BBVA has revised its outlook on Arca Continental (EMBVF, Financial), lowering the rating from Outperform to Market Perform. The financial institution has set a price target of MXN 217 for the stock. This adjustment reflects changes in the company's market performance expectations and suggests a more neutral stance on its future prospects.
EMBVF Key Business Developments
Release Date: April 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Arca Continental SAB de CV (EMBVF, Financial) reported a 12.4% increase in total consolidated revenue year over year, reaching 57 billion pesos.
- The company achieved a 10.2% rise in consolidated EBITDA to 10.6 billion pesos, with a margin of 18.7%, driven by strong contributions from US operations and a robust recovery in Argentina.
- Coca-Cola no sugar delivered robust growth of 17.8% in Mexico, supported by its expansion and innovation under the Coca-Cola Creations platform.
- The company's B2B digital platform, TAli, accounted for over 68% of total orders from traditional channels in Mexico, contributing to a 1.6% increase in overall sales volume.
- Arca Continental SAB de CV (EMBVF) continues to strengthen its sustainability agenda, with renewable energy sources now accounting for 43.3% of total energy consumption and a 32.6% reduction in emissions compared to the 2019 baseline.
Negative Points
- Total consolidated volume decreased by 3.1% to 548 million unit cases, impacted by geopolitical tensions, tariffs, and inflationary pressures.
- Volume in Mexico declined by 3.6% due to a high comparison base and a temporary production pause at the Topochico plant.
- The company's operations in Peru and Ecuador faced challenges, with volume declines of 4.6% and 7.4% respectively, due to economic slowdown and political uncertainty.
- In the US, volume declined by 5.6%, attributed to economic challenges, consumer caution, and the impact of tariffs.
- The EBITDA margin experienced a dilution of 30 basis points compared to the same period in 2024, mainly driven by lower volumes.
