Fomento Económico Mexicano (FEMSAUBD) Q4 2024 earnings summary

Executive summary

• Achieved double-digit growth across all major earnings line items for full year 2024, with notable margin expansion driven by strong performances in Proximity Americas and Coca-Cola FEMSA.

• Consolidated revenues grew 12.8% in Q4 2024 and 11.2% for the full year, supported by favorable FX effects and strong execution.

• Nearly completed planned divestitures under FEMSA Forward, monetizing $10.7 billion and focusing on core business units.

• Significant capital returns to shareholders, with plans to accelerate returns in 2025 and 2026 to reach leverage targets.

• Management succession process for CEO underway, with a special board committee established and key leadership changes in Health and Multiformat divisions.

Financial highlights

• Q4 2024 total revenue grew 12.8%, operating income up 31.5% year-over-year; full-year revenues reached Ps. 781,585 million (+11.2% YoY), operating income Ps. 70,668 million (+19.8% YoY).

• Net consolidated income increased 78.3% to nearly MXN 11 billion in Q4, aided by a non-cash FX gain and gain from sale of Imbera; full-year net income was Ps. 41,687 million, down 45.6% due to a high 2023 base and lower interest income.

• Proximity Americas revenues up 13.2% (8.1% organic), gross margin expanded 230 bps to 47.7%; OXXO store base reached 24,462 (+1,596 YoY).

• Health division revenues up 13.3%, operating income up 109.7%, margin expanded 250 bps to 5.5%.

• Coca-Cola FEMSA delivered double-digit increases across the income statement, with Q4 operating income up 25%.

Outlook and guidance

• Plans to deploy MXN 66 billion ($3.2 billion) in capital returns in 2025 and MXN 41.4 billion ($2 billion) in 2026.

• Aggregate capital return for 2025-2026 to reach MXN 107.4 billion ($5.3 billion), about 17% of market cap.

• Board proposes 4.2% increase in ordinary dividends and a significant extraordinary dividend for 2025, with further capital returns planned for 2026.

• Expect continued macro uncertainty and softer consumer environment in Mexico to impact Q1 2025 and beyond.

• Capital allocation framework targets Ps. 50,000 million annual investment in 2025–2026, with accelerated capital returns planned.