HIGHLIGHTS
Monterrey, Mexico, February 27, 2025 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) (NYSE: FMX; BMV: FEMSAUBD, FEMSAUB) announced today its operational and financial results for the fourth quarter and full year of 2024.
- FEMSA: Total Consolidated Revenues grew 12.8% and Income from Operations increased 31.5% compared to 4Q23.
- FEMSA Retail[1]: Proximity Americas total Revenues grew 13.2% and Income from operations increased 18.7% versus 4Q23.
- SPIN: Spin by OXXO had 8.6 million active users[2] representing 24.9% growth compared to 4Q23 while Spin Premia had 24.6 million active loyalty users2 representing 27.5% growth compared to 4Q23, and an average tender[3] of 40.7%.
- COCA-COLA FEMSA: Total Revenues and Income from Operations grew 14.3% and 25.0%, respectively against 4Q23.
José Antonio Fernández Carbajal, FEMSA’s Chief Executive Officer, commented:
“In the fourth quarter FEMSA delivered a strong close to a strong year, with double-digit growth in revenues, gross profit, and income from operations in most of our business units, driven by the strength of our platform and the effort of our teams, while also reflecting foreign exchange tailwinds from our international operations.
The solid trends in the fourth quarter’s top line were complemented by strong margin expansion at our two largest operations, Proximity Americas and Coca-Cola FEMSA, leveraging powerful execution in their core markets. Looking at the full year, margin expansion was achieved not only at Proximity Americas and Coca-Cola FEMSA, but also at Proximity Europe and Fuel.
Beyond our operations, during the year we continued to make progress with the remaining steps of FEMSA Forward, including in the execution of our capital allocation framework. In addition to high levels of capital expenditures as we continued to invest in our organic growth opportunities across business units, during 2024, we returned record amounts of capital through a combination of dividends and share repurchases, a process that we intend to accelerate in 2025 and 2026 as we move to maximize the efficiency of our balance sheet.
Finally, on the governance front, the Corporate Practices and Nominations Committee of FEMSA’s Board of Directors has formally launched the succession process for the CEO position. Please refer to the Recent Developments section of this release for further details.
We begin 2025 facing an increasingly challenging consumer environment in many of our markets, particularly Mexico, but we are confident we have a compelling opportunity set in front of us, a solid strategy to pursue those opportunities, and the best team in the business.”
FEMSA FORWARD UPDATE
Advancing FEMSA Forward:
Update on our capital allocation framework
In line with our FEMSA Forward strategy, on February 15, 2024, we shared FEMSA’s capital allocation framework and plans as approved by our Board of Directors. One year later, we have made important progress executing on these plans and are poised to accelerate the pace during 2025 and 2026.
Investing in our core
In line with our long range plan we expect to continue to deploy capital in our core organic initiatives to reach our original commitment of around of Ps. 50,000 million per year for 2025 and 2026, with close to Ps. 32,000 million a year of that deployed in Mexico, where we are one of the largest employers (over 260,000 employees), and taxpayers, expecting to pay over Ps. 41,000 million in aggregate income taxes for the period between fiscal 2025 and 2026. We are beginning to see the fruits of these investments in the reported figures for 2024 in the form of continued high hit-rate new store growth, merchandising and segmentation initiatives driving margin expansion, investment in production and market assets at KOF, and investments in both analog and digital capabilities throughout our portfolio that have created attractive returns and quick paybacks.
Developing new value capillaries
During 2024, we invested a relatively modest amount of approximately USD$385 million in inorganic initiatives, mostly related to the establishment of a beachhead for our proximity operations in the US. We continue to be on the lookout for opportunities that could generate value or add capabilities across our portfolio, maintaining high thresholds for both strategic fit and financial returns within our defined FEMSA Forward core business verticals, and our leverage objective of 2x Ex-KOF Net Leverage target, as we maximize the efficiency of our balance sheet.
Capital Returns
Having successfully executed the majority of the FEMSA Forward-related divestments, and after accounting for our expected organic and inorganic capital needs, we believe that returning capital to shareholders is a key component of the overall strategy, keeping in mind that all capital allocation actions are guided by the principle of driving intrinsic per share value through both operational and financial decisions.
Return of capital initiatives carried out during 2024
During 2024 we declared ordinary dividends of Ps. 3.6644 per FEMSAUB unit and Ps. 4.3972 per FEMSAUBD unit (Ps. 43.972 per ADS). We also announced extraordinary dividends of Ps. 2.5672 per FEMSAUB unit and Ps. 3.0804 per FEMSAUBD unit (Ps. 30.804 per ADS). Finally, we repurchased 102,201,323 FEMSAUBD units, representing approximately 2.86% of our total outstanding units as of December 31, 2024. These repurchased shares are currently held in our Treasury and will be proposed for cancellation at the Annual Shareholders’ Meeting on April 11th, 2025. On aggregate these actions returned an amount representing approximately 8.1% of FEMSA’s current market capitalization.
Return of capital initiatives proposed for 2025
FEMSA’s Board of Directors has approved to submit to the 2025 Annual Shareholders Meeting the following proposals: i) Increase our ordinary dividends per unit by 4.2% compared to 2024, in line with Mexican inflation, or Ps. 3.8190 per FEMSAUB unit and Ps. 4.5826 per FEMSAUBD unit (Ps. 45.826 per ADS), to be paid in four quarterly installments beginning in April of 2025; ii) pay an additional extraordinary dividend of Ps. 8.4240 per FEMSAUB unit and Ps. 10.1084 per FEMSAUBD unit (Ps. 101.084 per ADS), over and above the approved ordinary dividends, to be disbursed in four quarterly installments on the same dates as the ordinary dividends; and iii) allocate to share repurchases an amount representing approximately 2.9% of FEMSA’s current market capitalization. These actions represent an aggregate amount of approximately 10.4% of FEMSA’s current market capitalization.
Considerations on capital initiatives for 2026
During 2026, assuming no extraordinary circumstances beyond our control, we plan to announce a minimum additional capital return representing approximately 4.2% of FEMSA’s current market capitalization, over and above the approved ordinary dividends for that year. Based on our cash flow generation and planned capital deployment during 2025 and 2026, we would expect to substantially advance towards our objective ex-KOF leverage ratio of 2x, maximizing the efficiency of our balance sheet.
[1] FEMSA Retail: Proximity Americas & Europe, Fuel and FEMSA Health.
[2] Active User for Spin by OXXO: Any user with a balance or that has transacted within the last 56 days.
Active User for Spin Premia: User that has transacted at least once with OXXO Premia within the last 90 days.
[3] Tender: OXXO MXN sales with Spin Premia redemption or accrual / Total OXXO MXN Sales, during the period.
