Fomento Economico Mexicano SAB de CV (FMX) 2012 Q3 法說會逐字稿

Good morning and welcome, everyone, to FEMSA's Third Quarter Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the presentation, there will be a question and answer session.

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's expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which may materially impact the Company's actual performance.

At this time I will now turn the conference to Javier Astaburuaga, FEMSA's CFO. Please go ahead, sir.

Thank you, Nancy. Good morning, everyone, and welcome to FEMSA's third Quarter 2012 results earnings conference call. Juan Fonseca and Jose Castro are with us today as well as always.

As is customary in our calls, today we will focus on the consolidated figures for FEMSA and on FEMSA's Comercio's results since many of you probably had the opportunity to participate in Coca-Cola's FEMSA's conference call yesterday.

As you have also no doubt seen our detailed results, we will use this opportunity to focus on the highlights and main trends on our businesses.

As we mentioned in our release, during the third quarter we saw both our corporations perform well. Our Coca-Cola FEMSA experience on margin pressure earlier in the year in Q3 they were able to capitalize on stable volumes, solid pricing and improving raw materials and foreign exchange dynamics. That led to achieve double-digit operating income growth for the business.

For its part FEMSA Comercio maintained its BRIC space and also posted double-digit operating income growth on the back of consistent, balanced same store sales growth and an ever improving level of execution.

As you know, at the end of March we reported our 2011 quarterly and full year financial information under IFRS, this to facilitate comparability. If you have any questions about these changes please get in touch with Juan and our Investor Relations team who will be glad to follow up.

In terms of our perception of the environment and the drivers for consumption, particularly in our key Mexico market, we continue to see encouraging trends that are consistent with what we saw in the first half of the year. Manufacturing activity and GDP growth remained healthy and consumer confidence is near recent highs while unemployment is under control.

Inflation has continued to trend gradually higher inching towards 5% making it the one divergent variable. However, the overall economic environment in Mexico is positive and should continue this way for the remainder of the year and perhaps beyond.

Looking briefly at the macro environment in other markets where we operate, the standouts regarding GDP are Columbia and Venezuela, all of them posting mid single-digits growth in sharp contrast with Brazil and Argentina where growth is almost zero.

In terms of inflation, Argentina and Venezuela continued to show levels in the double digits, particularly related to labor, freight and transportation costs.

And moving on to discuss our consolidated quarterly numbers, quarter revenues increased 18% and income from operations grew 24%.

On an organic basis, this is excluding the integration of the beverage operations of Grupo Tampico's, CIMSA and (inaudible). Total revenues and income from operations increased also a healthy 12% and 18% respectively.

For the third quarter the line labeled Participation in Heineken Results represents FEMSA's 20% participation in Heineken's third quarter net income, which was reported yesterday using the average exchange rate for the euro during the third quarter.

Net income increased 21%. As we explained in our press release, this increase reflects growth in FEMSA's income from operations and incorporates the variation in FEMSA's 20% participation in Heineken's third quarter net income versus the figure reported for the third quarter last year.

These factors more than compensated for a swing from a significant foreign exchange gain in the third quarter of 2011 to now a foreign exchange loss in the third quarter of 2012, this driven largely by the effect of the devaluation of the Mexican peso and the US dollar dominated component of our cash position in the third quarter of 2011.

Our effective tax rate was 30.4% for the quarter.

In terms of our cash position during the third quarter, we went from having basically zero net cash levels at the end of June to a consolidated net cash position of MXN3.1 billion at the end of September reflecting cash generation at both of our core businesses basically.

Moving on to discuss our operations and beginning with FEMSA Comercio, we opened 178 net new stores during the third quarter reaching 1,019 total new net stores openings for the last 12 months. This number is in line with our expectations, which as I mentioned last quarter are to surpass a 1,000 net new stores for the year, representing a level of store growth which are current system is well equipped to manage.

Revenues increased 16% during the quarter. Same-store sales were up again, approaching a healthy 8% reflecting improvements in both average tickets as traffic. Our average ticket rose slightly, about 4%, aided by price increases taken in the first quarter by several of our suppliers for important categories. And our traffic increased slightly below 4% continuing to reflect progress in our management of category and purchasing occasion mix and the continuous fine tuning of our value proposition within the store.

For the quarter the gross margin expanded 70 basis points, again driven mainly by a positive mix shift due to the growth of higher margin categories and a more effective collaboration and execution with our key supplier partners, including our achievement of certain sales objectives with some of these partners and the corresponding benefit accrued to us.

Additionally, we continued to have a more efficient use of promotion related marketing resources and a better execution of our strategy of segmented pricing across markets.

In terms of operating margin, this quarter FEMSA Comerica posted an expansion of 50 basis points, even in the fact of incremental expenses relating to, among other things, the continued strengthening of FEMSA Comerica's organizational structure and the development of specialized distribution routes aimed at enabling our prepared food initiatives.

Also, as is always the case, the rapid pace of store openings put some pressing on the selling expenses line as the new stores generate expenses from day one while revenues take a while to get up to speed.

Given that FEMSA Comercio's results are still running above our restated medium term expectation of mid single-digits same-store sales growth and 10 to 20 basis points of expansion per year, it is likely that our full-year results will come in ahead of plan. However, as we have stated before, this should not signal a change in our medium-term expectations for next year and beyond.

And finally moving to Coca-Cola FEMSA, revenues for the quarter increased 20% versus a comparable period of 2011 as a result of double-digit total revenue growth in each division and the integration of our new territories in Mexico.

On an organic basis revenues for the quarter increased 10%. Operating income increased 27% driven by double-digit operating income growth in each division and including as well the integration of the new territories in Mexico, while on an organic basis, operating income increased 18% compared to the third quarter of 2011 reflecting improvement in raw materials and foreign exchange dynamics as I already mentioned.

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

Finally in terms of more strategic developments, a brief note just saying that we have made a good progress in our analysis of the opportunity we face in the Philippines and the process continues to move in the right direction.

As Hector Trevino mentioned during this call yesterday, we expect to make a decision before year end on this matter.

And so we are once more in the final stretch of a year that has brought us a combination of opportunities and challenges and we're excited to approach the final couple of months of 2012 with strong momentum across our business units and across our market.

And with that, I'd like to now to open the call for questions. Operator, please.

Thank you. The question and answer session will begin at this time. (Operator Instructions). Your question will be taken in the order that it is received. In the interest of time, we ask that you please limit yourself to one question at a time in order to allow for the maximum number of callers to ask their questions and one moment while we assemble the queue.

And we will go to Alan Alanis with JP Morgan.

I have a question regarding the CapEx of OXXO. I mean we're seeing the year-to-date base growing around 13% in the quarter, actually a little bit faster around 14%. Yet the number of stores, well openings will likely be smaller this year than last year. So two questions, I mean where is this CapEx being redirected if it's not store openings? Javier, is this -- I mean what's up to the latest in terms of your Greenfield initiatives for fast food and so on? And the second question would be how do you see the annual pace of openings in the next two to three years or the next one to three years for OXXO? That was my question, Javier.

Sure, Alan Alanis, I -- the CapEx as a proportion of sales has been relatively stable, between 5% to 6%, both involving remodelization of the store base but more driven by the opening of stores. And, as you were mentioning, even though we're opening less we're investing a little bit more. This has a lot to do with the opening of distribution centers. In the year we're basically going to open a couple of those.

Also, we've invested during the year on a center for prepared food in Northwestern Mexico as well and the core, both spending or investing behind the store base in terms of re-modelization is also increasing as the store base gets a little bit older. This is not a significant amount yet but it's also, I would say, having an influence in the growth of the CapEx.

But all in all a little bit also related to some of this effort that I mentioned in my opening remarks about the building a specialized distribution route system to precisely take care of prepared food initiatives, which is still in the early stages, but again that requires some investing ahead of the core of both development of the category.

So those would be my comments on the CapEx and on the base of opening of stores, as I mentioned as well, we feel pretty comfortable that the right balance in terms of the number of stores that we feel comfortable with opening year in, year out is around 1,000. Any number between 1,000 and 1,100 this is the right number we think for the kind of organization that we have put in place to do that.

While at the same time we continue to develop the value proposition within the stores, which as you can imagine and know, brings a lot of complexity into the process of opening new stores. So 1,000 to 1,100 new openings for the next two to three years is a number that we still feel comfortable with.

Okay, that's useful. And if I may, I mean I'm getting that you have almost $800 million of cash at the FEMSA level, ex the Coca-Cola FEMSA's cash, that's net cash. What's the latest or any updating terms of the thinking in terms of how you will deploy capital going forward? I guess that's a more strategic question, Javier.

Yes it hasn't changed really that much. We think we are well, I would say, positioned after spending some months on developing some opportunities, as I have been mentioning, on the front of some opportunities in what we call small-box format around FEMSA Comercio and some other opportunities around our logistic business as well. And we also have some other potential uses of cash.

We feel confident that having had this liquid position for the last couple of years, we might now get into a time frame in which we feel comfortable that we we're going to be able to allocate that capital in ideas that are pretty much in line with the strategy of the business as we have been reviewing these every quarter.

Okay, thank you so much then, congrats, bye.

Lauren Torres, Hong Kong Shanghais Banking Corporation.

Good morning. My question is also on OXXO. You've been doing very good same-store sales growth, high single digits for the last several quarters. Just curious to get your impression as we start to think about next year, how sustainable this type of growth rate is and if you could also just talk about the components of this growth? It seems like it's been pretty balanced between store traffic and also ticket sales, so just curious to get any trends there as far as how behavior has changed or stayed the same?

This has been a very good year I should say for OXXO. If you look at the performance of the different categories and speaking a little bit about categories, we have would say everything, a little bit of everything, so categories which are soft during a little bit because of consumer dynamics as well as the emerging categories, which have been very favorable to the gross margin performance because we have been able to again grow those categories in which we're able to capture a little bit more margin.

So the balance between traffic and I would say ticket is really a reflection of again bringing to the stores with the knowledge that we continuously get from consumer needs and trying to satisfy those in the best and convenient way. We feel confident that the efforts that we have in place will, I would say, be enough to -- I'm not sure if to match this year's performance but at least to continue in a positive trend.

We think we still have a number of initiatives that we feel confident will still bring more people into the store because we are, again, expanding a number of I would say both products and services all across the country, talking about financial services on one side all the way to food offering, prepared food offering to the other as well as continue efforts on again bringing innovation to the stores, which we are a preferred partner for a lot of our most important suppliers.

So the combination a little bit of bringing innovation, new services, solutions for consumers to take advantage of their three minute stop in a nutshell, we feel confident that again that we will be able to bring more people and to make them buy a little bit more stuff or store some of their needs.

And again as I'm saying, the long-term objective for same-store sales is, I would say, to continue to grow I would say hopefully above the general retail market in Mexico that we have been able to do so in the past years very successfully. So, all in all, my take would be positive just with the caveat that some of the efforts that we're putting in place are more complex than others. So it's easier to design and test a proof of concept for a new product or solution than to roll it out to close to now 1,100 stores all across the country.

So we still think we have a lot of opportunity in order to improve our speed to execution of new initiatives and that would hopefully sometime translate to even a more stronger same-store sales. But for the time being we think that the business is performing extremely well and we feel confident that we will continue to do going forward.

Great, that's helpful and if could also ask, I'm not sure if I just missed in your comments when you talked about margin expansion at OXXO. Did you mention that you're trending ahead for this year? And I don't know if you made comments for next year but just curious about -- I know you've provided some longer-term guidance on margin improvement if that's still intact as we think about next year.

Yes sure my comment was that on this year we're definitely going to be above our long-term expectation, which is a modest expansion of 10, maybe 20 basis points at the EBIT line. This year definitely results up to September makes us very, very confident that we're going to well surpass that long-term strategic intent.

And for next year that 10 to 20 is still the guidance?

Yes, yes.

Yes okay, thank you.

That still remains our long term. That doesn't really change a lot for 2013.

Okay, very good, thank you.

Antonio Gonzales, Credit Suisse.

Hi, good morning Javier. I just have two quick questions. First, is there anything that you can comment on? We're hearing from many of the grocery retailers in Mexico that price competition is intensifying, both in perishables as well as in a couple of categories that I guess I'm do not compete at all with OXXO. But I wanted to ask within perishables would you be able to comment at all on how do you feel about these price gaps and I guess you close these trends quite closely? You track them down quite closely.

Would you be able to mention how do you feel with respect to more price aggressiveness from these retailers and whether to the extent that you can comment your strategy would be to continue differentiating by adding new categories and value-added services to the store or do you foresee any event in which you will or you maybe already did lower prices in these categories that do overlap with the large-box retailers in Mexico? That would be my first question.

Sure, Antonio, we're really not very active in this category at all and this is not one of the categories that people have in their minds when they're thinking about OXXO or a need to be satisfied. We are more kind of a last resource or a short trip to the store to buy some perishables that we were left out and we are in a hurry to really use it for supper or dinner, whatever.

So we have been following a little bit the dynamics on the category but, as I'm telling you, this is not an important one for us at least so far. So I really do not have a point of view again on how intensive this degree of competition is turning out.

We are still very much focused, again, on building a very well, I would say, diversified category of consumption, location kind of outlet an OXXO should be. So perishables play a very, very, little role in very, very few even stores. We don't have that really wide, nationwide, kind of offering on this category so we are very, very tactical and selective on participating in this category.

We have much more stronger efforts in things that I had mentioned already, which is expanding the lines of services that we provide to customers, both general services and financial services, through our relationships with now Banco (inaudible) all across our 10,000 stores in Mexico. And we are going to be bringing new banks also into the picture and also in our offering on prepared food, which is I would say starting to develop very well, at least in the stores in which we have this capability of offering prepared food in a much more broader offering and with a much I would say with a variety than the one we had only a couple of years ago those would be my remarks here, Antonio.

Thanks and secondly if I may, I just want to talk very quickly is it reasonable would you say to assume that the cash balance that you have denominated in dollars will remain in dollars between now and whenever you have some strategic decisions regarding probably the Philippines or some other M&A transaction or is there any event in which you could, given the trend that the peso is having, reduce those dollar holdings?

No we still feel comfortable with the currency mix we have on our cash balances. We build that I would say at very, very reasonable exchange rates, below MXN12 a little bit more than a year ago, so we feel confident that, as I said a little while ago, that having the cash balances with a currency mix as of today is pretty consistent with our view on the potential use of that resource going forward and I would feel confident that we will be able to allocate that cash into good opportunities for FEMSA to continue creating value, so we don't have anything in our minds seeing changing things as they are today, Antonio.

Thanks so much, Javier, and congrats on the results.

Gabriel Lima, Barclays.

Yes thanks. First question, you--

You're breaking up, Gabriel.

Yes just a second. Better now?

Can you ask the question from the beginning?

Yes sure. So it's a follow-up, very first question, cash, you mentioned that you--

I apologize, we're not getting -- the line is not great so the question is breaking up. You said something about cash?

Yes I'll try to reconnect and come back to the line.

Apologies, yes. I think that's best.

No problem, no problem, thank you.

And we'll move to the next question from Lore Serra with Morgan Stanley.

I wanted to ask one quick question and one broader question. The quick question is can you just give us your updated timetable for the rollout of prepared foods in OXXO? And the more broad one is yesterday on the call with [KOF] Hector talked about how you would think about the Philippines as the beachhead for KOF to expand in Asia because of KOF's sort of deep [penchant] and desire to expand and when I ask this question it's going to sound like I am asking about Philippines but I am really not. I am just trying to understand how investors or how we should think about how you find good return opportunities in Asia, given that my perception is that margins are substantially below where you are in your current operations in KOF so, as you think about investing in Asia and, like I said, Philippines is part of that but not really the whole thing, what compensates for the lower margins to make good return opportunities or potentially good return opportunities because you haven't invested there yet, in Asia?

Sure hi, Lore. On the first one, as I mentioned, I mean rolling out I would say a new product innovation, which is bar-coded and you can just scan it because here it's very easy for us to do. Really the complexity involving having the ability to prepare food and distribute to the stores on a daily basis store in, store out, and manage waste and the likes, I mean I am just preparing you to a very maybe easy answer out of your question, which is it's going to be a long term initiative. It took us a number of years really to roll out the coffee initiative and making coffee seems very easy for all of us early in the morning, even though we are a little bit sleepy. But doing it the way consumers want it, which is fresh, hot and portable, it's not that easy.

So this is a process that's going to take a long time. That's my answer. We don't really provide a framework for, not even on a yearly basis, but I am telling you this is a multi-year effort in order to develop the capabilities outside of the store, the transportation abilities to the store and then the execution within the store, it's going to be a multi-year effort. We feel confident about again in the early signs that we have but it's going to take a long time to develop this but we think this is a category, which is so under developed within the, I would say, vision of the store of the future we have, that this is a great potential for the business but it's going to take a long time to do it.

The second one I think that one question -- I mean answer, would be growth and by growth I mean profitable growth. We're looking at a region, which has a lot of similarities to some of the Latin American colonies in the 70s and 80s. By definition I am speaking about long-term returns. This is a region of the world in which we think our capabilities have a good fit of what is required to develop a much more developed and complex portfolio to execute in the marketplace. As I said, a number of years in Latin America and you might also have the impression of having a very narrow availability of packaging and products. We think that in Asia there's a very, very big opportunity in taking advantage of emerging economies with more people or with purchasing power and the Philippines particularly have a very, very solid start point in terms of the likeliness for people for soft drinks with carbonated and for the Coca Cola brand for sure.

So, all in all, I am just saying we think we have the right set of capabilities. This is a growing region with emerging affordability of people and if we do our act well in terms again of segmenting the market the proper way, through the different stages of development of the markets combining in an intelligent way returnable glass and returnable (inaudible) as well as one ways and both working on the personal servings and as well as the multi-serve kind of [occasions], that's the kind of future we envision for Asia and we want to be part of that experience.

Thanks very much.

Gabriel Lima, Barclays.

Yes thanks; can you hear me now, Javier?

Much better, thank you, Gabriel.

Yes sorry about that, so I just had a follow-up question on the very first question regarding the cashiers. You mentioned that you're looking to other formats but you also mentioned the logistic business so I just want to better clarify what you mean when you're looking to opportunity in the logistic business?

Sure we have a fairly large business within FEMSA. We don't speak much about that but this is north of $500 million. A lot of that is being served to our internal needs in Coca Cola FEMSA. We also provide freight services for Heineken as well but it's I would say more than 50% of what we do is to third parties and we have a very nice business, which is very well run and this is the largest one in Mexico in terms of private fleets and managing third-party fleets as well for some customers and we think we have an opportunity to expand a little bit.

This is not, I would say again, big investments maybe for the Company but we think we have some opportunity to expand a little bit the lines of services that we are providing there and basically here and maybe Brazil, here in Mexico I mean, and that's the kind of opportunities that I mentioned in FEMSA [logistica] if it is.

Okay that's interesting and can you share with us the level of returns and profitability that you have in that business?

No I think those are business we would chart, as I said, non -- I mean that these are not the core businesses. What I can share with you is that these businesses perform well ahead of their cost of capital so we feel confident about putting some, a little bit more, capital into them. And but again these are not the core businesses that we communicate with the market for FEMSA.

But be confident that these are very well run businesses. We don't talk too much about these but these are businesses which are benchmarks against the best of its class in the region, both in the logistics one as well as in the commercial refrigeration equipment business, which we have a fairly large business as well, which is as a matter of fact the biggest one in the Americas but even though we don't talk too much about those you just saw that we just disposed the third business in which was non core, the chemical one, that we've said we will in the past two, three years.

What these logistics business as well as the refrigerants, the commercial refrigeration equipment, are businesses which we think sits very fine, very nicely within the environment and the capabilities of FEMSA and again these are, even though smaller as compared with the rest of the other ones, we think there are opportunities that we would like to tap on those opportunities. That's why we're exploring and trying to develop opportunities to grow not only organically but also in a very, very moderate way, I should say that and reinforce that. We'd also like to do some non-organic stuff in this business as well.

Okay very interesting and still on the cashiers, Javier, you mentioned in the last call you were looking in opportunities in Brazil regarding OXXO, so do you have any update on that on any thought on what kind of format you would come to Brazil if it would be through a JV or by yourself or any update is helpful?

No the only update is we continue to look at the retail landscape. We continue to look at potential opportunities and, as I said in the past, we would love to be in Brazil somehow some time but we don't have really a clear blueprint that tells that in a certain quarter we should be there doing something, so it's still in the stages of understanding better that market and trying to assess priorities in terms of what would be the best way to sometime being present in Brazil in retail.

Okay thank you, Javier; congrats on the results.

Alex Robarts, Citi.

Yes I have two questions. I guess first of all just thinking about the services component, right, of OXXO sales, the financial services piece seems to be accelerating. It looks like Banamex was included in the portfolio during the third quarter. You mentioned I guess there will be some other banks getting to be included. I mean you gave us a nice overview of prepared foods.

I mean obviously banking service is not like the bar-coded type of concept and it's more like the multi-year project thing. Can you kind of give us a view kind of some comments on where you stand in the banking service initiative, the related economics and kind of do we expect this to perhaps overtake the other services over time to really being kind of the main source of service related revenue, so that's the first question.

I guess the second one has to -- relates to Heineken. I mean it looks like we're coming to the end of the year. well, I mean April is when you have the choice and option to start selling the Heineken shares and I am not sure how much comment you could give us around this but should we think about the Philippine transaction if it happens kind of changing the way you view the ownership of the Heineken shares and any thoughts around that option to sell those shares as it comes in April would be very helpful. Thanks.

Sure, Alex, hi. First on the services piece, this is kind of a two function product. It's -- I mean it should be a business by itself, which it is. Complexity regarding the capability to really provide even though the narrow services that we provide to consumers, customers in our stores on financial services, it requires a lot of training for people and, of course, we are certified and evaluated by authorities in Mexico so it's not as I would say something different from the food prepared kind of category but it also -- it involves a high degree of complexity again because, as you know, retail has a low -- I mean a very high turnaround of people. So you have to have a permanent effort to keep trained people about again how solving consumer when they they're trying to make a deposit or a payment of service, whatever.

But it's an important category as well to again bring people into the store and while they are doing something financially related, doing something and buying a Coke or a beer or a snack. So it is a category, which is aimed at both these objectives of building margin, which is I would say good enough for us to see it as a category in which we would like to keep doing some efforts. But at the same time, this is not necessarily the category that is going to move the needle and, as a matter of fact, there is no one single category that moves the needle for OXXO.

So we need to work in a number of initiatives and financial services, as just one of them. This is not something that again has a ramp up core which is very, very short. It might not be as long at least with a scope of services that we have decided to provide as a fast food offering but anyway it takes some time to keep on bringing new banks but of course we are starting with the big ones and then I would say the effect of the late entrants would not be as important as the early entrants. So those would be my comments on the financial service question.

And on the second one, we have said this and this is still our thinking. This both as an investor of FEMSA and as Directors in the Board of Heineken, we really need to have the long-term view for the Company so our decisions regarding again our recommendations to the Board and our decisions regarding our holding in the shares have a lot to do with how this investment for FEMSA will play out in the medium to long term. There are some dates starting next year, which for us is just a reminder that we will need to continue to assess the perspectives of the business going forward to make sure that we still make the right decisions for our shareholders, which in the past -- I mean in the last two and a half years the decision that we made we think was the proper one in terms of again changing our investment mode in the beer business by exchanging our wholly owned subsidiary into this 20% participation in Heineken.

But to tell you the truth, we feel confident that the performance of the business for the last two and a half years in which we have been invested in Heineken have been very good. The market performance has been extremely well we think. I mean, if you look at share price these days as compared when we made the exchange or the merge, we feel confident. So the balance sheet of the Company, as you know, is well levered, both Coca Cola FEMSA and FEMSA as well, so the Philippines is really not a factor. It's a starting point, as I mentioned, as Lore in her question also remembered us.

That is a starting point for -- but we might like to have as a broader participation in the [Southeastern] nation market so my, again, statement here would be we need to look at this as if again the investment in Heineken for the long-term for FEMSA still has the characteristics and this is a permanent effort that is done on a permanent basis and the fact that the next year we start to have some flexibility to start disposing some of those shares, really doesn't translate into a critical day for us to either make a decision or have a big announcement to the market. Do not expect that at all.

This is a process that has to be very thoughtful and that has to be very careful and I am sure you can appreciate that we -- I mean we really do not -- I mean we really cannot share a lot of, again, what our decision regarding investment in this company would look like because we think it's in the best interest of our shareholders to be very careful about what we decide, what we say and what we do about these in fact. So we will still, as we have done in the past, determine our decisions on the potential return of our investment in Heineken going forward but, as I said, what I can tell you is looking backwards we feel very, very good about the decisions we have made in the past and we hope that you have the confidence that we will do the same going forward.

Okay fair enough. Thank you, no and just one clarification, Javier, sorry; on the financial services, I mean on the banking services, is the goal to kind of roll it out really with all -- I mean all across the store, the stores nationally or might you think about just kind of trying to get to certain penetration levels in certain regions?

No it's a full -- it's a nationwide effort. It's -- I mean the line of services, which today as I said it's pretty narrow, that the intention is to deploy that to all the store base. Going forward we might evolve into a more segmented approach but so far it's really a very nationwide effort, all services present in all stores.

Great, okay thank you.

Ladies and gentlemen, that is all the time we have for questions today. I will now turn the conference back to Mr. Astaburuaga for posing additional remarks.

Thank you very much for participating in this call and looking forward to seeing you in the next one. Bye now.

Ladies and gentlemen, if you wish to replay 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 and have a nice day. All parties may now disconnect.