Ulises Argote

Ulises Argote with Santander asked for insights into Coca-Cola FEMSA's strategy regarding price gaps between sugar and non-sugar products, given the new excise tax differentiation, and if any major shifts in pricing are anticipated. He also inquired about the company's capital allocation priorities for the next couple of years, considering the low net debt to EBITDA and reduced CAPEX.

Answer

CEO Ian Craig stated that the company is committed to incentivizing a move towards non-calorics through differentials in baseline prices or more intense promotional grids, aiming for a lower effective price for these options. He emphasized being pro-choice and respectful of consumer tastes. CFO Gerardo Cruz acknowledged the inefficient capital structure and the intention to address it in 2026. However, he noted that the excise tax impact in Mexico, delaying volume recovery, would affect cash flow projections, requiring further evaluation before detailing capital allocation plans.

Ulises Argote asked about Coca-Cola FEMSA's strategy regarding price gaps between sugar and non-sugar products following the new excise tax, and for an update on the company's capital allocation priorities given its low net debt to EBITDA ratio and reduced CapEx.

Answer

CEO Ian Craig stated that Coca-Cola FEMSA is committed to incentivizing a shift towards non-caloric options through baseline price differentials or more intense promotional grids, expecting a lower effective price for these products while respecting consumer choice. CFO Gerardo Cruz acknowledged the inefficient capital structure and the intent to address it in 2026. However, the impact of the excise tax in Mexico is expected to affect cash flow projections, requiring further evaluation before firm capital allocation decisions are made.