Hello, and welcome to FEMSA Fourth Quarter 2025 Conference Call. My name is Augier, and I'll be your moderator for today's event. Please note that this conference is being recorded. [Operator Instructions] I would now like to hand the call over to Mr. Juan Fonseca, Investor Relations Director at FEMSA. Please go ahead, Juan.

Good morning, everyone, and welcome to FEMSA's Fourth Quarter and Full Year 2025 Results Conference Call. Today, we are joined by Jose Antonio Fernandez Garza, FEMSA's CEO; Martin Arias, our CFO; and Jorge Collazo, who heads Coca-Cola FEMSA's Investor Relations team. The plan is for Jose Antonio to open the conversation with some high-level comments on performance, followed by a strategic overview and an update on our priorities. Next, Martin will provide more details on the results. And finally, we will open the call for your questions. Jose Antonio, please go ahead.

Thank you, Juan. Good morning, everyone. Today, I would like to split my remarks in two. First, we will focus on operational results and trends, highlighting some important points and takeaways. Then we will address more strategic topics, including an update on our priorities as well as some relevant structural changes we are putting in place as we prepare for the next stage of growth. Let me begin with the performance of our business during the fourth quarter, particularly at OXXO Mexico. Back in October, during our previous quarterly call, we mentioned we had observed what seemed to be an inflection point in the same-store sales and traffic trends that made us optimistic about the fourth quarter and beyond. As you saw in the numbers, this improved trend indeed continued through the end of the year and allowed us to close 2025 on a positive note with same-store sales for Proximity Americas approaching the mid-single-digit growth range at 4.4% and traffic that while still negative, 0.6% was markedly better than what we saw earlier in the year. While we are not satisfied with the year's performance, as we look back at 2025, we have gained many lessons, and we can also take some encouragement from the fact that initiatives put in place in the second half of 2025 have begun to show results. We began 2025 with a challenge. Traffic at OXXO Mexico was falling by mid-single digits, and it was not following the cyclical recovery we had expected. Initially, we attribute it to the economy and the typical post-election hangover. Accordingly, it took us a little while to diagnose the causes. But once it became clear to us that we had a competitiveness issue versus the traditional trade around some of our core categories, the team designed and put…

Thank you, Jose Antonio. Good morning, everyone. Let me begin by walking you through FEMSA's consolidated financial results for the fourth quarter of 2025. During the fourth quarter, total revenues increased by 5.7% year-over-year, reflecting a combination of improved trends in Proximity Americas and continued growth outside of Mexico, particularly in Coca-Cola FEMSA and Valora. Operating income increased by 8.5% as cost containment initiatives offset gross margin pressure. These results reflect, for the most part, a recovery in the fourth quarter relative to the first 3 quarters. Net consolidated income for the quarter amounted to MXN 12.7 billion, representing a 33.6% increase compared to the fourth quarter of last year, driven mainly by an increase in income from operations of 8.5%, nonoperating expenses that fell by 62.7% and a decline of 26.6% in income taxes due to nonrecurring items, which were partially offset by MXN 830 million of foreign exchange loss from our U.S. dollar-denominated cash position compared to a gain of MXN 2.7 billion in the comparable period and lower interest income as a result of a reduced cash position during the period. Turning to our operating results. Starting with Proximity Americas. During the fourth quarter, total revenues increased by 5.3% or 6.3% on a comparable basis, mostly driven by same-store sales growth in Mexico as well as top line growth in OXXO Colombia and Peru. Gross margin stood at 48.1%, reflecting a 40 basis point expansion as a result of an improvement in OXXO LatAm, driven by increased scale and more disciplined commercial negotiations with suppliers. Operating income increased by 7.7%, while operating margin was 12%, reflecting the initial benefits of our overhead reduction and productivity initiatives, along with disciplined expense management, which allowed us to translate most of the gross margin expansion all the way to the…

[Operator Instructions] Our first question comes from Thiago Bortoluci from Goldman Sachs.

Antonio, congrats for the results. Martin, thank you very much for your time. I have two questions here, right? The first one is on the balance between growth and profitability, particularly in OXXO Mexico, right? I remember last earnings call, Jose Antonio, you mentioned a number of initiatives to improve traffic and protect demand. Obviously, a lot of this has been already playing out. But still in this quarter, you had better gross margins and lower traffic at OXXO Mexico, right? So my question is, going forward, how ready do you think the assortment and the value proposition in Mexico is already set? And if there is any low-hanging fruit or any clear initiatives yet to be done, if you could help us just understanding particularly in which category that might come from? And then my second question, maybe for you both on the initiatives and restructurings, right? Obviously, we understand directionally what you're trying to do here. But just on the magnitude, right, this is relevant. Martin mentioned like MXN 800 million plus another MXN 1 billion from the fit for purpose and Spin. This is like almost 3% of your net income, right? So I think the question here is, what are those low-hanging fruits and how possible this kind of efficiencies can exist in a company so efficiencies can exist in a company so efficient as FEMSA. Why hasn't this been done before? And what makes you confident that going forward, this could be fully executed on track? Those are the questions.

Thiago, thank you. Very complete and full questions. I'm happy to address them. Both, I will address the first one, and then I will let -- I will address a brief thing on the second one, but I will let Martin complement me. On growth and profitability, if you look at the full year of 2025, to me, it was a year that left me disappointed. It was much better the second half of the year. So I am very happy with the turnaround that we were able to implement, but I am much more obsessed with bringing profitable traffic and growing market share in our core consumer occasions than on short-term profitability. And obviously, I am much happy of how the year ended on the fourth quarter because it looks like we're turning -- taking a turn. And I am very happy with how the year started. I don't want to give any spoilers, but we see the trend continues upwards in terms of traffic, and that keeps me optimistic. But our obsession is not profitability -- just for profitability per se. Our obsession is we are about 10% of the consumer occasions we address. The total addressable market is huge and OXXO -- should remain the favorite part of the Mexican consumer for not only our core categories like impulse, like tobacco, like beer, like soft drinks, but more and more other consumer occasions like breakfast and coffee, like daily replenishment, which we are already playing there, but we are not playing to win as much as we want. And that's what's going to be our obsession. To be able to give you a number, it's tough. What I do see is that there's still a lot of margin expansion to be gained from our core supplier partners.…

Yes. I mean, as to your broader question of this, why now? And look, I've been around the block a long time with different types of companies. This tends to happen like this in terms of waves. You go through phases where you're making best and you're expanding and you're building capabilities. And as you begin to see the results of that, you naturally prune. And with Jose arriving to the seat of the CEO, he wanted to give us a renewed focus on this issue that he had already started at Proximity. Also with his arrival and given that the structure we ultimately decided to implement, which was to collapse the P&H division with FEMSA Servicios, that also created a new opportunity that didn't exist before when we had decided to maintain that division. As to the figures and the numbers, it's just very important to note, there's two numbers. There's one that will tend to be reflected more in Proximity Americas, which has to do with the fit for purpose, which was announced and we discussed for the first time last year. And then that should be impacting in Proximity Americas generally throughout this year as it gets implemented and rolled out. And some of that also gets reflected in Salud because I also mentioned it was in Salud, so some of that will be seen in the overhead expenses of Salud. The part that is at FEMSA Corporate is a combination of two things. It's a combination of reduction in costs. Definitely, there has been a net reduction in FTEs throughout the organization, particularly relating to the merger of P&H and FEMSA Corporate. Some of this has to do with Spin. So it will be reflected also at FEMSA Corporate because FEMSA Corporate is the one that consolidates the results of Spin. And in the case of Spin, it's not only a significant tightening of costs, which is directly related to the narrowing and focusing of the strategy and the ambition of Spin. As we mentioned on the call and in the press release, we're postponing the license. Premia will no longer be offered to third parties outside of the OXXO ecosystem and...

For the FEMSA ecosystem.

The FEMSA ecosystem. And we've also narrowed some of our efforts on payment platforms in small mom-and-pop stores. Some of these things have been delayed or postponed for the foreseeable future until we have greater visibility about the payment platform in the store, the credit initiatives. So also part of what's included in that figure is our expectation that the losses at Spin should be coming down. because of all these cost reductions, but also because we expect the momentum of the business with this renewed focus and alignment to improve. Obviously, that is a sort of a view about what will be the improvement in the top line performance of Spin. So it's a little bit harder to rely on because it depends on a lot of external things going right as well.

Our next question comes from Ricardo Alves from Morgan Stanley.

My first question on OXXO. I think that another impressive performance on the gross margin. It's great to see that. In our conversations, we've seen some people more concerned about financial services in the long term. So I wanted to think about your gross margin performance and financial services in taking advantage of all these long-term strategic initiatives. I wanted to think about that in the long term. Are there main initiatives that you're already working for 2026 as we speak to kind of defend your position and to remain relevant. The two main components of the gross margin that we always discuss, commercial income and financial services, I think that commercial income is easier for us to understand given your physical presence, given the World Cup this year and et cetera. But -- so perhaps my question is more directed to your strategy around cash in and cash out. We've been talking about remittances for the past couple of quarters. So an update here would be great. And then I'll ask my second question later.

So as you say, commercial income is still early and growing, and it's a huge source of growth. And I think we're just scratching the surface in terms of what we can do with retail media and other commercial income projects. In terms of financial services, look, it's still -- it's growing on traffic or if you blend that all together and if you put even top-ups for cell phone, this thing is driving growth. It's growing traffic at same-store sales level. It's accelerating. We just put Banorte as part of the [indiscernible] network, and it's driving tremendous growth. We see the need and the consumer demand needs for payments, being able to use the OXXO network as an ATM is still -- and I think it's going to be for the foreseeable future. If you ask me long, long term, that's in a way, and I would say we haven't even scratched the surface on what we can do with remittances. But we've been -- we keep installing the cash machines in more and more stores. And I think there's still a huge opportunity for us to capture market share in remittances. Long, long term, it is obvious that as people go more and more into digital, some of these services will fade or will reduce as we are seeing with cell phone top-ups reducing and going more into digital payments. And I think that's where Spin plays a huge, a critical central role within OXXO, and that's why the decision to turn it back into the OXXO ecosystem. If you look at Spin, Spin is a phenomenal fintech, but we've underdelivered in [indiscernible] making it a useful tool to bring people into the store. And I think Spin's value really does not come from choosing between OXXO or…

It does, [indiscernible]. Should I ask my follow-up now or go back to the question queue?

Yes. Please go ahead.

Yes. Yes. The other one is probably for Martin. I think that a helpful summary, Martin, that you gave on shareholder distribution, strong year in 2025. Congrats on the execution there. As we're thinking about 2026, however, we've ran a couple of sensitivities and we get easily to a potential excess cash beyond $3 billion. I'm not saying that this is the number that FEMSA is going to be distributing to shareholders, but it seems to us that the excess cash balance by the end of this year could be significantly higher unless some of the basic assumptions that we saw in 2024 and 2025 could have changed. For instance, I don't know if maybe the potential ticket for M&A is higher than before or maybe if the 2x target of leverage, maybe if we stay below 1.5, 1.7, that would be okay in the longer term. So I just wanted to provoke you a little bit more here. We seem -- it seems to us that the excess cash position could be significantly higher. So I just wanted to hear your thoughts on that.

Sure. I mean without trying to understand your number on this call in real time, which would probably not be prudent or helpful, I would remind you that given the extraordinary $1.3 billion that we've already committed to distribute, the $300 million in buybacks -- and let's just assume the Board approves, which I don't think is a difficult assumption to make, that the dividend -- ordinary dividend will be consistent with what we paid last year. We're talking about easily $2.4 billion, $2.5 billion being paid out this year, March to March. That's nothing else happening. So if for some reason, we do spectacularly -- so my estimate of excess cash is less than yours. And number two, if for any reason, it is what I expect and/or even better than I expect, and we will reserve the right during the year to do more buybacks, announce another extraordinary dividend. So we're not foreclosing the possibility. It just seemed given how close I expect to get to the 2x net debt to EBITDA that now we're just really, to be honest, playing with some decimal book points as opposed to -- and I don't need to be that precise because I have the flexibility and the company has the flexibility during the year to buy back more shares or call a special meeting -- shareholders' meeting and declare another extraordinary dividend. But I'd be happy offline to talk through numbers and try to understand where your $3 billion comes from.

Our next question comes from Rodrigo Alcantara from UBS.

Congratulations on the results. So two questions. The first one on the fit for purpose, amazing what you are doing there. Just for the sake of the conversation, I know that you of course have been in the road talking to investors. And as a frequent answer that you have -- a frequent question that you have received is in relation on how KOF fits into this new structure that you are envisaging. So my question is precisely to hear from you now in the call like what you are answering when you received this question about KOF within this fit for purpose. And my other question would be, very quickly, do you have any early comments on the unfortunate events that we have seen in terms of security arising to from what happened 2 days ago in Jalisco, right? We have seen some news flow there about x number of stores being affected. So any commentary on that would be helpful.

Thank you, Rodrigo. These are, as you say, very relevant question. The first one being very frequent one. The second one, I hope it's not -- it's never asked again. But on the Coca-Cola FEMSA side, as you know, we are always evaluating possibilities for all of our businesses. And we do not see ourselves as a conglomerate. We are very focused on what we bring value. We love these two -- our businesses, our main businesses where we are, and we see huge future ahead of them. And we've proven to you guys that we are pragmatic. We are a 135-year-old company, or that we started with beer. And we don't -- other than the huge amounts of beer we sell from many brewers in OXXO, we are not into beer anymore, and we will remain ourselves very pragmatic going forward. If these 2 companies, Coca-Cola FEMSA and Proximity or retail were 2 separate companies, would you consider merging them? The answer is absolutely no. Now the possibilities of separating has a lot of implications, a lot of things that we're going through, a lot of analysis that has gone through our minds. So I would let the comments there. For now, the structure that we have works great for us. And if something changes, we would address it at the appropriate level. On the second thing, Rodrigo, obviously, it was a very sudden and unfortunate event in the last couple of days. I do want to take a minute first to recognize the heroic and incredible work done by many of our employees and frankly, customers. We've received dozens of videos, comments, memories of people filming, protecting our stores, protecting our collaborators. We have a heroic employee that basically tried to put her life at risk to save…

Our next question comes from Alvaro Garcia from BTG Pactual.

I have two questions. The first one on the restructuring. Martin, I know you've run through it. I just kind of wanted to walk through the numbers. In the past, you've mentioned a cash burn at the corporate level of almost $200 million, a cash burn at the Spin level of around $150 million. So -- and then today, you mentioned the MXN 1 billion and the MXN 800 million. So I was wondering if you could just clarify if it's MXN 1 billion -- if it's MXN 1 billion plus MXN 800 million. I know some of that might be at Proximity Americas. But I guess at the corporate level specifically, how should we think of what used to be that cash burn? What might that look like on a pro forma basis into 2027? That would be very helpful. And then will Spin formally be merged into OXXO? I know that has relevant sort of fiscal implications. So that's my first question. And then I have a very, very quick follow-up, which I can ask after very quickly.

Sure. Let me -- Spin will not be merged into OXXO. There will be activities that were undertaken at OXXO and Spin that will be centralized in one of the 2 businesses. But Spin will remain as a separate distinct operating unit with its own budget, its own routines for management and its own support functions in order to ideally protect the unique capabilities that have been built around that business. Number two, as to the cash burn of Spin, in effect, there are -- the way we account for the cash burn of Spin is in a very conservative fashion. So that $200 million figure coming down to $150 million is a figure, which is Spin stand-alone. And what does that mean? Given our -- the transfer pricing rules and allocation of revenues and so on, there is a formula pursuant to which Spin has to share the revenues that are generated from certain service offerings that Spin provides that use the store. And it has to pay for certain services that are executed in the store by the store employee. So that number, just to put it in its context, is a very conservative way of measuring the cash burn of Spin on a stand-alone basis. On an ecosystem basis, it's significantly lower than that. And I'll give you a prime example. Spin by OXXO is -- generates a cash burn at Spin. But when you look at the ecosystem of all the payments that are executed in the store through Spin by OXXO, which arguably might never be executed had not Spin by OXXO existed. When you look at it, that business, for example, is breakeven, is easily breakeven. We do expect that cash burn to decline. So from the $200 million to $250 million, you should continue to see it come down. Some of this will be difficult to account because when you see it in others, there will be eliminations, accounting eliminations, which will counteract some of the effects. And we will do everything we can to give visibility and transparency on this as we progress throughout the year, and you ask us the follow-up question, how we're undergoing on this. And yes, the 2 figures are complementary of each other. In other words, there are some. There's MXN 800 million at P&H -- I'm sorry, Proximity Americas, which relates primarily to OXXO Mexico, but also includes -- and I should have been maybe a little bit clear, it does include an amount for Salud, which is basically cost reductions across the businesses, but very focused on overhead, but it also included savings within the operations. And the MXN 1 billion refers primarily to savings at FEMSA Servicios, FEMSA Corporate from the collapse of the 2 structures, P&H division and FEMSA Servicios. It also includes the momentum we expect from Spin at its top line. It includes also significant savings at Spin from the narrowing and focusing of our ambition.

And it includes -- I'd imagine it also includes additional head count from -- that you're moving towards the corporate level. That's also included in that MXN 1 billion figure.

Yes. Yes. Well, again, it's the net savings from moving some of those people over here plus the people here and then the net savings book we will execute.

Awesome. And then just one very quick one on OXXO. Now it's super helpful. Really appreciate the color, and I will be asking that going forward. On revenue growth at Proximity Americas, it grew 5.3%. Same-store sales was 4.4%, sort of the lowest gap we've seen between same-store sales growth and total revenue growth in quite some time, that productivity factor. If you could comment on that, that would be very helpful.

Alvaro, this is Juan. Yes, I think there's a number of things at play there, but a couple of them are some of the growth is actually also happening now outside of Mexico. So we saw a really good quarter from LatAm, and we had some currency headwinds there. So if you look at the comparable number, as you can see in the table, it's a little bit higher. But there's another factor, which has to do with the openings and closings. And we mentioned we are closing a fair number of stores in different markets because they are, for lack of a better word, mediocre. But they're selling, and we're replacing them with hopefully better stores, but that are brand new, right, or much newer. And so I think in some ways, we're exchanging potentially better stores, replacing stores that clearly kind of exhausted their potential and never really reached what we expected. And so I think that's also playing into that number. I think we're going to do a deeper dive. I'm happy to take this offline because you're right. Normally, you would have expected something perhaps in the order of 8 as opposed to the 6 that we're showing.

Our next question comes from Bob Ford from Bank of America.

Jose, how should we think about the strategy in Brazil? And how does it change following the separation from Raizen? And did your current same-store trajectory in Brazil, how long will it take you to cover all the central administrative and overhead expenses? And where do you see the most promising category SKU and service opportunities in Brazil for OXXO?

Great question, Bob. Thank you. To be honest, we're very excited for what we have been able to achieve in Brazil. We -- it was great to have a partner for the first few years. It gave us confidence, security. It gave us some training into how to build and gain permits and stuff. But now we're very excited that we're ready to go on it alone. And the potential we see is still enormous. We keep -- I think it's the third year in a row that we grow same-store sales on double digits. I'm pretty sure that number is right. And this -- and 2026 also began very, very strong. I mean we've had good weather. We've had carnival, but we see huge potential. To give you a precise number of how many stores do we need to get to pay for its overhead, I don't have the number, but it's still maybe -- it's going to be probably around 1,000 stores, which I have full confidence that we will be over 1,000 stores in Brazil. I think our huge challenges in Brazil are twofold. One, we need to continue growing the same-store sales business to a level that allows us to really absorb all the costs within the store. The cost structure in Brazil still has opportunities vis-a-vis Colombia, turnover-wise, cost to hire, cost to fire, et cetera, all these operational things, but they've been improving dramatically month-over-month. So at the moment -- and this number will -- as soon as we are able to stabilize and if we are able to have 7 net employees per store, gross margin of around 38% and around MXN 1 million per month, which all of them are 5% to 10% off. That's when we will know this will be a 10,000 store business or a 5,000 store business. It's that dramatic that turnaround. In terms of categories that we are excited, we are impressed by the food offerings. We have very strong margins on food and coffee, and we play a strong game there. We sell phenomenal Pao de Queijo, coxinhas, empanadas. All these things are -- our customers love them and are eating them frequently. Our coffee offerings is amazing. It's obviously pure Brazilian premium coffee, and we sell at a good price. And the other great thing is the consumer occasion, the impulse occasion of beer gathering plays a humongous role in Brazil. Obviously, you don't have the service component that we have in Mexico, but there are other services that we're beginning to try in terms of gaming, and other gift cards and other things that are part of the landscape in Mexico and could play a significant role in Brazil that we are trying to implement. So overall, it's too early, but I am very passionate about our Brazilian business, and I will not rest until we have 10,000 stores in Brazil, hopefully not far into the future. Does that answer you, Bob or...

No, it does. Very helpful, Jose. And just with respect to the Mexican drugstore business, what are the next moves?

That's a tough one. Thank you, Bob.

Bob, you're going from the best to...

From a darling to a tough one. We haven't nailed pharmacy in Mexico. It's been a tough business. We are not experts at it. We are -- we have a phenomenal business in Chile. Our pharmacy business in Colombia getting -- discarding the institutional side is great. In Ecuador, we're growing. We're growing share. We're growing profits. So our South American business is great. Mexico, I think we don't play with the league against the real good players. There is a future for pharmacy in Mexico, maybe more closely related to OXXO in over-the-counters. And on digital -- so if I see a future for us in pharmacy has more to do with helping doing an omnichannel type of pharmacy. And I think there are certain corners of Mexico where we can be profitable in the Pacifico region and in the Southeast. But overall, it's -- we're not winning in that. And unless we do something different or we exit that business, I don't see a foreseeable change in our Health Mexico business, being very honest.

And I think just -- I think this is somewhat obvious, but if you look at the competitive position that we have in all the -- in the other 3 countries were either the main player or the #2 player moving towards #1. And in Mexico, we never really were able to get to that critical mass and really take away from the couple of large incumbents. So that -- this being a scale business, that was a tough one to break. And so that's, I guess, where OXXO comes in, in terms of can we do something disruptive than use OXXO, but that's still very much in the drawing board.

I would just add, I mean, we have now a great CEO of our pharmacy in Mexico. He's doing wonderful things with the tools he has. I think the business is stabilizing, and it will not burn cash this year, hopefully, but it's not winning. That's for sure.

Our next question comes from Antonio Hernandez from Actinver.

Congrats on your results, and thanks for that asked that difficult question before me. But another question that I have is regarding Bara and OXXO. What about maybe cross-selling across the different private labels, different SKUs? I know it's a different value proposition. But still, I mean, you're growing Bara, you're facing competition at OXXO. So any findings that you have there or anything that you could provide would be helpful.

Can you clarify, you're saying we are facing competition between Bara and OXXO...

No, no, no. OXXO in terms of affordability, what was mentioned earlier in the call. So maybe some findings or any learnings that you found in Bara and that you can apply to OXXO as well cross-selling...

Okay. And that's like a bunch of reflection...

Very, very interesting question. Thank you, Antonio. So I think the worst thing you can do is try to change your positioning just based on your competitor. We have a phenomenal competitors in the discount space. That's obvious. They're growing, they're doing well, and they play a good game in their current discount space. And I think Bara has, in my opinion, a stronger value proposition for the long term against other discounters. It needs to grow its private label offering. But I like our odds in competing against the discount space. The discount space is going to grow dramatically in Mexico over the next couple of decades. And Bara has a real chance of becoming one of the leading players there. And I like what we have, and we are very -- our value proposition for Bara is very much adapted for the Bajio and Jalisco region and our stores we're opening in Monterrey are to me the perfect mix of what the Norteno needs. You see beer, you see assortment of beer, you see -- but you also see private label of food and daily replenishment and snacks and supermarket or grocery. So I love our concept, and that's where we're going to compete against those players. OXXO has a great role to play in getting into affordability in beer, in soft drinks, in tobacco, in snacks. And then for the daily replenishment, where we have a role to play that's different from the discounters is that daily replenishment. I need something urgently. I don't need a pack size. I don't need -- I need the brand I know, the brand I love, the brand I recognize in a smaller format for my daily things because I forgot shampoo and I need something for the gym or whatever. That consumer occasion OXXO will be where it competes more similar assortment to what you see on the traditional trade, where it's still 50% of the consumer basket, by the way. So I think OXXO has a lot of room to grow on the daily replenishment more similar to the traditional trade and Bara and whoever wants a very private label, very low pricing, they could go to a Bara or one of our competitors for that. Having said that, we do see private label becoming more relevant in OXXO and complementing the offering that we have. We already have a lot of private label in OXXO in our cooking oil, in our coffee, in some snacks. And we see that even in diapers and some housing products. And so I think OXXO can also develop some powerful brands around private label, especially where in some categories where commercial income is not as significant, and we can play a bigger role. But I think each one will have its place. And I see a lot of growth for OXXO, and I see a lot of growth for discount, hopefully more Baras than other ones.

And I suppose some suppliers from Bara could be...

Definitely, some of the suppliers in Bara. And even some of the private label suppliers of our pharmacy business in South America are interested in coming over and doing some things that we can sell in OXXO and in Bara. Does that answer you?

Okay. Okay. That's very clear. And just a quick follow-up. Do you have any white space potential number for Baras in Mexico?

Tens of thousands. They're slapping me here for saying that, but I think there's a room for many thousands.

Many thousands...

Yes, that business is here to stay. It will be huge. I don't want to sound Donald Trump huge, but it's going to be big.

Our next question comes from Hector Maya from Scotiabank. Héctor Maya López: Congrats on the results. Jose Antonio, Martin, I just wanted to understand from the excess cash right now and the planned deployments, the cash deployments, about $1.5 billion might be set aside still for M&A, correct? And on this, how has the appetite for M&A changed in the U.S.? I mean, has it changed a bit due to political uncertainty or the current immigration policies may be affecting traffic in states close to the Mexican border? And on the ongoing work to adapt the value proposition in the U.S., how long do you think you would still need to reach a point in which you feel comfortable enough to now go on a more aggressive growth path by organic expansion or more M&A in the U.S.?

I will address it briefly and I'll let Martin and Juan complement. Thank you, Hector. So we are not saving that money exclusively for inorganic M&A. I think Martin expressed it very well. We want to be -- we are evaluating a lot of opportunities throughout FEMSA. Not all of them are inorganic M&A. There are other things. And all those things are put into the equation, and we want to be cautious before we pronounce whether we give this cash in either buybacks or other opportunities to even considering another extraordinary dividend. So it's not exclusively that we are hunting for inorganic M&A. Having said that, we have a lot of things coming our way, some of them in the U.S. for convenience stores. But to be honest, none, we have been surprised by the expectations of the sellers, and we want to be very cautious. We are not concerned about traffic in the Texas region for immigration or stuff. We have a very long-term view for the U.S. The U.S. still has a long way to go to consolidate. And we are learning a lot from our little operation in Texas. We're getting more and more relevant in the El Paso region. We want to be the winners and win share and gain the confidence of the El Paso one, the Midland citizen, the Odessa. So that's where we're concentrated. When we see we can gain share against the QuickTrips and the other local players, we will become more aggressive in growing our footprint. We are already -- we bought a couple of stores here and there in El Paso, and we're very happy with that. So we're looking more at tuck-ins, small chains, the bigger chains. I'm very surprised about their expectations for multiples that are outrageous. Some of it has to do that everyone wants to think that they're the next Casey's. And to be honest, not all of them deserve those valuations. But credit to Casey's that they've done a tremendous job. But no, we have a long-term view, and we're still looking at opportunities in U.S., but we're being very cautious with our returns.

Yes. I mean very little to add. We have -- our interest has not diminished. It's been -- we have been unable to find an entry point with the right risk reward in a reasonable period of time that made us willing to pull the trigger. So as we have said, the entry into the United States is a function of finding the right opportunity. It's not an unconditional need that we have. It has to be based on being able to find value-creating opportunities.

Our next question comes from Renata Cabral from Citi.

I have two follow-ups here, one on Brazil and Bara. My question is, are Brazil and Bara already seen as scalable platforms. I know it was already discussed here as a great opportunities. But just to understand from your view today that's durable -- there's durable economics or they are seeing a proof of concept in terms of proposition that they can offer to the clients compared to OXXO, obviously, already consolidated and very clear for everyone. And in terms of capital allocation, timing allocation, especially, we are seeing the company much focused on the strategy. Now you have just discussed about the Health business that the company are working towards that. So we see the company much more focused, and we discussed it here 3 and more really important opportunities such as opportunities to grow in the U.S., Brazil, Bara. We have a top 2 that maybe in the next 5 years, you see more opportunity than the others. If you can shed some light qualitatively, I would really appreciate.

I got your question on Bara and OXXO Brazil very clearly, and I'm happy to add some comments, but I didn't understand very well the second question. Can you repeat it? Renata?

Sure. Yes. In terms of the big opportunities that we already discussed it here in the call, for instance, Bara, OXXO, expansion in the U.S. Can we have one of them should be bigger in the next 5 years? Or the company today is allocating more time in which of those initiatives?

Okay. Okay. I think I get it. Okay. obviously, Bara and Brazil are -- our obsession is OXXO Mexico and Coca-Cola FEMSA Mexico. Those are the motors and have huge growth opportunities that are our priorities. Then what keeps me very excited and frankly, come with a smile to work every day is OXXO Brazil and Bara. OXXO -- Bara is much more advanced in readiness to hyperscale. We've been tailoring the value proposition for the last probably 5 years. And today, we have a value proposition that we love, we are happy. We opened a distribution center in Monterrey, and we are ready for hyperscaling. And in Mexico is where it's easier to transfer capabilities of hyper growth. So you should expect a faster growth in unit numbers in Bara than in OXXO Brazil. OXXO Brazil first is a Sao Paulo bet. It's still very much Sao Paulo bet. It still has a lot of room to cover in Sao Paulo. And we've focused much more in quality versus quantity. So we are ready to open about 100 stores in 2026. That is a low number to what we would love to, but we much rather mature the right processes in place, the category management in place, the commercial income capabilities in place, the categories that really are going to move the needle and the process control that would allow us for OXXO Brazil to become a very valuable bet. If you do the DCF type of OXXO Brazil growing around 100 stores a year versus growing 1,000 stores a year moves exponentially the value of OXXO Brazil going forward. So 100 stores a year is not enough for us to call OXXO Brazil the second wave of FEMSA. But we're working hard on solving the operational things that we need to solve so that OXXO Brazil can grow at, I don't know if 1,000, but a store a day. That's still a few years down the line. So I think it's behind us. In terms of other bets, I think we have our plate full with OXXO Mexico, OXXO Brazil. But I would say we are incredibly surprised, and I don't want to scare you guys, but we're incredibly surprised about what we are beginning to see as opportunities for growth in Europe, mostly organic. But it's Europe -- the management team in Europe has done a tremendous job in getting more value. And we are still in very early stages of OXXO USA. And we think -- I think we shouldn't call it OXXO USA. We should call it OXXO Texas, New Mexico and that region, and we see huge opportunities for growth there as soon as we are able to refine our value proposition. That's where we are right now. I think those things are further down the road and not in the near future.

Yes, I would add to what Jose just said. I mean if you just look at the numbers that we provided you in this call about how many stores we're going to be opening this year. Obviously, this is just 1 year, and it doesn't speak too much about the future. But we said for Bara, we are aspiring to grow it by 1/3 in 2026. For OXXO Brazil, we spoke about 15%. OXXO Mexico is less than 5%, right? Obviously, this is -- it has to do with how big the base already is, but it also has to do with how -- what is our conviction about the value proposition and how many incremental tweaks we need to make. I do think that in Brazil, it feels like we've been in Brazil for just a little bit of time compared to how long we've been working on Bara. Never mind how long we've been working on OXXO, right? So there's nothing magical about this. It's -- you just get to the point where you step on the gas at different points in time. But also to Jose's earlier comments where you begin to think about eventually thousands of stores in a way that is actually somewhat literal as opposed to just hypotheticals.

Our next question comes from Ulises Argote from Santander.

And all the details that you have shared this has been extremely helpful. So Jose, I actually had one for you and kind of taking advantage there as you kind of ramp up into the CEO chair. But on your opening remarks, you said you were not satisfied with the results that we saw in the year, right? I know there's always room to grow and always room to improve. But if we are here 1 year from now and specifically maybe 2 or 3 key things, but what has to change from where the company is today for you to start next year's remarks saying you see a successful 2026 in the books?

Great question, Ulises. I would love to see hitting our top line growth of mid-single digits in OXXO with profitable traffic growth in same-store sales, at least -- I mean, for me, at least same-store sales growth of traffic, which is a tough, tough challenge because we have IEPS in soft drinks or taxes in soft drinks, added taxes in tobacco, the beer category with some struggles. But with the World Cup, with all of that we are doing with food, with all that we're doing in affordability and coffee, I should -- for me, success should mean same-store sales growth in the OXXO Mexico level. That should be added with market share growth. And then obviously, I would love to see Colombia in an -- at least EBIT breakeven and then Brazil hitting its targets of getting closer to a nice gross margin, opening 100 net new stores successfully. To me, that's what I would qualify as success. Europe should give us another strong year more because of efficiencies that they're still pulling out of the business, hopefully, with a couple of interesting deals that we're looking with partnering with some service stations. And then Coca-Cola FEMSA taking advantage of the World Cup and being able to transfer most of the price of the IEPS without any share loss gains, even with some gains in share and then gaining ROIC. All of them should be able to be gaining return on invested capital. Finally, if we are able to open a store a day in Bara, 1 store a day in Bara profitably, I will celebrate with champagne. That's success for me next year -- I mean, this year, sorry.

Amazing. That's great to hear and super clear. And if you reach that Bara per day target, I'll send you the champagne myself, Jose.

Thank you. I will send you a selfie or invite you for a toast.

Our next question comes from Henrique Brustolin from Bradesco BBI.

Jose Antonio, I wanted to circle back to your comments on OXXO Mexico about the opportunities you have for the new consumption occasions, right, or the large opportunity you see in breakfast, coffee, daily replenishment, which you're already present. But as you mentioned, you can effectively start to play to win on them. I just wanted to hear a little more what needs to change operationally in terms of assortment, pricing or even store execution for this to start to gain more traction? And how do you see the transition in terms of timing and implementing all these initiatives taking place to reflect in the performance of OXXO stores in Mexico? That would be my question.

Great. Just to be clear -- thank you, Henrique. But just to be clear, on regards to food or in general?

The question was in general, if there is anything specific that you can move the needle more or you are more focused at, it would be great to hear as well. But it was a category on food and the daily replenishment that you mentioned you can play to win.

Yes. So we've tried everything -- I mean, we've really tried a lot of things on food over our history. And it always has been a struggle because of the huge level of complexity that it brought into the OXXO store. And we were able to simplify complexity first when we did this partnership with Caffenio and we brought the coffee, these Japanese thermos that were a huge advantage and simplify the store operations many years. Now we're moving beyond that towards automated coffee machines. I just -- we all just came from a trip to Japan and now our coffee machines look like 10-year-old coffee machines. So it's impressive how the coffee store infrastructure has evolved in developed markets. There's huge potential for us to bring coffee into our stores. Just to give you an example or just to give you some thoughts -- some guidance on coffee. We sell about 28 cups per store per day in Mexico. Japan's convenience stores sell over 100. Colombia or Colombian stores, which, by the way, Colombia, Mexico has similar per capita on coffee are about 90 coffee per day per store. So we have a long way to go in becoming and we have very good coffee. It's 100% Mexican coffee from Hidalgo, Oaxaca, and from Veracruz. And I think we need to really win the narrative on why the best coffee to start your morning is the coffee at OXXO. It's high quality. It's really affordable at a very convenient price, and we're considering even lowering the price. Now people do not go to OXXO just for the coffee. They want a good feeling, hot breakfast option, and we are trying many different things, but we haven't delivered something that we can turn it national. We are looking at this…

This does conclude the Q&A section. At this time, I would like to turn the floor back to Mr. Juan Fonseca for any closing remarks.

Thanks, everyone, for attending today. Obviously, you know what to find us. The IR team is always around to double-click on questions that maybe were not raised during the call. Thanks, and have a great rest of the week.

Thank you, everyone.

Thank you. This does conclude today's presentation. You may disconnect now, and have a nice day.