Fomento Economómico Mexicano概述了到2026年53亿美元的资本回报计划

Earnings Call Insights: Fomento Económico Mexicano, S.A.B. de C.V. (NYSE:FMX) Q4 2024

Management View

• CEO José Antonio Fernández Carbajal highlighted double-digit growth across earnings line items and significant margin expansion for the full year 2024. Key drivers included strong performances at Proximity Americas and Coca-Cola FEMSA, along with advancements in data analytics, segmentation, and revenue management.
• The company announced its plan to deploy $5.3 billion in capital returns over 2025 and 2026, including $3.2 billion in 2025, comprising ordinary and extraordinary dividends and share buybacks.
• Fernández Carbajal reiterated FEMSA’s commitment to achieving a leverage ratio of 2.0x net debt-to-EBITDA by the end of 2026.
• CFO Martin Arias reported Q4 total revenue growth of 12.8% and a 31.5% increase in operating income, driven by strong performance across all business units.

Outlook

• Plans for 2025 include an ordinary dividend of MXN 14.8 billion and additional extraordinary dividends and buybacks totaling MXN 51.2 billion. The company also expects to propose an ordinary dividend for 2026 and at least MXN 26.6 billion in extraordinary capital returns.
• Fernández Carbajal noted that the company remains focused on optimizing its balance sheet, pursuing strategic projects, and delivering shareholder value.

Financial Results

• Q4 2024 net consolidated income increased by 78.3% to nearly MXN 11 billion, driven by non-cash foreign exchange gains and higher net income from discontinued operations.
• Proximity Americas saw same-store sales growth of 3.8% despite a 2.8% decline in traffic, offset by a 6.8% increase in average ticket size.
• Coca-Cola FEMSA recorded a 25% increase in income from operations, supported by disciplined revenue management and CapEx investments.
• The Health division reported a 109.7% increase in operating income, with a 250 basis point improvement in operating margin, reflecting favorable comparisons and provisions adjustments.
• Spin by OXXO platform achieved 8.6 million active users, a 24.9% growth year-over-year, while SPIN Premia loyalty program expanded by 27.5% to 24.6 million users.

Q&A

• Ricardo Alves, Morgan Stanley: Asked about shareholder remuneration and the OXXO store expansion strategy. CFO Martin Arias explained that share repurchases in 2025 would likely follow a mix of local and accelerated share repurchases. Fernández Carbajal highlighted the continued strong marginal returns from new OXXO store openings.
• Lisa Lane, Bank of America: Queried the traffic dynamics and operating margins at Proximity Mexico. Management attributed traffic declines partly to weather and political factors but emphasized ongoing efforts to optimize operations and maintain competitiveness.
• Hector Maya, Scotiabank: Inquired about growth strategy in the U.S. and financial services potential. Fernández Carbajal detailed experiments with new OXXO formats and highlighted plans to apply for a bank license to enhance monetization opportunities.
• Rodrigo Alcantara, UBS: Asked about gross margin trends and profitability in Brazil. Arias noted that commercial income and pricing strategies contributed to gross margin expansion. Management expressed optimism about operational improvements in Brazil.

Sentiment Analysis

• Analysts expressed a positive tone regarding FEMSA’s shareholder returns strategy and growth prospects in key markets like the U.S. and Brazil, but raised concerns about traffic trends in Mexico.
• Management displayed confidence in prepared remarks, emphasizing strong fundamentals and strategic initiatives. However, during Q&A, they acknowledged challenges such as softer consumer demand and traffic declines.
• Compared to the prior quarter, management maintained a consistent tone of optimism while addressing operational challenges with transparency.

Quarter-over-Quarter Comparison

• There was a notable shift in focus toward capital returns in the current quarter, with plans for MXN 107.4 billion in shareholder payouts over 2025-2026.
• Traffic declines in Proximity Americas persisted, but average ticket growth remained strong. Gross margin expansion continued, supported by pricing initiatives and financial services.
• Analysts maintained a cautious tone on traffic declines, compared to a more neutral sentiment in the previous quarter.

Risks and Concerns

• Traffic declines in Proximity Mexico due to weather, political factors, and potential cannibalization from new store openings.
• Challenges in maintaining operating leverage amid labor cost pressures and softer consumer demand.
• Execution risks related to the planned U.S. expansion and the ongoing development of financial services and digital initiatives.

Final Takeaway

FEMSA delivered strong financial results in Q4 2024, with significant revenue growth and margin expansion supported by robust performances in key divisions. The company outlined an ambitious $5.3 billion capital return plan through 2026, signaling confidence in its operational and financial strategies. While challenges persist in traffic trends and macroeconomic pressures, management remains focused on leveraging its scale, enhancing digital capabilities, and driving long-term shareholder value.

Read the full Earnings Call Transcript