COCA COLA FEMSA SAB DE CV Q4 FY25 earnings call KOF

Mexico experienced sequential volume improvements throughout 2025, culminating in a near-flat Q4 performance with a 0.9% contraction, and December marking the strongest month on record. Despite a soft consumer environment and the impact of a temporary unfavorable brand sentiment early in the year, the company implemented decisive measures including adjustments to price-pack architecture and revamped affordability initiatives, particularly in multi-serve refillable packs. Coke Zero maintained solid growth at 14% volume, and the stills portfolio grew 7.4%, driven by Monster (+41%), FUZE Tea (+33%), and Santa Clara (+28%). The Mexico team's swift reaction to challenges, including cost control and productivity measures, helped recover competitive position and profitability. For 2026, the company is prepared to navigate the excise tax increase and continued soft economic growth by bolstering its portfolio with affordability initiatives and increasing returnable pack offerings to defend household penetration.

Brazil delivered a strong performance in Q4 FY25, with volumes increasing 2.6%, marking the highest fourth-quarter volume on record for the operation. This growth was driven by a historic December, outstanding market execution, higher average temperatures, and digital enablers. The company continued gaining share across all relevant non-alcoholic ready-to-drink categories, recovering most of the share lost due to the temporary plant closure in Rio Grande do Sul. Coca-Cola Zero grew 44% and Sprite Zero achieved accelerated growth of 93% in FY25, with Sprite Zero now representing over 20% of total Sprite volume. The Juntos+ monthly active user base expanded beyond 303,000, and Juntos+ Premier loyalty customers increased 73% year-on-year. Juntos+ Advisor improved sales force efficiency by over 9.2 percentage points to 95.6%.

The South America division saw overall volume growth of 3% in Q4 FY25, with all territories contributing. Colombia's volumes grew 4.5% as the macroeconomic environment gradually recovered, driven by portfolio initiatives to adjust price-pack architecture and the continued growth of Coke Zero. Quatro became the #1 flavored sparkling beverage in Colombia. Argentina's volumes increased 3%, maintaining positive performance through agile responses to a volatile environment, enhancing affordability plans, and accelerating single-serve mix to 26.3%. Guatemala's volumes increased 3.5% despite a decelerating macro environment and rising insecurity, with a focus on gaining share through entry price points and developing stills categories. Cost control measures and capacity investments across the region contributed to improved efficiencies.

Coca-Cola FEMSA is leveraging its Juntos+ AI capabilities and rolling out Juntos+ Advisor across its four largest markets. In Mexico, the rollout is complete, improving geo efficiency (visitation) by 5.5 percentage points to 96.5%, and strengthening customer relationships. In Brazil, Juntos+ Advisor increased efficiency by over 9.2 percentage points to 95.6%, supporting positive share performance. The platform's ability to capture and process market information quickly through revenue growth management initiatives is seen as a strong position to address market challenges^🌐, including the excise tax in Mexico and the upcoming tax in Brazil.

The company successfully priced a MXN 10 billion bond issuance in the Mexican market on February 12, through a dual tranche structure (MXN 7 billion at 9.12% fixed for 10 years, MXN 3 billion at TIIE plus 38 basis points for 3 years). This issuance strengthens the financial position, extends the debt maturity profile, and provides financial flexibility, receiving the highest national credit ratings. While the company maintains a below 1x EBITDA leverage, it is taking a cautious approach to its dividend strategy for 2026, awaiting clarity on cash flow behavior due to the Mexico excise tax impact before providing further updates on shareholder remuneration.

Sustainability remains a core element of the company's long-term value creation strategy. Coca-Cola FEMSA's S&P Global Corporate Sustainability Assessment score increased by 11 points year-over-year to an all-time high of 81, leading to its inclusion in the 2026 Sustainability Yearbook as the highest-scoring company in its sector in the Americas. The company also achieved a record score of 4.1 out of 5 in the FTSE4Good assessment and improved across other key evaluations, reflecting strong performance in climate action, water stewardship, and supplier management.