Fomento Económico Mexicano, S.A.B. de C.V. (FMX) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 28, 2023 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to FEMSA's First Quarter 2023 Results Conference Call. Today's call is being recorded.

I would now like to hand the call over to Juan Fonseca, Investor Relations. Please go ahead, sir.

Juan Fonseca

Good morning, everyone, and welcome to FEMSA's first quarter 2023 results conference call. Today, we're joined by Paco Camacho, our Chief Corporate Officer and Eugenio Garza. As always, we also have Jorge Collazo on the line who leads Coke FEMSA's Investor Relations team.

Today the plan is we have Paco share some higher level strategic considerations, followed by an overview of performance trends during the quarter and then Eugenio will provide comments on the quarter results. After the remarks, I will address some changes we have introduced to our disclosure that we hope you will find helpful with some closing remarks by Paco and then we will open the call to Q&A.

Paco, please go ahead.

Paco Camacho

Thank you, Juan, and good morning to everyone on the line.

Before we get into the quarter, let me update you on our FEMSA, our commitment to achieve a focus platform built on retail, Coca-Cola FEMSA, and our digital ecosystem. And the progress we have made in the couple of months since we last spoke.

As you know, we already reduced our investment in the Heineken Group from approximately 14% to 8%, assuming our related exchangeable bonds are converted in food. Following the transactions, we carried out a tender offer for some of our outstanding bonds, significantly reducing our financial debt and bringing in -- bringing us slightly below our leverage target of 2x net debt to EBITDA ex-cost. That now stands at 1.8x.

Beyond these successful development, we are progressing on the various tracks that that will ultimately take us to the targeted structure in a value conscious fashion. We keep you updated as we move along.

As you remember, a big part of FEMSA Forward is about driving growth in our core verticals and there was a lot of that in our first quarter result. Indeed 2023 is off to a good start and we are excited about our momentum. This marks the eighth consecutive quarter that our proximity division has achieved double-digit top-line growth and the fifth in a row for Coca-Cola FEMSA.