Femsa (FEMSAUBD) 4Q15 Results: FEMSA’s Revenues Increase, but Acquisitions and New Stores Hurt Margins

Executive Summary

• In 4Q15, FEMSA Comercio split its fuel and retail divisions into two separate businesses. FEMSA Consolidated reported a 27.5% increase in revenue to MXN 89.5 billion and an 8.8% increase in operating income to MXN 10.6 billion in 4Q15. Organic growth was 7.6% and 4.1%, respectively.
• FEMSA’s Retail Division reported a 40.2% increase in 4Q15 revenues to MXN 40.4 billion, and operating income grew 32.2% to MXN 4.2 billion. Organic growth was 13.0% and 19.4%, respectively.
• The Retail Division continued to expand in 2015, opening 1,208 new OXXO stores and integrating Grupo Socofar. The company rotated its top talent in the beginning of 2016 to prepare for the difficulties it may face in the coming year with declining consumer demand in Brazil and the volatile foreign-exchange environment