Mexican Economic Development Inc. Files 20-F for Fiscal Year Ended December 31, 2023

Ticker: FMX · Form: 20-F · Filed: Apr 23, 2024 · CIK: 1061736

Sentiment: neutral

Topics: 20-F, Annual Report, Mexican Economic Development Inc., Financials, SEC Filing

TL;DR

<b>Mexican Economic Development Inc. has submitted its 20-F annual report detailing financial performance and corporate information for the fiscal year ending December 31, 2023.</b>

AI Summary

MEXICAN ECONOMIC DEVELOPMENT INC (FMX) filed a Foreign Annual Report (20-F) with the SEC on April 23, 2024. The filing is a 20-F annual report for Mexican Economic Development Inc. for the fiscal year ending December 31, 2023. The company's SIC code is 2086 for Bottled & Canned Soft Drinks Carbonated Waters. The filing includes financial data for the years 2021, 2022, and 2023. Key financial statement items such as Issued Capital, Additional Paid-in Capital, and Retained Earnings are reported. The company's principal executive offices are located in Monterrey, N.L., Mexico.

Why It Matters

For investors and stakeholders tracking MEXICAN ECONOMIC DEVELOPMENT INC, this filing contains several important signals. This filing provides investors and analysts with a comprehensive overview of the company's financial health and operational status for the past fiscal year. As a 20-F filing, it is crucial for understanding the company's compliance with SEC regulations and its financial reporting standards, particularly for foreign issuers.

Risk Assessment

Risk Level: low — MEXICAN ECONOMIC DEVELOPMENT INC shows low risk based on this filing. The risk is low as this is a standard annual filing (20-F) and does not appear to contain any immediate negative news or significant changes based on the provided header information.

Analyst Insight

Review the full 20-F filing to analyze the detailed financial statements, management discussion, and risk factors for Mexican Economic Development Inc.

Key Numbers

Key Players & Entities

FAQ

When did MEXICAN ECONOMIC DEVELOPMENT INC file this 20-F?

MEXICAN ECONOMIC DEVELOPMENT INC filed this Foreign Annual Report (20-F) with the SEC on April 23, 2024.

What is a 20-F filing?

A 20-F is a annual report for foreign private issuers, equivalent to a 10-K but following international reporting standards. This particular 20-F was filed by MEXICAN ECONOMIC DEVELOPMENT INC (FMX).

Where can I read the original 20-F filing from MEXICAN ECONOMIC DEVELOPMENT INC?

You can access the original filing directly on the SEC's EDGAR system. The filing is publicly available and includes all exhibits and attachments submitted by MEXICAN ECONOMIC DEVELOPMENT INC.

What are the key takeaways from MEXICAN ECONOMIC DEVELOPMENT INC's 20-F?

MEXICAN ECONOMIC DEVELOPMENT INC filed this 20-F on April 23, 2024. Key takeaways: The filing is a 20-F annual report for Mexican Economic Development Inc. for the fiscal year ending December 31, 2023.. The company's SIC code is 2086 for Bottled & Canned Soft Drinks Carbonated Waters.. The filing includes financial data for the years 2021, 2022, and 2023..

Is MEXICAN ECONOMIC DEVELOPMENT INC a risky investment based on this filing?

Based on this 20-F, MEXICAN ECONOMIC DEVELOPMENT INC presents a relatively low-risk profile. The risk is low as this is a standard annual filing (20-F) and does not appear to contain any immediate negative news or significant changes based on the provided header information.

What should investors do after reading MEXICAN ECONOMIC DEVELOPMENT INC's 20-F?

Review the full 20-F filing to analyze the detailed financial statements, management discussion, and risk factors for Mexican Economic Development Inc. The overall sentiment from this filing is neutral.

How does MEXICAN ECONOMIC DEVELOPMENT INC compare to its industry peers?

Mexican Economic Development Inc. operates within the Bottled & Canned Soft Drinks Carbonated Waters industry.

Are there regulatory concerns for MEXICAN ECONOMIC DEVELOPMENT INC?

As a foreign private issuer, the company files a Form 20-F annually with the SEC, which is an annual report containing information similar to a U.S. domestic issuer's 10-K.

Industry Context

Mexican Economic Development Inc. operates within the Bottled & Canned Soft Drinks Carbonated Waters industry.

Regulatory Implications

As a foreign private issuer, the company files a Form 20-F annually with the SEC, which is an annual report containing information similar to a U.S. domestic issuer's 10-K.

What Investors Should Do

  1. Thoroughly review the complete 20-F document for detailed financial statements and disclosures.
  2. Analyze the company's business operations and risk factors as presented in the filing.
  3. Compare the 2023 financial results with previous years (2021, 2022) to identify trends.

Key Dates

Year-Over-Year Comparison

This is the initial header information for the 2023 20-F filing; detailed comparisons to the previous filing (2022 20-F) would require access to that document.

Filing Stats: 4,560 words · 18 min read · ~15 pages · Grade level 11.1 · Accepted 2024-04-23 17:17:44

Key Financial Figures

Filing Documents

KEY INFORMATION

ITEM 3. KEY INFORMATION 2 Selected Consolidated Financial Data 2 Dividends 2

INFORMATION ON THE COMPANY

ITEM 4. INFORMATION ON THE COMPANY 15 Introduction 15 Corporate Information 16 Corporate History and I nformation 16 18 Significant Subsidiaries 18 Business Strategy 19 Coca-Cola FEMSA 20 Overview 20 Capital Stock 21 Business Strategy 22 Coca-Cola FEMSA's Territories 24 Coca-Cola FEMSA's Products 25 Packaging 2 5 Sales Volume and Transactions Overview 26 Seasonality 28 Marketing 28 Product Sales and Distribution 29 Principal Competitors 30 Raw Materials 31 Proximity Americas Division 33 Proximity Europe Division 3 7 Health Division 40 Fuel Division 41 Other Businesses 44 Description of Property, Plant and Equipment 45 Insurance 45 Capital Expenditures and Divestitures 46 Regulatory Matters 46

UNRESOLVED STAFF COMMENTS

ITEM 4A. UNRESOLVED STAFF COMMENTS 53

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 53 Overview of Events, Trends and Uncertainties 53 Effects of Changes in Economic Conditions 54 Operating Leverage 5 5 Critical Accounting Judgments and Estimates 55 Future Impact of Recently Issued Accounting Standards not yet in Effect 55 i Table of Contents Operating Results 56 Liquidity and Capital Resources 66

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 7 5 Directors 7 5 Senior Management 8 4 Compensation of Directors and Senior Management 9 1 EVA Stock Incentive Plan 9 2 Insurance Policies 9 2 9 2 Board Practices 9 3 Employees 94

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 9 5 Major Shareholders 9 5 Related-Party Transactions 9 6 Voting Trust 9 6 Interest of Management in Certain Transactions 9 6 Business Transactions between Coca-Cola FEMSA, FEMSA and The Coca-Cola Company 9 7

FINANCIAL INFORMATION

ITEM 8. FINANCIAL INFORMATION 9 8 Consolidated Financial Statements 9 8 Dividend Policy 9 8

Legal Proceedings

Legal Proceedings 98 Significant Changes 98

THE OFFER AND LISTING

ITEM 9. THE OFFER AND LISTING 98

Description of Securities

Description of Securities 98 Trading Markets 99 Trading on the Mexican Stock Exchange 99

ADDITIONAL INFORMATION

ITEM 10. ADDITIONAL INFORMATION 99 Bylaws 99 Taxation 105 Material Contracts 109 Documents on Display 102

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 112 Interest Rate Risk 112 Foreign Currency Exchange Rate Risk 116 Equity Risk 120 Commodity Price Risk 121

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 121

DEBT SECURITIES

ITEM 12A. DEBT SECURITIES 121

WARRANTS AND RIGHTS

ITEM 12B.WARRANTS AND RIGHTS 121

OTHER SECURITIES

ITEM 12C.OTHER SECURITIES 121

AMERICAN DEPOSITARY SHARES

ITEM 12D.AMERICAN DEPOSITARY SHARES 121 ITEMS 13-14. NOT APPLICABLE 121

CONTROLS AND PROCEDURES

ITEM 15.CONTROLS AND PROCEDURES 122

AUDIT COMMITTEE FINANCIAL EXPERT

ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT 125

CODE OF ETHICS

ITEM 16B.CODE OF ETHICS 125

PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 125 ii Table of Contents

NOT APPLICABLE

ITEM 16D.NOT APPLICABLE 126

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 126

NOT APPLICABLE

ITEM 16F.NOT APPLICABLE 126

CORPORATE GOVERNANCE

ITEM 16G.CORPORATE GOVERNANCE 126

NOT APPLICABLE

ITEM 16H.NOT APPLICABLE 128

NOT APPLICABLE

ITEM 16I.NOT APPLICABLE 128

NOT APPLICABLE

ITEM 17.NOT APPLICABLE 129

FINANCIAL STATEMENTS

ITEM 18.FINANCIAL STATEMENTS 129

EXHIBITS

ITEM 19. EXHIBITS 129 iii Table of Contents INTRODUCTION References The terms "FEMSA," "our company," "the Group," "we," "us" and "our" are used in this annual report to refer to Fomento Econmico Mexicano, S.A.B. de C.V. and, except where the context otherwise requires, its subsidiaries on a consolidated basis. We refer to our subsidiary Coca-Cola FEMSA, S.A.B. de C.V. as "Coca-Cola FEMSA" and to our subsidiary FEMSA Comercio, S.A. de C.V. as "FEMSA Comercio." FEMSA Comercio is a holding company that directly and indirectly owns our operating subsidiaries that make up the "Proximity Americas Division, "Fuel Division" and "Health Division." The "Proximity Europe Division" refers to the small-format retail and foodvenience chains in Europe operated by Valora. The term "Digital@FEMSA" refers to our digital and financial ecosystem business. The term "S.A.B." stands for sociedad annima burstil , which is the term used in the United Mexican States ("Mexico") to denominate a publicly traded company under the Mexican Exchange Market Law ( Ley del Mercado de Valores or "Mexican Exchange Market Law"). "U.S. dollars," "US$," "dollars" or "$" refer to the lawful currency of the United States of America ("United States"). "Mexican pesos," "pesos" or "Ps." refer to the lawful currency of Mexico. "Euros" or "" refer to the lawful currency of the European Economic and Monetary Union (the "Euro Zone"). As used in this annual report, "sparkling beverages" refers to non-alcoholic carbonated beverages. "Still beverages" refers to non-alcoholic non-carbonated beverages. "Waters" refers to flavored and non-flavored waters, whether or not carbonated. Currency Translations and Estimates This annual report contains translations of certain Mexican peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the Mexican peso amounts actually represent such U.S. dollar amounts o

KEY INFORMATION

ITEM 3. KEY INFORMATION The selected financial information should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements, including the notes thereto appearing elsewhere in this annual report. The selected financial information as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 is derived from the consolidated statements of financial position, consolidated income statements and other comprehensive income, included in the Consolidated Financial Statements appearing elsewhere in this Annual Report. See "Item 5. Operating and Financial Review Prospectus." This annual report includes (under Item 18) our audited consolidated statements of financial position as of December 31, 2023 and 2022, and the related consolidated income statements, consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2023, 2022 and 2021. Our audited consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). This annual report presents financial information for 2023, 2022 and 2021 in nominal terms in Mexican pesos, taking into account local inflation of any hyperinflationary economic environment pursuant to IFRS. Our non-Mexican subsidiaries maintain their accounting records in their local currency and in accordance with accounting principles generally accepted in the country where they are located. For presentation in our consolidated financial statements, we adjust these accounting records into IFRS and report in Mexican pesos under these standards. In the case of Argentina, the economy meets the criteria under IFRS to be treated as a hyperinflationary economy based on various economic factors, including that Argentina's cumulative inflation over the three-year period prior to December 31, 2023 exceeded 100

Risk Factors

Risk Factors Risks Related to Our Company Coca-Cola FEMSA's business depends on its relationship with The Coca-Cola Company, and changes in this relationship may adversely affect Coca-Cola FEMSA's business, financial condition and results of operations. Substantially all of Coca-Cola FEMSA's sales are derived from sales of Coca-Cola trademark beverages. Coca-Cola FEMSA produces, markets, sells and distributes Coca-Cola trademark beverages through standard bottler agreements in the territories where it operates, which we refer to as "Coca-Cola FEMSA's territories." Coca-Cola FEMSA is required to purchase concentrate for all Coca-Cola trademark beverages from affiliates of The Coca-Cola Company ("TCCC"), which price is determined from time to time by TCCC in all such territories. Coca-Cola FEMSA is also required to purchase sweeteners and other raw materials only from companies authorized by TCCC. Increases in the cost, disruption of supply or shortage of ingredients for concentrate could have an adverse effect on Coca-Cola FEMSA's business. See "Item 4. Information on the Company—Coca-Cola FEMSA—Coca-Cola FEMSA's Territories." In addition, under Coca-Cola FEMSA's bottler agreements, it is prohibited from bottling or distributing any other beverages without TCCC's authorization or consent, and it may not transfer control of the bottler rights of any of its territories without prior consent from TCCC. TCCC makes significant contributions to Coca-Cola FEMSA's marketing expenses, although it is not required to contribute a particular amount. Accordingly, TCCC may discontinue or reduce such contributions at any time. Coca-Cola FEMSA depends on TCCC to continue with its bottler agreements. Coca-Cola FEMSA's bottler agreements are automatically renewable for ten-year terms, subject to the right of either party to give prior notice that it does not wish to renew the applicable agreement. In addition, these agreements generally may be terminated in the case of material

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