Fomento Economico Mexicano SAB de CV (FMX) 2017 Q1 法說會逐字稿

Good day, and welcome, everyone, to FEMSA's First Quarter 2017 Financial Results Conference Call. (Operator Instructions)

During this conference call, management may discuss certain forward-looking statements concerning FEMSA's future performance and should be considered as good-faith estimates made by the company. These forward-looking statements reflect management expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which can materially impact the company's actual performance.

At this time, I would like to turn our conference over to Eduardo Padilla, FEMSA's Chief Corporate Officer. Please go ahead, sir.

Good morning, everyone, and welcome to FEMSA's First Quarter 2017 Results Conference Call. Juan Fonseca and [Maravilla] Castro are also with us today. As we usually do, we will focus the call on the consolidated figures of FEMSA and the FEMSA's Comercio results. Since many of you probably have had the opportunity to participate in Coca-Cola FEMSA's conference call last Wednesday, we want to use the call to try to add some color and some qualitative elements to the discussion as well as to hear your views and answer your questions. Hopefully, you will find it useful.

We started the first quarter knowing that we will face significant calendar headwinds throughout into last year, with one less weekend in January, one less day in February and a negative shift in the timing of the Holy Week. Fortunately, consumption trends in Mexico remains solid, and our team managed to deliver strong results.

Our FEMSA Comercio, structurally, we were again able to drive revenue growth and gross margin expansion, which is very positive. Operating expenses, we were ahead of revenues, putting some pressure on operating margins, for the reasons for these are well understood and short term in nature. Therefore, we are optimistic as ever about our ability to keep driving long-term earnings growth across our retail format.

At Coca-Cola FEMSA Mexico, -- at Coca-Cola FEMSA, Mexico was again our main engine for organic earnings growth during the first quarter, as most of our South American markets continued to face challenging macro headwinds. While we keep growing the platform having now closed acquisition of the Ades soy-based beverage portfolio. And we start -- we started fully consolidating the operation in the Philippines at the beginning of February.

Moving on to discuss FEMSA's consolidated quarterly numbers. Total revenues during the first quarter increased 29.1%, and income from operations increased 18.7%. On an organic basis, that is excluding the result of Vonpar and considering the 3 full months of Coca-Cola FEMSA Philippines operation for comparison purposes. Total revenues increased 18.6%, and income from operations increased 4%. Net income grew 51.3% in the first quarter, reflecting an increase in other nonoperating income, driven by the consolidation of the Philippines as well as by growth in FEMSA's income from operations. This increase was partially offset by higher interest expense and by a foreign exchange loss related to our U.S. dollar denominated cash position as impacted by depreciation of the Mexican peso during this first quarter.

Our effective tax rate was 23.7%, lower than the expected range, mainly driven by the one-time adjustments from the consolidation of Coca-Cola FEMSA Philippines operation, as I just described.

In terms of our consolidated net debt position, during the first quarter, it decreased by almost MXN 10 million compared to the previous quarter to reach MXN 80 million at the end of March.

Moving on to discuss our operations, and beginning with FEMSA Comercio Retail division. We opened 176 net new OXXO stores during the first quarter, reaching 1,203 net store openings for the last 12 months. This number of opening represents an increase of 28% over the comparable period last year, which is higher than usual for a first quarter and is a great way to start the year. Revenues increased 11.9%. OXXO same-store sales were up 5.7%, driven by a 3.1% increase in the average customer ticket and 2.5% increase in store traffic.

On the subject of traffic, we continued to see stabilization trends in the telephony category after 3 years of decline. And we're seeing solid traffic trends in other categories, particularly services. So these bodes well for our traffic metrics going forward.

Moving down the P&L. For the first quarter, gross margin expanded 120 basis points, reflecting: number one, sustained growth of the service category, including income from our financial services; number two, increased and more efficient promotional programs with our key supplier partners; and number three, healthy trends in our commercial income activity.

Operating income decreased 2.9%. Operating margins contracted by 70 basis points, reflecting a tough and profitable comparison based in first quarter 2016. One, retail operating income grew by almost 28% and operating margin expanded above trend. Number two, an increase in electricity drives of approximately 40% year-over-year. And number three, our continuing initiative to improve the compensation, structure of key in-store personnel at the store level. And four, the accelerated pace of store openings during this quarter, which put pressure on operating leverage.

So we are cognizant that operating expenses are growing above revenue. But as I mentioned before, the reasons are not structural. And we believe these are short-term pressure points.

Moving on to FEMSA's Comercio Health Division, we added 16 drugstores to reach 2,136 units across our territory at the end of March. Revenues increased 26%, driven by a solid increase of 20.7% in same-store sales, reflecting strong performance in South America and the translation of benefit from the depreciation of the Chilean and Colombian currencies relative to the Mexican peso.

Gross margin expanded 60 basis points, driven by the contribution of Socofar, that has a totally higher gross margin than the Mexican operations. However, operating margin contracted by 50 basis points in the first quarter, reflecting: number one, the integration of a single operating platform and the development of our distribution capabilities in Mexico; number two, improvements to the initiative and compensation structure for our in-store personnel; and number three, increased services at our Mexico drugstores, such as on-site doctors and home delivery.

(inaudible) FEMSA Comercio Fuel Division added 6 gas stations during the quarter to reach 388 units at the end of March and 69 net new service stations for the last 12 months. Same-station sales grew 24.8% in the first quarter as average volume increased 0.9%, while the average price per liter increased 23.6%, reflecting national price increases instituted at the beginning of the year.

In spite of these price increases and the fact that we had some lower cost inventories at the beginning of January, gross margin contracted by 90 basis points as gross profit per liter remained flat versus the previous year in peso terms per liter. However, operating margin expanded 20 basis points to reach 0.7% of revenues, reflecting expense containment and certain operating efficiencies at our service stations.

And finally, moving on briefly to Coca-Cola FEMSA. Total revenues increased 38.4% during the first quarter, including the results of Vonpar in Brazil and the impact from the consolidation of the Philippines and the tailwinds from currency translation. In Mexico, we continue to see growth, again, driven by solid pricing. We also rolled out affordability initiatives across operations that enabled Coca-Cola FEMSA to gain -- or maintain share in most markets. And in Brazil, we made good progress in the integration and synergy capture of Vonpar.

If you were unable to participate in Coca-Cola FEMSA's conference call on Wednesday, you can access a replay of the webcast for additional details on the results.

So summing up, the first quarter turned out a little better than we expected with the consumer in Mexico going to do most of the heavy lifting. As we get started with the second quarter, we have the high expectations for the month of April, given the favorable calendar and the positive trends we need to see in our main market. And here in Mexico, we're gradually becoming more optimistic on the second half outlook for Brazil. Structurally, we like where we stand and -- in our different businesses. And we are ready to keep working to lead the growth in the coming months and quarters.

Now let me turn it over to Juan for a moment.

Hi, everyone. Once again, just a reminder that we will take just one question per caller. This has worked very well in recent calls, and so we're making it permanent. So thanks for that, and we can open the call for your questions. Operator, please?

(Operator Instructions) And our first question comes from Robert Ford of Bank of America Merrill Lynch.

Guys, with respect to the 190 basis point increase in the expense ratio at OXXO, how much of that is coming from electricity? How much is coming from comp? And how do you expect that to evolve over the balance of the year, please?

Bob, I mean, electricity, as we mentioned, we talked about 40% year-on-year. And as you know, it's one of the more important line items. I mean, we've spoken about how electricity for OXXO given all the refrigeration equipment and the hardware that we have in the stores, it's almost as big as rent, right? So in the expense structure, you have the labor being the biggest line item. And then you have rent and electricity, more or less, at the same level. As you also know, electricity tariffs tend to be somewhat correlated with the price of fuel. And exchange rates, obviously, play a role there. So to the extent that the peso was more or less stabilizing around where it is today and if we don't have major shocks to the price of oil, we would expect the current levels of energy to remain. Obviously, we have to work through this increase throughout the summer. Sometimes, as you know, CFE will put through summer discounts, which would alleviate the pressure somewhat. We also -- we mentioned part of the reasons our ongoing effort to restructure the compensation and mechanisms for the people at the store, that still has some quarters to run. So I would expect for, at least the next couple of quarters, to see similar levels of pressure coming from energy and the adjustment to the labor force. And actually, the compensation adjustments to go on even beyond the next couple of quarters.

Yes. I will add that probably, the compensation of the store personnel, I will try to sell it as an investment because, really, with the more the store -- the more the store is become more sophisticated, I think the better it will be if rotation and turnover is being reduced at the store level. So really, it's a bet that is -- a bet that we are doing in order to have better store operations for the future.

Yes. I think in terms of one-offs, certainly, the -- we did open a lot more stores during the first quarter than we usually do relative to the first quarter of last year. And obviously, there are some operating deleverage there because you're paying rent and labor for stores that are taking sometime to ramp up. So we're still thinking we can probably keep the margins stable for the full year. We'll update you as the year goes by. But that's still the thinking at this point.

And your next question comes from Luca Cipiccia from Goldman Sachs.

Given that I already got one, I hope you'll be able to answer it. And I'll just share some thoughts. My question is really on what happened with Heineken in Brazil and the decision to break from the distribution with Coca-Cola, with the bottlers. Just your interpretation for what you can tell, how that, in a sense, maybe a telling in terms of the relationship between the bottlers, the Coca-Cola structure, but also yourself and Heineken, and if there's any update? Obviously, there are other relationships that are existing and I appreciate they are separate, they are different. But I think it would be interesting to hear your views on that decision and also, what we can read into it for some of the other relationships.

Luca, this is Juan. Certainly, as Hector mentioned a couple of days ago, the notification came very recently. There's an agreement in place where Coke FEMSA is still operating business as usual and kind of looking at next steps. So there really isn't a whole lot to discuss beyond that on the actual what's going to happen in Brazil. I would say from FEMSA standpoint, I don't think there's any change in terms of the broader relationship. I would say, in terms of orders of magnitude, obviously, the relationship we have in Mexico between the -- as our sole supplier of beer, which is one of the key categories at OXXO and OXXO being the most important channel for Heineken, that continues to obviously thrive and grow very, very nicely. The investment in Heineken continues to do well. The share price, as you -- I'm sure you know, is back in the low 80s in terms of euro, so the returns continue to be there. We continue to like what they're doing. So I wouldn't read too much into the whole Brazil situation. In terms of the broader relationship, I think the broader relationship is larger than that.

Your next question comes from Lauren Torres of UBS.

Just a follow-up or a little bit deeper into the margin, the operating margin weakness. And I totally understood that you know why it's happening, and you used the word short term in nature. But I think you did outline it on the previous question for retail. But can you talk a little bit about help as far as what short term, the impact that we saw in the first quarter, if that should continue through the year? And how are you thinking about the potential margin weakness or getting to something more flat full year?

Lauren, I think the comments on the short-term nature has more to do with OXXO and we kind of focus -- or make sure that, that message got out there because you have to go back a long, long time to find another quarter when operating income didn't grow at OXXO. If you look at the health business, it's really in a very different stage, right? I mean, there's a lot of stuff going on still in terms of the integration of the different regional companies, in terms of the distribution platform. We just opened a new distribution center on the West side of the country. We're still -- we're opening stores with a new brand in important parts of the country, basically Central Mexico. We have almost no footprint in that region. And so the maturation of those stores is going to take a while. I would say the -- it continues to be a situation where the South American business is providing cover for the Mexican business. And I think from an SG&A standpoint or just OpEx growth, I would still look at the Mexican business as a work in progress. Obviously, the aspiration is that margins -- EBITDA margins should trend and eventually catch up with the South American margins.

Obviously, the South American margins come from an integrated platform. I think in Mexico, we are very early days in terms of replicating what Socofar had built in Chile over a couple of decades. So it's going to take a while for Mexico to get to those kind of mid-single-digit level of EBITDA margins. But as we mentioned, as Eduardo mentioned in his opening remarks, there's nothing in the numbers or in the operations that takes away from our confidence that we will get to where we need to get in terms of profitability. And I think on the GAAP business, it's also kind of a different beast in that so many things are still changing. As you know, the whole price liberalization is happening as we speak. During this second quarter, we expect the maximum prices to go away in the part of the country where we have most of our gas stations. So that should -- it should provide a better picture of this business, a proper retail business. Right now, it continues to function a little bit like a utility where the prices are the same for everybody and everybody, whether you have a little bit of scale or you don't, you're still buying at the same price and selling at the same price. That will go away as we move throughout the year. So I think margins also should hopefully react positively once we begin to operate this as a proper retail business.

And the next question comes from Antonio Gonzalez from Crédit Suisse.

I wanted to ask about the gas business specifically. And I wonder whether you can give us any additional color in terms of sales expenses grown considerably below top line growth. And I presume there's a number of expenses that are tied to top line, I don't know, merchant discount rates from -- for current usage and so on. So I was just wondering if you can give us some examples as to why sales expenses grew 29% or so versus top line growing 50%. And then with the open season or [Foreign Language] from Pemex unfolding over the next few quarters, what's your most updated expectation in light of this, I guess, tight expense control? What's your timing and level to which you expect margins will converge in the following quarters?

Let me try and go after the second question. This is Eduardo speaking. Basically, I think we're in the process of, as Juan just said, how to move and how to learn the new regulations and scheme and, at the same time, understand how elastic and how prices could be moved really depending on each region and depending on each market. We are -- we have a very strong brand, OXXO GAS, and that strong brand relies very much on liters per liter, on service and on promotions. And those 3 together has made us really a clear differentiator among the rest of the retailers. We just have to be very cautious that don't -- not to spoil the brand, but being cautious understand how things could be moved ahead. And I think we are optimistic that this very first shopper of the very first quarter above margin being exactly -- remaining exactly the same in peso terms, I think that will be probably something that we will try to understand and move along as we understand how market -- or how the gasoline price will be moved within different regions.

Yes. I think on the expense part of the question, Antonio, I will mention a couple of things. One has to do with the number of people at each gas station. I think OXXO GAS made some progress in streamlining their -- the size of their teams a little bit. Obviously, all of our stations in Mexico are full-service stations, so you do have a fair number of people working at the gas station. But we are being able to reduce a little bit the size of those crews, if we add efficiency to the whole thing. And the other reason I would mention is, if you recall, a couple of quarters ago, we were talking about OXXO GAS opening more regions. If I recall, Ciudad Juárez opened in Chihuahua. We added a regional office there, hired some people. So we put a little bit of pressure on the overhead. And we are now cycling some of those movements. So this is a little bit more of a normalized number. Obviously, we will eventually open more regional offices and we will eventually hire more people. So this is going to be a bit of a moving target. But right now, I would mention those 2 as reasons why the operating margin actually expanded 20 basis points, even though the growth margin contracted significantly.

But I will add that, that is really some of the things that we have to learn, that we -- again, we don't want to hurt the service. And so we just have to balance one against the other.

Right. And I think, obviously, as I said, with everything we do, the market will be a consequence. The decisions will be made based on what the business requires.

The next question comes from Alex Robarts from Citi.

So I'd like to go back to health, and the focus of the question is around this 32% increase in OpEx. And it was a little bit of a surprise on the piece when you talk about the incentive and compensation structure for in-store personnel. It seems that the rationale that you've told us back in fourth quarter around doing that in OXXO was the increased sophistication of the stores over the years. But you really just kind of come in to -- these health stores. And I'm wondering, is it the same type of structure in incentive and monetary, nonmonetary that you're doing at OXXO? Or is it different? And the second piece of this OpEx, a health question, is this reference to the increased services seems to be something that we haven't seen before. And at least the on-site doctors at home delivery, is this going to continue to be a net expense? Or is there a time, in fact, this year where you expect to get return from some of these services such that there is a mitigating factor? So you talked about fourth -- in the fourth quarter call that this was a division that had -- that could be flat to slightly up in margin. And I'm wondering now with the first quarter, do you still feel that way?

Alex. It's Juan. I think on the health SG&A, when you talk about incentive compensation, it's a little bit different from what we were doing in OXXO. I think certainly, any time you improve the compensation structure, that's going to have a good impact on turnover. And we have said in the past, a lot of what we're doing at OXXO has to do with, yes, it's a little bit more sophisticated to manage the store. But you really want your people to stick around much longer, probably because you're training them more and you really want them to stay with us for as long as possible. I think when you look at the health business, you have differences, even when you look at South America versus Mexico. So in some cases, you have a compensation structure that is linked to some incentives based on what happens in the store.

So some of the things that we do in Mexico, for example, we don't do in Chile in terms of the compensation mechanisms. Obviously, the Chile operation is much more mature and just behaves differently. If you go to one of our stores down there, there's a lot more people. There's people from some of the suppliers that are demonstrating their product. It's a very well-oiled machine. I think in Mexico, we're still designing and fine-tuning and getting to where we want to be in terms of how we compensate our people. And I would say, the same thing goes for the doctors on-site and the home delivery. I think it -- we've been analyzing kind of the pros and cons of having on-site doctors.

Obviously, there's a cost involved and you need to figure out if having the doctor on-site actually generates enough scripts and enough incremental revenue to pay for itself, whether the consumer expects it, whether the competition does it. And many, many cases, we're coming to the conclusion that, yes, it's something that we should have. And so you set it up. You build the little office. It has to be not under the same -- I mean, it's adjacent to the drugstore if it's not inside. There has to be some separation and, of course, the doctor in that sense is just really separate from the drugstore. I think home delivery is also something that we -- it takes a while to figure out where you should have it and how do you do it. Do you have a call center with a centralized -- there's one large drugstore that may be supplies a whole region, like something we do in Manila for example or should each drugstore have a couple of motorbikes for their own distribution. So there's a learning curve involved. And I think we are -- obviously, we know more today than we did a year ago or 2 years ago. And we are just acting on some of that -- of that learning into our health business.

The Chile versus Mexico split, is that possible? Or you'd rather not share that with us in health and in the margin?

Yes, I mean, we don't really want to get too much into the nitty gritty of the different regions. One comment that we are happy to make has to do with same-store sales and we did last quarter. And we can talk about how -- if you look at the number as reported, obviously, it's something like 20%, but that includes the currency translation, the benefit from the Chilean peso, the Colombian peso. When you look at local currency, we saw South America grow in the mid-to high single digits, whereas Mexico was actually flat to a little bit down in -- say, in terms of same-store sales. So back to my comment about how South America is providing cover for Mexico, which continues to be a work in progress. In terms of the actual SG&A per region, I don't think we want to get into that level of detail, Alex.

Our next question comes from Pedro Leduc from JPMorgan.

On the OXXO stores, if you could help me reconcile following 3 pieces, pickets, rising demonstrations, which is not what you're used to see. But on the other hand, traffic growth and the fastest pace in a while. So in this sense, could we interpret this as perhaps, people going less often to the stores or buying a little less, more often but buying less once they're in it? Or another reason could be you looking not to pass on oil pricing in order to lure in relative traffic, especially as your gross margins expanded regardless. So any color on this combos, picket, traffic, gross margin, how it's changing this year could be welcome.

I will -- this is Eduardo speaking. I think the Holy Week really distorts a little bit our numbers because usually, the Holy Week is very heavy in ticket. And unfortunately, now, I mean, we already have learned -- well almost, April is over and the results are very good, really comparing with the previous month. Really unfortunately, the Holy Week makes a major impact in -- on the store performance. I would say probably, 3.5, 4 percentage points of performance of same-store sales are built in within the Holy Week. So I think that is really has affected the result. And the other one is one less day in February. The -- this year, we have one less day in February. We didn't have a 29, which we did have the year before. I don't know if you want to add anything, Juan.

Pedro, I think another thing to keep in mind is that, as we mentioned, the traffic -- and you had heard us talk for the last couple of years, really, about how telephony was putting pressure on the traffic number. Telephony numbers were really falling off the cliff, And they were obscuring, in many ways, healthy traffic trends on the rest of the categories. And we spoke the last few quarters about how the other categories were growing in the low single digits. And I think that's what you'll continue to see. You no longer have the drag from telephony, so you're seeing the low-single digit growth in other categories. But one of those categories that drives a lot of traffic is services, financial services, in particular, and the ticket for some of those transactions. When the customer -- I mean, ideally, they will come to pay their bills or to make a deposit and they will also pick up some snacks and a beer or whatever. But there are many people that just come in for the service transaction, which tends to be a smaller ticket than average. So some of the benefit on the traffic side actually results in a slightly smaller ticket. One thing that I want to be very clear on is, we are -- whatever price increases we are getting from our suppliers, we are passing straight through.

So we're not eating any of the price increases at all. I think, to Eduardo's comment, we did see -- and I don't know if this is some -- in some of your minds. There's about a 4-point differential coming from calendar shifts. So the 5.7% number that we reported would almost be 10%, if you know, on a comparable basis. Obviously, some of that benefit is going to manifest itself in April. So sometimes, it's just better to look at the first half as a whole, which, I'm sure, we'll do in 3 months. So those would be the comments, probably remembering that we already surpassed the 7 million-point in terms of Saldazo cards. We are -- within the first year of having both HSBC and Banorte as part of our correspondent banking. So all of that is helping the financial services drive traffic, but it can be a smaller ticket than average. So that -- those will be my comments.

(Operator Instructions) Our next question comes from Julie Chariell from Bloomberg intelligence.

I just wanted to come back to the store openings for OXXO and the high number of $176 million in the quarter. Just wondering what you were seeing in the marketplace that led you to, perhaps, take advantage of some opportunities and build out more stores than maybe your normal cycle.

This is Eduardo speaking. Some of our -- some of the competitors that we have in -- within the convenience store industry with the same format, they are not opening many stores. And some of the people that used to lease stores to them are coming out to us. So I think we're taking advantage of that temporary opportunity. So -- and number two, I think we were not very -- the closing of last year wasn't that very good. It was not very good because -- not because we didn't have stores, because the stores probably were not able to be finished at the end of the year. And we have resolved that opening up stores at the end of the year in the best month of the year sometimes is very traumatic for the store performance and the people of the store. So probably, we decided to delay those stores and open them up in the very first quarter. I don't know if you would like to add, Juan.

Yes. No, I think that's exactly what I was thinking about. I mean, if you look at our 2016 number, we came a little bit short of the 1,200 number. And I think it had a lot to do with what Eduardo just described, which is once you get to December, which is your -- by far, your best month in the year, you don't want people to be distracted by opening more stores. So some of the stores that we opened in the first quarter of this year, probably, were kind of -- the tale of the one that should've been opened in December. But still, I mean, it's a very good way to start and I think it puts us in a good position to aspire to reach the 1,200 number this year and perhaps, do a little bit better than that.

Yes.

Our next question comes from (inaudible) from Bradesco.

I just want to understand a little bit about your expansion in Chile. I mean, we heard news this week that you're opening a store and there's the conversion of the 12 Big John stores. From what I understand, there are 50 of Big John in Chile. So just if you could give some more detail on how you're expecting to grow in the region. I mean, is it just to going to convert them? Are you going to open more stores? Just a little bit more on that will be great.

Yes, at the end of -- this is Eduardo speaking. At the end, we'll look to have only one format and only one brand. And I think the challenge is really how fast and how we are going to be able to change the value proposition. Just to comment, Big John prices sometimes are very too high for our standards. And it's a typical convenience mindset where you think since you don't sell much of anything, you had to price it very -- at a very aggressive price. We and OXXO think differently. We think -- the thing that our main -- one important (inaudible) us to have very reasonable prices and very competitive prices among different -- when we compare our sales with big-box format. And I think the lack of scale probably also is hurting a Big John. But I think those 2 things, plus the evolution of the value proposition, how to have the right assortments, to have the right catalogs because really, what we found is an operation that has extraordinary good locations, but very poor operating procedures. And I think, well, we are in the process of the -- we're reshaping the organization, investing in the stores, marginally just to have -- so the Big John brand will hurt more and -- but try to move and start converting some of those stores. In fact, one of the OXXO store that we just opened up in Chile is a good way for the rest of the organization to have an example of where we would love to go. So I think it's working well and definitely will give a good position, so the rest of the employees will understand what we're trying to sell, where we're trying to go and how we want them to be part of it.

And I think, generally, you should expect those not only to eventually to convert the existing Big John stores, as Eduardo said, to the OXXO brand, but also to open on kind of a greenfield or from scratch. So definitely, we aspire to have more scale in Santiago and in the rest of the country. But there's just some learning that has to take place in terms of fine-tuning the value proposition. And then eventually, once you get that right, then it's a lot easier to just scale up.

Is there any time table or guidance that maybe you can give us? And what -- how much -- how many OXXO stores do you have by the end of 2017?

Well, I mean, internally, we have a very clear idea of what we are trying to do, but we -- I think don't -- we don't want to create expectations. It's going to take a little bit of time. And just assume that -- I mean, in order for it to be kind of worth our while to be in Chile, we aspire to have a much more significant store presence.

And I think we have learned that by investing in Big John, I think, probably, we save 3 or 4 years that the ones that we have invested in Colombia in order to have this challenge of opening up stores in Colombia, I think by investing in Big John would probably save 3 or 4 years.

Ladies and gentlemen, that is all the time we have for questions today. I would now like to turn the conference back to Mr. Padilla for closing or additional remarks.

Well, thanks, everybody. We -- we're very pleased and that you were around. And we hope to come up with good results for the next quarter.

Thank you, everyone. Have a good weekend. And obviously, if you guys have follow-ups? Gerardo and myself are around. We can, obviously, either do it by e-mail or if you want to call us up, that's great, too. Thank you.

Ladies and gentlemen, if you wish to access the replay of the webcast for this call, you may do so at FEMSA's Investor Relations website. This concludes our conference for today. Thank you for your participation. Have a nice day. All participants may disconnect.

Thank you.