Audited Financial Results for the twelve months ended December 31, 2020 compared to the twelve months ended December 31, 2019.
Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) is a Mexican holding company. Set forth below is certain audited financial information for FEMSA and its subsidiaries (the “Company” or “FEMSA Consolidated”) (NYSE: FMX; BMV: FEMSA UBD, FEMSA BD). The principal activities of the Company are grouped mainly under the following subholding companies (the “Subholding Companies”): Coca-Cola FEMSA, S.A.B de C.V. (“Coca-Cola FEMSA” or “KOF”), (NYSE: KOF, BMV: KOFL) which engages in the production, distribution and marketing of beverages, and FEMSA Comercio, S.A. de C.V. (“FEMSA Comercio”), including its Proximity Division operating OXXO, a small-format store chain, a Health Division, which includes all drugstores and related operations, and a Fuel Division, which operates the OXXO GAS chain of retail service stations. Additionally, through its Strategic Businesses unit, it provides logistics, point-of-sale refrigeration solutions and plastics solutions to FEMSA’s business units and third-party clients. FEMSA also participates in the specialized distribution industry in the United States.
The consolidated financial information included in this annual report was prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
The 2020 and 2019 results are stated in nominal Mexican pesos (“pesos” or “Ps.”). Translations of pesos into US dollars (“US$”) are included solely for the convenience of the reader and are determined using the noon buying rate for pesos as published by the U.S. Federal Reserve Board in its H.10 Weekly Release of Foreign Exchange Rates as of December 31, 2020, which was 19.8920 pesos per US dollar. This report may contain certain forward-looking statements concerning Company’s future performance that should be considered good faith estimates made by the Company. These forward-looking statements reflect management expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which could materially impact the Company’s actual performance.
2020 amounts in millions of Mexican pesos
|FEMSA Comercio – Proximity Division||181,277||(1.9%)||74,296||(1.1%)|
|FEMSA Comercio – Health Division||65,172||10.6%||19,575||10.9%|
|FEMSA Comercio – Fuel Division||34,292||(28.3%)||4,300||(9.9%)|
FEMSA’s consolidated total revenues decreased 2.7% to Ps. 492,966 million in 2020 compared to Ps. 506,711 million in 2019. Coca-Cola FEMSA’s total revenues decreased 5.6% to Ps. 183,615 million, driven mainly by unfavorable price-mix and currency translation effects resulting from the depreciation of all of Coca-Cola FEMSA’s operating currencies in South America into Mexican Pesos, mainly driven by a 14.5% unfavorable translation effect from the Brazilian Real. This figure includes an extraordinary income related to an entitlement to reclaim tax payments in Brazil, recognized in the third quarter. FEMSA Comercio – Proximity Division’s revenues decreased 1.9% to Ps. 181,277 million, driven by an average decrease of 5.4% in same-store sales reflecting reduced customer mobility coupled with operating restrictions driven by the COVID-19 pandemic. FEMSA Comercio – Health Division’s revenues increased 10.6% to PS. 65,172 million, driven by an average increase of 1.4% in same-store sales, and the addition of 207 net new stores, partially offset by strict mobility restrictions across our South American operations and a negative currency translation effect related to the depreciation of the Chilean and Colombian pesos compared to the Mexican peso. FEMSA Comercio – Fuel Division revenues decreased 28.3% to Ps. 34,292 million, driven by a 29.2% decrease in same-station sales, reflecting reduced mobility in connection to the COVID-19 pandemic.
Consolidated gross profit decreased 1.0% to Ps. 189,653 million in 2020 compared to Ps. 191,481 million in 2019. Gross margin increased 70 basis points to 38.5% of total revenues compared to 2019, reflecting gross margin expansion across all our business units.
Consolidated operating expenses increased 2.6% to Ps. 148,150 million in 2020 compared to Ps. 144,329 million in 2019. As a percentage of total revenues, consolidated operating expenses increased from 28.5% in 2019 to 30.1% in 2020.
Consolidated administrative expenses increased 15.3% to Ps. 22,988 million in 2020 compared to Ps. 19,930 million in 2019. As a percentage of total revenues, consolidated administrative expenses increased 80 basis points, from 3.9% in 2019 to 4.7% in 2020.
Consolidated selling expenses increased 1.3% to Ps. 123,405 million in 2020 as compared to Ps. 121,871 million in 2019. As a percentage of total revenues, selling expenses increased 90 basis points, from 24.1% in 2019 to 25.0% in 2020.
Consolidated income from operations decreased 12.0% to Ps. 41,503 million in 2020 as compared to Ps. 47,152 million in 2019. As a percentage of total revenues, operating margin decreased 90 basis points, from 9.3% in 2019 to 8.4% in 2020 reflecting margin contraction at FEMSA Comercio´s Proximity and Fuel Divisions reflecting the impact of the COVID-19 pandemic on their operating leverage, partially offset by an operating margin expansion at Coca-Cola FEMSA and FEMSA Comercio´s Health Division, mainly reflecting resilient consumer demand and strict cost and expense discipline across their territories.
Some of our subsidiaries pay management fees to us in consideration for corporate services we provide to them. These fees are recorded as administrative expenses in the respective business segments. Our subsidiaries’ payments of management fees are eliminated in consolidation and, therefore, have no effect on our consolidated operating expenses.
Net financing expenses increased to Ps. 14,911 million from Ps. 13,492 million in 2019, reflecting higher interest expense, partially offset by a foreign exchange gain related to the effect of FEMSA’s US Dollar-denominated cash position, as impacted by the depreciation of the Mexican peso during 2020.
Income before income taxes and share of the profit in associate results decreased 41.0% to Ps. 18,936 million in 2020 compared with Ps. 32,087 million in 2019, reflecting a decrease in our income from operations, higher other non-operating expenses and an increase in net financing expenses described above.
Our accounting provision for income taxes in 2020 was Ps. 14,819 million, as compared to Ps. 10,476 million in 2019, resulting in an effective tax rate of 78.3% in 2020, as compared to 32.6% in 2019 reflecting lower income before income taxes and share of the profit in associate results described above and the extraordinary tax payment agreed with the Mexican tax authority during the second quarter.
Consolidated net income was Ps. 3,756 million in 2020 compared to Ps. 28,048 million in 2019, reflecting i) lower income from operations; ii) higher taxes and other non-operating expenses reflecting the extraordinary tax payment of Ps. 8,754 million agreed with the Mexican tax authority during the second quarter; iii) impairments including for certain assets at Coca-Cola FEMSA and the closure of our Specialty’s Café and Bakery operation also during the second quarter; iv) higher interest expenses; and v) a negative impact due to FEMSA’s participation in Heineken’s results. These were partially offset by a non-cash foreign exchange gain related to FEMSA’s U.S. dollar-denominated cash position as impacted by the depreciation of the Mexican peso.
Controlling interest loss amounted to Ps. 1,930 million in 2020 compared to a Ps. 20,699 gain in 2019. Controlling interest loss in 2020 per FEMSA Unit1 was Ps. 0.54 (US$ 0.27 per ADS).
1. FEMSA Units consist of FEMSA BD Units and FEMSA B Units. Each FEMSA BD Unit is comprised of one Series B Share, two Series D-B Shares and two Series D-L Shares. Each FEMSA B Unit is comprised of five Series B Shares. The number of FEMSA Units outstanding as of December 31, 2020 was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided by 5.
Coca-Cola FEMSA total revenues decreased 5.6% to Ps. 183,615 million in 2020, compared to Ps. 194,472 million in 2019. Total revenues were impacted mainly by unfavorable price-mix and currency translation effects resulting from the depreciation of all Coca-Cola FEMSA’s operating currencies as compared to the Mexican Peso, mainly driven by a 14.5% unfavorable translation effect from the Brazilian Real. This figure includes extraordinary other operating income related to an entitlement to reclaim tax payments in Brazil recognized in the third quarter. These factors were partially offset by pricing and revenue management initiatives.
Coca-Cola FEMSA gross profit decreased 5.4% to Ps. 82,811 million in 2020, compared to Ps. 87,508 million in 2019, with a gross margin expansion of 10 basis points. A more favorable raw material environment, lower PET prices, revenue management initiatives, and favorable currency hedging strategies were partially offset by: i) an unfavorable price-mix effect; ii) higher concentrate costs in Brazil, related to the reduction of tax credits on concentrate purchased from the Manaus Free Trade Zone; iii) higher concentrate costs in Mexico; iv) and the depreciation in the average exchange rate of most of Coca-Cola FEMSA’s operating currencies as applied to our U.S. dollar-denominated raw material costs. Gross margin reached 45.1% in 2020.
The components of cost of goods sold include raw materials (principally concentrate, sweeteners and packaging materials), depreciation costs attributable to our production facilities, wages and other employment costs associated with labor force employed at our production facilities and certain overhead costs. Concentrate prices are determined as a percentage of the retail price of our products in the local currency, net of applicable taxes. Packaging materials, mainly PET and aluminum, and HFCS, used as a sweetener in some countries, are denominated in U.S. dollars.
Operating expenses decreased 7.3% to Ps. 57,568 million in 2020, compared to Ps. 62,085 million in 2019.
Administrative expenses decreased 6.4% to Ps. 7,891 million in 2020, compared to Ps. 8,427 million in 2019. Selling expenses decreased 6.8% to Ps. 48,554 million in 2020 compared with Ps. 52,110 million in 2019.
Income from operations decreased 0.7% to Ps. 25,243 million in 2020 compared to Ps. 25,423 million in 2019.
FEMSA Comercio – Proximity Division total revenues decreased 1.9% to Ps. 181,277 million in 2020 compared to Ps. 184,810 million in 2019, reflecting an average decrease in same-store sales of 5.4%. As of December 31, 2020, there were a total of 19,566 OXXO stores. As referenced above, OXXO same-store sales decreased an average of 5.4% compared to 2019, driven by a 16.8% decrease in store traffic, partially offset by a 13.7% increase in average customer ticket.
Cost of goods sold decreased 2.5% to Ps. 106,981 million in 2020, compared to Ps. 109,711 million in 2019. Gross margin increased 40 basis points to reach 41.0% of total revenues. This increase reflects the sustained growth of the services category, including income from financial services and commercial income activity. As a result, gross profit decreased 1.1% to Ps. 74,296 million in 2020 compared with 2019.
Operating expenses increased 8.3% to Ps. 62,276 million in 2020 compared to Ps. 57,527 million in 2019. The increase in operating expenses was driven by: i) our continuing initiative to strengthen our compensation structure of key in-store personnel in a tight labor market, including the gradual shift from commission-based store teams to employee-based teams; and ii) higher expenses related to IT programs and infrastructure.
Administrative expenses increased 24.1% to Ps. 5,696 million in 2020, compared to Ps. 4,590 million in 2019; as a percentage of sales, they increased to 3.1% in 2020, from 2.5% in 2019.
Selling expenses increased 6.6% to Ps. 56,030 million in 2020 compared with Ps. 52,545 million in 2019; as a percentage of sales they reached 31.0%.
Income from operations decreased 31.6% to Ps. 12,020 million in 2020 compared to Ps. 17,572 million in 2019, resulting in an operating margin contraction of 290 basis points to reach 6.6% as a percentage of total revenues for the year, compared with 9.5% in 2019, mainly reflecting operating deleverage, as our largely fixed cost structure base continues to face lower revenues coupled with higher operating expenses as described above.
FEMSA Comercio – Health Division total revenues increased 10.6% to Ps. 65,172 million compared to Ps. 58,922 million in 2019, mainly driven by a same-store sale increase of 1.4%, reflecting positive trends in Mexico. This was partially offset by strict mobility restrictions across our South American operations and a negative currency translation effect related to the depreciation of the Chilean and Colombian peso compared to the Mexican Peso. As of December 31, 2020, there were a total of 3,368 drugstores in Mexico, Chile, Colombia and Ecuador. On an organic basis2, total revenues grew 3.1%.
Cost of goods sold increased 10.5% to Ps. 45,597 million in 2020, compared with Ps. 41,277 million in 2019. Gross margin increased 10 basis points to reach 30.0% of total revenues. This was mainly driven by; i) positive sales mix effect driven by consumer behavior shifts in connection to the strict mobility restrictions in our operations in South America; and ii) more effective collaboration with key supplier partners across our operations. Gross profit increased 10.9% to Ps. 19,575 million in 2020 compared with 2019.
Operating expenses increased 10.1% to Ps. 16,919 million in 2020 compared with Ps. 15,360 million in 2019. This increase was driven by the organic growth in Mexico and South America, partially offset by cost efficiencies and tight expense control throughout our territories.
Administrative expenses increased 22.3% to Ps. 3,314 million in 2020, compared with Ps. 2,709 million in 2019; as a percentage of sales, they reached 5.1% in 2020. Selling expenses increased 8.7% to Ps. 13,540 million in 2020 compared with Ps. 12,462 million in 2019; as a percentage of sales, they reached 20.7% in 2020.
Income from operations increased 16.2% to Ps. 2,656 million in 2020 compared with Ps. 2,285 million in 2019, resulting in an operating margin expansion of 20 basis points to 4.1% as a percentage of total revenues for the year, compared with 3.9% in 2019, which reflects higher operating leverage. On an organic3 basis, income from operations increased 10.7%.
2. Excludes the effects of significant mergers and acquisitions in the last twelve months.
3. Excludes the effects of significant mergers and acquisitions in the last twelve months.
FEMSA Comercio – Fuel Division total revenues decreased 28.3% to Ps. 34,292 million in 2020 compared to Ps. 47,852 in 2019, reflecting a 29.2% average decrease in same-station sales. As of December 31, 2020, there were a total of 558 OXXO GAS service stations. As referenced above, same-station sales decreased an average of 29.2% compared to 2019, as the average volume decreased 24.3% and the average price per liter decreased by 6.6%, reflecting reduced mobility in connection to the COVID-19 pandemic.
Cost of goods sold decreased 30.4% to Ps. 29,992 million in 2020, compared with Ps. 43,077 million in 2019. Gross margin increased 250 basis points to reach 12.5% of total revenues. This increase reflects improved supply terms. Gross profit decreased 9.9% to Ps. 4,300 million in 2020 compared with 2019.
Operating expenses decreased 2.9% to Ps. 3,487 million in 2020 compared with Ps. 3,591 million in 2019. The decrease in operating expenses reflects tight expense control and increased expense efficiencies.
Administrative expenses increased 17.2% to Ps. 252 million in 2020, compared with Ps. 215 million in 2019; as a percentage of sales, they increased 30 basis points to 0.7% in 2020. Selling expenses decreased 1.7% to Ps. 3,226 million in 2020 compared with Ps. 3,281 million in 2019; as a percentage of sales, they increased 250 basis points to 9.4% in 2020.
Income from operations decreased to Ps. 813 million in 2020 compared with Ps. 1,184 million in 2019, resulting in an operating margin contraction of 10 basis points to 2.4% as a percentage of total revenues for the year, compared with 2.5% in 2019.
This decrease reflects lower operating leverage driven by the decrease in sales described above, coupled with higher administrative expenses.
Key Events during 2020
The following text reproduce our press releases as they were published.
FEMSA Announces Successful Issuance in the U.S. Bond Market
On January 16, 2020, FEMSA announced the placement of a U.S.-denominated SEC-registered offering of Senior Unsecured Notes in the international capital markets.
FEMSA successfully issued USD $1,500 million in 30-year senior unsecured notes. The notes will bear interest at an annual rate of 130 basis points over the relevant benchmark, for a yield of 3.608%.
This issuance received credit ratings of A- from Standard & Poor’s and A from Fitch Ratings.
The proceeds from this issuance will be used for general corporate purposes, improving FEMSA’s cost of debt. FEMSA has also increased its financial flexibility under extremely favorable conditions in order to continue to advance its long-term growth strategy.
Coca-Cola FEMSA Announces the Closing of its Senior Notes due 2030 and the Repurchase of its Senior Notes Due 2023
On January 23, 2020, Coca-Cola FEMSA announced the closing of the public offering of US$1.25 billion principal amount of senior notes due 2030 (the “2030 Notes”) published on January 9, 2020, as well as its intention to use the net proceeds from the sale of the 2030 Notes to repurchase and fully redeem its 3.875% senior notes due 2023 (the “2023 Notes”) and for general corporate purposes. On January 22, 2020 the Company closed the offering and used the proceeds from the sale of the 2030 Notes to partially repurchase the 2023 Notes through the initial settlement of a tender offer.
On January 27, 2020, the Company redeemed 100% of the remaining Notes outstanding, in a principal amount of US$398,208,000.00. Notices of redemption were sent to all currently registered holders of the Notes by the trustee, The Bank of New York Mellon, on January 22, 2020.
Coca-Cola FEMSA announces placement of a Ps. 4,727 million bond in Mexican Market
On February 6, 2020, Coca-Cola FEMSA announced the successful placement of two tranches of Mexican peso denominated bonds or certificados bursátiles in the Mexican market. The Company placed certificados bursátiles for an aggregate amount of Ps. 3,000 million for 8 years bearing an annual fixed interest rate of 7.35%, and certificados bursátiles for an aggregate amount of Ps. 1,727 million for 5.5 years bearing a variable interest rate of TIIE +0.08%.
The certificados bursátiles received credit ratings of AAA(mex) from Fitch México, S.A. de C.V. and mxAAA from S&P Global Ratings, S.A. de C.V.
The Company will use the net proceeds from the sale of certificados bursátiles for general corporate purposes. As of today, no specific or additional corporate purpose has been defined.
The transaction received broad participation from investors, and was over-subscribed almost four times, confirming investor’s trust in Coca-Cola FEMSA’s financial discipline and strong credit profile.
FEMSA Announces Successful Re-tap to its Senior Unsecured Notes due 2050
On February 12, 2020, FEMSA announced the successful placement of a US$300 million re-tap to its US-denominated SEC-registered Senior Unsecured Notes due 2050 (“New Notes”), representing an additional issuance to FEMSA’s outstanding US$1,500 million 3.500% Senior Unsecured Notes due 2050 issued on January 16, 2020 (“Initial Notes”). The New Notes will be treated as a single class with the Initial Notes, raising the total outstanding balance to US $1,800 million. The New Notes were priced at 101.433 for an implied yield to maturity of 3.423%.
The proceeds from this issuance will be used for general corporate purposes, further improving FEMSA’s cost of debt.
FEMSA enters the Jan-San and Specialized Distribution Industry in the United States
On March 9, 2020, FEMSA announced that it had entered into definitive agreements with the shareholders of WAXIE Sanitary Supply (“WAXIE”) and North American Corporation (“North American”) to form a new platform within the Jan-San, Packaging and Specialized distribution industry in the United States. The platform will bring together two market leaders in this field: WAXIE And North American, with FEMSA acquiring a majority controlling interest in the combined company. Current shareholders of WAXIE and North American will remain investors. Each company maintained their current management teams, with Charles Wax of WAXIE and John Miller of North American, members of the founding families of their respective companies and current CEOs, now serving as co-CEOs of the new enterprise. FEMSA’s investment in this venture is US$900 million.
About WAXIE and North American
Founded 75 and 100 years ago respectively and family-owned and managed, WAXIE and North American are leading distributors of consumables in the janitorial, sanitary supply and packaging industry, with complementary market footprints and combined annual revenues of more than US$900 million. Together they will have significant scale, operating a network of 26 distribution centers across the country and serving more than 27,000 customers in various industries such as building service contractors, education, government, retail and hospitality. WAXIE is headquartered in San Diego, California, and North American is headquartered in Chicago, Illinois.
This transaction is consistent with FEMSA’s capability set and fits well with our strategic intent of investing in adjacent businesses that can leverage those capabilities across different markets, while providing an opportunity for attractive growth and risk-adjusted returns. FEMSA has developed expertise in the organization and management of supply chains and distribution systems, serving very large numbers of business and retail customers through millions of interactions, in different industries.
The transaction was successfully closed on May 15,2020.
FEMSA reaches agreement with the Mexican tax authority to resolve interpretative differences and make payment
On May 29, 2020, FEMSA announced that it reached an agreement with the Mexican tax authority (the Servicio de Administración Tributaria), to resolve interpretative differences over taxes paid outside of Mexico, without judicial action. Under the agreed terms, FEMSA will pay the amount of Ps. 8,790 million, that will be recognized in FEMSA’s financial statements during the second quarter of 2020.
FEMSA Announces Successful Re-tap to its Senior Unsecured Notes due 2050
On June 25, 2020, FEMSA announced the successful placement of a US$700 million re-tap to its US-denominated SEC-registered Senior Unsecured Notes due 2050 (“New Notes”), representing an additional issuance to FEMSA’s outstanding US$1,500 million 3.500% Senior Unsecured Notes due 2050 issued on January 16, 2020 (“Initial Notes”), and the outstanding US$300 million re-tap notes issued on February 12, 2020 (“Re-Tap Notes”). The New Notes will be treated as a single class with the Initial Notes and Re-Tap Notes, raising the total outstanding balance to US $2,500 million. The New Notes were priced at 102.620 for an implied yield to maturity of 3.358%.
The proceeds from this issuance will be used for general corporate purposes, further improving FEMSA’s cost of debt.
Coca-Cola FEMSA prices US$ 705 million green bond, the largest ever for a Latin American corporation
On August 26, 2020, Coca-Cola FEMSA announced the pricing of its first ever green bond in the international capital markets. The successful public offering of US$ 705 million principal amount of notes due 2032, priced at US Treasury + 120 basis points and a coupon of 1.850%. The transaction received broad participation from investment grade dedicated investors, confirming Coca-Cola FEMSA’s financial discipline, strong credit profile and commitment with sustainability. The green bond will help the Company achieve its environmental sustainability objectives and contribute to the United Nations Sustainable Development Goals.
“This green bond is consistent with our goal of ‘refreshing our consumers, anytime, anywhere, in a sustainable way’ as we plan to continue to generate economic value and a positive contribution to society and the environment. We expect this transaction will allow us to support the achievement of our environmental targets and contribute to the United Nations Sustainable Development Goals” said John Santa Maria Otazua, Coca‑Cola FEMSA’s Chief Executive Officer.
The Company intends to allocate an amount equal to the net proceeds from this offering to finance or refinance eligible green projects, including in the following three areas: • Climate action: On June 11, 2020, Coca-Cola FEMSA became the first Mexican corporation to have carbon footprint reduction goals approved by the Science Based Targets Initiative (SBTi), thereby adhering to the goal framework set out by the Paris Agreement to avoid dangerous climate change by keeping global temperature rise well-below 2°C above pre-industrial levels.
The Company plans to achieve its 2030 commitment with a pipeline of specific projects that expect to allow it to reach its plan of decreasing greenhouse gas emissions by 28% across its value chain, in comparison to its 2015 baseline.
Water stewardship: The Company continuously seeks for opportunities to make a more efficient use of water and protect water sources. With a benchmark water use ratio of 1.52 liters of water per liter of beverage produced in 2019, the Company is committed to return the same amount of water that is used in its beverage production through initiatives like the Latin American Water Funds Alliance and local partnerships.
Circular economy: As part of the “World Without Waste” initiative, Coca-Cola FEMSA has a commitment to use 50% recycled resin in its PET bottles and to collect 100% of the beverage packages placed in the market by 2030. Consistent with the Ellen McArthur Foundation’s New Plastics Economy Global Commitment, the Company is working on closing bottle-to-bottle loops by developing its own infrastructure and sharing infrastructure with other stakeholders through partnerships. Coca-Cola FEMSA is currently on track to achieve its commitments with a 50% collection rate in its main markets and an average of 23.7% use of recycled resin in PET bottles.
As part of the green bond offering, the Company published its Green Bond Framework, which is aligned with the four core components of the Green Bond Principles 2018 as administered by the International Capital Market Association. The Company obtained a Second-Party Opinion from Sustainalytics in accordance with industry best practices.
The closing of the transaction and issuance of the notes was successfully concluded on September 1, 2020.
FEMSA Comercio announces agreement with Chilean retailer SMU to acquire OK Market stores
On October 8, 2020, FEMSA announced that its subsidiary, FEMSA Comercio has reached an agreement with SMU, S.A, a leading Chilean retailer, to acquire its OK Market store chain for a total amount of 1,515,965 Unidades de Fomento1 or approximately CLP $43,500 million. The transaction is subject to final confirmatory due diligence, the signing of definitive agreements and customary regulatory and anti-trust approvals and is expected to close during 2021.
About OK Market
OK Market is a leading small-format proximity store chain in Chile with more than 120 locations. During 2019, it recorded total sales of more than CLP $50,000 million.
Daniel Rodríguez Cofre, FEMSA Comercio’s CEO, commented:
“In recent years, we have made great progress developing the value proposition and footprint of our OXXO proximity stores in Chile. The transaction announced today will allow us to improve the way we serve this key market and our Chilean customers.”
1 Unidades de Fomento: Chilean inflationary variable accounting unit. 1 Unidad de Fomento = 28,715.50 CLP as of October 08 2020.
FEMSA increases its specialized distribution footprint in the United States
On December 16, 2020, FEMSA announced that it had reached agreements to acquire two independent specialized distribution businesses in the United States: Southeastern Paper Group, Inc., based in Spartanburg, South Carolina and Southwest Paper Company, Inc., (dba “SWPlus”) based in Wichita, Kansas. Combined revenues of the acquired businesses for the last twelve months as of September 2020, were approximately US$ 380 million.
These acquisitions fit well with FEMSA’s strategy of creating a national distribution platform, building on FEMSA’s capabilities and the foundation formed by the merger of WAXIE Sanitary Supply and North American Corporation earlier in the year.
These transactions were successfully closed during December 2020.