FMX

Finally, we will open the call for your questions. José Antonio, please go ahead.

Thank you, Juan. Good morning, everyone. Before we get into the numbers, we should talk a bit about the changes we have made to improve our disclosure. As you saw in our release, we are now reporting OXXO Mexico on its own, given how important its performance and trajectory continue to be for our investors and analysts. At the same time, we're reporting a new segment, Americas and Mobility, which comprises our OXXO operations outside of Mexico, as well as our fuel business in those markets where we participate in fuel, namely Mexico and the United States Hopefully it will allow you to track our progress as we work to gradually capture the growth opportunity in places like Brazil and Colombia.

These are the main changes to our reporting segments with Europe, Health, and Coca-Cola FEMSA remaining as they were. Moving on to the quarter results, most of our operations delivered a strong performance. The first highlight is a continued recovery at OXXO Mexico. Building on the positive trends we first saw during the final quarter of last year, OXXO delivered 8.3% revenue growth, driven by same-store sales that beat the industry despite the disruptions in late February that led to many store closures, a few of which remain today. In particular, we saw revenue growth in the tobacco and soft drink categories, reflecting the pass-through effect from the application of new excise taxes. We also saw positive revenue dynamics in almost all other categories except snacks, sweets, and alternative beverages.

We believe that these revenue trends reflected our continued focus on affordability through promotional activity and price package initiatives, which in turn helped drive improvements in traffic. Beyond the top line, however, the team also delivered gross margin expansion through continued cooperation with our suppliers, increases in distribution income, and warehouse cost savings. On the selling expense front, OXXO Mexico achieved selling expense containment with growth in line with expansion plus inflation. This reflects the impact of our efforts to increase efficiency. As a result of all these factors, operating income growth was well into the double digits. Just as relevant as the growth in numbers themselves, in a consumer environment that remains challenging, we believe we have continued to gain market share in recent months against the traditional trade, while bigger box retailers were stable as a whole.

However, as encouraging as these results are, we recognize there is still work to do. Average traffic remains slightly negative during the quarter, improved significantly versus the declines we faced last year, reflecting clear progress and the early benefits of our commercial initiatives. While we are encouraged by this trajectory, we are not being complacent and remain firmly focused on continuing to improve traffic. As we mentioned on our last call, we aspire to restore OXXO Mexico, sustain growth and relevance through a clear focus on recovering traffic and further improving same-store sales by sharpening our value proposition and enhancing the customer experience while delivering strong operational execution. I would like to talk a little about Americas & Mobility. During the first quarter, the business delivered strong growth across most of its income statement.

We should note that this segment includes two months of the recently consolidated operations of OXXO Brazil, therefore, the comparable column is particularly useful to understand the rest of the segment's year-on-year growth. Here we are especially proud of the same-store sales growth in LatAm ex Brazil of more than 20% in local currency, a very encouraging sign of OXXO's on-the-ground momentum in Colombia, Chile, and Peru. For its part, Brazil posted same-store sales growth of 6.9% in local currency, reflecting continued progress in strengthening the value proposition while the U.S. business delivered same-store sales growth of 1.7% in local currency. In terms of store expansion, growth was moderate on a last 12-month basis. In Colombia, this reflected our decision to prioritize operational improvements and strengthen key capabilities to support a stronger pace of expansion starting this year.

While in Brazil, expansion was impacted during most of 2025 by our focus on unwinding our joint venture. Looking ahead, this is a segment that should gradually improve its profitability as it gains scale, strengthens operating leverage, and continues to mature across markets. With our updated reporting structure, you will now be able to monitor that progress more closely on a regular basis. Since we're discussing some of our fast growers, we should also mention Bara and the fact that during the first quarter, it increased its same-store sales by double digits, driven equally by traffic and ticket, while opening 38 net new stores and reaching almost 30% of private label in its revenue mix. All in all, a solid quarter for Bara.

In Europe, Valora again delivered strong growth in operating income, even as they continue to face soft traffic trends, particularly outside the core Swiss retail and food service business. For its part, the Coca-Cola FEMSA team remains focused on executing its playbook of strengthening affordability, expanding refillable to defend household penetration, and continuing to deploy state-of-the-art digital tools and revenue growth management initiatives. Particularly important in Mexico, where softer consumer demand has been further pressured by this year excise tax increase. On the other side of the ledger, our health operations again delivered a lackluster set of results. Top line was driven by Colombia Retail, Chile and Ecuador in local currency, with revenue growth and market share gains. However, results were pressured by soft margins in Chile, reflecting an unfavorable product mix shift toward lower margin pharma products such as GLP-1 treatments and by continued losses in Mexico.

Let me also discuss recent developments on our institutional business in Colombia. As you know, our health business in Colombia includes a significant institutional segment in which we distribute medicine and provide highly specialized medical services on behalf of private healthcare providers, intermediaries known as EPSs. The institutional component represents a bit more than half of our business in Colombia, although it has been growing much more slowly than our retail business and is significantly less profitable. In recent years, this part of the business has become increasingly challenging due to funding gaps, which have impeded the ability of such EPSs to reimburse their service suppliers, including us. Accordingly, we have been gradually reducing our exposure, although our total outstanding receivables to the EPSs have continued to grow.

As part of our strategy to reduce exposure, at the beginning of April, we notified EPS Sanitas, our largest counterparty in this channel, by a significant margin, that we will not renew our agreement upon its expiration in September. The current environment in the Colombian healthcare system would result in the insolvency of certain EPSs, thus creating a credit risk for us with regards to such receivables. We will continue to actively manage this exposure, remain disciplined in our capital allocation, and keep the market informed of any relevant developments as we continue to prioritize our retail drugstore business, which has stronger profitability, cash generation, and more attractive long-term returns. Finally, Spin had a good quarter. Today, Spin by OXXO sits at the center of the digital consumer evolution in Mexico with 11 million active users and more than 100 million monthly transactions.

Spin is already one of the fastest-growing participants in stay and peer-to-peer transfers across FinTechs. As we mentioned on our last call, Spin is focusing on becoming a structurally omni-channel platform, aiming to amplify OXXO's ability to solve and serve daily consumption needs and occasions for the Mexican consumer and change how they experience convenience in their daily lives. Before turning the call over to Martín, I would like to reflect on some of the changes we have made in our organization during these first few months. The work has been intense and challenging, but having the right team in place is fundamental to our long-term success. At this point, we have finished almost all of the organizational changes we need to make.

We completed the combination of the overhead structures of FEMSA Corporate and the Proximity and Health Division, including the top reductions in headcount required by this new structure. For its part, OXXO Mexico has a renewed senior leadership team that brings additional capabilities, and the revamped team at Spin now has a more aligned reporting line with OXXO Mexico to ensure maximum alignment. We still have some work to do to review our corporate non-FDA expenses, but I believe we have assembled a strong world-class team that will help me lead this extraordinary company through the next stage of growth. I want to take this opportunity to thank everyone on our team at every level for continuing to deliver a top-notch performance, even as we made meaningful adjustments to the lineup. With that, let me turn it over to Martín to go over the numbers in more detail.

Thank you, José Antonio. Good morning, everyone, and thank you for joining us today. As José Antonio mentioned, starting this quarter, we are reporting under new segment structure: OXXO Mexico, Americas & Mobility, Europe, Health, and Coca-Cola FEMSA. We have included the comparable base numbers for the first quarter of 2025. Among other benefits, we believe this structure will make it easier for you to track and monitor operations that are in different stages of development and evolution. Let me begin with FEMSA's consolidated financial results for the first quarter of 2026. Total revenues increased 6.1% year-over-year, while operating income grew 5.5%. Reflecting the continued recovery in OXXO Mexico, contributions from our international operations, and the early benefits of our cost restructuring initiatives, offset by currency headwinds due to a stronger peso and the softer performance of Health and KOF.

On a comparable and currency neutral basis, total revenues and operating income grew 8.5% and 12.1% respectively. Net consolidated income amounted to MXN 17.6 billion, representing an increase of 97.3% compared to the first quarter of 2025. This increase was driven by a one-time non-cash accounting gain related to the BradyPLUS and Imperial Dade combination. Eliminating this non-cash gain, net consolidated income would have been MXN 5.7 billion, or a decline of 36.4% year-over-year. This decline was mainly explained by higher net financing expenses, reflecting, one, a foreign exchange loss compared to a gain in 2025, representing a swing of MXN 883 million driven by the appreciation of the Mexican peso against the U.S. dollar-denominated cash positions.

Two, an expense of MXN 189 million related to financial instruments, compared to a gain of MXN 1.1 billion last year for the favorable valuation of the convertible bond associated with Heineken shares. Three, lower interest income as a result of a lower cash position and lower interest rates. Additionally, income from discontinued operations contributed MXN 2.5 billion in the first quarter of last year, but not this year. The effective tax rate for the quarter was 17.1%, including the impact of the one-time accounting gain relating to our investment in BradyPLUS. The gain was recognized as part of a share exchange transaction that, for accounting purposes, required fair value recognition similar to a sale, resulting in a book gain with no current tax effect. Excluding this non-cash item, the effective tax rate would have been 37.9%.

The difference between the statutory corporate tax rate of 30% and our effective tax rate of 37.9% is mainly explained by certain non-deductible items, including labor-related expenses in OXXO Mexico, as well as losses at Spin that, while diminishing, currently do not generate a tax shield. We expect these losses to decline beginning next quarter. Turning to our operating results, OXXO Mexico delivered total revenue growth of 8.3%, driven by same-store sales growth of 6% and continued net new store additions of 158 units during the quarter. Gross margin was 46.2%, expanding 140 basis points year-over-year, reflecting solid income from key suppliers and the resilient performance of financial services.

Selling expenses grew in line with store expansion plus inflation, despite a double-digit growth in labor costs, reflecting our multiple initiatives to contain costs and drive efficiencies. Administrative expenses increased by 13.9% to represent 2.9% of revenues, driven by a change in the phasing of provisions for year-end bonuses and profit sharing that in the past were more heavily provisioned later in the year, and greater expected bonuses and profit sharing due to projected better financial performance this year. As a result, operating income grew 20.9%, with operating margin expanding 80 basis points to 7.6%. The Americas & Mobility segment delivered total revenues of MXN 25 billion, increasing 12.9% or 10.5% on a comparable and currency neutral basis.

The segment's top line benefited from strong performance across OXXO Latam, which saw average weighted currency neutral same-store sales growth of 13.1% in Chile, Peru, and Colombia, and the consolidation of OXXO Brazil. Gross margin of merchandise was stable at 31.8% of revenues. While in the fuel division, it increased 120 basis points to 13%, driven by a more favorable sales mix with higher retail volumes in OXXO Gas relative to wholesale, which carries higher margins, together with the benefit of higher fuel prices and improved CPG margins in the U.S., partially offset by lower volumes in the U.S.

Operating income was MXN 281 million, with an operating margin of 1.1%, which represented an increase of more than 100% on a comparable basis, excluding currency translations and the consolidation of OXXO Brazil. The operating margin reflects the recent consolidation of OXXO Brazil, which generates an operating loss at this stage, partially offset by strong fuel performance and narrowing losses across the remainder of OXXO Latam. Our operations in Europe reported total revenues of MXN 12.9 billion, stable in peso terms or up 1.5% on a currency neutral basis, as the start of the year was characterized by a solid Swiss retail and food service business, offset by a weak German retail and food service business, resulting from soft traffic across our consumer formats that improved during the month of March.

We continued to see a weak B2B segment, driven by strong competition. We have taken measures, including bringing in a new sales team to help us reignite growth in this business. Gross profit decreased by 1.3% with a gross margin of 41.5%, resulting from the reclassification of distribution expenses from SG&A to cost of sales. On a comparable basis, the gross margin would have expanded by 90 basis points. There is no impact on operating income from this reclassification. Operating income was MXN 356 million, a solid increase of 7.4% year-on-year, driven by strong cost containment offsetting the weak top line growth. Operating margin was 2.8%, reflecting continued cost discipline against the volatile macro environment.

For its part, the Health Division delivered total revenues of MXN 22.2 billion, growing 0.9% year-over-year or 6.5% on a currency neutral basis. On a same-store sales basis, performance was positive across Colombia, Ecuador and Chile in local currency, while Mexico continued to face headwinds. During the quarter and consistent with the adjustments made last quarter, we reclassified certain distribution expenses from SG&A to cost of sales. This change was made purely for accounting presentation purposes to better align the classification of distribution costs with the nature of the expense. As with Valora, there is no impact on operating income because of this reclassification. As a mechanical effect of this change, gross margin was impacted by approximately MXN 666 million, reflecting the proportional shift of these expenses into cost of sales.

Gross profit decreased by 10% with a gross margin of 26.2%. On a comparable basis, the first quarter gross margin would have declined by 20 basis points. Operating income reached MXN 657 million, a decline of 14.9% and 4.9% on a comparable basis with an operating margin of 3%. This result was supported by strong growth in Colombia and Ecuador, which was more than offset by a decline in Chile and continued losses in May. For its part, Coca-Cola FEMSA delivered revenue growth of 1.1% and a decline in operating income of 2.3%.

On a comparable basis, revenue grew 6.3% and operating income also grew 2.1%, reflecting the benefits of its diversified geographic footprint as international operations offset a more challenging result in Mexico. Portfolio initiatives, strong marketplace execution and digital capabilities continue to support market share gains, while disciplined cost and expense management help sustain stable consolidated margins. As always, we encourage you to listen to the earnings call hosted yesterday. Before closing, let me briefly update you on capital allocation. In the first quarter, we deployed MXN 6.2 billion in CapEx, representing approximately 3% of total revenues and a 29.5% lower than last year, primarily reflecting a slower start of the year in OXXO Mexico store openings and a conservative approach to capacity related investments at KOF.

We expect CapEx deployment to accelerate through the remainder of the year, trending towards our more typical CapEx to sales ratio of approximately 5%-6%. Our approach remains disciplined, linking investment decisions across markets to clear visibility on same-store sales and demand trends, margin evolution and cash generation. With respect to shareholder returns, in our recent annual general meeting of shareholders, we voted to deploy MXN 15.2 billion in ordinary dividends between March 2026 and March 2027, an increase per share of 4.5% versus last year. In addition, shareholders also approved an extraordinary dividend for the year equivalent to MXN 25.8 billion. Taken together, the combination of ordinary and extraordinary returns represents total expected capital distributions of approximately MXN 41 billion on a March 2026 to March 2027 basis.

We continue to execute on our latest 300 million share repurchase program, which we expect to be completed during the second quarter. This program is part of our 2025 returns and therefore incremental to the MXN 41 billion I just mentioned. As I look ahead, we are optimistic as we accelerate towards a busy summer that includes the FIFA World Cup, while executing against our strategy across our business units. We temper our optimism with some caution, particularly towards the second half of the year as we continue to operate in a challenging and uncertain macro environment worldwide. We got some feedback about our last call being a bit long. We are mindful of your time, and we want to be fair in giving as many participants an opportunity to ask questions.

We ask you to help us by asking one question at a time. Feel free to rejoin the queue if you have further questions. Thank you. With that, we can open the call for your questions.

Okay. At this time, we are going to open it up for questions-and-answers. If you have a question, please click on raise hand for audio questions or write it down in the Q&A section for written questions. Please remember that your company's name should be visible for your question to be taken. We do ask that when you pose your question, that you pick up your headset to provide optimum sound quality. Our first question comes from Alvaro Garcia with BTG.

[Non-English content] Alvaro.

Hey, good morning. Thanks for the space for questions. Thanks very much for the new segment information. I think it's great. You know, I have two questions, one for Martín on. Or I'll stick with one question. On others.

Thank you.

on others, just it, you know, came down materially relative to last year. This is obviously the difference in EBITDA, between your consolidated EBITDA and all of your different segments. I was wondering if you could just help piece together why that came down in the context of the recent restructurings, you announced last quarter. Thank you.

Sure. I mean, one big driver for that doubt was the decline in losses in spend. Again, generally our efforts at cost containment. One has to be careful with others line because sometimes that all the firms support things in our businesses that were coming in and out. Generally, I think from last quarter to this quarter, the best progress that was made was on the reduction of the spend. The benefits from cost reductions will probably begin to cycle in over the next three quarters, and you should continue to expect improvements also as we manage the spend losses and find more efficient ways to manage those losses from a tax shift perspective.

Wonderful. Thank you.

Our next question comes from Ben Theurer with Barclays.

Hello, Ben.

Good morning. Thank you very much. I'll stick to one as well. You showed relatively strong performance in terms of traffic this quarter, despite some of the security issues. Could you help us understand a little bit more just January, February, March, and how issues in the Pacific area, Guadalajara, Jalisco have impacted traffic throughout the quarter and what the normalization looks like? Thank you.

Ben, I would say, I'm still not satisfied with traffic. I expect OXXO is a growth platform, is a growing company, and it should also grow on a same-store sales basis on a traffic level. The strategies we have put in place are aiming towards profitable traffic growth on a medium term level. Having said that, we are encouraged by seeing, compared to other players in the industry, in ANTAD figures and what we see from NielsenIQ on the traditional trade, we're encouraged by our traffic numbers are relatively better. Especially considering the effects we had on February on the disruptions in the Jalisco region, and really in a larger swath of the country.

I would say we're seeing very good growth traffic, I mean, better than our average traffic growth, especially in the north of Mexico, probably helped a little bit by weather. Also maybe a little bit more economic momentum in that region, in the Bajío region, compared to a much difficult traffic scenario, obviously, in Jalisco, and Nayarit and that region, Michoacán. Obviously the southeast, which I think has a negative effect, after all these infrastructure projects from the last administration, are not present anymore or not as relevant. I that's how I would frame it in general.

Excuse me. I think maybe adding to the, to the lackluster performance in kind of the south of the country, as you know, really the states that are more exposed to remittances, you know, the remittances are coming down and the, you know, they're generating fewer pesos. I think that also-

Yes

contributes to the, to the difference between the north and the rest of the country.

We saw a relatively soft Holy Week or, you know, vacation season, probably a little bit discouraged by international tourism from the news in Jalisco, plus a stronger peso relative to the dollar, also affected the region around Cancún. That didn't help as well. A long way to go on traffic. We're working on lots of stuff.

Well, keep it going. Thank you very much. Good luck.

Thank you, Ben.

Our next question comes from Melissa Byun with Bank of America.

Hello, Melissa.

Hello. Thanks for taking my question. I too will try to keep this to one question or theme. On the OXXO gross margin, are you seeing a contribution from commercial income in anticipation of the World Cup yet? How do you expect margins to evolve along the year?

We are not yet seeing. I don't think that is part of the incremental promotional income from this quarter, maybe a little bit in March. No, I think we're gonna see much more of that during the second quarter. There's a lot of excitement being built by many of the sponsor World Cup brands. We're doing a lot of things behind that that should help. It's not necessarily promotional income, but today, which is Día del Niño here in Mexico, we're launching El Panini, that, this, you know, collectible thing. We're partnering with the Panini company and we expect some tailwinds of traffic and revenues behind that. We will see.

I mean, part of it is commercial income. We're also seeing a lot of expansion on our retail media efforts, gaining momentum. We are now. We have about almost 6,500 digital banners that are functioning and our network of sales of that channel is growing. Finally, some expansion in financial services. We're still seeing as some services like top-ups decrease, they're much more than being covered by growth in cash withdrawals from new banks, FinTechs, and other players like Spin, frankly. All of that has been help on the gross margin.

If I can compliment José just on one small item, this quarter saw an improvement in distribution income. In other words, suppliers who choose to use, deliver directly to our distribution centers, and then we just distribute on their behalf. As we have gained scale and efficiency in our distribution, more suppliers see us as a better alternative relative to them directly distributing to the store.

Just one final comment on this, Melissa. I mean, 140 basis points is a big number. Again, I think everything that was just discussed ahead of the World Cup, some long-term agreements that were recently renewed with some of our big suppliers, some of that may not be present in the second half, right? I don't think we should put 140 basis points for the second half of the year. Hopefully, I'm wrong. I've been wrong 100 times on this, more often than not in the right direction, meaning, margin expands more than I thought. Just to be a little bit conservative because this was a big number.

Yes.

Great. Understood. Thank you.

[Non-English content], Rodrigo.

Our next question.

Sorry.

I was jumping the gun.

with UBS. That's okay. Go ahead, Rodrigo.

Hello, Rodrigo, again. Sorry.

Go ahead, Rodrigo.

Hello, hello.[Non-English content]

[Non-English content]

Oh, super. Hello, José. I have three questions. No, just joking. I'm just. We'll ask one. José, now that, I mean, I have you here on the line, you know, the affordability strategy 2025 worked quite well, right? Helped you recovering the lost traffic to mom-and-pops. It clearly worked well, that strategy. Still, I mean, the way I see this was kind of like a reactive strategy, let's say, you know, to what was happening there, with the macro. The question is looking for 2026 and, you know, beyond the World Cup, what kind of like active strategies would you highlight for OXXO for it to accelerate traffic?

I mean, you mentioned that you're working in a couple stuff, right, at the beginning of your remarks, right? Just wondering if you can, like, help me understand the flagship strategies that you are working on to precisely re-accelerate the traffic trends beyond the World Cup. That would be my question. Thank you, José.

It's a great question. As you say, I think, working on a very good price from OBPPC architecture in OXXO in the impulse categories in terms of affordability has returned us in a growing share trend in tobacco, in beer, in soft drinks and in most of our key categories. I think we still have a long way to go in terms of our ambition of what we can do with impulse. I think, given our capillarity, given that we sell the coldest beer out there, we should still gain share and continue to do so. Cold and affordable beer for everyone is our goal.

Going forward, it's not gonna be enough to bring us where we want to go in terms of relevance for the Mexican consumer. We are very ambitious in our foodvenience agenda. One of the things we achieved over the quarter with very, still very minor price and offering adjustments, we increased our coffee cups sold per store on the quarter from 28 cups in the first quarter of 2025 to 30 cups on 2026. We still have a long way to go. Coffee. We serve phenomenally good coffee for a convenience store chain. It's 100% Mexican coffee in Mexico, 100% Colombia in Colombia, and in Brazil is 100% Brazilian. It's a great product. We should promote it more.

It's incredibly good coffee considering the price, we still can go very aggressively on price given that we have our own supply chain and have a capacity for withstanding margins there. Coffee should come with a great breakfast options with what we call hero products that can help you for snacking, for lunch. Especially in breakfast, we see a huge opportunity and hopefully we're successful and the plan is to be. You should see us grow in food and coffee over the next over the next few quarters. I think we still see a huge opportunity in OXXO, this is, you know, OXXO only in Mexico, in what we call daily replenishment.

The traditional trade plays a very good game there with all the CPGs and we are. I think we have a very good idea of what the consumer needs in terms of what is sold at mom-and-pops in everyday stores. This is not a competition against other formats like discounters. This is helping you on your daily replenishment on what you need for what you forgot while you were going to work, those type of things. We are piloting a few things in Chihuahua and Veracruz in terms of bringing back affordability and highlighting the importance of how it's more convenient to get your beer and on the way get your diapers or your toilet paper in OXXO.

We are seeing some encouraging progress, but still a long way to go. I think that's gonna take us more time. You know that traditional trade is still 50% of the basket in of the channel in Mexico, so we have a long share gains to achieve. I think there's room for growth for us and other players like Bara to gain share there. Thank you.

Thank you. Thank you, José.

Our next question comes from Tiago Bortoluci with Goldman Sachs.

[Non-English content] Tiago.

I think you might be on mute.

Sir, you can open your microphone. I believe he's having some technical issues. We're gonna go ahead with our next question from Alejandro Fuchs with Itaú BBA.

Hello, Alejandro.

[Non-English content] José Antonio, Martín, Juan. Thank you for the space, the questions, and congratulations on the very strong start of the year. Just one question, maybe a little more strategically for José Antonio. We have seen in the past, you know, FEMSA a little bit simplifying its portfolio of businesses, right, with the FEMSA Forward strategy and being very efficient now with capital allocation. How do you feel, José, with maybe the portfolio of businesses that you have today? You know, thinking about the future, I felt a little bit maybe more cautiousness on the pharma side of the business again. Do you think that? Do you feel comfortable today or we could see maybe going forward, you know, more of the simplification strategy that we have seen in the past?

Thank you.

I'll let Martín help me complement a little bit. I would say, in general, We're always studying parts of the portfolio that could either perform better with someone else or should be or should not be part. Simplification is still alive. It's always on our mind. We see most of our growth focused in organic growth. Frankly, some of our operations in pharma have huge potential for organic growth, and that keeps us encouraged in those platforms. Unfortunately, it's not across all of our pharma businesses. Mexico is really underperforming, and we are analyzing all possibilities with that asset. Colombia has huge amounts of potential to grow.

We continue to gain very significant amounts of share on our Colombia retail, and taking out the institutional side, as I mentioned on my initial remarks, has some issues. The Colombia private retail segment, the industry is growing and we are the fastest growers in that industry. That keeps a lot of momentum. We should capture as much of that waving as possible. Chile is gaining share. We had a lackluster set of results, but in general, it still has lots of potential. Ecuador as well. I would say on the big picture thinking is, yes, we are always understanding where we are the best at, and we are the best obviously at proximity and convenience.

That's where we shine. We are the best in Mexico, but we are also beginning to see that we can deliver growth and profitable growth in Latin America and even in Europe. We're encouraged by what we're able to turn around in our European businesses. Obviously, everything is always on our plates, and I delve a lot of my time thinking five years, 10 years from now, thinking in decades, how should the portfolio look and where should we go? Everything's on the table. I don't know, Martín, you.

Very, very little to add. I would just remind everybody the history of FEMSA, from the brewery to FEMSA Forward, the mandate that we have as management from our board and from our shareholders is to value maximize. Any opportunities that we have to find assets in the portfolio where we can maximize value will always be considered thoughtfully. Number two, obviously these are awkward conversations to have over forums like this because this impacts people, employees, suppliers, and so, you know, we have to be particularly cautious of what we say about what we're looking at or not looking at any given moment.

I would add a third qualitative comment, which is, you know, once you own an asset, you then have to make a judgment about, you know, what is it worth to you relative to what other players might be out there. That debate happens regularly here at the company. I would just close with that.

Thank you.

[Non-English content], José Antonio, Martín.

Thank you.

Next question from Tiago Bortoluci with Goldman Sachs.

Hey, guys. Good morning, everyone. Can you hear me now?

Yes.

Yes.

Hello, Tiago.

[Non-English content], José, Martín, Juan. Thank you very much for taking the question, and congrats on the solid sequential improvement and turnaround of the business. I would like to explore the productivity and traffic theme in Mexico, but from another angle. That is how your new stores are performing, right? You are opening a run rate of 890 stores per year in Mexico. When we try to see, and this is the best simplification we can get, your numbers, you are growing area by 3%, but the sales contribution of this growth is close to 2%. That might imply the productivity of these new stores is not trending in line or trending a bit lower than your same-store sales.

I would just like to understand if this is right, what is the plan, and how comfort it gives to you to keep up with the growth pace, and how should we think about the incremental ROIs of these new cohorts? Thank you very much.

It's a very good, thoughtful question. It looks like you've done your math. I think, first of all, we're still very impressed by the new cohorts of stores. As you know, a growing share of the mix is coming from what we all call, OXXO Niche or OXXO stores that are in, you know, in special either factories, apartment buildings, or offices. Those stores tend to sell, in average less than other stores. They usually have some SKU restrictions like alcohol, tobacco, et cetera. They tend to have a higher ROIs. As that share of our OXXO stores goes from 10% to almost 25% this year, that is impacting a little bit of that number.

The other thing is that we are also not looking not also on the nominator, but also the denominator, making sure we make a smarter, focusing on improving our ROI, reducing our cost of each new store. The return on invested capital of the new stores, even if they sometimes perform less or take more time to mature are in a very good shape. Compared to last year, we did, I think we should mention two important things. We made a pause in the in really making sure we are continuing to maximize ROIs. That led to a slower start of the year compared to last year. That should normalize throughout the year in terms of total opening of stores.

However, every three or four years, and I think, we haven't really done a big pruning after the recovery of COVID. In this year, we are being very smart about saying, Hey, it's, a few years have gone by. We've gone through COVID. How many stores of our underperforming stores, we should consider, you know, canceling the contract or eliminating? We think this year, while we're still gonna open about 1,100 stores, that net new, the net opening of stores could be impacted by a few hundred stores. We're still finalizing that number. The OXXO team is being very careful in seeing which stores, should probably not exist.

Maybe the net new stores of this year will be impacted throughout the year. I will have a better number as the year progresses.

Yeah, Tiago, this is Juan. I think I'd like to follow up on what José just said, because it started actually last quarter, where I mean, we usually talk about the net number, but we are, and it happened last quarter, closing more non-performing stores. The reality is that those stores are in the base of the same-store sales, and they're probably, even if they're not that great, they're probably selling more than some of the new ones or the newer ones. The ones that we just opened in the last few months are probably selling less.

Than those that we're closing. That's happening more than it ever did before. It. Again, this is where the question came up in the last, in the last conversation. That will probably continue as we continue to prune the store base.

Overall, we still see the opportunity for opening between 900 and 1,100 net new stores of OXXO. This is not counting Bara, which is also accelerating its pace, but also stores in Mexico for the next various years. A lot of years, hopefully.

This is very clear, José, Juan, thank you very much.

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Our next question comes from Héctor Maya with Scotiabank.

[Non-English content] Héctor.

[Non-English content] José Antonio, Martín, Juan. Congrats on the results. Could you please share with us how much of the ticket growth in Mexico in OXXO was driven mostly by the passthrough of the new taxes on cigarettes and beverages versus organic pricing or mix from the implementation of the affordability strategy?

Look, I'm gonna have to do some math here just quickly. We had been trending at inflation or a little bit above inflation generally in the tickets, and it wasn't like there was any structural thing that went on in the business. If you just calculate the difference between the growth of the ticket and inflation, probably, I would suggest that a significant portion of that was related to that. That would be my way to give you a quick and dirty answer 'cause I haven't actually calculated.

Yeah. Yeah.

Common sense leads me to that conclusion really.

I would say, if you'd add some color, we were quite impressed by the, in the tobacco section, the very inelastic behavior of the consumer with the tax, not so much on the soft drinks. I would say, it was a big portion of it. I don't think it was above 80%, but it was a big portion.

Depending what territory you spoke about, different soft drink brands decided to pass on more or less of the tax. Because remember, they collect the tax and then they decide in the price they sell you what's the price at which they're gonna increase it by. There is some variability between different parts of Mexico, depending on the competitive dynamics amongst the players.

Perfect. Very clear. Thank you. Thank you very much.

Next question from Lucas Mussi with Morgan Stanley.

Hello, Lucas.

Hi, everyone. Thanks for taking my question. Congrats on results. I have one for Martín maybe, about your current leverage excluding KOF, of course. Just wanted to hear a bit more how you're thinking about how that should progress through 2026, as we think about your capital allocation, your announced dividends and buyback activities. Just thinking about how you're thinking about cash flow for all 2026, how you think that should shape up as it pertains to your target two times net debt to EBITDA excluding KOF, by the end of the FEMSA Forward plan, in the next 12 months or so.

Just how you're thinking, how comfortable are you with your announced shareholder remuneration, given what you saw in the first quarter and your early expectations for the second quarter, if you see some upside, potential upside, some gaps that could be filled, in your target, or any general comment, given you are already four months into the year. Thank you very much, everyone.

I mean, all other things being equal, I would expect that given the return of capital position that we've taken, we will end up at the end of the year slightly below the two times. How much will ultimately depend on how well we do the remaining three quarters, I think. That will leave the question early next year of deciding whether we make a judgment of either doing another extraordinary dividend, for example. We also have capacity under our share buybacks. We can trigger that at any moment that we have in our judgment, we want to see an opportunity for buying shares.

Number three, you know, which is the part that's hard to discuss in a public forum, we also have in our radar opportunities that we're constantly looking at from the M&A perspective. There may be things that come up this year that will help us to close that gap. Without that M&A, I suspect we will be below. Not hugely, but we will likely be below, the two times. Expect to hear from us at the end of the year, beginning of next year, to give you thoughts on what our decision next year will be.

That's helpful. Thank you, Martín. Thank you, team.

Next question from Joseph Giordano with JPMorgan.

Hello, Joseph.

Hello. Good morning, everyone. Thanks for taking my question. I'd like to explore a little bit like, the expansion of Bara in the north region, of Mexico. Just wanted to understand like how you're seeing the performance, increase in private label, and how are you evolving the model. I think it's like, a building mode. Thank you.

We are very encouraged by what we are seeing on an expansion of Bara in the north. Although Bajio continues to prove, you know, with very favorable momentum. We are encouraged that we are seeing same-store sales growth on both a mix of traffic and ticket. We love to see more traffic driving the growth in sales. We are accelerating store expansion. We opened about 45 stores in the first quarter. We are planning. On April, we're opening 30 stores. It's 38 stores in the first quarter, we are opening 30 stores just in April.

We plan on accelerating expansion, and we're still on target on that champagne promise I made of a store a day for Bara in 2026. Hopefully, my team will deliver that, but we're gonna be close to that number. We are seeing, considering that some of the stores in Northern Mexico do not sell alcohol yet, the numbers remain quite impressive. We're still fixing issues with supply chain and still the welcoming has been very positive. I'll stop there. I don't wanna attract more attention towards our expansion here.

All right. Thank you very much.

Our next question comes from Henrique Brustolin with Bradesco BBI.

Good morning. Thanks for taking my question. I would like to address the merchandise margins in the Americas. You, you mentioned, right, the 31.8% flat gross margin, but when I look at the comparable figures from the, from the release, it looks like there was a 5-point margin expansion year-on-year. Just to be clear, if there was anything in the comparison base, you know, that we should be aware of when thinking about this margin expansion.

On this topic, when you look at the 31, the close to 32% gross margin, how is that compared to the target that you see for those operations outside of Mexico, in terms of, you know, the profitability you can achieve thinking about the expenses dilution that you should have as you grow, or if gross margin expansions is still potentially an important driver for growth to accelerate and the bottom line growth as well? Thank you very much.

The comparable items excludes Brazil still has a long way to go to match the gross margin that we're seeing in Chile, Peru, and Colombia. I think that's, that should explain most of it. I'm not sure, but I'm pretty sure it does.

Yeah.

However, we are encouraged by what we're seeing in Brazil in terms of margin expansion ambition towards the rest of the year. Frankly, again, the momentum we're seeing in Colombia with double-digit traffic growth, with double-digit same-store sales growth, it was very encouraged that Colombia will be eventually will dilute all of its overhead and will be a very profitable operation. It was already EBITDA profitable last year and hopefully will be very close to EBIT breakeven this year. Brazil has a longer way to go. It's still behind in gross margins. Every new cohort of stores we're opening is surprising us on the upside. They're maturing better, faster. Food is a larger component of our business in South America.

In the store, consumption of beer is allowed in Brazil and that is helping drive traffic. By the way, we're also seeing some interesting expansion of some services, very different types of services obviously in Brazil and Colombia, but there's people doing a lottery thing, big tickets, gift cards in Brazil. In Colombia, we're seeing a little bit of that and also some cash withdrawals. I think gross margins, while they're not gonna, I don't think will ever match Mexico, could go way above the 35%.

That should keep us on the safe side on paying our cost of capital, and continuing to invest in those two platforms, especially Colombia and Brazil.

Yeah, I think so much of your gross margin depends on your positioning with your suppliers, right? Your scale is a big part of that. If we continue to grow as we hope we will grow, then our conversations with our suppliers will evolve and that gap will close.

Yeah

... vis-à-vis Mexico.

There's two ways to prove scale in this business. You can be a very big guy and then extract more value or you can grow very fast. We're still not growing very fast in Colombia and Brazil, and we're still not a very big guy in those two countries. When we begin to show faster growth, faster profitable growth, which is the plan for the next couple of years, you'll start seeing our suppliers realizing we are for serious in South America. We're for serious in Brazil. We're educating the consumer of our CPG partners of how profitable is our channel for them.

It's a great place for them to launch new products, to launch new campaigns, and so we plan to stay in Brazil and Colombia for decades, hopefully.

That's very helpful. Thank you very much.

[Non-English content]

Our next question comes from Antonio Hernandez with Actinver.

Hi. Good morning.

[Non-English content] Antonio.

[Non-English content] Congrats on your returns. Just a quick question regarding that very strong performance in OXXO Mexico. I mean, you already mentioned that the 140 basis points expansion is maybe not sustainable, but you do expect some expansion ahead. Just wanted to get a sense on, at the disclosure of how much of that expansion was driven either from financial services, income from key suppliers, retail media, and so on. Thanks.

I think, I mean, generally, commercial income is the biggest contributor to the deltas, and I think that was the case again this time around. I mean, we spoke a little bit about, you know, new agreements that were signed recently with some of the big ones, everything, kind of leading up towards the FIFA World Cup. We put some big suppliers, some beer guys, or some beer, big beer SKUs into the distribution centers, and that is driving distribution income. I think it's a mix of everything.

I think with Juan cautious remarks before, has to do that if we are planning to be, to remain ambitious on our affordability, some of our margin expansion should be given back to our consumers in a SKUs that our consumer team are more elastic to them and really value. As we continue to grow some gross margin in certain categories, because there's a lot of room for expansion, there's also a lot of room to give back to some of our consumers to bring them more frequently to buy at our stores in things like pantry or coffee, for example.

Thanks. That's helpful.

Thank you.

Next question from Renata Cabral with Citi.

[Non-English content]

[Non-English content] Thanks so much for the space, and congrats on the results. My question is about Spin, maybe for José Antonio, as last quarter you described Spin as a phenomenal FinTech, but acknowledge the opportunity to bring more customers in, into the store. We signed the release Spin Premia at tender, now crossing the 50% in Q1, marked a milestone, and I would love to hear how you're actually putting the data, the transaction level to work across more than half of the OXXO sales or the opportunities you see there. Where's that personalizing promotion, optimizing assortment, or for strengthening commercial negotiation with suppliers? If you have an example, would be amazing. Just a follow-up to that, where do you see the natural ceiling for tender? Is 78% achievable over time? Thank you so much.

Renata, it's a very, very good question. We are very impressed by the encouraging results that we're seeing on Spin. I want to remain cautious. I do say in March alone, we added the highest number of active users in the past two years. More than our 11 million active users are impressive, our weekly active users keep growing. I think they're almost reaching 5 million. Our monthly transactions are growing month-over-month double digits on a very impressive basis. They overcome by far our financial services in the store. We're using much more pay and peer-to-peer payments in the Spin app.

Basically, Spin is gaining momentum and reducing costs, so it's becoming more profitable or, if you account for the OXXO commission that we get, it's already making money. I think Spin is proving to be a success. Now, as Spin continues to grow dramatically and becomes one of the biggest peer-to-peer payment systems in Mexico, a lot of those payments will commoditize and will capture some margins from OXXO. If we are the fastest growings and we capture a big momentum, we're basically meeting our consumers where they are, we're making them what it was very convenient to do at OXXO, making it more convenient to do in the app.

I think once we have that relationship with them in Spin, we can add either more services for them within Spin, and that may require some financial regulation changes. We can also invite them to the store more with promotions, with gamification. I think as you see that, we think Spin will continue to become a more relevant partner of OXXO to bring more people into the store, to remind them, Hey, you know, your, your beer is now available, all these things. We are studying how can we begin other services with Spin or financial services with Spin. We're still playing around with how to do credit, but I wanna be very cautious.

This is a very different consumer that what the other credit card players are doing. We will be cautious on that. We see an opportunity for that given all the information we're learning from them. Frankly, with this gamification and what we're seeing in Spin Premia, I think we have at least the responsibility of trying to get our tender well into the two thirds of. We've seen it in our pharmacy business in Chile. We're way above 90%. It's gonna be tougher in convenience, I think we should get above, hopefully get to towards 66%. It's an ambitious goal. It's not an unattainable goal. That's what I would say for Spin, very encouraging results for what we're seeing.

It also obviously helps for retail media channel. That should be a source of profitability for Spin as well.

Thank you so much, José Antonio. Really appreciate the color and the detail. [Non-English content] and congrats on the results.

[Non-English content], Renata. [Non-English content].

Thank you. This concludes the question-and-answer section. At this time, I would like to turn the floor back to Mr. Fonseca for any closing remarks.

Thanks everyone. We appreciate the discipline with the one-question policy. Obviously, any follow-ups, you know where to find me and Pamela and Alex, and we're always available. Thank you, and as we are getting closer to the weekend, have a good rest of your week.

Thank you. This does conclude today's presentation. You may disconnect now, and have a nice day.

Hello, and welcome to FEMSA Fourth Quarter 2025 Conference Call. My name is Augier, and I'll be your moderator for today's event. Please note that this conference is being recorded. [Operator Instructions] I would now like to hand the call over to Mr. Juan Fonseca, Investor Relations Director at FEMSA. Please go ahead, Juan.

Good morning, everyone, and welcome to FEMSA's Fourth Quarter and Full Year 2025 Results Conference Call. Today, we are joined by Jose Antonio Fernandez Garza, FEMSA's CEO; Martin Arias, our CFO; and Jorge Collazo, who heads Coca-Cola FEMSA's Investor Relations team. The plan is for Jose Antonio to open the conversation with some high-level comments on performance, followed by a strategic overview and an update on our priorities. Next, Martin will provide more details on the results. And finally, we will open the call for your questions. Jose Antonio, please go ahead.

Thank you, Juan. Good morning, everyone. Today, I would like to split my remarks in two. First, we will focus on operational results and trends, highlighting some important points and takeaways. Then we will address more strategic topics, including an update on our priorities as well as some relevant structural changes we are putting in place as we prepare for the next stage of growth. Let me begin with the performance of our business during the fourth quarter, particularly at OXXO Mexico. Back in October, during our previous quarterly call, we mentioned we had observed what seemed to be an inflection point in the same-store sales and traffic trends that made us optimistic about the fourth quarter and beyond. As you saw in the numbers, this improved trend indeed continued through the end of the year and allowed us to close 2025 on a positive note with same-store sales for Proximity Americas approaching the mid-single-digit growth range at 4.4% and traffic that while still negative, 0.6% was markedly better than what we saw earlier in the year. While we are not satisfied with the year's performance, as we look back at 2025, we have gained many lessons, and we can also take some encouragement from the fact that initiatives put in place in the second half of 2025 have begun to show results. We began 2025 with a challenge. Traffic at OXXO Mexico was falling by mid-single digits, and it was not following the cyclical recovery we had expected. Initially, we attribute it to the economy and the typical post-election hangover. Accordingly, it took us a little while to diagnose the causes. But once it became clear to us that we had a competitiveness issue versus the traditional trade around some of our core categories, the team designed and put in place a broad set of tactical affordability-focused initiatives. This including growing our mix of returnable beverage packages, increasing multi-serve presentations, seeking from suppliers more competitive promotions and packaging architectures as well as agreeing with suppliers on adding low price point SKUs in core categories like snacks and tobacco. The strategy worked as designed. We quickly began to recover market share. And as we saw in today's results, our numbers are now trending closer to our long-term expectations. Obviously, we do not operate in a vacuum. Earlier in the year, we mentioned abnormally poor and wet weather in most of the country as a relevant factor in our traffic underperformance and weather was more normal during the fourth quarter. That helped. We also talked about a soft consumer environment and generally lackluster macro sentiment around investment and economic activity in Mexico. Those have not really improved in recent months, but they seem to have stabilized. However, by focusing on the variables and drivers that we could control, our efforts delivered the desired results. That is an encouraging reminder of the strength and resilience of the OXXO platform. Having said all that, 2025 also highlighted the fact that the core consumer occasions that we serve best, trust, impulse and gathering still have significant opportunities to expand the number of consumer occasions where OXXO can be more relevant and create value. 2025 also highlighted the need to prioritize and focus on a few bold initiatives that will create significant new waves of value. Furthermore, as we already mentioned in our last call, in 2025, we began to address the need for a leaner fit-for-purpose organizational structure, which has now been fully implemented at OXXO Mexico and is currently being implemented at Proximity Americas as well as FEMSA Corporate. More details on that later. As we look at 2026, we aim to regain OXXO Mexico's growth and relevance with a clear focus on recovering traffic and same-store sales through a sharper value proposition and improved customer experience and strong operational execution. In the short to medium term, the team is working hard to take our core categories to their full potential, which means enhancing our already strong competitive position on impulse while also prioritizing and focusing on improving our position in food premiums with a focus on our coffee and breakfast offerings. On this front, we have a number of tests in place and are already seeing some compelling results from initiatives such as increasing the affordability of our regular coffee offering, while we learn from our successful food propositions in Colombia and Brazil and adjust them for the Mexican consumer, aspiring to be a go-to solution for a convenient and value compelling breakfast alternative. Further down the road, we believe we can also pursue and capture new missions like the daily replenishment occasion by improving our offering of pantry essentials at great value while continuing to strengthen our beyond trade opportunity with incremental payments and financial solutions. In the future and in various forums, I will begin to share more details and updates on some of these long-term initiatives. Considering that we currently only represent around 10% of all the categories in which we participate, we continue to see an enormous opportunity to keep growing our business in Mexico by capturing a broader share of consumer spending, increasing our store base by more than 1/3 over the next decade and leveraging that incremental scale to deliver growth while sustaining high returns. In fact, if we look at the whole of FEMSA during 2025, we deployed over $1 billion of CapEx in organic growth in Mexico across our business units for the third year in a row, despite the fact that at the consolidated level, you see a reduction versus 2024, reflecting our ability and willingness to adjust the pace of investment in challenging environments. I want to briefly highlight some of the operations delivering standout performances during the quarter, beginning with OXXO Colombia, where our value proposition has finally come of age, and we generated positive EBITDA for the first time for the full year and nearly breakeven EBIT in the fourth quarter. For its part, Bara showed strong momentum in the discount space, also growing its same-store sales by double digits, while we continue to fine-tune its value proposition and increase the mix of private label offerings now approaching 30% of the mix for all of BADA. And in Europe, Valora generated record operating income in 2025 on the back of strong retail results in Switzerland and solid expense containment. For Coca-Cola FEMSA, as Juan mentioned in more detail during their call, we remain focused on three clear priorities: first, driving volume by growing the core, strengthening execution and reinforcing our portfolio; second, take Juntos+ to the next level, leveraging AI and advanced analytics to create more value for our customers and improve decision-making; and third, continue fostering a customer-centric culture of empowerment. However, just like we point your attention to the successes, we must acknowledge when things do not go as intended. In particular, during the fourth quarter, our Health division again registered a provision for uncollectible accounts for MXN 487 million from the institutional side of the Colombian business, in line with similar provisions registered in 2023 as that segment of the market continues to struggle. This comes as the business in Mexico only begins to stabilize after significant downsizing, combining for an underwhelming result for the quarter. Our new management team at the Health division has completed its initial assessment and has launched a series of initiatives focused on more disciplined use of capital and commercial practices with a focus on cash flow generation and returns. This will be a tough year in terms of results for this division, particularly as it relates to our institutional business in Colombia and the need to stabilize the Mexico operations. Martin will get more into the details in a minute. Now let me get to the second part of my remarks. Beyond the quarterly results and operating trends, I want to provide you with a broad update on our strategic priorities as well as some of the changes we are making to our organizational structure to better align with those strategic priorities and with a focus on increasing efficiency and effectiveness. As we have said in the past, we strive to create value by generating returns in excess of our cost of capital. This means focusing our investment capacity with precision and purpose on those initiatives that can create the most value as well as putting the strongest possible team together and deploying our best people to where they are most needed. At the same time, together with Martin and the finance team across our business units, we are putting in place a renewed focus on cash flow rigor, pushing the teams to think about cash with an owner's mentality and exerting full control over the levers that drive cash, including an obsessive focus on managing working capital and highly disciplined investment in CapEx. Let me briefly touch on expansion, which remains a key pillar of our long-term growth strategy. During 2025, we instilled a more rigorous approach to store base growth across the portfolio, particularly in Colombia and Brazil. We have closed early cohort and underperforming stores as we keep refining our value proposition, resulting in a more measured number of net additions. This was a deliberate adjustment, not a structural shift in our ambition, and we are well positioned to accelerate growth going forward. Our top priorities remain consistent with what we have discussed in the past. As I just mentioned, the Mexican market will continue to be at the top of our list. OXXO Mexico remains our first priority as we continue to capitalize on the white space opportunity while we strengthen and expand our value proposition by consistently adding incremental layers of value to ensure we increase our relevance for an evolving Mexican consumer. Mexico is also Coca-Cola FEMSA's largest market, and we continue to develop and deploy the right market and portfolio strategies to grow our core and successfully navigate a challenging regulatory environment. At Bara, we now have two growth engines, having just opened our second distribution center in Monterrey. Together with our Bajio and Jalisco growth sale, we will continue to fine-tune our value proposition and raise our mix of private label beyond the current levels. 2026 should also be the year that we increase our pace of store expansion with plans to grow our store base by approximately 1/3 during this year. Moving to Brazil, our second largest market, we now have full strategic control of OXXO, and we will continue to fine-tune our value proposition while we also accelerate growth within the State of Sao Paulo. In particular, we will continue to develop our successful prepared food offerings, while we also increase our operational focus and execution. For 2026, our target for store expansion is approximately 100 net new stores, representing slightly more than 15% growth as we continue to build scale in this high potential market. Brazil is also a very high priority for KOF, where they see a compelling opportunity to keep growing the business, enhanced by cutting-edge digital capabilities with Juntos+. In Colombia, we have achieved strong unit economics at the OXXO store level anchored in a successful value proposition for prepared food. As a result, we are ready to further scale the operation in a disciplined manner with plans to increase our store base by 20% in 2026. Beyond Latin America, we are excited about our operations in the U.S. and Europe. In the U.S., we remain focused on fine-tuning our value proposition with a focus on prepared food, testing different alternatives and continuing with the conversion of the store base to the OXXO banner with positive results. For its part, Valora has exceeded expectations, particularly through the strength of our Swiss retail platform and the management team's proven ability to operate with increasing levels of efficiency. To better support these priorities and to prepare us for sustained long-term profitable growth, we have redesigned our organizational structure, integrating the leadership teams that existed at FEMSA corporate and at the Proximity and Health division, consolidating them at the FEMSA corporate level. As a result, in addition to Coca-Cola FEMSA, we will have the four large retail divisions reporting to me: OXXO Mexico through Carlos Arroyo, Proximity Americas and Mobility through Constantino Spas, Health and Multi-Formats through [indiscernible] and Europe through Michael Mueller. All corporate functions such as finance, strategic planning, human resources, corporate affairs and sustainability will also be consolidated at the FEMSA level. This consolidation will allow us to run a leaner, more streamlined organization while realizing meaningful synergies and efficiencies. Another critical component of this restructure effort involves Spin and OXXO Mexico. As we have continued to develop the value proposition of Spin during the past 5 years, we have come to understand that the physical growth path of OXXO and the digital growth path of Spin not only are not divergent, but they actually converge and intersect. Digital does not replace the store. It amplifies it. And the store is not a constraint on digital. It is its greatest competitive advantage. As a result, we have redefined our ecosystem 2.0 as a model focused on OXXO Mexico, creating greater alignment between Spin and OXXO. The principle is straightforward, one client, one strategy and one aligned P&L. This implies narrowing our focus and emphasizing the role of Spin within the OXXO store network, for example, by postponing the application for a full banking license and instead giving us the time to clarify the lending opportunity through the right partnership. This increased alignment of the Spin and OXXO platforms will allow us to merge digital and physical talent, capabilities and ways of working to reinforce our omnichannel value proposition where payments, services, loyalty and data are embedded into the store experience while creating important savings and efficiencies. Spin already reduced its negative EBIT for the full year 2025 by almost 30%, and we are estimating a further improvement of close to 20% in 2026. In the context of this important strategic adjustment, today, we want to recognize Juan Carlos Guillermety's leadership in building digital capabilities that are critical for FEMSA. Under his guidance, our ecosystem strengthened its value proposition, consolidated strategic partnerships and defined our financial ambition, setting the foundation for this new stage of integration. Juan Carlos will transition into an advisory role and Rodrigo Garcia Jacques will assume the leadership of Spin with a clear mandate, consolidate execution, ensure a permanent alignment with OXXO Mexico and maintain operating discipline. We expect the combined effect of all these restructuring efforts and the sustained improvement in performance from Spin to result in a positive impact on our bottom line of approximately MXN 1 billion on an annualized basis, which will show up in our results mainly at the corporate level. The efficiencies will ramp up during 2026 and reach their full impact in 2027 and beyond. Martin will also elaborate on some of the ground level implication of these changes. And with that, let me turn it over to Martin to go over the numbers in more detail.

Thank you, Jose Antonio. Good morning, everyone. Let me begin by walking you through FEMSA's consolidated financial results for the fourth quarter of 2025. During the fourth quarter, total revenues increased by 5.7% year-over-year, reflecting a combination of improved trends in Proximity Americas and continued growth outside of Mexico, particularly in Coca-Cola FEMSA and Valora. Operating income increased by 8.5% as cost containment initiatives offset gross margin pressure. These results reflect, for the most part, a recovery in the fourth quarter relative to the first 3 quarters. Net consolidated income for the quarter amounted to MXN 12.7 billion, representing a 33.6% increase compared to the fourth quarter of last year, driven mainly by an increase in income from operations of 8.5%, nonoperating expenses that fell by 62.7% and a decline of 26.6% in income taxes due to nonrecurring items, which were partially offset by MXN 830 million of foreign exchange loss from our U.S. dollar-denominated cash position compared to a gain of MXN 2.7 billion in the comparable period and lower interest income as a result of a reduced cash position during the period. Turning to our operating results. Starting with Proximity Americas. During the fourth quarter, total revenues increased by 5.3% or 6.3% on a comparable basis, mostly driven by same-store sales growth in Mexico as well as top line growth in OXXO Colombia and Peru. Gross margin stood at 48.1%, reflecting a 40 basis point expansion as a result of an improvement in OXXO LatAm, driven by increased scale and more disciplined commercial negotiations with suppliers. Operating income increased by 7.7%, while operating margin was 12%, reflecting the initial benefits of our overhead reduction and productivity initiatives, along with disciplined expense management, which allowed us to translate most of the gross margin expansion all the way to the operating level. During the quarter, Proximity Americas added 209 net new stores, closing the year with a total of 1,125 stores. At the same time, we have been prioritizing a rigorous evaluation of our entire store base. And as part of this process, we closed the number of underperforming stores in LatAm, particularly in Colombia. These actions allow us to enter 2026 refocusing growth on profitability and strong unit economics at the store level. Moving on to OXXO USA. We ended the year with 50 converted stores under the OXXO banner. We continue to make progress in our foodservice strategy, expanding our hot food and coffee offerings as well as assortment expansion. All these initiatives are part of a learning process as we continue to refine the value proposition in the region. Finally, at Bara, we added 63 net new stores during the quarter and 157 during the full year, remaining on track with our long-term growth ambitions while continuing to optimize the discount offering. In Europe, Valora delivered revenue growth of 2.5% in pesos in the fourth quarter. Gross margin was 37.9% and operating income increased by 10.8%, reflecting continued cost discipline and a favorable mix in Swiss retail while navigating a challenging macro environment in Germany and a softer performance in foodservice B2B. The decline in gross margin of 550 basis points is a result of the reclassification of full year 2025 distribution expenses from SG&A to cost of sales, all in the fourth quarter. On a comparable year-over-year quarterly basis, the fourth quarter 2025 gross margin would have expanded by 70 basis points. There is no impact on operating income as a result of this reclassification. Moving to the Health division. Fourth quarter revenues increased by 4.6% or 6.7% on a comparable basis, driven by strong growth in Colombia and Ecuador, complemented by flat performance in Chile, while Mexico remained under pressure, primarily due to lower store base compared to last year, following the closure of underperforming locations as part of our restructuring efforts. Additionally, during the quarter, we reclassified the full year 2025 distribution expenses from SG&A to cost of sales, all in the fourth quarter. This change was made purely for accounting presentation purposes to better align the classification of distribution costs with the nature of the expense. There is no impact on operating income because of this reclassification. However, as a mechanical effect of this change, gross margin was impacted by approximately MXN 1.8 billion, reflecting the proportional shift of those expenses into cost of sales. This is the full amount for the year 2025, which we are recording in the fourth quarter. If we only recorded the amount corresponding to the fourth quarter, the impact to gross margin would have been a reduction of 110 basis points relative to the comparable period. Additionally, during the fourth quarter, we reclassified certain administrative expenses into selling expenses for the full year. For comparability purposes, we suggest focusing on the sum of selling and administrative expenses. Operating income from the quarter was MXN 573 million with an operating margin of 2.5%, largely reflecting a deteriorating environment in the Colombian institutional business, where we took a charge of MXN 487 million for uncollectible accounts. Excluding this effect, operating income would have been MXN 1 billion with an operating margin of 4.6%. At OXXO GAS, same-station sales increased by 8.7% during the quarter, supported by higher wholesale volumes, which is allowing us to leverage our scale and optimize logistics. Operating margin stood at 4.8%, maintaining profitability levels compared to last year, reflecting disciplined cost management and operational efficiency. Turning briefly to Coca-Cola FEMSA. During the fourth quarter, the company delivered revenue growth of 2.9%, supported by growth across geographies, particularly outside Mexico. Operating income increased by 13.3%, reflecting continued focus on efficiency and disciplined execution. As always, we encourage you to refer to Coca-Cola FEMSA's earnings call for a more detailed discussion of the results. As Jose Antonio mentioned in his remarks, we continued advancing our restructuring process. The initial phase began late last year with the fit-for-purpose initiative, which was focused on OXXO Mexico and Health, and we expect to generate more than MXN 800 million on an annualized basis and has recently been put into place. We are now extending that discipline across Proximity and Health, FEMSA Corporate and Spin, including the consolidation of overlapping structures between the Proximity and Health division and FEMSA Corporate and between OXO Mexico and Spin to generate additional savings. These initiatives will generate approximately an additional MXN 1 billion on an annual run rate basis beginning in 2027, most of which will be reflected at the FEMSA corporate level. Due to the timing of the transition and the implementation of the new structure, we will not begin to see the full run rate benefit until the end of 2026. These efficiencies are primarily driven by headcount optimization, the simplification of the organizational structure as well as improving results at spin, supported by underlying business momentum and an organizational restructure in that business. Importantly, in the fourth quarter of 2025, we recorded provisions related to this restructuring process, which will temporarily offset a portion of the savings before the full benefits are reflected in our results. Before closing, let me briefly address capital allocation. During the fourth quarter, we deployed MXN 14.2 billion in CapEx, bringing full year CapEx to MXN 45.3 billion, focused primarily on store expansion, manufacturing, supply chain infrastructure and strategic capabilities across the company. That said, full year CapEx came in below 2024 levels, mainly driven by three factors. First, in Mexico, a softer macro environment allowed us to prudently postpone certain capacity and infrastructure investments without compromising service levels or long-term growth plans. Second, as we just mentioned, we implemented a measured slowdown in expansion in selected markets, particularly in OXXO LatAm, where we prioritize profitability and unit economics or pace of growth. Third, this outcome also reflects a renewed discipline in capital allocation, ensuring that every peso deployed meets our return thresholds and strategic priorities. On this point, we are increasingly linking expansion decisions to clear visibility on traffic recovery, margin sustainability and cash generation. Importantly, none of these adjustments alter our long-term growth runway. Instead, they demonstrate our ability to be flexible on investment timing in response to market conditions while preserving financial strength and return discipline. In terms of shareholder remuneration, for the full year from March 2025 to March 2026, total capital returned to shareholders through ordinary and extraordinary dividends and share buybacks amounted to $3.1 billion at the exchange rates at the time of payment. Importantly, this past January, we completed the deployment of our extraordinary dividend for 2025, totaling $1.7 billion at the exchange rates at the time of payment. Regarding our previously announced $900 million share repurchase objective, we executed approximately $600 million with the remaining $300 million pending execution. This delay was primarily driven by blackout periods during most of the second half of last year, which limited our ability to execute buybacks. Consistent with the road map we presented a year ago, our plans from March 2026 to March 2027 include extraordinary returns of approximately $1.3 billion. Tomorrow, we will present our recommendation to the Board of Directors regarding both ordinary and extraordinary returns of capital, and we will communicate the Board's resolutions accordingly. We expect that by the end of this year, we will be slightly below our target of 2x net debt to EBITDA, excluding Coca-Cola FEMSA, which will require us to consider additional returns. However, given how close we will be to the target and the potential inorganic projects that we are currently evaluating, we want to retain the flexibility to execute on such projects or to announce extraordinary capital returns, including buybacks later this year. It goes without saying that the performance of our business this year will also inform any additional extraordinary decisions. As we look at the year that begins, we are confident in the resilience of our portfolio, the actions we have taken to unlock further value across each of our divisions and our ability to continue executing with discipline. Our focus is clear: improving returns on capital, strengthening the fundamentals of our core businesses and allocating capital thoughtfully to continue to create value for our shareholders. And with that, we can open the call for your questions.

[Operator Instructions] Our first question comes from Thiago Bortoluci from Goldman Sachs.

Antonio, congrats for the results. Martin, thank you very much for your time. I have two questions here, right? The first one is on the balance between growth and profitability, particularly in OXXO Mexico, right? I remember last earnings call, Jose Antonio, you mentioned a number of initiatives to improve traffic and protect demand. Obviously, a lot of this has been already playing out. But still in this quarter, you had better gross margins and lower traffic at OXXO Mexico, right? So my question is, going forward, how ready do you think the assortment and the value proposition in Mexico is already set? And if there is any low-hanging fruit or any clear initiatives yet to be done, if you could help us just understanding particularly in which category that might come from? And then my second question, maybe for you both on the initiatives and restructurings, right? Obviously, we understand directionally what you're trying to do here. But just on the magnitude, right, this is relevant. Martin mentioned like MXN 800 million plus another MXN 1 billion from the fit for purpose and Spin. This is like almost 3% of your net income, right? So I think the question here is, what are those low-hanging fruits and how possible this kind of efficiencies can exist in a company so efficiencies can exist in a company so efficient as FEMSA. Why hasn't this been done before? And what makes you confident that going forward, this could be fully executed on track? Those are the questions.

Thiago, thank you. Very complete and full questions. I'm happy to address them. Both, I will address the first one, and then I will let -- I will address a brief thing on the second one, but I will let Martin complement me. On growth and profitability, if you look at the full year of 2025, to me, it was a year that left me disappointed. It was much better the second half of the year. So I am very happy with the turnaround that we were able to implement, but I am much more obsessed with bringing profitable traffic and growing market share in our core consumer occasions than on short-term profitability. And obviously, I am much happy of how the year ended on the fourth quarter because it looks like we're turning -- taking a turn. And I am very happy with how the year started. I don't want to give any spoilers, but we see the trend continues upwards in terms of traffic, and that keeps me optimistic. But our obsession is not profitability -- just for profitability per se. Our obsession is we are about 10% of the consumer occasions we address. The total addressable market is huge and OXXO -- should remain the favorite part of the Mexican consumer for not only our core categories like impulse, like tobacco, like beer, like soft drinks, but more and more other consumer occasions like breakfast and coffee, like daily replenishment, which we are already playing there, but we are not playing to win as much as we want. And that's what's going to be our obsession. To be able to give you a number, it's tough. What I do see is that there's still a lot of margin expansion to be gained from our core supplier partners. A lot of -- some of that has to be given back to the consumer to bring them on a profitable way more and more into the store. And so for us, a year with same-store sales traffic decline is a year that we -- that's a miss. We need to gain traffic on a same-store sales basis, and we're going to be obsessed with that. However, obviously, it has to be profitable growth. I hope that answers you the first question. For the second question, we began even my tenure in proximity with an obsession of trying to get leaner and meaner, and we were able to do that in Health and in OXXO Mexico. We've now instituted some efficiency opportunities in Spain, and we have just finished the same thing with FEMSA. On an FTE basis, I think we are done. We are not seeing a need for more restructuring. We have the team that we need in place to accomplish our goals. But there are still opportunities to do non-FTE restructuring. There's -- we are looking at every little expense that we make and everything that we think is redundant, not necessary or not bringing those traffic to the store should go. And so we're reviewing every consultant, every law firm, everything, every expense that we think may not be necessary going forward. And there should be even more opportunities that Martin mentioned, but it's too early for me to promise you a number. And with that, I'll open it to Martin.

Yes. I mean, as to your broader question of this, why now? And look, I've been around the block a long time with different types of companies. This tends to happen like this in terms of waves. You go through phases where you're making best and you're expanding and you're building capabilities. And as you begin to see the results of that, you naturally prune. And with Jose arriving to the seat of the CEO, he wanted to give us a renewed focus on this issue that he had already started at Proximity. Also with his arrival and given that the structure we ultimately decided to implement, which was to collapse the P&H division with FEMSA Servicios, that also created a new opportunity that didn't exist before when we had decided to maintain that division. As to the figures and the numbers, it's just very important to note, there's two numbers. There's one that will tend to be reflected more in Proximity Americas, which has to do with the fit for purpose, which was announced and we discussed for the first time last year. And then that should be impacting in Proximity Americas generally throughout this year as it gets implemented and rolled out. And some of that also gets reflected in Salud because I also mentioned it was in Salud, so some of that will be seen in the overhead expenses of Salud. The part that is at FEMSA Corporate is a combination of two things. It's a combination of reduction in costs. Definitely, there has been a net reduction in FTEs throughout the organization, particularly relating to the merger of P&H and FEMSA Corporate. Some of this has to do with Spin. So it will be reflected also at FEMSA Corporate because FEMSA Corporate is the one that consolidates the results of Spin. And in the case of Spin, it's not only a significant tightening of costs, which is directly related to the narrowing and focusing of the strategy and the ambition of Spin. As we mentioned on the call and in the press release, we're postponing the license. Premia will no longer be offered to third parties outside of the OXXO ecosystem and...

For the FEMSA ecosystem.

The FEMSA ecosystem. And we've also narrowed some of our efforts on payment platforms in small mom-and-pop stores. Some of these things have been delayed or postponed for the foreseeable future until we have greater visibility about the payment platform in the store, the credit initiatives. So also part of what's included in that figure is our expectation that the losses at Spin should be coming down. because of all these cost reductions, but also because we expect the momentum of the business with this renewed focus and alignment to improve. Obviously, that is a sort of a view about what will be the improvement in the top line performance of Spin. So it's a little bit harder to rely on because it depends on a lot of external things going right as well.

Our next question comes from Ricardo Alves from Morgan Stanley.

My first question on OXXO. I think that another impressive performance on the gross margin. It's great to see that. In our conversations, we've seen some people more concerned about financial services in the long term. So I wanted to think about your gross margin performance and financial services in taking advantage of all these long-term strategic initiatives. I wanted to think about that in the long term. Are there main initiatives that you're already working for 2026 as we speak to kind of defend your position and to remain relevant. The two main components of the gross margin that we always discuss, commercial income and financial services, I think that commercial income is easier for us to understand given your physical presence, given the World Cup this year and et cetera. But -- so perhaps my question is more directed to your strategy around cash in and cash out. We've been talking about remittances for the past couple of quarters. So an update here would be great. And then I'll ask my second question later.

So as you say, commercial income is still early and growing, and it's a huge source of growth. And I think we're just scratching the surface in terms of what we can do with retail media and other commercial income projects. In terms of financial services, look, it's still -- it's growing on traffic or if you blend that all together and if you put even top-ups for cell phone, this thing is driving growth. It's growing traffic at same-store sales level. It's accelerating. We just put Banorte as part of the [indiscernible] network, and it's driving tremendous growth. We see the need and the consumer demand needs for payments, being able to use the OXXO network as an ATM is still -- and I think it's going to be for the foreseeable future. If you ask me long, long term, that's in a way, and I would say we haven't even scratched the surface on what we can do with remittances. But we've been -- we keep installing the cash machines in more and more stores. And I think there's still a huge opportunity for us to capture market share in remittances. Long, long term, it is obvious that as people go more and more into digital, some of these services will fade or will reduce as we are seeing with cell phone top-ups reducing and going more into digital payments. And I think that's where Spin plays a huge, a critical central role within OXXO, and that's why the decision to turn it back into the OXXO ecosystem. If you look at Spin, Spin is a phenomenal fintech, but we've underdelivered in [indiscernible] making it a useful tool to bring people into the store. And I think Spin's value really does not come from choosing between OXXO or being a fintech. It comes from really bringing both together. Spin -- OXXO is really the best competitive advantage that Spin has, and you can use. There's a lot of things that we have not been promoting well that you can do with a Spin QR. You can take a picture of a Spin QR and you can tip your waiter, your gardener, your whatever or you can send/give money to a colleague and you can make it go to the OXXO store and with a QR scan really very quickly deliver it or pick the cash up. So I think we're just scratching the surface of what you can do when you combine a digital application and a physical network of over 25,000 stores. We have a lot of things on the pipeline, things in like PUDO, working with some of the e-commerce players. But I think we are just scratching the surface of the services that will come and replace the wave of services that will go entirely digital. So I'm optimistic that the pace of change will allow us to adapt, and we will come up on top on the long term. But obviously, there will be pluses and minuses throughout the coming years. Does that answer you, Ricardo?

It does, [indiscernible]. Should I ask my follow-up now or go back to the question queue?

Yes. Please go ahead.

Yes. Yes. The other one is probably for Martin. I think that a helpful summary, Martin, that you gave on shareholder distribution, strong year in 2025. Congrats on the execution there. As we're thinking about 2026, however, we've ran a couple of sensitivities and we get easily to a potential excess cash beyond $3 billion. I'm not saying that this is the number that FEMSA is going to be distributing to shareholders, but it seems to us that the excess cash balance by the end of this year could be significantly higher unless some of the basic assumptions that we saw in 2024 and 2025 could have changed. For instance, I don't know if maybe the potential ticket for M&A is higher than before or maybe if the 2x target of leverage, maybe if we stay below 1.5, 1.7, that would be okay in the longer term. So I just wanted to provoke you a little bit more here. We seem -- it seems to us that the excess cash position could be significantly higher. So I just wanted to hear your thoughts on that.

Sure. I mean without trying to understand your number on this call in real time, which would probably not be prudent or helpful, I would remind you that given the extraordinary $1.3 billion that we've already committed to distribute, the $300 million in buybacks -- and let's just assume the Board approves, which I don't think is a difficult assumption to make, that the dividend -- ordinary dividend will be consistent with what we paid last year. We're talking about easily $2.4 billion, $2.5 billion being paid out this year, March to March. That's nothing else happening. So if for some reason, we do spectacularly -- so my estimate of excess cash is less than yours. And number two, if for any reason, it is what I expect and/or even better than I expect, and we will reserve the right during the year to do more buybacks, announce another extraordinary dividend. So we're not foreclosing the possibility. It just seemed given how close I expect to get to the 2x net debt to EBITDA that now we're just really, to be honest, playing with some decimal book points as opposed to -- and I don't need to be that precise because I have the flexibility and the company has the flexibility during the year to buy back more shares or call a special meeting -- shareholders' meeting and declare another extraordinary dividend. But I'd be happy offline to talk through numbers and try to understand where your $3 billion comes from.

Our next question comes from Rodrigo Alcantara from UBS.

Congratulations on the results. So two questions. The first one on the fit for purpose, amazing what you are doing there. Just for the sake of the conversation, I know that you of course have been in the road talking to investors. And as a frequent answer that you have -- a frequent question that you have received is in relation on how KOF fits into this new structure that you are envisaging. So my question is precisely to hear from you now in the call like what you are answering when you received this question about KOF within this fit for purpose. And my other question would be, very quickly, do you have any early comments on the unfortunate events that we have seen in terms of security arising to from what happened 2 days ago in Jalisco, right? We have seen some news flow there about x number of stores being affected. So any commentary on that would be helpful.

Thank you, Rodrigo. These are, as you say, very relevant question. The first one being very frequent one. The second one, I hope it's not -- it's never asked again. But on the Coca-Cola FEMSA side, as you know, we are always evaluating possibilities for all of our businesses. And we do not see ourselves as a conglomerate. We are very focused on what we bring value. We love these two -- our businesses, our main businesses where we are, and we see huge future ahead of them. And we've proven to you guys that we are pragmatic. We are a 135-year-old company, or that we started with beer. And we don't -- other than the huge amounts of beer we sell from many brewers in OXXO, we are not into beer anymore, and we will remain ourselves very pragmatic going forward. If these 2 companies, Coca-Cola FEMSA and Proximity or retail were 2 separate companies, would you consider merging them? The answer is absolutely no. Now the possibilities of separating has a lot of implications, a lot of things that we're going through, a lot of analysis that has gone through our minds. So I would let the comments there. For now, the structure that we have works great for us. And if something changes, we would address it at the appropriate level. On the second thing, Rodrigo, obviously, it was a very sudden and unfortunate event in the last couple of days. I do want to take a minute first to recognize the heroic and incredible work done by many of our employees and frankly, customers. We've received dozens of videos, comments, memories of people filming, protecting our stores, protecting our collaborators. We have a heroic employee that basically tried to put her life at risk to save one of the stores. I just want to say, first, no customer at all was even injured during these disruptions by organized crime. Our employees suffered minor injuries. All of them are out of danger. And I was incredibly moved and touched by the amount of customers and employees that through themselves to save some of the stores that we were in danger. On the great scheme of things, we were not as harmed as much. We had to close for 1 day up to 6,000 of our stores. Yes, precautionary -- precautionary, but a day after we had opened over 90% of them. And today, only about 300 stores remain closed. If you look at the amount of damage that the country received, it's -- I mean, we had about 200 stores with some level of affection. It could be a loading or all the way to a store burn. But I would say most of those stores in a week or so will be up and running. But the fact is that we are everywhere. We are in every town in Mexico. We are -- and so it's not -- that we haven't seen anything that's against us. It's just that given that we are all over the place, we tend to be the first ones targeted, but there were other supermarkets, other convenience stores, other pharmacy chains affected. It's just that we tend to get the most coverage. I also do want to recognize the incredible closeness and collaboration with the security personnel, Army officers, Guardia Nacional, the authorities have been incredibly close to us and helpful in monitoring the situation and giving us feedback, and we've been able to give feedback. So I am very impressed by the security authorities, both Army, Marines and Guardia Nacional and the response has been tremendous. So I was also very thankful for that incredible back to normal that came quickly. So I really hope these things don't happen again. And we have protocols in place that have made my team very proud of how we were able to respond and have no incident on customers and some minor injuries on employees that are out of danger. Thankfully for addressing that question and thankfully, thanks for letting me give these comments.

Our next question comes from Alvaro Garcia from BTG Pactual.

I have two questions. The first one on the restructuring. Martin, I know you've run through it. I just kind of wanted to walk through the numbers. In the past, you've mentioned a cash burn at the corporate level of almost $200 million, a cash burn at the Spin level of around $150 million. So -- and then today, you mentioned the MXN 1 billion and the MXN 800 million. So I was wondering if you could just clarify if it's MXN 1 billion -- if it's MXN 1 billion plus MXN 800 million. I know some of that might be at Proximity Americas. But I guess at the corporate level specifically, how should we think of what used to be that cash burn? What might that look like on a pro forma basis into 2027? That would be very helpful. And then will Spin formally be merged into OXXO? I know that has relevant sort of fiscal implications. So that's my first question. And then I have a very, very quick follow-up, which I can ask after very quickly.

Sure. Let me -- Spin will not be merged into OXXO. There will be activities that were undertaken at OXXO and Spin that will be centralized in one of the 2 businesses. But Spin will remain as a separate distinct operating unit with its own budget, its own routines for management and its own support functions in order to ideally protect the unique capabilities that have been built around that business. Number two, as to the cash burn of Spin, in effect, there are -- the way we account for the cash burn of Spin is in a very conservative fashion. So that $200 million figure coming down to $150 million is a figure, which is Spin stand-alone. And what does that mean? Given our -- the transfer pricing rules and allocation of revenues and so on, there is a formula pursuant to which Spin has to share the revenues that are generated from certain service offerings that Spin provides that use the store. And it has to pay for certain services that are executed in the store by the store employee. So that number, just to put it in its context, is a very conservative way of measuring the cash burn of Spin on a stand-alone basis. On an ecosystem basis, it's significantly lower than that. And I'll give you a prime example. Spin by OXXO is -- generates a cash burn at Spin. But when you look at the ecosystem of all the payments that are executed in the store through Spin by OXXO, which arguably might never be executed had not Spin by OXXO existed. When you look at it, that business, for example, is breakeven, is easily breakeven. We do expect that cash burn to decline. So from the $200 million to $250 million, you should continue to see it come down. Some of this will be difficult to account because when you see it in others, there will be eliminations, accounting eliminations, which will counteract some of the effects. And we will do everything we can to give visibility and transparency on this as we progress throughout the year, and you ask us the follow-up question, how we're undergoing on this. And yes, the 2 figures are complementary of each other. In other words, there are some. There's MXN 800 million at P&H -- I'm sorry, Proximity Americas, which relates primarily to OXXO Mexico, but also includes -- and I should have been maybe a little bit clear, it does include an amount for Salud, which is basically cost reductions across the businesses, but very focused on overhead, but it also included savings within the operations. And the MXN 1 billion refers primarily to savings at FEMSA Servicios, FEMSA Corporate from the collapse of the 2 structures, P&H division and FEMSA Servicios. It also includes the momentum we expect from Spin at its top line. It includes also significant savings at Spin from the narrowing and focusing of our ambition.

And it includes -- I'd imagine it also includes additional head count from -- that you're moving towards the corporate level. That's also included in that MXN 1 billion figure.

Yes. Yes. Well, again, it's the net savings from moving some of those people over here plus the people here and then the net savings book we will execute.

Awesome. And then just one very quick one on OXXO. Now it's super helpful. Really appreciate the color, and I will be asking that going forward. On revenue growth at Proximity Americas, it grew 5.3%. Same-store sales was 4.4%, sort of the lowest gap we've seen between same-store sales growth and total revenue growth in quite some time, that productivity factor. If you could comment on that, that would be very helpful.

Alvaro, this is Juan. Yes, I think there's a number of things at play there, but a couple of them are some of the growth is actually also happening now outside of Mexico. So we saw a really good quarter from LatAm, and we had some currency headwinds there. So if you look at the comparable number, as you can see in the table, it's a little bit higher. But there's another factor, which has to do with the openings and closings. And we mentioned we are closing a fair number of stores in different markets because they are, for lack of a better word, mediocre. But they're selling, and we're replacing them with hopefully better stores, but that are brand new, right, or much newer. And so I think in some ways, we're exchanging potentially better stores, replacing stores that clearly kind of exhausted their potential and never really reached what we expected. And so I think that's also playing into that number. I think we're going to do a deeper dive. I'm happy to take this offline because you're right. Normally, you would have expected something perhaps in the order of 8 as opposed to the 6 that we're showing.

Our next question comes from Bob Ford from Bank of America.

Jose, how should we think about the strategy in Brazil? And how does it change following the separation from Raizen? And did your current same-store trajectory in Brazil, how long will it take you to cover all the central administrative and overhead expenses? And where do you see the most promising category SKU and service opportunities in Brazil for OXXO?

Great question, Bob. Thank you. To be honest, we're very excited for what we have been able to achieve in Brazil. We -- it was great to have a partner for the first few years. It gave us confidence, security. It gave us some training into how to build and gain permits and stuff. But now we're very excited that we're ready to go on it alone. And the potential we see is still enormous. We keep -- I think it's the third year in a row that we grow same-store sales on double digits. I'm pretty sure that number is right. And this -- and 2026 also began very, very strong. I mean we've had good weather. We've had carnival, but we see huge potential. To give you a precise number of how many stores do we need to get to pay for its overhead, I don't have the number, but it's still maybe -- it's going to be probably around 1,000 stores, which I have full confidence that we will be over 1,000 stores in Brazil. I think our huge challenges in Brazil are twofold. One, we need to continue growing the same-store sales business to a level that allows us to really absorb all the costs within the store. The cost structure in Brazil still has opportunities vis-a-vis Colombia, turnover-wise, cost to hire, cost to fire, et cetera, all these operational things, but they've been improving dramatically month-over-month. So at the moment -- and this number will -- as soon as we are able to stabilize and if we are able to have 7 net employees per store, gross margin of around 38% and around MXN 1 million per month, which all of them are 5% to 10% off. That's when we will know this will be a 10,000 store business or a 5,000 store business. It's that dramatic that turnaround. In terms of categories that we are excited, we are impressed by the food offerings. We have very strong margins on food and coffee, and we play a strong game there. We sell phenomenal Pao de Queijo, coxinhas, empanadas. All these things are -- our customers love them and are eating them frequently. Our coffee offerings is amazing. It's obviously pure Brazilian premium coffee, and we sell at a good price. And the other great thing is the consumer occasion, the impulse occasion of beer gathering plays a humongous role in Brazil. Obviously, you don't have the service component that we have in Mexico, but there are other services that we're beginning to try in terms of gaming, and other gift cards and other things that are part of the landscape in Mexico and could play a significant role in Brazil that we are trying to implement. So overall, it's too early, but I am very passionate about our Brazilian business, and I will not rest until we have 10,000 stores in Brazil, hopefully not far into the future. Does that answer you, Bob or...

No, it does. Very helpful, Jose. And just with respect to the Mexican drugstore business, what are the next moves?

That's a tough one. Thank you, Bob.

Bob, you're going from the best to...

From a darling to a tough one. We haven't nailed pharmacy in Mexico. It's been a tough business. We are not experts at it. We are -- we have a phenomenal business in Chile. Our pharmacy business in Colombia getting -- discarding the institutional side is great. In Ecuador, we're growing. We're growing share. We're growing profits. So our South American business is great. Mexico, I think we don't play with the league against the real good players. There is a future for pharmacy in Mexico, maybe more closely related to OXXO in over-the-counters. And on digital -- so if I see a future for us in pharmacy has more to do with helping doing an omnichannel type of pharmacy. And I think there are certain corners of Mexico where we can be profitable in the Pacifico region and in the Southeast. But overall, it's -- we're not winning in that. And unless we do something different or we exit that business, I don't see a foreseeable change in our Health Mexico business, being very honest.

And I think just -- I think this is somewhat obvious, but if you look at the competitive position that we have in all the -- in the other 3 countries were either the main player or the #2 player moving towards #1. And in Mexico, we never really were able to get to that critical mass and really take away from the couple of large incumbents. So that -- this being a scale business, that was a tough one to break. And so that's, I guess, where OXXO comes in, in terms of can we do something disruptive than use OXXO, but that's still very much in the drawing board.

I would just add, I mean, we have now a great CEO of our pharmacy in Mexico. He's doing wonderful things with the tools he has. I think the business is stabilizing, and it will not burn cash this year, hopefully, but it's not winning. That's for sure.

Our next question comes from Antonio Hernandez from Actinver.

Congrats on your results, and thanks for that asked that difficult question before me. But another question that I have is regarding Bara and OXXO. What about maybe cross-selling across the different private labels, different SKUs? I know it's a different value proposition. But still, I mean, you're growing Bara, you're facing competition at OXXO. So any findings that you have there or anything that you could provide would be helpful.

Can you clarify, you're saying we are facing competition between Bara and OXXO...

No, no, no. OXXO in terms of affordability, what was mentioned earlier in the call. So maybe some findings or any learnings that you found in Bara and that you can apply to OXXO as well cross-selling...

Okay. And that's like a bunch of reflection...

Very, very interesting question. Thank you, Antonio. So I think the worst thing you can do is try to change your positioning just based on your competitor. We have a phenomenal competitors in the discount space. That's obvious. They're growing, they're doing well, and they play a good game in their current discount space. And I think Bara has, in my opinion, a stronger value proposition for the long term against other discounters. It needs to grow its private label offering. But I like our odds in competing against the discount space. The discount space is going to grow dramatically in Mexico over the next couple of decades. And Bara has a real chance of becoming one of the leading players there. And I like what we have, and we are very -- our value proposition for Bara is very much adapted for the Bajio and Jalisco region and our stores we're opening in Monterrey are to me the perfect mix of what the Norteno needs. You see beer, you see assortment of beer, you see -- but you also see private label of food and daily replenishment and snacks and supermarket or grocery. So I love our concept, and that's where we're going to compete against those players. OXXO has a great role to play in getting into affordability in beer, in soft drinks, in tobacco, in snacks. And then for the daily replenishment, where we have a role to play that's different from the discounters is that daily replenishment. I need something urgently. I don't need a pack size. I don't need -- I need the brand I know, the brand I love, the brand I recognize in a smaller format for my daily things because I forgot shampoo and I need something for the gym or whatever. That consumer occasion OXXO will be where it competes more similar assortment to what you see on the traditional trade, where it's still 50% of the consumer basket, by the way. So I think OXXO has a lot of room to grow on the daily replenishment more similar to the traditional trade and Bara and whoever wants a very private label, very low pricing, they could go to a Bara or one of our competitors for that. Having said that, we do see private label becoming more relevant in OXXO and complementing the offering that we have. We already have a lot of private label in OXXO in our cooking oil, in our coffee, in some snacks. And we see that even in diapers and some housing products. And so I think OXXO can also develop some powerful brands around private label, especially where in some categories where commercial income is not as significant, and we can play a bigger role. But I think each one will have its place. And I see a lot of growth for OXXO, and I see a lot of growth for discount, hopefully more Baras than other ones.

And I suppose some suppliers from Bara could be...

Definitely, some of the suppliers in Bara. And even some of the private label suppliers of our pharmacy business in South America are interested in coming over and doing some things that we can sell in OXXO and in Bara. Does that answer you?

Okay. Okay. That's very clear. And just a quick follow-up. Do you have any white space potential number for Baras in Mexico?

Tens of thousands. They're slapping me here for saying that, but I think there's a room for many thousands.

Many thousands...

Yes, that business is here to stay. It will be huge. I don't want to sound Donald Trump huge, but it's going to be big.

Our next question comes from Hector Maya from Scotiabank.

Congrats on the results. Jose Antonio, Martin, I just wanted to understand from the excess cash right now and the planned deployments, the cash deployments, about $1.5 billion might be set aside still for M&A, correct? And on this, how has the appetite for M&A changed in the U.S.? I mean, has it changed a bit due to political uncertainty or the current immigration policies may be affecting traffic in states close to the Mexican border? And on the ongoing work to adapt the value proposition in the U.S., how long do you think you would still need to reach a point in which you feel comfortable enough to now go on a more aggressive growth path by organic expansion or more M&A in the U.S.?

I will address it briefly and I'll let Martin and Juan complement. Thank you, Hector. So we are not saving that money exclusively for inorganic M&A. I think Martin expressed it very well. We want to be -- we are evaluating a lot of opportunities throughout FEMSA. Not all of them are inorganic M&A. There are other things. And all those things are put into the equation, and we want to be cautious before we pronounce whether we give this cash in either buybacks or other opportunities to even considering another extraordinary dividend. So it's not exclusively that we are hunting for inorganic M&A. Having said that, we have a lot of things coming our way, some of them in the U.S. for convenience stores. But to be honest, none, we have been surprised by the expectations of the sellers, and we want to be very cautious. We are not concerned about traffic in the Texas region for immigration or stuff. We have a very long-term view for the U.S. The U.S. still has a long way to go to consolidate. And we are learning a lot from our little operation in Texas. We're getting more and more relevant in the El Paso region. We want to be the winners and win share and gain the confidence of the El Paso one, the Midland citizen, the Odessa. So that's where we're concentrated. When we see we can gain share against the QuickTrips and the other local players, we will become more aggressive in growing our footprint. We are already -- we bought a couple of stores here and there in El Paso, and we're very happy with that. So we're looking more at tuck-ins, small chains, the bigger chains. I'm very surprised about their expectations for multiples that are outrageous. Some of it has to do that everyone wants to think that they're the next Casey's. And to be honest, not all of them deserve those valuations. But credit to Casey's that they've done a tremendous job. But no, we have a long-term view, and we're still looking at opportunities in U.S., but we're being very cautious with our returns.

Yes. I mean very little to add. We have -- our interest has not diminished. It's been -- we have been unable to find an entry point with the right risk reward in a reasonable period of time that made us willing to pull the trigger. So as we have said, the entry into the United States is a function of finding the right opportunity. It's not an unconditional need that we have. It has to be based on being able to find value-creating opportunities.

Our next question comes from Renata Cabral from Citi.

I have two follow-ups here, one on Brazil and Bara. My question is, are Brazil and Bara already seen as scalable platforms. I know it was already discussed here as a great opportunities. But just to understand from your view today that's durable -- there's durable economics or they are seeing a proof of concept in terms of proposition that they can offer to the clients compared to OXXO, obviously, already consolidated and very clear for everyone. And in terms of capital allocation, timing allocation, especially, we are seeing the company much focused on the strategy. Now you have just discussed about the Health business that the company are working towards that. So we see the company much more focused, and we discussed it here 3 and more really important opportunities such as opportunities to grow in the U.S., Brazil, Bara. We have a top 2 that maybe in the next 5 years, you see more opportunity than the others. If you can shed some light qualitatively, I would really appreciate.

I got your question on Bara and OXXO Brazil very clearly, and I'm happy to add some comments, but I didn't understand very well the second question. Can you repeat it? Renata?

Sure. Yes. In terms of the big opportunities that we already discussed it here in the call, for instance, Bara, OXXO, expansion in the U.S. Can we have one of them should be bigger in the next 5 years? Or the company today is allocating more time in which of those initiatives?

Okay. Okay. I think I get it. Okay. obviously, Bara and Brazil are -- our obsession is OXXO Mexico and Coca-Cola FEMSA Mexico. Those are the motors and have huge growth opportunities that are our priorities. Then what keeps me very excited and frankly, come with a smile to work every day is OXXO Brazil and Bara. OXXO -- Bara is much more advanced in readiness to hyperscale. We've been tailoring the value proposition for the last probably 5 years. And today, we have a value proposition that we love, we are happy. We opened a distribution center in Monterrey, and we are ready for hyperscaling. And in Mexico is where it's easier to transfer capabilities of hyper growth. So you should expect a faster growth in unit numbers in Bara than in OXXO Brazil. OXXO Brazil first is a Sao Paulo bet. It's still very much Sao Paulo bet. It still has a lot of room to cover in Sao Paulo. And we've focused much more in quality versus quantity. So we are ready to open about 100 stores in 2026. That is a low number to what we would love to, but we much rather mature the right processes in place, the category management in place, the commercial income capabilities in place, the categories that really are going to move the needle and the process control that would allow us for OXXO Brazil to become a very valuable bet. If you do the DCF type of OXXO Brazil growing around 100 stores a year versus growing 1,000 stores a year moves exponentially the value of OXXO Brazil going forward. So 100 stores a year is not enough for us to call OXXO Brazil the second wave of FEMSA. But we're working hard on solving the operational things that we need to solve so that OXXO Brazil can grow at, I don't know if 1,000, but a store a day. That's still a few years down the line. So I think it's behind us. In terms of other bets, I think we have our plate full with OXXO Mexico, OXXO Brazil. But I would say we are incredibly surprised, and I don't want to scare you guys, but we're incredibly surprised about what we are beginning to see as opportunities for growth in Europe, mostly organic. But it's Europe -- the management team in Europe has done a tremendous job in getting more value. And we are still in very early stages of OXXO USA. And we think -- I think we shouldn't call it OXXO USA. We should call it OXXO Texas, New Mexico and that region, and we see huge opportunities for growth there as soon as we are able to refine our value proposition. That's where we are right now. I think those things are further down the road and not in the near future.

Yes, I would add to what Jose just said. I mean if you just look at the numbers that we provided you in this call about how many stores we're going to be opening this year. Obviously, this is just 1 year, and it doesn't speak too much about the future. But we said for Bara, we are aspiring to grow it by 1/3 in 2026. For OXXO Brazil, we spoke about 15%. OXXO Mexico is less than 5%, right? Obviously, this is -- it has to do with how big the base already is, but it also has to do with how -- what is our conviction about the value proposition and how many incremental tweaks we need to make. I do think that in Brazil, it feels like we've been in Brazil for just a little bit of time compared to how long we've been working on Bara. Never mind how long we've been working on OXXO, right? So there's nothing magical about this. It's -- you just get to the point where you step on the gas at different points in time. But also to Jose's earlier comments where you begin to think about eventually thousands of stores in a way that is actually somewhat literal as opposed to just hypotheticals.

Our next question comes from Ulises Argote from Santander.

And all the details that you have shared this has been extremely helpful. So Jose, I actually had one for you and kind of taking advantage there as you kind of ramp up into the CEO chair. But on your opening remarks, you said you were not satisfied with the results that we saw in the year, right? I know there's always room to grow and always room to improve. But if we are here 1 year from now and specifically maybe 2 or 3 key things, but what has to change from where the company is today for you to start next year's remarks saying you see a successful 2026 in the books?

Great question, Ulises. I would love to see hitting our top line growth of mid-single digits in OXXO with profitable traffic growth in same-store sales, at least -- I mean, for me, at least same-store sales growth of traffic, which is a tough, tough challenge because we have IEPS in soft drinks or taxes in soft drinks, added taxes in tobacco, the beer category with some struggles. But with the World Cup, with all of that we are doing with food, with all that we're doing in affordability and coffee, I should -- for me, success should mean same-store sales growth in the OXXO Mexico level. That should be added with market share growth. And then obviously, I would love to see Colombia in an -- at least EBIT breakeven and then Brazil hitting its targets of getting closer to a nice gross margin, opening 100 net new stores successfully. To me, that's what I would qualify as success. Europe should give us another strong year more because of efficiencies that they're still pulling out of the business, hopefully, with a couple of interesting deals that we're looking with partnering with some service stations. And then Coca-Cola FEMSA taking advantage of the World Cup and being able to transfer most of the price of the IEPS without any share loss gains, even with some gains in share and then gaining ROIC. All of them should be able to be gaining return on invested capital. Finally, if we are able to open a store a day in Bara, 1 store a day in Bara profitably, I will celebrate with champagne. That's success for me next year -- I mean, this year, sorry.

Amazing. That's great to hear and super clear. And if you reach that Bara per day target, I'll send you the champagne myself, Jose.

Thank you. I will send you a selfie or invite you for a toast.

Our next question comes from Henrique Brustolin from Bradesco BBI.

Jose Antonio, I wanted to circle back to your comments on OXXO Mexico about the opportunities you have for the new consumption occasions, right, or the large opportunity you see in breakfast, coffee, daily replenishment, which you're already present. But as you mentioned, you can effectively start to play to win on them. I just wanted to hear a little more what needs to change operationally in terms of assortment, pricing or even store execution for this to start to gain more traction? And how do you see the transition in terms of timing and implementing all these initiatives taking place to reflect in the performance of OXXO stores in Mexico? That would be my question.

Great. Just to be clear -- thank you, Henrique. But just to be clear, on regards to food or in general?

The question was in general, if there is anything specific that you can move the needle more or you are more focused at, it would be great to hear as well. But it was a category on food and the daily replenishment that you mentioned you can play to win.

Yes. So we've tried everything -- I mean, we've really tried a lot of things on food over our history. And it always has been a struggle because of the huge level of complexity that it brought into the OXXO store. And we were able to simplify complexity first when we did this partnership with Caffenio and we brought the coffee, these Japanese thermos that were a huge advantage and simplify the store operations many years. Now we're moving beyond that towards automated coffee machines. I just -- we all just came from a trip to Japan and now our coffee machines look like 10-year-old coffee machines. So it's impressive how the coffee store infrastructure has evolved in developed markets. There's huge potential for us to bring coffee into our stores. Just to give you an example or just to give you some thoughts -- some guidance on coffee. We sell about 28 cups per store per day in Mexico. Japan's convenience stores sell over 100. Colombia or Colombian stores, which, by the way, Colombia, Mexico has similar per capita on coffee are about 90 coffee per day per store. So we have a long way to go in becoming and we have very good coffee. It's 100% Mexican coffee from Hidalgo, Oaxaca, and from Veracruz. And I think we need to really win the narrative on why the best coffee to start your morning is the coffee at OXXO. It's high quality. It's really affordable at a very convenient price, and we're considering even lowering the price. Now people do not go to OXXO just for the coffee. They want a good feeling, hot breakfast option, and we are trying many different things, but we haven't delivered something that we can turn it national. We are looking at this hero product and we're trying a few things. But I think that also brings a lot of complexity to the store. How do you bring freshly baked product with some protein on it to start your morning in a fulfilling way. We are doing it incredibly well in Colombia, where over 25% of our revenue is full. In Brazil, it's almost 20%. In Mexico, we have a long way to go to get to those numbers. But I am continuously impressed by what the OXXO team is bringing to the table in terms of evolution. And then we're also trying a lot of little things like that pizza program in Monterrey, which has been a huge success. I don't know if it's going to scale so much, but it's incredibly successful. The batch things we're trying. So I think there's a lot of things to develop on that. That will be just part of the story. The other one is we need to be more competitive on daily and replenishment. And we need to continue to gain share in our impulse categories. So a lot of things moving on, but I think if we are able to win on the breakfast occasion and start moving the needle on daily replenishment, we should have a strong 2026.

This does conclude the Q&A section. At this time, I would like to turn the floor back to Mr. Juan Fonseca for any closing remarks.

Thanks, everyone, for attending today. Obviously, you know what to find us. The IR team is always around to double-click on questions that maybe were not raised during the call. Thanks, and have a great rest of the week.

Thank you, everyone.

Thank you. This does conclude today's presentation. You may disconnect now, and have a nice day.