FORM 6-K
Securities and Exchange Commission
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant To Rule 13a-16 Or 15d-16
Of The
Securities Exchange Act of 1934
For the month of February 2004 Commission file number 1-12260
COCA-COLA FEMSA, S.A. de C.V.
(Translation of Registrant's name into English)
Guillermo Gonzalez Camarena No. 600
Col. Centro de Ciudad Santa Fe
Delegacion Alvaro Obregon
Mexico, D.F. 01210
(Address of principal office)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
(Check One) Form 20-F |X| Form 40-F ___
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
(Check One) Yes____ No |X|
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b). 82-__.)
CONFORMED COPY
FORM 6-K
Securities and Exchange Commission
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant To Rule 13a-16 Or 15d-16
Of The
Securities Exchange Act of 1934
For the month of February 2004 Commission file number 1-12260
COCA-COLA FEMSA, S.A. de C.V.
(Translation of Registrant's name into English)
Guillermo Gonzalez Camarena No. 600
Col. Centro de Ciudad Santa Fe
Delegacion Alvaro Obregon
Mexico, D.F. 01210
(Address of principal office)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
(Check One) Form 20-F |X| Form 40-F ___
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
(Check One) Yes____ No |X|
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b). 82-__.)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COCA-COLA FEMSA, S.A. DE C.V.
(Registrant)
Date: February 26, 2004 By: /s/ HECTOR TREVINO GUTIERREZ
--------------------------------------
Name: Hector Trevino Gutierrez
Title: Chief Financial Officer
PRESS RELEASE [GRAPHIC OMITTED][GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION:
Alfredo Fernandez / Julieta Naranjo
Investor Relations Department
Coca-Cola FEMSA, S.A. de C.V.
(52-55) 5081-5120 / 5121 / 5148
afernandeze@kof.com.mx / jnaranjo@kof.com.mx
WEBSITE: www.cocacola-femsa.com.mx
COCA-COLA FEMSA announces fourth quarter and full year of 2003 results
FOURTH-QUARTER 2003
o Consolidated revenues reached Ps.11,435.2 million and consolidated
operating income totaled Ps.2,160.9 million during the fourth quarter of
2003, reaching a consolidated operating margin of 18.9%.
FULL-YEAR 2003
o Consolidated revenues reached Ps.35,729.0 million and consolidated
operating income totaled Ps.6,710.4 million in 2003, reaching a
consolidated operating margin of 18.8%.
MexicoCity (February 26, 2004) - Coca-Cola FEMSA, S.A. de C.V. (BMV: KOFL; NYSE:
KOF) ("Coca-Cola FEMSA" or the "Company"), the largest Coca-Cola bottler in
Latin America and second largest Coca-Cola bottler in the world, announced today
its consolidated results for the fourth quarter and the full year ended December
31, 2003.
"We are pleased with our team's capacity to work together and achieve positive
results on multiple fronts simultaneously. By consolidating our operating
facilities, implementing better commercial strategies and practices, adjusting
the pricing architecture of our packages and products, and implementing best
practices in our regions, we're building a stronger consolidated position across
our market territories" stated Carlos Salazar, Chief Executive Officer of the
Company.
CONSOLIDATED RESULTS
During the fourth quarter of 2003, our consolidated revenues reached Ps.11,435.2
million. Average price per unit case was Ps.23.56 (U.S.$2.1). Consolidated
operating income reached Ps.2,160.9 million during the fourth quarter of 2003,
resulting in an 18.9% operating margin.
February 26, 2004
1
The integral cost of financing totaled Ps.245.7 million during the fourth
quarter of 2003, reflecting our new financial profile after the acquisition, in
particular the combined effect of:
(i) accrued interest expenses related to existing debt and the
acquisition financing incurred in connection with the Panamco
transaction, which more than offset the interest income generated by
our reduced cash balances;
(ii) a foreign exchange loss generated mainly by the devaluation of the
Mexican peso against the U.S. dollar, as applied to our U.S.
dollar-denominated debt; and
(iii) a consolidated monetary position gain, as a result of inflation
adjustments applied to the consolidated net monetary position of our
assets.
The income tax, tax on assets and employee profit sharing as a percentage of
income before taxes, was 47.6% during the fourth-quarter 2003. However, the full
year effective tax rate was 41.6%, reflecting a higher Mexican tax rate of
44.0%, applied to our Mexican income before taxes, which generated the majority
of the taxable income.
Consolidated net income was Ps.942.9 million in the fourth quarter of 2003,
resulting in earnings per share ("EPS") of Ps.0.508 (U.S.$0.452 per ADR)
computed on the basis of 1,846 million shares outstanding (each ADR represents
ten local shares).
BALANCE SHEET
On December 31, 2003, Coca-Cola FEMSA recorded a cash balance of Ps.2,783
million (U.S.$247.7 million), total short-term debt of Ps.2,904 million
(U.S.$258.5 million) and long-term debt of Ps.26,011 million (U.S.$2,315.2
million). It is important to highlight that 65% of the total outstanding debt of
the Company is held in the form of bonds in the capital markets.
During the fourth quarter of 2003, the Company pre-paid U.S.$200.0 million of
the U.S. dollar-denominated bridge loan used for the acquisition of Panamco and
refinanced the remaining U.S.$80.0 million of such bridge loan. The following
chart sets forth the debt breakdown of the Company by currency and interest rate
type as of December 31, 2003:
-----------------------------------------------------------------
% Interest Rate Average
Currency % Total Debt Floating Rate(1)
-----------------------------------------------------------------
U.S. dollars 42% 5% 5.90%
-----------------------------------------------------------------
Mexican Pesos 56% 56% 7.41%
-----------------------------------------------------------------
Colombian Pesos 2% 100% 10.34%
-----------------------------------------------------------------
(1) Annualized average interest rate per currency for the fourth-quarter
2003.
We began consolidating the results of our new territories during the second
quarter of 2003 in accordance with Mexican GAAP. Corporacion Interamericana de
Bebidas S.A. de C.V., formerly known as Panamerican Beverages, Inc. ("Panamco")
had historically prepared its financial statements in accordance with U.S. GAAP
and presented financial information in U.S. dollars. We have historically and
will continue to prepare our financial statements in accordance with Mexican
GAAP and present financial information in Mexican pesos. The results of our new
territories in Mexican GAAP and Mexican pesos are different from and may not be
comparable to those reported by
February 26, 2004
2
Panamco for prior periods. In addition, Panamco results have not been included
in our financial statements for periods prior to May 2003.
Financial information for the fourth quarter of 2003 and year ended December 31,
2003 both on a consolidated basis and by territory, includes three and twelve
months results of the Coca-Cola FEMSA territories (Valley of Mexico, Southeast
of Mexico and Buenos Aires ) prior to the acquisition of Panamco, and three and
only eight months, respectively, of our new territories acquired from Panamco.
Coca-Cola FEMSA's financial information will not be comparable with previous
quarters until the third quarter of 2004, and on a yearly basis, until the end
of 2005.
For volume comparison purposes, we included the sales volume figures recorded by
Panamco for the fourth quarter of 2002 and the full year ended December 31,
2002.
OPERATING RESULTS BY TERRITORY
FOURTH QUARTER 2003 SUMMARY:
-------------------------------------------------------------------------------
Volume Operating % Operating
(MUC) Income (MM) % Total Margin
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Mexico 243.9 Ps. 1,491.4 69.0% 21.8%
Central America 29.3 110.2 5.1% 12.7%
Colombia 45.1 130.7 6.1% 14.7%
Venezuela 45.8 176.5 8.2% 16.3%
Brazil 77.5 137.7 6.4% 11.4%
Argentina 39.3 113.9 5.3% 17.5%
-------------------------------------------------------------------------------
Total 480.9 Ps.2,160.9 100.0% 18.9%
-------------------------------------------------------------------------------
MEXICAN OPERATING RESULTS
Revenues
Revenues in the Mexican territories reached Ps.6,837.4 million for the fourth
quarter of 2003. Average price per unit case was Ps.27.31 (U.S.$2.43). Excluding
Ciel water volumes in five, nineteen and twenty liter packaging presentations,
average price per unit case was Ps.30.93 (U.S.$2.75).
Despite the relatively weak economic environment and the increasing competitive
dynamics of the Mexican CSD industry driven by existing players and new low
price brand producers of family size presentations, CSD volumes increased 2.1%
in the fourth quarter of 2003 over the same period of 2002. The CSD volume
increased was mainly driven by the strong performance of Fresca Pink Grapefruit,
Lift Green Apple and the recent introduction of Coca-Cola Vanilla. Total sales
volume reached 243.9 MUC in the fourth-quarter 2003, remaining almost flat over
the same period in 2002, due to lower jug bottled water volumes in our new
territories offset CSD volume growth.
February 26, 2004
3
Earlier in the year, we filed an equitable action against the Mexican Tax
Authorities alleging violation of certain constitutional rights relating to the
application of excise taxes on diet soft drinks and mineral water products.
Despite receiving a temporary injunction from payment, the Company paid this
excise tax during the first nine months of 2003 in order to avoid any potential
penalty charges imposed by the authorities. Due to the uncertainty of the
outcome of the action and following conservative accounting criteria, the
Company registered an accounting provision decreasing the amount of total
revenues by the provision amount during the first nine months of 2003.
As a result of a favorable resolution of the legal action during the fourth
quarter, the Company (i) reversed $130 million of the accounting provision
related to the excise tax previously paid during the first nine months of 2003
and registered an account receivable against the Mexican government reflecting
the right to be reimbursed for the taxes paid and (ii) was not required to
record $40 million of excise taxes it would have had to pay if its legal action
had failed. Accordingly, the favorable resolution of the legal action resulted
in a total increase of net revenues of $170 million in the fourth quarter of
2003.
Income from Operations
Gross profit totaled Ps.3,737.6 reaching a 54.7% margin as percentage of total
revenues for the fourth-quarter 2003. Operating profit totaled Ps.1,491.4
million, reaching a 21.8% margin as a percentage of total revenues.
Selling expenses were impacted by (i) higher expenses related to the
standardization of coolers maintenance programs, (ii) higher distribution
expenses derived from shipping certain packaging presentations from Mexico City
to other remote areas of our Mexican territories, and (iii) higher marketing
expenses.
After conducting an intensive analysis on the current conditions and expected
useful life of our cooler inventories in our new and existing territories in
Mexico, we decided to modify the useful life of the coolers in our original
territories from three to five years, consistent with the useful life of the
coolers of our new Mexican territories (Golfo and Bajio). We made this decision
based on the quality of our equipment and the benefit of KOF's maintenance
policy. This modification reduced non-cash items in Mexico and increased our
operating income by a similar amount. The Audit Committee of the Company
approved this modification.
February 26, 2004
4
CENTRAL AMERICAN OPERATING RESULTS (Guatemala, Nicaragua, Costa Rica and Panama)
Revenues
Total revenues reached Ps.869.5 million during the fourth-quarter of 2003.
Average price per unit case was Ps.29.75 (U.S.$2.65) during this period. In the
fourth quarter of 2003, total sales volume in our Central America territories
increased by 7.0% to 29.3 MUC as compared to the same period of 2002, driven by
the strong performance of brand Coca-Cola representing more than 80% of
incremental volumes, and growth from core flavor brands in every country within
our Central American region.
In the fourth quarter of 2003, we introduced a 2.0 Lt non-returnable PET
presentation for brand Fanta in Nicaragua, and a 600 ml PET for Lift in
Guatemala, with the purpose of developing new price points in these markets.
These packaging presentations along with new product introductions such as
bottled water Dasani and Fanta in Panama, are intended to develop new
consumption occasions.
Income from Operations
Gross profit totaled Ps.439.9 million during the fourth-quarter of 2003,
reaching a 50.6% gross margin. During this period the Company experienced lower
operating costs driven by (i) lower raw material prices due to better supplier
negotiations, and (ii) a favorable mix shift from non-returnable packaging
presentations to returnable packaging presentations. Operating income totaled
Ps.110.2 million during the fourth-quarter of 2003, reaching an operating income
margin of 12.7%. During the quarter, the Company experienced lower
administrative expenses as a result of a headcount optimization.
COLOMBIAN OPERATING RESULTS
Revenues
Total revenues reached Ps.888.2 million during the fourth quarter of 2003, an
average price per unit case of Ps.19.69 (U.S.$1.75). During the fourth quarter
of 2003, an increasing competitive landscape of alternative lower priced
beverage categories such as powders, natural juices or tap water continued
affecting the Colombian CSD industry. Total volumes decreased by 12.3% as
compared to the same period of 2002. The Company continues evaluating the right
product, package and pricing architecture for its portfolio of brands in
Colombia.
Income from Operations
Gross profit totaled Ps.405.5 million during the fourth quarter of 2003,
reaching a 45.7% gross margin during the same period. Operating income was
Ps.130.7 million, reaching a 14.7% margin during the fourth quarter of 2003. Low
fixed cost absorption
February 26, 2004
5
driven by the volume decline was partially offset by cost efficiencies from the
recent manufacturing asset consolidation.
During the fourth quarter of 2003, the Company changed the accounting policy
related to the treatment of the bottles and cases in the Colombian market in
order to conform to our accounting policy. In the past, the bottles and cases
introduced in the market were capitalized by Panamco, while KOF's traditional
accounting policy treats them as marketing expenses. Due to these accounting
changes, non-cash charges were reduced significantly during the fourth-quarter;
however cash expenses increased by a corresponding amount. The Audit Committee
of the Company approved these accounting changes.
VENEZUELAN OPERATING RESULTS
Revenues
Total revenues reached Ps.1,082.5 million during the fourth quarter of 2003 and
average price per unit case in Venezuela reached Ps.23.57 (U.S.$2.09), as a
result of a 13% weighted average price increases implemented during the fourth
quarter of 2003. Despite the price increases implemented during the fourth
quarter of 2003, our volume increased 34.7% compared to the fourth quarter of
2002, when political unrest in Venezuela due to a national strike made it
practically impossible for Panamco to run these operations on a regular basis
during part of the month of December of 2002, and also driven by our packaging
and revenue management strategies implemented during the quarter.
Income from Operations
Gross profit totaled Ps.499.2 million during fourth quarter of 2003, reaching a
46.1% gross margin during the same period. During the quarter, sufficient sugar
production was not available to meet internal demand levels driving sugar costs
to unusual levels. Operating income was Ps.176.5 million reaching an operating
income margin of 16.3% during the fourth quarter of 2003, mainly driven by
higher volumes and operating improvements implemented since May 2003.
BRAZILIAN OPERATING RESULTS
Revenues
Total revenues reached Ps.1,212.3 million during the fourth quarter of 2003 and
the average price per unit case was Ps.15.60 (U.S.$1.39).
During the fourth quarter of 2003, sales volume in our Brazilian territories
decreased by 24.7% as compared to the same period of 2002, including the
reduction of 18.8% in CSDs and the 40.2% decline in beer, as a result of our
strategy of focusing on balancing volume growth with margin expansion and the
implementation of go-to-market strategies intended to increase the number of
clients served directly by the Company versus the use of distributors.
February 26, 2004
6
We launched a new 12-ounce non-returnable glass presentation for the Coca-Cola
brand, offering the consumer a more convenient package in the on-premise
segment. With this introduction the Company has launched more than six new
packaging presentations for the Coca-Cola brands since we took control of the
operations in May 2003.
Income from Operations
Gross profit during the fourth quarter of 2003 totaled Ps.467.2 million,
reaching a 38.5% margin. Lower sugar prices, the appreciation of the Brazilian
Real against the U.S. dollar applied to our U.S. dollar denominated raw material
costs, and a favorable change of product mix to more profitable packaging
presentations, improved the profitability of the Company during the fourth
quarter of 2003.
Due to the new commercial and point of sale development strategies, we achieved
operating income of Ps.137.7 million during the fourth quarter of 2003 and an
operating margin of 11.4%, the highest operating margin since we took over the
operations in May 2003.
ARGENTINE OPERATING RESULTS
Financial information and sales volume figures in our Argentine operations are
fully comparable with previous periods.
Revenues
Total revenues reached Ps.651.0 million, a 15.0% increase as compared to the
fourth-quarter of 2002 and the average price per unit case grew by 4.5% over the
fourth-quarter of 2002 to Ps.15.81 (U.S.$1.41), mainly driven by the combination
of (i) price increases implemented during the quarter, and (ii) the product
shift from our less profitable value protection brands, Tai and Crush, toward
our core and premium brands.
In the fourth quarter of 2003, total sales volume in our Buenos Aires territory
increased by 9.5% as compared to the same period of 2002. This increase was
mainly driven by the growth of our core brands in returnable packages, which
represented more than 25% of our total sales volume during the fourth-quarter
2003, and the growth of our premium brands, which represented more than 12% of
our total volume sales during the fourth- quarter of 2003.
February 26, 2004
7
Income from Operations
Gross profit as a percentage of total revenues increased from 34.5% in the
fourth quarter of 2002 to 40.0% in 2003. This improvement was mainly driven by
(i) higher sales volume, and (ii) an appreciation of the Argentina peso against
the U.S. dollar in 2003, which positively impacted the cost of our U.S.
dollar-denominated raw materials and expenses.
In Argentina, operating expenses as a percentage of total revenues decreased 600
basis points from 28.5% in the fourth quarter of 2002 to 22.5% in the fourth
quarter of 2003, as a result of the appreciation of the Argentina peso versus
the U.S. dollar applied to the U.S. dollar-denominated expenses and the
operating strategies implemented in the market during the year. Operating income
during the fourth quarter of 2003 in our Argentine territories was Ps.113.9
million and operating margin grew from 6.0% during the fourth quarter of 2002 to
17.5% during the fourth quarter of 2003, reaching the highest operating margin
in the history of our operations in Argentina.
SUMMARY OF FULL YEAR RESULTS
Consolidated sales volume reached 1,824.0 MUC in 2003 declining 2.3% versus
2002, mainly driven by (i) lower volumes of bottled water in Mexico, Colombia
and Venezuela, due to an asset rationalization strategy implemented by the
Company combined with revenue management initiatives intended to improve the
profitability of our water business; and also due to (ii) lower beer volumes in
our Sao Paulo territory in Brazil, driven by the implementation of new
initiatives intended to take over third-party selling and distribution.
During 2003, CSD volumes remained practically flat versus 2002 because of the
volume decline in Brazil, Colombia and Venezuela, which was offset by volume
growth in our Mexican, Central America and Argentine territories.
During 2003, total revenues reached Ps.35,729.4 million, resulting in a
consolidated average unit price per case of Ps.24.46 (U.S.$2.18). Gross margin
as a percentage of total revenues was 49.7% in 2003. Consolidated operating
income was Ps.6,710.4 million, 18.8% as percentage of total revenues during
2003.
Consolidated net income totaled Ps.2,332.0 during 2003. Net income per share
reached Ps.1.36 (U.S.$1.21 per ADR) computed under the basis of 1,704.3 million
compounded average shares outstanding.
CONFERENCE CALL INFORMATION
Our fourth-quarter 2003 Conference Call will be held on: February 26, 2003,
10:30 A.M. Eastern Time (9:30 A.M. Mexico City Time). To participate in the
conference call, please dial: Domestic U.S.: 800- 901- 5247 and International:
617-786-4501.
If you are unable to participate live, an instant replay of the conference call
will be available through March 26, 2003. To listen to the replay please dial:
Domestic U.S.: 888- 286- 8010 or International: 617-801-6888. Pass code:
98344233.
February 26, 2004
8
o o o
Coca-Cola FEMSA, S.A. de C.V. produces Coca-Cola, Sprite, Fanta, Lift and other
trademark beverages of The Coca-Cola Company in Mexico (a substantial part of
central Mexico, including Mexico City and Southeast of Mexico), Guatemala
(Guatemala City and surrounding areas), Nicaragua (nationwide), Costa Rica
(nationwide), Panama (nationwide), Colombia (most of the country), Venezuela
(nationwide), Brazil (greater Sao Paulo, Campinas, Santos and part of Mato
Grosso do Sul) and Argentina (Gran Buenos Aires), along with bottled water, beer
and other beverages in some of these territories.
The Company has 32 bottling facilities in Latin America and serves more than
1,500,000 retailers in the region. Coca-Cola FEMSA currently accounts for almost
10% of Coca-Cola global sales, approximately 40% of all Coca-Cola sales in Latin
America. The Coca-Cola Company owns a 39.6% equity interest in Coca-Cola FEMSA.
o o o
Figures for the Company's operations in Mexico and its consolidated
international operations were prepared in accordance with Mexican generally
accepted accounting principles ("Mexican GAAP"). All figures are expressed in
constant Mexican pesos with purchasing power at December 31, 2003. For
comparison purposes, 2002 and 2003 figures from the Company's operations have
been restated taking into account local inflation of each country with reference
to the consumer price index and converted from local currency into Mexican pesos
using the exchange rate as of the end of the period. In addition, all
comparisons in this report for the fourth quarter of 2003, which ended on
December 31, 2003, are made against the figures for the comparable period in
2002, unless otherwise noted.
This news release may contain forward-looking statements concerning Coca-Cola
FEMSA's future performance and should be considered as good faith estimates by
Coca-Cola FEMSA. These forward-looking statements reflect management's
expectations and are based upon currently available data. Actual results are
subject to future events and uncertainties, many of which are outside Coca-Cola
FEMSA's control that could materially impact the Company's actual performance.
References herein to "U.S.$" are to United States dollars. This news release
contains translations of certain peso amounts into U.S.
o o o
(8 pages of tables to follow)
February 26, 2004
9
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
Consolidated Balance Sheet
As of December 31, 2003 and December 31, 2002
Millions of Mexican pesos (Ps.)
Expressed in currency with purchasing power as of December 31, 2003
ASSETS 2003 2002
-----------------------------------------------------------------------------
Current Assets
Cash and cash equivalents Ps. 2,783 Ps. 6,429
-----------------------------------------------------------------------------
Accounts receivable:
Trade 1,338 581
Notes 85 13
Prepaid taxes 1,088 252
Other 391 214
-----------------------------------------------------------------------------
2,902 1,060
-----------------------------------------------------------------------------
Inventories 2,187 799
Prepaid expenses 202 77
-----------------------------------------------------------------------------
Total current assets 8,074 8,365
-----------------------------------------------------------------------------
Property, plant and equipment
Land 2,484 820
Buildings, machinery and equipment 24,059 9,374
Accumulated depreciation (10,386) (3,441)
Construction in progress 671 381
Bottles and cases 947 303
-----------------------------------------------------------------------------
Total property, plant and equipment 17,775 7,437
-----------------------------------------------------------------------------
Investment in shares 516 132
Deferred charges, net 1,332 885
Intangibles 33,723 268
-----------------------------------------------------------------------------
TOTAL ASSETS Ps. 61,420 Ps. 17,087
-----------------------------------------------------------------------------
LIABILITIES & STOCKHOLDERS' EQUITY 2003 2002
-----------------------------------------------------------------------------
Current Liabilities
Short-term bank loans Ps. 2,904 Ps. 0
Interest payable 374 82
Suppliers 3,376 1,681
Accounts payable, notes and others 1,725 689
Taxes payable 1,025 236
-----------------------------------------------------------------------------
Total Current Liabilities 9,404 2,688
-----------------------------------------------------------------------------
Long-term bank loans 26,011 3,296
Pension plan and seniority premium 580 193
Other liabilities 2,608 1,238
-----------------------------------------------------------------------------
Total Liabilities 38,603 7,415
-----------------------------------------------------------------------------
Stockholders' Equity
Minority interest 163 0
Majority interest
Capital stock 2,655 2,464
Additional paid in capital 11,361 1,733
Retained earnings of prior years 9,451 6,790
Net income for the period 2,312 2,661
Cumulative results of holding
non-monetary assets (3,125) (3,976)
-----------------------------------------------------------------------------
Total majority interest 22,654 9,672
-----------------------------------------------------------------------------
Total stockholders' equity 22,817 9,672
-----------------------------------------------------------------------------
TOTAL LIABILITIES & EQUITY Ps. 61,420 Ps. 17,087
-----------------------------------------------------------------------------
10
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the three months ended December 31, 2003 and 2002
Expressed in million of mexican pesos(1) with purchasing power as of
December 31, 2003
---------------------------------------------- ---------------------------------
Consolidated Mexican Operations
---------------------------------------------- ---------------------------------
2003 2002 % VAR 2003 %Total Revenues
------------------------------------------- ---------------------------------------------- ---------------------------------
Sales volume (millions unit cases) 480.9 165.0 191.4 243.9
Average unit price per case 23.56 28.85 (18.3) 27.31
Net revenues 11,331.0 4,759.6 138.1 6,661.3
Other operating revenues 104.2 34.2 204.6 176.1
------------------------------------------- ---------------------------------------------- ---------------------------------
Total revenues 11,435.2 4,793.8 138.5 6,837.4 100.0
Cost of sales 5,761.0 2,281.8 152.5 3,099.8 45.3
------------------------------------------- ---------------------------------------------- ---------------------------------
Gross profit 5,674.2 2,512.0 125.9 3,737.6 54.7
------------------------------------------- ---------------------------------------------- ---------------------------------
Administrative expenses 699.8 387.5 80.6 482.8 7.1
Selling expenses 2,813.5 893.9 214.7 1,763.4 25.8
------------------------------------------- ---------------------------------------------- ---------------------------------
Operating expenses 3,513.3 1,281.4 174.2 2,246.2 32.9
------------------------------------------- ---------------------------------------------- ---------------------------------
Goodwill amortization 5.3 (100.0) -- --
------------------------------------------- ---------------------------------------------- ---------------------------------
Operating income 2,160.9 1,225.3 76.4 1,491.4 21.8
------------------------------------------- ---------------------------------------------- ---------------------------------
Interest expense 387.5 97.3 298.2
Interest income 14.6 73.6 (80.2)
Interest expense, net 372.9 23.7 1,473.2
Foreign exchange loss (gain) 317.8 (56.9) (658.5)
Loss (gain) on monetary position (445.0) 30.6 (1,554.2)
------------------------------------------- ----------------------------------------------
Integral cost of financing 245.7 (2.6) (9,548.1)
Other (income) expenses, net 114.9 71.3 61.2
------------------------------------------- ----------------------------------------------
Income before taxes 1,800.3 1,156.6 55.7
Taxes 857.4 380.6 125.3
------------------------------------------- ----------------------------------------------
Consolidated net income 942.9 776.0 21.5
------------------------------------------- ----------------------------------------------
Majority net income 937.9 776.0 20.9
Minority net income 5.0 -- N.A.
------------------------------------------- ---------------------------------------------- ---------------------------------
Non-cash items (2) 303.7 232.3 30.7 209.8 3.1
------------------------------------------- ---------------------------------------------- ---------------------------------
-------------------------------------- -------------------------------------
Central American Operations Columbian Operations
-------------------------------------- -------------------------------------
2003 %Total Revenues 2003 %Total Revenues
------------------------------------------- -------------------------------------- -------------------------------------
Sales volume (millions unit cases) 29.3 45.1
Average unit price per case 29.75 19.69
Net revenues 871.3 888.2
Other operating revenues (1.9) 0.0
------------------------------------------- -------------------------------------- -------------------------------------
Total revenues 869.5 100.0 888.2 100.0
Cost of sales 429.6 49.4 482.7 54.3
------------------------------------------- ------------------------------ -------------------------------------
Gross profit 439.9 50.6 405.5 45.7
------------------------------------------- ------------------------------ -------------------------------------
Administrative expenses 68.3 7.9 112.0 12.6
Selling expenses 261.4 30.1 162.8 18.3
------------------------------------------- ------------------------------ -------------------------------------
Operating expenses 329.7 37.9 274.8 30.9
------------------------------------------- ------------------------------ -------------------------------------
Goodwill amortization -- -- -- --
------------------------------------------- ------------------------------ -------------------------------------
Operating income 110.2 12.7 130.7 14.7
------------------------------------------- ------------------------------ -------------------------------------
Interest expense
Interest income
Interest expense, net
Foreign exchange loss (gain)
Loss (gain) on monetary position
-------------------------------------------
Integral cost of financing
Other (income) expenses, net
-------------------------------------------
Income before taxes
Taxes
-------------------------------------------
Consolidated net income
-------------------------------------------
Majority net income
Minority net income
------------------------------------------- ---------------------------------- -------------------------------------
Non-cash items (2) 30.0 3.5 (0.2) (0.0)
------------------------------------------- ---------------------------------- -------------------------------------
----------
(1) Except volume and average price per unit case figures.
(2) Depreciation, amortization and other non-cash items (including returnable
bottle breakage expenses).
11
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the three months ended December 31, 2003 and 2002
Expressed in million of mexican pesos(1) with purchasing power as of
December 31, 2003
------------------------------------------------------------------------
Venezuelan Operations Brazilian Operations
--------------------------------- ----------------------------------
2003 % Total Revenues 2003 %Total Revenues
-------------------------------------------- --------------------------------- ----------------------------------
Sales volume (millions unit cases) 45.8 77.5
Average unit price per case 23.57 15.60
-------------------------------------------- --------------------------------- ----------------------------------
Net revenues 1,080.2 1,208.4
Other operating revenues 2.3 3.9
-------------------------------------------- --------------------------------- ----------------------------------
Total revenues 1,082.5 100.0 1,212.3 100.0
Cost of sales 583.3 53.9 745.2 61.5
-------------------------------------------- --------------------------------- ---------------------------------
Gross profit 499.2 46.1 467.2 38.5
-------------------------------------------- --------------------------------- ---------------------------------
Administrative expenses 87.8 8.1 56.4 4.7
Selling expenses 235.0 21.7 273.1 22.5
-------------------------------------------- --------------------------------- ---------------------------------
Operating expenses 322.7 29.8 329.5 27.2
-------------------------------------------- --------------------------------- ---------------------------------
Goodwill amortization -- -- -- --
-------------------------------------------- --------------------------------- ---------------------------------
Operating income 176.5 16.3 137.7 11.4
-------------------------------------------- --------------------------------- ---------------------------------
Non-cash items (2) 17.7 1.6 16.1 1.3
-------------------------------------------- --------------------------------- ---------------------------------
---------------------------------------------------------------------------
Argentine Operations
---------------------------------------------------------------------------
2003 *%Total Revenues 2002 %Total Revenues % VAR
-------------------------------------------- ---------------------------------------------------------------------------
Sales volume (millions unit cases) 39.3 35.9 9.5
Average unit price per case 15.81 15.14 4.5
-------------------------------------------- ---------------------------------------------------------------------------
Net revenues 621.4 543.6 14.3
Other operating revenues 29.6 22.5 31.9
-------------------------------------------- ---------------------------------------------------------------------------
Total revenues 651.0 100.0 566.1 100.0 15.0
Cost of sales 390.7 60.0 370.7 65.5 5.5
-------------------------------------------- ---------------------------------------------------------------------------
Gross profit 260.3 40.0 195.4 34.5 33.2
-------------------------------------------- ---------------------------------------------------------------------------
Administrative expenses 24.1 3.7 33.4 5.9 (28.1)
Selling expenses 122.4 18.8 128.0 22.6 (4.4)
-------------------------------------------- ---------------------------------------------------------------------------
Operating expenses 146.5 22.5 161.4 28.5 (9.2)
-------------------------------------------- ---------------------------------------------------------------------------
Goodwill amortization -- -- -- --
-------------------------------------------- ---------------------------------------------------------------------------
Operating income 113.9 17.5 34.0 6.0 234.7
-------------------------------------------- ---------------------------------------------------------------------------
Non-cash items (2) 30.2 4.6 64.8 11.4 (53.5)
-------------------------------------------- ---------------------------------------------------------------------------
----------
(1) Except volume and average price per unit case figures.
(2) Depreciation, amortization and other non-cash items (including returnable
bottle breakage expenses).
12
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the twelve months ended December 31, 2003 and 2002
Expressed in million of mexican pesos(1) with purchasing power as of
December 31, 2003
--------------------------------------------- ----------------------------
Consolidated Mexican Operations
--------------------------------------------- ----------------------------
2003 2002 % VAR 2003 %Total Revenues
------------------------------------------------ --------------------------------------------- ----------------------------
Sales Volume(millions unit cases) 1,450.5 620.3 133.8 850.1
Average unit price per case 24.46 29.86 (18.1) 27.86
------------------------------------------------ --------------------------------------------- ------------
Net revenues 35,486.4 18,518.6 91.6 23,683.1
Other operating revenues 242.6 148.9 62.9 252.1
------------------------------------------------ --------------------------------------------- ------------
Total revenues 35,729.0 18,667.5 91.4 23,935.2 100.0
Cost of sales 17,979.9 8,680.7 107.1 11,090.7 46.3
------------------------------------------------ --------------------------------------------- ----------------------------
Gross profit 17,749.1 9,986.8 77.7 12,844.5 53.7
------------------------------------------------ --------------------------------------------- ----------------------------
Administrative expenses 2,333.9 1,475.0 58.2 1,631.6 6.8
Selling expenses 8,704.8 3,844.5 126.4 5,579.3 23.3
------------------------------------------------ --------------------------------------------- ----------------------------
Operating expenses 11,038.7 5,319.5 107.5 7,210.9 30.1
------------------------------------------------ --------------------------------------------- ----------------------------
Goodwill amortization -- 40.4 (100.0) --
------------------------------------------------ --------------------------------------------- ----------------------------
Operating income 6,710.4 4,626.9 45.0 5,633.6 23.5
------------------------------------------------ --------------------------------------------- ----------------------------
Interest expense 1,551.5 348.4 345.3
Interest income 227.0 264.0 (14.0)
Interest expense, net 1,324.4 84.4 1,469.2
Foreign exchange loss (gain) 2,027.9 (250.0) (911.2)
Loss (gain) on monetary position (870.8) (394.8) 120.6
------------------------------------------------ ---------------------------------------------
Integral cost of financing 2,481.5 (560.4) (542.8)
Other (income) expenses, net 238.6 180.3 32.4
------------------------------------------------ ---------------------------------------------
Income before taxes 3,990.3 5,007.0 (20.3)
Taxes 1,658.2 1,912.1 (13.3)
------------------------------------------------ ---------------------------------------------
Goodwill Impairment -- (433.9) NA
------------------------------------------------ ---------------------------------------------
Consolidated net income 2,332.0 2,661.0 (12.4)
------------------------------------------------ ---------------------------------------------
Majority net income 2,311.8 2,661.0 (13.1)
------------------------------------------------ ---------------------------------------------
Minority net income 20.2 -- --
------------------------------------------------ --------------------------------------------- ----------------------------
Non-cash items (2) 1,628.4 1,060.7 53.5 988.3 4.1
------------------------------------------------ --------------------------------------------- ----------------------------
------------------------------------ ------------------------------
Central American Operations Colombian Operations
------------------------------------ ------------------------------
2003 %Total Revenues 2003 %Total Revenues
------------------------------------------------ ------------------------------------ ------------------------------
Sales Volume(millions unit cases) 72.9 114.1
Average unit price per case 29.93 20.32
------------------------------------------------ --------------- ------------
Net revenues 2,182.5 2,319.1
Other operating revenues 4.1 --
------------------------------------------------ --------------- ------------
Total revenues 2,186.5 100.0 2,319.1 100.0
Cost of sales 1,098.7 50.2 1,251.1 53.9
------------------------------------------------ ------------------------------------ ------------------------------
Gross profit 1,087.9 49.8 1,068.1 46.1
------------------------------------------------ ------------------------------------ ------------------------------
Administrative expenses 149.6 6.8 241.6 10.4
Selling expenses 719.8 32.9 565.4 24.4
------------------------------------------------ ------------------------------------ ------------------------------
Operating expenses 869.5 39.8 806.9 34.8
------------------------------------------------ ------------------------------------ ------------------------------
Goodwill amortization -- -- -- --
------------------------------------------------ ------------------------------------ ------------------------------
Operating income 218.4 10.0 261.1 11.3
------------------------------------------------ ------------------------------------ ------------------------------
Interest expense
Interest income
Interest expense, net
Foreign exchange loss (gain)
Loss (gain) on monetary position
------------------------------------------------
Integral cost of financing
Other (income) expenses, net
------------------------------------------------
Income before taxes
Taxes
------------------------------------------------
Goodwill Impairment
------------------------------------------------
Consolidated net income
------------------------------------------------
Majority net income
------------------------------------------------
Minority net income
------------------------------------------------ ------------------------------------ ------------------------------
Non-cash items (2) 143.5 6.6 150.0 6.5
------------------------------------------------ ------------------------------------ ------------------------------
----------
(1) Except volume and average price per unit case figures.
(2) Depreciation, amortization and other non-cash items (including returnable
bottle breakage expenses).
13
Coca-Cola FEMSA, S.A. de C.V. and Subsidiaries
INCOME STATEMENT
For the twelve months ended December 31, 2003 and 2002
Expressed in million of mexican pesos(1) with purchasing power as of
December 31, 2003
--------------------------------- ----------------------------------
Venezuelan Operations Brazilian Operations
--------------------------------- ----------------------------------
2003 %Total Revenues 2003 %Total Revenues
------------------------------------- --------------------------------- ----------------------------------
Sales Volume(millions unit cases) 110.1 176.6
Average unit price per case 23.08 15.77
------------------------------------- ---------------- ---------------
Net revenues 2,542.2 2,785.7
Other operating revenues 2.3 11.2
------------------------------------- --------------------------------- ----------------------------------
Total revenues 2,544.5 100.0 2,796.9 100.0
Cost of sales 1,438.6 56.5 1,785.9 63.9
------------------------------------- --------------------------------- ----------------------------------
Gross profit 1,105.9 43.5 1,011.0 36.1
------------------------------------- --------------------------------- ----------------------------------
Administrative expenses 168.4 6.6 170.8 6.1
Selling expenses 706.0 27.7 690.4 24.7
------------------------------------- --------------------------------- ----------------------------------
Operating expenses 874.4 34.4 861.2 30.8
------------------------------------- --------------------------------- ----------------------------------
Goodwill amortization -- -- -- --
------------------------------------- --------------------------------- ----------------------------------
Operating income 231.5 9.1 149.9 5.4
------------------------------------- --------------------------------- ----------------------------------
Non-cash items (2) 135.0 5.3 53.5 1.9
------------------------------------- --------------------------------- ----------------------------------
--------------------------------------------------------------------------
Argentine Operations
--------------------------------------------------------------------------
2003 %Total Revenues 2002 %Total Revenues % VAR
------------------------------------- --------------------------------------------------------------------------
Sales Volume(millions unit cases) 126.6 115.6 9.5
Average unit price per case 15.59 15.08 3.4
------------------------------------- -------------- ------------- -----------
Net revenues 1,973.9 1,743.8 13.2
Other operating revenues 103.0 80.5 28.0
------------------------------------- -------------- ------------- -----------
Total revenues 2,076.9 100.0 1,824.3 100.0 13.8
Cost of sales 1,309.3 63.0 1,196.7 65.6 9.4
------------------------------------- --------------------------------------------------------------------------
Gross profit 767.6 37.0 627.6 34.4 22.3
------------------------------------- --------------------------------------------------------------------------
Administrative expenses 103.4 5.0 119.8 6.6 (13.7)
Selling expenses 448.6 21.6 445.9 24.4 0.6
------------------------------------- --------------------------------------------------------------------------
Operating expenses 551.9 26.6 565.7 31.0 (2.4)
------------------------------------- --------------------------------------------------------------------------
Goodwill amortization -- -- 9.5 0.5 (100.0)
------------------------------------- --------------------------------------------------------------------------
Operating income 215.7 10.4 52.4 2.9 311.6
------------------------------------- --------------------------------------------------------------------------
Non-cash items (2) 158.0 7.6 245.9 13.5 (35.7)
------------------------------------- --------------------------------------------------------------------------
----------
(1) Except volume and average price per unit case figures.
(2) Depreciation, amortization and other non-cash items (including returnable
bottle breakage expenses).
14
SELECTED INFORMATION
For the three months ended December 31, 2003
Expressed in million Mexican pesos as of December 31, 2003
------------- -------------
4Q 2002 4Q 2003
----------------------------------- -------------------------------------
Capex 584.2 Capex 188.7
----------------------------------- ------------------------------------
Depreciation 129.9 Depreciation 265.7
----------------------------------- ------------------------------------
Amortization & Others 102.4 Amortization & Others 38
----------------------------------- ------------------------------------
VOLUME (MUC)
Expressed in million unit cases
---------------------------------------------------------------------------------------
4Q 2002
---------------------------------------------------------------------------------------
Colas Flavors Water Beer Others Total
---------------------------------------------------------------------------------------------------------
Mexico (1) 150.2 44.5 47.0 0.0 1.6 243.3
Central America 19.1 6.6 1.1 0.0 0.6 27.4
Colombia 32.3 11.1 7.9 0.0 0.1 51.4
Venezuela 16.9 11.3 3.3 0.2 2.3 34.0
Brazil 47.4 25.3 4.8 24.0 0.5 102.0
Argentina 25.6 9.8 0.4 0.0 0.1 35.9
---------------------------------------------------------------------------------------------------------
Total 291.5 108.6 64.5 24.2 5.2 494.0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
4Q 2003
---------------------------------------------------------------------------------------
Colas Flavors Water Beer Others Total
---------------------------------------------------------------------------------------
152.1 46.7 44.1 0.0 1.0 243.9
20.7 7.0 1.2 0.0 0.4 29.3
29.5 9.8 5.8 0.0 0.0 45.1
26.5 13.0 3.5 0.0 2.8 45.8
41.9 17.1 3.5 14.4 0.4 77.3
27.8 11.2 0.3 0.0 0.1 39.4
---------------------------------------------------------------------------------------
298.5 104.8 58.4 14.4 4.7 480.8
---------------------------------------------------------------------------------------
----------
(1) Water volume in 4Q 2003, includes 1.7 MUC of Ciel 5.0 Lt presentation
PACKAGE MIX BY PRESENTATION
Expressed as a Percentage of Total Volume
------------------------------------------------------------
4Q 2002
------------------------------------------------------------
Ret Non-Ret Fountain Jug
------------------------------------------------------------------------------
Mexico 27.0 56.3 1.4 15.3
Central America 47.3 48.4 4.3 0.0
Colombia 49.9 40.5 2.9 6.7
Venezuela 40.4 54.5 2.6 2.5
Brazil 11.7 84.8 3.5 0.0
Argentina 18.8 77.6 3.6 0.0
------------------------------------------------------------------------------
------------------------------------------------------------
4Q 2003
------------------------------------------------------------
Ret Non-Ret Fountain Jug
------------------------------------------------------------
28.4 56.3 1.3 14.0
50.9 44.5 4.6 0.0
51.5 39.5 3.2 5.8
37.1 57.9 2.6 2.4
9.4 87.4 3.2 0.0
25.2 71.6 3.2 0.0
------------------------------------------------------------
15
SELECTED INFORMATION
For the twelve months ended December 31, 2003
Expressed in million Mexican pesos as of December 31, 2003
--------------- --------------
2002 2003
------------------------------------- ------------------------------------
Capex 1,409.7 Capex 1,910.4
------------------------------------- ------------------------------------
Depreciation 572.3 Depreciation 967.5
------------------------------------- ------------------------------------
Amortization & Others 488.4 Amortization & Others 660.9
------------------------------------- ------------------------------------
VOLUME (MUC)
Expressed in million unit cases
---------------------------------------------------------------------------------------------
2002
---------------------------------------------------------------------------------------------
Colas Flavors Water Beer Others Total
------------------------------------------------------------------------------------------------------------------
Mexico (1) 595.9 168.2 203.4 0.0 13.0 980.5
Central America 69.7 23.7 4.0 0.0 2.7 100.1
Colombia 111.7 40.4 32.3 0.0 0.6 185.0
Venezuela 78.4 55.4 17.3 2.3 9.5 162.9
Brazil 153.4 86.2 16.4 65.3 1.3 322.6
Argentina 78.9 35.2 1.0 0.0 0.5 115.6
------------------------------------------------------------------------------------------------------------------
Total 1,088.0 409.1 274.4 67.6 27.6 1,866.7
------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
2003
---------------------------------------------------------------------------------------------
Colas Flavors Water Beer Others Total
---------------------------------------------------------------------------------------------
598.5 187.8 209.7 0.0 5.6 1,001.6
74.5 26.5 4.5 0.0 1.8 107.3
107.1 38.3 26.0 0.0 0.4 171.8
86.5 44.2 12.4 0.0 8.5 151.6
141.6 62.8 11.0 48.1 1.6 265.1
90.5 34.6 1.2 0.0 0.3 126.6
---------------------------------------------------------------------------------------------
1,098.7 394.2 264.8 48.1 18.2 1,824.0
---------------------------------------------------------------------------------------------
----------
(1) Water volume in 2003, includes 10.9 MUC of Ciel 5.0 Lt presentation
PACKAGE MIX BY PRESENTATION
Expressed as a Percentage of Total Volume
-------------------------------------------- ---------------------------------------------
2002 2003
-------------------------------------------- ---------------------------------------------
Ret Non-Ret Fountain Jug Ret Non-Ret Fountain Jug
-------------------------------------------------------------- ---------------------------------------------
Mexico 28.2 53.6 1.3 16.9 27.9 54.9 1.3 15.9
Central America 50.9 43.4 5.7 0.0 51.8 42.9 5.3 0.0
Colombia 53.8 35.3 3.0 7.9 53.4 36.8 3.0 6.8
Venezuela 39.1 52.5 3.0 5.4 36.4 57.6 2.7 3.3
Brazil 11.9 84.1 4.0 0.0 11.0 85.1 3.9 0.0
Argentina 12.4 82.9 4.7 0.0 24.5 71.8 3.7 0.0
-------------------------------------------------------------- ---------------------------------------------
16
December 2003
Macroeconomic Information
--------------------------------------------------------------------------------
Inflation Forreing Exchange Rate
YTD 4Q (Per US Dollar) *
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mexico 3.98% 1.69% 11.2350
Colombia 6.49% 1.02% 2,778.2100
Venezuela 27.08% 5.37% 1,853.0000
Brazil 10.34% 1.27% 2.8892
Argentina 4.05% 1.70% 2.9150
--------------------------------------------------------------------------------
----------
* Figures as of December 31, 2003
17