Report of Foreign Issuer (6-k)

 

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of April 2019

 

FOMENTO ECONÓMICO MEXICANO, S.A.B. DE C.V.

(Exact name of Registrant as specified in its charter)

 

Mexican Economic Development, Inc.

(Translation of Registrant’s name into English)

 

United Mexican States

(Jurisdiction of incorporation or organization)

 

General Anaya No. 601 Pte.
Colonia Bella Vista
Monterrey, Nuevo León 64410
México

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports

under cover of Form 20-F or Form 40-F:

 

Form 20-F    x    Form 40-F    ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as

permitted by Regulation S-T Rule 101(b)(1): _______

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as

permitted by Regulation S-T Rule 101(b)(7): _______

 

Indicate by check mark whether by furnishing the information contained in this

Form, the registrant is also thereby furnishing the information to the

Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes    ¨    No    x

 

If "Yes" is marked, indicate below the file number assigned to the registrant in

connection with Rule 12g3-2(b): 82-_____________

 

 

 

 

 

 

 

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.

 

####

 

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

 

		For the twelve months of:
		2018												2018
		As Reported				% of rev.				Adj. (A)				IFRS 16 (A)				% of rev.
Total revenues			469,744				100.0								469,744				100.0
Cost of sales			294,574				62.7				(135	)			294,439				62.7		(B)
Gross profit			175,170				37.3				135				175,305				37.3		(B)
Administrative expenses			17,313				3.7				(53	)			17,260				3.7		(B)
Selling expenses			114,573				24.4				(2,429	)			112,144				23.9		(B)
Other operating expenses (income), net (1)			1,708				0.4								1,708				0.4
Income from operations (2)			41,576				8.9				2,617				44,193				9.4		(B)
Other non-operating expenses (income)			874												874
Interest expense			9,825								4,315				14,140						(C)
Interest income			2,832												2,832
Interest expense, net			6,993								4,315				11,308						(C)
Foreign exchange loss (gain)			248								(14	)			234						(D)
Other financial expenses (income), net.			139												139
Financing expenses, net			7,380								4,301				11,681						(C) (D)
Income before income tax and participation in associates results			33,322								(1,684	)			31,638						(B) (C) (D)
Income tax			10,169								(515	)			9,654						(E)
Participation in associates results (3)			6,560								-				6,560
Net income from continuing operations			29,713								(1,168	)			28,545						(B) (C) (D) (E)
Net income from discontinued operations			3,366								-				3,366
Net consolidated income			33,079								(1,168	)			31,911
Net majority income			23,990								(1,098	)			22,891
Net minority income			9,089								(70	)			9,019

 

Operative Cash Flow & CAPEX		2018 As Reported				% of rev.				Adj. (A)				2018 IFRS 16				% of rev.
Income from operations			41,576				8.9				2,617				44,193				9.4		(B)
Depreciation			14,698				3.1				7,562				22,260				4.7		(F)
Amortization & other non-cash charges			4,184				0.9								4,184				0.9
Operative Cash Flow (EBITDA)			60,458				12.9				10,179				70,637				15.0		(B) (F)
CAPEX			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		Dic-18 As Reported				Adj. (A)				Dic-18 IFRS 16 (A)
Cash and cash equivalents			62,047								62,047
Investments			30,924								30,924
Accounts receivable			28,164								28,164
Inventories			35,686								35,686
Other current assets			20,786								20,786
Total current assets			177,607								177,607
Investments in shares			94,315								94,315
Property, plant and equipment, net			108,602								108,602
Right of use			-				51,220				51,220		(B)
Intangible assets			145,610								145,610
Other assets			50,247				515				50,762		(C)
TOTAL ASSETS			576,381				51,735				628,116
LIABILITIES & STOCKHOLDERS´ EQUITY
Bank loans			2,436								2,436
Current maturities of long-term debt			11,238								11,238
Interest payable			964								964
Current maturities of leases long-term debt			-				5,860				5,860		(D)
Operating liabilities			86,826								86,826
Total current liabilities			101,464				5,860				107,324
Long-term debt			108,161								108,161
Long-term leases			-				47,056				47,056		(E)
Laboral obligations			4,699								4,699
Other liabilities			26,515								26,515
Total liabilities			240,839				52,916				293,755
Total stockholders’ equity			335,542				(1,181	)			334,361		(F)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			576,381				51,735				628,116

 

(A)

Unaudited consolidated financial information.

(B)

Right-of-use asset 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

 

 

 

 

FEMSA Comercio - Fuel 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			10,593								10,593				11,511								11,511				12,196								12,196				12,636								12,636
Cost of sales			9,706								9,706				10,595								10,595				11,136								11,136				11,268								11,268		(B)
Gross profit			887								887				916								916				1,060								1,060				1,368								1,368		(B)
Administrative expenses			52				(0	)			52				61				(0	)			61				42				(0	)			42				87				(0	)			87		(B)
Selling expenses			697				(125	)			572				771				(131	)			640				884				(134	)			750				1,173				(141	)			1,032		(B)
Other operating expenses (income), net			1								1				2								2				1								1				1								1
Income from operations			137				126				263				82				131				213				133				135				268				107				142				249		(B)
Depreciation			30				148				178				32				154				186				36				157				193				38				163				201		(C)
Amortization & other non-cash charges			7								7				8								8				6								6				7								7
Operative Cash Flow (EBITDA)			174				274				448				122				285				407				175				291				466				152				305				457		(B) (C)
CAPEX			64								64				129								129				123								123				204								204

 

		For the twelve months of:
		2018
		As Reported				% of rev.				Adj. (A)				IFRS 16 (A)				% of rev.
Total revenues			46,936				100.0								46,936				100.0
Cost of sales			42,705				91.0								42,705				91.0		(B)
Gross profit			4,231				9.0								4,231				9.0		(B)
Administrative expenses			242				0.5				(2	)			240				0.5		(B)
Selling expenses			3,526				7.5				(532	)			2,994				6.4		(B)
Other operating expenses (income), net			5				0.0								5				0.0
Income from operations			458				1.0				534				992				2.1		(B)
Depreciation			137				0.3				621				758				1.6		(C)
Amortization & other non-cash charges			27				0.1								27				0.1
Operative Cash Flow (EBITDA)			622				1.3				1,155				1,777				3.8		(B) (C)
CAPEX			520												520

 

(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

 

 

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 of the

undersigned, thereunto duly authorized.

 

	FOMENTO ECONÓMICO MEXICANO, S.A. DE C.V .
	By:	/s/ Gerardo Estrada Attolini
		Gerardo Estrada Attolini
		Director of Corporate Finance

Date: April, 05, 2019