Coca-Cola FEMSA, S.A.B. de C.V. Q4 FY2025 earnings call

2025 tested the business but showed resilience. Key priorities include growing core business, capitalizing on Juntos+ AI capabilities, and fostering a customer-centric culture. In Mexico, adjusted promotional grid and affordability initiatives, rolled out Juntos+ Advisor. In Guatemala, implemented productivity initiatives. In South America, Brazil had strong volume growth and share gains, Colombia and Argentina had positive volume performances. Recognized leadership changes and sustainability achievements.

Consolidated volume increased 1.3% in the quarter to 1.09 billion unit cases. Total revenues grew 2.9% to MXN 77.7 billion. Gross profit increased 1.8% to MXN 36.3 billion with a margin contraction of 60 basis points to 46.7%. Operating income increased 13.3% to MXN 13.7 billion with an operating margin expansion of 160 basis points to 17.6%. Adjusted EBITDA increased 12.8% to MXN 18.2 billion with an EBITDA margin expansion of 210 basis points to 23.4%. Majority net income increased 3% to MXN 7.5 billion. In Mexico, volumes improved sequentially with a 0.9% year-on-year contraction, Coke Zero had 14% volume growth, stills portfolio grew 7.4% with Monster, FUZE Tea and Santa Clara showing strong growth. Guatemala volumes increased 3.5% to 48.9 million unit cases. South America division volumes increased 3% to 504.1 million unit cases, Brazil volumes grew 2.6% with strong performance in non-caloric and single-serve beverages, Colombia volumes grew 4.5%, Argentina volumes increased 3%.

Consolidated volume for 2026 expected to be flattish to slightly positive. Mexico expected to have low to mid-single-digit decline. Brazil expected to have low to mid-single-digit growth. Remaining markets with mixed performances. Will progressively update guidance as year progresses.

Q: Incremental color on Mexico performance, volume behavior, tax sensitivities and pricing strategy.

A: Saw sequential improvement in Mexico volume, December was strongest on record, guidance for 2026 low to mid-single-digit decline in Mexico due to IEPS tax.

Q: Strategic views into 2026, shareholder remuneration.

A: Key priorities remain growing core business, leveraging Juntos+ Advisor, fostering customer-centric culture. Cautious on shareholder remuneration due to IEPS impact.

Q: Drivers behind Brazil's strong performance, working capital.

A: Consistency in strategy, digital enablers, Juntos+ Advisor. Working capital disruption from ERP implementation, normalized from Q4 2025.

Q: Mexico price adjustments, gross margin visibility.

A: Too early to tell on additional price adjustments, seeing pressure in gross margins with some raw material factors.

Q: Brazil supply chain savings, CapEx investments.

A: Still cycling Porto Alegre plant closure effects, CapEx investments for Brazil expected to be phased with lower levels.

Q: Affordability in Mexico, CapEx levels.

A: Strategy seen as 12-month repositioning, CapEx expected to be 7% to 7.5% of revenues, lower end of range.

Q: Mexico December volume, competitor reaction, price gap.

A: No major overstocking effect, price gap varies by competitor, no deterioration overall.

Q: Brazil volume guidance, World Cup impact.

A: Expect low to mid-single-digit volume growth in Brazil, World Cup brings brand engagement and consumption opportunity opportunities.