Coca Cola Femsa Q2 2025 Earnings Report

Coca Cola Femsa EPS Results

• Actual EPS: $1.30
• Consensus EPS: $1.52
• Beat/Miss: Missed by -$0.22
• One Year Ago EPS: N/A

Coca Cola Femsa Revenue Results

• Actual Revenue: $3.74 billion
• Expected Revenue: $3.89 billion
• Beat/Miss: Missed by -$148.67 million
• YoY Revenue Growth: N/A

Coca Cola Femsa Announcement Details

• Quarter: Q2 2025
• Date: 7/23/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 23, 2025
• Conference Call Time: 11:00AM ET

Coca-Cola FEMSA, S.A.B. de C.V. (NYSE: KOF) is the largest franchise bottler of Coca-Cola beverages in the world. As a key strategic partner of The Coca-Cola Company, it produces, markets and distributes a full portfolio of sparkling and still beverages, including Coca-Cola, Sprite, Fanta and a range of juices, waters and dairy-based drinks. The company operates state-of-the-art bottling facilities, cold-drink equipment and an extensive logistics network to ensure product availability in retail outlets and on-premise establishments.

Founded in 1991 as a spinoff from FEMSA, Coca-Cola FEMSA has grown through both organic capacity expansions and selective acquisitions. Over the years, the company has invested in production technology, quality control and sustainability initiatives, such as water stewardship and packaging recovery programs. Its efforts to optimize supply-chain efficiency and reduce environmental impact have earned recognition in corporate responsibility and ESG (environmental, social and governance) reporting circles.

With operations spanning Mexico, Central America, Colombia, Brazil, Argentina, Uruguay, Paraguay and the Philippines, Coca-Cola FEMSA serves a population of over 450 million people. The company’s distribution footprint includes large metropolitan areas as well as smaller towns and rural communities, leveraging direct-store delivery, cold-drink equipment and third-party distributors to reach diverse consumer segments. Localized marketing campaigns and tailored packaging sizes support demand across different markets and consumption occasions.

Headquartered in Mexico City, Coca-Cola FEMSA is led by a seasoned management team with deep experience in the beverage and fast-moving consumer goods industries. The company maintains a corporate governance structure aligned with international best practices and publishes regular updates on its operational performance, sustainability targets and long-term strategic objectives. Through its partnership with The Coca-Cola Company and focus on innovation, Coca-Cola FEMSA aims to drive growth and enhance shareholder value in its served territories.

Coca Cola Femsa Q2 2025 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: Consolidated volume declined 5.5% year-over-year to 1.035 M unit cases while total revenues grew 5.0% to COP 72.9 B driven by revenue management and currency translation, with gross margin contracting 70 bps to 45.3% and adjusted EBITDA margin down 160 bps to 18.4%.
• Negative Sentiment: Mexico volumes fell 10% amid softer macroeconomic conditions and record rainfall, prompting the company to deploy tactical promotions, an affordability plan with returnable packages, and service improvements to recover market share.
• Positive Sentiment: In Brazil, volumes declined just 1.5% despite adverse weather, while record share gains in non-alcoholic RTD categories, a 56% rise in Coke Zero volume, and digital loyalty expansion underpinned improved profitability.
• Positive Sentiment: Argentina volumes surged 11.9% as inflation moderates, single-serve mix climbed to 18.2%, flavors grew 6.2%, digital customer penetration surpassed 30%, and order fulfillment hit 98%, driving strong top-line momentum.
• Positive Sentiment: Supply chain initiatives delivered USD 60 M of the USD 90 M savings target year-to-date, line efficiency gains and nine new bottling lines are on track to boost capacity and support long-term sustainable growth.

Presentation

[Operator]

Hello, and welcome to the Coca Cola FEMSA Second Quarter twenty twenty five Conference Call. My name is Sophia, and I'll be your moderator for today's question Please note that this conference is being recorded. For the duration of the call, all participants will be in a listen only mode. You will have the opportunity to ask questions at the end of the presentation. To do so, please use the raise hand feature in Zoom and we will open your line.

[Operator]

If you experience any technical issues during the call, please use the chat function to request assistance. I would now like to hand the call over to Mr. Jorge Coiasco, Investor Relations Director at Coca Cola FEMSA. Jorge, please go ahead.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

Good morning to you all, and welcome to this webinar to review our second quarter twenty twenty five results. As you have noticed, we migrated our earnings conference call and webcast to a Zoom based platform to enhance audio quality and ease of connection for all participants. As usual, after prepared remarks, we will open the call for Q and A. Joining me this morning are Iain Craig, our Chief Executive Officer and Gerardo Cruz, our Chief Financial Officer. Before I hand the call over to Ian, let me remind all participants that this conference call may include forward looking statements and should be considered as good faith estimates made by the company. These forward looking statements reflect management's expectations and are based upon currently available data. The actual results are subject to future events and uncertainties that can materially impact the company's performance. For more details, please refer to the full disclaimer in the earnings release that was published earlier today.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

With that, let me turn the call over to our CEO to begin our presentation. Please go ahead, Iain.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Thank you, Jorge. Good morning, everyone. Thank you for joining us today.

[Ian Craig García, CEO at Coca-Cola FEMSA]

During the second quarter, we faced a challenging environment marked by a softer macroeconomic backdrop in Mexico and adverse weather conditions in Mexico and Brazil. In addition, we faced a tough comparison base, driven by the strong results achieved during the same period of the previous year. However, despite a tougher than expected first half of the year, our long term perspectives remain unchanged. We are convinced that our strategy, the implementation of our long term sustainable growth model and the investments behind capacity expansions are ideally positioning Coca Cola FEMSA to capture the many opportunities ahead of us. During our call today, I will begin by summarizing our consolidated results for the second quarter.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Then I will take a moment to dive deeper into key markets to provide you with an update on their main operating developments. Finally, Jerry will guide you through our division's performance before closing with an update on supply chain initiatives. With that, let's move on to the summary of our consolidated results for the second quarter. Our consolidated volume declined 5.5% to 1,035,000 unit cases. This contraction was driven by declines in Mexico, Brazil, Colombia and Panama that were partially offset by growth in Argentina, Uruguay, Guatemala and the rest of our territories in Central America.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Despite the volume contraction, our revenue management initiatives and favorable currency translation effects led our total revenues for the quarter to grow 5%, reaching COP72.9 billion. On a neutral currency basis, our total revenues increased 2.4%. Gross profit increased 3.4% to MXN33 billion, leading to a margin contraction of 70 basis points to 45.3%. This decrease was driven mainly by lower operating leverage and unfavorable mix effects, coupled with higher fixed costs and the year on year depreciation of most of our operating currencies as compared with the U. S.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Dollar. These factors were partially offset by better sweetener costs and favorable raw material hedging initiatives. Our operating income remained flat at COP9.7 billion with OI margin contracting 60 basis points at 13.4%. As was the case during the first quarter, this operating margin contraction was driven mainly by lower operating leverage, coupled with higher operating expenses such as labor, maintenance, marketing and depreciation that were partially offset by cost and expense efficiencies and an operating foreign exchange gain. Adjusted EBITDA for the quarter decreased 3.8% to MXN13.4 billion and EBITDA margin contracted 160 basis points to 18.4%.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Finally, our majority net income decreased 5.3% to MXN 5,300,000,000.0. This decline was driven mainly by an increase in our comprehensive financial results that was mainly caused by higher interest expenses and a lower foreign exchange gain coupled with a higher effective tax rate. Now, let's switch gears and to expand on our operations performance for the second quarter. In Mexico, our volume declined 10% cycling a historic second quarter from the previous year, which grew 7.9%. Although we saw a month after month recovery in share trends, the main headwinds for volume performance came in the form of a softer macro backdrop and unfavorable weather.

[Ian Craig García, CEO at Coca-Cola FEMSA]

For instance, we faced consistently lower average temperatures throughout the quarter with June being on average three degrees Celsius below the previous year. Perhaps more challenging was the fact that we faced five times more rain than the previous year. To give you a sense, Mexico City saw the rainiest June in over fifty years, significantly impacting consumer behavior. In this context, we implemented the following key initiatives focusing on the levers under our control. First, we remain focused on the plan that is delivering positive share results.

[Ian Craig García, CEO at Coca-Cola FEMSA]

As I mentioned during our previous call, we adjusted our promotional grid and implemented tactical activities in single serve and multi serve. This has allowed us to not only recover our share in the modern channel, but to surpass previous year's levels. In the traditional trend trade, the trend is also positive, and we have closed most of the gap with work to do to fully recover during the second half of the year. Importantly, we have focused our promotional activities on actions that not only address the short term, but also provide sustainable share of value. Second, we have developed an affordability plan together with The Coca Cola Company that leverages marketing campaigns, attractive price points and relentless execution, especially in the traditional trade.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Considering the macroeconomic backdrop and consumer sentiment in Mexico, where personal consumption expense and remittances have entered negative territory, there is a significant opportunity to leverage our affordability platform with initiatives such as upsizing, the adjustment of key returnable packages at attractive price ranges and executing more than 33,000 dedicated cooler doors to affordability. Third, we continue to significantly improve execution on our customer service metrics. Our commercial and supply chain initiatives continue to drive improvements in order fulfillment and Net Promoter Score, also achieving historic levels in portfolio coverage. And fourth, we are focusing on productivity initiatives aimed at enhancing processes and resource allocation given the evolving macro landscape. Regarding long term investments behind capacity expansion, during the first half of the year, we completed key projects and began additional capacity initiatives that are progressing according to plan.

[Ian Craig García, CEO at Coca-Cola FEMSA]

For example, in Tolica, we completed the expansion of our warehouse adding more than 19,000 square meters and we began operations of a new PET line with monthly capacity of more than 5,000,000 unit cases. To increase capacity in the Bajio region in San Juan Del Rio, we completed Phase one of our expansion plan, adding a new truck yard and blow molding room. This represents more than 8,000 additional square meters to this plant. Finally, in the Southeast Region, we completed the separation of our Villermosa distribution center from the plant, adding more than 5,000 pallet positions in incremental capacity. In summary for Mexico, as a result of a tougher than anticipated first half of the year and a cautious outlook for the second half, our team in Mexico is leveraging winning top line initiatives together with savings in supply chain, procurement and IT.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Now moving on to Guatemala. Our volumes increased 1.6% to reach 51,300,000 unit cases. Despite seeing a decline in consumer confidence and the higher propensity to save during the first six months of the year, the implementation of key initiatives is delivering positive results. For instance, we increased our customer base by 10,000 new customers, 28% ahead of target, allowing us to gain share in key categories such as sparkling beverages, juices, water and energy drinks. At the same time, we continue focusing on the fundamentals of the business, strengthening sales force training while adding new routes and coolers.

[Ian Craig García, CEO at Coca-Cola FEMSA]

As an example, we exceeded our target of installed coolers reaching 9,700 new coolers installed year to date, a 10% increase versus the prior year. Regarding commercial labelers, we're leveraging Juntos Plus and Juntos Plus Premiere. This quarter, we added 7,000 monthly active users, a 7% increase versus the previous quarter, with more than 60% of these users active on the app, which is 10 percentage points ahead of last March. On the supply chain front, we continue progressing according to plan. We started production of a new can line last April and a new PET line is currently being assembled.

[Ian Craig García, CEO at Coca-Cola FEMSA]

As we enter the second half of the year, we expect to continue improving our profitability in Guatemala by optimizing our portfolio and productivity, all while focusing on rigorous cost and expense control. Now moving on to South America. In Brazil, our volumes declined 1.5% year on year cycling strong 12.1% growth achieved last year. In Brazil, whilst the positive macro environment continued, our quarterly volumes were impacted by colder temperatures, especially in June, with Sao Paulo being on average three degrees below the previous year. Aligned with our long term strategy, we continue focusing on share growth and profitability.

[Ian Craig García, CEO at Coca-Cola FEMSA]

For example, during the quarter, we achieved record share in the non alcoholic ready to drink segment, mainly driven by gains in the sparkling beverage, juices, sports drinks and water categories. Improvements in the sparkling beverage category are driven mainly by the recovery of flavors as additional capacity has allowed us to reduce unavailability. Notably in the low and no sugar category, Coca Cola Zero maintains its impressive growth pace increasing volume by 56% year on year. Regarding our single serve mix, we further increased 1.6 percentage points versus the previous year reaching 27.1%. Our digital customer base grew 12.1% with 28,000 additional active monthly users and a 12.7% year on year increase in average ticket size.

[Ian Craig García, CEO at Coca-Cola FEMSA]

The Juntos Plus premium loyalty program reached over 59,000 customers redeeming points this quarter, up from 18,000 during the same period of last year. Cuntos Plus Advisors enhanced sales force performance boosting geo efficiency by over 11 percentage points from 85% to 96% and expanding coverage by more than five points for sparkling beverages and over eight points for non carbonated beverages. Additionally, in Brazil, we're looking to continue leveraging our technological advances in order to deliver increased productivity. In order fulfillment, our transformation in culture, training and improvement in operational processes led to a 3.9 percentage point improvement to reach 93.5%. Our Porto Alegre reopening plan has also been concluded, both in the production and distribution functions, which positions us well to grow during the second half of the year.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Moving on to Colombia. In Colombia, our volume performance improved sequentially despite facing a still complex consumer sentiment scenario. For the quarter, our volumes declined 2.8% year on year as we continued to gain share supported by affordability and execution initiatives in sparkling beverages, teas, sports drinks and flavored water. Regarding capabilities, we continue to increase our customer base while expanding our digital capabilities with Juntos Plus and Premier loyalty plan as we double down on cost and expense efficiencies that are allowing us to improve profitability. Finally, in Argentina, our volumes continue recovering at a solid pace increasing 11.9%.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Macro indicators continue improving and monthly inflation is now below 2% as our country continues to foster a disciplined financial surplus policy. In this improving macro context, we continue leveraging our strategy to pave the way for long term growth. We continue offering affordability and promotions, while boosting single serve growth with our ShareAcco campaign and promotions. As a result, our single serve mix increased 1.6 percentage points to reach 18.2%. At the same time, we're strengthening our flavors portfolio with campaigns around Sprite and Fanta leading to 6.2% growth in flavors.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Notably, we're also adding important capabilities to our Argentine operation to enable continuous growth. For instance, we're accelerating digitalization via the rollout of the latest version of Cuntos Plus and Preme loyalty plan as we increased our digital customer base by 13 percentage points to surpassing 30% of our total customer base. Regarding execution, our customer centricity indicators are all showing improvement with order fulfillment increasing 1.5 percentage points versus our prior year to reach 98%. We are confident that despite a tougher than expected first half of twenty twenty five, we are well equipped to navigate the current landscape and emerge a stronger, more adaptable organization. We're leveraging the local nature of our business and the right set of initiatives across our markets to recover momentum during the second half of twenty twenty five.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Our strategy and ambitions remain focused on the long term, while we have fine tuned our plans together with our partners at The Coca Cola Company to achieve our common short- and long term objectives. With that, I will hand the call over to Gerard.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Thank you, Ian, and good morning, everyone. I will now proceed to summarize our division's results for the quarter. In Mexico and Central America, volumes declined 8.4% to 636,900,000 unit cases, driven by volume declines in Mexico and Panama that were partially offset by growth in Guatemala, Nicaragua and Costa Rica. Revenues increased 0.5% to MXN45.3 billion, driven mainly by our revenue management initiatives and favorable currency translation into Mexican pesos. On a currency neutral basis, revenues decreased 1.9.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Gross profit decreased 2.5% to reach MXN21.4 billion, resulting in a gross margin of 47.2%, a 150 basis point contraction year on year. This margin contraction was driven mainly by unfavorable top line and mix effects, coupled with higher fixed costs such as maintenance and the depreciation of the Mexican peso as applied to our U. S. Dollar denominated raw material costs. These effects were partially offset by revenue management initiatives and lower sweetener costs.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Operating income decreased 6.3% to MXN 6,800,000,000.0, and our operating margin contracted 110 basis points to 15.1%. This contraction was driven mainly by lower operating leverage due to volume contraction, coupled with higher operating expenses such as labor, maintenance and depreciation. These effects were partially offset by lower freight expenses and an operating foreign exchange gain. Finally, our adjusted EBITDA in the division declined 9.7% with a two twenty basis point margin contraction to 19.7%. Moving on to South America.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Volumes decreased 0.5% to 398,400,000 unit cases. This decrease was driven mainly by volume declines in Brazil and Colombia that were partially offset by the growth achieved in Argentina and Uruguay. Our revenues in South America increased 13.2% to MXN 27,600,000,000.0, driven mainly by our revenue management initiatives, favorable mix and favorable currency translation effects into Mexican pesos. On a currency neutral basis, total revenues in South America increased 10.3%. Gross profit in South America rose 16.2%, expanding margins by 110 basis points to 42.2%, mainly due to higher sales, operating leverage and lower sweetener costs.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Currency depreciation partially offset these gains. Operating income in South America rose 19.6% to MXN2.9 billion, with operating margin up 50 basis points to 10.6%. The improvement was mainly due to operating leverage and cost controls, partly offset by higher expenses such as labor and marketing. Finally, adjusted EBITDA in the division increased 10.4% to ARS 4,500,000,000.0 for a margin contraction of 40 basis points to 16.2%. Now let me expand on our comprehensive financial results, which recorded an expense of ARS 1,200,000,000.0 as compared to an expense of ARS $885,000,000 during the same period of the previous year.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

This 34.4% increase was driven mainly by two effects: first, an increase in interest expense driven mainly by the new issuance of senior notes due 2,035 new financing in Colombia and higher interest rates in Brazil. And second, we recorded a lower foreign exchange gain as compared to the previous year. These effects were partially offset by a larger gain on financial instruments and in hyperinflationary subsidiaries. We are improving our supply chain by eliminating infrastructure bottlenecks and digitizing operations to make our company more resilient and adaptable. First, regarding the committed savings I mentioned last February, we continue making progress toward our $90,000,000 target, reaching $60,000,000 year to date.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Approximately $30,000,000 come from primary distribution, 20,000,000 come from cost to serve and $10,000,000 from cost to make. Second, our line efficiency continues increasing by focusing on continuous improvement mindset, leveraging our manufacturing operational model, focusing on asset management and optimizing processes such as changeovers between different beverages and presentations. And third, we continue making progress on the installation of the nine new bottling lines planned for 2025. We started a new line in Mexico, one in Guatemala and one in Colombia. For the second half of the year, we will start production in four lines in Brazil, one more in Guatemala and one in Costa Rica.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

These initiatives are proof that despite a more challenging than expected first half of the year, we remain committed to the long term, strengthening our supply chain not only by generating savings, but by streamlining our operation while developing state of the art capabilities to improve our customer service. With that, operator, we're ready to take questions.

[Operator]

Section for written questions. Our first question comes from Lucas Fajeda with JPMorgan. You can open your microphone.

[Lucas Ferreira, Executive Director at J.P. Morgan]

Hi, guys. I hope you listen to me well. I wanted to explore a little bit more your expectations for the second half of the year and the initiatives you're taking navigate this challenging environment, especially in Mexico. Can you discuss a little bit where your market share stands in both the traditional and modern panels in the country? And then the initiatives you're talking about regarding affordability mix, how to think about let's say your average sales price or in other words your expectations, if you have expectations that you can share about the revenue growth for Mexico in the second half of the year would be great.

[Lucas Ferreira, Executive Director at J.P. Morgan]

And then the second question about Brazil, it seems like temperature was a key driver. But anything else you can share about the performance of specifically channels that would help us understand if we should see a rebound in volumes through the second half of the year given your execution, given the performance of the whole industry and your market share? So that will be great. Thank you very much.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Lucas. How are you? It's a two part question on Mexico and Brazil really asking us to expand more. If you want, Jeriel, head into Mexico first and then you can complement me and then we'll go into Brazil in the same format. So the story of Mexico this year, what we saw in the market was, first, for our company, a backlash that ended in April.

[Ian Craig García, CEO at Coca-Cola FEMSA]

I would say that after April, that was no longer the conversation. But then we started seeing the economy impacts on volume and finally in June impacts of the economy together with weather. So what the challenging piece of navigating the quarter is when we were looking at volumes, for example, in April and May, those were around 7% below last year. But when you looked at it versus 2023, they were record volume still. So they were 5% above 2023.

[Ian Craig García, CEO at Coca-Cola FEMSA]

So it was a tricky decision for us on what to expect for June because if we kept the same pattern vis a vis 2023 was going to be a very good June. And if we were going to keep the same pattern versus below 2024, it was going to be a complex June, and it was the latter that happened. So June was a decline of 15%. So it was 7%, 715%, and that ends up with a 10%. And what we saw in June, like I mentioned, was economy plus weather.

[Ian Craig García, CEO at Coca-Cola FEMSA]

So what we're looking at for the second half of the year is we're planning a more conservative scenario where the economy plays a role when we're looking at declining personal consumption expenditures and remittances two months in a row in the negative, it's prudent for us to plan that it will be a more complex scenario to navigate. Now the corollary of that, you asked about market share, is how we're doing in market share. So after the backlash, if we separate this by channels, we're completely built above last year in the modern trade channel. And remember, modern trade price compliance is much higher than in traditional. So we're above that versus last year.

[Ian Craig García, CEO at Coca-Cola FEMSA]

And when you're looking at the traditional channel, we're below, but we're below around 1.5 points. So we're getting there. It's just a longer journey. And when you break that down, the gap that we have, because you mentioned pricing, is specifically the SharePoint in that 20 pesos area, where we're competing against Pepsi, which has the liter 75 at 20 pesos and Red Cola, which has its two liter at 20. So that's the price point where we still have a gap and we have very clear initiatives to address that.

[Ian Craig García, CEO at Coca-Cola FEMSA]

And in the markets where we've rolled out those initiatives, we don't want to give everything away to our competitors on the call, but the response has been very, very favorable. So I think we have these strategies in place where we can turn around that remaining price point and get to the shares where we want them to get on the traditional channel. Jerry, would you like to give a little more color on that?

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Just I think one last thing to complement Ian, Lucas. Also, all these initiatives coupled with the comp base that we have for the second half of 'twenty four. As you remember, the second half of 'twenty four, we started seeing in the June heavy rains in Mexico that impacted volumes importantly to what we were seeing during the first half of 'twenty four. So in the base and just all of the initiatives that we're implementing, trying to address the consumer weakness that we're certainly seeing right now. I think we're cautiously optimistic to what we're expecting for Mexico in the second half of this year.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Then the other part of your question was regarding Brazil. Brazil is very different than Mexico because it's really very clearly pointing to the weather as that being what impacted in the in June basically. So it's really a weather phenomenon. It also hurt a bit in Argentina. And once that transition out in Argentina, everything responded and we feel the same will happen in Brazil.

[Ian Craig García, CEO at Coca-Cola FEMSA]

In Brazil, we're also leveraging the Juntos Plus advisor tool, which we should be starting to roll out in August, September in Mexico. And the results are just phenomenal. We're seeing like 1% to 2% volume uplifts there on the back of Advisor. And when you look at Brazil and you break down the share outside of Porto Alegre where we had lost the plant and we lost over eight points of share and are gaining those back very quickly. And you look at the other territories, their share gains above 1%, which are huge.

[Ian Craig García, CEO at Coca-Cola FEMSA]

And part of that, a big part of that with well, at least a third part of that is the adviser too. So we're very excited of bringing that to Mexico. It was a long question and hence the long answer, Lucas. I hope that addressed your question. Gary, any thoughts on Brazil?

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Nothing additional on Brazil.

[Operator]

Our next question comes from Rodrigo Alcantara with UBS.

[Rodrigo Alcantara, Director - Equity Research at UBS Group]

Hey. Hi. Hello, Ian. Jerry, can you hear me?

[Ian Craig García, CEO at Coca-Cola FEMSA]

Yes. We hear you now, Rodrigo.

[Rodrigo Alcantara, Director - Equity Research at UBS Group]

Okay. Awesome. Thank you very much for hello. Thank you very much. Hope you're are are doing well, Ian and and Jerry. I guess my question, some somehow related on on your previous remarks, both now let's focusing on on your pricemix, right, on on the reported pricemix that we saw in the quarter. Right?

[Rodrigo Alcantara, Director - Equity Research at UBS Group]

In Mexico, it it surprised to me that the the the pricemix, actually held quite well. Right? So, you know, what was very curious to me given the the the the backdrop, right, of the, you know, promotional spending, etcetera. So just curious if you can explain to us what's the underlying, trends going in yielding those results on the pricemix in Mexico, which held quite well? Also, what to expect for the second half, if it's still a slight premium to inflations could be still be achievable given, you know, the strategies that that you just mentioned.

[Rodrigo Alcantara, Director - Equity Research at UBS Group]

So that would be in Mexico, the pricing. And also, you know, a different story. I I totally agree with you. Brazil, weather, yeah, but also, you know, the the pricing also surprised to me that also quite quite strong. So there, the question would be on Brazil on the, sustainable you you think that pricemix is for the second half of the year?

[Rodrigo Alcantara, Director - Equity Research at UBS Group]

Maybe mix was a good component of that pricemix in Brazil. So those would be essentially the one question, pricemix in Mexico and Brazil. Thank you very much, Ian.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Hi, Rodrigo. Just a quick overview and Jerry, Jorge, if you can complement this. So in the case of Mexico, the team, I think, wanted to enter the no, I think the team wanted to enter the high season with a better availability metrics and better serving our markets. And like I said, it was a mixed picture. We were looking at declining volumes versus what was a record 2024, but they were substantially above 2023.

[Ian Craig García, CEO at Coca-Cola FEMSA]

So while that picture was in hand, I think we wanted to have the resources there, both in terms of headcount, but also in terms of the adequate price to ensure that once demand pulled in May as it usually does, we were able to serve it. And that's not the picture of what happened in May, June. So in terms of price, I think now we're working to adjust what I told you is offerings around the MXN 20 price points and in multi serve returnables, making sure we have some key upsizes that we're doing to make sure we catch the consumer if it continues facing a more challenging scenario. So like I said, the last two data points on consumption expenditures and remittances were not positive. So we need to be clear that we adjust that section of our OVPPC architecture to make sure we have offerings that catch the consumers that are looking for those price points.

[Ian Craig García, CEO at Coca-Cola FEMSA]

So what that reflects in Mexico is a more cautious pricing stance to the end of the year. In the case of Brazil, I would say it's a different scenario, but I don't expect additionally additional prices outside on inflation line pricing. So for Brazil, I think we have been reflecting more of an increase in single serve and an increase in Coke, no sugar rather than pricing above our inflation target. That's not the case. It's more of a mix effect.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Jerry, I don't know if you'd like to complement or

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Very quickly on that last point, Rodrigo. We did see a sharp pickup in single serve non returnable mix during the quarter for Brazil. And as Ian mentioned in prepared remarks, a significant growth in Coke Zero reaching 27% of bolus mix now, which has been the case throughout the past few quarters with Coke Zero being the top performer.

[Ian Craig García, CEO at Coca-Cola FEMSA]

One thing we didn't mention in Mexico, but another bright spot in Mexico was Coke No Sugar. So Coke Zero grew around 27%, if I recall. So it's I think we finally cracked the code on Coke Mexico and it continues to bring traction even in a tough quarter where we faced where on the economy that still continued to outperform significantly. So it should be a source of good news for us going forward, Coke, no sugar in Mexico.

[Rodrigo Alcantara, Director - Equity Research at UBS Group]

Awesome. Thank you very much for the detailed answers, Jean and Jeremy.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Thank you, Rodrigo.

[Operator]

Our next question comes from Renata Cabral with Citi. You can open your microphone.

[Renata Cabral, VP - Equity Research & Head - Consumer at Citigroup]

Hi. Hi, everyone. Thank you so much for for taking my my question. My question is related to CapEx investments, and I'll break it down into geographies. So first, in Mexico, a couple of quarters ago, we were discussing a lot about the CapEx plan of the company.

[Renata Cabral, VP - Equity Research & Head - Consumer at Citigroup]

And I would like to understand if there were any change in terms of plans, especially considering that the first half of the year, was full of global events, let's say, tariffs. So just to see if the company see the same needs of expansion in in CapEx that were discussed before, first in Mexico. And regarding Brazil, similar, but I would like first to understand how is the plant in Rio Grande Do Sul operating right now? And also an update about the CapEx plan here in Brazil. Thank you so much.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Thank you, Renata. So let me give you an overview of the strategy and the adjustments, and I'll let Jerry dive into the details. So when you look at our CapEx plan, you can see it in the following way. There are structural capacity, long term capacity investments that solve either long term capacity needs of having the production and distribution assets where we need them, I. E, to not be freighting product for long distances or to deliver savings because of structural imbalances, for example, leasing warehouses and trucks versus owning them.

[Ian Craig García, CEO at Coca-Cola FEMSA]

And then there are other capacities, other CapEx, which is directly linked to volume. The easiest example of that one is bottles and cases. So the latter one on different markets is what we are adjusting and we always adjust downward when volumes are not there. But we're not adjusting downward the structural capacity CapEx, which for example, we're in certain places where we have to freight volume long distances and those pay for themselves regardless of the whether we're slightly below our projected volumes, okay? So that's the general overview.

[Ian Craig García, CEO at Coca-Cola FEMSA]

And Gerry, you can deep dive into the details for Renata, please.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

So Renata, as you remember, we have been talking about CapEx investment for the following couple of years to reach about between eight to 9% of our net sales. We continue to be there. What we certainly do and we manage this as a dynamic process is we look at any opportunities that we have for facing the execution of said CapEx. So even though structurally, we remain committed to our long range plan that is based on sustainable growth, we certainly will look for any opportunities in phasing of the projects, large capacity projects that we have so that we can manage the expenditure of the cash flows of the CapEx required for each operation.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

And Renata, this is Jorge. Also to address your question regarding the status of our Porto Alegre plant. So basically, we're back 100% capacity there both in the production and in the distribution capabilities. There's one additional project that Ian mentioned during the previous call, which is we will build a contention wall around the plant. But this will be a project that will be concluded next year.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

This will be for 2026. But to give you an idea

[Ian Craig García, CEO at Coca-Cola FEMSA]

Just to follow-up that project doesn't add anything in terms of capacity. It's just a containment structure to avoid an impact during floods. We did that we finished that in Acapulco by the way. We were unable to test it because this hurricane, Eric, that we had didn't hit Acapulco this year in a strong manner. But that CapEx that is spending will not add capacity increases just to protect the plant during time. Sorry, Jorge.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

No. Thanks, Ian, for the context. Just the only additional thing that I will add regarding Porto Alegre is to give you an idea on the number of SKUs. So before the flood for example May 2024, we had a portfolio of around two twenty five different SKUs that we were selling there in Rio Grande Do Sul in Porto Alegre. At first, when we were out of the plant, we were working in a portfolio that was 30 SKUs in May.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

So as you might imagine a big impact and that affected our share. Now when you look at the current status by June 25, we were already working with 180 SKUs, which is around 95% of the volume that we have in Porto Alegre. And by July now we're back with the full portfolio. So we're glad that we were able to in this year's time get back with the Porto Alegre recovery. The team there definitely did a tremendous job in putting the plant and everything back on their feet.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

And we're glad that also the community and the state is back.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Thank you, Renata.

[Operator]

Our next question comes from Ben Theurer with Barclays. You can open your microphone.

[Rahi Parikh, AVP at Barclays]

Hi. This is Rahi on for Ben. Maybe more on more on some of the topics that we've talked about. Can we look more into the beverage category volume changes in Mexico? Your competitor noted decent growth in stills against other segment declines.

[Rahi Parikh, AVP at Barclays]

The cough saw flattish growth in two q, but some growth in one q. Is this just because you're focusing more on sparkling? And I guess, what categories are you maybe focusing on in Brazil and Mexico given the capacity additions and fixes we've just been talking about on the call? Thank you so much.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

Yes. Thank you, Rajiv. Yes, I would say that this is very characteristic of the kind of environment that we faced in Mexico. So usually, when we have these more rains, one of the categories that is more impacted when there's colder weather is the sparkling category. So we did see a little bit of a decline as well on steels as you saw, but definitely the sparkling category considering that's put it let me put it this way, it's a category that is a lot for on the go consumption out meals, people moved and traffic.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

So that was more impacted. And as you know, most of our volume performance or of our volume mix is regarding the sparkling category. So that is very telling of the kind of environment that we faced in Mexico during the quarter. And if you could repeat the second part of your question, Raghi, please?

[Rahi Parikh, AVP at Barclays]

Yes. Sure. Of course. Just for, all the capacity adds and the fixes you're saying, getting the SKUs back up in Brazil, is there any categories, I I guess, focusing on sparkling, but do you intend to put more effort sorry, more investment in other categories? Is there any shifts in in mix side, like, as you said, the single serve that you guys are implementing for through the year?

[Ian Craig García, CEO at Coca-Cola FEMSA]

You know, the the capacity is seeks to address where those gaps were. What I would say right now in in Brazil, I I think the latest last SKUs that we have pending to get up to full capacity was basically these. So when we're stressing in capacity, we prioritize CSDs and within CSDs Coca Cola brand. So when capacity starts flowing in, the first thing that recovers is flavors, CSD flavors, and then we start recovering NCVs. So in the case of Brazil, we pretty much are where we need to be in terms of unavailability.

[Ian Craig García, CEO at Coca-Cola FEMSA]

And I think the main constraint is teas. And of course, as you know, we don't have a water source in the South, and we're just adding capacity with a new water source in the South. So those would be, I would say, the only two SKUs where we still aren't where we need to be in Brazil. But that's not the lion's share of the volume. It's teas in general and water in the South.

[Rahi Parikh, AVP at Barclays]

Yes. That makes total sense. Thank you so much.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Thank you.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

Thank you.

[Operator]

Our next question comes from Enrique Morello with Morgan Stanley.

[Henrique Morello, Equity Research Analyst at Morgan Stanley]

Hi, everyone. Thank you so much for taking my question. So I'll let you explore a bit deeper the margins in South America as the EBITDA margin decline on a year on year basis was something that caught our eyes here. So if you could explore a bit deeper the components that influenced the margin behavior in the quarter and if you saw perhaps some pressure from any specific raw material front or any other specific front on that matter, it'd be very helpful. And maybe more specific on the impact of the reopen of the Porto Alegre plant in Brazil.

[Henrique Morello, Equity Research Analyst at Morgan Stanley]

So if you could explore if you already saw some positive impact flowing to the SG and A savings in the quarter from that front? Or how should that help margins in the region going forward would be very helpful as well? You very much.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Enrique. And thank you very much for your question. So I'll start with the first part, margin EBIT and EBITDA margin in South America. So the explanation for having the impact in EBITDA margin is that last year in this quarter is where we took basically all of the write offs of fixed assets and inventories related to the Porto Alegre plant flooding. So that's a virtual charge that happened last year that we didn't have this year.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

So that helped EBIT margins and not EBITDA, given that it's a noncash effect. So that's the explanation of the difference. Moving forward, still second quarter, we had a few expenses in Pollo related to freight mainly for the few weeks that we had in the quarter still with Pollo catching up. But we do expect that to be a tailwind for the rest of the year in improving margins in that region.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

I think, Enrique, the only thing that I would add regarding raw materials in particular, I think we're seeing a stable raw material environment overall. We're seeing better prices of sweeteners. Of course, we have to account on the other hand that there was the depreciation against the dollar in terms of dollar rise raw materials. So that pretty much evens out and we're seeing a stable raw material environment and that's what we expect going forward. So as we continue to see the outlook for the second half of the year in South America, we believe that there will be sequential improvements.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

We've discussed Brazil and the effect of the reopening of Porto Alegre. So we should be able to continue to improve our performance there regarding top line and we anticipate more stable performance also sequentially improving in terms of margin.

[Henrique Morello, Equity Research Analyst at Morgan Stanley]

That's very clear. Thank you.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Thank you,

[Operator]

Our next question comes from Thiago with Goldman Sachs. You can open your microphone.

[Thiago Bortoluci, Equity Research Analyst at Goldman Sachs]

Hi, good morning, everyone. Ian, Jerry, Jorge, thank you very much for the presentation. It's always great to talk to you guys. I'll like to move back the discussion, and I know we always talk about this, but to the balance sheet and particularly your leverage position, right? You have been consistently printing net leverage below one time, right?

[Thiago Bortoluci, Equity Research Analyst at Goldman Sachs]

We just heard from Coca Cola Corporation yesterday on their conference call that the, refranchising process on their end is not fully completed yet. So, you know, putting both, pieces together, number one, is there anything in this final push to re franchise from Coca Cola that might interest Coke FEMSA? This is number one. And number two, if no, are we getting close to a moment where we might see a higher underlying payout or some extraordinary dividends? How do you think about this? This is my question. Thank you very much.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Thiago. Yes, I think there are some very interesting assets from the Coca Cola Company in the refranchising process, but we're not being considered as part of those solution for what's out there. So yes, that does bring us closer to getting to a point where we need to address this inefficient capital structure, just to the point. I don't know, Jerry.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

That's our position, Thiago. We do expect to be able to provide some light for the market in terms of what we're expecting to do with our balance sheet. I would assume, towards the end of the year starting of next year.

[Thiago Bortoluci, Equity Research Analyst at Goldman Sachs]

No. That's great. Thank you very much, Jerry. And Ian, sorry for provoking you, but just a follow-up on this, right? Your wording here is Coke franchising.

[Thiago Bortoluci, Equity Research Analyst at Goldman Sachs]

You are not being part of this solution. Right? I think and the question is to understand your mindset. If it were just for Coke FEMSA. Right?

[Thiago Bortoluci, Equity Research Analyst at Goldman Sachs]

Would you like to be part of this solution? Do you see value in the options that today are for table for you guys?

[Ian Craig García, CEO at Coca-Cola FEMSA]

Like I said, our partnership with Coca Cola is very, very strong. And where they see that we can add value is in The Americas, and we're perfectly aligned and content with that assumption. And what's available in the refranchising now is outside of The Americas. So there is no complaints from our side. On the contrary, I mean, they're sitting in the driver's seat in that process, and they have a much better sense of who adds the most value to those territories.

[Ian Craig García, CEO at Coca-Cola FEMSA]

So it would be very, very out of place for us to say that we can add more value than others when we don't even have the feet on the ground on those territories that are being refranchised. So I think they're in a better position to say what makes sense, and we're aligned with that position. They have been very supportive towards our plans to grow both organically and inorganically. So So nothing to say about positive things there on our partnership. So what I'm saying is, obviously, someone who's been in the business for years, we always want to grow and look at what's out there, but it doesn't always make industrial sense when you're looking at it from the Coca Cola Company's global view. So I don't see any misalignment there, Teo.

[Thiago Bortoluci, Equity Research Analyst at Goldman Sachs]

That's great, Jan. Thank you very much. And maybe I promise a final one to Jerry, quick one. Jerry, could you please remind us where your FX hedges are for the remainder part of the year?

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Certainly, Thiago. So we have for the rest of 2025 FX hedging positions ranging between 50% to 80% of our dollarized raw material requirements. For example, Mexico, Colombia on the higher end of that range 83%, 81% respectively. Then Brazil, Costa Rica, Argentina and Uruguay around 50% to 60% of our requirements are hedged. And for 2026, looking a little further out, Mexico has right now a 22% hedge position for the whole year.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

The rest of the operations averaging at around 15% of the requirements for 2026.

[Thiago Bortoluci, Equity Research Analyst at Goldman Sachs]

On Mexico, Jerry, any color on the price that you were hedged?

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

For 2025, have an average FX hedge position of MXN 20 per dollar and for 2026, the same.

[Operator]

Our next question comes from Alvaro Garcia with BTG. You can open your microphone.

[Alvaro Garcia, Associate Partner at BTG Pactual]

Hey, guys. Thanks for the space for questions. Thanks for taking my question. Two questions. One for Ian on the taste profile, sort of a bigger picture question on the taste profile of Coke Zero.

[Alvaro Garcia, Associate Partner at BTG Pactual]

You've made these comments of, like, finally working in Mexico, and I was just curious of sort of how you think the taste profiles evolved in Mexico or how the consumer sort of interprets a taste profile of Coke Zero versus Coke with real sugar versus Coke with with fructose, which you you've increasingly been using in Mexico. And then a quick question for Jerry on interest expense popped a little bit higher. You mentioned higher rates in Brazil and obviously did a little liability management in May. I was wondering if there was any one offs in the number for this quarter in interest expense or this is a fair figure to use going forward? Thank you.

[Ian Craig García, CEO at Coca-Cola FEMSA]

Alvaro. Thank you for the question. So I would say in terms of Coke Zero, the geniuses at the Coca Cola Company's industrial R and D area are always refining the sweetener generations getting all the time closer and closer to the taste of Coke original. And I'm sure that has played a role, but I think what played the biggest role in Coke Zero success in Mexico is that we finally put all of the pieces in place. So what we see, we call this the Brazil playbook for Coke Zero and it's really a playbook that has been leveraged globally by the Coca Cola Company.

[Ian Craig García, CEO at Coca-Cola FEMSA]

And it not only consists of the winning formula, but of having all of the elements of having the right price pack architecture, including entry packs, which we got missed. It also includes the right properties, the right influencers and the right promotional intensity. To us, finally, all of those five pieces of the puzzle we're able to put in place in Mexico. What we've seen in other markets is when you have three out of five or two out of five, that doesn't cut it. You need to have five out of five and have it consistently there.

[Ian Craig García, CEO at Coca-Cola FEMSA]

We we were seeing what the competition was doing, and it was something that we needed to address quickly. We reacted and now it's going very well. And then the other thing we have seen is we really need at least two, ideally three years of very consistent double digit growth for that thing to get rolling how we want to in Brazil where it takes on a life of its own. So we're going to make sure we have the adequate spend and investment behind this brand because we're not going to replicate the Coca Cola brand. It's unique.

[Ian Craig García, CEO at Coca-Cola FEMSA]

It's the most powerful brand that we have it and that we have out there and Coke series is critical for the long term health of this brand. So we need to take care of it in such an important market of Mexico. But it's more than the flavor profile, although you're right that that is one very important piece of those five pillars.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Hi, Alvaro. On the net interest expense question, so there were no one off effects in the quarter. The explanation for higher net interest expenses on the interest expense side, more debt, the issuance that we did in at the corporate level for a $500 bond. We added some bank loans in Colombia for operation purposes. And we have significantly higher interest rates in real in Brazil.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

So our real denominated debt became more expensive in the period. And on the interest income side, even though we have more cash holdings, we had a significant decline in the rate at which we're investing that those cash holdings. So that's the explanation. And moving forward, I think it's a fair assessment of where we would be expecting net interest expense to be coming at.

[Alvaro Garcia, Associate Partner at BTG Pactual]

Great. Thank you very much, Adnan.

[Operator]

Our next question comes from Antonio Hernandez with Actinver. You can open your microphone.

[Antonio Hernández Vélez, Head - Equity Research & Director at Actinver]

Hi, good morning. Thanks for taking my question. Just a quick one. And sorry if you mentioned this earlier during the call. But in terms of competition, how are you seeing the different trends across your whole portfolio?

[Antonio Hernández Vélez, Head - Equity Research & Director at Actinver]

Any more color that you could provide there? And also, you mentioned in the press release that you will make learnings and adjustments to your plans. Just wanted to see if you could provide more light on that and if that's related as well to competition and the soft consumer environment? Thanks.

[Ian Craig García, CEO at Coca-Cola FEMSA]

So I don't know if the question relates to Mexico. But just in terms of competition, what we can mention is the biggest gap that we have is in the traditional channel in the MXN20 price range. That's the biggest share gap and share performance that we have in CSDs. And there we're addressing it via adjustments in our returnable offerings. Then the other gap that we had was in sports drink, where there was a big push from pairing and a reaction from Gatorade.

[Ian Craig García, CEO at Coca-Cola FEMSA]

But I think we're addressing that and Sherry is responding very well in the latest months on that. So that gives you the overall picture in Mexico. Anything that you want to add there?

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

In terms of the adjustments, I think, as Ian mentioned, both in prepared remarks as well as on a previous question, the focus on multiserve returnable presentations that are dedicated specifically towards the traditional trade with the capabilities that we have, of executing an affordable portfolio, very directly aimed at the portion of the market that's underperforming share. I think we'll be able to address the share gap that we still have to close.

[Operator]

Next question from Fernando Olvera with Bank of America. You can open your microphone.

[Fernando Olvera, Equity Research Analyst at Bank of America Merrill Lynch]

Sorry, can you hear me?

[Ian Craig García, CEO at Coca-Cola FEMSA]

Yes, Fernando. Yes.

[Fernando Olvera, Equity Research Analyst at Bank of America Merrill Lynch]

Perfect. Thank you so much, for taking my question. I also have one, mainly for Jerry. Jerry, you comment in the initial remarks that, regarding savings that you basically reached 60 per 67% of the target. So I was wondering, I mean, if there is room, to see to achieve more savings or above your target, you know, given that we are just at midyear? Thank you.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Hi, Fernando. Thank you very much for your question. We we certainly are working on bringing in more savings. And what I talked about in prepared remarks are specifically supply chain related savings. I had talked about early in the year of $90,000,000 that we were looking for.

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

Up to now, we've achieved 60,000,000 of those. We certainly are looking for more opportunities, and we do believe that we will be able to bring some more. And additionally, from supply chain savings, we'll certainly work and are working on all sources of savings that we can capture just to help through what has been, and we expect to continue to have, soft market conditions.

[Fernando Olvera, Equity Research Analyst at Bank of America Merrill Lynch]

Great. Perfect. And any idea of how, I mean, how much can you surpass that target?

[Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA]

I think we can I think we can provide more details to you guys as we progress? We have some numbers that we have already identified in terms of savings, some that we have already captured and some that are coming. But I think we need to get into a little bit more detail to be able to provide you with a guidance number.

[Fernando Olvera, Equity Research Analyst at Bank of America Merrill Lynch]

Okay. Perfect. Thank you, Yuri.

[Operator]

Thank you. This concludes the question and answer section. At this time, I would like to turn the floor back to Mr. Jorge for any closing remarks.

[Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA]

Thank you very much everyone for your interest in Coca Cola FEMSA and for joining us on today's call. Me and the rest of the Investor Relations team, we are available to answer any of your remaining questions. Thank you very much and have a great day.

[Operator]

Thank you. This does conclude today's presentation. You may now disconnect and have a nice day.

Participants

Analysts

• Jorge Collazo Pereda, Director - IR at Coca-Cola FEMSA
• Ian Craig García, CEO at Coca-Cola FEMSA
• Gerardo Cruz Celaya, CFO at Coca-Cola FEMSA
• Lucas Ferreira, Executive Director at J.P. Morgan
• Rodrigo Alcantara, Director - Equity Research at UBS Group
• Renata Cabral, VP - Equity Research & Head - Consumer at Citigroup
• Rahi Parikh, AVP at Barclays
• Henrique Morello, Equity Research Analyst at Morgan Stanley
• Thiago Bortoluci, Equity Research Analyst at Goldman Sachs
• Alvaro Garcia, Associate Partner at BTG Pactual
• Antonio Hernández Vélez, Head - Equity Research & Director at Actinver
• Fernando Olvera, Equity Research Analyst at Bank of America Merrill Lynch