Coca-Cola FEMSA (KOF) Q2 2024 earnings summary

Executive summary

• Consolidated volumes grew 7.5% year-over-year, with double-digit top and bottom-line growth, driven by strong performance in Mexico, Brazil, Guatemala, and Central America South, offsetting declines in Argentina and Uruguay.

• More than half of the customer base are now digital buyers, following the rollout of Juntos+ 4.0 in Mexico and Brazil and its expansion in Guatemala, Panama, and Colombia.

• The company responded swiftly to unprecedented flooding in southern Brazil, ensuring business continuity and community support.

• EPS reached Ps. 0.33 for the quarter.

Financial highlights

• Total revenues increased 13.1% to MXN 69.5 billion in 2Q24; on a currency-neutral basis, revenues rose 17.9%.

• Gross profit rose 17.2% to MXN 32 billion, with gross margin expanding 160 basis points to 46%.

• Operating income increased 13.8% to MXN 9.7 billion, with a 14% operating margin.

• Adjusted EBITDA grew 21.7% to MXN 13.9 billion, with EBITDA margin up 148 basis points to 20%.

• Majority net income increased 13.8% to MXN 5.6 billion, aided by operating income growth and a favorable comprehensive financing result.

Outlook and guidance

• Maintains mid-single-digit volume growth outlook for the full year, with optimism for the second half.

• Margins expected to remain flattish for the year, with potential upside in profitability if favorable trends continue.

• Cost environment expected to be more benign in the second half, especially for sugar.

• Priorities include building on core business growth, advancing Juntos+ platform, and fostering a sustainable future.