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 JULY
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 Results for Second Quarter and First Half Of 2003
MONTERREY, Mexico--July 28, 2003--Fomento Economico Mexicano, S.A.
de C.V. ("FEMSA") (NYSE: FMX; BMV: FEMSA UBD; FEMSA UB), the Leader in
Latin Beverages, reported today its operational and financial results
for the second quarter ended June 30, 2003.
-- Consolidated total revenues reached Ps. 19.189 billion and
consolidated operating income reached Ps. 3.328 billion during
the second quarter.
-- Coca-Cola FEMSA closed its acquisition of Panamco and
successfully issued Ps. 10 billion of Peso-denominated
long-term debt in two landmark offerings of Certificados
Bursatiles, in effect improving its debt profile in terms of
cost, tenor and currency denomination.
-- FEMSA Cerveza's quarterly domestic beer sales volume increased
by 6.2% year over year, with Sol continuing to grow at
double-digit pace--more than any other brand in our portfolio.
-- Oxxo continued its rapid expansion rate. 122 net new stores
helped to boost quarterly net sales 28.7% over last year's
second quarter, and operating margin expanded by 30 basis
points, reaching 5.1% of net sales.
Jose Antonio Fernandez, Chairman and CEO of FEMSA, commented, "We
are entering a new phase in the history of FEMSA, realizing that along
with great potential, come responsibility and significant challenges.
Since formally acquiring the Panamco operations in early May, and
having had the benefit of performing our diagnostic analyses with the
cooperation of Panamco management since the beginning of the year, we
are moving very fast. We are addressing the most pressing needs of
every one of our new markets, with a great focus on our new Mexican
franchises and the significant potential for synergies that these
represent." Mr. Fernandez continued, "We are comfortable with the new
structure of our balance sheet. Nevertheless, every level of our
organization understands that in the years ahead we must be very
disciplined in our finances and capital allocation, and more
productive than ever in our operations. I have every confidence that
we will."
UNAUDITED FINANCIAL RESULTS FOR THE SECOND QUARTER ENDED
JUNE 30, 2003 COMPARED TO THE SECOND QUARTER ENDED JUNE 30, 2002
Notice
On May 6, 2003 Coca-Cola FEMSA completed the acquisition of
Panamerican Beverages, Inc. ("Panamco"). For more information
regarding this acquisition, please consult the relevant filings found
in the websites of the Mexican Bolsa and the Securities and Exchange
Commission.
Upon completion of this acquisition, Coca-Cola FEMSA became
FEMSA's largest subsidiary in terms of total revenue and operating
income. As of May 2003 operating results for Coca-Cola FEMSA and for
FEMSA Consolidated for the second quarter of 2003 include the
operation of newly acquired bottling territories, which is not
reflected in the operating results shown for the second quarter of
2002. The quarterly results for Coca-Cola FEMSA and FEMSA Consolidated
will not be fully comparable with those of previous periods until the
third quarter of 2004.
FEMSA Consolidated
Total Revenues
During the second quarter of 2003, our consolidated total revenues
increased by 36.0% to Ps. 19.189 billion, as a result of revenue
growth in every one of our main subholding companies. The majority of
the incremental revenue for the second quarter relates to Coca-Cola
FEMSA's new revenue sources, which renders it incomparable with the
second quarter of 2002. FEMSA Comercio posted strong revenue growth of
28.7%, due to its rapid expansion of selling space and to recovering
traffic indicators. FEMSA Cerveza boosted its domestic sales volume to
achieve revenue growth of 2.8% in the quarter. For its part, FEMSA
Empaques recorded revenue growth of 6.6%, reflecting healthy demand
for beverage cans and favorable currency conversion conditions. For
the first six months of the year, consolidated total revenues reached
Ps. 31.723 billion. In this period, including only two months of
operation in Coca-Cola FEMSA's new territories, approximately 40% of
our total revenues came from Coca-Cola FEMSA, 31% from FEMSA Cerveza,
24% from FEMSA Comercio and 5% from FEMSA Empaques and others.
Income from Operations
During the second quarter of 2003, our consolidated income from
operations after participation in the results of affiliated companies
increased by 17.0% to Ps. 3.328 billion, and our consolidated
operating margin was 17.3% of consolidated total revenues. The
resulting margin contraction of 290 basis points results mainly from
the incorporation of Coca-Cola FEMSA's new bottling territories, which
currently have a lower level of profitability than Coca-Cola FEMSA's
traditional territories. FEMSA Cerveza and FEMSA Empaques also
recorded operating margin contractions, mainly reflecting increases in
their respective selling expenses. For the first six months of the
year, consolidated operating income reached Ps. 5.035 billion. In this
period, including only two months of operation in Coca-Cola FEMSA's
new territories, approximately 54% of our operating income came from
Coca-Cola FEMSA, 34% from FEMSA Cerveza, 6% from FEMSA Comercio and 6%
from FEMSA Empaques and others.
Integral Cost of Financing and Taxes
Net Interest Expense. Consolidated net interest expense during the
second quarter of 2003 amounted to Ps. 446 million. This figure is
mainly a result of the interest expense derived from new debt issued
by Coca-Cola FEMSA in order to finance the acquisition of new bottling
territories, only partially compensated by interest income derived
from higher peso cash holdings. For the first six months of the year,
consolidated net interest expense reached Ps. 590 million.
Foreign Exchange. For the second quarter of 2003, we recorded a
consolidated foreign exchange loss of Ps. 773 million. This amount is
a result of exchange rate volatility during the quarter and large
foreign exchange transactions entered into in relationship with the
Panamco acquisition. Specifically, the factors affecting Coca-Cola
FEMSA's foreign exchange loss were (i) the appreciation of the Mexican
peso against the U.S dollar applied towards our daily U.S. dollars
cash balances from March 31, 2003 to the date of acquisition (the
foreign exchange rate at closing was Ps. 10.188 per U.S. Dollar); and
(ii) the devaluation of the Mexican Peso versus the U.S. dollar
applied to the U.S. dollar-denominated acquisition financing from the
closing of the transaction to the end of the second quarter of 2003.
For the first six months of the year, consolidated foreign exchange
loss amounted to Ps. 929 million.
Monetary Position. For the second quarter of 2003, the gain on
monetary position amounted to Ps. 37 million, primarily reflecting a
mild inflation in Mexico during the period. For the first six months
of the year, gain on monetary position amounted to Ps. 25 million.
Other expenses. Other expenses amounted to Ps. 430 million for the
second quarter and Ps. 586 million for the first half of 2003. The
charge for the second quarter primarily relates to the write-off of
equipment at FEMSA Cerveza as replacements with newer technology
equipment are being implemented company-wide, as well as severance
payments across our subholding companies.
Taxes. For the second quarter of 2003, we recognized consolidated
income tax, tax on assets and employee profit sharing expense
("taxes") of Ps. 636 million. The effective tax rate for the quarter
was 37.1%.
Net Income
During the second quarter of 2003, our consolidated net income
amounted to Ps. 1.080 billion. For the first six months of 2003, the
consolidated net income reached Ps. 1.738 billion.
Consolidated Net Majority Income
Consolidated net majority income amounted to Ps. 721 million for
the second quarter of 2003 and to Ps. 1.122 billion for the first six
months of 2003. Net majority income per FEMSA Unit was Ps. 0.681 for
the second quarter of 2003 and of Ps. 1.059 for the first six months
of 2003.
Coca-Cola FEMSA
Coca-Cola FEMSA's financial results and discussion are
incorporated by reference from Coca-Cola FEMSA's press release which
is attached to this press release.
FEMSA Cerveza
For the second quarter of 2003, FEMSA Cerveza's total revenues
reached Ps. 5.836 billion, a 2.8% increase compared to the same period
last year, as a result of healthy total volume growth of 5.1% combined
with a decline of 1.8% in total real revenue per hectoliter. In the
quarter, FEMSA Cerveza advanced in the implementation of its strategic
initiatives, successfully testing the integrated systems that support
the sales organization in some of its markets. Domestic sales volume
grew by 6.2% to 6.120 million hectoliters, following a strong recovery
in demand particularly during April and May. We believe that the surge
in demand during the quarter was driven by a combination of the
following factors: (i) absence of a price increase during the first
six months of 2003, (ii) a favorable calendar effect as Easter
vacations occurred in April as opposed to March 2002 and (iii)
particularly warm weather during April and May. Real average domestic
revenue per hectoliter declined by 2.8% during the quarter. Export
sales volume decreased by 4.5%, as exports to the United States
declined due to weakness in the import segment. Nevertheless, export
revenues continued to benefit from the currency devaluation relative
to the previous year, posting an 8.2% increase in average revenue per
hectoliter in real peso terms.
During the second quarter of 2003, FEMSA Cerveza's gross profit
increased by 3.6% compared to the second quarter of 2002. Cost of
sales displayed a moderate increase in dollar-denominated variable
costs that was partially compensated by a reduction in fixed and
shipping costs per hectoliter, and resulted in a reduction of 60 basis
points in the cost of sales as a percentage of net sales. The gross
margin expanded by 20 basis points to 58.3% of net sales.
Administrative expenses increased by 0.6% to Ps. 565 million and
selling expenses increased by 11.1% to Ps. 1.608 billion during the
period. The increase of selling expenses above the growth rate in
sales, is mainly attributable to a larger provision for uncollectible
accounts, higher market research expenses and other expenses related
to the third party distributors acquired throughout the year. As a
result, FEMSA Cerveza's income from operations, before deduction of
management fees, decreased by 5.8% to Ps. 1.215 billion compared to
the second quarter of 2002, which yielded an operating margin before
deduction of management fees of 20.8%, 190 basis points below that of
the second quarter of 2002.
For the first six months of 2003, FEMSA Cerveza posted revenue
growth of 0.4% to Ps. 10.375 billion, while income from operations
declined by 4.8% to Ps. 1.734 billion, for a six-month operating
margin of 16.7%.
FEMSA Comercio
During the second quarter of 2003, FEMSA Comercio added 122 new
stores to the Oxxo convenience store chain, compared to 55 stores in
the same period of 2002. FEMSA Comercio's total revenues increased by
28.7% to Ps. 4.186 billion, mainly as a result of the increase in the
number of stores, which this quarter includes 521 more Oxxo stores
than the comparable period of 2002. Average sales per store for the
total store universe increased by 1.0% in the quarter, reflecting to a
certain extent Oxxo's successful marketing strategies and the
incremental traffic generated by well-located new stores. Sales in
comparative mature stores increased by 2.8% in the quarter, resulting
from the following main factors: (i) a favorable calendar effect as
Easter vacation occurred in April as opposed to March in 2002, (ii)
successful promotions implemented during May, (iii) a gradual recovery
of sales in stores located in the northern border towns, and (iv)
particularly warm weather during April and May. Successful category
management is fostering enhanced relationships with suppliers, which
is reflected in the improvement of FEMSA Comercio's gross margin.
Operating expenses as a percentage to total revenues increased by 30
basis points, mostly related to an increase in electricity costs as
well as maintenance and site enhancements in many older stores.
Operating income before management fees grew 38.5%, which translated
to an operating margin growth of 30 basis points to 5.1% of total
revenues for the quarter.
Accumulated results for the first six months of 2003 show FEMSA
Comercio with revenue growth of 25.0% to Ps. 7.590 billion, driving
growth in income from operations of 24.6% to Ps. 322 million,
resulting in an operating margin of 4.2%.
FEMSA Empaques
For the second quarter of 2003, FEMSA Empaques recorded total
revenue growth of 6.6% to Ps. 1.870 billion, driven by a remarkable
performance of its beverage can operation, Famosa, which posted 10.1%
growth in sales volume, as a result of higher can sales to FEMSA
Cerveza, Coca-Cola FEMSA and export clients. In addition,
dollar-denominated revenues (such as beverage cans) benefited from the
devaluation of the peso against the dollar year-on-year. Glass bottles
recorded sales volume growth of 0.8% due to an increase in purchases
from FEMSA Cerveza, which compensated the continued trend of reducing
sales to third parties. In spite of the revenue growth, gross margin
contracted by 140 basis points to 24.1% of net sales, mainly due to a
charge related to the depreciation of two of our three glass bottle
furnaces, since the useful life of these furnaces was adjusted to more
closely reflect actual conditions and newer technology. Operating
expenses increased by 8.3%, mainly reflecting higher shipping expenses
related to the can export business. Operating income before management
fees decreased by 2.8%, representing an operating margin contraction
of 150 basis points to 15.5% of total revenues for the second quarter.
For the first half of 2003, FEMSA Empaques posted growth in total
revenue of 6.8% to Ps. 3.410 billion and growth in income from
operations of 8.5% to Ps. 499 million, for a six-month operating
margin of 14.6%.
Capital Expenditures
As detailed in FEMSA's 2002 Form 20-F recently filed with the
Securities and Exchange Commission, we expect our consolidated capital
expenditures for the year 2003 to reach Ps. 11.1 billion. This
represents a measurable increase from that of previous years, and is
the result of simultaneous, mostly non-recurrent projects being
carried out at our different subsidiaries. At Coca-Cola FEMSA,
significant investments are being made related to the new territories
and the upgrade of our asset base; at FEMSA Cerveza, a significant
portion of the incremental capital expenditure is being assigned to
the project of fully aligning its primary distribution network, which
includes the acquisition and/or franchising of third party
distributorships; at FEMSA Comercio, the rapid expansion in selling
space together with the acquisition of selected choice sites has
required increased investment levels, and finally, at FEMSA Empaques,
there has been an overhaul of one of its three glass furnaces, which
occurs approximately every five years.
We must stress the fact that all capital expenditures are approved
only after very thorough analysis, not only from a strategic viewpoint
but also from an EVA(R) perspective. In every case, these investments
are consistent with the strategic long-term plans of our company and
represent, in our view, the best alternatives to employ our capital
and to continue to generate returns for our shareholders.
CONFERENCE CALL INFORMATION
Our Second Quarter 2003 Conference Call will be held on: Monday,
July 28, 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 August 4, 2003. To listen to
the replay please dial: Domestic U.S.: 1-800-428-6051; International:
973 709-2089, Passcode: 301313.
Set forth in this press release is certain unaudited financial
information for FEMSA for the second quarter ended June 30, 2003,
compared to the second quarter ended June 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 June
30, 2003 was 1,059,462,090, equivalent to the total number of shares
of the Company outstanding as of June 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 June 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. The restatement was determined as
follows:
-- For the results of the Mexican operations, using factors
derived from the Mexican National Consumer Price Index
("NCPI"). To restate June 2002 pesos to June 2003 pesos, we
applied an inflation factor of 1.0427 and to restate March
2003 pesos to June 2003 pesos, we applied a 0.9993 inflation
factor.
-- For the results of the Buenos Aires operations, using factors
derived from the Argentine National Consumer Price Index. To
restate June 2002 to June 2003 Argentine Pesos, we applied an
inflation factor of 1.0976 and to restate March 2003 Argentine
Pesos to June 2003 Argentine Pesos we applied a 0.9970
inflation factor; to convert constant Argentine Pesos into
Pesos, we used the June 30, 2003 exchange rate of Ps. 3.73 per
Argentine Peso.
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.
IMPORTANT NOTICES:
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
===============================================================================
CONSOLIDATED INCOME STATEMENT
For the second quarter and for the first semester of,:
(Expressed in Millions of Pesos as of June 30, 2003)
For the II quarter of: For the I Semester of:
----------------------------------------------
2003 2002 %Var 2003 2002 %Var
--------------------------------------------------------------------
Net sales 19,125 14,057 36.1 31,596 25,983 21.6
Other operating
revenues 64 52 23.1 127 92 38.0
--------------------------------------------------------------------
Total revenues 19,189 14,109 36.0 31,723 26,075 21.7
Cost of sales 9,845 6,902 42.6 16,448 13,046 26.1
--------------------------------------------------------------------
Gross profit 9,344 7,207 29.7 15,275 13,029 17.2
--------------------------------------------------------------------
Administrative
expenses 1,375 1,183 16.2 2,518 2,338 7.7
Selling expenses 4,643 3,209 44.7 7,702 6,225 23.7
--------------------------------------------------------------------
Operating expenses 6,018 4,392 37.0 10,220 8,563 19.4
Participation in
affiliated companies 2 29 (93.1) (20) 9 N.S.
--------------------------------------------------------------------
Income from operations 3,328 2,844 17.0 5,035 4,475 12.5
--------------------------------------------------------------------
Interest expense (586) (226) N.S. (916) (422) N.S.
Interest income 140 93 50.5 326 205 59.0
--------------------------------------------------------------------
Interest expense,
net (446) (133) N.S. (590) (217) N.S.
Foreign exchange
(loss) gain (773) (381) N.S. (929) (141) N.S.
Gain (loss) on
monetary position 37 286 (87.1) 25 474 (94.7)
--------------------------------------------------------------------
Integral result of
financing (1,182) (228) N.S. (1,494) 116 N.S.
Other (expenses)
income (430) (160) N.S. (542) (241) N.S.
--------------------------------------------------------------------
Income before taxes 1,716 2,456 (30.1) 2,999 4,350 (31.1)
Taxes (636)(1,044) (39.1) (1,261)(1,800) (29.9)
--------------------------------------------------------------------
Net Income 1,080 1,412 (23.5) 1,738 2,550 (31.8)
--------------------------------------------------------------------
Net majority income 721 843 (14.5) 1,122 1,535 (26.9)
Net minority income 359 569 (36.9) 616 1,015 (39.3)
--------------------------------------------------------------------
% Total Revenues % Total Revenues
----------------------------------------------
2003 2002 Var P.P. 2003 2002 Var P.P.
--------------------------------------------------------------------
Net sales 99.7 99.6 0.1 99.6 99.6 -
Other operating
revenues 0.3 0.4 (0.1) 0.4 0.4 -
--------------------------------------------------------------------
Total revenues 100.0 100.0 - 100.0 100.0 -
Cost of sales(1) 51.5 49.1 2.4 52.1 50.2 1.9
--------------------------------------------------------------------
Gross profit(1) 48.9 51.3 (2.4) 48.3 50.1 (1.8)
--------------------------------------------------------------------
Administrative
expenses 7.2 8.4 (1.2) 7.9 9.0 (1.1)
Selling expenses 24.2 22.7 1.5 24.3 23.9 0.4
--------------------------------------------------------------------
Operating expenses 31.4 31.1 0.3 32.2 32.8 (0.6)
Participation in
affiliated companies - 0.2 (0.2) (0.1) - (0.1)
--------------------------------------------------------------------
Income from operations 17.3 20.2 (2.9) 15.9 17.2 (1.3)
--------------------------------------------------------------------
(1) % to Net sales
CONSOLIDATED BALANCE SHEET
As of June 30, :
(Expressed in Millions of Pesos as of June 30, 2003)
ASSETS 2003 2002 % Var
--------------------------------------------------------
Cash and cash
equivalents 7,632 7,644 (0.2)
Accounts
receivable 4,316 3,228 33.7
Inventories 6,563 4,737 38.5
Prepaid expenses 2,155 1,109 94.3
--------------------------------------------------------
Total Current
Assets 20,666 16,718 23.6
Property, plant and equipment,
net 39,247 29,240 34.2
Deferred charges and other
assets 9,396 5,713 64.5
Bottling and distribution
rights(2) 31,226 818 3,717.4
--------------------------------------------------------
TOTAL ASSETS 100,535 52,489 91.5
--------------------------------------------------------
LIABILITIES & STOCKHOLDERS'
EQUITY
--------------------------------------------------------
Bank loans 3,091 1,675 84.5
Current maturities long term
debt 3,804 776 390.2
Interest payable 231 135 71.1
Operating
liabilities 11,025 6,441 71.2
--------------------------------------------------------
Total Current
Liabilities 18,151 9,027 101.1
Bank loans 32,871 6,690 391.3
Deferred income taxes 4,995 4,052 23.3
Other liabilities 3,460 1,449 138.8
--------------------------------------------------------
Total Liabilities 59,477 21,218 180.3
Total Stockholders'
equity 41,056 31,271 31.3
--------------------------------------------------------
LIABILITIES & STOCKHOLDERS'
EQUITY 100,533 52,489 91.5
--------------------------------------------------------
FINANCIAL RATIOS Var. p.p.
--------------------------------------------------------
Liquidity 1.14 1.85 (0.71)
Interest
coverage(3) 12.51 30.07 (17.56)
Leverage 1.45 0.68 0.77
Capitalization 51.16% 23.60% 27.56
--------------------------------------------------------
For the II quarter of: For the I Semester of:
--------------------------------------
OTHER CONSOLIDATED
INFORMATION 2003 2002 2003 2002
--------------------------------------------------------
Depreciation 635.7 546.6 1,126.5 1,047.5
Other non-cash
charges 685.4 463.8 1,219.6 1,003.1
Capex 1,342.2 1,379.8 2,922.0 2,287.9
Net Debt (MM
dollars) 3,077.8 149.9
--------------------------------------------------------
(2) Includes the intangible assets generated by Panamco acquisition.
(3) Income from operations + depreciation + other non-cash charges / interest
expense, net
Results from operations
For the second quarter of:
(Expressed in Millions of Pesos as of June 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 5,806.5 5,625.8 3.2 8,719.6 4,755.3 83.4 4,185.6 3,252.0 28.7 1,864.1 1,748.4 6.6
Other revenues 29.6 51.3 (42.3) 59.3 25.0 N.S. 5.4 4.8 12.7
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Total revenues 5,836.1 5,677.1 2.8 8,778.9 4,780.3 83.6 4,185.6 3,252.0 28.7 1,869.5 1,753.2 6.6
Cost of good sold 2,450.6 2,408.1 1.8 4,408.3 2,175.3 N.S. 3,088.6 2,419.9 27.6 1,419.3 1,307.0 8.6
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Gross margin 3,385.5 3,269.0 3.6 4,370.6 2,605.0 67.8 1,097.0 832.1 31.8 450.2 446.2 0.9
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Administrative expenses 564.7 561.6 0.6 537.2 372.5 44.2 68.1 58.4 16.4 46.2 44.1 4.6
Sales expenses 1,607.8 1,446.7 11.1 2,091.2 1,006.3 N.S. 814.6 618.9 31.6 114.4 104.1 9.9
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Operating expenses 2,172.5 2,008.3 8.2 2,628.4 1,378.8 90.6 882.7 677.3 30.3 160.6 148.2 8.3
Participation in
affiliated companies 1.5 28.8 (94.8)
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Income from operations
before
management fee 1,214.5 1,289.5 (5.8) 1,742.2 1,226.2 42.1 214.3 154.8 38.5 289.6 298.0 (2.8)
Management fee 102.5 99.6 2.9 18.7 24.9 (25.0) 27.5 25.1 9.4
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Income from operations 1,112.0 1,189.9 (6.5) 1,742.2 1,226.2 42.1 195.6 129.8 50.6 262.1 272.9 (3.9)
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
% to Total Revenues
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Income from operations
before
management fee 20.8 22.7 (1.9) 19.8 25.7 (5.9) 5.1 4.8 0.3 15.5 17.0 (1.5)
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
OTHER INFORMATION
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Depreciation 276.9 269.3 2.8 236.9 160.1 48.0 31.2 21.4 45.9 64.7 57.2 13.2
Other non-cash charges 433.9 287.0 51.2 201.9 126.0 60.2 30.1 24.5 22.7 15.5 20.3 (24.0)
Capex 592.3 882.3 (32.9) 431.0 289.4 48.9 254.9 179.3 42.1 49.2 38.0 29.5
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Results from operations
For the first semester of:
(Expressed in Millions of Pesos as of June 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 10,310.5 10,250.4 0.6 12,829.5 8,842.3 45.1 7,590.3 6,072.2 25.0 3,398.7 3,183.3 6.8
Other revenues 64.6 78.5 (17.7) 109.0 65.3 66.9 11.2 8.6 29.2
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Total revenues 10,375.1 10,328.9 0.4 12,938.5 8,907.6 45.3 7,590.3 6,072.2 25.0 3,409.8 3,191.9 6.8
Cost of good sold 4,492.2 4,492.1 0.0 6,410.9 4,104.4 56.2 5,608.0 4,521.4 24.0 2,605.6 2,453.4 6.2
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Gross margin 5,882.9 5,836.8 0.8 6,527.6 4,803.2 35.9 1,982.2 1,550.8 27.8 804.3 738.5 8.9
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Administrative expenses 1,129.7 1,129.7 0.0 865.9 719.2 20.4 128.0 112.9 13.4 90.2 88.4 2.0
Sales expenses 2,998.6 2,893.7 3.6 2,924.9 1,912.2 53.0 1,532.3 1,179.6 29.9 215.1 190.3 13.0
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Operating expenses 4,128.3 4,023.4 2.6 3,790.8 2,631.4 44.1 1,660.4 1,292.5 28.5 305.2 278.7 9.5
Participation in
affiliated companies (20.3) 8.7 N.S.
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Income from operations
before
management fee 1,734.3 1,822.1 (4.8) 2,736.8 2,171.8 26.0 321.9 258.2 24.6 499.0 459.8 8.5
Management fee 205.5 200.3 2.6 34.4 43.9 (21.7) 52.5 47.7 10.2
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Income from operations 1,528.8 1,621.8 (5.7) 2,736.8 2,171.8 26.0 287.5 214.3 34.1 446.5 412.2 8.3
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
% to Total Revenues
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Income from operations
before
management fee 16.7 17.6 (0.9) 21.2 24.4 (3.2) 4.2 4.3 (0.1) 14.6 14.4 0.2
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
OTHER INFORMATION
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
Depreciation 564.2 560.2 0.7 356.4 305.3 16.7 60.7 43.5 39.7 125.6 117.9 6.5
Other non-cash charges 805.5 666.8 20.8 294.1 233.5 26.0 61.8 48.0 28.7 32.3 31.4 3.1
Capex 1,427.5 1,533.0 (6.9) 779.8 521.5 49.5 456.5 230.4 98.1 248.6 64.7 N.S.
Net debt (million dollars) 330.8 229.2 44.3 2,479.0 (153.6) N.S. 69.7 41.2 69.2 190.8 127.2 50.0
-------------------------- ------------------------ ---------------------- ---------------------- ----------------------
OPERATING DATA
For the second quarter and for the first semester of:
FEMSA Cerveza
---------------------------------
Sales Volumes
(Thousand hectoliters) For the II quarter of: For the I Semester of:
---------------------------------------------
2003 2002 %Var 2003 2002 %Var
----------------------------------------------------------------------
Domestic 6,120.4 5,764.4 6.2 10,961.0 10,694.0 2.5
Exports 598.4 626.4 (4.5) 959.8 994.7 (3.5)
----------------------------------------------------------------------
Total Volume 6,718.8 6,390.8 5.1 11,920.8 11,688.7 2.0
----------------------------------------------------------------------
Presentation Mix
(%) For the II quarter of: For the I Semester of:
---------------------------------------------
Var Var
2003 2002 p.p. 2003 2002 p.p.
----------------------------------------------------------------------
Returnable 68.0 69.0 (1.0) 68.6 69.9 (1.3)
Non Returnable 8.8 8.0 0.8 8.5 7.7 0.8
Cans 23.2 23.0 0.2 22.9 22.4 0.5
----------------------------------------------------------------------
Total volume 100.0 100.0 - 100.0 100.0 -
----------------------------------------------------------------------
----------------------------------------------------------------------
Exports Million
revenues: Ps. 429.4 415.6 3.3 689.1 653.2 5.5
US
Millions 41.5 41.1 1.0 65.2 65.8 (0.9)
======================================================================
FEMSA Empaques
----------------
Total Sales Volume
(Millions of
pieces) For the II quarter of: For the I Semester of:
---------------------------------------------
2003 2002 %Var 2003 2002 %Var
----------------------------------------------------------------------
Cans 877.6 797.4 10.1 1,614.9 1,406.0 14.9
Crown Caps 3,838.7 3,828.4 0.3 6,954.2 7,148.1 (2.7)
Glass Bottle 278.6 276.4 0.8 488.4 507.5 (3.8)
----------------------------------------------------------------------
Export volumes: Cans 145.1 96.1 51.0 294.0 127.2 131.1
Crown
Caps 2,116.0 2,081.2 1.7 3,843.5 3,911.6 (1.7)
----------------------------------------------------------------------
Exports Million
revenues: Ps. 216.0 180.4 19.7 418.1 306.7 36.3
US
Millions 20.9 17.9 16.8 39.3 31.0 26.8
======================================================================
Percentage of sales revenue by
client category:
For the II quarter of: For the I Semester of:
---------------------------------------------
Var Var
2003 2002 p.p. 2003 2002 p.p.
----------------------------------------------------------------------
Intercompany sales 60.5 61.8 (1.3) 59.3 60.9 (1.6)
----------------------------------------------------------------------
FEMSA
Cerveza 41.8 44.2 (2.4) 40.0 44.3 (4.3)
Coca-Cola
FEMSA 18.7 17.6 1.1 19.3 16.6 2.7
----------------------------------------------------------------------
Third-party
sales 39.5 38.2 1.3 40.7 39.1 1.6
----------------------------------------------------------------------
Domestic 28.0 30.0 (2.0) 28.8 30.7 (1.9)
Export 11.5 8.2 3.3 11.9 8.4 3.5
----------------------------------------------------------------------
Total 100.0 100.0 - 100.0 100.0 -
======================================================================
Coca-Cola FEMSA
---------------------------
Sales Volumes
(Millions of Unit Cases) For the II quarter of: For the I Semester of:
-------------------------------------------
2003 2002 %Var 2003 2002 %Var
----------------------------------------------------------------------
Mexico 273.1 266.4 2.5 501.4 485.4 3.3
Central America 26.3 24.8 6.0 50.6 48.2 5.0
Colombia 40.7 42.3 (3.8) 84.7 88.3 (4.1)
Venezuela 37.7 39.5 (4.6) 65.9 80.4 (18.0)
Brazil 56.8 71.5 (20.6)127.7 150.2 (15.0)
Argentina 26.9 23.3 15.5 58.3 52.8 10.4
----------------------------------------------------------------------
Total KOF 461.5 467.8 (1.3)888.6 905.3 (1.8)
======================================================================
(1) Includes 2 months of operation
FEMSA Comercio
--------------------------
For the II quarter of: For the I Semester of:
-------------------------------------------
2003 2002 %Var 2003 2002 %Var
----------------------------------------------------------------------
Total stores 2,399 1,878 27.7
New stores 122 55 121.8 183 99 84.8
Comparative same stores:
(2)
Average monthly sales
(Ths. Ps.) (3) 597.7 581.5 2.8 558.6 553.8 0.9
Average Traffic 25.1 24.8 1.1 23.6 23.4 0.6
Average Ticket 23.8 23.4 1.6 23.7 23.6 0.3
======================================================================
(2) Calculated by comparing average sales per store of those sites with more
than 18 months of operation
(3) Based on comparative same stores in each period
July 28, 2003
PRESS RELEASE
FOR FURTHER INFORMATION:
Alfredo Fernandez / Julieta Naranjo
Investor Relations Department
Coca-Cola FEMSA, S.A. de C.V.
(52-555) 081-5120 / 5121 / 5148
afernandeze@kof.com.mx / jnaranjo@kof.com.mx
WEBSITE: www.cocacola-femsa.com.mx
--------------------------------------------------------------
COCA-COLA FEMSA announces second quarter and first half of 2003 results
SECOND-QUARTER 2003
-------------------
-- Consolidated unit case volume reached 461.7 Million Unit Cases
("MUC")(1) during the second quarter of 2003.
-- Consolidated revenues reached Ps.8,778.9 million and
consolidated operating income totaled Ps.1,742.2 million
during the second quarter of 2003, reaching a consolidated
operating margin of 19.8%.
Mexico City (July 28, 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
second quarter and the first half of 2003.
"Our company is going through a significant transformation. I feel
very pleased with the smooth and rapid integration process that we are
implementing. We have found significant opportunities and a strong
pool of management talent that will let us enhance the top line and
streamline operating facilities in all of our territories.
"We believe that our experience managing the pricing architecture
of our products developing packaging presentations by consumption
occasion and distribution channel will help us increase the
profitability of our territories. We intend to develop the best
portfolio of products and packaging presentation with the right
pricing architecture in every country, to leverage the strong brand
equity of brand Coca-Cola. In every single country where we currently
operate, brand Coca-Cola commands a wide preference among consumers.
"We have initiated a cross fertilization process of management
putting in practice the strong drive of the Coca-Cola FEMSA culture
and implementing the appropriate mechanisms to reward accountability
and performance among the strong pool of management talent that we
selected to run our new territories. We are just at the beginning and
we believe that we are on the right track," stated Carlos Salazar,
Chief Executive Officer of the Company.
-----------------------
(1)The unit case is equal to 24 eight-ounce servings.
We began consolidating the results of our new territories during
the second quarter of 2003 in accordance with Mexican GAAP.
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
presented 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.
Financial information, both on a consolidated basis and by
country, includes three and six months results of the original
Coca-Cola FEMSA territories (Valley of Mexico, Southeast of Mexico and
Buenos Aires) and only two months of our new territories acquired from
Panamco. 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.
However, volume performance figures for the second quarter of 2003
are comparable for previous periods, as presented in a separated
section in this press release.
CONSOLIDATED RESULTS
During the second quarter of 2003, our consolidated volume totaled
461.7 MUC. Consolidated operating income reached Ps.1,742.2 million
during the second quarter of 2003.
The integral cost of financing loss totaled Ps.1,218.9 million
during the second quarter of 2003, reflecting the new financial
position after the acquisition, and being the combined effect of:
(i) accrued interest expenses related to the existing debt and
acquisition financing assumed in connection with the Panamco
transaction;
(ii) a foreign exchange loss generated mainly by (i) the
appreciation of the Mexican peso against the U.S dollar
applied towards our U.S. dollars cash balances from March 31,
2003 to the acquisition date of Panamco (the foreign exchange
rate at closing was Ps.10.188 per U.S. dollar); and (ii) the
devaluation of the Mexican peso versus the U.S. dollar applied
to the U.S. dollar-denominated acquisition financing from the
closing of the transaction to the end of the second quarter of
2003; and
(iii) the 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 24.7% in the second quarter of
2003, reflecting deduction for tax purposes of fees and expenses
related to the Panamco acquisition, which were capitalized as part of
the acquisition cost for financial purposes.
Consolidated net income was Ps.360.8 million in the second quarter
of 2003, resulting in earnings per share ("EPS") of
Ps.0.213(U.S.$0.204 per ADR) computed under the basis of 1,692.9
million compounded average shares outstanding. Number of shares
differs from the total number of shares used for the six months
computation.
BALANCE SHEET
On June 30, 2003, Coca-Cola FEMSA recorded a cash balance of
Ps.3,699 million (U.S. $354.4 million) and total short and long-term
bank debt of Ps.29,612.0 million (U.S.$2,836.1 million).
OPERATING RESULTS BY TERRITORY
------------------------------
MEXICAN OPERATING RESULTS
Revenues
Revenues in the Mexican territories reached Ps.6,298.3 million for
the second quarter of 2003 resulting in an average price per unit case
of Ps.27.16 (U.S.$2.60). Excluding Ciel water volumes in five,
nineteen and twenty liter packaging presentations, average price per
unit case was Ps.30.3 (U.S. $2.90).
Income from Operations
Gross profit totaled Ps.3,362.0, reaching a 53.4% margin as
percentage of total revenues for the second-quarter 2003. During the
quarter, the company closed one plant and experienced higher sugar
prices. Packaging costs were higher than last year and were impacted
by the devaluation of the Mexican peso against the U.S. dollar year
over year.
During the quarter the Company closed fifteen distribution
facilities in our new territories, and implemented a headcount
reduction driven by the closing of the former Panamco headquarter
offices in Miami and Mexico City. Operating profit totaled Ps.1,611.0
million, reaching a 25.6% margin as a percentage of total revenues.
CENTRAL AMERICAN OPERATING RESULTS (Guatemala, Nicaragua, Costa
Rica and Panama)
Revenues
Total revenues reached Ps.489.4 million during May and June of
2003. Average price per unit case was Ps.28.63 (U.S.$2.74) during this
period.
Income from Operations
Gross profit totaled Ps.235.3 million during May and June of 2003,
reaching a 48.1% gross margin as a percentage of total revenues during
the same period. We realized some savings from procurement, which
offset the cost increase of U.S. dollar-denominated packaging costs
during these two months. Operating income totaled Ps.39.3 million
during May and June, reaching an operating income margin of 8.0% as a
percentage of total revenues.
COLOMBIAN OPERATING RESULTS
Revenues
Total revenues reached Ps.515.0 million during May and June of
2003, an average price per unit case of Ps.18.80 (U.S.$1.80).
Income from Operations
Gross profit totaled Ps.234.8 million during May and June of 2003,
reaching a 45.6% gross margin as a percentage of total revenues during
the same period. During the period the Company experienced higher
packaging costs and the impact of the devaluation of the U.S. dollar
versus the Colombian peso applied to the U.S. dollar denominated
expenses. Operating income was Ps.52.2 million, reaching a 10.1%
margin as a percentage of total revenues during May and June of 2003.
VENEZUELAN OPERATING RESULTS
Revenues
Total revenues reached Ps.488.8 million during May and June of
2003 and average price per unit case in Venezuela reached Ps.19.88
(U.S.$1.90). A significant devaluation of the Venezuelan bolivar
against the U.S. dollar and a change of packaging mix were partially
offset by strong price increases.
Income from Operations
Gross profit totaled Ps.211.0 million during May and June of 2003,
reaching a 43.2% gross margin as a percentage of total revenues during
the same period. Better asset utilization and higher operating
efficiencies should help us increase the profitability of this
territory in the following quarters. Operating income was Ps.28.0
million reaching an operating income margin of 5.7% during May and
June of 2003, after recording losses during the last months.
BRAZILIAN OPERATING RESULTS
Revenues
Total revenues reached Ps.570.1 million during May and June of
2003 and the average price per unit case was Ps.14.50 (U.S.$1.39).
Declining volume trend was reversed since May, as well as declining
net revenues trend due to a more balanced price architecture and
improved execution in the market.
Income from Operations
Gross profit during May and June of 2003 totaled Ps.183.0 million,
reaching a 32.1% margin as percentage of total revenues. The Company
experienced higher sweetener and packaging costs during this period.
The Brazilian operations reported a slight operating loss for May and
June of 2003, totaling Ps.(7.0) million. However, as a result of the
implementation of new commercialization and point of sale development
strategies, we regained our path to profitability in our Brazilian
territories during the month of June of 2003, achieving positive
operating income for the first time during the last ten months.
ARGENTINE OPERATING RESULTS
Financial information and sales volume figures in our Argentine
operations are fully comparable with previous periods.
Revenues
Total revenues reached Ps.417.3 million, a 20.9% increase as
compared to second-quarter 2002 and the average price per unit case
grew by 4.1% over the second quarter of 2002 to Ps.14.85 (U.S.$1.42).
Income from Operations
Gross profit as a percentage of total sales increased from 30.9%
in the second quarter of 2002 to 34.6% in 2003. This improvement was
mainly driven by (i) higher sales volume, (ii) an improvement in our
operating efficiencies, and (iii) an appreciation of the Argentina
peso versus the U.S. dollar applied to the U.S. dollar-denominated raw
materials and expenses.
In Argentina, operating expenses as a percentage total revenues
decreased 340 basis points from 34.4% in the second quarter of 2002 to
31.0% in the second 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 second
quarter of 2003 in our Argentine territories reached Ps.15.0 million,
operating margin rose from a negative (4.8)% during the second quarter
of 2002 to 3.6% during the second quarter of 2003.
2Q 2003 COMPARABLE VOLUME PERFORMANCE
-------------------------------------
We are providing sales volume for the three months of the second
quarter of 2003 in all of our territories. Volume growth figures are
comparable with previous periods.
Territory 2Q2002 2Q2003
(MUC) (MUC) % Change
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Mexico 266.4 273.1 2.5%
------------------------------------------------------------------------------------
Central America 24.8 26.3 6.0%
------------------------------------------------------------------------------------
Colombia 42.3 40.7 -3.8%
------------------------------------------------------------------------------------
Venezuela 39.5 37.7 -4.6%
------------------------------------------------------------------------------------
Brazil 71.5 56.8 -20.6%
------------------------------------------------------------------------------------
Argentina 23.3 27.1 15.5%
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Total 467.8 461.7 -1.3%
------------------------------------------------------------------------------------
MEXICO
Sales volume information for 2002 and 2003 is the combination of
sales volume from our new territories acquired in Mexico (Golfo and
Bajio) and our original territories (Valley of Mexico and Southeast of
Mexico).
Second-quarter 2003 sales volume reached 273.1 MUC, a 2.5%
increase over the same period of 2002. Excluding volumes generated
from promotional activity with powder products(2) last year, volume
increase was 4%, this increase was mainly driven by 8.3% volume growth
in the Valley of Mexico.
The 4.0% sales volume growth during the second quarter of 2003,
excluding volume generated from promotional activity with powder
products last year in the Mexican territories was mainly the result of
(i) the solid performance of our flavored brands including Fanta
Multi-Flavors and Lift Manzana Verde, (ii) the incremental sales
volume reached by Ciel still and mineral water, representing more than
30% of the incremental volume during the quarter and, (iii) volume
growth from brand Coca-Cola.
CENTRAL AMERICA (Guatemala, Nicaragua, Costa Rica and Panama)
In the second quarter of 2003, total sales volume in our Central
America territories increased by 6.0% to 26.3 MUC as compared to the
same period of 2002, as a result of sales volume increases in
Nicaragua, Costa Rica and Panama, which more than offset a slight
volume decline in Guatemala.
----------------------------
(2) 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
sold during the second quarter of 2002 was 3.8 MUC.
COLOMBIA
During the second quarter of 2003, total sales volume in our
Colombian territory decreased by 3.8% as compared to the same period
of 2002 driven by the economic situation of the country that has
depressed per capita income and forced consumers to adjust their
consumption habits.
VENEZUELA
In Venezuela, volume declined 4.6% during the second quarter of
2003, as a consequence of strong price increases implemented during
the first quarter of 2003 and a weak economic environment.
BRAZIL
During the second quarter of 2003, sales volume in our Brazilian
territories decreased by 20.6% as compared to the same period of 2002,
reflecting the impact of strong price increases implemented during the
first quarter of 2003, and the reduction of indirect channels aimed at
retaking control of selling and distribution capabilities of our
business. These initiatives are expected to allow us to control the
pricing architecture of our products and packaging presentations in
order to increase the profitability of our Brazilian territories.
ARGENTINA
In the second quarter of 2003, total sales volume in our Buenos
Aires territory increased by 16.2% as compared to the same period of
2002. We continue capitalizing the results of our returnable packaging
presentation strategy for our core brands implemented during 2002. Our
core brands, in terms of sales volume, grew by almost 30% and
Coca-Cola light combined with the recent introduction of Fanta light
drove the premium category generating slightly more than 5% of the
incremental volume during the quarter. During this period our value
protection brands decreased, representing 11.7% of our total sales
volume as compared to 19.9% during second quarter of 2002.
SUMMARY OF SIX MONTHS RESULTS
For the six months ended June 30, 2002, consolidated sales volume
reached 888.6 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
half of 2003.
During the first six months of 2003, total revenues reached
Ps.12,938.5 million, resulting in a consolidated average unit price
per case of Ps.24.87 (U.S.$2.38). Gross margin as a percentage of
total revenues was 50.5% in the first half of 2003. Consolidated
operating income was Ps.2,736.8 million, 21.2% as percentage of total
revenues during the first six months in 2003.
Consolidated net income totaled Ps.831.2 during the first six
months of 2003. Net income per share reached Ps.0.533 (U.S.$ 0.511 per
ADR) computed under the basis of 1,559.0 million compounded average
shares outstanding.
RECENT DEVELOPMENTS
-- As a result of the Panamco acquisition, in accordance with
Mexican GAAP, we recognized as intangible assets with
indefinite lives, the difference between the price paid and
the book value (fair value) of the net assets acquired. The
identified intangibles in Panamco were Ps.31,533 million
(equivalent to U.S.$3,020.1 million), which are mainly the
bottling contracts with The Coca-Cola Company. The value of
these intangible assets already considered restructuring
charges that we expected to take as we streamline our
operations within the next year. We will annually review the
carrying value of these long-lived assets for recoverability.
We also review for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset
may not be recoverable. If they are impaired, we are required
to recognize a loss by writing off part of their value. The
analysis we perform requires that we estimate the future cash
flows attributable to these assets, and these estimates
require us to make a variety of judgments about our future
operations, including, without limitation, volume, prices,
costs, inflation, exchange rates and interest rates. Although
no assurances can be given, we do not expect to take
write-offs with respect to these assets during 2003.
-- On July 16, 2003 the Company raised Ps.5,750 million,
equivalent to approximately U.S.$550 million, through three
bond offerings of "Certificados Bursatiles" (Mexican peso
denominated-bonds) in the Mexican debt capital markets, in
what is considered the largest and one of the most successful
debt offerings completed in Mexican history. Fitch and S&P
rated the bond offerings with local currency credit ratings of
AAA/AA+, respectively. The following table provides the
characteristics of each one of the issues:
Main Terms 2yrs TIIE Based Note 5 yrs CETES Based Note 6 yrs Fixed Rate Notes
------------------------------------------------------------------------------------------
Amount Ps.2,750 MM Ps.2,500 MM Ps.500 MM
------------------------------------------------------------------------------------------
Tenor/Amortization 2 year bullet 5 year bullet 6 year bullet
------------------------------------------------------------------------------------------
Rate 28 day TIIE + [55 bps] 91day CETE + [115] bps 9.90%
------------------------------------------------------------------------------------------
The proceeds from the offerings will be used to refinance
approximately 65% of the bridge loans put in place for the acquisition
of Panamco.
-- During May and June of 2003, we closed four of the fifty two
plants that we had on May 6, 2003. We closed one plant in the
Bajio region in Mexico, one in Panama and two in South
America. We expect to realize permanent cost savings and
operating efficiencies as a result of the consolidation of
these facilities.
-- As part of the integration plan in our Mexican territories, we
closed during May and June of 2003, 15 of the 97 distribution
centers that Panamco had in our new Mexican territories. We
expect to realize permanent cost savings and operating
efficiencies as a result of the consolidation of these
distribution facilities.
CONFERENCE CALL INFORMATION
Our Second-Quarter 2003 Conference Call will be held on: Monday,
July 28, 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.:
888-339-2688 and International: 617-847-3007.
If you are unable to participate live, an instant replay of the
conference call will be available through August 28, 2003. To listen
to the replay please dial: Domestic U.S.: 888-286-8010; International:
617-801-6888, Passcode: 80167389.
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 48 bottling facilities in Latin America and serves
more than 1,400,000 retailers Latin America. 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.
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 June 31, 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 second quarter of 2003, which ended
on June 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.
(8 pages of tables to follow)
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
Consolidated Balance Sheet
As of June 30, 2003 and December 31, 2002
Millions of Mexican pesos (Ps.)
Expressed in currency with purchasing power as of June 30, 2003
------------------------------------------------------------------------
ASSETS 2003 2002
------------------------------------------------------------------------
Current Assets
Cash and cash equivalents Ps. 3,699 Ps. 6,259
------------------------------------------------------------------------
Accounts receivable:
Trade 889 565
Notes 59 12
Prepaid taxes 867 245
Other 797 208
------------ ------------
------------------------------------------------------------------------
2,612 1,030
------------------------------------------------------------------------
Inventories 2,436 775
Prepaid expenses 329 74
------------------------------------------------------------------------
Total current assets 9,076 8,138
------------------------------------------------------------------------
Property, plant and equipment
Land 2,250 796
Buildings, machinery and equipment 22,041 9,088
Accumulated depreciation (9,379) (3,329)
Construction in progress 1,019 371
Bottles and cases 1,091 294
------------------------------------------------------------------------
Total property, plant and equipment 17,022 7,220
------------------------------------------------------------------------
Investment in shares 1,481 127
Deferred charges, net 1,189 860
Intangibles 31,585 262
------------------------------------------------------------------------
TOTAL ASSETS Ps. 60,353 Ps. 16,607
========================================================================
-------------------------------------------------------------------------------
LIABILITIES & STOCKHOLDERS' EQUITY 2003 2002
-------------------------------------------------------------------------------
Current Liabilities
Short-term bank loans and notes Ps. 3,534 Ps. 0
Interest payable 176.7 82
Suppliers 3,184 1,634
Accounts payable and others 2,173 670
Taxes payable 871 229
-----------------------------------------------------------------------
Total Current Liabilities 9,939 2,615
-----------------------------------------------------------------------
Long-term bank loans 26,078 3,209
Pension plan and seniority premium 520 188
Other liabilities 3,744 1,202
-----------------------------------------------------------------------
Total Liabilities 40,281 7,214
-----------------------------------------------------------------------
Stockholders' Equity
Minority interest 152 0
Majority interest
Capital stock 2,587 2,399
Additional paid in capital 11,151 1,688
Retained earnings of prior years 9,205 6,662
Net income for the period 825 2,542
Cumulative results of holding
non-monetary assets (3,848) (3,898)
-------------------------------------------------------------------------------
Total majority interest 19,920 9,393
-------------------------------------------------------------------------------
Total stockholders' equity 20,072 9,393
-------------------------------------------------------------------------------
TOTAL LIABILITIES & EQUITY Ps. 60,353 Ps. 16,607
===============================================================================
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the three months ended June 30, 2003 and 2002(1)
Expressed in million of mexican pesos(2) with purchasing power as of
June 30, 2003
--------------------------------------- ---------------- --------------- ---------------
Consolidated Mexican Central Colombian
Operations American Operations
Operations
--------------------------------------- ---------------- --------------- ---------------
*%Total *%Total % VAR %Total %Total %Total
2003 Sales 2002 Sales 2003 Revenues 2003 Revenues 2003 Revenues
------------------------------- --------------------------------------- -------------------------------- ---------------
Sales volume (millions unit
cases) 365.7 157.0 132.9 230.7 16.8 27.4
Average unit price per case 23.85 30.29 (21.3) 27.16 28.63 18.80
------------------------------- --------------------------------------- ---------------- --------------- ---------------
Net revenues 8,719.6 4,755.3 83.4 6,265.3 480.7 515.0
Other operating revenues 59.3 25.0 137.2 33.0 8.8 (0.0)
------------------------------- --------------------------------------- ---------------- --------------- ---------------
Total revenues 8,778.9 100.0 4,780.3 100.0 83.6 6,298.3 100.0 489.4 100.0 515.0 100.0
Cost of sales 4,408.3 50.6 2,175.3 45.7 102.7 2,936.3 46.6 254.1 51.9 280.2 54.4
------------------------------- --------------------------------------- ---------------- --------------- ---------------
Gross profit 4,370.6 50.1 2,605.0 54.8 67.8 3,362.0 53.4 235.3 48.1 234.8 45.6
------------------------------- --------------------------------------- ---------------- --------------- ---------------
Administrative
expenses 542.9 6.2 358.5 7.5 51.4 360.7 5.7 30.8 6.3 47.5 9.2
Selling
expenses 2,091.2 23.8 1,006.3 21.1 107.8 1,392.2 22.1 165.3 33.8 135.1 26.2
------------------------------- --------------------------------------- ---------------- --------------- ---------------
Operating expenses 2,634.1 30.0 1,364.8 28.6 93.0 1,752.9 27.8 196.1 40.1 182.6 35.5
------------------------------- --------------------------------------- ---------------- --------------- ---------------
Goodwill amortization (5.7) (0.1) 14.0 0.3 (140.7) (2.0) (0.0) - - - -
------------------------------- --------------------------------------- ---------------- --------------- ---------------
Operating income 1,742.2 19.8 1,226.2 25.7 42.1 1,611.0 25.6 39.3 8.0 52.2 10.1
------------------------------- --------------------------------------- ---------------- --------------- ---------------
Interest
expense 371.8 86.0 332.4
Interest
income 57.3 56.5 1.4
Interest
expense, net 314.6 3.6 29.4 0.6 970.0
Foreign
exchange loss
(gain) 918.2 10.5 (79.9) (1.7)(1,249.2)
Loss (gain) on
monetary
position (13.9) (0.2) (269.1) (5.6) (94.8)
------------------------------- ---------------------------------------
Integral cost of financing 1,218.9 13.9 (319.6) (6.7) (481.4)
Other (income) expenses, net 44.3 0.5 58.0 1.2 (23.5)
------------------------------- ---------------------------------------
Income before taxes 479.0 5.5 1,487.8 31.1 (67.8)
Taxes 118.2 1.3 658.7 13.8 (82.1)
------------------------------- ---------------------------------------
Consolidated net income 360.8 4.1 829.1 17.3 (56.5)
------------------------------- ---------------------------------------
Majority net income 360.8 4.1 829.1 17.3 (56.5)
------------------------------- --------------------------------------- ---------------- --------------- ---------------
Non-cash items (3) 438.8 5.0 286.1 6.0 53.4 251.8 4.0 43.2 8.8 52.7 10.2
------------------------------- --------------------------------------- ---------------- --------------- ---------------
(1) Includes information for the three months of our original territories and
two months of our new territories acquired from Panamco.
(2) Except volume and average price per unit case figures.
(3) Depreciation, amortization and other non-cash items (including returnable
bottle breakage expenses).
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the three months ended June 30, 2003 and 2002(1)
Expressed in million of mexican pesos(2) with purchasing power as of
June 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) 24.6 39.1 27.1 23.3 16.2
Average unit price per case 19.88 14.50 14.85 14.28 4.1
------------------------------------ ----------------- ------------------ ---------------------------------------------
Net revenues 488.8 567.6 402.3 332.7 20.9
Other operating revenues (0.0) 2.5 15.0 12.5 20.0
------------------------------------ ----------------- ------------------ ---------------------------------------------
Total revenues 488.8 100.0 570.1 100.0 417.3 100.0 345.2 100.0 20.9
Cost of sales 277.9 56.8 387.0 67.9 272.8 65.4 238.4 69.1 14.4
------------------------------------ ----------------- ------------------ ---------------------------------------------
Gross profit 211.0 43.2 183.0 32.1 144.5 34.6 106.8 30.9 35.3
------------------------------------ ----------------- ------------------ ---------------------------------------------
Administrative expenses 34.1 7.0 43.6 7.7 26.3 6.3 26.4 7.6 (0.4)
Selling expenses 148.9 30.5 146.4 25.7 103.2 24.7 92.3 26.7 11.8
------------------------------------ ----------------- ------------------ ---------------------------------------------
Operating expenses 183.0 37.4 190.1 33.3 129.5 31.0 118.7 34.4 9.1
------------------------------------ ----------------- ------------------ ---------------------------------------------
Goodwill amortization - - - - - - 4.6 1.3 (100.0)
------------------------------------ ----------------- ------------------ ---------------------------------------------
Operating income 28.0 5.7 (7.0) (1.2) 15.0 3.6 (16.5) (4.8) (190.5)
------------------------------------ ----------------- ------------------ ---------------------------------------------
Non-cash items (3) 40.0 8.2 13.2 2.3 41.6 10.0 59.4 17.2 (30.0)
------------------------------------ ----------------- ------------------ ---------------------------------------------
(1) Includes information for the three months of our original territories and
two months of our new territories acquired from Panamco.
(2) Except volume and average price per unit case figures.
(3) Depreciation, amortization and other non-cash items (including returnable
bottle breakage expenses).
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the six months ended June 30, 2003 and 2002(1)
Expressed in million of mexican pesos(2) with purchasing power as of
June 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) 24.6 39.1 58.7 52.6 11.5
Average unit price per case 19.88 14.50 14.67 14.65 0.0
------------------------------------ ---------- ------- --------- ---------- --------
Net revenues 488.8 567.6 861.1 770.5 11.8
Other operating revenues (0.0) 2.5 48.1 32.9 46.2
------------------------------------ ------------------ ---------------- -----------------------------------------------
Total revenues 488.8 100.0 570.1 100.0 909.2 100.0 803.4 100.0 13.2
Cost of sales 277.9 56.8 387.0 67.9 593.5 65.3 527.5 65.7 12.5
------------------------------------ ------------------ ---------------- -----------------------------------------------
Gross profit 211.0 43.2 183.0 32.1 315.7 34.7 275.9 34.3 14.4
------------------------------------ ------------------ ---------------- -----------------------------------------------
Administrative expenses 34.1 7.0 43.6 7.7 54.1 6.0 55.4 6.9 (2.3)
Selling expenses 148.9 30.5 146.4 25.7 208.1 22.9 203.8 25.4 2.1
------------------------------------ ------------------ ---------------- -----------------------------------------------
Operating expenses 183.0 37.4 190.1 33.3 262.2 28.8 259.2 32.3 1.2
------------------------------------ ------------------ ---------------- -----------------------------------------------
Goodwill amortization - - - - - - 9.1 1.1 (100.0)
Fixed asset adjustment - - - - - - - - -
------------------------------------ ------------------ ---------------- -----------------------------------------------
Operating income 28.0 5.7 (7.0) (1.2) 53.5 5.9 7.6 0.9 603.9
------------------------------------ ------------------ ---------------- -----------------------------------------------
Non-cash items (3) 40.0 8.2 13.2 2.3 84.4 9.3 112.2 14.0 (24.8)
------------------------------------ ------------------ ---------------- -----------------------------------------------
(1) Includes information for the six months of our original territories and two
months of our new territories acquired from Panamco
(2) Except volume and average price per unit case figures.
(3) Depreciation, amortization and other non-cash items (including returnable
bottle breakage expenses).
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the six months ended June 30, 2003 and 2002(1)
Expressed in million of mexican pesos(2) with purchasing power as of
June 30, 2003
-------------------------------------- ---------------- --------------- ---------------
Consolidated Mexican Central Colombian
Operations American Operations
Operations
-------------------------------------- ---------------- --------------- ---------------
*%Total *%Total % VAR %Total %Total %Total
2003 Sales 2002 Sales 2003 Revenues 2003 Revenues 2003 Revenues
-------------------------------- -------------------------------------- -------------------------------- ---------------
Sales Volume(millions unit cases) 515.9 297.6 73.3 349.3 16.8 27.4
Average unit price per case 24.87 29.71 (16.3) 28.39 28.63 18.80
-------------------------------- -------------------------------------- -------- ------ ------
Net revenues 12,829.5 8,842.3 45.1 9,916.4 480.7 515.0
Other operating revenues 109.0 65.3 66.9 49.6 8.8 (0.0)
-------------------------------- -------------------------------------- ---------------- --------------- ---------------
Total revenues 12,938.5 100.0 8,907.6 100.0 45.3 9,966.0 100.0 489.4 100.0 515.0 100.0
Cost of sales 6,410.9 50.0 4,104.4 46.4 56.2 4,618.3 46.3 254.1 51.9 280.2 54.4
-------------------------------- -------------------------------------- ---------------- --------------- ---------------
Gross profit 6,527.6 50.9 4,803.2 54.3 35.9 5,347.7 53.7 235.3 48.1 234.8 45.6
-------------------------------- -------------------------------------- ---------------- --------------- ---------------
Administrative
expenses 865.9 6.7 689.9 7.7 25.5 655.9 6.6 30.8 6.3 47.5 9.2
Selling
expenses 2,924.9 22.6 1,912.2 21.5 53.0 2,120.8 21.3 165.3 33.8 135.1 26.2
-------------------------------- -------------------------------------- ---------------- --------------- ---------------
Operating expenses 3,790.8 29.3 2,602.1 29.2 45.7 2,776.7 27.9 196.1 40.1 182.6 35.5
-------------------------------- -------------------------------------- ---------------- --------------- ---------------
Goodwill amortization - - 29.3 0.3 (100.0) - - - - - -
Fixed asset adjustment - - - - - - - - - - -
-------------------------------- -------------------------------------- ---------------- --------------- ---------------
Operating income 2,736.8 21.2 2,171.8 24.4 26.0 2,571.0 25.8 39.3 8.0 52.2 10.1
-------------------------------- -------------------------------------- ---------------- --------------- ---------------
Interest
expense 466.6 160.2 191.3
Interest
income 121.7 121.6 0.1
Interest
expense, net 344.8 2.7 38.5 0.4 795.7
Foreign
exchange loss
(gain) 936.7 7.2 (215.5) (2.4)(534.7)
Loss (gain) on
monetary
position 2.8 0.0 (455.2) (5.1)(100.6)
-------------------------------- --------------------------------------
Integral cost of financing 1,284.3 9.9 (632.2) (7.1)(303.1)
Other (income) expenses, net 99.5 0.8 64.3 0.7 54.7
-------------------------------- --------------------------------------
Income before taxes 1,353.0 10.5 2,739.7 30.8 (50.6)
Taxes 521.8 4.0 1,118.8 12.6 (53.4)
-------------------------------- --------------------------------------
Consolidated net income 831.2 6.4 1,620.9 18.2 (48.7)
-------------------------------- --------------------------------------
Majority net income 831.2 6.4 1,620.9 18.2 (48.7)
-------------------------------- -------------------------------------- ---------------- --------------- ---------------
Non-cash items (3) 650.5 5.0 538.8 6.0 20.7 417.0 4.2 43.2 8.8 52.7 10.2
-------------------------------- -------------------------------------- ---------------- --------------- ---------------
(1) Includes information for the six months of our original territories and two
months of our new territories acquired from Panamco
(2) Except volume and average price per unit case figures.
(3) Depreciation, amortization and other non-cash items (including returnable
bottle breakage expenses).
SELECTED INFORMATION
For the three months ended June 30, 2003
Expressed in million Mexican pesos as of June 30, 2003
-------------------- --------------------------
2Q 2002 2Q 2002
---------------------------------- --------------------------------------
Capex 289.4 Capex 431.0
Depreciation 160.1 Depreciation 236.9
Amortization & Amortization
Others 126.0 & Others 201.9
---------------------------------- --------------------------------------
VOLUME (MUC)
Expressed in million unit cases
---------------------------------------------- -------------------------------------------
2Q 2002 2Q 2003
---------------------------------------------- -------------------------------------------
Colas Flavors Water Beer Others Total Colas Flavors Water Beer Others Total
-------------------------------------------------------------- -------------------------------------------
Mexico (1) 157.9 43.7 59.6 0.0 5.2 266.4 159.0 49.4 63.1 0.0 1.6 273.1
Central America 17.2 5.9 1.1 0.0 0.6 24.8 18.4 6.4 0.6 0.0 0.9 26.3
Colombia 25.5 9.1 7.6 0.0 0.1 42.3 25.2 9.1 6.4 0.0 0.0 40.7
Venezuela 18.9 13.9 4.4 0.0 2.3 39.5 21.6 11.1 3.0 0.0 2.0 37.7
Brazil 34.6 19.7 3.5 13.4 0.3 71.5 30.3 13.6 2.2 10.4 0.3 56.8
Argentina 15.5 7.5 0.3 0.0 0.0 23.3 19.7 7.1 0.3 0.0 0.0 27.1
-------------------------------------------------------------- -------------------------------------------
Total 269.6 99.8 76.5 13.4 8.5 467.8 274.2 96.7 75.6 10.4 4.8 461.7
-------------------------------------------------------------- -------------------------------------------
(1) Water volume in 2Q 2003, includes 3.2 MUC of Ciel 5.0 Lt presentation
PACKAGE MIX BY PRESENTATION
Expressed as a Percentage of Total Volume
---------------------------------------- ---------------------------------------
2Q 2002 2Q 2003
---------------------------------------- ---------------------------------------
Ret Non-Ret Fountain Jug Ret Non-Ret Fountain Jug
------------------------------------------------------ ---------------------------------------
Mexico 27.6 52.8 1.3 18.3 27.5 54.0 1.2 17.3
Central
America 53.5 42.8 3.7 - 50.4 44.4 5.2 -
Colombia 56.3 32.5 2.9 8.3 54.3 35.6 3.0 7.1
Venezuela 38.3 52.0 3.0 6.7 36.0 57.4 2.6 4.0
Brazil 13.1 83.2 3.7 - 13.0 82.9 4.1 -
Argentina 7.2 86.8 6.0 - 24.4 71.2 4.4 -
------------------------------------------------------ ---------------------------------------
SELECTED INFORMATION
For the six months ended June 30, 2003
Expressed in million Mexican pesos as of June 30, 2003
--------------------- ------------------------
1H 2002 1H 2002
---------------------------------- ------------------------------------
Capex 521.5 Capex 779.8
Depreciation 305.3 Depreciation 356.3
Amortization Amortization &
& Others 233.5 Others 294.2
---------------------------------- ------------------------------------
VOLUME (MUC)
Expressed in million unit cases
---------------------------------------------- ---------------------------------------------------
1H 2002 1H 2003
---------------------------------------------- ---------------------------------------------------
Colas Flavors Water Beer Others Total Colas Flavors Water Beer Others Total
----------------------------------------------------------- ---------------------------------------------------
Mexico (1) 293.6 80.9 104.5 0.0 6.4 485.4 292.4 92.7 113.3 0.0 3.0 501.4
Central
America 33.5 11.5 2.2 0.0 1.0 48.2 34.9 12.7 1.2 0.0 1.8 50.6
Colombia 52.2 19.3 16.4 0.0 0.4 88.3 52.2 18.7 13.8 0.0 0.0 84.7
Venezuela 38.5 28.3 8.9 0.0 4.7 80.4 38.1 19.1 5.3 0.0 3.4 65.9
Brazil 71.2 42.6 8.2 27.6 0.6 150.2 67.5 32.1 5.2 22.1 0.8 127.7
Argentina 34.1 18.0 0.5 0.0 0.2 52.8 41.7 16.0 0.6 0.0 0.0 58.3
----------------------------------------------------------- ---------------------------------------------------
Total 523.1 200.6 140.7 27.6 13.3 905.3 526.8 191.3 139.4 22.1 9.0 888.6
----------------------------------------------------------- ---------------------------------------------------
(1) Water volume in 1H 2003, includes 6.2 MUC of Ciel 5.0 Lt presentation
PACKAGE MIX BY PRESENTATION
Expressed as a Percentage of Total Volume
---------------------------------------- ------------------------------------------
1H 2002 1H 2003
---------------------------------------- ------------------------------------------
Ret Non-Ret Fountain Jug Ret Non-Ret Fountain Jug
----------------------------------------------------- ------------------------------------------
Mexico 28.4 52.5 1.3 17.8 27.3 54.4 1.3 17.0
Central
America 53.1 43.1 3.8 - 50.4 44.1 5.5 -
Colombia 56.1 32.6 2.9 8.4 53.4 36.5 2.7 7.4
Venezuela 40.5 49.9 3.1 6.5 34.8 59.0 2.6 3.6
Brazil 12.9 83.7 3.4 - 11.8 84.6 3.6 -
Argentina 4.7 90.2 5.1 - 23.7 72.2 4.1 -
----------------------------------------------------- ------------------------------------------
June 2003
Macroeconomic Information
----------------------------- ------------------------
Inflation Foreing Exchange Rate(1)
LTM YTD 2Q (Per US Dollar)
----------------------------- ------------------------
---------------------------------- ----------------------------- ------------------------
Mexico 4.27% 1.25% -0.07% 10.4410
Colombia 7.22% 5.01% 1.59% 2,817.3200
Venezuela 37.67% 18.35% 8.20% 1,853.0000
Brazil 19.05% 7.25% 1.77% 2.8720
Argentina 9.76% 1.80% -0.30% 2.8000
---------------------------------- ----------------------------- ------------------------
(1) Figures as of June 30, 2003
CONTACT: Fomento Economico Mexicano, S.A. de C.V.
Juan Fonseca / (52) 81 83 28 62 45
juan.fonseca@femsa.com.mx
or
Alan Alanis / (52) 81 83 28 62 11
alan.alanis@femsa.com.mx
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: July 28, 2003