Illustrated above is the company’s bottling plant capacity by country. A number of the company’s competitors in Central America, Brazil, Argentina, and Colombia offer beer in addition to sparkling beverages, still beverages and water, allowing them to achieve distribution efficiencies. In all markets, the company’s principal competitors are local Pepsi bottlers and other bottlers and distributors of local beverage brands that compete on price. While the company markets many brands, Coca-Cola is the most important, accounting for 62.4% of 2019 sales volume. It also distributes and sells Heineken ( OTCQX:HEINY) beer products in its Brazilian territories. Coca-Cola products include sparkling beverages (colas and flavored sparkling beverages), waters, and still beverages (including juice drinks, coffee, teas, milk, value-added dairy, sports drinks, energy drinks, and plant-based drinks). KOF produces, markets, sells, and distributes Coca-Cola products. Guatemala, Nicaragua, Costa Rica, and Panama make up the Central American region. Brazil was the next largest market at 25% of sales volume followed by Colombia (8%), Central America (7%), Argentina (4%), and Uruguay (1%). Mexico, KOF’s largest market, generated 55% of 2019’s sales volume. It also operates in Venezuela through an investment in KOF Venezuela. It operates in several countries in Latin America including Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Brazil, Argentina, and Uruguay. The company is authorized by The Coca-Cola Company ( KO) (TCCC) to manufacture, sell and distribute Coca-Cola products within specific regions.ĭuring 2019, the company produced and sold 11.1% of Coca-Cola’s volume worldwide. In volume terms, Coca-Cola FEMSA is the largest franchise bottler of Coca-Cola beverages in the world. There is 44.5% upside to the target price of MXN137.71. Despite the stability of the business, the strength of the competitive position, and growth outlook, it trades on an EV/EBITDA of 7.3 times and offers a 3.7% dividend yield. It is a stable business with significant barriers to entry that should grow at a mid-single-digit pace. Investment ThesisĬoca-Cola FEMSA ( NYSE: KOF) is the world’s largest Coca-Cola bottling company with operations throughout Latin America. Note: This article was amended on to include additional commentary of risk section.
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