Thiago Bertolucci

Thiago Bertolucci from Goldman Sachs asked about Coca-Cola FEMSA's market position relative to consumers in Mexico, considering volume declines, pricing growth, and increased promotional activity. He sought clarification on how the company's average price list and effective pricing accommodate current demand sentiment. Additionally, he inquired about the potential impact of the new excise tax rate on discussions with The Coca-Cola Company regarding concentrate prices.

Answer

CFO Gerardo Cruz clarified that Mexico's performance in Q3 2025 showed recovery from a significant consumer backlash earlier in the year, with share gains in most segments except colas. CEO Ian Craig added that with soft macros and the excise tax increase, pricing power is expected to be limited, with no real pricing above inflation anticipated for next year. Regarding concentrate prices, Ian Craig explained that the system model divides profits, and while a tax impact affects profitability, it's too early to determine if there will be a direct impact on concentrate costs or support from The Coca-Cola Company, as it depends on how consumers and customers react to the tax pass-through in Q1 2026.

Thiago Bertolucci questioned Coca-Cola FEMSA's market position in Mexico relative to consumer sentiment, specifically regarding volume declines versus the industry and pricing strategies amidst inflation and promotional activity. He also asked how the new excise tax rate might influence discussions with The Coca-Cola Company regarding concentrate prices.

Answer

CEO Ian Craig clarified that Mexico's volume performance in Q3 2025 showed recovery from an earlier backlash, with share of value above last year in most categories, except for a small gap in colas. He noted that pricing power would be limited next year due to soft macros and the excise tax, not expecting price increases above inflation. CFO Gerardo Cruz explained that concentrate price discussions are part of the system's profit-sharing model, and while the tax will impact profitability, it's too early to determine a specific impact on concentrate prices.

Thiago Bertolucci from Goldman Sachs asked about the strategy for releasing the increased finished product inventory built up during the avian flu crisis and how dependent this strategy is on trade with China reopening. He also followed up on the negative EBITDA margin in the Banvit (Turkey) operation and its outlook.

Answer

CEO Miguel Goulard emphasized the philosophy of 'sell to produce,' aiming to normalize inventory levels to near-zero without destroying value as markets reopen. CFO Fabio Mariano added that the pace of normalization depends on market opportunities, especially the reopening of China and Europe. Regarding Turkey, an executive explained the negative margin was due to excess local poultry supply. The recovery plan involves increasing the mix of higher-value processed products, adjusting slaughter rates, and integrating the Turkish platform more closely with Brazilian operations under a 'Turkey Plus' efficiency program.