Coca-Cola FEMSA S.A.B. de C.V (KOFUBL.MX) Q1 2026 Earnings Call Transcript
Coca-Cola FEMSA, S.A.B. de C.V., a franchise bottler, produces, markets, sells, and distributes Coca-Cola trademark beverages in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Brazil, Argentina, and Uruguay. The company offers sparkling beverages, including colas and flavored sparkling beverages; waters; and other non-carbonated beverages, such as tea, sports drinks, energy drinks, fruit-based beverages, juice, coffee, milk, value-added dairy, and plant-based drinks. It also distributes and sells beer products under the Heineken, Estrella Galicia, and Therezópolis brands, as well as Campari alcoholic beverages, Perfetti confectionary and chewing gum, and Monster products. The company sells its products to distributors, retail outlets, wholesale supermarkets, discount and convenience stores, retailers, points-of-sale outlets, restaurants and bars, stadiums, auditoriums, theaters, and home deliveries. Coca-Cola FEMSA, S.A.B. de C.V. was founded in 1979 and is headquartered in Mexico City, Mexico.
Coca-Cola FEMSA delivered modest 2025 growth with resilience in margins, accelerated digital initiatives, and disciplined capital allocation, while guiding 2026 to flat-to-positive volumes amid Mexico IEPS headwinds and Brazil tailwinds.
⭐ Key Highlights
✔Positive Signals
- Coke Zero momentum in Mexico (14% volume growth) and robust performance in flavors
- Brazil: Sprite Zero growth (93%), Coke Zero 44%, record December volumes
- Juntos+ Advisor rollout improving sales force efficiency and share in multiple markets
- World Cup sponsorship and activations expected to lift brand engagement and consumption occasions
- Strong sustainability accolades (S&P Global, FTSE4Good, MSCI) underpinning long-term value creation
✖Negative Signals
- IEPS excise tax impact in Mexico pressure on gross margins and near-term pricing decisions
- Currency mix effects and hedging costs contributing to margin headwinds
- Higher depreciation and labor costs pressuring operating margins in Q4
- Working capital volatility linked to ERP SAP/4HANA rollout causing cash flow fluctuations
📊Financial Results
- Q4 revenue grew 2.9% YoY to MXN 77.7 billion; currency-neutral growth 6%
- Gross profit grew 1.8% to MXN 36.3 billion; gross margin down 60 bps to 46.7%
- Operating income rose 13.3% to MXN 13.7 billion; operating margin +160 bps to 17.6% (normalized margin 16.1% if insurance effects excluded)
- Adjusted EBITDA for the quarter up 12.8% to MXN 18.2 billion; EBITDA margin +210 bps to 23.4% (normalized EBITDA margin 21.9% up 30 bps)
- Net majority income up 3% to MXN 7.5 billion; impact from higher financing costs and tax regime
🔮Future Guidance
- 2026 Mexico: low-to-mid single-digit volume decline due to IEPS impact; pricing and RGM to mitigate margin pressure
- 2026 Brazil: low-to-mid single-digit volume growth; continued leverage of digital tools and portfolio shifts
- Consolidated 2026: flat to slightly positive volume with stabilization of cash flow as ERP working capital normalization completes
- Capex guidance: 7%–7.5% of revenues, with phasing adjustments in Mexico and Brazil to reflect plant closures and capacity needs
💡Interesting Insights
- AI-enabled platforms (Juntos+ Advisor) are now scaled in multiple markets, directly linking digital tools to higher average ticket and share gains
- Management sees 2027 as a potential need for a new Brazil plant due to potential future tax changes, guiding a longer horizon capex plan
Detailed Analysis
AI-generated summary of Coca-Cola FEMSA S.A.B. de C.V earnings call transcript.
Get Real-Time Earnings Call Alerts for Coca-Cola FEMSA S.A.B. de C.V
Create a free MarketAlerts account to add KOFUBL.MX to your watchlist and receive instant AI-powered alerts when new earnings call transcripts, insider trades, and technical signals are detected.
