Coca-Cola FEMSA (KOF) Q3 2024 earnings summary

Executive summary

• Achieved double-digit year-over-year growth in revenues and operating income, with Q3 2024 revenue up 10.7%, operating income up 13.9%, and net income up 8.9%.

• Digital transformation advanced, with Juntos+ reaching 1.2 million active users and 56% of the customer base as digital buyers; Juntos+ Advisor salesforce automation pilot launched in Brazil.

• Loyalty program Premia Juntos+ enrollment rose 21% quarter-over-quarter to 920,000 clients.

• Strategic focus on removing infrastructure bottlenecks, increasing CapEx, and optimizing bottling and warehouse operations.

• Supported communities affected by Hurricane John in Mexico and resumed operations at Porto Alegre distribution center in Brazil.

Financial highlights

• Q3 2024 revenues: MXN 69.6 billion (+10.7% YoY); gross profit: MXN 32.1 billion (+11.3% YoY); operating income: MXN 9.6 billion (+13.9% YoY); net income: MXN 5.9 billion (+8.9% YoY).

• Consolidated volumes grew 0.8% to 1.04 billion unit cases, led by Brazil and Central America, offsetting declines in Mexico, Colombia, and Uruguay.

• Gross margin expanded 20 bps to 46.1%; operating margin up 30 bps to 13.8%.

• Adjusted EBITDA for Q3: MXN 14 billion (+18.4% YoY); margin expanded 130 bps to 20.1%.

• EPS for Q3: MXN 0.35; for nine months: MXN 0.98.

Outlook and guidance

• Confident in medium-term growth in Mexico, supported by infrastructure projects, social programs, and nearshoring trends.

• Expect to expand manufacturing capacity by 4% in 2024 and add four new distribution centers.

• Anticipate full recovery of Porto Alegre plant in Brazil by first half of 2025, which should improve profitability.

• Gradual recovery expected in Argentina, with stable volumes and a focus on affordability.

• Management highlights resilience and ongoing investments in production and distribution capacity to support future growth.