Fomento Económico Mexicano, S.A.B. de C.V. (FMX) Q3 2022 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

p.m. ET

Contents:

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day and welcome to the FEMSA’s 3Q 2022 Results Conference Call. [Operator Instructions] I will now hand you over to Juan Fonseca.

Juan Fonseca

Good morning, everyone and welcome to FEMSA’s third quarter 2022 results conference call. Today, we are joined by Paco Camacho, our Chief Corporate Officer and Eugenio Garza, our CFO. As always, we also have Jorge Collazo on the line who leads Coke FEMSA’s Investor Relations team. Today, Paco will begin with some general considerations on our quarterly results and strategy, and then Eugenio will provide more granular comments on the numbers. And after that, we will open the call to Q&A as always. Paco, please go ahead.

Paco Camacho

Thank you, Juan and hello to everyone on the call. We appreciate your participation today. As you can tell from our quarterly results, positive momentum we have seen across our businesses for several quarters now is still going strong. Starting with proximity, OXXO Mexico delivered yet another strong set of numbers, with traffic accelerating its pace of growth on top of a robust ticket expansion that still reflect a resilient consumer environment and the positive performance of some of the key categories. This strong top line performance, combined with a leaner expense structure drove operating leverage, which in turn allowed OXXO to deliver a strong operating income growth.

Beyond OXXO Mexico, we continued to see dynamic growth trends, particularly in Colombia and in our Brazilian joint venture. Furthermore, as you probably saw a few weeks ago, we have finalized the acquisition of Valora. We are already working in tandem with the team in Europe and we will keep you posted on the plans and initiatives there in due course. For its part, OXXO Gas had another strong quarter on the back of increased vehicle mobility and finally, reaching pre-COVID levels as well as strong corporate sales and wholesale activity, which together drove strong volume recovery. On the digital front, we continue to add OXXO Premia and Spin by OXXO customers at an accelerated pace, reaching over 22 million and more than 4 million users respectively.

More importantly, earlier this month, Spin by OXXO received its definitive authorization to operate as a fintech in Mexico. This is a milestone as it will allow us to continue pursuing our ambition to become the preeminent fintech in Mexico as we expand its value proposition to solve more financial needs for its ever-growing user base. Importantly, this would allow Spin to operate Level 3 accounts, significantly raising the peso amount that the user can deposit every month and making the product a better fit for small businesses.