Fomento Economico Mexicano S. A. B. de C. V.

During the second half of 2020 and 2021, we only expect a gradual and lengthy recovery in FEMSA Comercio's (subsidiary that includes the proximity, health, and gas station divisions) operations that will be mainly driven by economic and consumption recovery although the company's main products should be resilient given their non-discretionary nature. Nonetheless, in the complicated and uncertain business conditions, our revised scenario currently assumes softer results in terms of sales, EBITDA, and cash flows in 2020 compared to previous years. We expect consolidated revenue increase in the mid to high single digit for 2020 versus the double-digit growth of recent years; however, we also forecast EBITDA margins of 15%-16% due to cost efficiencies. The negative outlook on the global

...Weak business and economic conditions due to COVID-19 pandemic will soften FEMSA's results in 2020. The depth and duration of the pandemic is still uncertain, and we forecast the severity of the economic impact from social distancing policies will push Latin America's economy to contract by a little more than 7.5% in 2020, with the second quarter having the largest contraction. Mobility restrictions and social distancing measures imposed by governments, lower oil prices, and the recession have impacted FEMSA's proximity, health, and fuel divisions in the second quarter of 2020 (63%, 20%, and 17% of its sales in 2019). These divisions have seen lower revenues versus the previous year, posting a consolidated sales decrease of 13%. During the second half of 2020 and 2021, we only expect a gradual and lengthy recovery in FEMSA Comercio's (subsidiary that includes the proximity, health, and gas station divisions) operations that will be mainly driven by economic and consumption recovery although...

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