Coca-Cola Femsa Conference Call Highlights

Coca-Cola Femsa FMX reported its third quarter earnings on Wednesday. Shares of the company are down 1%. Below are some key highlights and takeaways from its conference call: • Excluding the recently integrated territories in Brazil, total revenues grew 3%. • Our wide array of returnable presentations, our ability to offer packages at attractive and affordable prices points for our consumers and the strength of brand Coca-Cola continue to generate increased transactions • Consequently, our organic gross margin expanded 90 basis points. • Despite higher labor and freight costs, especially across the South America division, operating expenses remain under control across our operations and have decreased as a percentage of revenues in most of them. • For the quarter, our organic EBITDA margin expanded 150 basis points, highlighting our company's ability to deliver profitable results in challenging conditions. • Our low-calorie sparkling beverage portfolio grew more than 1% driven mainly by Sprite Zero and Sidral Mundet Light, along with Coca-Cola Zero, which grew • 4%, reaffirming its position as an affordable low-calorie value proposition for the consumer. • Our personal water portfolio grew 5% while bulk water grew 1%. Our non-carbonated beverage category contracted 7% during the quarter. • Despite this contraction, it is worth highlighting that Powerade continued its growth. • In August, reached the leading position in this category with more than 49% share. • Our Mexican operations continues to focus on intensifying connection with our consumers through a wide array of portfolio alternatives. • Details on America. Our acceleration plan based on the enhanced execution level increased cooler coverage as the introduction of magic price points continue to give positive results. • During the third quarter, our volume grew more than 9% in the region. • In terms of transactions, our volume grew to 12% this quarter. • Growth was mainly driven by a 10% increase of brand Coca-Cola, coupled with • 30% growth in flavored sparkling beverages and 21% growth in bottled water. • Our non-carbonated beverage portfolio remained flat this quarter. • On a per-country basis, Costa Rica grew more than 3%, Panama more than 5%, and both Nicaragua and Guatemala saw a large volume increase of more than 14%. • For the quarter, revenues in the Mexico and Central America division grew 4%. • In South America, our operations' organic volume increased 1% in the quarter, supported by the continued positive performance of Colombia and sustained growth in Venezuela, which compensated for a flattish Argentina and a volume decline in Brazil. • Including the recently integrated franchises in Brazil, the division volume grew close to 20%. • In Colombia, we continued posting strong volume and transaction growth • In terms of transactions, this quarter, our Colombia franchise grew 15%. • Brand Coca-Cola's volume grew 7%, supported by our magic price point strategy which continues to be very well received by the conscious consumer. • Year-to-date, we have been able to gain almost 4 percentage points of market share in the cola segment. • Our flavored sparkling beverages grew again this quarter, increasing more than 23%, supported by Quatro, Sprite and Kola Romn. • Our non-carbonated beverages grew 33%, mainly driven by growth of Del Valle • Fresh, FUZE Tea and Powerade. • Venezuela, despite a tough economic environment, our volume was up 3%, successfully building on 15% growth in the third quarter of last year. • Moreover, our operation was able to grow transactions by more than 5%. • Volume of brand Cola-Cola grew 18%, compensating for a decline in flavored sparkling beverages as we continue to favor production of the fastest-moving SKUs. • Our non-carbonated beverage category grew 3%, mainly driven by the success of • Powerade.