58.1 50.7 172.3 111.7 54.2
------------------------- ----------------------- ------------------------ ----------------------- ---------------------
12
OPERATING DATA
For the three months and nine months ended September 30,:
==============================================================================
FEMSA Cerveza
---------------------
Sales Volumes
(Thousand For the III quarter For the nine months of:
hectoliters) of:
--------------------------------------------
2003 2002 %Var 2003 2002 %Var
-----------------------------------------------------------------
Domestic 5,801.0 5,628.0 3.1 16,762.0 16,322.0 2.7
Exports
604.2 553.3 9.2 1,564.0 1,548.0 1.0
-----------------------------------------------------------------
Total Volume 6,405.2 6,181.3 3.6 18,326.0 17,870.0 2.6
-----------------------------------------------------------------
Presentation Mix (%) For the III quarter For the nine months of:
of:
--------------------------------------------
Var Var
2003 2002 p.p. 2003 2002 p.p.
------------------------------------------------------------------
Returnable 67.9 69.4 (1.5) 68.4 69.7 (1.3)
Non Returnable 8.8 7.9 0.9 8.6 7.8 0.8
Cans 23.3 22.7 0.6 23.0 22.5 0.5
-----------------------------------------------------------------
Total volume 100.0 100.0 - 100.0 100.0 0.0
-----------------------------------------------------------------
-----------------------------------------------------------------
Exports Millions
revenues: Ps. 436.8 367.1 19.0 1,133.1 1,027.1 10.3
US
Millions 40.2 35.2 14.2 105.4 101.0 4.4
=================================================================
FEMSA Empaque
---------------------
Total Sales Volume
(Millions of pieces) For the III quarter For the nine months of:
of:
--------------------------------------------
%Var %Var
2003 2002 2003 2002
-----------------------------------------------------------------
Cans
819.3 809.8 1.2 2,434.2 2,215.8 9.9
Crown Caps
3,649.4 3,831.0 (4.7)10,603.6 10,979.1 (3.4)
Glass Bottle
257.1 247.5 3.9 745.5 755.0 (1.3)
-----------------------------------------------------------------
Export Cans
volumes: 162.4 157.5 3.1 456.4 284.7 60.3
Crown
Caps 2,173.8 2,162.1 0.5 6,017.3 6,073.7 (0.9)
-----------------------------------------------------------------
Exports Millions
revenues: Ps. 233.8 214.6 8.9 656.4 524.5 25.1
US
Millions 21.5 20.6 4.4 60.8 51.6 17.8
=================================================================
Percentage of sales revenue by client category:
For the III quarter For the nine months of:
of:
---------------------------------------------
Var Var
2003 2002 p.p. 2003 2002 p.p.
-----------------------------------------------------------------
Intercompany sales 56.0 57.7 (1.7) 58.1 59.7 (1.6)
-----------------------------------------------------------------
FEMSA Cerveza 38.4 38.5 (0.1) 39.4 42.2 (2.8)
Coca-Cola FEMSA 17.6 19.2 (1.6) 18.7 17.5 1.2
-----------------------------------------------------------------
Third-party sales 44.0 42.3 1.7 41.9 40.3 1.6
-----------------------------------------------------------------
Domestic 31.2 27.9 3.3 29.7 29.7 -
Export 12.8 14.4 (1.6) 12.2 10.6 1.6
-----------------------------------------------------------------
Total 100.0 100.0 - 100.0 100.0 -
=================================================================
Coca-Cola FEMSA (1)
------------------------------
Sales Volumes
(Millions of For the III quarter For the nine months of:
Unit Cases) of:
---------------------------------------------
2003 2002 %Var 2003 2002 %Var
-----------------------------------------------------------------
Mexico 256.2 251.7 1.8 757.6 737.2 2.8
Central America 26.9 24.6 9.1 78.2 72.6 7.7
Colombia 41.6 45.1 (7.8) 126.5 133.5 (5.2)
Venezuela 39.7 47.4 (16.2) 106.7 128.8(17.2)
Brazil 60.0 69.9 (14.2) 187.8 219.7(14.5)
Argentina 28.6 27.1 5.7 87.4 79.9 9.4
-----------------------------------------------------------------
Total KOF 453.0 465.8 (2.8)1,344.2 1,371.7 (2.0)
=================================================================
FEMSA Comercio
------------------------------
For the III quarter For the nine months of:
of:
---------------------------------------------
2003 2002 %Var 2003 2002 %Var
-----------------------------------------------------------------
Total stores 2,541 2,000 27.1
New stores 142 122 16.4 325 221 47.1
Comparative same
stores: (2)
Average
monthly
sales
(Ths.Ps.)(3) 580.8 576.5 0.7 566.3 561.8 0.8
Average
Traffic 24.3 24.8 (1.8) 23.8 23.9 (0.2)
Average
Ticket 23.9 23.3 2.6 23.8 23.5 1.0
====================================================
(1) For comparison purposes the 2002 sales volumes of the acquired Panamco
territories, were included.
(2) Stores with more than 18 months of operations
(3) Based on comparative same stores in each period
13
(i) PRESS RELEASE
2. FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION:
Alfredo Fernandez / Julieta Naranjo
Investor Relations Department
Coca-Cola FEMSA, S.A. de C.V.
(52-55) 5081-5120 / 5121 / 5148
afernandeze@kof.com.mx / jnaranjo@kof.com.mx
WEBSITE: www.cocacola-femsa.com.mx
--------------------------------------------------------------
COCA-COLA FEMSA announces third quarter of 2003 results
THIRD-QUARTER 2003
------------------
-- Consolidated unit case volume reached 453.0 Million Unit Cases
("MUC")(1) during the third quarter of 2003.
-- Consolidated revenues reached Ps.10,490.1 million and
consolidated operating income totaled Ps.1.693.4 million
during the third quarter of 2003, resulting in a consolidated
operating margin of 16.1%.
Mexico City (October 23, 2003) - Coca-Cola FEMSA, S.A. de C.V.
(NYSE: KOF; BMV: KOFL) ("Coca-Cola FEMSA" or the "Company"), the
largest Coca-Cola bottler in Latin America and second largest
Coca-Cola bottler in the world, announced today its consolidated
results for the third quarter and the nine months ended September 30,
2003.
"We are pleased with the way that the integration process is
progressing. By implementing better commercial practices,
consolidating operating facilities, adjusting the pricing architecture
of our packages and products, and implementing best practices in our
regions, we have been able to build a stronger presence in our new
territories. The integration of all these initiatives is helping us
pave the way towards expected synergies." stated Carlos Salazar, Chief
Executive Officer of the Company.
CONSOLIDATED RESULTS
During the third quarter of 2003, our consolidated volume totaled
453.0 MUC. Consolidated operating income reached Ps.1,693.4 million
during the third quarter of 2003.
The integral cost of financing loss totaled Ps.910.9 million
during the third quarter of 2003, reflecting the new financial
position after the acquisition, and being the combined effect of:
------------------
(1)The unit case is equal to 24 eight-ounce servings.
14
(i) accrued interest expenses related to the existing debt and
acquisition financing assumed in connection with the Panamco
transaction, which more than offset interest income generated by our
cash balances;
(ii) a foreign exchange loss generated mainly by the devaluation
of the Mexican peso against the U.S. dollar, as applied to the U.S.
dollar-denominated debt; and
(iii) a consolidated monetary position gain, as a result of
inflation adjustments applied to the consolidated net monetary
position of our operations.
The income tax, tax on assets and employee profit sharing as a
percentage of income before taxes was 33.6% in the third quarter of
2003, reflecting the deduction for tax purposes of fees associated
with the Panamco acquisition, which were capitalized as part of the
acquisition cost for financial purposes.
Consolidated net income was Ps.507.4 million in the third quarter
of 2003, resulting in earnings per share ("EPS") of Ps.0.275
(U.S.$0.250 per ADR) computed under the basis of 1,846 million shares
outstanding.
BALANCE SHEET
On September 30, 2003, Coca-Cola FEMSA recorded a cash balance of
Ps.4,510 million (U.S.$410.4 million) and total short-term debt of
Ps.4,779.2 million (U.S.$434.9 million) and long-term debt of
Ps.25,552.9 million (U.S.$2,325.1 million).
During the third quarter of 2003, the Company pre-paid U.S.$489
million of the U.S. dollar-denominated bridge loan and Ps.666.2
million of the Mexican pesos- denominated bridge loan, used for the
acquisition of Panamco. The following chart sets forth the current
debt breakdown of the Company by currency and interest rate type as of
September 30, 2003:
Interest Rate Type
------------------------
Currency % Total Debt % Floating % Fixed Average Rate(1)
----------------------------------------------------------------------
U.S. dollars 50% 22% 78% 4.71%
----------------------------------------------------------------------
Mexican Pesos 48% 55% 45% 6.81%
----------------------------------------------------------------------
Colombian Pesos 2% 100% - 10.28%
----------------------------------------------------------------------
(1) Annualized average interest rate per currency for the
third-quarter 2003.
We began consolidating the results of our new territories during
the second quarter of 2003 in accordance with Mexican GAAP.
Corporacion Interamericana de Bebidas S.A de C.V., formerly known as
Panamerican Beverages, Inc. ("Panamco") had historically prepared its
financial statements in accordance with U.S. GAAP and presented the
information in U.S. dollars. We have historically and will continue to
prepare our financial statements in accordance with Mexican GAAP and
present the information in Mexican pesos. The results of our new
territories in Mexican GAAP and Mexican pesos are different from and
may not be comparable to those reported by Panamco for prior periods.
In addition, Panamco results will not be included in our financial
statements for periods prior to May 2003.
15
Financial information for the nine months ended September 30, 2003,
both on a consolidated basis and by country, includes nine months
results of the original Coca-Cola FEMSA territories (Valley of Mexico,
Southeast of Mexico and Buenos Aires) and only five months of our new
territories acquired from Panamco. Our consolidated results for the
third quarter of 2002 do not include new territories. Coca-Cola
FEMSA's financial information will not be comparable with previous
quarters until the third quarter of 2004, and on a yearly basis, until
the end of 2005.
For comparison purposes, we present sales volume figures recorded
by Panamco for the third quarter of 2002 and the nine months ended
September 30, 2002.
OPERATING RESULTS BY TERRITORY
------------------------------
MEXICAN OPERATING RESULTS
Revenues
Revenues in the Mexican territories reached Ps.6,794.7 million for
the third quarter of 2003. Average price per unit case was Ps.26.27
(U.S.$2.39). Excluding Ciel water volumes in five, nineteen and twenty
liter packaging presentations, average price per unit case was
Ps.30.29 (U.S.$2.76).
Third-quarter 2003 sales volume reached 256.2 MUC, a 1.8% increase
over the same period of 2002, mainly driven by a 4.0% volume growth in
CSDs2. Excluding volumes generated from promotional activity with
powder products(3) last year, volume increased 3.2% mainly as a result
of (i) the successful line extension of flavor core brands Fresca and
Lift, (ii) the volume growth of brand Coca-Cola, and (iii) incremental
volumes from water Ciel.
During the quarter we launched Coca-Cola Vainilla in the Valley of
Mexico in two different presentations, 450 ml PET non-returnable and 8
oz can, testing new alternatives in the cola category segment.
Income from Operations
Gross profit totaled Ps.3,598.3, reaching a 53.0% margin as
percentage of total revenues for the third-quarter 2003. During the
quarter, the company experienced higher raw material prices and the
impact of the devaluation of the Mexican peso against the U.S. dollar
applied to our U.S. dollar-denominated raw materials year over year.
Operating profit totaled Ps.1,518.8 million, reaching a 22.4% margin
as a percentage of total revenues.
--------------------
(2)Carbonated Soft Drinks.
(3)We distributed our Kin light powdered beverage brand on a complimentary
basis during last year in order to better examine this category's potential
and evaluate consumption patterns and price strategies. The total amount of
Kin light distributed during the third quarter of 2002 was 3.5 MUC.
16
CENTRAL AMERICAN OPERATING RESULTS (Guatemala, Nicaragua, Costa Rica and Panama)
Revenues
Total revenues reached Ps.766.4 million during the third quarter
of 2003. Average price per unit case was Ps.28.66 (U.S.$2.61) during
this period.
In the third quarter of 2003, total sales volume in our Central
America territories increased by 9.3% to 26.9 MUC as compared to the
same period of 2002, mainly driven by the strong performance of brand
Coca-Cola and the core flavor brands in every country within our
Central American region.
In the third quarter of 2003, we introduced a 2.0 Lt returnable
PET presentation in Guatemala and Nicaragua, 1.5 Lt non-returnable PET
in Panama, as well as a 2.5 Lt non-returnable PET presentation in
Guatemala in order to strengthen our presence in the market. These
packaging presentations are intended to foster future consumption of
soft drinks in these territories.
Income from Operations
Gross profit totaled Ps.383.0 million during the third quarter of
2003, reaching a 50% gross margin as a percentage of total revenues
during the same period. During this period the company experienced
lower costs of raw materials due to improved procurement terms and an
initial shift from non-returnable packaging presentations to
returnable packaging presentations. Operating income totaled Ps.64.5
million during the third-quarter 2003, reaching an operating income
margin of 8.4% as a percentage of total revenues.
COLOMBIAN OPERATING RESULTS
Revenues
Total revenues reached Ps.801.7 million during the third quarter
of 2003, an average price per unit case of Ps.19.25 (U.S.$1.75).
During the third quarter of 2003, total sales volume in our
Colombian territory decreased by 8.4% as compared to the same period
of 2002, mainly driven by revenue and asset management initiatives
implemented with the objective of increasing the profitability of our
business. We are reinforcing our market presence with the
re-introduction of family size in returnable PET packaging
presentations for brand Coca-Cola in some of the main cities of
Colombia.
Income from Operations
Gross profit totaled Ps.375.0 million during the third quarter of
2003, reaching a 46.8% gross margin as a percentage of total revenues
during the same period. During the quarter the Company experienced
lower sweetener costs and lower packaging costs driven by an initial
shift to returnable packaging presentations, offsetting lower fixed
costs and expenses absorption due to the decrease of sales volume.
Operating income was Ps.67.6 million, reaching an 8.4% margin as a
percentage of total revenues during the third quarter of 2003.
17
VENEZUELAN OPERATING RESULTS
Revenues
Total revenues reached Ps.819.2 million during the third quarter
of 2003 and average price per unit case in Venezuela reached Ps.20.64
(U.S.$1.88), driven by price increases implemented at the beginning of
the year.
Due to the challenging economic situation in Venezuela and the
impact of our price increases implemented in the first-quarter 2003,
our volume declined 15.7% during the third quarter of 2003 as compared
to the third quarter of 2002. During the third quarter of 2003 we
started to see the recovery of our Coca-Cola brand as a result of the
commercial strategies implemented in the market including the
re-introduction of the 1.0 Lt returnable glass package.
Income from Operations
Gross profit totaled Ps.331.0 million during third quarter of
2003, reaching a 40.4% gross margin as a percentage of total revenues
during the same period. During the third quarter of 2003 we
experienced higher costs of U.S.-dollar denominated raw materials due
to the devaluation of the Bolivar against the U.S.-dollar year over
year, and a lower fixed cost absorption driven by the volume decline.
Operating income was Ps.20.3 million reaching an operating income
margin of 2.5% during the third quarter of 2003.
BRAZILIAN OPERATING RESULTS
Revenues
Total revenues reached Ps.916.0 million during the third quarter
of 2003 and the average price per unit case was Ps.15.20 (U.S.$1.38).
During the third quarter of 2003, sales volume in our Brazilian
territories decreased by 14.2% as compared to the same period of 2002,
mainly due to the implementation of initiatives intended to take over
third-party selling and distribution, as well as packaging
diversification strategies to improve the profitability of our
business.
Following our packaging and product diversification strategy
during the quarter, we launched Coca-Cola light lemon and Kuat Laranja
(guarana flavor with orange) and a new value protection brand,
Sintonia, in several flavors. We also launched several returnable and
non-returnable packages during the quarter, including a 200 ml
returnable glass presentation for brand Coca-Cola, a 2.25 Lt
non-returnable PET presentation for core flavors, a 1.75 Lt
non-returnable PET presentation and a 1.0 Lt non-returnable PET
presentation both for brand Coca-Cola.
18
Income from Operations
Gross profit during the third quarter of 2003 totaled Ps.327.6
million, reaching a 35.8% margin as percentage of total revenues. The
Company experienced lower sugar prices and a change of product mix
during the quarter. As a result of the implementation of new
commercialization and point of sale development strategies, we reached
positive operating income of Ps.18.8 million during the third quarter
of 2003 and an operating margin of 2.1%.
ARGENTINE OPERATING RESULTS
Financial information and sales volume figures in our Argentine
operations are fully comparable with previous periods.
Revenues
Total revenues reached Ps.456.9 million, a 13.6% increase as
compared to the third-quarter 2002 and the average price per unit case
grew by 9.2% over the third quarter of 2002 to Ps.15.18 (U.S.$1.38).
This increase was mainly driven by a product shift from our less
profitable value protection brands, Tai and Crush, toward our core and
premium brands.
In the third quarter of 2003, total sales volume in our Buenos
Aires territory increased by 5.5% as compared to the same period of
2002. This increase was mainly driven by the growth of our core brands
in returnable packages, which represented almost 25% of our total
sales volume during the third-quarter 2003, and the growth of our
premium brands, which represented almost 13% of our total volume sales
during the third quarter of 2003. During the quarter, we introduced
Crush tonica targeting low to middle socioeconomic segments.
Income from Operations
Gross profit as a percentage of total revenues increased from
34.4% in the third quarter of 2002 to 37.3% in 2003. This improvement
was mainly driven by (i) higher sales volume, (ii) an appreciation of
the Argentina peso against the U.S. dollar applied to the U.S.
dollar-denominated raw materials and expenses, and (iii) a decrease in
the cost of sweetener.
In Argentina, operating expenses as a percentage of total revenues
decreased 430 basis points from 31.9% in the third quarter of 2002 to
27.6% in the third quarter of 2003, as a result of the appreciation of
the Argentina peso versus the U.S. dollar applied to the U.S.
dollar-denominated expenses. Operating income during the third quarter
of 2003 in our Argentine territories reached Ps.44.1 million and
operating margin rose from 2.5% during the third quarter of 2002 to
9.7% during the third quarter of 2003.
SUMMARY OF NINE MONTHS RESULTS
For the nine months ended September 30, 2003, consolidated sales
volume reached 1,344.2 MUC. The volume decline of our operations in
Brazil, Colombia and Venezuela, was partially offset by volume growth
in our Mexican, Central America and Buenos Aires territories during
the first nine months of 2003.
19
During the first nine months of 2003, total revenues reached
Ps.23,660.0 million, resulting in a consolidated average unit price
per case of Ps.24.28 (U.S.$2.21). Gross margin as a percentage of
total revenues was 49.8% in the first nine months of 2003.
Consolidated operating income was Ps.4,463.6 million, 18.9% as
percentage of total revenues during the first nine months in 2003.
Consolidated net income totaled Ps.1.353.0 during the first nine
months of 2003. Net income per share reached Ps.0.817 (U.S.$0.743 per
ADR) computed under the basis of 1,656.2 million compounded average
shares outstanding.
CONFERENCE CALL INFORMATION
Our third-Quarter 2003 Conference Call will be held on: October
23, 2003, 10:30 A.M. Eastern Time (9:30 A.M. Mexico City Time). To
participate in the conference call, please dial: Domestic U.S.:
800-901-5247 and International: 617-786-4501.
If you are unable to participate live, an instant replay of the
conference call will be available through November 21, 2003. To listen
to the replay please dial: Domestic U.S.: 888-286-8010; International:
617-801-6888, Passcode: 66252405.
v v v
Coca-Cola FEMSA, S.A. de C.V. produces Coca-Cola, Sprite, Fanta,
Lift and other trademark beverages of The Coca-Cola Company in Mexico
(a substantial part of central Mexico, including Mexico City and
Southeast of Mexico), Guatemala (Guatemala City and surrounding
areas), Nicaragua (nationwide), Costa Rica (nationwide), Panama
(nationwide), Colombia (most of the country), Venezuela (nationwide),
Brazil (greater Sao Paulo, Campinas, Santos and part of Mato Grosso do
Sul) and Argentina (Gran Buenos Aires), along with bottled water, beer
and other beverages in some of these territories.
The Company has 34 bottling facilities in Latin America and serves
more than 1,400,000 retailers in the region. Coca-Cola FEMSA currently
accounts for almost 10% of Coca-Cola global sales, approximately 40%
of all Coca-Cola sales in Latin America. The Coca-Cola Company owns a
39.6% equity interest in Coca-Cola FEMSA.
v v v
Figures for the Company's operations in Mexico and its
consolidated international operations were prepared in accordance with
Mexican generally accepted accounting principles ("Mexican GAAP"). All
figures are expressed in constant Mexican pesos with purchasing power
at September 30, 2003. For comparison purposes, 2002 and 2003 figures
from the Company's operations have been restated taking into account
local inflation of each country with reference to the consumer price
index and converted from local currency into Mexican pesos using the
exchange rate as of the end of the period. In addition, all
comparisons in this report for the third quarter of 2003, which ended
on September 30, 2003, are made against the figures for the comparable
period in 2002, unless otherwise noted.
This news release may contain forward-looking statements
concerning Coca-Cola FEMSA's future performance and should be
considered as good faith estimates by Coca-Cola FEMSA. These
forward-looking statements reflect management's expectations and are
based upon currently available data. Actual results are subject to
future events and uncertainties, many of which are outside Coca-Cola
FEMSA's control that could materially impact the Company's actual
performance.
References herein to "U.S.$" are to United States dollars. This
news release contains translations of certain peso amounts into U.S.
dollars at specified rates solely for the convenience of the reader.
These translations should not be construed as representations that the
peso amounts actually represent such U.S. dollar amounts or could be
converted into U.S. dollars at the rate indicated.
v v v
(8 pages of tables to follow)
20
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
Consolidated Balance Sheet
As of September 30, 2003 and December 31, 2002
Millions of Mexican pesos (Ps.)
Expressed in currency with purchasing power as of September 30, 2003
----------------------------------------------------------------------------------------------------------------------------------
ASSETS 2003 2002 LIABILITIES & STOCKHOLDERS' EQUITY 2003 2002
-------------------------------------------------------- ------------------------------------------------------------------------
Current Assets Current
Liabilities
Cash and cash Short-term bank loans and notes Ps. 4,783 Ps. -
equivalents Ps. 4,510 Ps. 6,325
--------------------------------------------------------
Accounts receivable: Interest
payable 422 82
Trade 929 571 Suppliers 3,488 1,651
Notes 66 12 Accounts payable and others 1,905 677
Prepaid taxes 753 247 Taxes payable 1,005 232
------------------------------------------------------------------------
Other Total Current
835 211 Liabilities 11,603 2,642
-------------------------------------------------------- ------------------------------------------------------------------------
2,583 1,041 Long-term bank loans and notes 25,583 3,243
--------------------------------------------------------
Inventories 2,616 784 Pension plan and seniority premium 549 190
Prepaid expenses Other
196 75 liabilities 2,753 1,215
-------------------------------------------------------- ------------------------------------------------------------------------
Total current assets Total
9,905 8,225 Liabilities 40,488 7,290
-------------------------------------------------------- ------------------------------------------------------------------------
Property, plant and Stockholders'
equipment Equity
Land Minority
2,361 805 interest 159 -
Buildings, machinery and Majority
equipment 23,027 9,193 interest
Accumulated depreciation (9,810) (3,369) Capital stock 2,613 2,424
Construction in progress 895 375 Additional paid in capital 11,179 1,705
Bottles and cases 1,050 297 Retained earnings of prior years 9,299 6,733
--------------------------------------------------------
Total property, plant and Net income for the period
equipment 17,523 7,301 1,339 2,566
--------------------------------------------------------
Investment in shares Cumulative results of holding non-monetary
747 129 assets (4,044) (3,929)
-- ---------------------------
Deferred charges, net Total majority
1,243 870 interest 20,386 9,499
------------------------------------------------------------------------
Intangibles Total
stockholders'
31,615 264 equity 20,545 9,499
-------------------------------------------------------- ------------------------------------------------------------------------
TOTAL ASSETS Ps. 61,033 Ps. 16,789 TOTAL LIABILITIES & EQUITY Ps. 61,033 Ps. 16,789
======================================================== ========================================================================
21
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the three months ended September 30, 2003 and 2002
Expressed in million of mexican pesos(1) with purchasing power as of September 30, 2003
-------------------------- -------------------- --------------- --------------------
Consolidated Mexican Central AmericanColombian
Operations Operations Operations
----------------------------------------------- ------------------------------------
% VAR %Total %Total %Total
2003 2002 2003 Revenues 2003 Revenues 2003 Revenues
----------------------------------- -------------------------- -------------------- --------------- --------------------
Sales volume (millions unit cases) 453.0 157.7 187.3 256.2 26.9 41.6
Average unit price per case 23.11 29.07 (20.5) 26.27 28.66 19.25
----------------------------------- -------------------------- -------------------- --------------- --------------------
Net revenues 10,466.2 4,580.2 128.5 6,729.3 769.8 801.7
Other operating revenues 23.9 45.7 (47.7) 65.4 (3.4) 0.0
----------------------------------- -------------------------- -------------------- --------------- --------------------
Total revenues 10,490.1 4,625.9 126.8 6,794.7 100.0 766.4 100.0 801.7 100.0
Cost of sales 5,346.0 2,132.9 150.6 3,196.4 47.0 383.4 50.0 426.7 53.2
----------------------------------- -------------------------- -------------------- --------------- --------------------
Gross profit 5,144.1 2,493.0 106.3 3,598.3 53.0 383.0 50.0 375.0 46.8
----------------------------------- -------------------------- -------------------- --------------- --------------------
Administrative
expenses 708.9 371.2 91.0 467.7 6.9 46.6 6.1 71.7 8.9
Selling
expenses 2,741.8 964.8 184.2 1,611.8 23.7 271.8 35.5 235.7 29.4
----------------------------------- -------------------------- -------------------- --------------- --------------------
Operating expenses 3,450.7 1,336.0 158.3 2,079.5 30.6 318.4 41.5 307.4 38.3
----------------------------------- -------------------------- -------------------- --------------- --------------------
Goodwill amortization 5.1 (100.0) - - - - - -
----------------------------------- -------------------------- -------------------- --------------- --------------------
Operating income 1,693.4 1,151.9 47.0 1,518.8 22.4 64.5 8.4 67.6 8.4
----------------------------------- -------------------------- -------------------- --------------- --------------------
Interest
expense 664.1 85.1 680.4
Interest
income 80.5 64.3 25.2
Interest
expense, net 583.6 20.9 2,692.4
Foreign
exchange loss
(gain) 736.4 32.1 2,194.2
Loss (gain) on
monetary
position (409.1) 40.9 (1,100.4)
----------------------------------- --------------------------
Integral cost of financing 910.9 93.9 870.1
Other (income) expenses, net 18.5 18.1 2.1
----------------------------------- --------------------------
Income before taxes 764.0 1,039.9 (26.5)
Taxes 256.6 376.2 (31.8)
----------------------------------- --------------------------
Goodwill Impairment - (446.6) NA
----------------------------------- --------------------------
Consolidated net income 507.4 217.1 133.7
----------------------------------- --------------------------
Majority net income 499.1 217.1 129.9
-----------------
Minority net income 8.3 - N.A.
----------------------------------- -------------------------- -------------------- --------------- --------------------
Non-cash items (2) 620.1 267.2 132.1 344.6 5.1 64.9 8.5 85.6 10.7
----------------------------------- -------------------------- -------------------- --------------- --------------------
(1) Except volume and average price per unit case figures.
(2) Depreciation, amortization,returnable bottle breakage and other non-cash
items related to working capital
22
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the three months ended September 30, 2003 and 2002
Expressed in million of mexican pesos(1) with purchasing power as of September 30, 2003
--------------- -------------------- ------------------------------------
Venezuelan Brazilian Argentine Operations
Operations Operations
------------------------------------ ------------------------------------
%Total %Total *%Total %Total % VAR
2003 Revenues 2003 Revenues 2003 Revenues 2002 Revenues
---------------------------------------------- --------------- -------------------- ------------------------------------
Sales volume (millions unit cases) 39.7 60.0 28.6 27.1 5.5
Average unit price per case 20.64 15.20 15.18 13.98 8.7
---------------------------------------------- --------------- -------------------- ------------------------------------
Net revenues 819.2 911.6 434.7 379.3 14.6
Other operating revenues 0.0 4.3 22.2 22.8 (2.6)
---------------------------------------------- --------------- -------------------- ------------------------------------
Total revenues 819.2 100.0 916.0 100.0 456.9 100.0 402.1 100.0 13.6
Cost of sales 488.2 59.6 588.4 64.2 286.5 62.7 263.9 65.6 8.6
---------------------------------------------- --------------- -------------------- ------------------------------------
Gross profit 331.0 40.4 327.6 35.8 170.4 37.3 138.2 34.4 23.3
---------------------------------------------- --------------- -------------------- ------------------------------------
Administrative expenses 37.3 4.6 63.6 6.9 21.9 4.8 27.4 6.8 (20.1)
Selling expenses 273.3 33.4 245.2 26.8 104.4 22.9 100.7 25.0 3.7
---------------------------------------------- --------------- -------------------- ------------------------------------
Operating expenses 310.7 37.9 308.8 33.7 126.3 27.6 128.1 31.9 (1.4)
---------------------------------------------- --------------- -------------------- ------------------------------------
Goodwill amortization - - - - - - - -
---------------------------------------------- --------------- -------------------- ------------------------------------
Operating income 20.3 2.5 18.8 2.1 44.1 9.7 10.1 2.5 336.6
---------------------------------------------- --------------- -------------------- ------------------------------------
Non-cash items (2) 65.0 7.9 21.9 2.4 38.0 8.3 61.4 15.3 (38.2)
---------------------------------------------- --------------- -------------------- ------------------------------------
(1) Except volume and average price per unit case figures.
(2) Depreciation, amortization,returnable bottle breakage and other non-cash items related to working capital
23
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the nine months ended September 30, 2003 and 2002
Expressed in million of mexican pesos(1) with purchasing power as of
September 30, 2003
--------------------------- -------------------- ----------------- --------------------
Consolidated Mexican Central American Colombian
Operations Operations Operations
------------------------------------------------ --------------------------------------
% VAR %Total %Total %Total
2003 2002 2003 Revenues 2003 Revenues 2003 Revenues
-------------------------------- --------------------------- -------------------- ----------------- --------------------
Sales Volume(millions unit
cases) 968.8 455.3 112.8 605.5 43.6 69.0
Average unit price per case 24.28 29.69 (18.2) 27.66 29.14 19.30
-------------------------------- --------------------------- ----------- -------- -----------
Net revenues 23,525.4 13,519.3 74.0 16,748.8 1,271.7 1,332.3
Other operating revenues 134.6 111.8 20.4 115.5 5.8 (0.0)
-------------------------------- --------------------------- -------------------- ----------------- --------------------
Total revenues 23,660.0 13,631.1 73.6 16,864.3 100.0 1,277.4 100.0 1,332.3 100.0
Cost of sales 11,880.4 6,283.2 89.1 7,862.7 46.6 648.8 50.8 715.4 53.7
-------------------------------- --------------------------- -------------------- ----------------- --------------------
Gross profit 11,779.6 7,347.9 60.3 9,001.6 53.4 628.6 49.2 616.9 46.3
-------------------------------- --------------------------- -------------------- ----------------- --------------------
Administrative expenses 1,590.8 1,068.6 48.9 1,130.4 6.7 78.8 6.2 120.7 9.1
Selling expenses 5,725.3 2,898.2 97.5 3,754.7 22.3 444.4 34.8 374.8 28.1
-------------------------------- --------------------------- -------------------- ----------------- --------------------
Operating expenses 7,316.1 3,966.8 84.4 4,885.1 29.0 523.1 41.0 495.4 37.2
-------------------------------- --------------------------- -------------------- ----------------- --------------------
Goodwill amortization - 34.5 (100.0) - - - - - -
-------------------------------- --------------------------- -------------------- ----------------- --------------------
Operating income 4,463.6 3,346.6 33.4 4,116.5 24.4 105.5 8.3 121.4 9.1
-------------------------------- --------------------------- -------------------- ----------------- --------------------
Interest expense 1,140.3 247.0 361.7
Interest income 206.9 187.2 10.5
Interest expense, net 933.4 59.8 1,460.9
Foreign exchange loss (gain) 1,683.0 (186.9)(1,000.5)
Loss (gain) on monetary
position (409.6) (419.1) (2.3)
-------------------------------- ---------------------------
Integral cost of financing 2,206.8 (546.2) (504.0)
Other (income) expenses, net 119.8 83.4 43.6
-------------------------------- ---------------------------
Income before taxes 2,136.9 3,809.4 (43.9)
Taxes 783.9 1,507.1 (48.0)
-------------------------------- ---------------------------
Goodwill Impairment - (446.6) NA
-------------------------------- ---------------------------
Consolidated net income 1,353.0 1,855.7 (27.1)
-------------------------------- ---------------------------
Majority net income 1,338.0 1,855.7 (27.9)
Minority net income 15.0 - -
-------------------------------- --------------------------- -------------------- ----------------- --------------------
Non-cash items (2) 1,284.4 812.1 58.2 766.0 4.5 110.1 8.6 139.9 10.5
-------------------------------- --------------------------- -------------------- ----------------- --------------------
(1) Except volume and average price per unit case figures.
(2) Depreciation, amortization,returnable bottle breakage and other non-cash
items related to working capital
24
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the nine months ended September 30, 2003 and 2002
Expressed in million of mexican pesos(1) with purchasing power as of September 30, 2003
----------------- -------------------- -----------------------------------------
Venezuelan Brazilian Argentine Operations
Operations Operations
-------------------------------------- -----------------------------------------
%Total %Total %Total %Total % VAR
2003 Revenues 2003 Revenues 2003 Revenues 2002 Revenues
--------------------------------------- ----------------- -------------------- -----------------------------------------
Sales Volume(millions unit cases) 64.3 99.1 87.3 79.8 9.5
Average unit price per case 21.11 15.20 15.00 14.57 3.0
--------------------------------------- -------- ----------- -------- -------- -------
Net revenues 1,357.3 1,505.7 1,309.7 1,162.2 12.7
Other operating revenues (0.0) 6.9 71.1 56.3 26.3
--------------------------------------- ----------------- -------------------- -----------------------------------------
Total revenues 1,357.3 100.0 1,512.6 100.0 1,380.8 100.0 1,218.5 100.0 13.3
Cost of sales 794.0 58.5 993.5 65.7 889.6 64.4 799.9 65.6 11.2
--------------------------------------- ----------------- -------------------- -----------------------------------------
Gross profit 563.2 41.5 519.2 34.3 491.2 35.6 418.6 34.4 17.3
--------------------------------------- ----------------- -------------------- -----------------------------------------
Administrative expenses 74.8 5.5 109.2 7.2 76.9 5.6 83.7 6.9 (8.1)
Selling expenses 437.3 32.2 398.4 26.3 315.8 22.9 307.8 25.3 2.6
--------------------------------------- ----------------- -------------------- -----------------------------------------
Operating expenses 512.1 37.7 507.6 33.6 392.7 28.4 391.5 32.1 0.3
--------------------------------------- ----------------- -------------------- -----------------------------------------
Goodwill amortization - - - - - - 9.3 0.8 (100.0)
--------------------------------------- ----------------- -------------------- -----------------------------------------
Operating income 51.1 3.8 11.5 0.8 98.5 7.1 17.8 1.5 453.4
--------------------------------------- ----------------- -------------------- -----------------------------------------
Non-cash items (2) 109.0 8.0 35.7 2.4 123.8 9.0 175.4 14.4 (29.4)
--------------------------------------- ----------------- -------------------- -----------------------------------------
(1) Except volume and average price per unit case figures.
(2) Depreciation, amortization,returnable bottle breakage and other non-cash items related to working capital
25
SELECTED INFORMATION
For the three months ended September 30, 2003
Expressed in million Mexican pesos as of September 30, 2003
---------------------
3Q 2002
-----------------------------------
Capex 284.3
-----------------------------------
Depreciation 124.3
-----------------------------------
Amortization & Others 142.9
-----------------------------------
3Q 2003
-------------------------------
Capex 868.1
-------------------------------
Depreciation 314.5
-------------------------------
Amortization & Others 305.6
-------------------------------
VOLUME (MUC)
Expressed in million unit cases
----------------------------------------------------------------- -----------------------------------
3Q 2002 3Q 2003
----------------------------------------------------------------- -----------------------------------
Colas Flavors Water Beer OthersTotal Colas FlavorsWaterBeer OthersTotal
------------------------------------------------------------------------------------ -----------------------------------
Mexico (1) 152.0 42.9 51.9 - 4.8 251.6 154.1 48.6 52.2 - 1.3 256.2
Central America 17.0 5.8 1.0 - 0.8 24.6 18.8 6.5 1.1 - 0.5 26.9
Colombia 27.2 9.9 8.1 - 0.2 45.4 25.3 9.9 6.4 - - 41.6
Venezuela 23.2 15.7 5.0 0.7 2.5 47.1 21.8 12.2 3.6 - 2.1 39.7
Brazil 34.6 18.1 3.3 13.7 0.3 70.0 32.2 13.5 2.3 11.6 0.4 60.0
Argentina 19.3 7.4 0.3 - 0.1 27.1 20.9 7.4 0.2 - 0.1 28.6
------------------------------------------------------------------------------------ -----------------------------------
Total 273.3 99.8 69.6 14.4 8.7 465.8 273.1 98.1 65.8 11.6 4.4 453.0
------------------------------------------------------------------------------------ -----------------------------------
(1) Water volume in 3Q 2003, includes 3.1 MUC of Ciel 5.0 Lt presentation
PACKAGE MIX BY PRESENTATION
Expressed as a Percentage of Total Volume
------------------------------------------
3Q 2002
------------------------------------------
Ret Non-Ret Fountain Jug
--------------------------------------------------------
Mexico 28.8 53.1 1.2 16.8
Central
America 51.7 42.0 6.3 -
Colombia 54.0 34.9 3.0 8.1
Venezuela 35.8 55.4 3.0 5.8
Brazil 12.2 83.7 4.2 -
Argentina 19.1 75.8 5.1 -
--------------------------------------------------------
26
SELECTED INFORMATION
For the nine months ended September 30, 2003
Expressed in million Mexican pesos as of September 30, 2003
--------------------
9M 2002
----------------------------------
Capex 811.4
----------------------------------
Depreciation 433.3
----------------------------------
Amortization & Others 378.8
----------------------------------
9 M 2003
-------------------------------
Capex 1,675.4
-------------------------------
Depreciation 681.1
-------------------------------
Amortization & Others 603.3
-------------------------------
VOLUME (MUC)
Expressed in million unit cases
------------------------------------------------------- --------------------------------------
9M 2002 9 M 2003
------------------------------------------------------- --------------------------------------
Colas Flavors Water Beer Others Total Colas FlavorsWater Beer Others Total
--------------------------------------------------------------------------------- --------------------------------------
Mexico (1) 445.7 123.7 156.4 - 11.4 737.2 446.5 141.2 165.6 - 4.5 757.8
Central America 50.6 17.1 2.9 - 2.0 72.6 53.7 19.4 3.3 - 1.5 77.9
Colombia 79.4 29.3 24.5 - 0.5 133.7 77.6 28.6 20.2 - 0.3 126.7
Venezuela 61.5 44.1 13.9 2.1 7.2 128.8 61.0 31.1 8.9 - 5.7 106.7
Brazil 105.3 60.7 11.6 41.2 0.9 219.7 99.7 45.6 7.5 33.8 1.2 187.8
Argentina 53.4 25.4 0.6 - 0.4 79.8 62.7 23.5 0.9 - 0.2 87.3
--------------------------------------------------------------------------------- --------------------------------------
Total 795.9 300.3 209.9 43.3 22.4 1,371.8 801.2 289.4 206.4 33.8 13.4 1,344.2
--------------------------------------------------------------------------------- --------------------------------------
(1) Water volume in the nine months 2003, includes 9.3 MUC of Ciel 5.0 Lt presentation
PACKAGE MIX BY PRESENTATION
Expressed as a Percentage of Total Volume
------------------------------------------
3Q 2002
------------------------------------------
Ret Non-Ret Fountain Jug
--------------------------------------------------------
Mexico 28.8 53.1 1.2 16.8
Central
America 51.7 42.0 6.3 -
Colombia 54.0 34.9 3.0 8.1
Venezuela 35.8 55.4 3.0 5.8
Brazil 12.2 83.7 4.2 -
Argentina 19.1 75.8 5.1 -
--------------------------------------------------------
9 M 2003
------------------------------------------
Ret Non-Ret Fountain Jug
------------------------------------------
27.7 54.5 1.3 16.5
52.1 42.3 5.6 -
54.0 35.8 3.0 7.2
36.2 57.2 2.7 3.9
11.7 84.2 4.1 -
24.2 71.9 3.9 -
------------------------------------------
27
September 2003
Macroeconomic Information
---------------------------------------------------- ------------------------------
Inflation Foreign Exchange Rate
LTM YTD 3Q 2003 (Per US Dollar) *
---------------------------------------------------- ------------------------------
----------------- ---------------------------------------------------- ------------------------------
Mexico 4.04% 2.30% 1.04% 10.9900
Colombia 6.88% 5.42% 0.38% 2,889.3900
Venezuela 26.58% 20.61% 4.57% 1,853.0000
Brazil 17.79% 9.15% 1.22% 2.9234
Argentina 3.35% 2.32% 0.50% 2.9150
----------------- ---------------------------------------------------- ------------------------------
28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
FOMENTO ECONOMICO MEXICANO, S.A. DE C.V.
By: /s/ Federico Reyes
----------------------------
Federico Reyes
Chief Financial Officer
Date: October 23, 2003