Note 26. Information by Segment
The analytical information by segment is presented considering the Company’s business units (as defined in Note 1) based on its products and services, which is consistent with the internal reporting presented to the Chief Operating Decision Maker. A segment is a component of the Company that engages in business activities from which it earns revenues, and incurs the related costs and expenses, including revenues, costs and expenses that relate to transactions with any of Company’s other components. All segments’ operating results are reviewed regularly by the Chief Operating Decision Maker, which makes decisions about the resources that would be allocated to the segment and to assess its performance, and for which financial information is available.
Inter-segment transfers or transactions are entered into and presented under accounting policies of each segment, which are the same to those applied by the Company. Intercompany operations are eliminated and presented within the consolidation adjustment column included in the tables below.
| a) | By Business Unit: |
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2017 |
Coca-Cola FEMSA |
FEMSA Comercio-Retail Division |
FEMSA Comercio- Health Division |
FEMSA Comercio- Fuel Division |
Heineken Investment |
Other (1) | Consolidation Adjustments |
Consolidated | ||||||||||||||||||||||||
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Total revenues |
Ps. | 203,780 | Ps. | 154,204 | Ps. | 47,421 | Ps. | 38,388 | Ps. | — | Ps. | 35,357 | Ps. | (18,694) | Ps. | 460,456 | ||||||||||||||||
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Intercompany revenue |
4,678 | 198 | — | — | — | 13,818 | (18,694) | — | ||||||||||||||||||||||||
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Gross profit |
91,685 | 58,245 | 14,213 | 2,767 | — | 7,186 | (3,828) | 170,268 | ||||||||||||||||||||||||
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Administrative expenses |
— | — | — | — | — | — | — | 16,512 | ||||||||||||||||||||||||
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Selling expenses |
— | — | — | — | — | — | — | 111,456 | ||||||||||||||||||||||||
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Other income |
— | — | — | — | — | — | — | 34,741 | ||||||||||||||||||||||||
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Other expenses |
— | — | — | — | — | — | — | 33,959 | ||||||||||||||||||||||||
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Interest expense |
8,810 | 1,317 | 685 | 156 | — | 2,359 | (2,203) | 11,124 | ||||||||||||||||||||||||
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Interest income |
887 | 298 | 23 | 47 | 23 | 2,491 | (2,203) | 1,566 | ||||||||||||||||||||||||
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Other net finance expenses (3) |
— | — | — | — | — | — | — | 6,342 | ||||||||||||||||||||||||
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Income before income taxes and share of the profit of associates and joint ventures accounted for using the equity method |
(7,162 | ) | 11,518 | 956 | 146 | 30,000 | 4,472 | (64 | ) | 39,866 | ||||||||||||||||||||||
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Income taxes |
4,554 | 734 | 434 | 23 | (5,132 | ) | 9,970 | — | 10,583 | |||||||||||||||||||||||
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Share of the profit of associates and joint ventures accounted for using the equity method, net of taxes |
60 | 5 | — | — | 7,847 | 11 | — | 7,923 | ||||||||||||||||||||||||
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Consolidated net income |
— | — | — | — | — | — | — | 37,206 | ||||||||||||||||||||||||
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Depreciation and amortization (2) |
11,657 | 4,403 | 942 | 118 | — | 545 | — | 17,665 | ||||||||||||||||||||||||
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Non-cash items other than depreciation and amortization |
1,714 | 296 | 31 | 18 | — | 255 | — | 2,314 | ||||||||||||||||||||||||
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Investments in associates and joint ventures |
11,500 | 642 | — | — | 83,720 | 235 | — | 96,097 | ||||||||||||||||||||||||
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Total assets |
285,677 | 68,820 | 38,496 | 4,678 | 76,555 | 150,816 | (36,501) | 588,541 | ||||||||||||||||||||||||
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Total liabilities |
144,968 | 49,696 | 25,885 | 4,091 | 1,343 | 62,147 | (36,501) | 251,629 | ||||||||||||||||||||||||
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Investments in fixed assets (4) |
14,612 | 8,563 | 774 | 291 | — | 1,311 | (371) | 25,180 | ||||||||||||||||||||||||
| (1) | Includes other companies (see Note 1) and corporate. |
| (2) | Includes bottle breakage. |
| (3) | Includes foreign exchange loss, net; loss on monetary position for subsidiaries in hyperinflationary economies; and market value gain on financial instruments. |
| (4) | Includes acquisitions and disposals of property, plant and equipment, intangible assets and other long-lived assets. |
|
2016 |
Coca-Cola FEMSA |
FEMSA Comercio-Retail Division |
FEMSA Comercio- Health Division |
FEMSA Comercio- Fuel Division |
Heineken Investment |
Other (1) | Consolidation Adjustments |
Consolidated | ||||||||||||||||||||||||
|
Total revenues |
Ps. | 177,718 | Ps. | 137,139 | Ps. | 43,411 | Ps. | 28,616 | Ps. | — | Ps. | 29,491 | Ps. | (16,868) | Ps. | 399,507 | ||||||||||||||||
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Intercompany revenue |
4,269 | — | — | — | — | 12,599 | (16,868) | — | ||||||||||||||||||||||||
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Gross profit |
79,662 | 50,990 | 12,738 | 2,248 | — | 6,114 | (3,548) | 148,204 | ||||||||||||||||||||||||
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Administrative expenses |
— | — | — | — | — | — | — | 14,730 | ||||||||||||||||||||||||
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Selling expenses |
— | — | — | — | — | — | — | 95,547 | ||||||||||||||||||||||||
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Other income |
— | — | — | — | — | — | — | 1,157 | ||||||||||||||||||||||||
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Other expenses |
— | — | — | — | — | — | — | 5,909 | ||||||||||||||||||||||||
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Interest expense |
7,473 | 809 | 654 | 109 | — | 1,580 | (979) | 9,646 | ||||||||||||||||||||||||
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Interest income |
715 | 246 | 31 | 37 | 20 | 1,229 | (979) | 1,299 | ||||||||||||||||||||||||
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Other net finance expenses (3) |
— | — | — | — | — | — | — | 3,728 | ||||||||||||||||||||||||
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Income before income taxes and share of the profit of associates and joint ventures accounted for using the equity method |
14,308 | 11,046 | 914 | 182 | 9 | 2,218 | (121) | 28,556 | ||||||||||||||||||||||||
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Income taxes |
3,928 | 719 | 371 | 16 | 3 | 2,851 | — | 7,888 | ||||||||||||||||||||||||
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Share of the profit of associates and joint ventures accounted for using the equity method, net of taxes |
147 | 15 | — | — | 6,342 | 3 | — | 6,507 | ||||||||||||||||||||||||
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Consolidated net income |
— | — | — | — | — | — | — | 27,175 | ||||||||||||||||||||||||
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Depreciation and amortization (2) |
8,666 | 3,736 | 855 | 92 | — | 360 | — | 13,709 | ||||||||||||||||||||||||
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Non-cash items other than depreciation and amortization |
2,908 | 288 | 8 | 17 | — | 630 | — | 3,851 | ||||||||||||||||||||||||
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Investments in associates and joint ventures |
22,357 | 611 | — | — | 105,229 | 404 | — | 128,601 | ||||||||||||||||||||||||
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Total assets |
279,256 | 59,740 | 35,862 | 3,649 | 108,976 | 90,429 | (32,289) | 545,623 | ||||||||||||||||||||||||
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Total liabilities |
150,023 | 42,211 | 24,368 | 3,132 | 7,132 | 64,876 | (32,289) | 259,453 | ||||||||||||||||||||||||
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Investments in fixed assets (4) |
12,391 | 7,632 | 474 | 299 | — | 1,671 | (312) | 22,155 | ||||||||||||||||||||||||
| (1) | Includes other companies (see Note 1) and corporate. |
| (2) | Includes bottle breakage. |
| (3) | Includes foreign exchange loss, net; loss on monetary position for subsidiaries in hyperinflationary economies; and market value gain on financial instruments. |
| (4) | Includes acquisitions and disposals of property, plant and equipment, intangible assets and other long-lived assets. |
|
2015 |
Coca-Cola FEMSA |
FEMSA Comercio-Retail Division |
FEMSA Comercio- Health Division |
FEMSA Comercio- Fuel Division |
Heineken Investment |
Other (1) | Consolidation Adjustments |
Consolidated | ||||||||||||||||||||||||
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Total revenues |
Ps. | 152,360 | Ps. | 119,884 | Ps. | 13,053 | Ps. | 18,510 | Ps. | — | Ps. | 22,774 | Ps. | (14,992) | Ps. | 311,589 | ||||||||||||||||
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Intercompany revenue |
3,794 | 46 | — | — | — | 11,152 | (14,992) | — | ||||||||||||||||||||||||
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Gross profit |
72,030 | 43,649 | 3,688 | 1,420 | — | 5,334 | (2,942) | 123,179 | ||||||||||||||||||||||||
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Administrative expenses |
— | — | — | — | — | — | — | 11,705 | ||||||||||||||||||||||||
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Selling expenses |
— | — | — | — | — | — | — | 76,375 | ||||||||||||||||||||||||
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Other income |
— | — | — | — | — | — | — | 423 | ||||||||||||||||||||||||
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Other expenses |
— | — | — | — | — | — | — | (2,741 | ) | |||||||||||||||||||||||
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Interest expense |
(6,337 | ) | (612 | ) | (148 | ) | (78 | ) | — | (1,269 | ) | 667 | (7,777 | ) | ||||||||||||||||||
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Interest income |
414 | 149 | 8 | 35 | 18 | 1,067 | (667 | ) | 1,024 | |||||||||||||||||||||||
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Other net finance expenses (3) |
— | — | — | — | — | — | — | (865 | ) | |||||||||||||||||||||||
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Income before income taxes and share of the profit of associates and joint ventures accounted for using the equity method |
14,725 | 9,714 | 416 | 164 | 8 | 208 | (72 | ) | 25,163 | |||||||||||||||||||||||
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Income taxes |
4,551 | 859 | 97 | 28 | 2 | 2,395 | — | 7,932 | ||||||||||||||||||||||||
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Share of the profit of associates and joint ventures accounted for using the equity method, net of taxes |
155 | (10 | ) | — | — | 5,879 | 21 | — | 6,045 | |||||||||||||||||||||||
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Consolidated net income |
— | — | — | — | — | — | — | 23,276 | ||||||||||||||||||||||||
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Depreciation and amortization (2) |
7,144 | 3,132 | 204 | 63 | — | 282 | — | 10,825 | ||||||||||||||||||||||||
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Non-cash items other than depreciation and amortization |
1,443 | 296 | (16 | ) | 17 | — | 326 | — | 2,066 | |||||||||||||||||||||||
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Investments in associates and joint ventures |
17,873 | 744 | — | 19 | 92,694 | 401 | — | 111,731 | ||||||||||||||||||||||||
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Total assets |
210,249 | 44,677 | 22,534 | 3,230 | 95,502 | 49,213 | (16,073 | ) | 409,332 | |||||||||||||||||||||||
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Total liabilities |
101,514 | 30,661 | 14,122 | 2,752 | 4,202 | 30,298 | (16,073 | ) | 167,476 | |||||||||||||||||||||||
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Investments in fixed assets (4) |
11,484 | 5,731 | 317 | 228 | — | 1,448 | (323 | ) | 18,885 | |||||||||||||||||||||||
| (1) | Includes other companies (see Note 1) and corporate. |
| (2) | Includes bottle breakage. |
| (3) | Includes foreign exchange loss, net; loss on monetary position for subsidiaries in hyperinflationary economies; and market value gain on financial instruments. |
| (4) | Includes acquisitions and disposals of property, plant and equipment, intangible assets and other long-lived assets. |
| b) | By Geographic Area: |
The Company aggregates geographic areas into the following for the purposes of its consolidated financial statements: (i) Mexico and Central America division (comprising the following countries: Mexico, Guatemala, Nicaragua, Costa Rica and Panama) and (ii) the South America division (comprising the following countries: Brazil, Argentina, Colombia, Chile and Venezuela). Venezuela operates in an economy with exchange controls and hyper-inflation; and as a result, it is not aggregated into the South America area, (iii) Europe (comprised of the Company’s equity method investment in Heineken Group) and (iv) the Asian division comprised of Philippines commencing on February 1, 2017, started to consolidated in the Company financial statements. The Company’s results for 2017 reflect a reduction in the share of the profit of associates and joint ventures accounted for using the equity method, net of taxes, as a result of this consolidation (see Note 4.1.2).
Geographic disclosure for the Company is as follow:
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2017 |
Total Revenues |
Total Non Current Assets |
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Mexico and Central America (1) |
Ps. | 301,463 | Ps. | 176,174 | ||||
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Asia (2) |
20,524 | 17,233 | ||||||
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South America (3) |
135,608 | 130,225 | ||||||
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Venezuela |
3,932 | 1 | ||||||
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Europe |
— | 83,720 | ||||||
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Consolidation adjustments |
(1,071 | ) | — | |||||
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Consolidated |
Ps. | 460,456 | Ps. | 407,353 | ||||
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2016 |
Total Revenues |
Total Non Current Assets |
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Mexico and Central America (1) |
Ps. | 267,732 | Ps. | 176,613 | ||||
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South America (3) |
113,937 | 138,549 | ||||||
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Venezuela |
18,937 | 7,281 | ||||||
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Europe |
— | 105,229 | ||||||
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Consolidation adjustments |
(1,099 | ) | — | |||||
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Consolidated |
Ps. | 399,507 | Ps. | 427,672 | ||||
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2015 |
Total Revenues |
Total Non Current Assets |
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Mexico and Central America (1) |
Ps. | 228,563 | Ps. | 158,506 | ||||
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South America (2) |
74,928 | 67,568 | ||||||
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Venezuela |
8,904 | 3,841 | ||||||
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Europe |
— | 92,694 | ||||||
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Consolidation adjustments |
(806 | ) | — | |||||
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Consolidated |
Ps. | 311,589 | Ps. | 322,609 | ||||
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| (1) | Central America includes Guatemala, Nicaragua, Costa Rica and Panama. Domestic (Mexico only) revenues were Ps. 288,783, Ps. 254,643 and Ps. 218,809 during the years ended December 31, 2017, 2016 and 2015, respectively. Domestic (Mexico only) non-current assets were Ps. 170,547 and Ps. 168,976, as of December 31, 2017, and December 31, 2016, respectively. |
| (2) | South America includes Brazil, Argentina, Colombia, Chile and Venezuela, although Venezuela is shown separately above. South America revenues include Brazilian revenues of Ps. 64,345, Ps. 48,924 and Ps. 39,749 during the years ended December 31, 2017, 2016 and 2015, respectively. Brazilian non-current assets were Ps. 89,137 and Ps. 97,127, as of December 31, 2017 and December 31, 2016, respectively. South America revenues include Colombia revenues of Ps. 17,545, Ps. 17,027 and Ps. 14,283 during the years ended December 31, 2017, 2016 and 2015, respectively. Colombia non-current assets were Ps. 18,396 and Ps. 18,835, as of December 31, 2017 and December 31, 2016, respectively. South America revenues include Argentina revenues of Ps. 13,938, Ps. 12,340 and Ps. 14,004 during the years ended December 31, 2017, 2016 and 2015, respectively. Argentina non-current assets were Ps. 3,052 and Ps. 3,159, as of December 31, 2017 and December 31, 2016, respectively. South America revenues include Chile revenues of Ps. 40,660 and Ps. 36,631 during the year ended December 31, 2017 and 2016, respectively. Chile non-current assets were Ps. 19,590 and Ps. 19,367, as of December 31, 2017 and 2016, respectively. |