In 2019, FEMSA continued to progress in its evolution as an organization that generates economic and social value through companies and institutions. We are convinced that long-term success depends on the balanced execution of meeting our customers’ daily needs, as well as supporting the well-being of our employees and communities. FEMSA’s 2019 integrated Annual Report seeks to illustrate how we are working to grow strategically and operationally, while also strengthening our organizational culture and sustainability strategy.

The year was one of great activity in deploying capital to high growth, high return assets that align with our experience and capability set.

For example:

• We announced the entry of FEMSA Comercio’s Proximity Division into Brazil through a joint venture with Raízen Conveniências, which has more than one thousand franchised or licensed Shell Select convenience stores within its wide network of Raízen gas stations. The transaction allows us to expand into a new territory with a strong local partner while retaining the flexibility to be able to develop the right value propositions for the Brazilian consumer.
• In FEMSA Comercio’s Health Division, we now own 100% of our health platforms in Mexico and South America. Specifically, we became the sole shareholder of Grupo Socofar in South America by completing the acquisition of the 40% interest that was not previously owned. Socofar also expanded to Ecuador with the acquisition of Corporación GPF, a leading drugstore operator in the region. And in Mexico, we also became the sole shareholder of our drugstore platform following the purchase of its minority interest.

• Solistica secured another important building block in its growth strategy through the acquisition of AGV in Brazil, a leader in value-added warehousing and distribution. The transaction makes Solistica the first fully integrated third-party logistics solution provider in the Brazilian market, building a key differentiating factor among the leading players in the industry.
• We acquired a minority stake in Jetro Restaurant Depot, a leader in the wholesale business-to-business cash and carry retail foodservice segment in the United States with more than 130 stores. The transaction allowed us to deploy capital into a unique opportunity while presenting a compelling potential new growth avenue for the development of a cash and carry platform in Mexico and Latin America.

We saw strong consolidated operational and financial performance across FEMSA business units in 2019.

Total revenues increased 7.9% over the previous year to Ps. 506.7 billion (US$ 26.9 billion), and income from operations increased 13.4% to Ps. 47.1 billion (US$ 2.5 billion), while net consolidated income decreased 15.2% to Ps. 28.0 billion (US$ 1.5 billion). Net majority income per BD Unit was Ps. 5.8 in 2019 (US$ 3.1 per ADS).

FEMSA Comercio continued to see strong growth in 2019. The Proximity Division opened 1,331 net new OXXO stores; the Health Division opened 180 net new stores and added 620 stores as part of the acquisition of Corporación GPF; and the Fuel Division opened six net new stations. Together, FEMSA Comercio surpassed 24,690 units across formats and markets. FEMSA Comercio deployed more than Ps. 12,800.0 million (US$ 679 million) in Capital Expenditures during the year, with more than 85% of that invested in Mexico, and created more than 21,000 new jobs. Operationally, the Proximity Division delivered solid results in Mexico as well as encouraging trends in its fast-growing international operations, particularly in Colombia and Chile. In the Health Division, we continued to make steady progress in Mexico; saw dynamic growth in Colombia, while Chile had a challenging year; and we began the integration of Corporación GPF in Ecuador. For its part, the Fuel Division increased its total revenues by 2.0% for the year as compared to 2018, even as we temporarily slowed down the pace of station growth.