Coca-Cola Femsa S.A.B. DE C.V. - ADR

Volume Performance and Challenges: Coca-Cola FEMSA experienced a consolidated volume decline of 2.2% year-on-year, with significant declines in Mexico (5.4%) and Colombia (8.1%), partially offset by growth in Brazil (2.5%), Argentina (9.1%), Uruguay (6%), and Guatemala (1.9%). This decline was attributed to a soft macroeconomic environment and high comparison bases from the previous year, raising concerns about consumer sentiment and spending.

Revenue Growth and Margin Improvement: Despite the volume contraction, total revenues grew by 10% year-on-year to MXN 70.2 billion, driven by effective revenue management initiatives and favorable currency effects. Gross profit increased by 12% to MXN 31.8 billion, leading to a gross margin expansion of 80 basis points to 45.4%. Adjusted EBITDA rose 11% to MXN 13.3 billion, indicating that the company was able to manage costs effectively despite the tough market conditions.

Operational Efficiency and Cost Savings: The company has identified approximately $90 million in cost savings for 2025, with a focus on procurement and supply chain efficiencies in Mexico and Colombia, reflecting proactive measures to mitigate the impact of a challenging consumer environment.