Fomento Económico Mexicano, S.A.B. de C.V. (FMX) Q1 2013 Earnings Report, Transcript and Summary

Good morning, and welcome, everyone, to FEMSA's First Quarter 2013 Earnings 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's 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'd like to turn the conference over to Mr. Javier Astaburuaga, FEMSA's CFO. Please go ahead, sir.

Good afternoon, everyone. This is actually Juan Fonseca, just for a second. Welcome to our first quarter results conference call. Javier is on the call, and I will turn it over to him in just a moment, but we wanted to let you know that he is traveling and therefore, you may notice that while we're during the Q&A session, we're actually not in the same location. So I just wanted to give you the heads up on that. Jose Castro is also on the line, as always. So with that, Javier, go ahead, please. Javier Gerardo Astaburuaga Sanjinés: Thanks, Juan, and hello, everyone. As is customary in our calls, today, we'll focus on the consolidated figures for FEMSA and on FEMSA Comercio's results, since many of you probably had the opportunity to participate in Coca-Cola FEMSA's conference call earlier today. As you have also likely seen our detailed results, we will use this opportunity to share some of what we see as highlights and main trends in our business. As we mentioned in our release, we operate across many different markets and sometimes the diverse economic environments we face manifest themselves with particular clarity in our results. This was the case during the first quarter with our operations in Mexico performing solidly, both Coca-Cola FEMSA and especially FEMSA Comercio, but some of our operations in South America reflecting not only challenging operating conditions, but also the impact of currencies that weakened significantly against a strong Mexican peso. In terms of the macro drivers on our presumption of the consumer environment, we see trends that generally carry over the end of 2012. In Mexico, inflation has picked up slightly, while GDP growth and manufacturing activity have stabilized off the recent highs. The business mood is still positive, aided by expectations of upcoming structural reforms. However, we are sensing a slightly more cautious consumer, relative to this time last year. Conditions are more fragile in our South American markets. In Venezuela, as you know, we are dealing not only with the recent devaluation of the currency and pricing inflation with low real growth, while the current post-electoral environment remains delicate. In Brazil, Colombia and Argentina, growth seems to have stabilized but at low levels and inflation has become a concern everywhere except, perhaps, in Colombia. Generally speaking, the macro backdrop is still not very constructive in many of these markets. However, as we have stated before, these types of environments are not new or unfamiliar to us, and we continue to deploy measures and strategies accordingly. Moving on to discuss our consolidated quarterly numbers. Total revenues increased 5% and income from operations increased 2%. On an organic basis, excluding the integration of recently acquired bottling operations in Mexico, total revenues increased 3% and income from operations decreased 3%. For the first quarter, the land label participation in Heineken results represents FEMSA's 20% participation in Heineken's first quarter net income, which was reported earlier today. Staying on the subject of net income, we see that it increased 5% in the first quarter. As we explained in our press release, this increase reflects an increase in FEMSA's participation in Heineken's first quarter '13 net income, combined with lower financing expenses, which more than compensated lower income from operations. Our effective tax rate was 33% for the quarter, very much within the expected range in the low- to mid-30s. And in terms of our cash position, during the fourth quarter, we went from having a consolidated net cash position of MXN 2 billion at the end of December to now having a consolidated net debt position of MXN 6 billion at the end of March, reflecting the acquisition of 51% of Coca-Cola Bottlers Philippines, which was partially compensated by cash generation at both our corporations. Before we move on to discuss our operations, as we have mentioned before, and as you read in our release, we are exploring the possibility of tapping the international bond markets given the historical low long-term interest rate environment. While the decision to actually issue debt will depend on market conditions as determined during upcoming conversations with investors, the general objective would be to increase our liquidity in order to be ready to undertake strategic transactions as they become available. As we have said before, we have a good pipeline of potential acquisition opportunities that are in various degrees of development. But there is nothing imminent and certainly, there is no major transaction in the immediate future that would be linked to the issuance of this debt. So it really is all about capturing the low rate opportunity while the window is out there. Now moving on to discuss our operations and beginning with FEMSA Comercio. We opened 135 net new stores during the first quarter, in line with the previous year. Our objective to reach and exceed 1,000 net store openings for 2013, also in line with 2012, remains very much in place. Revenues for the quarter increased 14%. Same-store sales were up a solid 5%, in line with our medium-term expectations. However, when we break the number down, we see that their average ticket grew 6% and offset the slight decrease in traffic, which is not typical. So let me take a moment here to elaborate a bit on these dynamics because there are a number of things going on there. First, we have the calendar effects. Holy week took place late in the first quarter this year as opposed to early in the second quarter last year, so that would help the comparison versus the first quarter of 2012. Conversely, we had only 1 day less in February from the leap year effect, representing a tougher comparison, so these 2 factors partially offset each other. Second, we have the tough comparison of last year's pre-electoral environment, which is hard to quantify, but clearly a factor, and will continue to be there in the second quarter. And finally, but importantly, we are seeing a clear declining trend in prepaid wireless airtime revenues driven by a significant reduction in the price per minute for the end user. During the fourth quarter of 2012, and continuing now in the first quarter of 2013, the consumer price for wireless minutes decreased substantially due to promotional campaigns all across the board. What this means, ultimately, is that consumers are getting more minutes for the same amount of money and therefore, many of them are coming into the store for a top-up less frequently. This is, of course, positive in the greater scheme of things, as the consumers can reallocate these resources to satisfy other needs; but in the short term, it puts a bit of pressure on our numbers. It is encouraging, nevertheless, to note that a good portion of the impact from the fall in telephony is being offset by the growth in other services and categories. For the quarter, gross margin expanded 100 basis points, again, driven by a positive mix shift due to the growth of higher-margin categories, including services. A more efficient use of promotional-related marketing resources and the better execution of segmented pricing strategies across markets. This margin expansion took place even while telephony's contracting, which is worth mentioning, given that we only book our margins when we sell wireless top-ups and therefore, the category's margin enhancing. Having said that, while structurally we have often been able to deliver some margin expansion at the gross level, this 100 basis points are above trend and we will be cautious in assuming similar performance going forward. Income from operations for the quarter increased a strong 21%, and operating margin posted an expansion of 30 basis points in the face of incremental expenses related to the continued strengthening of FEMSA Comercio's organizational and IT structure, and the development of specialized distribution routes aimed at enabling our prepared food initiatives. Moving onto Coca-Cola FEMSA. Total revenues remained stable and organically, they decreased 2%, mainly as a result of high single-digit revenue growth in our Mexican and Central American division, which compensated for a mid-single digit contraction in our South American division. This contraction reflects the negative translation effect from the devaluation of several local currencies and depreciation -- and the appreciation of the Mexican peso, as well as a volume decline in Brazil coupled with increased marketing spending in Colombia, higher freight costs in Argentina and labor cost pressures in several markets. On a currency-neutral basis, anyhow, and excluding the noncomparable effect of Grupo Fomento in Mexico, total revenues increased 11%. Clearly, Coke FEMSA is facing very different business environments in its operating divisions. While business dynamics in Mexico and Central America are stable, several markets in South America currently present challenges that go from sluggish macro growth to higher taxes and regulatory costs, to weakening currencies. As tends to be the case, Coke FEMSA is making the best of this complex scenario, and we are confident that it will emerge with stronger competitive positions and more efficient cost and expense structures. In the meantime, we must navigate with some short-term headwinds, even as we remain bullish about the medium- and long-term fundamentals of our South American markets, particularly Brazil and Colombia. If you were unable to participate in Coke FEMSA's conference call earlier today, you can access a replay of their webcast for additional details on the results. So wrapping up our comments for the quarter, it was certainly a mixed set of results, but at this point, we believe our objectives for the full year can be achieved. We will, of course, have to keep an eye on macro dynamics in South America, but by the same token, we share the broad optimism that surrounds Mexico, our most important market. And we fully expect the business trends in the rest of our territories to continue to support long-term value creation. And so we continue to push forward with great expectations. And with that, I would like to open, now, the call for your questions. Operator, please?

[Operator Instructions] Alan Alanis with JPMorgan will be the first questioner. Alan Alanis - JP Morgan Chase & Co, Research Division: With the comment you made, Javier, regarding issuing debt, could you provide some -- a bit of -- more color in terms of the orders of magnitude of what you're thinking of? And if you can make any comment, regardless, both Coca-Cola in the United States and Hector, you said that, as it has been said in the past, that there would be something that you would look into when the opportunity arises. I mean, if there was going to be a transaction in the United States, I would assume that this would be Coca-cola FEMSA participating. But I guess, the question that I'm trying to ask is, would this strategic opportunity that you were talking at the FEMSA level would include something in the United States or another developed market? Or any other kind of color or update that you could give us in terms of the thinking of those strategic initiatives, would be appreciated, Javier. Javier Gerardo Astaburuaga Sanjinés: On the nature, magnitude and the tenor of the probable debt issuance, I'd rather not comment a lot. We are going to start, as I said, a roadshow early next week. And I think it's better for us to go and talk to investors before we give any public signal on what we're aiming at. But it shouldn't be a long time for you to find out what we're thinking, but I would just like to reassess the message that we're trying, again, to tap historical low interest rates and very favorable conditions in order to be flexible and ready to tap on opportunities that, hopefully, we can be able to tap in the foreseeable future. In terms of the Coca-Cola U.S.A. potential opportunities, as I'm sure Hector mentioned in his call or what the Coca-Cola Company just signaled, as a starting point in its process to rethink the way they are operating in the U.S. market. A number of very small transactions, already, were announced. And together with that, the message that not only domestic but also international potential candidates will be taken into account for potential candidates for refranchising of parts of the territory of the U.S. And we have said in the past that given the size and the presence in this part of the world of Coca-Cola FEMSA, its financial flexibility and its depth of management, we think it -- we will be looking at any opportunity that makes sense for us and, of course, the U.S. is a market which is very close to our home market in Mexico, and with a little bit of -- or with no prejudice in mind and with a very, very open mind in terms of assessing the opportunity, if presented at its proper time by the Coca-Cola Company. And as we have said also in the past, and it is very clear to everyone, the balance sheet of Coca-Cola FEMSA is pretty strong, so we think that Coca-Cola FEMSA would be able to really face potential opportunities related to the U.S. market and, of course, it all depends on the size and on the conditions that, that opportunity might present and at which point of time, as well. But again, FEMSA, being the controlling company of Coca-Cola FEMSA, also has financial flexibility that if required, can be also put to work in favor of our investments in Coca-Cola FEMSA. So we're not ruling out anything, but at the same time, I'm confirming that within -- that the Coca-Cola FEMSA balance sheet is pretty strong these days to support a potential opportunity in that market. Alan Alanis - JP Morgan Chase & Co, Research Division: Okay. That's very clear. While I have you on the line, the last question on OXXO. I think you did a -- gave a very clear explanation on the issue regarding traffic and the drivers of that lower traffic. Could you expand a little bit of what's driving the ticket being now higher than, I mean, well above inflation, to put it that way? And that will be my last question. Javier Gerardo Astaburuaga Sanjinés: As I said in the opening remarks, if you look at traffic and -- just build 1% decrease we had in traffic for the quarter, compared with the previous trend, it's a reduction on the previous trends. But it can be explained, we think, and we measure tickets on an occasion basis, and there's a very high correlation with, again, the amount of times the consumers are visiting stores for top-ups related with airtime. So we feel confident that we're doing a good job in, again, dealing with the different needs of consumers, but there's a very, very specific reason on the traffic performance. On the ticket, if you look at it also against past trends, it's slightly higher, and this has a lot to do with the mix of the categories that we are developing, mostly, regarding food and some others, which are -- an occasion which is very special, which is called gathering or reunion. And so that, together also with the impact of the rollout we did last year, in which now credit cards are being accepted in the 10,000 stores that we have all across the country is, we think, having also some -- even though minor, but an effect, also, as well. And of course, if you look at, again, the -- I would say, the pricing power that most consumer product companies in Mexico have been exercising in the past months also is a factor in which, again, people are pretty much either, at least, increasing prices with inflation or everybody doing the job in trying to build a healthier and stronger pricing, working around the mix of products that they sell and we sell to our customers in the stores. So I would say, it's a little bit of all these reasons why we're looking at an uptick on the ticket amount for the quarter.

And our next question comes from Karla Miranda with GBM.

Javier, I had a follow-on question regarding -- I know that you've been very specific on explaining what happened to the traffic during the first quarter. I'm just wondering if we should continue this downward trend in the quarters to come and how's April performing. Javier Gerardo Astaburuaga Sanjinés: It is hard to say, going forward, what's going to be the performance of traffic because as has been the story of OXXO, you have what I would call different course of development of different value propositions. So hopefully, we're able to, again, catch up with declining trends on some categories, with increasing trends on some others, and we are again, as we speak, looking a little bit on that. So going forward, I would say, it will depend a lot not only on the dynamics of the airtime category on itself because of the promotional activity or the pricing strategy of the key players in Mexico, but it will depend on how well we do our job in terms of, again, bringing in new offerings into the store. And in that regard, the service category growth is, I would say, we're enthusiastic about how it's been developed once we are starting to roll out new banks into the solution that is accepted in the stores. So that, coupled with fast food and gathering occasions and with daily replenishment, we think that we're going to be able to, hopefully, continue to build same-store sales on a balanced approach within traffic and tickets. And April, of course, I'm not commenting a lot on this, but you will need to bear in mind that last year, we had Easter in April and now we don't have that affect. So with that, I think, I'm -- telling already a lot. And as I said in my opening remarks, the second quarter, April, May and June, were months in which pre-electoral presidential elections activity was pretty much in favor for consumption, so we are looking at a tough comp for FEMSA Comercio for the second quarter. But all in all, as I said also in my opening remarks, we feel very comfortable in, again, achieving our results for the year that we have set ourselves at the end of last year.

And our next question comes from Lauren Torres with HSBC.

I guess my question, also, is somewhat of a follow-up to the 2 previous questions. I think, Javier, when you said that you're expecting a slightly more cautious environment at the consumer level this year versus last year, that was specific to Mexico, is that correct? Javier Gerardo Astaburuaga Sanjinés: Yes.

So if that's the case, I'm just trying to understand, now that you expressed the fact that, obviously, last year was a strong year. So was that more of a respect on a comparative basis? Or you are seeing some changes how people are spending, where they're spending..? Javier Gerardo Astaburuaga Sanjinés: No, no, it's much more, Lauren, on a comparative basis. And again, we had a number -- I didn't mention weather in the first quarter because we had, I would say, a mixed bag of weather all across Mexico particularly very, very cold, not so much wet, particularly in Northwest and Central North as well. But there are a number of effects built into last year's performance. And the start of the year, we have to remember as well that every 6 years, when there's a change on the regime of the president in Mexico, there's kind of a low start in terms of budget allocations and infrastructure building, and a lot of projects are either finalized or at least reviewed. So also, that's part of why we're thinking that consumers are going to be a little bit more cautious, particularly, at the beginning of the year, as we have seen in the first quarter. But again, we are very, very optimistic about the very fundamentals of the country going forward. So we will, hopefully, have a much stronger second half of the year and, of course, 2013 because of a number of things that are taking place in the country, should serve as a very, very good platform for growth for the medium and long term as well.

Great, that's much clearer. And if I could also just ask about the CapEx spend. I guess, you mentioned in this quarter that some of the increased spend was more related to Coke FEMSA. Just curious if there's any comment, directionally, on what you're doing at FEMSA. I know with the store openings, you're somewhat on track for your long-term or your annual goal of 1,000-plus stores, but is there's anything new with respect -- any updates on how you're spending and where you're spending that incremental dollar in -- at Comercio, that would be helpful? Javier Gerardo Astaburuaga Sanjinés: You'll note that the structure of the CapEx program for the year is based on the number of stores we are targeting to open for the year and the amount of real estate we will buy, hopefully, and the amount that -- the number of distribution centers we will open and the increase in the specialized distribution routes. The composition of the CapEx for the year for FEMSA Comercio is pretty much similar to the one we exercised in 2012, both in its breakdown and in the amount, in the total amount that we're going to be exercising or we're doing. So there shouldn't be any change there. Basically, the increase, the substantial increase is coming more from Coca-Cola FEMSA, particularly, with the building of 2 plants that we announced last year. We will be building -- or we are actually building in Brazil, and we will start very, very soon to build in Colombia as well.

Our next question comes from Lore Serra with Morgan Stanley.

I'm sorry to kind of harp on a similar theme, but you were leaving me with the impression that the traffic would have been more negative in the quarter because of the -- the Easter shift was probably more important than Leap Day. So as you think about going from this traffic growth of 3% to a number that is negative, and that ticket's gone up a lot, and the gross margin's gone up a lot, is there any concern on the operator's part? I mean, you can see the segment data, you can see the specific data more than we can, that there's been, I don't know, too much pricing taken by some of your suppliers? I mean, what's driving that gross margin up 100 basis points? Javier Gerardo Astaburuaga Sanjinés: No, as I said -- and you're right, we look at the, I mean, the 8 million tickets we have on a daily basis, and we broke down those by consumption occasion and time of day and specific store, and we are not really seeing anything that calls for a, I mean, radical shift on habits of consumers or customers going to our stores. There is, again, if you look at, I mean, the tariffs of mobile airtime in Mexico starting in maybe September, October last year and continuing to the first quarter, there was a tremendous level of discounting taking place in the market. So again, if a person is -- used to call -- could use maybe 100 minutes for every week or every couple of weeks and now he's getting 30%, 40%, maybe more minutes for the same price, he's going to go to the store on a less frequent basis. So we're looking at traffic numbers based on the categories and operations that we're serving, and we have very, very healthy and strong numbers, still, in a number of categories. And again, we have this slight decline in the categories, particularly, that relates to the airtime top-ups that is taking place, we think, mostly because of, again, the tariff dynamics that is taking place in Mexico, which is hard to say, again, what's going to be in the evolution going forward. But continuously, we have been able to, again as I said, deal with declining trends, either a short or longer term on some categories, building precisely new offerings into the store. And as I mentioned, services is one category which is bringing some additional traffic, still, at the very early stages; still, a lot of consumers not really acquiring the habit of going to OXXO and do their payments of services or making deposits or paying credit cards and the like. But we think that as time progresses, people are going to find it much more convenient to go to a 24/7 convenience store, which is very close to their -- the place they work or they live, as opposed to having to go to a branch and spend, maybe, some time there in the line in trying to make these payments in a bank branch. So all in all, I would say again, we have a good degree of comfort that we still have a good and healthy growth in both indicators, ticket and traffic. And I don't think that, again, consumer product companies are going above what they think is the purchasing power of consumers in Mexico these days. If you look at the way salary renewals or negotiations or increases for the labor force in Mexico are behaving these days, most of them -- organized labor are seeing reviews just slightly above inflation, so there are some consumer goods companies that are taking a little bit of pricing. But as I said in my comment as well, most of them are working more, building either premium products or working around mix in terms of packaging, trying to drive revenue management such as we do in Coca-Cola FEMSA all the time, so I don't really have a concern on, maybe, people being too greedy on pricing at all.

Our next question comes from Alex Robarts with Citi.

I have 2 questions. First, on the OXXO operations. Can you build -- drill down into the OpEx and specifically, the selling expenses? And as a percentage of sales, I mean, they've creeped up a little bit, and I'm just wondering, you make an interesting reference to specialized distribution routes with the whole prepared food initiative, and is it safe to -- or can we assume that maybe some of this bump-up in the selling expenses is measurably related to this rollout or I guess, the prepared food project? And specifically, where are you in the prepared food project? Sandwiches, a lot of new products coming online, but as far as the penetration and how you're doing with some of the baking and kind of -- and the facilities that you have up in Famosa in these areas and in the country that provide support to the initiative, it would be great if you could give us a sense where you are in that process, and do you think it gets to be prepared food more or less than 10% of your sales on an annual basis? So that's the first one. The second one is related to the stake in Heineken. I mean, the shares have been up 20% year-to-date. I guess, today, we see that first quarter had a 5% drop in volumes on a consolidated basis. And the question, really, I have is about the selling discipline that you guys have on the stake. You can sell some starting this quarter, you're clearly keen to raise some capital for a project that we'll -- I guess, we'll find out at some point. But in other words, does it make sense to trim your stake there and kind of just revisit your thinking, really, vis-a-vis the sale discipline that you might have or not to want to exercise regarding Heineken's stake? Javier Gerardo Astaburuaga Sanjinés: First on the OXXO piece, yes, part of the explanation of the growth on selling expenses has to do with this incremental scope of having special routes going to the stores and by that, I mean cold routes. So having a cold chain capability in order to properly serve the food in-store occasion is critical for us for the long term. And so a little bit of the increase, small increase is due to that, but if you see we have been able, really, to again manage growth in selling expenses slightly below the growth in gross margins. So we have been able to keep on bringing leverage to the bottom line as we grow the top line, so we, hopefully, are able to continue doing that. But in terms of the penetration of this offering, we are at the very, very early stages, as I have said in the past. We basically have just a food processing center in Tijuana, which we opened last year, late last year, which we are still on the very, very low level of utilization. We are, I would say, still in -- not necessarily in the test stage, but on the penetration stage or mostly stores which are on the state of Baja California and Sonora and Sonora Norte, and this is pretty much the only food processing center that we have built. We also had, from a very long time ago, a very small one in Ciudad Juárez that came with the acquisition of a number of stores we made in that city a number of years ago. But this is really the first effort that we have in place. So the penetration is very, very slow, and very small, still. And the development of the category within the store is still very, very small as compared with what our long-term objective is, which is significantly higher than the one we have today. But as I've said also in the past, this is not as simple as just bringing new products and updating them in the catalog and scanning product, barcoding in the cashiers of the 10,000 stores. This is a much more complex operation that involves production and assembly in the -- at the store level. So it'll take a long time, I think, for this to really make a real dent on the -- both on the top line and the bottom line, and the trick here is, I think, is to take it as fast as we can but as safe as we can to make this a real success. And on the Heineken stake, as we've said in the past, Alex, things like the ones you mentioned, and a number of other alternatives, are all on the table. We, of course, have now -- starting this month to plan for the ability to start selling part of our stake in Heineken. I have been clear on this that whatever we decide to do will be measured for our judgment on the value creation perspectives of our investment in Heineken. We are very enthusiastic about the profile of the company and the perspective of the company. Of course, these are very, very rough times for companies which have, as Heineken does, a large exposure to the European market. But performance in the rest of the world, we think, all things considered, are still very good. So whatever we decide to do, as I said, with the Heineken stake, will have to pass the test of being the right thing for FEMSA shareholders for the long run, and that's basically the only thing we have in our mind when we assess the alternatives that we have regarding our Heineken stake. As for the past 3 years, we continue to behave and to present our perspectives to the Heineken board, thinking on the benefit of the company on the first place. And if we do that I think we, as FEMSA shareholders, will benefit definitely, with this investment which has proven to be very successful for the past 3 years.

The next question comes from Alex Miguel with Itaú. Alexandre Miguel - Itaú Corretora de Valores S.A., Research Division: My question is just a follow-up on the traffic and also, I think I missed it in the beginning, but I just wanted to understand your views going forward for how you expect traffic to behave. I understand you mentioned that you still have other initiatives to bring traffic to OXXO, like with services and some other things, but I'm not sure if that will take place already throughout this year. So how do you expect traffic to behave in the following quarters and why? And my second question is mainly related to your initiatives on the drug store and the pharmacy segment. If you can share with us where you are and what are your plans, also, for the following quarters, will be excellent. Javier Gerardo Astaburuaga Sanjinés: Sure, Alex. Again, looking at the perspective of the traffic development for the rest of the year, I think that it will have a lot to do with, again, the pricing dynamics in the category, which is affecting traffic the most, as well as the success that we have in launching the new initiatives regarding fast food offering and services and, of course, leveraging our leadership in managing categories such as refreshment, ready-to-drink beverages, alternative beverages and the like. So I would say that we would need to look at, again, how pricing dynamics in the category indicates and hopefully, we're going to be able to again develop new value propositions to consumers that can compensate whatever negative effect we might have because, again, of these pricing dynamics taking place in the telephony category. And in terms of the pharma, Alex, we are very close to the time limit that the Antitrust Commission in Mexico has for declaring or giving the resolution, which is basically the only, the last, final requirement we have for closing this transaction. And we have complied with all the processes, information, inquiries that we have been subject to, and we are very optimistic and confident that in the very, very few days or coming weeks, we would be able to hopefully announce the closing of the transaction and start the work of integrating this new venture in the small-box format arena in Mexico. And as we said in the past, this is the starting point of a strategy that, hopefully, will combine going forward, more acquisitions in different geographies, as well as organic growth on a reviewed value proposition format for drugstores in Mexico, which is what we're aiming at. So that's basically the status of this initiative, Alex.

And moving on to Antonio Gonzalez with Credit Suisse. Antonio Gonzalez - Crédit Suisse AG, Research Division: I have 2 questions. The first one was just a follow-up on the OXXO traffic situation. I just wanted to ask if you can remind us first what's the average ticket at OXXO. And then, maybe if not numerically, at least, maybe if you have some qualitative comments on -- of the 8 million transactions that you mentioned earlier that you have at OXXO on a daily basis, how many do you think are actually related to mobile telephony, whether that is the only item related -- involved in the transaction or if there's, probably, more items involved? And I'm trying to understand, qualitatively, if you're seeing customers already relocating those pesos from the mobile telephony category to some other category inside the OXXO store. That's my first question and then, I just have a quick follow-up. Javier Gerardo Astaburuaga Sanjinés: Sure. The average ticket is slightly below $2, Antonio, that's pretty much what it is and, of course, it changes a little bit from geography to geography, being higher in the North than in the South; and in Central, pretty much average. But on the second one, we don't really disclose percentages of this kind of information. We think it's competitive-sensitive. What I can share as I said is, again, in retail, you compete in particular, in formats such as the one we're present more than frontally on the margin. So this situation of the pricing dynamics of the category is also taking place at a time in which you are not finding a lot of other retail offerings providing this service of airtime to consumers. So when we look at, again, at how good we are at satisfying different consumer needs that we are trying to serve on a daily basis to our customers, we are seeing strong performance in those categories in which we're bringing innovation -- and innovation, and not only innovation, but promotional activities, which are well designed and which are attractive to customers. And as I said, the trick here is trying to balance sometimes from time to time, declining categories or categories which are in the middle of transition to a new future state with new emerging wants. And that's precisely what we have been doing in the past with OXXO, going from a very, very simple offering, which was pretty much skewed, basically, to beverages and snacks and things which are very, very basic to, put it one way to a much more sophisticated and more importantly, segmented offering based on the location of the store. So it's not only a matter of putting just products which we might think could be interesting for our customers but also looking at the nature of the customer needs that is willing to be satisfied on a certain location within a city or a town. So again, my main comment here would be the name of the game is continue to anticipate consumer needs and try to satisfy them in a better way, and we think that, again, we possess very, very strong characteristics, which is, we have by far, the largest number of stores which are closer to our customers. So all we have to do is to think of what their needs are and try to satisfy them better than anybody else, to continue to build healthy numbers, both on traffic and tickets, so that's what we're doing. Antonio Gonzalez - Crédit Suisse AG, Research Division: Perfect. And secondly, if you can just remind us to a particular kind of contractual relationships that you have with both Heineken and Coke FEMSA. First, on the OXXO and Heineken exclusive, can you remind us whether there's contractually any compensation or exit strategy, so to speak, if the regulatory environment in Mexico forbids exclusive agreements between brewers and retailers at some point in the future or there's nothing contractual? And b, I wanted to also ask if you can remind us whether on the new territories that Coke FEMSA has acquired, are you extending the OXXO, Coca-Cola exclusive to those territories? Or are those just part of the former Coke FEMSA or the original, so to speak, Coke FEMSA territory in Mexico? Javier Gerardo Astaburuaga Sanjinés: Sure, Antonio. Now on the first one, we were very clear when we announced Heineken-FEMSA Cerveza transaction 3 years ago. We have a contractual agreement which was looked by the Antitrust Commission back in those days as part of the transaction, which still is a good 7-year going forward, that calls for exclusive sale of Cervecería Cuauhtemoc Moctezuma products in OXXO stores, so that's, again, out there in the open since 2010. And it's working great, I think, for both companies. And on the other part, on the OXXO, we have a number of regions in the country in which we not only sell Coca-Cola products but also a number of other competitors' brands as well. And we are not increasing the number of stores in which we are selling only -- on exclusive basis, Coca Cola products but maybe not the other way around at a very, very fast pace. But I would say that we have more instances in which we are now expanding the variety of products as opposed to reducing the variety of products in the OXXO stores in relation with carbonated soft drinks and noncarbonated soft drinks without alcohol. But in beer, we have a -- still, a 7-year exclusive agreement with Heineken. Antonio Gonzalez - Crédit Suisse AG, Research Division: Understood. And on the Heineken agreement, there is no provision, so to speak, that stipulates what explicitly happens if there are regulatory changes. I mean, I understand the agreement between yourself and Heineken, but if there is any regulatory change or something like that, that wouldn't allow for exclusive agreements between brewers and retailers, there's no explicit provision yet in -- or there's no explicit provision at all in your contract with Heineken, is that correct? Javier Gerardo Astaburuaga Sanjinés: Well, I would limit myself to say that we have a 7-year term, still, there. And we feel that there are the conditions for nothing changing in that regard at all. That's the way I will put it, Antonio.

Ladies and gentlemen, this is all the time we have for questions today. I will now turn the call back over to Mr. Astaburuaga for posing additional remarks. Javier Gerardo Astaburuaga Sanjinés: Well, thank you, everyone, for taking the call. And goodbye for now and see you or talk to you in the next quarter. Bye now.

Thank you. 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.