Coca‑Cola FEMSA SAB (KOF)
Description
The largest Coca‑Cola franchise bottler in the world by sales volume, operating across Mexico, Brazil, Central America, Colombia, Argentina, Uruguay and other Latin American markets.
Historical Reports
Financial Information
- Report Date
- 2025-04-09
- Report Period
- Full Year 2024
- Debt
- MXN 73,697 million (approx. USD 3.5 billion)
- Debt History
- Debt rose from MXN 65,214 million to MXN 73,697 million, a 13% increase year‑on‑year.
- Debt Trend
- Increasing
Profit Information
- Profit
- MXN 24,549 million (approx. USD 1.18 billion)
- Profit History
- Net income climbed from MXN 20,226 million to MXN 24,549 million, a 21% increase.
- Profit Trend
- Increasing
Detailed Report
Coca‑Cola FEMSA Annual Report Analysis
Report Date: April 09, 2025
Period Covered: Fiscal Year ended December 2024
Key Financial Highlights
| Metric | 2024 | 2023 | YoY % |
|---|---|---|---|
| Net Sales | MXN 279,793 million | MXN 245,088 million | +14% |
| Gross Profit | MXN 128,736 million (46.0% margin) | MXN 110,860 million (45.2% margin) | +16% |
| Operating Income | MXN 27,129 million (9.7% margin) | MXN 19,324 million (7.9% margin) | +40% |
| Net Income (controlling) | MXN 23,729 million (USD 1.18 billion) | MXN 19,536 million (USD 0.94 billion) | +21% |
| Total Indebtedness | MXN 73,697 million (USD 3.5 billion) | MXN 65,214 million | +13% |
| Capital Expenditures | MXN 29,416 million | MXN 21,396 million | +38% |
| Free Cash Flow (approx.) | MXN 18,046 million | MXN 22,219 million (2023 pro forma) | -19% |
Profit & Loss Analysis
– Volume Growth: Total sales volume rose 4% to 42.2 billion unit cases driven by gains in Mexico (+4%), Brazil (+8%), and Central America (+4%).
– Revenue Management: Average price per case increased 6.4%, reflecting favorable mix and price initiatives.
– Cost Control: Raw‐material costs (sugar, PET resin) declined, and hedging programs offset commodity volatility, lifting gross margin by 80 bp.
– Operating Leverage: SG&A rose 16% but represented just 31.5% of sales vs. 28.2% in 2023, as increased marketing and hurricane/flood impact were offset by scale.
– Finance Charges: Net finance cost of MXN 4,492 million vs. MXN 3,914 million last year, due to higher debt levels and FX.
– Tax Rate: Effective tax rate widened to 32.7% (vs. 30.5%), driven by nondeductible expenses and deferred‐tax adjustments.
Balance Sheet & Cash Flow
– Net Debt: MXN 73.7 billion in total debt, up 13%; net of MXN 32.8 billion cash, net debt ~MXN 40.9 billion.
– CapEx: Investments up 38% to MXN 29.4 billion, focused on manufacturing expansion, cooler fleets and digital upgrades.
– Liquidity: MXN 32.8 billion cash balance; strong free cash flow expected to fund dividends and debt service.
Reasons for Performance
Drivers of Profit Increase
- Robust volume recovery across markets.
- Favorable pricing/mix and revenue‐management programs.
- Declines in key packaging and sweetener costs.
Challenges & Offsets
- FX volatility in Argentina and Brazil.
- Weather events (hurricanes in Mexico, floods in Brazil) drove one‑time asset write‑offs.
- High marketing reinvestment to sustain share.
Pros & Cons
Pros
- #1 bottler in LatAm with unrivaled distribution network.
- Diversified portfolio: sparkling, still, water, energy, and alcohol.
- Strong ESG credentials: water stewardship, renewables, circular‐economy.
Cons
- Exposure to currency and commodity cycles.
- Rising ESG compliance costs, packaging regulations.
- Concentration in LatAm macro environment.
Statistics Breakdown
Segment & Statistical Breakdown
Revenue by Region (MXN million)
- Mexico & Central America: MXN 166,996 (+12% YoY)
- South America: MXN 112,797 (+18% YoY)
Sales Volume by Region (million unit cases)
- Mexico: 21,243 vs. 20,529 (+3.5%)
- Central America: 3,698 vs. 3,419 (+8.1%)
- Brazil: 11,593 vs. 10,751 (+7.8%)
- Colombia: 3,523 vs. 3,476 (+1.4%)
- Argentina: 1,683 vs. 1,787 (–5.8%)
- Uruguay: 507 vs. 517 (–2.0%)
Category Mix
- Sparkling: 75.2% of volume
- Still & water: 16.9% of volume
- Bulk water: 7.9% of volume
Packaging Mix (sparkling)
- Returnable multi‐serve: 29.1%
- Non‐returnable single‐serve: 70.9%
Key Consumer Categories
- Colas (Coca‑Cola, zero‐sugar): 60% of sparkling volume
- Flavored sparkling: 15%
- Water, juices, coffee, dairy, energy: 25%
Company Direction Insights
Forward‑Looking Insights
Growth Trajectory
- Continued focus on volume in under‑penetrated regions, esp. Central America & Colombia.
- Premiumization push: zero‐sugar, energy, alcoholic seltzers.
- Digital & omnichannel expansion via “Juntos” platform and modern trade.
Financial Health
- Strong cash flow to sustain 70%+ dividend payout and deleveraging.
- Well‑laddered debt maturities; continued access to local/international markets.
Opportunities
- M&A in smaller bottlers or new categories (coffee, dairy).
- Further ESG differentiation: renewable energy, recycled PET, water‐neutral targets.
Risks & Challenges
- FX and high inflation in Argentina; potential reclassification to hyperinflationary again.
- Sugar & oil‐linked packaging cost volatility despite hedges.
- Evolving regulatory taxes on sweetened beverages and plastics.
Strategic Priorities
- Grow core: focus on Coca‑Cola portfolio, low‑per‑capita markets
- Preferred platform: deepen omnichannel Juntos
- Strategic M&A: value‐accretive acquisitions
- Debottleneck: expand production & distribution capacity
- Digitize: enterprise & customer journey
- Culture & sustainability: DE&I, water, packaging, climate
Overall, Coca‑Cola FEMSA is well‑positioned to leverage its scale, relationship with Coca‑Cola Company, and digital/sustainability investments for sustainable mid‑single‑digit top‑line growth, margin resilience, and solid free‑cash‑flow generation, while remaining vigilant on macro and input‐cost headwinds.