Mexico City, Oct. 18 – Grupo Modelo, S.A.B. de C.V. and Subsidiaries (“Grupo Modelo” or “the Company”), the leading brewer in Mexico and producer of the best-selling Mexican beer in the world, today announced its financial and operating results for the third quarter ended September 30, 2007.
Total domestic volume grew 4.2% and exports 3.0%.
Net sales increased 24.4%.
Operating income rose 21.1%.
In the third quarter of 2007, total volume increased 3.8% to 13.1 million hectoliters. The domestic market registered volume increases of 3.8% in Modelo’s brands and 27.7% in the imported brand portfolio, as a result of solid demand in the first half of the quarter and the impact of heavy rains at the end of the period. Regarding brand performance, Estrella outperformed in the quarter with the highest rate of growth.
Export volumes increased 3.0% compared to the same quarter of the previous year. The volume sold in the U.S. was affected by the price increase implemented by Crown that reached the final consumer at the end of the second quarter; thus, the volume in the third quarter declined 0.8%. It is worth noting that as a consequence of the startup of Crown Imports operations, sales volume in the U.S. as of 2007 reflects the sale of the importer to distributors, while the volume figures in 2006 reflect the sales of Grupo Modelo to importers. Therefore, the volume change is not entirely comparable. Regarding other export markets, Oceana, Europe and Latin America were the regions with the most outstanding growth.
Net sales totaled 18,428 million pesos, which represents a rise of 24.4% compared to the same quarter of 2006. Domestic sales increased 2.7% due to the combination of a volume increase and the reduction in the price per hectoliter of 1.4% in real terms. Total export revenues were 759 million dollars, an increase of 86.5%. The average export price per hectoliter grew 81.0% in dollars, primarily as a result of the consolidation of Crown Imports.
During the third quarter of 2007, Crown Imports, LLC., registered net sales of 675 million dollars and operating profit of 150 million dollars.
The cost of goods sold increased 23.8% due to the incorporation of the storage and distribution costs of the products sent to Crown Imports warehouses, as well as to the increases in packaging for the domestic market and certain raw materials. Gross profit grew 24.9% compared to the third quarter of 2006, while the margin expanded 20 basis points, reaching 54.3%.