6-K 1 kofpr3q12_6k.htm EARNINGS RELEASE 3Q12 kofpr3q12_6k.htm - Generated by SEC Publisher for SEC Filing

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of October 2012
Commission File Number 1-12260

 

COCA-COLA FEMSA, S.A.B. de C.V.

(Translation of registrant’s name into English)

United Mexican States

(Jurisdiction of incorporation or organization)

Guillermo González Camarena No. 600
Col. Centro de Ciudad Santa Fé
Delegación Alvaro Obregón
México, D.F. 01210

México

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X   Form 40-F     

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)

Yes    No  X 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)

Yes    No  X 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes    No  X 

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with

Rule 12g3-2(b): 82-__.

 

 

Stock Listing Information

Mexican Stock Exchange
Ticker: KOFL

NYSE (ADR)
Ticker: KOF

Ratio of KOF L to KOF = 10:1



 

For Further Information:

Investor Relations

José Castro
jose.castro@kof.com.mx
(5255) 5081-5120 / 5121

Roland Karig
roland.karig@kof.com.mx
(5255) 5081-5186

Carlos Uribe
carlos.uribe@kof.com.mx
(5255) 5081-5148

Website:
www.coca-colafemsa.com
2012 THIRD-QUARTER AND FIRST NINE-MONTH RESULTS
  Third Quarter      YTD     
  2012  2011  Reported Δ%  Excluding M&A Effects Δ%(5)  2012  2011  Reported Δ% Excluding M&A
Effects Δ%(5)  
Total Revenues  36,193 30,077 20.3% 9.6% 106,202 85,894 23.6% 13.6%
Gross Profit  16,986 13,915 22.1%   48,983 39,497 24.0%  
Operating Income  5,487 4,334 26.6% 18.0% 14,545 12,690 14.6% 7.4%
Net Controlling Interest Income  3,543 2,308 53.5%   8,923 7,364 21.2%  
Operative cash flow(1)  6,990 5,498 27.1% 17.2% 19,012 15,839 20.0% 11.2%
Net Debt (2)  9,449 10,344 -8.7%          
Net Debt / Operative cash flow(3)  0.36 0.44            
Operative cash flow/ Interest Expense, net(3) 18.46 21.31            
Earnings per Share (3)  6.12 5.76            
Capitalization (4)  17.5% 20.5%            

Expressed in millions of Mexican pesos.

(1) Operative cash flow = Operating income + Depreciation + Amortization & Other operative Non-cash Charges.
See reconciliation table on page 8 except for Earnings per Share

(2) Net Debt = Total Debt - Cash

(3) LTM figures

(4) Total debt / (long-term debt + shareholders' equity)

(5) Excluding M&A Effects means, with respect to a year-o ver-year comparison, the increase in a given measure excluding the effects of mergers, acquisitions and divestitures. We believe this measure allows us to provide investors and other market participants with a better representation of the performance o four business. In preparing this measure, management has used its best judgment, estimates and assumptions in order to maintain comparability.

        Reported total revenues reached Ps. 36,193 million in the third quarter of 2012, an increase of 20.3% as compared to the third quarter of 2011, mainly as a result of double-digit revenue growth in both divisions, including the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in our Mexican territories. Excluding the recently merged territories in Mexico, total revenues increased 9.6%.

        Reported consolidated operating income grew 26.6% to Ps. 5,487 million for the third quarter of 2012, driven by double-digit growth in both divisions and the integration of the new territories in Mexico. Our reported operating margin expanded 80 basis points to 15.2% in the third quarter of 2012. Excluding the recently merged territories, operating income grew 18.0%.

        The smooth integration of the recently merged territories in Mexico and the enhancement of the combined operational structure based on our integration plan have allowed us to increase the net synergy target from Ps. 800 million to Ps. 900 million, to be captured at the operative cash flow level as of 2014.

        Reported consolidated net controlling interest income grew 53.5% to Ps. 3,543 million in the third quarter of 2012.

 

Mexico City (October 24, 2012), Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOFL, NYSE: KOF) (“Coca-Cola FEMSA” or the “Company”), the largest franchise bottler in the world, announces results for the third quarter of 2012.

"After facing a very tough commodity and volatile currency environment over the past several quarters, we look forward to a strong close of the year. Among our initiatives, we continue to introduce innovative products and packages, including the Fuze Tea brand, to build an even more robust non-carbonated beverage portfolio. We have rolled out our new commercial model across all of our franchise territories. We also continue to identify additional synergies in our newly merged territories, underscoring the proven capability of our operators to integrate new franchises efficiently and effectively. With our industry's increasing level of sophistication, our company continually develops new skills and abilities to rise to the occasion, transforming challenges into opportunities. Indeed, as we approach the final part of the year, we are confident that our company will continue to work towards meeting the business plan that we established at the beginning of the year, creating value for all of our shareholders," said Carlos Salazar Lomelin, Chief Executive Officer of the Company.

 

 

October 24, 2012    Page 1 
 

CONSOLIDATED RESULTS

Our reported total revenues increased 20.3% to Ps. 36,193 million in the third quarter of 2012, compared to the third quarter of 2011 as a result of double-digit total revenue growth in both divisions, including the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in our Mexican operations(1). Excluding the recently integrated territories in Mexico, total revenues grew 9.6%. On a currency neutral basis and excluding the recently merged territories in Mexico, total revenues grew 13.1%, driven by average price per unit case growth in every territory and volume growth mainly in Mexico, Venezuela, Brazil and Central America.

Reported total sales volume increased 17.6% to reach 759.4 million unit cases in the third quarter of 2012 as compared to the same period in 2011. Excluding the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in Mexico, volumes increased 1.2% to reach 653.6 million unit cases. On the same basis, the still beverage category grew 15.0%, mainly driven by the introduction of the Jugos del Valle line of business in Venezuela and a double-digit volume growth in this category in Mexico and Central America. In addition and excluding the newly merged territories, our sparkling beverage category grew low single-digits and our bottled water portfolio grew 7.4%. These increases compensated for a 2.4% decline in our bulk water business.

Our reported gross profit increased 22.1% to Ps. 16,986 million in the third quarter of 2012, as compared to the third quarter of 2011. Lower PET and sugar prices in most of our territories were partially compensated by the depreciation of the average exchange rate of the Brazilian real(2), the Argentine peso(2) and the Mexican peso(2) as applied to our U.S. dollar-denominated raw material costs. Reported gross margin reached 46.9%, an expansion of 60 basis points as compared to the third quarter of 2011. Excluding the integration of the newly merged territories, gross margin expanded 90 basis points as compared with the third quarter of 2011.

Our reported operating income increased 26.6% to Ps. 5,487 million in the third quarter of 2012, driven by double-digit operating income growth in both divisions, and including the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in Mexico. Our reported operating margin reached 15.2% in the third quarter of 2012, as compared with 14.4% in the same period of 2011, an expansion of 80 basis points. Excluding the integration of the recently merged territories in Mexico, operating income increased 18.0%. On the same basis, operating expenses increased in the third quarter of 2012, mainly as a result of (i) higher labor costs in Venezuela, (ii) higher labor and freight costs in Argentina and Brazil, (iii) additional expenses related to the development of information systems and commercial capabilities in connection with our commercial models and (iv) certain investments related, among others, to the development of new lines of business and categories. Excluding the recently merged territories, operating margin expanded 110 basis points as compared with third quarter of 2011.

Our comprehensive financing result in the third quarter of 2012 recorded an expense of Ps. 20 million as compared to an expense of Ps. 355 million in the same period of 2011. This difference was mainly driven by a foreign exchange gain as a result of the quarterly appreciation(3) of the Mexican peso as applied to a higher US dollar-denominated net debt position.

During the third quarter of 2012, income tax, as a percentage of income before taxes, was 31.8% as compared to 35.1% in the same period of 2011. The difference was mainly driven by the recording of a tax on shareholders equity in our Colombian subsidiary during the third quarter of 2011.

Our reported consolidated net controlling interest income grew 53.5% to Ps. 3,543 million in the third quarter of 2012. Earnings per share (EPS) in the third quarter of 2012 were Ps. 1.74 (Ps. 17.45 per ADS) computed on the basis of 2,030.5 million shares (each ADS represents 10 local shares).

 

 

(1) Our Mexican operations include Grupo Tampico’s results as of October, 2011, Grupo CIMSA’s results as of December, 2011 and Grupo Fomento Queretano’s results as of May, 2012
(2) See page 12 for average and end of period exchange rates for the third quarter and first nine months of 2012
(3) This calculation is performed using the end-of-period exchange rate as of September 2012 as compared with the end-of-period exchange rate as of June 2012

October 24, 2012    Page 2 
 

 


BALANCE SHEET

As of September 30, 2012, we had a cash balance of Ps. 11,163 million, including US$ 280 million denominated in U.S. dollars, a decrease of Ps. 1,010 million compared to December 31, 2011. This difference was mainly driven by the payment at maturity of one of our Certificados Bursátiles in the amount of Ps. 3,000 million during March, 2012 and the payment of our dividend in the amount of Ps. 5,625 million during May, 2012; net of the cash generated by our operations and debt assumed during the second quarter of 2012.

As of September 30, 2012, total short-term debt was Ps. 1,606 million and long-term debt was Ps. 19,006 million. Total debt decreased by Ps. 1,905 million, compared to year end 2011. Net debt decreased Ps. 895 million compared to year end 2011. The Company’s total debt balance includes U.S. dollar-denominated debt in the amount of US$ 715 million.

The weighted average cost of debt for the quarter was 6.1%. The following charts set forth the Company’s debt profile by currency and interest rate type and by maturity date as of September 30, 2012.

Currency  % Total Debt  % Interest Rate 
Floating(1)(2)
Mexican pesos  46.2%  29.9% 
U.S. dollars  44.5%  9.4% 
Colombian pesos  4.3%  100.0% 
Brazilian reals  0.4%  0.0% 
Argentine pesos  4.7%  14.8% 

(1) After giving effect to interest rate swaps
(2) Calculated by weighting each year’s outstanding debt balance mix

Debt Maturity Profile

Maturity Date  2012  2013  2014  2015  2016  2017 + 
% of Total Debt  3.0%  6.1%  21.6%  13.8%  12.1%  43.4% 

 

Consolidated Cash Flow

Starting the third quarter of 2012, Coca-Cola FEMSA encourages the reader to refer to the cash flow statement contained in our quarterly filing to the Mexican Stock Exchange (Bolsa Mexicana de Valores or BMV) for more detailed information. This cash flow is available at www.bmv.com.mx in the Información Financiera section for Coca-Cola FEMSA (KOF).

We would like to remind the reader that the cash flow statement is presented on a historical basis, whereas the balance sheet is presented in nominal terms. Certain differences resulting from calculations performed with the information contained in the balance sheet may differ from items shown in the cash flow statement. These differences are presented separately as a part of the Translation Effect in the cash flow statement in accordance with International Financial Reporting Standards.

 

October 24, 2012    Page 3 
 

 


MEXICO & CENTRAL AMERICA DIVISION OPERATING RESULTS (Mexico, Guatemala, Nicaragua, Costa Rica and Panama)

Coca-Cola FEMSA is including the results of Grupo Tampico as of October 2011, Grupo CIMSA as of December 2011and Grupo Fomento Queretano as of May 2012 in the Company’s Mexico & Central America divisions’ operating results.

Revenues

Reported total revenues from our Mexico and Central America division increased 34.8% to Ps. 16,899 million in the third quarter of 2012, as compared to the same period in 2011, supported by the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in our Mexican operations(1). Excluding the recently integrated territories in Mexico, total revenues grew 9.0%. On the same basis, increased average price per unit case, mainly reflecting selective price increases across our product portfolio, implemented over the past several months, accounted for almost 85% of incremental revenues. On a currency neutral basis and excluding the recently merged territories in Mexico, total revenues increased 8.0%.

Reported total sales volume increased 30.4% to 478.1 million unit cases in the third quarter of 2012, as compared to the third quarter of 2011. Excluding the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in Mexico, volumes increased 1.5% to 372.2 million unit cases. On the same basis, the sparkling beverage category grew 1.7% driven by a 2% growth of the Coca-Cola brand and the performance of the Sidral Mundet brand in Mexico. Still beverages grew 11.6% mainly driven by the Jugos del Valle line of products in Mexico, the performance of Powerade and Fuze Tea in the division and the incorporation of the Estrella Azul portfolio in Central America. Our bottled water portfolio grew 5.6%. These increases compensated for the 4.5% decline in the bulk water business.

Operating Income

Our reported gross profit increased 34.3% to Ps. 8,058 million in the third quarter of 2012 as compared to the same period in 2011. Lower PET and sugar prices were partially offset by the depreciation of the average exchange rate of the Mexican peso(2) as applied to our U.S. dollar-denominated raw material costs. Reported gross margin reached 47.7% in the third quarter of 2012, as compared with 47.9% in the same period of the previous year. Excluding the integration of the newly merged territories, gross margin expanded 50 basis points as compared with the third quarter of 2011.

Reported operating income increased 44.0% to Ps. 2,694 million in the third quarter of 2012, compared to Ps. 1,871 million in the same period of 2011. Our reported operating margin was 15.9% in the third quarter of 2012, as compared with 14.9% in the same period of 2011, an expansion of 100 basis points. Excluding the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in Mexico, operating income increased 23.9%. On the same basis, operating expenses increased mainly as a result of (i) additional expenses related to the development of information systems and commercial capabilities in connection with our commercial models and (ii) certain investments related, among others, to the development of new lines of business and categories. Excluding the recently merged territories, operating margin expanded 210 basis points as compared with the third quarter of 2011.

 

 

(1) Our Mexican operations include Grupo Tampico’s results as of October, 2011, Grupo CIMSA’s results as of December, 2011 and Grupo Fomento Queretano’s results as of May, 2012
(2) See page 12 for average and end of period exchange rates for the third quarter and first nine months of 2012

October 24, 2012    Page 4 
 

 


SOUTH AMERICA DIVISION OPERATING RESULTS (Colombia, Venezuela, Brazil and Argentina)

Volume and average price per unit case exclude beer results.

Revenues

Reported total revenues were Ps. 19,294 million in the third quarter of 2012, an increase of 10.0% as compared to the same period of 2011 mainly as a result of double-digit total revenue growth in Venezuela, Argentina and Colombia, and despite the negative translation effect as a result of the devaluation of the Brazilian real(1). Excluding beer, which accounted for Ps. 963 million during the quarter, revenues increased 10.4% to Ps. 18,331 million. Excluding beer, higher average prices per unit case across our operations accounted for close to 95% of incremental revenues. On a currency neutral basis, total revenues increased 16.8%.

Reported total sales volume in our South America division increased 0.8% to 281.3 million unit cases in the third quarter of 2012 as compared to the same period of 2011, as a result of volume growth in Venezuela and Brazil, and flat volumes in Argentina and Colombia. The still beverage category grew 21.1%, mainly driven by the introduction of the Jugos del Valle line of business in Venezuela and its continued success in Brazil. Our water portfolio, including bulk water, grew 9.9%. This increases compensated for a slight decrease in our sparkling beverage category.

Operating Income

Reported gross profit reached Ps. 8,928 million, an increase of 12.8% in the third quarter of 2012, as compared to the same period of 2011. Lower cost of PET and sugar across the division were partially offset by the depreciation of the average exchange rate of the Brazilian real(1) and the Argentine peso(1) as applied to our U.S. dollar-denominated raw material costs. Reported gross margin reached 46.3% in the third quarter of 2012, an expansion of 120 basis points as compared to the same period of 2011.

Our reported operating income increased 13.4% to Ps. 2,793 million in the third quarter of 2012, compared to the same period of 2011. Reported operating expenses increased 14.7%, mainly as a result of higher labor costs in Venezuela, in combination with higher labor and freight costs in Argentina and Brazil. Our reported operating margin was 14.5% in the third quarter of 2012, an expansion of 50 basis points, as compared with the same period of 2011.

 

 

(1) See page 12 for average and end of period exchange rates for the third quarter and first nine months of 2012

October 24, 2012    Page 5 
 

 


SUMMARY OF NINE-MONTH RESULTS

Our reported consolidated total revenues increased 23.6% to Ps. 106,202 million in the first nine months of 2012, as compared to the same period of 2011, as a result of double-digit total revenue growth in both divisions, including the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in our Mexican operations.(1) Excluding the recently integrated territories in Mexico, total revenues grew 13.6%. On a currency neutral basis and excluding the recently merged territories in Mexico, total revenues increased 14.3% in the first nine months of 2012.

Reported total sales volume increased 16.5% to 2,232.7 million unit cases in the first nine months of 2012, as compared to the same period in 2011. Excluding the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in Mexico, volumes grew 1.8% to 1,950.9 million unit cases. On the same basis, the sparkling beverage category grew 1.7%, driven by growth of the Coca-Cola brand and a 4% growth in flavored sparkling beverages. In addition and excluding the newly merged territories, the still beverage category grew 13.3%, mainly driven by the performance of the Jugos del Valle line of business across our territories, the continued growth of Powerade, and the successful launch of Fuze Tea. Our bottled water portfolio grew 3.2%. These increases more than compensated for a 4.3% decline in our bulk water business.

Our reported gross profit increased 24.0% to Ps. 48,983 million in the first nine months of 2012, as compared to the same period of 2011. Lower PET costs were partially compensated by higher sweetener prices in most of our territories in combination with the depreciation of the average exchange rate of the Brazilian real,(2) the Mexican peso(2) and the Argentine peso(2) as applied to our U.S. dollar-denominated raw material costs. Reported gross margin reached 46.1%, a 10 basis points expansion as compared to the same period of 2011.

Our reported consolidated operating income increased 14.6% to Ps. 14,545 million in the first nine months of 2012, as compared to the same period of 2011, mainly driven by double-digit operating income growth in both divisions, including the integration of Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano in Mexico. Our reported operating margin was 13.7% for the first nine months of 2012, as compared to 14.8% in the same period of 2011. Excluding the integration of the recently merged territories in Mexico, operating income grew 7.4%. On the same basis, operating expenses increased mainly as a result of (i) higher labor costs in Venezuela, and higher labor and freight costs in Argentina and Brazil, (ii) continued marketing investment to reinforce our execution in the marketplace, widen our cooler coverage and broaden our returnable base availability across our territories, (iii) additional expenses related to the development of information systems and commercial capabilities in connection with our commercial models and (iv) certain investments related, among others, to the development of new lines of business and categories.

Our consolidated net controlling interest income increased 21.2 % to Ps. 8,923 million in the first nine months of 2012 as compared to the same period of 2011. Earnings per share (EPS) in the first nine months of 2012 were Ps. 4.44 (Ps. 44.38 per ADS) computed on the basis of 2,010.5 million shares(3) outstanding (each ADS represents 10 local shares).

 

(1) Our Mexican operations include Grupo Tampico’s results as of October, 2011, Grupo CIMSA’s results as of December, 2011 and Grupo Fomento Queretano’s results as of May, 2012
(2) See page 12 for average and end of period exchange rates for the third quarter and first nine months of 2012
(3) According to International Financial Reporting Standards (IFRS), Earnings Per Share is computed on the basis of the weighted-average number of shares outstanding during the period. The weighted average number of shares is calculated based on the number of days within a reporting period that each share was outstanding, divided by the full length of that reporting period

October 24, 2012    Page 6 
 

 


RECENT DEVELOPMENTS

As of September 3, 2012, as a consequence of the increased liquidity of the KOF series L shares in the Mexican market, Coca-Cola FEMSA was included in the IPC Index of the Bolsa Mexicana de Valores (“BMV”). The BMV, based on its new methodology, ranked KOF as number 11 out of the 35 companies included in this Index, with a weight of 2.84% of the new sample.

 

 

During the second quarter of 2012, as a consequence of a change in the Labor Law in Venezuela and its changes to labor tenure, among other areas, we registered a one-time provision, which was included in our other net non-operating expenses line. All corporations with operations in Venezuela and reporting under IFRS are in the process of calculating the potential liability as of December 31, 2012 based on an actuarial method determined by these accounting standards.

CONFERENCE CALL INFORMATION

Our third-quarter 2012 Conference Call will be held on October 24, 2012, at 12:00 P.M. Eastern Time (11:00 A.M. Mexico City Time). To participate in the conference call, please dial: Domestic U.S.: 800-299-6183 or International: 617-801-9713. We invite investors to listen to the live audiocast of the conference call on the Company’s website, www.coca-colafemsa.com If you are unable to participate live, an instant replay of the conference call will be available through October 30, 2012. To listen to the replay, please dial: Domestic U.S.: 888-286-8010 or International: 617-801-6888. Pass code: 27299261.

Coca-Cola FEMSA, S.A.B. de C.V. produces and distributes Coca-Cola, Fanta, Sprite, Del Valle, and other trademark beverages of The Coca-Cola Company in Mexico (a substantial part of central Mexico, including Mexico City, as well as southeast and northeast Mexico), Guatemala (Guatemala City and surrounding areas), Nicaragua (nationwide), Costa Rica (nationwide), Panama (nationwide), Colombia (most of the country), Venezuela (nationwide), Brazil (greater São Paulo, Campiñas, Santos, the state of Mato Grosso do Sul, part of the state of Goias, and part of the state of Minas Gerais), and Argentina (Buenos Aires and surrounding areas), along with bottled water, juices, teas, isotonics, beer, and other beverages in some of these territories. The Company has 37 bottling facilities in Latin America and serves close to 1,800,000 retailers in the region.

This news release may contain forward-looking statements concerning Coca-Cola FEMSA’s future performance, which should be considered as good faith estimates by Coca-Cola FEMSA. These forward-looking statements reflect management’s expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, many of which are outside Coca-Cola FEMSA’s control, which could materially impact the Company’s actual performance.

References herein to “US$” are to United States dollars. This news release contains translations of certain Mexican peso amounts into U.S. dollars for the convenience of the reader. These translations should not be construed as representations that Mexican peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated.

(5 pages of tables to follow)

 

October 24, 2012    Page 7 
 

 


Consolidated Income Statement
Expressed in millions of Mexican pesos(1)
 
  3Q 12  % Rev  3Q 11  % Rev  Reported Δ%  Excluding M&A
Effects Δ%(5) 		 YTD 12  % Rev  YTD 11  % Rev  Reported Δ%  Excluding M&A
Effects Δ%(5) 
 
Volume (million unit cases) (2)  759.4    645.9    17.6%  1.2%  2,232.7    1,916.4    16.5%  1.8% 
Average price per unit case (2)  46.18    44.89    2.9%  8.5%  46.01    43.22    6.4%  11.7% 
Net revenues  36,033    29,936    20.4%    105,621    85,500    23.5%   
Other operating revenues  160    141    13.5%    581    394    47.5%   
Total revenues  36,193  100%  30,077  100%  20.3%  9.6%  106,202  100%  85,894  100%  23.6%  13.6% 
Cost of goods sold  19,207  53.1%  16,162  53.7%  18.8%    57,219  53.9%  46,397  54.0%  23.3%   
Gross profit  16,986  46.9%  13,915  46.3%  22.1%    48,983  46.1%  39,497  46.0%  24.0%   
Operating expenses  11,583  32.0%  9,409  31.3%  23.1%    34,535  32.5%  26,596  31.0%  29.9%   
Other operative expenses, net  (84)  -0.2%  172  0.6%  -148.8%    (97)  -0.1%  211  0.2%  -146.0%   
Operating income (3)  5,487  15.2%  4,334  14.4%  26.6%  18.0%  14,545  13.7%  12,690  14.8%  14.6%  7.4% 
Other non operative expenses, net  87    99    -12.1%    576    211    173.0%   

Interest expense 

 425    460    -7.6%    1,344    1,204    11.6%   

Interest income 

 68    201    -66.2%    269    445    -39.6%   

Interest expense, net 

 357    259    37.8%    1,075    759    41.6%   

Foreign exchange gain 

 (355)    (188)    88.8%    (430)    (107)    301.9%   

(Gain) loss on monetary position in Inflationary subsidiries 

 (4)    3    -233.3%    (20)    (22)    -9.1%   

Market value loss on ineffective portion of derivative instruments 

 22    281    -92.2%    10    234    -95.7%   
Comprehensive financing result  20    355    -94.4%    635    864    -26.5%   
Income before taxes  5,380    3,880    38.7%    13,334    11,615    14.8%   
Income taxes  1,712    1,362    25.7%    4,036    3,823    5.6%   
Consolidated net income  3,668    2,518    45.7%    9,298    7,792    19.3%   
Net controlling interest income  3,543  9.8%  2,308  7.7%  53.5%    8,923  8.4%  7,364  8.6%  21.2%   
Net non-controlling interest income  125    210    -40.5%    375    428    -12.4%   
Operating income (3)  5,487  15.2%  4,334  14.4%  26.6%  18.0%  14,545  13.7%  12,690  14.8%  14.6%  7.4% 
Depreciation  1,353    920    47.1%    3,788    2,716    39.5%   
Amortization and other operative non-cash charges  150    244    -38.5%    679    433    56.8%   
Operative cash flow (3)(4)  6,990  19.3%  5,498  18.3%  27.1%  17.2%  19,012  17.9%  15,839  18.4%  20.0%  11.2% 
 
(1) Except volume and average price per unit case figures
(2) Sales volume and average price per unit case exclude beer results
(3) T he Operating income and Operative cash flow lines are presented as non-gaap measures for the convenience of the reader
(4) Operative cash flow = Operating Income + depreciation, amortization & other operative non-cash charges
(5) Excluding M&A Effects means, with respect to a year-over-year comparison, the increase in a given measure excluding the effects of mergers, acquisitionsand divestitures. We believe this measure allows us to provide investors and other market participants with a better representation of the performance of our business. In preparing this measure, management has used its best judgment, estimates and assumptions in order to maintain comparability
As of October 2011, we integrated Grupo Tampico in the operations of Mexico
As of December 2011, we integrated Grupo CIMSA in the operations of Mexico
As of May 2012, we integrated Grupo Fomento Queretano in the operations of Mexico

 

As a result of the regular quarterly review procedures that we perform together with our external auditors, we identified certain adjustments that have been included in the financial information regarding 2011 figures presented in this press release. As such, this information differs from the financial information presented under International Financial Reporting Standards (“IFRS”) in the document released on March 29, 2012, which contained unaudited information.

 

October 24, 2012    Page 8 
 

 


Consolidated Balance Sheet
Expressed in millions of Mexican pesos.
Assets    Sep 12    Dec 11 
Current Assets         
Cash, cash equivalents and marketable securities  Ps.  11,163  Ps.  12,173 
Total accounts receivable    7,814    8,631 
Inventories    8,143    7,549 
Other current assets    4,161    3,685 
Total current assets    31,281    32,038 
Property, plant and equipment         
Property, plant and equipment    66,909    64,514 
Accumulated depreciation    (27,868)    (26,703) 
Total property, plant and equipment, net    39,041    37,811 
Other non-current assets    75,825    70,467 
Total Assets  Ps.  146,147  Ps.  140,316 
 
 
Liabilities and Equity    Sep 12    Dec 11 
Current Liabilities         
Short-term bank loans and notes  Ps.  1,606  Ps.  5,541 
Suppliers    12,189    11,852 
Other current liabilities    9,193    7,697 
Total Current Liabilities    22,988    25,090 
Long-term bank loans    19,006    16,976 
Other long-termliabilities    5,098    5,354 
Total Liabilities    47,092    47,420 
Equity         
Non-controlling interest    2,712    3,053 
Total controlling interest    96,343    89,843 
Total equity    99,055    92,896 
Liabilities and Equity  Ps.  146,147  Ps.  140,316 

 

As a result of the regular quarterly review procedures that we perform together with our external auditors, we identified certain adjustments that have been included in the financial information regarding 2011 figures presented in this press release. As such, this information differs from the financial information presented under International Financial Reporting Standards (“IFRS”) in the document released on March 29, 2012, which contained unaudited information.

 

October 24, 2012    Page 9 
 

 


Mexico & Central America Division
Expressed in millions of Mexican pesos(1)
 
  3Q 12  % Rev  3Q 11  % Rev  Reported Δ%  Excluding M&A
Effects Δ%(4) 		 YTD 12  % Rev  YTD 11  % Rev  Reported Δ%  Excluding M&A
Effects Δ%(4) 
 
Volume (million unit cases)  478.1    366.7    30.4%  1.5%  1,395.0    1,100.5    26.8%  1.2% 
Average price per unit case  35.18    34.05    3.3%  7.3%  34.91    33.69    3.6%  7.1% 
Net revenues  16,822    12,486    34.7%    48,695    37,077    31.3%   
Other operating revenues  77    46    67.4%    290    108    168.5%   
Total revenues  16,899  100.0%  12,532  100.0%  34.8%  9.0%  48,985  100.0%  37,185  100.0%  31.7%  8.6% 
Cost of goods sold  8,841  52.3%  6,533  52.1%  35.3%    25,764  52.6%  19,197  51.6%  34.2%   
Gross profit  8,058  47.7%  5,999  47.9%  34.3%    23,221  47.4%  17,988  48.4%  29.1%   
Operating expenses  5,385  31.9%  4,004  32.0%  34.5%    15,963  32.6%  11,763  31.6%  35.7%   
Other operative expenses, net  (21)  -0.1%  124  1.0%  -116.9%    15  0.0%  138  0.4%  -89.1%   
Operating income (2)  2,694  15.9%  1,871  14.9%  44.0%  23.9%  7,243  14.8%  6,087  16.4%  19.0%  3.9% 
Depreciation, amortization & other operative non-cash charges  841  5.0%  606  4.8%  38.8%    2,327  4.8%  1,547  4.2%  50.4%   
Operative cash flow (2)(3)  3,535  20.9%  2,477  19.8%  42.7%  20.8%  9,570  19.5%  7,634  20.5%  25.4%  7.0% 
(1) Except volume and average price per unit case figures
(2) The Operating income and Operative cash flow lines are presented as non-gaap measures for the convenience of the reader
(3) Operative cash flow = Operating Income + Depreciation, amortization & other operative non-cash charges
(4) Excluding M&A Effects means, with respect to a year-over-year comparison, the increase in a given measure excluding the effects of mergers, acquisitionsand divestitures. We believe this measure allows us to provide investors and other market participants with a better representation of the performance of our business. In preparing this measure, management has used its best judgment, estimates and assumptions in order to maintain comparability
As of October 2011, we integrated Grupo Tampico in the operations of Mexico
As of December 2011, we integrated Grupo CIMSA in the operations of Mexico
As of May 2012, we integrated Grupo Fomento Queretano in the operations of Mexico

 

South America Division
Expressed in millions of Mexican pesos(1)
 
  3Q 12 % Rev   3Q 11   % Rev   Δ%  YTD 12 % Rev   YTD 11   % Rev   Δ% 
Volume (million unit cases) (2)  281.3    279.2    0.8%  837.7    815.9    2.7% 
Average price per unit case (2)  64.87    59.14    9.7%  64.49    56.08    15.0% 
Net revenues  19,211    17,450    10.1%  56,926    48,423    17.6% 
Other operating revenues  83    95    -12.6%  291    286    1.7% 
Total revenues  19,294  100.0%  17,545  100.0%  10.0%  57,217  100.0%  48,709  100.0%  17.5% 
Cost of goods sold  10,366  53.7%  9,629  54.9%  7.7%  31,455  55.0%  27,200  55.8%  15.6% 
Gross profit  8,928  46.3%  7,916  45.1%  12.8%  25,762  45.0%  21,509  44.2%  19.8% 
Operating expenses  6,198  32.1%  5,405  30.8%  14.7%  18,572  32.5%  14,833  30.5%  25.2% 
Other operative expenses, net  (63)  -0.3%  48  0.3%  -231.3%  (112)  -0.2%  73  0.1%  -253.4% 
Operating income (3)  2,793  14.5%  2,463  14.0%  13.4%  7,302  12.8%  6,603  13.6%  10.6% 
Depreciation, amortization & other operative non-cash charges  662  3.4%  558  3.2%  18.6%  2,140  3.7%  1,602  3.3%  33.6% 
Operative cash flow (3)(4)  3,455  17.9%  3,021  17.2%  14.4%  9,442  16.5%  8,205  16.8%  15.1% 
(1) Except volume and average price per unit case figures
(2) Sales volume and average price per unit case exclude beer results
(3) The Operating income and Operative cash flow lines are presented as non-gaap measures for the convenience of the reader
(4) Operative cash flow = Operating Income + depreciation, amortization & other operative non-cash charges

 

As a result of the regular quarterly review procedures that we perform together with our external auditors, we identified certain adjustments that have been included in the financial information regarding 2011 figures presented in this press release. As such, this information differs from the financial information presented under International Financial Reporting Standards (“IFRS”) in the document released on March 29, 2012, which contained unaudited information.

 

October 24, 2012    Page 10 
 

 

SELECTED INFORMATION

  

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended September 30, 2012 and 2011

                       

Expressed in millions of Mexican pesos

                       
         

3Q 12

          

3Q 11

 

Capex

 

 

 

2,578.0

 

Capex

 

 

 

1,786.7

 

Depreciation

 

 

 

1,353.0

 

Depreciation

 

 

 

920.0

 

Amortization & Other non-cash charges

150.0

 

Amortization & Other non-cash charges

244.0

 

VOLUME

Expressed in million unit cases

                       
 

3Q 12

  

3Q 11

 

Sparkling

Water (1)

Bulk Water (2)

Still

Total

  

Sparkling

Water (1)

Bulk Water (2)

Still

Total

Mexico

318.8

20.6

79.7

22.7

441.8

  

248.0

15.1

52.0

16.2

331.3

Central America

30.8

1.8

0.1

3.6

36.3

  

30.5

1.6

0.1

3.2

35.4

Mexico & Central America

349.6

22.4

79.8

26.3

478.1

  

278.5

16.7

52.1

19.4

366.7

Colombia

46.8

5.4

7.5

4.2

63.9

  

48.3

4.7

7.1

4.1

64.2

Venezuela

45.8

2.4

0.7

3.4

52.3

  

47.2

2.2

0.5

1.2

51.1

Brazil

103.0

6.2

0.7

5.7

115.6

  

103.3

5.5

0.4

5.3

114.5

Argentina

44.7

2.5

0.2

2.1

49.5

  

44.3

2.7

0.2

2.2

49.4

South America

240.3

16.5

9.1

15.4

281.3

  

243.1

15.1

8.2

12.8

279.2

Total

589.9

38.9

88.9

41.7

759.4

  

521.6

31.8

60.3

32.2

645.9

(1) Excludes water presentations larger than 5.0 Lt ; includes flavored water

(2) Bulk Water = Still bottled water in 5.0, 19.0 and 20.0 - liter packaging presentations; includes flavored water

 

Volume of Mexico, the Mexico & Central America division, and Consolidated for the third quarter 2012 results includes Grupo Tampico´s, Grupo CIMSA’s and Grupo Fomento Queretano’s results, accounting for 105.8 million unit cases, of which 62.7% is Sparkling Beverages, 4.5% is Water, 28.4% is Bulk Water and 4.4% is Still Beverages.

 

SELECTED INFORMATION

                       

For the nine months ended September 30, 2012 and 2011

                       

Expressed in millions of Mexican pesos

                       
         

YTD 12

          

YTD 11

 

Capex

 

 

 

5,803.7

 

Capex

 

 

 

4,299.2

 

Depreciation

 

 

 

3,788.0

 

Depreciation

 

 

 

2,716.0

 

Amortization & Other non-cash charges

679.0

 

Amortization & Other non-cash charges

433.0

       

203.6

        

978.5

    
                 

-978.5

    

VOLUME

Expressed in million unit cases

                       
 

YTD 12

  

YTD 11

 

Sparkling

Water (1)

Bulk Water (2)

Still

Total

  

Sparkling

Water (1)

Bulk Water (2)

Still

Total

Mexico

918.5

65.3

233.4

66.7

1,283.9

  

730.3

50.5

162.9

50.6

994.3

Central America

94.5

5.7

0.3

10.6

111.1

  

90.9

5.5

0.2

9.6

106.2

Mexico & Central America

1,013.0

71.0

233.7

77.3

1,395.0

  

821.2

56.0

163.1

60.2

1,100.5

Colombia

136.3

15.7

20.8

12.2

185.0

  

139.5

15.0

20.9

12.2

187.6

Venezuela

132.8

6.4

1.6

9.5

150.3

  

125.4

5.7

1.5

3.1

135.7

Brazil

308.8

18.4

2.2

17.3

346.7

  

309.7

17.3

1.7

15.7

344.4

Argentina

139.6

9.1

0.5

6.5

155.7

  

133.3

8.3

0.6

6.0

148.2

South America

717.5

49.6

25.1

45.5

837.7

  

707.9

46.3

24.7

37.0

815.9

Total

1,730.5

120.6

258.8

122.8

2,232.7

  

1,529.1

102.3

187.8

97.2

1,916.4

(1) Excludes water presentations larger than 5.0 Lt ; includes flavored water

(2) Bulk Water = Still bottled water in 5.0, 19.0 and 20.0 - liter packaging presentations; includes flavored water

 

 

Volume of Mexico, the Mexico & Central America division, and Consolidated for the first nine months of 2012 results includes Grupo Tampico´s, Grupo CIMSA’s and Grupo Fomento Queretano’s results, accounting for 281.6 million unit cases, of which 62.1% is Sparkling Beverages, 5.3% is Water, 28.1% is Bulk Water and 4.5% is Still Beverages.

 

October 24, 2012    Page 11 
 

 


 

 

 

 

 

 

 

 

 

 

 

  

 

September 2012

 

 

Macroeconomic Information

 
                       
         

Inflation (1)

      
         

LTM

3Q 2012

 

YTD

      
                       
     

Mexico

  

4.77%

1.31%

 

2.12%

      
     

Colombia

  

3.08%

0.31%

  

2.31%

      
     

Venezuela

  

18.02%

3.71%

  

11.48%

      
     

Brazil

 

5.28%

1.42%

  

3.77%

      
     

Argentina

  

10.01%

2.59%

 

7.78%

      
                       
     

(1) Source: inflation is published by the Central Bank of each country.

      
                       

 

 

 

 

 

 

 

 

 

 

 

 

                       
 

Average Exchange Rates for each Period

  
                       
     

Quarterly Exchange Rate (local currency per USD)

  

YTD Exchange Rate (local currency per USD)

  
     

3Q 12

 

3Q 11

Δ%

  

YTD 12

YTD 11

Δ%

  
                       
 

Mexico

  

13.1932

 

12.2647

7.6%

  

13.2410

12.0281

10.1%

  
 

Guatemala

  

7.8913

  

7.8159

1.0%

  

7.8190

7.7785

0.5%

  
 

Nicaragua

  

23.6885

  

22.5593

5.0%

  

23.4023

22.2865

5.0%

  
 

Costa Rica

  

504.6911

  

512.5221

-1.5%

  

509.6392

509.7301

0.0%

  
 

Panama

  

1.0000

  

1.0000

0.0%

  

1.0000

1.0000

0.0%

  
 

Colombia

  

1,797.9857

  

1,794.2610

0.2%

  

1,795.2168

1,823.0609

-1.5%

  
 

Venezuela

  

4.3000

  

4.3000

0.0%

  

4.3000

4.3000

0.0%

  
 

Brazil

  

2.0287

  

1.6369

23.9%

  

1.9200

1.6333

17.6%

  
 

Argentina

  

4.6110

 

4.1666

10.7%

  

4.4669

4.0873

9.3%

  

 

 

 

 

 

 

 

 

 

 

 

 

                       
 

End of Period Exchange Rates

  
                       
         

Exchange Rate (local currency per USD)

      
         

Sep 12

Sep 11

 

Δ%

      
                       
     

Mexico

  

12.8521

13.4217

 

-4.2%

      
     

Guatemala

  

7.9572

7.8686

  

1.1%

      
     

Nicaragua

  

23.8314

22.6958

  

5.0%

      
     

Costa Rica

  

503.3100

519.8700

  

-3.2%

      
     

Panama

  

1.0000

1.0000

  

0.0%

      
     

Colombia

  

1,800.5200

1,915.1000

  

-6.0%

      
     

Venezuela

  

4.3000

4.3000

  

0.0%

      
     

Brazil

  

2.0306

1.8544

  

9.5%

      
     

Argentina

  

4.6970

4.2050

 

11.7%

      

 

 

 

 

 

 

 

 

 

 

 

 

 

October 24, 2012    Page 12 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

COCA-COLA FEMSA, S.A.B. DE C.V.

 

By:  /s/ Héctor Treviño Gutiérrez              

 

Héctor Treviño Gutiérrez

Chief Financial Officer

 

 

 Date: October 24, 2012