Q3 2025 Coca-Cola Femsa SAB de CV Earnings Call Transcript
Key Points
- Coca-Cola Femsa SAB de CV (KOF) reported a 3.3% increase in total revenues for the quarter, reaching 71.9 billion pesos, driven by revenue management initiatives.
- Operating income increased by 6.8% to 10.3 billion pesos, with an operating margin expansion of 50 basis points to 14.3%, attributed to expense efficiencies and an operating foreign exchange gain.
- Coca-Cola Zero showed strong performance, growing 23% year-over-year, and has grown more than 40% compared to 2022, indicating successful product strategies.
- The company is rolling out its digital sales force tool, Juntos Plus Advisor, in Mexico, which has already shown positive impacts in Brazil.
- In South America, particularly Brazil, Coca-Cola Femsa SAB de CV (KOF) achieved a 2.6% volume increase, supported by share gains and the reopening of the Porto Alegre plant.
- Consolidated volume declined by 0.6% to 1.04 billion unit cases, with notable contractions in Mexico and Panama.
- Gross profit increased only by 0.9%, leading to a margin contraction of 100 basis points to 45.1%, due to a non-favorable mix and increased promotional activity.
- The company faces challenges in Mexico with a significant 87% increase in the excise tax on soft drinks, which is expected to impact volume performance in 2026.
- In Mexico, volumes declined by 3.7% due to a soft macroeconomic backdrop, with declines in consumption drivers such as remittances and formal job creation.
- The depreciation of the Argentine peso and unfavorable currency translation effects negatively impacted total revenues.
(audio in progress) Recording a more resilient macro and consumer environment which supported volume performance.
Despite this environment, our consolidated results improved sequentially as we implemented cost control and productivity initiatives.
As we look beyond this year, we will leverage Coca-Cola Femsa's ability to adapt to challenging operating conditions, including the impact of the recent beverage excise tax increase in Mexico.
We're confident that focusing on our sustainable growth model combined with RGM affordability initiatives, short-term productivity and cost control measures, and the revised capital investment level is the best way to navigate these conditions while maximizing value for our stakeholders.
Now, let me expand on our consolidated results for the 3rd quarter.
Our consolidated volume declined 0.6% to reach 1.04 billion unit cases. A sequential improvement versus the second quarter, which is partially explained by a softer comparison based in Mexico than
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