FEMSA Presents 2018 Results under IFRS 16- "Leases"
Monterrey, Mexico, April 5, 2019 - Fomento Económico Mexicano, S.A.B. de C.V. ("FEMSA" or "The Company") (NYSE: FMX; BMV: FEMSAUBD) presents a best efforts retroactive estimation of the effect that the adoption of the International Financial Reporting Standards (IFRS) 16 - "Leases" would have had on the 2018 financial results of the Company. This exercise was performed to provide investors and other market participants an estimated base reflecting the significant effects of the IFRS in the Proximity, Health and Fuel Divisions of FEMSA Comercio. IFRS 16 has a material effect in the Financial Statements of the Company, particularly on the aforementioned divisions, due to the number of existing leases at January 1, 2019, the IFRS adoption date.
The information in this document is not audited but is based on the 2018 audited reported results, adjusted by the impact related to IFRS 16 if the Company would have adopted IFRS 16 at January 1, 2018. We used our best reasonable estimates to replicate the dispositions of the adoption, considering the conditions of 2018 during each period.
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This report may contain certain statements about the expectations with respect to the development of FEMSA and should be considered as best effort estimates made by the Company. These statements reflect the management's opinions based on current available information.
About FEMSA
FEMSA is a leading company that participates in the beverage industry through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume; and in the beer industry, through its ownership of the second largest equity stake in Heineken, one of the world's leading brewers with operations in over 70 countries. In the retail industry, it participates through FEMSA Comercio, comprising a Proximity Division operating OXXO, a small-format store chain, a Health Division, which includes all drugstores and related operations, and a Fuel Division, which operates the OXXO GAS chain of retail service stations. Additionally, through its Strategic Businesses unit, FEMSA provides logistics, point-of-sale refrigeration solutions and plastics solutions to FEMSA's business units and third-party clients.
Five pages of tables are included as appendices
April 5, 2019
FEMSA
Consolidated Income Statement
Millions of Pesos
Total revenues
Cost of sales
Gross profit
Administrative expenses
Selling expenses
Other operating expenses (income), net (1)
Income from operations(2)
Other non-operating expenses (income)
Interest expense
Interest income
Interest expense, net
Foreign exchange loss (gain)
Other financial expenses (income), net.
Financing expenses, net
Income before income tax and participation in associates results Income tax
Participation in associates results(3)
Net income from continuing operations
Net income from discontinued operations
Net consolidated income
Net majority income
Net minority income
Operative Cash Flow & CAPEX
Income from operations
Depreciation
Amortization & other non-cash charges
Operative Cash Flow (EBITDA)
CAPEX
For the twelve months of: | |||||
2018 | 2018 | ||||
As Reported | % of rev. | Adj. (A) | IFRS 16 (A) | % of rev. | |
469,744 | 100.0 | 469,744 | 100.0 | ||
294,574 | 62.7 | (135) | 294,439 | 62.7 | (B) |
175,170 | 37.3 | 135 | 175,305 | 37.3 | (B) |
17,313 | 3.7 | (53) | 17,260 | 3.7 | (B) |
114,573 | 24.4 | (2,429) | 112,144 | 23.9 | (B) |
1,708 | 0.4 | 1,708 | 0.4 | ||
41,576 | 8.9 | 2,617 | 44,193 | 9.4 | (B) |
874 | 874 | ||||
9,825 | 4,315 | 14,140 | (C) | ||
2,832 | 2,832 | ||||
6,993 | 4,315 | 11,308 | (C) | ||
248 | (14) | 234 | (D) | ||
139 | 139 | ||||
7,380 | 4,301 | 11,681 | (C) (D) | ||
33,322 | (1,684) | 31,638 | (B) (C) (D) | ||
10,169 | (515) | 9,654 | (E) | ||
6,560 | - | 6,560 | |||
29,713 | (1,168) | 28,545 | (B) (C) (D) (E) | ||
3,366 | - | 3,366 | |||
33,079 | (1,168) | 31,911 | |||
23,990 | (1,098) | 22,891 | |||
9,089 | (70) | 9,019 | |||
2018 | % of rev. | Adj. (A) | 2018 | % of rev. | |
As Reported | IFRS 16 | ||||
41,576 | 8.9 | 2,617 | 44,193 | 9.4 | (B) |
14,698 | 3.1 | 7,562 | 22,260 | 4.7 | (F) |
4,184 | 0.9 | 4,184 | 0.9 | ||
60,458 | 12.9 | 10,179 | 70,637 | 15.0 | (B) (F) |
24,266 | 24,266 |
(1)Other operating expenses (income), net = other operating expenses (income) +(-) equity method from operated associates.
(2)Income from operations = gross profit - administrative and selling expenses - other operating expenses (income), net.
(3)Mainly represents the equity method participation in Heineken´s results, net.
(A)Unaudited consolidated financial information.
(B)Elimination of lease payment expense, partially offset by depreciation of right-of-use asset.
(C)Interest expense related to lease liability.
(D)Foreign Exchange gains or losses from lease liabilities denominated in foreign currency.
(E)Deferred taxes due to differences between lease assets and lease liabilities throughout lease term.
(F)Depreciation of right-of-use asset.
April 5, 2019
FEMSA
Consolidated Balance Sheet
Millions of Pesos
ASSETS
Cash and cash equivalents
Investments
Accounts receivable
Inventories
Other current assets
Total current assets
Investments in shares
Property, plant and equipment, net
Right of use
Intangible assets
Other assets
TOTAL ASSETS
LIABILITIES & STOCKHOLDERS´ EQUITY
Bank loans
Current maturities of long-term debt
Interest payable
Current maturities of leases long-term debt Operating liabilities
Total current liabilities
Long-term debt
Long-term leases
Laboral obligations
Other liabilities
Total liabilities
Total stockholders' equity
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
Dic-18 | Adj. (A) | Dic-18 | |
As Reported | IFRS 16 (A) | ||
62,047 | 62,047 | ||
30,924 | 30,924 | ||
28,164 | 28,164 | ||
35,686 | 35,686 | ||
20,786 | 20,786 | ||
177,607 | 177,607 | ||
94,315 | 94,315 | ||
108,602 | 108,602 | ||
- | 51,220 | 51,220 | (B) |
145,610 | 145,610 | ||
50,247 | 515 | 50,762 | (C) |
576,381 | 51,735 | 628,116 | |
2,436 | 2,436 | ||
11,238 | 11,238 | ||
964 | 964 | ||
- | 5,860 | 5,860 | (D) |
86,826 | 86,826 | ||
101,464 | 5,860 | 107,324 | |
108,161 | 108,161 | ||
- | 47,056 | 47,056 | (E) |
4,699 | 4,699 | ||
26,515 | 26,515 | ||
240,839 | 52,916 | 293,755 | |
335,542 | (1,181) | 334,361 | (F) |
576,381 | 51,735 | 628,116 | |
- | (0) | (0) |
(A)Unaudited consolidated financial information.
(B)Right-of-useasset related to leases longer than 12 months and underlying asset value greater than US$5,000.
(C)Deferred taxes due to differences between lease assets and lease liabilities throughout lease term.
(D)Long term leases maturing within 12 months.
(E)Net present value of unavoidable future lease payments.
(F)Recalculation for adjustments related to adoption of IFRS 16, mainly net income.
April 5, 2019
FEMSA Comercio - Proximity Division | |||||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||||
Millions of Pesos | |||||||||||||||||||||||||
For the three months of: | |||||||||||||||||||||||||
1Q 2018 | 2Q 2018 | 3Q 2018 | 4Q 2018 | ||||||||||||||||||||||
As Reported | (A) | Adj. | (B) | IFRS 16 | (B) | As Reported | (A) | Adj. | (B) | IFRS 16 | (B) | As Reported | Adj. | (B) | IFRS 16 | (B) | As Reported | Adj. | (B) | IFRS 16 | (B) | ||||
Total revenues | 37,747 | 37,747 | 42,387 | 42,387 | 43,967 | 43,967 | 43,357 | 43,357 | |||||||||||||||||
Cost of sales | 24,286 | 24,286 | 26,279 | 26,279 | 26,917 | 26,917 | 24,446 | 24,446 | (C) | ||||||||||||||||
Gross profit | 13,461 | 13,461 | 16,108 | 16,108 | 17,050 | 17,050 | 18,911 | 18,911 | (C) | ||||||||||||||||
Administrative expenses | 845 | (1) | 844 | 885 | (2) | 884 | 1,046 | (2) | 1,044 | 810 | (2) | 808 | (C) | ||||||||||||
Selling expenses | 10,596 | (397) | 10,199 | 11,540 | (410) | 11,130 | 12,325 | (422) | 13,130 | (431) | 12,699 | (C) | |||||||||||||
Other operating expenses (income), net | 65 | 65 | 80 | 80 | 69 | 69 | 63 | 63 | |||||||||||||||||
Income from operations | 1,956 | 398 | 2,354 | 3,603 | 411 | 4,014 | 3,610 | 424 | 4,034 | 4,908 | 433 | 5,341 | (C) | ||||||||||||
Depreciation | 1,116 | 866 | 1,982 | 1,144 | 884 | 2,028 | 1,262 | 904 | 2,166 | 1,295 | 918 | 2,213 | (D) | ||||||||||||
Amortization & other non-cash charges | 112 | 112 | 129 | 129 | 126 | 126 | 154 | 154 | |||||||||||||||||
Operative Cash Flow (EBITDA) | 3,184 | 1,265 | 4,448 | 4,876 | 1,295 | 6,172 | 4,998 | 1,328 | 6,327 | 6,357 | 1,351 | 7,708 | (C) (D) | ||||||||||||
CAPEX | 1,476 | 1,476 | 2,394 | 2,394 | 2,654 | 2,654 | 2,917 | 2,917 | |||||||||||||||||
For the twelve months of: | |||||||||||||||||||||||||
2018 | |||||||||||||||||||||||||
As Reported | % of rev. | Adj. | (B) | IFRS 16 | (B) | % of rev. | |||||||||||||||||||
Total revenues | 167,458 | 100.0 | 167,458 | 100.0 | |||||||||||||||||||||
Cost of sales | 101,929 | 60.9 | 101,929 | 60.9 | (C) | ||||||||||||||||||||
Gross profit | 65,529 | 39.1 | 65,529 | 39.1 | (C) | ||||||||||||||||||||
Administrative expenses | 3,587 | 2.1 | (7) | 3,580 | 2.1 | (C) | |||||||||||||||||||
Selling expenses | 47,589 | 28.4 | (1,659) | 45,930 | 27.4 | (C) | |||||||||||||||||||
Other operating expenses (income), net | 276 | 0.2 | 276 | 0.2 | |||||||||||||||||||||
Income from operations | 14,077 | 8.4 | 1,667 | 15,744 | 9.4 | (C) | |||||||||||||||||||
Depreciation | 4,817 | 2.9 | 3,572 | 8,389 | 5.0 | (D) | |||||||||||||||||||
Amortization & other non-cash charges | 521 | 0.3 | 521 | 0.3 | |||||||||||||||||||||
Operative Cash Flow (EBITDA) | 19,415 | 11.6 | 5,239 | 24,654 | 14.7 | (C) (D) | |||||||||||||||||||
CAPEX | 9,441 | 9,441 |
(A)1Q18 and 2Q18 adjusted to reflect change from Commercial Division to Proximity Division implemented in 3Q18.
(B)Unaudited financial information.
(C)Elimination of lease payment expense, partially offset by depreciation of right-of-use asset.
(D)Depreciation of right-of-use asset.
April 5, 2019
FEMSA Comercio - Health Division | |||||||||||||||||||||||
Results of Operations | |||||||||||||||||||||||
Millions of Pesos | |||||||||||||||||||||||
For the three months of: | |||||||||||||||||||||||
1Q 2018 | 2Q 2018 | 3Q 2018 | 4Q 2018 | ||||||||||||||||||||
As Reported | Adj. | (A) | IFRS 16 | (A) | As Reported | Adj. | (A) | IFRS 16 | (A) | As Reported | Adj. | (A) | IFRS 16 | (A) | As Reported | Adj. | (A) | IFRS 16 | (A) | ||||
Total revenues | 12,454 | 12,454 | 13,380 | 13,380 | 12,562 | 12,562 | 13,343 | 13,343 | |||||||||||||||
Cost of sales | 8,758 | 8,758 | 9,287 | 9,287 | 8,750 | 8,750 | 9,080 | 9,080 | (B) | ||||||||||||||
Gross profit | 3,696 | 3,696 | 4,093 | 4,093 | 3,812 | 3,812 | 4,263 | 4,263 | (B) | ||||||||||||||
Administrative expenses | 485 | 485 | 514 | 514 | 514 | 514 | 541 | 541 | (B) | ||||||||||||||
Selling expenses | 2,910 | (49) | 2,861 | 2,923 | (50) | 2,873 | 2,732 | (52) | 2,680 | 2,992 | (53) | 2,939 | (B) | ||||||||||
Other operating expenses (income), net | 21 | 21 | 22 | 22 | 26 | 26 | 69 | 69 | |||||||||||||||
Income from operations | 280 | 49 | 329 | 634 | 50 | 684 | 540 | 52 | 592 | 661 | 53 | 714 | (B) | ||||||||||
Depreciation | 166 | 424 | 590 | 166 | 430 | 596 | 169 | 436 | 605 | 176 | 442 | 618 | (C) | ||||||||||
Amortization & other non-cash charges | 85 | 85 | 86 | 86 | 80 | 80 | 76 | 76 | |||||||||||||||
Operative Cash Flow (EBITDA) | 531 | 473 | 1,004 | 886 | 480 | 1,366 | 789 | 488 | 1,277 | 913 | 494 | 1,407 | (B) (C) | ||||||||||
CAPEX | 351 | 351 | 229 | 229 | 376 | 376 | 206 | 206 | |||||||||||||||
For the twelve months of: | |||||||||||||||||||||||
2018 | |||||||||||||||||||||||
As Reported | % of rev. | Adj. | (A) | IFRS 16 | (A) | % of rev. | |||||||||||||||||
Total revenues | 51,739 | 100.0 | 51,739 | 100.0 | |||||||||||||||||||
Cost of sales | 35,874 | 69.3 | 35,874 | 69.3 | (B) | ||||||||||||||||||
Gross profit | 15,865 | 30.7 | 15,865 | 30.7 | (B) | ||||||||||||||||||
Administrative expenses | 2,055 | 4.0 | 2,055 | 4.0 | (B) | ||||||||||||||||||
Selling expenses | 11,557 | 22.3 | (204) | 11,353 | 21.9 | (B) | |||||||||||||||||
Other operating expenses (income), net | 138 | 0.3 | 138 | 0.3 | |||||||||||||||||||
Income from operations | 2,115 | 4.1 | 204 | 2,319 | 4.5 | (B) | |||||||||||||||||
Depreciation | 676 | 1.3 | 1,732 | 2,408 | 4.7 | (C) | |||||||||||||||||
Amortization & other non-cash charges | 329 | 0.6 | 329 | 0.6 | |||||||||||||||||||
Operative Cash Flow (EBITDA) | 3,120 | 6.0 | 1,936 | 5,056 | 9.8 | (B) (C) | |||||||||||||||||
CAPEX | 1,162 | 1,162 |
(A)Unaudited financial information.
(B)Elimination of lease payment expense, partially offset by depreciation of right-of-use asset.
(C)Depreciation of right-of-use asset.
April 5, 2019
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FEMSA - Fomento Económico Mexicano SA de CV published this content on 05 April 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 05 April 2019 21:52:06 UTC